TipRanks Smart Value #38: Hidden Riches
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Dear Investors,
Dear Investors,
Welcome to the 38th edition of our recently launched TipRanks Smart Value Newsletter!
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This Week’s Top Value Pick: Newmont Mining Corp. (NEM)
Newmont Mining Corp. (NEM) is one of the world’s largest gold producers, engaged in the exploration, development, and operation of gold, copper, and other metal mines across the Americas, Australia, and Africa. The company operates a diversified portfolio of open-pit and underground assets, supported by a robust project pipeline and a longstanding focus on safety, sustainability, and disciplined capital allocation.
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Deep Origins
Newmont traces its origins to 1921, when Colonel William Boyce Thompson founded the Newmont Company as a mining and investment enterprise. Through the early and mid-20th century, the company expanded across the Americas by developing and acquiring gold, copper, and base-metal assets, later establishing a dominant position in Nevada – one of the world’s most productive gold regions. Technological adoption in the 1980s and 1990s, including advances in ore processing, improved recovery rates and operating efficiency, while major acquisitions such as Santa Fe Pacific Gold and Battle Mountain Gold strengthened Newmont’s U.S. presence and reserve base.
A pivotal moment came in 2002, when Newmont completed a landmark three-way merger with Normandy Mining and Franco-Nevada, transforming it into the world’s largest gold producer at the time and simultaneously expanding its footprint into Australia, Canada, and West Africa. Over the following decade, the company continued optimizing its portfolio and investing in long-life assets such as Ahafo in Ghana while also deepening its Nevada operations.
Newmont then accelerated its growth through some of the most consequential M&A transactions in modern mining history. In 2019, the company acquired Goldcorp, significantly enlarging its production base and diversifying across the Americas, Australia, and Africa. In 2023, it completed a $19.2 billion acquisition of Newcrest Mining – the largest gold mining merger ever – adding world-class copper-gold assets and strengthening its multi-decade resource profile. Additional bolt-on acquisitions over the past decade focused on consolidating minority interests and joint venture stakes, particularly in North America and Australia.
Beginning in 2024, Newmont launched a broad divestiture program aimed at streamlining its enlarged portfolio and sharpening its focus on Tier 1, long-life assets. Over 2024 and 2025, the company exited several non-core operations, netting some $4.6 billion in proceeds. Since the start of the third quarter, Newmont has added nearly $640 million in net cash from additional equity and asset sales, effectively completing its divestment program and further reducing exposure to non-core positions. These transactions, along with the sale of stream interests – where Newmont receives upfront cash in exchange for granting a partner rights to a small portion of future metal production –and other non-core financial assets such as royalties and equity stakes, strengthened the balance sheet, supported meaningful debt reduction, and increased the company’s capacity to return capital to shareholders.
Today, after a century of strategic acquisitions, disciplined divestitures, and operational innovation, Newmont stands as a gold producer with a broad, long-life portfolio positioned for sustained earnings generation.
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Mining Backbone
Newmont operates a diversified global mining business centered on the exploration, development, and production of gold, supported by additional contributions from copper, silver, zinc, and lead. Gold remains the company’s dominant earnings driver, accounting for over 80% of total sales. Revenue is primarily generated through the sale of gold doré1 as well as metal concentrates from copper and polymetallic operations.
A defining feature of Newmont’s model is its emphasis on Tier 1 mining assets—large, long-life, low-cost operations in stable jurisdictions that typically produce more than 500,000 ounces per year and generate strong margins even during softer commodity cycles. These mines form the backbone of Newmont’s portfolio across the United States, Canada, Australia, Ghana, and Latin America, providing multidecade reserve visibility and consistent cash flow.
This portfolio is reinforced by a substantial exploration pipeline, steady project development, and high-value joint ventures such as Nevada Gold Mines in the U.S. and Red Chris in Canada. The Newcrest acquisition further expanded the company’s exposure to large-scale copper and gold deposits, including Cadia, Lihir, and additional ownership in Red Chris, positioning Newmont to benefit from rising long-term demand linked to global electrification. With 12 large mines and multiple equity interests, Newmont also benefits from scale advantages such as shared technical expertise, centralized procurement, and coordinated mine planning.
