Dacha Strategic Metals reported a net loss of $8.1 millionStaff writer ▼ |
The net loss during the three months ended June 30, 2013 was largely as a result of losses on Dacha's metals investments including declines over the period in the estimated fair market value of Dacha's metals inventories.
As at June 30, 2013, Dacha held 47,450 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 $15.2 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 June 30, 2013, Dacha had net assets of $17.4 million (or $0.23 per basic share), principally comprising its metals inventories with an estimated fair value of $15.2 million, cash of $2.6 million, accounts receivable of $276,974, prepaid expenses and deposits of $57,408, accounts payable and accrued liabilities of $424,001, income taxes payable of $122,375 and deferred income taxes of $124,011.
Subsequent to June 30, 2013, Dacha sold a portion of its inventory of Terbium Oxide. These metals were sold for an amount approximating 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 June 30, 2013 as reflected in Dacha's financial statements. ■