Good morning, everyone. Thank you for joining me on this rather auspicious day of Almonty presenting in the Nasdaq, which we listed on, obviously, last year. We were given a tour of this facility when we rang the bell, I think in November of last year. They showed us this room, and we said, "Well, this would be wonderful to do something in." They said, "Well, we have one date for you for next year, and this is it." There's no meaning of this particular day. This is just the day we were allotted, and apparently, this is the only one that was available. Let us hope and make a good show of it. My name is Lewis Black. I'm the President, CEO, and Founder of Almonty. We're here today more to let you meet who we really are.
I think our record speaks for itself. We are, unfortunately, the last real credible man standing in a sector because of the duration we've been in this sector. We've survived low pricing, we've survived changing uses, and we've survived a world where tungsten has become more and more in the eye of the general investor. But in a world where we knew how important it was, every Western government knew how important it was, and our industrial base knew how important it was. But until last year, the most people would ever say is that it's in a golf club. Even when I was at my son's school thing, and you have to, as a dad, explain what you do. I remember I said I mined tungsten, and the teacher said, "How do you spell that?" Which was never a good sign.
I pivoted and said, "Actually, that's my cover for being an international jewel thief." Which got all the kids' attention. But tungsten and Almonty, we survived because we had to innovate. We had to find ways to get from A to B. We saw people come and go. We saw, unfortunately, pricing remain artificially low. We saw who was responsible, and it wasn't just the Chinese. We saw the rationale of what China was trying to do. What we are caught in right now as a company is an extraordinary moment where we're seeing a transition of the largest producer, which is China, which also embraces North Korea and Russia, and the largest consumer, which is China, transition from an upstream economy to a downstream in tungsten. We knew that this was going to happen. We just didn't know when.
All of my customers knew it was inevitable, but they didn't know when. We have no real understanding of the end game here because we're seeing a decoupling of a free market and a subsidized market. This has created an environment where we don't truly know what the value of tungsten is. Until last year, it hadn't traded freely for 30 years. Now we are seeing demand destruction occur, not because of price, because of lack of availability. We didn't have a plan B because we didn't think we'd need one in the short term. Our viewpoint in the West is we look out three months, whereas, of course, in China, they have a lot longer term view.
We also find ourselves trying now to develop a supply chain in a very disadvantaged position in that in democracies, we have that wonderful journey of permitting, of which there is no defined ending of how long it takes. There is no certainty that you will receive it. Even if the state wants you to build, which every Western government does, there's no guarantee that will happen, and if it does, it won't happen quickly. Whereas our adversary, our competitor is a better word, in China, if the state wants it built, it's done rather quickly, I think is the best way to put it. We are at that disadvantage. Free market is a cold and lonely place, but is extremely positive in getting things done ultimately. Efficiencies and innovation is the way to ultimately do it. As a company, we don't like tariffs.
We don't like subsidies. We don't even like things like U.S. government involvement or any government's involvement. It's not because we don't respect and love these governments. It's because we feel that ultimately as a company, you have to be focused on value, efficiency, and earnings. If a government is involved, they're focused on procurement. That ultimately is the same way of having one of your off-takers as an investor. It never ends well. I think ultimately with us as a company, we have a look that we don't see new supply coming on anytime soon. That's not because we think all projects aren't that good. That's not the case. We just think that there is a journey that has to be undertaken that we have already concluded. We started in Korea 10 years ago, 11 years now. It took 8 years to permit.
We were liked. They liked us. But they said something to me that was very meaningful. I met the governor just after we bought the project, and he said that he was very excited we were there, very excited that we were going to build, and it was going to be great for economy and all the good things. But he said, "If I have one phone call complaining about you, I can't talk to you." Which I thought was actually very refreshing. He gave me this advice. He said, "I suggest you build like a submarine." I think we can all accept that sometimes things that politicians say perhaps are not the most meaningful. But this, in fact, is incredibly insightful if you're building in democracies. We are taking the same approach in everything that we do.
You have to be out of sight and out of mind because there are too many reasons why people can slow you down, whether it be NGOs, delays in permits. Bureaucrats don't naturally want to make decisions. It's not because they're against you, it's just that if you don't make a decision, you can't be wrong. That's mining is something which we struggle to really embrace because we've closed more mines than we've opened in the last 30 years. Not a natural growth area for many people. Essentially, I'm going to put my glasses on at this point. Essentially, I think everyone in here is familiar with Almonty. We have a number of assets. Some are in production, some are ramping, some are under development, and we will continue to look to expand our resource reserve base if we feel that there's value to be had.
We are also looking at moving further downstream because I have always been a big fan of maintaining margin. Right now the margin sits with me in the upstream, but ultimately, I have to look out five, 10 years. If prices soften as market normalizes, which we would expect once Chinese recycling matures in five, seven years, I want to still be able to capture that margin. We have a large amount of cash on hand. We obviously are in a wonderful position being in a bear market where everyone else is going to struggle to try and see their project's materialization. We are fully going to try and take advantage of this current situation. Yes, the stock price is doing what the stock price is doing, as all metals, the whole metal sector. It does not mean that the fundamentals have changed in our space. They have not.
Ultimately, we are uniquely positioned in that regard. I hate that word uniquely because it sounds a bit like a con. We have a lot of money, we are open, we are permitted, and we already receive all the benefits from our industrial base unlike anyone else. I think in terms of the market of tungsten, a year ago when I would tell people, they would look in fascination. Now everyone knows the story, and it is not a dissimilar story from other metals. China dominates with Russia and North Korea. Now Myanmar has joined the party, but that is only momentary. The military gents are not terribly good at producing tungsten, but they have quite a lot of inventory. That is an interesting point, that conflict has become more of a suggestion than a rule, and hence the desperation for this material.
We look at the outlook in the U.S. with the impending outlawing of Iranian, North Korean, Chinese, and Russian material for DoD from the end of this year. This is not something which was a surprise. This was announced some years ago under a previous administration. Most of the industrial base already kind of We know that earlier this year there was an attempt to try and get an exemption from the White House for a three-year waiver on this. That was rebuffed by the administration, and correctly so. I think we are going to see how this comes into effect. We do not believe that apart from two companies, two major producers, the others really have a plan. So this is going to be an interesting switchover.
