Lundin Gold (TSX:LUG) has emerged as a top-tier gold mining stock, thriving in the current bull market thanks to exceptional operational and financial performance. Its flagship asset, the Fruta del Norte mine in Ecuador, ranks among the highest-grade gold mines globally. This world-class quality enables Lundin to maintain ultra-low production costs, with all-in sustaining costs (AISC) projected to stay below US$1,000 per ounce from 2025 through 2027. With gold prices now exceeding US$3,300 per ounce, Lundin enjoys extraordinary profit margins on every ounce sold.
Record-Breaking Q2 Financial Performance
In the second quarter of 2025, the company reported exceptional financial results, generating $453 million in revenue from the sale of 136,737 ounces of gold. The average realized gold price was an impressive $3,361 per ounce. This translated into EBITDA of $319 million and net income of $197 million—both reflecting strong operational efficiency and favorable market conditions.
Upward Revision to 2025 Production Guidance
On the back of a strong first half, the company has increased its full-year production guidance. The previous range of 475,000 to 525,000 ounces has been revised to 490,000 to 525,000 ounces. This reflects solid performance and operational momentum. However, due to planned mine sequencing, the company anticipates a reduction in average head grade during the second half of the year.
Cost Expectations Adjusted Toward Upper End of Guidance
As production shifts in H2, the company expects cash operating costs and all-in sustaining costs (AISC) to trend toward the higher end of earlier guidance. Specifically, cash operating costs are now expected to range between $730 and $790 per ounce sold, while AISC is forecasted between $935 and $995 per ounce.
Higher Gold Prices Drive Costs Up Alongside Profits
Although record-high gold prices have significantly enhanced financial performance, they have also led to increased royalty payments and higher profit-sharing with employees. These factors are contributing to the rise in both cash operating costs and AISC, despite the company’s strong underlying efficiency.
Stock Performance and Recommendation
The company’s financial performance is equally impressive. Lundin Gold shares have soared 155% year-to-date, reflecting a surge in revenue, earnings, and free cash flow. Notably, revenue growth in the first half of 2025 was driven largely by rising gold prices, despite only modest increases in production—demonstrating strong leverage to the commodity’s price.
Adding to its appeal, Lundin’s successful exploration activities in 2024 replaced more gold than was mined, effectively increasing its mineral reserves and extending the life of its key asset. For investors looking for a high-quality, cash-rich gold producer with strong growth potential, Lundin Gold stands out as a premier investment opportunity.
Considering these facts, a “Buy” rating has been given at the price of CAD 93.67 per share as on September 9, 2025.
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