Almonty's Convertible Bond Overhang Weighs on Shares Despite Sangdong Production Milestone
Veröffentlicht: 07.07.2026 um 20:21 Uhr, Redaktion boerse-global.de
Almonty Industries swung its Sangdong processing plant into action on July 1, marking the company's transition from mineral developer to tungsten producer. Yet the stock has failed to catch a bid, with the overhang from a massive convertible bond placement overshadowing the operational milestone.
Shares closed at C$21.85 in Tuesday trading, down 5.04 percent on the day and 6.86 percent lower over the past seven sessions. The retreat has pulled the 14-day relative strength index to 38.8, edging toward oversold territory. From the April high of C$33.35, the stock now sits roughly 34.5 percent below that peak.
The immediate source of selling pressure is structural rather than operational. Almonty placed $800 million in convertible notes in June, with investors fully exercising a $100 million greenshoe option. The notes carry a 2.25 percent coupon, mature in 2031 and carry an initial conversion price of $27.40 per share — well above the current trading level. Net proceeds of roughly $772.7 million will go toward balance sheet strengthening, working capital and debt refinancing.
That conversion price, combined with the sheer size of the deal, creates a perceived overhang that has weighed on near-term sentiment. Even the company's inclusion in the Russell 1000 and Russell 3000 indices on June 29 — an event typically expected to trigger passive inflows — failed to arrest the slide.
Should investors sell immediately? Or is it worth buying Almonty?
The operational news itself was solid. Almonty began feeding stockpiled ore through the Sangdong mill in South Korea's Gangwon province on July 1. The company had accumulated approximately 139,700 tonnes of ore grading about 0.25 percent tungsten trioxide by the end of the second quarter. That stockpile carries an estimated gross value of $68 million at current market prices and provides around 2.6 months of feed for the first phase of production. Management plans to eventually transition from stockpiled material to higher-grade ore from the active underground mine as the ramp-up advances.
Longer-term fundamentals remain intact. From January 1, 2027, the U.S. Department of Defense will be barred from sourcing tungsten from China, Russia, North Korea or Iran. That regulatory deadline positions Sangdong — one of the few significant non-Chinese tungsten sources — as a strategic asset in the supply chain for defense electronics and semiconductor manufacturing.
Almonty is also advancing a molybdenum drilling program adjacent to the Sangdong property and evaluating its Gentung project in Montana. A planned Phase 2 expansion aims to double Sangdong's output by 2027, which could give the company up to 40 percent of the non-Chinese tungsten market.
Almonty at a turning point? This analysis reveals what investors need to know now.
Despite the recent correction, the stock has delivered enormous gains over the longer timeframe. Almonty is up 81.63 percent year-to-date and 193.29 percent over the past 12 months — a reflection of its role as a pure-play tungsten supplier outside China's dominant grip.
The next catalyst will be hard numbers. Investors now need to see the ramp-up at Sangdong translate into real revenue and cash flow. Until then, the convertible bond overhang is likely to keep a lid on the share price, even as the underlying business makes its most significant operational leap in history.
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