CMS: Frank Giustra sees gold juniors like ‘a kid in a candy store’

Western investors have been “asleep at the wheel” with seizing on investments in the exploration and junior gold sector, entrepreneur and philanthropist Frank Giustra told The Northern Miner’s Canadian Mining Symposium on Oct. 12 in London.  

In an interview with TNM’s Editor-in-Chief, Alisha Hiyate, Giustra lamented the West’s fixation on other sectors, making mining pale in an investment size comparison. 

“We’re focused on other things like tech stocks and crypto… but there’s incredible value out there in gold mining,” he said. 

Coupled with the phenomenon are concerns for junior mining companies struggling with access to financing, with the broader market showing little interest in the mining sector.  

“Even gold mining companies and developers, despite having value, are overlooked by generalist investors,” according to Giustra, who is also the CEO of Fiore Group. 

Yet, despite the challenges, Giustra’s tone took an optimistic turn when discussing the cyclical nature of the gold market, describing present opportunities as akin to being “a kid in a candy store.” 

For those who are currently able to invest and are interested in the sector, Giustra sees a playground of possibilities. He highlighted the value waiting for astute and patient investors. Giustra noted many companies (which he refrained from naming) show healthy profit margins, strong cash flows, and promising mine lives. Yet, the market largely overlooks them. 

The financier has recently become interested in early-stage gold exploration, investing in Blackwolf Copper & Gold (TSXV: BWCG), which has properties in Alaska and B.C. He’s also backing West Red Lake Gold Mines (TSXV: WRLG; US-OTC: WRLGF), which is hoping to revive the recently shuttered Madsen gold mine in northern Ontario’s storied Red Lake mining camp. 

Global reset 

Drawing from decades of experience in the financial sector, Giustra shared his insights on the shifting dynamics of the global economy and the potential dominance of gold as a pivotal asset in that economy. 

He emphasized how current geopolitical trends may affect the very fabric of the world’s monetary system. 

“There’s a shift that’s been going on from a U.S.-centric system to a multi-polar world,” Giustra said, implying significant economic consequences in the pipeline. 

At the heart of this shift, he believes, is the ‘de-dollarization’ phenomenon and the potential for the U.S. dollar to lose its esteemed reserve currency status. 

One of the cornerstones of Giustra’s argument is the increasing accumulation of gold by countries like China and Russia. “The U.S. had historically revalued gold, notably in 1933 and 1971, and we’re witnessing a similar scenario unfolding now,” he said. 

Giustra pointed to the relentless gold purchases by Eastern nations, particularly stressing China’s proactive role: “It’s in the East that people are buying the gold and investing in gold mines.” 

Giustra catapulted to mining fame by running prominent mining finance house Yorkton Securities before helping to build multiple gold producers, including Wheaton River Minerals, which later became Goldcorp and Endeavour Mining (TSX: EDV). 

Philanthropist at work 

Apart from his renowned business acumen, Giustra’s philanthropic endeavours took centre stage. His work encompasses everything from poverty alleviation to refugee resettlement. His approach is unique: “For me, it’s always looking for a very difficult, complex problem and trying to figure out a new model that will address that problem or at least mitigate it.” 

Perhaps the most striking takeaway from the interview was Giustra’s views on wealth disparities. He asserted, “The wealth gap between the rich and poor is getting very, very wide, and it’s causing issues. I don’t think it’s healthy that you have multi, multi billionaires and then the rest.” 

He urged a more egalitarian approach to wealth, emphasizing the societal responsibilities of the ultra-wealthy and the impossibility of actually spending vast amounts of cash. 

“Pretend you have a billion dollars. and see how much you can spend with that billion. And you won’t get very far, you’ll still have a lot left over,” he said, referencing the 1980s movie Brewster’s Millions. 

“Good for you for making billions of dollars. Live a great life and make sure your children, your grandchildren, are taken care of. But for God’s sake, you have a bunch there that should be used as Andrew Carnegie once said, for the betterment of society. That’s my belief.”