"Up 140% Yet Still Optimistic"... Resilient 100-Year-Old U.S. Gold Mining Leader [Business & Issue]

Newmont: The Leading U.S. Gold Mining Stock
Stock Price Remains Unshaken Despite AI Bubble Concerns
Economic and Geopolitical Uncertainty... "Gold Rally to Continue"

Newmont Corporation website

Newmont, the leading gold mining stock in the United States, continues its strong rally despite a somewhat sluggish U.S. stock market. With gold prices soaring this year, Newmont’s share price has risen by nearly 140% since the beginning of the year, yet there is still widespread optimism for further gains. Experts believe that ongoing concerns about economic downturns and growing geopolitical instability are fueling demand for gold, and that Newmont’s stable financials and performance will support continued growth in its share price.

Despite AI Bubble Concerns and Yen Carry Trade Unwinding Fears... Share Price Continues to Soar

On December 4 (local time) at the New York Stock Exchange (NYSE), Newmont’s share price closed at $90.72, marking a 136.43% increase since the start of the year. Last month, the S&P 500 index halted its six-month rally and slipped by 0.04%, showing some stagnation, but Newmont’s share price still rose by 15% over the same period. Even as the U.S. stock market wavered due to concerns over an AI bubble and the possibility of interest rate hikes in Japan, Newmont, the world’s largest gold mining company, continued to climb on the back of rising gold prices.

Gold prices have continued their rally even after surpassing $4,000 per ounce for the first time in history this past October. On December 4, gold closed at $4,243 per ounce on the New York Mercantile Exchange (COMEX), up 5.95% from October 7, when it first broke through the $4,000 mark. As the stock market showed signs of weakness, demand for safe-haven assets increased, further boosting gold demand.

CNBC analyzed that for every $100 increase in the price of gold per ounce, Newmont’s free cash flow rises by $550 million (about 810 billion won) due to higher gold selling prices. Josh Wolfson, Head of Global Mining Research at Royal Bank of Canada (RBC), said, “With gold prices rising this year, Newmont’s free cash flow in the second half is expected to reach $3.5 to $4 billion. Expectations that this capital will be used for shareholder returns, such as share buybacks, are driving up the share price.”

Over 100 Years of History... Stable Revenue and Financials for America’s Leading Gold Miner

Reuters Yonhap News

According to The New York Times, Newmont, founded in 1916, is one of America’s most prominent gold mining companies and a flagship stock in the S&P 500 index. Founder William Boyce Thompson was originally known as the “Copper King” for his monopoly of copper mines in the western United States in the mid-19th century. He later focused on the gold mining industry, consolidating his mining businesses under Newmont.

Today, Newmont owns 20 mines worldwide, including in North America, Central and South America, Africa, and Australia. While gold is its main product, the company also mines silver, copper, and zinc. In 2019, Newmont acquired Goldcorp, a major Canadian mining company, and in 2023, it acquired Newcrest, Australia’s largest gold mining company, solidifying its position as the world’s largest mining firm.

In October, Newmont reported better-than-expected third-quarter results despite a slight decrease in gold production. In the third quarter of this year, Newmont produced 1,421,000 ounces of gold, down about 4% year-on-year, but revenue rose 20% to $5.524 billion, and net income reached $1.9 billion. The company’s financial structure also improved significantly, with assets at $5.5 billion and liabilities at $12 million, resulting in a virtually debt-free and highly stable financial position.

With strong revenue and a stable financial structure, Newmont is currently enhancing shareholder returns. After buying back $1 billion worth of its own shares in the second quarter of this year, the company announced an additional $3 billion share repurchase plan.

Gold Rally Expected to Continue Amid Economic and Geopolitical Uncertainty... "Further Upside for Share Price"

Reuters Yonhap News

Experts predict that ongoing concerns about economic instability and geopolitical risks will continue to drive demand for gold as a safe-haven asset next year, leading to further gains in Newmont’s share price.

At the end of last month, Goldman Sachs conducted a survey of more than 900 institutional investors, and 36% of respondents predicted that gold prices would exceed $5,000 per ounce next year. Another 33% expected prices to rise to the $4,500-$5,000 range. In contrast, only 5% of respondents expected gold prices to fall to the $3,500-$4,000 range next year.

The biggest factor driving up gold prices is central bank buying. According to the World Gold Council (WGC), central banks around the world purchased 1,089 tons of gold last year, and have been buying more than 1,000 tons annually since 2022. This is more than double the average annual purchases in 2021. As the Russia-Ukraine war, conflict in the Middle East, and inflation risks from U.S.-led trade wars have intensified, central banks worldwide have significantly increased their holdings of gold as a safe asset.

Michael Schuh, an analyst at Deutsche Bank, told CNBC, “With sustained buying by central banks and steady private sector demand, gold prices will remain above $5,000 per ounce even in 2027. Central banks, facing slower growth and inflationary pressures, will continue to purchase gold regardless of price fluctuations, supporting not only gold prices but also the strength of gold-related stocks.”