The company’s leadership transition supports this strategic direction. With CEO Tom Palmer retiring at year-end and COO Natascha Viljoen stepping into the role, Newmont is signaling continuity while implementing a more agile structure built around two business units, each managing six assets, supported by a streamlined senior team aimed at faster decision-making, stronger accountability, and lower costs.
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1 – Gold doré is a semi-pure gold alloy bar, usually produced directly at mine sites as the first solid form of gold after extraction and smelting, containing trace amounts of silver and occasionally other metals such as copper or zinc.
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Agile Mining
The company also refined its exploration pipeline, cutting $450 million from spending through a more targeted approach following its portfolio review. Management remains focused on directing capital to the highest-value opportunities.
Newmont’s third-quarter results reflect a company maintaining operational stability while laying the groundwork for stronger future production. Production was supported by higher-grade ore at Brucejack in Canada –which contains more gold per ton, and stronger productivity at Cerro Negro (Argentina) and Yanacocha (Peru), helping offset expected declines at Peñasquito and Ahafo South as those mines move through lower-grade zones. At Lihir, completion of the Phase 14a pit layback, which widens the pit to safely access deeper ore, positions the site to begin mining higher-grade material in the coming quarters. Unit costs were essentially flat as higher royalties and taxes from stronger gold prices were balanced by productivity gains and cost-control efforts.
The company’s project execution offers additional strategic reassurance: Ahafo North reached first gold and commercial production in Q3, while Tanami Expansion 2 (Australia), Cadia, and Red Chris advanced on schedule. Yanacocha is shifting from mining to leaching, a process that uses chemical solutions to extract remaining gold from previously mined ore. The shift to leaching at Yanacocha extends the asset’s cash-generating life even as mining winds down, while Nevada Gold Mines looks set for a stronger fourth quarter, reinforcing the outlook for stable to improving performance across the portfolio. Newmont’s capital strategy offers a balance of discipline, flexibility, and value protection. The company remains focused on maintaining a strong balance sheet, reinvesting only in high-return projects, and returning excess cash to shareholders—an approach that prioritizes sustainable value rather than aggressive expansion. Management continues to advance profitable near-term developments while evaluating the portfolio for potential divestments, reinforcing a commitment to deploying capital where it generates the strongest returns.
Growth remains purposefully measured. Newmont has no acquisition plans, and long-dated projects such as Fourmile, Wafi-Golpu, Galore Creek, and Nueva Unión will progress only if they meet strict return criteria and align with near- and medium-term goals. Fourmile, part of the Nevada joint venture with Barrick, is viewed as a promising high-grade gold opportunity; Wafi-Golpu in Papua New Guinea and the Galore Creek and Nueva Unión copper-gold projects in Canada and Chile, respectively, offer significant future optionality but require substantial capital and long development timelines.
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Golden Momentum
Over the past five years, Newmont has delivered steady financial growth, with revenue and EPS rising at a CAGR of 14.2% and 15.1%, respectively. Revenue benefited from higher gold prices and increased production, while EPS gains were supported by tighter cost control, improved operating efficiency, and disciplined capital allocation toward higher-return assets.
This momentum carried into the third quarter, which marked one of Newmont’s strongest financial periods to date. Adjusted EBITDA reached $3.3 billion, up 20% from the prior quarter and more than double year-over-year, reflecting higher realized gold prices and increased sales volumes. Adjusted net income rose to $1.71 per share, also up 20% sequentially and more than twice last year’s level, exceeding analyst expectations. Operating cash flow totaled $2.3 billion, supporting $1.6 billion in free cash flow – a quarterly record and the fourth consecutive quarter above $1 billion. Year-to-date free cash flow of $4.5 billion has already set a new annual record.
The company’s balance sheet remains a key strength. Newmont ended the quarter with $5.6 billion in cash and near-zero net debt after retiring $2 billion of obligations. This improved financial profile contributed to Moody’s upgrading Newmont to “A3” with a stable outlook, underscoring the miner’s enhanced liquidity and conservative financial management.
Looking ahead, Newmont expects a solid finish to 2025, with production set to increase in the fourth quarter as Ahafo North and key Nevada assets ramp up. Despite higher gold-price-linked royalties and taxes, unit-cost guidance remains unchanged, supported by disciplined spending and $450 million in cost reductions across G&A, exploration, and project development. Full-year managed production is expected to land near 4.2 million ounces, within the ±5% variability range.
