Almonty's Double Game: Forced Index Buying Meets a High-Stakes Production Ramp

The timing could hardly be more awkward for Almonty Industries. Its shares closed Friday at C$23.26, down roughly 13% on the week and 17% on the month. Yet in just three trading days, some of the world's largest institutional funds will have no choice but to load up on this exact stock. On Monday, June 29, Almonty joins the Russell 1000 and Russell 3000 indices, triggering automatic buying by passive funds and ETFs that track trillions of dollars in assets. The irony is hard to miss: forced buyers are arriving at a 30% discount from the 52-week high.

The reason for that discount is a genuine execution puzzle playing out in South Korea. Almonty is running two strategic mineral programs simultaneously on the same site. Its Sangdong mine, revived after over 30 years of idleness, is already producing about 2,300 tonnes of tungsten concentrate annually in Phase 1. A second expansion phase aims to double that capacity by 2027. At the same time, the company is drilling for molybdenum — a 26-hole, 12,000-metre campaign that is roughly 37% complete. Initial results confirm historical grades, but a final resource report is still pending. Both projects compete for capital and management bandwidth, and investors are pricing in the risk that the tungsten ramp could be slowed by molybdenum distractions.

The macro tailwinds behind both metals are hard to overstate. China controls about 80% of global tungsten supply and tightened export controls in February 2025, citing national security. The Asia-Pacific price for high-purity tungsten has surged 273% in a year to over $183 per kilogram. Starting in January 2027, the US defense industry will be banned from purchasing tungsten from China, Russia, Iran, or North Korea. Molybdenum was recently added to Washington's list of critical minerals. Almonty's Sangdong project, once fully operational, could supply more than 80% of the world's non-Chinese tungsten output — a prospect that gives western governments a powerful incentive to support it.

Financially, the company has bought itself some breathing room. A C$700 million convertible bond placement, maturing in 2031 and carrying a 2.25% coupon, has lowered near-term funding risk. Revenue in the first quarter of 2026 jumped 221% year-over-year to C$25.4 million, and operating cash flow turned solidly positive at C$9.7 million. The headline net loss of roughly C$132 million against annual revenue of C$50 million is largely the result of mark-to-market accounting on derivatives and the convertible — a technical effect tied to the stock's earlier surge.

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

That earlier surge is still visible on a 12-month chart: Almonty shares remain up roughly 300%, even after the recent pullback. But the annualized volatility of nearly 91% tells a different story. The stock sits 30% below its April high and has sliced through its 50-day moving average. The 200-day line at C$18.04 now represents a crucial floor. A sustained break below that level would signal a fundamental reassessment.

The molybdenum drill program, meanwhile, carries its own set of risks. With only 37% of the boreholes completed, the actual resource could disappoint. And the convertible bond structure, while cheap, poses a dilution threat if the share price stays below the conversion threshold — something that matters more given that Phase 2 of the tungsten mine won't start until 2027, leaving ample time for delays.

Analysts at Canaccord Genuity project global tungsten demand could reach 210,000 tonnes by 2035, while non-Chinese supply remains constrained by aging mines, declining ore grades, and a lack of western refining capacity. Almonty's broader strategy calls for building a fully integrated, western supply chain that meets at least 40% of the world's demand outside China. To that end, the company acquired the Gentung Browns Lake project in the US late last year, with production expected to begin in the second half of 2026.

Almonty at a turning point? This analysis reveals what investors need to know now.

The index inclusion on Monday solves none of these operational tensions. What it does is force the largest passive investors on Wall Street to carry exactly the same risk. The arrival of billions in automatic buying creates a mechanical tailwind, but the stock's trajectory will ultimately be determined by the drill bit and the mine ramp. The next major catalyst — a complete molybdenum resource update — is not expected until late 2026. Until then, investors are left watching whether Almonty can manage the strategic balancing act of advancing two critical minerals at once without derailing the core tungsten story.

Ad

Almonty Stock: New Analysis - 27 June

Fresh Almonty information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Almonty analysis...

en | CA0203981034 | ALMONTYS | boerse | 69637143 |