Almonty Industries (Nasdaq: ALM) posts Q2 profit, raises $800M in converts
Rhea-AI Filing Summary
Almonty Industries reported a sharp turnaround in the quarter ended June 30, 2026, as soaring tungsten prices and initial Sangdong contribution drove results. Revenue rose 498% year-over-year to $43.0 million from $7.2 million and increased 69% sequentially. Income from mining operations was $26.1 million versus a loss in the prior-year quarter, with total cost of sales at 39.3% of revenue and a gross margin of 60.7%.
Net income reached $181.8 million (diluted EPS $0.62) compared with a loss of $58.2 million, but this included $173.1 million of net non-cash gains from revaluing derivative and warrant instruments tied to convertible securities and capped calls. Adjusted EBITDA was $17.6 million versus negative $4.8 million, highlighting stronger underlying operations.
Operating cash flow for the first half was $31.6 million compared with a use of $14.9 million a year earlier. Cash increased to $1.23 billion from $268.4 million, primarily from an oversubscribed US$800 million 2.25% convertible senior notes issuance due 2031. Phase I of the Sangdong Mine remains in commissioning, and an amended offtake with GTP extends term by six years, increases contracted volumes by 40%, and improves pricing by about 6.3%.
Positive
- Revenue surged 498% year-over-year to $43.0 million, driven largely by record tungsten pricing and higher volumes, marking a major scale-up of the operating base.
- Adjusted EBITDA improved to $17.6 million from a loss of $4.8 million, indicating substantially better underlying operational performance.
- Net income swung to $181.8 million from a $58.2 million loss, reflecting both stronger operations and favorable non-cash derivative revaluations.
- Operating cash flow for the first half reached $31.6 million, versus a $14.9 million use of cash a year earlier, showing improved cash-generation capacity.
- Cash rose to $1.23 billion from $268.4 million, mainly from a US$800 million convertible notes issue, providing significant flexibility to fund multiple projects in parallel.
- The amended GTP offtake agreement extends term by six years, raises contracted volumes by 40% and improves pricing by about 6.3%, strengthening future revenue visibility.
Negative
- Results are highly influenced by $173.1 million of non-cash gains on derivative and warrant revaluations, introducing earnings volatility unrelated to core mining operations.
- General and administrative expenses more than doubled year-over-year in the quarter to $8.9 million, reflecting higher overhead as the company scales.
- The balance sheet now carries $687.2 million of convertible senior notes plus $258.6 million of derivative liabilities, increasing financial complexity and future dilution or refinancing risk.
Key Figures
Key Terms
Adjusted EBITDA financial
capped call financial
embedded derivative liabilities financial
restoration provision financial
conflict-free tungsten technical
Russell 1000 Index market
FAQ
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What is Almonty Industries’ (ALM) underlying operating performance in Q2 2026?
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AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2026
Commission File Number: 001-42737
ALMONTY INDUSTRIES INC.
(Translation of registrant’s name into English)
8 South Idaho Street, Suite A
Dillon, Montana 59725 United States of America
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
DOCUMENTS FILED AS PART OF THIS FORM 6-K
| Exhibit | Description | |
| 99.1 | Press Release dated August 11, 2026 | |
| 99.2 | Interim Condensed Consolidated Financial Statements for the three and six months ended June 30, 2026 (unaudited) | |
| 99.3 | Management’s Discussion and Analysis for the three and six months ended June 30, 2026 |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ALMONTY INDUSTRIES INC. | ||
| Date: August 11, 2026 | ||
| By: | /s/ Lewis Black | |
| Name: | Lewis Black | |
| Title: | Chief Executive Officer | |
| 3 |
Exhibit 99.1
Almonty Industries Reports Second Quarter 2026 Financial Results
Revenue Increases 498% Year-Over-Year to $43.0 Million, Driven by Record Tungsten Pricing
Net Income of $181.8 Million Compared to a Loss of $58.2 Million and Adjusted EBITDA(1) of $17.6 Million Compared to ($4.8) Million in Q2 2025
Closes Oversubscribed US$800 Million Convertible Senior Notes Offering; Cash Position of C$1.2 Billion
Dillon, Montana — August 11, 2026 – Almonty Industries Inc. (“Almonty” or the “Company”) (Nasdaq: ALM; Frankfurt: ALI1), a leading global producer of tungsten concentrate, today announced its financial results for the three and six months ended June 30, 2026. All figures are presented in Canadian dollars unless otherwise noted.
All amounts in this news release are in thousands of Canadian dollars except per common share amounts and unless otherwise noted.
Financial Summary:
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | 42,989 | 7,192 | ||||||
| Income (loss) from mining operations | 26,103 | (944 | ) | |||||
| General and administrative expenses | 8,858 | 4,088 | ||||||
| Net income (loss) for the period | 181,797 | (58,209 | ) | |||||
| Earnings (loss) per share – basic | $ | 0.64 | $ | (0.30 | ) | |||
| Earnings (loss) per share – diluted | $ | 0.62 | $ | (0.30 | ) | |||
| Adjusted EBITDA (Non-IFRS) | 17,564 | (4,761 | ) | |||||
Key Second Quarter 2026 & Subsequent Operational Highlights
| ● | Phase I of the Sangdong tungsten mine (the “Sangdong Mine”) in Gangwon Province, South Korea remains in commissioning and ramp-up. Once fully operational, targeted ore throughput capacity is expected to reach approximately 640,000 tonnes per year, with a fully permitted Phase II expansion contemplated to increase throughput capacity to up to 1.2 million tonnes per year. | |
| ● | Subsequent to quarter end, on July 14, 2026, Almonty entered into an amendment to its long-term offtake agreement with Global Tungsten & Powders LLC (“GTP”), a member of Austria’s Plansee Group, covering tungsten concentrate produced from Phase I of the Sangdong Mine. The amendment extends the term of the agreement by six years, increases total contracted volumes by 40% and improves the pricing payable to Almonty on all contracted volumes by approximately 6.3%. | |
| ● | On June 9, 2026, Almonty closed its oversubscribed offering of 2.25% convertible senior notes due 2031, generating gross proceeds of US$800 million, including the exercise in full by the initial purchasers of their option to purchase additional notes. | |
| ● | Cash totaled $1.2 billion as of June 30, 2026, as compared to $268.4 million as of December 31, 2025, providing the Company with substantial financial flexibility to advance its growth pipeline. | |
| ● | On June 29, 2026, Almonty joined the large-cap Russell 1000 Index and the broad-market Russell 3000 Index upon the conclusion of the 2026 Russell indexes reconstitution. |
| 1 |
Management Commentary
Lewis Black, Chairman, President & CEO, commented: “The second quarter of 2026 demonstrated a first look at the prospective earnings power that Almonty has spent more than a decade building toward. Revenue increased 498% year-over-year to $43.0 million and 69% sequentially, income from mining operations reached $26.1 million, and Adjusted EBITDA was $17.6 million – an improvement of more than $22 million from the same quarter last year.
“Just as importantly, we transformed our balance sheet. The US$800 million convertible senior notes offering we closed in June was substantially oversubscribed and leaves us with $1.2 billion in cash – providing capital that allows us to advance the Phase II expansion at Sangdong, the Tungsten Oxide Facility in South Korea, the Gentung Tungsten Project in Montana and the Panasqueira extension in parallel rather than sequentially. Our inclusion in the Russell 1000 and Russell 3000 indices, together with the amendment to our GTP offtake agreement extending the term by six years while increasing contracted volumes by 40% and improving pricing by approximately 6.3%, reflects how quickly both the market and our customers are recognizing the strategic value of secure, Western-aligned tungsten supply.”
Jorge Beristain, CFA, Chief Financial Officer, added: “Our second quarter results show a business with substantial operating leverage. Revenue of $43.0 million converted into $26.1 million of income from mining operations, with gross profit margin at 60.7% of revenue, and we generated $31.6 million of cash flow from operating activities in the first half of the year, compared to a use of $14.9 million in the same period last year.
“Reported net income of $181.8 million includes $173.1 million of net non-cash gains on the revaluation of derivative and warrant instruments, which are a function of IFRS fair value accounting on our convertible instruments and capped calls. We ended the quarter with $1.2 billion in cash, and subsequent to quarter end we repaid our KfW term loan in full. We are well capitalized to fund our development pipeline through to production.”
Second Quarter 2026 Financial Results Highlights
Revenue in the second quarter of 2026 increased 498% to $43.0 million, as compared to $7.2 million in the same year-ago quarter, and increased 69% from $25.4 million in the first quarter of 2026. The increase was driven primarily by the significant appreciation in the price of tungsten APT, with the European APT average price rising to US$3,075 per MTU during the second quarter of 2026 from US$453 per MTU in the second quarter of 2025.
Income from mining operations in the second quarter of 2026 was $26.1 million, as compared to a loss from mining operations of ($0.9) million in the same year-ago quarter. Total cost of sales was $16.9 million, or 39.3% of revenue, as compared to $8.1 million in the same year-ago quarter.
| 2 |
General and administrative expenses in the second quarter of 2026 totaled $8.9 million, as compared to $4.1 million in the same year-ago quarter. The increase was primarily attributable to higher salaries and wages as the Company expanded its management team to support its growth trajectory, as well as increased consulting, legal, and operating costs. The Company expects a normalization of general and administrative expenses over time as the organization scales.
Net income in the second quarter of 2026 was $181.8 million, or $0.62 per diluted share, as compared to a net loss of ($58.2) million, or ($0.30) per share, in the same year-ago quarter. Second quarter 2026 results included $173.1 million in aggregate net non-cash gains on the revaluation of derivative and warrant instruments, comprising a $204.4 million non-cash gain on the revaluation of embedded derivative liabilities, partially offset by a $30.7 million non-cash loss on the revaluation of the embedded derivative asset associated with the Company’s capped call transactions and a $0.6 million non-cash loss on the revaluation of warrant liabilities. These non-cash accounting items did not impact the Company’s operating performance, cash flow, or liquidity position.
Adjusted EBITDA, a non-IFRS measure, was $17.6 million in the second quarter of 2026, as compared to ($4.8) million in the same year-ago quarter, reflecting the substantial improvement in underlying operational performance.(1)
Cash flow provided by operating activities was $31.6 million for the six months ended June 30, 2026, as compared to cash used in operating activities of ($14.9) million in the same year-ago period.
Cash as of June 30, 2026 totaled $1.23 billion, as compared to $268.4 million as of December 31, 2025. The increase primarily reflects gross proceeds of US$800 million from the convertible senior notes offering completed in June 2026, together with positive cash flow generated from operations.
About Almonty
Almonty (Nasdaq: ALM) (Frankfurt: ALI1) is a leading supplier of conflict-free tungsten – a strategic metal critical to the defense and advanced technology sectors. As geopolitical tensions heighten, tungsten has become essential for armor, munitions, and electronics manufacturing. Almonty’s flagship Sangdong Mine in South Korea, historically one of the world’s largest and highest-grade tungsten deposits, is expected to be a major contributor to the global non-China tungsten supply chain upon reaching full capacity, directly addressing critical supply vulnerabilities highlighted by recent U.S. defense procurement bans and export restrictions by China. With established operations in Portugal and additional projects in the U.S. and Spain, Almonty is strategically aligned to meet rapidly rising demand from Western allies committed to supply-chain security and defense readiness. To learn more, please visit https://almonty.com
Legal Notice
The release, publication, or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published, or distributed should inform themselves about and observe such restrictions.
| 3 |
(1) Use of Non-IFRS Financial Measures
This news release makes reference to the non-IFRS financial measure “Adjusted EBITDA”. Non-IFRS financial measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS financial measures by providing further understanding of Almonty’s results of operations from management’s perspective. Almonty’s definitions of non-IFRS measures, including the definition of the non-IFRS financial measure “Adjusted EBITDA” used in this news release, may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of Almonty’s financial information reported under IFRS. Almonty uses non-IFRS financial measures, including “Adjusted EBITDA”, to provide investors with supplemental measures of its operating performance and to eliminate items that have less bearing on operating performance or operating conditions, and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. In particular, Almonty’s management uses Adjusted EBITDA in order to evaluate its operating performance, by eliminating the impact of non-operational or non-cash items. Almonty believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. Almonty’s management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period.
IFRS NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION
| Three Months Ended June 30, | ||||||||
| (in thousands of Canadian dollars) | 2026 | 2025 | ||||||
| Net income (loss) for the period | 181,797 | (58,209 | ) | |||||
| Depreciation & amortization | 319 | 271 | ||||||
| (Gain) loss on valuation of embedded derivative liabilities | (204,407 | ) | 6,942 | |||||
| Loss on valuation of embedded derivative asset | 30,683 | – | ||||||
| Loss on valuation of warrant liabilities | 588 | 38,084 | ||||||
| Foreign exchange (gain) loss | (698 | ) | 314 | |||||
| Taxes | 6,244 | (58 | ) | |||||
| Interest, net | 1,919 | 1,122 | ||||||
| Share-based compensation | 1,119 | 6,773 | ||||||
| Adjusted EBITDA (Non-IFRS) | 17,564 | (4,761 | ) | |||||
Cautionary Note Regarding Forward-Looking Information
This news release contains “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws. All statements, other than statements of present or historical facts, are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results could differ materially from those expressed or implied in such statements. You are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are typically identified by words such as “plan”, “development”, “growth”, “continued”, “intentions”, “expectations”, “emerging”, “evolving”, “strategy”, “opportunities”, “anticipated”, “trends”, “potential”, “outlook”, “ability”, “additional”, “on track”, “prospects”, “viability”, “estimated”, “reaches”, “enhancing”, “strengthen”, “target”, “believes”, “next steps” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements in this news release include, but are not limited to, statements concerning the commissioning and ramp-up of Phase I of the Sangdong Mine, the expected timing, capacity and throughput of the Sangdong Mine and its contemplated Phase II expansion, the development of the Tungsten Oxide Facility, the Gentung Tungsten Project and the Panasqueira Mine extension, the expected timing and effect of the Company’s delisting from the Australian Securities Exchange, the anticipated benefits of the amended GTP offtake agreement, the Company’s expected use of the proceeds of its convertible senior notes offering, the sufficiency of the Company’s capital resources, and the expected impact of tungsten market trends and prices on the Company’s operations.
| 4 |
Forward-looking statements are based upon certain assumptions and other important factors that, if untrue, could cause actual results to be materially different from future results expressed or implied by such statements. There can be no assurance that forward-looking statements will prove to be accurate. Key assumptions upon which the Company’s forward-looking information is based include, without limitation, the successful completion of commissioning and ramp-up at the Sangdong Mine, the availability of funding for continued development, the performance of counterparties under offtake and other material agreements, and the expected trajectory of tungsten prices. Forward-looking statements are also subject to risks and uncertainties facing the Company’s business, including, without limitation, the risks identified in the Company’s annual information form dated March 18, 2026 for the year ended December 31, 2025 and in the Company’s management’s discussion and analysis dated August 11, 2026 for the three and six months ended June 30, 2026 and 2025.
Although Almonty has attempted to identify important factors that could cause actual results, level of activity, performance or achievements to differ materially from those contained in forward-looking statements, the foregoing list of material factors is not exhaustive, and there may be other factors that could cause results, level of activity, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, and even if events or results described in the forward-looking statements are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, Almonty. Accordingly, readers should not place undue reliance on forward-looking statements and are cautioned that actual outcomes may vary. When relying on Almonty’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Almonty has also assumed that material factors will not cause any forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF ALMONTY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE ALMONTY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
Company
Lewis Black
Chairman, President & CEO
(647) 438-9766
info@almonty.com
Investor Relations
Lucas A. Zimmerman
Managing Director
MZ Group – MZ North America
(949) 259-4987
ALM@mzgroup.us
www.mzgroup.us
| 5 |
Exhibit 99.2
Unaudited Interim Condensed Consolidated Financial Statements
For the Three and Six Months Ended June 30, 2026 and 2025
Presented in Canadian dollars
| 1 |
Management’s Responsibility for Financial Reporting
The accompanying unaudited interim condensed consolidated financial statements for Almonty Industries Inc. (“Almonty”) were prepared by management in accordance with International Financial Reporting Accounting Standards (“IFRS”). Management acknowledges responsibility for the preparation and presentation of the unaudited interim condensed consolidated financial statements, including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to Almonty’s circumstances. The significant accounting policies of Almonty are summarized in Note 3 to the audited annual consolidated financial statements for the year ended December 31, 2025.
Management has established processes, which are in place to provide it with sufficient knowledge to support management representations that it has exercised reasonable diligence that (i) the unaudited interim condensed consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the unaudited interim condensed consolidated financial statements and (ii) the unaudited interim condensed consolidated financial statements fairly present in all material respects the financial condition, financial performance and cash flows of Almonty, as of the date of and for the periods then ended presented by the unaudited interim condensed consolidated financial statements.
Almonty’s board of directors (the “Board of Directors”) is responsible for reviewing and approving the unaudited interim condensed consolidated financial statements together with other financial information of Almonty and for ensuring that management fulfills its financial reporting responsibilities. The audit and risk management committee of the Board of Directors (the “Audit Committee”) assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the unaudited interim condensed consolidated financial statements together with other financial information of Almonty. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the unaudited interim condensed consolidated financial statements together with other financial information of Almonty for issuance to the shareholders.
Management recognizes its responsibility for conducting Almonty’s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.
| “Lewis Black” | “Jorge Beristain” | |
| Lewis Black | Jorge Beristain | |
| Chairman, President & CEO | Chief Financial Officer | |
| August 11, 2026 | ||
| Dillon, Montana, USA |
| 2 |
Almonty Industries Inc.
Unaudited Interim Condensed Consolidated Statements of Financial Position
(in 000’s of Canadian dollars except for common share and per common share amounts and unless otherwise noted)
| Note | June 30, 2026 | December 31, 2025 | ||||||||
| Assets | ||||||||||
| Current Assets | ||||||||||
| Cash | 5 | 1,227,242 | 268,409 | |||||||
| Trade receivables | 13,128 | 3,085 | ||||||||
| Taxes recoverable | 2,880 | 1,954 | ||||||||
| Inventories | 6 | 8,664 | 9,418 | |||||||
| Prepaid expenses and other current assets | 6,479 | 4,054 | ||||||||
| Total Current Assets | 1,258,393 | 286,920 | ||||||||
| Mining assets | 7 | 305,823 | 266,439 | |||||||
| Tailings inventory | 6 | 33,660 | 33,392 | |||||||
| Derivative asset | 10 | 103,214 | - | |||||||
| Deferred tax assets | 2,236 | 2,219 | ||||||||
| Other assets | 691 | 762 | ||||||||
| 445,624 | 302,812 | |||||||||
| Total Assets | 1,704,017 | 589,732 | ||||||||
| Liabilities | ||||||||||
| Current Liabilities | ||||||||||
| Accounts payable and accrued liabilities | 8 | 55,106 | 33,357 | |||||||
| Deferred revenue | - | 3,071 | ||||||||
| Warrant liabilities | 9 | 1,616 | 1,938 | |||||||
| Current derivative liabilities | 10 | 17,048 | 8,112 | |||||||
| Current portion of long-term debt | 11 | 57,576 | 27,267 | |||||||
| Total Current Liabilities | 131,346 | 73,745 | ||||||||
| Long-term debt | 11 | 755,572 | 134,846 | |||||||
| Non-current derivative liabilities | 10 | 241,559 | - | |||||||
| Restoration provision and other liabilities | 12 | 23,724 | 23,315 | |||||||
| Deferred tax liabilities | 15 | 15 | ||||||||
| 1,020,870 | 158,176 | |||||||||
| Total Liabilities | 1,152,216 | 231,921 | ||||||||
| Shareholders’ Equity | ||||||||||
| Share capital | 13 | 647,789 | 568,042 | |||||||
| Commitment to issue shares | 13 | - | 60,748 | |||||||
| Equity portion of convertible debentures | 508 | 508 | ||||||||
| Contributed surplus | 14,311 | 18,474 | ||||||||
| Accumulated other comprehensive loss | (5,206 | ) | (7,827 | ) | ||||||
| Deficit | (105,601 | ) | (282,134 | ) | ||||||
| Total Shareholders’ Equity | 551,801 | 357,811 | ||||||||
| Total Liabilities and Shareholders’ Equity | 1,704,017 | 589,732 | ||||||||
Nature of operations (Note 1)
Commitments and contingent liabilities (Note 19)
Subsequent events (Note 23)
Approved on behalf of the Board of Directors:
| /signed/ Lewis Black | /signed/ Mark Trachuk | |
| Director | Director |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
| 3 |
Almonty Industries Inc.
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
(in 000’s of Canadian dollars except for common share and per common share amounts and unless otherwise noted)
| For the three months ended | For the six months ended | |||||||||||||||||
| Note | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||||
| Revenues | 42,989 | 7,192 | 68,389 | 15,100 | ||||||||||||||
| Cost of sales | ||||||||||||||||||
| Production costs | 16,258 | 7,581 | 28,097 | 14,169 | ||||||||||||||
| Care and maintenance costs | 309 | 284 | 607 | 564 | ||||||||||||||
| Depreciation and amortization | 319 | 271 | 572 | 559 | ||||||||||||||
| 16,886 | 8,136 | 29,276 | 15,292 | |||||||||||||||
| Income (loss) from mining operations | 26,103 | (944 | ) | 39,113 | (192 | ) | ||||||||||||
| Expenses | ||||||||||||||||||
| General and administrative | 22 | 8,858 | 4,088 | 15,992 | 7,494 | |||||||||||||
| Interest expense | 5,742 | 1,122 | 6,236 | 2,328 | ||||||||||||||
| Share-based compensation | 13 | 1,119 | 6,773 | 4,752 | 7,624 | |||||||||||||
| Foreign exchange (gain) loss | (698 | ) | 314 | (2,498 | ) | 1,414 | ||||||||||||
| 15,021 | 12,297 | 24,482 | 18,860 | |||||||||||||||
| Income (loss) before other income (expenses) and income taxes | 11,082 | (13,241 | ) | 14,631 | (19,052 | ) | ||||||||||||
| Other income (expenses) | ||||||||||||||||||
| Interest income | 3,823 | - | 6,169 | - | ||||||||||||||
| Loss on valuation of warrant liabilities | 9 | (588 | ) | (38,084 | ) | (2,608 | ) | (63,894 | ) | |||||||||
| Gain (loss) on valuation of embedded derivative liabilities | 10 | 204,407 | (6,942 | ) | 198,015 | (9,851 | ) | |||||||||||
| Loss on valuation of embedded derivative asset | 10 | (30,683 | ) | - | (30,683 | ) | - | |||||||||||
| 176,959 | (45,026 | ) | 170,893 | (73,745 | ) | |||||||||||||
| Net income (loss) before income taxes | 188,041 | (58,267 | ) | 185,524 | (92,797 | ) | ||||||||||||
| Income tax expense | 6,244 | (58 | ) | 8,991 | 34 | |||||||||||||
| Net income (loss) for the period | 181,797 | (58,209 | ) | 176,533 | (92,831 | ) | ||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||
Items that may be reclassified subsequently to profit/loss | ||||||||||||||||||
| Unrealized gain on foreign currency translation | 8,083 | 15,184 | 2,621 | 13,687 | ||||||||||||||
| Comprehensive income (loss) for the period | 189,880 | (43,025 | ) | 179,154 | (79,144 | ) | ||||||||||||
| Earnings per share | ||||||||||||||||||
| Basic | $ | 0.64 | $ | (0.30 | ) | $ | 0.63 | $ | (0.49 | ) | ||||||||
| Fully-diluted | $ | 0.62 | $ | (0.30 | ) | $ | 0.60 | $ | (0.49 | ) | ||||||||
| Weighted average shares outstanding | 285,003,738 | 192,149,789 | 281,737,428 | 188,201,871 | ||||||||||||||
| Weighted average fully-diluted shares outstanding | 295,166,112 | 192,149,789 | 291,801,432 | 188,201,871 | ||||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
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Almonty Industries Inc.
