Tungsten Producer Closes on Oversubscribed US$800M Offering, Including Full Exercise of Over-Allotment Option

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Global tungsten concentrate producer Almonty Industries Inc. (AII:TSX; ALM:NASDAQ; AII:ASX; ALI1:Frankfurt) has settled its oversubscribed US$800 million offering of 2.25% convertible senior notes due 2031, according to a June 5 release.

Worldwide, tungsten demand is surging, driven primarily by an intensifying defense sector, military stockpile replenishment, and strict export controls from China.

Almonty's flagship Sangdong Mine in South Korea, historically one of the world's largest and highest-grade tungsten deposits, is expected to be a major contributor to the global non-China tungsten supply chain upon reaching full capacity, according to the company. It also has established operations in Portugal and additional projects in the U.S. and Spain.

The company's offering is targeted at qualified institutional buyers. The sale of these notes closed on June 9, pending the satisfaction of customary closing conditions.

In addition, Almonty has provided the initial purchasers with an option to buy up to an additional US$100,000,000 in notes within a 13-day period starting from the issuance date, which has been fully exercised as of the closing on June 9. These notes, which are senior unsecured obligations of Almonty, will accrue interest at an annual rate of 2.25%, with semi-annual payments due on January 1 and July 1 each year, starting from January 1, 2027. The notes are set to mature on July 1, 2031, unless they are repurchased, redeemed, or converted earlier.

Almonty said it anticipates the net proceeds from its offering of convertible senior notes to be approximately US$675.9 million, or up to US$772.7 million if the initial purchasers exercise their option to acquire additional notes. These figures are calculated after accounting for the initial purchasers' discounts and commissions as well as Almonty's estimated offering expenses.

The company plans to allocate about US$83 million of these proceeds to fund the cost of entering into capped call transactions. Additionally, approximately US$50 million will be used to refinance existing debt and liabilities, with the remaining US$543 million earmarked for working capital and general corporate purposes, which may include acquisitions of assets or businesses.

The offering and sale of the notes and any common shares issuable upon their conversion have not been registered under the Securities Act of 1933 or other securities laws. Therefore, they can only be offered or sold through transactions exempt from or not subject to these laws' registration requirements.

The completion of the offering is contingent upon receiving all necessary regulatory approvals, including acceptance by the TSX.

Sangdong Set to Be Key Supplier

In May, Almonty released its financial results for the first quarter ending March 31, as per a release on May 11. A significant event for the company during this period was the formal commissioning ceremony of its Sangdong tungsten mine in Gangwon Province, South Korea, held on March 17. The event celebrated the completion of the mine's development phase and its transition to commercial operations. The mine is recognized as one of the largest and highest-grade tungsten deposits globally, and is set to become a key supplier for Western industrial and defense supply chains.

For the first quarter of 2026, Almonty reported a remarkable 221% increase in revenue, amounting to CA$25.4 million. This substantial growth in revenue was primarily driven by a significant rise in the spot price of tungsten APT, coupled with continued strong performance at the company's Panasqueira Mine. Additionally, there was a notable improvement in cash flow, with the company generating a positive operating cash flow of CA$9.7 million, a significant recovery from the negative cash flow of CA$4.4 million recorded in the first quarter of 2025.

"The first quarter of 2026 represents a pivotal moment for Almonty," Chairman, President, and Chief Executive Officer Lewis Black said at the time. "The results speak for themselves — revenue increased 221% to CA$25.4 million, we generated positive Adjusted EBITDA of CA$6.1 million and positive operating cash flow of CA$9.7 million, marking a decisive inflection point in the Company's financial trajectory."

He further highlighted the strategic developments, including the formal commissioning of the Sangdong mine and the relocation of the corporate headquarters to Dillon, Montana. This move aims to align more closely with U.S. defense and industrial stakeholders and brings the company nearer to its Gentung Tungsten Project and essential government, defense, and industrial partners.

