SpreadEx Gold Rush Watchlist: UK Miners

Rate cut bets in the US have pushed gold prices to record highs in quick succession this month, with several UK mining companies covered under the ‘Gold Rush’ watchlist in the SpreadEx platform seeing gains in the hopes that prices in the yellow metal will keep rising despite recently pulling back.

UK ‘Gold Rush’ Companies 1-Month Gains

• Fresnillo (FRES) +27%
• Pan African Resources (PAF) +25%
• Caledonia (CMCL) +39%

Can Gains Keep Going?

Gold prices have risen 40% since the start of the year, reaching new record highs of over $3640/oz, on expectations that at its monetary policy meeting next week. Poor jobs data in the US has recently raised bets for more easing, which traditionally supports the price of gold.

The expectation of a slowing US economy could keep the Fed dovish, while rising political tensions could support demand for safe havens. A series of global political incidents, from France appointing its third prime minister this year to Japan's leadership elections to riots and protests in Indonesia and Nepal, could continue to support the yellow metal.

Gold miners, however, have risen much faster than gold, as they can leverage efficiencies to boost profits. Some of the miners stand out amid a sector seeing triple-digit gains, as Goldman Sachs says gold could reach as much as $5,000an ounce if the Fed's independence is compromised.

Fresnillo: Leading the Pack

Although best known as the largest silver miner in the world, Fresnillo is also one of Mexico's largest gold producers. Both metals have been scoring record highs amid expectations of lower interest rates in the US. Last August, to $0.21 per share as cost-cutting initiatives bore fruit, and the company raised its profits by 266%, with revenue increasing by 27%. The company produced 631.6K oz of gold last year and expects to create 550-590K oz this year.

Pan African Resources: Big Gains for a Small Company

This gold mining company with assets in South Africa has a market cap of under £1.0 billion, despite its share price rising in triple digits so far this year. The company recently acquired a new tailings treatment facility, projecting a 25% increase in production. It reported its fiscal 2025 earnings on Wednesday, with over the prior year. What's intriguing is the company expects to more than double its production in fiscal 2026, guiding 275 to 292K oz, and cut its AISC to $1,525 per oz from $1,600 in the last fiscal year.

Caledonia Mining: As Pure Play as It Gets

The company operates a single asset dedicated to gold production: the Blanket Mine in Zimbabwe. It commissioned a new shaft in 2.21, which has allowed it to constantly increase production as it continues to intersect relatively high-grade gold deposits. The company, up from 38.7K oz a year ago, and is expected to grow to 77.5K oz this year.

Thanks to higher gold prices, its EPS more than tripled in the first half to $1.72 from $0.54 in the same period last year. The company has several brownfield and exploration projects in the mineral-rich Maligreen area of Zimbabwe, which could allow the company to expand gold production significantly in the coming years.

Closing Words

With gold trading near record highs and ongoing global uncertainties, UK miners might be well-positioned for continued momentum. However, investors should remain cognisant of the sector’s volatility and potential changes in market sentiment