Fronteer has a 2.7% weighting in the Market Vectors Junior Gold Miners ETF.  Other components are on the move as well.

Allied Nevada Gold Corp. (AMEX: ANV) is up 4% at $28.48 on just under 800,000 shares; its 52-week range is $11.57 to $29.05.

Hecla Mining Co. (NYSE: HL) up 5.3% at $9.71, yet volume is only 8.9 million shares; its 52-week range is $4.27 to $11.56.

Gammon Gold, Inc. (NYSE: GRS) is up 4.3% at $8.17 on just under 1.4 million shares; its 52-week range is $5.09 to $10.47.

Coeur d`Alene Mines Corporation (NYSE: CDE) is up only 1.3% at $24.83 on about 1.6 million shares; its 52-week range is $13.41 to $28.20.

The hope here is a simple one, but it stands out against against gold the metal today.  Spot gold is up about 1.4% at $1352.12 per ounce, while the SPDR Gold Shares (NYSE: GLD) is up about 1.2% at $131.90.  The hope is that more gold mining acquisitions will come.  It has actually been surprising at just how few deals there have been.  Now that many of these stocks have pulled back so much it may be time to look at the biggest bargains that are off the most.

JON C. OGG

Analog Devices Inc. (NYSE: ADI) Reiterated Buy but raised target to $46 at Gleacher & Co.
Barrick Gold Corporation (NYSE: ABX) Started as Overweight at HSBC.
Broadcom Corporation (NASDAQ: BRCM) Started as Buy at Gleacher & Co.
DaVita, Inc. (NYSE: DVA) Started as Neutral at Baird.
Fortinet Inc. (NASDAQ: FTNT) Started as Buy at Needham.
Gammon Gold, Inc. (NYSE: GRS) Raised to Buy at Canaccord Genuity.
General Motors Corporation (NYSE: GM) Started as Hold at S&P Equity research (Details of the late Monday call).
Goldcorp (NYSE: GG) Started as Neutral at HSBC.
Health Net Inc. (NYSE: HNT) Cut to Hold at Stifel Nicolaus.
Home Inns & Hotels Management Inc. (NASDAQ: HMIN) Started as Overweight at JPMorgan.
Newmont Mining Corporation (NYSE: NEM) Started as Overweight at HSBC.
Potash Corp. of Saskatchewan (NYSE: POT) Raised target to $155 at TD.
SAVVIS Inc. (NASDAQ: SVVS) Raised to Outperform at William Blair.
SunPower Corporation (NASDAQ: SPWRA) Maintained hold but cut target to $11 at Auriga.
Suntech Power Holdings Co. Ltd. (NYSE: STP) Maintained neutral but cut target to $8.50 at HSBC.
United States Steel Corp. (NYSE: X) Cut to Hold at S&P Equity Research (late yesterday call).
Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) Maintained underweight and cut target to $8.10 at HSBC.

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JON C. OGG

SPDR Gold Shares (NYSE: GLD) are up about 35% from their lows over the last year, but the leveraged nature of gold mining returns at higher prices has led Market Vectors Gold Miners ETF (NYSE: GDX) to be up more than 50% from yearly lows and helped Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) rise above 90% from its lows earlier in the year.  We are tracking some underperformance from the likes of Yamana Gold, Inc. (NYSE: AUY), Kinross Gold Corporation (NYSE: KGC), Royal Gold, Inc. (NASDAQ: RGLD), Gammon Gold, Inc. (NYSE: GRS), Rubicon Minerals Corporation (AMEX: RBY), Northgate Minerals Corp. (AMEX: NXG), Exeter Resource Corporation (AMEX: XRA) and DRDGOLD Ltd. (NASDAQ: DROOY).

Yamana Gold, Inc. (NYSE: AUY) is one of the largest gold producers but it is an underperformer.  At $11.82 its shares are up about 28% from yearly lows and still down 18% from its highs.  With an $8.7 billion market cap, a September disclosure showed that the Canada-based Latin American mine operator will spend $650 million in project expansion from into early 2013 to boost production by more than 50% during high gold prices.  Analysts have an average target of about $14.30 per Thomson Reuters.

Kinross Gold Corporation (NYSE: KGC) is back above $19.00 but is still lagging gold and up only 28% from its yearly lows and still is down almost 15% from its highs.  The $13 billion market cap is also a larger player with a lagging share price.  The stock was punished when it acquired Red Back Mining, but now production is expected to grow from 2.6 to 2.7 million gold equivalent ounces in 2010 to 4.5 to 4.9 million gold equivalent ounces in 2015 as a result.  Thomson Reuters lists an average analyst price target of $22.29.

