The outlook for Zacks Mining – Gold industry remains under pressure as gold prices have slipped below $4,400 per ounce, hovering near a two-month low. Renewed Iran war fears, rising inflation concerns, a stronger U.S dollar and expectations that central banks will keep interest rates higher weighed on sentiment. Miners continue to face rising costs and labor shortages. Longer-term challenges include resource depletion and declining production from mature mines, which point to a potential supply deficit.
Amid this uncertainty, Franco-Nevada Corporation FNV, Harmony Gold HMY, Novagold Resources NG, DRDGOLD Limited DRD and Idaho Strategic Resources, Inc. IDR are well-poised for growth, backed by their strong balance sheets and growth initiatives.
About the Industry
The Zacks Mining – Gold industry mainly comprises companies engaged in extracting gold from mines. The mines may either be underground or open pits. Mining is a long and complex process, and requires significant financial resources. It involves exploration to evaluate a deposit’s size; assessing ways to extract and process ore efficiently, safely and responsibly; and developing the mine before the actual mining process. It normally takes 10-20 years for a gold mine to produce material that can finally be refined. Players in the industry nowadays use a range of sophisticated techniques to extract gold and convert it into dore bars, an alloy of gold and silver, alongside other impurities. These are then sent for purification, after which gold is purchased as bars or coins, or used in jewelry or other purposes.
Major Trends Shaping the Future of the Mining – Gold Industry
Gold Prices Dip to 2 Month Lows: Gold prices have tumbled to below $4,400 an ounce, the lowest since March 27, 2026. This was fueled by fresh U.S. attacks on Iran, which dampened hopes of a deal. This boosted the dollar and oil prices, feeding inflation expectations and reducing rate-cut bets. Gold is currently down more than 15% since the conflict began. Even if both sides move closer to a deal, elevated energy prices are still expected to fuel inflationary pressures and encourage central banks to keep interest rates higher for longer, rather than proceed with the rate cuts.
High Costs, Labor Shortage Are Worrisome: The industry has been facing a shortage of skilled workforce, causing a spike in wages. Industry players are persistently grappling with escalating production costs, including energy, water, and material and supply-chain issues. Since the industry cannot control gold prices, it focuses on improving the sales volume and the operating cash flow, and lowering unit net cash costs. The industry participants are opting for alternative energy sources, such as solar or wind farms, to minimize fuel-price volatility and secure supply. Miners are committed to cost-reduction strategies and digital innovation to drive operating efficiencies.
Declining Supply a Concern for the Industry: Depleting resources, declining supply in old mines and the lack of new mines have been a perennial problem for the industry. Due to the scarcity of discoveries and exhaustive existing resources, miners prefer building up reserves through acquisitions rather than digging new ones that are risky and capital-intensive. On the demand side, the use of gold in energy, healthcare and technology is rising. India and China account for around 50% of consumer gold demand. The yellow metal has long been considered a safe-haven investment in financial or political uncertainty. Gold demand continues to be on the rise from central banks. Therefore, there will be an eventual demand-supply imbalance.
Zacks Industry Rank Indicates Dull Prospects
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bleak near-term prospects. The Zacks Mining – Gold Industry, which is a 44-stock group within the broader Zacks Basic Materials sector, currently carries a Zacks Industry Rank #149, which places it at the bottom 39% of 244 Zacks industries.
Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock-market performance and valuation picture.
Industry Versus S&P 500 & Sector
The Mining-Gold Industry has outperformed the S&P 500 Index and the Basic Material sector in a year. The stocks in the industry have collectively gained 71% compared with the broader sector’s growth of 41.5%. The S&P 500 has risen 31.9% in the same time frame.
One-Year Price Performance
Industry’s Current Valuation
On the basis of the trailing 12-month EV/EBITDA, a commonly used multiple for valuing gold-mining companies, we see that the industry is currently trading at 7.30X compared with the S&P 500’s 18.78X and the Basic Material sector’s trailing 12-month EV/EBITDA of 13.74X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Enterprise Value/EBITDA (EV/EBITDA) TTM Ratio
Over the last five years, the industry traded as high as 11.74X and as low as 5.25X, the median being 7.92X.
5 Mining-Gold Stocks to Bet On
DRDGOLD: The company delivered strong operational and financial results for the quarter ended March 31, 2026, driven by higher throughput, disciplined cost management and continued exposure to a favorable gold price environment. DRDGOLD remains on track to achieve the upper end of its 2026 production guidance range of between 140 000 and 150 000 ounces of gold. The group’s liquidity position continues to support the internal funding of its expanded capital program while maintaining a debt-free balance sheet. The company’s focus for the near term remains the successful completion of the ‘Big 5’ projects comprising its Vision 2028 to establish the platform that will unlock the balance of DRDGOLD’s gold resources. This is expected to expand throughput to 3 million tons a month and increase gold output to six tons (200,000 ounces) a year at a total cost of R7.8 billion ($1.54 billion) forecasted for the medium term. DRD shares have gained 70.7% in the past year.
The Zacks Consensus Estimate for DRDGOLD’s earnings for fiscal 2026 indicates 164.34% year-over-year growth. The estimate has moved up 20% over the past 60 days. DRD currently sports a Zacks Rank #1 (Strong Buy).
