Q: I’ve invested in a mining stock called Almonty that has been extremely successful as of late. It’s up over 300 per cent in the last six months. This week it’s been on a terrific run.
The company is just about to mine the highly sought tungsten in South Korea. The price of tungsten continues to go up and it’s in great demand esp by the US government. The plan is to move headquarters to the US and to fulfill contracts with a number of nations. There’s multiple years of this mineral to be mined as well as molybdenum.
What’s not to like about this burgeoning company that appears to be on the threshold of a very successful run?
The company is just about to mine the highly sought tungsten in South Korea. The price of tungsten continues to go up and it’s in great demand esp by the US government. The plan is to move headquarters to the US and to fulfill contracts with a number of nations. There’s multiple years of this mineral to be mined as well as molybdenum.
What’s not to like about this burgeoning company that appears to be on the threshold of a very successful run?
5i Research Answer:
It looks solid, but there are always risks. Currently, debt is high (this will change with cash flow). Cash flow has been negative. A start up/ramp up of a mining is always uncertain and the mine needs to meet production expectations. Sentiment towards the sector could change. There could be environmental, mining, political or other issues that hurt production. But these risks exist with any mine, of course, and the potential is certainly there if things go well. Market cap is now over $1B which can bring out new investors. Momentum itself will attract attention. Consensus calls for 22c in earnings per share next year. The sector and government support continue to look good. Certainly it has lots of good qualities to justify recent gains.