Newmont Surges to $66.99 on $690M Volume as Operational Risks and Capital Returns Shape Outlook

Newmont (NEM) rose 2.78% on August 5, trading at $66.99 with a volume of $690 million, as investors digested its Q2 2025 earnings call. The company reported a record $1.7 billion in free cash flow and 1.5 million ounces of gold production, aligning with annual guidance. However, operational risks emerged following two fall-of-ground incidents at its Red Chris mine in British Columbia, which blocked access to underground work areas and suspended operations. CEO Tom Palmer emphasized safety as the priority, with rescue efforts ongoing for three workers trapped underground.

Production challenges loom in the second half as gold output at Cadia and Penasquito is expected to decline due to lower ore grades and planned mine sequencing. All-in sustaining costs (non-GAAP) are projected to rise in Q3 and Q4, driven by higher sustaining capital expenditures and taxes linked to elevated gold prices. Management outlined a deliberate shift in capital allocation, with 57% of sustaining capital weighted to the second half of 2025, reflecting delayed projects at key sites like Tanami and Lihir.

Capital returns remain a focus, with a $3 billion share repurchase program authorized in Q2 2025, doubling the total buyback authorization to $6 billion. Newmont also reported a $6.2 billion cash balance, exceeding internal liquidity targets, and reduced gross debt to $7.4 billion. The company’s non-core asset divestment program generated $470 million in after-tax proceeds from Greatland Gold and Discovery Silver, with deferred payments from Discovery Silver to be received in four equal tranches starting late 2027.

A backtest of a strategy purchasing the top 500 stocks by daily trading volume and holding for one day yielded a 166.71% return from 2022 to the present, outperforming the benchmark by 137.53%. This highlights the role of liquidity concentration in short-term performance, particularly in volatile markets. Newmont’s recent operational and financial updates, coupled with its robust balance sheet and capital return initiatives, position it to navigate near-term challenges while maintaining alignment with long-term guidance.