If 2024 was the year of AI, then 2025 has belonged to gold, with several FTSE mining stocks benefiting significantly.
The precious metal started the year at approximately $2,624 per ounce. Over Christmas, it blew past $4,500, putting the year-to-date gain at a glittering 66%.
Fuelling this has been interest rate cuts, central bank hoarding of bullion (to reduce reliance on the US dollar), geopolitical instability, persistent inflation, and colossal government debt. It’s pretty much been a perfect backdrop for the price of gold.
Three UK stocks that have benefitted hugely from this are Fresnillo (LSE:FRES) and Endeavour Mining from the FTSE 100, and Pan African Resources from the FTSE 250.
Their share prices have surged 404%, 163%, and 246%, respectively.
Don’t forget soaring silver
Fresnillo obviously stands out here, with it being the best-performing FTSE 100 stock this year by some distance. Indeed, Airtel Africa is second, with a truly pitiful 198% gain.
As well as operating gold mines across Mexico, Fresnillo is also the world’s largest primary silver producer, giving it exposure to both metals. Silver’s up a whopping 146% this year to $71.
As such, Fresnillo’s profits are going through the roof. In the first half of 2025, earnings per share skyrocketed 399%, and full-year earnings growth will be significantly higher than that.
The first-half EBITDA margin rose to 56.9% from 36.5% the year before, while free cash flow jumped above $1bn (from $187.4m). Incredible stuff.
Our continued focus on running our operations as efficiently as possible will enable us to further capitalise on the consistently strong precious metals prices.
Fresnillo CEO Octavio Alvídrez
Volatility guaranteed
Due to its vast operations in silver, which has industrial applications in growth markets like solar panels and electric vehicles, I continue to prefer Fresnillo stock over Endeavour Mining and Pan African Resources.
However, none of them offer new investors much income, with their forward-looking dividend yields around 2.7%.
The main risk for all three, of course, is a significant drop in the gold price. But all of Fresnillo’s mines today are in Mexico, which naturally adds significant some risk to any investment.
This is heightened because the Mexican government has been bringing in a lot of new mining laws, including much stricter environmental permit requirements. It also introduced higher mining duties at the start of the year, and may do so again in future.
On the other hand, the Mexican government is benefiting from higher tax revenue from soaring precious metal prices. As such, I don’t expect anything radical will jeopardise that, though it’s worth noting that Fresnillo recently acquired Canada’s Probe Gold for approximately $560m. So it has started diversifying its operations geographically.
On balance, I think the stock is still worth considering, as there are powerful long-term structural trends supporting both gold and silver, in my view. But it will be a volatile ride, and anyone expecting triple-digit returns again in 2026 is likely to be disappointed.
For what it’s worth, Goldman Sachs recently said it expects gold to hit $4,900 per ounce by the end of 2026 under its base case scenario.
