Gold Stocks Offer Torque To The Performance of Gold
If you would have told me a few years ago that gold would be well over $3000 per ounce and on its way to $4000 this year, and that I would be able to find plenty of gold stocks trading at bargain valuations I wouldn’t have believed it. To my surprise, valuations on many gold stocks are still cheap on a relative basis and trading like gold is around half its current price.
In 2024, I talked about gold being in a stealth bull market, and I would still say it is still pretty stealthy when it comes to generalist investors in the West. Central bankers are certainly well aware of the bullish arguments for gold, as are retail and institutional investors in the East.
It hasn’t gone unnoticed with some big institutional investors in the West, and they are some of the best performers compared to their peers. I would imagine that more money managers are starting to get questions from their customers about how exposed they are to gold and gold stocks. If their answer is none, or very little, they could very well see money flow out of their accounts to those that are well positioned in gold.
So far, the generalist institutional funds that are getting positioned have been primarily focused on gold, major gold miners and the gold miners index funds. Although there is some interest trickling down to the junior gold miners, gold mine developers with high-quality projects and gold explorers with important discoveries.
Down the gold stock food chain is where I see tremendous opportunities for leveraged plays for investors. Of course there is still plenty of meat on the bone for large extremely well run gold miners like Agnico Eagle and Alamos Gold. They have been significantly outperforming gold and will continue to do so as gold goes higher. They are still the best way for investors that want leverage to bullish moves in gold while also having minimal downside risk.
But, there is serious torque in the not as well known names amongst generalist investors, especially in gold miners that are growing toward being mid-tiers of the future. Or junior gold miners that are increasing their production and also bringing down their costs of production.
The least well understood group of gold stocks are those that have high-quality gold mine development projects and gold explorers with important discoveries.
I have been working lately on putting together the list of my top picks in each category. I will start presenting some in upcoming reports including this report as I believe we are about to go into the best bull market ever for gold stocks all along the gold stock food chain.
My two top picks for the major gold miners are Agnico Eagle and Newmont. With Agnico Eagle you have an extremely well run gold miner that is making records quarter after quarter in free cash flow due to having strong controls on their cost of production and grades which gives them healthy margins. I expect more of the same from them for the foreseeable future as they are having no problems replacing their current production with new deposits.
With Newmont, they have sold off all their non-core gold mines, and have absorbed the Newcrest takeover. Now they are completely focused on optimizing their Tier 1 gold mines and paying down debt. They are a great turnaround pick, plus I also like them because as they appreciate in value, it has a way of making sentiment toward gold miners improve. I refer to it as the Newmont effect and think it will help the bullishness toward gold, major gold miners and will also filter its way down the gold stock food chain.
My top pick for the best in breed mid-tier gold miner has and continues to be Alamos Gold. I can see a path for them to grow into being a major gold miner. They are an exceptionally well run company that currently mines gold for well below the average cost of gold miners. Plus they have projects in the pipeline to increase their production and also bring down their cost of production to be the envy of many gold miners.
Alamos Gold can also be a consolidator, they have used that method adeptly to grow to their current size. I can also see them being a target to be taken over by bigger miners or a merger of equals type scenario. If I was running a major gold miner they would be at the top of my shopping list, and if I was running a mid-tier they would be my go to for a merger of equals.
Some Top Picks Down The Gold Stock Food Chain
Borealis Mining
Borealis Mining is an emerging gold miner focused in Nevada with a path to become a high-growth junior gold miner. Their key project is the Borealis Mine, a permitted past producer that they are working toward getting back into production.
Initially, they will start with contracting mining of a stockpile (327k tons) that they will move onto their leach pad and then the material will go through their permitted and built ADR processing plant.
The production of gold from the stockpile should last them into the first half of 2026. In the fourth quarter of 2025 they will begin the process of mining from their permitted open pits. These two efforts are their first milestones to become a Nevada focused junior gold miner.
The Borealis Mine is a large land package with minimal exploration, in the past the drilling was primarily focused on the known deposits and not thorough exploration of the entire project.
Borealis Mining’s CEO, Kelly Malcolm, is a very talented exploration geologist with a strong production on his team and Bob Buchan (founder of Kinross) as their Chairman.
