Gold is on a tear, having surged 34% in 2024 – reaching 41 new record highs along the way – and already being 9% higher in 2025, having notched a fresh record high of US$2,866.20 an ounce in February.
In Australian dollar terms, the yellow metal jumped 39.4% in 2024, to $4,246.35 an ounce, and 2025 so far has delivered a 7.4% rise, to a record figure of $4,560.698.
The surging gold price has been driven by several factors, including strong demand coming from gold’s traditional role as a ‘safe haven’ investment: both institutional and retail investors have been flocking to gold as a safe-haven asset amid growing geopolitical tensions, inflation concerns, and economic instability. With the global economic and geopolitical outlook remaining uncertain, gold is increasingly seen as a reliable asset, and a very effective diversifier for portfolios.
State Street Global Advisors, one of the biggest investment firms in the world, has stated that gold could run as high as US$3,100 an ounce in 2025, on the back of continued uncertainty.
It makes for a wonderful operating environment for gold miners, especially if they have a relatively low cost of production and can maximise their operating margins in terms of sales price of their gold versus their production costs.
The trouble is that investors have realised this, and most goldminers have been bid-up by the share market to very full prices. But here are two ASX-listed miners where the analysts’ consensus price target implies that there is still good value to be found.
- Westgold Resources (WGX, $2.46)
Market capitalisation: $2.3 billion
One-year total return: 24.7%
Three-year total return: 8.8% a year
Analysts’ consensus target price: $3.50 (Stock Doctor/Refinitiv, four analysts), $3.41 (FN Arena, four analysts)
Westgold Resources has had a couple of hiccups in 2025, the first in January, when first-half production, at 158,255 ounces of gold, came in well short of half the miner’s full-year guidance range of 400,000–420,000 ounces; and the second, last week, with the announcement of a significant production guidance downgrade for FY25, and increased guidance on the all-in sustaining cost (AISC) of production.
(The AISC is a figure that incorporates not only the “cash cost” of production but all the costs that allow production to be sustained; effectively, it is break-even. If the realised price achieved in sales is above the AISC, the company is operating at a profit.)
The first revelation knocked 13.7% from the share price; the second dragged it 10.7 per cent lower.
The upshot is that at $2.46, Westgold Resources is down 13.1% from the end of 2024. But that can work for investors contemplating buying the stock now.
In August 2024, Westgold completed a merger with Canadian-listed Karora Resources, elevating its annual gold production above 400,000 ounces. Westgold’s operations are based around the Western Australian town of Cue, at the historic mining centres of Big Bell, Cuddingwarra, Day Dawn and Tuckabianna. This includes two of Western Australia’s most historic and iconic gold producing mines in Big Bell (which has produced about 2.6 million ounces) and Great Fingall (about 1.2 million ounces). Westgold manages six underground mines and five processing plants, with an installed capacity of approximately 6.6 million tonnes a year. The company says it has a “clear vision and strategy” to sustainably produce more than 500,000 ounces a year from FY27.
In the December half of FY25, Westgold produced 158,255 ounces of gold. In the September 2024 quarter, the AISC was $2,422 an ounce, which rose to $2,703 an ounce. However, the achieved gold price rose, too, from $3,723 an ounce in the September 2024 quarter to $4,066 an ounce. The company said the “elevated” AISC per ounce in Q2 FY25 was due to lower than anticipated production from Bluebird-South Junction and Beta Hunt combined with the impact of absorbing a full quarter of Southern Goldfields operating costs.
Now, the company has reduced its full-year production guidance from the original post-merger range of 400,000–420,000 ounces, to 330,000–350,000 ounces. The full-year AISC has gone in the other direction, from the original figure of $2,000–$2,300 an ounce, to $2,400–$2,600 an ounce.
The company says its output will continue to improve across the second half of the financial year, with production in the fourth quarter expected to reflect an annualised run rate of more than 400,000 ounces a year.
The FY25 production guidance cut shocked the market, but the company is implying that it was conservative. It will require a substantial production uplift in the second half, but the analysts think the share price cut was overdone.
- Perseus Mining (PRU, $2.85)
Market capitalisation: $3.9 billion
One-year total return: 70.8%
Three-year total return: 25.4% a year
Analysts’ consensus target price: $3.34 (Stock Doctor/Refinitiv, six analysts), $3.40 (FN Arena, two analysts)
Perseus Mining operates three gold mines in Africa: Edikan in Ghana, and Sissingué and Yaouré in Côte d’Ivoire. The company also owns the Nyanzaga gold project in Tanzania, on which the Final Investment Decision (FID) has been made, and the Meyas Sand gold project in Sudan.
The company is profitable. In FY24, its revenue, at US$1.03 billion, was up 7%; its earnings before interest, tax, depreciation and amortisation (EBITDA) rose 13%, to US$625.2 million; and its net profit lifted 14%, to US$364.8 million.
The company boosted its average sale price by 11.7% for the financial year, to US$2,014 an ounce – and that gold was produced at an AISC of US$1,053 an ounce. Perseus paid a full-year dividend of 3.75 Australian cents. Perseus produced 509,977 ounces in FY24, down by 4.7% from 535,281 ounces in FY23.
Perseus gave the market guidance for total production in FY25 of 467,709 ounces–504,709 ounces, at an AISC of US$1,250–US$1,280.
It is a very profitable operation – but the ever-constant political risk of operating in Africa is hanging over the stock, especially since the events of late 2024, when three executives of fellow ASX-listed miner Resolute, including chief executive Terry Holohan, were detained for more than a week in Mali, in a tax dispute; and a similar detention of four employees of Canadian miner Barrick Gold for several days in September, before they were released when the Canadian miner agreed to pay officials in Mali about 50 billion West African francs ($124 million). In both cases, Mali claimed the mining companies owed very large amounts in unpaid taxes of new tax assessments.
Perseus does not operate in Mali, but the nervousness about operating in Africa has been heightened. African governments are much more vocal about demanding a bigger share of their natural resources wealth, and mining companies are on notice. In fact, exploration activity around Perseus’ project in Sudan has been restricted, although its tenements have been extended for four years.
With the development of the CMA Underground mine at Yaouré, and the Nyanzaga project in Tanzania also progressing towards construction – on top of further consistent operating delivery from its Yaouré, Sissingué and Edikan mines – Perseus has a rising production and cashflow profile and looks to be nicely positioned to generate long-term value for shareholders. That is, for investors prepared to ignore the elevated level of sovereign risk of operating in Africa.
Analysts like the stock’s price outlook; Macquarie is the most bullish, with a price target on the stock of $3.70.
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