A Record Quarter and a Doubled Buyback, With Gold at $4,900: A Superb Business at the Wrong Price, Maintaining Hold
Key Takeaways
- Newmont set records again: an all-time-quarterly $3.1B of free cash flow (even after ~$1.3B of cash tax payments), $2.90 adjusted EPS versus ~$2.07–$2.24 Street, $5.2B adjusted EBITDA, and a $3.2B net-cash position. The Q4 guide that Q1 free cash flow would step down proved conservative; it rose to a record instead.
- The engine is an extraordinary realized gold price of $4,900/oz, up $684 sequentially. This is the crux of our caution: the record cash is real, but it is generated at a gold price roughly 2.5 times the company's own $2,000 reserve assumption, which raises rather than lowers the reversion risk in a leveraged producer.
- Management fully executed its prior $6B buyback and the Board immediately authorized another $6B, the fourth authorization since 2024. Free cash flow per share is already 6% higher than it would have been pre-buyback. The capital-return machine is working exactly as designed.
- The headline by-product AISC of $1,029/oz is flattered by peak silver and copper credits and seasonally low Q1 capex; on a co-product basis AISC actually rose to $1,709/oz, and management guided Q2 costs "notably higher, more in line with February guidance." A magnitude-4.5 earthquake at Cadia on April 14 will also lower Q2 production, and the Barrick default over Nevada Gold Mines remains unresolved.
- Rating: Maintaining Hold. Our conviction in the franchise is higher after this quarter, not lower. But we rate the forward risk/reward, and a leveraged gold producer trading near an all-time high with gold at a record $4,900/oz, entering a trough production year with rising costs and an open partner dispute, is the wrong place to add. We would upgrade on a gold-price reset that de-rates the stock or on resolution of the Nevada dispute, not on more of the same at higher prices.
Results vs. Consensus
| Metric (Q1 2026) | Actual | Consensus | Beat/Miss | Magnitude |
|---|---|---|---|---|
| Revenue | $7.31B | ~$6.5B–$6.9B | Beat | +6% to +13% |
| Adjusted EPS | $2.90 | ~$2.07–$2.24 | Beat | +30% to +40% |
| Adjusted EBITDA | $5,154M (record) | n/a | — | +13% QoQ |
| Adjusted net income | $3,156M | n/a | — | +15% QoQ |
| Free cash flow | $3,144M (record) | n/a | — | +12% QoQ despite ~$1.3B tax |
| Attributable gold production | 1.30 Moz | ~1.28 Moz | In line | −10% QoQ |
| Gold AISC (by-product) | $1,029/oz | ~$1,300/oz | Better (see note) | Flattered |
On the numbers this was the strongest quarter in the company's history, and the standout is that free cash flow set a record despite the ~$1.3B of tax payments management had flagged in February as a reason Q1 would be soft. The reason is simple and important: realized gold of $4,900/oz overwhelmed everything else. Adjusted EPS of $2.90 beat the ~$2.07 consensus by roughly 40%. The beat is, once again and to an even greater degree, a gold-price beat.
Quality of Beat
- Revenue: Revenue of $7.31B was up 16% year on year even though production of 1.30 Moz was down 10% sequentially. Every incremental dollar of the top line came from price, not volume. The polymetallic mix helped: 9M ounces of silver and 30kt of copper at high prices lifted both revenue and the by-product cost calculation.
- Margins / costs: This is where the headline misleads and the detail matters. By-product AISC of $1,029/oz looks spectacular, but management was candid that it was flattered by unusually strong silver and copper credits and by seasonally low Q1 sustaining capital ($381M). On a co-product basis, gold AISC actually rose to $1,709/oz from $1,620 in Q4. Q2 AISC was guided "notably higher, more in line with February guidance."
- EPS: High quality on cash, with GAAP net income of $3.26B actually above adjusted net income of $3.16B, so no aggressive add-backs. But the forward-relevant point is that $2.90 sits on a $4,900 gold price; normalize the price and the earnings power is materially lower.
