Africa-focused West African Minerals (LON:WAFM) is unlucky enough to be currently working in the iron ore space where prices have slumped but the group has prudently scaled back costs and is now waiting for an upturn in the market.
On the plus side, compared to peers, it has no debt, a healthy cash balance and a low maintenance cash burn rate of less than US$ 1 million per year, it pointed out in recent half year numbers.
And like other companies, which have survived, it is considering using its cash to buy advanced exploration or producing assets in commodities other than iron ore.
The fall in commodities has been well documented, with iron getting hit hard.
As executive chairman Brad Mills said in recent interims, iron ore continued in 2015 to trade in a range between US$71.1 per dry tonne of 62% in January 2015 to US$38.50 in December - which was down a whopping 70% from its 2013 peak of over US$140 per ton. Now it is around the US$40 mark.
West African has reduced expenditure to a minimum and divested its Sierra Leone assets, while advancing its most mature and promising iron asset toward production, namely, Sanaga in Cameroon, which lies 60km from the Douala Port and within 10km of the main rail line.
A maiden resource estimate showed Sanaga contains 82.9mln tonnes of ore at 32.1% iron and a 25% cut-off, including a 15.8mln-tonne, near-surface oxidised cap at 37.3% iron, while previous metallurgical test work has shown it could produce a premium grade concentrate of 69% iron.
The firm also has the Binga permit near the Kribi deepwater seaport, which has an inferred estimate of 30.5 million tons at 29.7% iron.
Larger permits to the southeast in Cameroon lie along an extensive iron ore corridor, where there are other advanced deposits, namely the North and South Djadom permits immediately adjacent to the Mbalam project, and the Lélé permit to the west.
At Sanaga, the firm is doing scoping studies on a collaboration to secure future off-take deals to create a regional steel industry, ahead of a point where the firm feels it can justifiably start the feasibility process.
The relevant gvernment authority is also reducing the company's land holdings so WAFM can retain resources and deposits but reduce exploration commitments. It will now hold four leases instead of five.
The firm has told investors its cost cutting measures would remain throughout this year and results showed it had stable cash pile as at end of September last year, of £3.9 million, compared to £4.4 million six months earlier.
"Until market fundamentals resolve and demand from China strengthens, WAFM will continue to "weather the storm" and position itself for the eventual and, in the view of the board, inevitable recovery
"The company's management maintains its positive outlook for the future demand for iron ore and is committed to creating sustainable value for shareholders through cash flow generating assets with anticipated low operational and capital costs." Mills has said.