First Berlin – Almonty Industries Inc. Research Update (20/02/2019)

First Berlin Equity Research has published a research update on Almonty Industries Inc. (ISIN: CA0203981034). Analyst Simon Scholes reiterated his BUY rating and maintained his CAD 1.25 price target.

Q1 18/19 revenue climbed 52.4% to CAD16.4m (Q1 17/18: CAD10.8m, FBe: CAD 16.1m). EBITDA from mining operations excluding the partial reversal of an impairment charge taken in Q4 17/18, was 27% better than we expected and came in at CAD7.6m (Q1 17/18: CAD3.0m, FBe: CAD 5.9m). Over three quarters of the difference between our forecast for this figure and the reported result was attributable to lower production costs (mainly at the Los Santos mine) than we had modelled. Negotiation of the final term sheet for the financing of the Sangdong mine project is continuing and management expects all principal terms and commitments to be completed during early-calendar 2019. The project financing commitment will then be subject to the execution of definitive loan and security documentation. Meanwhile, work continues at the mine site to ensure commissioning on schedule in 2020. Given that it is still early in Almonty's financial year, and the higher than average macroeconomic uncertainty, we have made only minor changes to our forecasts excluding the impact of the partial reversal of the impairment charge. We maintain our Buy recommendation and price target of CAD1.25.