Tungsten Producer Almonty Turns the Mill at Sangdong, but Convertible Overhang Keeps Shares on a Leash

Almonty Industries has crossed a threshold that investors have waited years to see: its Sangdong mine in South Korea is now processing ore into saleable tungsten concentrate. The milestone, achieved on July 1, transitioned the company from developer to producer at a moment when tungsten prices are surging. Yet the stock’s path tells a more complicated story, swinging between analyst optimism and the chill of dilution fears.

The Sangdong ramp-up uses a stockpile of roughly 139,700 tonnes of ore, with the mill now feeding concentrate into a market where China controls about 80% of global supply and Western buyers are scrambling for alternatives. European ammonium paratungstate prices have more than tripled this year alone. CEO Lewis Black called the moment “the culmination of years of hard work,” noting the shift from construction to actual processing. The next quarterly report, expected in mid-August, will show whether those higher prices translate into visible revenue.

While the operational news is unambiguous, the share price has been anything but. In the days surrounding the mill start, the stock carved out a new intraday low of US$14.30 before rebounding. On the Friday after DA Davidson published an upbeat note, the Canadian-listed shares shot up 9.71% to close at C$22.82. That still left them 31.57% below the 52-week high of C$33.35 hit in April. The gap between the US listing and the Canadian listing partly reflects currency, but the volatility is real: the 30-day annualized volatility stands at nearly 95%.

Should investors sell immediately? Or is it worth buying Almonty?

The main force pulling the shares in the opposite direction is a massive convertible note offering. In June, Almonty placed C$800 million in convertible bonds due 2031, carrying a 2.25% coupon. Underwriters fully exercised their overallotment option, and the initial conversion price was set at roughly C$27.40 per share. Investor anxiety over dilution, combined with technical churn from the company’s inclusion in the Russell 1000 and Russell 3000 indexes on June 29, has weighed on sentiment. Market observers see the convertible overhang as a far bigger driver of the recent slide than anything happening underground at Sangdong.

Against that backdrop, the analyst community remains divided but broadly constructive. DA Davidson raised its price target to C$33 after the study, reiterating a buy on the back of Sangdong progress, potential US government support, and what it called a solid balance sheet. B. Riley Financial lifted its target from C$17 to C$23 in March, and Oppenheimer followed suit from C$22 to C$25 in June. Texas Capital upgraded the stock to “Strong Buy” in April. On the bearish side, Weiss Ratings maintains a sell recommendation. MarketBeat polls show an average target of C$21.88 and a consensus rating of “Moderate Buy.”

The rally from the intraday low has not erased the damage done over the past two months. Year-to-date, the stock is still up 89.69%, and the 12-month gain stands at 193.32%. The weekly change was negative by 1.38%, but the monthly picture showed a 7.19% advance. All the same, DA Davidson’s report carried a cautionary tone: Almonty continues to burn cash and generates only thin profits, leaving it reliant on further financing. Any delay in the sangdong ramp-up could compound dilution and pile on debt.

The August earnings release will offer the first hard data on concentrate deliveries, cash flow, and the balance-sheet impact of the convertible. Until then, the stock is likely to ricochet between two stories — an operational turnaround that is finally real, and a capital structure that has yet to prove it can support the share count without punishing holders.

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