As gold prices continue their upward climb, savvy investors are shifting attention to Canadian mining stocks, many of which remain undervalued despite the commodity’s bull run. Among them, Equinox Gold Corp. (TSX: EQX) has emerged as a stock to watch, even after falling 46% from recent highs.
Gold has surged dramatically since 2019, fueled by a confluence of global disruptions including the COVID-19 pandemic, geopolitical instability, and evolving trade dynamics. Yet some Canadian gold producers have lagged behind in market performance. Equinox, which has seen a modest return of under 25% since going public in 2017, is now drawing fresh investor interest as a potential breakout candidate.
With a market capitalization of CAD 4.3 billion, Equinox Gold operates precious metals projects across the Americas—including sites in Canada, the United States, Brazil, and Mexico. The company is now on the verge of a transformative merger with Calibre Mining, a deal recently approved by shareholders and expected to close by the end of May pending regulatory approval. The merger would establish the combined company as Canada’s second-largest gold producer, trailing only Agnico Eagle, with annual output expected to exceed one million ounces.
Major production assets include the Greenstone Mine in Ontario, which is projected to yield 390,000 ounces annually, and the Valentine Mine in Newfoundland, expected to produce 200,000 ounces per year. According to company forecasts, Equinox’s total output could reach 1.2 million ounces in 2025 and grow further to 1.4 million ounces in 2026.
Financial projections reflect the company’s potential if the gold price remains elevated. With gold currently trading near USD 3,300 per ounce, up from USD 2,000 at the start of 2024, Equinox’s EBITDA is forecast to rise from CAD 515 million in 2024 to CAD 1.8 billion in 2025. The bulk of this cash flow is expected to be directed toward reducing corporate debt.
However, the company has faced recent operational setbacks. A delayed startup at the Greenstone Mine and community agreement disputes at the Los Filos Mine in Mexico have disrupted operations. Nonetheless, there has been notable progress on the Castle Mountain project in California, where new development permits have been secured. The site could add an additional 200,000 ounces to the company’s annual output capacity.
Despite strong commodity prices, mining stocks have not yet fully priced in the surge in gold. Analysts suggest this valuation gap could close quickly as Equinox begins to realize stronger cash flows. Earnings per share are projected to rise from CAD 0.20 in 2024 to CAD 1.62 by 2027, while free cash flow is expected to swing from negative territory to CAD 814 million over the same period.
Valuation metrics remain compelling. At a forward price-to-earnings ratio of 10, Equinox shares could climb to CAD 16.20, a 70% increase from current levels near CAD 9.50. Similarly, a forward free cash flow multiple of 10 would imply a market capitalization exceeding CAD 8.2 billion, effectively doubling the company’s share price within two years.
Most institutional analysts maintain a “buy” rating on the stock, anticipating a minimum short-term upside of 25%.
As the company enters what executives describe as a “harvest year,” Equinox appears poised to reward long-term investors. With a robust growth pipeline, improving operational efficiency, and an anticipated wave of strong cash generation, the miner could be nearing a pivotal turnaround—just as the broader gold bull market gathers steam.
