"Newmont Mining is seeing aggressive trading on a Barrick Gold for NEM rumor," said analyst Frederic Ruffy of options education firm Optionetics.
The September calls allowing investors to buy Newmont shares at $42.50 and $45 apiece are seeing aggressive trading, as it appears that some players are positioning for further strength in the stock, Ruffy said.
"Such a merger would represent a major development in the gold mining industry, as it would unite the two largest players," he said.
Jon Najarian, co-founder of Web information site optionmonster.com in Chicago, said: "The rumors are that Barrick Gold would be buying Newmont Mining for $57 to $60 a share. I think at that level, this would represent a $25 billion deal. So I am skeptical about this speculation."
Traders and analysts noticed unusual call activity in Newmont Monday as its shares dropped. Heavy volume of more than 20,000 contracts was seen in the December $45 calls, which some viewed as a bullish sign for the stock.
In March, a report in BusinessWeek magazine said Barrick might make a bid for Newmont. The report, citing "some pros," said Barrick would go after Newmont for its proven and probable reserves of about 95 million ounces of gold.
A deal between the two companies, according to the March 26 edition of the magazine, would probably value Newmont stock in the "mid-$50s" per share, compared with a trading price of $40.53 to $45.09 that month. The suggestion came from Brookhaven Capital Management, which has loaded up on Newmont stock.