NEM — Q3 2026 Financial Report Analysis

Overview

Newmont grew Q3 2026 sales 15% to $6.36 billion and net income attributable to shareholders 35% to $2.48 billion ($2.35 per diluted share), even though it sold 8% fewer gold ounces than a year earlier. The reason is price. Newmont realized an average $4,317 per ounce of gold, 22% more than the $3,539 of Q3 2025, and silver from its Peñasquito mine in Mexico sold for $50.50 an ounce against $37.02. Costs per ounce rose too, but by less in dollars than the price did, so the profit on each ounce widened. Against the previous quarter the picture was steadier: attributable production edged up 1%, Cadia in Australia recovered from its April earthquake-related shutdown, and management cut its full-year cost guidance.

Key figures

*Newmont doesn't report an "operating income" line. The figure here is Sales minus the "Costs and expenses" total on its income statement ($3,163M vs $2,576M). The year-ago total includes a $99M gain on assets sold in Newmont's 2025 divestment program; without it, the Q3 2025 margin would be 44.8%.

What AISC means: all-in sustaining cost is the gold industry's closest thing to a per-ounce break-even. It adds the day-to-day cost of mining and processing ore, royalties, the capital spending needed just to keep existing mines running (not to grow them), overhead and some exploration and reclamation, then divides by ounces sold. The 10-Q reports it on a "co-product" basis, which splits costs between gold and the other metals by their value. The earnings release headlines a "by-product" figure, which subtracts copper, silver, lead and zinc revenue from gold's costs instead. Newmont's guidance uses the by-product figure.

Where the extra $839 million of sales came from

Newmont's own sales bridge in the 10-Q splits the change by metal:

Gold's price gain was about 2.4 times its volume loss. Silver was the surprise of the quarter: sales nearly doubled to $550 million because Peñasquito both mined more silver (11 million ounces vs 7 million) and sold it at a higher price. Copper went the other way. Volumes fell from 68 million pounds sold to 42 million, mostly because of Cadia, and a $6.91/lb copper price (vs $4.67) only partly made up for that. Zinc sales rose $67 million on price.

Mine by mine: the same three problem sites, one of them recovering

Production losses were concentrated in a few places. The 10-Q gives these reasons:

• Cadia (Australia): gold production fell 37% to 61 koz and copper to 13 thousand tonnes from 22, from "continuing impacts in the third quarter" of the April 14 seismic event. Underground mining restarted in mid-June and the filing says production returned "to pre-event levels in the third quarter". Output still nearly doubled from Q2's 34 koz. Because fewer ounces carried the same fixed costs, Cadia's co-product AISC was $3,390/oz, against $1,188 a year ago.
• Ahafo South (Ghana): production fell 28% to 104 koz on lower ore grade, meaning less gold in each tonne of rock milled. AISC rose 47% to $2,261. Ghana has also become more expensive. Newmont's old investment agreement expired at the end of 2025, and in March 2026 Parliament replaced the flat royalty with a sliding scale of 5% to 12% of gold revenue that rises with the gold price. The corporate tax rate also went up from 32.5% to 35%.
• Peñasquito (Mexico): gold production fell 48% to 46 koz. The filing blames "mine sequencing", meaning the pit was in lower-grade gold ore, plus higher organic carbon in the feed, which lowers recovery. The same sequencing brought richer silver, lead and zinc, so Peñasquito's gold-equivalent output from those metals held roughly flat.
• Red Chris (Canada) gold fell 40% on lower grade and recovery, and Yanacocha (Peru) fell 23% because fewer, lower-grade tonnes were placed on its leach pads.

On the other side, Ahafo North (Ghana, in commercial production since Q4 2025) added 69 koz at a $1,714 AISC. Merian (Suriname) rose 40% on higher grade, and Nevada Gold Mines, the joint venture with Barrick, was flat at 251 koz. NGM's cost per ounce still rose 12%, mainly because of higher royalties at Carlin and Cortez, which are paid as a share of the gold price, and slightly fewer ounces sold.

