What are we looking for?
The United States and Iran have reached a tentative peace deal, with a number of details yet to be ironed out. The agreement, set to be signed in Geneva on Friday, will allow the Strait of Hormuz to be opened and oil to flow. Iran’s deputy foreign minister confirmed the deal on state television but said it would not take effect till until Friday’s signing. Over the past three months, gold’s attractiveness as a safe haven has been outweighed by higher real interest rates and U.S.-dollar pressure, both driven by the Iran conflict. On top of that, inflation has been driven by higher oil prices, leading to expected rate increases this fall by the U.S. Federal Reserve. With the end of hostilities, let’s look at a couple of scenarios for the price of gold and how they can play out on the underlying stocks,
The screen
We used stockcalc’s screener to select the top 11 listed gold mining companies by market capitalization on the TSX. We then used stockcalc’s valuation tools to calculate fundamental (or intrinsic) valuation for each stock to see if it is undervalued or overvalued compared with its price.
Overview of the techniques used:
- discounted cash flow (DCF value) is a valuation technique in which cash-flow projections are discounted back to the present to calculate value per share;
- a price comparables (price comps) technique values the company on the basis of ratios from selected comparable companies;
- an adjusted book value (ABV) is calculated by multiplying book value per share by its 10-year average price-to-book ratio.
- if we have analyst coverage, we may consider the consensus target price.
More about stockcalc
Stockcalc is a fundamental valuation platform with tools to calculate and report on value per share for thousands of public companies listed on major North American stock exchanges. Stockcalc also contains numerous tools to understand what the stocks you are investing in are worth. Globe Unlimited subscribers can subscribe to stockcalc using the promo code ‘Globe30’, which offers a 30-day free trial.
Where is gold heading? Two scenarios:
If the ceasefire holds, the structural drivers for gold remain bullish: central-bank buying, a weaker U.S. dollar, continued concerns over debt levels and fiscal management, and eventual rate-cut expectations. The World Gold Council shows first-quarter demand remained strong, with central banks buying 244 tonnes and ETF demand positive, even at higher prices. The price of gold will continue to rise under a Middle East ceasefire deal that is mutually agreeable and holds, with the only shorter-term concern being inflation/rate hikes.
If the ceasefire deal falters, the price of oil will rise and Persian Gulf supply will be disrupted again. Part of the deal includes a 60-day time frame for nuclear negotiations to begin, which Iran’s foreign minister said will only happen once the U.S. releases US$12-billion in frozen funds. The U.S. has a different position on that clause. Israel also says it is not bound to this agreement. If the deal comes undone, gold will drop back to the low US$4,000 range with a possible downside spike to US$3,500, owing to the combined forces of inflation, rate hikes and technical selling. Gold will find a support base somewhere in that range as inflation and subsequent rate hikes will slow the economy and start a rate-cut cycle again.
What we found
Assuming the first scenario holds, you can see the percentage difference between each stock’s recent price and its intrinsic value in the table. The “stockcalc valuation” column is a weighted calculation derived from our models and analyst target data if used. (Note we are transitioning our analyst coverage data which is not currently showing in our reports). Let’s look at a couple of companies:
Agnico Eagle Mines Ltd. (AEM-T) has mines in Canada, Mexico, Finland, and Australia and is expected to produce between 3.3 and 3.5 million ounces in 2026. In May, they announced plans to redevelop and restart Hope Bay in Nunavut by approving US$2.4-billion of initial development capital. This will enable them to build a new mining complex around the existing Hope Bay district, with expected production of 400,000 to 435,000 ounces per year starting in 2030. Agnico Eagle also renewed its common share buyback program, looking to purchase 25 million shares between May 6, 2026, and May 5, 2027.
Lundin Gold Inc. (LUG-T) unlocked value from its silver revenue stream recently by creating a separate royalty investment for shareholders. It sold the rights to a portion of the future silver production from its Fruta del Norte mine to LunR Royalties. Instead of receiving cash, Lundin Gold received approximately 50.5 million LunR shares (valued at about $US670-million) as consideration. It then distributed the new company shares directly rather than paying a traditional cash dividend.
As a note, Newmont Corp. (NGT-T) was voluntarily delisted from the TSX in September, 2025.
Investing involves risk. stockcalc accepts no liability whatsoever for any loss or damage arising from the use of this analysis.
Brian Donovan, CBV, is the president of StockCalc, a Canadian fintech based in Miramichi, N.B.