Canadian Eric Sprott has multiplied his investment in Hycroft Mining by eight thanks to the precious metals boom. And its stake is now worth more than $2.1 billion, despite the fact that the mine has not been operating for years.
Numbers. Sprott is a veteran investor commonly recognized as the “gold magnate.” In 2022 it invested $28 million in Hycroft Mining. Today its participation exceeds 2.1 billion dollars, having achieved a profitability of 746%. The company’s shares have soared more than 425% in the last two months and have accumulated a rise of more than 1,500% since the tycoon began to expand his position last summer.
A mine that does not mine. Hycroft owns an open pit deposit in northern Nevada that has been operational since the 1980s, but the company has not mined gold since 2021. Instead, it reprocesses previously mined ore that remains on the surface. Most of its reserves are underground and the company lacks a defined plan to resume mining operations. In fact, it has not generated income since 2022, when it had a turnover of just $33 million, according to data from Bloomberg.
Gold and silver rally. Hycroft operates as if it were “a huge underground ETF,” according to defined Brian Quast, precious metals analyst at Bank of Montreal. Gold and silver prices have reached all-time highs over the last year, and investors are looking for any way to get exposure to this rally. Even if the mine is not operating, its reserves gain value with each rise in prices. Sprott has been defending investment in gold and silver for decades, and this bet has placed him among the few billionaires who have been able to capitalize on the current boom.
From almost bankruptcy to stock market stardom. Just like account Bloomberg, Sprott’s initial investment came as Hycroft was close to insolvency. Together with AMC Entertainment, which had plenty of liquidity after the meme stock phenomenon, the Canadian ended up saving the company from its creditors with this investment.
The announcement skyrocketed the shares almost 100% in the premarket, although the enthusiasm did not last long, as by the end of 2022 the value had fallen below half the entry price. Sprott sold a fifth of his position, barely recovering his investment. For three years, his bet remained stagnant while the price of gold rose without stocks following suit.
Searching results. Last summer, Sprott changed strategy. Between June and January it has invested an additional $187 million to almost double its stake to exceed 40% of Hycroft’s capital. “I am doing everything possible to expand my position to the maximum,” declared in October to Tony Denaro, content creator dedicated to finance. Their move coincided with new drilling results that identified higher-quality silver deposits than expected and areas with expansion potential.
AMC stared. The other major investor, who rode the wave with Sprott in 2022, was the AMC cinema chain, although it did not suffer the same fate. In December, when his Hycroft shares finally turned positive after years of losses, he sold 80% of his stake to Sprott for $24 million. Adam Aron, CEO of AMC, justified the operation ensuring that it was “the right time to monetize and reallocate capital” to its core business. Two months later, that block of shares is worth $172 million.
The gold fortune. Although precious metals are on the rise, few big fortunes have been able to take advantage of the boom. According to the report UBS Global Family Offices 2025, these types of asset structures barely allocate 2% on average to precious metals. Only a few investors like Sprott or Hong Kong’s Cheah Cheng Hye have bet heavily, as share Bloomberg.
For Sprott, Hycroft’s spotty track record is precisely its biggest draw, because as gold and silver prices rise, the likelihood increases that reprocessing will become increasingly profitable, opening up more possibilities for monetizing underground reserves. “You cannot find a more leveraged and significant reward,” said the investor. in the interview with Denaro.
Cover image | Palisades Gold Radio and Leonie Clough
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