Almonty (ALM) Authorized a $300M Buyback Before Sangdong Fully Ramps. Is that the Best Use of Capital?

Almonty (ALM) Authorized a $300M Buyback Before Sangdong Fully Ramps. Is that the Best Use of Capital?

Jeff Lewis

Thu, August 27, 2026 at 11:49 PM GMT+3 3 min read

• ALM -4.50%

Almonty Industries Inc. (NASDAQ:ALM) began a 36-month share-repurchase authorization on August 24 that permits the company to buy up to 14.4 million common shares, representing approximately 5% of shares outstanding as of August 14, for as much as US$300 million.

The headline amount overstates what Almonty Industries Inc. (NASDAQ:ALM) would spend at its current valuation. At the August 24 closing price of $18.28, repurchasing the full 14.4 million shares would cost approximately $263.2 million before transaction costs. The share limit would become the binding constraint unless the average purchase price exceeds roughly $20.83.

Bull Case

The buyback is financially plausible because Almonty Industries Inc. (NASDAQ:ALM) ended June with C$1.23 billion of cash. First-half operating cash flow reached C$31.6 million, compared with a C$14.9 million outflow a year earlier, while second-quarter revenue increased to C$43.0 million from C$7.2 million.

Sangdong is also moving beyond construction. Almonty Industries Inc. (NASDAQ:ALM) began feeding stockpiled ore into the processing plant in June to produce saleable tungsten concentrate. Phase I is designed for approximately 640,000 tonnes of annual ore throughput, and the planned Phase II expansion could increase capacity to approximately 1.2 million tonnes.

If management is correct that the market undervalues Sangdong's future cash flow, retiring shares before the mine reaches full output could increase each remaining shareholder's participation in that growth. Almonty Industries Inc. (NASDAQ:ALM) also has flexibility to spread purchases across three years rather than committing the entire amount immediately.

Bear Case

The cash balance is not entirely surplus capital. Almonty Industries Inc. (NASDAQ:ALM) issued US$800 million in principal of 2.25% convertible senior notes due in 2031, generating approximately US$772.7 million in net proceeds. Management said the resulting liquidity would allow Almonty to advance Sangdong Phase II, the Korean tungsten-oxide facility, Gentung and the Panasqueira extension in parallel.

Because the cash balance increased primarily from the note offering, executed repurchases would reduce liquidity otherwise available for development projects, regardless of which cash source management assigns to the purchases. The company must determine how much capital its expansion pipeline will require before treating excess cash as available for shareholder returns.

The authorization itself creates no earnings or per-share benefit. Almonty Industries Inc. (NASDAQ:ALM) may determine the timing and volume of purchases and can amend, suspend, or discontinue the program. No shares will be retired unless management executes repurchases.

Hedge Fund Sentiment

The filings available so far reflect positions held before ALM authorized the Buyback program. Insider Monkey's database showed 28 hedge funds holding ALM at the end of 2Q2026, down from 30 funds three months earlier.

Conclusion

Almonty Industries Inc. (NASDAQ:ALM) has enough liquidity to consider a buyback while Sangdong ramps, and repurchasing undervalued shares could become an attractive use of capital. However, the company's cash position followed a large convertible-note offering and supports several development projects.

The authorization should therefore be treated as a signal of management confidence. Its value will depend on the number of shares actually purchased, the prices paid, and whether those purchases leave sufficient capital to complete Sangdong's ramp and planned expansions.

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Disclosure: None. This article is originally published at Insider Monkey.