Newmont's Record Profits Overshadowed by Operational Headwinds

Newmont faces a tough 2026 with falling gold output, rising costs, and a legal dispute with partner Barrick Gold over the Nevada Gold Mines joint venture.

Despite posting historic financial results for the 2025 fiscal year, Newmont Mining saw its shares come under selling pressure. Investor sentiment shifted abruptly due to a disappointing outlook for the coming period and a rapidly escalating dispute with its joint-venture partner, Barrick Gold. The world's largest gold producer now faces a challenging transitional year, characterized by declining output and rising expenses.

A Legal Dispute Adds to Uncertainty

Beyond its financial metrics, Newmont is grappling with significant operational uncertainty. The company has issued a formal notice of deficiency to Barrick Gold concerning their shared "Nevada Gold Mines" project. The allegation is serious: Barrick is accused of diverting resources from the joint venture to advance its separate "Fourmile" project.

This conflict emerges at a critical juncture. Barrick is planning an initial public offering for its North America division by the end of 2026, a process that could be complicated without a resolution with Newmont. Newmont insists that such transactions require joint-venture approval, setting the stage for potentially protracted legal proceedings.

Strong Past Performance Meets a Weaker Forecast

A review of 2025 initially tells a story of remarkable success. Benefiting from an average realized gold price exceeding $4,200 per ounce, Newmont generated an adjusted net income of $7.6 billion and significantly reduced its debt load. The company also comfortably surpassed Wall Street's earnings expectations in the fourth quarter.

However, financial markets trade on future expectations, and Newmont's guidance proved disappointing. Management announced that 2026 production is expected to fall by approximately 10% to just 5.3 million ounces. Concurrently, all-in sustaining costs (AISC) are projected to rise noticeably from $1,358 to $1,680 per ounce. This margin pressure, combined with substantial capital expenditures for mine expansions, weighed on the stock, which closed Friday's session at €103.90.

Near-Term Challenges Compound the Outlook

The company's difficult start to the new year is set to continue. Operational performance in the first quarter is being impacted by a wildfire at its Boddington site, with an anticipated production loss of around 60,000 ounces. Furthermore, with management forecasting that over half of the year's total gold output will only be realized in the second half of 2026, investors should prepare for a period of constrained results in the coming months.