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Original-Research: Almonty Industries Inc. - from GBC AG

08.09.2025 / 08:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQ

Group.

The issuer is solely responsible for the content of this research. The

result of this research does not constitute investment advice or an

invitation to conclude certain stock exchange transactions.

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Classification of GBC AG to Almonty Industries Inc.

Company Name: Almonty Industries Inc.

ISIN: CA0203987072

Reason for the research: Research Note

Recommendation: Buy

Target price: 9.00 CAD

Target price on sight of: 31.12.2026

Last rating change:

Analyst: Matthias Greiffenberger, Cosmin Filker

Strategic Positioning Strengthens as Sangdong Nears Commissioning

Almonty Industries Inc. delivered first half 2025 results that highlight

both the transitional state of its operating portfolio and the considerable

strategic progress achieved in the period. For the six months ended June 30,

2025, revenue totaled C$15.10 million, down modestly from C$15.76 million in

the prior-year period, while the net loss widened sharply to C$92.83 million

compared with C$5.58 million in the first half of 2024. The increase in

losses was driven primarily by non-cash revaluation charges related to

warrants and embedded derivatives, along with higher share-based

compensation and increased corporate expenses linked to the company'

redomiciling and U.S. listing preparations.

Although headline results were weak, the company advanced its strategic

positioning significantly during the first half. Key developments included

the execution of a long-term molybdenum offtake agreement with SeAH in

January, confirmation in April that U.S. tariffs on certain critical

minerals would not apply to tungsten, participation in the U.S. Critical

Minerals Forum in April, the signing of a strategic defense-focused tungsten

oxide offtake in May, and recognition from the U.S. House Select Committee

in June for its contribution to securing American supply chains. These

operational and strategic milestones culminated in the successful U.S.

Nasdaq listing and US$90 million public offering in July, which

substantially strengthened Almonty's balance sheet.

Tungsten Market Context

The tungsten market continues to experience supply-driven tightness, with

China's export restrictions accelerating price appreciation. Benchmark

ammonium paratungstate prices exceeded US$500 per metric ton unit in

mid-August 2025, up sharply from US$350 in March 2025. Demand remains robust

across defense, aerospace, energy, and industrial tooling sectors, while

U.S. Department of Defense restrictions on adversary-sourced tungsten

beginning in 2027 will structurally elevate demand for non-Chinese supply.

Almonty's planned expansions at Sangdong and Panasqueira point to a

step-change in output over the next few years, positioning the company as a

leading non-Chinese tungsten supplier. With long-term offtake agreement

that include price floors, Almonty appears comparatively de-risked versu

peers.

Furthermore, the recently released USGS Open File Report 2025 characterize

the tungsten market as strategic and cost sensitive, with demand

concentrated in cemented carbides and supply heavily concentrated in China

under export controls, resulting in an estimated probability weighted U.S.

GDP impact of about $544 million. Substitution is limited and pricing is set

by APT and powder benchmarks that pass through quickly to carbide tool

costs, implying near term input cost pressure for metalworking OEMs and

operating leverage for Western miners, recyclers, and converters positioned

to benefit from supply chain diversification.

HY1 2025 Financial Results Review

For the six months ended June 30, 2025, Almonty reported revenue of C$15.10

million, compared with C$15.76 million in the first half of 2024. The modest

decline reflects temporary production constraints at Panasqueira a

resources were allocated to preparation for the Level 4 expansion, offset by

continued demand for the mine's high-grade concentrate. Production cost

rose to C$14.17 million from C$12.83 million in the prior-year period, with

mining ore and processing costs both higher year-over-year. This resulted in

a near breakeven performance from mining operations, with a loss of C$0.19

million compared to a profit of C$1.81 million in the first half of 2024.

Operating expenses increased significantly, with general and administrative

expenses totaling C$7.49 million compared with C$3.01 million a year

earlier, and share-based compensation of C$7.62 million compared with C$0.94

million in the prior year. These increases were linked to corporate

expansion, preparation for the Nasdaq IPO, and equity-linked compensation

expenses.

The most material impact on reported results came from non-cash items. A

C$63.89 million loss (PY: C$+0,41) was recorded on the revaluation of

warrant liabilities, alongside a C$9.85 million loss (PY: C$0,00) on the

valuation of embedded derivative liabilities. These IFRS-mandated

adjustments, while substantial, are accounting-based and do not reflect

operating cash flows. Net loss for the half-year was C$92.83 million,

compared with C$5.58 million in HY1 2024.

Operating cash outflow for the half-year was C$17.62 million, compared with

C$5.42 million last year, reflecting higher corporate expenses and working

capital requirements. Investing activities consumed C$14.87 million (PY:

C$5.42 million), largely directed toward continued development at Sangdong.

Financing activities provided C$49.46 million (PY: C$7.14 million), driven

by warrant exercises and equity issuances, leaving the company with cash of

C$24.68 million at June 30, 2025, compared with C$7.64 million at year-end

2024.

Financial Position

At the end of HY1 2025, Almonty held C$24.68 million in cash, strengthened

further by the US$90 million Nasdaq raise in July. Long-term debt totaled

C$192.7 million, primarily tied to Sangdong financing. Shareholders' equity

declined to C$10.5 million due to accumulated losses and non-cash

revaluations, but the subsequent equity raise meaningfully improves solvency

metrics. Liquidity is our opinion sufficient to complete Sangdong

commissioning and advance downstream initiatives.

Valuation Assumption

Given the recent strength in tungsten markets, we now assume a long-term

tungsten price of USD 520/mtu (previously USD 430/mtu). In addition, we have

rolled forward our valuation horizon by one year, with our target date

moving from December 31, 2025 to December 31, 2026. Reflecting both the

higher commodity price assumption and the rollover effect, we are revising

our target price for Almonty Industries to CAD 9.00 per share (from CAD 8.25

previously).

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=9c7daff7e34332ad3615936b007e3e87

Contact for questions:

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Interessenkonflikte finden Sie unter:

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Completion: 05.09.2025 (10:30)

First distribution: 08.09.2025 (08:00)

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2193736 08.09.2025 CET/CEST

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