Dilution Fears Trump Strategic Promise: Almonty Tumbles 30% After $800M Convertible Note Placement

Almonty's $800M funding for Sangdong tungsten mine oversubscribed, but stock plunges 30% on convertible note dilution concerns. Analysts maintain buy ratings.

The irony is hard to miss. Almonty Industries just locked down $800 million in funding—oversubscribed by $100 million—to accelerate development of the Sangdong tungsten mine, one of the few large-scale tungsten projects outside China. Yet the stock has shed roughly 30% over the past month, a classic case of existing shareholders recoiling at the dilution threat embedded in the convertible notes.

The offering closed on June 9, with the initial buyers exercising their full over-allotment option. After discounts and fees, net proceeds landed at roughly $772.7 million. The notes carry a 2.25% coupon and mature in 2031. Almonty plans to deploy about $543 million for general corporate purposes and potential acquisitions, $83 million into capped-call transactions designed to limit dilution upon conversion, and $50 million to repay existing debt. CEO Lewis Black framed the deal as a balance-sheet strengthening move that boosts financial flexibility.

A 30-Day Slide That Erases Recent Gains

The market’s reaction has been brutal. The stock last closed at C$21.08, down roughly 5% on the day and more than 26% over the trailing month, according to one measure. That puts the shares well below their 50-day moving average of C$26.76 and roughly 37% off the all-time high of C$33.35 set in April. The relative strength index has fallen to 36.2, flirting with oversold territory, while annualized 30-day volatility has surged past 100%—a sign that wild swings in either direction remain possible.

Still, the long-term numbers tell a different story. Over the past twelve months, Almonty has gained roughly 339%, a reminder that the current sell-off comes after a powerful rally fueled by the Sangdong narrative.

Analysts Stand Pat as Production Milestones Loom

Despite the share-price slide, Oppenheimer and B. Riley have kept their buy ratings. Oppenheimer raised its price target to $25.00 per share on June 3, maintaining an outperform call. Both firms point to the strategic value of Sangdong, a deposit that could help break China’s near-monopoly on tungsten supply—a critical metal for defence, aerospace, and electronics manufacturing.

Almonty’s annual general meeting, also held on June 9, confirmed the seven-member board of directors and reappointed Zeifmans LLP as auditor. The company now faces the task of converting its fresh capital into tangible progress at Sangdong, where the start of commercial production would be the clearest catalyst for a turnaround. Until then, the convertible note hangover may continue to weigh on sentiment.