Most important element is that the consequence of this I think is, are going to be quite profound because I think there will be a knock-on effect then into Europe, and Europe will follow suit. I am going to talk about Sangdong later. Ultimately, as a company, after a very long journey, Sangdong is online. Would I build in a democracy again? You would have to really twist my arm. It is not for the faint-hearted.
What anyone says to you, "Oh, we are going to have permits this time next year," they do not know what they are talking about. It is a real journey. I think the important thing for me with Sangdong is that we are now playing to our strengths. We have owned and operated tungsten mines for many years. We have bought mines that were not working well, and we turned them around and made them work well. That is what we do.
Building is always a drama for anyone, especially when you do it in an environment that is highly bureaucratic, which Korea is. Now we're into that phase of our strength, which is the ramp-up. Making something that works well, work better. That's where we're feeling much more. Well, I'm sleeping better, I think is the best word to sum it up. We've obviously made some arrangements with a sovereign country. This was in fact at the suggestion of the State Department. We looked for ways of how we could, in fact, get in front of other buyers like traders or the Chinese, who are the main consumers of Central African material. Of course, if you're in business with a sovereign nation, you have a certain edge when you're in the negotiations. Doesn't mean you pay more money, but the small-scale miners have a choice.
You can supply to China or the local governments. I think we can say that generally people pick the home team. It's not so easy to make an agreement between a sovereign government and a U.S. company. That took quite an undertaking, and it's constantly evolving. We're constantly looking at how we can increase the footprint of that deal, as well as the fact that we can now transplant it to other sovereign nations who also have large small-scale mining sectors. The whole purpose of this is to procure material in a market where long-term supply from mines is questionable when they're going to come online. This is a band-aid fix. To date, it's been very successful, more successful than I even realized. We're only about less than a month into it.
I believe the Rwandan government has told me that as of next month, I'll be the largest exporter of concentrate in the country. Of course, we've received our final operational permit. In Sangdong, this is important. Now we can go get our free money from them, the subsidy, which is the benefit we get. No conditions. It's just a large check, and that will be explained by the team afterwards now that we've completed that plant. The GTP offtake was extended by six years. Well, they're the largest producers of midstream of oxides outside of China. Their confidence level of all this new material coming online is somewhat jaded because they've been in this a long time. They wanted to expand what we had.
The price of that extension was an increase across the entire contract, as well as, of course, the adjustment of when we can recognize because title will now pass in the United States rather than Korea. I think what's important with this contract is that it redressed something which has always stung with me. All those years ago when we got the DoD guarantee for the KfW loan, that came through this offtake with Plansee Group, and we had to assign a discount, an additional discount to that material to in fact get that guarantee. What we were able to do with the extension was to get rid of that discount. Now we are priced right in the middle of the market, which is what I'd always sort of hankered for.
The fact that they gave it over the entire contract was really a consequence of the environment we find ourselves in tungsten. If this was three years ago, there was no chance, short of kidnapping their doc, of getting this. This was something which was a product of this current malaise in the market. This almost panic for material. In terms of Los Santos, we made our deal with a very large consumer in Europe. This was another example of how we try and innovate our growth. It is not just about developing processes or advancing or making existing processes more efficient. It is looking at ways we can operate in areas where we think you cannot normally operate. You cannot get permits in Europe right now and haven't done for nearly nine years. It is not that they say no, they just do not say yes.
It is not just tungsten, it is any metal mine. Spain and Portugal are the Iberian Peninsula. That is where all mining traditionally is, and they haven't issued any permits for any new mines in that time to anyone. So it made sense when we really started to look at recycling. We have to reclaim Los Santos anyway. Is it going to work? Who knows. It worked in the lab. It worked in our pilot plant. We do not know if it is going to work commercially, but we have a high degree of confidence that it will. So the upside is I recover tungsten from tailings as I reclaim the site. I have got a floor price on the contract, meaning that on the downside, if it does not work, I still have to reclaim the site, but I am not going to lose my shirt.
But if it works, then we have a new business model in Europe. We have 136 years of tailings in Panasqueira to work from. And I can guarantee you that picking up old disused sites in Europe that have not been reclaimed, which none of them really have, is a far simpler undertaking with local authorities to get that underway than permitting a new mine. So I think this is a good example of how we keep looking at how to grow through our innovation. Finally, in phase two. Phase two is underway because that was always contemplated when we built phase one. So we have already started the ordering of the equipment and the planning of the underground for that. On that, I am going to hand over to Michael Dornhofer. Michael, I have known for many years. He was my customer for many years. He is cheap.
He used to beat me up on the price. But I have always respected him as most of our sector have. I think it is always good to have a viewpoint of the market from Michael. Michael, please.
Thank you, Lewis, for the nice words, and thank you for the invitation that I can talk here about the tungsten market and my view on the tungsten market, which of course is very interesting and shows some interesting development. To my person, my name is Michael Dornhofer. I am from Austria. I am 20 years working in the tungsten industry. 20 years ago, I started at WBH Wolfram Bergbau und Hütten, an Austrian tungsten company, now 100% owned by Sandvik. When I was working there, that was the time when I first came in contact with Lewis, and in fact, yes, we were customers of him. Eight years ago, I started my own company, ISBP, Independent Supply Business Partner, and I am acting now as a consultant and agent with a focus on the hard metal and tungsten industry.
Tungsten has some very unique properties, and that is the reason why in most application, whatever the price of tungsten is, it will not be replaced. I think that is very good news for all of us. We see here on the slide the end use mix where tungsten is used today and where it will be used in the future. The main application for tungsten is, and that will remain, the tooling industry, tools used in car manufacturing, in aerospace, in mining, and in some other industries. But what we see is that the tungsten end use consumption will not only grow during the next years, in the coming years, but there is a shift, and that is a very important shift, especially for a company that is producing tungsten out of the ground. In the field of tools, there is a very high recycling rate.
