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NEM Q3 Earnings Call Highlights 2027 Growth and Cost Pressures
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Key Takeaways
NEM expects gold production to rise by a low- to mid-single-digit percentage in 2027 after a 2026 trough.
NEM sees higher 2027 unit costs as Peasquito silver output falls and labor inflation exceeds 2026 levels.
NEM plans up to $4.8B for Red Chris, targets 2033 production and expects 2027 development spending to rise.
Newmont Corporation (NEM - Free Report) expects gold production to recover in 2027 after a trough this year, but management warned that inflation and reduced silver credits could push unit costs higher.
On its third-quarter earnings call, executives also outlined a major investment at Red Chris while emphasizing shareholder returns and execution of existing mine expansions.
NEM Targets a Production Rebound in 2027
Chief financial officer Brian Tabolt expects total portfolio production to rise by a low- to mid-single-digit percentage in 2027. The company remains on track for its full-year 2026 target of approximately 5.3 million attributable gold ounces.
Fourth-quarter gold production is projected at 1.4 million ounces, supported by higher-grade ore at Lihir and Tanami, Cerro Negro's Vein Zone and Ahafo North's ramp-up.
Chief executive officer Natascha Viljoen said stronger grades at Boddington and additional opportunities at Yanacocha should also support growth. She identified potential El Niño-related water shortages at Lihir as an operational risk.
Newmont Improves 2026 Costs but Flags 2027 Inflation
Tabolt lowered full-year gold all-in sustaining cost guidance to approximately $1,520 per ounce, about 10% better than the initial outlook. Third-quarter costs were $1,454 per ounce, aided by higher co-product volumes and prices.
However, fourth-quarter costs are expected to reach approximately $1,900 per ounce as sustaining capital spending increases and silver output at Peñasquito declines.
For 2027, Tabolt anticipates higher unit costs, partly because Peñasquito's silver production is expected to fall roughly 30% from 2026. Answering a Jefferies analyst, he said labor cost escalation should exceed the approximately 3% assumption used for 2026.
NEM Details Red Chris Investment and Timeline
Viljoen outlined development capital of $4.2 billion to $4.8 billion for Red Chris on a 100% basis, incorporating anticipated Canadian government funding. A final investment decision is expected early in 2027, with commercial production targeted for 2033.
The initial 13-year phase is expected to produce approximately 3 million ounces of gold and 850,000 tonnes of copper. Following ramp-up, annual production is projected at 275,000 to 325,000 gold ounces and 65,000 to 85,000 tonnes of copper.
Responding to Scotiabank, Viljoen explained that revised geotechnical assumptions, a larger cave and expansion of processing capacity from 9 million to 15 million tonnes annually underpin the updated plan. She declined to break down the respective capital impacts ahead of the investment decision.
Newmont Advances Projects While Spending Rises
Viljoen said the Tanami Expansion 2 shaft is complete, with commercial production expected by the end of the second quarter of 2027. Cadia's PC2-3 project remains on track for completion this year.
Tabolt expects 2027 development capital to increase approximately $500 million over 2026. Responding to a Barclays analyst, Viljoen clarified that half the increase relates to Red Chris.
Declining spending on Yanacocha's water treatment plants should free approximately $200 million in 2027 and $400 million annually beginning in 2028, partially offsetting higher development investment.
NEM Maintains Buybacks Alongside Nevada Deal
Tabolt reported third-quarter free cash flow of $1.9 billion and adjusted earnings of $2.20 per share, above the Zacks Consensus Estimate of $1.94. Revenue of $6.36 billion exceeded the $6.01 billion consensus.
Newmont Corporation Price, Consensus and EPS Surprise
Management said Newmont had returned approximately $1.9 billion to shareholders since its previous earnings call. Repurchases have reduced shares outstanding by roughly 10% since February 2024.
The quarter ended with $3.2 billion in net cash, before an anticipated $1.95 billion payment linked to the amended Nevada Gold Mines joint venture agreement. Management expects closure in the fourth quarter.
Newmont Balances Growth With Financial Discipline
Viljoen emphasized that development projects must fit the portfolio, improve its durability and deliver compelling economics. For Red Chris, the company is targeting a double-digit internal rate of return.
Tabolt reinforced a capital allocation approach prioritizing sustaining investment, dividends, balance-sheet flexibility and share repurchases. Management's outlook combines expected production growth with warnings about inflation and cost pressures.
The stock's VGM Score of B reflects favorable combined style characteristics, although its Hold ranking warrants a measured assessment. The Zacks Rank can change as analysts revise earnings estimates following the reported results.
