Newmont Q2 2026 Earnings Call: Complete Transcript

Newmont (TSX: NGT ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. 2 billion in free cash flow.

Strategic executive appointments were made to strengthen the company's financial, operational, and technical capabilities, including new roles for Brian Tabold, Mark Rogers, Dave Thornton, and David Fry. Newmont maintained its full-year 2026 guidance, expecting 51% of production in the second half, with a focus on cost control amidst rising oil prices impacting expenses. Key operational highlights included regulatory approvals for the Red Chris project in British Columbia and recovery efforts at Cadia following a seismic event, with no anticipated impact on full-year production.

9 billion to shareholders through dividends and share repurchases, with a commitment to maintaining a strong balance sheet and funding growth projects. Future outlook remains strong with expectations of increased production in Q4 2026 and continued focus on productivity improvements and capital discipline. Discussions with Barrick regarding the Nevada Gold Mines joint venture continue, with Newmont committed to protecting shareholder interests. Full Transcript OPERATOR And welcome to Newmont's second quarter 2026 results conference call.

All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Newmont's Group Head of Treasury and Investor Relations, Neil Backhouse.

Neil, please go ahead. Neil Backhouse, Group Head of Treasury and Investor Relations Thank you, Holly. Hello everyone and thank you for joining Newmont's second quarter 2026 results conference call. Joining me today are Natasha Fuljun, our President and Chief Executive Officer, Brian Tabold, our newly appointed Executive Vice President and Chief Financial Officer, as well as other members of our management team who will be available to answer questions at the end of the call.

Before we begin, please take a moment to review our cautionary statement shown here and refer to our SEC filings which can be found on our website. With that, I'll turn the call over to Natasha. Natasha Fuljun, President and Chief Executive Officer Thank you Neil and hello everyone. To begin today's call, I'd like to start by acknowledging the executive leadership appointments we announced last month, reflecting the depth and talent we have within Newmont and reinforcing our commitment to building a future-ready organisation with the leadership capabilities needed to execute our strategy.

Together these appointments strengthen our financial, operational, technical and project development expertise that will help us deliver consistent performance and steward our world-class portfolio. Brian Tabold has been appointed as Executive Vice President and Chief Financial Officer. Since joining Newmont in 2021, Brian has held several senior finance roles, helping to strengthen financial oversight, integrated planning and capital allocation priorities across the business. Most recently Brian served as the Chief Accounting Officer and Group Head Finance and brings more than 20 years of experience to the role.

I also want to recognise and thank Peter Wixler who served as interim CFO over the past year, providing steady leadership and continuity during an important period for Newmont and we are grateful for the discipline and commitment he brought to the position. Mark Rogers has been appointed as Executive Vice President and Chief Operating Officer. Mark joined Newmont in 2020 and has held senior leadership roles across several regions, most recently as Managing Director for Africa and Asia Pacific.

Mark has over 30 years of experience in the industry and as Chief Operating Officer he will lead performance across our 12 managed operations with a strong focus on safe, consistent delivery and operational excellence inclusive of health, safety, security and environment. Dave Thornton has been appointed as Executive Vice President and Chief Technical Officer. Dave has more than 25 years of mining experience and joined Newmont in 2016 where he has since held leadership roles across North and South America and Africa, most recently serving as the Managing Director of the Americas.

In his new role, he will lead the Technical Services team, bringing together exploration, mining and mine planning, processing, asset management and digital capabilities to strengthen technical excellence in support of operational and project performance. And finally, David Fry has been promoted to the newly created position as Executive Vice President, Project Development. David joined Newmont in 2022 and most recently served as Group Head, Global Projects.

He brings significant international project delivery experience across mining, energy and infrastructure sectors and will continue to focus on disciplined execution as we advance our highest return growth opportunities. These appointments reflect the confidence we have in the people who know our business best. Together with existing team members Peter Wexler, Peter Toth and David Lager, they have helped shape the company we are today and share accountability for delivering the plans that define our future, executing our strategy, advancing our world-class portfolio and leading with cost and capital discipline. With that, I will turn now to our second quarter highlights.

