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Will Higher Unit Costs Weigh on Newmont's Margins in Q4?
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Key Takeaways
Newmont's Q3 gold CAS rose 22% to $1,449 per ounce, while co-product AISC climbed 25%.
Q4 by-product AISC is projected to reach $1,900 per ounce as sustaining capital spending peaks.
Newmont expects 2026 gold output of 5.26 million ounces, down from 5.89 million in 2025.
Newmont Corporation’s (NEM - Free Report) gold costs applicable to sales (CAS) rose roughly 22% year over year to $1,449 per ounce on a co-product basis in the third quarter of 2026. All-in sustaining costs (AISC) — the most important cost metric of miners — were $1,963 per ounce, reflecting a roughly 25% year-over-year increase.
AISC also increased nearly 12% year over year on a by-product basis to $1,454 per ounce. The increase was partly due to a rise in sustaining capital spending. CAS was stable year over year on a by-product basis.
NEM reduced its 2026 by-product AISC guidance to $1,520 per ounce from $1,680 per ounce and lowered by-product CAS guidance to $925 per ounce. However, fourth-quarter by-product AISC is projected to rise to around $1,900 per ounce as sustaining capital spending peaks and silver production at Penasquito declines.
While NEM lowered its AISC guidance for the full year, it still indicates roughly a 12% increase from $1,358 per ounce in 2025. Lower production in 2026 is expected to lead to higher year-over-year costs. The company anticipates gold production at about 5.26 million ounces for 2026, indicating a year-over-year decline from 5.89 million ounces in 2025, despite projected fourth-quarter output of about 1.36 million ounces, its strongest production quarter of 2026. The production decline and higher costs could undercut the profitability goals.
Looking across the competitive landscape, Kinross Gold Corporation’s (KGC - Free Report) production cost of sales per gold-equivalent ounce sold increased 30.6% year over year to $1,502 in the third quarter. KGC’s attributable AISC per gold-equivalent ounce sold rose 20% to $1,947. Kinross’ total production cost of sales increased to $627.2 million from $598.6 million.
Agnico Eagle Mines Limited (AEM - Free Report) also remains exposed to higher production costs. AEM’s third-quarter AISC increased 24% year over year to $1,648 per ounce, reflecting higher sustaining capital spending and reclamation-related costs. AEM projects AISC near the upper end of its $1,400-$1,550 per ounce guidance range.
The Zacks Rundown for NEM
Shares of Newmont have gained 33.5% in the past year compared with the Zacks Mining – Gold industry’s 16.8% rise.
Image Source: Zacks Investment Research
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 13.08, a 1.3% premium to the industry average of 12.91X. It carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NEM’s 2026 earnings implies a year-over-year rise of 32.7%. The EPS estimates for 2026 have been trending higher over the past 60 days.
Image Source: Zacks Investment Research
NEM stock currently carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Will Higher Unit Costs Weigh on Newmont's Margins in Q4?
Key Takeaways
Newmont Corporation’s (NEM - Free Report) gold costs applicable to sales (CAS) rose roughly 22% year over year to $1,449 per ounce on a co-product basis in the third quarter of 2026. All-in sustaining costs (AISC) — the most important cost metric of miners — were $1,963 per ounce, reflecting a roughly 25% year-over-year increase.
AISC also increased nearly 12% year over year on a by-product basis to $1,454 per ounce. The increase was partly due to a rise in sustaining capital spending. CAS was stable year over year on a by-product basis.
NEM reduced its 2026 by-product AISC guidance to $1,520 per ounce from $1,680 per ounce and lowered by-product CAS guidance to $925 per ounce. However, fourth-quarter by-product AISC is projected to rise to around $1,900 per ounce as sustaining capital spending peaks and silver production at Penasquito declines.
While NEM lowered its AISC guidance for the full year, it still indicates roughly a 12% increase from $1,358 per ounce in 2025. Lower production in 2026 is expected to lead to higher year-over-year costs. The company anticipates gold production at about 5.26 million ounces for 2026, indicating a year-over-year decline from 5.89 million ounces in 2025, despite projected fourth-quarter output of about 1.36 million ounces, its strongest production quarter of 2026. The production decline and higher costs could undercut the profitability goals.
Looking across the competitive landscape, Kinross Gold Corporation’s (KGC - Free Report) production cost of sales per gold-equivalent ounce sold increased 30.6% year over year to $1,502 in the third quarter. KGC’s attributable AISC per gold-equivalent ounce sold rose 20% to $1,947. Kinross’ total production cost of sales increased to $627.2 million from $598.6 million.
Agnico Eagle Mines Limited (AEM - Free Report) also remains exposed to higher production costs. AEM’s third-quarter AISC increased 24% year over year to $1,648 per ounce, reflecting higher sustaining capital spending and reclamation-related costs. AEM projects AISC near the upper end of its $1,400-$1,550 per ounce guidance range.
The Zacks Rundown for NEM
Shares of Newmont have gained 33.5% in the past year compared with the Zacks Mining – Gold industry’s 16.8% rise.
From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 13.08, a 1.3% premium to the industry average of 12.91X. It carries a Value Score of C.
The Zacks Consensus Estimate for NEM’s 2026 earnings implies a year-over-year rise of 32.7%. The EPS estimates for 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.