To The Moon

$Newmont Mining(NEM)$’s second-quarter earnings exceeded expectations, but the stock slipped because stronger gold prices concealed weaker production. The report illustrates why a miner’s outlook cannot be determined from the commodity price alone.

Newmont earned an adjusted $2.10 per share, above the approximately $1.99 expected by analysts. Revenue rose to $6.12 billion from $5.32 billion one year earlier. The company generated a record $2.2 billion of quarterly free cash flow and returned approximately $1.9 billion through dividends and share repurchases. Barron’s July 23 results analysis discusses the cash generation and capital returns.

The average realised gold price was $4,414 per ounce, up from $3,320 a year earlier. However, attributable production declined from 1.48 million to 1.29 million ounces. Lower grades at Ahafo South, Peñasquito and Yanacocha contributed to the decline, while seismic activity disrupted the Cadia operation in Australia. Reuters’ July 23 report provides the operational comparison.

Newmont still expects to meet its full-year target of approximately 5.3 million ounces. If production recovers while gold remains elevated, operating leverage could be powerful: additional ounces would be sold at prices substantially above the company’s all-in sustaining costs.

The opposing risk is that current profitability relies too heavily on the gold price. Newmont’s realised price already declined sequentially from approximately $4,900 in the first quarter. Meanwhile, lower production raises unit costs because fixed mine expenses are spread across fewer ounces. Higher oil prices could further increase the cost of operating and transporting heavy equipment.

NEM Weekly Chart

Newmont closed around $94.60 and weakened modestly after the report. $Newmont Mining(NEM)$’s weekly chart remains in a corrective structure, with price trading inside a narrowing descending channel and currently testing the lower boundary near the low-$90s. The former support zone around $95–$98.60 has now become overhead resistance, so the bullish case would require NEM to reclaim that area and then break above the upper trendline, which would signal that the correction is losing control and could open a recovery toward roughly $105–$110. Until that happens, the risk of another rejection toward approximately $86–$88 remains elevated.

A defined-risk trade would be a 45–75 DTE $95/$105 call debit spread, entered only after a confirmed weekly close above $98.60; alternatively, if price closes decisively below the lower channel boundary near $89–$90, a $90/$82.50 put debit spread would better align with the prevailing downtrend.

The evidence leans neutral. Newmont’s balance sheet and cash generation are bullish, but declining production and exposure to gold-price reversals limit conviction. The outlook would become more bullish if output recovers while all-in sustaining costs remain controlled. It would turn bearish if operational disruptions force lower guidance or costs rise while gold prices retreat. This is personal opinion for education and is not financial advice.

@Tiger_SG @Tiger_comments @TigerStars @TigerClub @CaptainTiger @Daily_Discussion

Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.