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

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: 28.60 CAD

Target price on sight of: 31.12.2026

Last rating change:

Analyst: Matthias Greiffenberger, Cosmin Filker

RIDING THE TUNGSTEN PRICE SURGE

The tungsten market tightened dramatically through late 2025 and accelerated

further into early 2026, driving an unprecedented rally in APT prices.

China's implementation of export licenses, stricter production quotas, and

effective export restrictions on tungsten containing products sharply

constrained global supply. China accounts for approximately 82.7 percent of

global primary tungsten production, and export volumes of APT declined

materially following the February 2025 regulatory changes. At the same time,

environmental inspections, declining average ore grades, and stockpiling

behavior among intermediaries further reduced available spot material. On

the demand side, structural growth from defense, aerospace, semiconductors,

renewable energy applications, and advanced manufacturing intensified the

supply imbalance.

The price response has been historic. In October 2025, APT averaged

approximately USD 648 per MTU with spot highs around USD 685. By mid

November 2025, quotations reached roughly USD 689 per MTU. Prices continued

to climb through December and January, surpassing USD 1,000 per MTU for the

first time in mid January 2026. By the end of January 2026, reference prices

reached approximately USD 1,249 per MTU, representing a year over year

increase of more than 270 percent. Market data through February 2026 shows

continued acceleration, with weekly averages rising to USD 1,375 in early

February, USD 1,737.50 by mid February, and approximately USD 1,775 per MTU

by February 20, with spot highs quoted as high as USD 1,900 per MTU.

This represents a structural repricing of tungsten. APT has risen from

roughly USD 300 at the beginning of 2025 to well above USD 1,200 and

approaching USD 1,800 per MTU in early 2026. The combination of structural

supply constraints, US import restrictions on Chinese tungsten for defense

procurement beginning in 2027, and strategic stockpiling initiatives has

fundamentally altered the pricing paradigm and reset long term expectations.

For Almonty, this price environment significantly enhances near term

realized pricing at Panasqueira and materially improves projected cash flows

at Sangdong and Gentung. The move from an average of approximately USD 485

per MTU in August 2025 to levels approaching USD 1,800 per MTU in February

2026 implies a transformational shift in revenue and margin leverage as

production scales. The operating leverage embedded in the company's asset

base is now substantially higher than previously modeled under more

conservative price assumptions.

Revenue and Earnings development Q3 2025

Almonty's third quarter 2025 results reflected early operating leverage to

strengthening tungsten prices. Revenue increased to C$8.7 million from C$6.8

million in Q3 2024, driven primarily by higher realized APT prices, while

Panasqueira volumes remained broadly stable. Income from mining operations

improved to C$1.25 million compared to C$0.66 million in the prior year

period despite lower mined grades. Operating costs rose year over year

reflecting expanded corporate infrastructure following the Nasdaq listing,

increased investor relations activities, and scaling initiatives, partially

offset by favorable foreign exchange effects.

Reported net income of C$33.2 million in Q3 2025 was primarily driven by a

C$34.5 million non cash warrant revaluation gain, compared to a net loss of

C$5.3 million in Q3 2024. Excluding this item, underlying profitability

remained negative as Sangdong had not yet contributed revenue and corporate

pre production costs remained elevated. However, the operating inflection

point has now clearly arrived with active mining operations at Sangdong

beginning in December 2025, marking the transition from development stage to

revenue generation at the flagship asset.

Sangdong Ramp Up and Phase Expansion

A major operational milestone was achieved in December 2025 with the

commencement of active mining operations at the Sangdong Tungsten Mine in

South Korea, marked by the first ore delivered to the run of mine pad. This

transition from construction to production represents the culmination of

years of capital investment and significantly de-risks the asset from both a

financing and execution perspective.

Commercial mining has commenced and the project has moved decisively into

the ramp up phase. Phase 1 establishes the foundation for large scale

operations, while a subsequent Phase 2 expansion is designed to materially

increase overall throughput and position Sangdong among the most significant

tungsten operations outside China. The deposit supports a long mine life,

providing multi decade production visibility and a durable cash flow base

once steady state operations are achieved.

Production growth is expected to accelerate as commissioning progresses,

operating parameters are optimized, and recoveries stabilize at targeted

levels. Management has indicated that full ramp up to nameplate production

should start shortly, marking the transition from initial production to

sustained commercial scale output. As Sangdong advances toward full

capacity, consolidated production is set to increase substantially relative

to historical levels, transforming the company's overall production profile

and cost structure. Further optimization initiatives and expansion phases

remain part of the medium term strategy, subject to operational performance

and market conditions.