Black expressed optimism about the company's positioning, noting, "With the formal commissioning ceremony at Sangdong held in March 2026, the relocation of our corporate headquarters to Dillon, Montana, and tungsten prices continuing to reflect the critical nature of this metal to Western defense and industrial supply chains, we believe Almonty has never been better positioned."

He emphasized that as they ramp up Sangdong toward full commercial throughput and advance the Gentung Tungsten Project toward production, they are laying the groundwork for what is expected to be a long-lasting, high-margin operating platform that addresses critical mineral vulnerabilities in the West.

A Threefold Increase in Revenue

The first quarter of 2026 has marked a significant transformation for Almonty Industries, shifting from its earlier perception as a highly speculative tungsten explorer and project developer to a strategically positioned commodities company with a robust capital base and improved access to institutional capital markets, according to an updated research note by Sphene Capital Analyst Peter Thilo Hasler on May 15.

This transition is underscored by a notable increase in operational scale and profitability, said the analyst, who rated the stock Buy with a CA$37.40 per share target price, a 48% upside from the price at the time of writing.

In Q1/2026, Almonty reported a more than threefold increase in revenue, rising to CA$25.4 million from CA$7.9 million in the same period the previous year. This surge in revenue was not due to the commencement of production at the Sangdong mine but rather stemmed from enhanced operational stability at the Panasqueira mine in Portugal, which continues to be the group's main production asset, Hasler wrote.

This stability has contributed to increasing operational leverage, allowing the company to manage a slower growth in production costs compared to revenue. Specifically, production costs rose to CA$11.8 million from CA$6.6 million, significantly boosting operating profitability with income from mining operations escalating to CA$13 million from CA$0.8 million in Q1/2025.

Despite these operational gains, Almonty still recorded a net loss of CA$5.3 million in Q1/2026, an improvement from CA$34.6 million in Q1/2025, Hasler said. This loss was significantly influenced by IFRS-related non-cash fair value losses, including CA$2.0 million from the valuation of warrant liabilities and CA$6.4 million from losses on embedded derivative liabilities. These losses are ironically linked to the sharp rise in the company's share price.

Almonty's financial position remains strong, with cash and cash equivalents totaling CA$259.9 million at the end of Q1/2026. This robust cash position is largely due to the company's successful Nasdaq listing and associated US placements, positioning Almonty among the best-capitalized smaller resource companies in the Western sector and enhancing its visibility on international capital markets.

Given the sustainable increase in tungsten prices, the revised valuation of Almonty now includes the net present value of both current and future producing assets, such as the Sangdong mine (tungsten and molybdenum), Panasqueira, Gentung, and Los Santos mines, along with a discounted valuation of the development-stage Valtreixal project, Hasler said.

Analyst: Sangdong Is a Pivotal Catalyst for Co.

In a recent analysis, Alliance Global Partners Analyst Jake Sekelsky reviewed Almonty's financial performance for the first quarter of 2026, noting that the results were largely in line with expectations, driven primarily by the rising prices of tungsten. During this period, ALM's operations were concentrated at the smaller Panasqueira Mine in Portugal, as the Sangdong tungsten mine in Korea is still in the process of reaching full operational capacity. Consequently, the outcomes of this quarter are seen as less reflective of ALM's broader strategic ambitions, which aim for a significant expansion of tungsten production in both Korea and the United States.

The financial figures for the first quarter showed an operating cash flow of CA$9.7 million and revenue of CA$25.4 million, marking a substantial 221% increase from the first quarter of 2025.

This increase was primarily attributed to the soaring prices of ammonium paratungstate (APT), reaching new all-time highs, he said. This revenue boost is particularly timely as it coincides with the Sangdong mine's advancement towards full capacity. It is expected that once fully operational, the Sangdong mine will greatly enhance ALM's production and revenue, potentially pushing consolidated quarterly revenue beyond CA$100 million by the end of 2026.

