In the California gold rush of 1848, many headed out West to find their riches mining for gold. While most failed to find their fortune, some struck ‘gold’ selling the miners essential equipment, such as picks, shovels, and most famously Levi Strauss’s sturdy workwear.
Private wealth, institutional, and corporate finance business Euroz Hartley (ASX: EZL) is also provides services to miners, because it is based in Perth, and Perth is a hotspot for mining companies. The mining sector is the largest contributor to Western Australia’s economy, accounting for approximately 25% of Gross Domestic Product.
Just as higher gold prices benefit its customers, I believe Euroz Hartley (ASX: EZL) will also benefit from gold’s rapid price rise. My theory is that higher prices will encourage more capital raisings, takeovers, and mergers among mining companies. Given its established networks in WA, Euroz is well-positioned to earn higher fees by arranging financing for the increased interest in gold mining.
Gold Miner Mergers and Acquisitions Rise
In May, the largest gold miner on the ASX, Northern Star (ASX: NST) completed a takeover of De Grey Mining, because it wanted the high-potential Hemi Project in Western Australia.
Gold Road Resources was acquired by South African mining giant Gold Fields, and was taken off the ASX in October.
Also in 2025, Red5 and Silver Lake merged to form Vault Minerals (ASX: VAU), and Ramelius Resources (ASX: RMS) acquired Spartan Resources.
Australia is seen as a good place to invest in gold miners due to its stable jurisdiction, decent infrastructure, and world-class gold deposits.
After exhausting much of the gold on the surface, miners now need to go further underground, making exploring and extracting gold more costly. This means it is often becoming more economical to merge with or take over existing miners.
My own view is that gold will continue to remain elevated, as central banks continue to diversify away from the US dollar, and will likely buy any dip in price. Additionally, this safe-haven asset should be buoyed by continued geopolitical uncertainty, which will most likely continue with the unpredictable Trump administration in power. The US dollar, which most gold is traded in, could continue to weaken as the US debt pile continues to grow, leading many to question the US dollar’s role as the world’s reserve currency.
Copper is another commodity experiencing supply deficits, and increased demand from renewable energy, and emerging economies. The same theme of increased M&A could play out as miners need to go underground for new projects, and to cash in on the current high prices. Many organisations will be looking at offtake agreements for this critical metal to secure an adequate supply. This could see miners rush to acquire suitable mines to meet this demand.
Euroz Hartley (ASX: EZL) Increases Earnings
Net Profit After Tax (NPAT) was $10.3 million for the financial year ended 30 June 2025, up 87.7% on the $5.47 million earned in the previous corresponding period (pcp). This was a reversal of the downward trend in earnings in the previous four years, as subdued market conditions persisted, during a period when interest rates and inflation rose rapidly, leading to lower Equity Capital Market (ECM) activity, and subdued investor activity. In FY2025, lower interest rates and increased confidence in capital markets have seen increased IPOs, and more mining corporate activity.
In FY25 the ECM division, which makes up around 40% of total revenue (and the part that is most leveraged to the mining sector), saw Euroz raise $1.6 Billion in capital for business clients, up from $1.4 Billion in FY24. The chart below shows the total raised by the ECM division over the last 6 years.
In a trading update released late November, Euroz reported ECM capital raised of $737 million in FY26 so far, up 19% of the prior corresponding period (pcp). This included $200 million for WA-based gold miner Rox Resources.
Unaudited Net Profit After Tax (NPAT) was ~$8.3 million on revenue of ~$48.9 million for the four months to 31 October 2025, up ~66% on the prior corresponding period of ~ $5 million.
With higher gold miner share prices and profits, executives and board members may be incentivised to raise more capital and acquire businesses. Executives may want to control larger businesses through ego and/or for higher salaries. We could also see gold miners acquiring copper miners, or targeting other minerals exposed to the renewable energy theme.
Free Cash Flow (FCF) over the financial year was $39.17 million (FY24: $18.82 million), calculated as operating cash flow of $39.20 million minus property, plant, and equipment spending of $32,000. Financial services businesses are capital-light, so can return excess capital to shareholders or buy back shares. Euroz may also benefit from increased efficiencies in back office operations due to advances in Artificial Intelligence (AI).
The balance sheet is solid with $91.7 million in cash on 30 June 2025, and no debt.
The chart below shows the Euroz Hartley Group (ASX: EZL) share price vs the ASX Gold Miners Index (ASX: XGD). As you can see the gold miners index appears to loosely follow the Euroz Hartley share price, until mid-2022 when the gold price experienced one of the most significant rises in history, while the Euroz Hartley share price fell away. Earnings Per Share (EPS) declined as inflation spiked, and the official cash rate rose at the fastest rate since the late 1980s, causing a slowdown in capital raisings.
Does the Euroz Hartley share price offer Value?
From a technical perspective, the share price is trending up from lows. Earnings have improved in the 2025 financial year, after declining for the previous four years. One might have expected, looking at the chart above, that with the increase in the company’s earnings, gold’s stellar price rise, and supply deficits for other commodities like copper and silver, that Euroz Hartley’s share price would have followed previous trends and be far higher.
Euroz is not widely followed, likely due to the small market cap, unexciting business, and the fact that brokers can be reluctant to cover competing brokers.
Investors may want to look at this under-followed, $116 million market capitalisation financial services firm for medium-term price appreciation and yield. The trailing Price to Earnings (P/E) ratio of ~16, is not overly demanding, and it pays a healthy grossed-up 7.85% fully-franked dividend yield.
I (Christopher Coe) have Euroz Hartley on my watchlist, and have purchased an insignificant amount of shares in my ‘watchlist portfolio’. I have no current intention of buying a meaningful condition. As you can see from the chart below, earnings have been up and down over the years for this cyclical company, and the historical sideways movement of the share price will probably continue over the long term, as I cannot see any reason for this to change.
Source: Euroz Hartley FY25 Annual Report
Euroz may interest investors looking for a decent dividend yield. Furthermore, while this is not the kind of long-term thesis that I favour, it does seem the company earnings are close to the bottom of the cycle, if you believe the commodity market outlook to be favourable. One could argue that the share price may re-rate if earnings continue to improve, closing the divergence between the share price performance and the gold price that began in 2022.
Disclosure: The author Chris Coe owns shares in EZL will not trade shares for at least 2 business days after the publication of this article. The editor of this article Claude Walker does not own shares in EZL and also will not trade the stock for at least 2 business days after the publication of this article. This article is not intended to form the basis of an investment decision and is not a recommendation. Any statements that are advice under the law are general advice only. The author has not considered your investment objectives or personal situation. Any advice is authorised by Claude Walker (AR 1297632), Authorised Representative of Equity Story Pty Ltd (ABN 94 127 714 998) (AFSL 343937).
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