Investment Highlights
- Almonty Industries Inc. (TSX: AII, ASX: AII, OTC: ALMTF, FRA: ALI) (“Almonty” or the “Company”) is a multi-asset owner that develops and operates tungsten projects. Its assets include development projects and a producing mine. The share price has increased more than ten times since we initiated analyst coverage.
- U.S. Congress recognition: The U.S. Congress recognition highlights Almonty’s strategic importance, underscoring its position as a key supplier of critical minerals. This move is materially significant, particularly in the context of growing tension with China over earth supplies. The U.S. Committee expressed approval of Almonty’s intention to domicile in the U.S., which would position it as the only U.S.-based producer of tungsten.
- Updated NI 43-101 report on Sangdong: The updated NI43-101 report indicates that the Sangdong mine is on track for commencement of production by H2 2025. The mine will become operational in two phases. During Phase 1, the targeted ore throughput capacity is expected to be 640,000 tons per year, which will then expand to 1.2 million tons per year in Phase 2. Production under Phase 2 could commence in 2027. The updated report suggests an after-tax NPV @5% of US$343.7 million.
- Listing on Nasdaq: The Company filed a registration statement with the U.S. SEC as it seeks to list on the Nasdaq, aiming to boost its funding base and expand its strategic presence in North America. Almonty is already listed on the TSX and ASX. Almonty will use the proceeds to fund the development of its planned tungsten oxide processing facility, as well as for working capital and other general purposes.
- Based on our analysis, we update our fair value estimate to $7.69 per share and downgrade our rating to HOLD.
The Company has made considerable progress in advancing its tungsten and molybdenum mines towards production. Some of the key updates include:
- Updated NI 43-101 report on Sangdong: The updated NI43-101 report indicates that the Sangdong mine is on track for commencement of production by H2 2025. The mine will become operational in two phases. During Phase 1, the targeted ore throughput capacity is expected to be 640,000 tons per year, which will then expand to 1.2 million tons per year in Phase 2. The production under Phase 2 could commence in 2027. The updated report suggests an after-tax NPV @5% of US$343.7 million. The transition to a fully permitted near-term operating mine with phase-ready growth significantly de-risks the project.
- Listing on Nasdaq: The Company filed a registration statement with the U.S. SEC as it seeks to list on the Nasdaq, aiming to boost its funding base and expand its strategic presence in North America. Almonty is already listed on the TSX and ASX. Almonty will use the proceeds to fund the development of its planned tungsten oxide processing facility, as well as for working capital and other general purposes. Almonty’s shares will trade under the ticker symbol “ALM” on the Nasdaq. The price of the offering is yet to be determined.
- U.S. Congressional recognition: The U.S. Congress recognition highlights Almonty’s strategic importance, underscoring its position as a key supplier of critical minerals. This move is materially significant, particularly in the context of growing tension with China over our earth supplies. The U.S. Committee expressed approval of Almonty’s intention to domicile in the U.S., which would position it as the only U.S.-based producer of tungsten. We believe that being based in the United States will enhance Almonty’s position as a reliable alternative supplier aligned with U.S. national interests.
In Sangdong, we see Almonty potentially ascending to the status of the largest producer of tungsten concentrate outside of the majority producer, China. Almonty has achieved all major milestones for the Sangdong Tungsten mine, including financing and equipment installation. The mine is on track to commence production from H2 2025. Should it successfully execute, bringing this project to the production milestone, Almonty looks poised to evolve into a tungsten major, which coincides with several growth tailwinds facing the broader tungsten market.
