Newmont (NEM): Zor Para İçin Altın Bir Bilet

The Eternal Shine Of Gold

When it comes to mining metals, the bulk of the attention goes to industrial metals, from the massive production volumes of iron and aluminum to the more niche products like Tungsten, platin, renyum, RODYUMveya Uranyum (follow the links for a detail investment report on each of these metals).

One metal, however, tends to catch the public and investors’ attention more than any other, despite its lack of use in industry: gold.

Gold has been used since time immemorial as a symbol of power, luxury, and wealth. It has also, by far, been the most common and long-lasting form of currency in history. To this day, gold is still one of the main reserve assets held by national central banks, forming the foundation of the global financial system’s stability.

Still, it looked for a while that the best days of gold were in the past, with the precious metal described as a “barbarous relic” by leading economists. With the end of the convertibility of the dollar into gold in the 1970s, it looked indeed like gold would no longer play a role as a prime financial asset.

This was until the last months, when gold kept breaking new records for all-time-high prices, ending up outperforming the S&P500 over the last decades.

This naturally brings back attention to gold miners, whose margins should improve dramatically from the rise in gold price. And first among them is the world’s largest gold miner by production volume: Newmont.

Altın Tüm Zamanların En Yüksek Seviyesine Ulaştı

Since the end of the convertibility of gold into US dollar (USD) in 1971, there have been two gold bull markets in the 1970s and 2000s. And we are now in the midst of a new one, especially with the very strong run in gold in 2024 and 2025.

Kaynak: Google Finans

Altındaki her yükselişin başlıca nedeni ekonomiye ilişkin endişeler ve ABD dolarının küresel finans sistemi üzerindeki hakimiyetinin devam etmesi olmuştur.

This is what is partially driving the current gold bull market again, with the US government piling up debt like never before. And with rising interest rates in parallel, this has caused the interest payment to go above the 1 trillion USD mark for the very first time.

Kaynak: St Louis Federal Rezerv Bankası

Referans olması açısından bu rakam, küresel askeri harcamaların 40%'si olan ABD savunma bütçesinden daha büyüktür.

Growing & Diverse Concerns

Contrary to previous gold bull markets, this one is the result of a convergence of multiple factors and not just the worries about US deficits and debt.

To mention just a few:

• Trump’s tariffs have created a situation where future gold imports in the US could be difficult, causing a rush to relocate gold from London to US vaults.
• The real volume of gold stored in Fort Knox has been put into question by both Elon Musk and President Trump, with a call for an audit that has suddenly and mysteriously been forgotten since.
• Global international tensions are at an all-time high, with NATO potentially breaking up, Canada and Greenland potentially annexed by the US, European nations on the brink of war with Russia, chaos in the Middle East (Israel, Gaza, Lebanon, Syria, Yemen, Iran, etc.), and the USA-China rivalry not calming down either.

You can read more details about all these factors leading to all-time-high prices for gold in our dedicated article from February 2025: “Altın Kıtlığı Rekor Fiyat Artışını Tetikledi".

This is putting gold in a favorable light even to top-performing assets, like the S&P 500.

“In USD terms, gold has grown 9.99 times since 2000, significantly outperforming the S&P 500, which has grown 4.34 times during the same period. This indicates that gold has more than doubled the returns of the S&P 500 over 25 years.”

Investing In Gold Miners

Historically, in a gold bull market, the rising prices have been working in successive phases:

• The rise of the commodity itself is due to concerns about financial stability, making gold outperform stocks.
  • This creates an incentive to increase gold exposure and reduce career risk for doing so.
• Flow of institutional investors’ money into the largest gold miners, with gold stock often a better way to get exposure (and dividends) than metallic gold for institutional investors in need of liquidity and yields.
• Mid-size and then smaller gold miners tend to rise in stock price later on.
• Finally, at the end of the bull run, junior miners (not producing yet) get caught in the speculative activity.

So far, this template seems to hold, as most gold miners’ stocks have barely reacted to the underlying commodities exploding in price, and junior gold miners have not at all.

However, the stock price of the largest gold miners has started to recover, with Newmont leading the charge.

