A magnate and his golden dream
Frank Giustra likes to see big where others think small. The Canadian mining maverick’s latest target is a subterranean patch of red earth in southwestern Mexico. In January his new undertaking, Leagold Mining Corp., bought the Los Filos mine from Goldcorp Inc. for US$ 350 million. It wasn’t the open pits churning out 200,000-plus ounces of the precious metal that caught this attention — it was the untapped deposit stretching for roughly 600 metres below.
“We just looked at it and thought: This is a jewel,” Giustra, 59, said in an interview at his downtown Vancouver office. The plan is to use Los Filos to build “a major gold producer over the next two, three, four years,” he says. “Unless the world changes dramatically, I think we’ ll pull it off.”
Giustra has a track record of finding the sparkle in the dirt. He’s used what he calls a grow-by-acquisition model to help build Endeavour Mining Corp. as well as a predecessor to Goldcorp, which is now one of the largest gold producers and Lea-gold’s biggest shareholder. In his spare time, he founded Lions Gate Entertainment Corp., which became one of the world’s biggest independent studios.
Giustra now spends about 20 per cent of his time trying to grow his wealth across a slew of interests ranging from an Italian olive estate whose oils have been voted among the planet’s best, to Thunderbird, the film company behind the upcoming Blade Runner sequel. The bulk of Giustra’s time is spent trying to give money away in partnership with Bill Clinton, a close pal, and George Soros.
Vancouver- based Lea-gold marks a return to the resource sector after a halfdecade hiatus. Since early 2016, Giustra has also acquired stakes in NewCastle Gold Ltd. and Sandspring Resources Ltd., which are developing gold mines in California and Guyana, and Lithium X Energy Corp., an explorer searching in Argentina and Nevada for the metal.
“Gold — of all the money-generating things I do, it’s my favourite and the one I understand the best,” Giustra says.
Los Filos produced 231,000 ounces of gold in 2016 at an all- in sustaining cost of $ 878 an ounce, according to the company. Buried below its two open pits is El Bermejal, a deposit that has the potential to produce an additional 1.39 million ounces over eight years at about half the cost, $439 per ounce. That’s because little more than a ramp has to be built to exploit El Bermejal’s reserves — everything else it needs has already been built for Los Filos. El Bermejal is set to start producing in 2019, according to Giustra.
‘ PASSION FOR FOOD’
Giustra was born in Sudbury, Ont., into a poor immigrant family and spent his childhood in Italy, Argentina and Texada Island off the B.C. coast while his father toiled in mines as a driller and blaster. “I didn’t like not having money,” he says. Starting in Grade 6, he says he began finding ways to earn cash by mowing lawns, delivering newspapers, and rounding up drowsy chickens at night — four to a hand — and loading them onto a truck, a foulsmelling job for which he pocketed about $2 an hour.
He has a knack for both success and controversy. He founded Lions Gate, which backed films deemed too risky by the Hollywood majors. He plunged into the olive oil business because, as he told a packed hall of hundreds in January, of “a passion for food. It’s better than sex — unless you’re vegan.”
He assembled stakes in a clutch of Kazakhstan uranium properties in 2005 to form Ur-Asia Energy Ltd., which two years later was involved in a multibillion- dollar merger. That deal landed him in controversy following media reports that he may have benefited from Clinton’s political influence in the Central Asian nation. Giustra has repeatedly denied the allegations.
He also unabashedly admits to his failures, including an investment in a West Coast sablefish farm that went under: “I lost a lot of money — even for me.”
Giustra’s return to resour- ces is driven in part by his convictions about the U. S.led global financial system, which he sees as undermining both his biggest business focus, gold, and the issue closest to his heart, a more-equitable distribution of wealth.
He has referred publicly to U. S. Fed chair Janet Yellen and her predecessors as “well- trained circus dogs” who’ve pumped money into the financial system, bolstering corporations and allowing the wealthy to binge on real estate, stocks and art. He believes Western governments don’t want their citizens amassing gold because it signals a loss of confidence, and are aided in “managing” the price by Wall Street banks which don’t like the metal because it presents few opportunities to generate fees.
‘ I WILL NEVER BE A BILLIONAIRE’
Gold is “the only real currency that everybody accepts that you can’t dilute and you can’t print,” says Giustra.
Gold has climbed 9.4 per cent this year amid a weakening dollar and political friction in the U.S. and Europe.
Giustra says he holds “a lot more” gold than a traditional financial portfolio, but declines to specify how much. He also doesn’t disclose his net worth but disputes a common characterization that he’s a billionaire.
“Excess money is an illusion,” says Giustra, who has forsworn his two children any inheritance except an education.
“I will never be a billionaire because I will give it away faster than I’ ll get there.”
GOLD — OF ALL THE MONEY- GENERATING THINGS I DO, IT’S MY FAVOURITE AND THE ONE I UNDERSTAND THE BEST. ... (IT’S) THE ONLY REAL CURRENCY THAT EVERYBODY ACCEPTS THAT YOU CAN’T DILUTE AND YOU CAN’T PRINT. — FRANK GIUSTRA, BUSINESSMAN AND PHILANTHROPIST