The gold industry is not doing enough to combat debt and rising losses and not investing enough in exploration, Randgold CEO Mark Bristow said Tuesday.
"A number of major companies in the industry today are simply not viable," Bristow said at the Mines and Money conference in London.
"Half the industry cannot payback the debt it owes, and can simply not deliver a long-term future."
Gold miners have little to show despite raising up to $95 billion of equity in the past decade, and are struggling with $50-$60 billion debt, Bristow said.
"The industry has cut its own throat by reducing exploration and, instead of keeping production profitable, it oversupplied in the good times," he said.
"Reckless capital" from fund managers and investors with little knowledge of the industry outside of quarterly earnings was culpable, while management were not taking the necessary decisions to cut production and improve efficiency, he said.
"The longer we live in denial, the more drastic the work-out will be."
Better times could be on the horizon if the industry focused on exploration and tackled its skills shortage. "Value creation is not just about money, but the intellect committed to research and development."
Gold prices are down 8% this year, following similar declines in 2014 and 2013. It hit a 6-1/2 year low in November around $1,050/oz.
A strong dollar, partly on the back of expectations of higher US interest rates, and weak Asian demand have pushed gold lower.
Bristow said gold miners should cost their businesses to $1,300-$1,500/oz gold prices.
The London Bullion Market Association Gold Price settled at $1,069.25/oz Tuesday morning, up $7.65/oz.
