Almonty Industries just pulled the trigger on a $700 million convertible note that sent its stock into a tailspin—but the real story is what that cash will buy. The tungsten producer is betting big on its Sangdong mine in South Korea, a project that could eventually supply 40% of the West’s demand for a critical strategic mineral. The market recoiled at the dilution, but the company’s long-term calculus is clear: secure capital now to capture a market that is about to be reshaped by geopolitics, US defense policy, and index fund demand.
The convertible notes carry a 2.25% coupon and mature in 2031. The initial $700 million tranche was oversubscribed, with an option to upsize by another $100 million. The conversion price sits at roughly $27.40 per share, a 32.5% premium over the June 4 close. Net proceeds are pegged at $675.9 million, potentially rising to $772.7 million if the greenshoe is exercised. Settlement is expected on June 9.
Of that war chest, $83 million is earmarked for capped-call transactions designed to cap dilution up to $41.36 per share. Another $50 million will retire existing debt. The lion’s share—roughly $543 million—is destined for working capital and general corporate purposes, including potential acquisitions. The sheer size of the raise spooked the Street. Shares touched an intraday low of CAD 22.70, a 21% drop, before closing at CAD 23.45, down 18.43% on the day. The 50-day moving average of CAD 26.64 was breached decisively.
Yet the operational picture tells a different story. Phase 1 of the Sangdong mine came online in March, processing 640,000 tonnes of ore annually to yield about 2,300 tonnes of tungsten concentrate. Phase 2, slated to begin next year, will double processing capacity to 1.2 million tonnes and boost output to roughly 4,600 tonnes. At full tilt, Sangdong alone could meet 40% of global tungsten demand outside China—a staggering share in a market historically dominated by Chinese supply. The strategic urgency is amplified by Beijing’s export licensing regime for strategic minerals, introduced in February 2025, and the Pentagon’s DFARS rule, which from January 2027 will ban Chinese tungsten from US defense supply chains.
Should investors sell immediately? Or is it worth buying Almonty?
First-quarter results underscore the momentum. Revenue nearly tripled to $25.4 million, and adjusted EBITDA hit $6.1 million. Cash on hand stands at roughly $260 million. Tungsten prices have been on a tear: the reference price for ammonium paratungstate in Rotterdam is around $3,185 per tonne, a nearly ninefold increase over the past twelve months. Supply constraints are driving the rally.
Index funds are about to become forced buyers. Almonty will join the Russell 1000 and Russell 3000 on June 29, 2026, following the annual reconstitution. That places the stock in front of about $12.2 trillion in passively managed assets. ETFs and index funds must weight the shares accordingly, a structural demand shift that could offset some of the near-term dilution.
Analysts remain bullish despite the selloff. On June 3, Oppenheimer lifted its price target to $25.00 and reiterated an “Outperform” rating. D.A. Davidson also holds a $25.00 target with a “Buy” rating. Both see Sangdong’s expansion as a long-term value creator. The RSI has slipped to 40.8, and 30-day annualized volatility has spiked to 96.5%, reflecting the tug-of-war between growth ambitions and dilution fears.
The week ahead brings two pivotal events. On Tuesday, June 9, the convertible note settles and the company holds its annual general meeting in Toronto, where shareholders will vote on the re-election of the seven-member board. That continuity is crucial for executing the Sangdong ramp-up and navigating the broader tungsten boom. Over the past twelve months, the stock has still gained 376% from its 52-week low of CAD 4.67, despite the recent correction. Whether the market ultimately treats this capital raise as a bridge to dominance or a painful detour will depend on how quickly Sangdong delivers on its promise.
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