# Newmont (NEM) Financial Model

Free Excel 3-statement financial model and company analysis for Newmont.

- Canonical: https://finamodel.com/companies/newmont
- Industry: Materials
- Downloadable model: Yes
- Excel download: https://finamodel.com/company-models/NEM.xlsx

## Model Purpose

This model provides a comprehensive equity valuation and scenario planning tool for Newmont Corporation, enabling an analyst to forecast free cash flow and net asset value (NAV) based on metal price cycles, mine sequencing, and the recent divestiture of non-core assets.

## Company Overview

Newmont Corporation is the world's leading gold company and a significant producer of copper, silver, zinc, and lead. The company operates a world-class portfolio of assets anchored in favourable mining jurisdictions across North America, South America, Australia, Africa, and Papua New Guinea. Following the transformational acquisition of Newcrest Mining in late 2023, Newmont streamlined its business in 2024 by announcing the divestiture of six non-core assets (Akyem, Cripple Creek & Victor, Éléonore, Musselwhite, Porcupine, and Telfer) to focus exclusively on its Tier 1 portfolio of 11 managed operations and key equity investments.

The business model is highly asset-heavy and capital-intensive, relying on the extraction and processing of mineral reserves over long mine lives. Newmont holds a dominant competitive position as the only gold producer listed in the S&P 500, benefiting from scale, geographic diversification, and a strong balance sheet. Recent major events include the aforementioned Newcrest integration, the 2024/2025 divestiture programme expected to yield up to $4.9 billion in proceeds, and a strategic shift to optimise sustaining capital and lower All-In Sustaining Costs (AISC) across its remaining Tier 1 assets.

## Revenue Deep Dive



### Gold

- **Segment name:** Gold Sales
- **Revenue driver formula:** Attributable Gold Ounces Sold x Average Realised Gold Price ($/oz)
- **Historical growth rate:** Highly variable based on commodity cycles; production volume has historically ranged between 5.0 to 6.0 million ounces annually.
- **Key growth levers and headwinds:** Mine sequencing, ore grade profiles, mill throughput, and macroeconomic factors driving the spot price of gold.
- **Pricing dynamics:** Spot market pricing with minimal hedging, allowing full exposure to gold price upside.
- **Revenue recognition notes:** Recognised upon transfer of control, typically when concentrates or doré are delivered to the buyer or refinery.
- **Seasonality:** Production and costs can be impacted by seasonal weather events (e.g., wet season in Australia or Papua New Guinea), but revenue is generally distributed throughout the year.

### Copper

- **Segment name:** Copper Sales
- **Revenue driver formula:** Attributable Copper Tonnes Sold x Average Realised Copper Price ($/tonne or $/lb)
- **Historical growth rate:** Significantly increased following the Newcrest acquisition (addition of Cadia and Red Chris).
- **Key growth levers and headwinds:** Global electrification trends driving copper demand; headwinds include declining grades at legacy operations.
- **Pricing dynamics:** Spot market pricing subject to provisional pricing adjustments based on forward curves at the time of delivery.
- **Revenue recognition notes:** Similar to gold, but provisional pricing adjustments are recorded in revenue as commodity prices fluctuate prior to final settlement.
- **Seasonality:** Minimal seasonality, driven primarily by mine sequencing.

### Silver, Zinc, and Lead

- **Segment name:** Silver, Zinc and Lead Sales (often grouped as other metals)
- **Revenue driver formula:** Volume Sold x Average Realised Price for each respective metal
- **Historical growth rate:** Stable, largely produced as by-products at operations like Peñasquito.
- **Key growth levers and headwinds:** Driven entirely by the mine plan of polymetallic ore bodies.
- **Pricing dynamics:** Spot market pricing with provisional adjustments.
- **Revenue recognition notes:** Treated as co-products in revenue reporting rather than being credited against gold operating costs.
- **Seasonality:** Tied to the specific mine plans of the polymetallic assets.

