Almonty's Convertible Note Stings Shareholders as Tungsten Prices Surge 20% and Sangdong Ramp-Up Nears
07.06.2026 - 16:34:50 | boerse-global.de
A brutal Friday saw Almonty Industries shares plunge 21.04% to close at CAD 22.70, wiping nearly 17% off the stock for the week. The trigger was a USD 700 million convertible bond offering aimed at funding the company's flagship Sangdong tungsten mine in South Korea. Yet even as the market punished the stock for the potential dilution, a raft of bullish catalysts — from a 20% weekly jump in tungsten prices to a looming Pentagon mandate and upcoming index inclusion — paint a more nuanced picture.
The convertible notes carry a 2.25% coupon, mature in 2031, and were oversubscribed, underscoring institutional appetite. The conversion price is set at roughly USD 27.40, a 32.5% premium to the June 4 closing level. Investors also secured an option for an additional USD 100 million. Net proceeds from the initial tranche are estimated at USD 675.9 million, earmarked for working capital and debt reduction. To cushion the dilution effect, Almonty is hedging with capped-call transactions costing USD 83 million — a structure that limits the number of new shares that would be issued upon conversion.
The timing of the sell-off looks particularly harsh against the backdrop of surging tungsten markets. China has tightened its export licensing system, curbing global supply and sending ammonium paratungstate prices in Europe to between USD 2,900 and USD 3,180 per metric tonne unit. In a single week, tungsten prices climbed around 20%. Meanwhile, the US Pentagon now requires defence contractors to source tungsten from non-Chinese suppliers by January 2027, positioning Almonty’s Sangdong deposit — one of the largest outside China — as a strategic alternative. At full build-out, the mine could meet up to 40% of Western demand.
Should investors sell immediately? Or is it worth buying Almonty?
Next Tuesday, June 9, is a pivotal date. The company will simultaneously close the bond settlement and hold its annual general meeting. Shareholders can expect updates on the Phase 2 expansion, which aims to double production to roughly 4,600 tonnes of tungsten concentrate by 2027. Phase 1 ramp-up begins in July, with Almonty set to deliver first output from Sangdong just as the commodity tailwind intensifies.
Technically, the stock is now trading well below its 50-day moving average of CAD 26.64, and the relative strength index at 39.3 suggests the sell-off has been severe but not yet oversold. A potential floor could come later this month: on June 29, Almonty will be added to the Russell 1000 and Russell 3000 indices, likely triggering passive buying from institutional funds.
Despite the weekly carnage, the longer-term picture remains intact. Almonty shares are still up 88.69% year-to-date and 375.89% over the past twelve months. The convertible bond has introduced a layer of dilution uncertainty, but the fundamental drivers — soaring tungsten prices, the Pentagon’s sourcing shift, and the tangible progress at Sangdong — give the bull case a solid footing. The next few weeks will test whether the market can look past the near-term dilution scare and focus on the production momentum ahead.
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