Red Cloud's Ron Stewart on Gold's Enduring Bull Market, Producer Resilience, and M&A Opportunities Amid 2026 Volatility

Red Cloud analyst Ron Stewart shares his long-term bullish outlook on gold, the advantages of low-AISC producers, M&A potential, and copper's structural story amid 2026 volatility timely insights for Canadian resource investors navigating corrections and opportunity.

In a wide-ranging conversation on the Mining Stock Education podcast, Red Cloud Securities mining analyst Ron Stewart offered a grounded, long-term perspective on the precious metals and mining sector amid a challenging Q2 2026 marked by geopolitical volatility, shifting economic data, and metal price corrections. Host Brian Leni and Stewart discussed the drivers behind recent weakness, the enduring structural case for gold, the advantages of quality producers, jurisdiction and management priorities, copper’s longer-term potential, and the role of M&A as a value-creation catalyst. Stewart’s analysis provides Canadian resource investors with a timely framework for navigating uncertainty while focusing on durable fundamentals. While short-term conditions remain volatile, the discussion underscores why many in the sector continue to view the current environment as an opportunity for selective, patient capital allocation in high-quality assets.

A Roaring Q1 Gives Way to Q2 Volatility

Stewart acknowledged the strong performance across the resource sector in Q1 2026, when broad participation drove gains with relatively little need for deep analysis. “Basically, be in it to win it,” he recalled. The second quarter, however, brought a sharp change in tone. The escalation of conflict in the Middle East introduced significant uncertainty, contributing to demand destruction in certain commodities (notably oil) and broader economic repricing. This geopolitical backdrop, combined with stronger U.S. data influencing rate expectations and the U.S. dollar, created “crazy” volatility in both metals and equities. Stewart noted that the drivers supporting the metals complex earlier in the year—secure demand across categories—faced temporary headwinds, leading to a more difficult period for investors. Despite the near-term challenges, Stewart maintained a constructive longer-term view. He advised against trying to time short-term moves, describing such attempts as “a recipe for disaster.” Instead, he encouraged investors to focus on the multi-year outlook, where he sees the sector still in the early stages of a bull market.

Gold’s Long-Term Bull Case Remains Intact

Stewart is “extremely bullish on the long-term outlook for gold.” He views the recent pullback and consolidation as a potential “generational opportunity” for investors willing to do their homework and identify high-quality situations.

Key supports for his thesis include:

• Structural demand from central banks and investors seeking diversification and hedges against currency or policy risks.

• Constrained mine supply growth and the challenges of bringing new large-scale projects online.

• The sector’s resilience through economic cycles when viewed over extended timeframes.

For investors, the current correction creates a window to evaluate opportunities at more reasonable entry points. Stewart cautioned against aggressive buying (“back up the truck”) given ongoing uncertainty but emphasized the value of sharpening focus on companies with strong fundamentals that can weather volatility and capitalize on eventual recovery.

Producers with Low AISC Favored for Resilience

When evaluating where value exists across the gold equity spectrum (explorers, developers, producers, royalties), Stewart highlighted established producers with low all-in sustaining costs (AISC) and healthy margins as the area offering the most attractive risk/reward in the current environment.

Producers benefit from:

• Strong balance sheets and significant cash treasuries, enabling share buybacks and flexibility.

• Ability to maintain profitability even as prices fluctuate, thanks to lower costs.

• Reduced operational risk compared to pre-production assets.

He observed that Q1 margins reached exceptionally high levels (over 50-55% in some cases) but have since compressed due to price weakness and ongoing cost pressures (historically tracking ~7% compound annual growth). In this context, low-AISC operators stand out for their ability to sustain margins and remain healthy businesses positioned for M&A or organic growth.

Management, Jurisdiction, and Project Quality as Core Criteria

Stewart’s investment framework prioritizes people first: the quality of management, board, and governance. Track record, integrity, and alignment matter enormously, particularly in a capital-intensive, long-cycle industry. He noted his advantage of decades in the sector, allowing him to know many teams personally, but encouraged all investors to dig into backgrounds through advisors or direct research.Jurisdiction is “case-by-case” and cannot be painted with a broad brush. Even within stable countries like Canada or the U.S., local factors (e.g., California vs. Nevada permitting) create meaningful differences. Stewart expressed preference for certain Canadian provinces (Quebec, Saskatchewan) but stressed evaluating each project on its merits rather than relying solely on broad rankings like the Fraser Institute survey. Project quality follows: size, grade, technical metrics, and infrastructure access. For advanced assets, he looks for clear pathways to value creation while remaining mindful of capital intensity and execution risks.

M&A as a Persistent Value Driver

M&A remains a key theme. Stewart sees opportunities where companies have synergistic reasons for deals—proximity, shared infrastructure, or operational overlap. Hostility is rare; successful transactions typically require willing parties on both sides. Producers with strong treasuries are well-positioned to act as acquirers, leveraging valuation premiums to acquire assets that fit their portfolios. The transition from developer to producer often delivers significant equity re-rating (Stewart referenced 3-4x lifts in some cases), making existing producers or advanced developers with de-risked assets attractive targets or consolidators.

Copper’s Longer-Term Positive Outlook

On copper, Stewart acknowledged near-term volatility tied to economic softening and demand destruction risks but remained bullish on the structural story. Electrification, rewiring of the global economy, and supply constraints support a constructive multi-year view. High-grade or well-located deposits, even if smaller, can offer compelling economics, though the space is less populated with mid-tier producers compared to gold.

Royalty Companies and Dividend Appeal

For smaller royalty companies, Stewart highlighted dividend yield as an attractive feature for retail investors seeking income alongside exposure. While he does not cover the space in depth, he noted the appeal of healthy payouts from assets with long mine lives.

Capital Costs, Replacement Value, and the Producer Advantage

Rising capital costs have increased the replacement value of existing mines and infrastructure, favoring companies that have already built assets. Stewart observed that producers with sunk capital and strong margins occupy a privileged position relative to greenfield developers facing today’s cost environment.

Advice for Investors: Patience, Homework, and Long-Term Focus

Stewart’s overarching message is one of discipline. The sector rewards those who do their homework, focus on quality management and assets, and maintain a multi-year horizon. Volatility is expected to linger until geopolitical and economic uncertainties resolve, but the longer-term bull case for gold (and constructive outlook for copper) remains intact. Canadian resource investors, with access to a deep pool of listed companies on the TSX, are well-positioned to evaluate opportunities across jurisdictions while prioritizing domestic strengths in stable mining regions. The conversation underscores a timeless truth in resource investing: cycles create both challenges and opportunities. Those who remain focused on fundamentals amid short-term noise are best prepared for the sector’s next leg higher.

Important Disclaimer

This article summarizes and analyzes publicly available comments from a podcast interview for informational and educational purposes. It does not constitute investment advice or a recommendation regarding any company, security, or strategy. Resource markets are highly volatile and involve substantial risks. Readers should conduct their own due diligence, review company filings, and consult professional advisors. Views expressed are those of the interviewee and host and do not necessarily reflect those of Canadian Mining Report. Past performance is not indicative of future results. (For full context, listen to the original Mining Stock Education episode.)