## Cost Structure



### Variable Costs / COGS

- **Line-by-line breakdown:** Costs Applicable to Sales (CAS) includes direct mining and milling costs, royalties, production taxes, and inventory adjustments.
- **Gross margin range:** Highly dependent on gold prices; typically 35% to 50% over the last 5 years.
- **Key input costs and commodity exposures:** Diesel fuel, electricity, grinding media, cyanide, explosives, and labour.
- **How COGS scales with revenue:** Step-function scaling. Mining costs are largely fixed in the short term based on the mine plan, meaning higher gold prices drop directly to the bottom line (high operating leverage), though royalties scale linearly with revenue.

### Operating Expenses

- **Exploration and Advanced Projects:** Typically $400 million to $600 million annually. Expensed as incurred unless specific criteria for capitalisation are met.
- **SG&A:** General and administrative expenses typically run at 3% to 5% of revenue, largely headcount and corporate IT driven.
- **Depreciation & Amortisation:** Significant non-cash expense (often 15% to 25% of revenue) driven by the units-of-production method over the estimated proven and probable reserves.
- **Stock-Based Compensation:** Minor relative to revenue (less than 1%), not a primary driver of margin distortion.
- **Restructuring / one-time charges:** Frequent in recent years due to the Goldcorp and Newcrest integrations, as well as the 2024/2025 divestiture programme.

### Margin Profile

- **EBITDA margin:** Ranges from 35% to 50% depending on the gold price cycle (Adjusted EBITDA was $8.7 billion in 2024).
- **Margin trend:** Expanding in 2024 and 2025 due to record gold prices and the shedding of higher-cost, non-core assets, partially offset by general cost inflation and higher royalties.
- **Segment-level margins:** Tier 1 assets (e.g., Boddington, Tanami, Cadia) typically exhibit lower CAS and higher margins compared to the divested non-core assets.

## Balance Sheet Structure

- **Total assets:** Approximately $50 billion to $55 billion following the Newcrest acquisition.
- **Key asset categories:** Property, Plant and Mine Development (PP&E) is the largest component, alongside substantial Goodwill from historical M&A.
- **Goodwill & intangibles:** Represents a significant portion of total assets (often 15% to 20%) due to the premiums paid for Goldcorp and Newcrest.
- **Working capital profile:**
  - **Days Sales Outstanding (DSO):** 15 to 30 days (very low, as metals are sold into highly liquid markets).
  - **Days Inventory Outstanding (DIO):** 60 to 90 days (stockpiles, ore on leach pads, and in-circuit inventory take time to process).
  - **Days Payable Outstanding (DPO):** 30 to 45 days.
  - **Net working capital as % of revenue:** Typically low to mid-single digits.
  - **Is working capital positive or negative?** Generally positive, driven by large inventory balances of ore and supplies.
- **PP&E:** Consists of mineral interests, mine development costs, and processing facilities. Depreciated using the units-of-production method.
- **Right-of-use assets:** Material but small relative to the massive PP&E base (primarily mining equipment and office leases).

## Capital Expenditure & Investment

- **Capex as % of revenue:** Typically 15% to 25%, highly dependent on the project pipeline.
- **Maintenance capex vs. growth capex:** Sustaining capital (maintenance) is roughly 60% of total capex, while development capital (growth) makes up the remaining 40%.
- **Major capex programmes:** Tailings work at Cadia, potential expansion at Red Chris, and ongoing development at Ahafo North.
- **Capitalised software:** Immaterial compared to mine development costs.
- **M&A pattern:** Transformational acquirer. Newmont acquired Goldcorp in 2019 and Newcrest in 2023, followed by periods of portfolio rationalisation and debt reduction.
- **Typical acquisition multiple paid:** Often based on Net Asset Value (NAV) rather than EBITDA, typically paying a 15% to 30% premium to the target's undisturbed share price.

## Debt & Capital Structure

- **Total debt:** Approximately $8 billion to $9 billion, with net debt to adjusted EBITDA sitting at a very healthy 0.6x at the end of 2024.
- **Credit rating:** Investment grade (typically BBB+ / Baa1).
- **Key debt instruments:** Senior unsecured notes (e.g., 2026, 2030, 2034, 2041, and 2050 maturities) and a largely undrawn revolving credit facility.
- **Maturity profile:** Well-laddered, with recent issuances in 2024 refinancing near-term maturities.
- **Interest rate profile:** Predominantly fixed-rate bonds, resulting in a stable weighted average cost of debt around 4.5% to 5.5%.
- **Covenants:** Standard investment-grade covenants; leverage is well below any restrictive thresholds.
- **Share repurchase programme:** Active periodically, often funded by divestiture proceeds or excess free cash flow during gold price peaks.
- **Dividend policy:** Base dividend plus variable component. For late 2024 and 2025, the declared dividend is $0.25 per quarter ($1.00 annualised).

