Genco Resources Ltd.
TSX VENTURE : GGC

Genco Resources Ltd.

August 30, 2007 17:53 ET

Genco Reports Results for the Period Ended June 30, 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 30, 2007) - Genco Resources Ltd. (TSX VENTURE:GGC), announces the results for its second financial quarter ended June 30, 2007 and provides an update on mining activities during the same period. For the quarter, Genco had revenues from metal sales of $3,581,575, an operating profit of $1,514,761 and a net loss of $1,651,118.

The following table contains selected highlights from the Genco's consolidated income statement and consolidated balance sheet for the six month periods ended June 30, 2007 and June 30, 2006.



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6 Months ended 6 Months ended
June 30, 2007 June 30, 2006
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Cdn $ Cdn $
Total revenue 3,581,575 5,016,696
Operating profit 1,514,761 2,212,143
Net income (loss) (1,674,454) (195,474)
Net income (loss) per-share (0.05) (0.01)
Total assets 24,673,548 18,945,305
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Reduced revenues and metal production were primarily the result of a test mining program undertaken at La Guitarra during the first four months of 2007. Approximately 16,000 tonnes of ore grade material were taken from surface and processed in La Guitarra's flotation mill. By processing ore obtained from the Creston test mining/surface program the Company was able to determine silver and gold recoveries using its conventional flotation circuit and also obtain samples of surface oxide ores for further bottle roll and column tests. Over the test period recoveries improved from the low 70% range for silver and low 60% range for gold to over 80% recovery for both silver and gold. Bottle roll and column tests are ongoing to determine the metal recoveries using cyanide mill processing and heap leach processing.

The following table highlights the combined production of the La Guitarra and San Rafael Mines.



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6 Months Ended 6 Months Ended 12 Months Ended
June 30, 2007 June 30, 2006 December, 2006
Tonnes milled 33,835 27,351 53,873
Silver equivalent ounces 283,649 445,144 777,710
Silver ounces 166,188 301,274 532,506
Gold ounces 2,372 2,720 4,705
Silver equivalent grade
(gpt) 337 563 501
Average realized silver
price US$ 13.34 11.13 11.54
Average realized gold price
US$ 660.39 588.74 601.70
Gold$/silver$ equivalency
factor 49.50 52.90 52.12
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Mill throughput increased and the average silver grade and silver equivalent ounces produced fell during the period as a result of processing the lower grade ore from the Creston area. Genco expects total production for 2007 to be similar to total 2006 production. The long term value of the information gained from the test mining is expected to exceed the cost of any short term reduction in production.

The table below summarizes Genco's mining costs in US dollars on a cost per silver equivalent ounce basis.



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6 Months ended 12 Months ended
June 30, 2007 December 31, 2006
Cash operating cost (US$) 4.59 4.38
Total cash cost (US$) 5.09 4.77
Total production cost (US$) 6.59 5.40
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It is noted that even though ores with lower average grades were processed during the period, and metal recoveries from ores taken from surface were lower during the period; production costs were comparable to costs incurred during 2006. Genco's management feels that these results are encouraging in the analysis of potential expansion of mining to the Creston surface deposit and possible expansion of processing capacity.

During the six month period ended June 30, 2007 Genco continued its aggressive exploration and development program in the Temascaltepec Mining District and La Guitarra silver mine. Over 25,000 metres of exploration drilling and 2,100 metres of underground development were completed.

Information obtained from ongoing exploration and metallurgical test work will be used to develop a long term plan for La Guitarra and in a Feasibility Study currently being prepared by Kappes, Cassiday and Associates.

See attached balance sheet and income statement for more information. Full financial statements are available on SEDAR at http://www.sedar.com and on Genco's website.

GENCO RESOURCES LTD.

Wayne Moorhouse, Chief Financial Officer



GENCO RESOURCES LTD.
Consolidated Balance Sheets
As at June 30, 2007 and December 31, 2006
(Expressed in Canadian dollars)

June 30 December 31
2007 2006
$ $
---------- -----------
Assets
Current assets
Cash 708,155 2,184,209
Accounts receivable 2,189,935 1,738,315
Inventory 515,925 481,821
Prepaid expenses and deposits 454,316 399,128
---------- -----------
---------- -----------
3,868,331 4,803,473

Mineral property interests 45,082 44,974
Property, plant, and equipment 20,760,135 17,596,628
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24,673,548 22,445,075
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 2,947,492 2,695,089
Current portion of long term debt 531,700 582,650
---------- -----------
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3,479,192 3,277,739