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity
Three and Six Months ended June 30, 2026 and 2025
(in 000’s of Canadian dollars except for common share and per common share amounts and unless otherwise noted)
| Note | Share capital | Commitment to issue shares | Equity portion of convertible debentures | Contributed Surplus | Accumulated other comprehensive loss | Deficit | Total shareholders’ equity | |||||||||||||||||||||||
| Balance at December 31, 2024 | 146,619 | - | 1,241 | 16,072 | (4,638 | ) | (120,221 | ) | 39,073 | |||||||||||||||||||||
| Issuance of common shares and warrants for cash | 13 | 7,958 | - | - | 585 | - | - | 8,543 | ||||||||||||||||||||||
| Share issuance costs | 13 | (772 | ) | - | - | - | - | - | (772 | ) | ||||||||||||||||||||
| Shares issued on exercise of options1 | 13 | 484 | - | - | (377 | ) | - | - | 107 | |||||||||||||||||||||
| Shares issued on settlement of RSU’s1 | 13 | 2,172 | - | - | (1,725 | ) | - | - | 447 | |||||||||||||||||||||
| Shares issued on exercise of CDI options1 | 13 | 32,327 | - | - | - | - | - | 32,327 | ||||||||||||||||||||||
| Shares issued on exercise of warrants1 | 13 | 297 | - | - | (50 | ) | - | - | 247 | |||||||||||||||||||||
| Shares issued for settlement of debt1 | 13 | 90 | - | - | - | - | - | 90 | ||||||||||||||||||||||
| Shares issued for conversion of debt1 | 13 | 1,918 | - | - | - | - | - | 1,918 | ||||||||||||||||||||||
| Share-based compensation | 13 | - | - | - | 7,624 | - | - | 7,624 | ||||||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | 13,687 | (92,831 | ) | (79,144 | ) | |||||||||||||||||||||
| Balance at June 30, 2025 | 191,093 | - | 1,241 | 22,129 | 9,049 | (213,052 | ) | 10,460 | ||||||||||||||||||||||
| Issuance of common shares and warrants for cash | 13 | 302,277 | - | - | - | - | - | 302,277 | ||||||||||||||||||||||
| Share issuance costs | 13 | (24,140 | ) | - | - | - | - | - | (24,140 | ) | ||||||||||||||||||||
| Shares issued on exercise of options1 | 13 | 6,115 | - | - | (6,045 | ) | - | - | 70 | |||||||||||||||||||||
| Shares issued on settlement of RSU’s1 | 13 | 665 | - | - | (664 | ) | - | - | 1 | |||||||||||||||||||||
| Shares issued on exercise of CDI options1 | 13 | 21,998 | - | - | (2,838 | ) | - | - | 19,160 | |||||||||||||||||||||
| Shares issued on exercise of warrants1 | 13 | 9,740 | - | - | (1,371 | ) | - | - | 8,369 | |||||||||||||||||||||
| Shares issued for conversion of debt1 | 13 | 47,831 | - | (733 | ) | - | - | - | 47,098 | |||||||||||||||||||||
| Shares issued on acquisition of 100% of US Tungsten, Inc.1 | 13/14 | 12,463 | - | - | - | - | - | 12,463 | ||||||||||||||||||||||
| Commitment to issue shares for conversion of debt | 13 | - | 60,748 | - | - | - | - | 60,748 | ||||||||||||||||||||||
| Reclassification of amended CDI options | 13 | - | - | - | 3,802 | - | - | 3,802 | ||||||||||||||||||||||
| Share-based compensation | 13 | - | - | - | 3,461 | - | - | 3,461 | ||||||||||||||||||||||
| Net loss and comprehensive loss for the period | - | - | - | - | (16,876 | ) | (69,082 | ) | (85,958 | ) | ||||||||||||||||||||
| Balance at December 31, 2025 | 568,042 | 60,748 | 508 | 18,474 | (7,827 | ) | (282,134 | ) | 357,811 | |||||||||||||||||||||
Shares issued on exercise of options1 | 13 | 6,660 | - | - | (4,982 | ) | - | - | 1,678 | |||||||||||||||||||||
| Shares issued on settlement of RSU’s1 | 13 | 2,315 | - | - | (2,315 | ) | - | - | - | |||||||||||||||||||||
| Shares issued on exercise of CDI options1 | 13 | 6,089 | - | - | (614 | ) | - | - | 5,475 | |||||||||||||||||||||
| Shares issued on exercise of warrants1 | 13 | 5,305 | - | - | (1,004 | ) | - | - | 4,301 | |||||||||||||||||||||
| Settlement of commitment to issue shares1 | 13 | 59,378 | (60,748 | ) | - | - | - | - | (1,370 | ) | ||||||||||||||||||||
| Share-based compensation | 13 | - | - | - | 4,752 | - | - | 4,752 | ||||||||||||||||||||||
| Net income and comprehensive income for the period | - | - | - | - | 2,621 | 176,533 | 179,154 | |||||||||||||||||||||||
| Balance at June 30, 2026 | 647,789 | - | 508 | 14,311 | (5,206 | ) | (105,601 | ) | 551,801 | |||||||||||||||||||||
1See Note 21 for supplemental cash flow disclosures as these amounts include non-cash components.
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
| 5 |
Almonty Industries Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(in 000’s of Canadian dollars except for common share and per common share amounts and unless otherwise noted)
| For the six months ended | For the six months ended | |||||||||
| Note | June 30, 2026 | June 30, 2025 | ||||||||
| Operating activities | ||||||||||
| Net income (loss) for the period | 176,533 | (92,831 | ) | |||||||
| Add (deduct) non-cash items: | ||||||||||
| Share-based compensation | 4,752 | 7,624 | ||||||||
| Depreciation and amortization | 572 | 559 | ||||||||
| Interest expense | 6,236 | 2,328 | ||||||||
| Income tax expense | - | 34 | ||||||||
| Loss on valuation of warrant liabilities | 9 | 2,608 | 63,894 | |||||||
| (Gain) loss on valuation of embedded derivative liabilities | 10 | (198,015 | ) | 9,851 | ||||||
| Loss on valuation of embedded derivative asset | 10 | 30,683 | - | |||||||
| Unrealized foreign exchange (gains) losses | (2,498 | ) | 1,414 | |||||||
| 20,871 | (7,127 | ) | ||||||||
| Changes in non-cash working capital | ||||||||||
| Trade receivables | (10,043 | ) | (636 | ) | ||||||
| Taxes recoverable | (926 | ) | (206 | ) | ||||||
| Inventories | 754 | (876 | ) | |||||||
| Prepaid expenses and other current assets | (2,425 | ) | (1,439 | ) | ||||||
| Accounts payable and accrued liabilities | 26,491 | (4,321 | ) | |||||||
| Deferred revenues | (3,071 | ) | - | |||||||
| Net change in non-cash working capital | 10,780 | (7,478 | ) | |||||||
| Other assets | (45 | ) | (312 | ) | ||||||
| Cash flow provided by (used in) operating activities | 31,606 | (14,917 | ) | |||||||
| Investing activities | ||||||||||
| Additions to mining assets | (36,893 | ) | (14,871 | ) | ||||||
| Cash flow used in investing activities | (36,893 | ) | (14,871 | ) | ||||||
| Financing activities | ||||||||||
| Issuance of common shares for private placements | - | 11,125 | ||||||||
| Share issuance costs paid | (1,370 | ) | (772 | ) | ||||||
| Exercise of stock options | 1,678 | 107 | ||||||||
| Exercise of CDI options | 2,119 | 11,478 | ||||||||
| Exercise of warrants | 4,301 | 247 | ||||||||
| Issuance of long-term debt | 11 | - | 29,374 | |||||||
| Repayment of long-term debt | 11 | (409 | ) | (354 | ) | |||||
| Issuance of convertible senior notes | 11 | 1,127,440 | - | |||||||
| Convertible senior notes issuance costs | 11 | (38,793 | ) | - | ||||||
| Funding of capped call | 10 | (132,310 | ) | - | ||||||
| Interest paid | (494 | ) | (1,745 | ) | ||||||
| Cash flow provided by financing activities | 962,162 | 49,460 | ||||||||
| Effect of foreign currency translation on cash | 1,958 | (113 | ) | |||||||
| Net increase in cash for the period | 958,833 | 19,559 | ||||||||
| Cash at beginning of period | 268,409 | 7,830 | ||||||||
| Cash at end of period | 1,227,242 | 27,389 | ||||||||
See Note 21 for supplemental cash flow disclosures.
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
| 6 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 1. | Nature of operations |
Almonty Industries Inc. (together with its subsidiaries, “Almonty” or the “Company”) is incorporated under the Canada Business Corporations Act. As of June 30, 2026 Almonty’s common shares were listed on the Nasdaq Capital Market under the symbol ALM. Almonty’s common shares were also listed on the Toronto Stock Exchange (“TSX”) under the symbol AII, on the Australian Securities Exchange (“ASX”) under the symbol AII, and on the Frankfurt Stock Exchange under the symbol ALI1.
Subsequent to June 30, 2026, the Company’s shares were voluntarily delisted from the TSX, effective July 31, 2026 and the Company received approval to voluntarily delist from the ASX, which Almonty expects to be effective September 1, 2026.
The head office of the Company is located at 8 South Idaho Street, Suite A, Dillon, Montana, 59725. The Company is primarily engaged in the development of the Sangdong tungsten mine project in South Korea (the “Sangdong Mine”), and the Company is currently mining, processing and shipping tungsten concentrate from the Panasqueira tin and tungsten mine in Covilha, Castelo Branco, Portugal (the “Panasqueira Mine”). Additionally, the Company is evaluating its molybdenum project with inferred mineral resources on a separate property adjacent to the tungsten orebody at the Sangdong Mine, its Valtreixal tin and tungsten mine project located in Western Spain in the province of Zamora (the “Valtreixal Mine”) and the Gentung Browns Lake tungsten project located in Montana, United States that was acquired in late 2025 (the “Gentung Tungsten Project”). The Company also owns the Los Santos tungsten mine located near Salamanca, Spain (the “Los Santos Mine”), which is currently under care and maintenance.
On July 3, 2025, Almonty effected a share consolidation of its issued and outstanding common shares on the basis of one and a half (1.5) pre-consolidated common shares for one (1) post-consolidated common share (the “Share Consolidation”). Almonty’s common shares commenced trading on a post-consolidation basis on the TSX at the start of trading on July 7, 2025. As a result, Almonty’s issued and outstanding CHESS Depository Interests (“CDIs”), common share purchase warrants (“warrants”), CDI options, stock options and restricted share units (“RSUs”) were also consolidated on a 1.5 to 1 basis. All information relating to per common share amounts, issued and outstanding common shares, CDIs, warrants, CDI options, stock options and RSUs in these unaudited interim condensed consolidated financial statements have been adjusted retrospectively to reflect the Share Consolidation. There were 288,109,013 (December 31, 2025 - 262,776,228) common shares issued and outstanding as at June 30, 2026 on a post-consolidated basis.
| 7 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
These unaudited interim condensed consolidated financial statements have been prepared on a going concern basis which assumes that the Company will continue operating for the foreseeable future and will be able to realize a return on its assets and discharge its liabilities and commitments in the ordinary course of its business. Management assesses the Company’s ability to continue as a going concern at each reporting date, using quantitative and qualitative information available. As at June 30, 2026, the Company had a working capital position of $1,127,047 (December 31, 2025 – position of $213,175).
During the six months ended June 30, 2026, the Company received gross proceeds of US$800,000 in conjunction with the issuance of convertible senior notes (the “June 2026 Convertible Senior Notes”), from which US$26,000 was paid for underwriters’ fees and US$1,300 was paid for other transaction costs (Note 11), and paid US$94,800 in conjunction with the related capped call transaction (Note 10). In addition, the Company received $5,252 in conjunction with the exercise of warrants, CDI options and stock options. Subsequent to June 30, 2026, the Company also repaid its term loan with KfW IPEX-Bank GmbH (“KFW”) in the amount of EUR14,662.
The Company’s current forecast indicates that it will have sufficient cash flows from operations and from financings outlined above for the next year to continue as a going concern and settle obligations as they come due. The assessment of the Company’s ability to continue as a going concern, by its nature, relies on estimates of future cash flows and other future events, whose subsequent changes would materially impact the validity of such an assessment.
| 2. | Basis of presentation |
Statement of compliance
These unaudited interim condensed consolidated financial statements, including comparatives, have been prepared in compliance with IFRS as issued by the International Accounting Standards Board, including International Accounting Standards (“IAS”) 34, Interim Financial Reporting. Accordingly, certain disclosures included in annual financial statements prepared in accordance with IFRS have been condensed or omitted and these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025.
These unaudited interim condensed consolidated financial statements were authorized for issuance by the Board of Directors of the Company on August 11, 2026.
Basis of presentation
These unaudited interim condensed consolidated financial statements are presented in Canadian dollars (“CAD”), unless otherwise noted and have been prepared on a historical cost basis, except for fair-value through-profit-or-loss financial assets and liabilities and derivative financial instruments, which are measured at fair value.
| 8 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Change in Functional Currency
From inception to June 1, 2026, the functional currency of the Company has been CAD. The functional currency determination was conducted through an analysis of the consideration factors identified in IAS 21 The Effects of Changes in Foreign Exchange Rates. The June 2026 Convertible Senior Notes financing completed in June 2026 and changes to the Company’s structure and operations have resulted in a change to the functional currency in which the Company’s management conducts its operating, capital and financing decisions. Consequently, the functional currency of the Company became the United States dollar (“USD”) effective June 1, 2026.
| 3. | Material accounting policies |
The significant accounting policies applied in the preparation of these interim condensed consolidated financial statements are consistent with those disclosed in Note 3 to the Company’s audited annual consolidated financial statements for the year ended December 31, 2025. There have been no other significant changes to the Company’s accounting policies during the three and six months ended June 30, 2026, other than the addition of the accounting policy for derivatives as described below.
Derivatives
The Company may use capped call arrangements in connection with the June 2026 Convertible Senior Notes. A capped call is a derivative instrument that allows the Company to settle its conversion obligations in respect of the 2026 Convertible Senior Notes in common shares, cash, or a combination of the two, to economically offset potential dilution arising from the conversion of the associated convertible instruments, subject to a cap. Capped calls are classified as derivative assets, initially measured at fair value on the issuance date and subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in other income (expenses) in the consolidated statements of operations.
As an accounting policy election, the Company does not reassess or reclassify financial instruments for changes in circumstances occurring after initial recognition, other than where reclassification is required by IFRS. Accordingly, financial instruments continue to be accounted for based on their classification at initial recognition. This policy applies consistently to similar changes in circumstances, including changes in the Company’s functional currency, which may otherwise have affected the classification of certain convertible debt instruments.
| 9 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 4. | Judgments and estimation uncertainty |
The preparation of unaudited interim condensed consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and form assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. These estimates and assumptions are disclosed in Note 4 of the Company’s audited annual consolidated financial statements for the year ended December 31, 2025.
There have been no significant changes to the areas of estimation and judgment during the three and six months ended June 30, 2026, other than the valuation of derivative assets related to capped call arrangements described in Note 10. The fair value of these instruments is determined using valuation techniques that incorporate significant unobservable inputs and is therefore classified within Level 3 of the fair value hierarchy.
| 5. | Cash |
As at June 30, 2026, cash includes $4,106 (December 31, 2025 - $2,461) solely for use on the Sangdong Mine.
| 6. | Inventories |
| June 30, 2026 | December 31, 2025 | |||||||
| Stores and fuel | $ | 6,730 | $ | 6,344 | ||||
| Ore and in-process ore | 1,124 | 397 | ||||||
| Finished goods – WO3 concentrate | 810 | 2,677 | ||||||
| Current inventories | 8,664 | 9,418 | ||||||
| Tailings | 33,660 | 33,392 | ||||||
| Total inventories | $ | 42,324 | $ | 42,810 | ||||
As at June 30, 2026 and December 31, 2025, tailings inventories are classified as long term as these inventories may not be processed within the next year.
| 10 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 7. | Mining assets |
| Note | Plant and Equipment | Mineral Property Acquisition and Development Costs | Exploration and Evaluation Projects | Total | ||||||||||||||
| Cost | ||||||||||||||||||
| Balance at December 31, 2024 | $ | 76,289 | $ | 161,957 | $ | 8,592 | $ | 246,838 | ||||||||||
| Additions | 40,134 | 20,836 | 144 | 61,114 | ||||||||||||||
| Acquisitions | 14 | - | - | 13,885 | 13,885 | |||||||||||||
| Change in restoration provisions | 12 | - | (3,884 | ) | 250 | (3,634 | ) | |||||||||||
| Asset disposals | (4,977 | ) | - | (37 | ) | (5,014 | ) | |||||||||||
| Translation adjustment | (260 | ) | 614 | 668 | 1,022 | |||||||||||||
| Balance at December 31, 2025 | 111,186 | 179,523 | 23,502 | 314,211 | ||||||||||||||
| Additions | 28,309 | 18,637 | 700 | 47,646 | ||||||||||||||
| Change in restoration provisions | 12 | - | 172 | 7 | 179 | |||||||||||||
| Asset disposals | (136 | ) | - | - | (136 | ) | ||||||||||||
| Translation adjustment | (2,914 | ) | (4,734 | ) | 471 | (7,177 | ) | |||||||||||
| Balance at June 30, 2026 | $ | 136,445 | $ | 193,598 | $ | 24,680 | $ | 354,723 | ||||||||||
| Accumulated Amortization | ||||||||||||||||||
| Balance at December 31, 2024 | $ | 10,190 | $ | 34,782 | $ | - | $ | 44,972 | ||||||||||
| Amortization | 1,515 | 441 | - | 1,956 | ||||||||||||||
| Asset disposals | (3,872 | ) | - | - | (3,872 | ) | ||||||||||||
| Translation adjustment | 695 | 4,021 | - | 4,716 | ||||||||||||||
| Balance at December 31, 2025 | 8,528 | 39,244 | - | 47,772 | ||||||||||||||
| Amortization | 702 | 35 | - | 737 | ||||||||||||||
| Asset disposals | (100 | ) | - | - | (100 | ) | ||||||||||||
| Translation adjustment | 41 | 450 | - | 491 | ||||||||||||||
| Balance at June 30, 2026 | $ | 9,171 | $ | 39,729 | $ | - | $ | 48,900 | ||||||||||
| Carrying Value | ||||||||||||||||||
| Balance at December 31, 2025 | $ | 102,658 | $ | 140,279 | $ | 23,502 | $ | 266,439 | ||||||||||
| Balance at June 30, 2026 | $ | 127,274 | $ | 153,869 | $ | 24,680 | $ | 305,823 | ||||||||||
Indicators of impairment
In accordance with the Company’s accounting policies, each cash-generating unit is assessed for indicators of impairment and impairment reversal, from both external and internal sources, at the end of each reporting period. As at June 30, 2026, no indicators of impairment or reversal of impairment existed (December 31, 2025 – none).
| 8. | Accounts payable and accrued liabilities |
| June 30, 2026 | December 31, 2025 | |||||||
| Accounts payable | $ | 28,897 | $ | 21,079 | ||||
| Accrued liabilities | 26,209 | 12,278 | ||||||
| $ | 55,106 | $ | 33,357 | |||||
| 11 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 9. | Warrant liabilities |
The Company uses the Black-Scholes Option Pricing Model to measure the fair value of warrant liabilities, wherein the Company’s trading price is the main driver for calculating the resulting amount. The revaluation of this derivative liability arising from an increase in share price from C$12.07 per common share at December 31, 2025, to C$23.46 per common share at June 30, 2026, has resulted in the recognition of a loss for the six months ended June 30, 2026 of $2,608 (six months ended June 30, 2025 - $63,894) in the statement of operations and comprehensive loss.
Changes in the balance of the warrant liabilities for the six months ended June 30, 2026 and year ended December 31, 2025 are summarized as follows:
Six Months Ended June 30, 2026 | Year Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | 1,938 | $ | 5,154 | ||||
| CDI options issued | - | 2,500 | ||||||
| CDI options exercised | (2,930 | ) | (31,251 | ) | ||||
| CDI options reclassified to equity | - | (3,802 | ) | |||||
| Fair value revaluation on exercise of CDI options | 1,537 | 8,336 | ||||||
| Fair value revaluation on amendment of exercise price | - | (36,828 | ) | |||||
| Fair value revaluation on CDI options at end of year | 1,071 | 57,829 | ||||||
| Balance, end of period | $ | 1,616 | $ | 1,938 | ||||
The fair value of the CDI options outstanding was estimated using the Black-Scholes Option Pricing Model with the following weighted average assumptions:
| June 30, 2026 | December 31, 2025 | |||||||
| Stock price | $ | 23.46 | $ | 12.07 | ||||
| Exercise price | $ | 1.29 | $ | 1.72 | ||||
| Expected life | 1.61 yrs | 2.07 yrs | ||||||
| Risk-free interest rate | 2.74 | % | 2.58 | % | ||||
| Expected volatility | 97.90 | % | 89.07 | % | ||||
| Expected dividends | nil | nil | ||||||
| 10. | Derivatives |
Derivative assets
On June 9, 2026, in connection with the issuance of the June 2026 Convertible Senior Notes (Note 11), the Company closed on a capped call instrument arrangement. The capped call instruments (or “Capped Calls”) were priced at the trade date (June 4, 2026) with a strike price equal to the initial conversion price of the June 2026 Convertible Senior Notes of US$27.40, a cap price of US$41.36 and a term consistent with the term of the June 2026 Convertible Senior Notes. The purchase price for the Capped Calls was $132,218 (US$94,800), which was deemed to be the fair value at inception.
The Capped Calls are accounted for as a derivative instrument and are re-measured to fair value at each reporting date. The Capped Calls are classified as Level 3 of the fair value hierarchy under IFRS 13, Fair Value Measurement and valued using a Monte Carlo Simulation. The key assumptions used in the valuation model at June 30, 2026 are:
| Key Assumptions | June 30, 2026 | |||
| Stock price | US$ 16.56 | |||
| Strike price | US$ 27.40 | |||
| Cap | US$ 41.36 | |||
| Expected life | 5.00 yrs | |||
| Risk-free interest rate | 3.91 | % | ||
| Counterparty credit spread | 0.39% – 0.535 | % | ||
| Expected volatility | Variable* | |||
*Bloomberg OVDV Mid, June 30 18-month, 4-year, 5-year, and 7-year tenors – option volatility surface analysis
| 12 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
As of June 30, 2026, the fair value of the Capped Calls was $103,214 (US$72,635). The change in carrying value for the period was $29,004 comprised of a fair value loss of $30,683 (US$22,165) recorded in other income (expenses) and a foreign currency translation gain of $1,679 recorded in other comprehensive income.
Changes in the fair value of the derivative assets for the six months ended June 30, 2026 and year ended December 31, 2025 are summarized as follows:
Six Months Ended June 30, 2026 | Year Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | - | $ | - | ||||
| Issuances | 132,218 | - | ||||||
| Change in fair value | (30,683 | ) | - | |||||
| Translation adjustment | 1,679 | - | ||||||
| Balance, end of period | $ | 103,214 | $ | - | ||||
Derivative liabilities
The Company has entered into convertible debenture agreements that permit the holders to convert the outstanding principal and accrued interest into common shares of the Company at a fixed conversion price denominated in a currency other than the Company’s functional currency (see Note 11(d)).