When you think about the car manufacturer, when they buy 5 tons on tools, after a few weeks, these tools are used, they can resharpen it, but at the end, after two, three turns of resharpening, it will go back to recycling. Then you, instead of 5 tons, you might have 4.9 tons or whatever. This is definitely an area where we have a very high recycling rate, and it is nearly a circuit. But fresh tungsten is needed wherever the recycling rate is low or where tungsten is not only used but consumed. When we see this, then we see that the growing demand of tungsten comes from the defense industry, from electronics, from battery business, from fracking. There are areas where tungsten is not recycled. The weapons, if they are just used, they lie somewhere and you will not be able to collect them.
What we can say is that the growth in tungsten consumption that is expected to be somehow in parallel to the general development of industry and economy, the demand for tungsten out of the ground will be even faster growing and more growing. That is definitely the effect that we have to see. I already mentioned the main application is in the cutting tools industry. Mining, and mining is another area where tools are used, but the recycling rate definitely is smaller and lower than in the car manufacturing because you will have some wear and so on. That is something that we have to have in mind, then even growth of tungsten demand will just be parallel to the economic growth. We have this fact that more and more material will come out of the ground. Now, where does the tungsten come from?
In recent years, China stood for about 80% of the worldwide tungsten production and even a higher share in the conversion of tungsten, raw materials, concentrate, and scrap into APT and oxide. On February 4 last year, China put tungsten on the list of dual-use products. I will come back to that when we will talk about the price development, but that was definitely a point in the tungsten industry that no one was expecting to happen with this effect. Anyhow, we have to say, and a lot of people claim about the Chinese suddenly stopping their supply with tungsten to the Western world. We have to say that Chinese producers, Chinese traders, over many years warned again and again their Western customers that there is a mismatch between the 80% of tungsten that they take out of the ground and about 50% of known reserves.
These Chinese companies, producing companies, always want their Western companies that one day their government would stop this mismatch by reducing or even stopping the export of cheap raw material to the Western world. We have the other point that we have to see is that a lot of these Chinese mines live from very high subsidies. I have seen mines in China where 4,000 people were producing exactly the same as a small tungsten mine in Austria, where there 40 people are working underground and 30 people in the ore dressing plant. It was exactly the same amount of tungsten producing. A lot of these mines in China survived only due to extremely high subsidies.
Other effects that we have to see is that as of January 1st next year, the U.S. will not allow that tungsten coming from China, from North Korea, from Myanmar, and so on, is used in the supply chain to their defense industry. Another point is that, already about eight years ago, tungsten was set on this conflict mineral policy list, where tungsten, tantalum, and gold is on the list, and there are special requirements to check where the material is coming, whether it supports the conflict in the Congo, and all certain surrounding countries of the Congo are affected by these very strict rules. The second largest supplier of tungsten raw material in the past was Russia.
There is still, at least in Europe, no import ban on Russian raw material, but no European customer is buying Russian concentrate anymore, and the U.S. do not allow the use of concentrates coming from Russia either. That is definitely the point that we have to see when we are talking about this market. Of course, the most interesting thing for all of us is the development of prices. For very long, the tungsten prices were relatively stable. Of course, at that time, we didn't talk about stable because when the graph was only ended at about 500, there were, of course, some up and downs. But when we see it today, definitely the tungsten price for very long was in a range of about 250-300, with a peak going up to 470. When we are talking about the tungsten price, we have to be precise.
We definitely talk mainly about the APT notation published by Fastmarkets over by other service. On February 4 last year, I mentioned that China put tungsten and most of tungsten raw materials, most of tungsten products on the list of dual-use goods. That requires now for each individual contract, a permit, an export permit, a license to be exported. Of course, at the beginning, Chinese exporter just thought that is just paperwork that will delay exports by a few weeks, but we know how to handle that. That was the reason that in February, the price started to rise, but relatively slow. But with months coming in, people more and more understand that this time, the Chinese really take it serious. There were nearly no export licenses granted for intermediates, for APT, for oxide, even for tungsten metal powder, and very limited export licenses for tungsten carbide.
That led to the situation that there is an extremely shortage on these raw materials in the Western world. I already mentioned that China was standing for 80% of the worldwide supply. Normally, one would expect, and that most expected, that when China stops the export of tungsten raw material, they would be overrun with inventory in their own country. But what China did in parallel, they reduced their own mining output. Already two or three years ago, China reduced the mining quota that tungsten mines in China require to be able and allowed to take material out of the ground and to sell. But now, with this stop of export in parallel, they stopped small and illegal mines, and they put mines where tungsten is a by-product also under the mining quota regime.
That led to the situation that not only in the West, there was a shortage on intermediates, but in China, there was a shortage on concentrate. China is importing increasing volumes on concentrate from countries like Kazakhstan, Myanmar, North Korea, but that couldn't compensate the volume that was less produced in China. Therefore, the prices in China and in the Western world moved in parallel to a peak of 3,200, 3,300. So what happened? The Chinese were buying more and more concentrate, and the Western were willing to pay extremely high prices, higher prices than some Western companies were willing to pay. But in April this year, something suddenly happened. I saw that because a lot of Chinese companies were asking me, "Where can we buy concentrate in the West?" But suddenly they stop. "We are not interested in imports anymore." So what happened?
I mentioned the mining quota system in China. Tungsten mines in China, there is a mining quota, but that is not taken that serious. So they were still producing, even their mining quotas were already used up. But due to these new strict regulations, they were not allowed to sell their concentrate, even to their own mother, sister, daughter companies. So a lot of Chinese mines were sitting on huge inventories. In April, middle of April this year, the Chinese government released the mining quota for the first half year this year. So suddenly, they were able to sell this product, and all these mines went on the market with the huge volume that was sitting around. That led to this collapse of tungsten prices in China. But we have to be careful when I talk about the collapse. The price in China went down to about $1,000 .
