Classification of Sphene Capital GmbH to Almonty Industries Inc.Company Name: Almonty Industries Inc.ISIN: CA0203981034Reason for the research: Update ReportRecommendation: Buyfrom: 19.08.2024Target price: CAD 2.31 (previously CAD 2.13)Target price on sight of: 36 monthsLast rating change: -Analyst: Peter Thilo Hasler, CEFAH1/2024 above estimates - increasing price target to CAD 2.31On the backdrop of higher production and increased tungsten recovery ratesat the Panasqueira Mine, H1/2024 profits from mining operations weresignificantly above our estimates and last year's level. With the world'slongest producing mine (Panasqueira) and the world's largest tungstendeposit (Sangdong) under construction, Almonty is - in our view - very closeto becoming one the most important global suppliers of conflict-freetungsten material. We continue to value the shares of Almonty Industriesusing a two-stage Discounted Cashflow entity model of Almonty's current andfuture producing assets (Sangdong, Panasqueira, and Los Santos,) to which wehave added the discounted value of the development project (Valtreixal). Wecalculate a target price of CAD 2.31 per share. With an expected share priceperformance of 203.4%, we confirm our Buy rating for the shares of Almonty
Tungsten is classified as a critical raw material by the European Union, theUnited States, Canada, Japan, South Korea, Australia and other countries -and additionally as a strategic raw material by the EU - due to its hightechnological importance and unstable supply. Decarbonization anddigitalization are causing a change in demand for raw materials, moving awayfrom fossil and towards mineral raw materials, some of which are expected tosee significant demand increases. In addition, as geopolitical tensionscontinue to rise, demand for advanced defense technologies is likely toincrease, driving demand for tungsten armour, which is less regulated thandepleted uranium and considered "exportable" by the US government.
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