Research Roundup: Top picks in gold mining as input costs climb

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Top picks in precious metals

Scotiabank analyst Tanya Jakusconek identified the best positioned gold miners as input costs climb,

“Cost structure is impacted by various inputs including fuel price, gold price and changes in FX. Fuel exposure accounts for 21 per cent of the 2026 cost structure (direct and indirect) and SC estimates $20/oz impact for every $10/bbl move (guidance at $70/bbl). Companies with the lowest sensitivity to fuel price (direct and indirect) include AEM, EDV, KGC. Gold price also impacts costs on royalties paid (every $100/oz move impacts royalties by $6/oz with guidance at $4,365/oz). Companies with the lowest sensitivity exposure to royalties include AGI, AEM, B, EQX, & KGC. FX also impacts cost structure. On average, 45 per cent of the cost structure is denominated in USD and a 10-per-cent move in FX can impact costs by $45/oz or 3 per cent. Overall, AEM has the lowest percentage of costs denominated in USD, B the highest. Lastly, operators have assumed 4-per-cent inflation in costs. Should the higher oil price persist for longer, inflation will likely increase. A 1-per-cent increase in inflation, would increase overall TCC and AISC by $13/oz and $18/oz, respectively. In short, we believe that of the operators, AEM, EDV, AGI & KGC are best positioned in this higher inflationary environment (lowest sensitivity and 4-5-per-cent inflation assumption”

Bullish on Ovintiv

RBC Capital Markets head of global energy research Greg Pardy called his Tuesday report on Ovintiv Bullish Thesis Intact,

“Our view: In our eyes, Ovintiv’s streamlined portfolio, resource depth and enhanced shareholder returns point toward ongoing share price appreciation and relative multiple expansion over time. That the company’s strong well performance in the Montney will offset higher (price-related) royalties—while its ongoing efficiency gains are set to neuter inflationary pressures—in 2026 is also bullish in our books. We are maintaining an Outperform recommendation on Ovintiv and our one-year target price of $70 per share. Ovintiv is on our RBC Global Energy Best Ideas List. Ovintiv delivered solid first-quarter results and streamlined its portfolio around two powerful basins—the Montney and Permian. The company has emerged as one of the largest condensate producers in Canada, the constructive pricing outlook for which reflects ongoing oil sands growth and a supply deficit.”

Top themes

Citi’s global theme team of analysts track 83 separate investment themes to identify top performers,

“Top-ranked themes for the month such as FinTech, Mobile Payments, AI Enablers, Defence and Cloud Computing have been characterized by strong Growth, Quality, and Earnings Momentum characteristics, with relatively limited reliance on Price Momentum. This is confirmed by their still-strong rankings even when Price Momentum is excluded, highlighting stronger fundamentals and improving earnings visibility as key drivers of attractiveness.

“By contrast, bottom-ranked themes which include Electric Vehicles, Solar Energy, Green Mobility and Genetically--Informed Therapies continue to struggle due to weaker Quality, Low Risk, and Earnings Momentum metrics”

Stocks with the most exposure to the top 15 performing themes include Alphabet Inc., ADP and TSMC.

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