In addition, during the period, the Company issued the June 2026 Convertible Senior Notes under which it retains the contractual right to settle the conversion obligation in cash (see Note 11(c)(iv)). Because the Company has a settlement alternative that would not result in the exchange of a fixed number of its own equity instruments, the conversion feature fails the conditions for equity classification under IAS 32 and is likewise accounted for as a derivative liability. In addition, the Company’s call (redemption) option, if exercised, gives the creditor the right to convert within two business days. The two embedded features are inter-related and have similar economic risks. Therefore, they have been valued on a combined basis and recorded as a derivative liability
Changes in the fair value of the derivative liabilities for the six months ended June 30, 2026 and year ended December 31, 2025 are summarized as follows:
Six Months Ended June 30, 2026 | Year Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | 8,112 | $ | 1,121 | ||||
| Issuances | 441,769 | - | ||||||
| Settlements | - | (90,417 | ) | |||||
| Change in fair value | (198,015 | ) | 97,408 | |||||
| Translation adjustment | 6,741 | - | ||||||
| Balance, end of period | $ | 258,607 | $ | 8,112 | ||||
| June 30, 2026 | December 31, 2025 | |||||||
| Classified as: | ||||||||
| Current | $ | 17,048 | $ | 8,112 | ||||
| Non-current | 241,559 | - | ||||||
| $ | 258,607 | $ | 8,112 | |||||
The fair value of the derivative liabilities was estimated using the Black-Scholes Option Pricing Model with the following weighted average assumptions:
| June 30, 2026 | December 31, 2025 | |||||||
| Stock price | US$16.56 | $ | 12.07 | |||||
| Exercise price | US$41.28 | $ 0.86 - $ 1.77 | ||||||
| Expected life | 0.34 yrs | 0.83 yrs | ||||||
| Risk-free interest rate | 2.74 | % | 2.58 | % | ||||
| Expected volatility | 97.90 | % | 89.07 | % | ||||
| Expected dividends | nil | nil | ||||||
| 13 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
The fair value of derivative liabilities related to the June 2026 Convertible Senior Notes was estimated using a partial differential equation valuation model with the following assumptions:
| June 30, 2026 | June 4, 2026 | |||||||
| Stock price | US$16.56 | US$20.68 | ||||||
| Maturity date | July 1, 2031 | July 1, 2031 | ||||||
| Bond price | 106.731 | 100.000 | ||||||
| Dividend yield | 0.00 | % | 0.00 | % | ||||
| Volatility | 50 | % | 50 | % | ||||
| Credit spread | 1.63 | % | 8.98 | % | ||||
| Interest rate curve | USD SOFR vs Fixed Rate | USD SOFR vs Fixed Rate | ||||||
| 11. | Long-term debt |
| Note | June 30, 2026 | December 31, 2025 | ||||||||
| Term loans – Euro | (a) | $ | 20,044 | $ | 25,707 | |||||
| Promissory notes – U.S. dollar | (b) | 8,526 | 8,224 | |||||||
| Promissory note | (b) | 250 | 250 | |||||||
| Convertible senior notes | (c) | 687,217 | - | |||||||
| Convertible debentures | (d) | 9,389 | 9,303 | |||||||
| Lease liabilities | (e) | 419 | 489 | |||||||
| Mine construction loan facility | (f) | 136,369 | 130,656 | |||||||
| 862,214 | 174,629 | |||||||||
| Deferred financing costs | (49,066 | ) | (12,516 | ) | ||||||
| 813,148 | 162,113 | |||||||||
| Less: current portion | (57,576 | ) | (27,267 | ) | ||||||
| $ | 755,572 | $ | 134,846 | |||||||
| (a) | Term loans – Euro |
The Company has a Euro-denominated term loan with KfW totaling $18,249 (EUR14,662) (December 31, 2025 - $23,589 (EUR14,662)). This loan bears interest at the prevailing Euro Interbank Offered Rate (“EURIBOR”) plus 1.9% per annum, with interest payable quarterly and with principal repayable at the maturity date of March 31, 2027. The loan is secured by a pledge of the shares of Woulfe Mining Corp. (“Woulfe”), a wholly-owned direct subsidiary of Almonty and the parent company of Almonty Korea Tungsten Corporation (“AKTC”), which owns a 100% interest in the Sangdong Mine; shares of Beralt Tin & Wolfram (Portugal), S.A. (“BTW”), an indirect wholly-owned subsidiary of the Company, which owns 100% of the various rights and interests comprising the Panasqueira Mine and operates the mine; and shares of Daytal Resources Spain, S.L. (“Daytal”), an indirect wholly-owned subsidiary of the Company, which owns a 100% interest in the Los Santos Mine. Subsequent to June 30, 2026, the Company repaid this term loan in full.
Daytal has Euro-denominated term loan facilities totaling $1,258 (December 31, 2025 - $1,476). The loans are unsecured, have a maturity date of July 2028 (December 31, 2025 – July 2025) and require monthly payments of principal and interest. Of the loans, $42 (December 31, 2025 - $50) have fixed interest rates with a weighted average interest rate as at June 30, 2026 of 1.50% per annum (December 31, 2025 – 1.50% per annum). The remaining $1,216 (December 31, 2025 - $1,426) have floating interest rates, based on varying spreads from EURIBOR rates. As of June 30, 2026, the weighted average interest rate on these loans was 4.78% per annum (December 31, 2025 – 4.78% per annum).
The Company’s wholly-owned Spanish subsidiary, Valtreixal Resources Spain, S.L. (“VRS”), which owns the Valtreixal Mine, has a Euro-denominated term loan with a balance of $521 as of June 30, 2026 (December 31, 2025 - $619). The loan is unsecured, bears interest at 3.75% per annum (December 31, 2025 - 3.75% per annum), with monthly payments of principal and interest until it matures in July 2028 (December 31, 2025 - in July 2028).
BTW has a Euro-denominated term loan with a balance of $16 as of June 30, 2026 (December 31, 2025 – $23). The loan is unsecured, bears interest at 7.40% per annum (December 31, 2025 - 7.40% per annum), with monthly payments of principal and interest until it matures in September 2027 (December 31, 2025 – March 2027).
| 14 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| (b) | Promissory notes |
The Company has issued two promissory notes each with a balance of $1,421 (US$1,000) (December 31, 2025 - $1,371 (US$1,000) to Deutsche Rohstoff AG (“DRAG”), an existing shareholder of the Company. The notes bear interest at 6.0% per annum, with the accrued interest due on the maturity date. The notes mature on October 31, 2026. The notes are secured by a pledge of the shares of Woulfe. As at June 30, 2026, the notes had a balance of $2,842 (US$2,000) (December 31, 2025 - $2,742 (US$2,000)).
The Company has issued a promissory note with a balance of $4,263 (US$3,000) as of June 30, 2026 (December 31, 2025 - $4,111 (US$3,000)) to DRAG. The note bears interest at the rate of 6% per annum and matures October 31, 2026. The note is secured by a pledge of the shares of VRS.
The Company has issued a promissory note with a balance of $1,421 (US$1,000) as of June 30, 2026 (December 31, 2025 - $1,371 (US$1,000)) to DRAG. The note bears interest at the rate of 5.0% per annum and matures October 31, 2026. The loan is unsecured.
The Company has issued a promissory note with a balance of $250 as of June 30, 2026 (December 31, 2025 - $250) to DRAG. The note bears interest at the rate of 6.0% per annum and matures October 31, 2026. The note is secured by a pledge of the shares of VRS.
| (c) | Convertible Senior Notes |
Changes in the balances of the June 2026 Convertible Senior Notes for the six months ended June 30, 2026 and year ended December 31, 2025 are summarized as follows:
| Six
Months Ended June 30, 2026 | Year
Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | - | $ | - | ||||
| Issuance of the June 2026 Convertible Senior Notes | 1,127,440 | - | ||||||
| Less: fair value of embedded derivative (see Note 10) | (441,769 | ) | - | |||||
| Accretion | 3,797 | - | ||||||
| Translation adjustment | (2,251 | ) | - | |||||
| Balance, end of period | 687,217 | - | ||||||
| Less: transaction costs | (38,075 | ) | - | |||||
| Balance, net of transaction costs | $ | 649,142 | $ | - | ||||
On June 9, 2026, the Company issued the June 2026 Convertible Senior Notes for $1,127,440 (US$800,000) aggregate principal amount due July 1, 2031. The June 2026 Convertible Senior Notes bear interest at a rate of 2.25% per annum, payable semi-annually in arrears, and mature on July 1, 2031, unless earlier converted, redeemed, repurchased or otherwise settled in accordance with the terms of the Indenture.
The June 2026 Convertible Senior Notes are initially convertible at a conversion rate of 36.4950 common shares per US$1,000 principal amount, which represents an initial conversion price of approximately US$27.40 per share. The conversion rate is subject to adjustment for certain customary anti-dilution events.
Holders may convert their June 2026 Convertible Senior Notes prior to maturity only upon the occurrence of specified contingent conversion events and during certain prescribed periods. Beginning April 1, 2031, holders may convert their June 2026 Convertible Senior Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.
| 15 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Upon conversion, the Company may elect to settle its conversion obligation in cash, common shares, or a combination of cash and common shares. The Company retains the contractual right to settle the conversion feature in cash, giving rise to a settlement outcome that would not result in the issuance of the Company’s own equity instruments. As a result, the conversion feature fails the conditions for equity classification and is recognized as a derivative financial liability in accordance with IAS 32 and IFRS 9.
Beginning on July 1, 2029, the Company may redeem all or a portion of the June 2026 Convertible Senior Notes for cash, at its option, if the last reported sale price of its common shares exceeds 130% of the applicable conversion price for a specified period as set forth in the indenture governing the June 2026 Convertible Senior Notes. The redemption price equals 100% of the principal amount being redeemed, together with accrued and unpaid interest. Upon notice of the Company’s redemption, the holders may convert their June 2026 Convertible Senior Notes.
The June 2026 Convertible Senior Notes also contain a make-whole adjustment provision that increases the conversion rate for certain conversions occurring in connection with specified corporate events or certain redemption notices.
The June 2026 Convertible Senior Notes additionally contain holder repurchase rights upon the occurrence of certain fundamental changes and customary events of default. Any of these notes remaining outstanding at maturity are repayable in cash at par.
The early redemption feature and conversion option meet the definition of embedded derivatives (the “Embedded Derivatives”) and under IFRS, the Company has bifurcated the Embedded Derivatives from the host liability. The conversion option and redemption feature are treated as one unit on account of being closely related. The Embedded Derivatives are measured at fair value on issuance and at each reporting period, with changes in fair value recorded in other income (expenses) in the consolidated statement of operations. The host liability was recorded as the residual amount and subsequently measured at amortized cost.
The Embedded Derivative in the June 2026 Convertible Senior Notes was bifurcated and recognized as a derivative liability at its estimated fair value of $441,769 (US$319,128) on the issuance date. In addition, the Company incurred commissions, fees, and transaction costs (collectively, the “Transaction Costs”) of $38,075 (US$27,300) relating to the issuance of the June 2026 Convertible Senior Notes. The Embedded Derivative liability and the Transaction Costs (collectively, the “Debt Discount”) are included in the amortized value of the host contract and amortized over the life of the June 2026 Convertible Senior Notes using the effective interest method. The Debt Discount will be accreted to the face value of the convertible notes over the term of the instrument using the effective interest method, with accretion recognized in interest expense. See Note 10 for additional disclosure regarding the Derivative Liabilities.
For the six-month period ended June 30, 2026, the Company incurred interest expense of $5,250, including cash interest expense of $1,454 and accretion of the host liability of $3,797 from the June 2026 Convertible Senior Notes at an effective interest rate of 15.32% per annum.
| 16 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| (d) | Convertible debentures |
Changes in the balances of the convertible debentures for the six months ended June 30, 2026 and year ended December 31, 2025 are summarized as follows:
| Six
Months Ended June 30, 2026 | Year
Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | 9,303 | $ | 27,872 | ||||
| Issuance of convertible debentures | - | - | ||||||
| Debentures revalued, derivative liability component | - | (623 | ) | |||||
| Debentures converted for shares | - | (19,456 | ) | |||||
| Accretion | 37 | 720 | ||||||
| Translation adjustment | 49 | 790 | ||||||
| Balance, end of period | $ | 9,389 | $ | 9,303 | ||||
| (i) | The Company has an unsecured convertible debenture with a principal amount of $2,000, held by DRAG. The debenture has a maturity date of October 31, 2026 and bears interest at a rate of 6.0% per annum, payable at maturity. The Company may elect to convert the debenture into common shares upon the availability to the Company of full funding for the Sangdong Mine at a conversion price equal to the higher of the price per common share in any equity financing completed by the Company after the date of issuance of the debenture and prior to the conversion or the maturity date of the debentures for purposes of financing the Sangdong Mine and $0.942. However, the Company may not convert the debenture if at any time the Company’s common shares trade below $0.942 per common share or if such conversion would result in DRAG holding more than 19.9% of Almonty’s issued and outstanding common shares. | |
| (ii) | The Company has a $6,000 (December 31, 2025 - $6,000) unsecured convertible debenture outstanding with DRAG, which bears interest at 4.0% per annum, payable at maturity. The debenture (including any accrued and unpaid interest) may be converted by the holder, at its option, into common shares of the Company at an exercise price of $2.175 per common share. The debenture has a maturity date of October 31, 2026. |
| 17 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| (iii) | The Company has a $1,389 (US$1,000) (December 31, 2025 - $1,302 (US$1,000)) unsecured convertible debenture outstanding with DRAG, which bears interest at 5.0% per annum, payable at maturity. The debenture has a maturity date of October 31, 2026. The outstanding principal amount of the debenture plus any related unpaid accrued interest is convertible into common shares of the Company at the option of the holder at the fixed conversion price of US$1.275 per common share for the principal and at the conversion price of the greater of (i) EUR1.05 (equivalent to $1.68) and (ii) the Euro equivalent of the volume weighted average price of the common shares of the Company on the TSX for the five trading days immediately preceding the date of conversion for related accrued interest. As the convertible debentures are denominated in US$, the instrument contains an embedded derivative liability. |
| (e) | Lease liabilities |
Capital leases relate to certain equipment and vehicles. The leases carry implied interest rates of between 3.41% and 5.98% per annum (December 31, 2025 – 3.12% and 5.69% per annum) and mature between June 2027 and August 2029 (December 31, 2025 – June 2027 and August 2029). The capital leases are secured by the underlying equipment or vehicle being financed.
| (f) | Mine construction loan facility |
During June 2022, the Company entered into a US$75,100 senior secured term loan facility with KfW for the financing and construction of the Sangdong Mine and received US$906 during January 2025 in conjunction with the ninth and final drawdown on this loan facility. In addition, during the year ended December 31, 2025, KfW also advanced an additional US$20,000 in conjunction with a cost overrun availability. The loan bears interest at the Secured Overnight Financing Rate (“SOFR”) plus 2.3%, capitalized quarterly, with repayment of principal quarterly over a 6.25-year period commencing six months subsequent to commencement of the mine’s ramp-up period. The loan is secured by a pledge of the shares of Woulfe, shares of AKTC and by a mortgage on all property held by AKTC.
| (g) | Debt repayment schedule |
Payments are due under the terms of the Company’s loans and leases for each of the following years ending June 30:
| 2027 | 57,608 | |||
| 2028 | 20,796 | |||
| 2029 | 19,606 | |||
| 2030 | 18,450 | |||
| 2031 | 1,195,370 | |||
| 1,311,830 | ||||
| Less: unamortized discount | (449,590 | ) | ||
| Less: imputed interest on capital lease obligations | (26 | ) | ||
| 862,214 |
| 18 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| (h) | Debt continuity |
Changes in the balances of the long-term debt for the six months ended June 30, 2026 and the year ended December 31, 2025 are summarized as follows:
Six Months Ended June 30, 2026 | Year
Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | 174,629 | $ | 168,328 | ||||
| Cash flows: | ||||||||
| Issuance of debt | 1,127,440 | 29,447 | ||||||
| Scheduled debt repayments | (409 | ) | (1,698 | ) | ||||
| Non-cash changes: | ||||||||
| Conversion of debt to shares | - | (19,456 | ) | |||||
| Accrued interest | 4,720 | 1,755 | ||||||
| Amount reclassified to derivative liability | (441,769 | ) | (623 | ) | ||||
| Translation adjustment | (2,397 | ) | (3,124 | ) | ||||
| Balance, end of period | 862,214 | 174,629 | ||||||
(i) The Company’s term loans and convertible loans include various positive and negative covenants as well as cross-default clauses which could cause several defaults in the event the Company is in default on any of its loan agreements. As of June 30, 2026, the Company was in compliance with all covenants under its term loans and convertible loans.
| 12. | Restoration provision and other liabilities |
| (a) | Restoration provision |
Future restoration of the Company’s mining properties, in accordance with local requirements are as follows:
| Balance at December 31, 2024 | $ | 24,291 | ||
| Revisions in estimated cash flows and changes in assumptions | (3,884 | ) | ||
| Acquisitions (Note 14) | 250 | |||
| Accretion expense | 402 | |||
| Translation adjustment | 1,595 | |||
| Balance, at December 31, 2025 | $ | 22,654 | ||
| Revisions in estimated cash flows and changes in assumptions | 179 | |||
| Accretion expense | 310 | |||
| Translation adjustment | 35 | |||
| Balance, at June 30, 2026 | $ | 23,178 |
As at June 30, 2026, there is a restoration provision of $18,483 (December 31, 2025 - $18,026) with respect to the Panasqueira Mine, representing management’s estimate of the present value of the rehabilitation costs relating to the mine site totaling $41,899 (€ 26,070) (December 31, 2025 - $41,944 (€ 26,070)) and are to be incurred after the mine ceases production subsequent to 2045. BTW has assumed an inflation rate of 2.0% per year in calculating its estimates and a discount rate of 3.48% (December 31, 2025 – 2.0% and 3.48% respectively).
There is a restoration provision of $949 (December 31, 2025 - $942) with respect to Daytal’s future obligation to restore and reclaim the mine once it has ceased the processing of tungsten from the Los Santos Mine. The restoration provision represents management’s estimate of the present value of the rehabilitation costs relating to the mine site totaling $1,281 (December 31, 2025 - $1,282) and are to be incurred beginning in 2027 after Daytal ceases processing operations. Daytal has used a 5.5% discount rate and assumes an inflation rate of 2.0% per year (December 31, 2025 – 5.5% and 2.0% respectively) in calculating its estimates. The Company has filed, and is awaiting final approval of its mine plan and restoration provision by the relevant authorities in Spain. Banco Popular has posted a bank warranty of $289 (€180) (December 31, 2025 - $294 (€180)) on behalf of Daytal with the Region of Castilla y Leon, Trade and Industry Department as a form of deposit to cover the expected costs of restoring the mining property as required by Daytal’s Environmental Impact Statement that forms a part of its mining and exploitation license on the Los Santos Mine.
| 19 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
There is a restoration provision of $3,496 (December 31, 2025 - $3,436) with respect to the Sangdong Mine. The provision was determined based on a levy imposed by the relevant local government authority.
There is a restoration provision of $250 (December 31, 2025 – $250) with respect to the Gentung Tungsten Project. The provision represents management’s estimate of the present value of the rehabilitation costs relating to the property (see Note 14(a)).
| (b) | Other liabilities |
Included in other long-term liabilities is $546 (December 31, 2025 - $661) related to employee benefit obligations in respect of government mandated pension plans in AKTC and BTW.
| 13. | Share capital |
Common Shares
| Number of Shares | Amount | |||||||
| Authorized – Unlimited number of common shares | ||||||||
| Issued and outstanding | ||||||||
| Outstanding at December 31, 2024 | 176,947,216 | $ | 146,516 | |||||
| Shares issued for cash, net of issuance costs | 49,606,881 | 285,426 | ||||||
| Shares issued for exercise of stock options | 8,054,911 | 6,599 | ||||||
| Shares issued for exercise of CDI options | 13,931,501 | 54,325 | ||||||
| Shares issued for exercise of warrants | 6,321,538 | 10,037 | ||||||
| Shares issued for settlement of RSUs | 786,089 | 2,837 | ||||||
| Shares issued for settlement of debt | 66,667 | 90 | ||||||
| Shares issued for conversion of debt | 5,714,120 | 49,749 | ||||||
| Shares issued on acquisition of 100% of US Tungsten, Inc. | 1,347,305 | 12,463 | ||||||
| Outstanding at December 31, 2025 | 262,776,228 | $ | 568,042 | |||||
| Shares issued for exercise of stock options | 4,406,180 | 6,660 | ||||||
| Shares issued for exercise of CDI options | 1,292,218 | 6,089 | ||||||
| Shares issued for exercise of warrants | 3,913,744 | 5,306 | ||||||
| Shares issued for settlement of RSUs | 673,024 | 2,315 | ||||||
| Shares issued for conversion of debt, net of issuance costs | 15,047,619 | 59,377 | ||||||
| Outstanding at June 30, 2026 | 288,109,013 | $ | 647,789 | |||||
During January 2025, Almonty issued 5,000,000 CDI units, for net proceeds totaling $5,803 (AUD $6,750), in conjunction with the closing of a non-brokered private placement. Each unit is comprised of one CDI and one warrant, with each warrant enabling the holder to acquire one additional common share with an exercise price of AUD $1.875, expiring January 14, 2028. The warrants were initially valued at $1,528 and subsequently revalued at June 30, 2026 at $nil (December 31, 2025 - $739).
| 20 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
During January 2025, Almonty issued 1,684,659 common share units for net proceeds totaling $1,755 in conjunction with the closing of a non-brokered private placement. Each unit is comprised of one common share and one warrant, with each warrant enabling the holder to acquire one additional common share with an exercise price of $1.71, expiring three years from the date of issuance. The warrants were valued at $586 using the weighted average fair value. The fair value of the warrants was determined using the Black-Scholes Option Pricing Model using the following assumptions: risk-free rate – 2.64%; expected volatility – 54.08%; expected life – 3 years; and dividend rate – nil.
During January 2025, Almonty issued 66,667 common shares as settlement of a $90 debt.
During February 2025, Almonty issued 2,222,222 CDI units, for net proceeds totaling $2,817 (AUD $3,000), in conjunction with the closing of a non-brokered private placement. Each unit is comprised of one CDI and one warrant, with each warrant enabling the holder to acquire one additional common share with an exercise price of AUD $1.875, expiring February 7, 2028. The warrants were initially valued at $972 and subsequently revalued at June 30, 2026 at $1,616 (December 31, 2025 - $1,566).
During May 2025, Almonty issued 120,475 common shares upon conversion of an outstanding $230 debenture. The fair value of the embedded derivative portion of this debenture of $234 was recognized upon conversion.
During June 2025, Almonty issued 793,646 common shares upon conversion of an outstanding $1,536 debenture. The fair value of the embedded derivative portion of this debenture of $2,420 was recognized upon conversion.
During July 2025, Almonty issued 20,000,000 common shares in the United States, for net proceeds totaling $109,952, in conjunction with a public offering and a concurrent listing on the Nasdaq Capital Market.
During September 2025, Almonty issued 133,333 common shares upon conversion of an outstanding $179 debenture. The fair value of the embedded derivative portion of this debenture of $428 was recognized upon conversion.
During November 2025, Almonty issued 1,347,305 common shares, at a market price of $9.25 per common share, amounting to $12,463, as consideration for the acquisition of 100% of US Tungsten, Inc. (“Gentung”) (see Note 14(a)).
| 21 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
During December 2025, Almonty issued 20,700,000 common shares in the United States, for net proceeds totaling $168,185, in conjunction with an underwritten public offering of common shares.
During December 2025, Almonty issued 2,666,666 common shares upon conversion of an outstanding $3,098 (US$2,000) debenture and 2,000,000 common shares upon conversion of an outstanding $2,323 (US $1,500) debenture. The fair value of the embedded derivative portion of these debentures of $22,458 and $16,843 was recognized upon conversion.
During January 2026, Almonty issued 15,047,619 common shares upon conversion of an outstanding $60,748 debenture.
