After a 200% surge, is a takeover now on the cards? Almonty Industries ignites the next stage!

INVESTMENT HIGHLIGHTS

• Strategic metals in the focus of Western industries
• Strong position in molybdenum alongside tungsten
• Mine launch still planned for 2025
• Close ties to the US
• Relocation of headquarters to the US and new partnerships
• Highly liquid stock with a stable shareholder base
• Defense sector positioning is closer than the commodities sector
• Analytically favorable with high-value appreciation potential

Tungsten and Molybdenum: A strong position for critical metals

Critical metals are an essential component of a wide range of high-tech and defense technologies. The industry can no longer avoid securing the supply of these elements. The unresolved conflicts in Ukraine and the Middle East, as well as the rapprochement between Russia and China, highlight the international complexity. Western industrialized countries are forced to look for alternatives. There is a bottleneck when it comes to tungsten when larger quantities are needed because the rare metal is comparatively rare in the earth's crust. So far, China accounts for 70% of global production of this heat-resistant hardening metal. The Canadian company Almonty Industries (EUR 1.30; WKN: A1JSSD; ISIN: CA0203981034; TSX: AII) already operates several tungsten deposits in Europe and is now focusing on the development and revitalization of the South Korean Sangdong mine. The complex will begin production in just a few months, and investors are eagerly anticipating the mine's launch.

Partnerships: The US has understood the situation

Important partners have already been brought on board in Europe with Deutsche Rohstoff AG, the KfW Group, and Plansee from Austria. Most recently, the Company set its sights on the US. With the recently announced collaboration with American Defense International (ADI), the largest defense lobbyist, and the appointment of General Gustave F. Perna to the board of directors, Almonty is making it clear that it is thinking in bigger categories and intends to play a major role in the internationally important defense market. CEO Lewis Black sees ADI and Perna as strategic partners to master the complex access to the US defense apparatus – and describes this as a necessary response to global supply shortages and China's export restrictions. All in all, the latest development points to a potential stock market listing in the US.

In high demand from all sides - Takeover speculation on top

Tungsten, molybdenum and rare earth elements are among the most critical materials. According to the US Geological Survey, 84,000 tons of tungsten were produced worldwide in 2022. Around 85% of production comes from China. Even then, the US had a share of 10,700 tons, which represented an increase of 17% over 2021. The extent to which the global scarcity situation can impact the valuation of companies is demonstrated by the example of MP Materials Coro from the US. With the Californian Mountain Pass project, the Company holds the largest rare earth deposit in the Western world. Revenues are estimated to have reached around USD 192 million in 2024, up from just USD 73 million in 2019. Analysts on the LSEG platform expect revenues to increase to around USD 750 million by 2027. MP Materials is currently valued at just under USD 4.2 billion, or around 12 times as much as Almonty Industries - a clear indication that the US stock exchange is pricing in the urgency of supply chain security much more strongly. By relocating to the US, Almonty is set to gain significant strategic advantages.

Analytically favorable – Sphene Capital expects CAD 5.20

Analyst Peter Thilo Hasler of Sphene Capital had recently raised his "Buy" recommendation twice to CAD 5.20. With 280.67 million shares, the fair value in 24 months would be set at around CAD 1.46 billion. This is based not only on the tungsten resources but also on an estimated 5,600 tons of molybdenum that can be mined at full capacity. The recently negotiated offtake agreement with the Korean SeAH Group significantly impacts the valuation parameters. The mine is expected to have a mine life of 60 years and start operations in 2025. The agreement includes a fixed minimum price of USD 19 per pound of molybdenum, which is below the current market price of USD 29.40 per pound. According to the Company, however, the minimum price provides a stable basis for financial planning and further access to low-interest domestic bank loans.

Management buys in - Correction used to enter

The Almonty share price is currently highly volatile, fluctuating between CAD 2.10 and 2.40. In Germany, daily trading volume often exceeds that of its home exchange in Canada. On Friday, an insider purchase by CEO Lewis Black attracted attention. With 50,000 shares at a price of CAD 2.17, the highly committed executive, who already has a direct and indirect interest of 25%, is taking advantage of the current correction to further increase his holdings. With the start of production imminent, Almonty's stock could, in our view, multiply.

Lyndsay Malchuk from Stockhouse interviewed CEO Lewis Black – and what he had to say could fundamentally change the way many investors view the Company. The supply shock in many metal groups has become a nightmare for producers of high-tech and defense goods. Orders are increasing dramatically within NATO and other alliances, and now deliveries must be ensured in the long run. This makes Almonty an important part of the Western defense strategy. Click here for the interview.

The near future is set to be exciting for Almonty Industries. With the relocation of the Company headquarters to the US, the final financing steps are becoming easier. Part of the South Korean production has already been sold through established offtake agreements. Investors should keep a revaluation in focus. Comparatively well-positioned producers of critical metals are being valued in the billions on the stock market.