What the headline numbers hide

• GAAP earnings were helped by tax items, not just by mining. Newmont's adjusted net income of $2,309M is $166M below reported net income. Two adjustments go in opposite directions. A $116M charge for revised cleanup plans at former and historic mine sites lowered GAAP profit; Newmont adds it back because those sites no longer produce anything. At the same time, $215M of "valuation allowance and other tax adjustments" raised GAAP profit, and Newmont strips them out. The effective tax rate fell to 26.1% of pre-tax income from 31.4% a year ago. Pre-tax income rose 28%, slower than the 35% rise in net income.
• About 5 points of EPS growth came from buybacks. Diluted shares fell 4.5% to 1,051 million from 1,100 million. That is why diluted EPS grew 41% while net income grew 35%. Since February 2024 Newmont has cut its share count by more than 115 million shares, roughly 10%.
• The year-ago quarter had one-offs of its own. Q3 2025 included a $99M gain on asset sales and a $72M loss on repaying debt early. Neither recurs, so they roughly cancel out in the comparison.
• Part of the jump in gold's co-product cost is an accounting change. On January 1, 2026 Newmont raised the prices it uses to convert other metals into "gold equivalent ounces", for example gold to $4,000 from $1,700 and silver to $50 from $20. The 10-Q says this results in "higher costs allocated to gold." So the 25% rise in co-product AISC overstates how much the real cost of producing gold went up. The by-product AISC, which the change doesn't affect, rose 12%.
• Cash conversion was decent but not as clean as Q2. Operating cash flow was about $2.8B in the quarter against $2.51B of net income. A $565M working-capital outflow held it back. The release attributes it to $318M of higher receivables (cash from sales not yet collected), $256M spent on reclamation work that was already accrued, and $172M of inventory builds. For the first nine months, operating cash flow of $9.48B was 1.17 times net income of $8.09B, and 41% above last year.
• Cash taxes are falling from Q1's peak. Income and mining taxes paid were $858M, down from $1,081M in Q2 and $1,268M in Q1, as the annual payments accrued in 2025 were settled.

Did last time's read hold up?

Our Q2 analysis set out several things to watch. Most played out as expected:

• Q3 production "broadly in line" with Q2: yes. Attributable production including equity stakes was 1,302 koz against about 1,293 koz in Q2.
• Cadia's return to pre-event output: partly. Production got back to pre-event rates during the quarter and gold output nearly doubled from Q2, but the quarter as a whole was still 37% below a year earlier.
• Q3 free cash flow below Q2's record: yes. It was $1.91B against $2.21B, on higher capital spending and the working-capital reversal Q2's release had warned about.
• Buyback pace not threatened: yes. Repurchases sped up to about $1.8B in Q3 from $3.46B over the whole first half.
• The dispute with Barrick over Nevada Gold Mines: this risk was resolved. On August 10 the two companies amended the joint venture agreement. The amendment "resolves all outstanding disputes", tightens governance, and adds Barrick's Fourmile and Newmont's Fiberline and Mike properties to NGM. Newmont will pay Barrick $1.95 billion in cash, due in Q4.
• Gold price direction: realized gold slipped again, by $97 an ounce from Q2. Margins per ounce are still far above last year's.

Takeaway: Newmont is earning more from fewer ounces. The margin on each gold ounce (realized price minus co-product AISC) widened 19% to about $2,354, while production fell 8%. The quarter's operating news was better than Q2's: Cadia came back and costs came in low enough to cut full-year cost guidance. But Q4 has to be the strongest quarter of the year to hit the 5.26 Moz target, and the gold price still decides most of the result.

Outlook

Management's guidance (October 22, 2026): production and capital guidance are unchanged. Attributable gold production is 5.26 million ounces (±5%), and Q4 is guided to 1,365 koz, which would be the year's strongest quarter, about 5% above Q3. The increase is expected to come from higher grades at Tanami, productivity gains at Cerro Negro, Ahafo North's ramp-up, and Lihir finishing its September maintenance shutdown. Full-year by-product cost guidance improved: CAS to $925/oz and AISC to $1,520/oz, from $1,680. Management credits "cost discipline and higher realized co-product pricing." However, Q4 by-product AISC is guided to $1,900/oz. Sustaining capital ($600M) and development capital ($520M) both peak in Q4, and Peñasquito's silver output is expected to fall to about half of Q3's.

Risks management names: El Niño conditions are reducing the water supply at Lihir (Papua New Guinea) and are "forecasted to intensify," which could hurt Q4 output and costs. Newmont also says every $10 change in the oil price shifts costs by about $50 million. For 2027, it expects attributable production to grow by a "low-to-mid single-digit percentage", but unit costs to "trend higher." The reasons it gives are inflation above its 3% assumption, diesel, unfavorable currency moves (especially the Australian dollar), gold-linked royalties, and lower silver, lead and zinc output at Peñasquito. Development capital is expected to rise about $500M in 2027 for the Lihir Nearshore Barrier and the Red Chris Block Cave, which is pending a funding decision in early 2027.

Our read: the volume target is reachable but leaves little room for error. After nine months Newmont has 3.90 Moz, and Q4 must deliver 1.365 Moz to hit 5.26 exactly. The ±5% band means anything above roughly 1.1 Moz keeps it within guidance. Lihir's water supply is the specific risk to watch. On cash, the $1.95B Barrick payment would take the $3.2B net cash position down to about $1.3B before Q4's own free cash flow. That is still within Newmont's target of $1 billion net cash plus or minus $2 billion, so buybacks can continue, but the Q4 pace may slow. Three things to watch in Q4: whether Lihir delivers its higher-grade ounces despite drought; whether by-product AISC lands near the $1,900 guide; and how much gain Newmont books when the Fiberline and Mike properties go into NGM. That gain is non-cash and will inflate GAAP earnings, so adjusted figures will be the better guide to that quarter.