The company had called a trading halt last week as it held talks with Macquarie Bank over restructuring its debt.

At June 30, Western Desert had drawn debt of $A80.65 million.

The company said the negotiations were progressing until last Wednesday, when Macquarie withdrew its offer for short-term support.

Macquarie also refused any access to "in the money" hedge proceeds for Western Desert's July and August shipments, which totalled about $7 million.

The company had hedged two-thirds of September quarter production at $120 per dry metric tonne and it said based on Thursday's iron ore price of $US84.30/t, its hedge book was in the money to the tune of about $A25 million.

The Roper River mine in the NT had experienced a slower-than-expected ramp-up, though mining rates doubled in the June quarter and the operation was expected to reach nameplate capacity of 3 million tonnes per annum in the current quarter.

The company raised $57 million in April, which was used to repay debt and pay port access fees.

Western Desert had just $3.08 million cash at the end of June but planned to seek approval for a $5 million convertible loan from Hamerroo, a company associated with director and major shareholder, poker machine billionaire Bruce Mathieson.

A last ditch proposal was made to Macquarie on Friday afternoon, asking for short-term support but it was rejected.

Western Desert said while it had received significant interest for funding, firm commitments had not been received.

"Accordingly and regrettably, acting on legal advice, WDR directors have no alternative but to appoint a voluntary administrator, which was so resolved at a board meeting this afternoon," Western Desert said on Friday.

Stephen Duncan, Mark Mentha and Scott Kershaw of KordaMentha were appointed as administrators, while Macquarie appointed Darren Weaver and Martin Jones of Ferrier Hodgson as joint and several receivers over the securities it holds.

Weaver said the receivers were working with the board and management to determine the company's future.

Shares in Western Desert, which last traded at 14.5c, will remain suspended.

The company's collapse is another blow for the NT's fledgling iron ore industry after the collapse of Sherwin Iron in July.

The territory had another scare that week when the ABC reported that Territory Resources' Frances Creek iron ore mine would close.

However, Territory director and Noble Group iron ore head Ben Stewart told MiningNews.net the report was inaccurate, though he confirmed the operation was under review and rather than shutting it down, the company was "reconsidering the scale" of operations.

In South Australia, IMX Resources appointed an administrator to its 51%-owned Cairn Hill operating subsidiary Termite Resources in June.

The iron ore price fell to a fresh five-year low of $US83.60/t on Friday.