A Clean Beat and a 10% Cost-Guide Cut, Then the Bill Arrives: Higher 2027 Costs and a Red Chris Priced at Twice Newcrest's Estimate

Results vs. Consensus

Q3 2026 Scorecard

This is a clean beat after last quarter's ambiguous one. Last quarter the EPS line was genuinely ambiguous and revenue missed by about 4%. This quarter every provider's EPS figure sat at or below $2.05 against $2.20 actual, and every revenue figure sat below $6,363M. Production was a hair under the street at 1,302koz, but that is a rounding difference on a quarter management had told the market would look like Q2, and it did.

Year-Over-Year Comparison

The year-over-year picture still carries the gold price, but the cost half of it is getting harder. Last quarter absolute costs applicable to sales rose 4.3% against a 33% higher realized price. This quarter they rose 9.8% against a 22% higher price, with Ahafo North now in the cost base as a reportable segment and higher direct costs at Boddington, Lihir and Nevada Gold Mines. Co-product AISC, which does not net out silver and copper revenue, is up 25.4%. Per-share growth outran every absolute line because the diluted share count fell 4.5% in a year.

Quarter-Over-Quarter Comparison

Quality of the Beat

• Revenue: The 4.0% sequential increase came almost entirely from co-products. Gold revenue was roughly flat, as consolidated ounces sold rose 1.3% to 1,211koz while the realized price fell 2.2%. Silver sold jumped to 11Moz from 6Moz and zinc to 67kt from 40kt as Peñasquito's co-product grades recovered. Copper is the oddity: production rose 35% to 23kt but copper sold fell to 18kt from 22kt, so Cadia's recovery has not yet reached the revenue line in full.
• Margins: By-product AISC fell to $1,454/oz on higher gold and co-product volumes, a $6.91/lb realized copper price and the absence of Q2's Cadia downtime costs, partly offset by higher sustaining capital, a lower silver price and higher diesel. Strip out the credits and co-product AISC rose $25/oz to $1,963, the fourth increase in a row from $1,566 a year ago. The cost guidance cut is built on the same credit: the release attributes it to cost discipline and to co-product prices above the guidance assumptions, and the copper assumption is $5.00/lb.
• EPS: High quality and, if anything, conservative. Adjusted net income of $2,309M sits $166M below GAAP net income of $2,475M. The adjustments add back $116M of remediation at the historic Midnite uranium site and remove a $40M asset-sale gain and $215M of valuation-allowance and other tax benefits. On our arithmetic the adjusted figure carries a tax rate of about 33%, in line with guidance, so the beat is operational rather than a tax line.
• Free cash flow: Down 13% sequentially, as we said to model it. Working capital used $565M: receivables reversed $318M, about 69% of Q2's $461M release, reclamation spending took $256M and inventories $172M. Before working capital the business generated more cash, not less: operating cash flow before working capital less capital additions was $2,477M against $2,295M in Q2, up 7.9%. Cash taxes of $858M were 21% lower than Q2 on the timing of 2025 tax payments.

Operating Performance by Asset

Peñasquito carried the cost line, and it will stop doing so

Peñasquito produced 11Moz of silver, up 57% sequentially and the most of any quarter in our coverage, along with 67kt of zinc and 22kt of lead, as co-product grades recovered from Q2's trough. Its by-product AISC swung from ($4,352)/oz to ($9,301)/oz. That single asset's credit is the main reason group by-product AISC fell, even as realized silver slipped to $50.50/oz from $53.49.

"The fourth quarter cost profile primarily reflects the planned timing of sustaining capital spend, lower co product credits as silver production at Penasquito declines to approximately half of third quarter levels and ongoing inflationary pressures."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

Assessment: We said in July that modelling group AISC means modelling Peñasquito's silver. Q3 proved it in the favourable direction. Q4 reverses it, with silver halving, and 2027 extends it, with silver guided about 30% below 2026 on mine sequencing. The 2026 cost guide cut is earned. It does not carry into 2027.

Cadia is back in production, but not yet back in cost or sales

Cadia produced 61koz of gold and 13kt of copper, up from 34koz and 7kt in the quarter of the April seismic event, though still below the 94koz and 21kt of Q1. Its by-product AISC rose to $2,236/oz and its co-product AISC to $3,390/oz. Part of that is a sales lag: Cadia sold 43koz of gold and 8kt of copper against what it produced, so the costs landed before the credits did. The regulatory approvals needed to resume cave establishment at the project caves have now been received.

Assessment: The operating recovery is on track and the regulatory question we flagged in July is closed. The unit-cost optics at Cadia should improve as concentrate sales catch up with production. The more important point is that the copper guide now leans heavily on Cadia's Q4 shipments, which we discuss under guidance.

Tanami missed, but the expansion that fixes it moved forward

Tanami produced 81koz, 10% below Q2 and about 10% below the street's expectation, with by-product AISC rising $234/oz to $2,267, now the highest in the managed portfolio. The offset is the second expansion: shaft construction finished in Q3, mechanical completion is due by year-end, and commercial production is now expected by the end of the second quarter of 2027, earlier than planned.

Assessment: The quarter was weak and the cost is high, but Tanami's problem is a hoisting constraint that the new 1.5km shaft is built to remove. Management guided higher-grade stopes in Q4 and a return to prior performance into 2028. We treat Tanami as the clearest 2027 growth lever after Boddington and Lihir.

