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Corporate Presentation - October 2012
TSX:DSM.V OTCQX:DCHAF
A member of the Forbes&Manhattan Group of Companies
A Unique Investment Vehicle
for Strategic Materials
Forward-Looking Statements
Caution regarding forward-looking information:
This presentation contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking
information includes without limitation, statements regarding the proposed use of the proceeds of the financing, the receipt of all necessary
approvals, the issue of permits, progress in development of mineral properties, future production and sales volumes, capital and mine
production costs, demand and market outlook for rare earth metals, future metal prices and treatment and refining charges, the financial
results of the Company, the future financial or operating performance of the Company, and terms and the availability and likelihood of
future acquisitions. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would",
"might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different
from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive,
geopolitical and social uncertainties; market risks; risks related to leverage; acquisition risks; and other risks of the mining and trading
industries. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those
contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company
does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
This presentation does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The
securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")
or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption from such registration is available.
2
Company Overview
Dacha operates as a unique investment conduit allowing its
shareholders to invest directly in physical strategic materials
Dacha focuses on achieving investment gains through the trading and
long-term appreciation of physical holdings in strategic minerals,
particularly REE’s, held in LME warehouses
Current net assets of approximately US$58 million
Management and Board composed of leading REE experts
Strong relationships for acquisition of Rare Earths from China
Company Ticker Symbols TSX .V: DSM
OTCQX : DCHAF
Shared Outstanding (Fully Diluted) 94.3 million
Share Price (October 26, 2012) $ 0.45
3
An Actively Managed Physical Portfolio
Dynamic Physical Portfolio
of Rare Earths + Trading Operations
Fundamental Research
Asset Allocation
Corporate not Hedge Fund Structure
First Mover Advantage
4
Management
Scott Moore, MBA, President & Chief Executive Officer • 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 holds a Bachelor of Arts degree from the University of Toronto and an MBA from the Kellogg School of Management
Alastair Neill, P.Eng., MBA, Executive Vice-President • Mr. Neill is the former VP sales, Rare Earth Division and VP Business Development for AMR (Now Neo-Material Technologies) and
brings over 15 years of direct Rare Earth experience • He holds a MBA from York University and a Bachelor of Engineering in Material Science from the University of Western Ontario
Ryan Ptolemy, CFA, Chief Financial Officer • From August, 2005, to September, 2009, Mr. Ptolemy was at an independent investment dealer in Toronto, most recently serving as
Chief Financial Officer, where he was responsible for financial reporting, auditing, budgeting and internal controls • Mr. Ptolemy currently serves as Chief Financial Officer to a number of public companies in the mining sector.
Christine Gallo, L.L.B., Corporate Secretary • Christine Gallo is a corporate securities lawyer who works as a legal consultant to several publicly traded companies in the mining
industry. • Previously, Ms. Gallo practiced law at a major Canadian law firm, with a focus on securities law. • Ms. Gallo holds a Bachelor of Laws from Osgoode Hall Law School and a Bachelor of Business Administration from the Schulich School
of Business.
5
Board Of Directors
Stan Bharti, P.Eng., Executive Chairman Mr. Bharti is a business consultant and a professional mining engineer with more than 25 years experience in business, management, operations, public markets, and finance. 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, MBA, President & Chief Executive Officer and Director
Alastair Neill, Executive Vice-President and Director Mr Neill is the former VP sales, Rare Earth Division and VP Business Development for AMR (Now Neo-Material Technologies). Alastair is one of the leading experts in rare earth elements. He brings over 15 years of direct Rare Earth experience with downstream end-users in Korea, Japan, Europe and North America and with suppliers in China. He holds a Master of Business Administration from York University and a Bachelor of Engineering in Material Science from the University of Western Ontario.
Jean-Guy Lambert, MBA, Vice chairman Mr. Lambert served as President and CEO of Dacha Capital Inc. since 1996. He has served as a financial advisor for Hydro-Quebec as well as a pension fund investment manager and Vice President for major financial institutions. He now sits on the boards of several public companies and is involved in the management of many private companies.