That is a price beginning of this year. We were discussing whether tungsten price would ever go up to this figure. Of course, from January to April, the price was three times higher and went up to 3,000. Even today, the prices in China, significantly lower than in the rest of the world, is on a high level when we talk about history. That is what happened. Now we have a completely different price level on the Chinese domestic market and the Western market, but there is a firewall. This firewall is this export license system, and there are companies looking for raw material for APT, for oxide, and cannot find it. It's not a question of price, it's a question of availability. We will see in the coming months how the market will react to that.
Definitely, we will have a shortage on the intermediates as long as there is no new capacity to convert, concentrate, and scrap into APT and tungsten. The molybdenum price also is increasing, maybe not with the same pace and speed as the tungsten prices, but even there we see a good development in prices going up. What about the volumes? I was talking about the prices. Now let's go to the volumes. Of course, due to the fact that prices are significantly higher now, a lot of mines try to produce more, but we all know, and Lewis mentioned that the permitting is something very time-consuming. It's not that easy just to increase. There are a lot of new projects, or maybe sadly not new, but old projects that should restart, but we know how complicated it is, and a lot of them will definitely not make it.
We will, in the next years, run again into a huge deficit in the volume. What is very interesting, I mentioned that I think several times, sorry for that China stands for 80% of the tungsten market, but China is the, by far, largest importer. A significant volume is coming out of one single mine in Kazakhstan, which is owned by two Chinese companies, but other important suppliers into China, Myanmar, North Korea, definitely different sources Western companies would not go for. That is the one thing that we have to see. In 2025, first time in history, China was a net importer of tungsten. In the past, they had 10,000 of tons more exports than imports. We see it here that China is this huge importer.
Another one is Vietnam, where there's a APT oxide producer that actually is a mine, but the APT plant there is significantly larger than their mining output, and therefore we see that they are also a significant importer. When we see about the forecast for the future in tungsten demand, we see a reduced mining output in China. Now we can say, okay, the mining growth in China was reduced and reduced. Is that something that will remain? I can tell you, of course, no one here in this room can look into the future, but there is one fact that we all have to see. In the first few, it looks a little bit strange when I mention that, but that is the nuclear fusion reactor.
When I was much, much younger than today, and I was at the university, we were told in 30 years, we will not have any energy problems in the world anymore. We will have the nuclear fusion reactor, and we will get the energy for nearly for free. Now, some people are talking it will take only 25 years till that is economical. Why are we talking now about this? There is one reason. In China, we know that for the fusion reactor, there are a huge amount of tungsten that will be needed. Even for smaller one now, people are talking about 100 - 200 tons of tungsten for the cover of the plasma chamber that is used. It will be used. And for very long, of course, everyone knew that will be a huge consumer for tungsten.
What turned out now is by the first test done in China, that this material, this tungsten, will be radioactive contaminated. Therefore, they will have to replace it every two to three years. Suddenly, tungsten, it is clear that tungsten will be a consumable in the nuclear fusion reactor industry. And that is why China is now saying even it will not be something with a significant volume in the coming years, but it is something that will be very important in the future. And without tungsten, the nuclear fusion reactor industry will not be able to perform. Therefore, they say now, "Let's keep this valuable raw material in the ground for future applications, for future generations." And that makes me personally very confident that China will not change their strategy and their policy to increase the tungsten output out of their own mines again.
That means, and we talked about 80,000 tons of tungsten taking out of the ground in China, sorry, in the past, and they reduced the mining quota by 5%. That is what they did in the two, three recent years. That means that outside of China, each year, one or two mines with a total capacity of 4,000 tons will have to start production each year just to cover what China will produce less.
And we are not talking about the additional volume to the coast, not talking about the additional volume that we will need for defense and other applications where there is little recycling possible. That is something that we really have to take into account when we talk about the future. It is difficult to predict the future, but I think that is one fact we definitively have to see. Thank you for listening to me. Thank you.
Right. The good stuff. Right. Let me just go back to this. Okay. I was going to let Ben talk about Sangdong, but I think it's probably better if I do. I think it's what Michael Dornhofer was saying, the amount of the myriad of uses of tungsten. It has a profound impact on entire economies and really everyone in this room and this city and this country, the planet generally. If you look around, pretty much everything on your desk has had some impact with tungsten, whether it be the ballpoint pen, the computer, the phone, the cabling, even the table. The manufacturing of the table and the chairs, tungsten has had some impact on all of that. Without tungsten, none of this would exist in this iteration. I think we often forget, tungsten is a really, really difficult metal to process. It fights you all the way.
It just wants to stay in the ground. It does not want to be liberated at all. We have all of these wonderful applications that obviously simplify and enhance our lives. But what people don't realize, and my customers, the industrial base, take enormous credit for the benefit and the contribution they make to our lives. What they neglect to mention, the miserable fight that it took to get it out the ground in the first place. This is a metal that's as dense as gold, but as brittle as porcelain, meaning every time you handle it and you blast it, you tram it, you grind it, you process it's just itching to dissipate into dust and to return to the ground where we found it. It is the reason why in the past 15 years, every tungsten mine that we have known has failed. Processing is extremely difficult.
The current price supports some level of processing. But if I look back to one particular project that was slated to be an enormous beneficiary back in the day, it was going to change everything. The cheapest price they ever produced was at $730 an MTU in a price at that time of 300. At Almonty, we've never lived in a world outside of 300. Everything we've done has been based on that. Sangdong is absolutely no different. I'm not really sure what's Alex. We have a technical glitch. Here we are. Sangdong, formerly the world's largest tungsten mine. We bought it in 2015, and we went through permitting. We found the right money to fund it. That was trick number one. It's very easy for a junior miner to make deals with groups that would've taken the value out of the business.
We chose not to go down that road. We were told it wasn't possible. I said, "Anything is possible." We got the right offtake, one that had a hard floor, no cap on the upside, years before it became fashionable. We were told we couldn't get one of those. We did. We were also told that opening a mine in a jurisdiction like Korea or a non-mining jurisdiction was going to be next to impossible. We said, "You're wrong. We can do it." We went on this journey and by some complete dumb luck, we happened to open with all of this in our sails, the right money, the right team, and the right market at a time where China was transitioning away from the upstream to the downstream. Of course, I'd like to say I knew this was going to happen exactly as we were opening Sangdong.