CDI options and Warrants
For the six months ended June 30, 2026 and year ended December 31, 2025, the outstanding CDI Options and Warrants, all of which are exercisable, are summarized as follows:
Number of CDI Options | Number of Warrants | Total Number Outstanding | ||||||||||
| Total outstanding at December 31, 2024 | 8,075,571 | 9,751,706 | 17,827,277 | |||||||||
| CDI Options and Warrants issued | 7,222,222 | 1,684,666 | 8,906,888 | |||||||||
| CDI Options and Warrants exercised | (13,931,501 | ) | (6,321,538 | ) | (20,253,039 | ) | ||||||
| Warrants expired | - | (1,197,090 | ) | (1,197,090 | ) | |||||||
| Total outstanding at December 31, 2025 | 1,366,292 | 3,917,744 | 5,284,036 | |||||||||
| CDI Options and Warrants exercised | (1,292,218 | ) | (3,913,744 | ) | (5,205,962 | ) | ||||||
| Total outstanding at June 30, 2026 | 74,074 | 4,000 | 78,074 | |||||||||
The following table discloses the average exercise price, number of CDI options and contractual life as at June 30, 2026:
| Range of Exercise Prices | Number Outstanding and Exercisable | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||||||||
| $ 1.68 (AUD $1.88) | 74,074 | 1.61 | $ | 1.68 | ||||||||
| Total CDI Options | 74,074 | 1.61 | $ | 1.68 | ||||||||
The following table discloses the average exercise price, number of warrants and contractual life as at June 30, 2026:
| Range of Exercise Prices | Number Outstanding and Exercisable | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||||||||
| $ 1.71 - $ 1.80 | 4,000 | 1.59 | $ | 1.71 | ||||||||
| Total Warrants | 4,000 | 1.59 | $ | 1.71 | ||||||||
| 22 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Incentive stock options
Under the Company’s Omnibus Equity Incentive Plan (the “Omnibus Plan”) and the Company’s Fourth Amended and Restated Incentive Stock Option Plan (which was superseded and replaced by the Omnibus Plan), the Company can grant stock options to directors, officers, employees and consultants for common shares of Almonty. Under the Omnibus Plan, the exercise price of a stock option may not be less than the closing market price during the trading day immediately preceding the date of the grant of the stock option, less any applicable discount allowed by the TSX. Stock options can be granted for a maximum term of 15 years and vest at the discretion of the Board of Directors of Almonty. The Omnibus Plan was re-approved by Almonty’s shareholders at its Annual and Special Meeting of Shareholders held on April 30, 2025. The Company’s stock options do not include CDI options.
For the six months ended June 30, 2026 and year ended December 31, 2025, the outstanding stock options are summarized as follows:
Number of Stock Options | ||||
| Options outstanding at December 31, 2024 | 14,520,001 | |||
| Options granted | 2,564,663 | |||
| Options exercised | (8,054,911 | ) | ||
| Options forfeited upon cashless exercise | (1,831,775 | ) | ||
| Options expired | (66,666 | ) | ||
| Options outstanding at December 31, 2025 | 7,131,312 | |||
| Options granted | 10,000 | |||
| Options exercised | (4,406,180 | ) | ||
| Options forfeited upon cashless exercise | (312,142 | ) | ||
| Options outstanding at June 30, 2026 | 2,422,990 | |||
The following table discloses the average exercise price, number of options and contractual life as at June 30, 2026:
| Range of Exercise Prices | Number Outstanding | Number Exercisable | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | ||||||||||||
| $ 0.50 - $ 1.85 | 1,583,324 | 1,583,324 | 2.37 | $ | 0.99 | |||||||||||
| $ 2.43 - $ 3.86 | 679,666 | 581,282 | 3.74 | $ | 3.18 | |||||||||||
| $ 8.93 - $23.69 | 160,000 | 160,000 | 4.44 | $ | 9.85 | |||||||||||
| Total Options | 2,422,990 | 2,324,606 | 2.89 | $ | 2.19 | |||||||||||
| 23 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
During February 2025, the Company granted 166,666 stock options to employees and consultants of the Company pursuant to the Company’s stock option plan then in effect. The stock options vested immediately and are exercisable for a period of five years from the grant date at $1.79 per common share. The grant resulted in the recording of share-based compensation expense of $204. The value of the stock options granted was determined using the Black-Scholes Option Pricing Model using a risk-free interest rate of 2.66%, volatility of 60.54% based on historical volatility, expected life of five years, and no expected dividend yield.
During February 2025, the Company granted 133,333 stock options to employees and consultants of the Company pursuant to the Company’s stock option plan then in effect. The stock options vested immediately and are exercisable for a period of five years from the grant date at $2.87 per common share. The grant resulted in the recording of share-based compensation expense of $206. The value of the stock options granted was determined using the Black-Scholes Option Pricing Model using a risk-free interest rate of 2.76%, volatility of 61.48% based on historical volatility, expected life of five years, and no expected dividend yield.
During March 2025, the Company granted 348,000 stock options to employees and consultants of the Company pursuant to the Company’s stock option plan then in effect. The stock options vest over three years and are exercisable for a period of five years from the grant date at $2.83 per common share. The grant resulted in the recording of share-based compensation expense of $328. The value of the stock options granted was determined using the Black-Scholes Option Pricing Model using a risk-free interest rate of 2.69%, volatility of 60.34% based on historical volatility, expected life of five years, and no expected dividend yield.
During March 2025, the Company granted 100,000 stock options to employees and consultants of the Company pursuant to the Company’s stock option plan then in effect. The stock options vest immediately and are exercisable for a period of five years from the grant date at $2.43 per common share. The grant resulted in the recording of share-based compensation expense of $120. The value of the stock options granted was determined using the Black-Scholes Option Pricing Model using a risk-free interest rate of 2.72%, volatility of 60.20% based on historical volatility, expected life of five years, and no expected dividend yield.
During April 2025, the Company granted 1,616,664 stock options to employees and consultants of the Company pursuant to the Company’s stock option plan then in effect. The stock options vested immediately and are exercisable for a period of five years from the grant date at $3.86 per common share. The grant resulted in the recording of share-based compensation expense of $3,302. The value of the stock options granted was determined using the Black-Scholes Option Pricing Model using a risk-free interest rate of 2.67%, volatility of 62.20% based on historical volatility, expected life of five years, and no expected dividend yield.
During November 2025, the Company granted 200,000 stock options to employees and consultants of the Company pursuant to the Company’s stock option plan then in effect. The stock options vested immediately and are exercisable for a period of five years from the grant date at $8.93 per common share. The grant resulted in the recording of share-based compensation expense of $1,128. The value of the stock options granted was determined using the Black-Scholes Option Pricing Model using a risk-free interest rate of 2.71%, volatility of 72.68% based on historical volatility, expected life of five years, and no expected dividend yield.
During May 2026, the Company granted 10,000 stock options to employees and consultants of the Company pursuant to the Company’s stock option plan then in effect. The stock options vested immediately and are exercisable for a period of five years from the grant date at $23.69 per common share. The grant resulted in the recording of share-based compensation expense of $147. The value of the stock options granted was determined using the Black-Scholes Option Pricing Model using a risk-free interest rate of 3.35%, volatility of 73.36% based on historical volatility, expected life of five years, and no expected dividend yield.
| 24 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Restricted share units
RSUs granted under the Company’s Restricted Share Unit Plan (the “RSU Plan”), which was superseded and replaced by the Omnibus Plan) or Omnibus Plan to employees vest in accordance with the conditions determined at the time of grant. RSUs issued were valued based on the value of the underlying shares at the date of issuance.
For the six months ended June 30, 2026 and year ended December 31, 2025, the outstanding RSUs, are summarized as follows:
Number of RSUs | ||||
| RSUs outstanding at December 31, 2024 | 2,566,667 | |||
| RSUs granted | 1,497,195 | |||
| RSUs settled | (786,089 | ) | ||
| RSUs outstanding at December 31, 2025 | 3,277,773 | |||
| RSUs granted | 259,837 | |||
| RSUs settled | (673,024 | ) | ||
| RSUs outstanding at June 30, 2026 | 2,864,586 | |||
The following table discloses the number of RSUs and contractual life as at June 30, 2026:
| Range of Exercise Prices | Number Outstanding | Number Vested | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | ||||||||||||
| $ 0.78 - $ 6.20 | 2,666,664 | 2,663,468 | 1.45 | $ | 2.88 | |||||||||||
| $ 8.88 - $ 12.78 | 84,000 | 31,623 | 2.53 | $ | 12.78 | |||||||||||
| $ 23.96 - $ 28.71 | 113,922 | 98,474 | 2.73 | $ | 23.96 | |||||||||||
| Total RSUs | 2,864,586 | 2,793,565 | 1.53 | $ | 4.01 | |||||||||||
During the year ended December 31, 2025, the Company granted 763,863 RSUs to directors of the Company under its Omnibus Plan, which vested on the grant date. The RSUs were determined to have a value of $2,730 based on the share price at the date of grant. A share-based compensation expense of $nil related to these RSUs was recorded during the six months ended June 30, 2026 (six months ended June 30, 2025 - $1,958).
During April 2025, the Company granted 666,666 RSUs to an officer of the Company under its Omnibus Plan, vesting at the completion of certain key events. The RSUs were determined to have a value of $2,150 based on the share price at the date of grant. A share-based compensation expense of $213 related to these RSUs was recorded during the six months ended June 30, 2026 (six months ended June 30, 2025 - $nil).
During December 2025, the Company granted 66,666 RSUs to an officer of the Company under its Omnibus Plan, vesting in three tranches over a 4-month period, with one-third vesting on the grant date and two-thirds vesting four months after the grant. The RSUs were determined to have a value of $597 based on the share price at the date of grant. A share-based compensation expense of $366 related to these RSUs was recorded during the six months ended June 30, 2026 (six months ended June 30, 2025 - $nil).
| 25 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
During the six months ended June 30, 2026, the Company granted 104,751 RSUs to directors of the Company under its Omnibus Plan, which vested on the grant date. The RSUs were determined to have a value of $2,135 based on the share price at the date of grant. A share-based compensation expense of $2,135 related to these RSUs was recorded during the six months ended June 30, 2026 (six months ended June 30, 2025 - $nil).
During January 2026, the Company granted 126,000 RSUs to officers of the Company under its Omnibus Plan, vesting in three tranches over a 24-month period, with one-third vesting on the grant date, one-third 12 months after the grant date and one-third 24 months after the grant date. The RSUs were determined to have a value of $1,556 based on the share price at the date of grant. A share-based compensation expense of $908 related to these RSUs was recorded during the six months ended June 30, 2026 (six months ended June 30, 2025 - $nil).
During March 2026, the Company granted 29,086 RSUs to an officer of the Company under its Omnibus Plan, vesting in three tranches over a 24-month period, with one-third vesting on the grant date, one-third 12 months after the grant date and one-third 24 months after the grant date. The RSUs were determined to have a value of $590 based on the share price at the date of grant. A share-based compensation expense of $277 related to these RSUs was recorded during the six months ended June 30, 2026 (six months ended June 30, 2025 - $nil).
Deferred share units
Deferred share units (“DSUs”) granted under the Company’s Omnibus Plan to employees vest in accordance with the conditions determined at the time of grant. DSUs issued were valued based on the value of the underlying shares at the date of issuance.
For the six months ended June 30, 2026 and year ended December 31, 2025, the outstanding DSUs, are summarized as follows:
| Number of DSUs | ||||
| DSUs outstanding at December 31, 2025 and 2024 | - | |||
| DSUs granted | 21,064 | |||
| DSUs outstanding at June 30, 2026 | 21,064 | |||
During the six months ended June 30, 2026, the Company granted 21,064 DSUs to directors of the Company under its Omnibus Plan, which vested on the grant date. The DSUs were determined to have a value of $483 based on the share price at the date of grant. A share-based compensation expense of $483 related to these DSUs was recorded during the six months ended June 30, 2026 (six months ended June 30, 2025 - $nil).
| 26 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 14. | Acquisitions |
| (a) | Acquisition of Gentung |
On November 14, 2025 Almonty acquired a 100% ownership interest in Gentung from a privately owned United States based minerals explorer. Gentung is the 100% owner of various rights and interest comprising the Gentung Tungsten Project. The project is located in Beaverhead County, Montana, United States.
Almonty acquired 100% of the shares of Gentung. The fair value of the consideration transferred comprised USD$9,000, for which the Company issued 1,347,305 shares at a deemed issue price of $9.25 per share, and a paid cash payment of US$750 ($1,043), resulting in total consideration of US$9,750 ($13,506).
The acquisition does not meet the definition of a business in accordance with IFRS 3, Business Combinations, as it satisfied the asset concentration test. Accordingly, the transaction has been accounted for as an asset acquisition. Under this approach, the consideration transferred has been allocated to the identifiable assets acquired on a relative fair value basis.
The allocation of the purchase consideration to the identifiable assets acquired is set out below:
Fair value at acquisition date | ||||
| Assets acquired | ||||
| Exploration and Evaluation assets | $ | 13,506 | ||
| Total assets | $ | 13,506 | ||
| Liabilities assumed | ||||
| Nil | $ | - | ||
| Total liabilities | $ | - | ||
| Net assets acquired | $ | 13,506 | ||
| Consideration: | ||||
| Cash | $ | 1,043 (US$750) | ||
| Common shares | $ | 12,463 (US$9,000) | ||
| Total consideration | $ | 13,506 (US$9,750) | ||
Transaction costs of $30 were capitalized to the assets acquired.
| 27 |
Almonty Industries Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2026 and 2025 (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| (b) | Acquisition of Apex |
On November 15, 2025, Almonty acquired a 100% ownership interest in Apex Garnet Inc. (“Apex”) from a privately owned U.S. based minerals explorer. Apex is the 100% owner of various assets for use in the processing of tungsten for the Gentung Tungsten Project. Apex holds a number of assets including, but not limited to, a plant permit, water rights and tungsten mining equipment for use in the processing of tungsten.
Almonty acquired 100% of the shares of Apex. The fair value of the consideration transferred comprised the payment of US$250 ($348) cash.
The acquisition does not meet the definition of a business in accordance with IFRS 3, Business Combinations, as it satisfied the asset concentration test. Accordingly, the transaction has been accounted for as an asset acquisition. Under this approach, the consideration transferred has been allocated to the identifiable assets acquired on a relative fair value basis.
The allocation of the purchase consideration to the identifiable assets acquired is set out below:
Fair value at acquisition date | ||||
| Assets acquired | ||||
| Exploration and Evaluation assets | $ | 348 | ||
| Restoration Provisions asset | $ | 250 | ||
| Total assets | $ | 598 | ||
| Liabilities assumed | ||||
| Rehabilitation provision | $ | 250 | ||
| Total liabilities | $ | 250 | ||
| Net assets acquired | $ | 348 | ||
| Consideration: | ||||
| Cash | $ | 348 | ||
| Total consideration | $ | 348 (US$250) | ||
Transaction costs of $3 were capitalized to the assets acquired.
| 15. | Employee compensation |
The Company incurred employee compensation and benefit expenses of $22,475 for the six months ended June 30, 2026 (six months ended June 30, 2025 - $12,262).
| 16. | Segmented information |
The Company’s operations are segmented on a regional basis and are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments has been defined as the Chief Executive Officer.
| 28 |
Almonty Industries Inc.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
Three and Six Months Ended June 30, 2026 and 2025
(in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted)
Management monitors the business of the Company as a single commodity segment, whose operations relate to the exploration and mining of tungsten across three geographical locations: the Iberian Peninsula (Spain and Portugal), the Republic of Korea and the United States.
For management reporting purposes, the Company is organized into business units based on its products and activities, and has five reportable operating segments, as follows:
| ● | The Los Santos Mine located in Spain whose current operations relate to the exploration and prior operations related to mining of tungsten that is ultimately sold as tungsten concentrate (currently in care and maintenance); | |
| ● | The Panasqueira Mine located in Covilha, Castelo Branco, Portugal whose operations relate to the exploration and mining of tungsten which is ultimately sold as tungsten concentrate, as well as the production of copper and tin concentrate by-products that are sold as concentrate; | |
| ● | The Valtreixal Mine located in Spain whose operations relate to the exploration and evaluation activities of the Valtreixal tin/tungsten project; | |
| ● | Woulfe, whose properties are located in Gangwon Province, Republic of Korea, and whose operations relate primarily to the development of the Sangdong Mine; and | |
| ● | The Gentung Tungsten Project located in Montana, United States whose operations relate to the exploration and evaluation activities of the Gentung Browns Lake tungsten project. |
The Company monitors the operating results of its operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on income (losses) from mining operations and is measured consistently with income (losses) from mining operations in the consolidated financial statements. The accounting policies used by the Company in reporting segments internally are the same as those contained in Note 3.
| 29 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Segmented information for the six months ended June 30, 2026 is as follows:
| Los Santos Mine | Valtreixal Mine | Sangdong Mine | Panasqueira Mine | Gentung Tungsten Project | Corporate | Total | ||||||||||||||||||||||
| Revenue | - | - | 120 | 68,269 | - | - | 68,389 | |||||||||||||||||||||
| Production costs | - | - | (96 | ) | (28,001 | ) | - | - | (28,097 | ) | ||||||||||||||||||
| Care and maintenance costs | (607 | ) | - | - | - | - | - | (607 | ) | |||||||||||||||||||
| Depreciation and amortization | - | - | - | (476 | ) | (13 | ) | (83 | ) | (572 | ) | |||||||||||||||||
| (Loss) income from mining operations | (607 | ) | - | 24 | 39,792 | (13 | ) | (83 | ) | 39,113 | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||
| General and administrative | (364 | ) | (15 | ) | (211 | ) | (1,020 | ) | (7 | ) | (14,375 | ) | (15,992 | ) | ||||||||||||||
| Interest expense | (24 | ) | - | - | - | - | (6,212 | ) | (6,236 | ) | ||||||||||||||||||
| Share-based compensation | - | - | - | - | - | (4,752 | ) | (4,752 | ) | |||||||||||||||||||
| Foreign exchange gain (loss) | (6 | ) | (2 | ) | (4,741 | ) | 323 | - | 6,924 | 2,498 | ||||||||||||||||||
| Interest income | - | - | - | - | - | 6,169 | 6,169 | |||||||||||||||||||||
| Loss on valuation of warrant liabilities | - | - | - | - | - | (2,608 | ) | (2,608 | ) | |||||||||||||||||||
| Gain on valuation of embedded derivative liabilities | - | - | - | - | - | 198,015 | 198,015 | |||||||||||||||||||||
| Loss on valuation of embedded derivative asset | - | - | - | - | - | (30,683 | ) | (30,683 | ) | |||||||||||||||||||
| Net (loss) income before tax | (1,001 | ) | (17 | ) | (4,928 | ) | 39,095 | (20 | ) | 152,395 | 185,524 | |||||||||||||||||
| Capital expenditures | - | 58 | 44,794 | 1,619 | 1,068 | 64 | 47,602 | |||||||||||||||||||||
As at June 30, 2026 | ||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||
| Current | 1,416 | 1 | 10,740 | 59,391 | 881 | 1,185,964 | 1,258,393 | |||||||||||||||||||||
| Non-current | 34,091 | 9,412 | 217,640 | 26,018 | 16,349 | 142,114 | 445,624 | |||||||||||||||||||||
| Total Assets | 35,507 | 9,413 | 228,380 | 85,409 | 17,230 | 1,328,078 | 1,704,017 | |||||||||||||||||||||
| Total Liabilities | 2,622 | 1,512 | 101,576 | 47,729 | 250 | 998,527 | 1,152,216 | |||||||||||||||||||||
| As at December 31, 2025 | ||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||
| Current | 1,322 | 14 | 7,473 | 12,478 | - | 265,633 | 286,920 | |||||||||||||||||||||
| Non-current | 33,820 | 9,280 | 220,352 | 24,810 | 14,428 | 122 | 302,812 | |||||||||||||||||||||
| Total Assets | 35,142 | 9,294 | 227,825 | 37,288 | 14,428 | 265,755 | 589,732 | |||||||||||||||||||||
| Total Liabilities | 2,683 | 1,592 | 131,621 | 28,859 | 250 | 66,916 | 231,921 | |||||||||||||||||||||
| 30 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Segmented information for the six months ended June 30, 2025 is as follows:
| Los Santos Mine | Valtreixal Mine | Sangdong Mine | Panasqueira Mine | Gentung Tungsten Project | Corporate | Total | ||||||||||||||||||||||
| Revenue | - | - | 26 | 15,074 | - | - | 15,100 | |||||||||||||||||||||
| Production costs | - | - | - | (14,169 | ) | - | - | (14,169 | ) | |||||||||||||||||||
| Care and maintenance costs | (564 | ) | - | - | - | - | - | (564 | ) | |||||||||||||||||||
| Depreciation and amortization | (10 | ) | - | - | (549 | ) | - | - | (559 | ) | ||||||||||||||||||
| (Loss) income from mining operations | (574 | ) | - | 26 | 356 | - | - | (192 | ) | |||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||
| General and administrative | (299 | ) | (2 | ) | 109 | (860 | ) | - | (6,442 | ) | (7,494 | ) | ||||||||||||||||
| Interest expense | (47 | ) | - | - | - | - | (2,281 | ) | (2,328 | ) | ||||||||||||||||||
| Share-based compensation | - | - | - | - | - | (7,624 | ) | (7,624 | ) | |||||||||||||||||||
| Foreign exchange gain (loss) | 1 | (2 | ) | - | (316 | ) | - | (1,097 | ) | (1,414 | ) | |||||||||||||||||
| Loss on valuation of warrant liabilities | - | - | - | - | - | (63,894 | ) | (63,894 | ) | |||||||||||||||||||
| Loss on valuation of embedded derivative liabilities | - | - | - | - | - | (9,851 | ) | (9,851 | ) | |||||||||||||||||||
| Loss before tax | (919 | ) | (4 | ) | 135 | (820 | ) | - | (91,189 | ) | (92,797 | ) | ||||||||||||||||
| Capital expenditures | - | 7 | 26,650 | 883 | - | - | 27,540 | |||||||||||||||||||||
Segmented information for the three months ended June 30, 2026 is as follows:
| Los Santos Mine | Valtreixal Mine | Sangdong Mine | Panasqueira Mine | Gentung Tungsten Project | Corporate | Total | ||||||||||||||||||||||
| Revenue | - | - | 64 | 42,925 | - | - | 42,989 | |||||||||||||||||||||
| Production costs | - | - | (54 | ) | (16,204 | ) | - | - | (16,258 | ) | ||||||||||||||||||
| Care and maintenance costs | (309 | ) | - | - | - | - | - | (309 | ) | |||||||||||||||||||
| Depreciation and amortization | (1 | ) | - | - | (230 | ) | (5 | ) | (83 | ) | (319 | ) | ||||||||||||||||
(Loss) income from mining operations | (310 | ) | - | 10 | 26,491 | (5 | ) | (83 | ) | 26,103 | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||
| General and administrative | (198 | ) | (2 | ) | (2 | ) | (539 | ) | (2 | ) | (8,115 | ) | (8,858 | ) | ||||||||||||||
| Interest expense | (13 | ) | - | - | - | - | (5,729 | ) | (5,742 | ) | ||||||||||||||||||
| Share-based compensation | - | - | - | - | - | (1,119 | ) | (1,119 | ) | |||||||||||||||||||
| Foreign exchange gain (loss) | _(1) | - | (2,503 | ) | 253 | - | 2,949 | 698 | ||||||||||||||||||||
| Interest income | - | - | - | - | - | 3,823 | 3,823 | |||||||||||||||||||||
| Loss on valuation of warrant liabilities | - | - | - | - | - | (588 | ) | (588 | ) | |||||||||||||||||||
| Gain on valuation of embedded derivative liabilities | - | - | - | - | - | 204,407 | 204,407 | |||||||||||||||||||||
| Loss on valuation of embedded derivative asset | - | - | - | - | - | (30,683 | ) | (30,683 | ) | |||||||||||||||||||
| (Loss) income before tax | (522 | ) | (2 | ) | (2,495 | ) | 26,205 | (7 | ) | 164,862 | 188,041 | |||||||||||||||||
| Capital expenditures | - | 45 | 21,790 | 880 | 271 | (15 | ) | 22,970 | ||||||||||||||||||||
| 31 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Segmented information for the three months ended June 30, 2025 is as follows:
| Los Santos Mine | Valtreixal Mine | Sangdong Mine | Panasqueira Mine | Gentung Tungsten Project | Corporate | Total | ||||||||||||||||||||||
| Revenue | - | - | 11 | 7,181 | - | - | 7,192 | |||||||||||||||||||||
| Production costs | - | - | - | (7,581 | ) | - | - | (7,581 | ) | |||||||||||||||||||
| Care and maintenance costs | (284 | ) | - | - | - | - | - | (284 | ) | |||||||||||||||||||
| Depreciation and amortization | (5 | ) | - | - | (266 | ) | - | - | (271 | ) | ||||||||||||||||||
| (Loss) income from mining operations | (289 | ) | - | 11 | (666 | ) | - | - | (944 | ) | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||
| General and administrative | (151 | ) | (1 | ) | (7 | ) | (281 | ) | - | (3,648 | ) | (4,088 | ) | |||||||||||||||
| Interest expense | (22 | ) | - | - | - | - | (1,100 | ) | (1,122 | ) | ||||||||||||||||||
| Share-based compensation | - | - | - | - | - | (6,773 | ) | (6,773 | ) | |||||||||||||||||||
| Foreign exchange gain (loss) | - | - | - | (257 | ) | - | (57 | ) | (314 | ) | ||||||||||||||||||
| Loss on valuation of warrant liabilities | - | - | - | - | - | (38,084 | ) | (38,084 | ) | |||||||||||||||||||
| Loss on valuation of embedded derivative liabilities | - | - | - | - | - | (6,942 | ) | (6,942 | ) | |||||||||||||||||||
| (Loss) income before tax | (462 | ) | (1 | ) | 4 | (1,204 | ) | - | (56,603 | ) | (58,267 | ) | ||||||||||||||||
| Capital expenditures | - | - | 16,311 | 372 | - | - | 16,683 | |||||||||||||||||||||
Information by geographical region is as follows:
| Revenue | Non-current Assets | |||||||||||||||
| Country | Six months ended June 30, 2026 | Six
months ended June 30, 2025 | June 30, 2026 | December 31, 2025 | ||||||||||||
| Portugal | $ | 68,269 | $ | 15,074 | $ | 26,018 | $ | 24,810 | ||||||||
| Spain | - | - | 43,503 | 43,100 | ||||||||||||
| South Korea | 120 | 26 | 217,640 | 220,352 | ||||||||||||
| United States | - | - | 158,463 | 14,550 | ||||||||||||
| Total | $ | 68,389 | $ | 15,100 | $ | 445,624 | $ | 302,812 | ||||||||
| 32 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 17. | Financial instruments and risk management |
Financial instruments
Fair values are determined directly by reference to published price quotation in an active market, when available, or by using a valuation technique that uses inputs observed from relevant markets.
