Hycroft Mining Stock News and Forecast: HYMC stock continues to fall and more losses are set to follow

HYMC stock closed down 4% on Friday and is already down by a similar amount in Monday's early premarket. The reason is straight forward. The crowd has moved on. The retail frenzy has fizzled out and so the stock has suffered. Added to this of course is the negative environment for all stocks and you have the perfect recipe for HYMC to continue its recent losing streak. HYMC stock is now down over 25% in the past week and looks likely to keep this trend going. 

HYMC stock news: Pay for play

We do note this morning some interesting news. HYMC has announced its shareholder meeting for June 2nd and one of the proposals caught our attention "To adopt and approve an amendment to the HYMC 2020 Performance and Incentive Pay Plan to increase the number of authorized shares of common stock available for issuance by 12.0 million shares of common stock". 12 million shares are worth about $18 million or so and is not to be sniffed at. This is for a company that nearly went bankrupt as recently as November and laid off half its workforce. Nice! Apart from that, there is little of not for this investment. Hycroft is a long term speculative play. It is a tricky mine with a high cost of production, that is why it nearly went bust in November. Efforts by some on social media to link its performance to the price of gold are strongly misplaced. Hycroft is only beginning its journey at extraction. "You never say 'never' in our industry. We've got a very long project with a lot of work to do, but for right now, we've got sufficient cash to get us plenty of runway down the road to be able to do the work we need to do, which is exploration and finalizing our technical studies for the larger commercial scale operation," said CEO Diane Garrett.

Even then it is unclear just what quality the gold is. Other reports have previously not been too promising in this regard. HYMC will burn through that cash pretty quickly as gold mining is expensive at the best of times and it appears this Nevada mine is more intensive than most it appears. It has had proven gold reserves for many decades but it was usually deemed not commercial. So why is it different this time around? Well, at least some reasoning is the high gold price meaning the high cost of production will be offset by the high selling price. But a long road ahead.

HYMC stock forecast

The spike from news of AMC's investment in HYMC caused a large gap from $0.41 to $0.83. While many of our readers may not want to hear it there is a strong chance that this gap gets filled. Markets love to fill gaps and there is as detailed above a long road ahead for HYMC. Nothing goes down in a straight line and there may be some dead cat rallies ahead. Certainly, AMC is lining up for a rally soon, once the environment turns back to risk assets. If AMC begins to recover it may bring in some momentum trades to HYMC once again. The first support at $1.36 is the 61.8% Fibonacci retracement from the spike move. This also corresponds to the 200-day moving average. But this may only act as a brief support. The strong one is the gap fill at $0.41. That is where it may tempt us in.

HYMC chart, daily