Dogged by rising production costs and a lack of corporate direction, Newmont Mining's ( NEM) stock has languished for the last two years. On Wednesday, the gold miner's shares settled at around $46, essentially where they were in the fall of 2005. That has badly lagged the performance of gold, which during the same period has seen its price jump more than 50%. But now there are signs of a nascent recovery that could turn investors bullish on a stock many had come to loathe. One observer, Doug Groh, senior research analyst at the New York-based $1.1 billion ( TGLDX) Tocqueville Gold fund, believes Newmont could head toward $80 a share. Tuesday's announcement that Newmont would acquire Canadian exploration and development firm Miramar Mining ( MNG) for $1.5 billion is but the latest sign that the sleeping giant stands a fighting chance of awakening. "These are the first steps as a fixer-upper," Groh says. "It's a work in progress, and there are more issues to be dealt with." In particular, the proposed acquisition, which has the approval of Miramar's board and senior management, gets to the issue of costs and reserves, the two persistently irksome problems for Newmont. Plus, it shows that Richard O'Brien, who was appointed president and CEO of the sluggish company earlier this year, means business. Gold miners are naturally dependent on the gold reserves they own. To simply stay constant each year, a company must at least replace the gold it has extracted from the ground with other reserves.