Equinox Gold (EQX): A Strategic Buy Ahead of a Strong Second Half and Gold's Path to $4,000

The gold market is on the cusp of a historic rally. J.P. Morgan Research has raised its price targets for gold, projecting an average of $3,675 per ounce by Q4 2025 and a potential $4,000 per ounce by mid-2026. This bullish trajectory is driven by a perfect storm of macroeconomic forces: a weak U.S. dollar, central bank demand for gold hitting record highs, and a global shift toward safe-haven assets amid geopolitical tensions and inflationary pressures. For investors, the question is no longer if gold will rise—but how to position for the upside.

Enter Equinox Gold (EQX), a Canadian gold miner poised to capitalize on this tailwind. With a robust portfolio of high-grade assets, strategic acquisitions, and a valuation that screams undervaluation, EQX is a compelling entry point ahead of a transformative 2026 gold rally.

Macro Tailwinds: Gold's $4,000 Path is Inevitable

Gold's ascent is not speculative—it's structural. Central banks added 710 tonnes of gold per quarter in 2025, diversifying away from U.S. dollar reserves amid trade policy uncertainty and inflation risks. Meanwhile, gold ETFs have surged to $383 billion in assets, with 397 tonnes of inflows in H1 2025 alone.

The U.S. dollar's weakness, coupled with a low-yield environment, has made gold a critical hedge. J.P. Morgan's analysis highlights that gold's gold-to-inflation expectations ratio is above the critical 22-point level, signaling sustained bullish momentum. If stagflation or recessionary fears materialize, gold could see a 10–15% surge in H2 2025.

EQX's Operational Momentum: A Gold Miner on Autopilot

Equinox Gold is not just riding the gold wave—it's accelerating with it. The company's Greenstone Gold Mine is nearing full capacity, with processing throughput at 24,500 tonnes per day (close to its 27,000-tonne nameplate). This ramp-up has driven Q2 2025 production to 219,122 ounces, with all-in sustaining costs (AISC) of $1,959 per ounce—a figure expected to decline as scale improves.

The Valentine Gold Mine is another catalyst. First gold pour is expected by Q3 2025, adding 100,000+ ounces annually. Meanwhile, the Calibre Mining acquisition (closed in June 2025) has already boosted pro-forma revenue to $1.33 billion for H1 2025, with full-year synergies yet to materialize.

EQX's management is also prioritizing cost discipline and balance sheet strength. The sale of non-core Nevada assets for $115 million has reduced net debt to $1.37 billion, while maintaining a 2025 production guidance of 785,000–915,000 ounces. With cash flow from operations at $126 million in Q2 2025, the company is well-positioned to fund growth without dilution.

Undervaluation: A 80%+ Discount to Intrinsic Value

Despite these strengths, EQX trades at a jaw-dropping discount to its intrinsic value. Key metrics highlight the gap:

• P/E Ratio: 16.8x vs. industry average of 21.9x.
• EV/EBITDA: 13x vs. peers like Coeur Mining (39.9x) and Royal Gold (25.2x).
• Price-to-Book (P/B): 0.93x, below book value for years.

A Discounted Cash Flow (DCF) model from Simply Wall St values EQX at $39.39 (USD)—an 82.8% discount to current levels. Analysts back this, with a $8.05 12-month price target (a 18–33% upside from $6.87 as of August 2025).

The undervaluation is even more glaring when compared to the gold sector's average EV/EBITDA of 7.61 (Newmont) to 10.17 (Agnico Eagle). At 13x, EQX is trading at a premium to these metrics, yet its growth profile and asset quality justify a much higher multiple.

Why Now? Positioning for 2026's Gold Rally

The timing is critical. EQX's production and cash flow are set to surge in H2 2025, with Valentine's contribution and full Calibre integration. As gold prices approach $4,000 per ounce, EQX's revenue and EBITDA will expand exponentially.

Consider the math: At $4,000/oz, EQX's 900,000-ounce production (mid-point of guidance) would generate $3.6 billion in revenue. With AISC falling to $1,800/oz, EBITDA could hit $1.62 billion, translating to a $22–$25 stock price using current EV/EBITDA multiples.

Investment Thesis: A High-Conviction Buy

Equinox Gold is a rare combination of operational execution, strategic positioning, and deep undervaluation. The company is:
1. Capitalizing on gold's structural bull case through high-grade assets and production growth.
2. Trading at a 80% discount to intrinsic value, with a clear path to re-rating.
3. Positioned to outperform peers as gold prices surge toward $4,000.

For investors seeking exposure to the gold rally, EQX offers a leveraged, undervalued entry point. With a $6.87 stock price and a $39.39 DCF fair value, the margin of safety is substantial.

Action Plan:
- Buy EQX at current levels to capture the H2 2025 production surge and 2026 gold rally.
- Hold through 2026 as the company's valuation aligns with its intrinsic value.
- Monitor gold prices and EQX's Q3 2025 results for confirmation of the thesis.

In a world of uncertainty, gold is the ultimate safe haven. And for those who act now, Equinox Gold is the key to unlocking its full potential.