Importantly, Sangdong's ramp up coincides with an exceptionally strong

tungsten price environment and long term binding offtake agreements,

including commitments to supply tungsten oxide for US defense applications.

These agreements enhance revenue visibility and provide strategic

validation, materially reducing commercialization risk during the early

years of operation. In parallel, development work has advanced at the

Sangdong Molybdenum Project, representing a strategic by product opportunity

that will further diversify the revenue mix and strengthen the overall

economic profile of the asset.

Balance Sheet Strength and Capital Markets Access

Financially, Almonty materially strengthened its capital structure in 2025

and early 2026. The July 2025 Nasdaq listing and initial public offering

raised approximately US$90 million in gross proceeds, increasing visibility

among US institutional investors and improving liquidity. In December 2025,

the company completed a second upsized US$129.4 million offering including

full exercise of the over allotment option. This additional capital

significantly enhances liquidity during the Sangdong ramp up phase and

supports development of the Gentung project in Montana.

The enhanced equity base provides flexibility to pursue expansion without

near term refinancing risk. The company is now sufficiently capitalized to

advance exploration, development, and ramp up activities while maintaining a

prudent balance sheet.

Gentung and North American Expansion

The acquisition of 100% ownership of the Gentung tungsten project in Montana

extends Almonty's geographic footprint into the United States and directly

aligns with US critical mineral reshoring policies. Gentung is among the

most advanced undeveloped tungsten assets in the United States and benefits

from historic underground workings and surface infrastructure that may

facilitate accelerated development timelines.

Commercial mining is targeted for late 2026 subject to permitting and

engineering milestones, with peak production of approximately 140,000 MTUs

output per annum at an average WO3 grade around 0.32 percent. The project

provides geographic diversification and strategic optionality as the United

States implements restrictions on Chinese sourced tungsten for defense

procurement beginning in 2027 and expands critical mineral stockpiling

initiatives. Should Gentung achieve targeted production, Almonty would

become a multi mine producer across South Korea, Portugal, and the United

States, materially enhancing supply security credentials and valuation

multiples.

Panasqueira Expansion and European Operations

In Portugal, Almonty has advanced a substantial drilling program at

Panasqueira targeting deeper Level 4 zones with potential for higher grade

ore and mine life extension. Panasqueira is one of the world's longest

continuously operating tungsten mines and has consistently delivered low

impurity, high grade concentrate to defense and industrial customers. The

deeper zone development has the potential to extend mine life beyond

currently indicated levels and improve production rates once brought online.

Given the current price environment, incremental grade improvements or

modest volume expansions at Panasqueira generate disproportionately strong

free cash flow leverage. Continued exploration success would support

sustained European production even as Sangdong becomes the dominant

contributor to consolidated output.

Valuation Re Rating and Market Perception

The structural repricing of tungsten has materially altered the valuation

framework for Almonty. The company's earnings profile exhibits significant

sensitivity to APT pricing, and the sustained move to historically elevated

levels meaningfully increases projected free cash flow across all producing

and development assets. Given the operating leverage embedded in Sangdong

and the stable contribution from Panasqueira, higher long term pricing

assumptions translate directly into expanded enterprise value under a

discounted cash flow methodology.

In our updated valuation model, we apply a long term APT price assumption of

USD 1,500 per MTU. This price deck reflects our view that the tungsten

market has undergone a structural shift driven by export restrictions,

defense related demand growth, supply chain reshoring initiatives, and

constrained new project development outside China. While spot prices have

recently traded above this level, we view USD 1,500 per MTU as a robust but

disciplined base case for long term modeling purposes.

Based on our updated model, we derive a target price of CAD 28.60 per share,

equivalent to EUR 17.71 per share. This represents a substantial re rating

relative to prior assumptions and reflects the expanded earnings power of

the company in a structurally tighter tungsten market. At this valuation

level, implied forward multiples remain justified by the company's projected

production growth, long mine life profile, and strategic importance as a

Western aligned supplier of a critical material.

Accordingly, we initiate a Buy recommendation at our revised target price of

CAD 28.60.

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=eafbd66e97fbca8845af713af80f5811

Contact for questions:

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR

Beim oben analysierten Unternehmen ist folgender möglicher

Interessenkonflikt gegeben: (5a,6a,7,11); Einen Katalog möglicher

Interessenkonflikte finden Sie unter:

https://www.gbc-ag.de/de/Offenlegung.htm

Completion: 26.02.2026 (15:00)

First distribution: 02.03.2026 (08:00)

The EQS Distribution Services include Regulatory Announcements,

Financial/Corporate News and Press Releases.

View original content:

https://eqs-news.com/?origin_id=102275ad-1328-11f1-8534-027f3c38b923&lang=en

2282408 02.03.2026 CET/CEST

°