Royal Gold, Inc. (NASDAQ: RGLD) has not sold off from highs so much but its performance has been like gold.  The gold royalty trust is still close to $53.00, and that translates to 28% from its lows and down less than 6% from its yearly highs.  Maybe it is dilution from offerings in the past or maybe it is a perceived future earnings quality that worries investors.  Our take is that it has just underperformed and its $2.8 billion market cap and only about 20 employees on last look might make investors consider it more of a fund than a hands-on operator.  While both concerns are true, Royal Gold often has just as much leverage and upside over successful mining ventures.  This may boil down to nothing more than that it has just not rallied as much as peers as analysts on average have an average price target of $61.00.

Gammon Gold, Inc. (NYSE: GRS) is just under $7.00 with a market cap of just under $1 billion.  is trading up about 36% from its lows, but it is down nearly in half from its highs and that is a significant drop compared to almost all peers.  Analysts have an average target of $8.18 for the stock.  The most recent earnings may still have an overhang from a new credit facility despite its recent drill target updates.  The Canadian company operates mostly in Mexico.

Rubicon Minerals Corporation (AMEX: RBY) has a market cap of just under $900 million.  At $4.11 and is up 33% from its lows of the year, but the stock is still down over 21% from highs.  The junior miner has made several production updates in recent weeks.

Northgate Minerals Corp. (AMEX: NXG) is just under $3.00 per share, but it only up 28% from its lows and is still down about 18% from its highs.  After a big pop on Monday, its market cap is closer to $900 million.

Exeter Resource Corporation (AMEX: XRA) is also low-priced at $6.22, but the stock is up only about 18% from yearly lows and is down almost 34% from yearly highs.  The company is valued around $470 million and it had a $50 million capital raise in Canada in October.

DRDGOLD Ltd. (NASDAQ: DROOY) remains another gold laggard and at $4.97, its shares are up 26% from yearly lows but down about 37% from highs.  Its $190 million market cap makes it a smaller concern based in South Africa.  It is thin volume and has very little analyst presence for U.S. investors.  South African gold production drops in reports from earlier in the summer, as well as a June coverage initiation by Morgan Stanley at “overweight” followed by a September downgrade to “equal-weight” only added to the overhang.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Our screen of our 40+ gold issues in our US-listed gold stocks universe brought up Barrick Gold Corporation (NYSE: ABX), Gammon Gold, Inc. (NYSE: GRS), Goldcorp Inc. (NYSE: GG), IAMGOLD Corp. (NYSE: IAG), Jaguar Mining Inc. (NYSE: JAG), Royal Gold, Inc. (NASDAQ: RGLD), and Yamana Gold, Inc. (NYSE: AUY).  This is stating the obvious, but investors who prefer not to take on individual company risk can also look at Market Vectors Gold Miners ETF (NYSE: GDX) and then the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ).

Our cut-off in the screening process was those which have markets caps of close to $500 million and higher, which are actively traded, and preferably which have 5 or more analysts that cover the shares.  There are many caveats to consider above and beyond regular stock picking targets when it comes to gold.  Most are foreign or are making their money from foreign operations, there are labor issues and safety issues that can come up, geopolitics is mining risk because companies generally have to work in many hostile or unfriendly local environments.  There is also an ongoing currency risk due to international operations, although gold is at least generally translated in dollars.

The greatest risk is also the easiest to guess and the hardest to pick: the price of gold today versus a year and two years out.  If gold rises to $2,000 per ounce as Jim Rogers suggests, then it probably won’t matter about stock picking skills for undervalued or underperforming names.  Conversely, if gold ends up being a huge asset bubble and rapidly falls to $1,000.00 per ounce then the effort of stock picking here is unlikely to make a difference as well.  Rising tides lift all ships, receding tides beach all ships.

Barrick Gold Corporation (NYSE: ABX) is the biggest by market cap in our universe and it seems odd that the biggest is also still at a discount when the gold market is still on so much fire for investors.  At $47.32, its 52-week trading range is $33.65 to $48.02.  With a $46.6 billion market cap, this Canadian giant is listed as having an average price target of $55.13.  The implied upside here is about 16% and we might have left this off, except that this would imply a whopping additional $7.5+ billion in market cap.

