Digging into gold: Should UK investors look again at Fresnillo and Endeavour?

Gold has been on a tear in 2025. It’s holding steady around $3,300 an ounce, not far off its all-time highs, driven by geopolitical uncertainty, sticky inflation and renewed trade tensions.

You’d expect gold miners to be flying. And many are. But according to UBS, some UK-listed names still look surprisingly cheap.

Gold stocks are finally catching up, but there’s more to go

After lagging behind the metal for much of the past few years, gold equities are back in fashion. The GDX index, which tracks global gold miners, is up 45% year to date. That’s around 20% ahead of the gold price itself.

But UBS reckons the rally hasn’t gone far enough. Using a blend of valuation methods, including enterprise value to EBITDA (EV/EBITDA) and net present value (NPV). 

The bank estimates that most miners are still pricing in gold at just $2,700 to $2,875 an ounce. That’s a hefty discount to current prices.

Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF): Pricing in much less than spot gold

Endeavour Mining, one of the few FTSE-listed gold specialists, is among UBS’s top European picks. The shares are currently trading at a multiple of just 4.3 times forward earnings, suggesting the market is only pricing in a gold price of around $2,800 an ounce. UBS believes that’s too low, given the metal’s current trajectory and the company’s steady production outlook.

Fresnillo PLC (LSE:FRES): Battered but recovering

Fresnillo, better known for silver, also gets a fresh thumbs-up from UBS. The company has had a rough few years, with operational issues and guidance downgrades weighing on sentiment. That’s pushed the valuation down to around 5 times EV/EBITDA, well below the long-term average of more than 10. UBS says the stock now prices in $2,850 gold and $33 silver, implying a lot of bad news is already reflected in the share price.

Streaming firms: A different breed

For investors after less risk, the big streaming and royalty companies (Franco-Nevada and Wheaton Precious Metals) offer exposure to gold without the costs and complications of mining it.

These businesses operate more like finance companies, taking a cut of production in return for upfront capital. They’re more expensive, trading at over 20 times earnings, but offer steady cash flow and fewer surprises.

What’s the play for UK investors?

With the FTSE 100 offering limited direct exposure to gold, UK investors often buy overseas-listed names via funds or ETFs. But stocks like Endeavour and Fresnillo (both FTSE 250 constituents) offer a more direct route.

UBS says both still look undervalued, even after the sector’s strong run. And if gold stays above $3,000, as many analysts now expect, earnings upgrades could follow.

In short: Gold might be glistening again, and some UK-listed miners could offer a good way to catch the shine.