Gold industry veteran Nick Giorgetta says the sector, and its investors, are too focused on bumping up production at the expense of profitable ounces.
On the eve of the Diggers & Dealers conference, which gets under way in Kalgoorlie-Boulder today, Mr Giorgetta also sounded a warning about acquisition-based growth strategies, saying many deals did not make sense and were driven by a desire to get bigger, not necessarily better.
"These days, if you want to rank anywhere, you have to produce lots and lots of ounces," the Regis Resources chairman said.
"And that seems to be what the investors want you to do. And once you produce a certain number of ounces, they all say you can do better than that.
"Unfortunately, everyone is driven by the investment and the share price. I think that is one of the downfalls of the industry.
"Assets no longer drive the company because some assets are only good to a certain tonnage and a certain grade.
"There is too much emphasis on production and not enough emphasis on profits."
Mr Giorgetta is well qualified to comment on the state of the Australian gold industry, which is enduring arguably its toughest period since the late 1990s. He draws on almost three decades of experience, from when he ran Samantha Gold before selling Equigold to Lihir Gold for $1.1 billion and then turning Goldfields-focused Regis into one of the country's biggest producers.
Mr Giorgetta said he never understood the logic of Lihir's 2008 takeover of Equigold, nor Newcrest Mining's subsequent move on Lihir, because of the lack of synergies in both cases.
He qualified his comments by stating Regis' $157 million scrip purchase of the McPhillamys gold asset in NSW two years ago, while not offering synergies, had given his company a 2.5 million- ounce resource in an under-explored region that would one day be transformational for Regis.
"I don't think consolidation is necessarily a better way of going about it," he said. "If you can run your mines and make good money, that is more important than just large tonnages and production for production's sake."
Mr Giorgetta was also cautious about the flood of assets being off-loaded by the industry's majors.
"If the big boys can't make ends meet, you can try to do things differently but how differently can you really do it," he said.
Regis has endured a horror year of operational problems at its three-mine Duketon project north of Laverton. Its share price is down almost 50 per cent.
The miner last week flagged it would wipe up to $215 million from the value of Duketon, having already downgraded production forecasts because of grade problems and the impact of flooding. Profits are also down.
"It's very disappointing," Mr Giorgetta said. "Over my career we built a reputation to deliver on everything we promise.
"In this industry you don't have the luxury to say things aren't going quite right. You have to do all the fixing on the run all the time. We will get it right, it shouldn't have taken this long but we will get it right. But there is no excuse, we have not performed to market expectations. So we are disappointed with that.
"If you want to use a sporting analogy, we played very bad but we still won the game."