Back to top

Image: Bigstock

NEM's Gold Output Hit by Divestments: Can Tier-1 Assets Close the Gap?

Read MoreHide Full Article

Key Takeaways

  • NEM's Q1 gold production was 1.54M ounces, down 8% YoY and 19% from the previous quarter.
  • Divestments in non-core assets led to reduced output, with Tier-1 mines now carrying growth expectations.
  • Newmont expects Q2 Tier-1 output to stay flat as gains at some mines are offset by declines at others.

Newmont Corporation (NEM - Free Report) reported a decline in gold production for the first quarter of 2025, largely tied to its strategic divestment of non-core assets. This move, while intended to sharpen focus on Tier-1 operations, weighed on total output. It reported a roughly 8% year-over-year and 19% sequential decline in gold production for the first quarter, reaching 1.54 million ounces. Lower contributions from non-core operations hurt production. 

Newmont anticipates maintaining its expected gold production for 2025 at about 5.9 million ounces. For the second quarter, it sees attributable production from the total Tier 1 portfolio to be relatively in line with the first quarter as higher production from the non-operated joint ventures, Cerro Negro, Brucejack and Boddington is expected to be masked by declines at Ahafo South and Cadia.

Looking across the competitive landscape, Barrick Mining Corporation (B - Free Report) saw a significant decline in gold production in first-quarter 2025 amid operational challenges. Barrick delivered production of 758,000 ounces, reflecting a 19% drop from the year-ago quarter and a 30% fall from the prior quarter. This downturn was primarily due to the suspension of operations at the Loulo-Gounkoto mine amid Barrick’s dispute with the Malian government over dividing the economic benefits, and lower output across Carlin and Cortez. Barrick provided a tepid forecast for 2025, with attributable gold production expected in the range of 3.15-3.5 million ounces, excluding production from Loulo-Gounkoto. 

Agnico Eagle Mines Limited (AEM - Free Report) saw a modest year-over-year decline of around 0.5% to 873,794 ounces on lower output at Canadian Malartic. Agnico Eagle wrapped up the acquisition of O3 Mining during the first quarter, adding the Marban project, which is expected to contribute around 130,000 ounces of gold per year to the Canadian Malartic complex. Agnico Eagle remains on track to meet its 2025 gold production target of around 3.3-3.5 million ounces. 

Newmont’s shift to a high-quality, Tier-1 portfolio is a long-term strategy aimed at reliability and efficiency. Whether these Tier-1 mines can ramp up sufficiently to hit full-year production targets remains uncertain, especially with higher sustaining capital requirements and cost pressures already affecting performance. Without a meaningful ramp-up in the second half, the production gap could undercut the profitability goals for 2025.

The Zacks Rundown for NEM

Shares of Newmont have shot up 57.2% year to date against the Zacks Mining – Gold industry’s rise of 58.5%, largely driven by the gold price rally.

Zacks Investment Research Image Source: Zacks Investment Research

From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 13.28, a roughly 7.8% discount to the industry average of 14.4X. It carries a Value Score of B.

Zacks Investment Research Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NEM’s 2025 and 2026 earnings implies a year-over-year rise of 20.1% and 11.7%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

Zacks Investment Research
Image Source: Zacks Investment Research

NEM stock currently carries a Zacks Rank #2 (Buy). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Newmont Corporation (NEM) - free report >>

Agnico Eagle Mines Limited (AEM) - free report >>

Barrick Mining Corporation (B) - free report >>

Published in