Original-Research: Almonty Industries Inc.

Original-Research: Almonty Industries Inc. - from GBC AG

10.06.2025 / 08:30 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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Classification of GBC AG to Almonty Industries Inc.

     Company Name:                Almonty Industries Inc.
     ISIN:                        CA0203981034

     Reason for the research:     Research Comment
     Recommendation:              Buy
     Target price:                5.50 CAD
     Target price on sight of:    31.12.2025
     Last rating change:
     Analyst:                     Matthias Greiffenberger, Cosmin Filker

Almonty Readies Sangdong Mine Amid Rising Tungsten Prices

Almonty Industries has reported first quarter 2025 financial results in line
with expectations and reaffirmed its position as one of the most
strategically important critical mineral suppliers in the Western
Hemisphere. The company continues to deliver on its operational roadmap,
capital deployment, and geopolitical positioning at a time when global
interest in reliable non-Chinese tungsten supply is intensifying. Following
a significant rally in tungsten prices since February and the continued
de-risking of its Sangdong Mine in South Korea, we have updated our
forecasts and valuation model. As a result, we are increasing our target
price to CAD 5.50 (EUR 3.52) from the prior CAD 4.20 (EUR 2.69) and maintain
our BUY recommendation.

Almonty reported CAD 7.91 million in revenue for the three months ended
March 31, 2025, representing a slight year-over-year increase compared to
CAD 7.82 million in Q1 2024. The consistent performance is underpinned by
stable output and pricing at the company's Panasqueira Mine in Portugal.
Income from mining operations rose by 24 percent to CAD 0.75 million due to
higher realized tungsten prices and improved operating efficiencies.
Adjusted EBITDA for the quarter was CAD -3.5 million (q1 2024: CAD -1.3
million), reflecting increased corporate expenditures as the company ramps
toward production at Sangdong. Operating expenses were higher primarily due
to non-cash share-based compensation, the costs associated with redomiciling
from Canada to the United States, and an embedded derivative revaluation.
Most significantly, the reported net loss of CAD
-34.6 million was largely driven by a CAD 25.8 million non-cash loss from
the revaluation of warrant liabilities, a technical IFRS adjustment caused
by a sharp rise in the company's share price. This accounting treatment has
no impact on the company's liquidity or cash flow.

The most significant operational milestone in the first quarter was the
substantial progress made toward completing the Sangdong Mine. Construction
is nearing finalization, the processing plant is in the final stages of
installation, and the final drawdown of the US$75.1 million KfW IPEX-Bank
project financing facility has been completed. Commissioning is expected to
begin shortly, with first ore processing anticipated in the second half of
2025. With its high average grade, large resource base, and nearly completed
vertically integrated infrastructure including a planned tungsten oxide
processing plant, Sangdong is positioned to become a key strategic asset in
the global tungsten supply chain. The company's low-cost structure giving it
resilience against pricing volatility and making it an ideal long-term
supplier to price-sensitive industrial and defense buyers.

Strategically, Almonty continues to strengthen its geopolitical alignment
with Western governments. During the quarter, it secured a landmark offtake
agreement with a major U.S. defense contractor for the exclusive supply of
tungsten oxide to be used in American defense systems. This agreement
confirms Almonty's role as a critical upstream partner in the U.S. defense
supply chain. Further reinforcing this position, the company was invited to
join the U.S. Defense Advanced Research Projects Agency (DARPA)-funded
Critical Minerals Forum. This inclusion grants Almonty access to artificial
intelligence-driven forecasting models that evaluate critical mineral
demand, pricing, and geopolitical risk tools that will enhance its ability
to structure long-term commercial agreements and guide capital allocation.

Furthermore, Almonty Industries announced the execution of a binding offtake
agreement with U.S.-based defense contractor Tungsten Parts Wyoming (TPW)
and Israeli tungsten processor Metal Tech (MT), marking a key milestone in
its strategic alignment with national security objectives. Under the terms
of the agreement, TPW will purchase a minimum of 40 metric tons of tungsten
oxide per month, with all material designated exclusively for U.S. defense
applications such as missile, drone, and ordnance systems. MT will process
the tungsten oxide into metal powder either in Israel or the United States
for use solely in TPW's defense production programs. Deliveries will begin
upon Almonty's commencement of commercially saleable tungsten oxide
production and will be priced with a hard floor consistent with existing
agreements, subject to grade-specific adjustments and no cap on the upside.
The contract spans an initial three-year term from first delivery, with
automatic annual renewals thereafter. This agreement not only secures
predictable revenue and long-term demand but also reinforces Almonty's role
as a key upstream supplier in the U.S. defense supply chain, highlighting
its commitment to shareholder value and alignment with national security
priorities.

On the corporate governance front, the company appointed Alan Estevez,
former U.S. Under Secretary of Commerce for Industry and Security, to its
Board of Directors. Mr. Estevez brings decades of experience in defense
logistics, export controls, and critical mineral policy, and his presence is
expected to deepen Almonty's ties to U.S. strategic initiatives. In
parallel, the company received shareholder approval for its redomiciliation
to the United States, a move designed to align corporate structure with its
growing U.S. business interests. Management has signaled that this
transition will support its goal of uplisting to the NASDAQ in the near
future. A NASDAQ listing would significantly expand Almonty's investor base,
improve liquidity, and enhance its profile among institutional and strategic
investors focused on critical materials and national security themes.

The macro environment for tungsten has also improved meaningfully. Market
prices for ammonium paratungstate (APT) have increased from USD 342.50 per
MTU in late February to USD 430,00 per MTU by early June 2025, a rise of
approximately 25 percent. This uptrend reflects both tightening supply and
heightened demand, particularly from defense and semiconductor applications
in Western economies. In response to these market developments, we have
revised our long-term tungsten price assumptions upward from USD 325 to USD
375 per MTU, and have modeled near-term prices in the range of USD 410 to
450. This adjustment significantly enhances the free cash flow generation
profile of Sangdong, particularly in its initial ramp-up years, and
increases our estimated NAV. As a result, our DCF-derived target price
increases to CAD 5.50.

Looking forward, we expect further positive catalysts including the
commissioning and ramp-up of production at Sangdong, progress toward NASDAQ
listing following U.S. redomiciliation, and additional strategic agreements
linked to the company's tungsten oxide and molybdenum output. We also
anticipate further clarity on the company's plans for its vertically
integrated nano tungsten oxide facility, which is targeted for commissioning
between 2027 and 2028 and could add significant downstream value.

Almonty Industries is uniquely positioned as a transparent, conflict-free
Western supplier of tungsten at a time when U.S. and allied governments are
actively reducing dependence on China for critical minerals. With
high-quality assets, government-backed financing, strategic partnerships,
and rising market prices, Almonty offers compelling upside. We reiterate our
BUY rating and raise our target price to CAD 5.50 (EUR 3.52) from the prior
CAD 4.20 (EUR 2.69), reflecting both improved tungsten market fundamentals
and enhanced visibility on Sangdong's value realization.



You can download the research here: http://www.more-ir.de/d/32824.pdf

Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Completion: 10.06.2025 (8:00 a.m.)
First distribution: 10.06.2025 (8:30 a.m.)

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2152764 10.06.2025 CET/CEST