In May 2024, I published a Weekly about gold mining stocks. My focus was on how to analyze them, and which parameters to know and watch. I also compared the industry’s three biggest names to evaluate how they performed, and why so (at that time, they had, surprisingly for many, underperformed the spot gold price). Today, I discuss three gold miners I like from a quality perspective for the watchlist. All my members on top will receive my latest stock idea – a gold stock, but with a slightly different case. Even if the gold price does not rise, this could become a multi-bagger which is unlikely for most gold stocks.

Summary and key takeaways from today’s Weekly
– Gold is living off a (geo)political premium, else it would likely be overvalued.
– Most gold miners experienced a strong run, with expectation and multiples being high.
– That’s why I searched for an idea that still can deliver stellar results – even if the gold price does not rise.

At the time of my first gold-mining-stocks Weekly (see here), I made the observation that over a timespan of then five years, the spot gold price had beaten many gold stocks, including the industry’s three heavyweights.

Yes, this way. Not the other way around.

This was surprising, given the wide-held belief that commodity stocks offer leverage to the underlying resource – in both directions of course. In other words, these equities should have easily outperformed. Depending on the setup, even by multiples. As gold was up by 80%, it was likely eyebrow-raising for many that this did NOT play out.

The good news is, spot gold has risen from 2,300 to 3,300 USD since.

The bad news is, my selected names from then still have not beaten the spot price of gold over the current five-year period, although one name did show a clear improvement.

Today, I am throwing in three new ideas that should be on everyone’s watchlist.

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^{both as per 27 August 2025 market close – since August 2022}

Quality at a price

Under what one would likely call “normal” circumstances, gold and gold mining stocks, would likely be strongly overvalued. “Normal” for me means an environment of strong economic growth, and little (geo)political uncertainty, including the robustness of the financial system. For the latter, think of the fiasco in 2008 or the Euro-crisis.

Gold is more than just a commodity (spoiler: I am not a goldbug).

The reason is, if gold were functioning like most other commodities, we’d likely be at the late stage of its bull market. Practically every miner is profitable now, and even the worst of the crop, which would be bleeding under less favorable conditions, are earning huge margins on their production costs.

In today’s world, low production costs means a figure around or below 1,000 USD. The middle, still a solid number, is around 1,500 bucks. Everything above that, especially above 2,000 USD is on the top-end of the cost curve. With gold trading more than 1,000 USD above that, currently the gold mining business is very profitable.

A rising tide lifts all boats they say.

Well, until the magic formula of “high prices is the cure for high prices” hits at some point.

The above is clear. At some point, the cycle reverses again.

If commodity prices are too high, every project is profitable, leading to over-investments, over-expansion, and oversupply which sends the price of the resource south again, until the bear market cleans itself from the previous excesses.

As we are having unfortunately pretty much uncertainty, paired with rather rising than falling tensions worldwide on many fronts, gold acts as the traditional safe haven because it is recognized everywhere, it is fungible, and it is politically neutral.

This is important to understand. Gold has special drivers and tailwinds.

Military conflicts are one thing. But governments and central banks obviously losing control and public trust is a very under-discussed issue. Otherwise, the yields of government bonds wouldn’t be rising with falling (short-term!) interest rates, would they? The academic theories cannot explain this.

First, though not the perfect example, despite the FED having already lowered interest rates multiple times, the 10-year bonds have not mirrored the Fed Funds Rate. They are off from the five-year peak, but it looks more like a stable sideways move.

More important, if you look closer, you can even see that as inflation kicked-in in 2021, while interest rates remained low, the bonds already adjusted to inflation expectations. Now, almost everyone is expecting lower rates soon – but bonds seem to think differently. It’s what the market thinks.

(all data from Trading Economics)

The following examples make it clearer.

Britain has seen its interest rates having been lowered five times from the five-year peak. The yield of Gilts, the UK 10-year bond, is pressing higher, though – exactly in the opposite direction.

(all data from Trading Economics)

Okay, Japan has seen some hikes.

But the 10-year bond has not only risen much more. It continues to press higher, despite flat interest rates now. If you follow the news on Japan ans its bonds, you will have noticed one or the other headline about record-high bond yields on the longer-term durations.

(all data from Trading Economics)

Last one, Germany. No explanation needed.

(all data from Trading Economics)

For me, this is not really surprising.

