Newmont Corporation (NEM) Earnings

Management highlights

- Executive Leadership Changes * Multiple internal leadership appointments were announced to strengthen operational, financial, technical, and project development expertise, reflecting deep internal bench strength and alignment with Newmont's core strategy of safe delivery, cost discipline, and high-return investment. * Brian Tabolt was appointed EVP and CFO, Mark Rodgers as EVP and COO, Dave Thornton as EVP and Chief Technical Officer, and David Fry as EVP of Project Development. - Operational Performance * Q2 2026 operational performance was modestly ahead of prior guidance, with approximately 50,000 ounces of production originally planned for H2 2026 pulled forward into Q2, driven by earlier-than-expected output at Yanacocha and stronger performance at Lihir following asset reliability work. * Nevada Gold Mines joint venture delivered stable performance in the quarter. 49% of full-year 2026 production is expected to be delivered in H1, with 51% in H2; Q3 production is expected to be broadly in line with Q2, and Q4 will remain the strongest quarter of the year. * Key project milestones: Redcrest Blockhive project received all required regulatory approvals from British Columbia, including an amended environmental assessment certificate agreed with the Taltan nation; work is ongoing to complete the feasibility study ahead of a final investment decision. Recovery efforts after the April 14 seismic event at Kaidia are on track, with production from operating caves resuming in mid-June; no impact to full-year 2026 production guidance is expected. The second expansion at Tanami is progressing to plan, with all underground infrastructure expected to be completed by the end of Q3 2026; mobilization for the Adihr near shore barrier will ramp up in Q3, unlocking access to more than 5 million ounces of gold starting in 2028. - Cost Management * Higher oil prices drove an expected sequential increase in Q2 unit costs, but all cost metrics remain firmly within full-year guidance ranges, as productivity initiatives offset external cost pressures. * Key productivity improvements include parking 50 idle mining production units across the portfolio without impacting output, 15% increased underground productive time per shift at Cerro Negro, improved milling efficiency at Ahafo North, and better rainy season equipment performance at Merion; the company continues to reduce unnecessary contract utilization across the portfolio. - Capital Allocation * Newmont's capital allocation framework prioritizes funding sustaining capital, advancing high-return development projects, maintaining a strong flexible balance sheet, and returning all excess cash to shareholders via dividends and share repurchases. The Q2 2026 dividend was held at 26 cents per share; based on current share repurchase progress, the framework supports a 1-cent per quarter (4-cent annualized) dividend increase to 27 cents per share at the next February 2027 board review, an 8% increase since the framework was introduced. As of the call, $1.7 billion in shares have been repurchased under the $6 billion April 2026 authorization, with ~$4.3 billion remaining; over two years, the program has reduced shares outstanding by more than 100 million shares (~9%).

Guidance

- Full year 2026 production, cost, and capital expenditure guidance remains unchanged from prior guidance, with all metrics currently tracking within established ranges. Gold all-in sustaining costs full-year guidance remains $1,680 per ounce, with Q2 2026 coming in well below this level at $1,621 per ounce. - Full-year 2026 sustaining capital guidance is $1.95 billion, with 58% of spending weighted to H2 2026, driven by project timing at Boddington, Cadia, Tanami, Brucejack, and Redcrest; a $150 million quarter-over-quarter increase in sustaining capital spending is expected between Q2 and Q3 2026, with Q3 and Q4 expected to be at relatively similar levels. - Full-year 2026 development capital guidance is unchanged at $1.4 billion, with 63% of spending weighted to H2 2026, driven by deferred work at Kaidia, ramp-up of the Adihr near shore barrier project, and Cerro Negro expansion work; a similar quarter-over-quarter spending increase is expected between Q2 and Q3 for development capital. - Production guidance remains on track, with Q3 2026 production expected to be broadly in line with Q2 2026, and Q4 2026 expected to be the strongest quarter of the year. No impact to full-year 2026 production guidance from the Kaidia seismic event is expected. - Unit costs are expected to increase moderately in Q3 2026, driven by planned higher capital spending and steady production levels relative to Q2, but will remain within full-year guidance ranges. - Newmont plans to review and re-establish multi-year guidance in February 2027, with additional thematic business insights provided to investors in the interim.

