This article is disseminated in partnership with Allied Critical Metals Inc. It is intended to inform investors and should not be taken as a recommendation or financial advice.
As we established in part one of this three-part series, tungsten is a metal fundamental to some of the most robust industrial tailwinds, including defense, AI and renewable energy, granting it a growing multi-billion-dollar market and making China’s restricted more than 80-per-cent share of global production a matter of national security, especially for its largest trade partners, fellow economic superpower the United States and the nearby European Union (E.U.).
China’s tungsten market dominance, coupled with a worsening global supply deficit, is, in turn, favoring miners in conflict-free jurisdictions developing projects with the potential to tilt influence away from the communist nation.
We then highlighted Allied Critical Metals (CSE:ACM), a tungsten explorer and near-term producer, as a stock that belongs near the top of any investor’s watchlist seeking to harvest value from Western tungsten demand. In part two, we’ll take a closer look at Allied Critical’s tungsten strategy, its growing momentum and its reasons for long-term conviction.
Allied Critical’s geopolitical alignment
From the broadest perspective, Allied Critical is on track to become the Western world’s next tungsten hub because its mineral-rich projects, Borralha and Vila Verde, are both strategically located in Portugal, a mining-friendly country positioned to contribute to the tungsten supply chain under established political frameworks. These include:
- The E.U.’s Critical Raw Materials Act (CRMA), which is designed to bolster the bloc’s economic independence by strengthening its supply of materials critical to modern technology, including tungsten. Benchmarks for 2030 include converting at least 10 per cent of annual critical materials consumption into domestic extraction, and at least 40 per cent of annual consumption into processing. The bloc also renewed anti-dumping duties on tungsten carbide imports from China until 2028.
- NATO’s commitment to bolstering allied defense capabilities, including the sourcing of critical minerals, with Portugal’s membership established in 1949 granting it access to 31 member nations, including Canada, major European economies Germany and the United Kingdom, as well as the United States, which currently has a 25 per cent tariff in place on Chinese imports, including tungsten.
As an operator in a free nation aligned with top Western governments, Allied Critical benefits from a firm regulatory foundation on which to develop its differentiated assets. Let’s profile them now.
Inside the Borralha project
When we zoom in a little closer into Allied Critical’s strategy, we see in its portfolio the potential to thrust Portugal onto the global tungsten stage, beginning with the 3.8-square-kilometre Borralha project.
Borralha delivered a 2024 resource estimate of 24,721 tonnes of tungsten trioxide (WO3), 1,063 tonnes of tin, 8,295 tonnes of copper and 55 tonnes of silver, which works out to about US$600 million in the ground or more than 13 times Allied Critical’s current market capitalization of C$44.27 million.
The project, in production from 1951–1985, yielded more than 10,280 tonnes of wolframite concentrate at an average grade of 66 per cent WO3, but has gone untouched by modern exploration methods. The Santa Helena Breccia, only half of which has been drilled, accounts for more than 70 per cent of known mineralization, posting historical drilling up to 188 metres at 0.29 per cent WO3 and 2023-2024 Allied Critical drilling of up to 10 metres at 1.75 per cent WO3.
Allied Critical is currently hard at work on a 5,000-metre drilling program kicked off in June, with management confident about expanding the resource base and adding value towards an updated preliminary economic assessment (PEA) slated for year end.
Vila Verde: Pilot-scale production
Allied Critical adds even more heft to its value proposition through its Vila Verde project – located 45 kilometres to the southeast of Borralha and 3 times its size – which is on track for near-term production while covering only a fraction of the total land package.
Pilot plant construction at Vila Verde is slated to begin in Q4 2025, reaching an initial processing capacity of 150,000 tonnes per year, entailing production of 250 tonnes of WO3, with potential expansion to 300,000 tonnes should management deem the move value accretive. At a current price of about US$42,000 per tonne WO3 as of August 20, initial yearly pilot production represents about US$10.5 million in the ground.
The pilot plant’s low capex of C$7.9 million, plus C$2.9 million for the expansion, all of which is intended to be raised through non-dilutive sources, positions Allied Critical for an expedited path to market to capitalize on soaring tungsten demand and reap the benefits of scale to foster shareholder value.
U.S.-based Global Tungsten and Powders will receive initial tonnage under a 2025 offtake agreement, with numerous discussions currently underway with refineries around the world, supported by a U.S. subsidiary established in July and historical drilling of 17 holes spanning 2,103 metres offering numerous prospective avenues for resource expansion.
Allied Critical’s brownfield advantage
When we get even more granular, looking past tungsten’s strong tailwind and the company’s robust resources, both established and potential, we notice that it’s Borralha and Vila Verde’s historical development that makes Allied Critical’s value-creation thesis actionable.
