Karas v. Newmont Corporation — Entry #52: ORDER Granting Motion to Dismiss

Case No. 1:25-cv-00341-DDD-KAS       Document 52     filed 08/14/26   USDC Colorado
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                 IN THE UNITED STATES DISTRICT COURT
                     FOR THE DISTRICT OF COLORADO
                         Judge Daniel D. Domenico

     Civil Action No. 1:25-cv-00341-DDD-KAS

     JAMES KARAS, individually and on behalf of all others similarly situ-
     ated,

             Plaintiff,

     v.

     NEWMONT CORPORATION, THOMAS R. PALMER,
     NATASCHA VILJOEN, and KARYN F. OVELMEN,

             Defendants.


                  ORDER GRANTING MOTION TO DISMISS


          Plaintiff James Karas alleges that Newmont Corporation and its of-
     ficers, Thomas Palmer, Natascha Viljoen, and Karyn Ovelmen, made
     false or misleading statements about Newmont’s newly acquired gold
     mines that artificially inflated its stock price. And when the truth about
     those mines was revealed, the stock price tumbled, harming sharehold-
     ers. Plaintiff sued, alleging violations of Sections 10(b) and 20(a) of the
     Exchange Act.

          Defendants moved to dismiss. Doc. 45. For the reasons stated below,
     the motion to dismiss is granted.


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                                BACKGROUND 1

         Newmont Corporation mines gold. In 2024, it operated 17 mines
     across 13 countries. Doc. 45 at 6. In 2023, Newmont purchased New-
     crest, another gold-mining company. In the deal, Newmont acquired two
     new Tier 1 mines: Lihir in Papua New Guinea and Brucejack in North-
     west Canada. A Tier 1 mine is one projected to produce 500,000 ounces
     of gold each year over at least ten years with relatively lower costs and
     in a stable country. See Doc. 39 ¶ 32. Lihir reported 17.5 million ounces
     of gold reserves at the time of the acquisition, and Brucejack reported
     3.1 million ounces.

         But these mines were more trouble than expected. Lihir was de-
     scribed during a 2023 earnings call as a “perennial underperformer” un-
     der Newcrest. Id. ¶ 47. Even though Newmont expressed confidence
     that they could turn the asset around, it struggled to do so. The com-
     plaint alleges, through the testimony of Former Employee 1, before the
     acquisitionthe mine suffered from “machinery breakdowns, ocean
     dumping, and, despite a bunker, the potential for waste to overflow into
     the pond which fed back into the tanks.” Id. ¶ 58. Most troublesome were
     the autoclaves—containers in which ore is exposed to high pressure,
     high temperatures, and oxygen to aid gold extraction. One of the auto-
     claves had not been operational for a year before the Newmont purchase.
     Former Employee 1 alleges that Newmont knew of these and other is-
     sues when it established a new reliability plan during the 2024 transi-
     tion. Id. ¶ 63. Former Employee 2 similarly alleges frequent shutdowns
     due to electrical system failures and other machinery breakdowns.


     1 Unless otherwise noted, all facts come from Plaintiff’s Amended
     Complaint with the original emphasis. Doc. 39.


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        Brucejack had its own problems. Former Employee 3 stated that
     Brucejack was never a Tier 1 mine. Id. ¶ 80. The mine had a “nuggety”
     ore body, meaning the concentration of gold on the site had a high vari-
     ance. The simple result is that it is very difficult to estimate the amount
     of gold that will actually be produced. And the complaint alleges that
     Newmont overestimated production. It further alleges that, even if New-
     mont did not know about Brucejack’s nuggety ore body at the time of the
     purchase, by July 2024, it should have known due to frequent reconcili-
     ation drilling. Id. ¶ 90.

        On October 23, 2024, Newmont issued a press release announcing
     disappointing earnings, lower production, and increased cost. Ms.
     Viljoen said of Lihir

            [O]ur operational focus at Lihir will remain on reducing
            complexity to deliver more sustainable and predictable re-
            sults at this Tier 1 operation. In the short term, these ef-
            forts will result in lower than initially anticipated
            production next year due to lower throughput to al-
            low for asset reliability improvement work and
            changes to the mine sequencing, including the estab-
            lishment of wider ramps to manage surface water
            and repositioning all roads to be more effective and
            efficient.
     Id. ¶ 146. Similarly, about Brucejack she said

            [W]e have taken a step back this year to do the devel-
            opment and drilling work to ensure that we improve
            our knowledge of this nuggety ore body. We continue to
            experience periods of exceptional high grades, including a
            1-day average of 52 grams per ton last month and an aver-
            age of over 20 grams per ton in the same week. As a result
            of the work we are doing, we anticipate that the gold
            production next year from Brucejack will also be
            largely consistent with this year, all around 100,000
            ounces lower than our initial guidance for 2025 that
            we provided back in February.


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     Id. Mr. Palmer confirmed that reduced production and increase costs
     would continue into 2025 “driven by the lower than previously ex-
     pected production from two of our new operations in Lihir and
     Brucejack.” Id. ¶ 148.

        Once investors learned that these literal gold mines were not figura-
     tive gold mines, Newmont’s stock price dropped 14.7% from $57.74 to
     $49.25 per share.

                              APPLICABLE LAW

        Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b), “pro-
     hibit[s] making any material misstatement or omission in connection
     with the purchase or sale of any security.” Smallen v. W. Union Co., 950
     F.3d 1297, 1304 (10th Cir. 2020) (quoting Halliburton Co. v. Erica P.
     John Fund, Inc., 573 U.S. 258, 267 (2014)). To recover damages for a
     violation of Section 10(b), Plaintiffs must allege “(1) a material misrep-
     resentation or omission by the defendant; (2) scienter; (3) a connection
     between the misrepresentation or omission and the purchase or sale of
     a security; (4) reliance upon the misrepresentation or omission; (5) eco-
     nomic loss; and (6) loss causation.” Halliburton, 573 U.S. at 267.