That would be a complete lie. Ultimately, the fact that we built phase two into phase one wasn't because we knew this was going to happen now. We did it for a really pragmatic reason. Commodity cycles said that when prices went up, you should produce more, and when they come down, you produce less. That was always the idea of phase two. We would underpin phase one with a hard floor, meaning that no matter what happened in the price, we could still make a living, we could still be profitable. When prices went up, we would just turn phase two on. We would work on a spot basis. We capture all that upside in 10, 11 months. When the price came back down, as it's always done in the past, we could just switch it off. When we built Sangdong, we thought of phase two.
This was not the afterthought or a reaction to the current market. We have obviously started phase 1, 640,000 tons per annum, and phase two is slated now to go to double that to 1.2. Our reserves in our current resource reports accommodate this comfortably, but the reality is we have 10 mining areas in Sangdong. These reserves represent two. We know a third one, which was in fact looked at by Korea Tungsten, the former owners of the government, where they also identified large volumes of high-grade tungsten. This is a big tungsten undertaking, very similar to Panasqueira Mine, which has gone for 136 years. These types of resources for tungsten are very rare. This sort of scale and size, and to have it in a good jurisdiction, even rarer.
We have no doubts that in terms of longevity, our outlook is good because we only look at things that have longevity. We have our first slide. September 24th is when that plant started going in. I remember we did a groundbreaking ceremony. There was over 100 politicians there. We had the baseball team that we support in the village, and it was a good day. It was cold. Actually, no, it was cold in the morning and it was warm in the afternoon when we did it. I remember every politician there looked at me with this look of, "Okay, this is great, but will it really happen?" Because even though we broke ground, they knew there was still a permitting journey during construction, which is completely normal in Korea. There's no such thing as a straight line in any democracy. We've seen this evolve discreetly.
As I said before, we build like a submarine. Until last October, people didn't even know we built a plant. I remember there were all kinds of individuals in our space, junior miners, who were saying, "Oh, Almonty's a big fraud. They don't even have a plant." Because we weren't discussing it. Because we didn't really want to advertise it on the advice of our governor and of our mayor. They wanted this kept nice and quiet until we were so far advanced, that was it. When the snowball couldn't be stopped. We've built a mine that under Equator Principles, which doesn't sound an awful lot, especially some companies use Equator Principles in some sections of their business, but not the entirety of it. This mine is entirely built under the Equator Principles.
I know ESG is no longer fashionable, but it is to us, and it is to us for a very good reason. It's the ultimate liability coverage that you can have. If anyone says anything to us in the future about, I don't know, something, environmental, community, we have already policies in place to counter that. This mine has been built to a level that has adhered to these principles at the insistence of not just our lender at KfW, but also of our customers. Ultimately, it's not so easy to take a mine that was conceived in the early 20th century and bring it into the 21st. It took 4 and a half years design work. All these things that no one really sees, and in that time, you're lambasted with abuse about the fact that, "Oh, are they really doing anything?" Yes. We had to do this properly.
If we were going to elicit the value of this to our shareholders, this had to be done correctly right from the beginning, and that started before we even put one stake in the ground. This project, as you can see, is built in the most miserable conditions you can possibly imagine. It's built on the side of a mountain and in a very small space. Not the easiest thing to plan. The good news is it's on the same level as our portal, so we can drive literally straight in. There's no descent. We are in a unique situation where we've been afforded the privilege of building this in Korea, but it has taken a great deal of time to adhere to all of the rules and regulations to comply. This is, again, we have this stockpile, and we have a further one further up the mountain.
The idea, of course, is to blend a consistent grade into the plant. Right now, unfortunately, we have no capacity on surface because the mine, as usual, has started somewhat earlier than the plant did. We'd like it all to have happened simultaneously. It never happens that way, so we essentially have far too much mineral on surface. We have to now chew through that. But I suppose in many ways, that's a good problem to have, although it doesn't really lend itself to the process of efficiencies that we like to adhere to. I'm assuming this slide says three for a reason. I'm guessing the next one is going to Oh, here we are. Right. There it is. Despite all of the rumors and superstitions, this is Sangdong. Here it is working after nearly 40 years. 1993, this project closed. We never doubted it could be done.
We just really didn't know when. I was going back to what I said right at the beginning in the opening remarks. It's about permits. It wasn't about anything else. I knew once I had the best offtake that had ever been done in tungsten in the West, ever, which was a hard floor contract with no cap on the upside with a AAA-rated offtaker, and I was able to procure that guarantee from OeKB to underpin my KfW notes. We knew it could be done. It's a question of when. We've not reinvented the wheel. We're using the same process they were using 40 years at this mine. Yes, we're using the latest equipment. It's much more efficient. It has a lot less impact. It's fully automated. But this system is very similar that you'll find in every major copper mine in the world.
This is a classic copper automated flotation cell system. Has everything gone wrong and broken on ramp up? Absolutely. That is completely normal. Anything that can break, will break. This is what we do. We make these things work. The journey was the build. This is now just the net result of that journey. I think it is very important to remember that we are now playing to our strengths.
As we have said, shipments are now being prepared. Is the grade as good as I would like? No, but it never is in the first two shipments. It is funny that three years ago, my off-taker would have demanded discounts for under-spec material when it is less grade than their specification. Now, they do not care. "Send it. Whatever you have got, we will take it." We will meet our boilerplate design output and specifications within, we estimate, the next 60 days.
Most important thing is the grinding circuit is working. We have only had one gearbox blow up because it was installed incorrectly by Metso, but that is another very good point. We are not in the middle of nowhere. We are in a highly industrialized country, and it is a peninsula, which means everybody carries inventory in every industrial space because everything has to be brought in by boat.
