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 1.70 price target.

Abstract
Almonty remains on track to complete and commission its flagship Sangdong tungsten mining project in South Korea during H2/2023. Since the end of July the company has drawn down USD26.7m of the KfW IPEX-Bank USD75.1m project financing loan facility with the balance to follow in line with construction progress. Orders for large, long lead time items such as the milling and flotation equipment were placed last year, and so project cost inflation is likely to be limited to 5%, which will be absorbed by the 15% contingency built into the project costs. When Sangdong reaches full capacity from the middle of this decade, it will account for ca. 30% of non-Chinese and ca. 7% of global supply. We also note the project’s multi-decade mine life (until 2073 assuming full 1.2m tonne processing capacity from 2027) and the CAPEX/contained metal figure of USD248/t which is under half the number for the closest competing project with a comparable grade. In March KfW-IPEX bank signed a letter of intent to provide a further USD50m for a tungsten oxide/nano tungsten oxide downstream processing plant to be built by Almonty in South Korea. South Korea is the largest per capita consumer of tungsten worldwide. It also consumes ~40% of global tungsten hexafluoride gas, which is used in the production of semiconductors, the raw material of which is nano tungsten oxide. Last week Almonty stated that it will ?continue to progress this opportunity in tandem with the construction of the Sangdong tungsten mine.? Furthermore, in July Almonty published a maiden JORC-compliant resource estimate for the molybdenum deposit at Sangdong. This shows inferred 21.48m tonnes grading 0.26% MoS2 based on a 0.19% cut-off. The molybdenum price has risen over 20% since our last update in July and the in situ value of the resource is over USD2bn. Similarly to the tungsten oxide project Almonty plans to discuss a consumption programme for output of the future molybdenum mine with South Korean government and industry representatives. We maintain our Buy recommendation and price target of CAD1.70. (p.t.o.)