Almonty Shares Tumble on Equity Offering Announcement

Almonty CA0203981034

A sharp rally in Almonty Industries shares has been abruptly interrupted. The company's announcement of a substantial public offering in the United States has triggered a significant after-hours sell-off, leaving investors to weigh the immediate dilution against the firm's long-term strategic ambitions.

Following a strong two-week period where the stock gained 25% and surpassed the CAD 10 mark, Almonty revealed plans to issue 15 million common shares in the U.S. The deal, with BofA Securities acting as the sole book-running manager, also includes a 30-day option for underwriters to purchase an additional 2.25 million shares. While the stock had closed Monday's regular session up 6.8%, sentiment reversed sharply after the bell. According to data from Investing.com, the share price fell approximately 13.4% in extended trading, a direct reflection of the dilution facing existing shareholders.

Strategic Use of Proceeds for Global Growth

Management has outlined a clear, expansion-focused strategy for the capital injection. Rather than debt reduction, the funds are earmarked for aggressive operational growth across three continents:

• North America: Development and exploration of the Gentung Browns Lake tungsten project in the United States.
• Europe: Ramping up operational activity at the Panasqueira mine in Portugal.
• Asia: Further exploration work at the Sangdong molybdenum project in South Korea.
• Corporate: A general strengthening of the company's working capital position.

The U.S. project is viewed as particularly strategic, aiming to secure a domestic tungsten supply chain amid geopolitical tensions and import restrictions on foreign-sourced materials.

Analyst Outlook Remains Constructive

Despite the near-term price pressure from the equity offering, analyst confidence in the company's trajectory appears intact. Oppenheim Research maintains a price target of USD 12.00, while Sphene Capital has set a target of CAD 13.50 for the stock.

The successful completion of this financing round is now considered a pivotal step in the company's transformation. The fresh capital is intended to pave the way for Almonty to become a significant tungsten producer, targeting the planned commencement of production in 2026.