Gold mining stocks have been melting up in recent months, thanks in part to the recent strength in gold prices. And while gold prices may be nearing a breakout moment, shares of many of the miners may still have yet to catch up to the current price of gold. Despite recent strength in the broad basket of gold miners, they still look too cheap given the potential upside in the face of a continuation of gold’s run in the second half. Indeed, when it comes to the mining plays, operating leverage can help them outrun the price of physical bullion.
When combined with well-managed operations and increased production in some of the names, the gold mining trade may be the best way to play the shiny yellow metal, whether you’re looking for value, a great hedge (and less correlation to the broad stock market), or a decent risk/reward in a market that may have too much money chasing too few opportunities within the tech scene (think IPOs and high-momentum AI stocks).
In any case, let’s check in on some gold mining plays that Canadian investors may wish to watch now before gold makes its next big move.
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Agnico Eagle Mines
Agnico Eagle Mines (TSX:AEM) is a top pick for investors looking for a premier miner that’s able to use its size to its advantage. The $94 billion mining juggernaut has been wheeling and dealing over the years. As the firm looks at new potential takeover targets to boost production as the price of gold continues to surge on the back of numerous macro tailwinds, I still think shares of AEM look like a bargain at 18.5 times forward price-to-earnings (P/E).
With a well-covered dividend (yielding 1.2%) that stands to grow quickly as gold continues shining for investors, AEM stock ought to be one of the first gold mining stocks to consider buying at current levels. In the past year, shares have soared 77%.
And while it’s tough to call gold’s next move, it’s hard to ignore the loud calls of the gold bugs as gold starts looking timely from a technical perspective. With a low beta, modest multiple, and upside amid gold’s run, I don’t think investors should fret about missing out on the past year of gains. If anything, the share price hasn’t gained as much as the fundamentals have in the past year.
Dundee Precious Metals
Dundee Precious Metals (TSX:DPM) is another high-flyer that has significant momentum riding behind it. If higher highs really are in the cards for gold (perhaps US$4,000 per ounce could happen in 2026), DPM looks like an absolute bargain I wouldn’t hesitate to buy at close to all-time highs just under $24 per share.
At an 8.3 times forward P/E, DPM shares look severely undervalued. And while the mid-cap stock ($4 billion market cap) may not be everyone’s cup of tea, I do think the name has highly underappreciated drivers that’ll support the rally, even if gold were to keep consolidating just shy of US$3,400 per ounce.
With impressive free cash flows, a track record of smart M&A, and ample exploration upside, DPM is one of the higher-upside gold miners to consider if you’re looking for a firm with stellar managers and the ability to make the most of its operating leverage. Also, the 0.92% dividend yield is a cherry on top for investors looking to get paid to wait.