        Defendants move to dismiss, arguing that Plaintiff has not properly
     alleged an actionable misstatement or scienter. Under Federal Rule of
     Civil Procedure 12(b)(6), a court’s role is to “determine whether the com-
     plaint sufficiently alleges facts supporting all the elements necessary to
     establish an entitlement to relief under the legal theory proposed.” For-
     est Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).

        The Private Securities Litigation Reform Act of 1995, Pub. L. No.
     104–67, 109 Stat. 737, applies a heightened pleading standard to both
     the material misrepresentation and scienter elements. In re Level 3
     Commc’ns, Inc. Sec. Litig., 667 F.3d 1331, 1333 (10th Cir. 2012). “In


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     order to overcome a motion to dismiss, a complaint must ‘specify each
     statement alleged to have been misleading, the reason or reasons why
     the statement is misleading, and, if an allegation regarding the state-
     ment or omission is made on information and belief, the complaint shall
     state with particularity all facts on which that belief is formed.’” Id.
     (quoting 15 U.S.C. § 78u–4(b)(1)). And “it is not enough for a plaintiff to
     allege generally that the defendant acted with scienter. . . a plaintiff
     must, ‘with respect to each act or omission alleged . . ., state with partic-
     ularity facts giving rise to a strong inference that the defendant acted
     with the required state of mind.’” Id. (quoting 15 U.S.C. § 78u–4(b)(2)).
     But as with any other motion to dismiss, the court takes all well pled
     factual allegations in the complaint as true. Tellabs, Inc. v. Makor Issues
     & Rts., Ltd., 551 U.S. 308, 322 (2007).

                                    DISCUSSION

     I.   Motion to Strike

          As a threshold matter, Plaintiff moved to strike Defendants’ motion
     to dismiss on the grounds that the motion’s appendices either wrongfully
     exceed the Court’s word limits or are improper for consideration at the
     motion to dismiss stage.

          Plaintiff is correct that “[g]enerally, we only consider facts alleged in
     the complaint itself in evaluating the sufficiency of the complaint.”
     Smallen, 950 F.3d at 1305. But a court can also “consider documents the
     complaint incorporates by reference, documents referred to in the com-
     plaint if the documents are central to the plaintiff’s claim and the parties
     do not dispute the documents’ authenticity, and matters of which a court
     may take judicial notice.” Id. (internal quotations omitted).

          I agree with the Defendants that the exhibits fit into those permissi-
     ble categories. Plaintiff does not dispute their authenticity or centrality.


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     The Tenth Circuit recognizes that “[i]n securities cases it is not unusual
     to consider documents incorporated by reference into the complaint,
     public documents filed with the [Securities and Exchange Commission],
     and documents the plaintiffs relied upon in bringing suit.” Employees’
     Ret. Sys. of Rhode Island v. Williams Companies, Inc., 889 F.3d 1153,
     1158 (10th Cir. 2018) (internal quotations omitted). This practice can be
     abused to dispute facts found in the complaint. See Khoja v. Orexigen
     Therapeutics, Inc., 899 F.3d 988, 1003 (9th Cir. 2018). So I am mindful
     that “such documents may properly be considered only for what they
     contain, not to prove the truth of their contents.” Employees’ Ret. Sys. of
     Rhode Island, 889 F.3d at 1158 (quoting Roth v. Jennings, 489 F.3d 499,
     511 (2d Cir. 2007)).

        I also see no issue with Defendants’ chart of the alleged misstate-
     ments. The chart merely reproduces and numbers the allegedly false
     misleading statements. This chart contains no argument and so does not
     flout the Court’s word limits. Like the district court and Tenth Circuit
     in Pluralsight, I adopt the Defendants’ numbering, which I find helpful
     and convenient, but should the chart and complaint differ, I rely “solely
     on the statements as alleged in the complaint.” Indiana Pub. Ret. Sys.
     v. Pluralsight, Inc., 45 F.4th 1236, 1249 n.2 (10th Cir. 2022).

        The motion to strike is denied.

     II. Motion to Dismiss

         A. Actionable Misstatements

        Plaintiff alleges that between July and October 2024, Defendants
     made several materially false statements about the financial prospects
     of the company. I begin by reproducing the statements and Plaintiff’s
     allegations about their falsity from the complaint. The statements come
     from the Amended Complaint, and include the emphasis from that


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     filing, see Doc. 39 ¶¶ 110–44, but for clarity and consistency, I adopt the
     Defendants’ numbering, see Doc. 45-1.

        Statement 1

        The first allegedly actionable statement was made in Newmont’s sec-
     ond quarter 2024 press release, issued and filed with the SEC on July
     24, 2024. It read:

              Attributable gold production1 decreased 4 percent to 1,607
              thousand ounces from the prior quarter primarily due to
              lower production at Cerro Negro as a result of the suspen-
              sion of operations during the quarter following the tragic
              fatalities of two members of the Newmont workforce on
              April 9, 2024. Operations at Cerro Negro safely resumed on
              May 24, 2024. In addition, operations were suspended as of
              April 14, 2024 at Telfer, one of Newmont's non-core assets,
              as further work is completed to remediate the safe opera-
              tion of the tailings storage facility. Second quarter pro-
              duction was also impacted by lower production at
              Lihir due to heavy rainfall impacting mine sequenc-
              ing, as well as lower production at Akyem due to lower
              grades as a result of the ongoing stripping campaign. These
              impacts were partially offset by higher production at Por-
              cupine, Brucejack and Peñasquito.
              Full year production for 2024 is expected to be second-
              half weighted as previously indicated, with a sequen-
              tial increase weighted towards the fourth quarter.
              The second-half weighting is expected to be driven
              primarily by improved grades at Peñasquito, Ahafo and
              Tanami, improved throughput from Lihir and Bodding-
              ton and sequential improvements delivered from our non-
              managed joint venture operations.
     Doc. 39 ¶ 110. Plaintiff alleges this statement was false and misleading
     because “production problems such as outdated and unreliable machin-
     ery, ocean dumping, and potential for waste overflow had already mate-
     rially impacted Lihir’s performance as to both reliability and safety.” Id.
     ¶ 111.

