New York bank Jefferies described Newmont's Q1 results as a miss against its modelling - "EBITDA of $1.12 billion fell short of consensus and our estimate of $1.17 billion due to higher costs" - but the company had "operational upside ahead" in the form of mines returning to full capacity post the easing of COVID-19 restrictions. Newmont had about 10% of its production, in South and North America, on care and maintenance, "but we expect those mines to restart and production to therefore increase from 1H to 2H".

Newmont realised an average gold price of $1,591/oz in the March quarter compared with $1,498/oz in the December period. The price is currently above $1,700/oz.

"Newmont is in a position of strength, but gold price is the risk," Jefferies said.

Newmont CEO Tom Palmer said on a conference call Tuesday the company was positioned to become a free-cash generating machine, with forecast five-year cumulative free cash flow expected to rise from more than $5 billion at the base case $1,200/oz gold price, to more than $17 billion at $1,800/oz.

Jefferies said Newmont management expected further operational improvements to lead to $500 million in cash flow improvements in 2021 - "30% higher than previously expected" - and had also guided for an "additional $400 million a year of FCF for each $100/oz increase in the gold price".

"We are responding to COVID-19 from a position of strength, taking proactive steps to prioritise the well-being of our employees and the communities in which we operate," Palmer said.

"These unprecedented times further highlight the importance of a proven operating model, talented workforce, and the ability to adapt to dynamic circumstances quickly and with care for all stakeholders."

Full-year production guidance remains suspended. Palmer said it was increasingly likely a pandemic second-wave could develop from late 2020 to early 2021. Newmont has said it expects to maintain production at 6-7Mozpa gold-equivalent for the next decade.

Net income for the March quarter was $837 million, or $1.04 per share, including $724 million of one-off gains from the sale of interests in Kalgoorlie Consolidated Gold Mines, Continental Gold and Red Lake.

Benefits of creating the Nevada Gold Mines joint venture with Barrick Gold continue to be seen, with attributable output from the Nevada operations of 329,000oz at US$927/oz AISC yielding EBITDA of $264 million.

Palmer said Newmont was progressing initiatives to realise the full potential of Penasquito, Cero Negro and Eleonore, launch autonomous haulage at Boddington, and complete the Tanami Expansion 2, Musselwhite material handling and conveyor installation, and Subika underground projects.

With $1 billion of share buyback about 80% complete and increased Q1 dividend (25c/share) to be paid, Jefferies says Newmont's annualised FCF yield "would approach 6%" at the current gold price, with a dividend yield of 2%.

"Newmont is committed to investing in its assets and returning surplus capital to shareholders. In the current gold price environment, the company is able to do both," the bank said.

The gold miner's cash balance swelled from $2.2 billion to $3.7 billion in the March quarter; net debt was $3.03 billion at the end of the period.

"While there are clear reasons to be positive on NEM, our analysis indicates that NEM shares are nearly fairly valued even at the current spot gold price. The near-term risk to the gold price may be to the upside due to central bank policies, but we maintain our hold rating on NEM following the very strong performance of these shares so far this year," Jefferies said.

Newmont shares are up more than 50% year-to-date at Tuesday's close, capitalising the company at $52.43 billion.