For 2026, Newmont expects production to be similar to 2025 but closer to the lower end of the range at around 4 million ounces, mainly due to planned mine transitions at Ahafo South, Cadia, Yanacocha, and Peñasquito, where the company is shifting between ore zones and mining phases that temporarily lower output before supporting more efficient production in later years. Capital spending will rise modestly as some 2025 expenditures shift into 2026, but overall costs should remain stable as efficiency initiatives take full effect. The higher Q4 cost estimate of about $1,260 per ounce is likely temporary and reflects seasonal factors rather than a new baseline.
Newmont is also prioritizing high-quality, high-margin ounces in its reserve planning, especially as it rationalizes its portfolio and reduces exploration spending. In practice, this means the company is focusing on the most profitable gold deposits, those that generate stronger margins – while phasing out lower-quality ounces to protect long-term cash flow and returns.
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Golden Upside
Newmont has maintained an uninterrupted annual dividend for more than three decades, reflecting a commitment to returning capital even during periods of metal-price volatility. Newmont has increased its dividend over the past two years. For the most recent quarter, the company paid a dividend of $0.25 per share, translating into a dividend yield of 1.12%.
In addition to dividends, Newmont deploys occasional share repurchases, typically scaling buybacks during periods of strong commodity prices or excess liquidity. This year, the company executed $2.1 billion in share repurchases, bringing the total to $3.3 billion in share repurchases since February of last year, with approximately $2.7 billion remaining in its $6 billion program.
Over the past year, NEM has surged by more than 90% thanks to strong performance in quarterly earnings, robust gold price momentum, and strong operational execution. Despite this rally, the stock currently trades at more than a 25% discount to its historical averages on non-GAAP trailing and forward P/E ratios and at roughly a 9% discount on its forward EV/EBITDA, suggesting that investors are assigning lower earnings and cash-flow multiples than in past cycles. At the same time, Newmont trades at a premium on forward price-to-book and price-to-cash-flow ratios, indicating that the market is placing a higher value on its asset base and near-term cash-generation potential.
Relative to peers such as Agnico Eagle, Barrick Gold, and AngloGold Ashanti, Newmont screens on the lower end of the valuation range across trailing and forward P/E, the non-GAAP forward PEG ratio, and trailing price-to-book and price-to-cash-flow metrics. Its forward EV/EBITDA sits in the mid-range of this peer group, reflecting a balanced view of its operating cash flow and cost profile.
For investors evaluating an entry point, these valuation dynamics suggest that Newmont may offer meaningful upside as earnings stabilize and integration-related costs ease, particularly given its discount to historical earnings-based multiples and its relatively inexpensive positioning against competitors. The premium on book and cash-flow multiples reinforces the market’s confidence in Newmont’s high-quality reserves and robust cash-flow outlook, positioning the company to unlock further valuation upside as it continues to execute on its plans and enhance operating efficiency.
Analysts remain bullish about NEM as the company’s record cash flow underscores the company’s strong operational efficiency and financial resilience, giving it greater capacity to invest in future growth while continuing to return capital to shareholders. At the same time, successful asset divestments have strengthened the balance sheet and increased liquidity, and the addition of a new mine has expanded Newmont’s production base and geographic reach, supporting sustained revenue growth and a stronger long-term market position.
Wall Street consensus estimates point to roughly 22% upside from current levels, with some analysts projecting gains of more than 44%. A discounted cash flow analysis reinforces this view, indicating that NEM’s shares may be trading at about a 34% discount to intrinsic value – suggesting meaningful long-term upside potential for investors.
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Investing Takeaway
Newmont offers a compelling value opportunity for investors seeking exposure to a high-quality gold producer with a strengthened portfolio and improving fundamentals. After completing a major portfolio overhaul, which included selling non-core assets, integrating large-scale copper and gold operations, and streamlining its cost structure, the company now operates with a cleaner asset base and a stronger balance sheet. Despite a sharp rebound in its share price, the stock continues to trade at a noticeable discount to its historical earnings-based multiples and at more attractive levels than several of its global peers. This disconnect suggests the market has yet to fully reflect Newmont’s improved operational performance, enhanced project pipeline, and long-term cash-flow potential. As productivity gains take hold and integration synergies build, investors may find Newmont well-positioned for further re-rating as the company delivers steadier margins, disciplined capital returns, and sustained production from Tier 1 assets.
