Hycroft Mining Holding Corporation (NASDAQ: HYMC) is a gold and silver mining company with major assets in the Hycroft Mine. After releasing impressive results this week, HYMC stock has been gaining momentum and climbed as much as 30%. Considering that the company plans to release another drilling update in the first half of 2023, HYMC could be poised for another run given its history of releasing impressive results. Meanwhile, the company expects to start drilling in non-permitted areas and update its technical report in Q1 2023. Considering the scale of these catalysts, HYMC stock is one to watch closely over the coming months.
HYMC Stock News
The Hycroft mine is located in the 1800’s Sulfur District but as high grade silver appeared early in the 19th century the mine began showing its true potential. As the Duval Corporation took control in 1966 the company reported higher levels of silver and gold. It wasn’t until 1977 when the Cordex Syndicate mapped and sampled the property, that Hycroft’s potential for “a bulk tonnage, low-grade precious metal deposit” was recognized. From 1983 to 1998, the Hycroft Mine produced approximately 1.2 million ounces of gold and 2.5 million ounces of silver. It produced another 58,700 ounces of gold from 1999 through 2004 through leaching operations. In 2008, vortex drilling revealed a large area of sulfide gold and silver with higher grade silver values.
From September 2007 through July 2019 metal sales totaled approximately 900,000 ounces of gold and 5 million ounces of silver. Annual sales in ounces for these precious metals from 2019 to 2021 totaled approximately 90,000 ounces of gold and 570,000 ounces of silver.
However, according to its technical report conducted in February, they recorded 5,616 measured ounces containing gold and 270,247 measured ounces containing silver as well as 9,069 measured ounces containing gold equivalent. Indicated ounces containing gold clock in at 4,030 whereas indicated ounces containing silver are recorded at 175,722. Gold equivalent Mineral Resources totaled 15.3 million ounces for measured and indicated. The study was conducted using data from 1981 to 2018 and includes 5,501 holes on the property.
The company exceeded its production guidance for 2021 producing 55,668 ounces of gold compared to the guidance range of 45 to 55 thousand ounces. Silver production was recorded at 355,967 ounces which did not meet the company’s expectations for the year. The company is still waiting on the majority of the results from its 2021 drill program and variability test work. The 2021 mineral assays included in this testing are notably absent from the mineral resources report that was recently filed.
But overall the company found that its silver projections may be underestimated in its current model. It also noted that inflation as well as other factors have resulted in increased cost assumptions. HYMC’s CEO is bullish on future possibilities saying that, “In addition to the opportunities within the current resource area, that represents just 2% of our overall land position, we have identified multiple targets outside the current resource area with promising geophysics and high-grade intercepts drilled by predecessor companies that have not been further investigated.”
It’s worth noting that HYMC has a number of institutional investors including Citadel Advisors LLC which had a 1,749.6% increase in the number of shares held this quarter. Meanwhile, Whitebox Advisors LLC has 14% ownership in the company.
*Updated March 30th, 2022
With fears over the company’s future operations due to limited cash, HYMC has received investors’ attention after securing $56 million from AMC and Eric Sprott through a private placement. Based on this, AMC and Sprott will receive over 23 million units – consisting of an HYMC stock and a purchase warrant at $1.193 per unit – for $27.9 million each. Through these proceeds, HYMC plans to repay its existing debts as well as advancing the Initial Assessment in the 2022 Technical Report Summary to a feasibility study and more explorations at the Hycroft Mine.
Pursuant to the terms of this agreement, AMC will have the right to appoint a director to HYMC’s BOD – as long as AMC owns 50% of the shares it bought under the agreement. Considering that HYMC is in a similar situation to AMC a year ago, many investors are bullish AMC will help HYMC stock realize its full potential.
After the success of this private placement, HYMC issued an additional 89 million shares for $138.6 million through an at-the-market equity offering program. CEO Diane Garrett believes this financing “places the Company on solid footing to advance the Hycroft Mine as well as opening up additional opportunities for the Company”. With a total of $194 million raised, Garrett emphasized these funds “will expand our ability to properly and diligently develop the Hycroft Mine, including a robust exploration program, and to further unlock the value of this world-class asset.”
In terms of the company’s debt, HYMC agreed with Sprott Private Resource Lending to extend its debt repayment to a bullet payment in 2027. At the same time, HYMC agreed with its second lien holders to extend the loan by two years to 2027 with annual 10% interest payments. HYMC is also in discussions with its debtors to reduce the company’s debts. With these efforts to extend its loan payments, HYMC could report solid financials as the company continues extracting gold and silver.