Lihir took its planned shutdown, and now watches the weather

Lihir produced 135koz, down 14% on the planned September maintenance shutdown, with by-product AISC rising to $1,912/oz. The shutdown finished on schedule and the asset moves into higher-grade ore in Q4. The new risk is water: El Niño conditions are forecast to strengthen through November and December.

Assessment: Lihir is a named driver of both the Q4 production step-up and 2027 growth, so a drought is a direct risk to both. The mitigation is credible: mining continues to stockpile even if the plant is water-constrained. But the island's communities rely on Newmont for water and come first, and the timing is the quarter that carries the full-year guide.

Ghana: Ahafo South eased, Ahafo North is ramping slowly

Ahafo South produced 104koz with by-product AISC falling $343/oz to $2,261, while Ahafo North produced 69koz with AISC rising to $1,714. The 10-Q confirms the fiscal reset behind Ghana's cost base: a sliding-scale royalty of 5% to 12% of gold revenue since March, a 35% maximum corporate tax rate, a 1% growth levy and an 8% dividend withholding tax.

Assessment: Ahafo South's improvement is welcome, but the royalty scale means Ghana's costs rise with the gold price, which is the reverse of what an investor buys a gold miner for. Ahafo North at 69koz a quarter annualizes to about 276koz, short of the roughly 350koz run rate management has described. The answer on the call was "continuous increase," not a date.

Nevada Gold Mines: steady output, and the dispute is over

Newmont's 38.5% share of NGM rose 4.6% to 251koz, with AISC down 2.5% to $1,760/oz. The asset now sits inside an amended joint venture agreement, signed August 10, that adds Fourmile, Fiberline and Mike and settles all outstanding disputes.

Assessment: NGM is still about 19% of attributable production and is still not operated by Newmont. What changed is that it is no longer the subject of a notice of default. We cover the transaction itself in Key Topics.

Co-Product Metals

Assessment: Every co-product volume recovered at once, the mirror image of Q2. The price column explains the cost guide cut: copper is realizing 38% above the guide assumption and zinc 34% above, while silver is realizing 16% below it. The credit that matters most for 2027 is silver volume, and that is the one management has already guided down.

Key Topics & Management Commentary

Overall Management Tone: Confident and forward-leaning, the most assured posture since the record first quarter, with the Barrick dispute removed from the script and replaced by a long, prepared case for Red Chris. Management again pre-empted bad news, this time a full year ahead, by volunteering higher 2027 unit costs and development capital before the first question. Where it was less convincing was on the size of the Red Chris capital increase and on what the $1.95B Barrick payment buys, both of which were deflected to later dates.

1. A Beat Built on Silver and Copper Credits

Management attributed the sequential cost improvement to volume and price on the co-products, together with lower operating costs at some sites. That is an accurate description, and it is worth reading closely because it says what the improvement is not.

"Unit costs improved sequentially from the second quarter, primarily reflecting higher gold and co product volumes, including 11 million ounces of silver production stronger realized copper prices, and lower operating costs at certain operations across the portfolio."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

Co-product AISC per gold ounce has now risen in each of the last four quarters: $1,566, $1,620, $1,709, $1,938 and $1,963. The by-product figure has swung from $1,029 to $1,621 to $1,454 over the same span, moving almost entirely with silver and copper.

Assessment: The beat is genuine cash, and a polymetallic miner should be paid for its by-products. But the underlying cost of producing an ounce of gold is still rising. The deceleration, $25/oz this quarter after $229/oz last quarter, is the good news. The direction is not.

2. Cost Guidance Cut 10%, With Q4 and 2027 Guided Higher

Full-year by-product CAS guidance fell to $925/oz from $1,055 and AISC to $1,520/oz from $1,680, the first downward revision to unit-cost guidance this year. Q4 by-product AISC is guided to $1,900/oz, the highest quarter of 2026, on sustaining capital timing, lower silver and inflation.

"Continued operational execution, disciplined cost management, and stronger realized prices for copper, silver, and other co products have enabled us to improve our full year cost outlook..."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

The CFO then pointed straight at 2027, describing the Q4 cost profile as an early indication of external factors that will carry into next year.

"Based on current conditions, we anticipate unit costs to trend higher next year reflecting macroeconomic headwinds and lower co product credits. Primarily from reduced silver production at Penasquito where output is expected to be roughly 30% lower than 2026 levels due to planned mine sequencing."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

Assessment: This resolves the most important open item from July. We calculated that the old $1,680 guide implied a second-half average of roughly $2,025/oz; on Q3's actual and Q4's guide the second half lands near $1,680, the old full-year figure. The risk has moved a year out rather than disappeared. Q4's $1,900 is a reasonable first marker for where 2027 starts, before production growth and Yanacocha's falling closure spend offset part of it.

3. The Barrick Dispute Ends in a $1.95B Cheque

On August 10, Newmont and Barrick signed a second amended and restated NGM agreement. Barrick's Fourmile and Newmont's Fiberline and Mike will be contributed to the joint venture, a confidential settlement resolves all outstanding disputes, governance approval rights over NGM's senior leadership change, and Newmont consented to Barrick's proposed IPO of its North American assets. Newmont pays Barrick $1.95B in cash within 30 days of Fourmile's contribution, expected in Q4. Ownership stays at 38.5%.