## Cash Flow Characteristics

- **Operating cash flow conversion:** OCF is typically 1.5x to 2.0x Net Income due to massive non-cash depreciation and amortisation charges ($6.3 billion OCF in 2024).
- **Free cash flow margin:** Highly variable. In 2024, FCF was $2.9 billion on strong gold prices, representing a mid-teens FCF margin.
- **Major non-cash items:** Depreciation, depletion and amortisation (DD&A), stock-based compensation, and deferred income taxes.
- **Working capital cash flow impact:** Can be a significant source or use of cash quarter-to-quarter based on the timing of tax payments and inventory stockpile build/drawdown.
- **Capex intensity:** Very high. Mining requires continuous sustaining capital to maintain production levels.
- **Cash tax rate vs. GAAP effective tax rate:** Cash taxes are often lower than GAAP taxes due to accelerated depreciation for tax purposes and the utilisation of historical tax attributes.

## Sheet Structure

1. **Assumptions:** Hardcoded inputs for macroeconomic drivers (gold price, copper price), production volumes by Tier 1 asset, unit costs (CAS, AISC), and corporate tax rates.
2. **Production & Sales Schedule:** Detailed build of attributable ounces/tonnes produced and sold for Gold, Copper, Silver, Zinc, and Lead.
3. **Revenue Schedule:** Calculates revenue by metal (Volume Sold x Realised Price) and includes provisional pricing adjustments.
4. **Operating Costs (CAS & AISC):** Builds Costs Applicable to Sales and All-In Sustaining Costs. Reconciles CAS to total COGS.
5. **Income Statement:** Consolidated view mirroring the 10-K, from Sales to Net Income Attributable to Newmont Stockholders.
6. **Balance Sheet:** Assets, Liabilities, and Equity. Highlights PP&E, Goodwill, and Debt.
7. **Cash Flow Statement:** Operating, Investing, and Financing cash flows. Explicitly models divestiture proceeds in 2025.
8. **Debt & Interest Schedule:** Traces the specific bond tranches (2026, 2030, 2034, etc.), calculates interest expense, and tracks debt paydown.
9. **PP&E & Capex Schedule:** Models sustaining vs. development capex, and calculates DD&A using a simplified units-of-production proxy.
10. **Working Capital Schedule:** Calculates Accounts Receivable, Inventories, and Accounts Payable based on DSO, DIO, and DPO.
11. **Valuation (DCF & NAV):** Calculates Free Cash Flow to the Firm (FCFF), applies WACC, and includes a Net Asset Value cross-check based on reserve life.

## Key Financial Relationships

1. **Gold Revenue** = Attributable Gold Ounces Sold x Average Realised Gold Price
2. **Copper Revenue** = Attributable Copper Tonnes Sold x Average Realised Copper Price
3. **Total Sales** = Gold Revenue + Copper Revenue + Silver/Zinc/Lead Revenue + Provisional Pricing Adjustments
4. **Costs Applicable to Sales (CAS)** = Total Gold Ounces Sold x Gold CAS per ounce + Total Copper Tonnes Sold x Copper CAS per tonne
5. **All-In Sustaining Costs (AISC)** = CAS + Sustaining Capital + General & Administrative + Exploration Expense + Reclamation Accretion
6. **Gross Margin** = Total Sales - CAS - Depreciation and Amortisation
7. **Adjusted EBITDA** = Net Income + Income Tax Expense + Interest Expense + Depreciation and Amortisation + Impairments + Loss on Assets Held for Sale
8. **Free Cash Flow** = Net Cash Provided by Operating Activities - Additions to Property, Plant and Mine Development (Total Capex)
9. **Ending PP&E** = Beginning PP&E + Total Capex - Depreciation and Amortisation - PP&E Divested
10. **Net Debt** = Total Debt (Short-term + Long-term) - Cash and Cash Equivalents
11. **Interest Expense** = Average Outstanding Debt x Weighted Average Interest Rate
12. **Effective Tax Rate** = Income and Mining Tax Expense / Income Before Income and Mining Tax

