It’s good news for Greatland (GGP), it’s good news for Caledonia Mining (CMCL), it’s good news for Pan African Resources (PAF). All of these companies have existing gold production - and in the case of Caledonia and Pan African, strong track records of existing gold production – and all of them will enjoy the benefits of increased margins.
Gold producers around the world will be benefitting from the same dynamic – because the costs of a gold mining operation are largely fixed, any increase in the gold price goes straight to the bottom line. Which means that in a bull market for gold, the producers often outperform the actual gold price.
Greatland, for example, is expected to produce between 260,00 and 315,000 ounces of gold in fiscal 2026 at all-in costs reckoned at between A$2,400 and A$2,800. Any advance of the gold price on that is simple profit.
Another existing producer with assets that are now tried and tested is Thor Explorations (THX), the company that proved you could produce gold, and not just oil, from Nigeria.
But smaller companies will benefit too. Those with production perhaps most of all, but in an environment like this the explorers can benefit too, since more money flows into the sector and existing producers remain on the lookout for their next asset.
Caledonia has already positioned itself with its upcoming Bilboes asset, and Pan African also has a good history of moving its next assets along while the existing ones are still flourishing. But the majors are always looking for the next big thing, and the explorers are always looking to provide it. Some likely contenders in this field are: ECR Minerals (ECR), Pinnacle Silver and Gold (TSXV: PINN), Bezant (BZT), Reabold, Metals Exploration, and Oracle Power.
View from Vox
The equity market for junior gold miners has been humming during the past few months, and this news will only add to that sense of growing bull market. Will it be like bull markets in the past? Well, be careful what you wish for, because they almost always ended badly. But, for 20 years, ever since Gordon Brown sold the UK’s stocks, gold has only really been going in one direction, up. At this point it seems far more likely that the worse case scenario will be consolidation rather than collapse. No-one likes paper money any more, not even the governments that issue it, since their constantly debasing it. Bitcoin, it turns out, isn’t actually a rival to gold, but more like the digital partner to gold’s analogue hedge. Perhaps you’d better have both in your portfolio, or consider companies like Panther Metals (PALM), which offer bitcoin as well as mining assets.