DSM Deep South Resources Inc

Dacha Strategic Metals Inc. ("Dacha" or the "Company") (TSX
VENTURE:DSM)(OTCQX:DCHAF) is pleased to announce that it has released its
interim financial results for the three months ended June 30, 2011. For more
information please see the Company's interim financial statements and
Management's Discussion and Analysis ("MD&A") which are filed under the
Company's profile on SEDAR at www.sedar.com.


Dacha reported net earnings of US$57.8 million or US$0.79 per share for the
three months ended June 30, 2011 from total revenue of US$60.3 million (US$61.6
million from gain on its metal investments offset by US$1.4 million loss on
security investments). For the three months ending June 30, 2010, Dacha reported
net income of US$0.2 million or US$0.00 per share from total revenue of US$1.4
million (US$1.7 million from gain on its metal investments offset by US$0.5
million loss on security investments). 


The June 30, 2011 financial statements mark the Company's first quarter
reporting under International Financial Reporting Standards ("IFRS"). Along with
the transition to IFRS, the Company has changed its functional and reporting
currency to the US dollar. 


As of June 30, 2011, the Company's metals inventory, with a cost basis of
US$20.5 million, had an estimated market value of US$102.7 million. During the
three months ended June 30, 2011, Dacha purchased US$3.1 million of metals and
disposed of US$3.8 million of metals for realized profit of approximately US$3.0
million.


Outlook on Rare Earth Pricing

Dacha has noted a significant upward trend in heavy rare earth prices since its
March 31 year end as a result of fundamental changes to the mining and refining
in the domestic Chinese rare earth market, which has affected prices both
domestically and internationally. In the last 60 days, pricing has declined
slightly in both markets, which the Company believes is primarily the result of
speculators, who may have obtained material outside of authorized production
channels, moving material out of inventory. Mining and refining of heavy rare
earths in southern China, the major source of all heavy rare earths globally,
has undergone a substantial restructuring in 2011. Production quotas for the
mining and refining of rare earths are also being enforced for the first time.
China Minmetals announcement in early August of the voluntary shutdown of its
South China separation facilities seems to have gone largely unnoticed by the
investing public but has a significant impact of the availability of material
for the balance of this year. Although the capital market does not appear to
have reacted to recent announcements in early August as to the voluntary
shutdown of certain South China separation facilities, this change appears to
have a significant impact on the availability of material from China for the
balance of the year. 


With production quotas being enforced for the mining and refining of rare earths
and the substantial reduction in production capacity, Dacha expects that the
rare earth oxide market this fall will experience a significant shortfall in
available material which could cause a rebound in rare earths prices,
particularly for heavy rare earth oxides, which will have an effect on the value
of the metals held in our inventory.


Normal Course Issuer Bid 

During the three months ended June 30, 2011, Dacha commenced a Normal Course
Issuer Bid ("NCIB") that will terminate on June 3, 2012. During the quarter, the
Company purchased and cancelled 175,000 common shares at an average cost of
CAD$0.79. Subsequent to June 30, 2011, an additional 1,950,000 common shares
have been purchased for cancellation at an average cost of CAD$1.08. Dacha
expects to continue to purchase shares over the remainder of the fiscal year,
depending on market conditions and other investment opportunities that may be
available. 


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 the Company's ability to trade in
rare earth elements, the realization value of Dacha's physical inventory
portfolio, the investment strategy of the Company, trends in the supply and
price of rare earth elements 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 (www.asianmetal.com) and Metal-Pages
(www.metal-pages.com). 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.

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