Newmont Q2 2025 slides: Record free cash flow amid Red Chris safety challenges

Introduction & Market Context

Newmont Corporation (NYSE:NEM) presented its second quarter 2025 results on July 24, revealing strong financial and operational performance despite safety challenges at its Red Chris project in British Columbia. The gold mining giant maintained its full-year guidance while generating substantial free cash flow and continuing its shareholder return program.

The presentation comes as gold prices remain elevated, with the company reporting an average realized gold price of $3,320 per ounce during the quarter, significantly above the $2,500 per ounce assumption used for its 2025 guidance. This favorable pricing environment has helped Newmont deliver impressive financial results while addressing operational challenges.

Safety Challenges at Red Chris

On July 22, 2025, just days before the earnings presentation, Newmont reported two fall of ground incidents at the underground work area of its non-producing Red Chris project in British Columbia, Canada. The company immediately activated emergency response protocols and suspended operations at the site.

According to the presentation, Newmont assembled specialist teams from nearby mine sites to safely bring team members to the surface and is concentrating efforts on the safe recovery of all personnel. This incident represents a significant safety challenge for the company, though it has not affected the company’s overall production guidance for the year.

Quarterly Performance Highlights

Despite the challenges at Red Chris, Newmont delivered strong operational results in the second quarter of 2025. The company reported attributable gold production of 1.5 million ounces and 36,000 tonnes of copper. This production came primarily from its core managed operations (1.12 million ounces) and core non-managed operations (340,000 ounces).

The company’s operational efficiency is reflected in its cost metrics, with Gold Costs Applicable to Sales (CAS) of $1,204 per ounce on a co-product basis and $903 per ounce on a by-product basis for the total core portfolio. All-in Sustaining Costs (AISC) were reported at $1,582 per ounce (co-product) and $1,360 per ounce (by-product).

Newmont emphasized that these results keep the company on track to achieve its full-year 2025 guidance, which was established in February. The guidance includes gold production of 5.6 million ounces (±5%), driven by stronger gold grades at Cadia and Peñasquito in the first half of 2025.

Financial Results

The second quarter of 2025 saw Newmont generate exceptional financial results, highlighted by $1.7 billion in free cash flow. The company reported Adjusted EBITDA of $3.0 billion, GAAP Net Income of $1.85 per share, and Adjusted Net Income of $1.43 per share.

Cash from operations reached $2.4 billion, contributing to the company’s strong cash position of $6.2 billion in cash and cash equivalents at the end of the quarter. This robust financial performance positions Newmont to continue delivering strong free cash flow while maintaining its capital allocation priorities.

The company’s financial strength is further underscored by its detailed breakdown of all-in sustaining costs, which provides transparency into its operational efficiency across its mining portfolio.

Capital Allocation Strategy

Newmont’s capital allocation strategy for the first half of 2025 demonstrates its commitment to balancing shareholder returns, debt reduction, and strategic investments. The company maintained $6.2 billion in cash, well above its target of $3.0 billion, providing significant financial flexibility.

On the debt front, Newmont reduced its total debt to $7.4 billion, having retired $1.4 billion in debt during 2025, with further reduction opportunities under evaluation. The company allocated $837 million to sustaining capital and $660 million to development capital in the first half of the year.

Notably, Newmont returned significant capital to shareholders, with $561 million paid in common dividends ($0.25 per share quarterly) and $1.5 billion in share repurchases. The company has executed $2.8 billion of its $6.0 billion authorized repurchase programs to date, including $145 million of shares repurchased in July 2025.

Divestiture Program Completion

A significant milestone highlighted in the presentation is the completion of Newmont’s non-core divestiture program, which has generated up to $3.8 billion in total gross proceeds, including over $3.0 billion in cash. The program included the sale of several assets:

• Telfer: $219 million in cash at close, plus Greatland shares valued at $168 million upon announcement
• Musselwhite: $799 million, plus up to $40 million in deferred contingent cash
• Éléonore: $784 million
• Cripple Creek & Victor: $109 million, plus $87.5 million in deferred contingent cash
• Akyem: $887 million, plus $100 million in deferred contingent cash
• Porcupine: $201 million, plus Discovery shares and deferred cash consideration

This strategic divestiture program has allowed Newmont to streamline its portfolio and focus on its core, high-performing assets.

Cost Structure Analysis

The presentation provided insight into Newmont’s direct operating cost structure, which remains largely unchanged from 2024. Labor costs account for 50% of direct operating costs, with materials and consumables at 30% and fuel and energy costs at 15%.

This breakdown highlights the company’s exposure to inflation in these key areas, though Newmont noted its focus on cost discipline and productivity enhancements to mitigate these pressures.

Forward-Looking Guidance

Newmont reaffirmed its 2025 guidance, which includes:

• Gold production: 5.6 million ounces (±5%)
• Gold CAS: $1,180 per ounce
• Gold AISC: $1,620 per ounce
• Sustaining capital: $1.8 billion
• Development capital: $1.3 billion

The company noted that it expects to ramp up spending in the second half of 2025, driven by the timing of expenditures at Tanami, Cadia, Lihir, and Red Chris. Development capital spending is also expected to increase in the second half, related to projects currently in execution and studies to advance a potential underground expansion at Red Chris.

In conclusion, Newmont’s Q2 2025 presentation depicts a company with strong operational and financial performance, despite facing safety challenges at one of its development projects. The completion of its divestiture program, robust free cash flow generation, and continued shareholder returns highlight Newmont’s focus on creating value while maintaining operational discipline. The company appears well-positioned to meet its full-year guidance and continue its strategic initiatives through the remainder of 2025.

Full presentation:

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