        Statement 2


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        The same press release also stated “Gold AISC 2 per ounce increased
     9 percent to $1,562 per ounce compared to the prior quarter primarily
     due to higher CAS 3 and higher sustaining capital spend.” Id.
     ¶ 112. Plaintiff alleges this statement was misleading because “material
     problems at Lihir and Brucejack relating to both production and costs
     had caused and would continue to cause Newmont to expend more to
     produce each ounce of gold . . ..” Id. ¶ 113. He adds that “[b]y choosing
     to discuss AISC, Defendants had a duty to disclose these facts.” Id.

        Statement 3

        The next day, July 25, 2024, during Newmont’s second quarter 2024
     earnings call, Defendants made seven additional statements that Plain-
     tiff alleges were false or misleading. First, Mr. Palmer stated

            We delivered solid operational performance as planned,
            keeping us firmly on track to achieve our 2024 guid-
            ance and positioning us to deliver improving finan-
            cial results. These solid results have also enabled us to
            progress our capital allocation priorities, which I’ll touch
            on in a moment. With a continued focus on safely deliver-
            ing, we’ve also made meaningful progress on the 4 key com-
            mitments we made to our shareholders at the start of the
            year.
     Id. ¶ 114. Plaintiff alleges that “Defendants failed to disclose they knew
     or recklessly disregarded that material adverse circumstances at Lihir
     and Brucejack would materially, adversely impact Newmont’s produc-
     tion and increase its AISC, contracting margins materially.” Id. ¶ 115.

        Statement 4

        Mr. Palmer continued:

            Looking at the 3 components of our synergy delivery, and
            starting with full potential. We are now advancing into

     2 Lingo for “all-in sustaining costs.”

     3 Lingo for “cost applicable to sales.”


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           the delivery stage of the initiatives we have identified
           at Lihir, Cadia and Red Chris, with the largest value
           drivers coming from our 2 new Tier 1 assets in Lihir
           and Cadia. On our call last quarter, we provided an up-
           date on the opportunities we have identified at Lihir. In
           this quarter, I’ll briefly describe some of the opportunities
           we see in front of us at Cadia. We recently completed our
           full potential diagnosis phase at Cadia, from which
           we have identified a series of initiatives that are ex-
           pected to deliver more than $100 million of value by
           the end of next year.
     Id. ¶ 116. Plaintiff challenges this statement because of “production
     problems and rising AISC at Lihir that had already reduced Newmont’s
     production and decreased its operating margins, materially adversely
     impacting Newmont’s performance for both 3Q2024 and Newmont’s
     near and medium-term financial results.” Id. ¶ 117.

        Statement 5

        On the same call, Ms. Viljoen delivered prepared remarks that
     claimed:

           Our managed operations delivered solid second quarter re-
           sults in line with our expectations and outlook for the year.
           With a focus on size and efficient production at each
           of our managed operations, we are heading into the
           second half of the year with confidence in our ability
           to deliver on our business plan and the commitments
           Tom reiterated earlier. And similar to the first half of
           the year, our operational results in the third and fourth
           quarters will be largely driven by reduction from our 6
           managed Tier 1 operations.
     Id. ¶ 118. Plaintiff again states that it is false or misleading to forecast
     efficient production and ability to deliver because of “material produc-
     tion issues plagued at least Newmont’s Lihir and Brucejack” and those
     factual conditions “undermined the basis of Defendants’ statement.” Id.
     at ¶ 119.

        Statement 6


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        Ms. Viljoen continued:

            And finally, at Lihir, second quarter production de-
            creased from the first quarter primarily due to heavy
            rainfall, which contributed to soft ground conditions
            that in turn impacted mine sequencing. Production
            levels are expected to remain consistent in the third quar-
            ter as the site commences a planned 120-day shutdown of
            the primary autoclave. And just to bring the autoclave
            shutdown into perspective, the process includes not only
            shutting down the autoclave itself, but also removing the
            brick layer at [indiscernible] membrane, inspecting the 5.5-
            meter diameter steel shell, applying a high-temperature
            tolerant membrane and rebricking the 48-meter long struc-
            ture, which is nearly the length of a new Olympic swim-
            ming pool. Once complete, we anticipate gold production
            will return to normal levels in the fourth quarter, position-
            ing Lihir for a strong finish to the year. Taking everything
            into account, we anticipate an increase in gold production
            mix quarter, setting us up to deliver Lihir’s higher produc-
            tion in the fourth quarter.
     Id. ¶ 120. Plaintiff alleges that this statement is misleading because it
     was not just rain that decreased production at Lihir, but “material, ad-
     verse production issues with both reliability and safety such as outdated
     and unreliable machinery, ocean dumping, and potential for waste over-
     flow . . ..” Id. ¶ 121.

