Dacha Strategiv Metals Aug 2011 Presentation

8/4/2019 Dacha Strategiv Metals Aug 2011 Presentation

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Corporate Presentation

TSX-V:DSM OTCQX:DHCAF

A Forbes & Manhattan Group Company

August 2011


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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 thefinancing, 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 earthmetals, future metal prices and treatment and refining charges, the financial results of the Company, the future financialor 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 notanticipate", 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 knownand unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance orachievements of the Company to be materially different from those expressed or implied by such forward-lookinginformation, 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. Althoughthe Company has attempted to identify important factors that could cause actual results to differ materially from thosecontained 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 andfuture 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-lookinginformation, 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 UnitedStates. The securities have not been and will not be registered under the United States Securities Act of 1933, asamended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United Statesor to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemptionfrom such registration is available.

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Capital Structure

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Capital Structure

Stock symbol:

Shares issued:

Fully diluted:

Price (08/09/11):

Market Cap:52-week High/Low:

DSM TSX:V

76.7 M

100 M

$0.82

$62 M

$1.20 -$0.32

Key Institutional Shareholders

AGF Management ~ 6%

RAB Capital ~ 4%

Management & Insiders ~ 4%

HARD ASSET VALUE

$1.96 PER SHARE

Discount to Net Assets

60%

Metals ` $143.8 millionCash $3.7 millionLiquid Securities $3.7 million

Total: $150.0 million

Rare Earth Metal Value


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Investment Objectives

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Provide investment exposure to a physical inventory of Heavy RareEarth Elements

Multi Metal strategy reduces single element exposure risk

Generate profits from trading to downstream customers

Mitigate Risk with inventory located in multiple LME approvedwarehouses located off-shore near end-users

Maximize inventory and trade gains through a tax effective off-shorecorporate structure

Dachas Effective Tax rate is 2.5%


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BUSINESS MODELFiscal Achievements

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193,000 kilograms of Heavy Rare Earth Oxides in Inventory atMarch 31

Raised $22 million of Equity at $.45 per share in April 2010 to initiatebusiness model

Raised Net Assets from $0.38 per share to $0.64 per share at yearend March 31 for 68% gain in Net Assets per share

18 trades executed in 2011 for $5.2 million in gross profit inQ3 2011

300,000 kilograms of Heavy Rare Earth Oxides Acquired in F2011 in12 trades totaling $33.84 million


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Attractive Value PropositionInventory Value at April 21, 2011

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Participate in the expected price appreciation ofrare earths and strategic industrial metalsMetals Inventory Grades* Quantity Spot Price/kg Market Value Market Value

4/21/2011 (Kg) (US$) (US$millions) (C$millions)

US$1.00=C$0.9537

Busan, South Korea

Dysprosium Oxide 4N 15,000 $699 $10.5 $10.0Dysprosium Fe Santoku

12,000 $653 $7.8 $7.5Gadolinium Oxide 4N5+ 10,000 $185 $1.9 $1.8Lutetium Oxide 4N+ 3,000 $800 $2.4 $2.3

Neodymium Oxide 4N+ 18,000 $221 $4.0 $3.8Terbium Oxide 4N+ 14,000 $1,195 $16.7 $16.0Yttrium Oxide 5N 10,000 $160 $1.6 $1.5

Shanghai, China

Yttrium Oxide 4N5+ 120,000 $29 $3.5 $3.3

Total: 202,000 $48.5 $46.2

*Grades:

4N = 99.99%

4N+ = 99.99+%

5N = 99.999%

4N5+ = 99.99%/99.999+%

No Exploration or Mining Risk


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Attractive Value PropositionInventory Value at May 27, 2011

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Participate in the expected price appreciation ofrare earths and strategic industrial metalsMetals Inventory Grades

* Quantity Spot Price/kg Market Value Market Value5/27/2011 (Kg) (US$) (US$millions) (C$millions)

US$1.00=C$0.9773

Busan, South Korea

Dysprosium Oxide 4N 15,000 $969 $14.5 $14.2Dysprosium Fe Santoku12,000 $960 $11.5 $11.3

Gadolinium Oxide 4N5+ 10,000 $185 $1.9 $1.8

Lutetium Oxide 4N+ 3,000 $1,000 $3.0 $2.9Neodymium Oxide 4N+ 18,000 $257 $4.6 $4.5