Looking forward, Sekelsky views the Sangdong mine as a pivotal catalyst for ALM's stock in the latter half of 2026, poised to significantly transform the company's tungsten production capabilities. Following Sangdong, the Gentung tungsten project in Montana is expected to commence development in the latter half of 2026, with plans to start production and, after full development, reach a production of up to 140,000 MTUs of WO₃. While this figure is considerably lower than Sangdong's projected 230,000 MTUs per annum on Phase 1 and 460,000 MTUs in Phase 2, establishing tungsten production in the United States is strategically significant.

This initiative aligns with U.S. policies aimed at reshoring critical mineral supply chains and reducing reliance on foreign sources for these essential resources.

In response to these developments and the ongoing positive trajectory of tungsten prices, Sekelsky has updated ALM's financial model to more accurately reflect current spot prices, maintaining a Buy rating and increasing the target price from US$19.25 to US$26.25 per share. Similarly, Cantor Fitzgerald Analyst Matthew O'Keefe, in his May 12 update, attributed the revenue surge primarily to higher tungsten APT pricing and ongoing operations at the Panasqueira mine. He noted that ALM's strong balance sheet provides considerable flexibility to complete the ramp-up at Sangdong and advance further tungsten development initiatives, maintaining a Buy rating with a price target of US$25.80 per share.

Additionally, Excelsior Prosperity highlighted on May 12 that ALM is considered a bellwether in the tungsten sector and one of the few producers of this critical and defense-related metal, noting the company's significant stock price increase from US$0.92 in January 2025 to an all-time high of US$24.41 in April 2026.

Crucial Metal Under Pressure Globally

Recent restrictions on tungsten exports by China have led to a dramatic increase in the global prices of tungsten-based materials, impacting manufacturers that use the metal in their products, reported Brian Ford for Industrial Info Resources on June 1. Tungsten, known for its hardness and high resistance to heat, is crucial in the production of a range of products from military applications like armor-piercing shells to civilian uses such as semiconductors and oil and gas equipment.

The Oregon Group, an investment research firm, reported in April that the price of Rotterdam APT had escalated to record heights. The price reached US$3,185 per metric ton unit, marking a 350% increase year-to-date and an astonishing 900% rise over the past 12 months.

According to data from Industrial Info Resources, there are currently 70 active capital projects related to tungsten ore mining across the globe, representing a total investment of US$6.9 billion. Asia leads these developments with 37 projects valued at US$2.88 billion, followed by Oceania with 11 projects at US$1.73 billion, and North America with 10 projects totaling US$1.28 billion. Detailed reports on these projects are available to subscribers of the Industrial Info Resources Global Market Intelligence (GMI) Metals & Minerals Project Database.

On a country basis, Australia tops the list with 10 projects worth US$1.73 billion, China follows with 18 projects valued at US$1.6 billion, and Kazakhstan with 14 projects totaling US$1 billion. The United States, despite having seven projects valued at US$522 million, currently operates no commercial tungsten mines.

China, which produced nearly 80% of the global tungsten output of 85,000 metric tons last year, has imposed strict export controls since last year, as reported by news sources citing the U.S. Geological Survey. This policy shift has significantly contributed to the sharp increase in tungsten prices worldwide.

Tungsten is used in aerospace and defense ‌equipment because its extreme heat resistance and hardness allow components to withstand intense temperatures, stress, and wear, noted a piece by Ashitha Shivaprasad and Anmol Choubey for Reuters on April 29.

"The United States currently ‌has ⁠no active commercial tungsten mines, and while a few projects are under development to curb dependence on Chinese supply, there is no established timeline for production to resume," the authors noted.

Ownership and Share Structure¹

About 8% of the company is owned by insiders and management, about 11% by corporations, and about 36% by institutions. The rest is retail.

Top shareholders include Global Tungsten & Powders Corp. with 9.75%, President and Chief Executive Officer Lewis Black with 5.36%, Van Eck Associates Corp. with 3.02%, Deutsche Rohstoff AG with 2.9%, and Fidelity Management and Research Co. with 6.55%.

Almonty's market cap is CA$8.16 billion with 283.74 million shares outstanding. It trades in a 52-week range of CA$4.36 and CA$33.35.