In the cave, you still need to find a piece of cloth that you need for your arrow upgrade. The cavern is not big and you can explore it for loot at this point already. At the same time, take a look at the walls and the magnesite ore. This is a necessary material, which you can use later on to craft makeshift grenades. In here, you can find two magnesite ores. Approach each one of them and use the hatchet to extract them.