Newmont (NYSE: NEM)(TSX: NGT), the world's largest gold producer, expects a nearshore barrier at its Lihir mine in Papua New Guinea to unlock more than 5 million ounces of gold beginning in 2028. The announcement came as the company reaffirmed its 2026 production guidance following record quarterly free cash flow.

Lihir, acquired as part of Newmont's November 2023 takeover of Newcrest Mining, operates within an active volcanic caldera where geothermal heat and water inflow have long constrained deeper mining. The proposed barrier is designed to manage seawater intrusion, enabling access to lower-grade ore zones that were previously uneconomic to extract.

Chief executive Natascha Viljoen said Newmont remains on track to meet full-year guidance after producing 1.3 million ounces of gold, 17,000 tonnes of copper, and 7 million ounces of silver in the second quarter. Cash flow from operations reached $2.9 billion after working capital, while free cash flow climbed to a quarterly record of $2.2 billion.

"We delivered a strong second quarter and remain on track to achieve our full year 2026 guidance," Viljoen said during a conference call discussing the results.

Newmont returned approximately $1.9 billion to shareholders through dividends and share repurchases since its previous earnings call, including buybacks completed in July. Since launching the repurchase program just over two years ago, the company has now bought back more than 100 million shares.

Chief financial officer Brian Tabolt reported adjusted EBITDA of $3.8 billion and adjusted net income of $2.10 per share, supported by an average realized gold price of $4,414 per ounce. Gold all-in sustaining costs came in at $1,621 per ounce, below the company's full-year guidance of $1,680 per ounce. However, Tabolt cautioned that sustaining capital spending is expected to increase by roughly $150 million in the third quarter, which would push unit costs moderately higher.

Growth Pipeline

Management highlighted progress across several growth projects. The Red Chris block cave project in British Columbia, Canada, has received regulatory approvals and is advancing toward a feasibility study and a board investment decision.

At Cadia in Australia, production resumed from the operating caves in mid-June following a seismic event in April. The company does not expect any impact on full-year production guidance.

Newmont's long-term growth pipeline includes Ahafo North, Cerro Negro, Tanami, Boddington, and the Lihir nearshore barrier — all identified as key drivers of future production growth. Viljoen told analysts the company was "quite positive and encouraged" by operational improvements at Lihir, citing greater mining stability, improved reliability, and lower costs.

Investor Concerns

The update comes as investors continue to scrutinize inflation, project capital costs, and regulatory risks. Analysts pressed management on oil prices, policy uncertainty in Ghana, and expected cost increases at Red Chris. Viljoen acknowledged that capital spending at Red Chris will likely exceed estimates prepared under Newcrest, the company Newmont acquired in 2023.

She also said discussions with Barrick (TSX: ABX)(NYSE: B) over Nevada Gold Mines remain unresolved. The joint venture, one of the world's largest gold mining complexes, has been a source of tension between the two companies. Newmont expects to revisit its approach to multi-year guidance early next year.