Atlas Iron's shares rose after it flagged $900 million in write-downs and a likely first half loss as the iron ore price plunged to a fresh five year low.
The over-supplied iron ore market is increasingly claiming victims among smaller, higher cost producers such as Atlas who are cutting jobs and making losses.
The price dropped on Wednesday to $US66.84 a tonne, its lowest level since 2009, as this year's perfect storm of extra output from the big miners and slowing Chinese growth weigh on the steel making commodity.
It is also affecting Australia's coffers, with official forecasts for annual resources earnings reduced by $17 billion to $176 billion this week and a price rebound soon increasingly considered unlikely.
Atlas Iron's shares had jumped by half a cent, or 3.6 per cent, to 14.5 cents by 1415 AEDT.
However the Pilbara miner's share price has been one of the hardest hit by the 65 per cent fall in iron ore's price this year, with its stock falling 88 per cent and market value dropping from $11 billion to sub-$1 billion.
IG market strategist Stan Shamu said the uncertainty around iron ore, oil and other commodity prices was having a negative affect on the resources sector and share market generally.
Atlas flagged a non-cash impairment of $700-$900 million, involving write-downs on the value of its Pilbara iron ore projects and related to the iron ore price.
It also said it would buy out joint venture partner Altura Mining's 30 per cent stake in the Mr Webber mine for an expected $22 million, within Altura a victim of the price fall.
Atlas has previously been labelled by analysts from Citi as one of the most vulnerable miners in terms of its costs and debt, placing a sell on it and Mount Gibson.
However Atlas chief executive Ken Brinsden said the company was well within the contractual terms of its debt agreements.
The company had significantly reduced its "all-in cash costs" to $65 a tonne and was on track to achieve its annualised savings target of $75-$100 million a year by next June, he said.
Atlas earlier in December cut 80 jobs, reduced the size of its board and trimmed the pay packets of the remaining six board members.
"Its in all of our best interests to reduce Atlas costs, to ensure we remain competitive and have a sustainable business and ongoing operations," Mr Brinsden said.
"As a result, Atlas has very strong leverage to even a modest uptick in iron ore pricing."
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