Gold Mining Sector Overview

Because gold is so rare in the Earth’s crust, only a few deposits in the world are able to produce large amounts of it.

This is also a very technical field, with profitable, low-cost production a difficult challenge, usually achieved through a mix of geology (not too deep & rich enough ore) and deep expertise in the digging, crushing, and purifying of the raw minerals.

On average, most gold deposits produce only 1-10g of gold per tons\ of raw rocks for underground mines, and often even less for surface level open-pit mines. This makes it a very energy and capital-intensive business.

Source: Mining News North

Kaynak: Unsplash

When measured by production, Newmont is by far the largest producer. It is now far ahead of its closest competitors, Barrick Gold, since the acquisition of NewCrest in 2023 for $16.8B. This was following another acquisition of GoldCorp for $10B in 2019.

Kaynak: Mining Visuals

Newmont Overview

Newmont By The Numbers

Newmont was founded in 1921 and has been publicly traded for exactly a century since 1925.

In 2024, Newmont produced 6.8 million ounces of gold and 153,000 tons of copper.

Newmont has the industry’s largest gold reserves in the ground, with 136 million gold ounces, as well as nearly 600 million ounces of silver reserves and 30 billion pounds of copper (15 million tons).

When compared to current production levels, this would bring the company to 20 years of gold reserves and almost a century of copper reserves. When adding the “resource” category (likely but not proven mineral reserves), the total gold reserves are likely to be at least 300 million ounces.

Kaynak: Newmont

Overall, the company is planning to keep the current production levels in the long term, with mine expansions compensating for depletion (see below about the main major expansion).

This metal production resulted in revenues of $18.6B and a free cash flow of $2.9B.

From this cash flow, $1.1B was distributed to shareholders in the form of dividends, and $1.2B in the form of share repurchases.

The gold industry follows a standard called AISC (All-In Sustaining Cost) to measure the “real” cost of mining when including capital expenditure and operating costs. Newmont’s AISCs are $1.620 per ounce of gold, or almost half of the latest price.

Kaynak: Newmont

Newmont’s Assets

Most of Newmont’s mining assets are located in the Americas and Australia, with none in Europe or Asia, and only a small part in the whole in Africa. Of the world-class mining assets (“Tiers1”), most are located in Australia and North America.

As a result, Newmont mines are generally considered safer from a geopolitical point of view, especially for Western investors.

Kaynak: Newmont

This is, however, not to say that it is not exposed to some jurisdiction risks, notably with Latin America having a long history of conflicting relations with large mining companies.

While it would be too long to give a detailed examination of each of the company mines, a few key assets can be discussed further.

Australian Mines

Cadia and Tanami are both Australian gold mines undergoing an expansion after several decades of production.

Cadia is one of the world’s largest gold-copper mines. Its expansion is still ongoing, from the current production of 597,000 ounces of gold per year.

Meanwhile, Tanami Expansion 2 is expected to hit first production in the second half of 2025, with a ramping up from 150,000 to 200,000 ounces per year to 600,000 ounces per year for the first five years and reducing operating costs by approximately 10 percent.

Kaynak: Newmont

Boddington is another major Australian mine, expected to deliver ~30% more gold production in 2027.

Mines in the Americas

Peñasquito is a mine in Mexico producing gold, silver, lead, and zinc since 2009, it is the world’s 5^inci largest silver mine and was acquired from Goldcorp in 2019. It should be accessing higher grades of gold ore in 2025, boosting production by 30%.

The northern Nevada gold mines are now 61.5% owned and operated by Barrick, and 38.5% owned by Newmont. This includes 10 underground and 12 open pit mines. With an annual attributable production of 1.12 million ounces of gold, this is one of the most important assets of Newmont.

Others: Africa & Papua New Guinea

The Ahafo complex in Africa is being extended with the new Ahafo North, expected to get commissioned in 2025, with ~750koz of annual gold production.

Lihir is located in Papua New Guinea and was a Newcrest project. It is expected to deliver at least ~30% more gold by 2028.

