Almonty Couples Buyback With Sangdong Scale-Up as Analysts Diverge on Fair Value

Almonty cancelled 2,914,739 shares worth about USD 48 million and plans an automatic buyback as Sangdong tungsten output scales up.

Almonty Industries is putting capital to work on two fronts at once. Alongside the gradual ramp-up of its South Korean tungsten operation, the Toronto-listed miner has retired 2,914,739 of its own shares, a transaction worth roughly USD 48 million, according to a shareholder letter from CEO Lewis Black. Management intends to follow up by establishing an automatic repurchase program.

The buyback lands at a moment when the company is repositioning itself operationally. At the Sangdong mine, where Almonty reports the first tungsten concentrate produced since 1993, output is being brought on line in stages. The mill currently runs 13 hours a day, seven days a week, with management aiming to push that toward continuous 24-hour operation. Work on Phase II of the mine's development is already under way, with completion targeted for 2027. South Korean authorities had earlier cleared the path for processing and exporting concentrate by issuing the final inspection certificates.

Two Houses, Two Verdicts

Analysts have greeted the operational and capital-markets moves with markedly different conclusions. Sphene Capital reiterated a buy rating on September 28 with a price target of USD 26.40, pointing to the long-term offtake agreement with Sandvik subsidiary WBH for material from the Spanish Los Santos mine. In the analysts' view, that contract lowers restart risk and sharpens visibility on future cash flows.

Goldman Sachs took a more measured line. The US bank initiated coverage on September 24 at Neutral with a USD 13.00 target, arguing that the current valuation already discounts persistently exceptional conditions in the tungsten market as well as a demanding production profile at Sangdong. The bank expects commodity prices to normalize over the medium term and believes the further expansion of output at Sangdong will proceed more gradually than the market consensus currently assumes.

The two assessments bracket a stock that closed Friday at EUR 11.91. Measured from the start of the year, the shares are up 50 percent, though the past 30 days have brought a 22 percent decline.

Offtake in Place, Phase II in Motion

Beyond the first production milestone, Almonty is pressing ahead with the next stages of the project. Phase II development at Sangdong is in execution, and media reports indicate that deliveries to customers will begin once the first tonne of concentrate has been produced and the processes have settled into a reliable rhythm.

Existing partnerships underpin the extraction effort. On September 17, Almonty sealed a long-term supply agreement with Sandvik subsidiary Wolfram Bergbau und Hütten AG covering the processing of historical tailings.

How quickly management can lift output volumes without operational delays is likely to shape the share price from here. The share cancellation and the planned shift toward recurring buybacks signal that the company intends to manage its balance-sheet flexibility actively while its mining projects scale up.