Claude Blanchet, MBA, Director Mr. Blanchet was President of Overload Financial Inc., a Calgary-based corporation, managing energy-related investment funds. He was the Chairman
and CEO of Societe Generale de Financement du Quebec (SGF) from April 1997 to May 2003, and CEO of the Fonds de Solidarite des travailleurs du Quebec (F.T.Q.), from November 1983 to March 1997. Throughout his career, Mr. Blanchet has acted as director of many public companies such as Cascades Inc. (TSX), Domtar Inc. (TSX) and Saputo Inc. (TSX). He’s currently a Director of Demcap Investments Inc. (TSX-V)
Ronald Hite, Lieutenant General Lieutenant General Hite retired July 1, 1997 from the United States Army after 33 years of service. During his military career, General Hite held several senior military leadership positions and is a Vietnam War veteran. Lieutenant General Hite holds a BA in Chemistry and a MS in Management Science, and is a graduate of several senior-level military schools. General Hite currently serves on various boards and advisory boards and is President of the East Tennessee State University Alumni Association.
George Faught George Faught is a Chartered Accountant with over 25 years of senior management experience. He has served as the Chief Financial Officer of publicly traded companies in the natural resources, financial services and pharmaceutical industries. Mr. Faught has broad financial management, corporate development and operating experience.
6
Metals Inventory – Oct 26, 2012
Grades* Quantity
(Kg)
Spot Price/kg
(US$)
Market Value
(US$ millions)
Busan, South Korea
Dysprosium Oxide 3N+ 15,000 $810 $12.2
Dysprosium Fe Santoku 12,000 $825 $9.9
Neodymium Oxide 4N+ 18,000 $86 $1.5
Terbium Oxide 4N+ 14,000 $1,405 $19.7
Yttrium Oxide 5N 14,000 $98 $1.4
Gadolinium Oxide 4N5+ 9,950 $140 $1.4
TOTAL: 82,950 $46.0
** Inventory is marked to market based on the average price of
the metals as published on “MetalPages” and “Asian Metals” 7
*Grades: 4N = 99.99% 4N+ = 99.99+% 5N = 99.999% 4N5+ = 99.99%/99.999+%
Valuation Based On NAV Plus Premium
NAV of Physical Portfolio
+ Scarcity of Rare Earths
Only Financial Player
+
Dynamic Trading Strategy
Financial Products
+
+
8
An Actively Managed Physical Portfolio
Assess Long-Term
Demand Imbalance
Acquire Inventory
Assess Short
Price Fluctuations
Rebalance
Inventory
Post Markets
Trade
Earn Spread
9
Discount to NAV
- Rare Earth market is not exchange
traded so pricing is reported from
end users and suppliers
- General investor market has
difficulty accepting the pricing
reported hence a large discount to
NAV
- Overall, the 2011 Rare Earth
demand increased 50% from 2010
- Ongoing discount to NAV creates
risk of corporate action 0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
Share price FD NAV NAV Discount to FD NAV
10
Industrial Minerals are the
Enablers of Modern Technology
11
“Biggest User of Rare Earths of any Object in the World”
Toyota Prius
“In 20 years, all cars on the road will be electric”- Warren Buffett, November 2009
12
The largest user of rare earths tomorrow 1mt Neodymium needed for every 3 MW of wind power generated
13
-
50,000
100,000
150,000
200,000
250,000
2004 2005 2006 2007 2008 2009 2010f 2011f 2012f 2013f 2014f
Dem
an
d t
pa -
RE
O
China Supply ROW Supply Global Demand China Demand
Strong Demand Growth
ROW: rest of word supply (yet to come on stream) REO: Rare Earth Oxides Source: IMCOA
Global Demand (Exclusive of China)
China Demand
IMCOA Rare Earth Oxide Forecast
14
China – Guarding The Supply
• +95% of Global Supply
• Export Tariffs to drive mana
• Export Quotas
“The value of global rare-earth trade last
year was just $1.25 billion, and it is
projected to grow to about $3 billion by
2015.” - The Wall Street Journal, September 3rd, 2009
15
And Rare Earth Companies
Are Raising Capital
Company Market Cap.
