Newmont Corporation (NEM) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate a mixed sentiment. The company has strong financial metrics, with reduced costs and a large share repurchase program, but offers weak guidance for future production. The Q&A reveals ongoing projects and potential cost savings, but also highlights uncertainties, such as the unresolved notice of default with Barrick. The sentiment is balanced by positive shareholder returns and disciplined capital allocation, leading to a neutral stock price prediction.
Key Financial Performance
Gold Production 5.7 million ounces of gold produced in 2025, consistent with guidance. This was supported by cost savings and productivity initiatives, which helped mitigate pressures from a higher gold price environment and supported margin expansion.
Silver Production 28 million ounces of silver produced in 2025, consistent with guidance.
Copper Production 135,000 tonnes of copper produced in 2025, consistent with guidance.
Free Cash Flow $2.8 billion in free cash flow generated in Q4 2025 and $7.3 billion for the full year. This was attributed to operational and cost discipline.
Shareholder Returns $3.4 billion returned to shareholders in 2025 through dividends and share repurchases.
Noncore Divestiture Proceeds $4.5 billion generated from the successful completion of the noncore divestiture program in 2025.
General and Administrative (G&A) Costs Improved G&A guidance for 2026 by $100 million, equating to a 21% improvement, due to operational and cost discipline.
Gold Reserves 118 million ounces of gold reserves in 2025, supported by 149 million ounces of gold resources. The reserve price assumption increased from $1,700 per ounce to $2,000 per ounce, reflecting evolving price views.
Ahafo North Production Achieved commercial production at Ahafo North, adding over 300,000 ounces of gold production to the portfolio in 2025. The total capital spend for the project was approximately $950 million, at the lower end of the estimated range.
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Operating Highlights
Ahafo North: Achieved commercial production, adding over 300,000 ounces of gold production to the portfolio in 2025.
Tanami Expansion 2: Progressed with the 1.5 km concrete shaft lining completed; full project completion expected in the second half of 2027.
Cadia Panel Caves: Development continues with cave completion at PC2-3 expected in Q4 2026 and progress on PC1-2.
Lihir Mine Life Extension: Received full funds approval for a nearshore barrier project, unlocking over 5 million ounces of low-cost gold and extending mine life beyond 2040.
Red Chris Block Cave: Feasibility study for expansion project ongoing, with full funds approval targeted for the second half of 2026.
Gold Reserve Base: Increased to 118 million ounces, supported by 149 million ounces of gold resource, representing approximately 40 years of production life.
Copper Endowment: One of the largest within the gold industry, providing significant diversification opportunities.
Production and Cost Guidance: Achieved 2025 guidance with 5.7 million ounces of gold, 28 million ounces of silver, and 135,000 tonnes of copper produced.
Cost Savings Initiatives: Implemented measures leading to $100 million improvement in G&A guidance for 2026, equating to a 21% improvement.
Free Cash Flow: Generated $7.3 billion for the full year 2025, with $2.8 billion in Q4 alone.
Capital Allocation Framework: Introduced an enhanced framework prioritizing sustainable dividends, share repurchases, and disciplined reinvestment.
Exploration Focus: 80% of activities focused on near-mine and brownfields programs, with significant results at Brucejack and Ahafo South.
Portfolio Optimization: Continued divestiture of noncore assets, generating $4.5 billion in proceeds to date.
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Risk or Challenges
Fatal incident at Tanami operation: The tragic loss of a team member, Matthew Middlebrook, following a fatal incident at the Tanami operation raises concerns about safety protocols and operational risks. An investigation is underway to address the circumstances and strengthen safety systems.
Deferred Yanacocha Sulfides project: Approximately 4.5 million ounces of gold were reclassified from reserve to resource due to the indefinite deferral of the Yanacocha Sulfides project, impacting the reserve base and development strategy.
Boddington bushfires: The bushfires in December caused production disruptions at Boddington, although recovery efforts have restored operations. This highlights vulnerability to natural disasters.
Nevada Gold Mines joint venture issues: A notice of default was issued to the joint venture partner due to operational performance and management concerns, indicating potential risks to asset performance and shareholder value.
Macroeconomic volatility: Operating in a volatile macroeconomic environment poses challenges to cost management and financial performance, particularly with price-linked impacts on costs.
Sustaining capital and reclamation costs: Elevated sustaining capital and reclamation costs, including $850 million for water treatment plants at Yanacocha, could strain financial resources in the short term.