So when we need a gearbox, Metso apologized profusely. "We will give you a new one." "When is it going to come?" "Oh, 100 days." But in Korea, we found one immediately the same day, and it was delivered in two days. Because ultimately, we are not isolated, and that has been a very important factor to our ramp up. This is a small video just showing the automated way that this system actually works. It is a vacuum-packed bag. It takes the air out. Two reasons.
One, we get rid of the moisture so we do not have to weigh it. Secondly, because we get more efficiencies in the packing. If you imagine, that bag holds 1 ton, and we can ship roughly up to 24 tons in a 20-ft container, as long as there is a three-axle truck to pick it up at the other end. Could you imagine that in the entire world, we are producing roughly 98,000, 96,000 tons of concentrate. Our output is going to be 10 containers, 200 tons a month. This is how condensed this material is. We do not have shipping issues. It is a 20-ft container. As I said, everything is highly automated. We have had the luxury of time to plan. I think this gives you a sense of the history. We are not doing something for the first time in this mine.
We are just picking up the story that finished in 1993. It finished in 1993 because the price came down. In Panasqueira, we chose to innovate to survive. Korea's economy was changing when it closed. It was migrating into areas that were much more fashionable. LG, Samsung, SK. Mines were the past. Now, of course, that is a regret, but at the time, there was no real incentive, and that was a very important point. This mine, when it closed, was honored by the government. They cleaned the site. When you buy a brownfield, you have a legacy issue. No one ever mentions it, but there is a real legacy issue. Tailings. Contamination. The acts of the sins of the past you inherit when you buy that brownfield. In Sangdong, this was a sterile site. The tailings were all encased by the government. The site was cleaned. This is important.
I see these mines that are going to come back online, they never talk about the legacy. There's always a legacy cost of environment. This is I think a very good timeline to look at. Ultimately, this mine really should never have closed. There was probably a way to get it through as we did in Portugal. Ultimately, it did, and that was to the benefit of everybody in this room. Now, finally, a benefit to our community in Sangdong, the 1,200 people that remained of the 40,000 that used to live there. As I said, we are now fully underway. We have an entirely contained system because, of course, we have climate there. We have warm summers, cold winters. Ultimately, it's now, as I said, underway.
I'm going to pick up the pace because we've got a lot to go through. I think the Equator Principles is one thing that is often forgotten about. ESG is still very important, as I said, for liability, but because you can't move a mine. Resource nationalism is real. You're a house guest in someone else's home. You have to ensure that your conduct is becoming a good house guest. South Korea is the largest consumer of tungsten per capita in the world. There is a voracious market there of which the vast majority comes from China, or was coming from China. This is an important element. So thank you very much, [inaudible]. It is an important element to remember. Just because it's not fashionable anymore doesn't mean it shouldn't be adhered to. Environment is a way of shielding yourself from issues in the future.
On that, I'm going to hand this over to Nuno Alves. I'd like to point out Nuno has everyone at this stage has been with me a great deal of time. There's a couple of new faces, but everyone has been with me a long time, Nuno being one of them. He's appallingly honest. Go easy on him at the table because he'll tell you everything. Nuno, please.
Good morning. I just need to read what is this. My name is Nuno Alves. I'm the Mine Development Director of Almonty. I used to describe myself as the babysitter of the new projects. Usually I do the valuation, and then I follow technically the projects in the initial stages, and when they get more mature, they go to the local teams. It's what happened to Los Santos, what happened to Sangdong, and so on. Panasqueira is an old mine, a very old mine. It's the oldest tungsten mine still in production in the world. It started 136 years ago. It only stopped in the end of the First World War and in the end of the Second World War because of a political problem, an imposition from the Portuguese government.
It stopped during seven months in between 1992 and 1993 when we did the final phase of the mechanization. Panasqueira is a mine totally mechanized. Reportedly, it has the lowest cost for these mining methods in the entire world. It was due to that, on that time, we finished with the jacklegs, with everything that was not mechanized. So we have the highest grade and the cleanest concentrate all over the world. There was never a mine in the tungsten market that was able to get the grades that we have with no penalizers at all, no UTHs, no arsenic, no nothing. We also produce a little bit of tin. We also produce a little bit of copper. The copper also has a little bit of silver, 400 grams per ton. Now we are facing our new project that is level four.
We have been drilling since almost one year ago. We expect to finish that drilling by the end of this year. You can see here a photo of our underground miners, let's say, at the entrance of the mine. We have around 225 people working in underground. Now also with people from abroad. It is an evolution in the, let's say, European society. Now, in addition to the local communities, we have 50 nationalities working with us, mostly Brazilians from East Timor, also from Angola, and even from other countries. They are becoming good miners. You just train the people, and the people arrive there. Okay, I will approach. So, I have here a note about the tailings. We have around 4.2 million tons of tailings in our tailings dams. The grade is around 0.25% WO3. It has a little bit of zinc.
It has a nice content of copper. Now that Eduardo, our Chief Metallurgist, has been focusing a lot in Los Santos. Antonio also asked him to do tests on Panasqueira tailings, and we are getting very nice results. So the Falcon and the MGS that are giving good results to Los Santos are also giving good results to Panasqueira and also flotation. We never thought we were able to float the zinc, but the fact is that in addition to the copper, we are going to be able to float the zinc. All this is evolving quite fast. Okay. What else do we have? Yeah, more or less the history of Panasqueira. You can see there our tailings dams, the cells 1A and 1B. Cell 2 is not on those tailings evaluation. Here you have a lot of old photos.
Not all of them are 100 years old, but most of them are 100 years old. So the community kitchen that was serving 3,000 meals per day. The school, not in Panasqueira, but in Barroca Grande at different sites, that now is an auditorium. The bakery, because Panasqueira, especially during World War II, was having 11,000 men and women working directly. Of course, the local community, you are not having the bakeries to serve all that amount of people. The hospital that was the first hospital in the region, we gave it to the community. That hospital is the nursery home there in Barroca Grande. Almost everybody in the region born there. We still keep our first aid section there, is in the back part of the hospital. You don't see it in this photo. You have the bridge over the Zêzere River.
