according to materials from the site - By Tokenist
Over the year, the price of gold has increased by 41%, reaching a historical maximum of $3500 per ounce in April. Like bitcoin, the digital commodity, gold has benefited from the constant decline in the value of fiat currency due to inflation. Profligate government spending beyond its means seems to be carved in stone, making inflation a constant theme for the future.
Moreover, geopolitical instability has prompted central banks to accumulate gold. Only the People's Bank of China (PBoC) has been increasing its gold reserves for seven consecutive months, raising them to 73.83 million (~$242 billion) net troy ounces by the end of May.
At the same time, the Federal Reserve remains the world's largest holder of gold with reserves of about 8133 tons. Confirming its vassal status to the USA, Germany and Italy have delegated the Federal Reserve in New York to store gold totaling about $245 billion. Altogether, Germany and Italy are the second and third largest holders of gold in the world with a total reserve of ~5804 tons. At the time of publication, the price of gold had decreased by almost 1% over the month to $3354 per troy ounce. At this level, is this an opportunity to access the projected new historical maximums for the price of gold in 2026?
In the first quarter of 2025, ending in March, this Colorado gold mining company increased its free cash flow (FCF) to a record high of $1.2 billion, compared to negative $74 million in the same quarter last year. Given the cyclicality of gold mining and high capital expenditures, FCF is especially important for this sector.
In light of its debt of $7.8 billion, Newmont now has $4.7 billion in cash, which significantly exceeds the company's target of $3 billion. Throughout 2025, the company also conducted a share buyback worth $755 million from its $3 billion buyback program. Newmont pays quarterly dividends of $0.25 per share.
After the announcement in early 2024, Newmont completed the sale of six non-core businesses for up to $3.8 billion, such as Musselwhite, Éléonore, Akyem, and Porcupine, which were spread across Australia, Canada, Ghana, and the USA.
Since the beginning of the year, NEM shares have risen by 57%, currently valued at $58.53 per share. According to WSJ's forecast data, the average target price for NEM is $66.04, with a lower limit of $56 coinciding with the current price level. Most analysts recommend buying at this moment, 15, while 8 hold. No analyst recommends selling NEM shares.
AEM is another gold stock that is roughly at its projected price minimum, currently valued at $117.57 against an expected minimum of $116 per share. The average target price for AEM has significant growth potential up to $141.77 per share, with only one analyst recommending selling, while 15 recommend buying at this price.
Agnico, headquartered in Toronto, operates 11 mines, most of which are in Canada, but also in Finland, Australia, and Mexico. As of the first quarter of 2025, the company has an exceptionally low debt of $90 million against $1 billion in total long-term obligations. At the same time, Agnico has $2 billion in unused credit, in addition to $1.1 billion in cash reserves.
During the first quarter, Agnico achieved a free cash flow of $594 million, up from $396 million in free cash flow in the same quarter last year. Besides acquiring new mines and reinvesting, a significant portion of Agnico's cash flow goes towards share buybacks, currently yielding quarterly dividends of $0.40 per share.
For the entire year of 2025, Agnico expects to produce 1,030 thousand ounces (thousand ounces) of gold with total cash costs of $987 per ounce. With future underground mining at the Canadian Odyssey mine, at ~550 thousand ounces per year, the company anticipates annual gold production of 1 million ounces.
Since the beginning of the year, AEM shares have risen by almost 50%. While the average target price for AEM is $141.77, the maximum price is $173 per share.
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