Newmont delivered a strong second quarter and remains on track to achieve our full year 2026 guidance, supported by disciplined execution across the portfolio and continued momentum as we head into the second half of the year. 3 million ounces of gold, 17,000 tonnes of copper and 7 million ounces of silver from the full portfolio. 2 billion in free cash flow. 9 billion to shareholders through quarterly dividends and ongoing share repurchases.

I also want to highlight that we have now repurchased over 100 million shares since we began our share repurchase program a little over two years ago. This is a meaningful milestone that Brian will discuss later in the call. During the quarter, we also achieved several important milestones within our portfolio. First, at Red Chris, the block cave project received key regulatory approvals from the Province of British Columbia.

This includes an amended Environmental Assessment Certificate achieved through a consent-based process with the Tahltan Nation, reflecting the strength of our partnerships and shared commitment to advancing the project responsibly. With these approvals in place, we are focused on completing the feasibility study and advancing the project toward board approval and final investment decisions for this promising new project. We made significant progress on the recovery efforts at Cadia following the seismic event that occurred on April 14. Production from the operating caves resumed in mid-June and the team is working to complete the remaining ground support upgrades.

Development rates at PC1-2 have returned to normal levels and we are working to secure the regulatory approvals required to safely restart cave establishment at both of the project's caves later in the year. We continue to expect no impact on Newmont's full year production guidance. Collectively, our second quarter results continue to demonstrate the strength of Newmont's portfolio and its ability to convert solid operational performance into significant free cash flow and returns to our shareholders.

Turning now to the operational drivers supporting our full year outlook, our second quarter operational performance was modestly ahead of the expectations we communicated in April, primarily due to certain ounces being realized earlier than expected, driving some third quarter production forward into the second quarter. The most notable drivers were Yanacocha, where ounces were produced earlier than planned, and Lihir, which delivered a stronger quarter as a result of the ongoing asset reliability work at this world-class operation. Together these assets delivered approximately 50,000 ounces of production that was initially expected in the second half of the year.

During the quarter we also benefited from a stable performance from our Nevada Gold Mines joint venture. Taking these results into account, we now expect approximately 49% of full year production to have been delivered in the first half with 51% expected in the second half. Looking ahead, we expect third quarter production for the total portfolio to be broadly in line with the second quarter before picking up again in the fourth quarter, which is still expected to be our strongest of the year, as Lihir completes planned maintenance in the third quarter and Ahafo North reaches its full run rate.

Shifting now to cost, we remain focused on controlling our absolute cost base to maximize margins and continue supporting strong free cash flow. As we signaled last quarter, higher oil prices contributed to the expected increase in second quarter cost. However, even after absorbing that pressure, both cost applicable to sales and all-in sustaining costs remain firmly within our full year guidance ranges, reflecting the continued discipline and cost and productivity initiatives we have been implementing across the portfolio. To make the work that we've been doing more tangible, I want to highlight a few examples.

We have parked nearly 50 mining production units across the portfolio without affecting production. At Cerro Negro, more efficient pre-start activities have increased underground productive time by approximately 15% per shift. At Ahafo North, we have made targeted investments to operationalize and improve milling efficiency, and in Merian we have improved road conditions and overall wet weather preparedness to optimize existing equipment performance during the rainy seasons. Across the portfolio we continue to reduce contract utilisation where possible.

These are practical, site-led actions that collectively improve productivity and help offset external cost pressures. Finally, our capital spend for 2026 is on track to land within the guidance ranges that we set at the beginning of the year. Starting with sustaining capital, we now expect spending to be approximately 58% weighted towards the second half of the year, primarily due to the timing of key programs at Boddington and Cadia, ongoing ventilation work at Tanami, and seasonal surface construction at Brucejack and Red Chris during the warmest summer months in British Columbia.

Development capital is now expected to be 63% weighted to the second half, reflecting the timing of work at our key projects in execution as well as the progression of feasibility study work at Red Chris. At Cadia, development spending is expected to increase as work recommences at the panel cave projects following the April seismic event. At Lihir, mobilization of the nearshore barrier will ramp up in the third quarter, unlocking access to more than 5 million ounces beginning in 2028. And the second expansion at Tanami continues to progress to plan, with all underground infrastructure expected to be completed by the end of the third quarter.

