Forward Looking Statements<br />Caution regarding forward-looking information:<br />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.<br /> <br />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.<br />2<br />
Capital Structure<br />3<br />Rare Earth Metal Value<br />HARD ASSET VALUE<br />$1.96 PER SHARE<br />Metals ` $143.8 million<br />Cash$3.7 million<br />Liquid Securities$3.7 million<br />Total: $150.0 million<br />Discount to Net Assets<br />60%<br />
Investment Objectives<br />4<br /><ul><li>Provide investment exposure to a physical inventory of Heavy Rare Earth Elements
Multi Metal strategy reduces single element exposure risk
Generate profits from trading to downstream customers
Mitigate Risk with inventory located in multiple LME approved warehouses located off-shore near end-users
Maximize inventory and trade gains through a tax effective off-shore corporate structure
Dacha’s Effective Tax rate is 2.5% </li></li></ul><li>BUSINESS MODELFiscal Achievements<br />5<br />Raised $22 million of Equity at $.45 per share in April 2010 to initiate business model<br />300,000 kilograms of Heavy Rare Earth Oxides Acquired in F2011 in 12 trades totaling $33.84 million<br />193,000 kilograms of Heavy Rare Earth Oxides in Inventory at <br />March 31<br />18 trades executed in 2011 for $5.2 million in gross profit in <br />Q3 2011<br />Raised Net Assets from $0.38 per share to $0.64 per share at year end March 31 for 68% gain in Net Assets per share<br />
Attractive Value PropositionInventory Value at April 21, 2011<br />6<br />Participate in the expected price appreciation of <br />rare earths and strategic industrial metals<br />No Exploration or Mining Risk<br />
Attractive Value PropositionInventory Value at May 27, 2011<br />7<br />Participate in the expected price appreciation of <br />rare earths and strategic industrial metals<br />No Exploration or Mining Risk<br />
Attractive Value PropositionInventory Value at June 10, 2011<br />8<br />Participate in the expected price appreciation of <br />rare earths and strategic industrial metals<br />No Exploration or Mining Risk<br />
Attractive Value PropositionInventory Value at August 5, 2011<br />9<br />Participate in the expected price appreciation of <br />rare earths and strategic industrial metals<br />No Exploration or Mining Risk<br />
• 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<br />10<br />China - Guarding the Supply<br /><ul><li>Monetary surcharges for Export Quotas only implemented in past year
Additional US$100 per kg regardless of element – on top of 25% tariff</li></li></ul><li>Rare Earths in the Limelight<br />“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 to believe there will be anything but continuing pressure on REE prices and supplies outside of China.”<br />Jon Hykawy – interview in The Gold Report<br />“China Minmetals calls for rare earth production suspension”<br />August 3, 2011 – Bejing (Reuters) <br />“China Cracks Down on Illegal Mining of Rare Earth Metals” – Dec 2010<br />11<br />
A Paradigm Shift in the REE Industry<br />Security of supply no longer just a commercial Issue <br />It is now a Political Issue<br />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<br />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”.<br />“ China Defends Rare Earth Quotas as inline with WTO” Bloomberg Dec 30-2010<br />12<br />
“What Are Rare Earth Elements”<br />13<br /><ul><li>Rare Earth Element or REE are Lanthanide series elements and are found at the bottom of the Periodic Table
15 elements plus Yttrium are classified as REE and have specific magnetic, fluorescent and chemical properties
Some are classed as Light, Medium or Heavy REE and have varying applications in laptops, LCD’s , cellular phones and hybrid vehicles.
Heavy REE such as Europium, Terbium and Dysprosium command the highest value</li></li></ul><li>14<br />Lighter Weight<br />Product Miniaturization<br />Enhanced Performance and Functionality<br />Enhanced Control and Measurement<br />Energy Efficiency / Environmental Compliance<br />Rare Earth ElementsIndustry Primer<br /><ul><li>Essential inputs for virtually all electronic products
No substitutes exist that have the same characteristics and provide the same benefits</li></li></ul><li>Rare Earth Applications<br />15<br />Toyota Prius<br />Biggest User of Rare Earths of any Object in the World<br /><ul><li>1kg Neodymium
Most advanced Rare Earth mining projects are 2-5 years away from delivering product to market with substantial financial and technical hurdles to overcome</li></ul>Dacha has the inventory today!<br />
Risk Minimization<br />22<br />Inventory Insured at Market Value not cost<br />Pacorini Metals Shanghai Warehouse<br />Pacorini Metals LME Warehouse<br />Korea x 2<br />* Pacorini Metals is owned by Glencore<br />
Why buy DACHA?<br />23<br /><ul><li>Rising Commodity Prices For Rare Earth’s forecasted in next 3-5 years
Only Rare Earth Company that actually owns the finished product
Demonstrated Ability to acquire REE in China despite reduction in export 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</li></li></ul><li>Management<br />24<br />Scott Moore, MBA, President & Chief Executive Officer<br /><ul><li>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 resource companies 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</li></ul>Alastair Neill, P.Eng., MBA, Executive Vice-President<br /><ul><li>Mr. Neill is the former GM, Rare Earth Division and VP Business Development for Neo-Material Technologies (TSX:NEM) and brings over 15 years of direct Rare Earth experience. Mr Neill lives full time in Beijing.
He holds a MBA from York University and a Bachelor of Engineering in Material Science from the University of Western Ontario</li></ul>Ryan Ptolemy, CFA, CGA., Chief Financial Officer<br /><ul><li>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, where he was responsible for financial reporting, auditing, budgeting and internal controls. </li></ul>Jihong Gan, BA, MA, Manager Contracts and Administration<br /><ul><li>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 Foreign Studies. </li></li></ul><li>A Forbes & Manhattan Group Company<br />25<br />Forbes & Manhattan<br />A Private Merchant Bank<br />Dacha Strategic Metals Inc.<br />Management Team<br />Scott Moore<br />President and CEO<br />Alastair Neill<br />Executive VP<br />Ryan Ptolemy<br />CFO<br />Board of Directors<br />Scott Moore<br />Alastair Neill<br />Stan Bharti<br />George Faught<br />Jean-Guy <br />Lambert<br />Claude <br />Blanchet<br />Gen. Ron Hite<br />
TSX:DSM OTCQX:DHCAF<br />China Office<br />11th Floor, Kerry Centre<br />North Tower<br />1 Guanghua Rd<br />Beijing, China<br />1000020<br />G. Scott Moore<br />President and CEO<br />Tel: 416-861-5903<br />firstname.lastname@example.org<br />Toronto Office<br />65 Queen St west, Suite 800<br />Toronto, Ontario<br />M5h 2M5<br />