The company said the board appointed Stephen Longley, David McEvoy and Christopher Hill of PPB Advisory as administrators late yesterday.

Cobar said the action was taken after it was unable to secure commitments from shareholders for $8 million as part of a share purchase plan.

Patersons Securities was appointed lead manager of the SPP and was in talks to underwrite it, though an underwriting agreement never materialised.

Early last week, the company extended the SPP to Friday, but obviously that wasn’t enough to secure the funds.

All money received under the SPP will be returned to shareholders.

Cobar required the funds to restore its working capital and make a scheduled $2.6 million repayment to the Commonwealth Bank of Australia.

But the CBA was seeking the full $10 million repayment by June 30 and Cobar said earlier this month that it was in talks to refinance the facility and confident of having new arrangements in place by the end of the financial year.

The company had just $813,000 in cash at the end of December and recently posted a half-year loss of $29.6 million, which included a $23.5 million impairment on the Wonawinta silver mine in New South Wales.

The collapse comes just as Cobar had flagged steady state silver production of 200,000 ounces per month from Wonawinta.

Operating costs for the remainder of the financial year were forecast at $19 an ounce, while the Australian dollar spot price is currently $22.86/oz.

Cobar shares have lost 52% this year to 5.8c yesterday, while silver has risen 7.5% to $US20.86/oz over the same period, peaking at $22.08/oz last month.

Shares in Cobar have been suspended and administrators said a detailed announcement would be made in due course.