View the Zacks #1 Rank List
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NEM Q3 Earnings Call Highlights 2027 Growth and Cost Pressures
Key Takeaways
Newmont Corporation (NEM - Free Report) expects gold production to recover in 2027 after a trough this year, but management warned that inflation and reduced silver credits could push unit costs higher.
On its third-quarter earnings call, executives also outlined a major investment at Red Chris while emphasizing shareholder returns and execution of existing mine expansions.
NEM Targets a Production Rebound in 2027
Chief financial officer Brian Tabolt expects total portfolio production to rise by a low- to mid-single-digit percentage in 2027. The company remains on track for its full-year 2026 target of approximately 5.3 million attributable gold ounces.
Fourth-quarter gold production is projected at 1.4 million ounces, supported by higher-grade ore at Lihir and Tanami, Cerro Negro's Vein Zone and Ahafo North's ramp-up.
Chief executive officer Natascha Viljoen said stronger grades at Boddington and additional opportunities at Yanacocha should also support growth. She identified potential El Niño-related water shortages at Lihir as an operational risk.
Newmont Improves 2026 Costs but Flags 2027 Inflation
Tabolt lowered full-year gold all-in sustaining cost guidance to approximately $1,520 per ounce, about 10% better than the initial outlook. Third-quarter costs were $1,454 per ounce, aided by higher co-product volumes and prices.
However, fourth-quarter costs are expected to reach approximately $1,900 per ounce as sustaining capital spending increases and silver output at Peñasquito declines.
For 2027, Tabolt anticipates higher unit costs, partly because Peñasquito's silver production is expected to fall roughly 30% from 2026. Answering a Jefferies analyst, he said labor cost escalation should exceed the approximately 3% assumption used for 2026.
NEM Details Red Chris Investment and Timeline
Viljoen outlined development capital of $4.2 billion to $4.8 billion for Red Chris on a 100% basis, incorporating anticipated Canadian government funding. A final investment decision is expected early in 2027, with commercial production targeted for 2033.
The initial 13-year phase is expected to produce approximately 3 million ounces of gold and 850,000 tonnes of copper. Following ramp-up, annual production is projected at 275,000 to 325,000 gold ounces and 65,000 to 85,000 tonnes of copper.
Responding to Scotiabank, Viljoen explained that revised geotechnical assumptions, a larger cave and expansion of processing capacity from 9 million to 15 million tonnes annually underpin the updated plan. She declined to break down the respective capital impacts ahead of the investment decision.
Newmont Advances Projects While Spending Rises
Viljoen said the Tanami Expansion 2 shaft is complete, with commercial production expected by the end of the second quarter of 2027. Cadia's PC2-3 project remains on track for completion this year.
Tabolt expects 2027 development capital to increase approximately $500 million over 2026. Responding to a Barclays analyst, Viljoen clarified that half the increase relates to Red Chris.
Declining spending on Yanacocha's water treatment plants should free approximately $200 million in 2027 and $400 million annually beginning in 2028, partially offsetting higher development investment.
NEM Maintains Buybacks Alongside Nevada Deal
Tabolt reported third-quarter free cash flow of $1.9 billion and adjusted earnings of $2.20 per share, above the Zacks Consensus Estimate of $1.94. Revenue of $6.36 billion exceeded the $6.01 billion consensus.
Newmont Corporation Price, Consensus and EPS Surprise
Newmont Corporation price-consensus-eps-surprise-chart | Newmont Corporation Quote
Management said Newmont had returned approximately $1.9 billion to shareholders since its previous earnings call. Repurchases have reduced shares outstanding by roughly 10% since February 2024.
The quarter ended with $3.2 billion in net cash, before an anticipated $1.95 billion payment linked to the amended Nevada Gold Mines joint venture agreement. Management expects closure in the fourth quarter.
Newmont Balances Growth With Financial Discipline
Viljoen emphasized that development projects must fit the portfolio, improve its durability and deliver compelling economics. For Red Chris, the company is targeting a double-digit internal rate of return.
Tabolt reinforced a capital allocation approach prioritizing sustaining investment, dividends, balance-sheet flexibility and share repurchases. Management's outlook combines expected production growth with warnings about inflation and cost pressures.
What NEM's Zacks Rank and Style Scores Indicate
NEM currently carries a Zacks Rank #3 (Hold), reflecting a neutral near-term ranking. Its Growth Score of A contrasts with a Momentum Score of F and Value Score of C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock's VGM Score of B reflects favorable combined style characteristics, although its Hold ranking warrants a measured assessment. The Zacks Rank can change as analysts revise earnings estimates following the reported results.