Actually, only half of it was paid by Beralt. The other half was paid by the local communities directly. You have the cinema. You have the football ground, and you have there, let's say, a football match in between two neighboring villages. You can see the amount of people. You don't have this amount of people anymore there. The recreation center and the club, that is still operative. When Lewis left Panasqueira, when he sold it some years ago, he paid a new ground for the hockey team. By the way. Okay. I'm understanding the message. Okay, let's see if I have something else. Okay. The geology, this is in every book. Our flat-lying quartz veins. This photo is not very representative because it has four small veins that seem it gives quite a nice vein. Usually, we only exploit veins above 18 cm. You have the type of mineralization.
You can see that the wolframite, not only the wolframite, also the chalcopyrite, also the sphalerite, everything in Panasqueira is extremely well-crystallized. That's why the plant, despite being a very good plant, has the recoveries that we have, also in tin, also in copper. That's why the concentrates are so good because really it is so well-crystallized in the quartz veins that we don't have much problems in the plant. Here we have, well, a horrible sketch of the mine, but honestly, we never thought in doing something better. You have the three levels of Panasqueira. You have the fourth level. As you can see, the levels in Panasqueira used to be 60 meters depth when the raise boring arrived in 1974. That is a machine that we still own.
Level three was 90 meters depth, but the fact is that that raise boring can go up to 120 meters depth. That's why level four will be 120 meters depth. We want with one base infrastructure to get to as many veins as we can. Yes, the drilling campaign is 14 kilometers. We have three rigs, two working at surface, one working in underground. I already spoke about this. Okay. Well, you have here a funny, actually two funny photos of people using extensive timber. We don't use a single piece of lumber in the mine anymore. It's funny because eight years ago, it was extensive. But now, with the change of the mining method, we don't need to do it anymore. Panasqueira is totally trackless.
This photo is of 100 years ago, maybe more, and is not in the actual Barroca Grande zone. It is in the initial mining areas that were close to Panasqueira. Well, I don't know who will present the rest.
That's me.
Okay.
Thank you.
Sorry for the delay.
As you can see, we can talk about this all day long. Los Santos, I think I've covered. It's going over to tailings. If it works, we've got a great new business model in Europe. If it doesn't, we just reclaim the site, which we have to do anyway. I think that's worth bearing in mind. Los Santos was a mine that we bought many years ago. It was owned by an Australian company. They threw money at it. They ran out of money. They couldn't make it work. We bought it, and it made us a fortune. I think that was testament to the fact that we actually know what the hell we're doing, which is very important. I think, as we said, it's now underway.
We've shielded most of the costs and expenses with that by having our offtaker write us a check, which is the first time they've done it. They were very upset that I told anyone that they did it because now everyone's asking them for money. But what can I do? The rules are the rules, and I'm sure they'll forgive me in time. But ultimately, I think this project is an interesting, innovative approach to a permitting problem across Europe. I think we will see, if it does work, it's a fantastic opportunity. On that, I'm going to hand over to the guys from Montana. Pick up the pace, guys, because they want lunch. Thanks, Steve.
All right. Good morning, ladies and gentlemen. Since I came on board with Almonty, I have been focused westward with Niangon and also Montana, and I have spent quite a bit of time at both locations. With this, I've just got a few slides to cover. With the Montana project, this was acquired back in November of 2025. It does come with items already in place that are very critical for us, which is there are roads, there is water, there is power nearby, and there's permits that are already in place. Taking a look at all these things, it makes it a good opportunity for the future. I'm going to use the word planning quite a bit during this. With the acquisition right around April timeframe, the headquarters moved to Dillon. Dillon is located just south of Butte.
It's a town of about 4,000 people. At that time, we went ahead and established our headquarters there. Taking a look at this is part of the build-out that I've been given instructions to go ahead and do. Very small number of employees right now that may, in the future, could grow. But that comes down to the planning that we are doing for multiple areas. You can see some of our key representatives that are up on board. It does say plan like steps, but for any of those questions here, I'm going to defer those to Mr. Black. These pictures here represent where the ore body is at. It's there. We have documentation it's there. I want to go back to the planning piece.
I've got the team, small team, with our experts from Panasqueira, helping us in the planning process for the future. Any of those timelines or anything, I'm going to defer to Mr. Black with those, but it is there. Just a couple more pictures here, just to give you the visual of it's there, it's in there. We know it's in there. Now it's how do we get it out of there. With the headquarters, again, I mentioned Dillon's a town of 4,000 people. One of the things was to take a look at a headquarters, get something that resonates with not only the community, but with Almonty. Part of my mission set was to be able to go out there and to establish a very positive public relations with the community.
I've done quite a few engagements with local leaders and then within the state itself, and then as well as other industries there. They have a university, they have a hospital there. They have allied trades within the high school, and it's also partnering with the university. Those are all areas that we are interested in as we look at growing into the future. Attending multiple events within the town of Dillon itself and also within Beaverhead County. Very important to be able to establish that upfront, understand the capabilities, some of the areas where we can help them out, and then to be able to move this project forward. This is overlooking at about 20 miles north of Dillon. This is overlooking where the old mill used to be, or actually the current mill, and then the tailings area.
I just want to highlight that tailings pond. No decision is made on that. We're still planning for what that might look like in the future. We owe that back to Mr. Black here soon. This is just off Interstate 15. This also has where it's located from where the ore body is. It is a little bit of a distance, and we're working through the road network that will go to that eventual area. This just gives you an idea that it's in the mountainous area. This is a project that's going to require quite a bit of planning, detailed planning, and that's one of the things I have a charge with to be able to do. With that, we're going to switch over to Guillaume.
All right. Hi, everyone. I'm Guillaume de Lamaziere. I'm the Chief Development Officer at Almonty. Welcome, everyone. Rwanda, actually, the idea of Rwanda was introduced to us by the U.S. Department of State. It's significant for Almonty for a couple of reasons. First of all, Rwanda is the only African Country in the world's 10 largest producers of tungsten. Having documented and traceable origin will be critical from a U.S. defense supply chain perspective starting in January 2027. The completion, we have a JV, which will be owned 25% by the government of Rwanda and 75% by Almonty. That's what we get in exchange. Get a few things here, right? Get the Shyorongi concession, exploration concession of about 32 square kilometers. That's a green field.