The three levels of the fair value hierarchy are described below:
| Level 1 - | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |
| Level 2 - | Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e., quoted prices for similar assets or liabilities) | |
| Level 3 - | Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to determining the estimate. |
The carrying value of cash, trade receivables and accounts payable and accrued liabilities approximates their fair value due to their short terms to maturity. The accounts receivable associated with provisional pricing arrangements are a Level 2 fair value estimate and are valued based upon observable WO3 forward prices as of the reporting date. The fair value of long-term debt is a Level 2 fair value estimate and is not materially different from the carrying value based on current market rates of interest, or interest rates set at relatively short time intervals. The fair value of derivative assets, warrant liabilities and derivative liabilities are a Level 3 fair value estimate and the carrying value is based on a Black-Scholes market estimate.
Financial risk management objectives and policies
Almonty’s activities expose it to a variety of financial risks: market risk (including interest rate risk and foreign exchange risk), credit risk and liquidity risk. Almonty’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial performance.
| (a) | Market risk |
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Almonty’s exposure to the risk of changes in market interest rates relates to cash at banks and long-term debt with a floating interest rate. Of the long-term debt, $126,042 is subject to floating interest rates and $736,172 is subject to fixed interest rates. A portion of the floating-rate debt totaling $19,884 is subject to a fixed spread over the 6- and 12-month EURIBOR. A change of 100 basis points (1.0%) in the EURIBOR would result in a $199 change in annual interest costs. The remaining floating rate debt of $106,158 is based on a fixed spread over the three-month SOFR. A change of 100 basis points (1.0%) in the three-month SOFR would result in a $1,062 change in annual interest costs. All figures provided in this risk factor are as at June 30, 2026.
| 33 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
Foreign currency risk
Foreign exchange risk arises from monetary financial assets and liabilities denominated in currencies other than the functional currency of the respective entity within the Company.
Effective June 1, 2026, the functional currency of the Company changed from CAD to USD (see Note 3). The Company’s presentation currency remains the Canadian dollar. The Company is primarily exposed to fluctuations in the Canadian dollar, Euro and Australian dollar relative to the US dollar, while certain subsidiaries continue to have functional currencies of the Canadian dollar, Euro and Korean Won (“KRW”). The Company does not currently enter into foreign exchange contracts to hedge its foreign currency exposures.
The Company’s US$ functional currency businesses have the following financial instruments denominated in foreign currencies, expressed in the presentation currency as at June 30, 2026:
| CAD | EURO | |||||||
| Financial assets | ||||||||
| Cash | 2,637 | 53 | ||||||
| Taxes recoverable | 1,092 | - | ||||||
| Prepaid expenses and other assets | 344 | - | ||||||
| Financial liabilities | ||||||||
| Accounts payable and accrued liabilities | (10,607 | ) | - | |||||
| Warrant liabilities | (1,616 | ) | - | |||||
| Long-term debt | (8,250 | ) | (18,249 | ) | ||||
| Net financial liabilities | (16,400 | ) | (18,196 | ) | ||||
| 34 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
A 5.0% change in the value of the CAD relative to the above currencies would change net income for the six months ended June 30, 2026 by approximately $(1,730).
The Company’s Euro functional currency businesses have the following financial instruments denominated in foreign currencies, expressed in the presentation currency as at June 30, 2026:
| USD | ||||
| Financial assets | ||||
| Cash | 51 | |||
| Trade receivables | 12,369 | |||
| Net financial assets | 12,420 | |||
A 5.0% change in the value of the Euro relative to the above currencies would change net income for the six months ended June 30, 2026 by approximately $621.
The Company’s KRW functional currency businesses have the following financial instruments denominated in foreign currencies, expressed in the presentation currency as at June 30, 2026:
| USD | ||||
| Financial assets | ||||
| Cash | 2,097 | |||
| Financial liabilities | ||||
| Accounts payable and accrued liabilities | (1,273 | ) | ||
| Long-term debt | (136,369 | ) | ||
| Net financial liabilities | (135,545 | ) | ||
A 5.0% change in the value of the KRW relative to the above currencies would change net income for the six months ended June 30, 2026 by approximately $(6,777).
| 35 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| (b) | Credit risk |
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to credit risk consist of cash, trade receivables and deposits.
The Company manages credit risk by depositing surplus cash with major banks of high-quality credit standing, in interest-bearing accounts that earn interest at floating rates. Trade receivables represent amounts receivable related to delivery of concentrate that have not been settled and are with the Company’s customers, all of whom have good credit ratings and the Company has not experienced any credit issues with any of its customers. Other assets include deposits.
The carrying value of the cash, trade receivables and deposits totaling $1,240,422 represents Almonty’s maximum exposure to credit risk.
| (c) | Liquidity risk |
Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments.
As at June 30, 2026, the Company held cash of approximately $1,227,242 (of which $4,106 represented cash for use for the development of the Sangdong Mine) and a working capital position of $1,127,047 (December 31, 2025 – position of $213,175). Although Almonty has been successful in repaying liabilities in the past and issuing new debt securities, there can be no assurance that it can continue to do so. In addition, Almonty may assume additional liability in future periods or reduce its holdings of cash in connection with funding future acquisitions, existing operations, capital expenditures, dividends or in pursuing other business opportunities.
The Company’s level of indebtedness could have important consequences for its operations, including:
| ● | Almonty may need to use a large portion of its cash flow to repay the principal and pay interest on its debt, which will reduce the amount of funds available to finance its operations and other business activities; and | |
| ● | Almonty’s debt level may limit its ability to pursue other business opportunities, borrow money for operations or capital expenditures in the future or implement its business strategy. |
As of June 30, 2026, Almonty had approximately $57,576 of debt maturing within the next twelve months (December 31, 2025 - $27,267).
| 36 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
In addition to future cash flow from operations, potential divestment and the creation of new joint ventures and partnerships, Almonty’s potential other sources of liquidity for the payment of its expenses and principal and interest payable on its debt in 2026 include issuing additional equity or unsecured debt. Almonty’s ability to reduce its indebtedness and meet its payment obligations will depend on its future financial performance, which will be impacted by financial, business, economic and other factors. Almonty will not be able to control many of these factors, such as economic conditions in the markets in which it operates. Almonty cannot be certain that its existing capital resources and future cash flow from operations will be sufficient to allow it to pay principal and interest on Almonty’s debt and meet its other obligations. If these amounts are insufficient or if there is a contravention of its debt covenants, Almonty may be required to refinance all or part of its existing debt, sell assets, borrow more money or issue additional equity. The ability of Almonty to access the bank, public debt or equity capital markets on an efficient basis may be constrained by a dislocation in the credit markets and/or capital and/or liquidity constraints in the banking, debt and/or equity markets at the time of issuance.
Almonty is also exposed to liquidity and various counterparty risks including, but not limited to: (i) Almonty’s lenders and other banking counterparties; (ii) Almonty’s insurance providers; (iii) financial institutions that hold Almonty’s cash; (iv) companies that have payables to Almonty; and (v) companies that have received deposits from Almonty for the future delivery of equipment.
Contractual undiscounted cash flow requirement for financial liabilities as at June 30, 2026 are as follows:
| Less than 1 year | 1-2 years | 3-4 years | After 5 years | Total | ||||||||||||||||
| Accounts payable and accrued liabilities | 55,106 | - | - | - | 55,106 | |||||||||||||||
| Term and other loans – Euro | 19,687 | 966 | - | - | 20,652 | |||||||||||||||
| Term and other loans – US dollar | 8,694 | - | - | - | 8,694 | |||||||||||||||
| Promissory note | 255 | - | - | - | 255 | |||||||||||||||
| Convertible senior notes | 15,462 | 30,925 | 30,925 | 1,136,800 | 1,214,112 | |||||||||||||||
| Convertible debentures | 9,566 | - | - | - | 9,566 | |||||||||||||||
| Lease liabilities | 177 | 276 | 9 | - | 461 | |||||||||||||||
| Mine construction facility | 28,600 | 56,114 | 52,123 | 50,247 | 187,084 | |||||||||||||||
| 37 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 18. | Capital management |
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure (composed of shareholders’ equity) and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, Almonty may initiate dividend payments to shareholders, return capital to shareholders, repurchase issued shares or issue new shares. Almonty was not exposed to any externally imposed capital requirements for the six months ended June 30, 2026 and year ended December 31, 2025. There were no changes to the Company’s approach to capital management during the six months ended June 30, 2026.
| 19. | Commitments and contingent liabilities |
Daytal owns the Los Santos Mine, near the town of Los Santos, Salamanca in Western Spain. Daytal rents the land where the Los Santos Mine is located from local property owners and municipalities. The leases range from ten to 25 years. On all leases greater than ten years, Daytal has the right to terminate the leases under certain circumstances without penalty. Annual lease commitments total approximately $393 payable throughout the year on the anniversary dates of the individual leases.
The mining license for the Los Santos Mine was granted in September 2002 for a period of 30 years and is extendable for 90 years. Daytal pays minimal land taxes and there is no other royalty payment associated with the license. The Company files applications in the ordinary course to renew the permits associated with its mining license that it deems necessary and/or advisable for the continued operation of its business. Certain of the Company’s permits to operate that are associated with the mining license are currently under application for renewal.
The Company’s operations are subject to other claims and lawsuits from time to time, including any claims related to suppliers, employees or other parties. However, these are not expected to result in a material impact on the financial statements.
| 20. | Related party transactions |
For the six months ended June 30, 2026, the Company paid or accrued compensation to key management personnel, which includes the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Office, Chief Development Officer and members of the Board of Directors totaling $6,417 (six months ended June 30, 2025 - $1,683).
| 38 |
Almonty Industries Inc. |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements |
| Three and Six Months Ended June 30, 2026 and 2025 |
| (in 000’s of Canadian dollars except common share and per common share amounts and unless otherwise noted) |
| 21. | Supplementary cash flow information |
Six months ended June 30, 2026 | Six
months ended June 30, 2025 | |||||||
| Non-cash investing and financing activities | $ | $ | ||||||
| Mining assets additions included in accounts payable | 8,000 | 12,483 | ||||||
| Amortization capitalized to mining assets | 682 | 240 | ||||||
| Revision in estimate in restoration provision | 179 | 133 | ||||||
| Shares issued on cashless exercise of options | 4,982 | 377 | ||||||
| Shares issued on exercise of CDI options | 3,356 | 20,849 | ||||||
| Shares issued on exercise of warrants | 1,004 | 50 | ||||||
| Shares issued on settlement of RSUs | 2,315 | 1,725 | ||||||
| Shares issued for conversion of debt | 60,748 | 1,918 | ||||||
| Shares issued for settlement of debt | - | 90 | ||||||
| 22. | Schedule of general and administrative expenses |
Six months ended June 30, 2026 | Six
months ended June 30, 2025 | |||||||
| Legal, audit and accounting | $ | 2,477 | $ | 1,913 | ||||
| Consulting fees | 1,946 | 566 | ||||||
| Salaries and wages | 6,346 | 1,589 | ||||||
| Office and travel | 3,466 | 1,428 | ||||||
| Marketing and shareholder communications | 1,757 | 1,998 | ||||||
| $ | 15,992 | $ | 7,494 | |||||
| 23. | Subsequent events |
Subsequent to June 30, 2026, the Company:
| (a) | repaid, in full, the EUR14,662 KfW term loan. (Note 11(a)). | |
| (b) | delisted from the Toronto Stock Exchange, effective July 31, 2026; | |
| (c) | sought and received approval to delist from the Australian Securities Exchange, which Almonty expects to be effective September 1, 2026; | |
| (d) | entered into an amendment to its long-term offtake agreement with Global Tungsten & Powders LLC (GTP), a member of Austria’s Plansee Group, covering tungsten concentrate produced from phase I of the Company’s Sangdong Mine to extend the term of the agreement by six years, increases total contracted volumes by 40% and improves the pricing payable to Almonty on all contracted volumes by approximately 6.3%; and | |
| (e) | issued 371,737 common shares in conjunction with the exercise of stock options on a cashless basis. |
| 39 |
Exhibit 99.3
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
REPORT DATED: August 11, 2026
| Page | 1 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in thousands of Canadian dollars except for per common share amounts and unless otherwise noted)
Contents
| 1. | Introduction | 3 |
| 2. | Business Overview | 3 |
| 3. | Recent Developments | 3 |
| 4. | Overall Performance and Discussion of Operations | 5 |
| 5. | Summary of Quarterly Results | 13 |
| 6. | Outstanding Share Data | 14 |
| 7. | Liquidity and Capital Resources | 18 |
| 8. | Off-Balance Sheet Arrangements | 20 |
| 9. | Related Party Transactions | 20 |
| 10. | Proposed Material Transactions | 20 |
| 11. | Critical Accounting Estimates | 21 |
| 12. | Changes in Accounting Policies | 21 |
| 13. | Financial Instruments and Risk Management | 21 |
| 14. | Disclosure Controls and Procedures and Internal Control over Financial Reporting | 21 |
| 15. | Risks and Uncertainties | 23 |
| 16. | Restoration Provision | 24 |
| 17. | Emerging Market Issuer Disclosure | 25 |
| 18. | Forward-looking Information | 29 |
| 19. | General | 32 |
| 20. | Additional Information | 32 |
| 21. | Management’s Responsibility for Financial Statements | 32 |
| Glossary of Terms | 33 | |
| Page | 2 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
| 1. | Introduction |
This management’s discussion and analysis (“MD&A”), dated August 11, 2026, provides a review of, and discusses the financial position and results of operations of, Almonty Industries Inc. (Nasdaq: ALM; ASX: AII; Frankfurt: ALI1) (“Almonty” or the “Company”) for the three and six months ended June 30, 2026. It should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company and notes thereto for the three and six months ended June 30, 2026 (the “Q2-2026 Financial Statements”).
A glossary of terms is affixed to the last page of this MD&A. Capitalized terms used but not otherwise defined herein have their respective meanings ascribed thereto in the glossary of terms. All currency figures in this MD&A appear in thousands of Canadian dollars, except per common share amounts, unless otherwise stated.
On July 3, 2025, Almonty effected a share consolidation of its issued and outstanding common shares on the basis of one and a half (1.5) pre-consolidated common shares for one (1) post-consolidated common share (the “Share Consolidation”). Almonty’s common shares commenced trading on a post-consolidation basis on the TSX at the start of trading on July 7, 2025. As a result, Almonty’s issued and outstanding CDIs, common share purchase warrants (“warrants”), CDI options, stock options and restricted share units (“RSUs”) were also consolidated on a 1.5 to 1 basis. All per common share amounts and figures relating to the price and number of common shares reflect the Share Consolidation.
| 2. | Business Overview |
Almonty is a diversified and experienced global producer of tungsten concentrate. The Company is primarily engaged in the development of the Sangdong tungsten mine project (the “Sangdong Mine”) located in Gangwon Province, the Republic of Korea (“Korea” or “South Korea”), and is currently mining, processing and shipping tungsten concentrate from the Panasqueira tin and tungsten mine in Covilha, Castelo Branco, Portugal (the “Panasqueira Mine”). Additionally, the Company is evaluating its molybdenum project with inferred mineral resources on a separate property adjacent to the tungsten orebody at the Sangdong Mine (the “Sangdong Molybdenum Project”) and its Valtreixal tin and tungsten mine project located in Western Spain in the province of Zamora (the “Valtreixal Mine”). The Company also owns the Los Santos tungsten mine located near Salamanca, Spain (the “Los Santos Mine”), which is currently under care and maintenance, and is evaluating its unpatented tungsten mining claims located in Beaverhead County, Montana in the United States which was acquired in late 2025 (the “Gentung Tungsten Project”).
| 3. | Recent Developments |
During the three months ended June 30, 2026:
| ● | On April 13, 2026, Almonty announced the relocation of its corporate headquarters from Toronto, Ontario, Canada to Dillon, Montana, United States. The relocation of its corporate headquarters reflects Almonty’s continued strategic alignment with the United States and its role in supporting secure, transparent and Western-aligned supply chains for critical materials. The move positions the Company closer to key stakeholders, including U.S. government agencies, defence contractors and industrial partners, while reinforcing its commitment to becoming the leading U.S.-aligned tungsten producer. |
| Page | 3 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
| ● | On May 6, 2026, Almonty announced the appointment of Jorge Beristain, CFA, as Chief Financial Officer, effective June 1, 2026. Mr. Beristain’s appointment positions Almonty for its next phase of growth as the Company scales its flagship Sangdong Mine in South Korea and continues to expand its strategic role in the Western tungsten supply chain in the United States, Portugal and Spain. Brian Fox departed from his role as Chief Financial Officer, effective on May 6, 2026. Guillaume Wiesenbach de Lamaziere, the Company’s Chief Development Officer, served as Interim Chief Financial Officer during the period between Mr. Fox’s departure and Mr. Beristain’s start date. | |
| ● | On June 9, 2026, Almonty announced the successful closing of its oversubscribed offering of US$800,000,000 aggregate principal amount of 2.25% convertible senior notes due 2031 (the “June 2026 Convertible Senior Notes”), including the exercise in full by the initial purchasers of their option to purchase an additional US$100,000,000 aggregate principal amount of notes. | |
| ● | On June 29, 2026, Almonty announced that it had joined the large-cap Russell 1000 Index and the broad-market Russell 3000 Index. |
Subsequent to June 30, 2026:
| ● | On July 14, 2026, Almonty announced that it had entered into an amendment to its long-term offtake agreement with Global Tungsten & Powders LLC, a member of Austria’s Plansee Group, covering tungsten concentrate produced from phase I of the Sangdong Mine. The amendment extends the term of the agreement by six years, increases total contracted volumes by 40% and improves the pricing payable to Almonty on all contracted volumes by approximately 6.3%. | |
| ● | On July 15, 2026, Almonty repaid, in full, its EUR14,661 term loan with KfW IPEX-Bank GmbH (“KfW”). | |
| ● | On July 15, 2026, Almonty repaid, in full, the EUR14,662 KfW term loan. | |
| ● | On July 17, 2026, Almonty announced the voluntarily delisting of its common shares from the Toronto Stock Exchange effective as of the close of trading on July 31, 2026. | |
| ● | On July 23, 2026, Almonty announced that it received formal approval from the Australian Securities Exchange to be removed from the official list of ASX with delisting expected to occur on September 1, 2026. The Company’s CDIs will be suspended and cease to trade on the ASX at the close of trading on August 28, 2026. |
| Page | 4 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
| 4. | Overall Performance and Discussion of Operations |
Financial Information
The following financial information is for the three and six months ended June 30, 2026 and 2025:
| Three months ended | Six months ended | |||||||||||||||
| 30-Jun-26 | 30-Jun-25 | 30-Jun-26 | 30-Jun-25 | |||||||||||||
| $’000 | $’000 | $’000 | $’000 | |||||||||||||
| Gross revenue | 42,989 | 7,192 | 68,389 | 15,100 | ||||||||||||
| Mine production costs | 16,258 | 7,581 | 28,097 | 14,169 | ||||||||||||
| Care and maintenance | 309 | 284 | 607 | 564 | ||||||||||||
| Depreciation and amortization | 319 | 271 | 572 | 559 | ||||||||||||
| Income from mining operations | 26,103 | (944 | ) | 39,113 | (192 | ) | ||||||||||
| General and administrative costs | 8,858 | 4,088 | 15,992 | 7,494 | ||||||||||||
| Non-cash compensation costs | 1,119 | 6,773 | 4,752 | 7,624 | ||||||||||||
| Loss before the under noted items | 16,126 | (11,805 | ) | 18,369 | (15,310 | ) | ||||||||||
| Interest income | 3,823 | - | 6,169 | - | ||||||||||||
| Interest expense | (5,742 | ) | (1,122 | ) | (6,236 | ) | (2,328 | ) | ||||||||
| Gain (loss) on valuation of embedded derivative liability | 204,407 | (6,942 | ) | 198,015 | (9,851 | ) | ||||||||||
| Loss on valuation of embedded derivative asset | (30,683 | ) | - | (30,683 | ) | - | ||||||||||
| Loss on valuation of warrant liabilities | (588 | ) | (38,084 | ) | (2,608 | ) | (63,894 | ) | ||||||||
| Foreign exchange gain (loss) | 698 | 314 | 2,498 | (1,414 | ) | |||||||||||
| Tax provision | (6,244 | ) | (58 | ) | (8,991 | ) | (34 | ) | ||||||||
Net income (loss) for the period | 181,797 | (58,209 | ) | 176,533 | (92,831 | ) | ||||||||||
| Earnings (loss) per share – basic | $ | 0.64 | $ | (0.30 | ) | $ | 0.63 | $ | (0.49 | ) | ||||||
| Earnings (loss) per share – diluted | $ | 0.62 | $ | (0.30 | ) | $ | 0.60 | $ | (0.49 | ) | ||||||
| Dividends | - | - | - | - | ||||||||||||
| Cash flows provided by (used in): | ||||||||||||||||
| Operating activities | 31,606 | (14,917 | ) | |||||||||||||
| Investing activities | (36,893 | ) | (14,871 | ) | ||||||||||||
| Financing activities | 962,162 | 49,460 | ||||||||||||||
| Page | 5 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The following table sets forth a summary of the Company’s consolidated mine production costs for the periods presented:
| Three months ended | Six months ended | |||||||||||||||
| 30-Jun-26 | 30-Jun-25 | 30-Jun-26 | 30-Jun-25 | |||||||||||||
| $’000 | $’000 | $’000 | $’000 | |||||||||||||
| Production Costs: | ||||||||||||||||
| Allocated from (to inventory) | 762 | (594 | ) | 438 | (530 | ) | ||||||||||
| Mining ore costs | 5,893 | 4,828 | 11,277 | 9,006 | ||||||||||||
| Processing costs | 2,534 | 3,187 | 4,879 | 5,385 | ||||||||||||
| Selling costs | 100 | 71 | 177 | 136 | ||||||||||||
| Royalties | 6,968 | 89 | 11,326 | 172 | ||||||||||||
| Total Production Costs | 16,258 | 7,581 | 28,097 | 14,169 | ||||||||||||
The following table sets forth a summary of the Company’s consolidated financial position as of the dates presented:
| 30-June-26 | 31-Dec-25 | |||||||
| $’000 | $’000 | |||||||
| Cash | 1,227,242 | 268,409 | ||||||
| Total assets | 1,704,017 | 589,732 | ||||||
| Long-term debt | 813,148 | 162,113 | ||||||
| Shareholders’ equity | 551,801 | 357,811 | ||||||
| Other | ||||||||
| Outstanding common shares (’000) | 288,109 | 262,776 | ||||||
| Weighted average outstanding common shares (’000) | ||||||||
| Basic | 281,737 | 276,315 | ||||||
| Fully-diluted | 291,801 | 276,315 | ||||||
| Closing common share price | C$23.46 | C$12.07 | ||||||
Analysis of Financial Information
Gross revenue for the three months ended June 30, 2026 was $42,989 ($7,192 for the three months ended June 30, 2025) and $68,389 for the six months ended June 30, 2026 ($15,100 for the six months ended June 30, 2025).
