There's more to investing in gold than hoarding the metal underneath your bed. For starters, one way to beat the market is to identify the next big thing in gold mining. Eldon Brown, mining analyst with Blackmont Capital, has done the heavy digging for you and unearthed the "next tier" of gold companies in early development.

"As the price of gold looks to continue its run, we believe the next tier of gold mines — those just starting production or furthering development of their flagship projects — are ready to respond," he said in a note.

The criteria for Mr. Brown's search includes the potential to reach 2 million ounces or more in total and annual production of at least 150,000 to 200,000 ounces of gold a year. As well, the mines have to be affordable, with intitial development costs no higher than US$500-million.

Here are his choices:

Premier Gold Mines Ltd., Sector Perform ($4.60 price target): Owns several projects in Ontario, and counts Goldcorp Inc. as a partner on two of those projects.

Romarco Minerals Inc., Outperform, ($2.10 target): Romarco's attention is focused on its Haile project, an open pit gold mine in South Carolina.

Rubicon Minerals Corp., Outperform, ($5.75): This company's flaghship Phoenix site is in Red Lake gold district in Ontario, with a potentially defined resource of as much as 3.7 million ounces of gold.

San Gold Corp., Outperform, ($4.70): Its key property is in Manitoba, which is currently ramping up production from 40,000 ounces to potentially more than 200,000 ounces a year.

Ventana Gold Corp., Outperform, ($11): Found in Colombia, the La Bodega gold project has the potential to be a multi-million ounce major producer of gold. Only hitch is an ownership dispute with a local mineral rights option vendor.

Eric Lam