We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Despite gold prices hovering near record levels, the Zacks Mining - Gold industry's outlook remains challenged by escalating production costs and a tight labor market. Depleting resources, declining output from old mines and the extended lead times involved in bringing new mines online, along with the capital-intensive nature of such projects, indicate the industry is headed for a supply deficit, which is concerning.
Amid this uncertainty, Agnico Eagle Mines, Barrick Gold, Franco-Nevada Corp., Kinross Gold and Alamos Gold are well-poised for growth, backed by their strong balance sheets, efforts to lower costs and growth initiatives.
About the Industry
The Zacks Mining - Gold industry mainly comprises companies engaged in extracting gold from mines. The mines may either be underground or open pits. Mining is a long and complex process, and requires significant financial resources. It involves exploration 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 normally takes 10-20 years for a gold mine to produce material that can finally be refined. Players in the industry nowadays 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 Trend in Gold Prices: Spot gold hit a record high of $3,059 an ounce following U.S. President Donald Trump's announcement of new auto tariffs. Gold has remained above the $3,000 per ounce mark since mid-March, driven by safe haven demand amid geopolitical and economic uncertainties. The imposition of U.S tariffs and fears of an escalating trade war also stoked prices.
The Federal Reserve signaled the possibility of two interest rate cuts this year. Gold has gained 16.3% year to date and this trend is likely to persist, supported by central bank buying and global tensions. However, investor attention is now focused on the key economic data, such as the Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred inflation gauge, which could provide further cues on monetary policy.
High Costs, Labor Shortage Are Worrisome: The industry has been facing a shortage of skilled workforce, causing a spike in wages. Industry players are persistently 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, and lowering unit net cash costs. The industry participants are opting for alternative 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.
Declining Supply a Concern for the Industry: Depleting resources, declining supply in old mines and the lack of new mines have been a perennial problem for 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. The yellow metal has long been considered a safe-haven investment in financial or political uncertainty. Gold demand continues to be on the rise from central banks. Therefore, there will be an eventual demand-supply imbalance.
Zacks Industry Rank Indicates Dull Prospects
The group's Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. The Zacks Mining - Gold Industry, which is a 39-stock group within the broader Zacks Basic Materials sector, currently carries a Zacks Industry Rank #153, which places it at the bottom 38% of 246 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 43.7% against the broader sector's fall of 3.9%. The S&P 500 has risen 10.7% in the same time frame.
Industry's Current Valuation
On the basis of the forward 12-month EV/EBITDA, a commonly used multiple for valuing gold-mining companies, we see that the industry is currently trading at 4.58X compared with the S&P 500's 13.11X and the Basic Material sector's forward 12-month EV/EBITDA of 7.56X.
5 Mining-Gold Stocks to Keep an Eye On
Agnico Eagle Mines: The company recently closed the acquisition of O3 Mining, 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.
The Zacks Consensus Estimate for the Toronto, Canada-based gold mining company's 2025 earnings indicates year-over-year growth of 6.4%. AEM has a trailing four-quarter earnings surprise of 16.4%, on average. The company has a long-term estimated earnings growth of 31.6%. Agnico Eagle Mines currently has a Zacks Rank of 3.
Barrick Gold: 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, Donlin Gold, 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.
The Zacks Consensus Estimate for this Toronto, Canada-based company's earnings for fiscal 2025 indicates 8% year-over-year growth. GOLD has a trailing four-quarter earnings surprise of 12%, on average. The company currently carries a Zacks Rank of 3 and a long-term estimated earnings growth of 11.4%.
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. On Feb. 28, 2025, Franco-Nevada acquired a precious metals stream from Sibanye-Stillwater's South African mines for $500 million, expecting more than 45 years of deliveries, mostly gold and platinum, with initial deliveries totaling around 27,000 GEOs.
The Zacks Consensus Estimate for this Toronto, Canada-based gold-focused royalty and stream company's earnings for fiscal 2025 indicates 15.9% year-over-year growth. FNV has a trailing four-quarter earnings surprise of 2.8%, on average. The company has a long-term estimated earnings growth of 3.6% and currently carries a Zacks Rank of 3.
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.
The Zacks Consensus Estimate for this Toronto, Canada-based gold mining company's earnings for fiscal 2025 indicates 14.7% year-over-year growth. KGC has a trailing four-quarter earnings surprise of 23.7%, on average. Kinross Gold has a long-term estimated earnings growth of 21% and a Zacks Rank of 3.
Alamos Gold: The company projects production to grow 24% to 680,000-730,000 ounces by 2027, driven by Island Gold district, Young Davidson and Mulatos. All-in-sustaining costs (AISC) are expected to decrease 8% over that time frame from that reported in 2024, due to low-cost growth from Island Gold following the completion of the Phase 3+ Expansion in the first half of 2026.
AGI announced a construction decision on the Lynn Lake project in January 2025, with initial production expected in the first half of 2028. With an average annual production of 176,000 ounces over its first 10 years, Lynn Lake is anticipated to play a significant role in taking the company's production to approximately 900,000 ounces per year (implying 59% year-over-year growth from 2024).
The Zacks Consensus Estimate for the Toronto, Canada-based company's 2025 earnings indicates a 41.2% year-over-year increase. AGI has a long-term earnings growth rate of 10.1%. It has a trailing four-quarter earnings surprise of 7.9%, on average. AGI currently has a Zacks Rank of 3.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Industry Outlook Highlights Agnico Eagle Mines, Barrick Gold, Franco-Nevada, Kinross Gold and Alamos Gold
For Immediate Release
Chicago, IL – March 28, 2025 – Today, Zacks Equity Research discusses Agnico Eagle Mines (AEM - Free Report) , Barrick Gold (GOLD - Free Report) , Franco-Nevada Corp. (FNV - Free Report) , Kinross Gold (KGC - Free Report) and Alamos Gold (AGI - Free Report) .
