SLAM Exploration Ltd. (TSXV: SXL)
‘Exploring for critical elements and precious metals in New Brunswick, Canada.’
As gold prices shatter records with a staggering 70% annual gain to breach $5,000 per ounce, the investment world has naturally fixed its gaze on the glittering safe-haven asset itself. But sophisticated money may be looking elsewhere—toward the companies that actually pull the metal from the ground.
In this historic bull run, Newmont Corporation (NEM), the world’s largest publicly traded gold producer, is making a compelling case that it may offer even greater value than gold bars themselves.
Gold has climbed more than 18% year-to-date (as of this writing), recently closing well above $5,000 per ounce—a level that seemed almost unimaginable just two years ago. Yet while retail investors hesitate over whether to chase physical gold at these heights, Newmont has already delivered what can only be described as a flawless 2025 performance: $7.3 billion in free cash flow, a $3.4 billion reduction in debt, and a year-end net cash position of $2.1 billion.
These figures tell a significant story. During gold price upcycles, producers typically offer much higher operational leverage than the metal itself. When gold prices rise, mining companies with relatively fixed production costs see their profit margins expand at a rate that far outpaces the underlying commodity’s appreciation. Newmont stands as the perfect illustration of this principle.
With a market capitalization of $135 billion, Newmont’s advantages extend well beyond sheer size. Operating 12 assets across four continents, this industry titan possesses cost-control capabilities and project pipelines that smaller competitors can only dream of matching.
The numbers from 2025 tell the tale. Newmont’s core portfolio produced 5.7 million ounces of gold at an all-in sustaining cost (AISC) of just $1,599 per ounce. Meanwhile, the company sold its gold at an average price of $3,498 per ounce. That $1,899 per ounce spread forms the bedrock of its extraordinary profitability. In a high-price environment, this cost advantage gets magnified tremendously, translating directly into torrential cash flow.
Perhaps more importantly, Newmont isn’t resting on its laurels. Armed with substantial liquidity, it’s advancing three major growth projects: Tanami Expansion 2, Cadia Panel Caves, and Lihir Nearshore Barrier. These initiatives can proceed without weighing down the balance sheet with additional debt, ensuring production stability and cost optimization for years to come.
Looking ahead to 2026, Newmont projects gold production of approximately 5.3 million ounces, with AISC modestly rising to $1,680 per ounce. This increase reflects lower expected volumes, the company’s forecast of $4,500 average gold prices for the year, and higher sustaining capital expenditures.
But here’s the crucial variable: gold is currently trading above $5,000. This suggests Newmont’s actual 2026 earnings could once again significantly exceed guidance. The company plans to invest $1.4 billion in development capital this year, primarily channeling funds toward its highest-return free cash flow growth projects.
Meanwhile, the dividend commitment is rock-solid at $1.1 billion for the year. The per-share payout has increased to $0.26 from last quarter’s $0.25, driven entirely by the impact of the company’s share repurchase program. With $2.4 billion remaining under its current $6 billion buyback authorization, Newmont maintains ample firepower for continued repurchases.
This financial flexibility creates an attractive asymmetry. Even if gold prices eventually pull back, Newmont’s net cash position allows it to continue enhancing shareholder value by buying back shares at lower valuations. This combination of offensive capability and defensive resilience makes it a relatively attractive risk-reward proposition in the gold investment space.
Currently, Newmont trades at approximately 12.8 times operating cash flow—a slight premium to its five-year average multiple of 11.4. Given gold’s historically elevated price levels, this valuation premium appears reasonable.
For investors, however, the key question isn’t whether to buy, but how much to buy. Professional perspectives suggest Newmont is better suited as a component of a diversified portfolio rather than a concentrated position. Gold price volatility remains a real concern, and producer stocks typically exhibit even greater price swings than the underlying metal. In a market mesmerized by gold’s meteoric rise, the smartest play may well be the company turning that gold into cash.
