Two new mines in 12 months – Analysts give the thumbs up: Almonty, MP Materials, Rheinmetall

Almonty ahead of Sangdong production start – three times higher grades than competitors

Almonty's share price has climbed by more than 400% in the current year. Nevertheless, analysts still see upside potential based on the current price. Just earlier this week, analysts at Sphene Capital raised their long-term price forecast from CAD 8.40 to CAD 13.50. Almonty shares are currently trading at around CAD 8 - the reasons: the sharp rise in tungsten prices and the newly created capacity at Almonty. The Company is set to begin production at its Sangdong mine in South Korea this year and recently acquired Browns Lake, a tungsten project in the US state of Montana, which it plans to bring into production in 2026. This situation offers great upside potential – many other suppliers of critical metals are still a long way from production or only have one mine. Almonty is expected to have a total of three highly profitable production facilities by the end of 2026.

The massive Sangdong project is central to Almonty's prospects. Immediately after production starts later this year, the mine is to be expanded within two years. The capacity will then be so large that Sangdong alone is expected to account for 40% of the tungsten produced outside China. Sangdong is considered one of the highest-grade tungsten deposits in the world, with an average grade of 0.45% WO₃. That is more than many of its competitors. The new mine is very different from the old facility that made Sangdong a rich mining town until 1992.

Sangdong scores with financing partner KfW and unique offtake agreements

The new Sangdong mine is a modern, fully networked underground project and offers real-time monitoring of geology, air quality, and rock movements. The planned and already financed processing plant is expected to deliver a WO₃ concentrate with a grade of 65%. In Phase 1, which is set to begin in 2025, Almonty will move around 640,000 tons of ore per year in the mine, and in Phase 2, this figure is expected to rise to 1.2 million tons – enough to make Almonty one of the largest non-Chinese tungsten producers. If only Western mines in geopolitically robust locations are taken into account, the project is likely to be unique.

According to Almonty CEO Lewis Black, previous tungsten projects often failed due to volatile world market prices and unfavorable financial structures. For Sangdong, the experienced mining entrepreneur therefore opted for a different model: the combination of loans from the renowned German development bank KfW and off-take agreements, which have a price floor but benefit 100% from rising world market prices, offers the best economic conditions. While competing tungsten projects are still in the development stage, Almonty is expected to bring two mines into production within the next 12 months.

Costs at 50% of Chinese competitors - CEO Lewis Black rings the Nasdaq bell

While competitors, such as the tungsten project in Plymouth, UK, already have weaker geological starting conditions, Almonty outperforms the competition in terms of operational expertise. Already in the 2010s, Almonty led the Portuguese Panasqueira mine to profitability and honed its efficiency under pressure from heavily subsidized Chinese low-cost competitors. Instead of complaining, it opened a tungsten laboratory to learn more about processing this unique element. The result: when the Sangdong mine starts producing tungsten later this year, its costs will be around 50% of those of its Chinese competitors. There, too, it has now been recognized that indiscriminate government support tends to make mining companies sluggish, and subsidies for tungsten mining have been eliminated. However, this does not mean that conditions are equal – as Almonty CEO Lewis Black said in an interview with the Frankfurter Allgemeine Zeitung a few weeks ago, he believes Almonty is ten years ahead of the competition in terms of technology.**

While shares in companies such as rare earth specialist MP Materials, in which the US government acquired a stake in the summer, have recently risen again, Almonty's shares are still trading at around their four-week low. For investors with a long-term perspective who are aware of Almonty's technological superiority, this could be an opportunity. Today, Almonty CEO Lewis Black will ring the bell to open trading on the Nasdaq. The ceremony symbolizes the development the Company has undergone over the past ten years. While investors in stocks such as Rheinmetall are increasingly doubtful about how long the boom will last, Almonty appears to be perfectly positioned. Tungsten is used in numerous applications, from defense to high-tech, and is proven to be in short supply. Only Almonty can deliver in the short term. This starting position is unique for investors.