Today, Pierre Lassonde, President of Newmont Mining Corporation spoke at the Spencer Fox Eccles Convocation at the David Eccles School of Business at the University of Utah.
Newmont Mining (NYSE: NEM) is the world's largest gold mining producer, with operations in Australia, New Zealand, Central Asia, Indonesia, North and South America. Lassonde is author of The Gold Book: The Complete Guide to Precious Metals. Prior to becoming President of Newmont, he was the co-founder of Franco-Nevada Mining Corporation, which was acquired by Newmont. Canadian born Lassonde received an MBA from the David Eccles School of Business .
In 2000, Lassonde donated $3 million to fund the Lassonde New Venture Development Center at the University of Utah. Just weeks ago, the school announced that Lassonde had donated another $13.25 million to fund the largest University entrepreneurial center in the country at the University of Utah. The Pierre Lassonde Entrepreneur Center will consist of existing programs, including the Lassonde New Venture Development Center, the Utah Entrepreneur Challenge, Opportunity Quest, Speaker Series and Launch Pad.
Lassonde started out, he said, by creating a mining business for which he raised a few million dollars. After two years, the company had spent all of the money without actually acquiring any good assets. Under pressure, he and his partner decided to make a market in mining royalties--which had never been done before. This allowed the company to create a new niche for itself, reaching a billion in revenue before anyone else really noticed what they were doing.
Lassonde made the point that while there are only seven musical notes, there are an infinite number of songs. There is always something new to do. Find a niche.
He also suggested that entrepreneurs need to know the difference between being lucky and being smart. The first royalty Lassonde bought cost him $2 million--it has since paid out $600 million.
Lassonde also advised the audience to know the value of your company at all times. He notes that there are wholesale, retail, and fairytale valuations. He suggests focusing on hard asset valuations.
Having done countless deals, he advised "Don't be too tough, don't be too smart." He suggests that if you could lose your reputation as a fair player by doing a deal, don't do it. You'll want to come back and do business with people over and over again.
When he took over Newmont Mining, he read Good to Great. He took his team aside and made the point that they needed to get the right people on and the wrong people off the bus in order to make the business more efficient.
He closed by quoting from Proverbs: "A good name is rather to be chosen than great riches, and loving favour rather than silver and gold." Apt, he noted, for a gold miner turned philanthropist.
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