‘Digital Gold’ Could Lift Gold Price by 2026 (Uncut) 01-21-2025

Frank Giustra: ‘Digital Gold’ Could Lift Gold Price by 2026, Attracting the TikTok Generation

This is Kitco News special coverage of the Future Minerals Forum. Hello and welcome to Kitco here at the Future Minerals Forum in Riyadh in Saudi Arabia with me, Paul Harris. Joining me is Frank Giuster, Chair and CEO of the Fiore Group and the latest inductee to the Canadian Mining Hall of Fame.

Frank, welcome to Kitco. Thank you. Nice to be here again.

Well, let’s start with that. Congratulations in your induction to the Canadian Mining Hall of Fame. What does that mean to you personally? It’s a great honour.

I mean, I think you have to be pretty old to get it. So it certainly marks a point in your life, but it was a great honour. It was a great event and it was nice to see the other honorees.

It was great. You’re still very active, so it certainly doesn’t mark the cresting of your career. No, not retiring.

Excellent. We’re here at the Future Minerals Forum. What are your impressions of the event? Well, this is my second year.

I came here last year and I have to say, without doubt, that this is the most impressive and now the most important mining conference on the planet. They’ve done an outstanding job convening the most important people in our industry, policymakers, etc. And they put on quite a show here.

It’s really well done. Absolutely. In addition to Kitco, who have you been meeting with here? Well, I’ve just spoken on two panels in the main hall on various issues to do with mining and the industry in general.

And then I’ve obviously had my own business meetings here, as everybody does, because everybody’s here. So you can, like in most conferences, you get to meet everybody, only that here you’re meeting companies you would never meet at other conferences. We’ve certainly had that experience with some of the interviews we’ve been doing here.

Now, we’re at the Future Minerals Forum. So let’s talk about something that’s going to be in the future of gold. And that is, you recently spoke about the World Gold Council working to create digital gold, a project aimed at revolutionizing how gold is traded and used as a financial asset.

As with that, it would trade similarly to cryptocurrencies with divisibility down to one hundredth of a gram, making it accessible and hopefully more attractive to younger tech savvy investors. How is that project progressing and what do you think that would do for the gold market? Yeah, I had a recent conversation with David Tait, who’s the president of the World Gold Council. He walked me through the entire process.

They’ve been at it for five years. This has been a long time in the making. And it’s taken so long because they’re working with the 20 biggest banks, the LBMA banks, all the bullion banks.

And what they’re projecting now is that 2025 will be the year of laying the infrastructure, because it’s all going to be connected through fiber optics. And then it will be launched in 2026 as digital gold. And as you said, divisible, transferable, immediately transferable.

I was told that today it can take up to six hours to settle a gold trade between institutions. And as you said, in order to bring in the next, the younger generation into the gold market, you have to make it technologically convenient. The TikTok generation doesn’t like to get off their couch to walk down to the local bank to buy a bar or a coin of gold.

They want it to be immediate and tradable and easily usable. So I think it’s going to be fantastic from that point of view. But equally important, and I didn’t know this until he explained it to me, although gold is a tier one asset with the Bank of International Settlements, it’s not with commercial banks.

Commercial banks today get, if you want to use gold as collateral, they get discounted by 85% to the value. It means you only get 15% of the value for collateral value. So the banks are going to love this because they’re going to be able to have their gold positions as collateral as with any one other tier one asset like treasury bills, etc.

So that’s going to be very important to the banks. It’s going to be important to the younger generation. And I think it’s going to make gold much more attractive to the world at large.

I mean, if commercial banks can use that as a tier one asset, that’s potentially a huge amount of demand. So what could that potentially do to the price of gold? Well, first of all, I think gold is going to go up regardless. Even without this digital gold, gold is going to go up for many other reasons.

Mostly central bank continued buying, which they’ve been doing for 15 years straight now. And now at an accelerated pace. You know, there’s a de-dollarization movement taking place with the global central banks outside of the G7.

And they’re replacing a lot of it with gold. And that’s going to continue because that process is just going to, it takes time to de-dollarize. And they’re still heavily weighted, almost 58% in their reserves to the U.S. dollar.

