TORONTO,
Nov. 27, 2013 /CNW/ - Dacha Strategic
Metals Inc. (TSXV: DSM) ("Dacha") today released its unaudited
financial results for the three and six months ended September 30, 2013. For more
information, please see Dacha's condensed interim consolidated
financial statements and management's discussion and analysis filed
under Dacha's profile on SEDAR at www.sedar.com. All dollar
references below are to U.S. funds.
During the three months ended September 30, 2013, Dacha reported net income of
$1.1 million (or $0.01 per basic share), compared to a net loss of
$12.2 million (or $0.16 per basic share) during the three months
ended September 30, 2012. The
net income during the three months ended September 30, 2013 was largely as a result of
changes in the estimated fair market value as of September 30, 2013 of certain of Dacha's metals
inventories.
As at September 30,
2013, Dacha held 42,450 kilograms of rare earth metals with
an estimated fair market value, based upon pricing reported by two
independent news sources for the strategic metals industry, of
$14.2 million. The true
realizable value of the rare earth metals held by Dacha may
significantly differ from the prices reflected on these market
websites. Further, due to the illiquidity of rare earth
metals markets and the significant volatility of prices at which
Dacha's metals investments may be sold, there may be significant
differences between the prices that may actually be realized in a
sale of Dacha's metals and estimated values as reflected in Dacha's
financial statements.
As at September 30,
2013, Dacha had net assets of $18.5
million (or $0.25 per basic
share), principally comprising its metals inventories with an
estimated fair market value of $14.2
million, cash of $4.4 million,
accounts receivable of $606,324,
prepaid expenses and deposits of $69,604, accounts payable and accrued liabilities
of $430,545, income taxes payable of
$122,375 and deferred income taxes of
$133,771.
Subsequent to September
30, 2013, Dacha sold a portion of its inventory of Terbium
Oxide. These metals were sold for approximately $250,000 more than their original cost, although
market conditions at the time of this sale were such that the
metals were sold for less than their estimated fair market value as
at September 30, 2013 as reflected in
Dacha's financial statements.
Dacha continues to evaluate Dacha's inventory
positions and may make future purchases or sales of rare earth
metals depending upon market conditions and other relevant
facts.
Adoption of New Investment Policy
Since the reconstitution of Dacha's board on
November 28, 2012, Dacha has been
reviewing its opportunities and prospects to create shareholder
value from both its existing metals inventories and its rare earth
metals business going forward, and also assessing Dacha's overall
corporate strategy.
As part of that review, Dacha's board has
determined that it is in the best interests of Dacha and its
shareholders to broaden Dacha's investment focus beyond only rare
earth metals and to provide Dacha with the flexibility to make and
hold those investments that Dacha's board believes from time to
time are most likely to enhance shareholder value over the long
term. To facilitate this broader investment focus, Dacha's
board approved and adopted on November 27,
2013 a new investment policy (the "Investment Policy") to
govern Dacha's investment activities going forward.
The Investment Policy provides, among other
things, that: (a) Dacha's objective as an investment company is to
enhance shareholder value over the long term on a per share basis;
(b) Dacha will seek to accomplish this objective by making use
of the experience, expertise and opportunity flow of its management
and board of directors to opportunistically make investments in
situations that Dacha believes will provide superior risk-adjusted
returns over the long term; and (c) such investments may include,
without limitation, the acquisition of equity, debt or other
securities of publicly traded or private companies or other
entities, investments directly or indirectly in commodities
including in physical holdings of strategic minerals such as
rare-earth metals and the acquisition of all or part of one or more
businesses, portfolios or other assets, in each case that Dacha
believes will enhance value for the shareholders of Dacha over the
long-term.
The Investment Policy provides Dacha with broad
authority in regards to the types of investments that may be made
and held by Dacha with a view to enhancing value for its
shareholders over the long term. The Investment Policy states
that Dacha will invest with a preference for opportunities in
Canada or the United States, but may from time to time
also pursue opportunities internationally. The Investment Policy
does not preclude Dacha from investing in any particular industry
and has no specific policy with respect to investment
diversification, although over time it will be the goal of Dacha to
acquire and hold investments that Dacha believes will collectively
provide superior risk-adjusted returns over the long term. The
Investment Policy also states that, depending upon Dacha's
assessment of market conditions and investment opportunities, Dacha
may, from time to time, be fully invested, partially invested or
entirely uninvested such that Dacha is holding only cash or
cash-equivalent balances while Dacha actively seeks to redeploy
such cash or cash-equivalent balances in suitable investment
opportunities. The Investment Policy also sets forth criteria
that will be considered by Dacha in connection with particular
investments and the manner in which investments will be monitored
and any conflicts of interest addressed.
The Investment Policy may be amended from time
to time by Dacha's board and permits the board to authorize
investments outside of the Investment Policy if the board considers
that doing so will benefit Dacha and its shareholders.
A copy of the Investment Policy will be filed
under Dacha's profile on SEDAR at www.sedar.com, and the foregoing
summary is qualified in its entirety by reference to the full
Investment Policy as filed.
About Dacha
Dacha is an investment company whose objective
is to enhance shareholder value over the long term. Dacha is
currently invested in physical strategic minerals and, in
particular, indirectly owns an inventory of physical strategic
minerals with a focus on rare earth elements. Its shares are
listed on the TSX Venture Exchange under the symbol "DSM".
Except for statements of historical fact
relating to Dacha, 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 Dacha's investment policy
and intentions, Dacha's ability to source and make attractive
investments, Dacha's ability to trade in rare earth elements, the
realization value of Dacha's physical inventory portfolio, 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.
Certain information on parties other than Dacha
contained in this press release has been obtained or quoted from
publicly available sources, independent publications, media
articles or third party websites (collectively, the
"Publications"). In certain cases, these sources make no
representations as to the reliability of the information they
publish. Further, the analyses and opinions reflected in these
Publications are subject to a series of assumptions about future
events. There are a number of factors that can cause the results to
differ materially from those described in these publications. None
of Dacha or its representatives independently verified the accuracy
or completeness of the information contained in the Publications or
assume any responsibility for the completeness or accuracy of the
information derived from these Publications.
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.
SOURCE Dacha Strategic Metals Inc.