A sharp rally in Almonty Industries stock came to a sudden halt following the company’s disclosure of a significant capital raise. After posting a gain exceeding nine percent during the regular session, the share price reversed course in after-hours trading, plunging by approximately 13.4%. The catalyst was management’s decision to issue new equity, prompting investors to weigh the potential for future growth against the immediate impact of share dilution.
Market Reaction to Dilution Concerns
The company formally announced the placement of 15 million new common shares in the U.S. market. This offering includes an additional option for underwriters to purchase a further 2.25 million shares. BofA Securities is acting as the sole bookrunner for the deal. The market’s negative response was swift, with the after-hours sell-off reflecting investor apprehension over the increased number of shares outstanding.
This pullback interrupted a notable period of strength for the stock. As recently as December 8, shares closed on the Toronto exchange at 10.93 CAD, marking a single-day advance of 9.4%. That performance was part of a broader uptrend that had lifted the equity by roughly 25% over the preceding two weeks. Prior to this correction, the company’s market valuation had reached 2.53 billion CAD.
Strategic Use of Proceeds for Growth
Company leadership emphasized that the capital generated is earmarked for operational expansion, not debt restructuring. The net proceeds are designated for specific projects:
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- Gentung Browns Lake (Montana, USA): Funding for exploration and development activities.
- Panasqueira Mine (Portugal): Expansion of ongoing mining operations.
- Sangdong Project (South Korea): Further exploration at this molybdenum site.
Market observers note that the planned production start in Montana is scheduled for 2026. The timing of this liquidity injection appears strategically aligned to secure the necessary funding to meet this key operational milestone.
Supportive Commodity Backdrop
Despite the negative short-term price action, the fundamental environment for Almonty remains constructive. The price of ammonium paratungstate (APT), a key tungsten precursor, has nearly doubled since May 2025. This substantial price appreciation provides a solid economic foundation for the company’s ambitious expansion strategy.
Analysts had recently maintained price targets well above the stock’s current trading level. Oppenheim Research cited a target of 12.00 USD, while Sphene Capital held a target of 13.50 CAD. It remains to be seen whether these institutions will adjust their valuations to account for the enlarged share count.
In the near term, the stock is likely to trade within a volatile range. The new share offering places the 52-week high of 14.99 CAD out of immediate reach. Traders are now watching for support around the 10.00 CAD level. The critical factor for the share price trajectory in the coming weeks will be the market’s speed in absorbing the new equity and refocusing on the planned 2026 U.S. production start.
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