"First, we announced an amended joint venture agreement from Nevada Gold Mines under which the previously excluded Fourmile, Fiber Line and Myke properties will be contributed. We are very pleased with the outcome of this agreement which aligns the interest of both partners and positions us to maximize the value of 1 of the world's premier gold districts."
— Natascha Viljoen, President and Chief Executive Officer

The filing adds detail the call did not. On contribution, Newmont is deemed to contribute $1.95B of capital to NGM and Barrick about $3.11B, which together is consistent with the 38.5%/61.5% split. Newmont will recognize its 38.5% interest in Fourmile at the cash paid plus 61.5% of the fair value of Fiberline and Mike, which carry no book value today, so a non-cash gain is coming in Q4. The market voted on the day: Newmont rose 3.8% to $117.26 and Barrick fell 6.4%.

Assessment: This closes the largest governance overhang in our thesis, and on terms the market judged favourable to Newmont. In July we said we would add on a Barrick resolution and treated it as unpriced optionality. It came at $117 and the shares are now below that. The open question is economic, not legal: Newmont has not said what Fourmile's ounces, grades or capital are, so the $1.95B is a price without a disclosed return.

4. Red Chris Gets a Number: $4.2B to $4.8B and First Production in 2033

The block cave feasibility study is nearing completion with engineering beyond 60%. On a 100% basis, development capital is estimated at $4.2B to $4.8B in real terms, net of the C$500M Canadian government contribution and excluding the cost of the transition from open pit to cave. The first phase, Macro Block 1-2, runs about 13 years and produces about 3.0Moz of gold and more than 850kt of copper, ramping to 275koz to 325koz of gold and 65kt to 85kt of copper a year between 2035 and 2040. Construction ramps in 2027 and commercial production is targeted for 2033. Newmont owns 70%, so its share is about $2.9B to $3.4B.

"it is important to note that while the initial phase, MacroBlock 1-2, represents less than 20% of potential mine life at Red Chris, approximately 40% of the planned investment in processing facilities material handling systems and other key infrastructure is expected to support future expansions."
— Natascha Viljoen, President and Chief Executive Officer

The comparison management did not volunteer is to Newcrest's 2021 prefeasibility study, which carried about $2.1B for three blocks over 31 years. The new estimate is two to 2.3 times that for two blocks over 13 years, with the plant expanded from 9Mtpa to 15Mtpa, a larger and reoriented cave to avoid major faults, heavier ground support, and current development rates and costs. The double-digit IRR is evaluated across a range of scenarios that includes $3,600/oz gold and $5.00/lb copper, and it charges the full capital with no credit for later blocks. A former BHP CFO and copper president joined Newmont's Board and Audit Committee on September 1, ahead of this decision.

Assessment: The numbers are better framed than we feared and more expensive than the history implies. A double-digit return tested against $3,600 gold, with 40% of the spend reusable, is a defensible project, and the permitting and First Nations consent are done. But at the midpoint Newmont's share is roughly $3.15B spent over six years before the first commercial ounce, for a phase producing about 190koz to 230koz of gold a year attributable at full rate. This is a long-dated copper option paid for out of today's gold cash flow, and the market reacted accordingly.

5. 2027 Indications: Growth Returns, and So Do Costs and Capital

Management gave its first view of 2027 about four months ahead of the February guidance we expected. Attributable production rises by a low-to-mid single-digit percentage, driven by Lihir and Boddington grade, Tanami Expansion 2 and the Vein Zone open pit at Cerro Negro, with Yanacocha extending its low-cost ounces. Unit costs trend higher. Sustaining capital is roughly flat. Development capital rises about $500M.

"We now expect development capital in 2027 to be approximately $500 million higher than 2026, primarily reflecting planned investment in the Red Chris Block Cave project subject to board approval. And continued advancement of the Lihir nearshore barrier project."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

About half of that increase is Red Chris, with a linear spend profile to assume until the investment decision. On a 2026 base of $1.4B, 2027 development capital lands near $1.9B, on a gross basis before the Canadian grant.

Assessment: The 2026 trough ends, which matters for a stock whose production has fallen from 5.9Moz to 5.3Moz. But a low-to-mid single-digit production increase with higher unit costs and $500M more development capital is a modest free cash flow year unless gold rises. The near-term offset is Yanacocha, covered below.

6. The Receivable Reversed, as Pre-Warned

In July we flagged that $461M of Q2's free cash flow was a receivable release that management said might reverse. It did, largely.

"As we noted on our last call, the working capital benefit realized in second quarter partially unwound during the third quarter, reflecting normal timing related working capital movements across the business."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

Receivables used $318M, reclamation spending $256M and inventory builds $172M, partly offset by $165M of other accrued liabilities and $29M of accrued taxes. The release says this quarter's unfavourable receivable and payable movements may partly reverse in later periods, and that if gold stabilizes, higher cash taxes on previously accrued liabilities may weigh on 2027 working capital. Taxes payable stood at $1,373M at quarter end.

