Original-Research: Almonty Industries Inc. (von Sphene Capital GmbH): Buy

Classification of Sphene Capital GmbH to Almonty Industries Inc.

Updated NI 43-101 report on the Sangdong project

In Almonty’s recently published NI 43-101 compliant valuation report, mine planning calculations identified probable mineral reserves of 8,579 Kt, up from 7,896 Kt in the previous valuation report published in 2016, representing an 8.6% increase in tonnes from the historical resource filed. With an estimated WO₃ content of 0.42%, the mineral reserves therefore correspond to 36,140 tonnes of WO₃. Assuming an annual ore processing capacity of 640 Kt, these reserves would sustain mining operations (LOM) for approximately 14 years, with an existing offtake agreement for phase 1.

In addition, an inferred WO₃ resource of 50,686 Kt was estimated using a cut-off grade of 0.15%, based on an APT price of USD 450/mtu WO₃, a processing recovery rate of 85%, and assumed total operating costs of USD 45.8 per tonne of ore. This, in our view, substantial inferred resource base constitutes a significant potential source for future reserves. As additional exploration and delineation drilling is undertaken, we consider a strong likelihood that portions of these resources could be upgraded to higher confidence categories and ultimately reclassified as economically viable reserves.

In light of the higher-than-anticipated reserve estimates and the potential for additional resource-to-reserve conversions, we have revised our two-stage Discounted Cash Flow (DCF)-based target price for Almonty Industries upward—from CAD 5.40 to CAD 8.40 per share. This revised valuation comprehensively incorporates the net present value of both current and future producing assets, including the Sangdong mine (tungsten and molybdenum), Panasqueira, and Los Santos, as well as a discounted assessment of the development-stage Valtreixal project. Based on this updated valuation, which implies an upside potential of 35.9% from the previous day’s closing price of CAD 6.18, we reiterate our Buy recommendation for Almonty Industries’ shares.