Hycroft Mining shares fell sharply in June as gold and silver prices dropped by double-digit percentages, driven by growing expectations that the Federal Reserve will raise interest rates this year. The company, which owns a single 64,000-acre mine in Nevada, has generated no revenue since halting active mining in early 2023 and estimates it would need about $2.4 billion in capital expenditures to begin extraction from the site's sulfide deposits. Higher rates make interest-bearing assets more attractive relative to non-yielding precious metals, and the latest consumer price index reading showed inflation remains elevated, reinforcing rate-hike speculation. While markets may overshoot, the prospect of rising rates continues to weigh on mining stocks, particularly a non-diversified, pre-revenue company like Hycroft.
Hycroft Mining Holding CorporationHigher rates make gold less attractive, pressuring Hycroft's stock as a pre-revenue miner needing $2.4B capex.