Almonty's Buyback Bet: Tungsten Producer Moves to Close the Valuation Gap

Almonty Industries authorizes $300M buyback, citing undervaluation, after Q2 revenue surged 498% and Sangdong mine began processing ore.

The tungsten miner's board has authorized a US$300 million share repurchase program, covering up to 14.4 million common shares — roughly 5 percent of the outstanding float — over a 36-month window beginning August 24. Management's stated rationale: the market price simply doesn't reflect what the company's assets are worth.

That conviction is backed by a balance sheet that has been transformed in a matter of months. Following a US$800 million convertible note completed in June, Almonty held roughly C$1.23 billion in cash at the end of the second quarter. The buyback, in other words, is being funded from a position of considerable strength.

The Operational Turnaround Behind the Numbers

The second-quarter results, published in mid-August, show just how far the operating story has come. Revenue surged 498 percent year-over-year to C$43.0 million, with the Panasqueira mine in Portugal contributing C$42.9 million of that total. Net income swung to C$181.8 million from a loss of C$58.2 million in the same period a year earlier.

A word of caution on that headline profit figure: roughly C$173.1 million of it stems from non-cash gains tied to the revaluation of derivatives and warrants. Strip those out, and the underlying picture is still markedly improved — mining operations generated C$26.1 million in earnings versus a C$0.9 million loss previously, at a gross margin of 60.7 percent.

The European spot price for ammonium paratungstate, which climbed to US$3,075 per metric ton unit, provided a tailwind for Panasqueira's quarter. But the margin expansion suggests something more structural: the cost base is behaving as it should as production scales.

Sangdong Shifts the Narrative

The more consequential development sits in South Korea. The Sangdong mine began processing stockpiled ore in July, moving the investment thesis from construction and financing risk to measurable operating metrics. That transition is what prompted GBC AG to initiate coverage on August 20 with a "Buy" rating and a 12-month price target of US$30.00, dated to December 31, 2027.

The first half also showed meaningful cash-flow improvement. Operating cash flow flipped from an outflow of C$14.9 million in the prior-year period to an inflow of C$31.6 million.

Almonty has also locked in demand. The offtake agreement with Global Tungsten & Powders LLC was extended in July to a 21-year term, with volumes increased by 40 percent to 4.41 million metric ton units — a deal that has added 26.9 percent to the share price since its announcement.

A Pause After the Rally

The stock has had a remarkable run, and it shows. Shares closed Friday at €15.57, down 3.9 percent on the day — a pullback with no obvious company-specific trigger, more consistent with profit-taking after August's gains. Over 30 days, the stock is still up 62 percent.

Monday trading has the shares at €15.55, essentially flat. The stock remains about a quarter below its 52-week high of €20.61 from April, and has gained 96 percent since the start of the year. The delisting from the Toronto Stock Exchange, finalized about a month ago, has coincided with a 61.4 percent advance, while the Sangdong production start has added 10.9 percent.

The buyback announcement itself follows a period of consolidation. The share price has slipped 0.8 percent over the past week, even as the company's strategic repositioning — toward the NASDAQ as its primary listing — continues to take shape.

For investors, the calculus now hinges on whether management's view of intrinsic value proves more accurate than the market's. The cash position, the margin trajectory, and the long-dated offtake agreement all support the board's confidence. Whether the repurchase program closes the gap remains to be seen — but Almonty is clearly betting it will.