Why Did Almonty’s Q1 Loss Soar to CAD 34.6M Despite Stable Revenue?

Financial Performance and Loss Drivers

Almonty Industries Inc. released its unaudited interim financial statements for the first quarter ended March 31, 2025, revealing a net loss of CAD 34.6 million, a substantial increase from the CAD 3.8 million loss reported in the same period last year. Despite this, the company’s revenue remained relatively stable at CAD 7.9 million, underscoring consistent production levels from its tungsten mining operations.

The steep rise in net loss was largely attributable to significant non-cash charges related to the revaluation of warrant liabilities and embedded derivative liabilities. These valuation adjustments, driven by the company’s rising share price and market volatility, resulted in a combined loss exceeding CAD 28 million, overshadowing operational earnings.

Balance Sheet and Liquidity Position

Almonty’s balance sheet shows an increase in long-term debt to CAD 177.3 million, reflecting ongoing financing activities including a US$75.1 million project loan from KfW IPEX-Bank for the Sangdong tungsten project in South Korea. The company’s working capital deficiency improved to CAD 16.7 million from CAD 30.5 million at the end of 2024, supported by CAD 8.6 million in additional financing secured during the quarter.

Cash reserves rose to CAD 17.0 million, bolstered by proceeds from recent equity raises and warrant exercises. The company remains compliant with all debt covenants, a critical factor given its reliance on external financing to fund operations and project development.

Operational Footprint and Segment Overview

Almonty’s operations span multiple geographies, including tungsten mining at the Los Santos mine in Spain and the Panasqueira mine in Portugal, alongside development activities at the Sangdong project in South Korea and exploration at the Valtreixal project in Spain. The company reported mining income of CAD 752,000 for the quarter, a modest improvement over the prior year, reflecting steady production despite cost pressures.

Capital expenditures during the quarter totalled CAD 10.9 million, primarily directed towards advancing the Sangdong project and sustaining existing mine infrastructure. The company’s restoration provisions and environmental commitments remain significant, with liabilities exceeding CAD 25 million, reflecting long-term reclamation obligations.

Equity and Shareholder Activity

Equity financing remains a key component of Almonty’s capital strategy. The company issued over 12 million common shares during the quarter through private placements, warrant exercises, and debt conversions, raising substantial proceeds to support liquidity. Share-based compensation expenses increased, reflecting new stock option and restricted share unit grants to employees and directors, aligning incentives with shareholder value creation.

Subsequent to quarter-end, Almonty continued to raise capital through warrant and option exercises, further strengthening its cash position. The company also granted new stock options and RSUs, signaling confidence in its growth prospects and commitment to retaining key talent.

Outlook and Strategic Considerations

While the significant non-cash losses weigh heavily on the quarter’s results, Almonty’s operational performance and financing activities suggest a company actively managing its capital structure amid challenging market conditions. The completion of the Sangdong project financing and ongoing development efforts position the company for potential growth in tungsten production capacity.

Investors will be watching closely how Almonty balances its debt obligations, liquidity needs, and operational execution in the coming quarters, especially as commodity markets and currency fluctuations continue to impact financial outcomes.