Price: DRD
Idaho Strategic Resources: The company operates the producing Golden Chest gold mine and holds a majority ownership interest in the New Jersey Mill, along with several exploration-stage gold properties. The company’s strategy centers on growing production at Golden Chest while reinvesting cash flow into both gold and rare-earth elements (REE) exploration projects. The Golden Chest Mine produced 3,234 ounces of gold in the first quarter of 2026. Exploration activity remained active, with roughly 8,700 meters of drilling completed across several targets, including Paymaster, Red Star, Katie-Dora and the H-vein. The company also stated that permitting is in place for drill programs this year at two projects in the Murray Gold Belt (Little Baldy and Niagara) and at two of its REE prospects (Lucky Horseshoe at Lemhi Pass and Cardinal at Mineral Hill) near Salmon. IDR also secured an important milestone on the rare-earth front. One of its proposals submitted under the Department of Energy’s Funding Opportunity 3105 for critical material innovation was selected for funding. The stock has gained 158.4% in the past year.
The Zacks Consensus Estimate for this Coeur d’Alene, Idaho-based company’s earnings for fiscal 2026 indicates 33.3% year-over-year growth. The estimate has moved up 92% over the past 60 days. IDR has a trailing four-quarter earnings surprise of 68.7%, on average. Idaho Strategic has currently sports a Zacks Rank of 1.
Price: IDR
Franco-Nevada: The company reported record revenues, adjusted EBITDA, net income and operating cash flow for the first quarter of 2026. It benefited from record gold and silver prices during the quarter, strong contributions from Antamina, South Arturo, Hemlo, Musselwhite, and incremental contributions from Côté Gold, Porcupine and Valentine, all of which were acquired or commenced production over the past year. The company also benefited from higher revenues from its diversified assets, particularly from Vale’s iron ore interest, and Haynesville and Marcellus gas assets. One of the inherent strengths of Franco-Nevada’s business model is the diversified portfolio of precious metals, energy and iron ore. Franco-Nevada continues to deploy capital into new royalties and streams that can add long-duration optionality without adding operating complexity. Given its continued focus on cost management, the company has been generating high margins. FNV shares have gained 30.1% over the past year.
The Zacks Consensus Estimate for this company’s earnings for fiscal 2026 indicates 58.6% year-over-year growth. The estimate has moved up 3.5% over the past 60 days. FNV has a trailing four-quarter earnings surprise of 10.3%, on average. The company has a long-term estimated earnings growth of 13.11% and currently carries a Zacks Rank #2 (Buy).
Price: FNV
Harmony Gold: The company has delivered a solid operating performance for the nine months ended 31 March 2026, reflecting an excellent third quarter with improvements across all key operational metrics. Mponeng, Hidden Valley and Tshepong North delivered notable performances during this quarter. HMY remains on track to achieve full year production. The company has a diverse portfolio of gold development projects spread across South Africa and Papua New Guinea. Harmony Gold is also progressing with development projects, including the Eva Copper project in Australia and its Tier 1 joint venture asset, the Wafi-Golpu copper-gold project. HMY is focused on strengthening its position as a higher-quality, lower-risk global gold and copper producer, which will be aided by these projects. Harmony Gold acquired the CSA Copper Mine in Australia in October 2025 and has been focused on integrating the mine. Harmony Gold boasts a strong balance sheet and generates substantial cash flows, which allows it to finance its development projects and drive shareholder value. Harmony Gold shares have gained 18.7% over the past year.
The Zacks Consensus Estimate for the Randfontein, South Africa-based company’s 2026 earnings indicates year-over-year growth of 115.75%. The estimate has moved up 3.4% over the past 60 days. Harmony Gold currently has a Zacks Rank of 2.
Price: HMY
NovaGold Resources: The company is mainly focused on the development of the Donlin Gold project in Alaska, in which it has a 60% stake. The project hosts approximately 40 million ounces of gold in the Measured and Indicated Mineral Resource, inclusive of Mineral Reserves, at an average grade of 2.22 grams per ton, more than twice the industry average. It is expected to produce an average of more than 1 million ounces per year over a 27-year mine life on a 100% basis, once in production. Donlin Gold’s exceptional scale, high-grade open-pit mineralization, long mine life, competitive estimated operating costs, significant exploration upside[2] and location in an excellent mining jurisdiction place it among a rare class of global gold assets. In 2026, the primary focus remains on progressing the Bankable Feasibility Study of the project and moving to a subsequent Final Investment Decision. NovaGold shares have gained 121% over the past year.
The Zacks Consensus Estimate for this Vancouver, Canada-based company’s earnings for fiscal 2026 is pegged at a loss of 18 cents per share. The estimate has moved up from the loss of 25 cents projected 60 days ago. NG has a trailing four-quarter earnings surprise of 14.6%, on average. The company currently carries a Zacks Rank of 2.
Price: NG
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Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
Harmony Gold Mining Company Limited (HMY) : Free Stock Analysis Report
DRDGOLD Limited (DRD) : Free Stock Analysis Report
Novagold Resources Inc. (NG) : Free Stock Analysis Report
Idaho Strategic Resources, Inc. (IDR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
