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5 Gold Mining Stocks in Focus as Industry Prospects Shine
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The prospects for the Zacks Mining - Gold industry look bright, backed by the 38.5% growth seen in gold prices so far this year. The bullion is expected to trend higher, supported by escalating geopolitical tensions and central bank buying.
With gold prices expected to increase further due to demand-supply imbalance, companies like Newmont MiningNEM, Agnico Eagle Mines (AEM - Free Report) , Barrick Mining Corp (B - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Kinross Gold (KGC - Free Report) are well-positioned to capitalize on this, backed by their strong balance sheets, efforts to lower costs and growth initiatives.
About the Industry
The Zacks Mining - Gold industry comprises companies engaged in extracting gold from mines. These mines may either be underground or open pits. Mining is a long and complex process and requires significant financial resources. It involves exploring to evaluate a deposit's size; assessing ways to extract and process ore efficiently, safely and responsibly; and developing the mine before the actual mining process. It usually takes 10-20 years for a gold mine to produce material that can finally be refined. Nowadays, industry players use a range of sophisticated techniques to extract gold and convert it into dore bars, an alloy of gold and silver, alongside other impurities. These are then sent for purification, after which gold is purchased as bars or coins, or used in jewelry or other purposes.
Major Trends Shaping the Future of the Mining-Gold Industry
Solid Rally in Gold Prices to Aid Industry: Gold prices gained 38.5% so far this year, supported by strong safe-haven demand, geopolitical tensions and escalating trade conflict. Central banks worldwide have been accumulating gold reserves. Prices of the yellow metal catapulted to a record-high of $3,674 per ounce on Tuesday, on increasing bets of rate cuts. Also, geopolitical tensions will continue to fuel the yellow metal’s rally. Meanwhile, central banks are expected to continue the buying streak this year.
Efforts to Counter High Costs to Sustain Margins: The industry has been facing a shortage of skilled workforce, causing a spike in wages. Industry players are grappling with escalating production costs, including electricity, water, and material and supply-chain issues. Since the industry cannot control gold prices, it focuses on improving the sales volume and the operating cash flow, as well as lowering unit net cash costs. The industry participants are opting for alternate energy sources, such as solar or wind farms, to minimize fuel-price volatility and secure supply. Miners are committed to cost-reduction strategies and digital innovation to drive operating efficiencies.
Demand & Supply Imbalance to Support Prices: Depleting resources, declining supply in old mines and the lack of new mines have been inherent threats to the industry. Due to the scarcity of discoveries and exhaustive existing resources, miners prefer building up reserves through acquisitions rather than digging new ones that are risky and capital-intensive. On the demand side, the use of gold in energy, healthcare and technology is rising. India and China account for around 50% of consumer gold demand. Gold demand in India will remain strong on improving economic momentum and consumer confidence. The yellow metal has long been considered a safe-haven investment amid financial or political uncertainty. Central banks have been ramping up reserves held in gold due to currency depreciation and geopolitical and economic risks. Therefore, there will be an eventual demand-supply imbalance, which will likely drive gold prices.
Zacks Industry Rank Indicates Bright Prospects
The group’s Zacks Industry Rank, the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. The Zacks Mining - Gold Industry, which is a 40-stock group within the broader Zacks Basic Materials sector, currently carries a Zacks Industry Rank #91, which places it in the top 37% of 245 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock-market performance and valuation picture.
Industry Versus S&P 500 & Sector
The Mining-Gold Industry has outperformed the S&P 500 Index and the Basic Material sector in a year. The stocks in the industry have collectively gained 67.3% compared with the broader sector’s growth of 6.6%. The S&P 500 has risen 19.1% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA, a commonly used multiple for valuing gold-mining companies, we see that the industry is currently trading at 9.04X compared with the S&P 500’s 18.23X and the Basic Material sector’s trailing 12-month EV/EBITDA of 14.11X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Over the last five years, the industry traded as high as 27.96X and as low as 5.23X, the median being 7.44X.
Five Mining-Gold Stocks to Keep an Eye on
Agnico Eagle Mines: The company closed the acquisition of O3 Mining in March, gaining ownership of the Marban Alliance property. The integration of this property with the AEM’s Canadian Malartic land package will create significant and unique synergies. The company’s focus remains on extending mine life at existing operations, testing near-mine opportunities and advancing key value driver projects. Exploration priorities for 2025 include mineral resource conversion and expansion at the Detour Lake underground project and East Gouldie at Canadian Malartic, as well as advancing Hope Bay. AEM has managed to lower costs through the optimization of drilling productivity and innovation efforts. Its efforts to lower debt are also commendable. AEM shares have gained 24.65 in the past three months.