Since AMC’s investment in the company, HYMC stock has been witnessing a huge trading volume of 1.2 billion shares compared to its average daily volume of 85 million shares – leading its PPS to spike 69%. Considering that the company plans to file its annual report on March 31st, many investors anticipate HYMC stock to continue climbing with a solid report.
*Updated May 5th, 2022
Following the release of the company’s Q1 operational and financial results, HYMC stock has been trending among Reddit and FinTwit investors due to the encouraging results reported by the company. Delivering on its promises to continue exploring the Hycroft Mine, HYMC measured and indicated 9.6 million ounces of gold and 446 million ounces of silver. Moreover, HYMC has inferred mineral resources including 5 million ounces of gold, in addition to 150.4 million ounces of silver contained in oxide, transitional and sulfide ores. Given that extracting reserves contained in such ores could be expensive, HYMC is in a prime position to utilize the funds received from Eric Sprott and AMC’s investments in the company. Based on these results, HYMC stock surged and momentarily reached $1.90.
At the same time, HYMC found a number of high-grade intercepts at its sites in the Hycroft Mine – including the high grade silver Vortex deposit. Given the potential of these findings, HYMC is exploring targets for a drilling program to capitalize on these high grade intercepts. Considering that metal prices are rising due to the current inflationary environment, these high grade intercepts combined with HYMC’s gold and silver reserves could be major revenue streams for HYMC in 2022.
With the $197.5 billion gold mining industry expected to continue growing in 2022, gold miners including HYMC are attempting to ramp up production. Given that inflation is climbing globally, high gold prices are driving down weak currencies – causing gold to reach new highs. With this in mind, several central banks across the world – especially in developing countries – are demanding gold miners to increase their production as they diversify their assets away from dollars. Since gold is one of the best hedges against inflation due to its liquidity, HYMC stock could be one to watch in the coming quarters as the company attempts to capitalize on rising gold prices.
*Updated December 22nd, 2022
Building up on the success of its 2021 drill program, HYMC started its 2022 – 2023 exploration program which is considered to be the largest exploration program at the Hycroft Mine in a decade. Given the high-grade opportunities identified in the 2021 program, this program is expected to allow the company to better understand the controls to mineralization. While operating this program, HYMC encountered multiple zones of higher-grade silver than expected. At the same time, the company discovered that higher grade zones are more continuous than previously interpreted in the 2021 program. In light of this, HYMC has the potential to become one of the major players in the mining industry thanks to the gold and silver reserves in the Hycroft mine.
With the company constantly sharing updates regarding its ongoing program, HYMC recently soared 30% after the company shared positive drill results from its exploration program. These drilling operations have focused on higher-grade opportunities in the Brimstone, Vortex, and Central zones where 14 of the 20 RC drills reported outperformed the model resulting in higher grades than previously estimated.
On that note, a hole in the Brimstone zone returned 35 meters of 2.83 grams per tonne of gold and 35.59 grams per tonne of silver. Additionally, this hole returned a separate intercept of 14 meters of .29 grams per tonne of gold and 102.92 grams per tonne of silver. Other highlights of this program include a hole in the Vortex zone that returned 93 meters of .7 g/t of gold and 55.94 g/t of silver, as well as a hole in the Central zone that returned 56 meters of 0.73 g/t of gold and 19.32 g/t of silver. Based on these results, HYMC could be well-positioned to witness substantial revenue growth in the future if it is able to recover a significant portion of these reserves.
In addition to these results, the drilling program is demonstrating mineralization in areas that were previously considered to be waste. At the same time, drilling in the Central zone is showing ore grade mineralization which has not been previously modeled. These grades in the Central zone are more than double the average resource grade and extend mineralization farther south than the company’s expectations. As this phase of the program is continuing through the first half of 2023, many investors are watching for more updates regarding this program as the company could share more intriguing results in the future. With more results expected to be released in the first half of 2023, HYMC stock is one to watch closely as it could soar on additional positive results.
As for its upcoming plans, HYMC is targeting higher-grade opportunities in the Vortex and Camel deposits within the permitted resource areas for near-term drilling. Meanwhile, the company is waiting to receive drill permits for targets outside of the permitted areas – where drilling in these areas is expected to commence in Q1 2023. Moreover, HYMC intends to update its current technical report and expects to complete it by Q1 2023 too. This update is set to include additional 2021 and 2022 exploration drilling, in addition to a number of recently located historical silver fire assay data that was not reflected in the current model. Since these catalysts are right around the corner, HYMC stock could be one to hold in anticipation of these catalysts to play out.
