Embattled miner Atlantic has asked the State Government for millions in royalties relief on its Windimurra vanadium project, in a desperate bid to help it overcome a cash squeeze caused by production problems.

The company declined to comment yesterday.

But official sources told _WestBusiness _that Atlantic, along with struggling gold producer Navigator, is seeking to defer royalty payments of up to 5 per cent of the value of its production, possibly for years.

It comes just days after Atlantic boss Michael Minosora asked for - but has not yet been granted - a second extension to a deadline set by the Australian Securities Exchange to subscribe for $10 million shares in Mid West miner.

Mr Minosora's investment was meant to be part of a broader $41.7 million capital raising anchored by a $30 million injection from Atlantic's Indonesian backer Droxford, on April 27.

The first batch of Windimurra vanadium was produced in January, and the company is targeting full production of 6300 tonnes with a workforce of 140 by next year.

At current vanadium prices Atlantic could pay as much as $11 million in annual royalties, if it can overcome production problems.

Resources Minister Norman Moore would not discuss individual cases but said the Government was open to approaches in limited cases.

"I am always happy to discuss royalty relief with any mining companies that are experiencing demonstrable financial difficulties and where relief may avoid closure and job losses," he said. "To date I have not provided relief to any companies."

Separately, Navigator Resources remains blocked in its attempts to defer at least $4 million of future state royalty payments, which limit its future ability to draw on its short-term $10 million finance facility.

The company was last week hit with a $33,000 fine from Australia's corporate regulator over a misleading $32 million rights issue last year.

It has missed production targets at its Bronzewing gold mine, and last week effectively told the market it was on its last legs as it tries to cut costs.

The woes come as the Government begins a review of the royalty system flagged in the May Budget.

The West Australian

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