Sangdong's First Concentrate Marks a New Era for Almonty — But the Convertible Note Hangover Persists

Almonty Industries becomes active producer at its Sangdong mine in South Korea, boosting shares 12.4%. DA Davidson raises price target to $33, but a $800M convertible note overhang and $161.9M derivative loss temper gains.

Almonty Industries has officially crossed the line from mine developer to active producer, a milestone that sent its shares up 12.4% to C$23.38 on Friday and prompted DA Davidson to boost its price target to $33 from $25. The move reflects tangible progress at the Sangdong mine in South Korea, where the processing plant has started turning ore into saleable tungsten concentrate.

The ramp-up kicked off on July 1, 2026, backed by a stockpile of roughly 139,700 tonnes of run-of-mine material grading between 0.24% and 0.35% tungsten trioxide. At current metal prices, that inventory carries a gross value of about $68 million and is enough to feed the plant for around 2.6 months during the commissioning phase. Phase 1, completed in March, processes 640,000 tonnes of ore annually to produce 2,300 tonnes of tungsten concentrate. Phase 2, scheduled for 2027, will double throughput to 1.2 million tonnes and push output to roughly 4,600 tonnes, making Almonty the largest tungsten producer outside China.

DA Davidson’s upgrade, following a virtual roadshow with CEO Lewis Black, also factors in higher long-term tungsten price assumptions and a stronger balance sheet. The bank reiterated its "Buy" rating, arguing that Sangdong is no longer a theoretical project but a running operation that is actively feeding ore through the mill.

But the production breakthrough has not dispelled the shadow cast by a massive convertible note placement in June. Almonty raised $800 million through notes due 2031, carrying a 2.25% coupon and a conversion price of $27.40 per share. The offering was upsized from $700 million after full exercise of the over-allotment option, leaving net proceeds of about $772.7 million to fund the ramp-up and Phase 2 expansion. The notes have already left a mark on the income statement: non-cash revaluations of embedded derivatives pushed the company to a net loss of $161.9 million for fiscal 2025, including $87.3 million from derivative valuations alone. Paradoxically, those charges were triggered by the rising share price.

Almonty has set aside $83 million for anti-dilution protection and retains the option to settle conversions in cash rather than shares, which could limit dilution. Even so, the overhang keeps the stock well below its 52-week high of C$33.35 reached in April — roughly 30% off that record.

Operationally, the company has turned a corner. First-quarter revenue jumped 221% to C$25.4 million, adjusted EBITDA swung from negative to positive C$6.1 million, and operating cash flow became positive for the first time at C$9.7 million. As of March 31, Almonty held C$259.9 million in cash and C$169.5 million in working capital, figures that have since been reinforced by the convertible note proceeds.

The broader tungsten market provides a powerful tailwind. Chinese export restrictions imposed in early 2025 drove global prices up by more than 550%. European ammonium paratungstate prices surged from around $1,800 per metric ton unit in mid-February to over $3,100 by late March 2026, and have since traded in a range of $3,040 to $3,250. Almonty has locked in offtake agreements with price floors, including commitments for U.S. defense applications, insulating it from some of the volatility. Molybdenum, a byproduct of Sangdong, is also contributing additional pricing support.

Chartwise, the stock faces immediate resistance at the 50-day moving average of C$25.40, about 8% above the current price. The 200-day moving average sits at C$18.69 as a long-term support. The relative strength index at 48.0 points to neutral territory. Inclusion in the Russell 1000 and Russell 3000 indices on June 29 lifted trading volumes and increased visibility among passive fund managers.

Over the past 12 months, Almonty shares have more than tripled, gaining 200.5%, and they are up 94% year to date. But with 30-day annualized volatility near 97%, the stock remains a high-octane play. Investors will now focus on the first commercial deliveries of tungsten concentrate from Sangdong and the evolution of Chinese trade policy, which could push prices even higher or introduce additional export curbs that further benefit non-Chinese producers.