Operating Performance
Production of 1.30 Moz was down sequentially on planned sequencing and a set of genuine operational headwinds, yet the portfolio still delivered, which is the point management most wanted to make. Bushfires at Boddington, extreme snowfall at Brucejack and record rainfall at Tanami all hit in the quarter, and the diversified portfolio absorbed them.
| Driver | Q1 2026 read | Assessment |
|---|---|---|
| Gold production | 1.30 Moz; on track for 5.3M FY guide | Down on sequencing + weather; portfolio absorbed it |
| Silver / copper | 9M oz Ag; 30kt Cu, at high prices | Drove the flattering by-product cost; not repeatable at this level |
| Yanacocha | Strong leach from Quecher Main high grades | Mining extended into 2026–27; adds low-cost 2027 ounces |
| Cadia | Higher throughput/grade in Q1; then M4.5 quake April 14 | Q2 production lower; 80% capacity in ~5 weeks, full by end-Q2 |
| Boddington | Bushfire disruption, fully recovered | Back to full throughput for Q2 |
| Ahafo North | Ramp on plan, first full commercial year | The new low-cost ounces; the growth bright spot |
The Cadia earthquake
A magnitude-4.5 earthquake struck near Cadia on April 14. Safety protocols worked as designed, all underground personnel were evacuated with no injuries, and, critically, all surface infrastructure including the tailings facilities was inspected and undamaged. Underground power and dewatering have been restored and the regulator approved repairs. Newmont is processing surface stockpiles now, expects underground rehabilitation in about five weeks to 80% capacity, and full recovery by the end of Q2, at the cost of a lower Q2 production quarter.
Assessment: The response was a credit to the operation, and the intact tailings facilities are the most important fact given the industry's history. The financial impact is a one-quarter production dip that Q1's outperformance largely absorbs within the full-year guide. It is not a thesis event, but it is one more item on a growing list of near-term operational disruptions this year.
The Enhanced Framework in Action: the Doubled Buyback
The capital-return story executed exactly as the February framework promised. Newmont fully exhausted its prior $6B authorization (returning $2.4B since the last call), and the Board immediately authorized another $6B, the fourth authorization since 2024. The dividend held at $0.26, funded within the fixed $1.1B annual envelope. Management quantified the payoff: free cash flow per share is already 6% higher than it would have been without the buyback.
"Our Board has doubled the size of our share repurchase program with an additional $6 billion authorization... Both our share repurchase program and the resulting per share dividend growth are formulaic outputs of our capital allocation framework." — Peter Wexler, Interim CFO
Assessment: This is the strongest part of the story and the reason the rating is Hold and not lower. A near-total-payout model on a net-cash balance sheet, executed ratably and formulaically, is exactly what a mature gold producer should do. Our one reservation is timing: repurchasing at a share price near all-time highs retires fewer shares per dollar than the same cash would have at the lows where the company was also buying. The framework is right; the entry point for the buyback is expensive, which is precisely our concern about buying the equity here too.
Key Topics & Management Commentary
Overall Management Tone: Confident and operationally credible, leaning on a quarter that delivered records through real adversity (a quake, bushfires, snow, rainfall). The candor on costs was notable: rather than let the $1,029 AISC stand unqualified, management pre-warned that Q2 costs step up toward the February guide. The one topic still handled at arm's length was the Nevada Gold Mines dispute, described as an open-ended, iterative process.
1. Record Free Cash Flow, Against the Q4 Guide
Q1 free cash flow of $3.1B set an all-time quarterly record even after ~$1.3B of cash tax payments, contradicting February's guide that Q1 would step down from Q4. Operating cash flow was $3.8B on just $641M of total capex.
"Newmont generated $3.8 billion in cash flow from operations after working capital and a record $3.1 billion of free cash flow even after making approximately $1.3 billion in cash tax payments during the quarter." — Peter Wexler, Interim CFO
Assessment: A genuine positive surprise that de-risks the 2026 free-cash-flow trajectory. It also, however, underlines the dependence on the gold price: the tax drag was real and the record still happened only because gold ran another $684/oz. Strip the price back to normalized levels and the same quarter is good, not record.