Divestitures

To recenter on large projects and reduce distraction from smaller ones, the company has been divesting many “non-core” assets, with many sales expected to close by mid-2025.

Kaynak: Newmont

This will conclude the evolution of Newmont into the world’s largest gold miner, post-Newcrest acquisition, with a focus on making mega mines its main activity, more than many smaller projects.

The final position of the company will be to own all of the 6 largest gold mines and more than half of the top Tier 1 gold mines in the world (with Carlin in Nevada being a joint venture).

Kaynak: Newmont

Newmont’s Future

Due to its already massive size, Newmont is not likely to grow significantly, except if it were to make another mega acquisition as it did with Newcrest. This is even with the mine expansion planned, as they are going to be compensated by some decline in smaller mines and divestment of non-core mines.

However, it is equally likely to maintain production at the current levels for decades to come.

So overall, the company’s valuation should be more based on the current data than on hopes of growth, which brings attention to the company costs and gold prices.

Newmont’s Evolving Margins

Overall, mining is a business that is sensitive to inflation, as it is very capital-intensive. So any project planned and taking many years to unfold might quickly run over budget if prices of labor and supply rise.

At the same time, contrary to other miners, gold miners benefit from the fact that gold tends to benefit greatly from inflationary periods, as investors look for refuge in the metal against currency devaluation.

Currently, Newmont’s operational costs are roughly half labor and half material & energy.

Kaynak: Newmont

The company is, for now, projecting its future revenues with the assumption of gold price at $2,500/ounce, copper at $9,730/ton, and oil at $80/barrel. At the time of writing of this article, it seems like these are conservative assumptions, as these commodities are trading respectively at $3,023/ounce, $9,813/ton and $68/barrel.

Every $100/ounce above $2,500/ounce for gold will result in $517M more revenues for Newmont.

By far, this is the most price-sensitive number investors in the company should be following and trying to predict accurately.

Kaynak: Newmont

Newmont Sustainability

When investing in extractive industries like oil & gas, timber, or mining, investors are going to have to worry about possible scandals, disasters, and other environmental or social issues stemming from the production of these resources.

Newmont is actively looking to be a leader in sustainability among gold miners. Notably, it ranked:

• #2 out of 100 apparel and extractive companies in the 2023 Corporate Human Rights Benchmark.
• Top decile in ISS corporate rating within the mining industry.
• Most transparent company in the entirety of the S&P500, according to the Bloomberg ESG Disclosure Score.
• A- on climate actions, according to the CDP Climate score.

So, while these remarkable ratings are never a guarantee of nothing happening, this puts the company in a class of its own when it comes to environmental risk and provides some visibility for investors.

Newmont Finances & Distribution

As a company publicly listed for a century and a leader in its industry, the company has been committed to redistributing profits to its shareholders for a long time.

Its stated policy is to to maintain a “stable and predictable annualized common dividend” for now around $1/share.

The maintenance of around $3B in cash is also essential to maintain liquidity, dividend availability, and the overall stability of the company. Debt is currently at $7.9B and the company management aims to keep it below $8B for the foreseeable future.

The share repurchase program has up to $3B authorized until October 2026.

Long-term position of the company should be maintained by $1.5B in reinvested sustaining capital (to keep operations going stably), and $1.3B in organic development to maintain mineral reserves for the decades to come.

Sonuç

Newmont, through a mix of strategic acquisition, exploration & discovery of new world-class mines, and organic growth, is taking the lead in becoming the largest and most visible gold mining company in the world. It is also a significant producer of silver and copper.

Gold seems to enter into a long cycle of price rise, driven by a convergence of crises: monetary, debt, geopolitical, trust, etc. In that context, the flow of liquidity into the gold sector will first benefit the safest and most liquid assets.

In addition, the last 2 decades’ trend of passive investing popularity should help as well, as Newmont is the top holding of some of the largest gold miner ETFs, like VanEck Altın Madencileri ETF'si.

So, for investors unwilling to get direct exposure to gold through gold bars and bullion, Newmont can be a great option. It will also generate a modest dividend yield, helping buffer the often very unstable stock price.

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