The Zacks Consensus Estimate for the Toronto, Canada-based gold mining company’s 2025 earnings indicates year-over-year growth of 64%. The estimate has moved up 7.6% over the past 60 days. AEM has a trailing four-quarter earnings surprise of 10%, on average. The company has a long-term estimated earnings growth of 23%. Agnico Eagle Mines currently sports a Zacks Rank #1 (Strong Buy).
Barrick Mining: The company is well-placed to benefit from the progress in key growth projects that should significantly boost its production. Its major gold and copper growth projects, including Goldrush, the Pueblo Viejo plant expansion and mine life extension, Fourmile, Lumwana Super Pit and Reko Diq, are currently being executed. These projects are advancing on schedule and within budget, underpinning the next generation of profitable production. Barrick has a solid liquidity position and generates healthy cash flows, positioning it well to take advantage of attractive development, exploration and acquisition opportunities, drive shareholder value and reduce debt. Barrick shares have gained 39.5% in the past three months.
The Zacks Consensus Estimate for this Toronto, Canada-based company’s earnings for fiscal 2025 indicates 56.4% year-over-year growth. B has a trailing four-quarter earnings surprise of 6.7%, on average. The company currently carries a Zacks Rank #3 (Hold) and a long-term estimated earnings growth of 27.5%.
Price and Consensus: B
Newmont: The company’s acquisition of Newcrest Mining created an industry-leading portfolio with a multi-decade gold and copper production profile in the most favorable mining jurisdictions globally. Newmont has been divesting non-core businesses as it shifts its strategic focus to Tier 1 assets. The company has a strong liquidity position and generates substantial cash flows, which allow it to fund its growth projects, meet short-term debt obligations and drive shareholder value. It is pursuing several projects, including Tanami Expansion 2 in Australia, the Ahafo North expansion in Ghana and Cadia Panel Caves in Australia, which are expected to expand production capacity and extend mine life, driving revenues and profits. NEM shares have gained 34.6% over the past three months.
Headquartered in Denver, CO, Newmont has a trailing four-quarter earnings surprise of 32.8%, on average. The Zacks Consensus Estimate for NEM’s 2025 earnings has moved up 15% over the past 60 days and indicates year-over-year growth of 52%. The company has a long-term estimated earnings growth of 15.7%. Newmont currently carries a Zacks Rank of 3.
Price and Consensus: NEM
Franco-Nevada: FNV appears on a promising long-term trajectory, backed by a healthy portfolio of streaming and royalty agreements on several properties mined by some of the most reputable mining companies in the world. It expects total GEOs to be between 465,000 and 525,000 in 2025, indicating a 7% year-over-year increase at the midpoint. Given its focus on cost management, FNV has been generating high margins. The company is debt-free and uses its free cash flow to expand the portfolio and pay out dividends. It expects to receive around 10,000 GEOs from Cobre Panama in the third quarter as it has begun to receive deliveries of gold and silver from Cobre Panama based on its stream agreement. The company also continues to diversify its portfolio with acquisitions.
The Zacks Consensus Estimate for this company’s earnings for fiscal 2025 indicates 51.4% year-over-year growth. FNV has a trailing four-quarter earnings surprise of 5.72%, on average. The company has a long-term estimated earnings growth of 15.6% and currently carries a Zacks Rank of 3.
Price and Consensus: FNV
Kinross Gold: The company’s strong liquidity position and substantial cash flows allow it to finance its development projects while paying down debt and driving shareholder value. Kinross Gold has a strong production profile and boasts a promising pipeline of exploration and development projects. Its key development projects and exploration programs, including Great Bear in Ontario, the Redbird pit at Bald Mountain and Round Mountain Phase X in Nevada, remain on track. These projects are expected to boost production and cash flow and deliver significant value. Kinross shares have gained 47.8% in the past three months.
The Zacks Consensus Estimate for this Toronto, Canada-based gold mining company’s earnings for fiscal 2025 indicates 103% year-over-year growth. KGC has a trailing four-quarter earnings surprise of 22.5%, on average. Kinross Gold has a long-term estimated earnings growth of 21.8% and a Zacks Rank of 3.