Production at the Panasqueira Mine during the three months ended June 30, 2026 decreased by 20.8% compared to the three months ended June 30, 2025. Production at the Panasqueira Mine decreased 17.6% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Decreased overall production at the Panasqueira Mine was a result of a lower amount of ore mined and processed during the three and six months ended June 30, 2026 when compared to the three and six months ended June 30, 2025.
Shipment volumes from the Panasqueira Mine decreased by 17.9% overall in the three months ended June 30, 2026, and 12.0% overall in the six months ended June 30, 2026, when compared to the three and six months ended June 30, 2025.
| Page | 6 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Overall revenue at the Panasqueira Mine increased by $35,797 or 497.7% in the three months ended June 30, 2026, or $53,289 or 352.9% for the six months ended June 30, 2026, when compared to the three and six months ended June 30, 2025 as a result of the significant increase in the selling price of concentrate. As at June 30, 2026, the Company recorded deferred revenue of $Nil (December 31, 2025: $3,071) relating to shipments of concentrate that occurred during the first week of January 2026.
Mine production costs at the Panasqueira Mine for the three months ended June 30, 2026 (including direct mining costs, milling costs, tailings costs and waste rock stripping costs associated with current production) were $16,886 (or 39.3% of revenue), compared to $8,136 for the three months ended June 30, 2025, and $29,276 (or 42.8% of revenue) for the six months ended June 30, 2026, compared to $15,292 for the six months ended June 30, 2025.
The Company carries out a quarterly assessment of its ore and in-process ore and finished goods inventory as well as its stockpiles of long-term tailings inventory to ensure that the carrying value is recorded at the lower of cost and net realizable value. Any adjustments to the carrying value of ore, in-process ore and finished goods inventory are included in cost of goods sold (mine production costs). No write-downs of finished goods inventory were recognized during the three or six months ended June 30, 2026 or June 30, 2025. Any adjustment to long-term tailings inventory that is recognized as an impairment amount is expensed through the statement of operations as an addition to mine production costs. Conversely, any adjustment to long-term tailings inventory that is recognized as a reversal of prior period impairment charges is recorded as a reduction in mine production costs. Reversals may occur in future periods as a result of continued increases in the expected price of an MTU of APT in future periods.
Income (loss) from mining operations during the three months ended June 30, 2026 was $26,103, compared to a loss from mining operations in the three months ended June 30, 2025 of ($944), and income of $39,113 for the six months ended June 30, 2026, compared to a loss of (192) for the six months ended June 30, 2025.
General and administrative costs of $8,858 incurred during the three months ended June 30, 2026, or $15,992 for the six months ended June 30, 2026, were significantly higher than the $4,088 recorded during the three months ended June 30, 2025, or $7,494 for the six months ended June 30, 2025. General and administrative costs include employee salaries and employment-related expenses of all non-mining/processing personnel as well as corporate overhead costs, business development and corporate development costs, listing and transfer agent fees, accounting, legal and other professional fees and travel.
A foreign exchange gain on the revaluation of interest-bearing long-term debt and non-interest-bearing trade payables denominated in United States dollars, and in Euro, of $698 was recorded during the three months ended June 30, 2026, or $2,498 for the six months ended June 30, 2026, due to the appreciation of the Canadian dollar versus the United States dollar and Euro. This compared to a foreign exchange loss of $314 recorded for the three months ended June 30, 2025 or $1,414 for the six months ended June 30, 2025.
A gain on valuation of embedded derivative liabilities of $204,407 was recorded during the three months ended June 30, 2026, or $198,015 for the six months ended June 30, 2026, in conjunction with various convertible debentures, compared to a loss of $6,942 during the three months ended June 30, 2025, or a loss of $9,851 during the six months ended June 30, 2025 (see Note 10 of the Company’s Q2-2026 Financial Statements for further details).
| Page | 7 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
A loss on valuation of share purchase warrant (“warrant”) liabilities of $588 was recorded during the three months ended June 30, 2026, or $2,608 for the six months ended June 30, 2026 compared to a loss of (38,084) during the three months ended June 30, 2025 or a loss of ($63,894) for the six months ended June 30, 2025. The Company uses the Black-Scholes Option Pricing Model to measure the fair value of warrant liabilities, wherein the Company’s trading price is the main driver for calculating the resulting amount. The revaluation of this derivative non-cash liability, arising from an increase in the common share price from C$12.07 per common share (on a post-consolidation basis) at December 31, 2025, to C$23.46 per common share (on a post-consolidation basis) at June 30, 2026, resulted in the recognition of a non-cash loss of $2,608 (2025 – loss of $38,084) in the statements of operations and comprehensive loss during the six months ended June 30, 2026. (See the section entitles “Loss on Valuation of Warrant Liabilities” below.)
Net income (loss) for the three months ended June 30, 2026 was $181,797 or $0.64 per common share, or $176,533 or $0.63 per common share for the six months ended June 30, 2026. This compares to net loss of ($58,209), or ($0.30) per common share, for the three months ended June 30, 2025, or ($92,831) or ($0.49) per common share for the six months ended June 30, 2025.
Mineral Projects
Sangdong Mine
The Company is primarily engaged in the development of the Sangdong Mine. The current mine and processing plant construction at the Sangdong Mine (Phase I) began commercial mining in December 2025. The processing plant is in commissioning and ramp-up and is expected to be completed during Q3-2026. Once fully operational, the targeted ore throughput capacity is expected to reach around 640,000 tonnes per year. The Company expects to increase its throughput capacity up to 1.2 million tonnes through the Phase II planned expansion. This expansion is fully permitted under existing Phase I approvals, and during the development of Phase I, some components have been built which may support a higher throughput or expansion. It is expected that, subject to positive operating results from Phase I and prevailing market conditions, Phase II could be completed in 2027, and first ore production under Phase II could commence that same year.
Tungsten Oxide Facility
The Company also intends to develop a nano tungsten oxide downstream processing plant in South Korea, near the Sangdong Mine (the “Tungsten Oxide Facility”), to process the tungsten oxide from the Sangdong Mine and to supply the South Korean battery anode and cathode manufacturing industry, reducing the costs of such processing by avoiding the need to export tungsten oxide outside of South Korea for processing and reimporting it for sale to local customers. To date, the Company has completed a pre-basic engineering study in March 2025 with UTG Universaltechnik GmbH, forming the basis for current design and cost planning. The Tungsten Oxide Facility would be located in Yeongwol County on a greenfield site, secured under a memorandum of understanding with the local government, as announced on July 11, 2024. The Company expects to source feedstock for the Tungsten Oxide Facility from other tungsten producers as well as its existing and future mining operations. This includes the planned Phase II expansion of the Sangdong Mine, which is currently expected to serve as the primary initial source. The Company may also evaluate the use of concentrate from the Panasqueira Mine, whether from current output or potential future expansion, as well as material from other Company-owned assets in Spain or elsewhere, subject to further technical and economic assessment. As of the date hereof, no final sourcing decisions have been made beyond the expected production from the contemplated Phase II expansion of the Sangdong Mine. The plant is expected to process scheelite and wolframite concentrates into high-purity WO₃, with an initial nameplate production capacity of 4,000 tonnes per year. As of the date hereof, the Tungsten Oxide Facility remains in the pre-construction stage and is not yet material to the Company’s current operations. No significant capital expenditure has been incurred to date.
| Page | 8 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Panasqueira Mine
The Company is currently mining, processing and shipping tungsten concentrate from the Panasqueira Mine. The Company is also planning an extension of the Panasqueira Mine, with the potential to extend the life of the mine and significantly increase production capacity. Key objectives of this extension include increased ore throughput and improved average head grade, while continuing to serve customers who rely on the mine’s concentrate.
Between the third quarter of fiscal 2019 and the second quarter of fiscal 2021, management at the Panasqueira Mine determined that it would mine certain ore with a lower grade so as to enable work to be done to ensure that access to ore with the usual higher grade would be accessible in the future. Tungsten recovery rates for the period from January 1, 2025 to June 30, 2026 remained generally stable compared to the corresponding periods in fiscal 2024 and were consistent with the expected average recovery rate for the life of mine, subject to minor deviations observed over the longer term.
Mined grades for the period from January 1, 2025 to June 30, 2026 were generally consistent with the levels achieved under the revised mine plan implemented by Almonty since its acquisition of the Panasqueira Mine in January 2016. Production of by-product metals, namely copper and tin, provided additional revenue streams that supported and improved the cash flow profile of the Panasqueira Mine.
Los Santos Mine
In February 2020, as a result of additional testing work, Almonty placed the Los Santos Mine into care and maintenance. The Company is considering reopening operations in the near future once it has finalized plans to modify the plant’s infrastructure, through an approximately €1 million capital expenditure, which is expected to result in improved recovery rates from the future processing of its tailings inventory.
Valtreixal Mine
The Company is evaluating its Valtreixal Mine, a potential open pit operation located in Western Spain in the province of Zamora. The principal potential products are tungsten and tin.
Gentung Tungsten Project
On November 17, 2025, the Company completed its acquisitions of US Tungsten, Inc., a U.S.-based privately-owned minerals explorer with the exclusive right to explore, develop and mine the Gentung Tungsten Project, and a privately-owned Montana corporation holding a number of assets including, but not limited to, a plant permit, water rights and tungsten mining equipment for use in the processing of tungsten from the Gentung Tungsten Project.
| Page | 9 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The Gentung Tungsten Project is among the most advanced undeveloped tungsten assets in the U.S. and is positioned for near-term production. Significant work was completed by the previous owners of the project over the years to prepare the site for production. The project is located in a historic U.S. tungsten district that once supplied the U.S. national strategic stockpile and offers existing road access and infrastructure, supporting a relatively expeditious path to initial production.
Market for Tungsten Concentrate
The tungsten market is characterized by its critical importance to various high-tech and industrial applications and is deemed a critical material by the European Union, the United States, Australia, Canada, and South Korea due to its supply risks and economic value. The global tungsten market is relatively small in volume but highly concentrated in supply, with China dominating around 80% of the market in 2025 (Source: U.S. Department of the Interior – U.S. Geological Survey, Mineral Commodity Summaries, 2026). This concentration has led to increased market tension and supply chain vulnerabilities, particularly as geopolitical tensions rise and China limits exports of tungsten. The market’s tight supply conditions and the strategic importance of tungsten in critical industries are expected to support sustained price strength over the medium to long term.
APT pricing increased significantly during fiscal 2025 and into mid-2026, with mid-market prices rising from US$330 per MTU in January 2025 to US$3,075 per MTU by the end of June, 2026 ( Source: Metal Bulletin, ammonium para tungstate (APT), European (US$/MTU)).
In February 2025, China implemented export controls on certain rare metal products, including tungsten, contributing to tightening market supply conditions. Around the same time, increased military spending in the United States, Germany, France, Japan, the United Kingdom and among NATO member states has been associated with increased demand for tungsten in defence applications.
Near the end of fiscal 2025 and into the second quarter of fiscal 2026, APT prices increased significantly, with average mid-prices rising from US$862.5 per MTU in early January 2026 to approximately US$3,087 per MTU as at August 7, 2026, based on market quotations. APT prices have shown an upward trend since the fourth quarter of 2024. The upward trend continued into fiscal 2026. There can be no assurance that this pricing trend will continue in the future. See “RISK FACTORS – Financial Risks – Price of Metals” in the Company’s Annual Information Form dated March 18, 2026 for the year ended December 31, 2025 (the “AIF”).
| Page | 10 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The average of the high and low weekly quoted price for European APT according to the Metal Bulletin (“MB”) European weekly quotation for APT (from which Almonty’s concentrate prices are derived by the formulae under its supply agreements) averaged the following:
| Three Months Ended | Tungsten APT European Average High-Low | Tungsten APT European Average High-Low | ||||||||||
| US $ / MTU | Year Ended | US $ / MTU | ||||||||||
| 31-Dec-19 | $ | 242 | 31-Dec-19 | $ | 253 | |||||||
| 31-Mar-20 | $ | 236 | ||||||||||
| 30-Jun-20 | $ | 224 | ||||||||||
| 30-Sep-20 | $ | 213 | ||||||||||
| 31-Dec-20 | $ | 228 | 31-Dec-20 | $ | 225 | |||||||
| 31-Mar-21 | $ | 274 | ||||||||||
| 30-Jun-21 | $ | 275 | ||||||||||
| 30-Sep-21 | $ | 306 | ||||||||||
| 31-Dec-21 | $ | 322 | 31-Dec-21 | $ | 294 | |||||||
| 31-Mar-22 | $ | 340 | ||||||||||
| 30-Jun-22 | $ | 349 | ||||||||||
| 30-Sep-22 | $ | 340 | ||||||||||
| 31-Dec-22 | $ | 323 | 31-Dec-22 | $ | 338 | |||||||
| 31-Mar-23 | $ | 335 | ||||||||||
| 30-Jun-23 | $ | 328 | ||||||||||
| 30-Sep-23 | $ | 315 | ||||||||||
| 31-Dec-23 | $ | 314 | 31-Dec-23 | $ | 323 | |||||||
| 31-Mar-24 | $ | 316 | ||||||||||
| 30-Jun-24 | $ | 348 | ||||||||||
| 30-Sep-24 | $ | 335 | ||||||||||
| 31-Dec-24 | $ | 333 | 31-Dec-24 | $ | 333 | |||||||
| 31-Mar-25 | $ | 360 | ||||||||||
| 30-Jun-25 | $ | 453 | ||||||||||
| 30-Sep-25 | $ | 615 | ||||||||||
| 31-Dec-25 | $ | 863 | 31-Dec-25 | $ | 573 | |||||||
| 31-Mar-26 | $ | 2,975 | ||||||||||
| 30-Jun-26 | $ | 3,075 | ||||||||||
| 7-Aug-26 | $ | 3,087 | ||||||||||
Source: Metal Bulletin, ammonium para tungstate (APT), European (US$/MTU).
Almonty prices its tungsten concentrate product (on volumes of material that are not subject to a fixed-price contract) in relation to the prior month’s average weekly quoted price for APT on the MB European weekly quotation service and the Metal Pages pricing service.
Financings
On July 15, 2025, the Company closed its initial public offering of 20,000,000 common shares in the United States at a price of US$4.50 per common share for gross proceeds of US$90 million and for net proceeds, after deducting underwriting discounts and offering expenses, of approximately US$80.3 million. The , common shares commenced trading on the Nasdaq on July 14, 2025 under the ticker symbol “ALM” (the “Nasdaq IPO”).
On December 10, 2025, the Company closed an additional public offering of 20,700,000 common shares in the United States at a price of US$6.25 per common share for gross proceeds of US$129.375 million and for net proceeds, after deducting underwriting discounts and offering expenses, of approximately US$121.493 million (the “December 2025 Offering”).
On June 9, 2026, the Company successfully closed of its oversubscribed offering of US$800,000,000 June 2026 Convertible Senior Notes, including the exercise in full by the initial purchasers of their option to purchase an additional US$100,000,000 aggregate principal amount of notes.
| Page | 11 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The table below sets out, as at June 30, 2026, the particulars of how the Company is, and has been, using the proceeds, as well as variations, if any, from the Company’s anticipated use of proceeds, from the Company’s prior financings during the Company’s financial year ended December 31, 2025, being the Nasdaq IPO and the December 2025 Offering.
| Financing | Anticipated
Use of Proceeds |
Allocated Proceeds (1) | Actual Use of Proceeds (as at June 30, 2026) |
Variation from Anticipated Use of Proceeds |
Explanation and Impact | |||||
Initial public offering of common shares in the United States for gross proceeds of US$90 million (July 15, 2025) |
(I) Development of the Tungsten Oxide Facility | US$68.3 million | US$Nil | The Company has not yet spent the proceeds of the financing. | N/A | |||||
| 1. Early-stage development activities | US$0.8 million | US$Nil | The Company has not yet spent the proceeds of the financing. | N/A | ||||||
| 2. Development and construction of the Tungsten Oxide Facility | US$67.5 million | US$Nil | The Company has not yet spent the proceeds of the financing. | N/A | ||||||
| (II) Working capital and general corporate purposes (2) | US$12.0 million | US$12.0 million | N/A | N/A | ||||||
Offering of common shares in the United States for gross proceeds of US$129.375 million (December 10, 2025) |
(I) Exploration and development work at the Gentung Tungsten Project | US$32.1 million | US$1.29 million | US$1.29 million has been spent to date. | N/A | |||||
| (II) Expansion work at the Panasqueira Mine | US$32.1 million | US$Nil | The Company has not yet spent the proceeds of the financing. | N/A | ||||||
| (III) Exploration work at the Sangdong Molybdenum Project | US$32.1 million | US$0.63 million | US$0.63 million has been spent to date. | N/A | ||||||
| (IV) Working capital and general corporate purposes (2) | US$25.2 million | US$10.04 million | US$10.04 million has been spent to date. | N/A |
(1) Represents allocated net proceeds of the financing, after deducting underwriting discounts and offering expenses. Allocations represent the Company’s intentions with respect to its anticipated use of proceeds based on current knowledge, planning and expectations of management of the Company. Actual use of proceeds may differ from the anticipated and/or allocated uses thereof as set forth herein. There may be circumstances where, for sound business reasons, a reallocation of the anticipated and/or allocated use of proceeds may be deemed prudent or necessary. The actual amount that the Company allocates in connection with each of the anticipated uses of proceeds may vary significantly from the amounts specified herein and will depend on a number of factors, including those listed under the heading “Risk Factors” in the AIF and under the heading: “Risks and Uncertainties” in this MD&A.
(2) Funds included in general corporate purposes may be allocated to corporate expenses, business development, potential future acquisitions, debt repayment and to other purposes.
| Page | 12 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
| 5. | Summary of Quarterly Results |
2nd Quarter (2026) | 1st Quarter (2026) | 4th Quarter (2025) | 3rd Quarter (2025) | |||||||||||||
| Period Ended | June
30, 2026 | March
31, 2026 | December
31, 2025 | September
30, 2025 | ||||||||||||
| Total Revenue | 42,989 | 25,400 | 8,719 | 8,695 | ||||||||||||
| Net income (loss) | 181,797 | (5,264 | ) | (102,273 | ) | 33,191 | ||||||||||
| Basic gain (loss) per common share | $ | 0.64 | $ | (0.02 | ) | $ | (0.50 | ) | $ | 0.15 | ||||||
| Diluted gain (loss) per common share | $ | 0.62 | $ | (0.02 | ) | $ | (0.50 | ) | $ | 0.13 | ||||||
| Total assets | 1,704,017 | 605,621 | 589,732 | 433,138 | ||||||||||||
| Total long-term debt | 813,148 | 165,332 | 162,113 | 197,263 | ||||||||||||
| Dividends | - | - | - | - | ||||||||||||
2nd Quarter (2025) | 1st Quarter (2025) (“Q1-2025”) | 4th Quarter (2024) (“Q4-2024”) | 3rd Quarter (2024) (“Q3-2024”) | |||||||||||||
| Period Ended | June
30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | ||||||||||||
| Total Revenue | 7,192 | 7,908 | 6,280 | 6,794 | ||||||||||||
| Net income (loss) | (58,209 | ) | (34,622 | ) | (5,404 | ) | (5,319 | ) | ||||||||
| Basic loss per common share | $ | (0.30 | ) | $ | (0.13 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||
| Diluted loss per common share | $ | (0.30 | ) | $ | (0.13 | ) | $ | (0.02 | ) | $ | (0.02 | ) | ||||
| Total assets | 315,597 | 279,041 | 256,349 | 255,280 | ||||||||||||
| Total long-term debt | 192,690 | 171,612 | 156,901 | 149,748 | ||||||||||||
| Dividends | - | - | - | - | ||||||||||||
During the quarters discussed below, the Company received planned drawdowns on its US$75,100 project loan facility (the “KfW Facility”) from KfW, the funds from which were used for the development of the Sangdong Mine.
Revenues recorded in Q2-2026 were $42,989 compared to $25,400 in Q1-2026. The Company sold 21.1% fewer MTUs of WO3 in Q2-2026 compared to Q1-2026 as a result of the fact that certain March 2026 shipments were not received by the Company’s customers until April 2026. As a result, $3,442 was included in deferred revenue as at March 31, 2026 and was included in Q2-2026 revenue. The Company also received gross proceeds of US$800,000 in conjunction with the issuance of the June 2026 Convertible Senior Notes and paid US$94,800 for a related capped call transaction.
Revenues recorded in Q1-2026 were $25,400 compared to $8,719 in Q4-2025. The Company sold 43.5% more MTUs of WO3 in Q1-2026 compared to Q4-2025 as a result of the fact that certain December 2025 shipments were not received by the Company’s customers until January 2026. As a result, $3,071 was included in deferred revenue as at December 31, 2025 and was included in Q1-2026 revenue. However, a March 2026 shipment was not received by a customer as at March 31, 2026 and, accordingly, $3,442 was included in deferred revenue as at March 31, 2026. The Company also recorded a non-cash loss on revaluation of warrant liabilities totalling $2,020, as well as a non-cash loss on the revaluation of derivative liabilities totalling $6,392.
| Page | 13 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Revenues recorded in Q4-2025 were $8,719 compared to $8,695 in Q3-2025. The Company sold 26.6% fewer MTUs of WO3 in Q4-2025 compared to Q3-2025 as a result of the fact that certain December 2025 shipments were not received by the Company’s customers until January 2026. As a result, $3,071 was included in deferred revenue as at December 31, 2025 (2024 - $74) and was included in Q12026 revenue. The Company also recorded a gain on revaluation of warrant liabilities totalling $44, as well as a non-cash loss on the revaluation of derivative liabilities totalling $87,269.
