Almonty's Tungsten Play Gains Pentagon Backing as Production Ramp Masks Q1 Earnings Shortfall

A sweeping change in US defence procurement is reshaping the tungsten supply chain, and Almonty Industries finds itself squarely in the crosshairs of that shift. From January 2027, a new DFARS regulation will ban the use of tungsten sourced from China, Russia, Iran and North Korea in American military supply chains. With China currently controlling roughly 80% of global tungsten output and ammonium paratungstate trading at around $3,185 per metric ton unit in Rotterdam, the rule creates an urgent sourcing gap that Almonty aims to fill with its non-Chinese operations.

The company's first-quarter results for 2026 underscore both the opportunity and the near-term costs of capturing that market. Revenue surged 221% to 25.4 million Canadian dollars, beating analyst estimates by about 10%. Yet the bottom line disappointed: Almonty reported a loss per share of C$0.03, while the consensus had forecast a profit of C$0.016. The culprit was heavy start-up spending at the Sangdong mine in South Korea, a project the company describes as a strategic milestone on its path to becoming the largest tungsten producer outside China. On an adjusted EBITDA basis, however, the picture improved handsomely — the metric swung to positive C$6.1 million from a loss in the year-ago period.

Sangdong is the centrepiece of Almonty's growth story, and the mine's first-phase commissioning began in early 2026. The company is also running the Panasqueira mine in Portugal, which already delivers tungsten concentrate to international buyers. In a further sign of its alignment with North American defence clients, Almonty has relocated its corporate headquarters to Dillon, Montana — a move that positions it closer to US military contractors and the evolving logistics of the supply chain.

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

The stock market has reacted with a split personality. On the Toronto Stock Exchange, shares fell 4.4% on Friday to C$27.34, apparently disappointed by the earnings miss. Across the Pacific, the Australian-listed stock closed at A$28.75, gaining 3.3% on the day and 8.45% over the week. The longer-term rally is staggering: the stock has climbed 117% since the start of the year and 563% over the past twelve months. Still, it sits 11.57% below its 52-week high of A$32.51.

Technical indicators flash warning signals. The relative strength index stands at 98.6, deep in overbought territory, while the share price trades 72% above its 200-day moving average of A$16.76. With 30-day annualised volatility hitting nearly 70%, the ride has been anything but smooth. The Russell 1000 and Russell 3000 index inclusions, confirmed last quarter, have already forced systematic buying by index funds and institutional investors, providing a structural demand tailwind.

Analyst opinions diverge sharply on valuation. One camp sees further upside, with a "Strong Buy" rating and a price target of C$32.45. Another warns that the rally has overshot, setting a target of C$22.46 and citing stretched multiples. The appointment of Jorge Beristain as chief financial officer in May adds a new layer of financial stewardship as the company navigates its capital-intensive ramp-up.

All eyes now turn to the second-quarter report due in August 2026. The critical question is whether Sangdong's production can convert revenue growth into sustainable margins. Until then, Almonty's narrative rests on the intersection of policy-driven demand, operational execution and a stock that has already priced in much of the promise.

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