Newmont Corp. (NEM) had one of those Fridays where the numbers look good and the stock still goes down. The gold miner reported better-than-expected third-quarter 2026 earnings and revenue, and yet shares were down 1.50% at $112.40 in premarket trading, according to market data.
So what gives? A few things stacked up against the stock: an analyst downgrade, worries about rising costs and a broader soft patch in gold-mining equities.
Freedom Broker cut Newmont from Buy to Hold and trimmed its price forecast to $116 from $130. The reasoning: limited near-term upside, cost inflation at Australian mines and operational risks at Lihir and Cadia. That is the kind of note that makes investors pause even when the quarter itself was solid.
Investors also had to chew on the potential impact of higher operating costs, lower co-product credits and increased development spending on future profit margins. In other words, the present looks fine. The future looks expensive.
Meanwhile, Newmont announced amendments to its Nevada Gold Mines joint venture agreement with Barrick Mining Corp. (B), involving a payment of approximately $1.95 billion.
The Quarter Itself Was a Beat
Newmont reported adjusted earnings of $2.20 per share, beating analysts' consensus estimate of $2.11.
Revenue totaled $6.363 billion, exceeding Wall Street's estimate of $6.278 billion.
The company returned $1.9 billion to shareholders through dividends and share repurchases since its previous earnings call. It also declared a quarterly dividend of 26 cents per share.
Newmont ended the quarter with $8.8 billion in cash. That is a lot of dry powder for a miner that is simultaneously paying out shareholders and writing big checks for joint venture assets.
Nevada Gold Mines Gets a Rewrite
Newmont amended its Nevada Gold Mines joint venture agreement with Barrick to include previously excluded assets, including Barrick's Fourmile property and Newmont's Fiberline and Mike properties.
The changes aim to align the partners' interests and maximize value across the mining district. Think of it as two neighbors finally agreeing on where the fence goes, except the fence costs $1.95 billion and sits on top of some very valuable rock.
The transaction is expected to close in the fourth quarter, with Newmont paying approximately $1.95 billion to Barrick.
Production and Cash Flow Stay Strong
Newmont produced approximately 1.3 million ounces of gold, 23,000 tons of copper and 11 million ounces of silver during the quarter.
Operating cash flow reached $2.8 billion, while free cash flow totaled $1.9 billion.
Gold by-product costs applicable to sales were $832 per ounce. All-in sustaining costs (AISC) stood at $1,454 per ounce.
Red Chris: A Big Bet With a Long Timeline
Newmont expects to make a final investment decision on its Red Chris block cave project in British Columbia in early 2027, subject to board approval.
Construction is expected to begin in 2027, with commercial production targeted for 2033. That is a long runway, even by mining standards.
The project's initial 13-year phase is expected to produce approximately 3 million ounces of gold and more than 850,000 metric tons of copper on a 100% project basis. Newmont owns 70% of the joint venture.
Following ramp-up, annual production is projected to reach 275,000 to 325,000 ounces of gold and 65,000 to 85,000 metric tons of copper.
Development capital is estimated at $4.2 billion to $4.8 billion on a 100% project basis. That is the kind of number that explains why investors are watching development spending so closely.
2026 Outlook Holds, but Q4 Costs Bite
Newmont remains on track to produce 5.3 million attributable ounces of gold in 2026.
Fourth-quarter production is expected to reach 1.4 million ounces, marking the company's highest quarterly output of the year.
Full-year gold AISC guidance stands at approximately $1,520 per ounce, about 10% below the initial outlook.
However, Newmont expects fourth-quarter AISC to rise to approximately $1,900 per ounce. That is a sharp step up from the $1,454 reported in Q3, and it is a big part of why the stock is not celebrating the earnings beat.
The increase reflects the timing of sustaining capital spending, lower co-product credits and ongoing inflationary pressures, including higher fuel-related costs.
Lower silver production at Peñasquito is also expected to reduce co-product credits.
Newmont estimates that every $10-per-barrel change in oil prices would affect costs by approximately $110 million through fuel and other inputs. That is a useful reminder that gold miners are not just gold-price plays. They are energy consumers with a mining license.
2027: The Rebound Year
Management expects gold production to resume growing in 2027 after reaching a projected low in 2026.
Production from Newmont's managed portfolio is expected to increase by a low- to mid-single-digit percentage next year.
Growth will be supported by higher-grade ore at Lihir and Boddington, the Tanami expansion, Cerro Negro's Vein Zone open pit and potentially higher output at Yanacocha.
However, the company expects unit costs to rise because of inflation and lower co-product credits.
Silver production at Peñasquito is projected to decline by approximately 30%, adding to cost pressures.
Sustaining capital spending is expected to remain broadly stable, while development spending could increase by approximately $500 million.
The additional investment will primarily support the Red Chris block cave project and the Lihir Nearshore Barrier Project.
Lower closure spending at Yanacocha is expected to free up approximately $200 million in cash flow in 2027, with the annual benefit increasing to approximately $400 million beginning in 2028.
So the story here is not that Newmont had a bad quarter. It is that the market is looking past the beat and focusing on the cost curve, the development bill and the analyst downgrade. Gold miners can produce all the ounces in the world, but if the cost per ounce keeps climbing, investors start doing math in their heads. Friday's premarket move suggests they are doing exactly that.
