Original-Research: Almonty Industries Inc. (by GBC AG): Buy
| Original-Research: Almonty Industries Inc. – from GBC AG
02.03.2026 / 08:00 CET/CEST Classification of GBC AG to Almonty Industries Inc.
RIDING THE TUNGSTEN PRICE SURGE The tungsten market tightened dramatically through late 2025 and accelerated further into early 2026, driving an unprecedented rally in APT prices. China’s implementation of export licenses, stricter production quotas, and effective export restrictions on tungsten containing products sharply constrained global supply. China accounts for approximately 82.7 percent of global primary tungsten production, and export volumes of APT declined materially following the February 2025 regulatory changes. At the same time, environmental inspections, declining average ore grades, and stockpiling behavior among intermediaries further reduced available spot material. On the demand side, structural growth from defense, aerospace, semiconductors, renewable energy applications, and advanced manufacturing intensified the supply imbalance. The price response has been historic. In October 2025, APT averaged approximately USD 648 per MTU with spot highs around USD 685. By mid November 2025, quotations reached roughly USD 689 per MTU. Prices continued to climb through December and January, surpassing USD 1,000 per MTU for the first time in mid January 2026. By the end of January 2026, reference prices reached approximately USD 1,249 per MTU, representing a year over year increase of more than 270 percent. Market data through February 2026 shows continued acceleration, with weekly averages rising to USD 1,375 in early February, USD 1,737.50 by mid February, and approximately USD 1,775 per MTU by February 20, with spot highs quoted as high as USD 1,900 per MTU. This represents a structural repricing of tungsten. APT has risen from roughly USD 300 at the beginning of 2025 to well above USD 1,200 and approaching USD 1,800 per MTU in early 2026. The combination of structural supply constraints, US import restrictions on Chinese tungsten for defense procurement beginning in 2027, and strategic stockpiling initiatives has fundamentally altered the pricing paradigm and reset long term expectations. For Almonty, this price environment significantly enhances near term realized pricing at Panasqueira and materially improves projected cash flows at Sangdong and Gentung. The move from an average of approximately USD 485 per MTU in August 2025 to levels approaching USD 1,800 per MTU in February 2026 implies a transformational shift in revenue and margin leverage as production scales. The operating leverage embedded in the company’s asset base is now substantially higher than previously modeled under more conservative price assumptions. Revenue and Earnings development Q3 2025 Almonty’s third quarter 2025 results reflected early operating leverage to strengthening tungsten prices. Revenue increased to C$8.7 million from C$6.8 million in Q3 2024, driven primarily by higher realized APT prices, while Panasqueira volumes remained broadly stable. Income from mining operations improved to C$1.25 million compared to C$0.66 million in the prior year period despite lower mined grades. Operating costs rose year over year reflecting expanded corporate infrastructure following the Nasdaq listing, increased investor relations activities, and scaling initiatives, partially offset by favorable foreign exchange effects. Reported net income of C$33.2 million in Q3 2025 was primarily driven by a C$34.5 million non cash warrant revaluation gain, compared to a net loss of C$5.3 million in Q3 2024. Excluding this item, underlying profitability remained negative as Sangdong had not yet contributed revenue and corporate pre production costs remained elevated. However, the operating inflection point has now clearly arrived with active mining operations at Sangdong beginning in December 2025, marking the transition from development stage to revenue generation at the flagship asset. Sangdong Ramp Up and Phase Expansion A major operational milestone was achieved in December 2025 with the commencement of active mining operations at the Sangdong Tungsten Mine in South Korea, marked by the first ore delivered to the run of mine pad. This transition from construction to production represents the culmination of years of capital investment and significantly de-risks the asset from both a financing and execution perspective. Commercial mining has commenced and the project has moved decisively into the ramp up phase. Phase 1 establishes the foundation for large scale operations, while a subsequent Phase 2 expansion is designed to materially increase overall throughput and position Sangdong among the most significant tungsten operations outside China. The deposit supports a long mine life, providing multi decade production visibility and a durable cash flow base once steady state operations are achieved. Production growth is expected to accelerate as commissioning progresses, operating parameters are optimized, and recoveries stabilize at targeted levels. Management has indicated that full ramp up to nameplate production should start shortly, marking the transition from initial production to sustained commercial scale output. As Sangdong advances toward full capacity, consolidated production is set to increase substantially relative to historical levels, transforming the company’s overall production profile and cost structure. Further optimization initiatives and expansion phases remain part of the medium term strategy, subject to operational performance and market conditions. Importantly, Sangdong’s ramp up coincides with an exceptionally strong tungsten price environment and long term binding offtake agreements, including commitments to supply tungsten oxide for US defense applications. These agreements enhance revenue visibility and provide strategic validation, materially reducing commercialization risk during the early years of operation. In parallel, development work has advanced at the Sangdong Molybdenum Project, representing a strategic by product opportunity that will further diversify the revenue mix and strengthen the overall economic profile of the asset.
