Almonty Industries : Q1 March 31, 2024 MD&A

Management's Discussion and Analysis

Three Months Ended March 31, 2024 and 2023

REPORT DATED: May 13, 2024

Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000'sIntroductionf Canadian Dollars, unless otherwise noted) 1.

This management's discussion and analysis ("MD&A"), dated May 13, 2024, provides a review of, and discusses the financial position and results of operations of, Almonty Industries Inc. (TSX: AII) and ASX:AII) ("Almonty" or the "Company") for the three months ended March 31, 2024. It should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company and notes thereto for the three months ended March 31, 2024 (the "Q1-2024Financial Statements").

Dual Listing

On August 2, 2021, the Company, by way of an Initial Public Offering, received gross proceeds totaling AUD 15.25 million in conjunction with a listing on the Australian Securities Exchange ("ASX").

KfW IPEX-Bank-- Sangdong Mine Project Financing

During July 2022, the Company completed the US$75.1 million Project Financing Facility with the KfW IPEX-Bank ("KfW"). During August 2022, the Company received the first drawdown of US$12.8 million from KfW with a second drawdown of US$4.1 million having been received during August, 2022, a third drawdown of US$9.8 million received during November, 2022, a fourth drawdown of $US$5.6 million received during April, 2023, a fifth drawdown of US$9.8 million received during August 2023 and a sixth drawdown of US$13.68 million received in November 2023.

Highlights

During the three months ended March 31, 2024, the following transactions occurred:

1. the Company received $3,058 in conjunction with the closing of an unbrokered financing through the issuance of 4,035,863 placement units and 1,525,000 placement Chess depository interest units at Cdn$0.55 per placement unit and AUD0.62 per CDI unit Each placement unit participant will be issued one warrant for every common share issued and one free unlisted option for every one CDI issued, exercisable at Cdn$0.74 and AUD0.84, respectively, with an expiry date of 24 months from the date of closing;
2. the Company issued 10,249,605 common shares in conjunction with the conversion of a convertible debenture, plus related accrued interest, totaling $9,225 with a conversion price of Cdn$0.90 per share;
3. the Company issued 2,583,316 common shares of the Company to settle debt;
4. the Company made application to extend the expiry date of 1,414,285 share purchase warrants, subject to TSX, ASX and shareholder approval;

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

1. the Company negotiated the extension of the maturity dates of two convertible loans totaling $4,640 from October 31, 2024 to October 31, 2025; and
2. the Company granted stock options enabling the holder to acquire up to 1,000,000 common shares with an exercise price of $0.56 per share, expiring January 9, 2029.

Subsequent to March 31 31, 2024, the following transactions occurred:

1. the Company issued 227,490 common share units for proceeds totaling $125 and received a firm commitment to issue a further 3,000,000 CDI units for proceeds totaling $1,650;
2. the Company completed the refinancing of the Unicredit Bank US$15,650 term loan with the KfW IPEX-Bank ("KfW"), thus extending the maturity date of this loan from March 31, 2024 to March 31, 2027. While the Company was awaiting the fully executed definitive agreement from KfW, received on April 26, 2024, it had extended, as requested by the lenders, the Unicredit term loan maturity date from March 31, 2024 to April 30, 2024; and
3. the Company granted stock options enabling the holder to acquire up to 1,000,000 common shares with an exercise price of $0.63 per share, expiring April 30, 2029.

The Company's management is responsible for the preparation of the Company's unaudited condensed interim consolidated financial statements as well as other information contained in this MD&A. The board of directors of Almonty (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 committee (the "Audit Committee"). The Audit Committee meets 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 Q1-2024 Financial Statements and MD&A to the Board of Directors for review and approval. Following the recommendation of the Audit Committee, the Company's Board of Directors approved the Q1-2024 Financial Statements and this MD&A on May 13, 2024.

The Q1-2024 Financial Statements have been prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting".

All currency figures in this MD&A appear in thousands of Canadian dollars, except per share amounts, unless otherwise stated.

Additional information about the Company, including the Q1-2024 Financial Statements, is available on the Company's website at www.almonty.com and on SEDAR (www.sedar.com) under Almonty's profile.

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

Forward-Looking Information

This MD&A contains forward-looking statements that reflect management's expectations, estimates and projections concerning future events in relation to the Company's business and the economic environment in which it operates. Forward-looking statements may include, but are not limited to, statements with respect to possible acquisitions, demand for tungsten, tungsten prices, tungsten recovery and production, reductions in operating and unit production costs, improvements in efficiencies or reduction in dilution, future remediation and reclamation activities, future mineral exploration, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, the timing of activities and the amount of estimated revenues and expenses, the success of exploration activities, permitting time lines, the success of mine development and construction activities, the success of future mine operations, the success of other future business operations, requirements for additional capital and sources and uses of funds. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "estimates", "intends", "strategy", "goals", "objectives" or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be "forward-looking statements".