Assessment: Over the two quarters the receivable swing nets to a $143M benefit, which is noise. The clean read is pre-working-capital free cash flow of $2,477M, up 7.9% sequentially on a lower gold price. That is the number we would anchor on. Free cash flow for the first nine months is $7,261M, which nearly matches all of 2025's $7,299M.

7. Shareholder Returns Exceeded Free Cash Flow, and the Excess Cash Is Now Spoken For

Newmont repurchased $1,779M of stock and paid $272M of dividends in Q3, $2,051M in total or 107% of the quarter's free cash flow. It repurchased $1.6B since the July call, including about $451M in October, leaving about $2.8B of the April $6B authorization. Shares outstanding were 1,039M on October 15, and the count is down more than 115 million, about 10%, since February 2024.

"We ended the quarter with a net cash balance of $3.2 billion which is modestly above the upper end of our target range. it is important to note that this balance does not yet reflect the $1.95 billion payment associated with the amended Nevada Gold Mines joint venture agreement, which we expect to close in the fourth quarter."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

The dividend held at $0.26, and the CFO repeated that the fixed-dollar formula supports $0.27 at the February review. The release adds that Newmont will ask the Board for a new authorization as the current one approaches completion.

Assessment: In July the CFO said returns could exceed free cash flow to work the balance back into range. They did. After the Barrick payment, pro forma net cash is about $1.3B, close to the $1B midpoint of the target, so from here returns should track free cash flow rather than exceed it. At the October pace the remaining $2.8B lasts into early 2027, which makes the next authorization a near-term catalyst rather than a formality.

8. Cadia: The Regulator Clears Cave Establishment

The July question was whether cave establishment at the two Cadia project caves would restart this year. It has.

"At PC1-2, cave establishment activity continue to advance on schedule. And we are pleased to report that the key regulatory approvals and associated requirements following the April seismic event have been achieved. Allowing the project to continue advancing toward cave establishment."
— Natascha Viljoen, President and Chief Executive Officer

PC2-3 fired its final drawbell in September and remains on track for completion by year-end, with its development capital substantially complete in Q4. PC1-2 is advancing toward hydraulic radius.

Assessment: Resolved within the year, which management had targeted and would not date in July. One sell-side question put the cumulative slip on PC1-2 at about six months, which management did not dispute directly but said it had worked to mitigate. With PC2-3's capital rolling off, Cadia's development spend falls, which partly offsets Red Chris in 2027.

9. Tanami Expansion 2 Pulled Forward

Newmont's other large project in execution moved the other way from Red Chris: early.

"Most notably at the second expansion at Tanami we have now completed construction on the 1.5-kilometer shaft. We remain on track for full mechanical completion by the end of this year and our focus will shift towards commissioning as we move into 2027. We now expect commercial production by the end of the second quarter of 2027, Earlier than previously anticipated."
— Natascha Viljoen, President and Chief Executive Officer

Assessment: In February this was an H2 2027 event. A project delivered early lends credibility to the execution claims behind Red Chris, and Tanami's current $2,267/oz AISC gives it the most room to improve of any asset in the portfolio. Management declined to give site-level cost guidance, so the size of that improvement is ours to estimate.

10. Lihir and El Niño: The Q4 Swing Factor

Q4 is guided to 1,365koz, the strongest quarter of the year, and Lihir is one of four named drivers. The water risk was introduced in the prepared remarks rather than drawn out by a question.

"I do want to call out that while we continue to expect Lihir to be a strong contributor in the fourth quarter, we are closely monitoring potential water impacts as a result of El Nino conditions, which are forecast to strengthen through November and December, before beginning to ease in the first quarter of next year."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

Assessment: Newmont has pre-warned the next quarter's main risk on four consecutive calls, and this is the same discipline. The full-year guide has a 5% band, so a partial Lihir shortfall is absorbable. A severe one, landing in the quarter that carries the year, is the most likely way 2026 production guidance is missed.

11. The Oil Sensitivity Nearly Doubles

For two quarters we noted that the disclosed $60M-per-$10/bbl oil sensitivity covered only direct diesel, while management named indirect pressure from explosives, cyanide, grinding media and contractors without sizing it. That gap is now partly closed.

"In addition to the approximate $60 million impact from direct fuel consumption, we estimate a further additional approximate $50 million impact that key consumables input and inputs for every $10 per barrel change in oil prices."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

The total sensitivity is now about $110M per $10/bbl against a $70 Brent assumption. Labor is excluded, and the CFO said labor escalation will exceed the 2026 assumption of about 3%. The release also names unfavourable currency moves, particularly in the Australian dollar, as a 2027 headwind.

Assessment: Better disclosure, and an admission that the cost pressure is stickier than a diesel lag. Every $30/bbl above the assumption is now worth about $330M a year before labor, against about $180M on the old direct-only figure. This is the real content of "unit costs trend higher" in 2027.

12. Yanacocha's Closure Spend Rolls Off and Funds Growth

The two Yanacocha water treatment plants, about $1.8B of total spend with $1.3B spent, are approaching mechanical completion with commissioning underway and completion in 2027.

"As these projects advance toward completion in 2027, closure spending is expected to be approximately $200 million lower in 2027 and $400 million lower in 2028, compared with 2026 levels. As this cash flow becomes available, it will be reallocated to growth."
— Natascha Viljoen, President and Chief Executive Officer

Yanacocha the mine is also outperforming its plan: heap leach optimization with no material capital has opened open-pit opportunities that management is evaluating to extend its life.

