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The group's report on OZ Minerals, subtitled "Cash burn continues", said asset sales were looking increasingly like the miner's best option.
Following on from OZ's announcement yesterday that it had received expressions of interest over its Martabe project and Prominent Hill assets, Citigroup said Prominent Hill was likely the number one sell-off suspect.
The analysts went on to suggest a major miner may be eyeing it up.
"Prominent Hill is probably the most saleable asset as, for example, BHP Billiton, which has Olympic Dam just down the road, could be able to use the concentrate from Prominent Hill to top-up the smelter the Olympic Dam," the report said.
While noting development delays at Martabe, Citigroup said the Indonesian project could prove attractive to a gold company seeking growth opportunities.
In combination with asset sell-offs, Citigroup said OZ may also have to look at launching a "deeply discounted rights issue" to reduce its debt burden.
Commodity price drops, redundancy costs and provisional pricing impacts have seen OZ's cash position fall more than $125 million in a matter of days, from $405 million at November 30 to $279.4 million.
Meanwhile OZ's net debt has increase to $802.6 million, or $966 million when including the out-of-the-money convertible, which Citigroup said could be at risk of default due to triggers in other debt facilities.
Citigroup said the miner's refinancing options looked "poor", and with a prospective new lender pulling out of negotiations, the analysts said the likelihood of OZ securing refinance by December 29 was slim.
The report said even obtaining a deadline extension would likely be problematic, particularly with allegations from lender Societe Generale that OZ has defaulted on a facility.
"Given the rapid deterioration in commodity prices and the balance sheet of the company, it is possible that no facility is secure in the current environment and other funding options need to be reassessed," Citigroup said.
Meanwhile OZ today denied allegations that it had engaged in misleading and deceptive conduct.
The statement followed on from news of proposed claims made earlier this week by litigation lender IMF Australia.
The proposed claims concern alleged breaches by OZ of its continuous disclosure obligations between February 28, 2008 and December 3, 2008, two days after OZ entered voluntary suspension.
