He smashed silver as hard as he could, sending the Devil’s Metal from its high of $64.65 down to $60.82, before closing at $61.92. He does this the best on Friday evenings, when the Chinese are home, fast asleep.

Amusing. Specifically, it’s amusing how Mr. Slammy makes it so much easier for those same Chinese to come in Sunday night and send silver back to $63.75, where it trades as I write.

The long and the short of it is this: the U.S. bullion banks have lost their power to crush the metals futures markets because there’s always a buyer where the sun rises first.

And that’s why there’s a floor under metal prices, and that helps our miners to no end.

For most of the 21st century, gold and silver miners earned their awful reputations the hard way. Gold rallied, costs rose, capital discipline vanished, and every upcycle seemed to end with dilution and regret. Investors learned to treat miners as a trading vehicle at best, a value trap at worst.

Investors were conditioned to think of the miners as holes in the ground you threw your money into. But now, that conditioning is dangerously outdated.

At $4,350 gold, the mining sector has crossed into a structural margin regime the markets haven’t priced in. In short, the miners have become cash cows. The skepticism that once made sense has become the opportunity.

There are three reasons miners are now positioned for a repricing that could surprise even seasoned precious metals investors. And I’ll give you a fourth one for good luck.

Real Operating Leverage

At current prices, gold miners are generating cash at a scale the industry has never experienced.

Recent industry work shows that even the highest-cost operations are producing cash margins of $2,500 per ounce, roughly 10 times the industry’s long-run average. Given that the all-in sustaining costs (AISC) for major gold producers hover between $1,400 and $1,500 an ounce, a gold price of $4,350 translates to operating margins nearing $3,000 per ounce.

The real transformation will occur when gold climbs to $5,000 and beyond.

This dramatic shift in the margin profile fundamentally changes the financial outlook. Free cash flow rapidly accelerates. Balance sheets are de-leveraged in a matter of quarters, not years. This increased profitability allows for expanded dividend capacity, making share buybacks virtually inevitable. Reserves are remodeled with meaningfully higher gold assumptions, which mechanically lifts net asset value per share even if production volumes remain flat.

But the most important point isn’t what miners are earning. It’s what the market is still assuming.

Equity valuations reflect a world in which gold prices are fragile, margins are fleeting, and the sector is one bad quarter away from destroying capital. That mindset was defensible when gold was flirting with $1,700. At $4,350, it’s willful blindness.

We’re witnessing commodity prices permanently resetting above their industry cost curves. The cash flow leaps and overwhelms old narratives.

Fiscal Dominance

The second reason to be bullish has little to do with mining execution and everything to do with the monetary environment miners now operate in.

Gold is consolidating at levels that are historically unthinkable. A growing number of institutional outlooks now treat $4,000 to $4,500 as a plausible base into 2026. Almost no one on The Street is calling this a bubble. That distinction matters more than any short-term price target.

The drivers are structural. U.S. public debt is north of $37 trillion. Debt-to-GDP is pushing higher. The world expects annual deficits as far as the eye can see. Political reality constrains monetary policy. Liquidity support has taken on a permanent, “QE-lite” character, especially after the most recent Fed meeting. Central banks are buying gold for a reserve asset rather than trading it as a hedge.

In that environment, gold stops being a tail-risk insurance policy and becomes a monetary anchor. This is precisely the macro alignment many seasoned observers have been warning about: capital slowly migrating out of abstract financial promises and into assets that Jay Powell can’t print, and the market can’t rehypothecate (industry jargon meaning “loan out again and again as collateral”), and the government can’t negotiate away.

Miners sit directly in the path of that migration. They offer one of the few scalable ways for capital to express a structural shift toward hard assets. Central banks cannot buy mining stocks, but sovereign wealth funds, pensions, and long-only institutions eventually can and will.

When gold becomes part of the system’s foundation rather than its panic room, mining equities stop being optionality and start looking like long-duration real-asset cash flows.

Scarcity and the Capital-Cycle Trap No One Is Pricing In

The final reason to be bullish is the simplest and the most ignored: there are not many quality gold miners left, and there will not be many new ones.

For over a decade, the mining sector suffered from underinvestment. Exploration budgets were drastically cut, leading to a collapse in new discoveries. Factors like ESG requirements, slow permitting, and political risk further hampered development, even in areas with favorable geology. Capital exited the industry, experienced talent retired, and the ability to replace depleted reserves silently deteriorated.

Gold prices have now significantly increased, yet supply is unable to meaningfully respond in the short term. Bringing a mine from discovery to production typically requires a decade or more, assuming financing and permits are secured. This is not an operation that can be quickly restarted like a shale field with minimal effort.

This situation has created a classic capital-cycle dynamic: cash flows are surging, but new supply remains restricted. High-quality assets are becoming scarce, leading to an acceleration of mergers and acquisitions. Weaker players are being absorbed, and superior operators with extensive reserve lives are being aggressively valued as strategic long-term holdings, not just cyclical bets.

The market continues to price miners as though new supply will magically appear to cap profit margins. This is unlikely to happen. The most important ounces have already been discovered, and they reside on the balance sheets of companies that previously modeled their reserves based on much lower gold prices.

Bonus Reason: Oil Prices Tanking

The outlook for oil is challenging, with prices currently hovering in the high $50s to low $60s. The prospect of increased Venezuelan supply coupled with a global economic slowdown that smashes demand could easily drive the price per barrel down to $30.

This possible reduction in energy costs immediately benefits operations by cutting expenses for hauling (trucks), drilling, blasting support, on-site power generation (especially in remote locations), and moving ore/waste. Unlike labor, equipment, or sustaining capital expenditure, energy is a quickly resetting variable cost. Therefore, a slide in oil prices leads to a prompt improvement in miners' unit and cash costs, even if the All-in Sustaining Costs (AISC) reflect the change more slowly.

Energy, while not the sole expense, is a meaningful part of the cost structure. Various industry frameworks estimate direct energy and fuel's contribution to total operating costs. S&P Global, for instance, has previously put fuel at approximately 6% of total mine-site costs in a lower-price environment. Other, broader frameworks suggest that direct energy can account for anywhere from the mid-teens to the low-20s of all-in operating costs, depending on the specific type of mine and its power source.

The clear implication is this: if oil prices collapse, miners receive an immediate boost to their margins.

Wrap Up

Gold at $4,350 is a regime signal, not an anomaly.

Above it, miners start becoming cash-generating businesses embedded in a fiscally dominant monetary system.

They’re profitable at levels the market has never modeled, underowned by institutions that haven’t adjusted yet, and operating in a supply-constrained industry that won’t respond quickly when prices rise further.

And imagine if oil falls further.

This trade is far from crowded.

It’s a fundamental repricing happening before our eyes… and before the crowd realizes it.

Can miners double from here? You bet they can, and then some.