Silver, Rare Earths & Tungsten: How Aya Gold & Silver, Almonty Industries & Lynas Rare Earths Are Benefiting

Aya Gold & Silver: Growth and Higher Prices

The silver market has been facing a supply deficit for years. Aya Gold & Silver is one of the companies that is actually a pure-play silver miner. In fact, 70% of global supply comes as a byproduct of gold, copper, and zinc mines. However, the Canadian company produced 1.49 million ounces of silver equivalent at its Moroccan mine in the first quarter, a 49% year-over-year increase. The high profit of CAD 49 million (+600%) was the result of effective cost management. Cash costs amounted to just CAD 18.40 per ounce AgEq, while silver was sold at an average of USD 82.22 per ounce. The company's future growth will come primarily from the Boumadine project, which is currently under development. This year alone, a massive drilling program covering 240,000 m will be carried out there. Aya Gold & Silver plans to begin production in 2028/29.

Silver is indispensable in modern missiles. According to estimates, a single Tomahawk cruise missile alone contains between 15 and 20 kg of pure silver. That corresponds to 480 to 640 ounces. The exact figures, of course, are subject to the military's strictest secrecy. According to industry experts, Patriot interceptor missiles (PAC-2/PAC-3) contain 5-10 kg of silver per missile. Important for the silver market: the raw materials from a fired missile cannot be recycled.

The US and companies within the military-industrial complex will therefore have to take action. And this should continue to drive up silver prices in the medium and long term. As a primary producer of the precious metal, Aya Gold & Silver is one of the biggest beneficiaries. The Q1 figures alone showed the direction profits are heading when silver can be sold for over USD 80 per ounce. The stock has already reaped a small "peace dividend" and is once again on its way to its annual high. With a market capitalization of more than CAD 4.2 billion, Aya Gold & Silver ranks among the major players in the silver sector.

Almonty Industries: A Lifesaver

Due to its extreme density and high melting point, tungsten is an absolutely critical raw material for the military and irreplaceable in space travel for re-entering Earth's atmosphere. Defence contractors typically use the material in the form of tungsten-heavy-metal alloys or as powder/pellets in warheads. It helps penetrate bunkers or armour and optimizes the fragmentation effect. Depending on the estimate, a warhead contains anywhere from several kilograms to double-digit kilograms of tungsten.

The tungsten market has been dominated by China in recent years and decades. The US Geological Survey (USGS) estimates Beijing's global market share at approximately 80% of production. If China's partner countries—Russia and North Korea—are included, this share rises to nearly 95%.

These are therefore tough times for the United States when it comes to procuring critical raw materials like tungsten for its own arsenal. But a saviour is already at the ready: Almonty Industries. The Canadian company, headquartered in the US and listed on the Nasdaq, resumed operations in March at the historic Sangdong tungsten mine in South Korea's Gangwon Province. It is the company's flagship mine, and analysts estimate that Sangdong is one of the largest and highest-grade tungsten deposits on Earth. The ore grade is roughly three times higher than the global average. High grades are also responsible for the low costs. Almonty expects production costs to be around USD 110-127 per metric ton unit (MTU). On the other hand, global market prices for tungsten have skyrocketed in recent years. After China began to control and limit exports more strictly, prices have risen from under USD 1,000 before the turn of the year to around USD 3,000 per MTU in Rotterdam.

Thanks to the start of production at Sangdong, Almonty Industries' revenue is expected to increase significantly this year. Analysts at Bank of America project revenue of CAD 670 million for 2026. In the previous year, revenue was only CAD 33 million. For 2027, the investment bank estimates revenue of over CAD 1.32 billion, with EBITDA expected to roughly double to CAD 1.21 billion, driven by low production costs.

As a result, Almonty Industries' stock should benefit from growing revenue and profits over the next two years. The share is currently trading just over a quarter below its annual high and has already been trending upward in recent weeks. In the medium- to long-term, Almonty is likely to dominate tungsten supply to Western buyers.

Lynas Rare Earths: The Heavyweight in Rare Earths

Lynas Rare Earths is the counterpart to Almonty Industries in the rare earths sector. The Australian company is the longest-established producer in the West. And as with tungsten, Beijing also dominates this market. According to the USGS, China holds a global market share of approximately 60% to 70% in the production of these metals. For rare earths that are particularly valuable to the military, such as dysprosium and terbium, that figure is as high as nearly 90%. At the processing level, the People's Republic is even more dominant, with its share rising to 85% to 90%—and for some rare earths, as high as 99%.

The Tomahawk is often referred to as a "flying computer" that requires a significant amount of rare earth elements and other critical raw materials. According to estimates by raw materials analysts such as Critical Minerals Hub, the missile's guidance system, electronics, and propulsion system contain up to 18 different so-called critical metals. The cumulative weight of the rare earth elements is estimated at several kilograms. Of particular importance are neodymium, praseodymium, dysprosium, and terbium, due to their magnetic properties, which they retain even under extreme temperatures and vibrations during flight.

In addition to military technology, rare earths are found in virtually all high-tech product categories—from smartphones to automobiles. As an established Western supplier, Lynas Rare Earths is well-positioned here. The company controls the Mt. Weld deposit in Western Australia, with processing taking place in Malaysia. Figures from the start of the year demonstrated just how high demand is. Lynas more than doubled its revenue to AUD 265 million. Sales prices for rare earths were, in some cases, a quarter higher than in the previous quarter. With a cash position of around AUD 1.1 billion, the company has the financial firepower to expand. Lynas's stock has more than quadrupled since the beginning of 2024, but curiously, it began to decline with the outbreak of hostilities in the Gulf. The share is currently trading about 20% below its all-time high. With a market capitalization of around AUD 19 billion, the company is a heavyweight in its home market.

Silver, tungsten, and rare earths. The war in the Gulf is expected to significantly increase demand across key strategic metals. With Aya Gold & Silver, investors are betting on a pure-play silver miner that is currently on an upward trajectory in the stock market. Almonty Industries dominates the tungsten market outside of China. The Canadian company, which is headquartered in the US, is generating high profit margins and is expected to maintain its market leadership for the foreseeable future. Lynas Rare Earths, in turn, is Australia's answer to Beijing's dominance in rare earths.