Almonty's Tungsten Race: $700M Convertible Note and Soaring Prices Test Investor Patience

Almonty's 21% stock plunge masks strong fundamentals: tungsten shortage, US defense mandate, and index inclusion catalysts ahead.

Tungsten prices just jumped 20% in a week, the Pentagon is demanding non-Chinese supply by 2027, and Almonty Industries is sitting on the deposit that could cover 40% of that demand. Yet on Friday the stock cratered 21% to C$22.70. The disconnect between strategic momentum and near-term market sentiment has rarely been wider.

The source of the selloff is a $700 million convertible note offering that closed last week, carrying a 2.25% coupon and maturing in 2031. Institutional investors oversubscribed the deal so heavily that Almonty granted an option for an additional $100 million tranche. The conversion price of roughly $27.40 — about 32.5% above the stock’s close before placement — triggered immediate dilution fears among existing shareholders. To soften the impact, the company is spending $83 million on capped-call transactions. Net proceeds of approximately $675.9 million will go toward working capital, debt repayment, and potential acquisitions.

The operational story, however, points in the opposite direction. Almonty’s Sangdong mine in South Korea is set to begin phase?1 production ramp?up in July, with phase?2 expansion targeting 4,600 tonnes of tungsten concentrate annually by 2027. That timeline aligns with China’s tightening grip on export licenses, which has already sent European ammonium paratungstate prices to between $2,900 and $3,180 per metric ton unit. The U.S. Department of Defense has ordered its defense contractors to source tungsten from outside China by January 2027, creating a captive buyer pool that Sangdong is uniquely positioned to serve.

Analyst consensus remains firmly bullish. Eight analysts rate the stock a buy, none a sell, with an average price target of C$24.29. The technical picture, though, is bruised. Almonty closed below its 50?day moving average of C$26.64, and the RSI of 39.3 signals that the selling has been heavy but hasn’t yet reached oversold territory. Year?to?date the shares still show an 89% gain, underscoring the extreme volatility that has come to define the name.

Two catalysts on the horizon could shift the narrative. On June 9, the annual general meeting will put Sangdong’s expansion plans — including the move to accelerate production and the relocation of corporate headquarters to the U.S. — to a shareholder vote. That same day, the convertible note settlement becomes final. Less than three weeks later, on June 29, Almonty will join the Russell 1000 and Russell 3000 indices, forcing passive funds to accumulate the stock. The confluence of an ACG vote, a fresh capital stack, and index inclusion could provide a floor.

For now, the market is pricing in the uncertainty of a massive dilutive instrument while wolfram markets scream bullish. Almonty’s management is effectively betting that the tungsten supply gap will widen faster than investors can digest the convertible’s overhang. The next few weeks will show whether the company’s strategic gambit — funded by the cheapest institutional debt in the sector — can overcome the short?term skepticism that knocked a fifth of its market value in a single session.