And I think they’re all for a number of reasons wanting to bring that number down. Now, it seems long overdue, this modernization of the gold sector, modernization of gold trading, etc., etc. Why is it taking so long for this to happen? Well, again, the way that it was explained to me by David Tait was that the banks up until 2018, they didn’t keep any data on volatility.

And so their risk managers wouldn’t allow for gold to be a tier one asset within the bank. And in order to change that, you had to have immediate transferability. And that required 20 billion banks and the World Gold Council to get together and slowly work towards creating a brand new infrastructure.

And as David said, try and get 20 billion banks together in a meeting to agree on something. It just takes forever. And I think that that’s why it’s taken so long.

Now, Frank, you’re involved in many mining exploration companies, mining companies, publicly traded companies. Another thing that seems to be lagging and perhaps out of date is the way companies market themselves. The way they participate in events such as this is perhaps the same as the way they did it five years, 10 years, 15 years ago.

How should companies be looking to modernize their outreach, their marketing to appeal to a younger generation? I think they can. That’s a really good question. I think you can take a page out of the crypto marketing gamebook.

If you look at the way they’ve marketed Bitcoin, for instance, you can see a lot of things about Bitcoin. You can believe in it, not believe in it. I happen to not believe it is.

I don’t believe it’s digital gold. I don’t think it behaves like gold. I don’t think it ever will.

But they’ve done an incredible marketing job. And you look at their marketing pieces, their advertising commercials. They’re exciting.

They talk about the future. The gold mining industry or the mining industry in general is still living in the past, using the old methods of marketing, coming to these conferences, brochures, all that sort of thing. And I think marketing, let’s just talk about the gold mining business, has to become more innovative.

We have to make it more exciting for people to want to own gold or gold mining shares. OK, let’s change track a little bit and switch to silver. You’ve launched a couple of silver companies recently.

One, sorry, Argenta Gold, but you’re active in other silver companies. Let me get that correct. Now, silver had a good year last year, but not as good as gold.

There’s still a bit of catch up to go. And of course, silver is famous for when it really gets going, it really gets going. This year, analysts say that production is going to be down whilst consumption is going to be increasing.

So people are suggesting there could be a silver price crunch, a pinch or corn or something of that nature this year. What’s your view? Well, they’ve been talking about that for a couple of years now. And silver behaves slightly differently to gold.

It has different dynamics. It has much more commercial dynamics than gold. Gold is more of a monetary instrument and something used for jewelry.

Silver has, you know, solar panel dynamics and other commercial dynamics which impact the price and volatility. I think at the end of the day, and I’m watching it closely, I’m not a silver expert, but I watch closely. I think unlike gold, China hasn’t yet dominated and become the price maker in silver.

The reason gold is up is because it’s no longer priced in the west. It’s priced in the east. Most of the physical gold has moved from western vaults to eastern vaults.

So they now have pricing power. They can dictate the price. That’s not the same for silver.

Silver is much more widespread for commercially. And I think eventually what will happen, my prediction, if gold continues to be on this bull run, silver will always continue to track it. And if it ever gets really crazy, if we have one of those kind of explosive, crazy bull market, silver will outperform.

It always does. Always has in the past. But I think it will lag until that happens.

Which, of course, is why you’ve recently launched a new silver company. You want to be prepared. Okay.

Now we’re at FMF, which is, as you mentioned, a truly impressive event. You’re also, as I mentioned, an inductee to the Canadian Mining Hall of Fame. You’re a big proponent of Canadian mining.

This event, you said, is becoming or now is the most important event for mining in the world. And Saudi Arabia definitely seems to be positioning itself as the place where everybody gets together. It’s not necessarily lying to the east or the west.

It’s Middle Kingdom, if you like. It’s perhaps trying to occupy a space that historically you could argue that Canada occupied as a safe, friendly jurisdiction, not necessarily too allied with one party or another. Is that a valid observation? Yeah, I think it’s valid on a couple of points.

