WHO’S WHO » GOLD
Even more bullish than Perth in a gold bull market, from Brazil to Burkina Faso, Vancouver’s largest gold companies hoover-up the industry’s assets
Dodging coups and a monsoon, former banker Christian Milau took True Gold from 14 cents to over a dollar in as many months
Giustra's father was a blaster. He dabbled in stocks and introduced his son to his broker in Vancouver. The young Frank was hooked. He packed in the trumpet and was soon working for Yorkton Securities, peddling penny shares. “The whole concept of compliance and due diligence... didn't really exist back then,” Giustra later told The Globe & Mail. He thrived. In 1983, Giustra was flown off to open a London office, but hated England's stuffiness. “You couldn't even wear a brown suit in those days.” He wore it anyway, with brown shoes. The London market boomed and by focusing purely on mining, Giustra returned to Canada in 1990 a Yorkton hero.
Looking to pick-up assets in the former Soviet Union via the companies Yorkton got behind, he hired a former Chilean minister to advise Kazakhstan on drafting its mining laws. Political names opened doors. Giustra had found his formula. “It was a great way to look credible... it worked really well.” He rolled out the template in Africa and South Ameirca, by now as Yorkton's chairman, but resigned soon after a scandal at the firm's Calgary office.
Giustra stepped into Vancouver's movie studio business, founding Lions Gate Entertainment. It lost money on a deal with Sony, but Giustra took what was now movie money and returned to mining, teaming-up with Ian Telfer over assets that later went into Goldcorp. Another Giustra formula: make money for those around you, and do business with them again in the future. “The one thing that always worked for me is generosity. Generosity can be very profitable.” A large political donor, Giustra did a seven-country Africa tour with Bill Clinton in 2006. Collected a humanitarian award from the Dalai Lama in 2014. Owns an olive oil business in Tuscany. Pals include Tom Cruise.
Frank Giustra’s brother Enrico followed him into broking at Yorkton and is now at Haywood Securities in its Vancouver office. But there are “three Giustras in Canada”, says first cousin Robert, 47.
Having also begun in broking he is CEO of Columbus Gold, pushing a large gold concession in French Guiana under a joint-venture with Russian investors. Direct and proficient, talking in short bursts as if he has a minister waiting on line one, he once
launched a proxy battle without contacting the incumbent board (the board was removed). Owns an organic food business. Sits on the advisory board that sets policy for the Toronto Venture Exchange. Splits his time between Vancouver, London and Paris. Pals include French president Emmanuel Macron.
As soldiers fired warning shots and French troops entered the capital, Burkina Faso's prime minister sat in a meeting with Christian Milau. “If we don't get back into construction by May 1st, we will miss the rainy season and be a whole year behind.”
Parachuted into True Gold after its mine was stormed by demonstrators in a coup in 2015, Milau had spent 12 years in banking in London, Monaco and Zurich. After “a few sleepless nights”, the prime minister restored the cabinet, True Gold was back in business, the company was taken over and its share price went from 14 cents to over a dollar. “He helped us get back to work.”
Milau found himself spying the Aurizona gold mine in Brazil with a private equity firm. “We felt like we were in Ivory Coast or Ghana: the topography, the jungle, the rocks, the deposits, they're all the same.” After several rapid mergers at the bottom of the gold market, he is now CEO of Vancouver-based Equinox Gold. From Brazil and California, output has gone from zero to 200,000 ounces in 10 months.
With backers including Richard Warke, chairman Ross Beaty, Royal Dutch Shell's pension fund, Abu Dhabi’s's sovereign wealth fund, BlackRock and the French arm of Rothschild Bank, every door in London and Vancouver is open.
Equinox is aiming for output of 300,000 gold ounces in 2020 and 1m in two to three years, Milau says. He also sits on the board of Northern Dynasty, a $250m copper play in Alaska, and was finance director at Endeavour Mining, Frank Giustra’s gold company in West Africa, growing from half a mine to five in as many years.
“Mining is not about drilling a few holes then trying to flip it to people. What you do is build a great business through multiple cycles. Everyone's been downsizing and I think we've been doing the opposite.”
“Perseverance, doing the right thing, finding the right people and fighting through the hard times, usually pays off. Not always, but usually. You've got to have that conviction.”
Few people in gold have been closing deals in recent years. One of them is Greg Smith, who has been hitting up on coffee at 5am each morning, browsing Kitco News and meeting bankers for breakfast, folding seven companies in two years into what is now Equinox Gold, chaired by Ross Beaty.
Born in Vancouver, Smith, 43, dodged the dotcom world and joined KPMG, where the mining team “sold me on the adventure of flying around the world.” Mining took off, deal flow followed, and he was soon selling companies to Vancouver's biggest names. In a steakhouse one evening he also co-founded YMP, an association of young mining professionals that now has outlets from London to Perth.
Proactive, well-connected, Smith is in “deal-mode” as Equinox president and dealmaker-in-chief, building a market cap of C$830m ($630m). CEO Christian Milau has two mines in production, but is aiming for “maybe seven” by 2023. From Hawaii to Whistler, Smith is wracking-up the call charges. “I find it hard to disconnect,” he says. “Ross and the team want to build a major gold company. That's the path we're on.” Eco-warrior or climate change sceptic? “The green industry needs metals and we’re in the metals business.”
Stretching from the Atlantic to the Pacific, almost every morning, Bob Quartermain takes to the rocky Trans Canada Trail and runs to his office in downtown Vancouver, rock samples stuffed into the briefcase under his desk. A geology graduate from New Brunswick, he joined Canada’s Teck in 1980, prospecting in every province.
Transferred to Vancouver to run a subsidiary, Silver Standard, he teamed-up with investor Rick Rule to buy silver assets, flipping companies at 5 cents an ounce. In Peru, Mexico and Argentina, “we eventually accumulated almost 2bn ounces of silver in the ground.” But it was high-grade gold in Canada that caught Quartermain’s eye.
Having built the market cap from $2m to $2bn, lifting the shares from 78 cents to $24.15, Quartermain left in 2010 and was soon drilling bonanza grades in British Columbia, building the Brucejack mine, sinking over $1bn. From a $6 IPO, his new vehicle, Pretivm, now trades at $16.33. Pals include Teck boss Don Lindsay.