If you look at how gold prices have trended in the past decade, you’ll notice that gold hasn’t gone up in a stable slope, as many would make you believe. Instead, gold has seen an increase in valuation in two tranches: from 2019 to 2020 and from 2023 to 2024. The gradual long-term increase in gold prices only becomes obvious when you look at price data for the past 30 years — gold has mostly kept pace with the S&P 500 (minus dividends)  and has even outperformed it in certain timeframes. I believe this is important to keep in mind for those who think gold is a boring investment. 

I would also like to point out that gold has been an outstanding investment both during,  and after recessions. 

• 1973-1975 Recession: Gold surged by 87% while the S&P 500 declined by 13.1%. • 1980-1982 Recession: Gold had a modest increase of 1.6%, but in 1983 it grew  20%. 
• 2007-2009 (Great Recession): Gold prices rose from $803 per ounce to $934 per ounce. In contrast, the S&P 500 experienced a significant decline of 37.4% during this period. 
• 2020 Recession: Gold prices surged to new record highs in the first half of the year,  even as the stock market faced sharp declines. 

One would expect gold stocks to be performing really well in the current environment. Not  only has gold itself gone up significantly and has outperformed the benchmark S&P 500  index year-to-date, but we are also in a volatile environment where a large chunk of  investors are still skeptical of the “soft landing.” Sadly, this hasn’t been the case. 

Most gold stocks have actually gone down recently. This is because the strong dollar is causing pain. Most major gold companies have international operations — like in West  Africa — and any gains in these areas translate poorly into the US dollar if it is rising. In  addition, some investors prefer to have direct gold ownership instead; this can be done  

through ETFs like iShares Gold Trust Micro (NYSEARCA: IAUM).

I believe it’s a good idea to have both direct exposure and some gold mining stocks. Gold miners can often amplify the upside, plus the current decline in such stocks makes it a good time to buy it as it’s likely undervalued. Let’s take a look at three such stocks: 

Newmont Corporation (NEM) 

Newmont Corporation (NYSE: NEM) has taken a beating over the past few months. It is  down nearly 35% from its peak in October 2024 due to the company missing both its top  and bottom line estimates in Q3 2024. I now think what you’re currently paying for NEM is  too good to pass up. You’re getting the world’s largest gold mining company’s stock for just  nine times forward earnings. 

Newmont’s underlying financial performance remains robust. The company generated  $1.6 billion in operational cash flow and $760 million in free cash flow in Q3 2024, with  adjusted EBITDA reaching $2 billion. 

Newmont is actively optimizing its portfolio through: 

• A strategic non-core asset divestment program targeting minimum proceeds of $2  billion. 
• Recently announced transactions are expected to generate up to $3.6 billion. • Maintaining a strong liquidity of $8.5 billion while systematically reducing debt.
• Advancing key projects at Tanami, Ahafo North, and Cadia. 

Newmont Corporation is hugely profitable and it has also newly initiated a $2 billion share  repurchase program with $786 million already returned to shareholders through dividends  and buybacks. 

The market has likely overreacted after it missed earnings estimates and I think the lower expectations going forward will leave a lot of headroom for Newmont to deliver surprises.  The US dollar will likely start weakening during the Trump administration — to make it more export-oriented and reduce dependency on Chinese imports — while making gold miners much more profitable in dollar terms. This is a long-term play that could even deliver triple digit gains in the coming years if gold continues to climb. Remember, this is the only gold producer in the S&P 500 index. 

Catalyst Metals (CTYMF) 

This is more of a growth-oriented investment. Catalyst Metals (OTCMKTS: CTYMF) is an under-the-radar Australian gold producer that has seen massive growth recently and I still think it can deliver more in the coming quarters. CTYMF stock is up 291% in the past year  — there’s a compelling reason why.

The company is on track to double its gold production over the next three years; it plans to  reach 180,000-220,000 ounces by fiscal year 2027.  

What’s particularly intriguing is that this massive production ramp-up will require just AUD  31 million in pre-production capital. 

At the current gold price of AUD 4,182.9 per ounce, Catalyst’s projected annual production of 180,000-220,000 ounces would be worth between AUD 753 million and AUD 920 million.  Catalyst Metals has already generated AUD 54 million in cash flow in its 2024 fiscal year,  so this is an extremely efficient business with a top line that is growing at breakneck speed  — 400% year-over-year in the June 2024 quarter. That said, you should note that the dramatic revenue increase is due to the consolidation of the Plutonic Gold Belt operations. 

The growth ahead looks solid, though: 

• FY2024: AUD 317 million in net sales. 
• FY2025: AUD 454 million (43.2% growth). 
• FY2026: AUD 594 million (30.84% growth). 
• FY2027: AUD 710.8 million (19.67% growth). 

Endeavour Mining (EDVMF) 

Endeavour Mining (OTCMKTS: EDVMF) is a mature cash flow machine currently masquerading as a growth stock. This company is West Africa’s largest gold producer and just hit a record quarterly production of 270,000 ounces at an (All-In Sustaining Cost) AISC  of $1,287/oz. 

The company’s revenue for Q3 2024 was $706 million, a 33% jump from the previous year.  This was converted into $317 million in adjusted EBITDA and $97 million in free cash flow. Endeavour Mining has shown remarkable consistency by meeting its production guidance for eleven consecutive years. For 2024, the company has set production guidance of 1.13- 

1.27 million ounces, though current projections indicate production will likely land near the lower end of this range. 

It also has an extensive exploration program with $74 million invested year-to-date and  we’re looking at a huge and profitable production pipeline that will continue to churn out  cash for the foreseeable future.

$435 million of this cash will be returned through dividends over 2024 and 2025. The target total shareholder returns will be at $1.4 billion by 2025 and Endeavour has already paid  $229 million in shareholder returns in H1 2024.