NEW YORK ( TheStreet) -- NovaGold Resources (NG), Fronteer Gold (FRG) and Keegan Resources (KGN) are three junior mining stocks which have declined 11.3%, 2.3% and 5.7%, respectively, as compared to a 0.2% drop in the S&P 500 during the last month, thereby presenting an attractive buying opportunity at current levels.
NovaGold Resources, engaged in the exploration and development of mineral properties in Alaska, the United States and British Columbia, reported its second-quarter earnings and project updates during the last week. During the quarter, two major investors in the gold sector, Paulson & Co. and Quantum Partners, managed by Soros Fund Management, invested $100 million and $75 million, respectively into the company.
The company also revealed that gold reserves at the Donlin Creek project, its core property, increased by 15%, or 4.3 million ounces. The property is 50% self-owned and 50% by Barrick Gold (ABX).
During the quarter, NovaGold reported $175 million in cash from a non-brokered equity offering. Meanwhile, the after-tax loss for the period stood at $15.75 million as compared to a $4.77 million loss in second quarter of 2009. The loss was mainly due to a decline of $13 million in foreign exchange gains recorded in the prior-year quarter.Canada-based Wellington West Capital Markets on Thursday assigned a market perform rating to the stock with price target of $7.23, implying a 14% upside over current levels. Fronteer Gold, formerly known as Fronteer Development Group, is engaged in the acquisition, exploration and development of mineral properties or interests, gave a mid-year progress update on its key gold projects in late June. In total, Fronteer Gold has 10 operating drill rigs with an additional rig which was to be added during the end of last month. The company plans drilling of more than 65,000 meters across all projects in 2010, with almost 26,000 meters drilled as of June 2010. The total budget for all gold projects is about $35 million with Fronteer responsible for $20 million of expenditures. RBC Capital Markets on Wednesday assigned an outperform rating to the stock with price target of $6.71, implying a 12% upside over current levels.