2. Gold at $4,900 and the Reversion Question
Realized gold of $4,900/oz is the highest in the company's history and the direct cause of the record results. Management raised its reserve price only to $2,000/oz in February, so the realized price is roughly 2.5x the level at which the company books reserves.
Assessment: This is the center of our caution. The bull case, that gold stays here or rises, is a commodity-price bet we are not willing to underwrite at a near-record equity price. The reserve-price conservatism cuts both ways: it is prudent, but it also implies management itself does not plan the business around $4,900 gold. A leveraged producer at a record share price with the commodity at a record price is asymmetric to the downside.
3. The AISC That Is Not the Run-Rate
By-product AISC of $1,029/oz was flattered by strong silver and copper credits, seasonally low sustaining capital, and shutdown-related timing. Management explicitly guided Q2 costs higher and reaffirmed the full-year ~$1,680/oz by-product guide.
"All-in sustaining costs are expected to be notably higher in the second quarter and more in line with the guidance we provided in February, driven by the ramp-up in sustaining capital, higher cost applicable to sales and lower silver production." — Peter Wexler, Interim CFO
Assessment: Credit to management for not letting the flattering number stand. For the model, the co-product AISC of $1,709/oz, up from Q4, is the truer read of underlying gold cost, and it rises through the year as capex ramps. The margin optics of Q1 will not persist.
4. Nevada Gold Mines: the Default Remains Open
The February 3 notice of default served on Barrick over Nevada Gold Mines is still unresolved. Management described an open-ended, iterative process, exercising audit rights and reviewing findings, with no set timeline.
"The period of the notice of default is open ended, and we're working with them... we work through an orderly process on the notice of default, including exercising our audit rights, reviewing those findings. So it's really just an ongoing process at this point in time." — Peter Wexler, Interim CFO
Assessment: Two quarters in, this is still an active, undefined dispute over one of Newmont's larger equity-accounted exposures. An "open-ended" process with no timeline is exactly the kind of unquantifiable overhang that caps a rating. It is not deteriorating, but it is not resolving either.
5. Cost Pressures: Ghana Royalty, Oil, and the Middle East
Management flagged new external cost pressures: a Ghana sliding-scale royalty adding roughly $25/oz in 2026, and higher oil prices from the Middle East conflict (every $10/bbl adds ~$12/oz to AISC against a $70/bbl guide assumption). It maintained full-year cost guidance, leaning on productivity and its supply chain to offset.
Assessment: Individually small, collectively a headwind that argues against extrapolating Q1's low cost. Management's mitigation track record is good, but these are real incremental pressures into a year already guided to higher costs.
6. Operational Resilience Through Adversity
Bushfires at Boddington, extreme snowfall at Brucejack, record rainfall at Tanami, and a Cadia earthquake all landed in a single quarter, and the portfolio still produced 1.30 Moz on plan.
Assessment: This is the genuinely bullish, non-price part of the quarter and the best evidence yet that the stabilization program has made the portfolio resilient. It is the reason our conviction in the business is higher. It is also, notably, not enough to overcome our valuation discipline.
7. Tanami Fatality Investigation Complete
Newmont completed the investigation into the February fatality at Tanami and is sharing the learnings across the organization and the industry. Tanami Expansion 2 work resumed after the temporary pause, with the underground primary crusher commissioned.
Assessment: Closing out the investigation and resuming the project is the right resolution, though the operating-discipline questions raised by two serious safety events in the coverage window remain worth monitoring against the company's stated safety-first priority.
8. Per-Share Mechanics of the Framework
Management stressed that the buyback plus the fixed-dollar dividend are producing formulaic per-share growth: FCF per share up 6% already, with continued per-share dividend growth as the count shrinks.
Assessment: The mechanics are sound and shareholder-aligned. The compounding is real over time. Our only caveat, again, is that the accretion per dollar is smaller when the shares being retired are priced near record highs.
