There are major indications that the W (tungsten/wolfram) market is turning. Earlier this week, two junior antipodean W companies (Kings Island Scheelite and EQ Resources) got millions of dollarydoos each in private placements to advance their development projects. The W market is usually skittish about investment, precisely because it is so opaque. China is the largest producer of W (82%) and Vietnam (9%) is directly within their sphere of control. This means China has oligopolistic control of the market. They can flood or restrict supply as it suits their economic/geopolitical goals. But tungsten, like all metals, is one of those things we need to live our decadent western lifestyles.
Enter $AII. A massive pipeline of production and development projects. Recently got financing to restart the Sangdong mine in South Korea. One of the largest deposits and highest grades outside of China. 43-101 economics does not include the inferred resource. If even a fraction of the inferred moves into M&I, it is a multidecade monster. They have a producing mine in Portugal and two more Spanish projects each with a Sn byproduct.
Management? CEO Lewis Black has 15 years experience in Tungsten and owns something ridiculous (19.5%?). Because the Portuguese W mine is over 100 years old, the company has fourth-generation W miners, geos, engineers on staff. This gives the company an unparalleled understanding of the metal.
Financials? Positive FCF within a few years, especially if MTU WO3 cooperates. DYODD.
Immediate catalysts? Cross-listing on South Korean exchange and ASX exchange in coming weeks where there is a greater appreciation for the economic importance of W.
What about if China floods the market? Almonty has an off-take agreement with the Germans that includes a price floor. Asymmetric upside if South China Sea heats ups and/or China restricts export. We're currently working through a supply overhang created by a chinese company, Fanya. The financing of the Australian projects is a really bullish indicator that bulls believe the market is turning the corner.
What about the competition? Check out Saloro, W Resources, King Island, EQ. Tungsten West is still private. There are a couple massive high-grade deposits on the border between Yukon/NWT but the last company went bankrupt on low prices and the federal and territorial governments wound up having to buy the mines. High opex was too high. There are a handful of explorers in Canada (HPY,PLY,XTM) but given the uncertainty surrounding Chinese supply, a lot of these smaller and/or lower grade projects will never see development until prices rise significantly higher for an extended period of time.
No one can ramp up supply as easily as Almonty. It already has off-take agreements in place which allow it to weather cycles. This substantially protects against downside risk.
Please do your own due diligence. I am nobody special.
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