What Is The One Risk Every Newmont Investor Should Know

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Newmont (NEM) stock returned 36.4% over the past year, against 15.0% for the S&P 500. In its latest quarter, the gold miner brought in $1.91 billion of free cash flow. The risk worth knowing, however, does not come from the gold market. On its October 22, 2026 call, management flagged a pressure building inside Newmont's own mines that grows into 2027. What is that pressure, and where does it come from?

Newmont Expects Each Ounce To Cost More In 2027

Management expects Newmont's unit costs to trend higher in 2027. On the fiscal Q3 2026 call, management gave two reasons for the expected increase in what it spends to produce each ounce: macroeconomic headwinds and lower co-product credits. These credits represent the income from the silver, copper and other metals Newmont mines alongside its gold.

The lower credits come mainly from silver at Penasquito. Management expects output at the mine to be roughly 30% lower than in 2026 because of planned mine sequencing, which is the order the company works through the mine. Wages add to the pressure. Management expects labor costs across the company to rise by more than the roughly 3% it assumed for 2026.

Holders get an early look before 2027. Management expects all-in sustaining costs, a cost per ounce of gold that includes the spending to keep mines running, to be the highest of the year in fiscal Q4 2026. Those costs are expected to reach $1,900 per ounce, against $1,450 in fiscal Q3 2026. Management tied that partly to the planned timing of the upkeep spending and to silver output at Penasquito falling to about half of third-quarter levels.

How Much Of Newmont Is Exposed To Rising Costs?

Newmont pays the higher wages at every mine, but the lost silver comes from Penasquito. The mine brought in $3.42 billion of revenue in fiscal 2025, accounting for 15.1% of Newmont's revenue that year, second only to Nevada Gold Mines. That revenue figure covers all the metals the mine sells, not only its silver. Penasquito's revenue also grew 47.2% from fiscal 2024.

Newmont meets those costs with wide margins. Its operating margin was 50.0% in fiscal Q3 2026, up from 47.4% in fiscal Q3 2025. Within 2026, though, the margin came down each quarter from 61% in fiscal Q1 2026.

At 12.8 times earnings, against 22.6 for the S&P 500, the stock is priced well below the market. On sales, the stock is not cheap against its own past. The price-to-sales ratio of 4.5 at the end of September 2026 was higher than at 34 of the 39 earlier fiscal quarter ends since fiscal Q4 2016. On October 27, Newmont shares closed 16.5% below their August 25, 2026 high.

How Big A Problem Are Newmont's Rising Costs?

The problem is real, but not yet measured. Management expects unit costs to rise in 2027 and has not yet said by how much. When 2027 cash costs came up on the October 22 call, management said it was not in a position to give site-level cost guidance.

Management has done better than its own cost plan for 2026. The company lowered its 2026 outlook for all-in sustaining costs by about 10% from the guidance it gave at the start of the year.

Newmont shares have also swung harder than the market in rough patches. In three of the four market shocks since 2022 for which we have its figures, the shares fell further than the S&P 500. They fell as much as 32% against 24% in the 2022 inflation and Fed tightening shock.

Newmont would need to keep the cost discipline it showed in 2026 while its silver output falls. When the company next reports, expected in February 2027, Newmont's all-in sustaining cost per ounce of gold is the number to watch. Compare it with about $1,520 for 2026 in its current outlook.

Does This Mean You Should Act On NEM?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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