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events, results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the inability of the Company to maintain its interest in its mineral projects or to obtain or comply with all required permits and licenses, risks normally incidental to exploration and development of mineral properties, uncertainties in the interpretation of drill results, the possibility that future exploration, development or mining results will not be consistent with expectations, changes in governmental regulation adverse to the Company, lack of adequate infrastructure at the mineral properties, economic uncertainties, the inability of the Company to obtain additional financing when and as needed, competition from other mining businesses, the future price of tungsten and other metals and commodities, fluctuation in currency exchange rates, title defects and other related matters. See Section 7 in this MD&A and under the heading "Risk Factors" in the Company's Annual Information Form dated March 30, 2022 for a further discussion of factors 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. The forward-looking statements in this MD&A represent the expectations of management as of the date hereof and accordingly, are subject to change after such date. Readers should not place undue importance on forward-looking statements and should not rely upon these statements as of any other date. The Company does not undertake to update any forward-looking information, except as, and to the extent, required by applicable laws. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

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.

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

2. Overview

Almonty is a publicly traded company listed on the Toronto Stock Exchange (the "TSX"), under the symbol "AII" and listed on the Australian Securities Exchange (the "ASX"), under the symbol "AII". The principal business of Almonty is the mining, processing and shipping of tungsten concentrate from the Los Santos tungsten mine located near Salamanca, Spain (the "Los Santos Mine"), the processing and shipping of tungsten concentrate from the Panasqueira tin and tungsten mine in Covilha, Castelo Branco, Portugal (the "Panasqueira Mine"), as well as the development of the Sangdong tungsten mine project located in Gangwon Province, Republic of Korea (the "Sangdong Mine") and the evaluation of the Valtreixal tin and tungsten mine project located in Western Spain in the province of Zamora (the "Valtreixal Mine").

The Los Santos Mine was acquired by Almonty in September 2011 and is located approximately 50 kilometers from Salamanca in western Spain and produces tungsten concentrate. The Panasqueira Mine, which has been in production since 1896 and is located approximately 260 kilometers northeast of Lisbon, Portugal, was acquired in January 2016. The Sangdong Mine, which was historically one of the largest tungsten mines in the world and one of the few long-life,high-grade tungsten deposits outside of China, was acquired by Almonty in September 2015. Almonty also owns a 100% interest in the Valtreixal Mine in northwestern Spain, having exercised its option to acquire the remaining ownership in the Valtreixal Mine on December 21, 2016.

During February 2020, the Company made the decision to put the Los Santos Mine on care and maintenance so as to allow the Company to focus its efforts on finalizing the proposed project financing for the Sangdong Mine and to assess and complete a restructuring initiative that will involve an approximate EUR 1 million capital expenditure expected to lead to a significant increase in the recovery rate of WO3 from the processing of the Company's tailings inventory.

On June 4, 2015, Almonty acquired an 8% interest in Woulfe Mining Corp. ("Woulfe") and, through the acquisition of convertible debentures in Woulfe, gained control over Woulfe with the ability to nominate a majority of the board members. On July 7, 2015, Almonty and Woulfe entered into an arrangement agreement (the "Arrangement Agreement") in respect of the acquisition by Almonty of all of the issued and outstanding shares of Woulfe that it did not already own by way of a plan of arrangement under the Business Corporations Act (British Columbia) (the "Plan of Arrangement"). On August 21, 2015, Woulfe shareholders approved the Plan of Arrangement. On September 10, 2015, Almonty completed the Plan of Arrangement and acquired all of the shares of Woulfe that it did not already own, leading to Almonty having a 100% ownership interest in Woulfe. The principal asset of Woulfe is the Sangdong Mine.

On January 6, 2016, Almonty acquired 100% of the issued and outstanding shares of Beralt Ventures Inc. ("BVI") from Sojitz Tungsten Resources Inc. for €1.00. In connection therewith, Almonty acquired and purchased €12,260 in aggregate principal amount of debt owed by Beralt Tin & Wolfram (Portugal), S.A. ("Beralt"), a wholly-owned subsidiary of BVI, to Sojitz Corporation of Japan in exchange for a cash payment of €1,000 on closing and a promissory note issued by Almonty in the principal amount of €500, bearing interest at 4% per annum, maturing December 29, 2017 (paid) (the

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

"January 2016 Note"). BVI, through its wholly owned subsidiaries, is the 100% owner of the Panasqueira Mine.

