NEM's Divestments Drive Tier-1 Focus: Will Streamlining Unlock Value?

Newmont Corporation NEM has taken bold steps in reshaping its portfolio, aggressively shedding non-core assets to sharpen its focus on Tier-1 operations amid cost pressures. NEM completed its non-core divestiture program in April 2025 with the sale of its Akyem operation in Ghana and its Porcupine operation in Canada, generating total after-tax cash proceeds of roughly $850 million before closing adjustments. Total gross proceeds from disclosed divestitures are expected to reach $4.3 billion, including $3.8 billion from non-core divestitures and $527 million from the sale of other investments.

The asset streamlining is rooted in Newmont’s objective to concentrate capital on high-return, long-life assets that underpin its competitive edge and long-term sustainability. The exit of non-core operations has not only allowed Newmont to simplify its operating footprint but also bolster its balance sheet. The divestments have contributed to a $1 billion reduction in gross debt and helped deliver a record first-quarter free cash flow of $1.2 billion.

These moves free up capital for investment in its key growth projects, including Tanami Expansion 2 in Australia, the Ahafo North expansion in Ghana, and Cadia Panel Caves in Australia that are expected to expand production capacity and extend mine life. However, this strategy also exposes the company to execution risk if Tier-1 ramp-ups are delayed, which may impact its production goals for 2025.

Looking across the competitive landscape, Barrick Mining Corporation B also divested or exited several non-core assets to focus on Tier 1 assets. These divestments include Kalgoorlie Consolidated Gold Mines (KCGM) in Australia, the Massawa project in Senegal and Lagunas Norte in Peru, which Barrick completed in 2019, 2020 and 2021, respectively. Earlier this month, Barrick also completed the sale of its 50% interest in the Donlin Gold Project in Alaska. 

Kinross Gold Corporation KGC also streamlined its portfolio through the sale of its Russian assets, including the Kupol mine and Udinsk project, in 2022. Kinross also sold its 90% interest in the Chirano mine in Ghana in 2022. With these divestments, Kinross’ rebalanced portfolio now has a strong production profile anchored by Tasiast and Paracatu, its two biggest assets.

The Zacks Rundown for NEM

Shares of Newmont have shot up 59.8% year to date against the Zacks Mining – Gold industry’s rise of 54.4%, largely driven by the gold price rally.

From a valuation standpoint, NEM is currently trading at a forward 12-month earnings multiple of 13.46, a roughly 3.6% discount to the industry average of 13.96X. 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 20.1% and 11.7%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

NEM stock currently carries a Zacks Rank #1 (Strong Buy). 

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

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