Mumbai: While gold prices have delivered stellar returns of 41% in 2025 alone, a little-known small-cap stock, Deccan Gold Mines (DGM), has far outpaced the bullion market with a remarkable 772% gain over the last five years. Analysts attribute this surge to DGM’s strategic project portfolio and near-term production prospects, highlighting the potential benefits of early stock selection in the mining sector.
Deccan Gold Mines: business overview
Deccan Gold Mines is India’s first publicly listed gold mining company in over five decades. Its portfolio includes advanced-stage gold projects in India and Kyrgyzstan, alongside Tier-II exploration projects in Mozambique, Tanzania, and Eastern Finland.
According to Harshal Dasani, Business Head at INVAsset PMS, the company has evolved from a gold exploration firm into a mining entity with visible production potential. Its associate, Geomysore Services, recently received key approvals for the Jonnagiri gold project in Andhra Pradesh, including environmental clearance and consent to operate, positioning it as one of India’s first private-sector gold mines ready for commissioning.
In Kyrgyzstan, the Altyn Tor Gold Project is advancing steadily, with infrastructure nearing completion. Exploration drilling has reached 2,000m of a planned 2,500m program, with visible gold discovered and assay results awaited, indicating potential for an expanded resource base.
Financing and operations
To support project development, DGM has raised ₹120 crore in loans, secured against its Geomysore stake. Legal proceedings concerning the Ganajur lease in Karnataka continue, though a Supreme Court ruling was in the company’s favour.
Despite the soaring share price, DGM remains in a pre-production phase, with revenue rising from ₹3 lakh in December 2024 to ₹62 lakh in the June 2025 quarter. High operational and project costs have kept the company in the red, with a net loss of ₹15.59 crore in Q1 FY26. Dasani noted that this is typical of junior mining companies, where market valuations often respond more to project approvals, permits, and financing rather than near-term earnings.
Earnings inflection points
The company’s future profitability hinges on two key projects: Jonnagiri in Andhra Pradesh and Altyn Tor in Kyrgyzstan. Analysts believe that once production ramps up, DGM is well-positioned to benefit from gold prices holding near record levels of ₹1,10,000 per 10 grams. Execution, timely ramp-up, and regulatory clarity remain critical for converting high gold prices into sustainable cash flows.
Technical outlook
From a technical standpoint, DGM has gained nearly 10% in September, bouncing off the 200-day simple moving average (DSMA) support. Current consolidation is near the ₹135 zone, where descending trendline resistance aligns with the 89-day exponential moving average (DEMA).
Technical analyst Rajesh Bhosale of Angel One said a sustained move above ₹135 could unlock further upside towards ₹145, with momentum indicators like the RSI crossing above 50 and prior peaks, reinforcing a potential early buy signal. On the downside, the 200-DSMA around ₹122 remains key support.
Conclusion
Deccan Gold Mines demonstrates how small-cap mining stocks can outperform commodity markets when backed by strategic assets and regulatory approvals. While current earnings remain modest, the stock’s performance highlights the importance of project visibility, investor sentiment, and gold price trends in driving valuation.