Dacha Strategic Metals Inc.

COMPANY DATA | INTRODUCTION |  PROJECT IN HAND | MANAGEMENT
NEWS UPDATE | CHINESE

COMPANY DATA

INTRODUCTION

Dacha is building a strategic stockpile of Rare Earth Elements outside of China. Dacha is capitalizing on the opportunity to acquire and export high value, heavy rare earths, to create a strategic inventory of these minerals and provide investors with direct exposure to these un-substitutable elements. Dacha will create value by holding these materials in warehouses outside of China as a multi element strategy and expects the benefit from rising prices as well as attracting a strategic premium for its inventory.

PROJECT IN HAND

Dacha Business Model

Dacha is structured as a tax efficient, diversified vehicle that allows investors to participate in the long term appreciation of strategic Rare Earth elements and other critical Minor Metals. These materials will be stockpiled in geographically diversified warehouses that are LME (London Metal Exchange) or MMTA (Minor Metals Trade Association) approved in order to ensure the highest quality of service in storage handling. Dacha shareholders will benefit from the following trends:

• Rising values of strategic Rare Earth elements such as Dy, Tb, Eu, Y, Gd, Pr and Nd 

• The growing strategic premium for having critical materials in politically neutral countries 

• The expected spot volatility trading opportunities that will present themselves to the only publicly funded financial participant

• A diversified basket of hard assets as opposed to a single element approach

• Professional management critical to obtaining and managing the portfolio in difficult to access markets 

• Focused exposure to specific physical strategic commodities rather than mining deposits and their associated risk profile 

Dacha currently has established two London Metal Exchange approved warehouses in Busan, Korea, and in Singapore, with both locations operated by international freight forwarder Pacorini Toll. As the Company's stockpile grows, Dacha will look to additional warehouse locations from a risk diversification standpoint.

Rare Earths

China produces over 95% of the world's rare earth supply. Certain heavy rare earths are critical in the manufacturing of many products we use today, for example TVs, computers, cell phone, DVD players, cameras, nickel-metal hydride batteries, fluorescent lighting, medical Magnetic Resource Imaging equipment, car catalytic converters and super magnets. Rare earth elements are also essential for the defense industry and are found in cruise missiles, precision guided munitions, radar systems and reactive armor. 

Rare earth elements are incorporated into many modern technological devices (green technology), including batteries, motors and generators of hybrid cars, and the new generation of wind powered turbines.

"In 20 years, all cars on the road will be electric." - Warrant Buffett, November 2009

Rare earth elements are a small value component yet are critical because in many cases they cannot be substituted. Supply side response is limited and a substantial multiple-fold increase in price would have little effect on the pricing. These factors in addition to potential political conflict, lack of near term future production and mispriced inefficient markets, create the investment thesis Dacha has to offer.

"The value of global rare-earth trade last year was just $1.25 billion, and it is projected to grow to about $3 billion by 2015."- The Wall Street Journal September 3rd, 2009


Stockpiling

Dacha will initially focus on stockpiling certain heavy rare earths i.e. Terbium (Tb), Dysprosium (Dy), Gadolinium (Gd), Europium (Eu) and Yttrium (Y).

On May 6, 2010, Dacha announced that it has exported its first Rare Earth shipment totals 14 metric tonnes of Dysprosium from China destined for its primary warehouse located in Busan, Korea.

On May 13, 2010, Dacha announced that it has acquired 39 metric tonnes (39,000 kg) of Rare Earth Elements from China destined for its primary warehouse in Busan, Korea. For an aggregate price of US$5.8 million, Dacha has acquired 16 metric tonnes (16,000 kg) of Dysprosium metal, 20 metric tonnes (20,000 kg) of Yttrium Oxide and 3 metric tonnes (3,000 kg) of Terbium Oxide.

