There’s a saying for bull markets: “Even turkeys can soar like eagles in a hurricane.” 

The “turkeys” refer to the poor companies, and the “eagles” refer to well-run companies. And the “hurricane” is a metaphor for a massive tailwind.

I mention this because the run-up in gold prices created a hurricane-sized tailwind. Check out the chart of gold below:

When I think of a historical “turkey”, one company comes to mind: Allied Nevada.

I still have a 2007 corporate presentation from Allied Nevada saved somewhere in my files. I pulled it out to look at it this afternoon. Back then, the stock took off thanks to the gold tailwind of the early 2000s. 

This chart shows the gold price from 2005 to 2011:

In Allied Nevada’s 2007 presentation, the company discussed its flagship Hycroft Mine in Nevada, which had 539,000 ounces of gold reserves. The mine closed in 1998, but the company claimed it was “permitted and bonded with a gold recovery plant ready to operate.”

Sadly, Allied Nevada went bankrupt in 2015. It reorganized and renamed itself…

Today, I’d like to introduce you to the biggest “turkey” in the modern mining space: Hycroft Mining Corp. (Nasdaq: HYMC). Yes, it’s a repackaged Allied Nevada. Yes, it’s back. Even more amusing, it’s a mining stock that is also a “meme stock.” 

In 2022, the company faced bankruptcy again. However, this time two suitors arranged to save it: Canadian billionaire Eric Sprott and AMC Theaters (NYSE: AMC). Yes, the largest movie theater owner in the world bought a 22% stake in a nearly twice-bankrupt gold miner for $27.9 million.

Here’s the problem: Hycroft Mining isn’t actually mining anything, including at the time of AMC’s purchase. Hycroft was exploring. And that costs money. The company kept raising funds and diluting its shareholders.

AMC sold the bulk of its position in December 2026. It made a ton of money, right? Right?

Nope. Sprott Mining bought AMC out for $24.1 million. AMC kept 64,000 shares and 1 million warrants (each with a strike price of $10.68). So, it made a nominal profit… but that’s a brutal outcome.

Meanwhile, Hycroft published a new resource estimate. The company claims it grew its gold resource by 55%. That’s great, right? 

Except Hycroft’s massive boost in gold came from lowering the cutoff grade to 0.027 grams per ton. That’s incredibly low.

The “cutoff grade” is the point where getting the metal out of the rock stops being economic. 

Here’s what I mean… 

At $4,500 per ounce gold, one gram of gold is worth about $145. So, Hycroft’s cutoff grade of 0.027 grams per ton is about $3.91 gold per ton. That’s too low. Back in 2007, I spent time with a group of miners in that part of Nevada. Their cutoff for economic mining was about $15 per ton (about 0.1 gram per ton gold). That’s just the cost of mining, not the processing. 

And Hycroft’s rock needs substantial processing. 

The ore at Hycroft is “refractory.” That means the gold is locked up in complex sulfide minerals that require complex processing. In contrast, most Nevada mines are simple “oxide gold” mines. They stack the ore on a giant pool liner and put up sprinklers that gently shower the rocks with a dilute cyanide solution.

The gold gets dissolved and runs off in the solution to a plant that produces metal and recycles the solution. It’s simple, cheap, and easy to run. 

Hycroft is none of those things. 

Rather, it’s a trap. It’s the kind of marketing machine that lures in unsuspecting investors. The story is simple – “We have a lot of gold in Nevada, and gold prices are rocketing!”

What could go wrong?

This project isn’t going to be a mine anytime soon. And many investors will follow AMC down that drain of dilution, time sunk, and disappointment. The truth is that Hycroft will collapse again. And when it does, it will send a lot of investors’ money to money heaven.

So, buyers beware of Hycroft. When the metals tailwind slows down, this “turkey” is going to plunge back to earth.