Guidance & Outlook
| Metric | FY2026 Guide | Q1 tracking | Q2 direction |
|---|---|---|---|
| Attributable gold production | 5.3 Moz | 1.30 Moz; on track | Slightly below Q1 (Cadia gap) |
| Gold by-product AISC | ~$1,680/oz | $1,029/oz (flattered) | Notably higher, toward guide |
| Sustaining capex | ~$1.95B | $381M (light) | Increasing |
| Development capex | ~$1.4B (H2-weighted) | $239M | Increasing |
| Dividend | $1.1B/yr fixed | $0.26/quarter | Held |
| Buyback | Ratable, excess FCF | New $6B authorized | Ongoing |
Management maintained full-year guidance across the board despite the Ghana royalty and oil-price pressure, and framed Q2 as a lower production quarter (the Cadia mill-feed gap, lower Ahafo South grades after depleting Subika stockpiles, and lower Peñasquito silver during an organic-carbon treatment stretch), with Q3 recovering. Costs and capex both step up from Q1's low base.
Implied trajectory: Q2 is likely the low point for production and, with the capex ramp and normalized silver credits, a higher-cost quarter. The full-year 5.3 Moz remains in reach on Q1's cushion. The key message for anyone annualizing Q1: the unit-cost and free-cash-flow prints both benefited from factors that reverse.
Guidance style: Conservative and candid, consistent with the pattern all year. Management is again under-promising (holding guidance despite the gold windfall) and pre-warning on the Q2 cost step-up.
Analyst Q&A Highlights
The Nevada Gold Mines default: where does the process stand?
The first question went straight to the unresolved Barrick dispute and its timeline.
Q: "Can you comment on where we are on the whole process with the default that was issued in February of this year with respect to Nevada Gold Mines?"
— Tanya Jakusconek, Scotiabank
A: "The period of the notice of default is open ended... we work through an orderly process on the notice of default, including exercising our audit rights, reviewing those findings... There's no set time line for bringing it to resolution but we hope to do so in the near term."
— Peter Wexler, Interim CFO
Assessment: Still no timeline and no quantification two quarters in. The process is orderly but undefined, which keeps it an open-ended overhang on a material equity-accounted asset. This is precisely the kind of uncertainty that caps the multiple and supports a Hold.
Is Q2 the low quarter, and does momentum build from there?
An analyst sought the shape of the production year and confirmation that Q2 is the trough.
Q: "Can you take us through where operations were beating your expectations? And it sounds like Q2 may be a little bit down quarter-on-quarter. Should we think about Q2 as sort of the lowest production quarter for the business and then progressive momentum from there?"
— Matthew Murphy, BMO Capital Markets
A: "As we look into the second quarter... we do see lower grades coming from Apensu and Awonsu... For Peñasquito... we will also see lower silver production. And then... the recovery proceeds that we are working through at Cadia. So therefore, a slightly lower quarter as expected, and we'll see the third quarter coming back stronger."
— Natascha Viljoen, CEO
Assessment: Confirms Q2 as the low point on sequencing plus the Cadia gap, with recovery in H2. The full-year guide holds on Q1's cushion. It also confirms the Q2 cost and production optics will be less flattering than Q1, an unfavorable near-term setup for the shares.
Keeping unit costs in range amid energy inflation
A recurring line of questioning probed how Newmont keeps 2026 AISC within guidance given rising energy and input costs.
Q: "Could you speak to some of the levers that Newmont can pull in order to ensure that input cost inflation doesn't drive 2026 unit cost guidance above the range? And to what extent might Newmont be insulated from cost pressures across the supply chain?"
— Lawson Winder, Bank of America
A: "The levers sit in 2 areas. The one is in productivity... we have parked a high number of pieces of equipment across all of our operations to help us to reduce consumption... We have not seen the full impact coming through on increased fuel cost."
— Natascha Viljoen, CEO
Assessment: A candid acknowledgment that the full fuel-cost impact is still ahead and that holding guidance depends on continued productivity offsets. Management's execution here has been good, but this is a headwind working against Q1's flattering cost print, not a tailwind.
Quantifying the oil-price and broader cost sensitivity
An analyst pressed for a fuller quantification of the energy and input-cost exposure.
