Original-Research: Almonty Industries Inc. (von GBC AG): Buy

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Original-Research: Almonty Industries Inc. - from GBC AG

08.09.2025 / 08:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of GBC AG to Almonty Industries Inc.

Company Name: Almonty Industries Inc.
ISIN: CA0203987072

Reason for the research: Research Note
Recommendation: Buy
Target price: 9.00 CAD
Target price on sight of: 31.12.2026
Last rating change:
Analyst: Matthias Greiffenberger, Cosmin Filker

Strategic Positioning Strengthens as Sangdong Nears Commissioning

Almonty Industries Inc. delivered first half 2025 results that highlight
both the transitional state of its operating portfolio and the considerable
strategic progress achieved in the period. For the six months ended June 30,
2025, revenue totaled C$15.10 million, down modestly from C$15.76 million in
the prior-year period, while the net loss widened sharply to C$92.83 million
compared with C$5.58 million in the first half of 2024. The increase in
losses was driven primarily by non-cash revaluation charges related to
warrants and embedded derivatives, along with higher share-based
compensation and increased corporate expenses linked to the company's
redomiciling and U.S. listing preparations.

Although headline results were weak, the company advanced its strategic
positioning significantly during the first half. Key developments included
the execution of a long-term molybdenum offtake agreement with SeAH in
January, confirmation in April that U.S. tariffs on certain critical
minerals would not apply to tungsten, participation in the U.S. Critical
Minerals Forum in April, the signing of a strategic defense-focused tungsten
oxide offtake in May, and recognition from the U.S. House Select Committee
in June for its contribution to securing American supply chains. These
operational and strategic milestones culminated in the successful U.S.
Nasdaq listing and US$90 million public offering in July, which
substantially strengthened Almonty's balance sheet.

Tungsten Market Context

The tungsten market continues to experience supply-driven tightness, with
China's export restrictions accelerating price appreciation. Benchmark
ammonium paratungstate prices exceeded US$500 per metric ton unit in
mid-August 2025, up sharply from US$350 in March 2025. Demand remains robust
across defense, aerospace, energy, and industrial tooling sectors, while
U.S. Department of Defense restrictions on adversary-sourced tungsten
beginning in 2027 will structurally elevate demand for non-Chinese supply.

Almonty's planned expansions at Sangdong and Panasqueira point to a
step-change in output over the next few years, positioning the company as a
leading non-Chinese tungsten supplier. With long-term offtake agreements
that include price floors, Almonty appears comparatively de-risked versus
peers.

Furthermore, the recently released USGS Open File Report 2025 characterizes
the tungsten market as strategic and cost sensitive, with demand
concentrated in cemented carbides and supply heavily concentrated in China
under export controls, resulting in an estimated probability weighted U.S.
GDP impact of about $544 million. Substitution is limited and pricing is set
by APT and powder benchmarks that pass through quickly to carbide tool
costs, implying near term input cost pressure for metalworking OEMs and
operating leverage for Western miners, recyclers, and converters positioned
to benefit from supply chain diversification.

HY1 2025 Financial Results Review

For the six months ended June 30, 2025, Almonty reported revenue of C$15.10
million, compared with C$15.76 million in the first half of 2024. The modest
decline reflects temporary production constraints at Panasqueira as
resources were allocated to preparation for the Level 4 expansion, offset by
continued demand for the mine's high-grade concentrate. Production costs
rose to C$14.17 million from C$12.83 million in the prior-year period, with
mining ore and processing costs both higher year-over-year. This resulted in
a near breakeven performance from mining operations, with a loss of C$0.19
million compared to a profit of C$1.81 million in the first half of 2024.

Operating expenses increased significantly, with general and administrative
expenses totaling C$7.49 million compared with C$3.01 million a year
earlier, and share-based compensation of C$7.62 million compared with C$0.94
million in the prior year. These increases were linked to corporate
expansion, preparation for the Nasdaq IPO, and equity-linked compensation
expenses.

The most material impact on reported results came from non-cash items. A
C$63.89 million loss (PY: C$+0,41) was recorded on the revaluation of
warrant liabilities, alongside a C$9.85 million loss (PY: C$0,00) on the
valuation of embedded derivative liabilities. These IFRS-mandated
adjustments, while substantial, are accounting-based and do not reflect
operating cash flows. Net loss for the half-year was C$92.83 million,
compared with C$5.58 million in HY1 2024.

Operating cash outflow for the half-year was C$17.62 million, compared with
C$5.42 million last year, reflecting higher corporate expenses and working
capital requirements. Investing activities consumed C$14.87 million (PY:
C$5.42 million), largely directed toward continued development at Sangdong.
Financing activities provided C$49.46 million (PY: C$7.14 million), driven
by warrant exercises and equity issuances, leaving the company with cash of
C$24.68 million at June 30, 2025, compared with C$7.64 million at year-end
2024.

Financial Position

At the end of HY1 2025, Almonty held C$24.68 million in cash, strengthened
further by the US$90 million Nasdaq raise in July. Long-term debt totaled
C$192.7 million, primarily tied to Sangdong financing. Shareholders' equity
declined to C$10.5 million due to accumulated losses and non-cash
revaluations, but the subsequent equity raise meaningfully improves solvency
metrics. Liquidity is our opinion sufficient to complete Sangdong
commissioning and advance downstream initiatives.

Valuation Assumptions

Given the recent strength in tungsten markets, we now assume a long-term
tungsten price of USD 520/mtu (previously USD 430/mtu). In addition, we have
rolled forward our valuation horizon by one year, with our target date
moving from December 31, 2025 to December 31, 2026. Reflecting both the
higher commodity price assumption and the rollover effect, we are revising
our target price for Almonty Industries to CAD 9.00 per share (from CAD 8.25
previously).

You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=9c7daff7e34332ad3615936b007e3e87

Contact for questions:
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV
Beim oben analysierten Unternehmen ist folgender möglicher
Interessenkonflikt gegeben: (5a,6a,7,11); Einen Katalog möglicher
Interessenkonflikte finden Sie unter:
http://www.gbc-ag.de/de/Offenlegung
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Completion: 05.09.2025 (10:30)
First distribution: 08.09.2025 (08:00)

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2193736 08.09.2025 CET/CEST

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