Newmont Corporation (NEM) Earnings

Management highlights

Newmont's focus on operational excellence continues to deliver consistent performance. Cadia experienced a magnitude 4.5 earthquake, but all personnel were safe, damage was limited, underground systems restored, and expected to return to 80% operating capacity in five weeks with full recovery by end of second quarter. Operational performance in first quarter was strong with production figures mentioned. Cost performance was monitored with energy price increases and geopolitical impacts, but full-year cost guidance maintained. Capital allocation framework is in place with share repurchases and dividends. Projects in execution had milestones like Tanamai Expansion 2 resuming work, Kaedeo projects progressing well.

Guidance

Expect to remain on track to achieve 2026 guidance. Second quarter production expected to be slightly below first quarter but on track to deliver full-year production guidance of 5.3 million ounces. Sustaining and development capital expected to change in second quarter but full-year guidance maintained. Maintaining cost guidance despite higher oil prices and other potential impacts, with ways to mitigate.

Segment performance

In the first quarter, Newmont produced 1.3 million ounces of gold, 30,000 tonnes of copper and 9 million ounces of silver. Copper and silver volumes supported a favourable by-product cost profile. Gold all in sustaining costs were $1,029 per ounce for the first quarter on a by-product basis. The performance translated into strong financial results, including $3.8 billion in cash flow from operations after working capital and $3.1 billion in free cash flow.

Risks & headwinds

Higher energy prices may create incremental cost pressure. Geopolitical environment can impact cost. Ghana sliding scale royalty represents an incremental cost headwind of approximately $25 per ounce in 2026.

Analyst Q&A

• Q: Natasha, can you comment on where we are on the whole process with the default that was issued on February of this year with respect to Nevada Gold Mines?

  A: Natasha said focus remains on improving Nevada Gold Mines joint venture performance, working with partner on Formile and notice of default process. Peter Wexler added period of notice of default is open-ended, working through orderly process with audit rights.

• 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 sort of momentum from there?

  A: Operations beat expectations in Yanakotcha, Kaidia, Benesquito, Ahafo South. Q2 expected to be lower due to depleted stocks, lower grades, recovery process at Cadia, but third quarter to come back stronger.

• Q: When it comes to the discussions around 4 Mile, have you had any discussions with Eric on bringing that into the into the joint venture partnership at this stage?

  A: Continue to collect information on formal and do technical evaluation.

• Q: Can you speak to some of the levers that Newmont can hold in order to ensure that input cost inflation doesn't drive 2026 unit cost guidance above the range?

  A: Levers in productivity improvement and cost discipline, focusing on reducing damage consumption, working with supply chain.

• Q: What's Newmont's appetite for acquisitions at the current moment?

  A: Focus remains firmly on continuing to drive own operations, brownfields opportunities, and acquisition opportunities would compete for capital within broader portfolio.

• Q: There was a headline yesterday that Ghana is asking Newmont, among other companies, to shift mining operations to local firms by the end of this year. Maybe just any color you can provide on thoughts around that and whether that timing is feasible, what that could mean for cost, etc.?

  A: In active engagement with Minerals Commission and President Mahama, contractor mining issue not new, combination of capability in some areas but not all.

• Q: With regard to diesel and everything else that you need to run your business, is there anything in the supply chain you can identify that you might face shortages on that could impact your business outcomes at all?

  A: No identified shortages, keep close eye on supply chain and work with suppliers.

• Q: Do you intend to reinstate medium-term guidance at some point in the future? And then the second part of that question, if you're looking at an asset level, at least directionally, what we should be expecting for the major moving parts into 2027, if you can give any steer at this point.

  A: Keeping multi-year guidance in mind for 2027, key movements in various jurisdictions like Kaideas, Boddington, a half a north, Cerro Negro, Llanacocha.

• Q: If I understand it properly, there was an identified event of default related to evidence of mismanagement, diversion of resources at the JV facility. You filed the notice of default. And there could be a range of remedies, something as simple that Barak offers a cure related to that event of default up to much more consequential remedies. Can you talk about the range of remedies and what are your rights under the JV related to those?

  A: Peter Wexler said working through iterative process to understand viewpoints, range of possibilities, hope for meeting of the minds, and it depends on JV agreement on how to pursue remedies like arbitration or litigation if needed.