This morning, Newmont (NEM), the world’s largest gold miner, reported first-half financial results that beat market expectations, benefiting from higher gold prices. The HNW Portfolios have a 2% weighting to Newmont.

Key Points:

  • Profits Up: Newmont reported record profits of US$5.4 billion, an increase of 63%, following a strong increase in the gold price over the last 12 months, which more than offset lower production from divested assets. Over the next six months, Newmont will see lower production as a couple of mines undergo maintenance, with production ramping back up to 6 million ounces of gold in 2027.
  • No Debt: The Newmont balance sheet remains one of the strongest in the world, with a net cash position of US$4 billion, which is currently outside of the capital framework, and will see Newmont increase shareholder returns over the second half of 2026.
  • Dividends Up: NEM announced a record dividend of US$0.52, up 4% on last year.
  • Share Buyback: During the quarter, Newmont also bought back US$1.7 billion of stock, with US$4.3 billion still to be completed over the current year. With cash currently above the target range, we would expect NEM to increase the buyback pace over the second half, providing share price support if gold prices retreat.
  • Guidance: NEM management reaffirmed full-year guidance of 5.3 million ounces of gold produced at an all-in-sustaining cost of US$1,600, with management stating they are finding productivity improvements to offset some of the diesel cost increases.

 

Portfolio Strategy: Newmont is the world’s largest gold miner, providing the Portfolio leverage to precious metals of Gold, Silver and Copper. Newmont has a large-scale asset base with tier-one gold mines across Australia, PNG, the Americas, and Ghana. A large, diversified portfolio of mines provides a defensive nature to the investment, with production issues at one mine not causing wider production issues at the company level, something that systematically plagues many ASX-listed miners such as Northern Star that have a single mine. Here, an issue at the single mine can result in a precipitous fall in the share price, something we want to avoid in a transparent Direct equities managed account.

At US$4,500/oz, NEM trades on a PE of 14x with a shareholder yield (dividends + buy-backs) of 8%.

 

NEM shares finished down -1.5% to $135 a good outcome, with the wider gold sector down -4%.