Newmont eyes 5M-ounce boost from Lihir gold mine

Newmont (NYSE: NEM)(TSX: NGT) expects a nearshore barrier at its Lihir mine in Papua New Guinea to unlock more than 5 million ounces of gold beginning in 2028, as the world’s largest gold producer reaffirmed its 2026 production guidance after reporting record quarterly free cash flow.

Chief executive Natascha Viljoen said the company remains on track to meet its full-year guidance after producing 1.3 million oz. of gold, 17,000 tonnes of copper and 7 million oz. of silver in the second quarter. 

Cash flow from operations reached $2.9 billion after working capital, while free cash flow climbed to a quarterly record of $2.2 billion.

“We delivered a strong second quarter and remain on track to achieve our full year 2026 guidance,” Viljoen said in a conference call commenting on second quarter results.

Newmont returned about $1.9 billion to shareholders through dividends and share repurchases since its previous earnings call, including buybacks completed in July. The company has now repurchased more than 100 million shares since launching the program just over two years ago.

Chief financial officer Brian Tabolt said adjusted EBITDA totalled $3.8 billion and adjusted net income reached $2.10 a share, supported by an average realized gold price of $4,414 per ounce. Gold all-in sustaining costs were $1,621 per ounce, below the company’s full-year guidance of $1,680 per ounce, although Tabolt warned sustaining capital spending is expected to rise by about $150 million in the third quarter, pushing unit costs moderately higher.

Growth pipeline

Management highlighted progress across several growth projects, including regulatory approvals for the Red Chris block cave project in British Columbia, Canada, which is advancing toward a feasibility study and a board investment decision.

At Cadia in Australia, production resumed from the operating caves in mid-June following an April seismic event, with no impact expected on full-year production guidance.

The company’s long-term growth outlook also hinges on a pipeline that includes Ahafo North, Cerro Negro, Tanami, Boddington and the Lihir nearshore barrier, which the company identified as key drivers of future production growth.

Viljoen told analysts the company was “quite positive and encouraged” by operational improvements at Lihir, citing greater mining stability, improved reliability and lower costs.

Investor concerns

The update comes as investors continue to scrutinize inflation, project capital costs and regulatory risks. Analysts pressed management on oil prices, Ghana policy uncertainty and expected cost increases at Red Chris, where Viljoen acknowledged capital spending will likely exceed estimates prepared under Newcrest.

She also said discussions with Barrick (TSX: ABX)(NYSE: B) over Nevada Gold Mines remain unresolved, while Newmont expects to revisit its approach to multi-year guidance early next year.