Gold’s Price Surge Is Rewriting the Playbook for Northern Ontario Mining

From Marathon to Red Lake, higher bullion prices are boosting margins, accelerating deals, and heating up exploration—while costs and capacity remain the limiting factors

Gold prices have climbed to levels few in the industry would have predicted just a couple of years ago. As of mid-February 2026, spot gold is trading around US$5,000 per ounce—roughly C$6,700 per ounce—depending on the benchmark and the Canadian dollar’s daily swing.

For Northern Ontario—home to producing mines, new builds, and some of Canada’s most active exploration camps—this price environment is translating into stronger cash flow, higher asset valuations, and renewed urgency in drilling and development. But it’s not a simple “higher gold equals easy growth” story: labour shortages, rising input costs, and the pace of permitting and partnership-building will determine how much of today’s price strength becomes tomorrow’s production.

Why gold prices matter so much in the North

Northern Ontario’s gold sector is a cornerstone of the provincial economy. Ontario shipped 2.8 million troy ounces of gold in 2023, valued at $6.5 billion, accounting for 43% of Canada’s gold production by value, according to the province’s gold fact sheet.

When gold rises, the impact ripples quickly:

• Operating mines see improved margins (even with inflation).

• Projects under construction become easier to finance and justify.

• Exploration gets more risk capital—especially for juniors.

• M&A activity heats up as buyers and sellers reset valuation expectations.

Ontario’s mining association noted gold hit record highs in early 2025—an inflection point that helped drive momentum into 2026.

Stronger margins are extending mine lives and raising the bar for investment

Most gold operations sell into USD-linked markets, while many costs are paid in Canadian dollars. That combination can be powerful when gold is rising and the loonie is soft—one reason Canadian producers often see outsized cash-flow upside during bullion bull runs.

Even so, costs are real. Reuters reported Barrick’s all-in sustaining costs rising (industry-wide inflation pressures are a theme), but the same report underscores the bigger point: higher gold prices can overwhelm cost increases and keep operations profitable.

For Northern Ontario, that margin cushion can mean:

• keeping lower-grade ore economic,

• bringing forward underground phases,

• funding exploration to push mine life beyond current plans,

• and upgrading plants, fleets, and electrification initiatives.

New Gold’s Rainy River operation—one of Northwestern Ontario’s flagship producers—has explicitly tied longer-term underground potential to whether the “prevailing gold price” supports additional development and exploration.

New builds and expansions are moving faster—and attracting more attention

Northern Ontario has seen major production milestones recently, and gold’s price strength is helping keep capital flowing to ramp-ups and optimization.

Two examples that underscore the region’s trajectory:

• Greenstone Mine near Geraldton achieved its inaugural gold pour in May 2024, positioning the operation as a major new contributor in the Thunder Bay/Greenstone corridor.

• Côté Gold near Gogama poured first gold in March 2024 and reached commercial production later that year—one of the largest new Canadian gold mines to enter the lineup in years.

Meanwhile, established camps and operations are drawing sustained investment. Agnico Eagle’s Detour Lake plans highlight how major producers are looking beyond the open pit to secure long-duration production—exactly the kind of decision that becomes easier to justify when the gold tape is strong.

Deal-making is accelerating as asset values rise

When gold prices climb, portfolios get reshuffled. Higher prices lift projected cash flows and net asset values, often triggering both strategic acquisitions and divestitures of “non-core” assets at stronger valuations.

Northern Ontario has been at the centre of this:

• Orla Mining completed its acquisition of the Musselwhite Gold Mine from Newmont in early 2025—bringing one of the region’s key assets under new ownership.

• Barrick agreed to sell the Hemlo mine (near Marathon) in a deal valued up to about US$1.09 billion, including contingent payments tied to production and gold prices—an example of how price strength can reshape ownership and investment plans.

• Gold-fuelled consolidation has also touched Ontario’s broader gold belt: Reuters reported Alamos Gold’s deal for Argonaut, partly driven by the value of combining Ontario assets (Magino and Island Gold).

For Northern Ontario communities, M&A can be a double-edged sword: it can bring fresh capital and new plans, but it can also mean operational resets, workforce changes, and shifting procurement strategies.

Exploration is heating up—because the payoff looks bigger

Exploration is where higher gold prices often have the most dramatic effect. When gold rises, marginal targets become fundable, and drill results have a bigger impact on valuations.

Ontario reported $1.067 billion in exploration spending in 2024, highlighting the scale of activity already underway.
Invest Ontario also points to roughly $1.1 billion spent in 2024 across approximately 400 exploration projects, reinforcing the province’s status as a national exploration engine.

For Northwestern Ontario—Red Lake, Pickle Lake, Beardmore-Geraldton, Marathon, and the Rainy River district—this matters because the exploration-to-mine pipeline supports:

• long-term employment,

• sustained demand for contractors,

• training and recruitment opportunities,

• and infrastructure business cases (roads, power, broadband).

Thunder Bay and the regional supply chain are positioned to benefit

Higher gold prices don’t just benefit mine owners and investors. They also expand the addressable market for the supply and services economy that runs through Thunder Bay and across the northwest: aviation, logistics, equipment maintenance, camp services, environmental monitoring, Indigenous-led businesses, engineering, and professional services.

When mines generate more free cash flow, they’re more likely to:

• lock in longer-term service contracts,

• advance sustaining capital projects,

• accelerate exploration drilling,

• and expand local procurement—especially when done in partnership with Indigenous communities and nearby municipalities.

In practical terms: a strong gold price can mean more work orders, more drilling metres, and more movement through Thunder Bay’s transportation and warehousing networks—if capacity (people, parts, and permitting) can keep up.

The caution: price doesn’t remove constraints

Even with gold near historic highs, Northern Ontario’s mining growth still runs into real-world limits:

• skilled labour shortages (operators, trades, technicians),

• input cost inflation (diesel, reagents, steel, trucking),

• equipment lead times for fleets and processing components,

• and the time required to build respectful, durable partnerships with Indigenous communities and local stakeholders.

Gold is also volatile. Companies that plan responsibly typically stress-test projects at lower prices than the spot market—and communities benefit when operators invest through cycles, not just peaks.

What it means going forward

If gold stays elevated through 2026, Northern Ontario is likely to see:

• continued deal-making and portfolio shifts,

• persistent exploration intensity,

• stronger business conditions for suppliers,

• and a renewed push to extend mine lives and expand production—especially where infrastructure and community partnerships are already strong.

For Thunder Bay and Northwestern Ontario, the opportunity is clear: the higher the gold price, the more valuable it becomes to be ready—with skilled people, reliable supply chains, and relationships that help projects move from discovery to development.