Gammon Gold, Inc. (NYSE: GRS) has also been in trouble, partly over a mine strike and shares are trading at $6.99 versus a 52-week trading range of $5.09 to $12.63.  The consensus target is $8.34 on the stock, although that used to be higher.  The market cap here is $967 million and 7 analysts have price targets.  The implied percentage gain here is more than 19% if the target objective is hit.

Goldcorp Inc. (NYSE: GG) is the giant and at $44.09 it has a $32+ billion market cap.  Its 52-week trading range is also $32.84 to $47.41.  The Canadian-based international gold miner and producer has an average analyst price target of $52.32 from more than 15 analysts, but it is worth noting that there are some old leftover targets that have not updated (one is listed as being as low as $25.00).  The median target is $54.14, but the implied upside in the shares to $52.32 leaves more than 18% upside to the mean target (and 22% to the median target).

America First Tax Exempt Investors, L.P. (Nasdaq: ATAX) priced its secondary offering of 4,200,000 limited partnership interests at $5.05 per unit.  The firm raised about $19.95 million in net proceeds after the  payment of fees.  This one is trading up 0.5% at $5.08 and the 52-week trading range is $4.25 to $7.00.

ARYx Therapeutics, Inc. (NASDAQ: ARYX) announced that it has secured $35 million in a committed equity financing facility.  It will sell shares of common stock to Commerce Court Small Cap Value Fund over a 24 month period.  There is a maximum number of shares that can be sold and it is under no obligation to utilize any of the $35 million.  The company is also free to enter other equity and debt financing transactions.  ARYx shares are down 3% at $3.04 and the market cap here is $83.5 million.

AspenBio Pharma Inc. (NASDAQ: APPY) is getting slashed and burned on its secondary offering.  It sold 4,482,609 shares of common stock at $1.70 per share, but that is after a $2.16 close yesterday.  Shares are down 17% at $1.79 on 175,000 shares.  This one is raising cash close to the bottom as the 52-week trading range is $1.05 to $7.78.

Avis Budget Group, Inc. (NYSE: CAR) is under pressure as it has filed to sell some $250 million in convertible senior notes and on word that it intends to simultaneously enter into a warrant transaction to effectively hedge the convertible note sale.  These transactions often see selling, and that is what we are seeing here.  Shares are down 9% at $12.06 today and the market cap ius roughly $1.25 billion.

Gammon Gold, Inc. (NYSE: GRS) could be in the first wave of many smaller gold players to raise cash now that gold is over $1,000 per ounce.  The company announced a $100 million bought deal financing with a syndicate of underwriters including BMO and UBS.  The underwriters agreed to buy on a bought deal basis some 11.24 million shares of common stock at $8.90 per share.  We have shares down 5.5% at $8.85 on about 1,7 million shares (only 900K on average trading day).

LINN Energy, LLC (NASDAQ: LINE) priced some 7,500,000 units of limited liability company interests at $21.90 per unit.  Net proceeds are about $157 million before any overallotments.  This one is down 3.4% at $22.35 and the 52-week trading range is $10.81 to $24.09.  The market cap before the effect of any offering dilution is listed as $2.7 billion.

Sangamo BioSciences, Inc. (NASDAQ: SGMO) is getting its wings clipped this morning.  It priced its secondary offering of 3,000,000 shares of common stock at $7.20 per share.  This one has doubled this year and shares are down almost 11% at $7.12 after closing at $8.00 yesterday.  The 52-week trading range is $1.82 to $9.39 and the market cap before any effects of the dilution is listed as $293 million after today’s drop.

As long as the capital markets stay open, we’d expect more and more companies use the strength to raise cash either for acquisitions or for a rainy day.

JON C. OGG
OCTOBER 7, 2009

These releases always mean the same thing, no matter how they are worded–"We are looking hard, but we have not found anything yet."

From Gammon’s release today on its Guadalupe y Calvo exploration property located in Chihuahua State, Mexico:

"We continue to receive positive drill assay results that confirm the gold-silver potential of the Guadalupe y Calvo property. Drill results received to date indicate the potential for an underground mine below the previously identified open pit area where a significant number of high grade gold and silver intercepts have been received" stated Peter Drobeck, Senior Vice President of Exploration and Business Development of Gammon Gold. Mr. Drobeck continued, "Based on the positive results to date, we will continue to accelerate the engineering evaluation of this property with the completion of a Scoping Study that is expected during Q1, 2009. The Scoping Study will focus primarily on the open pit target and could provide the basis for moving directly to Feasibility Study levels to accelerate the operational development of this asset."

Well said…

Douglas A. McIntyre