First Berlin – Almonty Industries Inc. Research Update (25/11/2019)

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 1.35 price target.

Abstract
The Sangdong mine project has the potential to make Almonty the dominant non-Chinese tungsten player by 2025, with an ex-China market share of over one third. Sangdong's potential mine-life stretches beyond the middle of this century with annual production at over twice Almonty's current output. Following recent visits by KfW-IPEX Bank and the Austrian Development Bank (OeKB) to the Panasqueira and Sangdong mines, we believe that closure of the Sangdong financing is at hand. Q4 2018/19 results were weak due to soft market conditions in Europe and uncertainty surrounding large tungsten APT (ammonium paratungstate) stocks formerly held by the defunct Fanya Metal Exchange in China. The commodity price averaged USD210 in Q4 2018/19 compared with USD271 during the first three quarters of the 2018/19 financial year. However, pricing has since recovered to USD220-240 and we expect the current quarter to be stronger than Q4 18/19. With closure of the Sangdong financing imminent, we advise investors to take advantage of current share price weakness. Our recommendation is Buy with an unchanged price target of CAD1.35.