Shares of Newmont Mining Corp. hit a three-week high Friday after Business Week reported the Denver gold producer may be a target for No. 1 producer Barrick Gold Corp.

The stock for Newmont, the world's No. 2 gold producer, rose 79 cents, or 1.87 percent, to $42.93, giving the company a market value of $19.35 billion. Prices earlier reached a two-week high of $43.58.

Buying Newmont would give Toronto- based Barrick the former company's 95 million ounces of proven and probable reserves of gold, Business Week said in its "Inside Wall Street" column.

In an interview with the Rocky Mountain News this week, Newmont Chairman Wayne Murdy declined to say whether the company is looking at mergers or acquisitions, including with rival Barrick.

"We are looking at acquisitions all the time," Murdy said.

Newmont spokesman Omar Jabara said the company's "policy is not to comment on rumors or speculation about what other companies may or may not do."

Barrick was more clear on the story.

"That story is totally unsubstantiated," Barrick spokesman Vincent Borg said.

Some Wall Street analysts welcomed the possibility of a merger between the world's two biggest gold miners because Newmont's rising costs and declining production are poking holes in its profit despite skyrocketing gold price.

"This deal would have significant synergies," John Bridges, an analyst at J.P. Morgan Securities Inc., said in a report to clients. "It might be opportunistic for Barrick to look at Newmont at present as Newmont's profitability is troughing while it waits for its new mines and lower-cost power in Nevada."

Newmont shares plunged 15 percent last year partly because the company cut its sales estimates and raised its forecast of operating costs at its mines. During the same period, the Philadelphia Gold & Silver Index and Barrick rose 11 percent as gold prices rallied 23 percent.

Barrick overtook Newmont last year to become the largest gold producer with its $10 billion acquisition of Placer Dome Inc.

"Newmont, which has been an underperformer as a result of several problems, could be a nice takeover target for" Barrick, said Gijsbert Groenewegen, founder of New York-based hedge fund Gold Arrow Capital Management LLC, which manages $17 million, including Barrick shares.

But some question the wisdom of the rumored deal. HSBC Global Research analyst Victor Flores told Forbes magazine he's skeptical whether Barrick will try to acquire its rival.

"Newmont doesn't have a large portfolio of development stage projects," Flores said. "You are just putting two big guys together. There would be some synergies, but that isn't what Barrick is after."

Newmont

NEM: NYSE

$42.93

+ 79 cents

chakrabartyg@RockyMountainNews.com or 303-954-2976 News wire services contributed to this report.