Terbium Oxide 4N+ 14,000 $1,695 $23.7 $23.2

Yttrium Oxide 5N 10,000 $160 $1.6 $1.6

Shanghai, China

Yttrium Oxide 4N5+ 120,000 $33 $3.9 $3.8

Total: 202,000 $64.8 $63.3

*Grades:4N = 99.99%

4N+ = 99.99+%

5N = 99.999%4N5+ =

99.99%/99.999+%



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Attractive Value PropositionInventory Value at June 10, 2011

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Participate in the expected price appreciation ofrare earths and strategic industrial metalsMetals Inventory Grades* Quantity Spot Price/kg Market Value Market Value

6/10/2011 (Kg) (US$) (US$millions) (C$millions)

US$1.00=C$0.9783

Busan, South Korea

Dysprosium Oxide 4N 15,000 $1,469 $22.0 $21.5

Dysprosium Fe Santoku 12,000 $1,565 $18.8 $18.4Gadolinium Oxide 4N5+ 10,000 $255 $2.6 $2.5


Terbium Oxide 4N+ 14,000 $2,695 $37.7 $36.9Yttrium Oxide 5N 10,000 $168 $1.7 $1.7

Shanghai, China

Yttrium Oxide 4N5+ 4,000 $44 $0.2 $0.2

Total: 202,000 $91.7 $89.7

*Grades:

4N = 99.99%

4N+ = 99.99+%

5N = 99.999%

4N5+ = 99.99%/99.999+%



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Metals Inventory Grades* Quantity Spot Price/kg Market Value Market Value8/5/2011 (Kg) (US$) (US$millions) (C$millions)

US$1.00=C$0.9781

Busan, South Korea

Dysprosium Oxide 4N 15,000 $2,545 $38.2 $37.4

Dysprosium Fe Santoku 12,000 $2,800 $33.6 $32.9Gadolinium Oxide 4N5+ 10,000 $255 $2.6 $2.5


Terbium Oxide 4N+ 14,000 $4,353 $60.9 $59.6Yttrium Oxide 5N 14,000 $190 $2.7 $2.6

Total: 86,000 $147.0 $143.8

*Grades:

4N = 99.99%

4N+ = 99.99+%

5N = 99.999%

4N5+ =99.99%/99.999+%

Attractive Value PropositionInventory Value at August 5, 2011

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Participate in the expected price appreciation ofrare earths and strategic industrial metals



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Produces +95% of Global Supply Export Tariffs of 25% imposed to drive manufacturing to China Export Quotas reduced every year for last 5 years China reduced Quotas for second half 2010 by 70%

CHINA REDUCED QUOTAS FOR H1-2011 BY 35%

CHINA INCREASED QUOTAS FOR H2-2011 BY 8.9% China mandates consolidation of Heavy REE producers July, 2011 Heavy REE plant closures for consolidation = further supply strain

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China - Guarding the Supply

Monetary surcharges for Export Quotas only implemented in past year Additional US$100 per kg regardless of element on top of 25% tariff


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Rare Earths in the Limelight

I certainly believe that the FOB China prices for REEs will continue to rise given

the Chinese announcement of second-half quotas. There is no reason tobelieve there will be anything but continuing pressure on REE prices and

supplies outside of China.

Jon Hykawy interview in The Gold Report

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China Cracks Down on Illegal Mining of Rare Earth Metals Dec 2010

China Minmetals calls for rareearth production suspensionAugust 3, 2011 Bejing (Reuters)


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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 ResourcesTransformation Act [RESTART] introduced to both the U.S House ofRepresentatives and the U.S. Senate in 2010

Japanese Industry Minister asked Chinese Minister of Industryand Information for reductions to this year's export quota to be

reversed. We are concerned that rare-earth metals will notcome to Japan in the future.

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China Defends Rare Earth Quotas as inline with

WTO Bloomberg Dec 30-2010


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What Are Rare Earth Elements

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Rare Earth Element or REE are Lanthanide series elements and are foundat the bottom of the Periodic Table

15 elements plus Yttrium are classified as REE and have specificmagnetic, fluorescent and chemical properties

Some are classed as Light, Medium or Heavy REE and have varyingapplications in laptops, LCDs , cellular phones and hybrid vehicles.

