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Newmont (NEM) stock trades at 12.7 times earnings, compared with 22.8 for the S&P 500. Investors paying that price are buying the mines Newmont runs today and the ones it plans to build. Those plans have shifted since early 2025. Management emphasized portfolio rationalization on the fiscal Q4 2024 call, but has since dropped that focus. What is management talking up instead?
Newmont Now Talks Up Reinvestment And Growth
During the fiscal Q3 2026 call on October 22, 2026, management spoke of its next major reinvestment and outlined plans for the Red Chris gold and copper mine. The company also said it expects production growth to begin in 2027, describing its strategy as leading in gold and growing in copper.
In early 2025, the corporate message centered on getting smaller. Five smaller mines , including Porcupine, Musselwhite and Akyem, each accounted for 1.9% to 3.6% of Newmont's revenue in fiscal 2024. A year later, each reported roughly three-quarters less revenue. By the fiscal Q3 2025 call in October 2025, management discussed the successful completion of its asset divestment program. Newmont went quiet on asset sales only after management said they were finished, turning instead to spending on the mines it kept.
How Big Is Newmont's Red Chris Bet?
Red Chris is still small, representing 2.3% of Newmont's fiscal 2025 revenue. It is growing fast, however, with revenue rising 57.8% that year.
The bet is on what comes next. Management estimates development capital for the project at $4.2 billion to $4.8 billion. Construction is expected to ramp up in 2027, subject to board approval, with commercial production targeted for 2033.
Newmont's mines produce more than enough cash for that so far. Free cash flow reached $10.1 billion over the twelve months to September 2026, up from $6.12 billion a year earlier. Management expects development capital in 2027 to be about $500 million higher than in 2026, mostly for Red Chris. This extra spending is small compared with the cash the mines now produce .
What You Cannot See In Newmont's Low P/E
The P/E ratio does not reveal where costs are heading. Newmont's quarterly profit beat estimates on higher gold prices, news reports said on October 22, 2026. Yet management expects unit costs to trend higher in 2027. This increase is partly because silver output at Penasquito is expected to be about 30% lower, which leaves less silver income to offset the cost of mining gold.
The low P/E also hides the recent cash trend. Free cash flow fell to $1.91 billion in fiscal Q3 2026, down from $3.14 billion in fiscal Q1. The fiscal Q3 figure was still above the $1.57 billion reported for fiscal Q3 2025.
For a holder, the shift reads as more reassuring than concerning. Management went quiet on asset sales after calling them finished, and cash generation from the remaining mines sits well above the extra spending planned for 2027. The concern lies in timing. Costs and spending both rise from 2027, years before the next phase of Red Chris is due to reach commercial production. If the cash weakens, more of it would go to Red Chris and less to the dividends and buybacks Newmont pays now. Management said it had returned about $1.9 billion to shareholders since its previous call.
Newmont's asset sales look finished. Its cash flow is less certain as costs rise, making free cash flow the measure to watch when Newmont reports in February 2027, alongside the funding decision on Red Chris that management expects early in 2027.
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