Written by Amy Legate-Wolfe at The Motley Fool Canada
If you’ve got $5,000 to invest and a decade to let it work, one name on the TSX stands out. This is a stock known for its operational momentum, long-term growth potential, and a valuation that still leaves room for upside. That’s Lundin Mining (TSX:LUN). The dividend stock quietly climbed more than 22% over the past year, rising from $8.94 to just under $15.75. Yet that move only tells part of the story. This is a copper-heavy producer with ambitions to become one of the world’s top 10 copper miners. And its recent performance suggests it’s not just talk.
What happened
In the past 12 months, Lundin stock has been busy reshaping its portfolio. The $1.4 billion sale of its European assets allowed it to pay off its term loan and bring net debt (excluding leases) down to just $135 million. This was a dramatic improvement in balance sheet flexibility. That’s especially important as the company pursues its massive Vicuña Project. This could eventually produce more than 500,000 tonnes of copper annually alongside significant gold and silver output.
Furthermore, in the second quarter of 2025, the dividend stock reaffirmed its full-year production guidance and even lowered cash cost projections. That’s thanks in part to strong performance at its Chapada mine, where costs hit their lowest level since 2021.
Operationally, Lundin stock is firing on multiple fronts. Q2 revenue came in at $937 million, up nearly 7% year over year, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $394.7 million from continuing operations. Free cash flow (FCF) from operations was $211 million despite heavier-than-usual tax payments at Candelaria. Copper production reached 80,073 tonnes for the quarter, supported by healthy gold and nickel output. Chapada was a standout, producing over 11,000 tonnes of copper and more than 17,500 ounces of gold at cash costs of just $0.75 per pound. Even at Caserones, where grades were lower, cost reductions and favourable currency effects helped the bottom line.
More to come
The strategic case for Lundin stock over the next decade is rooted in copper demand. With electrification trends, renewable energy buildouts, and global infrastructure spending all requiring more copper, producers with long-life, low-cost assets are well-positioned. Lundin’s existing operations provide steady cash flow today. Meanwhile, its brownfield expansions and the Vicuña Project could transform its scale by the early 2030s. That growth pipeline is being developed with discipline, supported by a five-year outlook showing the ability to fund projects. All while maintaining shareholder returns through dividends and buybacks.
Of course, there are risks. Copper prices can be volatile, and Lundin’s earnings are sensitive to both commodity swings and operational hiccups at key mines. Large-scale projects like Vicuña carry execution and cost overrun risks, and while the balance sheet is much stronger now, funding billions in future capex will require careful capital allocation. There’s also the challenge of integrating production from multiple jurisdictions with different regulatory and political environments.
Still, for an investor with $5,000 and a 10-year timeframe, those risks may be worth taking. At a forward price-to-earnings (P/E) of about 21, the market seems to be pricing in steady performance but not fully reflecting the upside from Lundin’s long-term expansion. If copper prices remain supportive, or climb further, earnings could grow faster than expected, making today’s valuation look cheap in hindsight.
Bottom line
With a small but consistent dividend, a clear growth strategy, and operational results that are trending in the right direction, Lundin stock offers a compelling mix of current stability and future potential. The next decade could see it transform from a mid-tier producer into a global copper heavyweight, and getting in before that transition is fully priced in could make all the difference for patient investors.
The post $5,000 and a Decade to Invest? One Undervalued Canadian Stock to Consider Now appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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