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 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 www.dachametals.com. 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 (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.

Deep South Resources (TSXV:DSM)
Historical Stock Chart
From Jun 2024 to Jul 2024

Deep South Resources (TSXV:DSM)
Historical Stock Chart
From Jul 2023 to Jul 2024