Long term debt 1,875,608 1,992,789
Asset retirement obligation 139,523 171,057
Future income tax 865,332 841,996
---------- -----------
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6,359,655 6,283,581
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Shareholders' equity
Share capital 24,441,795 21,357,790
Contributed surplus 2,679,833 1,936,985
Retained earnings (8,807,735) (7,133,281)
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18,313,893 16,161,494
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24,673,548 22,445,075
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GENCO RESOURCES LTD.
Consolidated Statements of Operations and Deficit
For the six months ended June 30, 2007 and 2006
(Expressed in Canadian dollars)

3 Months 3 Months 6 Months 6 Months
June 30 June 30 June 30 June 30
2007 2006 2007 2006
$ $ $ $
---------- ---------- ---------- ----------

Sales 2,034,549 2,691,220 3,581,575 5,016,696
Cost of sales 830,989 1,347,108 2,066,814 2,804,553
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Gross profit 1,203,560 1,344,112 1,514,761 2,212,143
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Operating expenses
Administrative expenses 1,250,664 516,730 1,887,432 911,139
Stock-based compensation 739,164 96,710 1,227,501 524,385
---------- ---------- ---------- ----------
1,989,828 613,440 3,114,933 1,435,524
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Operating income (loss) (786,268) 730,672 (1,600,172) 776,619
---------- ---------- ---------- ----------

Other income (expense)
Accretion on long term debt (29,700) (31,636) (60,982) (62,925)
Interest and other income 3,427 18,188 10,036 36,327
---------- ---------- ---------- ----------
(26,273) (13,448) (50,946) (26,598)
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Net income (loss) before
tax (812,541) 717,224 (1,651,118) 750,021
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Income tax expense
Future 23,336 574,489 23,336 945,495
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23,336 574,489 23,336 945,495
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Net income (loss) (835,877) 142,735 (1,674,454) (195,474)
Retained earnings
(deficit), beginning (7,971,858) (5,979,098) (7,133,281) (5,640,889)
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Retained earnings
(deficit), ending (8,807,735) (5,836,363) (8,807,735) (5,836,363)
---------- ---------- ---------- ----------
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Earnings (loss) per share
Basic (0.02) 0.01 (0.05) (0.01)
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Fully diluted (0.02) - (0.05) (0.01)
---------- ---------- ---------- ----------
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Weighted average common
shares
Basic 33,621,131 27,867,978 31,927,955 27,347,072
---------- ---------- ---------- ----------
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Fully diluted 34,973,667 31,491,784 33,602,352 30,970,877
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GENCO RESOURCES LTD.
Consolidated Statements of Cash Flows
For the six months ended June 30, 2007 and 2006
(Expressed in Canadian dollars)

3 Months 3 Months 6 Months 6 Months
June 30 June 30 June 30 June 30
2007 2006 2006 2006
$ $ $ $
---------- ---------- ---------- ----------
Cash provided (used) by
operating activities
Net income (loss) (835,877) 142,735 (1,674,454) (195,474)
Adjustments
Accretion on long term debt 29,700 31,636 60,982 62,925
Amortization and accretion 243,500 178,570 496,614 321,630
Future income tax 23,336 574,489 23,336 945,495
Stock-based compensation 739,164 96,710 1,227,501 524,385
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199,823 1,024,140 133,979 1,658,961
Change in non-cash working
capital (178,680) 402,421 (281,090) 156,859
---------- ---------- ---------- ----------
21,143 1,426,561 (147,111) 1,815,820
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Cash provided (used) by
investing activities
Deferred exploration and
development (1,062,877) (1,157,577) (3,236,079) (1,599,681)
Mine development changes in
accounts payable 41,067 - (7,419) -
Mineral properties (108) - (108) (125)
Purchase of property,
plant, and equipment (164,419) (109,760) (455,576) (152,209)
---------- ---------- ---------- ----------
(1,186,337) (1,267,337) (3,699,182) (1,752,015)
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Cash provided (used) by
financing activities
Shares issued for cash
(less costs) 775,622 1,041,439 2,599,352 2,340,679
---------- ---------- ---------- ----------
775,622 1,041,439 2,599,352 2,340,679
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Increase (decrease) in cash
during the period (389,572) 1,200,663 (1,246,941) 2,404,484
Effect of changes in
foreign exchange rates (201,198) (132,986) (229,113) (124,648)
Cash, beginning 1,298,925 1,936,916 2,184,209 724,757
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Cash, ending 708,155 3,004,593 708,155 3,004,593
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This news release contains certain forward-looking statements that involve risks and uncertainties such as statements of the Company's plans, objectives, strategies, expectations, and intentions. The words "may", "would", "could", "will", "intend", "plan", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including those factors discussed below and in filings made with the Canadian securities regulatory authorities. Should one or more of these risk factors or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. The Company does not intend, and does not assume any obligation to update these forward-looking statements

The TSX Venture Exchange has not reviewed the contents of this release and does not accept responsibility for the accuracy of the contents of this release.

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