TORONTO, July 11, 2014 /CNW/ - Dacha Strategic Metals
Inc. (TSX-V: DSM) ("Dacha") today released its audited consolidated
financial results for the year ended March
31, 2014 and provided an update on its pending transaction
involving Merus Labs International Inc. ("Merus"). For more
information, please see Dacha's audited consolidated financial
statements and management's discussion and analysis filed under
Dacha's profile on SEDAR at www.sedar.com. Unless otherwise noted,
dollar references below are to U.S. funds.
Audited Financial Statements for year ended March 31, 2014
During the year ended March 31,
2014, Dacha reported a net loss of $14.1 million (or $0.19 per basic share), compared to a net loss of
$57.5 million (or $0.77 per basic share) during the year ended
March 31, 2013. The net loss
during the year ended March 31, 2014
was largely as a result of pricing declines in Dacha's metals
investments.
As at March 31, 2014, Dacha held
14,000 kilograms of rare earth metals with an estimated fair market
value of $2.7 million.
Subsequent to March 31, 2014, these
metals were sold for total proceeds equal to that amount.
As at March 31, 2014, Dacha had
net assets of $11.5 million (or
$0.15 per basic share), principally
comprising cash of $8.1 million,
metals inventories with an estimated fair market value of
$2.7 million, amounts receivable of
$1.0 million, prepaid expenses and
deposits of $36,746, accounts payable
and accrued liabilities of $295,521
and income taxes payable of $39,026.
Merus Transaction Update
As previously announced by Dacha in press releases issued on
June 10, 2014, June 12, 2014, and July 4,
2014, Dacha is in the process of completing transactions
whereby, subject to receiving all necessary regulatory and
shareholder approvals and the satisfaction of certain other
conditions, Dacha will invest at least Cdn. $11 million in Merus in exchange for common
shares of Merus, which will then be distributed to Dacha's
shareholders with a view to ultimately winding up Dacha's business
and affairs. Dacha will be seeking the requisite shareholder
approvals for these transactions at Dacha's annual and special
meeting of shareholders to be held on August
11, 2014, and further details regarding these matters will
be set out in Dacha's management information circular (the
"Circular") that Dacha expects will be mailed to shareholders
within the next week.
As will be set forth in the Circular, subject to various
conditions, Dacha currently intends to distribute the shares of
Merus that Dacha will own following the completion of its
investment in Merus by way of share capital reorganization that
will result in all of Dacha's common shares being redeemed in
exchange for common shares of Merus owned by Dacha. Based
upon various assumptions that will be set forth in the Circular,
including that the common shares of Merus are trading at the same
price upon completion of the share capital reorganization as the
closing price on July 10, 2014, Dacha
currently estimates, on a preliminary basis, that Dacha
shareholders will receive approximately 0.0838 of a Merus share in
exchange for each Dacha common share upon completion of the share
capital reorganization.
Forward-Looking Statements
This release contains certain "forward looking statements" and
certain "forward-looking information" as defined under applicable
Canadian securities laws. Forward-looking statements and
information can generally be identified by the use of
forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans"
or similar terminology. Forward-looking statements and information
include, but are not limited to, statements with respect to the
transactions contemplated under the acquisition agreement dated
July 4, 2014 between Dacha and Merus,
receipt of the requisite regulatory and shareholder approvals in
respect thereof and Dacha's intention to distribute the Merus
shares to its shareholders and wind up its operations thereafter.
Forward-looking statements and information are subject to various
known and unknown risks and uncertainties, many of which are beyond
the ability of Dacha to control or predict, that may cause Dacha's
actual results, performance or achievements may be materially
different from those expressed or implied thereby, and are
developed based on assumptions about such risks, uncertainties and
other factors set out here in, including but not limited to: the
risk that the transaction will not be approved by the Toronto Stock
Exchange, the TSX Venture Exchange or Nasdaq or the Dacha
shareholders; risks and uncertainties related to the contemplated
transactions not being completed in the event that the other
conditions precedent thereto are not satisfied and other related
risks and uncertainties. Dacha undertakes no obligation to update
forward-looking information except as required by applicable law.
Such forward-looking information represents management's best
judgment based on information currently available. No
forward-looking statement can be guaranteed and actual future
results may vary materially. Accordingly, readers are advised not
to place undue reliance on forward-looking statements or
information.
Completion of the pending transaction with Merus is subject
to a number of conditions, including TSX Venture Exchange
acceptance and shareholder approval. The transaction cannot close
until the required shareholder approval is obtained. There can be
no assurance that the transaction will be completed as proposed or
at all.
Investors are cautioned that, except as disclosed in the
Circular to be prepared in connection with the transaction, any
information released or received with respect to the transaction
may not be accurate or complete and should not be relied upon.
Trading in the securities of Dacha should be considered highly
speculative.
The TSX Venture Exchange has in no way passed upon the merits
of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
SOURCE Dacha Strategic Metals Inc.