Image source: Newmont Mining via Facebook.

What: Shares of gold miner Newmont Mining (NEM 2.36%) lost their luster in June, falling 14% according to data from S&P Capital IQ after the company announced an acquisition and a common stock offering shortly in quick succession.

So what: On June 8, Newmont Mining announced that it would be purchasing the Cripple Creek & Victor mine in Colorado from AngloGold Ashanti (AU -0.86%). Under the terms of the deal, Newmont will pay $820 million to AngloGold, as well as a 2.5% royalty for future gold production from underground ore. For AngloGold the deal represents an effort to reduce debt, while for Newmont this is an opportunity for the company to pick up an asset in its home state (Newmont is based in Greenwood Village, Colorado) and work on cutting the mine's expenses by a purported 10%.

But for investors the deal represents risk -- gold prices have been in a multiyear decline, and Newmont is already carrying more than $6 billion in debt on its books.

Just days later Newmont Mining closed a common stock sale that generated net proceeds of $674 million, which it plans to use to finance the AngloGold Ashanti deal. Of course, common stock offerings also dilute existing shareholders, further souring investors' initial perception of the deal.

Now what: What investors need to ask themselves here is whether or not Newmont's substantial pullback represents an attractive buying opportunity or a reason to be cautious.

Source: Newmont Mining via Facebook.

On one hand, the declining price of gold and the fact that many of Newmont's mines are fully ramped up makes it difficult for the company to squeeze additional profit out of its mines. Its close-to-$4 billion in net debt is also a bit of a drag on its share price.

However, Newmont's recent acquisitions provide a new source of production that could fuel modest growth throughout the remainder of the decade. Furthermore, Newmont's done a commendable job managing its costs. In its first-quarter earnings results Newmont delivered all-in sustaining costs of $849 per ounce, compared to $1,034 per ounce in the previous year. Newmont's ability to pull levers to chip away at its expenses is an important catalyst that it keeps in its back pocket.

Ultimately, for Newmont to really see substantial upside it'll need gold prices to stabilize or head higher. This is something that I do believe is possible by the latter-half of the decade, although there's no way to precisely time when gold prices will find a bottom. But as a hedge trade following a six-year-long bull market in the U.S. -- and considering solid cost-cutting efforts from Newmont's management -- I think Newmont offers investors more upside over the long run than downside at its current price.