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

10.06.2025 / 08:30 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: CA0203981034

Reason for the research: Research Comment

Recommendation: Buy

Target price: 5.50 CAD

Target price on sight of: 31.12.2025

Last rating change:

Analyst: Matthias Greiffenberger, Cosmin Filker

Almonty Readies Sangdong Mine Amid Rising Tungsten Price

Almonty Industries has reported first quarter 2025 financial results in line

with expectations and reaffirmed its position as one of the most

strategically important critical mineral suppliers in the Western

Hemisphere. The company continues to deliver on its operational roadmap,

capital deployment, and geopolitical positioning at a time when global

interest in reliable non-Chinese tungsten supply is intensifying. Following

a significant rally in tungsten prices since February and the continued

de-risking of its Sangdong Mine in South Korea, we have updated our

forecasts and valuation model. As a result, we are increasing our target

price to CAD 5.50 (EUR 3.52) from the prior CAD 4.20 (EUR 2.69) and maintain

our BUY recommendation.

Almonty reported CAD 7.91 million in revenue for the three months ended

March 31, 2025, representing a slight year-over-year increase compared to

CAD 7.82 million in Q1 2024. The consistent performance is underpinned by

stable output and pricing at the company's Panasqueira Mine in Portugal.

Income from mining operations rose by 24 percent to CAD 0.75 million due to

higher realized tungsten prices and improved operating efficiencies.

Adjusted EBITDA for the quarter was CAD -3.5 million (q1 2024: CAD -1.3

million), reflecting increased corporate expenditures as the company ramp

toward production at Sangdong. Operating expenses were higher primarily due

to non-cash share-based compensation, the costs associated with redomiciling

from Canada to the United States, and an embedded derivative revaluation.

Most significantly, the reported net loss of CAD

-34.6 million was largely driven by a CAD 25.8 million non-cash loss from

the revaluation of warrant liabilities, a technical IFRS adjustment caused

by a sharp rise in the company's share price. This accounting treatment ha

no impact on the company's liquidity or cash flow.

The most significant operational milestone in the first quarter was the

substantial progress made toward completing the Sangdong Mine. Construction

is nearing finalization, the processing plant is in the final stages of

installation, and the final drawdown of the US$75.1 million KfW IPEX-Bank

project financing facility has been completed. Commissioning is expected to

begin shortly, with first ore processing anticipated in the second half of

2025. With its high average grade, large resource base, and nearly completed

vertically integrated infrastructure including a planned tungsten oxide

processing plant, Sangdong is positioned to become a key strategic asset in

the global tungsten supply chain. The company's low-cost structure giving it

resilience against pricing volatility and making it an ideal long-term

supplier to price-sensitive industrial and defense buyers.

Strategically, Almonty continues to strengthen its geopolitical alignment

with Western governments. During the quarter, it secured a landmark offtake

agreement with a major U.S. defense contractor for the exclusive supply of

tungsten oxide to be used in American defense systems. This agreement

confirms Almonty's role as a critical upstream partner in the U.S. defense

supply chain. Further reinforcing this position, the company was invited to

join the U.S. Defense Advanced Research Projects Agency (DARPA)-funded

Critical Minerals Forum. This inclusion grants Almonty access to artificial

intelligence-driven forecasting models that evaluate critical mineral

demand, pricing, and geopolitical risk tools that will enhance its ability

to structure long-term commercial agreements and guide capital allocation.

Furthermore, Almonty Industries announced the execution of a binding offtake

agreement with U.S.-based defense contractor Tungsten Parts Wyoming (TPW)

and Israeli tungsten processor Metal Tech (MT), marking a key milestone in

its strategic alignment with national security objectives. Under the term

of the agreement, TPW will purchase a minimum of 40 metric tons of tungsten

oxide per month, with all material designated exclusively for U.S. defense

applications such as missile, drone, and ordnance systems. MT will proce

the tungsten oxide into metal powder either in Israel or the United State

for use solely in TPW's defense production programs. Deliveries will begin

upon Almonty's commencement of commercially saleable tungsten oxide

production and will be priced with a hard floor consistent with existing

agreements, subject to grade-specific adjustments and no cap on the upside.

The contract spans an initial three-year term from first delivery, with

automatic annual renewals thereafter. This agreement not only secure

predictable revenue and long-term demand but also reinforces Almonty's role

as a key upstream supplier in the U.S. defense supply chain, highlighting

its commitment to shareholder value and alignment with national security

priorities.

On the corporate governance front, the company appointed Alan Estevez,

former U.S. Under Secretary of Commerce for Industry and Security, to it

Board of Directors. Mr. Estevez brings decades of experience in defense

logistics, export controls, and critical mineral policy, and his presence i

expected to deepen Almonty's ties to U.S. strategic initiatives. In

parallel, the company received shareholder approval for its redomiciliation

to the United States, a move designed to align corporate structure with it

growing U.S. business interests. Management has signaled that thi

transition will support its goal of uplisting to the NASDAQ in the near

future. A NASDAQ listing would significantly expand Almonty's investor base,

improve liquidity, and enhance its profile among institutional and strategic

investors focused on critical materials and national security themes.

The macro environment for tungsten has also improved meaningfully. Market

prices for ammonium paratungstate (APT) have increased from USD 342.50 per

MTU in late February to USD 430,00 per MTU by early June 2025, a rise of

approximately 25 percent. This uptrend reflects both tightening supply and

heightened demand, particularly from defense and semiconductor application

in Western economies. In response to these market developments, we have

revised our long-term tungsten price assumptions upward from USD 325 to USD

375 per MTU, and have modeled near-term prices in the range of USD 410 to

450. This adjustment significantly enhances the free cash flow generation

profile of Sangdong, particularly in its initial ramp-up years, and

increases our estimated NAV. As a result, our DCF-derived target price

increases to CAD 5.50.

Looking forward, we expect further positive catalysts including the

commissioning and ramp-up of production at Sangdong, progress toward NASDAQ

listing following U.S. redomiciliation, and additional strategic agreement

linked to the company's tungsten oxide and molybdenum output. We also

anticipate further clarity on the company's plans for its vertically

integrated nano tungsten oxide facility, which is targeted for commissioning

between 2027 and 2028 and could add significant downstream value.

Almonty Industries is uniquely positioned as a transparent, conflict-free

Western supplier of tungsten at a time when U.S. and allied governments are

actively reducing dependence on China for critical minerals. With

high-quality assets, government-backed financing, strategic partnerships,

and rising market prices, Almonty offers compelling upside. We reiterate our

BUY rating and raise our target price to CAD 5.50 (EUR 3.52) from the prior

CAD 4.20 (EUR 2.69), reflecting both improved tungsten market fundamental

and enhanced visibility on Sangdong's value realization.

You can download the research here: http://www.more-ir.de/d/32824.pdf

Contact for questions:

GBC AG

Halderstrasse 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Completion: 10.06.2025 (8:00 a.m.)

First distribution: 10.06.2025 (8:30 a.m.)

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