Hycroft Mining Holding Corp. shares were up 37% to $1.91 after it received a $56 million equity investment from AMC Entertainment Holdings Inc. and precious metals investor Eric Sprott.
The stock, which closed Monday down 26%, hit its 52-week low of 28 cents on March 2.
The precious metals development company, which owns the Hycroft Mine in Northern Nevada, said the investment dramatically improves its liquidity position and provides years of financial runway.
Hycroft said Mr. Sprott and AMC will each invest $27.9 million in cash in exchange for 23.4 million units, with each unit consisting of one common share of Hycroft and one common share purchase warrant.
After closing, Mr. Sprott and AMC will become the company’s second largest stockholders, each holding about 22% of the outstanding common shares of Hycroft. With its investment, AMC has been granted the right to appoint a representative to the Hycroft board of directors.
The units are priced at $1.193 each, which is the minimum bid price required by Nasdaq for an at-the-market purchase of a unit. Each purchase warrant will be exercisable for one share of Hycroft at $1.068 a share and will carry a five-year term from the date of issuance. The closing of the private placement is expected to occur on or about Tuesday.
Hycroft said that it intends to use the proceeds for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital or capital expenditures and other investments, and/or feasibility study and additional exploration at the Hycroft Mine.