On December 21, 2016, Almonty exercised its option to acquire the remaining 49% of the Valtreixal Mine it did not already own for payment of €1.5 million ($2.2 million). Almonty now owns a 100% interest in the Valtreixal Mine.

During June 2020, the Company received, from the Municipality of Pedralba de la Paraderia in Spain, a new land classification for its Valtreixal Property whereby the property is now deemed to be suitable for extraction activity. The Company's Valtreixal Property is located approximately 250 kilometers from the Company's wholly-owned Los Santos Mine in Spain.

This new land classification will now allow the Company to complete the mining permitting process and to move forward with the completion of an open-pit mine plan for the property.

Further information about the Company's activities may be found at www.almonty.com and under the Company's profile at www.sedar.com

Market for Tungsten Concentrate

Market demand for tungsten concentrate continued to be stable from the first quarter of fiscal 2022 and through to Q1-2024. Current average Spot APT price is approximately US$338 per MTU which falls in line with several forecasting services having already projected prices to reach or exceed US$310 per MTU of APT by Q1-2024. Management expects that the limited quantities of "spot" concentrate available in the market will help with continued price improvement in the near to mid-term.

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:

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

	Tungsten APT European			Tungsten APT European
	Average High -Low			Average High -Low
Three Months ended	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			$323
31-Mar-24	$316
10-May-24	$338

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 quotation service and the Metal Pages pricing service.

Los Santos Mine, Spain

The Company changed its mine plan at Los Santos, whereby it ceased further mining of ore and commenced processing of its tailing during Q3 of the 2019 fiscal year.

During February 2020, management implemented a planned closure of Los Santos' operations by placing it into care and maintenance. This was done for two main reasons: 1) The Company is planning to reopen operations in early-2024 once it has finalized plans to modify the plant's infrastructure, through a EUR one million capital expenditure, which is expected to result in significantly higher recovery rates from the future processing of its tailings inventory; and 2) the Company intends to use the short-termfreed-up capital to assist with finalizing the Sangdong Mine's project financing.

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

Panasqueira Mine, Portugal

Almonty acquired the Panasqueira Mine on January 6, 2016.

Between Q3 2019 and Q2 2021, management at Panasqueira 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 will be accessible into the future. The tungsten recovery rate continued to improve during Q 2021 to Q1 2024 when compared to Q4 2020 and is now in line with the expected average tungsten recovery rate for the life of mine.

Almonty continued its focus on cost reduction and all-in production costs at Panasqueira continued to decrease. Mined grades continued to improve throughout Fiscal 2021 and into Q1 2024 as expected under the revised mine plan implemented by Almonty since its acquisition in January 2016. Mined grades in Q1 2024 continued to show improvement in the content of by-product payable metals as well (copper and tin) which are improving the overall cash flow profile of the mining operation.

Panasqueira is a poly-metallic wolframite deposit as opposed to a skarn deposit scheelite mine like Los Santos. Tungsten recovery rates for wolframite deposits are typically higher than for scheelite deposits. The Panasqueira Mine has some of the highest tungsten recovery rates in the industry, consistently averaging 80%.

Almonty anticipates that the grades of ore mined will continue trending towards the long-term average of the remaining life of mine of 0.185% (see NI 43-101 technical report on the Panasqueira Mine dated December 31, 2016 filed on SEDAR under Almonty's profile, also available on the Company's website www.almonty.com) through the refinement of the life of mine plan. The expected increased grades are continuing to have an impact on the level of production currently being experienced and the increase in contained tungsten is also having a positive impact on unit costs as at the date of this MD&A.

Valtreixal Project, Spain

During Q1 2017, Almonty exercised its option to acquire the remaining 49% interest in the project for a payment of €1.5 million ($2.2 million) in December 2016, a reduction of €0.75 million ($1.1 million) from the previously agreed price, resulting in a much-needed saving of capital on the acquisition. The Company is continuing to carry out work on the project and is working towards a final decision on proceeding with the development of the project. The Company continues to fine-tune its planning and budgeting for the potential build-out and commissioning of the Valtreixal Mine.

During June 2020, the Company received, from the Municipality of Pedralba de la Paraderia in Spain, a new land classification for its Valtreixal Property whereby the property is now deemed to be suitable for extraction activity. The Company's Valtreixal Property is located approximately 250 kilometers from the Company's wholly-owned Los Santos Mine in Spain.

This new land classification will now allow the Company to complete the mining permitting process and to move forward with the completion of an open-pit mine plan for the property.

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

Sangdong Mine, South Korea

On August 29, 2016, Almonty completed an updated technical report prepared pursuant to NI 43-101 entitled "Technical Report on the Mineral Resources and Reserves of the Sangdong Project, South Korea" (the "Sangdong Technical Report") that is available under Almonty's profile on SEDAR (www.sedar.com) and on the Company's website (www.almonty.com).

