Almonty Industries Faces a Critical Test as Russell Index Inclusion Collides with a 14% Weekly Slide
27.06.2026 - 12:11:55 | boerse-global.de
Almonty Industries finds itself in an unusual position as it enters the Russell 1000 and 3000 indices on Monday. The stock has just endured a seven-day losing streak that wiped almost 14% off its value, yet the fundamental picture has rarely looked stronger. Revenue tripled in the first quarter, operating cash flow turned positive, and the company raised $800 million through a convertible bond to accelerate development of its flagship Sangdong tungsten mine in South Korea. The market, however, is fixated on the dilution overhang from that very bond and seems to be pricing in execution risk with an annualised volatility of 90%.
The stock closed Friday at CAD 23.00, a 31% retreat from its April peak of CAD 33.35. It now sits roughly 14% below its 50-day moving average of CAD 26.78, a gap that defines the immediate technical challenge. If passive fund buying triggered by the index rebalancing can push shares back toward the CAD 25.00 level — near the 100-day average — it would signal stabilisation. Failure would bring the 200-day moving average of CAD 18.04 into view, still some 27% below the current price. The relative strength index of 40.9 is edging toward oversold territory, though historically that alone has not guaranteed a reversal for this stock.
The Convertible Conundrum
The 800-million-US-dollar convertible notes, placed on June 4 and upsized from an initial 700 million, carry a 2.25% coupon and mature in 2031. Proceeds are earmarked primarily for Sangdong, where Phase 1 is already processing around 640,000 tonnes of ore annually to produce roughly 2,300 tonnes of tungsten concentrate. Phase 2, slated for 2027, will double capacity to 1.2 million tonnes, positioning Almonty to supply about 40% of the tungsten demand outside China. That is a compelling long-term story, but the convertible represents a substantial equity overhang. Institutions that bought the paper may eventually convert, and every rally attracts sellers looking to lock in profits before dilution takes hold.
Should investors sell immediately? Or is it worth buying Almonty?
The company’s financials, meanwhile, argue against such pessimism. First-quarter revenue surged to CAD 25.4 million, a 221% year-over-year jump driven by higher tungsten prices and strong output from the Panasqueira mine in Portugal. Operating cash flow flipped to positive CAD 9.7 million from a negative CAD 4.4 million a year earlier. Adjusted EBITDA came in at CAD 6.1 million, and the net loss of CAD 5.3 million stemmed almost entirely from non-cash revaluations of derivatives and warrants. Almonty held CAD 259.9 million in cash at the end of March, a war chest that, when combined with the new bond, provides ample runway for the Sangdong ramp-up.
Structural Demand from Defence and Energy
The investment case rests on more than just a mining turnaround. The US Department of Energy has offered a conditional loan commitment of $17.5 billion for Westinghouse AP1000 nuclear reactors, which rely on high-performance components made from tungsten and molybdenum — both core materials in Almonty’s portfolio. Separately, from January 2027, US defence procurement rules will ban Chinese tungsten from American supply chains. Almonty has already moved its corporate headquarters to Dillon, Montana, and acquired the Gentung tungsten project there, with production readiness targeted for the second half of 2026. The company is also drilling a molybdenum deposit adjacent to Sangdong, where 37% of the planned 26 holes have been completed, with assay results confirming historical grades.
These structural tailwinds help explain why the stock is still up over 91% year to date despite the recent selloff, and why investors who bought twelve months ago are sitting on gains of nearly 300%. The short-term problem is that the market is weighing the dilution risk more heavily than the visibility provided by the Russell inclusion. Approximately $12.2 trillion in assets are benchmarked to those indices, and index funds are obligated to buy Almonty shares. The key indicator for Monday will be trading volume: a surge in turnover alongside a rising price would confirm that passive demand is absorbing the sell orders. If volume remains low despite the index reconstitution, the catalyst for a sustained recovery is missing.
Two Roads from Here
The most immediate test is whether Almonty can reclaim the CAD 25.00 area, roughly in line with the 100-day moving average. Success would provide a credible stabilisation signal. A slide toward CAD 20.00 — the low end of the range implied by the recent breakdown — would indicate that the dilution overhang continues to dominate sentiment. For now, the long-term uptrend remains technically intact, with the stock trading about 27% above its 200-day moving average, but that buffer will narrow sharply if the index-buying impulse fails to turn the tide. Monday will be a liquidity test that will tell investors whether forced buying is strong enough to stop a slide that has erased nearly a third of the stock’s value in two months.
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