Sinchao Metals Corp.
TSX VENTURE : SMZ

Sinchao Metals Corp.

November 30, 2007 16:33 ET

Sinchao Metals Announces Second Quarter Financial and Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 30, 2007) - Sinchao Metals Corp. (TSX VENTURE:SMZ) - (all figures in Canadian dollars, unless otherwise noted) -

Sinchao Metals Corp. is an exploration and development company focused on the Sinchao polymetallic project in Peru. Today it reports interim results for the 3 months ended September 30, 2007.

Highlights:

Financial

- Loss for the quarter was $268,306 compared to a net loss of $140,575 for the same quarter in 2006 and loss per share of $0.005 compared to $0.003 net loss per share in 2006. The increased net loss in the quarter compared to the prior year was due to the fluctuation in exchange rates and the resulting reduction in the foreign exchange gain.

- Net proceeds from the issuance of shares during the quarter ended September 30, 2007 were $7,500 compared to $353,201 in 2006.

Operational

- Drill program continued and an estimation of inferred resources is expected upon completion.

- Drill Hole SDH-11 intersected 194 m grading 0.43% Copper and 0.69 g/t Gold in the Breccia Zone.

- Further results for Drill Hole SDH-11: total intersection of 322.7 metres grades 0.27% copper, 0.36 g/t gold and 9.59 g/t silver.

"We are pleased with the success of our drill program to date," stated President Andrew Gourlay, "and we look forward to continuing our exploration in 2008."

The complete Management Discussion and Analysis and Financial Statements will be filed at www.sedar.com. For further information call (604) 681-6186 or toll free: 1-888-356-4784 or visit our website at www.smzmetals.com.

Andrew Gourlay, P. Geol., President of Sinchao Metals Corp. is the Qualified Person for the technical disclosure in this news release.

On behalf of Sinchao Metals Corp.;

Andrew W. Gourlay, P. Geol., President

About Sinchao Metals Corp.:

Sinchao Metals Corp. (TSX VENTURE:SMZ) is focused on the exploration and development of the Sinchao property, located in Cajamarca province in Northern Peru, 30 kilometres from Yanacocha, the largest gold mine in South America. The company is dedicated to creating value for its shareholders by pursuing growth, expansion and enhancement of the Sinchao property.

This news release may contain forward-looking information within the meaning of the Securities Act (Ontario) ("forward-looking statements"). Such forward-looking statements may include the Company's plans for its mineral projects, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company's operations in a foreign jurisdiction, uncertainty of production and costs estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of gold and other metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company's Financial Statements, Management Discussion and Analysis and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.



SINCHAO METALS CORP.
(An Exploration Stage Company)

INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars, except where noted)

Sept 30 Mar 31
2007 2007
---------- ----------
(unaudited) (audited)
$ $
ASSETS
Current
Cash and cash equivalents 15,959 137,441
Accounts receivable 23,952 16,422
Due from related parties (Note 7) 7,584 366,533
Prepaid expenses 74,700 45,589
---------- ----------
122,195 565,985

Mineral properties (Note 3) 23,431,159 22,202,906
Equipment (Note 4) 22,633 17,184
---------- ----------
23,575,987 22,786,075
---------- ----------
---------- ----------

LIABILITIES
Current
Accounts payable and accrued liabilities 389,324 181,460
Due to related parties (Note 7) 383,638 298,214
---------- ----------
772,962 479,674

Future income tax liabilities 4,970,205 5,723,679
---------- ----------
5,743,167 6,203,353

SHAREHOLDERS' EQUITY
Share capital (Note 5) 18,130,179 17,317,558
Contributed surplus (Note 6) 1,228,207 633,412
Deficit (1,525,566) (1,368,248)
---------- ----------
17,832,820 16,582,722
---------- ----------
23,575,987 22,786,075
---------- ----------
---------- ----------

Subsequent events (Note 10)

"ANDREW GOURLAY" "BRYAN MORRIS"
---------------- --------------
DIRECTOR DIRECTOR

The accompanying notes are an integral part of these interim consolidated
financial statements.


