Warrant Revaluation Drives Almonty’s Heavy Q1 Loss Despite Operational Gains
Almonty Industries posted a modest revenue rise in Q1 2025 but faced a steep net loss due to warrant revaluation, while securing key U.S. defense contracts and advancing its flagship Sangdong tungsten mine.
- Revenue edged up 1.3% to CAD 7.9 million
- Net loss widened to CAD 34.6 million driven by non-cash warrant liability revaluation
- Secured exclusive tungsten oxide offtake agreement with U.S. defense contractor
- Shareholders approved domestication to U.S. with 99.6% support
- Sangdong mine construction completed, near-term startup imminent
Financial Performance Highlights
Almonty Industries reported its first quarter 2025 financial results with revenue increasing slightly to CAD 7.9 million, up 1.3% from the prior year quarter. This modest growth was driven by improved pricing and increased production at its Panasqueira mine in Portugal. Income from mining operations rose 24.1% to CAD 0.75 million, reflecting operational efficiencies and market conditions.
However, the company recorded a significant net loss of CAD 34.6 million, primarily due to a non-cash accounting charge of CAD 25.8 million related to the revaluation of warrant liabilities. This revaluation was triggered by Almonty’s stock price more than doubling during the quarter, illustrating how accounting treatments can sometimes obscure underlying operational progress.
Strategic U.S. Expansion and Defense Sector Focus
Almonty made notable strides in strengthening its U.S. presence, a move aligned with rising geopolitical tensions and strategic demand for tungsten in defense applications. The company secured a binding offtake agreement with a U.S. defense contractor to supply tungsten oxide exclusively for American defense uses. Complementing this, shareholders overwhelmingly approved the company’s domestication from Canada to the United States, a strategic shift aimed at enhancing competitiveness and aligning with U.S. industry priorities.
Further cementing its position, Almonty partnered with American Defense International, a government relations firm, to bolster its role as a key allied supplier of tungsten. This partnership is expected to facilitate deeper engagement with U.S. defense and technology sectors, potentially opening doors to further contracts and collaborations.
Sangdong Mine Nears Operational Phase
The company is advancing toward the startup of its flagship Sangdong tungsten mine in South Korea, one of the world’s largest and highest-grade tungsten deposits outside China. Construction is effectively complete, with processing equipment installed and the final drawdown of a US$75.1 million project loan secured. Sangdong’s higher ore grade compared to Panasqueira is anticipated to deliver more favorable production economics, positioning Almonty for a new growth phase.
Almonty’s cash position improved to CAD 16.9 million by quarter-end, bolstered by equity placements and warrant exercises, providing financial flexibility to support the Sangdong ramp-up and other development projects in Spain.
Investor Relations and Market Positioning
Recognizing the importance of clear communication, Almonty engaged MZ Group to lead a global investor relations and financial communications program. This initiative aims to articulate the company’s strategic value proposition amid a complex market environment, especially given the non-cash accounting impacts on reported earnings.
CEO Lewis Black emphasized the company’s readiness to capitalize on rising strategic demand for tungsten in defense and technology sectors, highlighting the near-term operational milestones and strengthened U.S. ties as key drivers for future growth.
Bottom Line?
With Sangdong’s startup imminent and U.S. defense ties deepening, Almonty stands at a pivotal growth juncture despite accounting headwinds.
Questions in the middle?
- How will Sangdong’s production ramp-up impact Almonty’s profitability and cash flow?
- What are the long-term implications of domestication to the U.S. for Almonty’s operational and regulatory landscape?
- Could further strategic partnerships or contracts in the U.S. defense sector accelerate Almonty’s market position?
