Almonty’s Heavy Non-Cash Losses Mask Progress as Sangdong Mine Prepares for Launch
Almonty Industries reported a challenging Q2 2025 with a significant non-cash loss but strengthened its position through a Nasdaq listing, a major U.S. defense offtake agreement, and progress at its flagship Sangdong mine.
- Q2 revenue declined 9.4% to CAD 7.2 million
- Net loss surged to CAD 58.2 million due to non-cash warrant and derivative revaluations
- Completed Sangdong mine construction, targeting production in H2 2025
- Raised US$90 million in Nasdaq public offering
- Secured U.S. defense tungsten offtake and joined DARPA-backed critical minerals forum
Financial Performance and Accounting Impact
Almonty Industries released its second quarter 2025 financial results revealing a 9.4% drop in revenue to CAD 7.2 million compared to the prior year. The company reported a substantial net loss of CAD 58.2 million, primarily driven by non-cash accounting adjustments related to warrant and derivative liabilities. These revaluations reflect the surge in Almonty’s share price over the past year, inflating the reported loss but not impacting cash flow or operational performance.
Adjusted EBITDA, a key measure excluding these non-cash items, was negative CAD 4.8 million, marking a modest decline from breakeven in the previous year. Operating expenses rose sharply due to increased share-based compensation and costs linked to the company’s proposed redomiciliation.
Strategic Operational Advances
Despite financial headwinds, Almonty made significant strides operationally. The Sangdong mine in South Korea, one of the world’s largest and highest-grade tungsten deposits outside China, reached construction completion with all processing equipment installed. The company is on track to commence initial production in the second half of 2025, a milestone that could transform its production profile and economics given Sangdong’s superior ore grades compared to its existing Panasqueira mine in Portugal.
Alongside mine development, Almonty secured a hard floor offtake agreement to supply a minimum of 40 metric tonnes of tungsten oxide monthly exclusively for U.S. defense applications. This deal underscores the company’s strategic role in diversifying critical mineral supply chains amid geopolitical tensions and increasing demand for tungsten in defense and advanced technology sectors.
Capital Markets and Governance Enhancements
Almonty bolstered its financial position by successfully listing on the Nasdaq Capital Market under the ticker “ALM” and raising gross proceeds of US$90 million through a public offering. This capital injection strengthens the company’s balance sheet to support Sangdong’s ramp-up and future growth initiatives.
Further reinforcing its strategic focus, Almonty appointed Alan Estevez, a former U.S. Under Secretary of Commerce for Industry and Security, to its board. Estevez’s expertise in national security and industry aligns with Almonty’s increasing engagement with U.S. defense and critical minerals initiatives, including its invitation to the DARPA-funded U.S. Critical Minerals Forum.
Outlook and Market Positioning
With the Sangdong mine poised to become a cornerstone of global non-China tungsten supply, Almonty is positioning itself at the nexus of rising geopolitical demand and supply chain security efforts. The company’s operational progress, strategic partnerships, and strengthened capital base suggest a transformative phase ahead. However, investors should remain mindful of the typical risks associated with mining project ramp-ups and the volatility inherent in commodity markets.
Bottom Line?
Almonty’s upcoming Sangdong production and strategic U.S. partnerships set the stage for a pivotal growth chapter despite near-term accounting losses.
Questions in the middle?
- How will Sangdong’s production ramp-up impact Almonty’s revenue and profitability in the coming quarters?
- What are the implications of the planned redomiciliation on Almonty’s shareholder structure and warrant liabilities?
- How might geopolitical tensions and U.S. defense demand shape tungsten pricing and Almonty’s market share?
