Is gold losing its shine for the majors? Why Newmont and peers are doubling down on tier 1 mines

For much of the modern era, global gold majors built sprawling empires with dozens of mines, exploration projects, and equity stakes across multiple continents. The thinking was simple: spread risk through diversification, maximize ounces in reserve, and create the appearance of scale that reassured investors. But in 2025, that model is rapidly breaking down. Newmont Corporation (NYSE: NEM), the world’s largest gold producer, has taken a decisive turn away from minority stakes and small projects, divesting its holdings in Orla Mining Ltd. and selling its Coffee Project in Canada. Alongside its plan to delist from the Toronto Stock Exchange, the company is signaling a shift to a leaner portfolio built around so-called Tier 1 assets. Peers such as Barrick Gold Corporation and AngloGold Ashanti are following a similar path, suggesting that the industry’s long-standing playbook of diversification is giving way to a new era of capital discipline.

What defines a tier 1 gold asset and why are majors prioritizing them?

The term “Tier 1 mine” has become the holy grail of the gold sector. Typically, it refers to a mine capable of producing more than 500,000 ounces of gold per year over a reserve life of at least ten years, with low all-in sustaining costs and ideally located in a politically stable jurisdiction. These mines stand apart because they generate predictable, large-scale free cash flow and retain investor appeal even during volatile commodity cycles.

Barrick Gold has been explicit in its framework, consistently branding mines such as Pueblo Viejo in the Dominican Republic and Nevada Gold Mines in the United States as Tier 1 assets. Newmont, after acquiring Newcrest Mining in 2023, inherited a mix of assets that did not meet those criteria. By selling down non-core projects and minority stakes, the company is concentrating on fewer but higher-quality mines with stronger economics. Investors increasingly reward such focus, as Tier 1 mines are resilient in absorbing cost inflation and provide better protection against downturns in bullion prices.

How have Newmont and Barrick shifted their strategies toward tier 1 portfolios?

Newmont’s recent divestitures underscore how capital discipline has replaced empire building. In September 2025, the company sold its 13 percent stake in Orla Mining for US$439 million, marking a clean exit from a relationship that had delivered early development success but was no longer aligned with its priorities. Days earlier, Newmont announced the sale of its Coffee Project in Yukon to Fuerte Metals for up to US$150 million, completing a divestiture program announced in early 2024. With these transactions, Newmont has effectively offloaded all six operations and two projects that it had classified as non-core.

Barrick Gold has taken a similar approach. The company has poured capital into Fourmile, one of the most promising U.S. gold discoveries in decades, while advancing copper projects such as Lumwana and Reko Diq to diversify cash flow. AngloGold Ashanti, meanwhile, has consolidated its footprint to focus on longer-life operations in Africa and South America, trimming exposure to smaller projects that lacked scale. The pattern is clear: majors no longer measure success by the number of mines they operate, but by the depth, scale, and margin profile of a smaller set of world-class assets.

What financial pressures are pushing gold majors to refocus?

The economics of gold mining have grown more challenging in recent years. All-in sustaining costs, the industry’s preferred profitability metric, have risen sharply due to inflation in fuel, equipment, labor, and permitting. Newmont reported an AISC of around US$1,620 per ounce in the first half of 2025, compared with closer to US$1,500 a year earlier. Barrick has reported similar cost pressures, with AISC creeping toward US$1,400 to US$1,500 per ounce. With gold trading in a band around US$1,900 to US$2,000 per ounce, the margin may still be comfortable, but the risk of cost inflation outpacing bullion price growth has put investors on edge.

Free cash flow is the new currency of credibility. In the second quarter of 2025, Newmont generated roughly US$1.7 billion in free cash flow, strengthening its balance sheet and reassuring shareholders that divestitures would not compromise returns. Analysts have consistently argued that markets are rewarding majors that can deliver predictable free cash flow through Tier 1 mines rather than scattershot growth from small or marginal projects.

What risks and trade-offs come with doubling down on tier 1 assets?

The pivot toward Tier 1 assets is not without risks. Concentration is the most obvious: by narrowing their portfolios, companies become more exposed to disruptions at a handful of mines. Operational setbacks, regulatory delays, or environmental challenges can have an outsized impact on production guidance and earnings.

There is also the matter of jurisdictional risk. While Tier 1 assets often lie in established mining jurisdictions like Canada, Australia, and the United States, some of the largest projects are located in politically sensitive or environmentally contested regions. Maintaining a social license to operate in these geographies requires substantial investment in community engagement and compliance, which can erode margins over time.

Finally, there is commodity volatility. A company focused on Tier 1 assets may better withstand moderate downturns in gold prices, but if bullion were to fall sharply below US$1,700 per ounce, even low-cost mines would struggle to protect margins. The concentration on Tier 1 mines reduces exposure to riskier but potentially higher-return exploration, leaving majors less able to capitalize on a sudden gold bull market driven by macroeconomic shocks.

How are global investors and institutions responding to gold majors’ pivot toward tier 1 mines in 2025?

Investor sentiment is evolving alongside corporate strategy. Long-term institutional investors see the Tier 1 reset as a disciplined approach that provides clarity on capital allocation. Pension funds and sovereign wealth funds, in particular, prefer exposure to large producers with predictable dividends, debt reduction programs, and world-class mines. For this cohort, Newmont’s decision to simplify its portfolio is viewed as a positive step that strengthens free cash flow visibility.

Retail investors and short-term traders are more divided. Some worry that the delisting from the Toronto Stock Exchange may reduce accessibility for Canadian investors who have traditionally favored gold equities. Others remain cautious due to gold’s sensitivity to U.S. Federal Reserve policy and real interest rates. With inflation expectations shifting and the U.S. dollar strong, gold’s price trajectory is uncertain, creating hesitation in the short term.

Institutional flows tell a clearer story. Recent data shows U.S. pension funds and large asset managers increasing their exposure to Newmont on the New York Stock Exchange, while domestic institutional flows in Canada have slowed following the delisting announcement. Analysts are split between “buy” and “hold” recommendations, with consensus that debt reduction and buyback potential make Newmont attractive if gold prices stay above US$1,900 per ounce.

What do Newmont’s divestitures and Barrick’s tier 1 focus reveal about the future of the global gold sector?

The implications extend beyond Newmont. By completing its divestitures, Newmont has set a precedent that other majors may follow. Investors now expect similar discipline from competitors such as Kinross Gold, Agnico Eagle Mines, and AngloGold Ashanti. Companies with sprawling portfolios of small mines will face pressure to streamline, potentially sparking a new wave of asset sales. Mid-tier and junior miners stand to benefit, acquiring divested projects at attractive valuations and building their growth around assets that majors no longer consider core.

This trend could create a two-speed gold industry: majors focusing on a handful of Tier 1 assets with high margins and long lives, while juniors and mid-tiers accumulate the smaller, higher-risk mines discarded by the giants. Over time, this may concentrate production power in fewer hands at the top while encouraging entrepreneurial development lower down the chain.

For the sector as a whole, the reset may represent a more sustainable model. Gold remains a hedge against inflation, currency volatility, and geopolitical risk, but investors want companies that prioritize discipline over ambition. In the years ahead, the majors that survive and thrive will likely be those that can deliver capital returns consistently, maintain strong ESG credentials, and weather price cycles with world-class operations at their core.