Dacha Announces Completion of Normal Course Issuer Bid and Provides Corporate Update
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 01/16/12 -- Dacha Strategic Metals Inc. ("Dacha" or the "Company") (TSX VENTURE: DSM)(OTCQX: DCHAF) is pleased to announce that it has completed its normal course issuer bid ("NCIB"), which was launched in June of 2011.
Dacha has purchased for cancellation a total of 6,747,679 shares of the Company at an average price of CDN$0.738 per share. Dacha's corporate structure now consists of approximately 74.8 million common shares issued and outstanding, or 95.2 million common shares issued and outstanding on a fully diluted basis.
In accordance with TSX Venture Exchange rules, a new NCIB may be launched in June of 2012 on the basis of 10% of the public float of the Company at that time. Management feels that the NCIB has been highly accretive to Dacha's shareholders as the Company's current net assets as at December 31st were valued at $1.47 per share.
Corporate Update
The Rare Earth Market has seen a rocky fourth quarter with demand falling substantially both domestically and in the international market. By all estimates approximately 50% of the 2011 quotas will go unused. Chinese export quotas for the first half of 2012 ("H1") were recently released and for the first time the export quotas have been dispersed into categories between "Light rare earths" and "Mid/heavy rare earths". Dacha sources indicate Lanthanum, Cerium, Neodymium and Praseodymium which will now fall under the Light rare earths category with all others plus Yttrium falling under the Mid/Heavy rare earths quota limit.
The recent release of Chinese rare earth element quotas saw only 11 exporters pass the environmental review and receive their H1 quotas, with the majority of these approved exporters being state owned enterprises. It appears as though the quotas were split 86 % light rare earths (La,Ce,Nd,Pr) and 14% for medium to heavy rare earths. Interestingly, a significant number of northern rare earth companies were not included in the initial round of the quotas as they did not pass the environmental review.
Should China maintain the 30,000-tonne export quota for 2012, the implication is that about 4,000 tonnes of heavy rare earths will be available for export. The typical southern plant only produces up to 60% of light rare earths so these companies will not have a balanced portfolio of quotas to production output. Any one of the main plants in the south can produce upwards of 6,000 tonnes per year of which at least 40-50% would be heavies so this will likely reduced output from southern China overall. Last year, southern plants produced approximately 25,000 tonnes of rare earth oxides, on a reduced production schedule, or about 10,000 Tonnes of heavy rare earths (not counting SEG from the north). As such, one would expect a continued reduction of heavy rare earths produced which would likely solidify pricing of heaving rare earth in H1 2012.
As the main northern plants did not receive any quotas other than three State-owned companies (Minmetals, Sinosteel and China Nonferrous), they will have to ship through these companies or some southern plants with excess light quotas. It is still undetermined whether this will be approved by the State. Either way, this recent change in splitting the quotas will likely result in continued weakness in the light rare earth elemensas Lynas prepares to come to market later this year. We would expect continued decline in quota value in 2012.
Japan has been relatively inactive in the market over the past six months. Dacha believes that this will not continue and inventories of rare earths will have to be restocked in the near term. Production in China has been severely curtailed since August and as such inventories have not been growing substantially. Dacha would expect demand and potentially pricing to firm up for Dysprosium and Terbium in the first half of 2012 as the new split quota system is digested. Many end-users may not want to risk the lack of heavy quotas being available in H2 2012 and therefore buying activity may be heavier in H1.
Dacha will continue to seek strategic opportunities for moving its inventory during this quarter with a view to ensuring its net asset value is reflective of the value of the Company's holdings.
Dacha's inventory, including market value is updated weekly every Monday morning and posted to the "Inventory" tab of its website at . Dacha encourages its shareholders and all other interested parties to visit its website regularly and to monitor the ongoing appreciation of its physical inventory of Rare Earth Elements.
About Dacha
Dacha Strategic Metals Inc is an investment company focused on the acquisition, storage and trading of strategic metals with a primary focus on Rare Earth Elements. Dacha is in the unique position of holding a commercial stockpile of Physical Rare Earth Elements. Its shares are listed on the TSX Venture Exchange under the symbol "DSM" and on the OTCQX exchange under the symbol "DCHAF".
Except for statements of historical fact relating to the Company, certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to current market conditions and the Company's expectations for future market conditions, expected quotas, the Company's ability to trade in rare earth elements, the realization value of Dacha's physical inventory portfolio, proposed investment strategy of the Company, and general investment and market trends. 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 statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. 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 Dacha to be materially different from those expressed or implied by such forward-looking information. Although management of Dacha 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 statements 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. Dacha does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
The market value of the Company's physical inventory is estimated using price quotes published by two of the largest independent news sources for the metals industry, namely, Asian Metal () and Metal-Pages (). In cases where these websites do not provide a price quote on the type or quality of metal held in the Company's physical inventory, the Company relies on a price quote provided by independent third-party industry participants.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
Contacts:
Dacha Strategic Metals Inc.
Scott Moore
President and CEO
(416) 861-5903
Dacha Strategic Metals Inc.
Darcie Ladd
Manager of Marketing & Communications
(416) 861-5938
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Datum: 16.01.2012 - 15:27 Uhr
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