Almonty’s $700M Convertible Note Sparks 18% Selloff as Tungsten Producer Races to Capitalize on Strategic Mine Ramp-Up

Tungsten miner Almonty Industries sees shares drop 18.43% after $700M convertible note deal, but stock remains up 95% YTD amid surging tungsten prices and Sangdong mine ramp-up.

The market delivered a harsh verdict on Almonty Industries’ latest financing move. Shares of the tungsten miner tumbled 18.43% on Friday to close at C$23.45, after the company unveiled a US$700 million convertible note offering. The selloff added to a 14.23% weekly decline, though the stock still holds a 94.93% gain year-to-date and a 391.61% twelve-month return, underscoring the extreme volatility that has come to define the name.

The over-subscribed private placement consists of 2.25% senior convertible notes due 2031, priced at a conversion price of roughly US$27.40 per share — a 32.5% premium to the last closing price of US$20.68 before the announcement. Initial purchasers also have an option to buy an additional US$100 million in notes. Closing is scheduled for June 9, coinciding with the company’s annual general meeting.

Net proceeds are expected to reach approximately US$675.9 million, or US$772.7 million if the overallotment is fully exercised. Almonty plans to allocate about US$83 million to capped-call transactions designed to limit dilution upon conversion, with a cap price set at US$41.36 per share. Another US$50 million will go toward debt refinancing, leaving roughly US$543 million for working capital and general corporate purposes, including potential acquisitions.

While the convertible structure creates an equity overhang, management framed the move as a strategic necessity. The flagship Sangdong mine in South Korea resumed production in March 2026 after a 30-year hiatus, and is currently ramping toward an annual processing capacity of 640,000 tonnes of ore. The timing aligns with a dramatic rally in tungsten prices, which have surged more than 500% since Beijing imposed export license requirements on strategic minerals in February 2025 and expanded the list in early 2026.

Almonty’s first-quarter results reflected the tailwinds: revenue jumped 221% to US$25.4 million, driven by higher tungsten prices, while adjusted EBITDA turned positive at US$6.1 million. The company is positioning Sangdong to supply over 80% of the world’s tungsten production outside China once at full capacity, giving it a critical role in the supply chain for the strategic metal used in defense, cutting tools, and electronics.

Institutional interest is also expected to grow. Almonty will join the Russell 1000 and Russell 3000 indexes on June 29, a move that could trigger net buying demand of roughly 13 million shares — about three times average daily volume — given the US$12.2 trillion in assets benchmarked to these indices. That catalyst, however, sits just weeks after the dilution shock from the convertible note.

Analysts have remained constructive despite the selloff. Oppenheimer, DA Davidson, and B. Riley Securities have set price targets ranging from US$23 to US$25, focusing on the company’s strengthened balance sheet and long-term production trajectory rather than near-term equity overhang.

The stock’s behavior over the past year illustrates the high-risk nature of the trade. From a 52-week low of C$4.67, shares surged to a high of C$33.35 in April before losing about 31% from that peak. Annualized 30-day volatility stands near 99%, reflecting a name that has swung from near-penny status to a multi-billion dollar market cap. For investors, the question is whether the Russell index inclusion and operational momentum can eventually outweigh the dilution fears triggered by the largest convertible placement in the junior mining space.