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Barbara Henderson, the vice-president of investor relations at Pacific Rim Mining Corp., isn't just answering shareholder questions these days, she's also answering the phones.

In a desperate bid to preserve cash, the junior mining company has been forced to lay off about half of its head office employees including the receptionist. Ms. Henderson is now fielding incoming calls to Pacific Rim's Vancouver office in addition to her regular duties.

"Cash is king and preservation is the name of the game right now," Ms. Henderson said in an interview.

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Pacific Rim, which has endured unexpected delays obtaining the permits needed to build its El Dorado gold project in El Salvador, announced more cost-cutting measures Thursday. In an effort to reduce overhead even further, it let its chief financial officer and chief operating officer go.

The company has $2-million in cash right now, but, as with most junior mining companies, access to funds through traditional debt or equity financings has disappeared.

Tom Shrake, Pacific Rim's president and chief executive officer, said that with the trying circumstances, the company needs to keep costs as minimal as possible. "We're protecting our asset," he said.

The credit woes wreaking havoc on the financial markets have been particularly savage for the junior mining sector.

Hedge funds and other institutional investors facing redemptions have been forced to unload their positions in mining stocks.

As the credit crisis has intensified, development companies who need to raise money to build mines have been severely punished as investors bet that financing deals won't get done or terms will be exceedingly onerous.

Shares of the once high-flying Mirabela Nickel Corp., which is developing a promising nickel deposit in Brazil, have plunged 30 per cent in the past month.

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In addition to a falling nickel price, investors are worried about whether a $280-million (U.S.) term loan will be successfully syndicated.

Similarly, Katanga Mining Ltd., which is developing a massive copper mine in the Democratic Republic of the Congo and also has to complete major financing, has seen its shares skid 40 per cent in a month.

"Anything that smells like heavy capital expenditure is getting flogged," one analyst said.

However, junior mining companies focused on exploration have suffered even worse.

According to research compiled by Canaccord Adams, the small-capitalization mining industry has been hit with most precipitous decline since the crash of 1987.

Over the past four months, the TSX Venture Exchange has plummeted 43 per cent and is off 54 per cent since April, 2007.

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"This market is not your average hammer-to-thumb miscue - the sledge has slipped and junior mining is currently close to unconscious," Canaccord analysts said in a recent note to clients.

Awash in excess capital less than a year ago, junior mining firms have suddenly had to become penny pinchers.

Orezone Resources Inc. has secured a $330-million debt facility to help fund the construction of a gold mine in Burkina Faso.

But the Ottawa company needs to raise roughly $100-million more in equity to complete the deal. Unwilling to issue shares at such low price levels, the company is looking for alternative ways to raise the capital, including trying to tap high-net-worth investors from the Middle East and Asia or striking a deal with a gold royalty company.

In the mean time, construction at the mine site has slowed.

"Right now we're running at half speed," Orezone's CEO Ron Little said.

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Pacific Rim is also looking at finding cheaper office space in Vancouver or subletting the extra space it now has to another company. It intends to rehire both a COO and CFO once market conditions improve.

Ms. Henderson, meanwhile, remains philosophical about her expanded office duties.

"It's just a matter of the market turmoil filtering down to the nitty-gritty of everyday business," she said.

Pacific Rim (PMU)Close: 25 cents, unchanged

Mirabela Nickel (MNB)Close: $3.20, unchanged

Katanga Mining (KAT)Close: $5.90, down 40 cents

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Orezone Resources (OZN)Close: 91 cents, down 5 cents

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