        Statement 7

        Ms. Ovelmen also delivered prepared remarks during the call. He
     told investors

            And whilst we are pleased with the improvement in free
            cash flow, we are still not satisfied and are working to fur-
            ther improve margins. Looking ahead, we anticipate
            higher free cash flows in the second half of the year
            driven by increased production values and lower unit
            costs, as Tom and Natascha just mentioned. Heading into
            the second half of the year, we remain firmly on track to
            achieve our full year guidance of reduction, cost and capital
            spend. And as Natascha mentioned, production is expected


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           to increase in the third quarter with the year’s strongest
           performance anticipated in the fourth quarter.
     Id. ¶ 122. Plaintiff alleges it is false or misleading to tout higher cash
     flows and lower production costs without disclosing the production and
     cost issues at Lihir and Brucejack. Id. ¶ 123.

        Statement 8

        At the end prepared remarks, Mr. Palmer reiterated that “[w]e
     safely delivered solid production as planned, keeping us firmly
     on track to meet our full year guidance for both ounces and
     costs.” Id. ¶ 124. Plaintiff again alleges that this statement is actionable
     because Mr. Palmer failed to disclose that he knew of material issues at
     Lihir and Brucejack. Id. ¶ 125.

        Statement 9

        The Defendants took questions from analysists on the earnings call.
     In response to a question from a Scotiabank analyst, Mr. Palmer stated:

           Think about -- I made the picture this way, and I think
           you’re not too far off the mark. You certainly got to see the
           synergies getting through -- particularly those coming from
           full potential in the fourth quarter as those programs get
           their momentum up. You’re certainly going to see the high-
           est quarter 4 gold ounces in the fourth quarter. That’s from
           some of our key assets that Natascha covered in her com-
           ments. The 2 non-managed joint ventures, so NGM need to
           deliver on their commitments and they’ve got that strong
           fourth quarter. Our direct costs are pretty stable across
           the year. And certainly what we’re seeing in the first
           half flowing through the second half, pretty stable. So
           I think the picture you’re painting in terms of that third
           quarter weighting to the fourth quarter weighting is a rea-
           sonable position to be thinking about in terms of that
           weight between the third and the fourth quarter. You will
           see a step up in the third and then a step up into the fourth
           to get to our numbers.
     Id. ¶ 127. Plaintiff alleges that this answer was false or misleading be-
     cause Mr. Palmer knew that production and cost issues at Lihir and


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     Brucejack had already and would continue to impact Newmont’s mar-
     gins. Id. ¶ 128.

        Statement 10

        On July 25, 2024, Newmont filed its quarterly 10-Q report with the
     SEC. That report stated that “[t]here were no material changes from the
     risk factors set forth under Part I, Business; Item 1A, Risk Factors in
     our Annual Report on Form 10-K for the fiscal year ended December 31,
     2023, as filed with the SEC on February 29, 2024.” Id. ¶ 129. Plaintiff
     alleges that statements from that section of the 2023 10-K that New-
     mont readopted were false or misleading. The complaint identifies the
     following section:

           Increased operating and capital costs could affect
           our profitability.
           Costs at any particular mining location are subject to vari-
           ation due to a number of factors, such as variable ore grade,
           changing metallurgy and revisions to mine plans in re-
           sponse to the physical shape and location of the ore body,
           as well as the age and utilization rates for the mining and
           processing related facilities and equipment. In addition,
           costs are affected by the price and availability of input com-
           modities, such as fuel, electricity, labor, chemical reagents,
           explosives, steel, concrete and mining and processing re-
           lated equipment and facilities. Commodity costs are, at
           times, subject to volatile price movements, including in-
           creases that could make production at certain operations
           less profitable. Further, changes in laws and regulations
           can affect commodity prices, uses, and transport. Reported
           costs may also be affected by changes in accounting stand-
           ards. A material increase in costs at any significant
           location could have a significant effect on our profit-
           ability and operating cash flow.
           Our operational costs, including, without limitation,
           labor costs, can be impacted by inflation. Certain of
           our operations are located in countries that have in the
           past experienced high rates of inflation, such as in Argen-
           tina, Suriname, and Ghana. It is possible that in the future,
           high inflation in the countries in which we operate may


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           result in an increase in operational costs in local currencies
           (without a concurrent devaluation of the local currency of
           operations against the dollar or an increase in the dollar
           price of gold, copper, silver, lead or zinc). A material in-
           crease in costs at any significant location could have
           a significant effect on our profitability and operating
           cash flow.
           We could have significant increases in capital and
           operating costs over the next several years in connec-
           tion with new projects, costs related to closure reclama-
           tion activities, and in the sustaining and/or expansion
           of existing mining and processing operations. Costs
           associated with capital expenditures may increase in the
           future as a result of factors beyond our control. Increased
           capital expenditures may have an adverse effect on
           the profitability of and cash flow generated from ex-
           isting operations, as well as the economic returns antici-
           pated from new projects. Significantly higher and sus-
           tained increases in operational costs or capital expendi-
           tures could result in the deferral or closure of projects and
           mines in the event that costs become prohibitive.
     Id. Plaintiff challenges these risk disclosures, arguing that when they
     were readopted in the 10-Q, defendants already knew about or reck-
     lessly disregarded production and cost issues at the new mine. Id. ¶ 130.