Almonty has entered into an engineering, procurement and construction ("EPC") contract with S - Material Handling Co., Ltd. ("SMH") for the development work at the Sangdong Mine.

The EPC contract is a turnkey based contract for the development and construction of primary facilities for processing tungsten ore mined out of the Sangdong Mine. Under the EPC contract, SMH is responsible for not only engineering, civil & architectural, machinery & electrical works of processing plant and auxiliary facilities, but also commissioning of such facilities. The EPC contract has a net contract price of KRW40.3 billion (approx. US$37.3 million) and, including the value of primary equipment which will be erected and installed by SMH, the EPC price reaches KRW54.0 billion (approx. US$50.0 million) which accounts for 65% of the total capital expenditure budgeted for the Sangdong Project. The remaining 35% will be spent for the development of underground transportation galleries and accesses to tungsten veins, mine infrastructure, backfill plant, owner's cost, and other expenses. The primary facilities of the processing plant will be built for 900,000 to 1.2 million tonnes per annum capacity while the initial years of operation targets 640,000 tonnes per annum. The EPC contract stipulates a construction period of 18 months and commissioning period of 6 months. Following general rules of EPC contracts, cost overrun, and project delay will be the responsibility of the EPC Contractor.

On March 12, 2018, Almonty entered into a new off-take agreement with an existing customer for the tungsten concentrate to be mined and processed at the Sangdong Mine. The agreement has a term of 10 years and, based upon current pricing models and subject to the terms and conditions of the agreement, the agreement calls for revenues for the Company for a minimum of $500-million over a 10-year period (subsequently amended to increase the term to 15 years for a minimum of $750-million over a 15-year period.

The realization of the benefits of the off-take agreement are subject to risk factors typical of a supply agreement of this nature, including if the Company is unable to meet its obligations to deliver tungsten concentrate in accordance with the terms of the off-take agreement, variable costs of shipping and production over the term of the contract, the customer's ability to purchase the tungsten concentrate produced by Almonty at the mine, and the continued economic viability of the customer or its successors for the life of the off-take agreement. Finally, given these risks, there is no guarantee that the Company will realize the revenues contemplated under the terms of the off-take agreement.

Almonty announced that it had obtained the clearance and acceptance by the Lending Bank, KfW IPEX- Bank ("KfW"), of the final technical due diligence report on the Sangdong Mine Development Project submitted by the Independent Engineer. The final acceptance of the Independent Engineer's report signified the clearance of certain pending issues related to compliance with the Equator Principles.

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Management's Discussion and Analysis Three Months Ended March 31, 2024 Dated: May 13, 2024

(in 000's of Canadian Dollars, unless otherwise noted)

During December 2020, the Company finalized the definitive facility agreement (loan agreement) with KfW.

The facility agreement was the final piece prior to close, which completed in July 2022, with the first drawdown of US$12.8 million having been received by the Company during August 2022 and the second drawdown of US$4.1 million having been received on August 11, 2022, with a 3rd drawdown of US$9.8 million having been received mid-November, 2022, a 4th drawdown of US$5.6 million having been received during April 2023, a 5th drawdown of US$9.8 million having been received during August 2023 and a 6th drawdown of US$13.7 million Having been received during November 2023.

The general terms of the loan facility approved by the credit committee of KfW include:

1. The principal amount of senior project finance loan to be US$75.1 million;
2. Interest rate --three-month London interbank offered rate (LIBOR), plus 2.3 per cent, and borrower expects this to reduce on issuance of the ECA cover;
3. Term of 6.25 years with an initial principal repayment holiday during construction and quarterly instalment repayments of principal commencing after the completion of construction;
4. Oesterreichische Kontrollbank AG (OeKB) is committed to providing an import credit scheme cover guarantee based on the previously announced long-term offtake agreement, which was issued in February 2020.

Almonty has worked closely with the Independent Engineer in the past several months to ensure sustainable development outcomes and the integration of environmental, safety and social considerations into the project development procedures, meeting the stringent international standards and guidelines.

Almonty also announced the mechanical completion and the commencement of commissioning of the government-subsidized pilot plant at the site.

Meanwhile, work is continuing at the Sangdong site to ensure the timely commissioning as requested by Almonty's customer under the previously announced off-take agreement for the Sangdong Mine.

During July 2022, upon the completion of the KfW US$75.1 million project financing, the Company determined that it now has sufficient resources to complete the development of its Sangdong mine. As a result, capitalized exploration and evaluation assets totaling $60,501 were transferred to Mineral property, plant and equipment from exploration and evaluation costs during Q3-2022.

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