I think that Canada was the leader in global mining finance. It’s no longer. And I think that’s got a lot to do with Canadian policies and just a terrible environment in Canada for the mining industry.

But I think the Kingdom is taking a slightly different approach. They want to be a dominant player, not just in sourcing minerals, but in processing, manufacturing. They want to be like a mini-China, non-aligned.

So they want to be able to deal with both the east and the west. They’re geographically perfectly located for both the access to critical minerals from the super region, which includes Africa and Central Asia. But they’re also perfectly located for trade routes on the Red Sea.

And they can cater both to the west and to the east. They’ve got the Suez Canal and they’ve got a route to Asia. So they want to be more of a holistic player in the energy transition competition that’s taking place.

Canada, I have to say, I’m really disappointed with what’s happened in Canada over the number of years. The capital markets have completely disappeared. There’s no access to capital.

Canadian juniors, which represented half of the global mining companies in the world, are starved for capital. There are no institutions, western institutions, especially in Canada and the U.S., that cater any longer to the mining industry. It’s all gone towards tech and crypto.

And it’s very sad. And I think it really is, as a Canadian, I’m very, very disappointed. And maybe there might be a government change soon.

We will see in Canada. Hopefully policies will change. Canada needs shorter timelines for permitting.

It needs more infrastructure to remote areas. It needs better policies. It needs government involvement in public-private partnerships.

We’re one of the most richly endowed countries on the planet. It’s ridiculous. Second largest landmass in the world.

We’ve got everything that the world needs there. And here we are, you know, squandering our opportunity. And it’s really, really sad.

You mentioned earlier in the conversation how central bank bullion cells are transitioning, the money flows transitioning from west to the east. Is that part of what you see in the mining sector? You mentioned the lack of mining finance available in Canada. Is that mining finance transitioning to the east as well? A hundred percent.

And what you’ve got, here’s the problem. So, in the west, we rely mostly on public mining companies that have to access the capital markets in order to bring projects, develop projects and bring them to production. In the east, it’s a lot of state-backed entities that have long-term strategic goals.

Don’t have to worry about market sentiment, momentum, quarterly profits. They have a long-term strategic goal. That’s hard to compete with.

And, again, so you’ve got China, you’ve got Saudi Arabia, you’ve got other countries in the region here that are all vying for strategic stakes in places like Africa. So, in Africa, it’s not just the kingdom, it’s not just – now you’ve got the UAE, Qatar, Turkey, Egypt, Russia. The U.S. is now starting – they’re a latecomer, but they’re scrambling now to make those investments with, again, working with the private sector.

And it’s going to be very, very competitive. And I feel like Canada is almost missing the party. Hopefully, that will change, but I hardly see Canada anywhere.

One of the things you could argue that is hamstringing Canadian companies is the rise of ESG requirements, regulations, legislation, whatever you want to call that. The things that miners would argue they’ve always been doing in terms of looking after the environment, the communities they’re operating in, and their corporate governments. There seems to be a growing pushback against this ESG momentum, particularly in the United States, the SEC, various state legislatures pushing back against ESG investment requirements.

What can be done in Canada to, I don’t know, let’s say liberate companies from the onerous ESG burden without necessarily sacrificing the good thing? And I think you’re right. I think first you have to address what the reality is. And the reality is that the perception, this industry, mining industry, has an image problem.

It has a PR problem, okay? Because people, the media, and the public in general conflate the approach that industrial mining has to that of illegal and informal miners who wreck the environment, who use child labor, forced labor, where there’s corruption and money laundering taking place. That’s the way that, that’s how the image is painted. But that’s not reality.

Industrial mining, now I’ve been involved in mining companies around the world that act responsibly, work with the communities, protect the environment, educate and bring in the informal miners and illegal miners into a formal system. So it’s partially an image problem. And I think that that has to be rectified.

But then if you look at the trend right now, ESG is starting to take a back seat now. I don’t know if you saw BlackRock the other day, was the biggest investment pool of capital on the planet, is backing off their whole ESG movement. And with President Trump coming in, he could care less.