Capital Raised
Since July 2009
Expected
Production
(US$MM) (US$MM) Year
Arafura 236 NA 2010
Lynas 993 416 2011
Great Western Minerals* 66 17(1) 2012
Avalon* 203 17 2013
Greenland Minerals and Energy Limited 147 NA NA
Quest Uranium Corporation 123 8 NA
Rare Element 112 5 NA
Commerce Resources Corp. 57 7 NA
Hudson Resources Inc. 50 3 NA
Midland Exploration Inc. 34 3 NA
Pele Mountain Resources Inc. 25 1 NA
Matamec Explorations, Inc. 19 2 NA
Gold Canyon Resources Inc. 14 2 NA
Forum Uranium Corp. 13 2 NA
Fieldex Exploration Inc. 13 2 NA
Butler Resource Corp 7 1 NA
Big Red Diamond Corp. 3 0 NA
Mainstream Minerals Corporation 2 0 NA
Canadian International Minerals 2 1 NA
Molycorp NA NA NA
Total $1,885 $469
(1) Includes C$7M M prospectus offering announced Jan 12, 2009
* Production date is not conf irmed
Rare Element Development Mining Companies
16
Attractive Value Proposition for Investors
17
Growing demand for REE’s
Opportunity for early stage investment in a potentially
valuable industrial commodities trading operation
Limited supply to satisfy growth Participate in the expected price appreciation of
rare earths and strategic industrial commodities
Direct access to physical inventory; No mining risk
Invest in a diversified portfolio of physical inventory
that can earn a substantial market premium
Industry Veterans Management and Board of Dacha is composed
of leading REE experts
Appendices
Company History: 1996-2009
19
Company Milestones: 2009 - Present
20
General John Abizaid, U.S. Army (Ret.) Served for 34 years in U.S. military; was Commander of US Central Command from 2003-2007
Peter Boot, South America 25 years financial markets experience; 15 years with ING Group in Brazil, Curacao, Venezuela, Paraguay and Bolivia
General Jay Garner, U.S. Army (Ret.) Served for 35 years in the U.S. military; Command of Air Missile Defense Units during the Gulf War
General Ron Hite, U.S. Army (Ret.) Served 33 years in the U.S. military; Senior Military Advisor to the Army Chief of Staff
Larry King, U.S.A. American icon; Former Host of CNN’s Larry King Live
General Lewis MacKenzie, Canadian Army (Ret.) Served in the Canadian Forces for 35 years; led the UN peacekeeping mission in Sarajevo
Hon. Pierre Pettigrew, Canada Served as Canadian Federal Minister of Foreign Affairs and Minister of International Trade
Jim Rogers Author, financial commentator and successful international investor.
James Rooney Investment and Infrastructure development expert; Established and cultivated new businesses
General Sir Michael Rose, British Army (Ret.) Highly decorated former SAS Commander for the British Army
Bernard Wilson Corporate Finance and Investment Banking advisor with substantial experience in financial restructurings
F&M International Advisory Board
21
Strategic Metal Advisory Board
Management will be assisted by the Advisory Board consisting of Alistair Neill, Executive Vice President of Dacha Capital, Dr. Allen Alper, former General Manager of Osram Sylvania and Zheng Zhi, Chairman of the Beijing based China Mining United Fund
Dr. Allen Alper • Accomplished senior executive, 30 year career at Osram Sylvania • Formerly VP and General Manager Osram Chemical/Metallurgical Division (15 years) • Expert in manufacturing and marketing of Tungsten, Molybdenum and other strategic metals • Holder of 33 patents in high temperature metals
