(Kitco News) – As gold prices continue to trade near all-time highs above $5,000 per ounce, miners are generating record margins and free cash flow, and with all-in costs below $2,000 per ounce, the sector is positioned to outperform once again this year, according to Imaru Casanova, Portfolio Manager, Gold and Precious Metals at VanEck.
In a recent commentary, Casanova said the miners’ latest balance sheets, costs, and margins add up to durable profitability – even if gold prices don’t move higher.
“Investors continue to ask whether gold prices can rise further from here,” she wrote. “We believe that remains likely. We live in a world where a new gold catalyst seems to emerge every month. Market participants, many still watching from the sidelines, have observed gold’s relentless rally over the past couple of years and now appear increasingly convinced that these record prices are here to stay.”
Casanova said that even if gold price forecasts don’t rise further, the “shift in perception” to these prices being the norm rather than a temporary peak has meaningful implications for gold miners.
“As confidence builds that gold can remain at elevated levels, the market progressively embeds higher long-term gold price assumptions into equity valuations,” she said. “This durability of record or near-record margins and cash flow generation, even if the gold price holds at current levels, is a central driver of our conviction in gold mining equities for 2026.”
Casanova said that in a flat gold price environment, rising production costs would be the source of any margin erosion. “Companies have provided 2026 all-in sustaining cost (AISC) guidance that, so far, aligns with our expectation of roughly a 10–12% increase versus 2025,” she said.
On the other hand, she noted that gold prices have already gained over 20% on the year.
“The math remains compelling: margins have already expanded year over year, and with estimated average industry AISC below $2,000 per ounce, the sector demonstrates substantial resilience at current price levels,” Casanova said. “These strong fundamentals support our view that gold mining equities are well positioned to outperform the metal again in 2026.”
“The stocks demonstrated strong outperformance in February,” she added. “The MarketVector Global Gold Miners Index1 rose 21.01% for the month.”
Casanova also summarized the key takeaways from VanEck’s meetings with over 40 gold mining companies at BMO’s 2026 Global Metals and Mining Conference in February.
“Our discussions with producers, developers and royalty and streaming companies reinforced our view that the sector is in a cash-generative, disciplined phase, not a reckless expansion cycle,” she wrote, noting that while higher gold prices will ultimately support reserve growth as more ounces become economically viable, “companies continue to use conservative gold price assumptions (around $2,000 per ounce) in reserve calculations.”
Casanova characterized the overall tone of the meetings with miners as “constructive and confident.”
“Companies are generating record margins, balance sheets are strong and capital allocation is notably more disciplined than in past cycles,” she said. “Management teams are prioritizing returns, investing selectively in high-quality growth and advancing projects with greater technical rigor and lower risk. While permitting hurdles and geopolitical risks remain part of the landscape, the sector appears better positioned than ever, supported by resilient assets, improving operational execution and a clear commitment to long-term value creation.”
“With free cash flow robust even under conservative gold price assumptions, the sector appears fundamentally well positioned for 2026,” Casanova concluded. “If gold prices remain near current levels, or move higher, gold mining equities have both the financial strength and operational leverage to continue outperforming the metal.”