Assessment: This is the most underappreciated free cash flow item in the release. Reclamation runs through working capital, so it suppresses reported free cash flow, and its decline from about $850M in 2026 is a direct offset to the Red Chris ramp. In 2027 it covers about $200M of the $500M development capital increase. By 2028 it covers about $400M.

Guidance & Outlook

2027 Preliminary Indications

Management's framing of Q4 rests on four managed operations: Tanami on higher-grade stopes, Cerro Negro on the Vein Zone open pit and productivity, Ahafo North on its ramp into higher grade, and Lihir after the September shutdown. Sustaining and development capital both peak in Q4, which, with lower silver, is why AISC jumps to $1,900 even as production rises.

Implied quarter-over-quarter ramp: Q4's 1,365koz is 4.8% above Q3's 1,302koz and lands the year at 5,261koz, essentially the 5,260koz guide. In July the arithmetic required about 1,373koz, so the back-end load has eased slightly but the year still rests on one quarter.

Street at: Pre-print consensus put Q4 at $2.05 of adjusted EPS and 2026 at $9.04. Nine-month adjusted EPS of $7.22 plus the Q4 consensus gives about $9.27, so the full-year number moves up on the Q3 beat. Q4 consensus was set before gold's October 22 to 23 drop. At the October 23 spot of about $4,008, below Q3's $4,317 realized and the $4,500 guidance assumption, we would expect Q4 estimates to drift down.

Guidance style: Conservative and pre-emptive, now extending a full year out. Newmont has held production guidance through a fatality investigation, bushfires, a seismic event and now a drought warning. This quarter it also told the market that next year's unit costs go up before next year's guidance exists. The credibility of the guide is not in question. Its underlying assumptions, $4,500 gold and $70 oil, are now wrong in opposite directions.

Analyst Q&A Highlights

Reconciling Red Chris capital with the Newcrest-era study

The most pointed question of the call asked management to explain why the capital estimate is so far above the inherited prefeasibility study, and then to split the gap among its three named causes. Management described the causes in detail but would not size them.

Q: "If I was to think of those 3 points, that you mentioned, so all of the geotech, 1 of the larger processing facility, And then thirdly, on the inflation... How would you take that? Like, would you say it is a third each, or how would you take these 3 categories and allocate the discrepancy?"
— Tanya Jakusconek, Scotiabank

A: "I think the level of detail that we can give you at this stage, I am gonna limit it to that because we continue to. And as we said in the prepared remarks, we continue to ensure that we understand that we have reviewed our underlying assumptions. We are currently going through our technical review our financial review, and when we get it through to a FID, we will be able to give you more detail."
— Natascha Viljoen, President and Chief Executive Officer

Assessment: The three causes were stated clearly: geotechnical redesign, a plant expanded from 9Mtpa to 15Mtpa, and current development rates and costs. Declining to allocate the increase is the expected answer before the investment decision. The mix matters, though. Capital spent on a larger plant buys capacity for later blocks; capital spent on inflation buys nothing extra. The answer arrives in February.

Whether Red Chris economics stand alone

A follow-up probed whether the quoted double-digit return captures the value of infrastructure that later caves will reuse, or whether the first phase carries the full cost.

Q: "The returns and IRR of double digit given, is that just for the first 13 years?"
— Daniel Morgan, Barrenjoey

A: "As we indicated, about 40% of the capital that we spend is for infrastructure that will be will benefit future block caves... These economics will assume a 100% of the capital, though. that is part of our standard. So this project needs to be stand alone, have the right economics on a standalone basis."
— Natascha Viljoen, President and Chief Executive Officer

Assessment: The most reassuring answer of the call on Red Chris. A double-digit return that charges the first phase with all the shared infrastructure, tested against $3,600 gold, is a conservative hurdle. The same exchange showed the partner question is open: asked about funding beyond its 70%, management said only that Imperial Metals has full visibility of the capital and is running it through its own processes.

How much of the 2027 capital increase is Red Chris, and how it phases

A questioner sought to size Red Chris inside the $500M development capital increase and to establish whether the six-year spend is front-loaded or even.

Q: "I know you raised your CapEx. Development CapEx expectations for 2027 by $500 million How much is Red Chris a part of that? And then will it be fairly linear as you develop the mine, or is it more lumpy?"
— Richard Garchitorena, Barclays

A: "I think firstly, 50% of the expected increase is associated with Red Chris. We certainly have other projects like our Lihir nearshore barrier that is also included in that capital increase, which is also really value project for us... assuming FID early next year, I think it is safe for you to see. Assume a linear spend profile."
— Natascha Viljoen, President and Chief Executive Officer

Assessment: About $250M of Red Chris in 2027 is a gentle start against an attributable total near $3.15B at the midpoint. A linear profile from 2027 to 2032 implies about $500M a year attributable at full run rate, so 2027 is the light year and 2028 is where Red Chris becomes a material line in the capital budget.

How Newmont arrived at $1.95B for the Nevada settlement

The only question on the Barrick agreement asked how the price was set, noting that it looked favourable to Newmont. The answer described the deal's components without addressing the number.

