Eastern Goldfields (ASX:EGS) is in hot water after announcing that a planned $75-million recapitalization will no longer be going through.

The news came as part of an announcement that the company is looking to adjourn its annual general meeting, scheduled for Friday (November 30), until January 2019.

The recapitalization plan, announced in late September, was intended to “reset and deliver” a strong balance sheet for the company’s future growth.

The $75 million would have involved an interim financing; a capital raising through a placement; a one-for-seven non-renounceable pro-rata entitlement offer; a reduction in debt by negotiating settlements with existing trade creditors; and a recapitalization and services deed with Adaman Resources.

“The … recapitalization package, together with the alignment of key stakeholders represents a significant milestone and presents a solid platform from which to rebuild the company and deliver profitability and long-term shareholder value,” Non-executive Chairman Peter Mansell said at the time.

The company has faced significant struggles in the months leading up to this point, including ceasing operations at its Davyhurst project in Western Australia in September and placing processing activities at the mine into temporary suspension.

Additionally, Eastern Goldfields found itself in a standstill agreement with Investec Australia after it failed to make a repayment of $5 million plus interest by August 1 under a previously established syndicated facilities agreement.

Eastern Goldfields says that it will be evaluating a number of alternative options going forward, potentially including voluntary administration, but is not yet able to make an official statement.

The company was placed under a trading halt in late July, and has remained dormant ever since; its last share price came in at AU$0.115.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.