The markets continue to decipher what the U.S. capture of Venezuelan President Nicolas Maduro means for the oil and gas industry in that country.
While the potential oil reserves are the largest in the world at 303 billion barrels, modernizing the energy infrastructure will not be easy or cheap. Estimates put the total cost at more than $110 billion over the next decade.
To get America’s largest oil and gas producers excited about reviving Venezuela’s largest industry, the U.S. government will likely have to foot some of the bill to modernize the country’s energy infrastructure.
President Trump has said he’s willing to consider such an arrangement. Leaders from some of these firms are expected to meet with the Trump administration later this week to discuss how a plan could work for all stakeholders.
In addition to its large oil and gas reserves, Venezuela has significant mineral reserves that warrant development. Gold, copper, silver, zinc, and others are said to exist in Venezuela, but have yet to be tapped. Perhaps they never will be.
On Tuesday, Newmont (NEM) entered Barchart’s Top 100 Stocks to Buy in 78th position. Up 0ver 180% in the past year, NEM stock is poised to move higher on Barchart’s list.
With significant operations in Latin America, is Newmont a bet to make on Venezuela’s comeback? Perhaps.
The better question, however, is whether Newmont, current political and economic hot topics aside, is worth buying and holding for the long haul.
Here are my two cents’ worth.
In the trailing 12 months (TTM) ended Sept. 30, Newmont’s cash flow from operations was $9.22 billion according to S&P Global Market Intelligence, up from $8.57 billion in June, and 110% from $4.4 billion in September 2020.
On a free-cash basis, the current TTM free cash flow (FCF) of $6.12 billion yields an FCF margin of 28.5%, nearly identical to 2020. Furthermore, over the past 12 months, for every $1 of capital expenditures, it generated $6.93 in revenue, 17% less than in 2020.
While cash flow has never been higher, five years ago it was achieved with less, despite metal prices for gold, silver, and copper being about half what they are today.
By almost every valuation metric, the multiples investors were willing to pay in September 2020 were very similar to those today.
|
Metric
|
September 2020
|
Jan. 6/2026
|
|
TEV / LTM Revenue
|
5.28x
|
5.23x
|
|
TEV / NTM EBITDA
|
8.17x
|
7.18x
|
|
Total Debt / EBITDA
|
1.2x
|
0.4x
|
|
P / NTM Cash Flow Per Share
|
9.80x
|
9.41x
|
|
Altman Z-Score
|
2.27
|
2.82
|
Source: S&P Global Market Intelligence
What stands out to me are the two related to balance sheet strength: Total Debt / EBITDA and the Altman Z-Score. The former indicates the leverage applied in both periods. Neither is high, although the latter is one-third what debt levels were like in 2020. In the case of the Altman Z-Score, which indicates the likelihood of bankruptcy over the next 24 months, neither financial situation is distressed (score of 1.81 or lower.
At least with respect to these two metrics, the balance sheet today is healthier than it was five years ago. Higher metal and mineral prices tend to do that.
In the nine months ended Sept. 30, 2025, Newmont generated $1.91 billion in net income from its Latin American operations (Mexico, Peru, Suriname, and Argentina), representing 24% of total net income of $8.10 billion. So, about one-quarter.
Of the $15.85 billion in revenue over the same nine months, gold accounted for 85%, followed by copper (7%), silver (4%), lead (1%), and zinc (3%). It produces gold at all of its Latin American mines, with silver, lead, and zinc also produced at Peñasquito, its Mexican mine, 780 kilometres northwest of Mexico City. All of the copper is produced at two mines in Australia and a third in Canada.
Regarding development, Newmont has six projects underway, either independently or in partnership, with two in Chile and one in Argentina. The three in Latin America will add significant copper and gold production when ready.
While I wouldn’t want to speculate whether Newmont would have any interest in developing the untapped mineral reserves in Venezuela, it has plenty of growth already on its plate.
The company’s Yanacocha gold mine in Peru is the world’s largest. It has produced over 50 million ounces since production began in 1993. The mine has gold reserves of 5.3 million ounces, 83.4 million ounces of silver, and 700kt (kilotonnes) of copper. The reserve life, assuming no investment to extend it, is 22 years.
This mine alone makes Newmont an interesting investment.
I’m not much of a materials investor, but brushing up on everything Newmont has going on right now, I can’t help but think that the adage that it’s better to invest in physical gold than gold miners’ stocks is quickly disappearing.
In a recent interview, Sprott Senior Managing Partner Ed Coyne discussed why gold miners came alive in 2025.
“Now that gold has continued to perform as it has, the margins on these mining stocks are spectacular. The return on invested capital, the return on assets, and the return on all these different metrics look very attractive,” Coyne stated on Dec. 29, 2025.
Mining stocks spent years in the investors’ doghouse.
Take the iShares MSCI Global Gold Miners ETF (RING), for example. Newmont is the largest holding with a 15.71% weighting. Since the ETF’s inception in January 2012, it has a cumulative total return of 66.80% as of Nov. 30, 2025. That’s 3.14% on an annualized basis. You could have done just as well with a long-term Treasury bill.
As Coyne points out, 2025 could be the first inning of a very long game. Newmont’s scale gives it an advantage over the rest of the mining industry.
Whether Newmont ever gets involved in a project in Venezuela is immaterial at this point. It would be the icing on the cake.
Newmont is an excellent long-term hold despite the outsized gains in 2025.
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