Heavy REE such as Europium, Terbium and Dysprosium command thehighest value


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Rare Earth ElementsIndustry Primer

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Product Miniaturization

Lighter Weight

Energy Efficiency / Environmental Compliance

Enhanced Control and Measurement

Enhanced Performance and Functionality

Essential inputs for virtually

all electronic products

No substitutes exist that havethe same characteristics andprovide the same benefits


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Rare Earth Applications

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1kg Neodymium

15kg Lanthanum

0.1kg Dysprosium

Top-selling car inJapan

Toyota PriusBiggest User of Rare Earths of any Object in the World

100 g of Dysprosium is worth approximately $160Without Dysprosium you dont have a Prius


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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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Current State of theRare Earth Markets

17Source: Rhodia


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Supply Side Response

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MolyCorp Inc AMEX-MCP

Re-opening the Mountain Passmine closed since 1998 withproduction in 2013

Primarily a Light Rare EarthDeposit with 86% of 2013production in Cerium,Lanthanum and Neodymium

Expected to produceapproximately 40,000 Tonnes

per year

No production of Heavy Rare

Earth Elements ( DY,Tb,Yt)

Lynas Corporation ASX-LYC

Starting Mt Weld mine withannounced production in late2011

Primarily a Light Rare EarthDeposit with 96% of 2012production in Cerium,Lanthanum and Neodymium andPraseodymium

First production is 11,000

tonnes per year.

No production of Heavy RareEarth Elements ( DY,Tb,Yt)


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SUPPLY/Demand Gap Increasing

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IMCOA Rare Earth Oxide Forecast


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SUPPLY/Demand Gap Increasing

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Rare Earth Oxide Forecast


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Current State of theRare Earth Markets

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No significant commercial stockpile exists globally

No buffer to volatile pricing or actions from China

No ability to hedge against future price increases

Limited supply-side response

Most advanced Rare Earth mining projects are 2-5years away from delivering product to market withsubstantial financial and technical hurdles to

overcome

Dacha has the inventory today!


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Risk Minimization

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Pacorini Metals

Shanghai

Warehouse

Pacorini Metals

LME Warehouse

Korea x 2

Inventory Insuredat Market Value not

cost

* Pacorini Metals is owned by Glencore


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Why buy DACHA?

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Rising Commodity Prices For Rare Earths forecasted in next 3-5 years

Only Rare Earth Company that actually owns the finished product

Focused on high value Heavy Rare Earths

Demonstrated Ability to acquire REE in China despite reduction inexport quotas

No new supply of Heavy Rare Earths till 2015 at the earliest

Demonstrated Ability to trade with downstream customers

97.5% after tax exposure to gains in inventory or trading profits


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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 sector. Former CEO of Franc-Or Resources Corp and VP Corporate Development for Aberdeen International.

Former Director of Sulliden Gold and Avion Gold. He has raised in excess of $250 million in resourcecompanies in the last 3 years.

He holds a Bachelor of Arts degree from the University of Toronto and an MBA from the Kellogg Schoolof Management

Alastair Neill, P.Eng., MBA, Executive Vice-President

Mr. Neill is the former GM, Rare Earth Division and VP Business Development for Neo-MaterialTechnologies (TSX:NEM) and brings over 15 years of direct Rare Earth experience. Mr Neill lives fulltime in Beijing.

He holds a MBA from York University and a Bachelor of Engineering in Material Science from theUniversity of Western Ontario

Ryan Ptolemy, CFA, CGA., Chief Financial Officer Mr. Ptolemy is a certified general accountant and CFA charter holder. Mr. Ptolemy currently serves as

CFO to a number of public companies in the mining sector. From August, 2005, to September, 2009,

Mr. Ptolemy was at an independent investment dealer in Toronto, most recently serving as CFO, wherehe was responsible for financial reporting, auditing, budgeting and internal controls.

Jihong Gan, BA, MA, Manager Contracts and Administration Ms. Gan is an accomplished administrator with a specialization in East Asian languages. Ms. Gan has a Bachelor of Arts (Major: Japanese) from the Shanghai International Studies University

in Shanghai and a Masters of Arts in East Asian Language studies from Osaka University of ForeignStudies.


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A Forbes & Manhattan Group Company

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Forbes & ManhattanA Private Merchant Bank

Dacha Strategic Metals Inc.

Management Team

Scott Moore

President and CEO

Alastair Neill

Executive VP

Ryan Ptolemy

CFO

Board of Directors

Scott Moore Alastair Neill

Jean-Guy

Lambert

Claude

Blanchet

Stan Bharti George Faught

Gen. Ron Hite


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G. Scott Moore

President and CEO

Tel: 416-861-5903

[email protected]

TSX:DSM OTCQX:DHCAF

China Office

11th Floor, Kerry Centre

North Tower

1 Guanghua Rd

Beijing, China

1000020

Toronto Office

65 Queen St west, Suite 800

Toronto, Ontario

M5h 2M5
mailto:[email protected]:[email protected]

Documents

Dacha Strategiv Metals Aug 2011 Presentation