North American gold miners' earnings season: Falling gold prices and rising costs put cash returns in focus
Newmont led off with better-than-expected results and a large buyback. Bank of America expects the North American precious metals companies it covers to generate approximately 6.1 billion dollars in free cash flow in the third quarter, but production and cost pressures are driving divergent performance across companies.
Original source：BofA Global ResearchFirst published on Unhidea：Original source date：
Key takeaway
Bank of America believes the key issue this earnings season is whether precious metals companies can balance investment in growth, performance guidance and shareholder returns amid rising costs and production pressures.
How much cash can miners distribute after the pullback in gold prices?
The average gold price in the third quarter of 2026 was 4,263 dollars per ounce, down 5.4% quarter over quarter but still up 23.3% year over year; the average silver price fell 14.3% quarter over quarter. Bank of America believes both quarter-on-quarter declines will affect the precious metals companies it covers.
Despite the price pullback, Bank of America expects the North American precious metals companies it covers to generate approximately 6.1 billion dollars in combined free cash flow in the third quarter and approximately 29.2 billion dollars for full-year 2026. The allocation of funds among buybacks, dividends and growth investment has therefore become a focus of earnings season.
Bank of America expects companies that increase shareholder returns more than expected while investing in growth and meeting or exceeding guidance to deliver better share-price performance after reporting. Newmont's early results exceeded market consensus, and its buyback was also far larger than expected.
Why is cash flow still strong while operating pressure is increasing?
Gold prices remain higher than a year ago, supporting cash generation; but selling prices are lower than in the previous quarter, while unit cash costs are expected to rise for most producers. The average spot price of diesel rose 15% quarter over quarter in the third quarter, providing important context for discussions of miners' costs.
Bank of America expects Agnico Eagle's third-quarter gold production to fall 5% from the second quarter and its total cash cost per unit to rise 8.8%; it expects Kinross's production to fall 15.3% quarter over quarter and its unit cost to rise 13.4%. These are model estimates made before the earnings releases.
Production guidance is also under pressure: Kinross cut its production guidance for both 2026 and 2027 from 1.9 million–2.1 million to 1.84 million–1.86 million gold-equivalent ounces because of a harsh winter at La Coipa and lower-than-expected mining rates, grades and recoveries at Round Mountain.
How does Newmont's good news change Bank of America's model?
Management expects production to grow by a low- to mid-single-digit percentage in 2027, while Bank of America had previously expected a slight decline. The bank therefore raised its 2027 gold production forecast by 275 thousand ounces, or approximately 6%.
Growth comes with higher costs: the company expects inflation in 2027 to exceed the 3% assumption used in its 2026 guidance, with diesel and unfavorable exchange rates driving costs. Bank of America also raised its cost assumptions and adjusted its 2027 earnings-per-share forecast from 8.96 dollars to 9.23 dollars.
Bank of America raised its price target for Newmont from 139 dollars to 140 dollars and maintained its buy rating; the production figures disclosed by the company for Nevada Gold Mines and Pueblo Viejo also provided a positive signal for joint venture partner Barrick.
How have production and sales diverged at other companies?
IAMGOLD's attributable third-quarter production at Côté Gold was 64.4 thousand ounces, below Bank of America's expectation of 65.9 thousand ounces and Bloomberg consensus of 70 thousand ounces. The reasons included extended mill downtime in August and the transition to fully owner-operated crushing. The company expects full-year production at the mine to be at the low end of its 270 thousand–310 thousand ounce guidance range.
Côté Gold's average daily throughput in September reached 37.1 thousand tonnes, above its design capacity of 36 thousand tonnes, and the company expects fourth-quarter production to increase. However, Bank of America calculates that all-in sustaining costs must fall 20%–35% quarter over quarter in the fourth quarter for IAMGOLD to meet its full-year cost guidance.
Royal Gold's streaming business sold 74.7 thousand gold-equivalent ounces and generated revenue of 318.3 million dollars, both above Bank of America's previous forecasts of 61.05 thousand ounces and 260 million dollars. The bank raised its price target from 222 dollars to 223 dollars, but maintained its underperform rating because growth is modest compared with peer royalty and streaming companies.
What are the recent market developments and upcoming earnings focuses?
In the week ended 23 October, gold closed at 3,996 dollars per ounce, down 4.1% for the week. Bank of America noted that high oil prices heightened inflation concerns and reinforced expectations that the Federal Reserve would maintain restrictive monetary policy; the S&P/TSX Global Gold Index fell 9.2% over the same period.
Five companies covered by Bank of America are scheduled to report third-quarter results this week. Beyond shareholder returns, the bank is watching how Agnico Eagle addresses the production shortfall caused by pit slope movement at Canadian Malartic, and whether Alamos Gold can improve fourth-quarter production and costs to meet its revised full-year guidance.
By Bank of America's calculations, to meet its full-year 2026 guidance, Alamos must increase fourth-quarter production by 5%–46% from the bank's third-quarter forecast, and reduce all-in sustaining costs by 1%–17% quarter over quarter.
