Newmont Corporation (NYSE: NEM) posted adjusted earnings per share of $2.20 in Q3, comfortably clearing the $1.96 consensus. Revenue of $6.36 billion beat the $6.26 billion expected, climbing 15% from $5.52 billion a year earlier. The headline numbers reflect operational discipline meeting favorable commodity prices. The quarter's real substance lies in cash generation and management's decision to tighten cost guidance.
Adjusted net income reached a record $2.3 billion, up from $1.88 billion in the prior-year period. The mechanics were simple: higher gold sales volumes and realized copper prices more than offset a slight decline in average realized gold price to $4,317 per ounce from $4,414 in Q2. Copper production jumped 35% sequentially to 23 thousand tonnes, driven by Cadia's recovery from the seismic event that disrupted Q2. That recovery mattered. Cadia's gold production nearly doubled from 34 thousand ounces in Q2 to 61 thousand ounces in Q3, with copper output following.
Free cash flow of $1.9 billion fell 13% sequentially but remained substantial. The company returned exactly that amount — $1.9 billion — to shareholders through buybacks and dividends since the last earnings call. The buyback pace stands out: $1.6 billion in repurchases over roughly three months, contributing to a 10% reduction in total share count since February 2024. With $2.8 billion remaining under the current $6.0 billion authorization, capital returns continue at full throttle.
The most consequential move in the release is the improved full-year 2026 cost guidance. Gold by-product costs applicable to sales (CAS) were lowered to $925 per ounce from the prior $1,000 range; all-in sustaining costs (AISC) were cut to $1,520 per ounce from $1,600. This reflects both cost discipline and higher realized co-product pricing, particularly copper. The by-product CAS of $832 per ounce in Q3 already ran well below the new full-year guide, implying Q4 costs will rise meaningfully. Management explicitly flagged that Q4 unit costs will increase due to higher sustaining capital spend and lower co-product volumes, especially silver production at Peñasquito expected to drop to roughly half of Q3 levels.
That Q4 cost step-up creates the tension. The company expects Q4 to be the strongest production quarter of the year, driven by higher grades at Tanami, Cerro Negro, Ahafo North, and Lihir. Lihir carries specific risk: ongoing El Niño conditions threaten water supply, which could impact both production and costs. The company is monitoring the situation, but drought risk could offset expected gains.
The Red Chris Block Cave project remains a longer-term catalyst. A feasibility study nears completion, with a full-funds investment decision expected in early 2027. The project's potential 70-year mine life and double-digit IRR are compelling, though the $4.2-$4.8 billion capital estimate (net of a CAD$500 million Canadian government contribution) is substantial. Development capital is expected to increase by roughly $500 million in 2027 as investment ramps up, pressuring free cash flow even as production grows.
For investors, the Q3 print confirms Newmont's portfolio is performing well in a supportive commodity environment. The cost guidance reduction signals management sees structural improvement, not a one-off quarter. But the Q4 cost ramp and Lihir water risk mean the next quarter will test whether margins can be sustained. The buyback pace, while aggressive, makes sense given the net cash position of $3.2 billion — though that will shrink after the planned $1.95 billion payment to Barrick for the Nevada Gold Mines amendment. Whether production growth expected in 2027 can offset rising development spend and keep free cash flow growing on a per-share basis remains to be determined.