Newmont drops 12% on cost worries despite strong Q1 and buyback boost

Newmont shares tumbled more than 12% on Wednesday as investor concerns over rising operating costs and capital expenditure overshadowed a strong first-quarter earnings beat and a $6 billion expansion of the company's share buyback program.

The world's largest gold miner reported adjusted earnings per share of $0.82 for the first quarter, surpassing analyst estimates of $0.74. Revenue also came in ahead of expectations at $4.8 billion, supported by higher gold prices and steady production. In addition, Newmont announced a $6 billion increase to its existing share repurchase authorization and revealed that it has advanced discussions with Barrick Gold about adding the Fourmile discovery to their Nevada Gold Mines joint venture. Despite these positive developments, the market focused on the company's guidance for higher 2026 operating costs and increased capital spending, which pressured the stock. For gold and precious metals traders, Newmont's cost outlook is a key indicator of industry-wide margin pressures. When a major producer signals rising costs, it can imply that the gold price needs to stay elevated for miners to maintain profitability. This dynamic often supports gold prices in the medium term, as investors price in higher production costs. However, the immediate sell-off in Newmont shares also reflects a broader risk-off sentiment in the equity market, which can temporarily weigh on gold as investors liquidate positions to cover losses. For real-time pricing context, traders can check NowPrice's gold page to monitor spot gold movements against this backdrop.

Looking ahead, investors will watch Newmont's next earnings report for further clarity on cost trends and production targets. The company's ability to manage expenses while maintaining output will be crucial for its stock performance. Additionally, the outcome of the Fourmile joint venture talks with Barrick could provide a catalyst. On the macro side, gold traders should monitor upcoming US inflation data and Federal Reserve commentary, as these will influence the dollar and real yields, which are primary drivers of gold prices. Any signs of easing cost pressures across the mining sector could also shift sentiment back toward gold miners.