Production trough in 2026: 2026 represents a trough in production due to planned mine sequencing and other operational factors, potentially impacting financial performance and investor confidence.
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Guidance & Outlook
2026 Production Guidance: Total attributable production of 5.3 million ounces, including 3.9 million ounces from managed operations and 1.4 million ounces from non-managed operations. Production is expected to be relatively evenly weighted throughout the year with a modest second-half weighting of about 52%. 2026 represents a trough in the production cycle due to planned mine sequencing, with a return to production growth in 2027 and beyond, maintaining a longer-term outlook of approximately 6 million ounces of gold and 150,000 tonnes of copper annually.
Cost Outlook for 2026: All-in sustaining costs are expected to be approximately $1,680 per ounce, assuming a $4,500 per ounce gold price, a $60 per ounce silver price, and a $5 per pound copper price. Expected increases in costs are linked to timing impacts and higher gold prices, including production taxes, working participation costs, and third-party royalties. Sustaining capital is expected to be about $1.95 billion in 2026, with 52% weighted to the second half of the year.
Development Capital and Exploration Spend: Development capital is expected to be about $1.4 billion in 2026, with 55% of total spend weighted to the second half of the year. Exploration and advanced project spend is expected to increase to about $525 million, focusing on near-mine assets like Brucejack, Ahafo South, and Merian.
Longer-Term Production Growth Drivers: Production growth is supported by the ramp-up of Ahafo North, completion of the Boddington stripping campaign in 2026, completion of Tanami Expansion 2 in the second half of 2027, ongoing development of Cadia panel caves, and access to low-cost ounces at Lihir following the completion of the nearshore barrier. These initiatives are expected to extend mine life and support production growth into the 2040s.
Capital Allocation Framework: The company will prioritize sustaining capital and a sustainable cash dividend of $1.1 billion per year. Development capital and balance sheet targets will flex based on needs and priorities. Excess cash will be allocated to share repurchases. The framework is designed to maintain financial strength and flexibility while driving sustainable production growth and operational efficiency.
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Shareholder Return Plan
Dividend Increase: Newmont has increased its quarterly common dividend by 4%, with predictable future growth potential.
Sustainable Dividend Commitment: The company has committed to a sustainable cash dividend of $1.1 billion per year, ensuring consistency throughout the commodity and investment cycle.
Dividend Per Share: For the fourth quarter of 2025, a dividend of $0.26 per share was declared, reflecting the per share growth potential of the new approach.
Share Repurchase Program: Newmont has committed to ongoing share repurchases that permanently reduce the overall share count, enhancing per share metrics.
Excess Cash Allocation: Excess cash, after meeting other capital allocation priorities, will be allocated to share repurchases on a ratable basis.
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Key Q&A
Q:Could you talk about the potential upside in CapEx through Red Chris and Merian projects and whether this could lead to higher CapEx than currently guided?
A:The company is on track to provide more details on the Red Chris project in the second half of the year. Current capital guidance averages $1.8 billion on sustaining capital and $1.3 billion on development capital. The capital allocation framework allows for disciplined decisions on value-accretive projects, including Merian, which will be updated later in the year.
Q:Have there been further discussions with your JV partner, Nevada Gold Mines, Barrick, regarding Fourmile and a potential mechanism for vending that into the joint venture?
A:Current discussions have focused on improving the performance of Nevada Gold Mines, with a constructive relationship aimed at enhancing shareholder value.
Q:Is there a time frame for achieving the long-term growth target of 6 million ounces, and what are the larger drivers for that?
A:The company will continue to provide 1-year guidance and expects to offer better guidance on the long-term growth profile towards the end of the year after completing asset reviews and long-term plans.
Q:What are the company's views on M&A in the current gold price environment?
A:The company is satisfied with its portfolio of assets and pipeline of projects. It continues to evaluate its portfolio and will consider value-accretive opportunities in a disciplined manner within its capital allocation framework.
Q:Should we assume that 100% of free cash flow above the $1 billion threshold will be returned to shareholders through buybacks, and will this be done quarterly or annually?
A:The assumption is accurate. Share buybacks will be ratable, and the company will seek Board approval for any additional buybacks after completing the current $6 billion program, of which $2.4 billion remains.
Q:What is the like-for-like CAS guidance for the $1,935 co-product AISC guidance?
A:The like-for-like CAS guidance would be in the order of $1,430.
Q:Will the drivers of inflation (inventory change, working capital, and volumes) reverse in the subsequent 1-2 years?
