Q3: Another Good One For Gold/Silver Miners

This year’s third quarter is almost over, which means another earnings season will kick off soon. And despite some recent hiccups for precious metals miners, the news will generally be good, for a couple of reasons.

Gold and silver prices held up pretty well in Q3.

Gold and silver averaged, respectively, $4,400 and $64 per ounce in Q3, down only marginally from Q2’s $4,500 and $71.

Interest Income Partially Offset Higher Costs

Oil prices, and by extension the cost of diesel fuel, rose due to supply disruptions from the Iran war. So (energy-intensive) mining was generally more expensive in Q3, which shaved a few percentage points from miner operating margins.

But — one of the many benefits of free cash flow — miners have been paying down debt and building cash balances over the past year. So interest expense is falling and interest income is rising, at least partially offsetting higher fuel costs.

Solid Cash Flow

As a result, for the best-run miners, Q3 profits and cash flow should be in the same ballpark as Q2 — which is to say good-to-great. Look for earnings season to start on October 22nd, with the release of Newmont’s numbers.

Meanwhile, China’s Gold Buying Spree Continues

Part of the gold’s recent stability can be traced to China’s aggressive buying:

China imported 1,100 tonnes of gold in 8 months — a record $158.8B haul that beats 2025, and a potential sign

(Yahoo Finance) - China is importing gold at a record pace, as robust investor demand and a strong yuan create stellar conditions for a Far East gold rush.

Chinese August gold imports hit a record, as the country added 44 tonnes of gold to bring the year-to-date total to 1,100 tonnes, according to China’s General Administration of Customs. Those figures represent more gold through August than in all of 2025 and are China’s highest imported gold levels since 2017.

More Cash = Rising M&A

Miners with rising cash balances eventually use that money to buy each other. This is already happening — see Rick Mills: The Mining M&A Boom Has Begun.

So expect some of our smaller Portfolio companies to be targeted sooner rather than later.