Miners Have Quietly Become the Best Businesses in the Market
The financial system just woke up to the new era for precious metals miners.
For weeks now I’ve been pounding the table that precious metals miners offer some of the best fundamentals in the market. By way of quick review…
- Median profit margins for gold miners are now 31%, the highest of any sector in the market (including Tech).
- Gold miner free cash flow is now 10 times what it was in 2020.
- Long-term debt as a percentage of equity has been cut in half.
In the short term, markets are driven by sentiment and flows. In the intermediate to long-term, fundamentals rule. And by the look of things, the market finally has realized the fundamentals for precious metals miners.
The ratio between the VanEck Gold Miners ETF (GDX) and gold bullion makes this clear. When this line rises, GDX is outperforming gold. And when it falls, gold is outperforming GDX.
This ratio has just broken out of a clear bull flag pattern. This signals that gold miners are outperforming gold in a big way. The market is finally catching on to the new “normal” for gold miners based on gold trading above $4,400 per ounce.
Indeed, the majors are now flush with cash.
Newmont, the largest producer in the world, is now guiding to $9.5 billion in free cash flow for 2026, and it’s calling this a production trough year. Read that twice. The company isn’t even running at full output and it’s still on pace for its best cash flow year ever.
Agnico Eagle posted $1.335 billion in free cash flow in a single quarter, a company record. Kinross just put up its fourth consecutive quarterly free cash flow record, and its net cash position has ballooned to $1.9 billion, a number that would have been unthinkable for that company a decade ago given its history of getting buried in debt after the 2010-2012 acquisition binge.
And this is the part that matters most for anyone who owns these stocks or is thinking about it: the cash isn’t sitting there. Companies are returning 40% to 50% of free cash flow directly to shareholders through dividends and buybacks. Barrick alone bought back $1.2 billion of stock in Q2 under a new $3 billion program.
Compare that to the old playbook. For 30 years, miners took every extra dollar from a rising gold price and plowed it into overpriced acquisitions at the top of the cycle, diluting shareholders in the process. This cycle, they’re buying back stock and cutting debt instead. That is a completely different animal than the sector generalist investors learned to avoid.
Newmont’s chart says it all: the markets have finally figured out that this is a “new normal” for precious metals miners.
If you haven’t grabbed a copy of our Survive the Inflationary Storm yet, do it now. What I described two days ago is playing out faster than even I expected.
It explains my top precious metals plays, their names, their ticker symbols, and the resources they own. These are high-octane positions that rallied 75%, 140%, 150%, 180%, 280%, and an incredible 574% in 2025. And I wouldn’t be surprised to see them repeat this performance in 2026.
Normally I’d charge $499 for this report as a standalone item, but considering what is unfolding today, we are making just 100 copies available to the public.
To grab one of the last remaining copies…
Best Regards,
Graham Summers
Chief Market Strategist
Phoenix Capital Research