Zheng Zhi • Chairman of China Mining United Fund (www.cmufund.com) • He graduated from Jilin University majoring in corporate management in 1987, and completed his graduate
studies from Tsinghua University in the class of mining finance • Mr. Zheng is also acting as the board director for the Zhengda Group, which controls about 10 billion RMB in
assets
22
Market Size Must be Considered
Price/Kg
($/Kg)
Market Size
($MM)
Common
Uses
Lanthanum 4.12 123Optical fibres, Carbon arc lamps, High quality
glass
Cerium 5.59 170Laser crystals, Internal Combustion Engines,
Steel manufacturing
Praseodymium 16.18 76 Glass, Ceramics, Carbon arc lamps
Neodymium 17.21 271Protective lenses, Lasers, Magnetic imaging
equipment, Magnets (NdFeB)
Samarium 2.21 5Industrial magnets, Neutron absorber in
nuclear reactors, Glass, Magnets (SmCo)
Europium 367.65 138Liquid Crystal Display (LCD), Fluorescent
lighting, Cathode ray tubes
Gadolinium 6.47 16
Magnetic resonance imaging (MRI), Control
rods in nuclear power plants, Microwaves,
Magnetic Refrigeration
Terbium 294.10 71Fluorescent lightning, X-Rays, Fuel Cells,
Military sonar equipment
Dysprosium 95.59 127Control rods in nuclear power plants, Compact
discs, Magnets
Erbium NA NAGlass, Lasers for surgical applications, Control
rods in nuclear power plants
Yttrium 6.32 57Fluorescent Lighting, Electronic displays, Laser
systems, High strength metal alloys
Ho-Tm-Yb-Lu NA NA
Total 1,054Source: Metal Pages and Roskill Report
Rare Earth Element - Market
23
Rare Earth Ore Compositions
Loparite
Mt Weld,
Austrailia
Guangdong,
China
Nangang,
Guangdong,
China
Nolan's
Bore
Australia
Lovozersky,
Russia
Baiyun Obo,
Mongolia,
China
Mountain Pass,
California,
USA
Guangdong,
China
Xunwu, Jiangxi
Province,
China
Longnan,
Jiangxi
Province,
China
Lanthanum 25.50 24.00 23.00 20.40 28.00 25.00 33.20 30.40 43.40 1.82
Cerium 46.74 42.70 42.70 48.32 57.50 50.00 49.10 1.90 2.40 0.40
Praseodymium 5.32 4.10 4.10 5.91 3.80 5.10 4.30 6.60 9.00 0.70
Neodymium 18.50 17.00 17.00 21.06 8.80 16.70 12.00 24.40 31.70 3.00
Samarium 2.27 3.00 3.00 2.37 0.96 1.20 0.80 5.20 3.90 2.80
Europium 0.44 0.10 0.10 0.37 0.13 0.20 0.12 0.70 0.50 0.10
Gadolinium Trace 2.00 2.00 0.95 0.21 0.70 0.17 4.80 3.00 6.90
Terbium 0.07 0.70 0.70 0.08 0.07 Trace Trace 0.60 Trace 1.30
Dysprosium 0.12 0.80 0.80 0.34 0.09 Trace Trace 3.60 Trace 6.70
Holmium Trace Trace 0.12 0.05 0.03 Trace Trace Trace Trace 1.60
Erbium 0.03 0.30 0.30 0.09 0.07 Trace Trace 1.80 Trace 4.90
Thulium Trace Trace 0.01 Trace Trace Trace Trace Trace 0.70
Yttrium 0.06 2.70 2.40 0.05 0.29 Trace Trace Trace 0.30 2.50
Lutetium Trace 0.14 0.01 0.05 Trace Trace Trace 0.10 0.40
Yttrium 0.35 2.60 2.40 1.48 Trace 0.20 2.60 20.00 8.00 65.00
Total 99.98 100.00 98.76 101.49 100.00 100.00 99.79 100.00 102.30 98.82
Source: US Geological Survey and Company Reports
Ion Adsorption Clays
Rare earth content of major source minerals (% total REO)
Monazite Apatite Bastnaesite
24
REE Demand – Additional Information
25
The Periodic Table of The Elements
Lanthanides
Actinides
26
A Forbes & Manhattan Group Company
China Office
Floor 5, South Building
Zhonghai Mansion
Jianguomenwai Street
Beijing, China
1000020
Toronto Office
65 Queen Street W
Suite 800
Toronto, Ontario
M5H 2M5 G. Scott Moore
President and CEO
Tel: +1 (416) 861-5903
www.dachacapital.com
TSX-V: DAC | OTCQX: DCHAF
For more information:
A Member of the Forbes & Manhattan Group of Companies
