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Peak Your Profits: You’ll trip, if you skip

Jeff Blackman
Columnist

Most folks are often looking for short cuts to success. Quick fixes to “fame” and “fortune.” If they exist, please let me know.
Which is why, I always stress to others, prolonged, consistent success — requires discipline, focus, persistence, hard work and a process, methodology or system.
And what happens if you skip a step in the system? Let me answer this question, with a story.

Image source: Getty Images.
One certainty about the future is that it's cloaked in uncertainty. Nevertheless,  Newmont Mining   (NYSE: NEM)  management has graciously provided investors with a few peeks behind the cloak.
Out with the old...
In June, Newmont announced that it will be selling its stake in PT Newmont Nusa Tenggara, which operates the Batu Hijau mine in Indonesia. Representing 4% of Newmont's gold reserves at the end of 2015, the Batu Hijau mine was one of the company's more expensive operations. At $965 per gold ounce, Batu Hijau's all-in sustaining costs (AISC) were the third highest of Newmont's 12 gold-producing mines in 2015. But it was  strained  relations with the Indonesian government that most likely led the company to leave the country.
Identifying several benefits on the company's second-quarter conference call, management believes Newmont will emerge as a much stronger company following the closing of the transaction. According to Gary Goldberg, Newmont's president and CEO, besides mitigating risk, the deal "improves the underlying business by monetizing future production to fuel further balance sheet and portfolio improvements." The deal includes cash proceeds of $920 million, which Goldberg says "will be used to repay debt and self-fund our best projects."
... and in with the new
While Newmont is bidding farewell to operations in Indonesia, it will soon be welcoming gold production at two new mines: Merian and Long Canyon.

Construction of the Merian mine has come in $100 million below initial budget estimates. Image source: Newmont Mining corporate website.

Located in Suriname, the Merian mine is about 90% complete, while gold production is expected to begin before the end of 2016. Estimating production to fall between 400,000 and 500,000 ounces on average for the first five years of production, management believes Merian may prove to be of substantial value for years to come. On the recent conference call, management stated, "We also continue to see strong exploration results, both beneath the current pit and elsewhere in the concession."
About 80% complete, the Long Canyon mine, located in Nevada, is expected to begin commercial production in the first half of 2017. Management is forecasting production for the Long Canyon mine to average between 100,000 and 150,000 ounces for the first five years of production; moreover, the AISC is expected to fall between $500 and $600 per gold ounce.
Decisions, decisions
With numerous projects in varying stages of development, Newmont has its sights set on projects as far as 10 years away from actual gold production. The decision to pursue development of a project, however, is influenced by many factors, and there's no guarantee that each project in the pipeline will make it through to execution.
By the end of 2016, management expects to announce its decisions regarding the approval of two expansion projects at its Ahafo mine in Ghana: the Ahafo Mill Expansion and the Subika Underground mine.

Image source: Getty Images.

According to management's estimates, the Ahafo Mill Expansion would contribute gold production of 75,000 to 100,000 ounces on average for the first five full years with production beginning in 2018. The Subika Underground, on the other hand, has the potential to produce between 150,000 and 200,000 gold ounces on average for the first five full years
Although investors can expect to soon learn management's intentions regarding its projects in Ghana, they will have to wait longer to hear about operations in South America. When asked about the future of the company's Conga project -- where Newmont suspended construction operations in 2011 under political pressure -- in Peru, management revealed that it has "put Conga on the shelf for now." Elaborating further on the project, Gary Goldberg commented, "I don't see us in the current price environment, in the current social climate moving that project forward before 2020."
Despite its lack of interest in Conga, management is looking closely at expanding operations at another project in Peru: Yanacocha, the largest gold mine in South America. Conducting definitive feasibility studies of Quecher Main, management estimates that this could extend the life of Yanacocha mine, translating to 200,000 ounces of gold production from 2019 through 2024. Management expects to announce its decision regarding the project in 2017.
The takeaway
A global leader in the gold-mining industry, Newmont is taking a big step in further strengthening its positioning by selling its stake in the Batu Hijau mine in Indonesia. And with a strong pipeline of projects in varying stages of development, the company is well-positioned to prosper even more in the future. Investors will surely want to monitor the company's announcements regarding decisions to move forward or not with expansion projects, for these could provide great insights into where the company is headed.
Scott Levine  has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services  free for 30 days . We Fools may not all hold the same opinions, but we all believe that  considering a diverse range of insights  makes us better investors. The Motley Fool has a  disclosure policy .     The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.     Offer from the Motley Fool:   A secret billion-dollar stock opportunity

As a second-year law student, I began going to law school at night. My days were devoted to selling air time for a radio-brokerage company. The owner of the company shared with me his “alleged” three-step winning philosophy and strategy for successful business development:

Step 1

Make a telephone call to get the appointment.

Step 2

Write-up a contract that included: the stations, the air time, the length of the spots and even the budget, before ever meeting the potential client and determining any of their needs, goals or objectives.

Step 3

Show up at the appointment and leave with a signed contract.

Now, as you can obviously tell, there was no priority placed upon developing rapport, building a relationship and assessing how I could help a decision-maker — solve a problem, fill a need or realize a dream or a goal.
I literally walked into a prospect’s office with a completed contract. It only required a signature.
Their opinion, feelings, attitudes and problems were unimportant. Everything had already been predetermined — by me!
The owner taught me, there was really no need to probe or ask questions, because the meeting should be focused on my presentation and especially on the close, the signature and the initial payment. Not on the prospect.
He also fancied himself as a great motivational master. His pep talks went something like this:

  • “Close early and close often!”
  • “You’ll never smell the rose, if you can’t get the close.”
  • “The buyer is your enemy!”
  • “Get their damn signature, then get the hell out of there.”
  • “You represent my interests, not theirs!”

Did I bring in some contracts? Sure, but not often. At that time, I really didn’t understand the psychology, the process or the system involved in business development. Using the owner’s quick-hit attack strategy, my successes were rare. And as a result, my attitude, desire and self-esteem suffered.
It was only after leaving that job, I realized the major reason for my poor results was that I spent no time developing rapport, building relationships and discovering needs.
I immediately revealed or demonstrated that I had no ability to develop relationship power. Therefore, trust was low and fear was high!
Thankfully, I learned this valuable lesson early in my business life. Please, don’t make the same mistake I did.
Never guess or assume you know what your prospect’s needs are. Let him or her tell you. And if your Q&A or probe reveals, there’s no need to reveal, then don’t reveal!
In other words, if he or she has no problem to solve, need to fill or dream or goal to realize—there’s no need to even waste your time. For you’ve determined, this prospect is merely, a suspect!

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The preceding is an excerpt from the new 5th edition of Jeff’s bestselling book, “Peak Your Profits.” It’s now available on Amazon and at your favorite bookstore.

Jeff Blackman is a Hall of Fame speaker, author, success coach, broadcaster and lawyer. His clients call him a "business-growth specialist." If you hire speakers, contact Jeff at 847-998-0688 or jeff@jeffblackman.com. And visit jeffblackman.com to learn more about his other business-growth tools and to subscribe to Jeff's free e-letter, The Results Report. Jeff's books include “Stop Whining! Start Selling!” (an Amazon Bestseller) and the new 5th edition, of the bestselling “Peak Your Profits.” You can also stay connected with Jeff via Facebook, LinkedIn and Twitter: @BlackmanResults.