Newmont (NEM) has removed the key Fourmile overhang with Barrick Mining (B), which the market may be underappreciating, UBS Securities said.

The analysts said in a note Tuesday that a potential large cash payment from Newmont to Barrick to equalize ownership of Barrick's Fourmile project in the Nevada JV had been the key overhang for the Newmont investment case.

The dispute was resolved on Aug. 10, resulting in the consolidation of three properties outside the JV along with a settlement of undisclosed litigation, for a net payment of $1.95 billion.

Since the resolution, Newmont has outperformed the GDX Index by less than 5%, while outperforming Barrick by around 12%, the analysts said, adding that "the ability to deliver consistent buybacks & lower risk near-term production growth/recovery differentiates Newmont versus senior gold peers and this is still not reflected in its relative valuation."

UBS lifted its target price on Newmont to $155 from $120 and reiterated its buy rating.

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