NEM's Gold Output Hit by Divestments: Can Tier-1 Assets Close the Gap?

Group 1: Newmont Corporation Performance - Newmont Corporation reported a decline in gold production for Q1 2025, with a year-over-year decrease of approximately 8% and a sequential decline of 19%, totaling 1.54 million ounces due to strategic divestment of non-core assets [1][7] - The company anticipates maintaining its expected gold production for 2025 at about 5.9 million ounces, with Q2 production expected to be relatively flat compared to Q1, as gains from some mines will be offset by declines in others [2][7] - Newmont's shift to a high-quality, Tier-1 portfolio is a long-term strategy aimed at reliability and efficiency, but uncertainties remain regarding the ability of these mines to ramp up production sufficiently to meet full-year targets [5] Group 2: Competitive Landscape - Barrick Mining Corporation experienced a significant decline in gold production in Q1 2025, with a 19% drop year-over-year and a 30% fall from the previous quarter, primarily due to operational challenges and disputes with the Malian government [3] - Agnico Eagle Mines Limited saw a modest year-over-year decline of around 0.5% in gold production, totaling 873,794 ounces, but remains on track to meet its 2025 production target of approximately 3.3-3.5 million ounces [4] Group 3: Market and Valuation Insights - Newmont's shares have increased by 57.2% year-to-date, slightly underperforming the Zacks Mining – Gold industry's rise of 58.5%, driven largely by a rally in gold prices [6] - The Zacks Consensus Estimate for Newmont's earnings implies a year-over-year rise of 20.1% for 2025 and 11.7% for 2026, with EPS estimates trending higher over the past 60 days [8] - Newmont is currently trading at a forward 12-month earnings multiple of 13.28, which is about 7.8% lower than the industry average of 14.4X, and carries a Value Score of B [10]