Segment performance

Newmont does not break out separate product segment financial performance in this call. Aggregated company-wide results for Q2 2026 are: production of 1.3 million ounces of gold, 17,000 tons of copper, and 7 million ounces of silver; $3.8 billion adjusted EBITDA; adjusted net income of $2.10 per share; average realized gold price of $4,414 per ounce; $2.9 billion cash flow from operations after working capital; and a Q2 record $2.2 billion free cash flow. Gold all-in sustaining costs were $1,621 per ounce on a byproduct basis. Sustaining capital invested in Q2 was $438 million, and development capital invested in Q2 was $285 million. End-of-quarter net cash was $3.4 billion, which is modestly above the upper end of Newmont's $1-$3 billion target range. 80%+ of Q2 free cash flow was returned to shareholders, totaling ~$1.8 billion via dividends and share repurchases.

Risks & headwinds

- Re-emerging broad-based cost inflation across the mining sector, including higher energy, freight, explosives, labor, contractor, equipment, and input costs; every $10 per barrel change in oil prices impacts full-year costs by approximately $60 million, with additional indirect knock-on impacts across the supply chain. - Persistently elevated oil prices have already driven higher Q2 unit costs, and may flow through to higher indirect and freight costs in H2 2026 if prices remain elevated. - Ongoing unresolved legal, commercial, and operational disagreements with Barrick related to the Nevada Gold Mines joint venture, the proposed NGM IPO, and contribution processes for excluded properties; Newmont has engaged in extensive direct negotiations to resolve issues, but several key points remain unresolved, and Newmont is prepared to enforce its legal rights under the joint venture agreement if a resolution is not reached. - Seismic risk related to cave mining operations at Cadia: after the April 2026 seismic event, cave establishment work for new panels is paused while the company updates models and improves safety protocols, working with regulators to approve a safe restart. - Regulatory and political risk in operating jurisdictions, including ongoing discussions with the Ghanaian government related to local economic development and project frameworks.

Analyst Q&A

• Q: What are the remaining milestones for the Redcrest Blockhive project ahead of feasibility completion and a final investment decision (FID), how is Newmont addressing recent capital cost inflation, and what is the construction timeline? /

  A: The main regulatory approvals are complete, and the company is now working through final internal technical and independent economic review to ensure the project meets Newmont's hurdle rate requirements and long-term strategic fit. Original Newcrest capital cost estimates are expected to be higher due to industry-wide inflation, and Newmont is adjusting engineering designs to offset cost increases where possible. The project was delayed to reset feasibility to meet Newmont's standards and complete regulatory approvals, which allowed for design improvements that de-risk the project and improve overall economics despite higher costs. Management will delay FID if needed to ensure all items are properly closed out before making a public capital commitment that can be delivered on time and on budget.

• Q: How is Newmont managing building cost inflation pressures, particularly from elevated oil prices, and which assets face the greatest pressures? /

  A: The largest energy cost impact is on large open pit operations including Boddington, Penasquito, Lihir, and Merian, but Newmont has already reduced fuel consumption across these assets by parking underutilized production equipment. The company monitors inflation across all inputs including explosives, cyanide, grinding media, labor, and freight, but is still in the monitoring phase for broader indirect cost pressures. Newmont's full portfolio is focused on cost control and productivity improvements, and expected production growth in 2027 will help offset unit cost increases. All cost pressures are currently expected to be offset enough to keep full-year 2026 costs within guidance.

• Q: What is the path to 6 million ounces of annual gold production, and how dependent is that on the Cadia cave ramp up in 2029? Are there other opportunities to hit this target earlier? /

  A: Newmont is far less reliant on Cadia's new caves for medium-term production than generally assumed; the new caves will mostly offset lower grades from existing producing caves and improve overall average grade, rather than driving large incremental production growth. Incremental production growth will primarily come from Ahafo North ramping up to full production, plus grade improvements at Boddington, Lihir, Cerro Negro, and Tanami, so Newmont can grow production without relying on Cadia's new cave development ahead of 2029.

• Q: Can you update on the restart status at Cadia following the April seismic event, and explain why operating caves have restarted but new cave establishment remains paused? /

  A: The two existing operating caves at Cadia fully resumed production in mid-June, and routine development work for the two new under-development caves is ongoing. Cave establishment activity remains paused while the company incorporates lessons from the seismic event, updates seismic models, and works with regulators to approve updated safety protocols. Existing mature caves have returned to background seismic activity with no ongoing risk, while cave establishment inherently generates seismic activity, so additional work is required to ensure controls meet updated safety standards before restarting.