Q: "Thank you for providing some of that disclosure on oil price impacts and the diesel exposure... Is there any way the company can quantify the impact of sensitivity to some of these overall primary and secondary impacts based on current prices?"
— Josh Wolfson, RBC Capital Markets
A: "Not at this stage. The sensitivities that we supply, firstly on fuel and then also just our cost mix, is what we have available at this stage."
— Natascha Viljoen, CEO
Assessment: Management gave the direct diesel sensitivity (~$12/oz per $10/bbl) but would not quantify secondary effects, leaving part of the cost risk unmodeled. With gold this high the market is not focused on it, but it is a latent pressure if the price ever normalizes and the cost tailwind of by-product credits fades together.
The CFO seat, still interim
An analyst noted that a record quarter and a new framework were delivered with an interim CFO, and asked about the permanent search.
Q: "Related to the CFO recruitment process. Peter, certainly Newmont's delivering results with you in the CFO chair, but there is the interim in the title. So Natascha, any update on how that recruitment process is going?"
— Matthew Murphy, BMO Capital Markets
A: "That recruitment process is going well, Matthew, and we trust that we'll be able to share more information soon."
— Natascha Viljoen, CEO
Assessment: Still unfilled, now well over a year. The interim leadership has clearly delivered, so the urgency is low, but a permanent CFO is a governance box that remains unticked as the company runs the largest capital-return program in its history.
What They're NOT Saying
- What normalized-gold free cash flow looks like: Every quarter this year, management has narrated the upside of record gold without ever framing free cash flow at its own $2,000 reserve price. The single most important sensitivity for a leveraged producer is the one that is never quantified.
- A resolution path or timeline for the Barrick default: "Open ended" with "no set timeline" is candid but leaves the range of outcomes and the financial tail entirely undefined two quarters in.
- Secondary energy-cost sensitivities: Management gave the direct diesel number but declined to quantify second- and third-order energy effects, leaving part of the 2026 cost risk unmodeled just as external pressures build.
- The permanent CFO timeline: "Soon" again, more than a year in. The seat has been filled in practice but not in title, through a record year and a doubled buyback.
- Any view on the sustainability of $4,900 gold: Understandably, management will not forecast the gold price, but the entire earnings base now rests on a level it declines to endorse in its own reserve assumptions, and it offers investors no framework for the downside.
Market Reaction
- Pre-print setup: NEM closed at $111.06 on April 23, having pulled back roughly 11% from its February all-time high near $125, up 11% year to date and up 12% over the trailing 30 days. The stock entered with some room restored after the post-Q4 drift.
- Reaction session (April 24): The stock rose 8.7% to $120.70 (+$9.64), its strongest earnings reaction of the coverage window. The S&P 500 was up 3.8% year to date entering the print.
The market rewarded the record free cash flow, the doubled buyback and the beat, reading through the Cadia earthquake and the Q2 cost step-up. The pop is fully deserved on the quarter. But it also puts the stock back within striking distance of its all-time high, which is exactly the level at which we stepped aside a quarter ago. A great print that returns the shares to a full valuation does not, by itself, create the favorable risk/reward we need to upgrade.
Street Perspective
Debate: Buy the best gold franchise, or fear the gold price?
Bull view: This is the highest-quality, highest-free-cash-flow name in the sector, running a near-total-payout buyback on a net-cash balance sheet; at a mid-single-digit-plus free-cash-flow yield you are paid to own it while it compounds per share.
Bear view: The entire earnings base rests on $4,900 gold, roughly 2.5x the company's own reserve price; buying a leveraged producer at a record share price with the commodity at a record price is the classic cyclical trap of paying peak multiples on peak earnings.
Our take: The bulls are right about the quality and the payout; the bears are right about the entry. Quality does not neutralize commodity leverage at a price extreme. We would rather own this franchise after a gold-price reset than chase it at the highs, which is why we stay at Hold with high respect for the business.
Debate: Is the doubled buyback smart capital return or buying high?
Bull view: A formulaic, ratable buyback that has already lifted free cash flow per share 6% is textbook shareholder value, and management's confidence in authorizing a fourth program signals it sees intrinsic value above the current price.
