AMC Entertainment Holdings Inc. surprised investors Tuesday with the news of an investment in a gold and silver mine that is well outside of its core cinema business.

The company is buying 22% of Hycroft Mining Holding Corp. HYMC, -9.87% and its 71,000 acre Hycroft Mine in Northern Nevada, that is understood to have 15 million ounces of gold deposits and some 600 million ounces of silver deposit.

AMC AMC, +5.18% will also receive 23.4 million warrants priced at $1.07 a share, a discount over Hycroft shares closing price Monday of $1.37.

Eric Sprott, a seasoned metals investor, will make an investment equal to AMC, the company said in a statement. Combined, the investment comes to $56 million, which the two parties said would give Hycroft financial runway.

“To state the obvious, one would not normally think that a movie theatre company’s core competency includes gold or silver mining,” AMC Chief Executive Adam Aron said in the statement.

However, AMC’s success in recent years in guiding through a period of severe liquidity challenge caused by the coronavirus pandemic, in strengthening its balance sheet and in resonating with retail investors gives it experience it can bring to Hycroft, which has seen its share price hurt by its own liquidity challenges, he said.

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AMC is one of the original meme stocks, the group that became popular at the start of the pandemic when day traders gathered on the subreddit WallStreetBets to egg each other on to take on short sellers and drive stocks higher.

While the meme stock trend has faded, AMC still has a $1.8 billion war chest for investments and this one, “is a truly terrific opportunity to potentially strengthen and enrich our company, and thereby create significant value for AMC Entertainment shareholders,” said Aron. “We are confident that our involvement can greatly help it to surmount its challenges — to its benefit, and to ours,” he added.

Investors should think “creatively and boldly” about AMC’s future, which will include a full recovery from COVID for the biggest cinema chain in the world, he said.

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“But even with the enthusiasm that the public has for moviegoing at our theatres, it is not enough for us to merely bring back the AMC of old,” he said.

AMC shares were up 0.7% in midday trade but have lost 50% of their value in the year to date.

Hycroft shares were up 16.5% and are down 76% in the last 12 months, while the S&P 500 SPX, +2.24% has gained 5%.

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Source: finance.yahoo.com