In other news, HYMC was able to reduce its debt at a significant discount to bolster its balance sheet. To facilitate this, HYMC purchased a total of $12.2 million of debt in exchange for $6.7 million in cash and 500 thousand shares – representing a 42% discount to the face value of the debt. In light of this, HYMC could be setting itself for major growth once it starts recovering gold and silver from the Hycroft mine.
Despite the company’s potential, HYMC stock presents a major risk that investors should consider before investing in the company as the stock is not compliant with the $1 minimum bid price requirement. With this in mind, the company received a notice from the NASDAQ providing the company until April 3, 2023 to regain compliance by maintaining a closing price of $1 at least for 10 consecutive days. Given that the company has several pending updates around the corner, HYMC could be able to regain compliance within the notice period if the updates are major.
HYMC Stock Financials
Q1 Earnings
While the potential of HYMC stock is undeniable, the company’s Q1 financials were underwhelming to many investors. With $9.1 million in revenues, HYMC had a 52% decline from the year-ago-period. This led to $22 million in net losses despite the company reducing its operating costs to $12 million compared to $14.7 million in Q1 2021.
Meanwhile, HYMC reported $172.7 million cash on hand mainly due to AMC’s investment in the company last March. As a result, HYMC could ramp up its plans for extraction and exploration at the Hycroft Mine. Considering the promising results of the company’s operations, HYMC could be set to grow its revenues in the coming quarters.
Q3 Earnings
Looking into HYMC’s Q3 financials, the company has $272.4 million in assets – including $153.4 million in cash. This represents a significant increase from the beginning of the year where the company had $142.3 million in assets and $12.3 million in cash. At the same time, HYMC has been able to reduce its liabilities as the company reported $196.3 million compared to $210.8 million.
As for revenues, HYMC witnessed a steep decline YOY from $31.6 million to $8.7 million. Meanwhile, operating costs climbed to $10.1 million from $6.6 million last year mainly due to the company ramping up its exploration efforts in the Hycroft mine. Despite this, HYMC reported a net loss of $15.8 million – representing a significant improvement from $23.3 million a year ago due to cost of revenue declining from $43.6 million to $11.1 million.
Media Sentiment
@TheGoldApe is extremely bullish on HYMC stock’s long-term prospects following its latest drilling report.
Technical Analysis
HYMC stock price is currently at $.5167 and shows supports near .4905 and .4428. The stock also has resistances near .5576, .6173, and .7089. Following the company’s recent drill results, HYMC stock climbed more than 28% since the results were extremely positive. Despite this, HYMC has failed to break through its resistance – sending the stock to retest the 50 MA. As the stock appears to be holding the 50 MA support, bullish investors could watch for retests of the 50 MA to enter their positions ahead of the company’s upcoming catalysts in Q1 2023.
Despite the company’s upcoming catalysts in Q1 2023, accumulation is trending downwards since HYMC’s run near $.88 last month. Meanwhile, the MACD recently turned bearish which could be attributed to investors taking profits following the stock’s latest run. However, the RSI is holding at 50 which could allow the stock to witness strong movement in either direction. With the company’s pending catalysts, HYMC stock could be an opportunity at its current PPS. HYMC has an OS of 199.7 million and a float of 139.3 million.
HYMC Stock Forecast
Given that investors are estimating that the company’s current gold and silver reserves could be worth billions at current market value, HYMC stock could see another surge as it provides more drilling results. With the company planning to release an update on its exploration program in the first half of 2023, HYMC could be one to watch closely given its history of runs on drilling results. Given its market cap of $103.2 million, cash on hand of $153.4 million, and plans to ramp up exploration, HYMC stock could be a profitable investment for investors bullish on the mining company’s potential.
While the company is facing the risk of being delisted from the NASDAQ, HYMC could be on track to regain compliance with the listing requirements as it prepares to start drilling in non-permitted areas and update its technical report in Q1 2023. Since these catalysts are major for the company’s operations, HYMC stock could be on track to regain compliance as these catalysts could rally investors around the stock. In light of this, HYMC stock could be one to accumulate at its current PPS in anticipation of these catalysts to play out.
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