Almonty Walks a Tightrope: Record Tungsten Prices Meet $700M Convertible Note as Shareholders Weigh Dilution
05.06.2026 - 15:01:22 | boerse-global.de
Almonty Industries delivered a jarring message to its shareholders this week: the tungsten producer is raising up to $800 million in convertible debt at a time when its stock has already surged more than 500% over the past year. The market’s initial verdict was swift — shares slid about 12% in after-hours trading on Thursday as investors digested the dilution risk embedded in the offering.
The company is placing $700 million in senior convertible notes due 2031 with qualified institutional buyers, with an option for initial purchasers to take an additional $100 million within 13 days. The notes carry a 2.25% annual coupon, payable semi-annually from January 2027, and a conversion price of roughly $27.40 per share. After discounts and expenses, net proceeds are estimated at just under $676 million, or around $773 million if the overallotment is fully exercised.
Almonty plans to deploy the bulk of the capital — approximately $543 million — into working capital and general corporate purposes, including potential acquisitions. Another $83 million will fund capped-call transactions intended to limit dilution upon conversion, and roughly $50 million will go toward refinancing existing debt. The company can call the notes from July 2029 if its stock trades above 130% of the conversion price for a specified period.
The financing arrives on the heels of a dramatic operational turnaround. First-quarter 2026 revenue soared 221% year-over-year to $25.4 million, as tungsten prices hit levels not seen in years. Adjusted EBITDA swung to a positive $6.1 million, operating cash flow turned positive at $9.7 million, and the net loss narrowed sharply from $34.6 million in the year-ago period to $5.3 million. Almonty ended March with $259.9 million in cash and $169.5 million in working capital.
Should investors sell immediately? Or is it worth buying Almonty?
The price driver is unmistakable: ammonium paratungstate (APT) stood at $3,040 per metric ton on May 29, up from $920 at the start of 2026 — a tripling in less than five months. Structural supply constraints underpin the rally. China slashed its mining permits by another 8% in 2026, and new U.S. defense regulations under DFARS 252.225-7052 will ban tungsten from China, Russia, Iran, and North Korea in certain supply chains starting January 1, 2027. Western producers like Almonty sit directly in the path of that regulatory tailwind.
Adding to the momentum, Almonty will join the Russell 1000 and Russell 3000 indices on June 29 — a milestone that compels index-tracking ETFs and funds with roughly $12.2 trillion in assets under management to hold the stock. The company completed its headquarters relocation to the U.S., a prerequisite for inclusion, and management expects the move to sharply boost institutional visibility.
Operationally, Almonty’s Sangdong mine in South Korea began Phase 1 production in March, capable of processing about 640,000 tons of ore annually and producing roughly 2,300 tons of tungsten concentrate. A second expansion phase is already slated for 2027, which would double capacity. Oppenheimer recently lifted its price target on the stock to $25 from $22, maintaining an "Outperform" rating.
Almonty at a turning point? This analysis reveals what investors need to know now.
All this convergence — record prices, positive cash flow, index entry, and a dilutive capital raise — lands on the doorstep of the company’s annual general meeting scheduled for June 9 in Toronto. Friday marks the proxy deadline for voting, and the agenda includes the election of seven directors, reappointment of auditor Zeifmans LLP, and approval of a new equity incentive plan. Shareholders now must weigh the long-term value of the $700 million war chest against the immediate sting of dilution.
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