New Hope for Newmont

In addition to the proposed Miramar acquisition, the company's new leader also has taken steps to eliminate some features of the company that weren't helping its cause.

This past June, Newmont terminated its entire 1.85 million-ounce hedge book at a cost of $578 million. Previously, the presence of hedges meant that revenue from at least some of Newmont's output was capped -- directly at odds with what investors desired. The fact that it wasn't removed earlier is a prime example of behavior Tocqueville's Groh describes as "corporate arrogance."

Ending the hedge book means Newmont's earnings will be more sensitive to changes in the price of gold, and it gets to the primary motivation of why most investors buy gold companies over the metal, that is, to get leveraged exposure to changes in the price of bullion.

Newmont also announced its intention to get out of the merchant banking business, a segment of the firm not related to its core business of mining gold.

With all these changes, and if Newmont can improve the efficiency of its existing operations, the stock could leap to $80 a share, says Groh. That's based on a multiple of 20 times estimated cash flow of $4 in 2009, compared with last year's figure of about $2.70.