Balance Sheet Strength and Capital Markets Access Financially, Almonty materially strengthened its capital structure in 2025 and early 2026. The July 2025 Nasdaq listing and initial public offering raised approximately US$90 million in gross proceeds, increasing visibility among US institutional investors and improving liquidity. In December 2025, the company completed a second upsized US$129.4 million offering including full exercise of the over allotment option. This additional capital significantly enhances liquidity during the Sangdong ramp up phase and supports development of the Gentung project in Montana. The enhanced equity base provides flexibility to pursue expansion without near term refinancing risk. The company is now sufficiently capitalized to advance exploration, development, and ramp up activities while maintaining a prudent balance sheet. Gentung and North American Expansion The acquisition of 100% ownership of the Gentung tungsten project in Montana extends Almonty’s geographic footprint into the United States and directly aligns with US critical mineral reshoring policies. Gentung is among the most advanced undeveloped tungsten assets in the United States and benefits from historic underground workings and surface infrastructure that may facilitate accelerated development timelines. Commercial mining is targeted for late 2026 subject to permitting and engineering milestones, with peak production of approximately 140,000 MTUs output per annum at an average WO3 grade around 0.32 percent. The project provides geographic diversification and strategic optionality as the United States implements restrictions on Chinese sourced tungsten for defense procurement beginning in 2027 and expands critical mineral stockpiling initiatives. Should Gentung achieve targeted production, Almonty would become a multi mine producer across South Korea, Portugal, and the United States, materially enhancing supply security credentials and valuation multiples. Panasqueira Expansion and European Operations In Portugal, Almonty has advanced a substantial drilling program at Panasqueira targeting deeper Level 4 zones with potential for higher grade ore and mine life extension. Panasqueira is one of the world’s longest continuously operating tungsten mines and has consistently delivered low impurity, high grade concentrate to defense and industrial customers. The deeper zone development has the potential to extend mine life beyond currently indicated levels and improve production rates once brought online. Given the current price environment, incremental grade improvements or modest volume expansions at Panasqueira generate disproportionately strong free cash flow leverage. Continued exploration success would support sustained European production even as Sangdong becomes the dominant contributor to consolidated output. Valuation Re Rating and Market Perception The structural repricing of tungsten has materially altered the valuation framework for Almonty. The company’s earnings profile exhibits significant sensitivity to APT pricing, and the sustained move to historically elevated levels meaningfully increases projected free cash flow across all producing and development assets. Given the operating leverage embedded in Sangdong and the stable contribution from Panasqueira, higher long term pricing assumptions translate directly into expanded enterprise value under a discounted cash flow methodology. In our updated valuation model, we apply a long term APT price assumption of USD 1,500 per MTU. This price deck reflects our view that the tungsten market has undergone a structural shift driven by export restrictions, defense related demand growth, supply chain reshoring initiatives, and constrained new project development outside China. While spot prices have recently traded above this level, we view USD 1,500 per MTU as a robust but disciplined base case for long term modeling purposes. Based on our updated model, we derive a target price of CAD 28.60 per share, equivalent to EUR 17.71 per share. This represents a substantial re rating relative to prior assumptions and reflects the expanded earnings power of the company in a structurally tighter tungsten market. At this valuation level, implied forward multiples remain justified by the company’s projected production growth, long mine life profile, and strategic importance as a Western aligned supplier of a critical material. Accordingly, we initiate a Buy recommendation at our revised target price of CAD 28.60. You can download the research here: 20260302_Almonty_Note Contact for questions: |
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