Newmont (NEM) Q4 2025 earnings review
Record Cash Flow Masked by Impairments and Weaker 2026 Outlook
Newmont capitalized on surging gold prices to deliver a record-breaking financial performance in Q4, generating $2.8B in Free Cash Flow (up 79% sequentially) and $4.5B in Adjusted EBITDA. However, GAAP Net Income fell 29% sequentially to $1.3B, weighed down by a $779M impairment charge related to the deferral of the Yanacocha Sulfides project and significantly higher tax expenses. While the current quarter demonstrated massive operating leverage, the 2026 guidance introduces a sobering reality: production is set to decline ~10% and costs are projected to rise ~24%, driven by mine sequencing and higher royalties.
🐂 Bull Case
Newmont generated an all-time record $7.3B in Free Cash Flow for FY25, ending with a net cash position of $2.1B. This fortress balance sheet supports the new $0.26/share dividend and continued buybacks ($3.4B returned in 2025).
The Ahafo North project achieved commercial production in Q4. This asset is critical for 2026, expected to contribute low-cost ounces that will partially offset declines at other mature assets.
🐻 Bear Case
Guidance for 2026 is disappointing. Attributable gold production is guided to ~5.3 Moz (down from 5.9 Moz in 2025), while AISC is expected to jump to $1,680/oz from $1,358/oz. This indicates negative operating leverage ahead.
The decision to indefinitely defer the Yanacocha Sulfides project resulted in a $779M impairment. This removes a significant long-term growth lever from the immediate pipeline, raising questions about reserve replacement.
⚖️ Verdict: ⚪
Neutral. The Q4 cash flow generation is undeniable and the balance sheet is pristine. However, the 2026 guidance signals a 'transition year' with significantly lower production and sharply higher costs, which dampens the excitement from the gold price leverage.
Key Themes
2026 Guidance: The Cost of Sequencing
Management guided for a sharp deterioration in operating metrics for 2026. Production is expected to drop to 5.3 Moz (vs 5.9 Moz in 2025) while AISC climbs to $1,680/oz. Drivers include lower grades at Cadia and Peñasquito due to mine sequencing, and the expiration of the Ghana stability agreement which exposes the company to higher taxes and royalties. The $1,680/oz cost guidance is a 24% increase YoY.
Extreme Price Leverage
Newmont's leverage to the gold price was on full display. The average realized gold price jumped to $4,216/oz in Q4 from $3,539/oz in Q3 (+19%). This fueled a 55% YoY increase in Adjusted EBITDA for FY25 ($13.5B vs $8.7B). While costs are rising, the margin expansion from price realization is currently outpacing inflation.
Tax and Royalty Headwinds
Fiscal terms are tightening. The Ghana Stability Agreement expired Dec 31, 2025. Result: Corporate tax up 2.5% to 35%, new 3% Growth levy, and 8% withholding tax on repatriated cash. Additionally, the government proposed a sliding scale royalty (5-12%) that could add $50/oz to total company AISC if enacted (not yet in guidance). In Q4 alone, income/mining tax expense surged to $2.07B.
Capital Allocation Framework
With the divestiture program complete ($4.5B proceeds) and net debt at negative levels (net cash $2.1B), Newmont introduced an 'Enhanced Capital Allocation Framework.' Key pillars: Sustainable $1.1B annual base dividend ($0.26/quarter), $1.0B net cash target, and ratable share repurchases with excess cash. $2.4B remains on the buyback authorization.
Yanacocha Sulfides Indefinite Deferral
The company decided to 'indefinitely defer' the Yanacocha Sulfides project, triggering a $779M impairment. While they are pivoting to a 'capital efficient' plan to extend leaching through 2027, this removes a major reserve replacement block that investors were modeling for the late 2020s.
Other KPIs
Accelerating. Up 23% sequentially from $5,524M in Q3 and up 21% YoY (though YoY is less comparable due to divestitures). Driven entirely by the $677/oz increase in realized gold prices.
Accelerating. Up 46% sequentially from $1,883M in Q3. This metric strips out the $779M impairment, showing the true earnings power of the operating assets in this price environment.
Accelerating. Jumped 58% sequentially. Working capital was a tailwind ($61M benefit vs negative impact in prior quarters), aided by tax and liability accruals.
Guidance
Decelerating. This represents a ~10% decline from the 5.89 Moz achieved in 2025. The decline is driven by mine sequencing at Cadia (transition to next panel cave), Peñasquito (lower grades), and Ahafo South (end of Subika pit), only partially offset by Ahafo North ramp-up.
Accelerating (Costs). A sharp increase from $1,358/oz in 2025. Reasons: lower denominator (production volume), higher royalties from $4,500/oz gold price assumption, and deferral of $150M sustaining capital from 2025 into 2026.
Stable/Elevated. Basically flat vs 2025 guidance but higher than actual 2025 spend due to deferrals. Investment is heavy in tailings management at Cadia and Boddington to ensure longevity.
Stable. Continued heavy investment in Tanami Expansion 2, Cadia Panel Caves, and Lihir Nearshore Barrier. Red Chris block cave feasibility is the next major decision point (H2 2026).
Key Questions
Cost Mitigation in Downside Scenario
With AISC guided to $1,680 based on $4,500 gold, what is the cost flex if gold prices correct to $3,500? How much of the cost increase is sticky (labor/energy) vs variable (royalties)?
Yanacocha Long-Term Plan
With Sulfides deferred indefinitely, is Yanacocha effectively entering a closure phase post-2027 leaching extension, or are there other viable life-extension options?
Ghana Fiscal Stability Risk
The guidance excludes the proposed 5-12% sliding scale royalty in Ghana. What is the probability of this passing, and are there active negotiations to mitigate this potential $50/oz group-wide impact?
Cadia Production Gap
Cadia gold production is guided to drop ~30% in 2026 (to 270koz). How long will the transition to Panel Cave 1-2 and 2-3 take before we see a return to historical production levels?