Giustra gives US$100M to charity

Vancouver — Vancouver entrepreneur Frank Giustra has spent three decades in the mining and finance sectors. He’s raised multiple millions of dollars for up and coming companies, and certainly earned a pretty penny for himself.

But approaching his 50th birthday, he was prompted by a few people to shift his focus towards philanthropy. On June 21, he announced just how he would do that: by putting his deal-making abilities to work making money for sustainable aid and development in the Third World.

Giustra is donating US$100 million now, plus half of all his future mining earnings to an industry-based aid project in partnership with his friend, former U.S. president Bill Clinton. A new entity named the “Clinton-Giustra Sustainable Growth Initiative” will work to fight Third World poverty with help from the global mining industry.

“I really like what I do, which is creating wealth by investing in the mining industry, and I want to continue to do it — but the only twist is that now I get to do it to give it away,” Giustra says. “It’s fun — it’s actually a great position to be in.”

The initiative goes far beyond the donated funds. Giustra spent the last five months asking mining industry members and other industrialists to join the project. The world’s second-richest man, Mexican telecommunications tycoon Carlos Slim, is already matching Giustra’s US$100-million donation, and more than 20 large mining companies and mining-focused brokerage firms have already signed on as partners, many of them committing a percentage of revenue to the fund.

The coalition of companies and organizations will work with government and non-governmental organizations to improve health and education and promote sustainable development. Initially focused in Latin America, but with plans to expand worldwide, the initiative will seek out ways to help local leaders fix social, economic, and environmental problems in a cost-effective, sustainable manner.

Colombia is the initiative’s first focus, and Giustra says the organization hopes to have a plan ready for the country before the end of this year. It will also start developing projects in other parts of Latin America; Colombia is the first focus simply because plans there are already somewhat developed.

Frank Holmes, CEO of U.S. Global Investors (GROW-Q), has committed his firm to the project.

“I’ve found that mining people care about the Earth and the people they encounter, and they usually have big hearts, so they see these poor areas around where they’re working and they’re frustrated that they can’t do anything,” he says. “Now there’s going to be a mandate, if you’ve signed on, that there’s a budget for that. So they can actually help.”

Holmes explained that in signing on to the initiative, mining companies commit to spending 1% of their exploration budget on social programs. The benefit to shareholders is increased local support for the mine, which can greatly speed, even enable, project development. The added hope is that shareholders, who are increasingly interested in seeing real corporate social responsibility, will flock toward member corporations.

“If a company is spending ten million dollars on exploration in Bolivia, now you know you’re going to spend one per cent, one hundred thousand dollars, on social programs and aid, and that’s just massive,” Holmes says. “It’s also going to give Canada a huge competitive advantage in the formation of capital. It’s just a brilliant mechanism. I’m very, very bullish on it.”

U.S. Global is helping the initiative by monitoring junior explorers and providing report cards on their levels of social responsibility. In terms of outreach, companies can either develop social programs themselves or they can give the money to the initiative, with the coalition then developing appropriate programs.

Other partners in the Clinton-Giustra initiative include: Canaccord Capital (CCI-T, CCDPF-O), CoalCorp (CCJ-T, CCJMF-O), Deloitte & Touche, Gold Fields (GFI-N, GOF-L), the London and Toronto Stock Exchanges, the Lundin Group of Companies, Newmont Mining (NMC-T, NEM-N), Northern Orion Resources (NNO-T, NTO-X), Pacific Stratus Energy (PSE-T, PSELF-O), Teck Cominco (TCK.B-T, TCK-N), and the World Gold Council.

Giustra is the son of a Sudbury, Ont., nickel miner with a penchant for playing the stock market. Picking up the interest, Giustra studied finance and business at college, and then went to work for Merrill Lynch. Only a few years into his career, he jumped to the then-upstart Yorkton Securities, where he founded the company’s resource group. His resource group became the driving force in Yorkton’s rapid ascent to the top tiers of the international mining finance world.

Giustra left Yorkton in 1996, just before a crash in the mining sector, and moved into entertainment. He founded Lion’s Gate Entertainment, one of the biggest independent film companies in the world, and raised over $400 million in debt and equity for the corporation before selling his shares in 2003 to move back into mining. He founded Endeavour Financial and in the last few years has become increasingly wealthy investing in gold mines and other resource companies.

His most notable investment was in Wheaton River, which later merged with Goldcorp (G-T, GG-N). When Endeavour took over the Wheaton River reins, it was a small gold company with a market value around $20 million. Under Giustra, Endeavour helped build Wheaton into the world’s sixth-largest gold mining company in three-and-a-half years. In May, Giustra resigned as chairman and principal of Endeavour to focus on philanthropy, but he continues to act as a consultant for the company.

Giustra’s friends draw attention to the two opposing forces that drive him.

“He has a big heart, but at the same time he’s a very tough negotiator,” Holmes says. “That’s why this deal works so well for him — he’ll no doubt make money, but at the same time you’ll see accountability for a lot of the social programs.”

Giustra’s wife, Alison Lawton, is the chair of UNICEF Canada’s Unite For Children, Unite Against AIDS campaign, and is a dot-com millionaire turned philanthropist and documentary filmmaker. She was one of the driving forces behind Giustra’s increasing interest in charity. Giustra says Lawton deserves credit for the idea: a few years ago, Lawton suggested he use his influence in the mining industry to promote social responsibility in the developing world.

“We share a common belief, and partly because of that, more and more my life has become dedicated to philanthropy over the last fifteen years to where, today, it really is most of what I do,” Giustra says. “One thing they say about philanthropy is that once you start giving, it’s addictive — you just want to give more. And that’s true.”

Clinton has also influenced Giustra in his philanthropy. The two met following the 2004 Asian tsunami disaster, and were drawn to each other’s strong work ethic and interest in giving.

“I’ve had the privilege of travelling with him all over the world, seeing first-hand what he does, and it’s been amazing,” Giustra says. “He’s been a tremendous inspiration to me.”