Their timing to start a junior gold mining company with gold performing so well is impeccable and they have plenty of exploration potential on their projects, and a business plan to be a consolidator of Nevada gold projects that won’t move the needle for majors but could help them become a much larger gold miner generating substantial free cash flow.
There are very few new gold mining companies coming onstream, especially in a fantastic jurisdiction like Nevada, which puts Borealis Mining in a great position to increase their audience of investors.
Goliath Resources
Goliath Resources has mobilized for their 2025 drilling season and they are armed with the most drill hole data and geological information they have ever had to begin a drilling season.
Recently, they reported the findings of a detailed geological study conducted at the Colorado School of Mines. There were a few key findings from this work that stands out.
One is that they have a series of gently dipping stacked veins with many drill holes with high-grade gold. Cutting through those veins are a series of vertical reduced intrusion related gold (RIRG) dykes.
The team at the Colorado School of Mines studied the points of contact where the veins and dykes crosscut and found two temperature regimes responsible for the gold mineralization. This is very exciting as the cross cutting zones (being called Goldilocks zones) are key locations for primary and secondary gold mineralizations that can juice up the grades in those zones.
There is a vast array of targets where the RIRG dykes and veins crosscut, which suggests they have many potential Goldilocks zones to focus drilling.
Another important finding in the geological study was age data that confirmed the RIRG dykes and veins had the gold mineralizing event in the Eocene epoch. Which suggests a common magmatic event is responsible for the gold mineralization in the RIRG dykes and veins.
I’m very much looking forward to drilling this season below the RIRG dykes and veins during the 2025 drilling season, as well as more drilling into the known RIRG dykes and veins for expansion and also drilling to find more Goldilocks zones.
McEwen Mining
Whether you like junior gold mining or copper development, McEwen Mining has you covered. They will produce around 130k ounces of gold in 2025 and then increase production and bring down costs in 2026 as their Stock gold mine goes into production, its construction is underway.
In addition, they are having no problems adding to their gold resources and have the potential to increase their production to over 200k ounces per year in the next few years.
I’m extremely bullish on copper, primarily due to the increases in demand coming from various sources and the weak supply chain. McEwen Mining’s interest in the world-class Los Azules copper development project has them in an enviable position as all major miners want more copper mining assets.
Los Azules is one of the top 10 undeveloped copper mines, plus, importantly it is in the lowest cost quartile for undeveloped copper mines worldwide. A key milestone for Los Azules is a bankable feasibility study that is about to be published in the first half of this year. Another important development is their application for Argentina’s RIGI investment program, which will enhance the economics of Los Azules. RIGI approvals are starting to happen for mining projects, it is hard to know where they are in the list of miners that have applied, but it is not difficult to see that Los Azules will be a wonderful copper mine in Argentina.
Currently, unlocking the value of the gold mining assets and the copper assets is a little challenging because some investors want gold, while others want copper. An important plan is in the works to spin Los Azules out into its own publicly traded copper company which would mean that McEwen Mining would be laser focused on the gold business and McEwen Copper would be building one of the world’s next great copper mines.
In Closing
There has never been a better time to be a gold bull, even better is that there are plenty of gold stocks that give investors torque to the performance of gold.
Gold has recently been going through a basing process and is ready to breakout to new record highs.
All the best,
Allan Barry Laboucan
Disclosure
Allan Barry Laboucan is a shareholder of Borealis Mining, Goliath Resources and McEwen Mining.
Borealis Mining is a sponsor of Rocks And Stocks News, content creation about them is for the benefit of the company. Sponsors also benefit readers and viewers of the reports as it makes content creation possible for no charge to the Rocks And Stocks News audience.
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Founder’s Background and Expertise
Allan Barry Laboucan, the founder and owner of Rocks And Stocks News, has extensive experience in the mining sector, beginning in 1993. Since 2005, he has been reporting on the sector. He has worked with talented geoscientists in geology, geochemistry, and geophysics throughout his career in mining. Allan applies the expertise gained during his career to evaluate sponsors and sector picks for reporting purposes. Whether a company is a sponsor or a sector pick, it undergoes the same rigorous review process, with coverage focusing on significant news or developments. Allan may hold shares in companies discussed in the reports, whether they are sponsors or picks, and he discloses such holdings when relevant.
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