Gold Miners Are Free Cash Flow Machines But Are Being Priced Like Value Plays Not High-Growth Plays

Gold miners are free cash flow machines. High-cost gold miners are making around $1000 or more for every ounce they produce, while low-cost miners are selling gold for around half of what it costs them to mine an ounce of gold.

It is only getting better as gold is in a powerful bull market having made a series of new record highs throughout 2024 and 2025.

The debt and fiat currency system is broken, which is why gold is trading at record highs against every fiat currency, including the US dollar.

In 2024, gold surpassed the Euro to become the second highest reserve currency held by central bankers. The US dollar has lost around 10% of its position as the world reserve currency over the past couple of years. Gold is the soundest money and the central bankers clearly see this and are positioning themselves accordingly.

There is a Death Spiral of Debt that is getting worse rapidly as politicians keep spending like drunken sailors and the cost of servicing the debt is an unsustainable problem. In America, the cost of servicing the debt is higher than defense spending, only surpassed by medicare/medicaid and social security and on its way to being number one.

In 2025, $9 trillion of debt that was built up with much lower interest rates needs to be rolled over which will drive up the cost of servicing the debt. While the GOP led House wants to increase the debt limit to $40 trillion and has voted to keep the Biden spending going for Trump.

Layering on top of these various issues is that stagflation is a growing problem. I firmly believe that during Biden’s term, the economic numbers overstated the economic growth and understated the inflation. Which hasn’t stopped during Trump’s term.

The Fed members are predicting (before the mass deportations and tariffs have shown up in the economic reports) that growth will slow to less than 2% while inflation will grow to nearly 3%. They won’t say it, but they are forecasting 1% stagflation.

Consumers are predicting (as are some economists) a much worse scenario, they are concerned about the economy dropping into recession and expect that inflation will be over 5% in 2025. Some have dismissed these numbers because they say that surveys of consumers are politically biased. They may be, but that doesn’t mean they are wrong.

Pick your poison, if you believe the Fed, there will be around 1% stagflation, if you believe consumer sentiment (and some economists) it could be 3% or as much as 5%. I tend to lean more toward believing consumer sentiment because they have their fingers on the pulse of what is happening in the real economy.

Their concerns can not be easily dismissed because they showed up in November on Election Day to voice their displeasure about the economic growth and inflation. It wasn’t only MAGA voters that gave Trump a landslide victory, it was also left leaning voters as well. They know that Biden’s stagflation was worse than advertised and Trump’s stagflation will be even more troublesome.

Mass deportations have immediate economic ramifications. They remove consumers from the economy as they leave the country, those that stay in America, stop going to work and shopping out of fear of being caught by ICE agents. Which results in slowing the economy and increasing inflation in real time.

Tariffs cause the same issues of slowing the economy and cause higher inflation. The Fed is trying to dismiss tariffs (using what I thought had become a forbidden word at the Fed) as transitory. I highly doubt they will be transitory because they aren’t applied immediately across the board. Companies are going to find it challenging to pass them on because consumers are already stretched from persistent inflation.

Even though consumers are stretched, companies won’t be able to eat the increases from tariffs for very long. So some of them will be immediate, while others roll out in the coming months. This will cause a second wave of inflation that will be worse than the first wave and won’t be transitory.

Which means that all of the factors driving gold, primarily the Death Spiral of Debt made worse by the spending and cost of servicing the debt, plus stagflation, will drive gold much higher.

These factors make for a perfect storm for gold to keep making record highs and gold miners to continue to be free cash flow machines.

During 2024, my three favourite gold miners were Agnico Eagle, Alamos Gold and SilverCrest Metals. Both Agnico Eagle and Alamos Gold significantly outperformed gold in 2024 and are doing the same in 2025. SilverCrest Metals got bought out because Coeur Mining needed their warchest of cash, gold and silver, plus wanted to increase their production of gold and silver, while also bringing down their costs.

In early 2025, Agnico Eagle became the most valuable gold miner, surpassing Newmont and Barrick, to have the highest valuation of the Big 3 gold miners. They produce gold for lower than Newmont and Barrick, plus they are having no problems increasing their production and replacing their old production with new production. While also making moves to bring down their costs. They are the best in breed when it comes to the majors because they are mining gold at a cost that is around half of what they are currently selling it for which makes for a series of record quarters in free cash flow.

Alamos Gold is like a smaller version of Agnico Eagle. They are also a free cash flow machine that is selling gold for around half of what it costs them to mine it. They are already producing gold for well under the average cost of gold miners, and are in the process of increasing their production and bringing their costs down to be one of the lowest cost producers in the gold mining business.

