Still around Still very interested and invested in Almonty. I just don’t have the time to participate in the discussion as before.
General considerations.
- Tungsten right now has a tough market. Until infrastructure, transportation, mining and oil exploration come back and start growing again the demand will not be what it was projected to be 4-5 years ago.
- There are encouraging signs from oil. OPEC has agreed to cut down production, which will encourage new exploration
- Most industrial metals have moved up significantly over the last couple of months and the US election is expected to move the needle from the service sector to the manufacture sector.
- An increase in Tungsten demand already is happening. As soon as oversupply due to FANYA inventory sales is digested the price of tungsten will increase corresponding to demand.
The company is navigating a difficult route as well as can be expected.
- Avoided costly mistakes (it got out of the ferro-tungsten diversion and shut down the expensive Australian operation without losing too much money).
- Is continuing the development at Sangdong. This needs to be done carefully. The mine should be started too soon as not to get in the market at prices that are too low.
- Got good off-take revisions of terms with substantial premium over current spot prices.
- Is about to finance the construction of Sangdong with 100% debt.
- Mr. Black has stated that he has binding agreements on the financing from the Korean bank and an undisclosed off-taker. Such statements are legally actionable if they are not truthful.
- 100% debt financing is very hard to obtain in the mining industry and only well established companies with a ton of experience and trust can get them. It is possible that there is some kind of loan guarantee from the Korean government.
- I have not checked Korean sources lately. The plaque from the elder community of Sangdong looks personal and a bit touching.
The SP of Almonty is subject to supply and demand.
- For mining companies demand comes from better fundamentals, and for small companies even more from momentum.
- There are clear signs of improving fundamentals (good off-take agreements and financing terms). But right now looks like most momentum is denied by large supply of shares may be related to a couple of large holders liquidating.
- I do not blame the company for having a share buyback program to try to limit such downside.