The Canadian mining stocks have been a real source of strength in recent quarters, thanks in part to the rally in various commodities, especially gold, which has seen prices really shoot up in the past year. Though the spot price of gold is now off its peak, I still think there’s ample opportunity to be had in the gold-mining scene, especially given their relatively low multiples. Undoubtedly, the operating leverage of the miners can cut both ways.
That said, if you really are a fan of where gold prices head from here, I think that we could be in for a magnitude of multiple expansion, the likes of which we may not have witnessed in more than a decade. It’s not just the gold and silver miners, either.
Either way, I think the mining boom in the precious metals (gold and silver primarily), uranium, and other critical metals could help keep the TSX index’s strong momentum. Though it’s hard to tell how the TSX index will do against the S&P in 2026, I do think that Canadians should seek to expose their TFSA (Tax-Free Savings Account) portfolios to both sides of the border, given the unique strengths they possess. Of course, the S&P provides ample tech exposure while Canada has a lot to offer on the front of mining and, of course, energy.
Either way, here are two mining stocks that I think are worth watching closely going into the new year.
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Agnico Eagle Mines
I’m a fan of just about any gold miner right now, especially after the recent dip in spot prices as well as a correction in the miners. Of the batch, though, I prefer Agnico Eagle Mines (TSX:AEM), which is a miner that continues to operate efficiently.
In many ways, it’s the gold miner that other players in the space should aspire to be more like. With stellar management and a production ramp-up that’s allowed it to really boom amid the last two years of gold gains, I continue to view the name as severely undervalued and overdue for further multiple expansion.
Still down just over 13% from its peak, I think dip-buyers have an opportunity to get in at a relatively fair price of admission as the firm continues to power earnings growth, thanks to a bit of help from soaring demand for gold. Earnings have rocketed higher in the past year, and I don’t think the shares have rallied by enough to make up for the favourable climate for the shiny yellow metal, especially if we end the year with gold at new highs.
As gold stays in the US$4,000–5,000 range, as many industry experts expect for the year ahead, AEM stock is a name I suspect will shine even brighter. And with earnings powering higher at an astounding rate, I see room for more generous dividend hikes. Could we be entering a new dividend-focused era for the top gold miners? I certainly think so.
Either way, the 1%-yielder is too cheap at less than nine times price-to-sales (P/S) and around 20 times forward price-to-earnings (P/E). I think it’s time to buy if you don’t have enough gold in your TFSA.
