3 Gold Mining Stocks With 'Consistent Returns'

If you’re positive on gold, mining companies are the place to be, said Dan Denbow, co-portfolio manager at USAA Precious Metals & Minerals Fund. He shared his best mining stock plays.

“All of our investing is in the mining companies themselves—we don’t own any ETFs or bullion in the fund,” Denbow told CNBC.

Denbow said although people are “feeling better” at the moment and not running toward gold as a flight to safety, deficit and entitlement problems still remain, which will eventually hurt currencies.

“It’s a late-2010 move into 2011—we’re going to have to pay for these deficits and that’s going to be good for gold,” he said.

Denbow's Picks:

Eldorado Gold

Randgold

Royal Gold

“They’re all good low-cost producers, they’ve diversity and they’ve got good growth profiles,” he said of the firms.

“In the long-term, companies with low operating cost, high growth potential, quality balance sheets and quality management will outperform the group. And that’s what’s led to consistent returns for the fund over the last decade.”

• Watch Denbow's Previous Appearance on CNBC (Jan. 19, 2010)

Counterpoints:

• Forget Gold—Here's The 'Best Crowded Trade' Now
• Why Gold Will Keep Falling: Currency Strategist

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More Market Intelligence:

• Jim Rogers on Oil, Gold and the Biggest US Bubble

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CNBC Data Pages:

• Gold, Oil, Natural Gas Prices Now
• Dow 30 Stocks—In Real Time
• Where's the US Dollar Today?

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CNBC Slideshows:

• The World's Biggest Gold Reserves

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Disclosures:

No immediate information was available for Debrow or his firm.

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