We are getting processing license that covers mobile tailings units that will temporarily allow us to process tungsten from local license holders, mine operators, land owners. We are getting government help. Government of Rwanda will introduce us to local mine license holders. Also we have the right to acquire ore, process the ore, upgrade the ore in other facilities of Almonty, and that will be the first two stages. Later on, we will have the central unit processing plant in Rwanda, but that will come at a later stage. That was a quick presentation, but I know that we are short of time, so just want to give you the highlights of Rwanda. Thank you.
Hi, everyone. My name is Seung. I am Operations Superintendent at Sangdong, Korea. I actually coordinate two different projects in Sangdong, from line one, line two to a moly or oxide plant, but I am just covering the moly today. Let us go to the next slide. Moly, the second ore body. As you can see in the picture on your left there, the moly deposit is actually right below of the tungsten ore body here, about 150 meters below. It is not a new discovery. It actually already finished the technical report back in 2022, using the historical data. But moly deposit here, is a little bit different than tungsten scheelite. Tungsten scheelite is mostly in layers, but moly is spread with the network of quartz veins.
We are doing more drilling to verify that all the data is correct, and also we want to have reliable data for our technical report that will be updated for the future. How are we going to drill here? Actually we are using our underground gallery of the tungsten mine. We are not doing the drilling from the surface. We have a few drilling carves in underground using our developed gallery. Then we have a few different drill rigs working there. Total of 12,000 meters with 26 diamond drill holes. So far, we announced 37% drilled by June 2026. Then once it is done, then we will update the technical report after. That was everything for moly. Then I think this is you, Michael, right?
I promise this time I will not overrun my time. Lewis mentioned that South Korea has the highest tungsten consumption per capita, and we know about their electronic industry, their battery industry, and so on. It is clear that this concentrate that will be mined now, and upgraded now in Korea, is not exactly what the Korean industry needs, but they need definitively oxide. That is a relatively difficult way to go from concentrate to APT and oxide. But it brings several advantages. The first, it was mentioned before that the bottleneck in today's tungsten supply chain is definitely the step from concentrate to APT and oxide. What is missing now in the Western world are the intermediates. It is from this regards clear that it makes sense to go this way.
The other one is that, of course, it gives a higher overall recovery rate, when you go for a tailor-made APT oxide plant that is exactly tailor-made to the concentrate that you get out of this mine. I think as we are definitely running out of time, I hope that gives you a little bit idea about what this APT plant is for.
So it's you now, Jorge?
Sure.
Yeah.
I should advance it this way.
Oh, this one. That one.
Thank you. Hi, good morning. My name is Jorge. I'm the new Chief Financial Officer for Almonty, and I'm glad to say that I count many of you in the audience today as long-standing friends and colleagues. By way of introduction, for those of you who don't know me, I'm the guy helping Lewis spend all the company's hard-earned money on regulatory and financial paperwork, which I know is something he loves to do. I've spent my career on Wall Street as an analyst covering all major metals from aluminum to zinc, and from Alaska to Argentina. For the past seven years, I have been working with the second-largest metals distributor in North America, supplying a broad array of manufacturers with steel, aluminum, and red metals. In other words, I think Almonty and I make a pretty good match given the company's global growth projects and future downstream exposure.
I have been with Almonty for just over four months, and my tenure coincides with one of the most exciting periods in the company's history, where, among other key milestones, we raised $800 million in my first week on the job, leaving us exceptionally well-funded with CAD 1.2 billion in the bank as of the end of the second quarter. Following stock price weakness, we pivoted and announced a $300 million share buyback aimed at limiting possible dilution from the convert. Almonty moves quickly, and I thought it would be useful to snap the chalk line as to what we have been up to for the last 90 days. If I can leave one message with you, it is that we are building a unified technology foundation that will afford Almonty global connectivity and future state synergies.
As we prepare to move to U.S. dollars and U.S. GAAP reporting with the release of our full year 2026 financials, it was imperative to put in place the long lead items to support taking our financial reporting to the next level. We are building a 21st century finance operation where we combine best-in-class applications with best-in-class people so that we can not only work smart together, not just work hard. Ahead of our move to large accelerated filer status in 2027, we are standing up our internal Sarbanes-Oxley policies and procedures backed by a best-in-class implementation team.
Supporting this transformation requires a strong systems foundation, and we chose NetSuite as our new global ERP, which, when fully implemented, will allow an employee from the Korean office to land in Portugal and with the click of a mouse, convert their viewing screen to Korean language and extract financial and operational analytics with ease. A unified global ERP is also the foundation block for future state KPIs, which will drive off of our US GAAP reporting data. Anyone who has worked at a corporation will understand the limitations of systems that don't speak to each other, and especially between finance and accounting data. A state-of-the-art payable system is also being stood up and when ready, will be plug and play directly into NetSuite. Another major step has been getting out to the sites and meeting with our finance and accounting professionals and understanding our assets from the ground up.
For example, our mine in Korea has one of the best footprints and designs I have ever seen in my experience of having visited over 200 mines globally in my career. We've also earned the trust to engage PwC as our new global auditor, and we look forward to working with the leading auditor in the global metals and mining space. Lastly, all the best systems in the world without great people are meaningless, and we've made significant progress in hiring talented team members, some of which are here today, and I encourage you to meet with them. In summary, I look forward to continue building our best-in-class finance operation underpinned by state-of-the-art systems that will support Almonty's growth.
That's great, boy. Thank you very much. It's great to have a professional in the company. Anyway, I think I've just Can I have the schedule? Yeah, there we are. That's great. Thank you very much. Okay, so on that, I'm just going to call a close to the webcast, and thank you all very much for We've gone a bit over time, but, as you said, we do like to talk tungsten, and we could probably keep at this for the next few days. But thank you very much for your attention to this.