Almonty's Strategic Patience at Panasqueira Masks a Balance-Sheet Transformation

Almonty cuts Panasqueira output for long-term gains, while Sangdong drives growth; Q2 revenue up 498%, shares gain 62% in 30 days.

Wolfram prices may be at record highs, but Almonty Industries is deliberately leaving some of that money on the table. The Toronto-based producer confirmed that output at its Panasqueira mine in Portugal fell during the second quarter of 2026 — a move that looks counterintuitive against a backdrop of soaring tungsten prices, yet reflects a calculated choice to mine lower-grade ore while preserving higher-grade reserves for future pricing cycles.

Management's logic is straightforward: depleting the best ore bodies today would sacrifice flexibility when the next price upswing arrives. For shareholders, the signal is that Almonty is managing its resource base for the long term rather than chasing near-term revenue maximization.

Sangdong Carries the Growth Mantle

Panasqueira's reduced contribution doesn't alter the group's growth narrative — that role belongs to the Sangdong mine in South Korea, which began processing stockpiled ore in July and has since lifted the share price by 11.2 percent. The Portuguese operation's cutback demonstrates that Almonty manages its portfolio selectively, treating each deposit according to its own strategic logic rather than applying a one-size-fits-all approach.

The financial foundation supporting this multi-site strategy came into sharper focus with the second-quarter results reported in August. Revenue surged 498 percent year-over-year to 43.0 million Canadian dollars, while mining earnings reached 26.1 million Canadian dollars against a loss of 0.94 million in the prior-year quarter. The mining business posted a gross margin of 60.7 percent.

Investors should, however, separate the headline net profit of 181.8 million Canadian dollars from underlying operational performance. A substantial portion — 173.1 million Canadian dollars — stemmed from non-cash gains on the revaluation of derivatives and warrants, an accounting effect that inflates the bottom line without reflecting core earning power. The year-ago quarter, by contrast, recorded a net loss of 58.2 million Canadian dollars.

Regulatory Tailwinds and a Pause in the Rally

The stock received additional momentum on Thursday when the US Commerce Department's export ban on tungsten scrap and battery waste took effect. The measure, designed to keep strategic raw materials within American borders, pushed the shares up 3.6 percent that day. For a producer operating outside China like Almonty, a tightening Western procurement environment could support demand for its material over the medium term.

Monday's session saw the shares at 15.59 euros, virtually flat against Friday's close of 15.57 euros. That Friday, however, marked a 3.9 percent pullback — a dip with no identifiable company-specific trigger, suggesting profit-taking after August's strong run rather than a shift in sentiment. Over the past 30 days, the stock has still gained 62 percent, though it remains roughly 24 percent below its 52-week high of 20.61 euros set in April.

A Transformed Balance Sheet

The operational story is underpinned by a capital structure that has changed dramatically within a few months. Following the completion of a 800 million US-dollar convertible bond issue in June, Almonty held approximately 1.23 billion Canadian dollars in cash as of June 30, providing ample runway for the Sangdong ramp-up. Operating cash flow swung from an outflow of 14.9 million Canadian dollars in the first half of last year to an inflow of 31.6 million Canadian dollars this year.

The company has also strengthened its commercial position. The 21-year offtake agreement with Global Tungsten & Powders was expanded by 40 percent to 4.41 million MTU, with price terms improved by roughly 6.3 percent for the initial production phase at Sangdong — a deal announced over a month ago that has driven the shares up 27.3 percent since.

Analysts Take Note

The transition from construction risk to measurable operational metrics has not gone unnoticed. GBC AG initiated coverage on August 20 with a "Buy" rating and a twelve-month price target of 30.00 US dollars, set against a horizon ending December 31, 2027. The Bonn-based research house frames Sangdong's production start as the inflection point that shifts the investment case from build-out and financing concerns toward visible operating performance.

That re-rating coincides with a period in which the company's earnings quality has improved markedly. The swing from a mining loss of 0.9 million Canadian dollars in the year-ago quarter to a 26.1 million Canadian dollar profit, at a 60.7 percent margin, provides the operational evidence that Sangdong is now producing profitably — the very transition GBC highlights in its analysis.

The next quarterly figures, scheduled for November 2, will show whether the deliberate production discipline at Panasqueira, combined with Sangdong's accelerating contribution, delivers on the strategy's promise.