On May 27, 2010, Dacha announced that it has acquired an additional 155 metric tonnes (155,000 kg) of Rare Earth Oxides from multiple Chinese suppliers. For a consideration of approximately US$7.7 million, Dacha has acquired 20 metric tonnes (20,000 kg) of Gadolinium Oxide ( Gd2O3), 120 metric tonnes (120,000 kg) of Yttrium Oxide ( Y2O3), 3 metric tonnes (3,000 kg) of Lutetium Oxide ( Lu2O3), 6 metric tonnes (6,000 kg) of Europium Oxide (Eu2O3) and 6 metric tonnes (6,000 kg) of Terbium Oxide (Tb4O7).

MANAGEMENT

Stan Bharti, P.Eng., Executive Chairman
Mr. Bharti is a business consultant and a professional mining engineer with more than 25 years of operations and capital markets experience. Mr. Bharti has been the President of Forbes & Manhattan, Inc., a private merchant bank operating in Canada, the United States and Western Europe, since July 2001. He is the Chairman and Director of many other publicly listed junior mining companies.

Scott Moore, B.A., MBA, President & Chief Executive Officer, Director
Mr. Moore is an experienced business executive with 20 years experience in the resource and durable goods sector. Former CEO of Franc-Or Resources Corp. and VP Corporate Development for Aberdeen International. Former Director of Sulliden Exploration, Franc Or Resources and Avion Gold. He has raised in excess of $250 million in resources in the last 3 years.

Alastair Neill, P.Eng., MBA, Executive Vice President, Director
Mr. Neill is the former VP Sales, Rare Earth Division and VP Business Development of AMR (Now Neo-Material Technologies) and brings over 15 years of direct rare earth experience.

Ryan Ptolemy, CGA, CFA, Chief Financial Officer
Mr. Ptolemy currently serves as Chief Financial Officer to a number of public companies in the mining sector.

NEWS UPDATE

On July 5, 2011, Dacha Strategic Metals Inc. announced the continued appreciation of its rare earth metals inventory. Dacha reported assets of CDN$1.44 per share with rare earth metals inventory value estimated at US$102.7 million as of June 30, 2011.

On June 27, 2011, Dacha Strategic Metals Inc. reported that its rare earth metals inventory continues to appreciate. Dacha reported assets of CDN$1.39 per share with rare earth metals inventory value estimated at US$97.4 million as of June 24, 2011.

On June 13, 2011, Dacha Strategic Metals Inc. announced its rare earth metal inventory as of June 10, 2011. The estimated value of its metals inventory was US$91.7 million, or $89.7 million, an increase of $26.4 million, or 42%, from the estimated value of $63.3 million at May 27, 2011.

On June 9, 2011, Dacha Strategic Metals Inc. announced that it has sold 86,000 kg of yttrium oxide from its domestic supply in Shanghai at a price of 255 renminbi per kg for gross proceeds of 21.93 million renminbi (approximately US$3.4 million).

On June 7, 2011, Dacha Strategic Metals Inc. announced that it has sold 30,000 kg of yttrium oxide from its domestic supply in Shanghai at average price of 230 renminbi per kg for gross proceeds of 6.9 million renminbi (approximately US$1.1 million).

On May 30, 2011, Dacha Strategic Metals Inc. announced its intention to make a Normal Course Issuer Bid to buy back its common shares through the facilities of the TSX Venture Exchange.

Dacha also announced the appointment of Mr. Ryan Ptolemy, CFA, to the position of Chief Financial Officer. Mr. Ptolemy currently serves as Chief Financial Officer to a number of public companies in the mining sector.

The appointment of Mr. Ptolemy follows the resignation of Brad Boland.

On May 30, 2011, Dacha Strategic Metals Inc. announced that its rare earth metals inventory continues to appreciate. As of May 27, 2011, the estimated value of its metals inventory was CDN$63.3 million, an increase of CDN$17.2 million, or 37%, from the estimated value of CDN$46.1 million at April 29, 2011.

