Almonty Industries: The Cash Flows Are Coming

Almonty Industries: Production Launch as the Second Phase of Growth

"Where can this go from here?" investors often ask when stocks like Nvidia, SanDisk, or Almonty Industries show spectacular performance. But this question was also asked when Nvidia first reached the trillion-dollar mark in market capitalization. The chipmaker is now worth around USD 4.75 trillion. And just as with the expansion of AI infrastructure, Almonty Industries is now moving to the next level.

The Canadian company, headquartered in the US and listed on the Nasdaq, currently has a market capitalization of around USD 5 billion. The operational growth is just beginning. On March 17, production officially began at the Sangdong Mine in South Korea's Gangwon Province. It is the company's absolute flagship project. Sangdong was once a historic mine with high tungsten grades and is now considered one of the largest and highest-grade tungsten deposits on Earth. The ore grade is about three times higher than the global average. High grades are the decisive factor in the mining industry for producing at low costs and thus generating high profits. The executive board, led by CEO Lewis Black and the new CFO Jorge Beristain, expects production costs of USD 126.80 per metric ton unit (MTU).

Tungsten Prices Keep Climbing

However, the price of tungsten has recently risen sharply. Just before the turn of the year, it was below USD 1,000 per MTU. Prices in Rotterdam are now around USD 3,000 per MTU. This results in the massive margins seen at top AI companies. The reason for this dynamic development is quite simple. In response to the US-launched trade war, China has restricted exports of key specialty metals, including tungsten, antimony, and silver. Beijing needs large quantities itself and does not want to simply give away these raw materials—which are so important to the military industry—especially in light of the war in the Persian Gulf. This means that exports to Western companies that use tungsten as a dual-use component—i.e. for civilian or military purposes—have almost come to a standstill. China's global market share in mining is estimated at around 80%. When its partners Russia and North Korea are added, the controlling majority rises to about 95%.

Analysts Expect a Sharp Jump in Profits

Almonty Industries will thus be able to dominate the market for Western tungsten buyers in the coming years. With this quasi-monopoly, revenues should also reach new heights. In the first quarter—still without Sangdong—the company had already made a strong first impression. Revenue rose by 221% to CAD 25.4 million. The main driver was Portugal, where the company operates the significantly smaller Panasqueira tungsten mine. Cash flow is looking promising; the company reported its first operating profit in Q1 at CAD 9.7 million. Bank of America (BofA) expects Sangdong to drive steep growth in revenue and profits going forward. BofA projects 2026 revenue of CAD 670 million, up from just CAD 33 million the previous year. Next year, revenue is expected to surge to CAD 1.32 billion. Profit margins are expected to grow even more dynamically. Here, analysts anticipate an EBITDA of CAD 597 million for 2026 and a near-doubling to CAD 1.21 billion next year. This corresponds exactly to the profitability margins currently seen only by the top AI companies.

Many Drivers for the Share

As a result, the quarterly figures are likely to become a key driver for the share this year and next. In addition, the advantages and properties of tungsten should now also come into sharper focus for investors. The rearmament of the US missile arsenal following the disastrous Gulf War alone will drive demand massively. For instance, Tomahawk bunker-busting missiles alone require up to 100 kg of tungsten alloy. Furthermore, the metal is also used by the kilogram in Patriot defence systems or SM-3 interceptor missiles.

But SpaceX is also likely to be among future customers. This is because tungsten offers unique properties. For instance, when rockets re-enter Earth's atmosphere, temperatures can reach well over 2,000 °C and up to 3,000 °C. At 3,422 °C, tungsten has the highest melting point of any pure metal. At the same time, heat shields face another challenge. While extreme heat prevails on the outside, the inside must remain cool. Otherwise, thermal stresses can cause cracks in many materials. Tungsten has the lowest coefficient of thermal expansion of all pure metals and can solve this problem.

Almonty Industries has established a key position in the mining world with the Sangdong tungsten mine. As the only Western supplier, the company benefits from demand from both the military and the aerospace sectors. Based on analysts' estimates, the stock has a P/E ratio of just 14. The stock has thus already factored this growth into its valuation. This means there is still plenty of room for upside despite the rally of recent years.