After a nearly five-year break from launching mining deals, Vancouver entrepreneur Frank Giustra is getting back to work in the cyclical business where he built his fortune.
He’s just joined the board of Sandspring Resources, which controls a four-million-plus-ounce gold deposit in Guyana with copper and silver credits. PNO Resources, a cashed-up shell company affiliated with Giustra, raised $4.1 million on top of the $1.88 million it already had in its treasury and merged with Sandspring this summer. About $1.3 million will go toward a drill program later this year looking for higher-grade resources.
Giustra is attracted to Sandspring’s leverage to metals prices, he said in a company news release.
The second mining deal to come from the Giustra camp this summer turned some heads. Cannon Point Resources, another Giustra-affiliated shell company, this one with about $4.7 million in its treasury, announced intentions to merge with Northern Dynasty Minerals. Northern Dynasty controls the massive but controversial Pebble deposit in Alaska. According to a 2011 study, Pebble hosts an immense 107 million ounces of gold and 80 billion pounds of copper.
Over $700 million had been invested in Pebble – including roughly $150 million on an environmental baseline study – when the U.S. Environmental Protection Agency (EPA) threatened to veto the project.
According to reports in the Wall Street Journal and Washington Post, the EPA may have acted unfairly toward Pebble. Northern Dynasty is betting the EPA will step aside and let the U.S. Army Corps of Engineers manage the permitting process, which could put Pebble back on track for development.
Sandspring and Northern Dynasty both appear to have their challenges, but Giustra’s acumen in the mining business is legendary. More than 35 years ago, he got his start in Vancouver as a stockbroker focused on small mining firms. Giustra would move to Europe in his 20s and assemble an influential mining investment bank with Yorkton Securities, which gave him a seat at the table to many fantastic natural resources finds. Those included Robert Friedland’s greatest win, Diamond Fields International, which discovered the Voisey’s Bay nickel deposit in Newfoundland in 1995. Shares in the explorer went from pennies to nearly $200 before the company was sold to Inco for $4.5 billion in 1996. Giustra arranged the company’s first financing.
He quit the business that year just as the mining sector began a gruelling five-year slump not unlike today’s mining bear market. In the down period of the late 1990s, he founded Lionsgate Films. Today, Lionsgate is one of the world’s largest independent film studios.
Giustra timed the gold market perfectly when the yellow metal was trading under US$300 an ounce, returning to the mining sector in 2001 to launch Wheaton River Minerals with Ian Telfer.
The upstart eventually acquired Goldcorp, now the world’s second-largest gold miner (Telfer is Goldcorp’s chairman). This was followed up by other deals involving several commodities until the market turned in 2011.
During the recent downturn, Giustra turned his attention to the olive oil business and wasted no time applying his Midas touch. In 2010, the Vancouver entrepreneur launched Domenica Fiore – a line of organic olive oil named for his mother – and soon collected best in world honours at an influential competition.
You can request Domenica Fiore by name at Umberto Menghi’s recently reopened Giardino Restaurant in Vancouver, which is backed by Giustra, as well as Canaccord founder Peter Brown and music mogul Sam Feldman. His other foods enterprises include Modern Farmer magazine and soup company Canada’s Own.
Giustra also recently launched a music venture with co-founders Ian Price and Dave Corman. Westsonic Music is writing and producing songs and developing emerging artists including teen sensation Charlie Storwick. No word yet whether Westsonic is the musical answer to Lionsgate, but Giustra says he’s having fun with it.
His passions for music and philanthropy came together recently when Westsonic hosted a fundraiser at his West Vancouver waterfront home benefiting the Boys Club Network, a local non-profit close to his heart. Giustra is also paying it forward through his involvement in innovative charitable causes including StreettoHome and the Clinton Giustra Enterprise Partnership.
Giustra also writes a blog for the Huffington Post called #DearRichPeople about the importance of giving back. You can follow him on Twitter: @Frank_Giustra •
Tommy Humphreys is the founder and CEO of CEO.ca. At the time of writing, he holds shares in PNO Resources and Cannon Point Resources.
