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Will Lower Capex Help Newmont Sustain Free Cash Flow Momentum in Q4?
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Key Takeaways
Newmont posted record Q3 free cash flow of $1.6B as lower capex and higher operating cash boosted results.
NEM cut 2025 capital guidance by $200M after lowering sustaining and development spend.
NEM warned Q4 free cash flow may face pressure from Yanacocha water treatment spend and severance payments.
Newmont Corporation (NEM - Free Report) saw lower capital expenditure in the third quarter of 2025 on a year-over-year basis, helping it to deliver record free cash flows. Its total capital expenditures fell roughly 17% year over year to $727 million.
Newmont’s free cash flow more than doubled year over year to record $1.6 billion in the third quarter, led by an increase in net cash from operating activities and lower capital investment. This marked the fourth straight quarter of free cash flow exceeding $1 billion.
NEM, on its third-quarter call, lowered its capital guidance for 2025, factoring in reduced sustaining and development capital spending. It reduced sustaining capital by $150 million to $1,725 million and development capital by $50 million to $1,280 million, leading to a $200 million reduction in consolidated capital spending. Lower capital expenditures are expected to favorably impact free cash flow in the fourth quarter and for full-year 2025.
Notwithstanding lower capital spending, NEM has cautioned that several factors could weigh on its free cash flow in the fourth quarter, including continued higher spending on Yanacocha’s water treatment construction and planned severance payments.
Among its major peers, Barrick Mining Corporation’s (B - Free Report) total attributable capital expenditures increased 6% sequentially and 30% year over year in the third 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, partly due to the advancement of the Lumwana Super Pit Expansion project and spending associated with the Reko Diq project.
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 88.5% in the past six months against the Zacks Mining – Gold industry’s rise of 79.6%, largely driven by the gold price rally.
Image Source: Zacks Investment Research
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 15.64, a roughly 3.4% premium to the industry average of 15.13X. It carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NEM’s 2025 and 2026 earnings implies a year-over-year rise of 81.9% and 15.1%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.
Image Source: Zacks Investment Research
NEM stock currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Will Lower Capex Help Newmont Sustain Free Cash Flow Momentum in Q4?
Key Takeaways
Newmont Corporation (NEM - Free Report) saw lower capital expenditure in the third quarter of 2025 on a year-over-year basis, helping it to deliver record free cash flows. Its total capital expenditures fell roughly 17% year over year to $727 million.
Newmont’s free cash flow more than doubled year over year to record $1.6 billion in the third quarter, led by an increase in net cash from operating activities and lower capital investment. This marked the fourth straight quarter of free cash flow exceeding $1 billion.
NEM, on its third-quarter call, lowered its capital guidance for 2025, factoring in reduced sustaining and development capital spending. It reduced sustaining capital by $150 million to $1,725 million and development capital by $50 million to $1,280 million, leading to a $200 million reduction in consolidated capital spending. Lower capital expenditures are expected to favorably impact free cash flow in the fourth quarter and for full-year 2025.
Notwithstanding lower capital spending, NEM has cautioned that several factors could weigh on its free cash flow in the fourth quarter, including continued higher spending on Yanacocha’s water treatment construction and planned severance payments.
Among its major peers, Barrick Mining Corporation’s (B - Free Report) total attributable capital expenditures increased 6% sequentially and 30% year over year in the third 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, partly due to the advancement of the Lumwana Super Pit Expansion project and spending associated with the Reko Diq project.
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 88.5% in the past six months against the Zacks Mining – Gold industry’s rise of 79.6%, largely driven by the gold price rally.
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 15.64, a roughly 3.4% premium to the industry average of 15.13X. It carries a Value Score of C.
The Zacks Consensus Estimate for NEM’s 2025 and 2026 earnings implies a year-over-year rise of 81.9% and 15.1%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.
NEM stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.