Central Bank Gold Buying & De-Dollarization: The Macro Forces Repricing Mining Assets

• Central banks added 166t of gold in Q2 2025, underscoring a global shift toward reserve diversification and away from USD assets.
• Gold demand remains structurally supported by geopolitical risk, policy-driven inflation, and sovereign hedging behavior.
• Institutional flows into ETFs and physical bullion reflect investor positioning for currency volatility and macro uncertainty.
• Mining equities in Tier-1 jurisdictions with near-term cash flow or scalable development pathways are attracting capital reallocation.
• Companies like Integra, Perseus, West Red Lake, and Serabi offer differentiated exposure to macro themes through margin resilience, jurisdictional advantage, or low-capex growth visibility.

Gold's Resurgence in a Multipolar Monetary System

Central banks now hold over 36,000 tonnes of gold, with Q2 2025 purchases 41% above historical norms according to the World Gold Council. Gold's appeal as a reserve asset stems from policy insulation, liquidity, and non-sovereign counterparty risk. De-dollarization accelerates among BRICS+ economies, emerging markets, and energy-exporting nations amid sanctions and trade fragmentation.

Perseus Mining's African presence aligns with growing domestic reserves and sovereign hedging trends across the continent. The company's weighted average all-in sustaining cost (AISC) of $1,235 per ounce for fiscal year 2025, combined with production of 496,551 ounces, demonstrates operational resilience in diversified foreign exchange environments.

As Chief Executive Officer, Jeff Quartermaine explains:

"We guided the market production to 469,000 to 505,000 ounces finishing at 496,000. We were anticipating an increase in costs and communicated that to the market. In fact, what we have done is performed better than what we had anticipated."

Interview with Jeff Quartermaine, CEO of Perseus Mining

Policy, Tariffs & Real Yields: Gold as a Hedge Asset

Persistent inflation and fragmented trade policy have kept real yields elevated, reducing the urgency for aggressive rate cuts according to Federal Reserve commentary from July 2025. Gold demand from central banks remains price-insensitive, contrasting with ETF and retail flows driven by tactical inflation hedging.

Serabi Gold's cash-generative model benefits from Brazil's favorable foreign exchange conditions and tax efficiency. The company generated approximately $5 million of free cash flow in Q1 2025, ending the period with $22 million in cash compared to $5 million at the same point in the previous year.

Chief Executive Officer Mike Hodgson notes the operational leverage:

"We ended the year with $22 million in the bank. At this point last year we had about $5 million and anticipated ending the year with $8 million."

Capital Rotation: Sovereign Accumulation & Institutional Repricing

Central bank demand serves as a long-duration buyer of last resort, lifting long-term pricing floors for gold. Institutional inflows into mining ETFs and equities have surged 40% year-over-year, targeting developers with strong cost discipline.

Integra Resources exemplifies this trend through Florida Canyon's free cash flow generation, which self-funds DeLamar development and Nevada North expansion. This approach showcases asset scarcity and capital efficiency in an environment where equity dilution remains costly for development-stage companies.

VP of Corporate Development & IR Jason Banducci emphasizes the strategic advantage:

"We're lucky with the acquisition of Florida Canyon we don't need to raise equity again until we build DeLamar."

Interview with Jason Banducci, VP Corp Dev, Integra Resources

Elevated Cost Inputs & Margin Management

AISC across the sector remains elevated due to wage inflation and diesel-linked input costs. However, companies with high-grade resources and optimized infrastructure mitigate cost volatility effectively.

West Red Lake Gold Mines utilizes mill recoveries of 96% and reduced cut-off grades to align output with spot gold prices above $3,200 per ounce. The company's ability to mine against historical remnant stopes has de-risked operational challenges while expanding mineable reserves.

interview with Shane Williams, CEO of West Red Lake Gold

Capital Formation & Strategic Deployment in Mining

Cash-rich producers are increasingly pursuing internal project advancement and selective mergers and acquisitions. Companies with staged feasibility work and restart optionality across multiple assets enable development sequencing based on commodity cycle conditions.

