S&P Revises Newmont Outlook to Positive on Debt Reduction and Portfolio Strategy

S&P Global Ratings has revised its outlook on Newmont Corp. (NYSE:NEM) to positive from stable, citing the gold producer’s significant debt reduction and a strengthened asset portfolio. The rating agency affirmed the company's BBB+ long-term issuer credit rating in its Monday announcement.

Post-Acquisition Strategy Pays Off

The improved outlook follows Newmont's strategic moves after its 2023 acquisition of Newcrest. The company divested six noncore gold mines, which generated approximately $4.6 billion in after-tax cash proceeds used primarily for debt reduction.

According to S&P, these sales reduced Newmont's attributable gold production by about 17% but also lowered estimated unit costs by 3%. The rating agency noted this has resulted in a more robust portfolio, complemented by elevated gold prices that have lifted the company's margins.

Disciplined Capital and Financial Projections

S&P highlighted Newmont's new, more conservative capital allocation framework as a key factor. The framework targets a net cash position of $1 billion, with a variance of plus or minus $2 billion, and supports annual common shareholder dividends of around $1.1 billion.

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The rating agency projects that Newmont will maintain its adjusted debt to EBITDA ratio below 0.5x over the next two years. This forecast holds even as S&P assumes gold prices will moderate from a potential high of $4,500-$4,600 per ounce in 2026 to $3,300 per ounce by 2028.

S&P estimates Newmont's strong free operating cash flow will be sufficient to fund its dividend and $2.5 billion in share repurchases while maintaining low leverage, even as cash flow is expected to decline with lower gold prices and higher capital expenditures.

Nevada Joint Venture Update

In a separate strategic development, Newmont and Barrick Mining Corp. have agreed to expand their Nevada Gold Mines joint venture. The deal involves folding in Barrick’s Fourmile project and Newmont’s Fiberline and Mike deposits.

As part of the transaction, Newmont will make a cash payment of $1.95 billion to Barrick. The agreement is also intended to settle outstanding disputes between the two mining giants regarding the joint venture.