A:Yes, these drivers are expected to reverse as part of the normal mining cycle. Sustaining capital will remain elevated due to ongoing projects, but cost applicable to sales has stayed constant year-on-year.
Q:What needs to be tackled to maximize shareholder value at Nevada Gold Mines, and how long will it take?
A:The focus is on filling the mill effectively, optimizing plans across the portfolio, and improving short-term productivity. The implementation is ongoing in partnership with JV partners, with action plans being reviewed continuously.
Q:What is the process and timing for resolving the notice of default to Barrick regarding Nevada Gold Mines?
A:The agreement outlines detailed timelines and jurisdiction for resolving disputes. The process includes a time period for resolution and, if unresolved, court proceedings in Nevada.
Q:Do you see room for further divestments or acquisitions in the portfolio, particularly in the region around Yanacocha?
A:The company is focused on disciplined development and growth within its capital allocation framework. Peru remains central to the portfolio, and projects like Yanacocha Sulfides and Conga are under review for future potential.
Q:What is the magnitude of cost savings hitting the 2026 outlook, and are there further cost-out targets for this year?
A:Cost savings have offset inflation, reducing costs by $100 per ounce. G&A costs have been reduced by 21%, and debt retirement and share repurchases have saved $230 million. Future savings will focus on operational productivity and non-headcount reductions.
Q:Will the Tanami expansion hit the $1.7 billion to $1.8 billion target, and what is the status of the project?
A:The project is on track to hit the target. Operations resumed within four days after a recent incident, and development for ventilation infrastructure is ongoing. Shaft infrastructure work will resume after completing the internal investigation.
Q:Why did the company decide to lift reserve and resource assumptions to $2,000 an ounce for resources and $1,700 an ounce for reserves?
A:The assumptions align with the 3-year trailing average and are considered appropriate for the portfolio. The company evaluates these assumptions rigorously and optimizes mine plans accordingly.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the question about the process and timing for resolving the notice of default to Barrick regarding Nevada Gold Mines. They referred to the agreement's publicly available details without elaborating on the company's specific actions or expectations.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Apensu
Francois
Lihir completion
Natascha hello
Officer Newmont
Yanacocha
access
allocation framework
approach
average
base
basis
body knowledge
capital manner
capital project
control
copper cost
cost ounce
count
cycle cash
driver
exploration activity
exploration success
extension Lihir
fund approval
infrastructure processing
life extension
nearshore barrier
ounce resource
potential
price assumption
production profile
reserve price
reserve resource
water
NEM Transcript
Newmont Corporation (NEM) Q4 2025 Earnings Call Transcript
Unknown2-19
The earnings call summary and Q&A indicate a mixed sentiment. The company has strong financial metrics, with reduced costs and a large share repurchase program, but offers weak guidance for future production. The Q&A reveals ongoing projects and potential cost savings, but also highlights uncertainties, such as the unresolved notice of default with Barrick. The sentiment is balanced by positive shareholder returns and disciplined capital allocation, leading to a neutral stock price prediction.
Newmont Corporation (NEM) Q3 2025 Earnings Call Transcript
Positive10-23
The earnings call reflects strong financial performance with record cash flows and significant shareholder returns, including a $3 billion share repurchase program. The Q&A session did not reveal major concerns, and projects are on track. Despite some non-specific management responses, the overall sentiment is positive, supported by robust operational results and optimistic guidance.
Newmont Corporation (NEM) Q2 2025 Earnings Call Transcript
Positive7-25
The earnings call summary and Q&A indicate a positive outlook. The company returned over $1 billion to shareholders and approved a $3 billion share repurchase, signaling strong shareholder returns. Despite production declines in some areas, the company has strategic plans for long-term stability and growth, such as improvements at Lihir and ongoing productivity enhancements. The Q&A reveals no major negative surprises, and management's optimistic guidance for future projects supports a positive sentiment. Thus, a stock price increase of 2% to 8% is expected.
Newmont Corporation (NYSE:NEM) Q4 2024 Earnings Call Transcript
Positive2-21
The earnings call presents a strong financial performance with EPS beating expectations and record free cash flow, despite high G&A costs. The share repurchase program and maintained dividends further support positive sentiment. While there are concerns about long-term guidance and certain project timelines, the divestment proceeds and debt reduction indicate financial health. The positive production outlook and cost reduction in Q4 2024 add to the optimism. Overall, the positive elements outweigh the uncertainties, suggesting a likely positive stock price movement.
NEM Slides
NEM Report
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