The following is a summary of commodity price forecasts and some opportunities in the sector.

Near-term iron ore prices are higher on strong China steel production. Gold prices are up on optimism over peak interest rates, driving a 2% rise in our estimate for no-moat Newmont (ASX: NEM), to $54 US. It is the cheapest we cover, trading 30% below fair value.

Our estimates for no-moat Barrick (NYS: GOLD), Agnico Eagle (NYS: AEM), and Kinross (ASX: KGC) modestly rise to $21.50 US, $54.00 US, and $5.50 US, respectively. However, our fair values for no-moat Northern Star, Evolution, and Perseus are unchanged at $11.30, $3.00, and $2.00, respectively. A stronger AUD/USD rate broadly offsets higher U.S. dollar gold prices.

Lower thermal coal prices and a stronger Australian dollar drive our estimates for no-moat Whitehaven and New Hope (ASX: NHC), down 5% to $9.50 and down 7% to $5.70, respectively. Lower thermal coal and nickel prices more than offset higher copper and zinc prices along with a stronger British pound, driving no-moat Glencore’s (LON: GLEN) estimate down 3% to 500 Pounds. We retain no-moat Teck’s (NYS: TECK) $34 US estimate, with increased copper prices offset by a stronger Canadian dollar.

No-moat Iluka’s (ASX: ILU) estimate falls 10% to $9.50, driven by reduced near-term zircon prices, the increased cost of its Eneabba rare earths refinery, and a stronger Australian dollar.

Higher iron ore prices drive increased estimates for no-moat Fortescue (ASX: FMG) and wide-moat Deterra (ASX: DRR), up 8% to $17.30 and up 5% to $4.40, respectively. Along with higher copper prices, we raise our estimate for no-moat BHP (ASX: BHP) by 5% to $43, and reiterate our $116 estimate for no-moat Rio (ASX: RIO), which we increased for similar reasons.

Higher iron ore and copper prices more than offset lower nickel prices for no-moat Vale, whose fair value rises 7% to $15.50 US. Higher iron ore, copper, and platinum prices drive a 3% increase in our estimate for no-moat Anglo American (LON: AAL) to 2,160 Pounds. No-moat South32’s (ASX: S32) estimate falls 3% to $3.80, with lower nickel and silver prices along with a stronger Australian dollar more than offsetting higher copper and zinc prices.

Gold miner Newmont is the cheapest commodity producer in our coverage universe

Newmont is the world’s largest gold miner, with a portfolio reflecting three major deals in recent years. First, it acquired fellow gold producer Goldcorp for a relatively mild premium in 2019. Not only did it avoid paying a high price, Newmont also extracted better performance at mines where Goldcorp struggled.

Second, it combined its crown jewel Nevada assets with Barrick Gold's in a joint venture called Nevada Gold Mines, or NGM, also in 2019. With Barrick as the operator, Newmont owns 38.5% of the partnership, which reduced costs given the proximity of mines owned by the joint venture. Newmont also acquired Australian-based gold miner Newcrest in 2023.

We forecast Newmont to increase attributable gold sales to around 8.8 million ounces in 2027, up from roughly 7.3 million in 2023 pro forma for Newcrest on an annualized basis. The increase is driven by higher gold production from its 38.5% and 40% stakes in the Nevada Gold Mines, or NGM, and Pueblo Viejo joint ventures with Barrick, respectively, Lihir, Penasquito and its mines in Ghana. About 70% of Newmont’s midcycle production in 2027 comes from the U.S., Canada, Australia and Ghana.

As a commodity producer, Newmont is a price taker and needs low-cost mines with long lives and a low installed capital base to support the longer-term excess returns needed to justify an economic moat. We assign a no-moat rating to Newmont. Newmont is placed around the middle of the gold industry AISC curve. Due to the flatness of the industry cost curve, only miners in the lowest quartile tend to enjoy a material operating cost advantage. And that would need to be paired with an efficient invested capital base and long reserve life to warrant a moat. Newmont’s costs are not low enough to justify a moat, and so we don’t think Newmont exhibits a low-cost advantage

Newmont is currently trading at a 30% discount to our fair value.