The embattled miner had negotiated a restructuring in August, designed to write off significant debt and enable it to once again restart its San Ramon gold mine in Colombia. 

But the restructure hinged on a US$38 million equity financing from large shareholder Annibale SAC, which Red Eagle said was personally guaranteed by Annibale's principal, Peru-based Spanish developer Fernando Palazuelo.

However Palazuelo, who was to become Red Eagle's independent chairman as part of the deal, got cold feet last month leaving Red Eagle in default on a US$60 million loan from private equity backers Orion Mine Finance and Liberty Metals & Mining Holdings. 

"Annibale defaulted on that commitment and as a result, the restructuring could not proceed," Red Eagle said in a statement.

Red Eagle said its secured lenders planned to appoint FTI Consulting as receiver over its assets.

San Ramon had produced 5,579oz of gold in the June quarter before mine contractor Stracon suspended operations pending the restructure, in which Stracon had agreed to convert its $3 million in accounts receivable into equity.

The transactions as part of the restructure were to be completed at C20c per share, a 300% premium to Red Eagle's share price on August 23.

Red Eagle shares were trading above 30c a year ago and hit a 52-week low of 1c on Friday.

They last traded at 1.5c, before entering a trading halt prior to the announcement, to capitalise the company a little over $6.6 million.