AII Almonty Industries (delisted)

EDISON EQUITY RESEARCH: ALMONTY INDUSTRIES - Q215 RESULTS; WOULFE TRANSACTION

Almonty reported mixed Q215 financials, with Los Santos delivering solid results while WCM underperformed. The company has also announced the acquisition of shares and debt in Woulfe Mining, which could provide it with an 18.7% interest, potentially leading to a combination of the companies’ assets. We lower our SOTP valuation of Almonty to C$1.0/share, but expect the shares to be well supported in the near-term should tungsten prices stabilise and on any evidence of WCM’s performance gradually improving. 

Almonty Industries is an independent tungsten producer, with two operating mines – Los Santos in Spain and Wolfram Camp in Australia – and the development-stage Valtreixal tungsten-tin project in Spain. The company produced 90kmtu of contained WO3 in FY14 and we expect it to deliver 133kmtu in FY15 as it fully consolidates WCM.

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