It is a misconception and misunderstanding to assume that central banks can determine the direction of government bonds, especially the long term.

Again, it’s what the market thinks and anticipates.

More relevant is the underlying confidence, or the lack thereof. If there’s no confidence in a country’s finances, respectively its government, bond yields will rise, no matter the central bank’s (and government’s) wishes.

Unlike many, many investors, I do not support the thesis that gold has anything to do with inflation. For me this is a goldbug sales pitch. Gold had issues to rise historically during times of high inflation. Look no further than 2022, when inflation exploded, gold took a breather, and it needed two years to reach new highs again.

What I wanted to express with my rather unusual intro (as gold mining stocks are my core topic), is that the price of gold should be overvalued from a traditional commodity-cycle or business sense (if it were just a commodity like others), meaning gold prices are too high, as the entire industry is extremely profitable.

However, given its special role, and bond markets indicating stress, it is feasible to assume that gold could be trending even higher. But this has nothing to do with the businesses, making investments in gold miners for my taste a bit tricky.

As we will see, equities demand high prices. With stretched valuations, it becomes somewhat of a gamble in expectation of higher gold prices.

This can absolutely happen, I personally even think we will see higher gold prices.

But what are the consequences for investors who do not want to just bet on higher gold prices, and who do not want to ignore stock valuations?

None of the following names made it into my latest report, because the valuations are simply too high for me. I need a higher margin of safety. With valuation multiples on the higher end, the risk for painful corrections should not be ignored.

In my previous Weekly, I discussed Barrick Gold (re-branded to Barrick Mining due to its high copper share; ISIN: CA06849F1080, Ticker: B), Newmont (ISIN: US6516391066, Ticker: NEM), and Agnico-Eagle Mines (ISIN: CA0084741085, Ticker: NEM).

Here’s the chart I showed back then:

It was a five-year period I looked at.

During the inflation-spike in 2021, and especially 2022, spot gold was clearly underperforming. But then the party ended, spot gold fell, and the miners did the same in sympathy, but on a disproportionate level.

The miners did not fall just due to the gold price, though.

Many seem to forget that input costs, primarily energy, but also labor costs, though lagging, had exploded. This has increased the cost base for mining substantially.

The end result was that after five years, this was a randomly chosen period, simply as of writing my article back then, spot gold had outperformed all these names. Even by a relatively wide margin, namely 80% vs. 58% for AEM, and the other two both not even having been up by 40%.

How does it look today, with the gold price being up from 2,300 to 3,300 USD, or 40% since my Weekly (new five-year period)?

As of writing, spot gold is up by 75% over the last five years.

Barrick Mining is a total disaster with MINUS 9%. Newmont with +10% is not really better compared to gold. NEM still has not exceeded its 2022-high, though it is slowly approaching it.

Agnico-Eagle Mines made the by far biggest progress, rising 73%. Depending on the day I look, it is a close neck-and-neck race between AEM and spot gold over the last five years, with gold currently having the upper hand. Let’s say roughly on par.

The reason for AEM’s significantly better performance?

As I concluded in my previous Weekly, AEM simply has the by far highest torque. It is delivering, showing the best operational performance of the pack. I especially highlighted per-share metrics that many people simply just don’t bother to look at. But they are important as equity raising and subsequently dilution are part of the business.

The question is only, does it create value? In most cases, it does not.

With its recent half-year results, AEM guided for AISC (all-in sustaining costs) of 1,250–1,300 USD per ounce which is strong, and noticeably better than its two peers (NEM had ~1,600 USD, B had ~1,700 USD).

However, the run of AEM stock seems to be a bit over-heated now.

AEM now trades for a price to tangible book value of almost 4x, which is extreme.

This is not a major growth story, but a seasoned producer.

The company deserves a premium, no question. But there have been better entry points historically. And despite the circumstances and special conditions of gold, it does not go up always in one direction. The next correction, whenever it will happen, could easily send even a behemoth like AEM down 30% or more.

The commodity price as a driver is one thing, but excessive valuations in this sector can lead to brutal and painful stock price declines.

I promised to present three new names of high quality, and strong performance.

And here they are. I like their overall setups and profiles. Also, costs are under control or even extremely low compared to the industry. And all of them have some kind of organic growth story.

Let’s flip over them case by case.

