Original-Research: Almonty Industries Inc. (von Sphene Capital GmbH): Buy

Classification of Sphene Capital GmbH to Almonty Industries Inc.

Tungsten prices above USD 1,000 trigger share revaluation

In mid-January, the price of tungsten surpassed the USD 1,000 per MTU APT threshold for the first time. The current reference price of around USD 1,250 per MTU reflects a number of structural and cyclical market influences that we believe are also of crucial importance to Almonty. A key factor in price development is the sharp reduction in the market's available supply of tungsten. China, which controls 82.7% of all global mine production, has significantly tightened export regulations and state production quotas since the beginning of 2025. This has led to a substantial decline in (officially) exported raw material volumes, due to stricter licensing requirements and lower quotas for tungsten-containing ores and intermediate products such as APT. This has effectively reduced the global available supply and exacerbated the shortage of raw materials. In addition, environmental regulations and regulatory interventions have resulted in production cuts in key mining regions, further limiting physical output despite existing demand. As a result, spot inventories of industrial metals such as APT and concentrates reached historic lows at times, exerting additional upward pressure on prices. Alongside the supply shortage, geopolitical tensions have led to increased demand for tungsten products from the defence industry, where tungsten alloys are used in armour-piercing ammunition, high-performance tools, and military components. Tungsten's physical properties make it essentially irreplaceable in the defence industry, leading to low price elasticity of demand and disproportionate price increases given the comparatively small and illiquid tungsten market. At the same time, price levels in the upstream sector (concentrate-related) have become more prevalent, while margin pressure has emerged in the downstream sector (e.g. carbide and tool manufacturers)-an indication of the profound shortage in the raw materials segment, regardless of final demand. In view of the strong and, in our view, sustainable increase in tungsten prices and Almonty Industries' new tungsten project in the US, we have again updated our financial model. Based on our two-stage Discounted Cash Flow (DCF) model, we raise our price target to CAD 20.10 from CAD 13.50 per share. This revised valuation comprehensively incorporates the net present value of both current and future producing assets, including the Sangdong mine (tungsten and molybdenum), Panasqueira, Gentung, and Los Santos, as well as a discounted assessment of the development-stage Valtreixal project. Based on this updated valuation, which implies an upside potential of 29.0% from yesterday's closing price of CAD 15.58, we reiterate our Buy rating for Almonty Industries.