The trend toward self-funding represents a fundamental shift from the traditional junior mining model of continuous equity raises. This approach reduces shareholder dilution while maintaining development optionality during favorable market conditions.

Exploration Optionality & Multi-Asset Pipelines

Developers with district-scale assets offer long-term leverage to price trends and M&A optionality. Perseus Mining's Nyanzaga project in Tanzania provides multi-asset visibility beyond current production, with the company maintaining a five-year outlook based on JORC-compliant reserves.

Quartermaine outlines the strategic pipeline:

"We substituted the Nyanzaga project in Tanzania for Meyas Sand. It comes on stream in 2027 so while we do encounter a small dip in fiscal 2026, by 2027 it starts to come back. This projection is based on the JORC-compliant ore reserves that we currently own - 93% of this gold is JORC-compliant ore reserves."

Project Readiness in a Dynamic Market Environment

North American jurisdictions including Nevada, Idaho, and Ontario are implementing policy efforts to streamline approvals for critical minerals and gold projects. Integra Resources benefits from active permitting and feasibility advancement within Tier-1 regulatory frameworks.

The company's positioning in established mining districts provides regulatory predictability and infrastructure access. DeLamar's updated feasibility study expected in 2025 will provide clearer development timelines and capital requirements.

Operational Leverage & Short-Cycle Upside

Serabi Gold and West Red Lake Gold Mines represent near full-cycle leverage examples, both ramping production with limited new capital outlay. Short-term production expansion often creates asymmetric upside in a rising gold price environment.

Serabi's guidance of 45,000 ounces for 2025 reflects measured growth from established operations, with potential for significant expansion through brownfield exploration.

Serabi’s Hodgson outlines the growth trajectory:

"We got a path going from 45,000 to 100,000 within a three-year timeframe. We can be pushing 60,000 next year, maybe 70,000 to 75,000 the year after. We can certainly have very significant incremental growth over the next five years without diluting shareholders."

Interview with Mike Hodgson, CEo of Serabi Gold

Thematic Exposure & Resource Allocation Strategies

Gold producers with local cost structures in devaluing currencies experience operational foreign exchange leverage. Companies operating in Brazil and West Africa benefit from USD-denominated revenue and local currency costs, creating natural hedging mechanisms. This operational structure provides margin expansion during periods of currency weakness while maintaining cost competitiveness in global markets.

Central bank buying is non-cyclical, making sovereign demand a hedge against retail investment volatility. Long-term projects with reserve life exceeding 10 years align with demand growth from emerging market reserve managers seeking portfolio diversification. The structural nature of sovereign demand provides price support independent of speculative trading patterns or ETF flows, creating a more stable foundation for long-term investment planning.

The Investment Thesis for Gold

• Exposure to structural de-dollarization trends and central bank reserve reallocation away from USD assets
• Jurisdictional concentration in Tier-1 regions including Nevada, Ontario, and Brazil with transparent permitting frameworks
• Low AISC cost base and high margin spreads supported by strong free cash flow positions above $1,500 per ounce
• Self-funded development pathways reducing shareholder dilution and enhancing project internal rates of return
• Reserve-backed growth visibility with scalability aligned with multi-year central bank demand trends
• Resource concentration in high-grade zones enabling near-term cash flow optimization and operational flexibility
• Robust balance sheets and flexible development schedules enabling macro timing adaptability during market volatility
• Leverage to rising gold prices via re-optimization of mining plans, mill efficiency improvements, and heap leach recovery enhancements

Gold's Role in the Post-Dollar Era

Central bank accumulation confirms gold's enduring role as a financial anchor amid growing currency bifurcation and policy fragmentation. Institutional investors are responding to the same macroeconomic cues, shifting toward assets offering reserve resilience and macro convexity.

Mining equities with strategic jurisdictional exposure, cost discipline, and scalable reserves offer asymmetric opportunity in the current cycle. As de-dollarization becomes more structural than episodic, positioning across the development-production spectrum remains a credible allocation thesis for sophisticated investors seeking exposure to monetary system evolution and sovereign hedging behavior.