Bear view: Repurchasing near all-time highs retires far fewer shares per dollar than the same program did at the lows; the framework is sound but the timing is expensive, and a net-cash miner could hold some dry powder for a better entry.
Our take: We strongly endorse the framework and the discipline; our reservation is narrow and it is the same one we have about the equity itself. Buying high is still buying, and the accretion is simply smaller here than it was at $40 or $80.
Debate: Do the near-term disruptions matter, or are they noise?
Bull view: A quake, bushfires, snow and rainfall all hit and the company still produced 1.3 Moz on plan and set free-cash-flow records; the resilience proves the portfolio quality and the disruptions are transient.
Bear view: A fatality, an earthquake, weather at three sites and an open partner default in two quarters is a lot of operational and governance noise for a business whose entire appeal is now supposed to be stability and predictability.
Our take: The resilience is real and impressive, and none of these is individually a thesis-breaker. But collectively they argue for patience rather than paying up, and they keep the balance of risk to the downside at the current price.
Model Update Needed
| Item | Prior Assumption | Suggested Change | Reason |
|---|---|---|---|
| Realized gold price (2026E) | ~$4,200/oz | ~$4,500–$4,700/oz | Q1 realized $4,900; spot elevated |
| 2026 by-product AISC | ~$1,680/oz | ~$1,680/oz (unchanged) | Q1 low is flattered; Q2 steps up toward guide |
| Q2 2026 production | Flat QoQ | Slightly below Q1 | Cadia earthquake mill-feed gap |
| 2026 FCF | Below 2025 record | Raise; Q1 record de-risks the year | Q1 $3.1B beat the guided step-down at $4,900 gold |
| Incremental cost headwinds | — | +$25/oz Ghana royalty; +$12/oz per $10 oil | New royalty; Middle East energy |
| Share count | Declining | Declining faster | New $6B authorization; ~100% excess FCF to buybacks |
Valuation impact: At ~$121, back near the all-time high, the stock discounts the record cash generation and the buyback in full. On a normalized gold price well below spot, forward free-cash-flow yield compresses meaningfully from the Q1 annualized figure, and the equity carries maximum operating leverage into any gold-price reset. We see fair value roughly in line with the current price, with the risk skewed to the downside if gold cools toward the company's own reserve assumption. That is a Hold, and a high-conviction one on the business, a cautious one on the price.
Thesis Scorecard Post-Earnings
We score the quarter against the standing six-pillar thesis.
| Thesis Point | Status | Notes |
|---|---|---|
| Bull 1 — Gold-price leverage into record cash | Confirmed | Record $3.1B FCF; but at $4,900/oz gold, the reversion risk is now higher |
| Bull 2 — Capital-return machine | Confirmed (strengthened) | Prior $6B fully executed; new $6B authorized; FCF/share +6% |
| Bull 3 — Operational stabilization + resilience | Confirmed (strengthened) | Delivered 1.3 Moz through quake, bushfires, snow, rainfall |
| Bear 1 — Leveraged bet on gold + valuation | Confirmed (dominant) | Near-record share price + record $4,900 gold = asymmetric downside |
| Bear 2 — Operational / safety / execution risk | Neutral | Tanami investigation closed; but Cadia quake + Ghana royalty + oil |
| Bear 3 — Management / governance overhang | Challenged (unresolved) | Barrick/NGM default open-ended; CFO still interim >1 year |
Overall: Thesis intact and, on the business, strengthening; the bull pillars are all confirmed and two strengthened. But the dominant pillar is now Bear 1: a superb, resilient franchise priced near an all-time high on a record gold price we are unwilling to underwrite. The risk/reward is balanced-to-unfavorable at the current price.
Action: Maintain Hold, with raised conviction in the franchise. We would upgrade to Outperform on a meaningful gold-price reset that de-rates the shares to a clear discount to normalized free cash flow, or on resolution of the Nevada dispute paired with a more attractive entry. We would turn cautious toward Underperform only if gold broke sharply toward the $2,000 reserve price while the market was still capitalizing peak earnings.