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Rare Earth ElementsUnique Ownership in Strategic
Metals
Global Investment ConferenceSeptember 14th 2010
TSX:DAC OTCQX:DHCAF
A Forbes & Manhattan Group Company
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.
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• China – Guarding The Supply• +95% of Global Supply• Export Tariffs to drive manufacturing to China• Export Quotas to limit material available to the Rest of World
• CHINA REDUCES QUOTAS FOR 2010 BY 70%
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“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
“Chinese adamant on rare-earth metal cuts”- Aug 30-2010
Rare Earths in the Limelight
“China Tightens Grip on Rare Minerals”
“Rare Earth Minerals' Scarcity Worrisome for Growing Tech Sector”-06-10
“Why China holds 'rare' cards in the race to go green”-08-10
“Top China rare earth producer to build stockpile” -08-10
Toyota to set up rare earth processing plant in India- 08-10
A Paradigm Shift in the REE Industry
Security of Supply no longer just a commercial Issue
It is now a Political Issue
Rare Earth Supply Technology and Resources Transformation Act [RESTART] introduced to both the U.S House of Representatives and the U.S. Senate in 2010
Japanese industry minister asked Chinese Minister of Industry and Information for reductions to this year's export quota to be reversed. “We are concerned that rare-earth metals will not come to Japan in the future”.
Why all the Fuss?
• Growing Demand for REE in Green Tech
• Limited Supply to satisfy growth in China
• China cutting back material available for Rest of World
• New projects outside of China have technical and financial challenges
• Timeline for new mines is years away
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BUSINESS MODEL
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Provide Investors Direct Access to a Physical Strategic Stockpile of Rare Earths
Proven Ability to Source and Export REE from China
LME Warehouses established in Korea and Singapore
Ability to Trade individual metals to take advantage of spot market volatility
Attractive Value Proposition for Investors
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Participate in the expected price appreciation of rare earths and strategic industrial metals
No Exploration or Mining Risk
Rare Earth Metal inventoryApr 2010 to July 31 2010 Quantity (Kgs) Cost Market Value
Dyprosium Oxide 5,000 $ 1,002,000 $ 1,487,000 Dyprosium Fe 30,000 5,856,000 8,921,000 Gadolinium 20,000 357,000 720,000 Lutetium 3,000 949,000 1,050,000 Terbium 13,000 6,647,940 7,518,000 Yttrium 20,000 250,000 370,000 Europium 6,000 2,554,000 2,666,000 Yttrium 120,000 1,022,000 1,034,000
217,000 $ 18,637,940 $ 23,766,000 **28% Increase in Inventory Value
Industrial Minerals are the Enablers of Modern Technology
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“Biggest User of Rare Earths of any Object in the World”
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Toyota Prius
1kg Neodymium 15kg Lanthanum 0.1kg Dysprosium Top-selling car in Japan
“In 20 years, all cars on the road will be electric”- Warren Buffett, November 2009
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The Largest User of Rare Earths Tomorrow1mt Neodymium needed for every 3 MW of wind power generated
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50,000
100,000
150,000
200,000
250,000
2004 2005 2006 2007 2008 2009 2010f 2011f 2012f 2013f 2014f
Dem
and
tp
a -
RE
O
China Supply ROW Supply Global Demand China Demand
SUPPLY/Demand Gap Increasing
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ROW: rest of word supply (yet to come on stream)REO: Rare Earth OxidesSource: IMCOA
Global Demand (Exclusive of China)
China Demand
IMCOA Rare Earth Oxide Forecast
Current State of the Rare Earth Markets
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Small number of market participants
Transactional based market
No significant commercial stockpile exists globally
No buffer to volatile pricing from China
Most advanced mining projects are 2-5 years away from delivering product to market
Dacha delivers investment exposure to Rare Earth Elements without the mining risk
An Actively Managed Physical Portfolio
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Dynamic Physical Portfolio
of Rare Earths+
Trading Operations
Fundamental Research
Asset Allocation
First Mover Advantage
Risk Minimization
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Dacha’s LME Warehouse Locations
LME WarehouseSingapore
LME WarehouseKorea
Inventory Insured at Market Value
Why buy DACHA?
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Rising Commodity Prices For Rare Earth in next 3yrs
Growing recognition with broader investor base and market transference of strategic premium
Ability to continue to acquire REE in China despite reduction in export quotas
Non-dilutive nature of equity financings builds critical mass for size of strategic inventory
Diversification into other strategic metals
Valuation Based On NAV Plus Premium
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NAV of Physical Portfolio
+Scarcity of Rare Earths
Only Financial Player
+
Dynamic Trading Strategy
Financial Products
+
+
PREMIUM TO NAV=
Management
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Scott Moore, MBA, President & Chief Executive Officer Mr. Moore is an experienced capital markets 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 Gold, Franc Or Resources and Avion Gold. He has raised in excess of $250 million in resources in the last 3 years.
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 GM, 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
Patrick Wong, Chief Investment Officer Mr. Wong is a seasoned hedge fund manager with over 15 years of experience and a consistent track record of high
returns During his career in the public markets, Mr. Wong ran proprietary trading desks at various brokerage firms
Brad Boland, C.M.A., Chief Financial Officer Mr. Boland was the CFO of Consolidated Thompson Iron Mines Limited until July 2009 From May 2005 to September 2007, he was at Kinross Gold Corp., most recently serving in the position of Vice
President, Corporate Controller Prior to that, from August 1998 to February 2005, Mr. Boland was at Goldcorp Inc., as Corporate Controller and the Vice
President, Finance
Advisory Board
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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
assetsDon Bubar Mr Bubar is CEO Avalon Rare Metals and has been a leader in promoting the growth of Rare Earth Deposits
outside of China.
Capital Structure
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Capital Structure
Stock symbol:Shares issued:Fully diluted:Price (08/31/10):Market Cap:52-week High/Low:
DAC – TSX:V71.5 M* 97.5 M$0.37$27 M$1.05-$0.32
Latest Financing(Mar 2010)
Amount Raised:Shares issued:Issue Price:
$22.0 M48.9 M $0.45
Key Institutional Shareholders
Goodman & Co
Aberdeen International Inc
TD Asset Management
AGF Management
A Forbes & Manhattan Group Company
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Forbes & ManhattanA Private Merchant Bank
Dacha Strategic Metals Inc.
Management Team
Stan Bharti Executive Chairman
Scott MoorePresident and CEO
Alastair NeillExecutive VP
Patrick WongCIO
Brad BolandCFO
Board of Directors
Scott Moore Alastair Neill Jean-Guy Lambert
Claude BlanchetStan Bharti George Faught
Strategic Metal Advisory Board
Zheng Zhi Alastair NeillDr. Allen Alper Don Bubar
Gen. Ron Hite
G. Scott MoorePresident and CEOTel: 416-861-5903
TSX:DAC OTCQX:DHCAF
China OfficeFloor 5, South Building
Zhonghai MansionJianguomenwai Street
Beijing, China1000020
Toronto Office65 Queen St west, Suite 800
Toronto, OntarioM5h 2M5
