NASDAQ-listed Mudrick Capital Acquisition Corporation (MUDS) and Hycroft Mining Corporation, the US-based, gold and silver producer in Nevada, have announced the completion of the purchase of Hycroft by MUDS. The shareholders of each of MUDS and Hycroft approved the transaction, which closed on May 29, 2020, creating a new world-class mining company named Hycroft Mining Holding Corporation that will trade publicly on the NASDAQ Capital Market under the ticker symbol HYMC.
Hycroft has sold all of the equity interests of Hycroft’s subsidiaries and substantially all of its other assets to MUDS, and MUDS has discharged and paid or assumed all or substantially all of Hycroft’s liabilities. HYMC has 50.2 million common shares outstanding, as of the consummation of the transaction.
“This is a critical transaction that paves the way for the development of Hycroft into one of the world’s premier gold and silver producers with a long life and in a desirable mining jurisdiction,” noted Randy Buffington, Hycroft Mining President & CEO. “We now have the pieces we need to build a profitable future for the mine, its employees and the surrounding areas.”
HYMC operates its wholly owned Hycroft Mine, a world-class gold and silver producing operation located 55 miles west of Winnemucca in the prolific Northern Nevada mining jurisdiction. In July 2019, Hycroft completed the Hycroft Technical Report, a third-party feasibility study supporting its multi-year developed proprietary sulphide oxidation and leach process along with M3 Engineering and incorporating resources modelled by SRK Consulting. Results of the feasibility study were robust indicating a projected LOM NPV of $2.1 billion (at a 5% discount rate), a LOM after-tax IRR of 147.5%, and a payback period of 2.6 years.
The Hycroft Mine was restarted in 2019 to demonstrate this proprietary process on a commercial scale and, to date, has proven successful. Based on the success of initial operations and the robust feasibility study, Hycroft began implementing the long-term mine plan with the start of construction in April 2020 of the first phase of a large leach pad capable of processing the resource base with more than 30 years of mine life. The funds received from this transaction allow HYMC to construct the new leach pad, expand its existing mining fleet (via rental contracts) and increase production rates. The project is also expected to include a major stacker-conveyor installation in due course, though no details have yet been given on the supplier or design.
