'Junior' gold miners seen as attractive - Barron's

NEW YORK, Feb 14 (Reuters) - With the gold price reaching record highs recently, stock in so-called "junior" miners has skyrocketed too but may still be viewed as a bargain by some investors, Barron's business newspaper said on Sunday.

But it also cautioned that estimated reserves may not always pan out and stocks that once appeared attractive, can sometimes disappoint.

It cited in particular, NovaGold Resources (NG.A) and Seabridge Gold (SA.A), whose valuations have risen ten-fold to about $1 billion each.

The report noted the increased valuations were directly related to the companies' increased estimates of the amount of gold in their reserves.

Barron's said since gold rose to over $1,200 an ounce, the shares of major gold producers, such as Newmont Mining (NEM.N), "went nowhere." But the shares of juniors -- small exploration companies that often have only one property -- had surged.

The newspaper said bulls view NovaGold and Seabridge as cheap at their respective prices of $6 and $25. That represents about $49 and $14 for each ounce of gold they claim to have underground.

"But NovaGold and Seabridge are bargains only if the gold estimates prove out," Barron's said. "The gold industry's recent decades have featured many disappointments in ore grade, tonnage and processing cost.

"At Seabridge and NovaGold. the track records of important technical experts, managers and controlling shareholders raise worries about whether the mines will meet expectations," it said.

(Reporting by Steve James; editing by Gunna Dickson)