Revenues recorded in Q3-2025 were $8,695 compared to $7,192 in Q2-2025. The Company sold 9.6% fewer MTUs of WO3 in Q3-2025 compared to Q2-2025. During Q3-2025, the Company also recorded a gain on revaluation of warrant liabilities totalling $34,513, as well as a non-cash loss on the revaluation of derivative liabilities totalling $288.
Revenues in Q2-2025 were $7,192 compared to $7,908 in Q1-2025. The Company sold 10.5% fewer MTUs of WO3 in Q2-2025 compared to Q1-2025. The production costs increased primarily due to the fact that fewer underground faces were worked on, yielding lower-grade material, as a result of temporarily diverting resources to Level 4 during the quarter. During Q2-2025, the Company also recorded a non-cash loss on revaluation of warrant liabilities totalling $38,084 as well as a non-cash loss on the revaluation of derivative liabilities totalling $6,942.
Revenues in Q1-2025 were $7,908 compared to $6,280 in Q4-2024. The Company sold 24.7% more MTUs of WO3 and produced 15.1% more MTUs of WO3 in Q1-2025 compared to Q4-2024. During Q1-2025, the Company also recorded a non-cash loss on revaluation of warrant liabilities totalling $25,810 as well as a non-cash loss on the revaluation of derivative liabilities totalling $2,909.
Revenues in Q4-2024 were $6,280 compared to $6,794 in Q3-2024. The Company sold 1.0% more MTUs of WO3 at a higher average selling price per MTU and produced 7.3% more MTUs of WO3 in Q4-2024 compared to Q3-2024.
Revenues in Q3-2024 were $6,794 compared to $7,938 in Q2-2024. The Company sold 27.2% fewer MTUs of WO3 and produced 21.4% fewer MTUs of WO3 in Q3-2024 compared to Q2-2024. During Q3-2024, the Company also recorded non-cash losses totalling $1,044 on revaluation of warrant liabilities and derivative liabilities totalling as well as recording $1,464 for share-based compensation expense on granting of stock options.
| 6. | Outstanding Share Data |
Common Shares
The Company’s authorized share capital consists of an unlimited number of common shares. The common shares do not have a par value. As of the date of this MD&A, there were 288,480,750 common shares outstanding (including CDIs), 1,956,326 stock options outstanding, with each option entitling the holder thereof to acquire one common share of Almonty at a weighted average price of $2.34 per common share, and 78,074 warrants (which include CDI options) enabling the holders to acquire one common share (or CDI, as applicable) at a price of $1.71 (or at A$1.875 in the case of CDI options) expiring between January 2028 and February 2028.
As at June 30, 2026, the Company had common shares outstanding as follows:
| Number of Shares | Amount | |||||||
| Authorized – Unlimited number of common shares | ||||||||
| Issued and outstanding | ||||||||
| Outstanding at December 31, 2024 | 176,947,216 | $ | 146,516 | |||||
| Shares issued for cash, net of issuance costs | 49,606,881 | 285,426 | ||||||
| Shares issued for exercise of stock options | 8,054,911 | 6,599 | ||||||
| Shares issued for exercise of CDI options | 13,931,501 | 54,325 | ||||||
| Shares issued for exercise of warrants | 6,321,538 | 10,037 | ||||||
| Shares issued for settlement of RSUs | 786,089 | 2,837 | ||||||
| Shares issued for settlement of debt | 66,667 | 90 | ||||||
| Shares issued for conversion of debt | 5,714,120 | 49,749 | ||||||
| Shares issued on acquisition of 100% of US Tungsten, Inc. | 1,347,305 | 12,463 | ||||||
| Outstanding at December 31, 2025 | 262,776,228 | $ | 568,042 | |||||
| Shares issued for exercise of stock options | 4,406,180 | 6,660 | ||||||
| Shares issued for exercise of CDI options | 1,292,218 | 6,089 | ||||||
| Shares issued for exercise of warrants | 3,913,744 | 5,306 | ||||||
| Shares issued for settlement of RSUs | 673,024 | 2,315 | ||||||
| Shares issued for conversion of debt | 15,047,619 | 59,377 | ||||||
| Outstanding at June 30, 2026 | 288,109,013 | $ | 647,789 | |||||
Stock Options
The Company’s omnibus equity incentive plan (the “Omnibus Plan”) was approved by the Company’s shareholders at the Company’s Annual and Special Meeting of Shareholders held on April 30, 2025, pursuant to which the Company may grant its directors, officers, employees and consultants stock options to acquire common shares, subject to a 10% insider participation limit and the maximum number of common shares reserved for issuance under the Omnibus Plan.
As of the date of this MD&A, there are 1,956,326 stock options outstanding, all of which were granted under the Omnibus Plan or the Company’s Fourth Amended and Restated Stock Option Plan (which was superseded and replaced by the Omnibus Plan). The Company’s stock options do not include CDI options.
| Page | 14 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
As at June 30, 2026, the Company had outstanding stock options, all of which are exercisable, as follows:
Number of Stock Options | ||||
| Options outstanding at December 31, 2024 | 14,520,001 | |||
| Options granted | 2,564,663 | |||
| Options exercised | (8,054,911 | ) | ||
| Options forfeited upon cashless exercise | (1,831,775 | ) | ||
| Options expired | (66,666 | ) | ||
| Options outstanding at December 31, 2025 | 7,131,312 | |||
| Options granted | 10,000 | |||
| Options exercised | (4,406,180 | ) | ||
| Options forfeited upon cashless exercise | (312,142 | ) | ||
| Options outstanding at June 30, 2026 | 2,422,990 | |||
The following table discloses the average exercise price, number of options and contractual life as at June 30, 2026:
Range of Exercise Prices | Number Outstanding | Number Exercisable | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | ||||||||||||
| $ 0.50 - $ 1.85 | 1,583,324 | 1,583,324 | 2.37 | $ | 0.99 | |||||||||||
| $ 2.43 - $ 3.86 | 679,666 | 581,282 | 3.74 | $ | 3.18 | |||||||||||
| $ 8.93 - $23.69 | 160,000 | 160,000 | 4.44 | $ | 9.85 | |||||||||||
| Total Options | 2,422,990 | 2,324,606 | 2.89 | $ | 2.19 | |||||||||||
Warrants and CDI options
For the year ended December 31, 2025 and the six months ended June 30, 2026, the outstanding warrants and CDI options, all of which are exercisable, are summarized as follows:
| Number of CDI Options | Number of Warrants | Total Number Outstanding | ||||||||||
| Total outstanding at December 31, 2024 | 8,075,571 | 9,751,706 | 17,827,277 | |||||||||
| CDI Options and Warrants issued | 7,222,222 | 1,684,666 | 8,906,888 | |||||||||
| CDI Options and Warrants exercised | (13,931,501 | ) | (6,321,538 | ) | (20,253,039 | ) | ||||||
| Warrants expired | - | (1,197,090 | ) | (1,197,090 | ) | |||||||
| Total outstanding at December 31, 2025 | 1,366,292 | 3,917,744 | 5,284,036 | |||||||||
| CDI Options and Warrants exercised | (1,292,218 | ) | (3,913,744 | ) | (5,205,962 | ) | ||||||
| Total outstanding at June 30, 2026 | 74,074 | 4,000 | 78,074 | |||||||||
| Page | 15 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The following table discloses the average exercise price, number of CDI options and contractual life as at June 30, 2026:
Range of Exercise Prices | Number Outstanding and Exercisable | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||||||||
| $ 1.68 (AUD $1.88) | 74,074 | 1.61 | $ | 1.68 | ||||||||
| Total CDI Options | 74,074 | 1.61 | $ | 1.68 | ||||||||
The following table discloses the average exercise price, number of warrants and contractual life as at June 30, 2026:
Range of Exercise Prices | Number Outstanding and Exercisable | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | |||||||||
| $ 1.71 - $ 1.80 | 4,000 | 1.59 | $ | 1.71 | ||||||||
| Total Warrants | 4,000 | 1.59 | $ | 1.71 | ||||||||
Loss on Valuation of Warrant Liabilities
Under International Financial Reporting Standards (“IFRS”), certain warrants are treated as a derivative liability because these were denominated in currencies other than the Company’s functional currency of Canadian dollars and, accordingly, the Company was not able to demonstrate that it met the “fixed for fixed” criterion per IAS 32, Financial Instruments: Presentation (“IAS 32”). As a result, at the balance sheet date, these warrants issued as part of a unit private placement must be recorded at their fair value.
On September 29, 2025, the Company obtained shareholder approval for the amendment to the exercise prices of various CDI options from AUD to CAD, with the effective date being January 2, 2025. No changes were made to the number of instruments, expiry dates, or other terms. As a result of the amendment, the “fixed for fixed” criteria per IAS 32 would be met, therefore certain CDI options were fair valued using the value of the equity instrument at January 2, 2025 as required by IFRS Interpretations Committee Interpretation 19, Extinguishing Financial Liabilities with Equity Instruments and transferred to equity.
The Company uses the Black-Scholes Option Pricing Model to measure the fair value of warrant liabilities, wherein the Company’s trading price is the main driver for calculating the resulting amount. The revaluation of this derivative liability arising from an increase in share price from $12.07 per common share at December 31, 2025, to $23.46 per common share at June 30, 2026, has resulted in the recognition of a loss of $2,608 (2025 – $63,894) in the statement of operations and comprehensive loss for the six months ended June 30, 2026.
| Page | 16 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Changes in the balance of the warrant liabilities for the year ended December 31, 2025 and the six months ended June 30, 2026 are summarized as follows:
| Six
Months Ended June 30, 2026 | Year
Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | 1,938 | $ | 5,154 | ||||
| CDI options issued | - | 2,500 | ||||||
| CDI options exercised | (2,930 | ) | (31,251 | ) | ||||
| CDI options reclassified to equity | - | (3,802 | ) | |||||
| Fair value revaluation on exercise of CDI options | 1,537 | 8,336 | ||||||
| Fair value revaluation on amendment of exercise price | - | (36,828 | ) | |||||
| Fair value revaluation on CDI options at end of year | 1,071 | 57,829 | ||||||
| Balance, end of period | $ | 1,616 | $ | 1,938 | ||||
The fair value of the warrants outstanding was estimated using the Black-Scholes Option Pricing Model with the following weighted average assumptions:
| June 30, 2026 | December 31, 2025 | |||||||
| Stock price | $ | 23.46 | $ | 12.07 | ||||
| Exercise price | $ | 1.29 | $ | 1.72 | ||||
| Expected life | 1.61 yrs | 2.07 yrs | ||||||
| Risk-free interest rate | 2.74 | % | 2.58 | % | ||||
| Expected volatility | 97.90 | % | 89.07 | % | ||||
| Expected dividends | nil | nil | ||||||
Restricted Share Units
Restricted share units (“RSUs”) granted to employees under the Company’s restricted share unit plan (the “RSU Plan”, which was superseded and replaced by the Omnibus Plan) or Omnibus Plan vest in accordance with the conditions determined at the time of grant.
Between December 31, 2024 and June 30, 2026, the Company had RSUs outstanding as follows:
| Number of RSUs | ||||
| RSUs outstanding at December 31, 2024 | 2,566,667 | |||
| RSUs granted | 1,497,195 | |||
| RSUs settled | (786,089 | ) | ||
| RSUs outstanding at December 31, 2025 | 3,277,773 | |||
| RSUs granted | 259,837 | |||
| RSUs settled | (673,024 | ) | ||
| RSUs outstanding at June 30, 2026 | 2,864,586 | |||
| Page | 17 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
During the six months ended June 30, 2026, the Company granted 259,837 RSUs to directors and officers of the Company pursuant to the RSU Plan or the Omnibus Plan. The value of the RSUs granted was based on the value of the underlying shares at the date of issuance. The grant resulted in the recording of share-based compensation of $3,320 during the six months ended June 30, 2026.
Convertible Debentures
Changes in the balances of the convertible debentures for the year ended December 31, 2025 and for the six months ended June 30, 2026 are summarized as follows:
| Six
Months Ended June 30, 2026 | Year
Ended December 31, 2025 | |||||||
| Balance, beginning of period | $ | 9,303 | $ | 27,872 | ||||
| Debentures converted for shares | - | (19,456 | ) | |||||
| Debentures revalued, derivative liability component | - | (623 | ) | |||||
| Interest accrued | 37 | 720 | ||||||
| Translation adjustment | 49 | 790 | ||||||
| Balance, end of period | $ | 9,389 | $ | 9,303 | ||||
| 7. | Liquidity and Capital Resources |
As at June 30, 2026, the Company held cash and receivables of $1,240,370 (compared to $271,494 as at December 31, 2025) (of which $4,106 ($2,461 as at December 31, 2025) represented cash for use for the development of the Sangdong Mine). Based on the Company’s currently available non-contingent financial resources and its expected rate of cash burn, the Company expects to be able to continue operations for a minimum of 15 months.
Capital Resources
Loan and Credit Facility
KfW Facility Loan
In conjunction with the closing of the KfW Facility in July 2022, and the additional US$20 million loan availability, the Company received the first drawdown of US$12.80 million and a second drawdown of US$4.10 million in August 2022, with a third drawdown of US$9.80 million received during November 2022, a fourth drawdown of US$5.60 million received during April 2023, a fifth drawdown of US$9.80 million received during August 2023, a sixth drawdown of US$13.68 million received in November 2023, a seventh drawdown of US$5.01 million received in July 2024, an eighth drawdown of US$5.63 million received in July 2024, a ninth drawdown of US$0.91 million received in January 2025, a tenth drawdown of US$5.00 million received in February 2025, an eleventh drawdown of US$8.87 million received in April 2025, and a final drawdown of US$6.13 million received in June 2025.
| Page | 18 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
KfW Bank Term Loan
On July 15, 2026, the Company repaid, in full, the EUR14,662 KfW bank term loan.
Equity, Options and Other Financings
Issuance of Common Shares
During the year ended December 31, 2025, the Company closed the Nasdaq IPO on July 15, 2025. The net proceeds from the offering, after deducting underwriting discounts and offering expenses, was approximately US$80,300. In addition, during December 2025, the Company closed an additional financing for net proceeds of approximately US$121,493.
Warrants and CDI Options
During the six months ended June 30, 2026, the Company issued 5,205,962 common shares in conjunction with exercise of warrants and CDI options for proceeds totalling $6,420.
Stock Options
During the six months ended June 30, 2026, the Company issued 4,406,180 common shares in conjunction with the exercise of stock options, mainly on a cashless basis, for proceeds totalling $1,678.
Subsequent to June 30, 2026, the Company issued 371,737 common shares in conjunction with the exercise of stock options on a cashless basis.
Long-Term Debt
The Company had $813,148 in long-term debt as at June 30, 2026 ($162,113 as at December 31, 2025), of which $57,576 is the current portion ($27,267 as at December 31, 2025), comprised of the June 2026 Convertible Senior Notes, individual facilities with Spanish-domiciled banks, one facility with an Austrian bank, promissory notes owed to a shareholder, convertible loans owed to a shareholder and drawdowns on the KfW Facility as at June 30, 2026 (See Note 11 of the Company’s Q2-2026 Financial Statements for additional details regarding each component of long-term debt).
Sources of Financing:
On July 15, 2025, the Company received gross proceeds of US$90,000 in conjunction with the completion of the Nasdaq IPO.
During December 2025, the Company received gross proceeds of US$129,375 in conjunction with the completion of an additional equity raise in the U.S.
On June 9, 2026, the Company received gross proceeds of US$800,000 in conjunction with the issuance of 2.25% convertible senior notes.
The Company expects to use the net proceeds of the offerings primarily to fund the development of the Tungsten Oxide Facility, as well as to fund the development of the Sangdong Molybdenum Project, the Gentung Tungsten Project and the Panasqueira Mine Level 4 development and for working capital and other general corporate purposes.
| Page | 19 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Summary of Long-Term Debt
| June 30, 2026 | December 31, 2025 | |||||||
| Term loans – Euro | $ | 20,044 | $ | 25,707 | ||||
| Promissory notes – US$ | 8,526 | 8,224 | ||||||
| Promissory note | 250 | 250 | ||||||
| Convertible senior notes | 687,217 | - | ||||||
| Convertible debentures | 9,389 | 9,303 | ||||||
| Lease liabilities | 419 | 489 | ||||||
| Mine construction loan facility | 136,369 | 130,656 | ||||||
| 862,214 | 174,629 | |||||||
| Deferred financing costs | (49,066 | ) | (12,516 | ) | ||||
| 813,148 | 162,113 | |||||||
| Less: current portion | (57,576 | ) | (27,267 | ) | ||||
| $ | 755,572 | $ | 134,846 | |||||
Summary of Contractual Obligations
The table below summarizes the Company’s contractual undiscounted cash flow requirements for long-term debt as at June 30, 2026.
| Contractual Obligations | Less than 1 year | 1-2 years | 3-4 years | After 5 years | Total | |||||||||||||||
| Debt | 82,264 | 88,005 | 83,048 | 1,187,047 | 1,440,364 | |||||||||||||||
| Capital Lease Obligations | 177 | 276 | 9 | - | 462 | |||||||||||||||
| Total contractual obligations | 82,441 | 88,281 | 83,057 | 1,187,047 | 1,440,826 | |||||||||||||||
| 8. | Off-Balance Sheet Arrangements |
The Company has no off-balance sheet arrangements as at the date of this MD&A.
| 9. | Related Party Transactions |
For the six months ended June 30, 2026, the Company paid or accrued compensation to key management personnel, which includes the Company’s chief executive officer (“CEO”), chief financial officer (“CFO”), chief operating officer, chief development officer, and members of the Board of Directors, totalling $6,417 (2025 - $1,683).
| 10. | Proposed Material Transactions |
The Company has not entered into any undisclosed material proposed transactions as at the date of this MD&A.
| Page | 20 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
| 11. | Critical Accounting Estimates |
The preparation of Almonty’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. In particular, information about significant areas of estimation uncertainty considered by management in preparing the consolidated financial statements is described in more detail in Note 2 and Note 11 of the Company’s Q2-2026 Financial Statements.
New and Pending Accounting Standards
Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates have now been assessed by the Company and are not expected to have any impact on the Company’s consolidated financial statements. The Company has not early adopted these standards.
| 12. | Changes in Accounting Policies |
There have been no other significant changes in the Company’s accounting policies during the six months ended June 30, 2026, other than the addition of the accounting policy for derivative assets (see Note 3 of the Company’s Q2-2026 Financial Statements).
| 13. | Financial Instruments and Risk Management |
The Company’s principal financial instruments comprise cash deposits and long-term debt.
The main purpose of these instruments is to provide cash flow funding for the operations of Almonty and its subsidiaries.
The main risks arising from the Company’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk, which are described in Section 15 of this MD&A.
| 14. | Disclosure Controls and Procedures and Internal Control over Financial Reporting |
Disclosure Controls and Procedures
The Company’s CEO and CFO are responsible for establishing and maintaining the Company’s disclosure controls and procedures (“DC&P”) as well as its internal control over financial reporting (“ICFR”), as those terms are defined in NI 52-109.
The CEO and the CFO have designed DC&P, or caused them to be designed under their supervision, to provide reasonable assurance that:
| ● | material information relating to the Company is made known to them by others, particularly during the period in which the interim filings are being prepared; and | |
| ·● | information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. |
| Page | 21 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
As of June 30, 2026, the Company’s management, including the CEO and CFO, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934, as amended, and National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings. Based on this evaluation, management concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2026, due to the continuing impact of previously identified material weakness in ICFR, as described below under Internal Control over Financial Reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will occur and not be detected by management before the financial statements are published. Controls can potentially be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Internal Controls over Financial Reporting
The CEO and CFO have also designed ICFR, or caused it to be designed under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.
As of June 30, 2026, management, including the CEO and CFO, also evaluated the effectiveness of the Company’s ICFR based upon the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In its assessment of the effectiveness of ICFR as of June 30, 2026, the Company determined it had ineffective design and implementation of internal controls over the financial statement close and related disclosure processes, including segregation of duties within transaction processing and control over system data integrity. The cumulative impact of such deficiencies increases the reliance on management review procedures which may not be designed at a level of precision to detect material misstatements regarding assertions about the completeness, existence, and accuracy of the financial information.
Remediation Plan
During fiscal 2025 and the six months ended June 30, 2026, the Company continued to implement measures to strengthen its internal control environment, including increased segregation of duties within the financial reporting and close process. These measures also included the ongoing expansion of the Company’s internal accounting and financial reporting team, and the engagement of an external firm to assist management with ongoing assessments of the design and operating effectiveness of ICFR. This assessment remains in progress as of the date of this MD&A. Management expects the assessment to be substantially completed in the third quarter of 2026 with any existing material weaknesses subsequently addressed by management to further strengthen the Company’s ICFR.
| Page | 22 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
While these initiatives represent meaningful progress toward remediation of control weaknesses, management has determined that additional work remains to be completed during 2026, including increased scope of ICFR effectiveness testing to fully document and assess the impact of ongoing control remediation with respect to segregation of duties and information technology general controls.
In light of the aforementioned material weakness, management, with the assistance of an external firm, continues to assess ICFR effectiveness and work to address material weaknesses and deficiencies as necessary. While remediation efforts are ongoing, management continues to monitor and enhance internal processes and controls designed to ensure the reliability of the Company’s financial reporting. Accordingly, management has conducted a thorough review of all significant or non-routine adjustments for the six months ended June 30, 2026. As a result of this review, management believes that there were no material inaccuracies or omissions of material fact and, to the best of its knowledge, believes that the consolidated financial statements for the six months ended June 30, 2026 fairly present in all material respects the financial condition and results of operations for the Company in conformity with International Financial Reporting Standards.
Other than the measures noted above, there have been no changes in the Company’s ICFR that occurred during the six months ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR.
Please also refer to the section entitled “Risk Factors – Financial Risks – Weaknesses in Disclosure Control and Procedures and Financial Disclosure” in the AIF for a discussion of the limitations of DC&P and ICFR and efforts by management to improve DC&P and ICFR (including with respect to the material weakness in ICFR for past financial years) and the section of this MD&A entitled “Emerging Market Issuer Disclosure” for a discussion of how the Company’s operations in South Korea impacted the design of ICFR.
| 15. | Risks and Uncertainties |
The Company operates in the mining industry, which presents a variety of risks and uncertainties, many of which could materially and adversely affect the Company’s business, financial condition and results of operations and could cause actual events to differ materially from those described in the Company’s forward-looking statements. While some exposures may be reduced by the Company’s risk management strategies, many risks are driven by external factors beyond the Company’s control or are of a nature which cannot be eliminated.
A discussion and description of certain risks and uncertainties related to the Company and its activities is set out below and in the section entitled “Risk Factors” in the Company’s AIF, which is available on the Company’s website at www.almonty.com and on SEDAR+ at www.sedarplus.ca under the Company’s profile. The sections entitled “RISK FACTORS” in the AIF and the section entitled “Risks and Uncertainties” in the Company’s management’s discussion and analysis dated May 11, 2026 for the three months ended March 31, 2026 and 2025 (the “Q1 MD&A”) are incorporated by reference into this MD&A.
| Page | 23 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The Company’s view of risks and uncertainties that could affect the Company is not static. Readers are cautioned that there can be no assurance that all risks and uncertainties with respect to the Company, at any point in time, can be accurately identified, assessed as to significance or impact, managed or effectively controlled, or mitigated. There can be additional new or elevated risks or uncertainties with respect to the Company that are not described herein or in the AIF.
| 16. | Restoration Provision |
Included in other long-term liabilities are provisions for the future restoration of the Company’s mining properties, in accordance with local requirements, as follows:
| Balance at December 31, 2024 | $ | 24,291 | ||
| Revisions in estimated cash flows and changes in assumptions | (3,884 | ) | ||
| Acquisitions | 250 | |||
| Accretion expense | 402 | |||
| Translation adjustment | 1,595 | |||
| Balance, at December 31, 2025 | $ | 22,654 | ||
| Revisions in estimated cash flows and changes in assumptions | 179 | |||
| Accretion expense | 310 | |||
| Translation adjustment | 35 | |||
| Balance, at June 30, 2026 | $ | 23,178 |
As at June 30, 2026, there is a restoration provision of $18,483 (December 31, 2025 - $18,026) with respect to the Panasqueira Mine, representing management’s estimate of the present value of the rehabilitation costs relating to the mine site totalling $41,899 (€26,070) and are to be incurred after the mine ceases production subsequent to 2045. Beralt Tin & Wolfram (Portugal), S.A., an indirect wholly-owned subsidiary of the Company, which owns 100% of the various rights and interests comprising the Panasqueira Mine and operates the mine, has assumed an inflation rate of 2.0% per year in calculating its estimates and a discount rate of 3.48%.
