Newmont targets record $4.5B free cash flow for 2025 while advancing asset optimization

Earnings Call Insights: Newmont Corporation (NEM) Q3 2025

MANAGEMENT VIEW

* CEO Tom Palmer announced his retirement at the end of the year, with President & COO Natascha Viljoen appointed as the next CEO. Palmer stated, "We have successfully navigated some of the most significant transactions in mining history, fundamentally changing the landscape of our industry and what it means to be a gold company."
* Viljoen reported significant milestones in the third quarter, including the safe recovery of employees at Red Chris and the completion of the asset divestment program with $640 million in net cash proceeds from equity and asset sales since the start of the quarter. She also noted, "We generated record 3 quarter cash flow of $1.6 billion, enabling us to reach an all-time annual record of $4.5 billion, with 1 quarter still remaining."
* Viljoen highlighted a new organizational structure with two business units to streamline decision-making and accountability. She emphasized, "We have reduced our absolute cost guidance in 2025 for G&A, Exploration and Advanced Projects by approximately 15%."
* The balance sheet was further strengthened, with Moody's upgrading Newmont's issuer credit rating to A3 with a stable outlook. Viljoen stated, "We ended the quarter in a near 0 debt position after successfully retiring $2 billion of debt."
* The company returned $823 million to shareholders since the last earnings call and declared a dividend of $0.25 per share.
* Commercial production is being declared at the new Ahafo North mine, which adds profitable gold production with an initial 13-year mine life.

OUTLOOK

* Viljoen said, "Strong execution across all our managed operations during 2025 has positioned us to achieve our full year production guidance."
* Fourth quarter is expected to see the conclusion of mining at Yanacocha and increased production from Ahafo North and Nevada Gold Mines.
* The company projects gold production from managed operations in 2026 within the same guidance range as 2025, but toward the lower end due to planned mine sequencing.
* Capital spending in 2026 is expected to be elevated following a $200 million improvement to 2025 capital guidance, maintaining a two-year average in line with expectations.
* Viljoen explained, "If elevated gold prices persist into next year, increased profit sharing, royalties and production taxes could offset a significant portion of the benefits we expect to realize from our cost savings initiatives in 2026."

FINANCIAL RESULTS

* Newmont delivered $3.3 billion in adjusted EBITDA and adjusted net income of $1.71 per share for the third quarter, a 20% increase from the second quarter and more than double last year's results.
* The company reported $2.3 billion of cash flow from operations and $1.6 billion of free cash flow after working capital for the quarter.
* Total free cash flow for the year to date reached $4.5 billion, setting a full-year record with one quarter remaining.
* Since the last call, $640 million in after-tax cash proceeds were received from asset divestitures, bringing 2025 proceeds to over $3.5 billion.
* Share repurchases since the last earnings call totaled $550 million, with $2.1 billion executed in 2025 and $3.3 billion since February of the previous year.

Q&A

* Daniel Major, UBS: Asked about capital allocation amid a strong balance sheet. Viljoen responded, "We remain firstly committed to...a very well-defined capital allocation framework...we will continue to review our returns to shareholders within the flexibility that we have."
* Matthew Murphy, BMO: Queried on management restructuring and Ahafo North ramp-up. Viljoen stated, "We have a deep bench across our operational teams...Ahafo North...ramp-up is going -- is running on schedule."
* Joshua Wolfson, RBC: Sought details on reserve pricing and capital guidance. Viljoen said, "You're right. It is a little bit early. As you would expect, we're right in the middle of our budgeting cycle."
* Lawson Winder, BofA: Inquired about allocation towards acquisitions and Nevada Gold Mines. Viljoen explained, "The best investment for us is in our own assets and in share buybacks."
* Anita Soni, CIBC: Asked about Yanacocha production, Cadia grade outlook, and cost guidance. Viljoen clarified, "Into the fourth quarter, we do see slightly lower than the third quarter...we will be fully focused on the injection leaching."
* Tanya Jakusconek, Scotiabank: Explored capital returns, restructuring, and dividend policy. Viljoen responded, "We have a fixed dividend, and it is -- something that the Board review on a quarterly basis."
* Fahad Tariq, Jefferies: Asked about 2026 production guidance and cost inflation. Viljoen said, "We do see that next year's production would be on the lower end of the managed portion of the guidance, which is in the order of 4.2 million ounces."
* Daniel Morgan, Barrenjoey: Probed on 2026 guidance and reserves. Viljoen noted, "It is directional...the impacts that we are having...Yanacocha...Peñasquito...Cadia."
* Hugo Nicolaci, Goldman Sachs: Asked about project pipeline and capital discipline. Viljoen reiterated, "We have these projects in study phase...they will all...compete for capital within the portfolio."
* Ralph Profiti, Stifel: Questioned the reduction in Exploration and Advanced Projects. Viljoen explained, "It was a deliberate review of doing the right work for the assets and targeting our dollars towards that."

SENTIMENT ANALYSIS

* Analysts expressed a generally positive but probing tone, frequently congratulating management on transitions and results while pressing for clarity on capital allocation, production guidance, and cost outlook.
* Management maintained a confident and disciplined tone, frequently emphasizing commitment to capital discipline, operational performance, and shareholder returns. Viljoen often reiterated, "We will remain disciplined within that framework."
* Compared to the previous quarter, analysts maintained similar levels of scrutiny, but management showed increased confidence, particularly highlighting record cash flow and successful restructuring. Leadership transition was a key topic, handled by management with assurance.

QUARTER-OVER-QUARTER COMPARISON

* The third quarter included the announcement of CEO Palmer's retirement and Viljoen's appointment, a significant management change from last quarter.
* Cost guidance for G&A, Exploration, and Advanced Projects was improved by approximately 15% in Q3, following ongoing cost and productivity initiatives.
* Free cash flow for the year to date reached an all-time high of $4.5 billion, compared to a record $1.7 billion in Q2 alone.
* The asset divestment program concluded in Q3, with additional proceeds and further streamlining of the portfolio, compared to ongoing divestments in Q2.
* Analysts continued to focus on capital allocation, cost management, and production outlook, but the increased clarity and confidence in Q3 responses contrasted with the more cautious messaging in Q2.
* Management maintained a steady focus on disciplined capital returns and operational optimization but added emphasis on the ongoing benefits from restructuring and productivity improvements.

RISKS AND CONCERNS

* Viljoen acknowledged that higher gold prices could increase profit sharing, royalties, and production taxes, potentially offsetting cost saving benefits in 2026.
* Lower production is expected from Peñasquito, Yanacocha, and Cadia due to planned mine sequencing and transitions.
* Capital expenditure is projected to rise in 2026, with the need to balance responsible capital management and capacity investments.
* The company continues to assess its reserve and resource base, with outcomes to be shared in February next year.

FINAL TAKEAWAY

Newmont's third quarter call highlighted a seamless leadership transition, record free cash flow, and execution on cost discipline and asset optimization. With a streamlined structure, successful asset divestitures, and a strong balance sheet, the company is positioned to maintain its production outlook and drive shareholder returns, while remaining disciplined in capital allocation and focused on delivering long-term value. Management underscored their confidence in sustaining operational efficiency and financial resilience, despite potential headwinds from elevated gold prices and planned production shifts in 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/nem/earnings/transcripts]

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