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Will Higher Capex Slow Newmont's Free Cash Flow Momentum in 2H?

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Key Takeaways

  • Newmont's Q2 free cash flow jumped nearly threefold to $1.7 billion on lower capital spending.
  • Higher sustaining capital spending may pressure NEM's second-half free cash flow.
  • NEM's shares are up 151.4% YTD with 2025 estimates rising amid strong gold price support.

Newmont Corporation (NEM - Free Report) saw lower capital expenditure in the second quarter of 2025, helping it to deliver record free cash flows. Its total capital expenditures fell both year over year and sequentially to $674 million in the second quarter. 

Newmont’s free cash flow surged nearly threefold year over year and 42% from the prior quarter to $1.7 billion, led by an increase in net cash from operating activities and lower capital investment.  Despite the strong second-quarter showing, concerns linger over the sustainability of Newmont’s cash flow heading into the third quarter. 

Newmont has flagged several headwinds likely to unfavorably impact third-quarter free cash flow. These include higher capital spending, increased cash tax payments and a continued increase in spending related to the construction of the Yanacocha water treatment facilities. 

NEM sees a ramp-up in sustaining capital spending in the back half of 2025, driven by the timing of spending at Tanami, Cadia, Lihir and Red Chris. It expects sustaining capital for the core portfolio to be weighted toward the second half. Sustaining capital spend is projected to increase significantly in the third quarter from the prior quarter due to an uptick in planned investments. Capital spending for the core portfolio is also expected to pick up in the second half. Higher capital expenditures are expected to unfavorably impact free cash flow in the third quarter and the second half. 

Among its major peers, Barrick Mining Corporation’s (B - Free Report) total attributable capital expenditures increased 14% sequentially and 3% year over year in the second quarter. For 2025, Barrick expects the same in the band of $3,100-$3,600 million, higher than the 2024 level of $2,607 million. Barrick’s attributable capital expenditures are expected to rise in 2025 due to the advancement of the Lumwana Super Pit Expansion project and expectations that the Reko Diq project will proceed toward execution.  

Agnico Eagle Mines Limited’s (AEM - Free Report) capital spending is also expected to remain at high levels in 2025. Agnico Eagle predicts capital expenditures excluding capitalized exploration to be between $1.75 billion and $1.95 billion for the year compared with roughly $1.66 billion in 2024. This increase in capital expenditures is partly driven by higher capital expenditures to advance Agnico Eagle’s pipeline projects.  

The Zacks Rundown for NEM

Shares of Newmont have shot up 151.4% year to date against the Zacks Mining – Gold industry’s rise of 123.5%, largely driven by the gold price rally.

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From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 16.57, a roughly 3.6% premium to the industry average of 16.17X. It carries a Value Score of B.

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The Zacks Consensus Estimate for NEM’s 2025 and 2026 earnings implies a year-over-year rise of 60.1% and 8.2%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

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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.


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