Sinchao Metals Corp.
TSX VENTURE : SMZ

Sinchao Metals Corp.

March 03, 2008 09:00 ET

Sinchao Metals Announces Third Quarter Financial and Operating Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 3, 2008) - 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 December 31, 2007.

Highlights:

Financial

- Loss for the quarter was $584,366 compared to a net loss of $139,095 for the same quarter in 2006 and loss per share of $0.010 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 increases in professional fees and stock-based compensation charges, along with fluctuation in exchange rates and the resulting increase in the foreign exchange loss.

- Net proceeds from the issuance of shares during the quarter ended December 31, 2007 were $6'234,436 compared to $634,872 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. For further information please contact the Company at (604) 681-6186 or toll free: 1-888-356-4784. Visit the company website at www.sinchaometals.com.

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)

December 31 March 31
2007 2007
-------------------------
-------------------------
(unaudited) (audited)
$ $

ASSETS
Current
Cash and cash equivalents 4,473,727 137,441
Accounts receivable 48,035 16,422
Due from related parties (Note 7) 416,347 366,533
Prepaid expenses 79,589 45,589
-------------------------
5,017,698 565,985

Mineral properties (Note 3) 24,165,701 22,202,906
Equipment (Note 4) 69,255 17,184
-------------------------
29,252,654 22,786,075
-------------------------
-------------------------

LIABILITIES
Current
Accounts payable and accrued liabilities 50,093 181,460
Due to related parties (Note 7) 329,219 298,214
-------------------------
379,312 479,674

Future income tax liabilities 5,057,959 5,723,679
-------------------------
5,437,271 6,203,353

SHAREHOLDERS' EQUITY
Share capital (Note 5) 23,676,074 17,317,558
Contributed surplus (Note 6) 2,249,241 633,412
Deficit (2,109,932) (1,368,248)
-------------------------
23,815,383 16,582,722
-------------------------
29,252,654 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 Nine months
Ended Ended
December 31 December 31
-----------------------------------------------
2007 2006 2007 2006
-----------------------------------------------
OPERATING EXPENSES
Administrative and
management services 103,578 107,556 270,044 260,736
Investor relations 39,496 29,544 120,615 32,797
Office salaries and sundry 6,833 14,617 31,866 16,974
Professional fees 74,483 401 100,575 50,123
Stock based compensation
(Note 5(f)) 212,743 - 857,689 -
Depreciation 1,293 206 1,909 280
-----------------------------------------------
438,426 152,324 1,382,698 360,910
-----------------------------------------------

LOSS BEFORE OTHER ITEMS (438,426) (152,324) (1,382,698) (360,910)

OTHER INCOME (EXPENSE)
Interest and other income 11,422 5,155 14,088 17,818
Bank charges and interest (3,246) (5,427) (10,233) (5,707)
Foreign exchange gain
(loss) (154,116) 13,501 637,159 8,176
-----------------------------------------------
(145,940) 13,229 641,014 20,287
-----------------------------------------------
NET INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
FOR THE PERIOD (584,366) (139,095) (741,684) (340,623)
DEFICIT - BEGINNING OF
PERIOD (1,525,566) (201,528) (1,368,248) -
-----------------------------------------------
DEFICIT - END OF PERIOD (2,109,932) (340,623) (2,109,932) (340,623)
-----------------------------------------------
-----------------------------------------------

PER SHARE INFORMATION
Weighted average number of
common shares outstanding
(basic and diluted) 59,613,814 47,548,261 55,596,517 28,691,014
-----------------------------------------------
-----------------------------------------------
Net income (loss) per
common share
(basic and diluted) (0.010) (0.003) (0.013) (0.012)
-----------------------------------------------
-----------------------------------------------

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 Nine months
Ended Ended
December 31 December 31
----------------------------------------------
2007 2006 2007 2006
----------------------------------------------
$ $ $ $

CASH PROVIDED FROM (USED
FOR):

OPERATING ACTIVITIES
Net income (loss) for the
period (584,366) (139,095) (741,684) (340,623)
Adjustments for items not
affecting cash:
Stock based compensation 212,743 - 857,689 -
Unrealized foreign exchange
(gain) loss related
to future income tax
liability 87,754 (13,501) (665,720) (8,176)
Depreciation 1,293 206 1,909 280
----------------------------------------------
(282,576) (152,390) (547,806) (348,519)

Net changes in non-cash
working capital items:
Accounts receivable (24,083) (114,238) (31,613) (228,772)
Due from related parties (463,182) - (18,809) -
Prepaid expenses (4,889) 15,649 (34,000) (29,813)
Accounts payable (339,231) (25,319) (131,367) 114,440
----------------------------------------------
(1,113,961) (276,298) (763,595) (492,664)
----------------------------------------------

INVESTING ACTIVITIES
Expenditures on mineral
properties (586,992) (551,911) (1,765,275) (1,514,930)
Equipment (47,915) - (53,980) (17,854)
----------------------------------------------
(634,907) (551,911) (1,819,255) (1,532,784)
----------------------------------------------

FINANCING ACTIVITIES
Common shares issued for
cash 6,234,436 634,872 6,946,936 3,637,974
Share issue costs (27,800) (298,400) (27,800) (662,161)
Reorganization costs - (114,609) - (114,609)
----------------------------------------------
6,206,636 221,863 6,919,136 2,861,204
----------------------------------------------

INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS DURING
THE PERIOD 4,457,768 (606,346) 4,336,286 835,756
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 15,959 1,442,102 137,441 -
----------------------------------------------
CASH AND CASH EQUIVALENTS -
END OF PERIOD 4,473,727 835,756 4,473,727 835,756
----------------------------------------------
----------------------------------------------

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


The TSX Venture Exchange has not reviewed and doses not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

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