Q: "Just wondering how you can give us some color to how these discussions came about, including the timing, why now, and also how you landed on the $1.95 billion because this optically appears to be a great deal for you guys."
— Adam Baker, Macquarie

A: "I think I am personally quite excited about that district because it is the first time that we can look at that district unencumbered. To improve its performance. So I think it is important to know that a number of different components that came together in the outcome of the $1.95 billion We are pleased that we were able to conclude this with a modernized agreement and I think a really bright outlook for the asset."
— Natascha Viljoen, President and Chief Executive Officer

Assessment: The confidential settlement means the price mixes asset value with the resolution of claims, and management will not separate them. That is understandable legally and unhelpful analytically. "Unencumbered" is the useful word: for the first time Newmont and Barrick can plan Fourmile and the Carlin and Cortez infrastructure as one district, which is where the value case rests.

Labor inflation on top of oil

After confirming that the new indirect oil sensitivity excludes labor, a follow-up asked what labor costs are doing. The answer put a floor under 2027 escalation.

Q: "What are you seeing in terms of labor cost inflation? And if you can maybe speak to we have heard about labor market tightness, particularly in Nevada and Western Australia."
— Fahad Tariq, Jefferies

A: "I think in terms of labor cost assumption, we are looking at a general escalation across the organization that will exceed our 2026 assumption, which was about 3%... a recognition in showing the indirect impacts of oil is a bit of a recognition that we are seeing a bit more of that stickiness associated with diesel prices and not just the oil price, but also the crack spread..."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

Assessment: "Exceed about 3%" with no figure, plus a sticky diesel crack spread, is how a cost guide gets built in February. The CEO added that turnover is under control and there are no major shortages, so this is a rate problem rather than an availability problem. Rate problems are easier to model and harder to manage away.

Whether Lihir's water risk reaches into 2027

With Lihir central to both Q4 and 2027 growth, a questioner asked how far the El Niño risk extends and what mitigation exists.

Q: "But can you just give me more detail around where you see the potential for water availability into next year? Just given the year is 1 of the key drivers of production growth and what you are doing to mitigate that risk there?"
— Hugo Nicolaci, Goldman Sachs

A: "So firstly, important to note that we have not been impacted yet... We will be able to continue to mine and stockpile material that will enable us to continue to build stockpile, do blending, and be ready for a consistent and blended feed into the plant... But as long as mining is done and we get that onto stockpiles, you have a fairly good chance of making up that volume."
— Natascha Viljoen, President and Chief Executive Officer

Assessment: A practical answer: mined ore is deferred production, not lost production, and the option management is studying, pulling 2027 maintenance forward into the drought window, is a sensible hedge. Management also confirmed that community water supply takes priority. The risk to Q4 is timing; the risk to 2027 is small unless the drought outlasts the first quarter.

The path back to 6 million ounces after the Cadia delay

The growth question returned in a new form: with PC1-2's cave establishment paused for part of the year, where does the portfolio's flexibility come from to reach 6Moz?

Q: "On your point around that portfolio, if I have flexibility, I wanted to just talk to where that flexibility might be to continue to support the group getting back to that 6 million-ounce target and where flexibility at Cadia might be to catch up some of that timing?"
— Hugo Nicolaci, Goldman Sachs

A: "So I think we are well set up to build back to the 6 million ounces And then projects like Red Chris will then secure that longer term sustaining of a really robust production profile."
— Natascha Viljoen, President and Chief Executive Officer

Assessment: The drivers were broadly July's list, with Yanacocha and growth at the non-managed assets added: Lihir and Boddington grade, Tanami, Yanacocha, Cerro Negro and the joint ventures. Still no year attached to 6Moz. The 2027 indication of a low-to-mid single-digit increase takes production to roughly 5.4Moz to 5.5Moz, so the path is real but not quick.

Where the reserve price goes at year-end

A question on year-end reserves drew the clearest signal yet that the $2,000/oz reserve price, which we have cited as a downside reference point, is about to rise.

Q: "...does Newmont ultimately anticipate replacing reserves at year end 2026? And what are some of the moving parts around that, including gold price and the various operating changes at some of the assets."
— Lawson Winder, Bank of America

A: "We tend to be grounded in looking at the 3 year trailing average. Obviously, a lot of different dynamics that have gone on over the course of the last 3 years. So we do take that into consideration as well in terms of the volatility of gold price. But I would say that is a good anchor just to note, and so we will anticipate as a result a bit of an increase in terms of the reserve and resource numbers that we will come out with."
— Brian Tabolt, Executive Vice President and Chief Financial Officer

Assessment: A higher reserve price will add ounces, and it will also make our "gold is twice the reserve price" framing less stark. It does not change the economics of any mine, but it will change the headline mine lives and reserve replacement in February. Management also confirmed the Cadia seismic event does not affect Cadia's reserve assumptions.