With that, I will now turn it over to Brian to review our financial performance and capital allocation priorities. Brian, over to you. Brian Tabold, Executive Vice President and Chief Financial Officer Thank you, Natasha and hello everyone. I want to start by expressing how honored I am to step into the CFO role here at Newmont.

Since joining the company in 2021 and having worked closely with teams across the business, including the newly appointed and existing members of the executive leadership team, I have developed a deep understanding of our portfolio, financial priorities and the discipline required to deliver consistent shareholder value, and I look forward to building on that work in my new role. I also want to thank Peter and the broader finance team for the strong foundation and continuity they have provided through this transition.

Turning to the second quarter, Newmont delivered strong financial results, supported by stable operations, disciplined cost management, and continued execution across the portfolio. 10 per share. 2 billion of free cash flow. Working capital was a modest use of cash during the quarter, primarily reflecting reclamation spending at Yanacocha, normal course inventory and stockpile builds, and the timing of cash tax payments.

This was partly offset by favorable receivable movements at Penasquito and Cadia, where strong collections and lower sales volumes reduced outstanding balances. As we move into the second half of the year, working capital variability may continue, including the potential unwinding of a portion of the receivable benefit recorded in the quarter. 8 billion through quarterly dividends and share repurchases, marking the second consecutive quarter in which we returned more than 80% of the free cash flow generated during the period.

Importantly, we achieved this while continuing to fund our organic growth pipeline and maintaining a strong net cash position, further differentiating Newmont from our peers and demonstrating the strength of our business through the commodity and investment cycles. Our second quarter results also demonstrate the significant operating leverage embedded in the portfolio. Year over year, our realized gold price increased by approximately $1,100 per ounce or about 33%, while absolute cost applicable to sales increased just 4%. As a result, a substantial portion of the higher gold price translated into stronger margins and free cash flow.

Turning to costs, gold all-in sustaining costs were $1,621 per ounce on a byproduct basis, remaining well below our full year guidance of $1,680 per ounce. Unit costs increased sequentially quarter over quarter as expected, primarily reflecting lower gold and silver production and sales volumes, a lower byproduct contribution and the full quarter impact of higher Ghana royalties and higher diesel prices. Despite these factors, our absolute cost base remains well controlled and we continue to monitor the geopolitical environment and its potential cost implications while remaining encouraged by our demonstrated ability to manage costs and improve productivity.

As Natasha mentioned, total portfolio production in the third quarter is expected to remain broadly in line with the second quarter, which, when coupled with the planned approximate $150 million quarter-over-quarter increase in sustaining capital, is expected to result in moderately higher unit costs in the third quarter. We remain focused on managing absolute costs, protecting margins and maintaining discipline as we work through the higher capital spend expected in the second half of the year.

Turning now to our capital allocation priorities, the capital allocation framework introduced earlier this year continues to provide the right balance between reinvesting in our world class portfolio, maintaining financial flexibility and returning excess cash to shareholders. Having been closely involved in the development of this framework, our focus remains on executing against it with discipline, consistency and transparency. Beginning with the sustaining capital, we invested $438 million in the second quarter to support safe production and long-term sustainable cash generation.

95 billion, with spending expected to increase in the second half as we progress critical work that preserves the integrity and longevity of our assets. 26 per share, unchanged from the prior quarter. Moving to development capital, we invested $285 million during the quarter. 4 billion, with spending expected to increase in the second half as we advance projects at Cadia, Tanami and Lihir.

4 billion of net cash, modestly above the upper end of the range of our net cash target of $1 billion, plus or minus $2 billion. That position will naturally fluctuate as we fund our capital programs, pay dividends and return excess cash to shareholders. In stronger price environments, we would expect our cash position to remain toward the upper end of our net cash range. If prices were to decline, entering that part of the cycle with additional cash would help us to continue funding our capital program while returning capital to shareholders, consistent with our through-the-cycle approach to creating shareholder value.

With those priorities funded, the framework directs all excess cash to share repurchases. 7 billion of shares under the $6 billion authorization approved in April.