Atlas Iron's dire financial position has worsened as shareholders consider a $390 million all-cash takeover offer backed by mining billionaire Gina Rinehart's Hancock Prospecting.

The junior iron ore miner suffered an operating loss of $6 million in the June quarter and cash at hand dwindled to $57 million, down from $64 million, plus $14 million in a reserve account, at the end of March.