Gold stocks to watch in ‘structural’ bull market

Gold equities remain undervalued despite a strong start to 2026, Haywood Securities says – with the firm’s mining analysts pointing to a “structural bull market” in precious metals and continued consolidation across the sector as key drivers for further gains.

Although the war on Iran recently caused gold to retreat from record highs set in January, the yellow metal is still up about 8% since the start of the year. Haywood’s mining analysts view the pullback as an opportunity, calling it “an attractive entry point” into the sector in a research note published Thursday.

Haywood isn’t alone in being bullish. BMO Capital Markets on Tuesday raised its gold equity targets by an average of 15% and copper equity targets by 19%. This year promises to generate strong free cash flow for gold miners, says BMO mining analyst Matthew Murphy.

“While some geopolitical risks remain, the robustness of the commodity price environment is reassuring,” Murphy wrote in a note. “High gold prices and margins translate to high cash flow and, for much of the gold sector, capital returns.”

Rising cash flow

While it’s unlikely that the first three months of 2026 will set records for free cash flow due to several gold deliveries being delayed until the latter part of the year, “we do expect companies to point to improving cash flow in the second quarter and beyond, especially since the gold price remains strong,” Murphy said.

War in the Middle East recently ignited investor fears over energy supply and miners’ cost pressures. BMO insists the concern is overdone – at least in the short term.

“Our understanding is companies are still able to source fuel and we do not expect supply shortages to be a major issue when companies report first-quarter earnings,” Murphy said.

BMO’s top picks among miners include Aris Mining (TSX: ARIS; NYSE-A: ARMN), Discovery Silver (TSX: DSV; US-OTC: DSVSF), Montage Gold (TSX: MAU; US-OTC: MAUTF) and Newmont (NYSE: NEM; TSX: NGT).

Senior gold producers are trading at a price-to-next-12-month cash flow multiple of 9.6 times, slightly above the five-year average of 8.4 times, Haywood says. This suggests that equities have yet to fully reflect stronger underlying metal prices.

Commodity prices should provide a tailwind. Haywood’s forecast calls for gold to average $4,906 per oz. in 2026, rising to $5,000 in 2027 – with long-term outlook of $4,500 thereafter. Gold has traded at an average price of $4,873 so far in the first quarter, topping Haywood’s $4,500 forecast.

Continued mergers and acquisitions are also expected to support valuations.

“The pace of M&A activity remains robust, with high-quality development projects recently attracting significant takeout premiums,” Haywood’s analysts wrote.

Increased values

Record margins across the sector should drive increased share values in producer equities as markets adjust to sustained higher gold prices, Haywood argues.

Among senior producers, Equinox Gold (TSX, NYSE-A: EQX) is singled out as a top pick. Haywood describes the company as being “on the cusp of delivering two large-scale, long-life Canadian assets” in the Valentine and Greenstone mines. The pair could support annual production of more than 500,000 oz. in Canada.

Other producers highlighted include Artemis Gold (TSXV: ARTG), which presents “attractive upside” as its advances current expansion plans at the Blackwater mine, and Americas Gold and Silver (TSX: USA; NYSE-A: USAS), where a new management team is expected to improve operational performance and free cash flow.

Developers and explorers also offer improvement potential, Haywood says — particularly those with large-scale projects in stable jurisdictions. Newcore Gold (TSX-V: NCAU; US-OTC: NCAUF); Thesis Gold (TSXV: TAU), and Troilus Mining (TSX: TLG; US-OTC: CHXMF) are named as top picks in this category.

Newcore is on track to deliver a pre-feasibility study for its Enchi project in Ghana in June, while Thesis Gold is progressing its Lawyers-Ranch project in British Columbia, which Haywood says could rank among Canada’s top-tier gold and silver mines.

Troilus Mining, meanwhile, offers significant leverage to gold prices. At $5,000 an oz. gold, the company’s namesake project could generate an after-tax net present value of $7.3 billion and an internal rate of return of 47%, Haywood says. A construction decision is expected by Dec. 31.

Restart opportunities

Development-stage assets and restart opportunities include 1911 Gold (TSXV: AUMB), which is advancing the True North project toward a potential production restart by next year, and First Mining Gold (TSX: FF), which is awaiting an environmental assessment decision for its Springpole project in Ontario’s Red Lake district.

Vancouver-based 1911 “is on a likely trajectory to being a Canadian gold producer by 2027 with a line of sight on a much bigger district size production and exploration opportunity,” Haywood says.

Exploration companies such as Fury Gold Mines (TSX: FURY) are also seen as potential takeover targets amid ongoing consolidation in Quebec’s James Bay region.

Fury “has already demonstrated strong standalone development potential” at its Eau Claire project through a recently completed preliminary economic assessment, Haywood’s mining analysts wrote.