Geopolitics is the talking point again in 2026, and gold is still stealing all the attention.
The wars in Ukraine and the Middle East keep dragging on, US–China tensions haven’t cooled, and policy uncertainty is part of the global backdrop now. These global tensions are now keeping gold prices alive.
The World Gold Council expects this to carry through FY 26 and into FY 27, with central banks (Poland, China and India amongst others) continuing to buy gold at amounts close to recent highs, even as investors get cautious. Gold bought by central banks and major international financial institutions represented about 17%–20% of global gold demand in early 2026. Note that all this buying is more of a long-term policy than panic.
That’s the landscape Canadian producer Torex is operating in.
Torex has spent the last few years doing the underlying dirty work: building Media Luna (an underground gold, copper and silver mine in Guerrero, Mexico), absorbing acquisitions, and asking investors to wait as the balance sheet did the heavy lifting. In Q1 26, the wait has ended, with the company confirming the pivot from construction story to operating business. Of course, there are a few caveats.
Fool’s gold?
Torex posted one of those quarters that looks almost too good to be true. If you read between the lines, you will realize it is. Revenue tripled y/y to $539m, up a whopping 217% from $170m a year ago. Net income jumped to $207.5m, a 432% leap from $39m.
Remember that the bar was on the floor after the Q1 25 numbers. The company was in the middle of a 4-week processing plant shutdown to tie in the new Media Luna project, which negatively impacted production.
After years of construction headaches, the company sold 81,233 oz of gold (up +36%) and 109,222 oz of gold equivalent (up 80%). This is thanks to the average realized gold price jump by 71% to $4,784/oz (up from $2,793/oz in Q1 25) thanks to the market rally. This $1,991 per ounce difference was the main reason revenue literally exploded.
By selling 81,233 oz of gold at new prices, the company cleared an extra $162m more than it would have had the prices stayed at last year's levels. Either way, the real test is whether it can sustain $200m quarterly earnings if and when gold pulls back from these levels.
Mind the gap
Torex’s stock has already had its moment. The stock climbed 55.6% over the past year to reach its current levels of CAD 69.4, riding the gold rally.
It's sitting 18% below its 52-week high of CAD 85, which shows that investors are skeptical that gold can hold its 2026 record high. At a CAD 6.5bn market cap (USD 4.7bn), Torex is trading at a 2026e P/E of 6.5x, close to half its previous 2-year P/E multiplr of 11.7x. That expansion only works if margins and cash flow remain constant.
Despite that skepticism, analysts are overly optimistic, with all of the 11 analysts monitoring it having “Buy” ratings, with an average target price of
CAD 96.9, representing 39.7% upside potential, which feels more like wishful thinking than a guarantee.
Double trouble
Torex faces significant geographical and operational risks, operating two underground mines in Guerrero, Mexico - a highly volatile region that is prone to security threats and fatal safety incidents, such as the 2024 carbon monoxide leak. The transition to a complex dual-mine setup adds execution risk, as the brand-new Media Luna project faces ramp-up challenges, including potential geological surprises or processing hiccups that could threaten projected revenues.
Furthermore, while high gold prices boost cash flow, it also triggers increased taxes, royalties, and profit-sharing costs. Torex is throwing off cash now but it’s still a fairly concentrated bet, and the next few capital decisions matter a lot more than the last few.
