The Resurgence of Mining Stocks on the TSX: A Strategic Buy-Point Amid Inflation and Earnings Momentum?

The Canadian mining sector, long a cornerstone of the Toronto Stock Exchange (TSX), has entered a transformative phase in 2024-2025. After a challenging 2023 marked by a 9.3% revenue decline and rising operational costs, according to Simply Wall St, the sector has rebounded with vigor, posting a 67% gain in the 12 months through October 2025, per a DailyMiner report. This resurgence is not merely cyclical but structurally driven by macroeconomic alignment and sector-specific momentum. For investors, the question is no longer whether the TSX mining sector is recovering-it is whether this recovery represents a strategic buy-point amid inflationary pressures and earnings sustainability.

Macroeconomic Alignment: Inflation, Rates, and Commodity Demand

The 2024-2025 rally in TSX mining stocks is underpinned by a confluence of macroeconomic factors. Rising commodity prices, particularly for gold, uranium, and battery metals, have acted as a tailwind for mining equities. The S&P/TSX Battery Metals Index surged 29.8% in 2024, per Simply Wall St, reflecting global demand for lithium and nickel in electrification and energy transition projects. Gold, meanwhile, has surged as a safe-haven asset, with the S&P/TSX Global Gold Index gaining 19.4% in 2024, according to Simply Wall St.

Inflation trends have further amplified this momentum. While 2023 saw mining companies grapple with a cost-to-revenue ratio of $0.73, as noted by Simply Wall St, 2024-2025 has seen inflationary pressures translate into higher commodity prices, which offset rising costs. For instance, Agnico Eagle Mines (AEM) reported a record $770 million adjusted net income in Q1 2025, supported by a production cost per ounce of $879 and a near-zero net debt position, according to a MarketBeat forecast. Similarly, Calibre Mining Corp. exceeded production budgets by 15% in early 2025, per Fool.ca, underscoring the sector's ability to convert higher prices into earnings.

Interest rate cuts in Canada, Europe, and the U.S. have also played a pivotal role. As borrowing costs decline, capital-intensive mining projects become more viable, and discounted cash flow models for resource companies improve. This dynamic is evident in the TSX's record-breaking capital-raising activity in 2024, with $10 billion raised across the TSX and TSX Venture Exchange (TSXV)-a 46% increase from 2023, reports Simply Wall St.

Sector Momentum: Earnings Growth and Production Recovery

The TSX mining sector's earnings momentum is robust. Forecasted annual earnings growth of 25%, according to DailyMiner, is supported by companies like Barrick Gold Corporation (ABX), which reported adjusted earnings per share (EPS) of $0.47 in Q2 2025, in line with consensus estimates reported by MarketBeat earnings. Agnico Eagle, meanwhile, has a trailing 12-month EPS of $5.88 and a forward P/E ratio of 20.72, per MarketBeat, suggesting strong earnings visibility despite a current P/E of 27.66, as noted by MarketBeat.

Production recovery is another key driver. While 2023 saw operational challenges, 2024-2025 has witnessed a rebound in output. Calibre Mining's Valentine Gold Mine in Canada advanced to first gold production in Q2 2025, per Fool.ca, and Endeavour Mining PLC (EDV) is expected to report rising revenue and earnings in Q2 2025, according to MarketBeat. These developments signal a shift from cost-cutting to growth-oriented strategies.

Valuation Metrics and Analyst Sentiment

From a valuation perspective, the sector is attractively positioned. Lundin Gold (LUG) has surged 155% year-to-date, per DailyMiner, driven by low all-in sustaining costs and a strong dividend yield. First Majestic Silver (AG) has also outperformed, with a 47% stock price gain in 2025, noted by DailyMiner, reflecting its expansion into new silver reserves.

Analyst ratings reinforce this optimism. Agnico Eagle has 8 "Strong Buy" ratings, with an average price target of C$163.33 (implying a 25% upside from its current price of C$211.61), according to Simply Wall St. Barrick Gold's average price target of $45.65 and "Outperform" ratings have been highlighted by Fool.ca, further emphasizing institutional confidence. However, junior miners like those in the S&P/TSX Venture Metals & Mining Index have lagged, falling 6.1% in 2024, per DailyMiner, indicating that risk remains concentrated in smaller, capital-light plays.

Strategic Buy-Point: Risks and Opportunities

The TSX mining sector's resurgence is compelling, but investors must weigh risks. Gold prices, which have been a key driver, are volatile and sensitive to central bank policy. Additionally, while inflation has boosted commodity prices, it could also lead to regulatory scrutiny or environmental, social, and governance (ESG) pressures.

That said, the sector's alignment with macroeconomic trends-rising commodity demand, rate cuts, and inflationary tailwinds-creates a favorable backdrop. For strategic buyers, the current valuations of mid-to-large-cap miners like AEM and ABX, combined with strong earnings visibility, present a compelling case. As one analyst noted, "The TSX mining sector is not just recovering-it is repositioning for long-term growth in a resource-constrained world," according to Simply Wall St.

Conclusion

The TSX mining sector's 2024-2025 resurgence is a product of both macroeconomic tailwinds and sector-specific momentum. While challenges like inflationary costs and junior miner underperformance persist, the broader trend of earnings growth, production recovery, and favorable interest rates positions the sector as a strategic buy-point. For investors seeking exposure to a resource-driven economy, the TSX offers a diversified, high-conviction opportunity-one that aligns with the global shift toward electrification and energy transition.