The Capital Waterfall - How Money Flows Through Mining Stocks in a Bull Market

Happy Tuesday, GoldBuzzers!

I know your inbox is probably full of takes on Iran right now. Here's mine - focused on what actually matters to gold and silver holders. Then I'm getting into one of the most important pieces I've published: how money flows through mining stocks in a bull market, and where it's heading next.

Ok. Let’s get to it. ⬇️

Gold surged toward $5,400 on Tuesday, with US futures climbing nearly 3% as the US-Israel war with Iran entered its third day and the world's most important oil chokepoint effectively shut down. Operation Epic Fury - which began with joint US-Israeli strikes on February 28th and killed Supreme Leader Khamenei - has escalated rapidly, with six American service members now dead, Iran launching retaliatory strikes across the Gulf, and the Strait of Hormuz ground to a halt after Iran's Revolutionary Guard declared it closed and threatened to torch any ship that tries to pass.

Over 150 tankers are sitting idle in open Gulf waters, Brent crude has spiked above $79, and President Trump told reporters the campaign could last four to five weeks - or "far longer." The inflationary shock from surging energy prices has triggered a Treasury sell-off and pushed Fed rate cut expectations out to September, but none of that matters to gold right now: when actual bombs are falling and a fifth of the world's seaborne oil is stuck, the yellow metal does exactly what it's supposed to do.

Silver, meanwhile, remains the frustrating little brother in this trade - it spiked to $96.40 intraday on safe-haven buying before retreating below $90 as a surging dollar ate into gains. The white metal is still down from $100+ just weeks ago and continues to face heavy selling pressure from banks in what looks like coordinated attempts to control the price.

At some point, the physical market will overwhelm the paper games - and with 159 million ounces of sell orders stacked against under 60 million registered for delivery on the CME, that point may be closer than the banks would like.

Gold's above $5,300 and mining companies are printing record cash flow. And yet most investors still don't know where to put their money.

In every bull market going back to the 1970s, capital has never flooded into all mining stocks at once. It follows a sequence, and that sequence has been weirdly consistent. If you know where the money goes first, you can position yourself before it arrives.

The Waterfall

Picture money flowing into the mining sector like water pouring down a series of pools. The top pool fills first. Once it overflows, the water rushes into the next one down. Each pool is smaller, so it fills faster and more violently.

Pool 1 - The Majors (Newmont, Barrick, Agnico Eagle). Household names. Liquid, in the big ETFs, easy for fund managers to buy. When gold runs, these attract the first capital wave. GDX - dominated by majors - surged 155% in 2025.

Pool 2 - The Mid-Tiers (Kinross, Equinox Gold, Gold Fields). One-to-four mine operators producing 300K–1M ounces annually. Smaller market caps mean capital moves the needle more. In past bull markets, these have done 3-4x what gold does.

Pool 3 - The Juniors. Exploration companies with no revenue, burning cash on drill programs. They can sit dormant for years. But once confidence in the rally is established, the money pours in hard and fast. The TSX Venture Composite rose 440% from 2001-2007, then another 376% from the 2008 lows to 2011.

The lag between each pool filling up? Typically six to twelve months. In both the 2001-2004 and 2009-2011 runs, majors moved first, with juniors following about six months later.

Historical Proof - It Keeps Happening

The 1970s bull market is the granddaddy. Gold ran from $35 to $850 - up 2,329%. But miners did even better. The Barron's Gold Mining Index gained 1,247% from late 1969 to October 1980, while the S&P 500 managed just 43%. During the 1973-74 crash, when the S&P dropped 48%, the gold mining index rose 193%. Many producers became ten-baggers in the 1979-1980 mania, and some juniors did twenty-fold or better. Gold stocks didn't peak until nine months after gold topped.

Here's one that'll surprise you - it works in deflationary crashes too. During the Great Depression, Homestake Mining rose 474% while the Dow lost 73%. Canada's Dome Mines gained 558%. Both raised their dividends while the economy collapsed around them.

The 2000s repeated it with modern ETFs. GDX roughly quadrupled from its 2008 lows to 2011. Leading juniors? Around fourteen-fold.

Here's the maths. If a miner's all-in sustaining cost is $1,400/oz and gold's at $2,000, they pocket $600 per ounce. At $5,400 gold? They're pocketing $4,000 - a 567% increase in margin from a 170% move in gold. That's why Newmont posted $7.3 billion in free cash flow for 2025.

Where Are We Right Now?

Pool 1 has filled. Majors have re-rated aggressively - GDX up 155% in 2025 and another 10% in early 2026.

Pool 2 is filling fast. Mid-tiers are reporting blowout earnings. Equinox Gold jumped 15% in a single day after posting 23% production growth. GDXJ delivered 178% in 2025.

Pool 3 is stirring. In late February, GDXJ surged nearly 6% in one session, outpacing both GDX and physical gold. That pattern - juniors beating seniors, seniors beating the metal - is exactly what you see when money starts flowing down the food chain. But the TSX Venture is still below its 2008 crisis lows. That's how beaten-down the junior space remains.

Your Action Items

Not in miners yet? Start with majors. GDX, or individual names like Newmont and Agnico Eagle. AISC around $1,400, gold above $5,400 - these companies are absolute cash machines right now.

Already own majors? Add mid-tier exposure through GDXJ. Look for growing production, AISC under $1,400, low debt, and mines in stable countries. Best returns-for-risk in the sector without the white-knuckle ride of the juniors.

Got some experience and a strong stomach? Start doing your homework on juniors now. The waterfall hasn't fully reached them yet. Look for companies with at least 12 months of cash, a real resource in the ground, and a clear route to getting into production or getting acquired. When the majors start spending their record cash piles on acquisitions - and they will - good juniors won't stay cheap for long.

One of the things you'll be able to see when GoldBuzz INSIDER launches this month is exactly how many companies in each tier are outperforming their benchmarks at any given time - basically a real-time view of where the capital is flowing.

This capital waterfall has played out in every gold bull for fifty-plus years. The question isn't whether it happens again. It's which pool you're standing in when the water arrives.

That’s all for this Tuesday, folks. See you on Thursday.

Before you go, please take a moment to rate today’s newsletter and tell us how we did.

Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com