Valued at a market cap of $3 billion, Allied Gold (TSX:AAUC) is a gold mining stock that has returned 146% to shareholders in the last 12 months. Allied Gold explores and produces mineral deposits in Africa. The company primarily explores for gold and silver, and its flagship project is the Sadiola gold mine, an open-pit mine located in the Republic of Mali.
Typically, mining stocks move in line with gold prices and deliver outsized returns during bull runs. Gold prices have delivered solid returns in 2025, with spot gold recently surging past US$4,200 an ounce. In fact, gold prices are up over 50% year-to-date, making it the top-performing asset class compared to stocks, bonds, and Bitcoin.
The bullish momentum shows no signs of fading as we approach 2026. Industry experts from CPM Group, UBS, Bank of America, and Standard Chartered have raised their price targets substantially, with several forecasting gold could reach US$5,000 per ounce by 2026.
These projections are tied to multiple factors, which include geopolitical tensions, the ongoing trade war, central bank purchases, and interest rate cuts.
The investment case for the yellow metal remains compelling amid a challenging macro backdrop. Moreover, portfolio managers are now increasing exposure to precious metals to diversify portfolios further and reduce overall risk. Given these factors, Allied Gold stock remains a top investment in 2026 and beyond.
The bull case for this gold mining stock
Allied Gold delivered solid third-quarter results with production of just over 87,000 ounces while generating a strong cash flow of nearly US$200 million and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) approaching US$110 million.
All-in sustaining costs declined 11% quarter over quarter to US$2,092 per ounce, with further improvements expected in Q4 as higher-grade ore feeds the mill and the Sadiola Phase 1 expansion comes online over the next few weeks.
Allied Gold achieved notable operational improvements across its portfolio. Agbaou production jumped 43% quarter-over-quarter, driven by higher grades and throughput, while Bonikro performed on plan with improving grades, recoveries, and throughput.
Management expects Q4 production at Sadiola and Bonikro to increase by up to 40% over Q3 levels, which positions the company for strong year-end results. With operations already tracking ahead of expectations halfway through the quarter, Allied appears well-positioned to meet its guidance of exceeding 375,000 ounces for 2025.
What is the stock price target for the TSX mining stock?
The Sadiola Phase 1 expansion remains on schedule for December commissioning, enabling the mill to process up to 60% fresh ore, compared to primarily oxide feed currently.
This structural change will materially lift throughput rates, improve recoveries, and lower processing costs while providing greater operational flexibility. The expansion sets up Allied for consistent quarterly production of 100,000 ounces at improved costs heading into 2026.
Development of the transformational Kurmuk project in Ethiopia continues to advance on schedule for first gold by mid-2026. Management described Kurmuk as a true Tier 1 asset that will produce over 300,000 ounces annually at low all-in sustaining costs, generating robust cash flows.
Combined with ongoing exploration success at Sadiola, targeting an additional 3.5 million ounces over five years, Allied Gold is positioning itself as a mid-tier producer, underpinned by two Tier 1 assets that are expected to produce approximately 800,000 ounces annually within a few years.
Analysts tracking Allied Gold forecast adjusted earnings to grow from US$0.42 per share in 2024 to US$7.23 per share in 2028. If the TSX mining stock is priced at eight times forward earnings, which is in line with its 12-month average, it should gain over 200% over the next two years.