While Agnico Eagle and Alamos Gold are free cash flow machines, their valuations are seeing them valued more like value plays on Wall Street than companies with high growth in free cash flow. They are great candidates for investors that want exposure to gold, in companies that can significantly outperform gold, with less risk than smaller gold miners.

Ross Beaty’s Equinox Gold is another of my top picks for gold miners. They have recently brought their Greenstone Mine into production, and it is one of Canada’s newest big gold mines. While it was in construction they had Orion Resource Partners as a 40% partner and just as it was going into production Orion decided they wanted to sell their interest because they are a mine finance company, not a miner. Equinox had to take on $1 billion of debt to buy them out and by doing that, they doubled their gold production. Recently, they bought Calibre Mining in a merger of equals in an all stock deal. When Calibre’s Valentine Lake Gold Mine comes into production shortly, it will boost Equinox to be over a 1 million ounce per year gold miner. They will be a low-cost gold miner that is focused on paying down their debt with the free cash flow from their various gold mines. Ross Beaty is a serial mining entrepreneur that has built several mining companies using the buy and build strategy and he is well on his way to building another mining success story.

Heliostar Metals is a junior gold miner with aspirations to become a mid-tier gold miner. Most importantly, they have the projects to do it and a young CEO that is an extremely talented geologist with a strong business sense as well. In the past year, they pulled off a key transaction that turned them into a gold miner. Earlier I mentioned Ross Beaty, and I see a lot of Ross Beaty in Charles Funk (the CEO of Heliostar) as he has impressive talents as a geologist and deal-maker. Their current mines make them a junior gold miner, those projects also have great exploration potential, Charles Funk and his team are great at exploration, and they are also rapidly moving Ana Paula toward production. People, projects and funding are the building blocks for miners and Heliostar has all of those covered, plus, they are very good at using digital marketing to tell their story. I can clearly see Heliostar growing into a much bigger gold miner while gold is in a tremendous bull market that will last for many years.

Orla Mining is a company I first started covering when they were bringing their Camino Rojo mine in Mexico into production. Back then what stood out was that it would be a low-cost gold mine, and they were going through the sweet spot of the Lassonde Curve prior to bringing a mine into production when they transitioned from spending money to build a mine into turning it on and making money. Adding to my confidence was that Pierre Lassonde himself was a key shareholder, putting his money where his mouth is as he is very fond of investing in companies when they go though the sweet spot of his Lassonde Curve prior to going into production. The success (which is ongoing) from their Camino Rojo mine has given them the financial strength to be an acquirer. They first bought a project in Nevada with the same geological characteristics of their Camino Rojo mine. Then recently they bought the Musselwhite mine from Newmont as Newmont was selling their non-core mines. It may not be a big mine for Newmont, but in a company the size of Orla Mining, it is a tremendous asset. I really like their focus on being a low-cost miner, and they have forecasted an all-in sustaining cost in 2025 of just under $1000 per ounce of gold production. In addition to their production profile, they are also planning $50 million to go into exploration to increase gold resources. They are a junior gold miner with the assets to grow into a mid-tier.

McEwen Mining is a junior gold miner with a top 10 copper development project as a kicker. In 2024, they produced 135k ounces of gold and will do around the same in 2025, then in 2026 their Stock Mine will be in production that will enable them to significantly increase their production and bring down their all-in sustaining costs. Plus, they have a resource of 2 million ounces (combining their inferred, measured and indicated resources) that is an asset with near-term production potential. Their Los Azules copper development project is exactly what Dr. Copper is prescribing as the world needs more copper production, immediately and long into the future. It is in the top 10 of undeveloped copper projects worldwide and also in the lowest cost quartile. While copper is in strong demand, there are not nearly enough copper development projects in the pipeline and Los Azules is what the copper miners and copper users need. If you look at Los Azules as a gold project, and consider the current mining operations of McEwen Mining, on a gold equivalent basis, they have the potential to be like a 1 million ounce gold miner by 2030 that is a free cash flow machine. Rob McEwen built Goldcorp from a small gold miner into a huge success and I strongly believe he is going to have even more success as he builds McEwen Mining into a gold and copper miner.

In Closing

The companies above are my top picks for companies in the gold mining space. I have a few more that I am considering to add to that list.

I also have a list of strong picks that have high-quality development projects and explorers with important discoveries. The gold miners offer plenty of torque to the price of gold, and the developers and explorers have even more. I will write a report this weekend about my top picks down the gold stock food chain on developers and explorers.

All the best,

Allan Barry Laboucan