Price and Consensus: KGC
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5 Gold Mining Stocks in Focus as Industry Prospects Shine
The prospects for the Zacks Mining - Gold industry look bright, backed by the 38.5% growth seen in gold prices so far this year. The bullion is expected to trend higher, supported by escalating geopolitical tensions and central bank buying.
With gold prices expected to increase further due to demand-supply imbalance, companies like Newmont Mining NEM, Agnico Eagle Mines (AEM - Free Report) , Barrick Mining Corp (B - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Kinross Gold (KGC - Free Report) are well-positioned to capitalize on this, backed by their strong balance sheets, efforts to lower costs and growth initiatives.
About the Industry
The Zacks Mining - Gold industry comprises companies engaged in extracting gold from mines. These mines may either be underground or open pits. Mining is a long and complex process and requires significant financial resources. It involves exploring to evaluate a deposit's size; assessing ways to extract and process ore efficiently, safely and responsibly; and developing the mine before the actual mining process. It usually takes 10-20 years for a gold mine to produce material that can finally be refined. Nowadays, industry players use a range of sophisticated techniques to extract gold and convert it into dore bars, an alloy of gold and silver, alongside other impurities. These are then sent for purification, after which gold is purchased as bars or coins, or used in jewelry or other purposes.
Major Trends Shaping the Future of the Mining-Gold Industry
Solid Rally in Gold Prices to Aid Industry: Gold prices gained 38.5% so far this year, supported by strong safe-haven demand, geopolitical tensions and escalating trade conflict. Central banks worldwide have been accumulating gold reserves. Prices of the yellow metal catapulted to a record-high of $3,674 per ounce on Tuesday, on increasing bets of rate cuts. Also, geopolitical tensions will continue to fuel the yellow metal’s rally. Meanwhile, central banks are expected to continue the buying streak this year.
Efforts to Counter High Costs to Sustain Margins: The industry has been facing a shortage of skilled workforce, causing a spike in wages. Industry players are grappling with escalating production costs, including electricity, water, and material and supply-chain issues. Since the industry cannot control gold prices, it focuses on improving the sales volume and the operating cash flow, as well as lowering unit net cash costs. The industry participants are opting for alternate energy sources, such as solar or wind farms, to minimize fuel-price volatility and secure supply. Miners are committed to cost-reduction strategies and digital innovation to drive operating efficiencies.
Demand & Supply Imbalance to Support Prices: Depleting resources, declining supply in old mines and the lack of new mines have been inherent threats to the industry. Due to the scarcity of discoveries and exhaustive existing resources, miners prefer building up reserves through acquisitions rather than digging new ones that are risky and capital-intensive. On the demand side, the use of gold in energy, healthcare and technology is rising. India and China account for around 50% of consumer gold demand. Gold demand in India will remain strong on improving economic momentum and consumer confidence. The yellow metal has long been considered a safe-haven investment amid financial or political uncertainty. Central banks have been ramping up reserves held in gold due to currency depreciation and geopolitical and economic risks. Therefore, there will be an eventual demand-supply imbalance, which will likely drive gold prices.
Zacks Industry Rank Indicates Bright Prospects
The group’s Zacks Industry Rank, the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. The Zacks Mining - Gold Industry, which is a 40-stock group within the broader Zacks Basic Materials sector, currently carries a Zacks Industry Rank #91, which places it in the top 37% of 245 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock-market performance and valuation picture.
Industry Versus S&P 500 & Sector
The Mining-Gold Industry has outperformed the S&P 500 Index and the Basic Material sector in a year. The stocks in the industry have collectively gained 67.3% compared with the broader sector’s growth of 6.6%. The S&P 500 has risen 19.1% in the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA, a commonly used multiple for valuing gold-mining companies, we see that the industry is currently trading at 9.04X compared with the S&P 500’s 18.23X and the Basic Material sector’s trailing 12-month EV/EBITDA of 14.11X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Over the last five years, the industry traded as high as 27.96X and as low as 5.23X, the median being 7.44X.
Five Mining-Gold Stocks to Keep an Eye on
Agnico Eagle Mines: The company closed the acquisition of O3 Mining in March, gaining ownership of the Marban Alliance property. The integration of this property with the AEM’s Canadian Malartic land package will create significant and unique synergies. The company’s focus remains on extending mine life at existing operations, testing near-mine opportunities and advancing key value driver projects. Exploration priorities for 2025 include mineral resource conversion and expansion at the Detour Lake underground project and East Gouldie at Canadian Malartic, as well as advancing Hope Bay. AEM has managed to lower costs through the optimization of drilling productivity and innovation efforts. Its efforts to lower debt are also commendable. AEM shares have gained 24.65 in the past three months.
