Just how strong is the ongoing gold bull market? Consider the following…
Demand for physical gold and silver coins has become so acute that many dealers are reporting a scarcity of some of the most popular bullion coins. What’s more, the soaring gold demand is becoming a global phenomenon. For instance, The Guardian newspaper of London reported last month:
“It’s not just the uber-wealthy who are turning to gold, as its price continues to soar. Whether going big on bullion or nabbing a gold sovereign for a few hundred pounds to pension-plan, more and more of us are at it. Welcome to a new gold rush. Last year, the Royal Mint, which buys and sells gold bars and coins, had a ‘record year’ for customer purchases. Revenues from its gold bullion sales were up 153% year on year.”
More recently, the Financial Times (FT) reported that a surge of shipments to New York is causing a “shortage” of bullion in the metal’s central marketplace and storage hub of London. Consequently, lease rates for a one-month gold loan jumped to a multi-month high of 3.3% per annum, while three-month gold borrowing costs rose by 1 percentage point to 2.34%, according to Reuters.
According to an anonymous source quoted by FT, “People can’t get their hands on gold because so much has been shipped to New York, and the rest is stuck in the queue. Liquidity in the London market has been diminished.” Reuters, meanwhile, quoted a former U.S. trading house executive as saying, “The Bank of England "[can] not...handle the onslaught.”
One such recent example is JPMorgan Chase & Co, which will reportedly deliver gold bullion valued at over $4 billion this month against futures contracts in New York. “The delivery notices totaling 3 million ounces were the second-largest ever in bourse data going back to 1994,” according to Bloomberg.
The main driver for the surge in gold demand is the continued threat of rising inflation and the need to hedge against the dollar’s diminished purchasing power. And for investors in other countries, an article in Reuters this week highlights the growing demand for physical gold and uranium company shares as a way to hedge against Trump’s recently proposed tariffs.
Given the supportive backdrop for the precious metals, I think this is a good opportunity to take a closer look at some potential turnarounds within the mining sector, with a particular focus on gold.
While most actively traded mining shares are closer to 52-week highs than lows, a few mid-tier and even senior miners are trading at what could be regarded as bargain prices while lagging their stronger brethren for several months—or even years. What follows is what I regard as two of the more attractive turnaround candidates.
2 Bargain-Priced Turnaround Stocks for the Gold Bull Market
Barrick Gold (GOLD)
After a seemingly interminable period of underperformance, Barrick Gold (GOLD) may be on the cusp of finally turning the corner. While the stock is still down on both a five-year and a three-year basis, it has spent the last two years establishing what looks to be a solid base above the 14 level, with the last test of this level coming a year ago. Significantly, the stock also etched out a higher low in December and is now finally beginning to harmonize with the rising gold price.
The stock is attractively priced and has a solid balance sheet and production profile, with excellent gold and copper reserves and a strongly supportive project pipeline. The pipeline features several key growth projects currently underway, including the Goldrush mine, the Pueblo Viejo expansion, the Donlin Gold and the Lumwana Super Pit, all of which are expected to significantly contribute to expansive production and future growth.
Moreover, Barrick’s CEO Mark Bristow recently said the firm’s Reko Diq copper and gold project in Pakistan could generate a whopping $74 billion in free cash flow over the next 37 years, based on consensus long-term prices.
Barrick considers this one of the world’s largest underdeveloped copper-gold areas, and it’s owned 50% by Barrick and 50% by the governments of Pakistan and the province of Balochistan. The project is expected to start production by year-end 2028 and is anticipated to produce 200,000 tons per year of copper in its first phase.
On the financial front, the company just released Q4 earnings that featured revenue of $3.7 billion that jumped 19% from a year ago and per-share earnings of 46 cents that beat estimates by a nickel, led by production increases for both gold and copper. Management also reaffirmed guidance for its prior projection of 30% growth in gold equivalent ounces by the end of the decade, “supported by organic reserve additions and new project developments.”
Equinox Gold (EQX)
Equinox Gold (EQX) is another stock that looks to be crossing a major threshold after several years of underperformance. The company engages in the exploration, acquisition, development and operation of gold and silver deposits in the Americas, holding interests in properties in California, Mexico, Brazil and Canada.
The stock has shown particular strength in the wake of its Q4 2024 earnings report, which featured full-year production that not only came in within the company’s guidance of 590,000 to 675,000 ounces from its seven operating gold mines in the U.S., Canada, Mexico and Brazil, but also set records on both a quarterly and a yearly basis.
This was especially significant given that Equinox had previously set a record of four consecutive annual guidance misses while also setting the far more ignominious record of having one of the worst track records for average beats/misses versus guidance within the entire sector.
Having finally broken free of that negative trend, Equinox is now poised to continue growing thanks to its 100% ownership of the Greenstone mine in Ontario, which has produced more than 111,700 ounces of gold in the mine’s first, partial year of operations. At full production, Greenstone will be one of Canada’s largest and highest-grade open-pit gold mines, with output estimated at 390,000 ounces per year on average for the first five years and 330,000 ounces per year over an initial 15-year mine life.
Looking ahead, Wall Street expects revenue to nearly double for 2025 and earnings to more than triple, followed by several more years of strength as the company’s production profile presumably accelerates.