        Statement 11

        Nearly two months later, on September 17, 2024, Ms. Viljoen and Ms.
     Ovelmen spoke at the Denver Gold Forum (held in Colorado Springs,
     oddly enough). When asked about Newmont’s new assets, Ms. Viljoen
     answered:

           So firstly, when I think about our new assets, I can’t think
           about it without stepping back and looking at the full
           portfolio of assets because what it enabled for us is to
           really step back and turn these inside -- these assets
           inside out in a way that we haven’t done before, be-
           cause we have the opportunity now to look at this entire
           portfolio of assets.
           The flexibility that we can build in our operational perfor-
           mance and how we think about our sustaining capital


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           profile and staging that to ensure that we have a stable
           ounce profile and a sustainable -- sustainable capital pro-
           file.
           When we consider the full potential program on the new
           assets, particularly, we’ve run all 4 assets that will remain
           in the portfolio now through our full potential program.
           And that is -- all of those are in execution at the moment.
           We have committed $200 million are as part of the syner-
           gies that will come from that process, and we're well on
           track.
           But I do want to emphasize that not only through the full
           potential program, but in stepping back and changing the
           constraints that we’ve put on our operations, the con-
           straints that we've put on how we look at our portfolio of
           assets and how that enterprise have interdependency, it is
           an opportunity for us to make a real step change in
           productivity, bringing costs down to sustainable low
           cost base and working towards that economic margin
           expansion that Karyn has been talking about.
     Id. ¶ 131. Plaintiff points out that these statements claim that the com-
     pany had thoroughly reviewed the new mines—“turned these assets in-
     side out”—but still did not disclose cost and production issues. Id. ¶ 132.

        Statement 12

        Plaintiffs next challenge a chart distributed to BNP Paribas and in-
     vestors in London and Paris near or after the close of Q3 2024.


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     Id. ¶ 136. Plaintiffs assert that this October 2024 chart shows the same
     projections that the Defendants presented in February 2024 despite De-
     fendants’ knowledge of production and cost uses that were flattening
     gold production relative to the February forecast. Id. ¶ 137.

        Statement 13

        Similarly, in October 2024, Defendants distributed the following
     costs chart to investors:


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     Id. ¶ 139. Again Plaintiff alleges that this chart is false because it is
     substantially the same as a chart distributed in February 2024, but De-
     fendants failed to adjust for the cost issues at the new mines. Id. ¶ 140.

               1.   Safe Harbour

        Defendants first argue that most of the statements fall under the
     PSLRA’s safe harbor for forward-looking statements. The statute ex-
     empts some such statements from liability so long as:

        (A) the forward-looking statement is--
              (i) identified as a forward-looking statement, and is accom-
                   panied by meaningful cautionary statements identify-
                   ing important factors that could cause actual results to
                   differ materially from those in the forward-looking
                   statement; or
              (ii) immaterial; or
        (B) the plaintiff fails to prove that the forward-looking state-
        ment--
              (i) if made by a natural person, was made with actual
                  knowledge by that person that the statement was false
                  or misleading; or
              (ii) if made by a business entity; was--
                 (I) made by or with the approval of an executive officer
                     of that entity; and
                 (II) made or approved by such officer with actual
                     knowledge by that officer that the statement was
                     false or misleading.
     15 U.S.C. § 78u-5(c)(1)(A)–(B). The statement is protected (1) if the
     statement is forward-looking and accompanied by meaningful caution-
     ary statements; (2) if the statement is immaterial; or (3) if Plaintiff fails
     to show the statement was made or approved by an executive with ac-
     tual knowledge of falsity. See In re Gold Res. Corp. Sec. Litig., 957 F.
     Supp. 2d 1284, 1293 (D. Colo. 2013), aff’d, 776 F.3d 1103 (10th Cir.
     2015).


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Case No. 1:25-cv-00341-DDD-KAS        Document 52       filed 08/14/26    USDC Colorado
                                      pg 17 of 27


        Newmont argues that statements 1(b), 3, 4, 5, 7, 9, 10, 11, 12, and 13
     fall under this safe harbor.

        Statement 1(b)

        In relevant part, statement 1(b) states, “[f]ull year production for
     2024 is expected to be second-half weighted as previously indicated, with
     a sequential increase weighted towards the fourth quarter. The second-
     half weighting is expected to be driven primarily by . . . improved
     throughput from Lihir.” Doc. 39 ¶ 110 (emphasis omitted). This is a
     “classic growth and revenue projection[], which [is] forward-looking on
     [its] face.” Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc., 759 F.3d
     1051, 1058 (9th Cir. 2014). The press release from which that statement
     was taken, Doc. 45-10 at 6, concludes with a disclaimer on forward-look-
     ing statements. It warns that the press release contains forward looking
     statements that “impl[y] an expectation or belief as to future events or
     results,” that such expectations are “expressed in good faith and be-
     lieved to have a reasonable basis,” and that “such statements are subject
     to risks, uncertainties and other factors, which could cause actual re-
     sults to differ materially.” Id. at 33.

        Plaintiff does not argue that this statement is not forward-looking or
     that it lacks cautionary statements. He broadly argues that cautionary
     statements are inadequate if the identified risk has already occurred,
     but he does not explain what has already occurred that would make
     these projections already false. Statement 1(b) is protected by the safe
     harbor.

        Statements 3–5 and 7–9 all come from Newmont’s Second-Quarter
     earnings call. Doc. 45-9. And they all rely on the same cautionary state-
     ments. To analyze these statements, I begin by determining whether
     each statement is forward-looking. Then I will determine whether the
     cautionary statements were adequate.


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Case No. 1:25-cv-00341-DDD-KAS      Document 52      filed 08/14/26   USDC Colorado
                                    pg 18 of 27


        Statement 3

        Statement 3 reads “We delivered solid operational performance as
     planned, keeping us firmly on track to achieve our 2024 guidance
     and positioning us to deliver improving financial results.” Doc.
     39 ¶ 114 (emphasis in original). Plaintiff argues that this is not a for-
     ward-looking statement because it describes the present state of the
     company. While the first part of the statement may describe current fi-
     nancial conditions, that statement is not challenged. When this state-
     ment was made, Newmont had just released its second-quarter earn-
     ings, and Plaintiff makes no reference to those earnings and does not
     argue they are not “solid.” He challenges only the forward-looking appli-
     cation of the information. The complaint alleges that Defendants knew
     adverse circumstances “would materially, adversely impact Newmont’s
     production and increase its [costs].” Id. (emphasis added). The complaint
     takes issue with the predicted future performance, not the current re-
     sults.