On May 3, 2011, Dacha Strategic Metals Inc. announced that its rare earth metals inventory continues to appreciate. As of April 29, 2011, the estimated value of its metals inventory was CDN$46.1million, an increase of CDN$5.5 million, or 13%, from the estimated value of CDN$40.6 million at March 31, 2011.

On April 11, 2011, Dacha Strategic Metals Inc. announced that it has acquired an additional 9,000 kg of rare earth oxides to be exported from China to its Busan, South Korea, warehouse location.

On April 5, 2011, Dacha Strategic Metals Inc. announced that its rare earth metals inventory has continued its appreciation. As of March 31, 2011, the estimated value of its metals inventory was US$41.8-million, or $40.6-million, an increase of $4.8-million, or 13%, from the estimated value of $35.8-million at March 10, 2011.

On March 29, 2011, Dacha Strategic Metals Inc. announced that it has sold an additional 2,000 kg of europium oxide in China, for gross proceeds of US$1.2-million.

On March 1, 2011, Dacha Strategic Metals Inc. provided its financial results for the third quarter ended December 31, 2010. The Company recorded net earnings of $1.5-milion, or 2 cents per share in Q3.

On February 15, 2011, Dacha Strategic Metals Inc. reported its estimated net asset value at January 31, 2011, was 51 cents per share based on 73.1 million shares outstanding.

On December 29, 2010, Dacha Strategic Metals Inc. announced that it has acquired 12,000 kg (12 metric tonnes) of heavy rare earth elements.

On December 15, 2010, Dacha Strategic Metals Inc. released its estimated net asset value at Nov. 30, 2010, to be 46 cents per share based on 73.1 million shares outstanding.

On November 29, 2010, Dacha Strategic Metals Inc. announced that it has traded 70,000 kg of heavy rare earth elements. Dacha also reported that it sells 40,000 kg of heavy rare earth elements to multiple customers for US$9.71-million.

On November 23, 2010, Dacha Strategic Metals Inc. announced that it has appointed Ms. Jihong Gan to the position of Manager, Contracts and Administration.

On November 15, 2010, Dacha Strategic Metals Inc. provided its estimated net asset value at October 31, 2010, of 44 cents per share based on 72,159,214 shares outstanding.

Dacha also announced the departure of Patrick Wong, Chief Investment Officer, who has left Dacha to pursue other endeavours.

On September 28, 2010, Dacha Capital Inc. announced that pursuant to special resolution passed by the shareholders of the Company at its annual and general meeting held on September 13, 2010, the Company has changed its name to "Dacha Strategic Metals Inc.". Effective at market open on September 28, 2010, the common shares of the Company will commence trading on the TSX Venture Exchange under the name "Dacha Strategic Metals Inc." with the new trading symbol "DSM".

On August 16, 2010, Dacha Capital Inc. reported its estimated net asset value at July 31, 2010, was $29.59-million or 41 cents per share based on 72,159,214 million shares outstanding.

On July 21, 2010, Dacha Capital Inc. announced that it has obtained a receipt on July 20, 2010, in connection with the filing of a final prospectus in the provinces of British Columbia, Alberta, Ontario, Quebec, and the Northwest Territories. The prospectus qualifies for distribution 48,889,001 common shares of the Company issuable upon the automatic exercise of 48,889,001 previously issued special warrants of the Company.

On June 10, 2010, Dacha Capital Inc. announced that it has acquired an additional 8 metre tonnes (8,000 kg) of rare earth oxides from a Chinese supplier. For consideration of approximately US$2.5 million, Dacha has acquired 3 metric tonnes (3,000 kg) of Terbium Oxide (Tb4O7), and 5 metric tonnes (5,000 kg) of Dysprosium Oxide (Dy2O3).
Scott Moore, President and CEO of Dacha commented; "We continue to see opportunity to purchase heavy rare earth oxides in China and the news of consolidation in the industry is welcomed by Dacha." 
Dacha closed a $22 million equity financing at the end of March 2010 with the proceeds to be utilized to acquire and export Rare Earth Elements from China to create a strategic stockpile outside of China.

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