What They're NOT Saying

1. How the Red Chris increase splits among its causes: Geotechnical redesign, a larger plant and current costs were named; the allocation was explicitly deferred to the investment decision. Whether the extra capital buys future capacity or just covers inflation is the difference between a growth project and a cost overrun.
2. What the $1.95B Barrick payment buys: No Fourmile ounces, grades, capital estimate or mine plan, and a confidential settlement that blends asset value with dispute resolution. The market priced the deal as favourable on the day; Newmont has given holders no way to check that.
3. How much higher 2027 unit costs go: Direction only. With silver down 30%, labor above 3%, higher oil prices against a $70 assumption and an unfavourable Australian dollar, the range of outcomes for the 2027 AISC guide is wide, and the number arrives in February.
4. The copper guide: Q4 needs about 32kt, 39% above Q3, to land on the 102kt midpoint. Nobody asked and management did not volunteer it.
5. Ahafo North's run-rate date: 69koz in the quarter annualizes to about 276koz against a roughly 350koz target. "Continuous increase" was the full answer.
6. The cost of moving Red Chris from open pit to cave: Excluded from the $4.2B to $4.8B estimate and not sized anywhere.
7. Earnings and free cash flow at spot gold: Guidance still assumes $4,500/oz. Gold closed October 23 at about $4,008. The release discloses a sensitivity of $505M per $100/oz and leaves the reader to do the subtraction.

Market Reaction

• Pre-print setup: NEM closed at $114.11 on October 22, up 14.3% year to date against an S&P 500 up 11.9%, down 10.3% over the trailing 30 days and up 31.1% over the trailing twelve months. The 52-week closing range was $78.63 to $135.14, the high set on August 25, leaving the stock 15.6% below it. Since our July 28 upgrade at $91.52 the shares had risen 24.7% into the print.
• Print day, before the release: The complex sold off hard on October 22. Gold fell 2.2% and the gold-miner ETF fell 5.8%, while NEM fell a more modest 2.6% to $114.11.
• After-hours: Shares rose about 1.5% in extended trading after the release.
• Reaction session (October 23): Opened at $110.28, a 3.4% gap down, traded $107.81 to $114.24 and closed at $108.87, down 4.6% or $5.24. Volume of 7.9M shares against a 5.9M thirty-day average, 1.3x.
• Versus the complex: The gold-miner ETF fell 1.8%, gold 1.3%, two large North American peers about 1.3% each, and the S&P 500 0.5%. NEM underperformed the miners by about 280 basis points on the session. Across both sessions, though, NEM fell 7.1% and the miner ETF 7.5%.

The after-hours gain reversed into a gap down by the next open. The release and the call both carried the 2027 indications and the Red Chris capital range, and overnight the market moved its attention from the beat to the outlook. That sequence tells us what the market traded: not the beat, which was clean, but the outlook, where every line moved against holders except production. Higher unit costs, $500M more development capital and a $4.2B to $4.8B project with first production seven years out is a combination that lowers free cash flow estimates for 2027 and 2028 at any gold price.

The two-day view matters as much as the one-day number. NEM held up much better than its peers on October 22, before the release, when the sector fell sharply with gold. Part of the October 23 underperformance is that cushion unwinding. Measured from the October 21 close, NEM's decline matches the miner ETF almost exactly, which suggests the print was a modest negative absorbed into a sector-wide move driven by gold falling from about $4,150 to about $4,008.

Set against our own call, the stock remains 19.0% above our upgrade price against 8.1% for the miner ETF and a 0.8% decline in gold over the same period. Much of the relative performance since July came with the Barrick resolution, which lifted the shares 3.8% on the day. The 19% decline from the August high is gold falling 15% from its own high. Newmont has not done anything this quarter to deserve the second, and has done enough to have earned the first.

Street Perspective

Debate: Is Red Chris value-creating, or a capital trap?

Bull view: A fully permitted, First Nations-consented block cave in a top-tier jurisdiction with a 70-year endowment, government support and a double-digit return tested against $3,600 gold is exactly the long-life gold and copper asset the industry struggles to find. Forty percent of the spend is reusable for later blocks, so phase one carries costs that phase two will not, and the sell-side math that puts Red Chris near 2% of net asset value says the downside is small.

Bear view: Capital has roughly doubled versus the inherited study for less than half the mine life, the transition cost is excluded, and first commercial production is 2033. That is six years of spending gold cash flow on a copper option, at a company whose investment case has been near-total capital return. Megaproject estimates at the feasibility stage rarely fall.

Our take: The bears are right about the shape and the bulls are right about the hurdle. A return that charges phase one with all the shared infrastructure and still clears a double-digit IRR across scenarios that include $3,600 gold is a project worth doing. Our concern is narrower: the remaining scope risk sits in the parts that were excluded or not allocated. We want the February split between capacity and cost before giving the project credit, and we would view a capital figure above $4.8B at the investment decision as a negative.

Debate: Is the cost improvement durable, or a co-product windfall?

Bull view: Newmont cut full-year unit-cost guidance by 10% in a year of oil shocks, royalty increases and a seismic event, while absolute corporate costs keep running below guide. Credits are part of the business; Peñasquito and Cadia exist to produce them, and copper above $6.50/lb is not a fluke.

Bear view: Co-product AISC has risen four quarters in a row, the improvement came from silver and copper volume and price, silver is about to halve in Q4 and fall 30% in 2027, and management has already told the market 2027 unit costs go up. The guide cut is the peak of a credit cycle being reported as cost discipline.

