Mining magnate donates $100 million for industry-based aid initiative

Vancouver – Vancouver entrepreneur Frank Giustra has spent three decades in the mining and securities sectors. Hes brought in multiple millions of dollars in financings, 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 $100 million now plus half of all his future mining earnings to an industry-based aid project in partnership with his good friend, former U.S. President Bill Clinton. 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. Its fun its 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 to join the project. The worlds second-richest man, Mexican telecommunications tycoon Carlos Slim, is matching Giustras $100-million donation. And more than twenty large mining companies and mining-focused brokerage firms have already signed on as partners, many of them committing a percentage of the 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 identify opportunities to assist local leaders in addressing social, economic, and environmental issues in a cost-effective, scalable, sustainable manner.

Columbia is the initiatives first focus, and Giustra says they hope to have a plan ready for that country before the end of this year. They will also start developing projects in other parts of Latin America; Columbia is the first focus simply because plans there are already further developed.

Frank Holmes, CEO of U.S. Global Investors, has committed his firm to the project. Ive 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 theyre working and theyre frustrated that they cant do anything, he says. Now theres going to be a mandate, if youve signed on, that theres 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 flow towards member corporations.

If a company is spending $10 million on exploration in Bolivia, now you know youre going to spend one percent, $100,000 on social programs and aid, and thats just massive, Holmes says. Its also going to give Canada a huge competitive advantage in the formation of capital. Its just a brilliant mechanism. Im very, very bullish on it.

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

Other partners in the Clinton-Giustra initiative include Canaccord Capital, CoalCorp (CCJ-T), Deloitte & Touche, Gold Fields (GFI-J), the London and Toronto Stock Exchanges, Lundin Group (LUN-T), Newmont Mining (NMC-T, NEM-N), Northern Orion Resources (NNO-T, NTO-A), Pacific Stratus (PSE-T), Teck Cominco (TCK.B-T, TCK-N), and the World Gold Council.

Giustra is the son of a Sudbury 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 companys resource group. His resource group became the driving force in Yorktons rapid ascent to the top tiers of the international mining finance world.

Giustra left Yorkton in 1996, just prior to a crash in the mining sector, and moved into entertainment. He founded Lions 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 built Wheaton into the worlds sixth-largest gold mining company in three-and-a-half years. Last month Giustra resigned as chairman and principal of Endeavour to focus on philanthropy, but continues to consult for the company.

Giustras friends draw attention to the two opposing forces that drive him He has a big heart but at the same time hes a very tough negotiator, says Holmes. Thats why this deal works so well for him hell no doubt make money but at the same time youll see accountability for a lot of the social programs.

Giustras wife Alison Lawton, herself a dot-com millionaire turned philanthropist and documentary filmmaker, was one of the driving forces behind Giustras increasing interest in charity. Giustra says she deserves credit for the idea: a few years ago she 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 15 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 its addictive you just want to give more. And thats true.

Clinton has also influenced Giustra to move towards giving. The two met following the 2004 tsunami disaster, and were drawn to each others strong work ethics and interest in giving. Ive had the privilege of traveling with him all over the world, seeing first hand what he does, and its been amazing, says Giustra. Hes been a tremendous inspiration to me.