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Number one I’d put on every serious watchlist is DPM Metals (ISIN: CA2652692096, Ticker: DPM). Until not long ago, DPM Metals had the name Dundee Precious Metals, but it rebranded recently after an acquisition.

The Canadian mining company owns two gold-producing assets in Bulgaria, and is advancing its activities in Serbia as well as Ecuador.

On the map above you can see that Bosnia and Herzegovina is also shown. The reason is, DPM recently acquired Adriatic Metals and its promising low-cost silver mine Vareš. The deal made absolutely sense as the mine is located in proximity to its other major assets.

So, it’s a gold and silver story in the Balkans, first and foremost.

This setup makes it riskier at first glance. I am leaving this assessment open, as for my taste it is not necessarily riskier than for example Barrick’s adventures in Pakistan, Africa, or even Panama.

DPM has clearly outperformed everything mentioned before, including spot gold.

The case of DPM in a nutshell is that one of the two Bulgarian mines, Ada Tepe, will stop producing next year. The other, and bigger one, Chelopech, continues to be the flagship. In the meantime, management is conducting exploration activities as well as working on a feasibility study for its Serbian projects. The Ecuador actives are a bonus for me, they are more behind.

With the acquisition of the Vareš mine, DPM is adding primarily silver, but also zinc to its portfolio. All its mines are low-cost. Currently, the Bulgarian mines have AISC of 865 USD. Chelopech even has AISC below 700 USD with an expected mine life of at least ten years.

In other words, DPM at current gold prices has an almost incredible margin of around 2,500 USD per ounce!

The game plan is now, the second Bulgarian mine, Ada Tepe, will cease production next year. In the meantime, the Serbian Čoka Rakita project is being developed, and if all goes well, shall start production in 2028. The pre-feasibility study showed AISC below 700 USD, but this figure is likely to go up when the updated numbers are released, even though I still expect a world-class outcome below or around 1,000 USD.

You will likely have noticed there’s a gap of about two years between Ada Tepe closing shop, and Čoka Rakita potentially being shovel-ready.

For some time, this has been holding DPM back, as the valuation was rather low.

But year-to-date, the stock has more than doubled, driven by strong operating performance, extremely robust margins thanks to low production costs, buybacks, a balance sheet with net cash, and a strong future outlook.

Now with the acquisition of Vareš, and counting the values of all the assets together, it does not look that bad, given one is okay with the jurisdictional profile. For example, Vareš alone could be worth half of the current market cap of DPM (which has net cash, so even more on an EV basis).

For my taste, I’d like first to see the feasibly study for the Serbian project, Čoka Rakita which is expected to be published by the end of the year. Also, I want to see the ramp-up of Vareš, as the mine has started production only recently.

After the strong run of DPM in 2025 until here, and a price to tangible book value of 2.4x (not too log ago, the figure was significantly below 2x), there’s no need to rush in. I must confess, I only discovered the case recently. I like to watch it, but for now it does not catch me enough from the valuation perspective, that’s why it is only for the watchlist.

It could be worth a look after a setback, and / or after a few more updates.

Next in line, Lundin Gold (ISIN: CA5503711080, Ticker: LUG). The company, backed by the famous Swedish family of the same name, is a major success story. It operates the first large-scale gold mine in Ecuador, its only asset so far.

The performance over the last five years is simply impressive with a stock return of more than 600%, and on top a dividend.

But what kind of an asset Lundin owns!

The Fruta del Norte mine is one the lowest-cost gold mines in world. It has extremely high gold grades of around 10 grams per tonne, while the competition is often happy to have 1% (no typo).

With production costs below 1,000 USD, a long mine life of at least 12 years, many resources ready to be converted into reserves to extend expected mine life, a now debt-free balance sheet, and ongoing exploration activities funded by strong cash generation, this is one of most clear-cut cases out there.

The main drawbacks are likely that Lundin is only a one-asset company at this stage, and its non-Tier-1 jurisdictional profile. But here I would again point to Barrick’s assets and let this assessment for everybody to do on their own.

Since Fruta del Norte started production, Lundin Gold managed to significantly increase its free cash flow, despite rising costs. The main reason is of course a higher gold price, …

… but also higher gold production.

However, the above is the total throughput, meaning all the moved rocks.

In fact, in seems Lundin Gold has reached somewhat of a plateau regarding gold production, changing its drivers and catalysts from here on. The company will depend more on the gold price, which I do not like, and it will need to deliver on reserves and resource expansion which I am confident will be the case.

