Newmont (NEM) Q1 2026 earnings review
Record Gold Prices Drive Historic Free Cash Flow, Masking Volume Declines
Newmont delivered a staggeringly profitable quarter driven almost entirely by macro tailwinds. An average realized gold price of $4,900/oz propelled Revenue up 46% YoY to $7.3B and delivered an all-time record $3.1B in Free Cash Flow. Adjusted EPS came in at $2.90. The company aggressively capitalized on this windfall, executing $2.4B in share repurchases and immediately authorizing a new $6.0B program. However, operational realities present a contrast: attributable production fell 10% sequentially to 1.3 Moz, and the exceptionally low Q1 AISC ($1,029/oz) is a temporary anomaly that will reverse sharply. Management maintained FY26 production and cost guidance, signaling notably higher costs and lower production in Q2.
🐂 Bull Case
The company generated $3.8B in operating cash flow and a record $3.1B in Free Cash Flow in a single quarter. This is radically transforming the balance sheet, creating a massive $3.2B net cash position.
Management is not hoarding cash. After exhausting the prior buyback authorization with a $2.4B deployment since February, the Board immediately reloaded the chamber with a fresh $6.0B authorization.
🐻 Bear Case
Total attributable gold production dropped 10% sequentially to 1.3 Moz. Joint ventures like Nevada Gold Mines dropped 19%, revealing that top-line growth is entirely price-driven rather than volume-driven.
The Q1 AISC of $1,029/oz is an anomaly driven by timing of capital spend, inventory builds, and strong by-product credits. Full-year guidance remains at $1,680/oz, meaning costs will spike dramatically in the remaining quarters.
⚖️ Verdict: 🟢
Bullish. The sheer magnitude of cash generation at current gold prices outweighs near-term operational hiccups. As long as Newmont continues aggressively retiring shares, the per-share value growth will remain highly compelling despite flat or declining production volumes.
Key Themes
Macro Tailwinds: Gold Pricing Defies Gravity
The primary driver of Newmont's exceptional quarter is the macro environment. The average realized gold price reached $4,900/oz, a massive $684/oz sequential increase and a 66% jump YoY. This direct flow-through to the bottom line proves the immense operating leverage inherent in Newmont's unhedged portfolio.
By-Product Credits Artificially Suppress Costs
Gold By-Product AISC plummeted 21% sequentially to $1,029/oz. While management highlighted cost discipline, the primary drivers were highly favorable silver and copper sales volumes/prices, lower sustaining capital spend timing, and a favorable inventory build at Boddington. This represents peak margin expansion for the year.
Unrelenting Capital Return Execution
Newmont has structured an aggressive ratable share repurchase framework. After executing $2.4B in buybacks over just a few months, they have permanently lowered the share count, which structurally increases the future per-share dividend capacity. The new $6.0B authorization ensures this floor remains firmly in place.
Nevada Gold Mines (NGM) Deterioration
The NGM joint venture remains a bleeding wound. Attributable production collapsed 19% sequentially to 236 Koz, and AISC climbed 6% to $1,595/oz. Combined with the previously issued 'notice of default' to operator Barrick, this asset continues to be a severe operational and legal overhang.
Ghana Fiscal Regime Grab
The Government of Ghana enacted a sliding royalty rate (up to 12%) and an adjusted Growth and Sustainability Levy. This will structurally increase AISC by ~$185/oz for the Ghana operations (adding ~$25/oz to the total company AISC). This was not included in original 2026 guidance and demonstrates the rising geopolitical cost of high commodity prices.
Operational Disruptions: Cadia Earthquake & Weather
Operational stability was hit by multiple events: a 4.5 magnitude earthquake at Cadia halted underground mining (reducing expected Q2 production), a bushfire impacted Boddington, and record rainfall alongside lower grades hurt Tanami. These disruptions solidify Q2 as a fundamentally weaker volume quarter.
Advanced Environmental Engineering: Yanacocha Water Treatment
The company continues its massive environmental remediation program, spending $169M in Q1 alone on the construction of advanced water treatment plants at Yanacocha. With total expected spend for the project reaching $1.8B, this highlights the immense capital intensity of post-mining environmental technology and life-cycle management.
Other KPIs
Accelerating. The company has completely transformed its balance sheet, moving from a massive debt load a year ago to a $3.2B net cash surplus. Total cash and equivalents ballooned to $8.8 billion, giving Newmont virtually unlimited flexibility for M&A, project development, or sustained buybacks during cycle downturns.
Accelerating. Up 12% from the prior quarter. Despite a $202M unfavorable working capital movement (driven by accrued reclamation spend and severance payouts), cash flow generation was monstrous enough to easily cover capital expenditures and shareholder returns.
Guidance
Stable. The company maintained its guidance for a 'trough' year. With Q1 delivering 1.30 Moz, Newmont is tracking perfectly against this target. Q2 is expected to be slightly below Q1, meaning production is heavily back-half weighted (guided at 52% in H2).
Reversing. Q1 came in shockingly low at $1,029/oz. The fact that management did not lower the $1,680/oz full-year guidance confirms that costs will spike dramatically in Q2 through Q4. Management explicitly warned that Q2 unit costs will be 'notably higher' due to sustaining capital ramps, lower silver production, and the new Ghana royalty.
Stable full-year, but expected to accelerate sequentially. Q1 spend was only $381M. To hit the $1.95B target, sustaining capex must average over $520M per quarter for the rest of the year, providing a heavy headwind to Free Cash Flow in upcoming quarters.
Key Questions
AISC Trajectory
With Q1 AISC at $1,029 and full-year guidance maintained at $1,680, this implies Q2-Q4 AISC will average closer to $1,900/oz. How much of this is driven purely by capital timing versus structural cost inflation and lower by-product credits?
Nevada Gold Mines (NGM) Dispute
Given the 19% sequential drop in production at NGM and the previously issued notice of default to Barrick, what are the specific operational triggers required to restore this asset, and is arbitration inevitable?
Cadia Structural Integrity
Following the 4.5 magnitude earthquake at Cadia, what is the level of confidence in the long-term structural integrity of the underground panel caves, and will this delay the ramp-up of the PC2-3 cave?
Ghana Margin Compression
The new sliding royalty in Ghana acts as a margin ceiling in this high gold price environment. Are there any mitigations or volume increases planned at Ahafo to offset the projected $185/oz cost increase?