NEM's Lower AISC Signals Strong Cost Discipline: Can It Be Sustained?

Newmont Corporation NEM achieved a notable milestone in the second quarter of 2025 by reducing its all-in sustaining costs (AISC) — the most important cost metric of miners — to $1,593 per ounce, marking a 4% decrease from the prior quarter. This improvement was primarily due to a decline in costs applicable to sales resulting from lower direct operating costs and lower sustaining capital spending during the quarter.

NEM’s ability to lower its AISC amid industry-wide cost pressures underscores its operational efficiency. However, the company expects AISC from its core portfolio to be modestly higher than full-year guidance in the third quarter due to an uptick in sustaining capital spending. Newmont expects gold AISC for the total portfolio to be $1,630 per ounce in 2025, reflecting a rise from $1,516 per ounce in 2024, with AISC for the core portfolio forecast at $1,620 per ounce.  In the third quarter, sustaining capital spending is expected to rise significantly from the second quarter due to an increase in planned investments. Maintaining its cost discipline will be crucial for the company to sustain its margin expansion.

Among its major peers, Barrick Mining Corporation B saw a 22% sequential increase in AISC in the first quarter of 2025, reaching $1,775 per ounce. This upside was influenced by operational challenges, higher total cash costs per ounce and an uptick in minesite sustaining capital expenditures. Lower production, partly due to due to the suspension of operations at Barrick’s Loulo-Gounkoto mine, also contributed to the rise. For 2025, Barrick projects AISC in the range of $1,460-$1,560 per ounce, indicating a year-over-year increase at the midpoint. 

Agnico Eagle Mines Limited AEM reduced its AISC to $1,183 per ounce in the first quarter, marking a 10% decrease from the prior quarter. This improvement was primarily due to the deferral of certain sustaining capital expenditures at Detour Lake and Canadian Malartic operations. Agnico Eagle clocked a record-high operating margin in the first quarter, thanks to reduced production costs. However, Agnico Eagle anticipates higher AISC in the latter part of 2025 as deferred expenditures are realized.  

The Zacks Rundown for NEM

Shares of Newmont have surged 71.9% year to date against the Zacks Mining – Gold industry’s rise of 55.4%, largely driven by the gold price rally.

From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 13.21, a roughly 6.5% premium to the industry average of 12.4X. It carries a Value Score of B.

The Zacks Consensus Estimate for NEM’s 2025 and 2026 earnings implies a year-over-year rise of 39.4% and 3.1%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

NEM stock currently carries a Zacks Rank #3 (Hold). 

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This article originally published on Zacks Investment Research (zacks.com).

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