Newmont heads into its third-quarter report with a peculiar mix of momentum and friction. Last quarter the miner produced record free cash flow of $2.2 billion, bought back stock aggressively and finally cleared a path for its Red Chris block cave in British Columbia. It also warned that costs would climb again in the third quarter, that its Nevada partnership with Barrick was turning adversarial, and that 2026 remains the production trough. The upcoming report, due after the close on October 22, is essentially a test of whether high gold prices can keep outrunning those headwinds.
The Street is not asking for heroics. Consensus calls for earnings of $1.92 per share on revenue of $6.01 billion, up 12.3% and 8.8% from a year ago, respectively. That is solid but unspectacular growth, and it represents a step down from the $2.10 and $6.12 billion delivered last quarter. Analysts appear to have absorbed management's message that the back half carries a heavier cost load and fewer ounces than the strong second quarter suggested. Some of that second-quarter strength was borrowed: roughly 50,000 ounces were pulled forward from the second half as Cadia recovered faster than planned, with help from Yanacocha and Lihir. That leaves less room for a volume surprise now.
Costs are the swing factor. All-in sustaining costs jumped from $1,029 an ounce in the first quarter to $1,621 in the second, and management flagged a moderate further rise in the third quarter. The drivers are concrete: oil running near $100 a barrel against a $70 planning assumption, which management sizes at about $60 million annually for every $10 move, plus a roughly $150 million sequential increase in sustaining capital and a new Ghana royalty worth around $25 an ounce. The full-year AISC guide sits at $1,680. A third-quarter figure that lands near or modestly above that level would validate the plan. A sharper jump, or any hint that the annual target is slipping, would challenge the narrative that Newmont's cost base is under control while volumes bottom out.
The strategic agenda offers its own checkpoints. Red Chris is targeting a final investment decision in the second half of this year or early next, and any update on capital costs, which management already said will exceed Newcrest's original estimates, matters for how the market values the growth pipeline. The Lihir near-shore barrier was slated to mobilize this quarter, Ahafo North should be closing in on full run rate, and the two Cadia cave areas still awaiting regulatory restart after April's seismic event deserve a status report. On Nevada, last quarter's shift from constructive engagement to readiness to enforce legal rights means any escalation in the Barrick dispute could overshadow the numbers themselves.
The market has leaned into the story. Shares are up 23.3% since the last report, roughly 18 points ahead of the S&P 500, and sentiment has swung from mildly bearish to modestly bullish. Yet the stock, at $115.59, has retreated well off its post-earnings high of $135.29 while holding above its 200-day moving average near $112. That pullback suggests some of the earlier enthusiasm has cooled, leaving the bar elevated but not stretched.
Ultimately, the quarter hinges on margin conversion. If realized prices keep expanding faster than costs and free cash flow stays strong enough to sustain buybacks and support the planned 27-cent dividend, the improving tone from last quarter holds. If energy, royalties and sustaining capital start eating into that spread during a trough production year, the record cash flow story will look more like a peak than a platform.