SINCHAO METALS CORP.
(An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS,
COMPREHENSIVE INCOME (LOSS) AND DEFICIT
(unaudited)
(Expressed in Canadian Dollars, except where noted)

Three months Six months
Ended Ended
Sept 30 Sept 30
---------------------- -----------------------
2007 2006 2007 2006
---------------------- -----------------------
$ $ $ $

OPERATING EXPENSES
Administrative and
management services 82,267 113,144 166,466 138,144
Investor relations 60,181 5,253 81,119 27,553
Office salaries and sundry 10,991 7,751 25,033 8,844
Professional fees 22,401 23,289 26,092 34,251
Stock based compensation
(Note 5(f)) 335,811 - 644,946 -
Depreciation 75 74 616 74
---------------------- -----------------------
511,726 149,511 944,272 208,866
---------------------- -----------------------

LOSS BEFORE OTHER ITEMS (511,726) (149,511) (944,272) (208,866)

OTHER INCOME (EXPENSE)
Interest and other income 457 10,690 2,666 12,664
Bank charges and interest (2,975) - (6,987) -
Foreign exchange
gain (loss) 245,938 (1,754) 791,275 (5,325)
---------------------- -----------------------
243,420 8,936 786,954 7,339
---------------------- -----------------------

NET INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
FOR THE PERIOD (268,306) (140,575) (157,318) (201,527)
DEFICIT - BEGINNING OF
PERIOD (1,257,260) (60,952) (1,368,248) -
---------------------- -----------------------
DEFICIT - END OF PERIOD (1,525,566) (201,527) (1,525,566) (201,527)
---------------------- -----------------------
---------------------- -----------------------

PER SHARE INFORMATION
Weighted average number
of common shares
outstanding
(basic and diluted) 53,854,066 46,422,196 53,576,893 33,579,678
---------------------- -----------------------
---------------------- -----------------------
Net income (loss) per
common share (basic and
diluted) (0.005) (0.003) (0.003) (0.006)
---------------------- -----------------------
---------------------- -----------------------

The accompanying notes are an integral part of these interim consolidated
financial statements.


SINCHAO METALS CORP.
(An Exploration Stage Company)

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars, except where noted)

Three months Six months
Ended Ended
Sept 30 Sept 30
---------------------- -----------------------
2007 2006 2007 2006
---------------------- -----------------------
$ $ $ $

CASH PROVIDED FROM
(USED FOR):

OPERATING ACTIVITIES
Net income (loss) for
the period (268,306) (140,575) (157,318) (201,527)
Adjustments for items
not affecting cash:
Stock based
compensation 335,811 - 644,946 -
Unrealized foreign
exchange (gain)
loss related to
future income
tax liability (176,567) 1,754 (753,474) 5,325
Depreciation 75 74 616 74
---------------------- -----------------------
(108,987) (138,747) (265,230) (196,128)

Net changes in non-cash
working capital items:
Accounts receivable (3,575) (87,892) (7,530) (114,534)
Due from related parties 388,062 - 444,373 -
Prepaid expenses 10,875 (43,576) (29,111) (45,462)
Accounts payable 271,269 (7,683) 207,864 139,759
---------------------- -----------------------
557,644 (277,898) 350,366 (216,365)
---------------------- -----------------------

INVESTING ACTIVITIES
Expenditures on mineral
properties (711,545) (430,900) (1,178,283) (963,233)
Equipment (1,969) (17,640) (6,065) (17,640)
---------------------- -----------------------
(713,514) (448,540) (1,184,348) (980,873)
---------------------- -----------------------

FINANCING ACTIVITIES
Common shares issued
for cash 7,500 478,000 712,500 3,003,100
Share issue costs - (124,799) - (363,760)
---------------------- -----------------------
7,500 353,201 712,500 2,639,340
---------------------- -----------------------

INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
DURING THE PERIOD (148,370) (373,237) (121,482) 1,442,102
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 164,329 1,815,339 137,441 -
---------------------- -----------------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD 15,959 1,442,102 15,959 1,442,102
---------------------- -----------------------
---------------------- -----------------------

The accompanying notes are an integral part of these interim consolidated
financial statements.


Contact Information

  • Sinchao Metals Corp.
    Andrew W. Gourlay, P. Geol.
    President
    (604) 681-6186 or Toll Free: 1-888-356-4784
    (604) 681-3652 (FAX)
    Website: www.sinchaometals.com