Almonty’s Pentagon Tailwind: A $219 Million Bet on Tungsten’s Geopolitical Pivot

Almonty stock soars 685% in a year, yet DCF model shows 60% upside. Geopolitical shifts, a high-grade Korean mine, and U.S. tungsten ban drive the disconnect.

The numbers are staggering. Almonty Industries has seen its stock price rocket roughly 127 percent since January, and a staggering 685 percent over the past twelve months. Yet even after that blistering run, one discounted cash flow model pegs the shares at C$44.11—more than 60 percent above the current C$27.30 level. The gap between market price and intrinsic value, in other words, remains yawning.

What explains the disconnect? The answer lies in a perfect storm of geopolitics, supply shortages, and a mine in South Korea that could reshape the global tungsten market.

Washington’s Deadline Drives Demand

By January 2027, the Pentagon will ban Chinese-origin tungsten from all defense applications. That creates a supply void that Western producers must fill—and fast. Almonty is positioning itself as the primary beneficiary. The company relocated its headquarters from Canada to Dillon, Montana, in April, following the acquisition of the Gentung tungsten project. Production there is expected to start in the second half of this year, with nearly half of the output already reserved for U.S. buyers.

Management has also confirmed that, at the request of multiple governments, Almonty is evaluating additional tungsten projects. The strategic shift is deliberate: a Montana base offers closer ties to U.S. defense agencies and industrial partners.

Sangdong: The Margin Machine

While Gentung addresses near-term U.S. demand, the real prize is Sangdong in South Korea. The mine’s first processing phase kicked off at the end of March. At full capacity, it could supply roughly 40 percent of the world’s tungsten demand outside China. Crucially, the ore grade is three times higher than the global average, insulating margins even if tungsten prices fluctuate.

That matters because tungsten prices have already hit record territory. In early May, the metal surged past $3,200 per metric ton unit, driven by a structural supply deficit. Almonty’s high-grade ore means it can profitably produce when lower-grade competitors cannot.

The Accounting Mirage

For all the operational momentum, Almonty’s 2025 financials show a net loss of nearly C$162 million. The headline looks alarming—until you dig into the details. Management attributes the shortfall almost entirely to non-cash valuation adjustments on derivatives, which are directly tied to the soaring stock price. In other words, the company’s own success created a paper loss.

Revenue tells a different story. Full-year sales hit $32.5 million, with the fourth quarter alone jumping 39 percent. Analysts project annual revenue growth of nearly 38 percent, with profitability expected within three years. The forecast return on equity stands at 62.5 percent—assuming Sangdong and the Portuguese operations scale as planned.

Institutional Money Piles In

The market’s enthusiasm is not just retail-driven. Texas Capital initiated coverage in April with a buy rating and a $25 price target. The number of institutional funds holding Almonty has climbed to 107. Two large U.S. fundraising rounds have left the balance sheet flush with cash.

That cash position will likely dominate the agenda at the annual shareholder meeting in Toronto on June 9, where seven directors are up for election. With the stock trading at 21.7 times book value—versus a Canadian industry average of 3.1—investors are paying a hefty premium for future cash flows from Sangdong.

The Risk That Remains

Almonty’s story is compelling, but it hinges on execution. Sangdong is still ramping up. The company’s valuation rests on the assumption that production scales on time and on budget. The tungsten price tailwind provides cover, but if the mine stumbles, the premium investors are paying today could evaporate quickly.

For now, the pieces are in place: a Pentagon-mandated supply gap, record commodity prices, and a high-grade asset that could dominate Western tungsten markets. The question is whether Almonty can deliver the numbers to match the narrative.