## Cross-Sheet Dependencies

- The **Production & Sales Schedule** feeds directly into the **Revenue Schedule** and the **Operating Costs (CAS & AISC)** sheet.
- The **Revenue Schedule** and **Operating Costs** sheet feed the top half of the **Income Statement**.
- The **Income Statement** generates Net Income, which is the starting point for the **Cash Flow Statement**.
- The **PP&E & Capex Schedule** calculates Depreciation, which feeds both the **Income Statement** (reducing profit) and the **Cash Flow Statement** (added back to OCF).
- The **Debt & Interest Schedule** calculates Interest Expense for the **Income Statement** and ending debt balances for the **Balance Sheet**.
- The **Cash Flow Statement** calculates the net change in cash, which feeds the Cash line on the **Balance Sheet**, ensuring the model balances. Circularity exists between Interest Expense, Net Income, Cash Flow, and Debt balances; this should be managed with a toggle switch.

## Sign Convention

- **Revenue and Sales:** Positive
- **Expenses (CAS, SG&A, Exploration, Interest):** Positive in their specific schedules, but subtracted in the Income Statement formulas.
- **Assets:** Positive
- **Liabilities and Equity:** Positive
- **Cash Flow Statement:** Cash inflows are positive; cash outflows (e.g., Capex, Dividends, Debt Repayment) are negative.
- **AISC and CAS per ounce:** Displayed as positive numbers.

## Things Most Likely to Go Wrong

1. **Divestiture Stub Periods:** Newmont sold six non-core assets in early 2025. The model must exclude production and revenue from these assets after Q1 2025, otherwise revenue and costs will be structurally overstated.
2. **Co-Product vs By-Product Accounting:** Newmont reports Copper, Silver, Zinc, and Lead as co-products (included in Total Sales) rather than deducting their value from Gold CAS. Misclassifying this will distort AISC calculations.
3. **Nevada Gold Mines (NGM) Consolidation:** Newmont owns 38.5% of NGM (operated by Barrick). This is proportionately consolidated. The model must ensure NGM's attributable production and costs are correctly blended into the Tier 1 metrics.
4. **Equity Method Investments:** Pueblo Viejo (40%) and Fruta del Norte (32%) are equity method investments. Their attributable production is included in Newmont's metrics, but their financials hit the income statement below the operating line.
5. **Provisional Pricing Adjustments:** Copper and zinc sales are subject to mark-to-market adjustments between shipment and final settlement. This can cause unexpected revenue swings in volatile commodity markets.
6. **Units-of-Production Depreciation:** DD&A does not scale linearly with time; it scales with production volumes. If production drops, DD&A should drop proportionally.
7. **AISC vs GAAP COGS:** AISC is a non-GAAP metric that includes sustaining capex and G&A. The builder must not confuse CAS (which sits in COGS) with AISC (which blends income statement and cash flow items).
8. **Asset Impairments:** Mining companies frequently take massive non-cash impairment charges. The model should forecast these at zero, but historical data must be scrubbed to calculate normalised Adjusted EBITDA.

## Validation Checks

1. **Total Attributable Gold Production:** Must equal approximately 5.6 million ounces for the Tier 1 portfolio in 2025.
2. **Gold AISC per Ounce:** Should reconcile to the 2025 guidance of $1,620 per ounce for the Tier 1 portfolio.
3. **Balance Sheet Check:** Total Assets must exactly equal Total Liabilities plus Equity in all forecast periods.
4. **Debt to Adjusted EBITDA:** Should remain below 1.0x in the base case (actual was 0.6x at year-end 2024).
5. **OCF to Net Income Conversion:** Should consistently be greater than 1.0x due to heavy depreciation add-backs.
6. **Capex to Revenue:** Should flag if it falls outside the historical 15% to 25% band, as underinvesting will deplete the reserve base.
7. **Dividend Payout:** The annualised dividend should equal $1.00 per share based on the $0.25 quarterly declaration.
8. **Divestiture Proceeds:** Cash flow from investing activities in 2025 must reflect the anticipated $2.6 billion to $4.9 billion in proceeds from the sale of non-core assets.