The Zacks Consensus Estimate for the Toronto, Canada-based gold mining company’s 2025 earnings indicates year-over-year growth of 64%. The estimate has moved up 7.6% over the past 60 days. AEM has a trailing four-quarter earnings surprise of 10%, on average. The company has a long-term estimated earnings growth of 23%. Agnico Eagle Mines currently sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Price and Consensus: AEM
Barrick Mining: The company is well-placed to benefit from the progress in key growth projects that should significantly boost its production. Its major gold and copper growth projects, including Goldrush, the Pueblo Viejo plant expansion and mine life extension, Fourmile, Lumwana Super Pit and Reko Diq, are currently being executed. These projects are advancing on schedule and within budget, underpinning the next generation of profitable production. Barrick has a solid liquidity position and generates healthy cash flows, positioning it well to take advantage of attractive development, exploration and acquisition opportunities, drive shareholder value and reduce debt. Barrick shares have gained 39.5% in the past three months.
The Zacks Consensus Estimate for this Toronto, Canada-based company’s earnings for fiscal 2025 indicates 56.4% year-over-year growth. B has a trailing four-quarter earnings surprise of 6.7%, on average. The company currently carries a Zacks Rank #3 (Hold) and a long-term estimated earnings growth of 27.5%.
Price and Consensus: B
Newmont: The company’s acquisition of Newcrest Mining created an industry-leading portfolio with a multi-decade gold and copper production profile in the most favorable mining jurisdictions globally. Newmont has been divesting non-core businesses as it shifts its strategic focus to Tier 1 assets. The company has a strong liquidity position and generates substantial cash flows, which allow it to fund its growth projects, meet short-term debt obligations and drive shareholder value. It is pursuing several projects, including Tanami Expansion 2 in Australia, the Ahafo North expansion in Ghana and Cadia Panel Caves in Australia, which are expected to expand production capacity and extend mine life, driving revenues and profits. NEM shares have gained 34.6% over the past three months.
Headquartered in Denver, CO, Newmont has a trailing four-quarter earnings surprise of 32.8%, on average. The Zacks Consensus Estimate for NEM’s 2025 earnings has moved up 15% over the past 60 days and indicates year-over-year growth of 52%. The company has a long-term estimated earnings growth of 15.7%. Newmont currently carries a Zacks Rank of 3.
Price and Consensus: NEM
Franco-Nevada: FNV appears on a promising long-term trajectory, backed by a healthy portfolio of streaming and royalty agreements on several properties mined by some of the most reputable mining companies in the world. It expects total GEOs to be between 465,000 and 525,000 in 2025, indicating a 7% year-over-year increase at the midpoint. Given its focus on cost management, FNV has been generating high margins. The company is debt-free and uses its free cash flow to expand the portfolio and pay out dividends. It expects to receive around 10,000 GEOs from Cobre Panama in the third quarter as it has begun to receive deliveries of gold and silver from Cobre Panama based on its stream agreement. The company also continues to diversify its portfolio with acquisitions.
The Zacks Consensus Estimate for this company’s earnings for fiscal 2025 indicates 51.4% year-over-year growth. FNV has a trailing four-quarter earnings surprise of 5.72%, on average. The company has a long-term estimated earnings growth of 15.6% and currently carries a Zacks Rank of 3.
Price and Consensus: FNV
Kinross Gold: The company’s strong liquidity position and substantial cash flows allow it to finance its development projects while paying down debt and driving shareholder value. Kinross Gold has a strong production profile and boasts a promising pipeline of exploration and development projects. Its key development projects and exploration programs, including Great Bear in Ontario, the Redbird pit at Bald Mountain and Round Mountain Phase X in Nevada, remain on track. These projects are expected to boost production and cash flow and deliver significant value. Kinross shares have gained 47.8% in the past three months.
The Zacks Consensus Estimate for this Toronto, Canada-based gold mining company’s earnings for fiscal 2025 indicates 103% year-over-year growth. KGC has a trailing four-quarter earnings surprise of 22.5%, on average. Kinross Gold has a long-term estimated earnings growth of 21.8% and a Zacks Rank of 3.
Price and Consensus: KGC