There is a restoration provision of $949 (December 31, 2025 - $942) with respect to the future obligation of Daytal Resources Spain, S.L. (“Daytal”), an indirect wholly-owned subsidiary of the Company, which owns a 100% interest in the Los Santos Mine, to restore and reclaim the Los Santos Mine once it has ceased the processing of tungsten from the Los Santos Mine. The restoration provision represents management’s estimate of the present value of the rehabilitation costs relating to the mine site totalling $1,282 and are to be incurred beginning in 2027 after Daytal ceases processing operations. Daytal has used a 5.5% discount rate and assumes an inflation rate of 2.0% per year in calculating its estimates. The Company has filed, and is awaiting final approval of its mine plan and restoration provision by the relevant authorities in Spain. Banco Popular has posted a bank warranty of $289 (€180) on behalf of Daytal with the Region of Castilla y Leon, Trade and Industry Department as a form of deposit to cover the expected costs of restoring the mining property as required by Daytal’s Environmental Impact Statement that forms a part of its mining and exploitation license on the Los Santos Mine.
| Page | 24 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
There is a restoration provision of $3,496 (December 31, 2025 - $3,436) with respect to the Sangdong Mine. The provision was determined based on a levy imposed by the relevant local government authority.
There is a restoration provision of $250 (December 31, 2025 – $250) with respect to the Gentung Tungsten Project. The provision represents management’s estimate of the present value of the rehabilitation costs relating to the property.
| 17. | Emerging Market Issuer Disclosure |
Asset Verification
The Company’s title to the Sangdong Mine is held through its indirect wholly-owned subsidiary, Almonty Korea Tungsten Corporation (“AKTC”), which holds the relevant mining rights and permits as required under the laws of Korea.
The Company is satisfied as to its ownership of its property interests in the Sangdong Mine through: (a) the receipt and review of title opinion dated December 10, 2025 regarding the Company’s mineral rights to the mine provided by the Company’s Korean legal counsel, which is a law firm recognized as having expertise in energy and natural resources law matters; (b) searches conducted in the mining registry of the relevant Korean government authorities, in which all applications, grants, transfers and assignments of exploration permits, mining concessions and other evidence of mineral rights to conduct exploration and mining activities are registered and recorded; (c) correspondence with the relevant authorities pursuant to which exploration and mining plans, as well as detailed reports of work performed and geological and technological studies, are required to be submitted; and (d) review, negotiation and execution of various agreements relating to the acquisition or transfer of certain mining titles. As of the date of this report, the Company has obtained and maintains all material title opinions and supporting documentation in respect of the mineral rights of the Sangdong Mine.
AKTC holds exclusive real property rights over the Sangdong Mine during the validity period of its mining rights (excavation rights). However, if the Minister of Trade, Industry and Energy (the “Minister”) deems the mining operation to be detrimental to the public interest or interfering with projects of national importance, the Minister has the power to revoke the mining rights or order a reduction of the mining area in accordance with Article 34 of the Mining Industry Act.
Legal Right to Conduct Operations
Korea has an established Mining Industry Act which defines the mining rights guaranteed by the government of Korea. As a result, the Company and other foreign mining companies are generally able to operate predictably and stably in that country.
Except for relatively small areas in the south in the main river valley and a few small areas of vegetable farms, the Sangdong Mine is on government land. On government (i.e., non-private) land, an environmental security bond must be lodged. On private land, access must be negotiated with the individual landowner(s). In the case of mining, there is no formal mediated process for land disturbance, and the purchase or lease of the surface rights would have to be negotiated with the landowner(s).
| Page | 25 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
AKTC has obtained all permits required for the conduct of its business as presently conducted, including the grant of the extraction right and authorization of extraction plan by the Ministry of Economy and Finance of Korea in relation to the Sangdong Mine. AKTC holds, or may be required to obtain in the future, certain customary or routine permits, licenses, or other regulatory approvals in the ordinary course of its operations.
The Company has retained reputable legal counsel in Korea to provide necessary or prudent advice, guidance and/or opinions relating to the Company, including as to the Company’s (and its subsidiaries’) legal right to conduct business in Korea.
The Company is not aware of, and has not received notice of, any non-compliance with any requirements with respect to permits, licenses or other regulatory approvals required to carry on its business in Korea as currently conducted. Further, the Company is not aware of any material restrictions against foreign investment in Korean companies, nor any material legal requirements imposed on foreign ownership of Korean mining companies. To the best knowledge of the Company, the Company and AKTC are in compliance with all foreign investment regulations in Korea.
Foreign Operating Entity
The Company has incorporated and maintains subsidiaries as they are relevant to the jurisdictions in which the Company undertakes its operations and enables the Company’s compliance with its corporate and commercial obligations within each of the legal frameworks of those countries. The Company maintains the subsidiaries as separate operating entities to limit the Company’s liability for its operations and business across multiple jurisdictions, to diversify risk and to allow for increased efficiencies. The Company has implemented a system of corporate governance, ICFR and DC&P that apply at all levels of the Company and its subsidiaries. These systems are overseen by the Board of Directors and implemented by the Company’s senior management.
The Company’s corporate structure has been designed to ensure that the Company controls, or has a measure of direct oversight over, the operations of its subsidiaries. Almonty owns a 100% indirect ownership interest in the Sangdong Mine through its subsidiaries. Almonty’s interest in the Sangdong Mine is held by AKTC, which owns a 100% direct interest in the Sangdong Mine. AKTC is a wholly-owned direct subsidiary of Woulfe Mining Corp., itself a wholly-owned direct subsidiary of Almonty.
The Company, as the direct or indirect controlling shareholder of its subsidiaries, has visibility into and effective control of the operations and assets of its subsidiaries. For example, the Company, directly or indirectly, has the power to appoint and dismiss any of its subsidiaries’ directors at any time. The directors of each subsidiary then have the power to appoint and dismiss such subsidiaries’ officers at any time, give instructions to such officers, and require such officers to comply with their fiduciary and other obligations. As the direct or indirect controlling shareholder of its subsidiaries, the Company’s approval will be required for any fundamental changes requiring shareholder approval. The Company, as shareholder, can also enforce its rights by way of various shareholder remedies available to it under local laws. In addition, as the direct or indirect controlling shareholder of its subsidiaries, the Company is able to cause each subsidiary to transfer funds, by way of dividend, capital reduction or other right as a shareholder under the applicable law, to the Company to fund the expenses of the Company, including the salary of its officers, director fees, legal fees or the costs of any investigation that the Board of Directors or the Audit Committee (as defined herein) may need to undertake in order to comply with their fiduciary obligations to the Company.
| Page | 26 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The current members of the board of directors of AKTC are Antonio Correa de Sa, Daniel D’Amato and Lewis Black, and the representative director of AKTC is Lewis Black. Pursuant to the Articles of Incorporation of AKTC, the term of office of a director shall be three years; provided, however, that such term shall be extended until the conclusion of the ordinary general meeting of shareholders for the final settlement of accounts within the term. According to Article 385 of the Korean Commercial Code, a director may be removed at any time by a resolution of the general meeting of shareholders passed by the affirmative votes of not less than two-thirds of the voting rights of the shareholders present and not less than one-third of the total number of issued shares. However, if the director is removed before the expiration of his or her term without just cause, the director may claim compensation for damages resulting from such dismissal against AKTC. In the case of removing a representative director while retaining his or her position as a director, as AKTC’s Articles of Incorporation stipulate that the representative director be appointed by a resolution of the general meeting of shareholders, with the approval of a majority of the shareholders present and at least one-quarter of the total issued shares, the removal and replacement of a representative director may also be carried out according to the same procedure, and Article 385 of the Korean Commercial Code would not apply.
The Company’s books and records are located at the principal office of the Company. The minute books, corporate seal (if applicable) and records of AKTC are held in Seoul, Korea. There are no restrictions on the Board of Directors from accessing the books and records of the Company.
The Company confirms that there are no material agreements that involve AKTC that have not been identified as a material contract of the Company and that could reasonably be considered a material contract if the Company itself were a party to the agreement. A “material change” in the business, operations or capital of AKTC would be regarded as a material change for the Company.
Shareholder Rights
The Company is a corporation existing under the Canada Business Corporations Act (the “CBCA”) and is a reporting issuer in the provinces of Ontario, Alberta and British Columbia. Shareholders of the Company have all rights and remedies available to them under the CBCA and applicable securities laws.
The fact that the Sangdong Mine is located in Korea and that title to the mine is held by AKTC, which is incorporated under Korean law, does not affect a shareholder’s ability to exercise statutory rights and remedies against the Company under applicable securities laws. However, the enforcement of a judgment obtained in a Canadian court could be adversely affected by the fact that certain of the Company’s assets are located outside of Canada, including the Sangdong Mine. Further, certain directors and officers are resident outside of Canada. The enforcement of judgments obtained in a Canadian court against such directors or officers of the Company may be adversely affected by the fact that they reside outside of Canada.
| Page | 27 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Management Experience in Foreign Jurisdiction
The Board of Directors and officers of Almonty have some but generally limited experience conducting business in Korea.
For directors and officers with limited experience conducting business in Korea, in order to facilitate such individuals familiarizing themselves with: (i) the laws and legal/operational requirements of Korea; (ii) the role the government of Korea has in the Company’s Korean operations; and (iii) the local business culture and practices in Korea, including differences in banking systems and controls as between Korea and the jurisdiction(s) they are familiar with, the Company has taken the following measures:
| ● | the Company has facilitated visits of such individuals to Korea as well as the material projects of the Company; | |
| ● | the Company has engaged English-speaking local legal counsel in Korea; | |
| ● | there is active communication among and between directors and officers with experience conducting business in Korea and those with more limited experience in Korea; and | |
| ● | regular updates on current events and business in Korea are shared among directors and officers. |
Of the current members of the Board of Directors, a majority have visited Korea and the Sangdong Mine. The members of the Board of Directors receive regular updates regarding the Company’s operations in Korea and are able to discuss with local management in Korea on a regular basis via teleconference/telephone.
Internal Controls over Financial Reporting
The Company maintains ICFR with respect to its operations in emerging jurisdictions by taking various measures. Certain of the Company’s key employees have the relevant language proficiency (Korean in Korea), local cultural understanding, and relevant work experience in each of the Company’s operating jurisdictions, which facilitates better understanding and oversight of the Company’s operations in the foreign jurisdictions in the context of internal controls over financial reporting.
Differences in banking systems and controls between Canada and Korea are addressed by having stringent controls over cash in all locations, especially over access to cash, cash disbursements, appropriate authorization levels, performing and reviewing bank reconciliations in Korea on a regular basis, and the segregation of duties.
The difference in cultures and practices between Canada and Korea is addressed by employing competent staff in Canada and Korea who are familiar with the local laws, business culture, and standard practices, have local language proficiency, are experienced in working in the jurisdiction and in dealing with the relevant governmental authorities, and have experience and knowledge of the local banking systems and treasury requirements.
| Page | 28 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
The foreign subsidiaries also have established practices, protocols, and routines in place for the distribution of their excess cash to the Company. Furthermore, the opening and closing of bank accounts in the name of a foreign subsidiary is controlled, overseen, and approved by the Company.
The Company will ensure the flow of funds between Canada and South Korea functions as intended by:
| ● | controlling the Company’s treasury management and control over bank accounts; | |
| ● | appointing common directors and/or officers of the Company and the foreign subsidiary; | |
| ● | closely monitoring the finance departments in Korea; and | |
| ● | by regular personal visits by the CEO, CFO, other key executives and members of the Board of Directors to Korea. |
| 18. | Forward-looking Information |
This MD&A contains “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws.
All statements, other than statements of present or historical facts, are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and assumptions and accordingly, actual results could differ materially from those expressed or implied in such statements.
Readers are hence cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are typically identified by words such as “plan”, “development”, “growth”, “continued”, “intentions”, “expectations”, “emerging”, “evolving”, “strategy”, “opportunities”, “anticipated”, “trends”, “potential”, “outlook”, “ability”, “additional”, “on track”, “prospects”, “viability”, “estimated”, “reaches”, “enhancing”, “strengthen”, “target”, “believes”, “next steps” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements in this MD&A include, but are not limited to, statements with respect to: demand for tungsten; tungsten prices; tungsten recovery and production; reductions in operating and unit production costs; currency and interest rate fluctuations; expectations regarding impairments of the Company’s mineral properties; improvements in efficiencies; future remediation and reclamation activities; expectations regarding the further exploration, development and life of mine of the Company’s mineral projects, including the Sangdong Mine, the Panasqueira Mine and the Gentung Tungsten Project; plans and expectations regarding the Company’s mineral projects, including the re-opening of the Los Santos Mine, the potential of the Sangdong Molybdenum Project, the potential production profile of the Gentung Tungsten Project and the development of and production at the Gentung Tungsten Project; the estimation of mineral reserves and mineral resources; the realization of mineral reserve and mineral resource estimates; the timing of activities; the amount of estimated revenues and expenses; the anticipated and/or allocated use of proceeds from financing transactions; the success of exploration activities; permitting timelines; the success of mine development and construction activities; the success of future mine operations; the success of other future business operations; litigation risks; changes to governmental laws and regulations; the expected contribution of Mr. Beristain as Chief Financial Officer to the next phase of the Company’s growth; and requirements for additional capital and sources and uses of funds; and the ASX delisting.
| Page | 29 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Forward-looking statements are based upon certain assumptions and other important factors that, if untrue, could cause actual results to be materially different from future results expressed or implied by such statements. There can be no assurance that forward-looking statements will prove to be accurate. Key assumptions upon which the Company’s forward-looking information is based include, without limitation: the absence of material adverse changes in the Company’s industry or the global economy including interest rate fluctuations, inflationary pressures, supply chain disruptions, and commodity market volatility; trends in the Company’s industry and markets, including the competitive environment; the ability of the Company to maintain its interests in its mineral projects, including with respect to title, access, and permitting matters; the Company’s ability to manage risks normally incidental to the exploration, development and operation of mineral properties; the performance and results of Phase I operations at the Sangdong Mine; the Company’s ability to proceed with Phase II expansion of the Sangdong Mine; the Company’s ability to maintain good business relationships with key stakeholders, including customers, suppliers, lenders, regulators, and local communities; the Company’s ability to manage its growth effectively, both organically and through acquisitions; the Company’s ability to effectively integrate acquisitions and realize anticipated benefits; the Company’s ability to manage potential uncertainties in the interpretation of geological data, drill results and market data, including data related to pricing trends, demand forecasts, and competitive positioning; the Company’s ability to manage the possibility that future exploration, development or mining results may not be consistent with its expectations; the accuracy of the Company’s mineral resource and reserve estimates and their underlying assumptions, including with respect to cut-off grades, recovery rates, and long-term commodity prices; the adequacy and availability of infrastructure (including power, water, roads, and processing capacity) at or near the mineral properties; the timely receipt and maintenance of necessary governmental and third-party approvals, permits, licenses, authorizations and regulatory compliance obligations; the Company’s ability to comply with current and future environmental, health and safety, and other regulatory requirements and to timely obtain and maintain required regulatory approvals, licenses and permits; the Company’s expectation that its operations will not be significantly disrupted as a result of political instability, pandemics and communicable diseases, nationalization, terrorism, sabotage, social or political activism, breakdown, natural disasters, governmental or political actions, litigation or arbitration proceedings, equipment or infrastructure failure, labour shortages, transportation disruptions or accidents, or other development or exploration risks; the Company’s ability to execute construction and development activities on schedule and within budget; the Company’s ability to recruit, retain and engage qualified personnel and contractors in all required jurisdictions; the expected contribution of Mr. Beristain as Chief Financial Officer for the next phase of the Company’s growth; the Company’s ability to raise sufficient debt or equity financing to support its continued growth; the Company’s ability to continue to have sufficient working capital to fund its operations; the performance of counterparties under offtake agreements, supply arrangements, financing agreements, and other material contracts; that input costs, including energy, labour, equipment, and materials, will not increase materially beyond current expectations; that the price of tungsten and other metals and commodities will not decline significantly or for a protracted period of time; that the global financial markets and general economic conditions (including trade and monetary policies, currency exchange rates and rates of inflation) will be stable and conducive to business in the future; the Company’s ability to maintain the security and integrity of its information technology systems and mitigate the impact of any potential cybersecurity threats; and the Company’s ability to meet increasing expectations regarding environmental, social and governance matters from regulators, investors, and other stakeholders.
| Page | 30 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Forward-looking statements are also subject to risks and uncertainties facing the Company’s business, including, without limitation: the negative cash flow from the Company’s operations; the adequacy of the Company’s disclosure control and procedures and internal controls over financial reporting; the price of metals; the Company’s economic dependency on few customers; fluctuation in foreign currency; fluctuation in interest rates; inflation; tax-related risks; the risk of default under any of the Company’s credit agreements; future financing; the Company’s liquidity and level of indebtedness; risks associated with the Company’s business being carried on through foreign subsidiaries; credit risk; the Company’s ability to continue as a going concern; risks relating to the development of the Sangdong Mine, including risks relating to the start-up of commercial production, commissioning, ramp-up and process performance risk, financing risk, construction risks, risk relating to the offtake agreements for the Sangdong Mine, availability of infrastructure and skilled labour, and risks related to the implementation of technological innovations at the Sangdong Mine; risks relating to the Tungsten Oxide Facility, including project financing and capital cost overrun risk, execution and construction risk, and permitting and regulatory risk; the Company’s production; the Company’s mineral reserve and mineral resource estimates; the Company’s dependence on key personnel; the Company’s competition; trade risks and supply chain disruptions (including as a result of geopolitical tensions); the cost of raw materials; energy supply and power grid reliability; water supply and management; infrastructure and operational risks; the Company’s impairment of assets; risks related to property title; laws and regulations; licenses and permits; mining risks and insurance limitations; legal systems; mineral reserve and mineral resource depletion; risks related to underground stope stability; reputational risks; geopolitical risks in key operating regions; public allegations, regulatory investigations, or litigation; capital market structure and dilution risk; environmental and global climate change risks; risks related to costs of land reclamation; technological obsolescence; management of growth; cybersecurity and data protection; opposition to mining; costs and compliance risks as a result of being a public company; acquisitions and synergies; anti-corruption and anti-bribery laws; Canada’s Extractive Sector Transparency Measures Act; health and pandemic risks; and risks related to the Company’s proposed redomiciling to the United States, including disruptions to the Company’s business, Canadian corporate tax risk.
Any of these risks could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects. Readers should consider reviewing the detailed risk discussion under the heading “RISK FACTORS” of the AIF and under the heading “Risks and Uncertainties” of the Q1 MD&A for a fuller understanding of the risks and uncertainties that affect the Company’s business and operations and that could cause the Company’s actual results, performance or achievements to be materially different from any anticipated results, performance or achievements expressed or implied by forward-looking statements.
Although Almonty has attempted to identify important factors that could cause actual results, level of activity, performance or achievements to differ materially from those contained in forward-looking statements, there may be other factors that could cause results, level of activity, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate and even if events or results described in the forward-looking statements are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, Almonty. Accordingly, readers should not place undue reliance on forward-looking statements and are cautioned that actual outcomes may vary.
Investors are cautioned against attributing undue certainty to forward-looking statements. Almonty cautions that the foregoing list of material factors is not exhaustive. When relying on Almonty’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Almonty has also assumed that material factors will not cause any forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
| Page | 31 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS MD&A REPRESENTS THE EXPECTATIONS OF ALMONTY AS OF THE DATE OF THIS MD&A AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE ALMONTY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
| 19. | General |
The Company’s management is responsible for the preparation of the Company’s unaudited interim condensed consolidated financial statements as well as other information contained in this MD&A. The Board of Directors is required to ensure that management assumes its responsibility in regard to the preparation of the Company’s financial statements. To facilitate this process, the Board of Directors has created an audit and risk management committee (the “Audit Committee”). The Audit Committee met with members of the management team to discuss the operating results and the financial results of the Company, before making their recommendations and submitting the Q2-2026 Financial Statements and MD&A to the Board of Directors for review and approval. Following the recommendation of the Audit Committee, the Board of Directors approved the Q2-2026 Financial Statements and this MD&A on August 11, 2026.
The Q2-2026 Financial Statements have been prepared in accordance with IFRS.
Adam Wheeler, B.Sc, M.Sc, C. Eng., an independent qualified person pursuant to NI 43-101 and a competent person under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012), reviewed, prepared or supervised the preparation of, and approved, the information upon which the scientific and technical information relating to the Company’s mineral properties contained in this MD&A is based.
For the purposes of the ASX Listing Rules, production targets for the Sangdong Mine contained in this MD&A were reported in accordance with ASX Listing Rule 5.16 on July 11, 2025. The Company confirms that, as of the date of this MD&A, it is not aware of any new information or data that materially affects the information included in the announcement and that all material assumptions and technical parameters underpinning the estimates in the announcement continue to apply and have not materially changed. The Company confirms that, as of the date of this MD&A, the form and context in which the competent person’s findings are presented have not been materially modified from the original market announcement.
| 20. | Additional Information |
Additional information relating to the Company, including the audited annual consolidated financial statements of the Company and notes thereto for the year ended December 31, 2025 and the AIF, is available on the Company’s website at www.almonty.com and on SEDAR+ at www.sedarplus.ca under the Company’s profile.
| 21. | Management’s Responsibility for Financial Statements |
The information provided in this MD&A, including the Company’s financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgements and have been properly reflected in the accompanying financial statements.
August 11, 2026
On behalf of the Company’s management and the Board of Directors,
| “Lewis Black” | |
| Chairman, President and Chief Executive Officer |
| Page | 32 |
Management’s Discussion and Analysis
Three and Six Months Ended June 30, 2026
Dated: August 11, 2026
(in 000’s of Canadian Dollars, unless otherwise noted)
Glossary of Terms
| A$ | Australian dollars | |
| APT | ammonium para tungstate is an intermediate product which is one of the principal chemical forms in which tungsten is traded | |
| ASX | Australian Securities Exchange | |
| Board of Directors | the board of directors of the Company | |
| CDI | CHESS Depositary Interests, the form under which the Company’s common shares trade on the ASX, with each CDI representing a single common share | |
| concentrate | the valuable fraction of an ore that is left after waste material is removed in processing | |
| € | Euros | |
| Frankfurt | Frankfurt Stock Exchange | |
| MTU | metric tonne unit, equal to 1 percent of a metric tonne or 10 kg (22.046 pounds) of contained WO3 | |
| Nasdaq | Nasdaq Capital Market | |
| NI 43-101 | National Instrument 43-101 – Standards of Disclosure for Mineral Projects | |
| NI 52-109 | National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings | |
| scheelite | a brown tetragonal mineral, CaWO4. It is found in pneumatolytic veins associated with quartz and fluoresces to show a blue colour. Scheelite is a mineral of tungsten | |
| tonne | a metric unit equal to 1,000 kg (2,204.6 pounds) | |
| TSX | Toronto Stock Exchange | |
| tungsten concentrates | concentrates generally containing between 40 and 75 percent WO3 | |
U.S. |
United States of America | |
| US$ | United States dollars | |
| WO3 | tungsten tri-oxide, a compound of tungsten and oxygen |
| Page | 33 |