Almonty Industries: Short-Term Shock, Long-Term Opportunity

Almonty Share Posts Significant Losses

Almonty Industries' stock closed Friday's trading at USD 16.31, representing a drop of over 21%. Since the start of the year, however, the outlook has remained clearly positive, with the share gaining around 87%. The chart currently shows broad support zones around the USD 14.15 level. The 200-day EMA currently stands at USD 13.33. Despite the short-term turbulence, the current downturn could prove to be a long-term buying opportunity; after all, everything is going according to plan for CEO Lewis Black and his team.

Convertible Bond as a Party Crasher

The reason for the sell-off was the announcement of a USD 700 million convertible bond. Many investors initially feared future dilution of their shares and reacted by selling. However, a closer look at the details demonstrates that, with this move, Almonty Industries is primarily significantly increasing its financial clout and positioning itself for the next phase of growth.

The capital raise attracted strong interest from institutional investors and was even oversubscribed. Almonty is issuing convertible bonds totalling USD 700 million, maturing in 2031, with a comparatively low coupon of just 2.25% per year. Additionally, there is the option to increase the volume by a further USD 100 million.

The conversion price is approximately USD 27.40 per share, which is about 33% above the closing price of USD 20.68 on June 4, 2026. Any potential dilution would therefore occur only at a significantly higher share price level. At the same time, the company reserves the right to settle conversions in cash, in whole or in part.

For Almonty's future, the use of the funds is likely to be the decisive factor. After deducting all costs, the company expects net proceeds of approximately USD 675.9 million. Should the additional USD 100 million option be fully exercised, net proceeds could rise to approximately USD 772.7 million, making funds available for potential acquisitions. This provides the tungsten producer with significant financial flexibility in a market increasingly shaped by geopolitical tensions and Western nations' desire for independent raw-material supply chains.

So-called capped call transactions offer additional protection for existing shareholders. Almonty is investing approximately USD 83 million in this structure, which is intended to significantly reduce dilution in the event of a subsequent conversion. The cap price is set at USD 41.36 per share, exactly 100% above the reference price as of June 4. In doing so, management has taken active measures to protect shareholders' interests.

Fully on Track Operationally

Operationally, everything is proceeding according to plan at Almonty Industries. With the Sangdong Mine in South Korea, the company owns one of the most significant tungsten projects outside of China. Commercial production began at the end of 2025, and the first expansion phase has been officially underway since March 2026.

The scale of the project underscores its strategic importance. In the first phase of expansion, approximately 640,000 tonnes of ore will be processed annually, producing approximately 230,000 MTU of tungsten concentrate. One metric ton unit (MTU) corresponds to 10 kg of tungsten trioxide (WO₃). Particularly attractive is the ore grade of 0.51% tungsten trioxide, which is significantly above the global average. A higher ore grade means lower production costs and better margins. The second expansion phase is scheduled to follow as early as 2027, doubling capacity to 1.2 million tonnes of ore and 460,000 MTU.

Index Inclusion Holds Promise

Almonty is also receiving a boost from the political arena. Starting in 2027, the US Department of Defence will require that tungsten-containing components come from non-Chinese sources.

Inclusion in the Russell indices could bring additional attention in the coming weeks. Starting June 29, 2026, Almonty will be represented in both the Russell 3000 and the Russell 1000.

Since numerous ETFs and index funds track these benchmarks, market observers anticipate additional demand for shares in the tens of millions.

Analysts are also becoming increasingly optimistic. Cantor Fitzgerald sees a price target of USD 25.80, while Bank of America sets its target at USD 23. DA Davidson expects USD 25.

Strategically, the financing comes at a crucial time. With the Sangdong mine in South Korea, Almonty possesses one of the most significant tungsten projects outside of China. As Western industries and defence companies seek to reduce their dependence on Chinese supply chains, the importance of alternative producers is steadily increasing. The fresh capital enables Almonty to proactively capitalize on this environment and pursue further growth.

The share price decline following the announcement therefore appears to be primarily a short-term reaction to the dilution issue. In the long term, the transaction strengthens the balance sheet, reduces financing risks, creates substantial liquidity reserves, and opens up additional strategic options. For a company seeking to establish itself as a leading Western tungsten supplier, the oversubscribed financing could therefore be an important milestone on the path to the next stage of growth.