        Courts have split on the issue, but I agree with the circuits who have
     held that “an unadorned statement that a company is ‘on track’ to
     achieve an announced objective, or a simple statement that a company
     knows of no issues that would make a goal impossible to achieve, are
     merely alternative ways of declaring or reaffirming the objective itself.”
     Wochos v. Tesla, Inc., 985 F.3d 1180, 1192 (9th Cir. 2021); see also Insti-
     tutional Invs. Grp. v. Avaya, Inc., 564 F.3d 242, 256 (3d Cir. 2009) (“The
     ‘on track’ and ‘position us’ language here, however, does not advert to a
     particular current fact such as cash on hand, but expresses only defend-
     ants’ continuing comfort with the earlier, October annual projection,
     which they were then reiterating; that is, it amounts in essence to a re-
     affirmation of that projection.”). Like those statements, the “on track”


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Case No. 1:25-cv-00341-DDD-KAS       Document 52      filed 08/14/26   USDC Colorado
                                     pg 19 of 27


     claim here merely reiterates a previous projection and is forward-look-
     ing.

        Statement 4

        Statement 4 touts that the company was “now advancing into the
     delivery stage of the initiatives we have identified at Lihir, Cadia and
     Red Chris, with the largest value drivers coming from our 2 new Tier 1
     assets in Lihir and Cadia.” Doc. 39 ¶ 116 (emphasis omitted). 4 This
     statement describes what the company is “now” doing, and so is a veri-
     fiable, present fact not subject to the statutory safe harbor.

        Statement 5

        The complaint emphasizes the following part of Statement 5: “With
     a focus on size and efficient production at each of our managed opera-
     tions, we are heading into the second half of the year with confidence in
     our ability to deliver on our business plan and the commitments Tom
     reiterated earlier.” Id. ¶ 118 (emphasis omitted). Like the “on track”
     claims, this statement merely reinforces previous projections and so is
     forward-looking. 5


     4 The Complaint also emphasizes a second sentence: “[w]e recently com-

     pleted our full potential diagnosis phase at Cadia, from which we have
     identified a series of initiatives that are expected to deliver more than
     $100 million of value by the end of next year.” Doc. 39 ¶ 116 (emphasis
     omitted). But it does not allege why this sentence is false and alleges no
     facts about the Cadia mine. And, in any event, its $100 million dollar
     projection is forward-looking.
     5 Even if the statement describes the present thinking of management,

     it is not actionable because it is immaterial. It is “vague (if not meaning-
     less) management-speak upon which no reasonable investor would base
     a trading decision.” In re Level 3, 667 F.3d at 1340.


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Case No. 1:25-cv-00341-DDD-KAS       Document 52      filed 08/14/26    USDC Colorado
                                     pg 20 of 27


        Statement 7

         “[W]e anticipate higher free cash flows in the second half of the year
     driven by increased production values and lower unit costs,” Id. ¶ 122,
     is cash flow projection and plainly forward-looking, see Intuitive Surgi-
     cal, 759 F.3d at 1058.

        Statement 8

        Statement 8 claims “[w]e safely delivered solid production as
     planned, keeping us firmly on track to meet our full year guidance for
     both ounces and costs.” Doc. 39 ¶ 124 (emphasis omitted). The complaint
     does not allege that the then-present statement that the company deliv-
     ered solid production is false, and, like Statement 3, the claim that the
     company remained “on track” merely reaffirms a previous projection.

        Statement 9

        In the last alleged misstatement from the earnings call, Statement
     9, Mr. Plamer stated “[o]ur direct costs are pretty stable across the year.
     And certainly what we’re seeing in the first half flowing through the
     second half, pretty stable.” Id. ¶ 127. He made this statement in the con-
     text of projecting increased revenues in the second-half of the year, so
     Defendants argue that the statement is forward-looking because it pro-
     jects stable costs to continue. But this statement is different from the
     “on track” claims. Here, Mr. Palmer’s claim is of a current state, “direct
     costs are pretty sable,” that he expects to continue. Id. The Seventh Cir-
     cuit found a similar statement fell outside the safe harbor; a claim that
     “sales are ‘still going strong’ does not entitle [Defendant] to a safe harbor
     with regard to the statement’s representation concerning current sales.”
     Makor Issues & Rts., Ltd. v. Tellabs Inc., 513 F.3d 702, 705 (7th Cir.
     2008). So too here, the safe harbor does not apply to the statement that
     direct costs were stable over the first half of the year.


                                        - 20 -


Case No. 1:25-cv-00341-DDD-KAS       Document 52      filed 08/14/26    USDC Colorado
                                     pg 21 of 27


        Statements 3, 5, 7, and 8—Cautionary Statements

        Having concluded that Statements 3, 5, 7 and 8 are forward-looking.
     The question is whether they were accompanied by cautionary state-
     ments. The second quarter earnings call begins with Mr. Palmer direct-
     ing listeners to “note our cautionary statement and refer to our SEC fil-
     ings.” Doc. 45-9 at 5. This directs listeners to the 10-Q filed the day be-
     fore, and the written cautionary statements therein. Doc. 45-11 at 78.
     The second quarter 10-Q also incorporates by reference the risk factors
     from the company’s annual 10-K statement. Id. at 79.

