Almonty's $300 Million Buyback Faces Its First Test as a Longtime Backer Cashes Out

Almonty launches $300M buyback amid Deutsche Rohstoff exit, backed by strong Q2 results and Sangdong commercial production.

The tungsten producer's capital-return program kicks off at an awkward crossroads: management is signaling conviction in its own stock just as one of its most patient shareholders heads for the exit.

Almonty Industries begins repurchasing its own shares on August 24, with authorization to buy back up to 14.4 million shares — roughly 5 percent of the float — for as much as $300 million. The program, approved by the board earlier this month, runs through August 2029.

The timing places the buyback squarely against a familiar Wall Street dynamic. Deutsche Rohstoff AG, a long-standing investor, has sold approximately five million Almonty shares at an average price of around $16, banking profits after a powerful rally in recent months. Such profit-taking after sharp run-ups is routine, but it raises the perennial question of whether the stock's latest valuation has run ahead of fundamentals.

A Balance Sheet Transformed in Two Quarters

What makes the buyback feasible is a financial overhaul that has unfolded with unusual speed. Almonty closed an oversubscribed convertible bond offering of $800 million in June, carrying a 2.25 percent coupon and maturing in 2031. The proceeds helped push the company's cash position to C$1.23 billion as of June 30 and allowed it to fully repay its KfW loan, a deleveraging step that has since done little for the share price — the stock has shed roughly 21.3 percent since that milestone.

That pullback, however, preceded the buyback announcement, and management's decision to deploy capital into its own equity suggests the sell-off overshot the operational progress underneath.

The centerpiece of that progress is the Sangdong mine in South Korea, which has officially transitioned into commercial production. The processing mill, completed in March, began commercial throughput in July, supported by an ore stockpile of 139,700 tonnes accumulated during the ramp-up phase — enough for about 2.6 months of operations. Phase I is designed to sustain an annual throughput of 640,000 tonnes.

The Numbers Behind the Confidence

The second-quarter results, released in early August, give the buyback its fundamental underpinning. Revenue surged 498 percent year over year to $43.0 million, while net income swung to $181.8 million from a loss of $58.2 million in the prior-year quarter. Adjusted EBITDA flipped from negative $4.8 million to positive $17.6 million.

One caveat deserves attention: the net income figure includes C$173.1 million in non-cash revaluation gains from derivatives, a distortion that flatters the headline number. Analysts are already recalibrating. Diamond Equity cut its earnings-per-share estimates for fiscal 2026 and 2027 on August 14, a typical response after an outsized quarter that includes one-off items unlikely to repeat at the same magnitude.

Long-Term Visibility Bolsters the Case

Beyond the quarterly optics, Almonty has locked in demand visibility that makes the buyback easier to justify without crimping growth spending. In July, the company extended its offtake agreement with Global Tungsten & Powders LLC by six years. At current prices, the contracted annual volume translates to an estimated $490 million in revenue — a commitment that anchors the Sangdong output and gives management cover to return capital while funding expansion.

The market's read on the buyback is straightforward: a company with a fortified balance sheet and a mine now in commercial operation is putting money behind its own valuation. Whether that signal outweighs the selling from Deutsche Rohstoff — and the more conservative earnings trajectory sketched by Diamond Equity — will likely depend on the pace at which Almonty actually executes its repurchases in the weeks ahead.