Almonty’s $800M Convertible Deal Sparks Dilution Jitters Despite Surging Sangdong Output and Russell Entry

Almonty raises $800M convertible note; stock drops 21% despite strong operations. Analysts see entry; Russell index inclusion and Sangdong ramp-up ahead.

Almonty Industries has secured the largest capital injection in its history, but the market’s response has been anything but celebratory. The tungsten producer placed $800 million in convertible notes — a transaction that was oversubscribed and triggered a dramatic sell-off. Shares on the Toronto Stock Exchange slumped more than 21% on the initial announcement, closing Wednesday at C$21.29, another 4.23% lower.

The company initially sought $700 million, but strong investor demand triggered the full exercise of a $100 million greenshoe option. The notes carry a 2.25% coupon, mature in 2031, and will yield net proceeds of roughly $773 million after fees. Almonty plans to funnel the bulk of the capital into ramping up its flagship Sangdong mine in South Korea’s Gangwon province, which resumed tungsten production in March after more than three decades of idleness. Around $50 million will refinance existing debt, and $83 million has been allocated to capped-call transactions designed to soften the dilution hit for current shareholders — the cap price sits at just over $41.

Operational momentum tells a different story

While the convertible rattled equity holders, the operational picture continues to brighten. In the first quarter of fiscal 2026, Almonty posted revenue of C$25.4 million, a 221% surge year-on-year, and generated C$9.7 million in operating cash flow. The mine completed Phase 1 commissioning in March and is on track for full commercial production in July, according to management. The full-year 2025 net loss of C$161.9 million remains on the books, but the trajectory is clearly turning.

A handful of analysts see the post-issuance weakness as an entry point. Price targets remain well above the current trading level: Sphene Capital sees C$37.40, Alliance Global Partners has $26.25, Cantor Fitzgerald $25.80, Oppenheimer C$25.00 (Outperform), and B. Riley C$23.00 (Buy). On Thursday morning, a tentative recovery emerged: the stock climbed 4.87% in Frankfurt to €13.74.

Board continuity and a strategic pivot

The capital raise coincided with the annual general meeting, where shareholders overwhelmingly re-elected the seven-member board. Crucially, General Gustave F. Perna and Alan Estevez retained their seats, underscoring Almonty’s push to position itself as a reliable tungsten supplier to the US defence sector, outside China’s dominant supply chain.

The company’s market capitalisation now stands at roughly C$6.05 billion, with around C$260 million in cash. Net proceeds of the convertible add another C$773 million, though the convertible’s share count implications remain a concern. The capped-call structure helps, but conversion could still water down existing holders.

Index entry and a packed July schedule

Almonty’s stock is set for a further catalyst at the end of June, when it joins the Russell 1000 and Russell 3000 indices — a move that typically forces passive fund buying. In Australia, where the company also lists, shares closed at A$22.32, reflecting some relief that the financing was secured without a secondary equity offering.

With the Sangdong mine expected to begin formal operations in July, the coming quarter will be a critical test. Analysts at Bank of America and Cantor Fitzgerald are already updating their models to reflect the new capital structure. Whether the production ramp can outweigh dilution anxiety should become clearer with the second-quarter fiscal 2026 results, expected later this year.