I mean, he’s going in the other direction, drill, baby, drill, and all of that. So I think that whole ESG movement, where it’s harmful to the production of the critical minerals that we’re going to need to get to clean energy, I think that that’s going to start to take a back seat. Because there is really a disconnect between investors who on one hand say, oh, mining is dirty, but on the other hand say we need clean energy.

Well, where are those critical minerals going to come from? They don’t fall out of the sky. You haven’t connected the dots yet, but they’re going to start. And they will start as the prices of these metals go up, because there is going to be a deficit.

I see that. You see that, let’s say ESG fatigue. You see that.

You mentioned BlackRock. They’ve been heavily impacted, the United States, by different state legislatures pushing back on ESG investment criteria. I think in the last few weeks, the American Airlines Pension Fund, which invests via BlackRock, they had the court said, no, you can’t do that anymore.

OK, now you mentioned that next week the United States has a new president in Donald Trump. He’s very pro-resource development. He has also suggested that perhaps Canada could become the 51st state.

I’m from the UK, and I’ve thought for many years that the UK was the 51st state of the United States. But that aside, you mentioned Justin Trudeau’s resignation and the likelihood that Canada is going to have a new government, probably a more conservative government. Would that new government reinvigorate Canada’s resource industries, do you think? Well, if Kiir Polyaev actually wins the election, which it looks like he probably will, he certainly has made those gestures to the marketplace that he wants to improve the development of critical minerals.

You have to believe what comes out of his mouth. I mean, you know, politicians always say a lot of things when they’re campaigning. But I would think that it’ll be a big improvement on what the Liberals, how they’ve conducted themselves over the last number of years, which I think has been very harmful to investment in general in Canada.

There’s been a huge capital flight out of Canada. And look at our dollar. It’s tragic.

This shouldn’t be happening. We’ve lost investment capital to other jurisdictions. Our own pension funds in Canada, what, $3, $4 trillion worth of pension funds don’t even invest in Canada.

They invest in China, which I find ridiculous. But, you know, they’re looking for returns. And so you need policy change.

You need government involvement, which is happening all over the world. Governments are getting involved directly with the private sector to develop what everybody knows is going to be a huge deficit in the minerals that are going to be necessary to make this energy transition. So one can only hope that a conservative government, if they actually win, will have slightly better policies for this industry.

What policies should the new government prioritize to strengthen Canada’s resource sector? Shorten those damn timelines for permitting. It takes 10 to 15 years to get a project permitted in Canada, in most parts of Canada. You know, I’ve operated in Africa and Latin America 18 months to two years.

Once you start the permitting process. How do you compete against that when it takes 10 to 15 years in British Columbia? It’s ridiculous. That’s number one.

Number two, the government needs to start working to create infrastructure in the remote areas of Canada to access those minerals. And that, you know, that’s going to require some vision and some strategy. Okay.

Let’s end our conversation, Frank, focusing on the Fiori Group and Fiori Group companies. What are some of your goals for this year? What are some of the things you’re really looking forward to? You know, I’ve been doing this a long time. You know, I like to create new companies.

If I have a talent, it’s that I recognize an opportunity. Let’s say it’s an asset. I’m able to put together a management team, board of directors, the initial capital that’s necessary to launch it, and a strategy.

And then I allow the management to do its thing and I just sit back and help where I can. And I’ve done this for many, many years. And I just want to continue to do that.

I want to do it in gold, silver, copper, nickel, uranium if possible. I don’t have a uranium deal, but I’m always on the lookout. And I haven’t been able to find anything that suits my things that I need.

But I’m on the lookout for those minerals. You know, gold is separate than the critical minerals. And I have a different reason why I want gold.

It’s about the monetary system shift that’s taking place. But the critical minerals, I’m all over. Excellent.

Well, Frank Truistel, wishing you the best of luck with that. And thank you very much for joining us today. My pleasure.

Thank you. We have more to come from the Future Minerals Forum here in Riyadh, Saudi Arabia. So stay tuned and hit that subscribe button.

I’m Paul Harris and this is Kitco Mining. This is Kitco News special coverage of the Future Minerals Forum. you