Can Gold & Silver Stocks Still do Well in 2026? | David Finch Ixios Asset Management Interview

Gold & Silver Stock Valuations

• 💡 Despite GDX and GDXJ being up nearly 200%, gold producers are still trading at lower multiples than a year ago, indicating reasonable valuations.
• 🎯 The sector has experienced a "mechanical reaction" to higher gold prices but no significant rerating, suggesting further upside potential.
• 📈 Stocks like Oceana Gold show strong fundamentals, with a PE of six times and 18% free cash flow yield, making them difficult to argue as overvalued.

Drivers for Future Growth

• 🔑 The next leg up will come from institutional and private money currently lacking gold exposure, driven by client pressure and the search for yield.
• 🚀 A significant portion of US pension funds currently have no gold exposure, and even a small allocation from them could double the gold mining sector.
• ✨ The leverage effect means gold stocks can double with only a modest increase in gold prices (e.g., 15-25%), even without the gold price itself doubling.

Investment Strategy & Valuation

• 📊 Ixios Asset Management's fund is split approximately 60% producers and 40% exploration/development, with about 10% exposure to silver.
• 🔬 For valuation, the fund uses the spot gold price in NPV models as a relative comparison tool across companies with different mine lives.
• ⚠️ The fund avoids extreme jurisdictional risk, preferring Tier 1 regions like Canada and Australia, and does not directly factor geopolitical risk into NPV models.

Active Management & Market Dispersion

• ✅ The gold mining sector offers significant opportunities for active management due to the massive dispersion in stock performance.
• 📈 Performance differences can be extreme, with some stocks gaining 50% while others achieve 1080% in the same period, highlighting varied quality.
• 🧠 This dispersion stems from differences in management quality, balance sheets, jurisdiction, costs, and strategic choices (growth vs. cash return).

Broader Metals Market Trends

• 🌍 The geopolitical environment is shifting, with the US and EU recognizing strategic vulnerabilities due to China's dominance in smelting and refining.
• 🌱 Significant underinvestment in new mining capacity over decades is now meeting increased, price-insensitive demand for metals like copper and tin.
• 🔥 The mining industry is transforming from an "ESG embarrassment" to a "key element in the solution" for geostrategic problems, backed by government funding.
• ⚠️ A major mistake for investors is selling too soon in commodity markets, which can experience exponential gains over long periods.