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Will Higher Unit Costs Weigh on Newmont's Margins in 2026?
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Key Takeaways
Newmont's co-product AISC rose 22% year over year to $1,938 per ounce in the second quarter.
Lower sales volumes, higher royalties and taxes are expected to lift 2026 AISC to $1,680 per ounce.
Higher sustaining capital spending and oil prices are expected to drive a sequential cost rise in Q3.
Newmont Corporation’s (NEM - Free Report) gold costs applicable to sales (CAS) rose roughly 20% year over year to $1,463 per ounce on a co-product basis in the second quarter of 2026. All-in sustaining costs (AISC) — the most important cost metric of miners — were $1,938 per ounce, reflecting a roughly 22% year-over-year increase. Both metrics also increased year over year on a by-product basis. AISC increased due to higher CAS and increased sustaining capital spending. CAS was impacted by lower gold volumes.
Lower production is expected to lead to higher unit costs in 2026. NEM expects AISC to be $1,680 per ounce on a by-product basis, indicating a notable increase from $1,358 per ounce in 2025. The expected increase is due to lower sales volumes as a result of planned mine sequencing, higher royalties and production taxes, deferral of sustaining capital from 2025 into 2026 and inventory changes.
Newmont also sees a sequential rise in unit costs in the third quarter, mainly due to increased sustaining capital spending and higher oil prices. The production decline and higher costs could undercut the profitability goals.
Looking across the competitive landscape, Barrick Mining Corporation (B - Free Report) saw an 11% year-over-year increase in AISC to $1,866 per ounce in the second quarter. Barrick projects AISC to be $1,760-$1,950 per ounce for 2026. Cash costs per ounce are forecast to be $1,330-$1,470. Barrick also expects cost of sales of $1,870-$2,070 per ounce.
Agnico Eagle Mines Limited (AEM - Free Report) also remains exposed to higher production costs. AEM’s AISC was $1,459 per ounce in the second quarter, marking a roughly 14% year-over-year rise, impacted by higher total cash costs and an uptick in sustaining capital expenditures. Agnico Eagle forecasts total cash costs per ounce in the range of $1,020 to $1,120 and AISC per ounce between $1,400 and $1,550 for 2026, suggesting a year-over-year increase at the midpoint of the respective ranges.
The Zacks Rundown for NEM
Shares of Newmont have shot up 70.7% in the past year compared with the Zacks Mining – Gold industry’s 50.5% rise.
Image Source: Zacks Investment Research
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 12.31, a modest 0.3% premium to the industry average of 12.27X. It carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NEM’s 2026 and 2027 earnings implies a year-over-year rise of 30.6% and 10.1%, respectively. The EPS estimates for 2026 and 2027 have been trending lower over the past 60 days.
Image Source: Zacks Investment Research
NEM stock currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
Will Higher Unit Costs Weigh on Newmont's Margins in 2026?
Key Takeaways
Newmont Corporation’s (NEM - Free Report) gold costs applicable to sales (CAS) rose roughly 20% year over year to $1,463 per ounce on a co-product basis in the second quarter of 2026. All-in sustaining costs (AISC) — the most important cost metric of miners — were $1,938 per ounce, reflecting a roughly 22% year-over-year increase. Both metrics also increased year over year on a by-product basis. AISC increased due to higher CAS and increased sustaining capital spending. CAS was impacted by lower gold volumes.
Lower production is expected to lead to higher unit costs in 2026. NEM expects AISC to be $1,680 per ounce on a by-product basis, indicating a notable increase from $1,358 per ounce in 2025. The expected increase is due to lower sales volumes as a result of planned mine sequencing, higher royalties and production taxes, deferral of sustaining capital from 2025 into 2026 and inventory changes.
Newmont also sees a sequential rise in unit costs in the third quarter, mainly due to increased sustaining capital spending and higher oil prices. The production decline and higher costs could undercut the profitability goals.
Looking across the competitive landscape, Barrick Mining Corporation (B - Free Report) saw an 11% year-over-year increase in AISC to $1,866 per ounce in the second quarter. Barrick projects AISC to be $1,760-$1,950 per ounce for 2026. Cash costs per ounce are forecast to be $1,330-$1,470. Barrick also expects cost of sales of $1,870-$2,070 per ounce.
Agnico Eagle Mines Limited (AEM - Free Report) also remains exposed to higher production costs. AEM’s AISC was $1,459 per ounce in the second quarter, marking a roughly 14% year-over-year rise, impacted by higher total cash costs and an uptick in sustaining capital expenditures. Agnico Eagle forecasts total cash costs per ounce in the range of $1,020 to $1,120 and AISC per ounce between $1,400 and $1,550 for 2026, suggesting a year-over-year increase at the midpoint of the respective ranges.
The Zacks Rundown for NEM
Shares of Newmont have shot up 70.7% in the past year compared with the Zacks Mining – Gold industry’s 50.5% rise.
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 12.31, a modest 0.3% premium to the industry average of 12.27X. It carries a Value Score of B.
The Zacks Consensus Estimate for NEM’s 2026 and 2027 earnings implies a year-over-year rise of 30.6% and 10.1%, respectively. The EPS estimates for 2026 and 2027 have been trending lower over the past 60 days.
NEM stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.