        Plaintiff argues that these cautionary statements are inadequate
     only because he alleges that the risks had already occurred. He in fact
     alleges that, by adopting the 10-K statements without change, the cau-
     tionary statements in the 10-Q were materially misleading. The 10-K
     included several warnings: “[i]ncreased operating and capital costs could
     affect our profitability;” “[a] material increase in costs at any significant
     location could have a significant effect on our profitability and operating
     cash flow;” “[o]ur operational costs, including, without limitation, labor
     costs, can be impacted by inflation;” “[a] material increase in costs at
     any significant location could have a significant effect on our profitabil-
     ity and operating cash flow;” “[w]e could have significant increases in
     capital and operating costs over the next several years in connection
     with new projects, costs related to closure reclamation activities, and in
     the sustaining and/or expansion of existing mining and processing oper-
     ations;” and “[i]ncreased capital expenditures may have an adverse ef-
     fect on the profitability of and cash flow generated from existing opera-
     tions.” Doc. 39 at ¶ 129. If these risks had already materialized and they
     were false when made, then Plaintiff is correct that they are inadequate
     cautionary statements.


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Case No. 1:25-cv-00341-DDD-KAS      Document 52      filed 08/14/26   USDC Colorado
                                    pg 22 of 27


        But Plaintiff alleges that these statements were misleading only be-
     cause vague “production and cost issues” had already “impacted New-
     mont’s margins” and would continue to do so. But the complaint does
     not allege with any specificity what changed between February and
     July. True, the complaint contains general allegations that Lihir and
     Brucejack were not as profitable as the company had hoped. But Plain-
     tiff alleges only in conclusory fashion that Defendants knew of these
     problems “no later than late July 2024.” Id. ¶ 4. The Tenth Circuit has
     rejected that type of claim: “allegations that defendants should have an-
     ticipated future events and made certain disclosures earlier than they
     actually did do not suffice to make out a claim of securities fraud.” City
     of Philadelphia v. Fleming Companies, Inc., 264 F.3d 1245, 1260 (10th
     Cir. 2001) (discussing scienter).

        And Plaintiff gives us no specific failures that occurred before the
     July statement. Despite claiming the production and cost issues “had
     materially, adversely impacted” margins, id. ¶ 130, Plaintiff does not
     point to any second-quarter financial results. And despite stating that
     the issues “would continue impacting for the near-term and medium
     term,” id., the complaint contains no specific facts that allege any prob-
     lems in the past were certain to continue in the future, or that the com-
     pany knew that was the case. In short, the complaint leaves the Court
     to guess what specifically changed between February and July. 6


     6 Courts have remarked that “[w]hat makes many securities fraud cases

     more complicated is that often there is no reason to assume that what is
     true at the moment plaintiff discovers it was also true at the moment of
     the alleged misrepresentation, and that therefore simply because the al-
     leged misrepresentation conflicts with the current state of facts, the
     charged statement must have been false.” Philadelphia, 264 F.3d at
     1260; In re GlenFed Sec. Litig., 42 F.3d 1541, 1548–49 (9th Cir.1994) (en
     banc) (stating the same).


                                         - 22 -


Case No. 1:25-cv-00341-DDD-KAS      Document 52      filed 08/14/26   USDC Colorado
                                    pg 23 of 27


     Because the complaint does not properly allege Statement 10, the cau-
     tionary statements, were false, Statement 10 is not actionable and
     Statements 3, 5, 7 and 8 are protected by the statutory safe harbor.

        The remaining three statements were made separately from the sec-
     ond-quarter earnings release, but Defendants argue that they too are
     properly forward-looking. Even if they are forward looking, it is not clear
     that they were accompanied by effective cautionary statements. See Doc.
     45 at 13 (identifying only a generic disclaimer from the Denver Gold
     Group and the company’s general practice for “presentations like
     these.”). I need not decide those questions, however, because Plaintiff
     fails to allege falsity.

              2.   Falsity

        For the remaining statements (1(a), 2, 4, 6, 9, 10, 11, 12, and 13),
     Plaintiff must plausibly allege falsity, materiality, and scienter. But
     Plaintiffs claims meet a common end: under the heightened pleading
     standard, he has failed to plausibly allege falsity.

        The Court evaluates the facts alleged in the complaint to determine
     “whether, taken as a whole, they support a reasonable belief that the
     defendant’s statements identified by the plaintiff were false or mislead-
     ing.” Hampton v. root9B Techs., Inc., 897 F.3d 1291, 1298 (10th Cir.


     This is particularly true in mining, a famously unpredictable business.
     For example, Newmont’s stock fell from $57.74 to $49.25 on October 24,
     2024. Doc. 39 at ¶ 6. But as of this writing, the price is $118. Stock In-
     formation, Newmont Corp. (last visited Aug. 14, 2026, at 1:01 MT),
     https://www.newmont.com/investors/stock-information/default.aspx.
     This growth is at least in part because of Lihir. See Cecilia Jamasmie,
     Newmont eyes 5M-ounce boost from Lihir gold mine, (July 24, 2026),
     https://www.mining.com/newmont-eyes-5m-ounce-boost-from-lihir-
     gold-mine/. The PLSRA is not in place to punish statements that turn
     out to be wrong, just those that are fraudulent when made.


                                        - 23 -


Case No. 1:25-cv-00341-DDD-KAS       Document 52      filed 08/14/26   USDC Colorado
                                     pg 24 of 27


     2018). The Tenth Circuit has identified six factors to consider when eval-
     uating falsity:

            (1) the level of detail provided by the facts stated in a com-
            plaint; (2) the number of facts provided; (3) the coherence
            and plausibility of the facts when considered together; (4)
            whether the source of the plaintiff's knowledge about a
            stated fact is disclosed; (5) the reliability of the sources
            from which the facts were obtained; and (6) any other indi-
            cia of how strongly the facts support the conclusion that a
            reasonable person would believe that the defendant's state-
            ments were misleading.
     Id. at 1298–99. And, under the PLSRA’s heightened pleading standard
     “the facts alleged in an information and belief complaint will usually
     have to be particularly detailed, numerous, plausible, or objectively ver-
     ifiable by the defendant before they will support a reasonable belief that
     the defendant’s statements were false or misleading.” Adams v. Kinder-
     Morgan, Inc., 340 F.3d 1083, 1103 (10th Cir. 2003).