Our take: Closer to the bear on the trend and to the bull on the level. Underlying gold cost is still rising, but at $25/oz a quarter rather than $229, and the controllable cost lines remain below guide. We model 2027 by-product AISC above 2026's $1,520 and closer to Q4's $1,900 exit rate, and we do not treat the 2026 cut as a run-rate.

Debate: Did Newmont win the Barrick settlement?

Bull view: A 38.5% look-through interest in a deposit with a published potential of up to 750koz a year for at least 25 years, with sell-side valuations of the whole near $11B, for $1.95B in cash and two development properties, plus the end of an open-ended dispute and better governance. The market's verdict on the day, Newmont up and Barrick down, says who got the better terms.

Bear view: Newmont paid nearly $2B for an asset it cannot describe to its own shareholders, under a confidential settlement, in a joint venture it does not operate, at the same moment it is committing several billion dollars to Red Chris. The consent to Barrick's IPO also gives up leverage over a partner whose North American assets are about to have a separate public valuation.

Our take: A good outcome that we cannot fully verify. Resolving the dispute was worth something on its own, since it removed an open-ended legal risk over about 19% of production. The asset value depends on Fourmile's eventual cost and grade, which neither company has published. We give credit for the resolution and keep Fourmile as upside rather than as a valuation input.

Debate: After a 19% fall from the August high, is NEM cheap again?

Bull view: At about 12x 2026 consensus, roughly 6.3x trailing EBITDA and an 8.9% trailing free cash flow yield, with production growing again in 2027, the Barrick overhang gone and a falling share count, the stock prices a gold decline that has already happened.

Bear view: Trailing multiples include a $4,900 quarter. At spot gold near $4,000, with 2027 costs and capital rising, earnings power is lower and the multiple is closer to 14x. Gold's momentum is negative, and a leveraged producer is the wrong way to own a falling commodity.

Our take: Both are describing the same arithmetic. Our case has never been a call that gold rises, and on a spot-gold basis the shares are not as cheap as in July. They are still reasonably priced for a net-cash producer returning substantially all of its free cash flow, and the governance discount has gone. That keeps us at Outperform with the same conviction, not higher.

Model Update Needed

Valuation framework

At the October 23 close of $108.87 on the 1,039M shares outstanding on October 15, the market capitalization is about $113.1B. Against $3.24B of net cash, enterprise value is about $109.9B, or about $111.8B pro forma for the Barrick payment, since that cash buys an asset rather than leaving the company. On trailing twelve-month adjusted EBITDA of $17,407M that is 6.3x EV/EBITDA, or 6.4x pro forma. Trailing four-quarter free cash flow of $10,074M is an 8.9% yield. Nine-month adjusted EPS of $7.22 plus the pre-print Q4 consensus of $2.05 gives about $9.27 for 2026, or 11.7x.

Every one of those trailing figures includes quarters realized at $4,414 to $4,900 gold, so the test that matters is spot. Annualizing Q3's $2.20 gives $8.80 at a $4,317 realized price. Applying the disclosed $505M-per-$100/oz sensitivity, net of the roughly $6/oz royalty and tax relief per $100/oz, a 33% tax rate and 1,039M shares, each $100/oz is worth about $0.31 per share a year. At $4,000 gold that gives run-rate earnings of about $7.83, or 13.9x. At $4,300 it gives about $8.75, or 12.4x. At $3,500 it gives about $6.30, or 17.3x. These figures carry Q3's peak silver credit, so 2027's lower credits and higher costs pull them down, partly offset by a low-to-mid single-digit increase in ounces and a share count falling about 4% a year.

On free cash flow, the 2027 picture at $4,000 gold is lower than the trailing yield suggests: development capital rises about $500M, cash taxes catch up on accrued liabilities, and only about $200M of that is offset by lower Yanacocha closure spending. We think a mid-single-digit free cash flow yield at spot, returned almost in full, is the honest base case. That is less than the 6% we wrote in July, because the share price is higher and capital spending is rising.

Valuation impact: We set fair value at $117 to $131, which is 15x run-rate earnings on a $4,000 to $4,300 gold band. Fifteen times is an undemanding multiple for a net-cash producer with a near-total payout and growing production. The midpoint of $124 is about 14% above the current price. At $3,500 gold the same multiple gives about $95, which is the downside case we accept. The asymmetry is smaller than in July, when the shares were 16% lower on the same gold price, but it still favours the upside.

Thesis Scorecard Post-Earnings

The July commitments, revisited

The standing thesis

Overall: The thesis is modestly stronger. The two items that made us wait in April, valuation and governance, have now both resolved in our favour, and the operating business delivered a cost cut while holding production through another quarter. Against that, the cost and capital story has moved from 2026, where it was a fear that did not materialize, to 2027 and Red Chris, where it is a disclosed fact. The share price has captured much of July's discount, which is why conviction does not rise.

Action: Maintain Outperform, conviction 6 out of 10, fair value $117 to $131. This remains a call on what we pay and on capital return, not a call that gold rises. We would move to Hold if gold breaks decisively below $3,500/oz with the shares still pricing a $4,300 realized price, if February's 2027 guidance puts by-product AISC above Q4's $1,900 exit rate, or if the Red Chris investment decision comes above $4.8B or without the split between capacity and cost. We would add on a new buyback authorization sized to the free cash flow run rate at a share price below $105.