March Quarter Gold Medal For Newmont

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This story features NEWMONT CORPORATION REGISTERED.
For more info SHARE ANALYSIS: NEM
The company is included in ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Newmont's March quarter delivered significant beats across all metrics. Analysts do not see recent gold price volatility as upsetting the miner's upside.

• Newmont Corp’s March quarter beats across the board
• Surging by-product prices reduce costs
• Capital management continues through buybacks
• Analysts remain bullish on gold

By Greg Peel

US-based Newmont Corp ((NEM)) is the world’s largest gold miner by volume and became dual-listed in Australia when the company acquired Australia’s largest gold miner, Newcrest, in 2023.

Newmont has operations in the US, Canada, Mexico, Argentina, Peru, Suriname, the Dominican Republic, Australia, PNG and Ghana.

Before a backdrop of solid gold prices, Newmont’s March quarter beat consensus by 7% on production (1.3moz), costs by -10% (US$1709/oz), earnings by 19% (US$5.2bn), net income by 31% (US$3.2bn) and free cash flow by 49% (US$3.1bn).

The stellar result was achieved despite disruptions across multiple assets, highlighting the benefits of Newmont’s globally diversified portfolio and productivity improvements executed in 2025.

Site-level volatility was more than offset by outperformance at other assets, reinforcing Morgans’ confidence in the miner’s earnings stability.

The better operational performance in the quarter was driven by Cadia (NSW), Yanacocha (Peru), Penasquito (Mexico) and Boddington (WA).

Newmont reiterated FY26 production guidance of circa 5.3moz with a 48:52 split implying lower production in the June quarter due to impacts of the earthquake at Cadia and grades at Yanacocha, Penasquito and Ahafo South (Ghana).

Citi believes production guidance looks conservative.

Costs

A strong cost performance was partly due to seasonally lower sustaining capex, but the primary driver was higher silver production (a by-product of gold mining) matched with surging silver prices.

While some normalisation is expected over 2026, management commentary pointed to improved structural cost discipline with productivity initiatives and supply chain optimisation helping to offset inflationary pressures.

Macquarie is not so sanguine, pointing to higher oil prices driving higher costs.

Newmont’s 2026 guidance is based on US$70/bbl Brent oil prices and every added US$10 increase costs by US$12/oz, Macquarie calculates. Therefore, with oil at circa US$110/bbl, that would increase Newmont’s cost base by US$48/oz, or -US$240m, which equates to a 3% increase in Newmont’s cost base.

Additionally, higher royalties which have recently been implemented in Ghana have impacted Newmont’s costs by circa US$25/oz in 2026, with costs impacted circa US$50/oz from 2027 onwards, which has previously been factored into Macquarie’s forecasts.

UBS suggests spot silver and copper prices would more than offset the impact of oil over US$100/bbl oil under management’s by-product unit cost guidance framework.

Newmont is not experiencing any issues with fuel availability, including in regions with tighter fuel/diesel markets including Australia and Ghana.

Cadia

Earlier this month, a magnitude 4.5 earthquake struck the NSW Central West near Orange, which is 25kms from the Cadia mine.

Management revealed there has been no damage to surface infrastructure, but there has been some minor damage to underground infrastructure that will require rehabilitation over the next few weeks.

The June quarter is expected to be impacted slightly, while remediation takes place, running at circa 80% capacity, which Macquarie estimates would imply around 54koz, before returning to full run rates in the September quarter (67.5koz).

Capital Management

Newmont has repurchased US$2.4bn of its own shares since its last earnings call in February, fully exhausting the original US$6bn share repurchase authorisation.

The board has now approved a further US$6bn share repurchase program.

Newmont outlined a new capital allocation framework that provides more visibility on cash returns with the majority of cash expected to be returned through share buybacks.

In UBS’ view, a net debt target and commitment to return 100% of free cash flow beyond this is the optimal distribution policy for the mining sector and therefore UBS sees this as a positive for Newmont’s investment case versus gold peers.

The miner paid US$1.1bn in regular dividends in 2025. The board is committing to maintaining the same base dividend at US$1.1bn and will adjust the equivalent US$ per share at its December quarter results.

This should see dividends per share grow as the share count is reduced through buybacks, UBS notes, but at around 1% the dividend yield is low.

Newmont has set a US$1bn net cash target with a plus or minus $2bn range, implying if net cash increases to above $3bn, the company will return 100% of free cash flow to shareholders.

The balance sheet currently remains strong with net cash of US$3.2bn, above the through-the-cycle target range, hence Newmont will continue to return 100% of free cash flow through buybacks through the remainder of 2026.

Macquarie believes the upsized share buyback demonstrates the board’s commitment to return capital to shareholders as opposed to looking to M&A.

Note that aside from aforementioned operations, Newmont also has multiple further projects underway across the globe.

Views

Back in January, Ord Minnett brought forward its commodity price review (last conducted in December) following a spike in the price of key minerals, lifting 2026 forecasts.

Silver led the gain, with a 90% rise in the forecast, gold rose 19% and copper 14% (another by-product of gold mining).

Ord Minnett subsequently upgraded Newmont to Buy from Accumulate, which remained one of the broker’s preferred gold stocks, as the broker remained upbeat on gold. Ord Minnett raised its price target on Newmont to A$215 but has not yet updated on the March quarter result.

In October last year, gold was trading around US$4000/oz. In early February, the price reached US$5400 at which point a blow-off top was forthcoming after the extraordinary surge.

The bull market began recovering until Trump’s bombing of Iran drove a bounce in the US dollar, sending the gold price down to US$4400 in late March, an -18.5% plunge. It has since recovered once more to US$4700/oz.

Gold price consolidation, triggered by the conflict in the Middle East, may continue near term but UBS believes the macro backdrop and logic for gold remains robust. UBS expects strategic buying interest to support prices at elevated levels in 2026.

Newmont still has a long way to go to build a reliable operating track record, but UBS saw the March quarter as a good start.

If current gold prices persist, free cash flow remains robust, and Newmont’s clear capital allocation return policy provides better visibility on cash returns versus large cap gold peers and production should start improving from 2027.

Morgans expects the strong momentum in Newmont’s operating, earnings and cash flow results to continue in the near term, supported by its diversified portfolio of Tier-1 gold assets positioned to deliver both production growth and further cost improvements in the short-to medium term.

Morgans sees continued balance sheet strength and expects excess capital to be increasingly directed toward share buybacks, enhancing per share returns and supporting total shareholder value.

Macquarie suggests Newmont’s March quarter was “exceptional”, demonstrating the exceptional cash generation of the business.

Citi suggests simply it expects the stock to outperform.

The five brokers monitored daily by FNArena covering Newmont all have unchanged Buy or equivalent ratings. There has been little change to forecasts and only a slight drop in consensus price target, to $203 from $205.

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