This the big investor Stan Bharti's positionIf you were curious what he meant. Bharti is big money. He is in this play and once he is finished establishing his position, expect take off.
The NAV is .51. Nuff said.
TGR: You indicated that each of the five sectors that F&M focuses on will go through its own kind of up and down cycle within this bull market. Which of the sectors are currently in their up cycles and trading at the high versus which are still low and you're expecting to take off?
SB: With what's going on in China, there's a lot of interest in rare earth elements. China produces over 90% of the world's supply, especially the heavy rare earth elements. We've created
Dacha Capital Inc. (TSX:DAC; OTCQX:DCHAF). It's a fabulous model for rare earth elements because instead of trying to buy an asset, we got special licenses to be able to buy the actual rare earth elements, the actual product, in China, then we move them Hong Kong or Singapore and put them in storage. It's a very tiny market, and we think we can be one of the lead players in capturing part of the market and in eventually trading rare earth elements as demand for them increases and prices go higher. We raised $25 million in Dacha not long ago, and have spent about $15 million buying some of these materials. They're inert, so we can store them for a long time.
As almost every analyst will tell you, rare earth elements are in huge short supply. With oncoming growth in technology and environmental issues, the rare earth element demand will be big. In fact, we believe that at some point, the U.S. will make some of the rare earths strategic metals, which will require the Pentagon to have them in storage.
So Dacha has a lot of leverage. It's a very strategically, interestingly created company.
TGR: One of the interesting viewpoints about Dacha is that it trades more like an ETF than a rare earth exploring company.
SB: Yes, and that's a good thing because the market is saying, "I'd rather own Dacha than wait five years for a mine to go into production with all the risks of having to find the management team, get the capital, get the permits, spend the money. Lots of companies that have good assets are still four or five years away from production. Dacha can supply you the element today. We are lucky that we have these special relationships in China and an office in China that allow us to do that.