Newmont’s (ASX: NEM) Global Footprint: More Than Just a Gold Miner, a Diversified Metals Powerhouse

Key Takeaways: We are reiterating our buy on Newmont Corporation (ASX: NEM), with a target price above $115 per share. Newmont has evolved into a diversified metals powerhouse, combining world-class, high-margin assets with a de-risked balance sheet and strong operational execution. Highlights include Adjusted EBITDA of $3.0 billion, free cash flow of $1.7 billion, AISC down 4% QoQ, and a net debt to EBITDA of just 0.1x. Alongside sustainable dividends and a $3.0 billion share repurchase program, the company’s leadership in ESG practices strengthens its competitive edge. Trading at a discount to peers, Newmont offers a compelling opportunity, not just as a play on gold, but as a reliable, cash-generating engine set for further upside as the market recognises its transformation. --- Newmont Corporation stands as the world’s largest gold producer, but its reach extends far beyond gold. With significant production of copper, silver, zinc, and lead, the company is a diversified metals powerhouse. What really sets Newmont apart is its combination of unmatched reserves and an unwavering focus on operational excellence. This is most visible in its "Go-Forward Portfolio," which consists of 11 Tier 1 assets in politically stable, top-tier mining jurisdictions. By concentrating on these high-quality operations, Newmont reduces operational risk and ensures a predictable production profile. Its leadership in Environmental, Social, and Governance (ESG) practices further enhances its reputation, attracts institutional investors, and creates a protective moat against both market volatility and competitors. A Golden Opportunity: How Portfolio Optimisation and Strategic Acquisitions Are Transforming Cash Flow and Shareholder Returns The market is underestimating Newmont’s transformed earnings power. The acquisition of Newcrest Mining, combined with a decisive portfolio optimisation programme, has reshaped the company into a more focused and profitable enterprise. The results are clear: - Adjusted EBITDA: $3.0 billion – A record for the company, reflecting strong operational efficiency. - Free Cash Flow: $1.7 billion – All-time high, demonstrating sustainable cash generation. - All-in Sustaining Costs: Down 4% quarter-on-quarter – Driven by shedding higher-cost assets and focusing on high-margin mines. - Net Debt to Adjusted EBITDA: 0.1x – A fortress-like balance sheet enabling strategic capital returns. - Annualized Dividend: $1.00, 19% payout ratio – A sustainable and conservative return to shareholders. - Share Repurchase Program: $3.0 billion authorized – Highly accretive, further enhancing shareholder value. These figures show that Newmont’s transformation is not just operational, but also financial, providing a robust and credible framework for shareholder returns. Execution and Opportunity: Why Investing in Newmont Is a Bet on a De-risked, High-Margin, Cash-Generating Machine Through a fundamental reshaping of its business, Newmont has emerged not just as the largest gold miner, but as one of the best. Its portfolio of world-class assets now generates record, sustainable cash flow, and the company’s intelligent capital return policy makes this tangible for shareholders. Investing in Newmont is not merely a play on gold prices, it is a bet on a de-risked, high-margin, cash-generating powerhouse, perfectly positioned to deliver superior returns. The thesis is clear, execution is proven, and the opportunity is there.

Gold prices continue to exhibit strength, fuelled by persistent geopolitical instability and aggressive central bank buying as institutions diversify away from the U.S. dollar. This isn’t a temporary spike; we appear to be in a structural bull market for the yellow metal. Within this environment, the mining industry is consolidating, emphasising world-class, low-cost assets in stable jurisdictions. Newmont is leading this trend, not merely participating. Its strategic increase in copper exposure positions it to benefit from the long-term growth of the global energy transition, improving both strength and broad appeal across commodities. Operational Excellence Driving Record Earnings and High Profitability Metrics Newmont’s transformation is reflected in its operational and financial results, which go beyond simply riding higher gold prices: (*) Adjusted EBITDA: $3.0 billion – A record quarter, showing strong operational efficiency. (*) Free Cash Flow: $1.7 billion – All-time high, highlighting the cash-generating power of the portfolio. (*) Gold All-In Sustaining Costs (AISC): -4% QoQ – Demonstrates improved margin efficiency from a focused asset base. (*) Trailing 12-Month Net Margin: 30.5% – Reflecting strong profitability and operational discipline. (*) Return on Equity (ROE): 17.9% – Supports both organic growth and substantial shareholder returns. An Exceptionally Strong, Investment-Grade Balance Sheet Underpinning Future Growth Newmont’s balance sheet is a cornerstone of its investment thesis, providing stability and flexibility to capitalise on market opportunities: (*) Net Debt to Adjusted EBITDA: 0.1x – Markedly improved from 0.6x at FY2024, reflecting a de-risked balance sheet. (*) Total Liquidity: $10.2 billion – Ensures ample resources to fund growth and shareholder returns. (*) Quarterly Free Cash Flow: $1.7 billion – Reinforces the financial strength and sustainability of its operations. A Significant Valuation Discount Relative to Peers Presents a Clear Investment Opportunity Despite superior scale, profitability, and a strategically de-risked portfolio, Newmont trades at a trailing P/E of 12.4x, below Barrick Gold at 15.6x and Agnico Eagle Mines at 27.1x. This gap appears unjustified. As the market fully recognises the company’s transformation, there is a clear path for the valuation gap to close, presenting a compelling opportunity for investors. The stock is in a well-defined upward trend, comfortably above its 50-day and 200-day moving averages, both sloping higher. This alignment between price action and fundamentals reinforces our BUY thesis, creating a solid base for further gains.