## Key Assumptions (Default Values)

| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Realised Gold Price | 2,600 | $/oz | Approximate spot price environment for 2025 base case |
| Realised Copper Price | 4.00 | $/lb | Approximate spot price environment for 2025 base case |
| Tier 1 Gold Production | 5.60 | M oz | 2025 Company Guidance for Tier 1 portfolio |
| Non-Core Gold Production (Q1 2025 only) | 0.30 | M oz | 2025 Company Guidance for assets held for sale |
| Gold CAS per Ounce (Tier 1) | 1,180 | $/oz | 2025 Company Guidance |
| Gold AISC per Ounce (Tier 1) | 1,620 | $/oz | 2025 Company Guidance |
| Exploration & Advanced Projects | 525 | $M | 2025 Company Guidance |
| Sustaining Capital | 1,500 | $M | Estimated based on historical run-rate and 2025 guidance |
| Development Capital | 1,000 | $M | Estimated based on historical run-rate and project pipeline |
| Effective Tax Rate | 32.0 | % | Historical average reflecting mining taxes and jurisdictional mix |
| Dividend per Share | 1.00 | $/year | Declared $0.25 quarterly dividend annualised |
| Divestiture Proceeds (2025) | 3,500 | $M | Midpoint of expected proceeds from non-core asset sales |
| Weighted Average Interest Rate | 4.8 | % | Based on the coupon rates of existing senior notes |
| WACC | 7.5 | % | Standard discount rate for large-cap, unhedged gold producers |

## Data Sources & Benchmarks

- **Filings:** SEC EDGAR (Form 10-K, 10-Q, 8-K) and Newmont Investor Relations website (Earnings Releases, Reserves & Resources reports).
- **Key Peers for Benchmarking:** Barrick Gold (GOLD), Agnico Eagle Mines (AEM), Kinross Gold (KGC).
- **Industry Data Sources:** World Gold Council (for macro gold demand/supply), Kitco (for historical spot prices), Wood Mackenzie (for mine cost curve benchmarking).
- **Consensus Estimates:** Bloomberg or FactSet for forward commodity price curves and consensus NAV estimates.

## Sources

- Newmont Corporation Form 10-K for the Fiscal Year Ended December 31, 2024 (Filed February 2025)
- Newmont Q4 and Full Year 2024 Earnings Press Release (February 20, 2025)
- Newmont 2024 Reserves & Resources Release (February 20, 2025)
- SEC Correspondence and Prospectus Filings for Newmont Senior Notes (2024)

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## Frequently asked questions

### What does Newmont Corporation do?

Newmont Corporation is the world's leading gold company, also producing copper, silver, zinc, and lead. It operates a global portfolio of assets, recently streamlining its business by divesting non-core assets to focus on its Tier 1 operations.

### What are the primary revenue drivers for Newmont?

Newmont's revenue is primarily driven by metal price cycles, mine sequencing, and the volume of metals extracted from its operations. The company's strategic focus on its Tier 1 portfolio after recent divestitures will also influence future revenue generation.

### What is a key assumption for capital expenditure in the Newmont financial model?

The financial model assumes Capex as a percentage of revenue is approximately 16.07%. Historically, Newmont's capital expenditure typically ranges between 15% to 25% of revenue, with sustaining capital making up about 60% of this total.

### How does the Newmont financial model assist in valuation?

The Newmont financial model is designed as a comprehensive equity valuation and scenario planning tool. It enables analysts to forecast free cash flow and net asset value (NAV) based on factors like metal price cycles and mine sequencing.

### What is Newmont's approach to mergers and acquisitions?

Newmont has a history as a transformational acquirer, notably acquiring Goldcorp in 2019 and Newcrest in 2023. These acquisitions are often followed by periods of portfolio rationalisation and debt reduction, with acquisition multiples typically based on Net Asset Value (NAV).

### Can I download an Excel model for Newmont, and what is its forecast horizon?

Yes, an Excel model for Newmont is available for download. This model provides a forecast horizon spanning from Fiscal Year 2026 through Fiscal Year 2030.

[Interactive forecast calculator](https://finamodel.com/companies/newmont/forecast)