The nearby projects are equipped with existing roads, power and infrastructure, as well as access to a skilled workforce, which will enable cost-effective scaling as the pilot plant generates its first concentrate and Borralha strengthens its economics with the upcoming PEA.
The projects also boast mining licenses and positive endorsements from local municipalities, setting the stage for long-term tungsten exploration and production across the commodity cycle, with drill-defined resources pointing to the attractiveness of the company’s unexplored land.
These foundational factors place Borralha and Vila Verde near the front of the line when it comes to economical near-term options to boost Western tungsten production and expedite the E.U.’s 2030 CRMA benchmarks.
Allied Critical’s leadership and capital advantage
While we’ve shown Allied Critical’s assets and target market to be green flags towards a potential investment, the question remains as to whether or not the company’s leadership team is well-equipped to advance operations into production. The answer, as we shall see, is just as promising.
Roy Bonnell, Director and Chief Executive Officer (CEO), has built a three-decade career spanning capital markets, natural resources and venture capital. Notable tenures include Chairman of the multi-million-ounce Thesis Gold (TSXV:TAU) in British Columbia and Director of Founders Metals (TSXV:FDR), a junior gold miner in Suriname with a long history of converting high grades into shareholder value.
Bonnell’s robust exploration and development experience is complemented by:
- João Barros, Director and President, whose more than 20 years in the Portuguese mining industry, including as President of Ascendant Resources (TSX:ASND), a gold miner with established resources in Portugal, positions the company for efficient growth.
- Sean Choi, Chief Financial officer (CFO), CPA, CA, whose almost 20 years in public accounting and the mining sector includes CFO roles at TSXV-listed Ecuador Gold and Copper, Northern Sun Mining and York Harbour Metals (2014–2024), the latter currently developing a past-producing copper, zinc and silver project in Newfoundland.
- Andrew Lee, Director and Corporate Secretary, who brings 15 years of experience in public mineral exploration, including gold in Ecuador and phosphate in West Africa. Lee is currently Managing Director at York Harbour Metals.
- Sean O’Neill, Director and Non-Executive Chairman, currently Head of Securities at Boughton Law, where he has been advising global mining companies about corporate and securities law for more than two decades.
- Colin Padget, Director, who serves as Director, President and CEO of Founders Metals.
- Michael Galego, Director, who has co-founded numerous CSE and TSXV-listed companies over his more than 10 years in M&A and corporate finance. He is Chief Legal Officer, Director and Co-Founder of LNG Energy Group (TSXV:LNGE) and previously served as Director at Woulfe Mining, where he facilitated the company’s sale – including its Sangdong tungsten mine in South Korea, one of the world’s largest – to Almonty Industries (TSX:AII).
- Additionally, Allied Critical Metals USA recently appointed a pair of directors that cement the company’s alignment with U.S. interests, including Major General (Ret.) James A. “Spider” Marks, a former Commanding General, U.S. Army Intelligence Center, and Kirstjen M. Nielsen, a former U.S. Secretary of Homeland Security from 2017 to 2019, both of whom will open new avenues to pursue the importing, marketing and distribution of tungsten across strategic U.S. sectors.
Taken as a whole, Allied Critical’s leadership team is familiar with success in permitting, exploration and technical execution across the world and the mining lifecycle, including in the contexts of tungsten and the Portuguese market, granting the company the specialized knowledge required to unlock the value of its projects with a long-term perspective.
With C$5.1 million raised through a private placement closed on August 18 – and numerous non-dilutive funding discussions currently underway – Allied Critical will be able to continue harvesting this value through drilling at Borralha and pilot plant development at Vila Verde, responding to the inevitable fluctuations in any commodity market from a position of strength, actively growing its runway to pursue disciplined growth in line with profitability.
Allied Critical is strategically positioned to create value
A commodity’s attractiveness is inextricably tied to demand, which comes down to the problems it’s able to solve in the global industrial complex. In the case of tungsten, the list is long and of the utmost importance, especially when it comes to the effectiveness of military-grade weapons, AI’s underlying semiconductor technology, as well as renewable energy batteries in EVs, wind turbines and solar energy systems, making tungsten resources highly prized by key players in these essential industries.
As allocators scan the investable universe for candidates to feed processing facilities, fuel the supply chain and fortify national security, market-leading Chinese resources have ceased to be a viable option because of self-disrupted supply, causing dry powder to shift towards freer jurisdictions in search of companies best-positioned to alleviate tungsten demand.
Allied Critical Metals, as we’ve delineated to this point, earns its spot as a top consideration on all counts, from high-grade, mineral-rich assets, to bespoke leadership, to a high-conviction path to becoming a global production hub, all of which serves to maximize an investor’s operational leverage to tungsten’s multi-billion-dollar tailwind.
Look out for the final instalment in our three-part series, in which we’ll explore how Allied Critical Metals is a strategic fit to solve the unmet need for tungsten within the Western military supply chain.
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