First Berlin – Almonty Industries Inc. Research Update (11/06/2018)

First Berlin Equity Research has published a research update on Almonty Industries Inc. (ISIN: CA0203981034). Analyst Simon Scholes reiterated his BUY rating and increased the price target from CAD 1.20 to CAD 1.30.

Almonty has reported strong Q2 17/18 numbers which were well above our forecasts. Revenue was up 70.0% at CAD17.3m (FBe: CAD15.0m; Q2 16/17: CAD10.2m) while EBIT rose to CAD3.7m (FBe: CAD1.8m; Q2 16/17: CAD-3.1m). The results benefited from the expiry of fixed priced offtake agreements and falling unit costs at both the Los Santos and Panasqueira mines. Commodity pricing remains firm. The tungsten APT price is now USD340-345 per MTU compared with an average of USD324 per MTU in calendar Q1. Meanwhile, the ten year offtake agreed in March for the Sangdong mine in Korea continues to suggest that a financing agreement for this project is near. We have revised up our forecasts in the light of the Q2 17/18 results and now see fair value for the stock at CAD1.30 (previously: CAD 1.10). We maintain our Buy recommendation.