Small-Cap Miner Rallies On Exclusive Offtake Agreement

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Wednesday, January 29, 2025

Let’s start this article off by talking about a sweet deal that just hit the wires this morning. Imagine signing a deal whereby a massive company agrees to buy all of your Company’s product for 60 years at a pre-negotiated fair price.  Would you agree to it?  We would.

Well, that’s in essence what was just announced this morning by Almonty Industries Inc. (TSX: AII) (OTCQX: ALMTF). Almonty announced that it had entered into an exclusive offtake agreement with SeAH M&S, the largest processor of molybdenum products in South Korea and the second largest Molybdenum oxide smelter in the world, pursuant to which SeAH has agreed to purchase 100% of the material produced from Almonty’s Sangdong Molybdenum Project for life of mine. 

The Sangdong Molybdenum Project, which is being developed by Almonty’s wholly owned subsidiary, Almonty Korea Moly Corp., is already fully permitted (Mining and Environmental) and is expected to begin producing by the end of 2026 with an anticipated life of mine of 60 years based on historical Korean Government data.

The Offtake includes a hard floor price of US$19.00/Lb. (prior to the deduction of treatment charges) to ensure financial stability and a predictable revenue base as Almonty advances this transformative project. The current price of molybdenum is approximately US$22/Lb.

When operating at full capacity, the mine will produce approximately 5,600 tons of molybdenum annually. SeAH is building a US$110 million metals and fabrication facility in Temple, Texas, that is slated to provide fabricated metal products to Space Exploration Technologies Corp. (“SpaceX”) and to the U.S. defense and civilian aerospace sectors.

Not surprisingly, shareholders were biding up Almonty shares on the announcement, sending Canadian listed shares up 15.45% to $1.27 while U.S. listed shares were up 13.62% to $0.8782. Both stocks are currently trading at their 52-week highs as of mid-morning.

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