Gold Mining Sector: A Unique Contrast That Contrarian Investors Should Relish

Gold miners are beginning to get into the action while gold continues its bullish trend

While the rabble focus on TRUMP’s meme coin, AI stocks, and which shitcoin to YOLO into next, gold continues its nascent 2025 uptrend. Three weeks into the new year, gold is knocking on the door of fresh all-time highs in US dollar terms. Meanwhile, after a depressing Q4 2024 performance, the gold mining sector is beginning to exhibit some green shoots.

The world’s 3rd largest gold producer, Agnico Eagle Mines (NYSE:AEM), is breaking-out to all-time highs today:

AEM (Daily)

Judging by various social media timelines and CNBC/Bloomberg headlines, nobody cares about how well Agnico or gold are trading.

Over the years, I have learned that rising prices against a backdrop of general investor disinterest is the perfect recipe for even higher prices in the future. Q4’s performance was disappointing enough for most gold mining investors, that many have given up just in time for the real bull market to commence.

Here are a few other gold miner charts (both juniors and producers) that have my full attention:

CNL (Daily)

IAG (Weekly)

PPTA (Daily)

While the overall performance of gold mining sector ‘beta’ was underwhelming in 2024, there were plenty of bright spots. This is a stock picker’s market in which there is ample room for outperformance (and underperformance). The trick is being in the right stocks and avoiding the pitfalls.

This is a topic I’ve written about before, and one I am likely to continue to emphasize. While the overall gold mining sector woefully underperformed gold in 2024 (largely due to Barrick and Newmont), there were plenty of gold stocks that have risen more than 100% in the last year.

Some of the common themes among the winners like Collective Mining, IAMGOLD, Perpetua, and Agnico Eagle:

• Impactful news flow that regularly surpasses market expectations

• Key valuation inflection points at the project level (new discoveries of high-grade gold zones at CNL’s Guayabales project in Caldas, Colombia OR final federal mining permit for Perpetua’s Stibnite Gold Project in Idaho OR production ramp-up at IAG’s Côté Gold Mine)

• Chart uptrends with ‘resting’ periods characterized by healthy share price oscillations, followed by higher highs

Gold producer earnings season will begin in 2-3 weeks. After some of the operational disappointments of 2024, this earnings season will be especially important - the gold mining sector is poised to deliver a record quarter of free cash-flow generation and raise guidance early in the year.

Gold miner margins are fat, and they’ve been getting fatter as gold continues to rise:

The profitability outlook for the sector has never been better, and in many ways the sector has never been better positioned than it is today. Meanwhile, it has also never been more hated, and more under-owned by investors than it is today.

A unique contrast that contrarian investors should relish.

Disclosure: Author owns CNL IAG shares at the time of publishing and may choose to buy or sell at any time without notice.

---

DISCLAIMER: The work included in this article is based on current events, technical charts, company news releases, corporate presentations and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This article is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.