Gold mining companies are experiencing an unprecedented surge in cash flow, benefiting from three years of high gold prices. The sector is now generating what’s being dubbed a “cash harvest,” a term more commonly associated with agriculture than mining, but one that accurately reflects the financial windfall for these companies.
Leading the charge is Newmont Corporation, the world’s largest gold miner. Despite gold prices rising by 30% over the past year due to central bank and institutional buying, Newmont’s share price has only increased by 11.5%. While the majority of the company’s earnings are derived from gold, with a secondary contribution from copper, its performance still lags behind the precious metal’s impressive price increase.
Goldman Sachs is optimistic about Newmont’s future, predicting its stock will continue to climb. The investment bank has set a target price of $47.20 for Newmont’s New York-listed shares, a 17% rise from the most recent closing price of $40.23. The company’s Australian shares are also expected to see a boost, with Goldman Sachs forecasting an increase from A$64.80 to A$76.20.
Despite gold’s strong finish to the year—up nearly 30%, or 40% in Australian dollars—Goldman Sachs noted that both Australian and global gold equities underperformed by about 10%. The firm also expects gold prices to continue their upward trajectory, predicting a rise to $3,000 per ounce from the current $2,670. Goldman Sachs raised its long-term forecast for gold as well, increasing the price from $1,950 to $2,300 per ounce starting in 2029.
Goldman Sachs also anticipates further growth for Australian gold stocks, with rising prices offsetting cost increases. This should result in stronger balance sheets, higher capital returns, and potential mergers and acquisitions in the sector.
Among the companies benefiting from this environment is Northern Star Resources, a leader in Australia’s gold sector. Goldman Sachs has given the company a buy recommendation, citing its robust production and improving cash flow generation. The firm also highlighted the value created by Northern Star’s proposed acquisition of De Grey Mining, an emerging gold producer.
However, not all gold miners are experiencing smooth sailing. Bellevue Gold, rated highly by Macquarie Bank, has seen its stock fall by 44% in the past six months due to a 9% reduction in its 2025 gold output guidance. Despite this, Macquarie predicts the stock will recover, with a target price increase to A$1.70 over the next year.
Meanwhile, smaller gold producer Alkane Resources has faced a 25% drop in share price over the past year. The company, however, is expected to see profit growth, driven by steady gold production and a higher gold price. Australian stockbroker Bell Potter has raised Alkane’s target price from A49c to A$1.25, suggesting a potential 155% increase in its share price.
As gold prices continue to rise, the gold mining sector looks set to enjoy another year of strong cash flows and growing investor interest.
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