Industry: Gold
Link: https://www.zacks.com/commentary/2436131/5-gold-stocks-likely-to-tide-industry-headwinds
Despite gold prices hovering near record levels, the Zacks Mining - Gold industry's outlook remains challenged by escalating production costs and a tight labor market. Depleting resources, declining output from old mines and the extended lead times involved in bringing new mines online, along with the capital-intensive nature of such projects, indicate the industry is headed for a supply deficit, which is concerning.
Amid this uncertainty, Agnico Eagle Mines, Barrick Gold, Franco-Nevada Corp., Kinross Gold and Alamos Gold are well-poised for growth, backed by their strong balance sheets, efforts to lower costs and growth initiatives.
About the Industry
The Zacks Mining - Gold industry mainly comprises companies engaged in extracting gold from mines. The mines may either be underground or open pits. Mining is a long and complex process, and requires significant financial resources. It involves exploration 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 normally takes 10-20 years for a gold mine to produce material that can finally be refined. Players in the industry nowadays 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 Trend in Gold Prices: Spot gold hit a record high of $3,059 an ounce following U.S. President Donald Trump's announcement of new auto tariffs. Gold has remained above the $3,000 per ounce mark since mid-March, driven by safe haven demand amid geopolitical and economic uncertainties. The imposition of U.S tariffs and fears of an escalating trade war also stoked prices.
The Federal Reserve signaled the possibility of two interest rate cuts this year. Gold has gained 16.3% year to date and this trend is likely to persist, supported by central bank buying and global tensions. However, investor attention is now focused on the key economic data, such as the Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred inflation gauge, which could provide further cues on monetary policy.
High Costs, Labor Shortage Are Worrisome: The industry has been facing a shortage of skilled workforce, causing a spike in wages. Industry players are persistently 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, and lowering unit net cash costs. The industry participants are opting for alternative 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.
Declining Supply a Concern for the Industry: Depleting resources, declining supply in old mines and the lack of new mines have been a perennial problem for 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. The yellow metal has long been considered a safe-haven investment in financial or political uncertainty. Gold demand continues to be on the rise from central banks. Therefore, there will be an eventual demand-supply imbalance.
Zacks Industry Rank Indicates Dull Prospects
The group's Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. The Zacks Mining - Gold Industry, which is a 39-stock group within the broader Zacks Basic Materials sector, currently carries a Zacks Industry Rank #153, which places it at the bottom 38% of 246 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 43.7% against the broader sector's fall of 3.9%. The S&P 500 has risen 10.7% in the same time frame.
Industry's Current Valuation
On the basis of the forward 12-month EV/EBITDA, a commonly used multiple for valuing gold-mining companies, we see that the industry is currently trading at 4.58X compared with the S&P 500's 13.11X and the Basic Material sector's forward 12-month EV/EBITDA of 7.56X.
5 Mining-Gold Stocks to Keep an Eye On
Agnico Eagle Mines: The company recently closed the acquisition of O3 Mining, 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.
The Zacks Consensus Estimate for the Toronto, Canada-based gold mining company's 2025 earnings indicates year-over-year growth of 6.4%. AEM has a trailing four-quarter earnings surprise of 16.4%, on average. The company has a long-term estimated earnings growth of 31.6%. Agnico Eagle Mines currently has a Zacks Rank of 3.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Barrick Gold: 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, Donlin Gold, 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.
The Zacks Consensus Estimate for this Toronto, Canada-based company's earnings for fiscal 2025 indicates 8% year-over-year growth. GOLD has a trailing four-quarter earnings surprise of 12%, on average. The company currently carries a Zacks Rank of 3 and a long-term estimated earnings growth of 11.4%.
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. On Feb. 28, 2025, Franco-Nevada acquired a precious metals stream from Sibanye-Stillwater's South African mines for $500 million, expecting more than 45 years of deliveries, mostly gold and platinum, with initial deliveries totaling around 27,000 GEOs.
The Zacks Consensus Estimate for this Toronto, Canada-based gold-focused royalty and stream company's earnings for fiscal 2025 indicates 15.9% year-over-year growth. FNV has a trailing four-quarter earnings surprise of 2.8%, on average. The company has a long-term estimated earnings growth of 3.6% and currently carries a Zacks Rank of 3.
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.
The Zacks Consensus Estimate for this Toronto, Canada-based gold mining company's earnings for fiscal 2025 indicates 14.7% year-over-year growth. KGC has a trailing four-quarter earnings surprise of 23.7%, on average. Kinross Gold has a long-term estimated earnings growth of 21% and a Zacks Rank of 3.
Alamos Gold: The company projects production to grow 24% to 680,000-730,000 ounces by 2027, driven by Island Gold district, Young Davidson and Mulatos. All-in-sustaining costs (AISC) are expected to decrease 8% over that time frame from that reported in 2024, due to low-cost growth from Island Gold following the completion of the Phase 3+ Expansion in the first half of 2026.
AGI announced a construction decision on the Lynn Lake project in January 2025, with initial production expected in the first half of 2028. With an average annual production of 176,000 ounces over its first 10 years, Lynn Lake is anticipated to play a significant role in taking the company's production to approximately 900,000 ounces per year (implying 59% year-over-year growth from 2024).
The Zacks Consensus Estimate for the Toronto, Canada-based company's 2025 earnings indicates a 41.2% year-over-year increase. AGI has a long-term earnings growth rate of 10.1%. It has a trailing four-quarter earnings surprise of 7.9%, on average. AGI currently has a Zacks Rank of 3.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.