Image source: Cliffs Natural Resources.

What: Cliffs Natural Resources' (NYSE:CLF) shares rose an impressive 34% in February, with the increase continuing into the early days of March. But there were three distinct bumps along the way, which speak to what may be going on behind the scenes.

So what: Cliffs mines for iron ore, selling predominantly to U.S. steel mills such as AK Steel (NYSE:AKS). Although iron ore prices have moved up, Cliffs is still struggling. And just as important, so are its main customers. AK Steel, for example, has bled red ink for seven consecutive years and still faces intense pressure from foreign steel imports. In fact, the entire U.S. steel industry is producing far less steel than it has the capacity to produce, which hurts returns and, more to the point for Cliffs, limits demand for iron ore.

That helps give a little background for Cliffs' current state of affairs. It's got lots of debt, is working hard to lower costs, and has been selling assets. It's in survival mode. That brings us to the three price bumps, each occurring around the time of news about a sizable debt exchange plan that should help to shore up Cliffs' balance sheet.

The first announcement was to tell bondholders about the exchange, which hit the news wires in late January and probably helped push the shares higher in the early days of February. The next announcement was an update on how many investors had agreed to tender their bonds on Feb. 10, along with an extension of the deal's closing date. This appears to have led to another swift advance. The last news came toward the end of the month and probably helped push the shares higher into the early days of March. That release summarized the final results of the deal.

Did Cliffs get everything it wanted? Probably not, but the amount of debt exchanged was in line with the miner's expectations. But in the end, this is another important step in the direction of surviving this deep industry downturn. Recovering iron prices were no doubt a help to Cliffs and its stock price, but even that can be viewed as simply helping to ensure Cliffs' survival. And that's the bigger story here today.

Now what: Cliffs is working hard to get its house in order during a deep iron ore bear market. Every little step it takes, including selling its coal business and restructuring its debts, helps ensure it survives to fight another day. With the shares off more than 95% over the past five years, the current price advance is really just a drop in the bucket. But it appears that investors may be starting to believe there is a future for Cliffs after all.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.