        In Plaintiff’s telling, Defendants purchased these new mines and, in
     February 2024, made optimistic financial projections based off their new
     assets. By October 2024, Defendants realized the mines had significant
     problems and this resulted in lower production and higher costs than
     expected. See Doc. 39 ¶¶ 145–46. But Plaintiff alleges that Defendants
     knew, or at least should have known, this truth earlier and should have
     disclosed it. See id. at ¶ 121 (“no later than July 2024, Lihir had already
     begun experiencing material, adverse production issues”); ¶ 147 (“It is
     clear, however, that no later than July 24, 2024, Defendants had either
     gained sufficient understanding of Newmont’s Brucejack investment or
     were severely reckless in failing to understand that Brucejack was nug-
     gety.”).

        The complaint describes, citing anonymous former employees, the
     general state of both Lihir and Brucejack. Former employees 1 and 2
     explain that Lehir was not profitable, had high operational costs, and


                                        - 24 -


Case No. 1:25-cv-00341-DDD-KAS      Document 52      filed 08/14/26   USDC Colorado
                                    pg 25 of 27


     had frequently unreliable equipment. Similarly, former employee 3 as-
     serts that Brucejack did not qualify as a Tier 1 mine and had other costly
     infrastructural issues.

        But these allegations describe only the general state of the mines.
     The complaint does not allege any specific facts that allow the Court to
     conclude that the statements were false in July as opposed to October.
     The closest the complaint comes to a specific fact about Lihir is the alle-
     gation that the largest autoclave “had been out of operation for 2 or 3
     years and was considered a disaster.” Doc. 29 at ¶ 59. But Mr. Palmer
     disclosed that Autoclave 4 would be shut down for 120 days. Id. ¶ 54
     (“the guidance for Lihir for the year respected that the largest of the
     autoclaves being down from 120 days.”). If Newmont knew about but
     failed to disclose the autoclave shutdown, that kind of fact may suggest
     falsity. But because Mr. Palmer disclosed the shutdown as early as Feb-
     ruary, see Doc. 39 ¶ 50, so it is unclear how investors were misled.

        Brucejack’s biggest problem was its inconsistent, “nuggety” ore body,
     and the complaint only states in conclusory fashion that “reconciliation
     drilling during 2024 necessarily alerted Defendants to issues with re-
     spect to production at Brucejack no later than July 24, 2024.” Id. ¶ 90.
     The complaint contains no specific facts about what the reconciliation
     drilling revealed, and when.

         The October revelations confirm that Lihir and Brucejack were not
     as profitable as Newmont hoped. But taking that October fact and as-
     suming Newmont knew it was also the case in July is impermissible
     “fraud by hindsight.” Grossman v. Novell, Inc., 120 F.3d 1112, 1124
     (10th Cir. 1997). The October revelations occurred because Newmont at-
     tained and reported disappointing earnings. Doc. 39 ¶ 145. Plaintiff does
     not point to any concerning financials in July, the date of the alleged
     fraud, nor does he point to specific production issues that occurred before


                                       - 25 -


Case No. 1:25-cv-00341-DDD-KAS       Document 52      filed 08/14/26   USDC Colorado
                                     pg 26 of 27


     July and were expected to recur. In fact, some of the allegations are not
     just conclusory, they are circular. See id. ¶ 115. (“Defendants failed to
     disclose they knew or recklessly disregarded that material adverse cir-
     cumstances at Lihir and Brucejack would materially, adversely impact
     Newmont’s production and increase its AISC, contracting margins ma-
     terially.” (emphasis added)).

        Plaintiff must do more than simply allege the generally disappoint-
     ing nature of Lihir and Brucejack. Instead, he “must set forth, as part of
     the circumstances constituting fraud, an explanation as to why the dis-
     puted statement was untrue or misleading when made.” Grossman, 120
     F.3d at 1124 (internal quotation omitted). And because Statements 10,
     12, and 13 are readoptions of statements made in February, Plaintiff
     must specifically allege what changed and when and what defendants
     knew and when. He must do so with precise facts. Under this heightened
     standard, the allegations in the complaint are too general to conclude
     that these statements were false when made. 7

                                  CONCLUSION

        It is ORDERED that:

        Plaintiff’s MOTION TO STRIKE, Doc. 47, is DENIED;

        Defendants’ MOTION TO DISMISS, Doc. 45, is GRANTED;


     7 Though the Court need not reach this point, the failure to plead that

     the statements were known to be false when made is also dispositive as
     to the scienter element. See Philadelphia, 264 F.3d at 1260 (“[B]ecause
     corporate officials should be liable for failing to reveal only those mate-
     rial facts reasonably available to them . . . allegations that defendants
     should have anticipated future events and made certain disclosures ear-
     lier than they actually did do not suffice to make out a claim of securities
     fraud.” (analyzing scienter) (quotations omitted)).


                                        - 26 -


Case No. 1:25-cv-00341-DDD-KAS       Document 52        filed 08/14/26   USDC Colorado
                                     pg 27 of 27


         Plaintiffs’ request for leave to amend complaint is GRANTED. Plain-
     tiff may file an amended complaint no later than 9/11/2026. Failure to
     do so will result in the Court closing the case.

     DATED: August 14, 2026               BY THE COURT:


                                          Daniel D. Domenico
                                          Chief United States District Judge


                                        - 27 -