And, at some point it could lead to M&A activity to acquire new growth.

Interesting is the dividend policy for those who like commodity companies with frequent and reliable payouts (which I personally do not need, as I am preferring organic growth stories).

For some time, Lundin focussed on paying down its debt. Now, it has a fixed and a variable payout component which together at current gold prices result in a dividend yielding significantly more than the industry’s average.

The last figures are a 0.30 USD fixed and a 0.49 USD variable dividend for 0.79 USD, which annualized would be 3.16 USD or a yield of ~5% at current stock prices.

Not bad.

Where I am more concerned about is the valuation.

The price to tangible book is extremely high with 11x. The tikr chart shows the parabolic rise, which does not make me want to jump onto this case. I fully recognize the success story, and I am confident the strong management will be able to extend mine life.

But this is a hefty price tag.

The same for EV / FCF.

The EV is around 14 bn. USD, while FCF should reach a full billion USD soon. With gold output not planned to grow at current circumstances, 14x seems to be a bit rich of a valuation, despite good arguments to justify a premium like the without-a-doubt strong quality.

But being a one-asset company, which by the way I am not opposed to as my members know from out Silvercrest Metals case, makes it riskier in nature, despite the benefits of a world-class and low-cost mine.

Watchlist.

Making the line-up complete is Alamos Gold (ISIN: CA0115321089, Ticker: AGI) which some view as the next Agnico-Eagle in the making. And it makes sense, as AGI is, like AEM, focussing on Tier-1 assets, primarily in Canada. Other similarities are a strong acquisition track record, and a strong cost profile.

The stock is a major winner with a cool triple over the last five years.

AGI has 89% of its assets (as per NAV) in Canada, with the rest spread over the US and Mexico. The current estimated average mine life for its Canadian assets is 20 years, with expansions ongoing.

Against the trend of the industry, Alamos is planning not only to increase output meaningfully, in their case by 50% over the next years, which alone is a strong argument in its favor.

But the founder-led management aims to reduce AISC from currently 1,425 USD to 1,175 USD until 2027 through the ramp-up of lower-cost activities!

Alamos is a disciplined capital allocator with a great acquisition track record, laser-focused on per-share growth instead of growth for growth’s sake, sacrificing shareholder value.

Unfortunately, the latter is the predominant case in the mining industry.

Alamos is growing organically, but also through well-timed acquisitions. The track record is great, as the balance sheet has net cash and no goodwill!

Despite higher production, management was able to grow mineral reserves on a net basis. This is testament to their strong execution, and all this while not being overly aggressive financially.

All relevant figures and metrics know only one direction: up.

Gold production, mineral reserves, cash flow, and multiple per share metrics (!) almost every year, but definitely over many years, continue to climb up the ladder of success.

Free cash flow is mainly used to fund growth, hence at first sight it looks weak and lumpy. But operating cash flow is strong, and seeing the big picture, it becomes clear why this a compounding machine.

Unfortunately, here I also am a bit defensive, as I do not want to jump in after a strong run. AGI has a market cap of over 12 bn. USD (and some net cash).

When comparing it to the free cash flow, we obviously get a very high multiple of around 40x, as Alamos is strongly reinvesting into growth.

That’s why it seems to make more sense to look like in the other cases here also at the price to tangible book value – a decade high.

The price to tangible book is not a perfect metric.

None is, but the advantage of it is that it still seems to work remarkably well for commodity companies (and some other asset-heavy and “old” industries).

We can definitely see, that multiple expansion has made the stock meaningfully more expensive. There were times, when it traded at or even below 1x. I do not expect to see 1x TBV anytime soon, to make it clear. But I absolutely do not like to get in at a decade-high.

This does not mean that this is the all-time high.

I can imagine the stock to continue to run higher. Why not.

But I do not like the risk and reward, as despite the high potential reward, the risk is very high at this stage, too. With inflated, respectively historically high valuation multiples, it becomes not an investment with decent margin of safety, but a gamble with almost a binary outcome.

As said, I do not want to rely solely on higher commodity prices.

Conclusion

Gold is living off a (geo)political premium, else it would likely be overvalued.

Most gold miners experienced a strong run, with expectation and multiples being high.

That’s why I searched for an idea that still can deliver stellar results – even if the gold price does not rise.

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