(Kitco News) - Despite gold prices climbing 41% year over year and trading above $3,000 an ounce, mining equities have yet to catch up, creating what industry leaders see as a significant investment opportunity.
Speaking at PDAC 2025, GoldMining Inc., CEO Alastair Still pointed to a growing disconnect between bullion prices and the performance of gold mining stocks.
“Surprisingly, to see such a rapid increase in the price of gold, what we haven’t seen is a catch-up with the equities,” Still told Kitco Mining. “There’s a disconnect between gold price and the gold equities.”
The mining sector has yet to experience a major influx of capital from generalist investors, Still noted, despite strong earnings from major producers. “On some of the earlier-stage explorers and developers, there’s an even bigger disconnect,” he added.
Scarcity of supply, rising M&A activity
Still emphasized the scarcity of gold supply, a factor that continues to drive industry consolidation. “Big miners, their reserves are difficult to replace, and they need to play catch-up, so that creates M&A opportunity,” he said, referring to the wave of merger and acquisition activity seen across the sector.
“We’re starting to see more rhetoric this week about it. Big companies now have the option to pay in cash or shares, which is a great option,” Still explained. “The reality is the scarcity of projects and good quality projects in stable jurisdictions.”
Retail investors remain on the sidelines
Despite gold’s strong fundamentals, retail investors have yet to fully embrace mining stocks. Many continue to favor large-cap technology names, even as gold prices rise. “There are certain stocks that capture people’s attention, but the nice thing about gold is that it offers generational opportunities,” Still said.
Exchange-traded funds (ETFs) tracking gold have seen inflows, a positive sign for the metal’s future. However, the lag in mining stock valuations suggests that investors remain hesitant to shift their capital away from other asset classes.
Geopolitical tensions and economic instability continue to bolster gold’s appeal as a safe-haven asset. “Generally, that works out favorably for gold,” Still noted, referencing global uncertainties that have fueled demand for the precious metal. “We may see some settling in the short term, but long term, the fundamentals are still very much there.”
GoldMining’s strategic position
GoldMining, which has significant cash reserves, remains well-positioned amid these market dynamics. The company is an exploration-stage firm, meaning it is not yet directly affected by production-related cost fluctuations.
Additionally, GoldMining has a diverse portfolio, including exposure to copper and uranium, assets that are gaining importance amid the global push for clean energy. “Not only do we have gold in the portfolio, but often byproducts that come with the gold,” Still said. “About 20% of our commodity exposure is to copper.”
Outlook for 2025: A turning point?
With higher cash flows, major miners may soon ramp up acquisitions. “We’re on the tip of the iceberg,” Still said, predicting that consolidation will intensify this year. “Majors take a conservative approach, but what we’ve also seen is that they’re on the hunt right now.”
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