Gold Mining News - Sinchao Reports 2010 Audited Financial Results

Sinchao Reports 2010 Audited Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 28, 2010) - Sinchao Metals Corp. ('Sinchao' or the 'Company') (TSX VENTURE:SMZ) reports that for the year ended March 31, 2010, it incurred a loss of $807,826 or $0.01 per share compared to a loss of $1,341,685 or $0.02 for the same period in 2009.

Overview

Sinchao Metals Corp. ("Sinchao", of the "Company") was incorporated on March 15, 2006 under the Business Corporations Act of Alberta. Through its 100% owned subsidiary, Corporacion Minera Sinchao S.A.C. ("Minera Sinchao"), the Company's principal business is the exploration of mineral properties located in Peru.

Sinchao is a Canadian-based exploration and development company. The Company is a subsidiary of Andean American Mining Corp. ("Andean"), which owns approximately 60.17% of the outstanding shares. The Company's principal business is the exploration of mineral properties located in Peru. This South American nation has a long tradition of mining and infrastructure to support the mining industry.

The Company is actively exploring its Sinchao property and the proposed drill program is seeking to define the size of the potential bulk tonnage, open pittable mineralization of the Breccia and Skarn zones.

Operational

Only 15% of the geological targets on the Sinchao Property have been drill tested. An additional drill program of approximately 5,000m has been recommended in order to test the extensions of the Breccia Zone to the northwest and the Skarn Zone to the southeast. An additional 15,000 metres of drilling, contingent on the results of this drilling, has also been budgeted. The objectives of the planned drilling will be to increase the inferred resource and collect representative samples for metallurgical studies. Strategic partners may be involved.

Reinterpretation of the geology has identified potential additional mineralization at the Hydrothermal Breccia and Skarn Zones and extensions to the Epithermal Zone. These zones have the geological potential to host additional resources ranging from 400 million to 1600 million tonnes, with estimated grades of 0.3% to 0.6% copper and 0.3 to 0.5 g/t gold. This is exclusive of the recently identified porphyry – style mineralization, which has not yet been evaluated.

A NI 43-101 compliant resource estimate of inferred resources was completed October 30, 2008.

Inferred Resource estimates by cut-off:

Cut-Off		Tonnes	Copper	Gold
Cu %	Au g/t	Millions %	g/t	g/t	Silver

0.13	0.07	416	0.36	0.33	9.2
0.23	0.15	376	0.38	0.36	9.9
0.27	0.24	237	0.47	0.49	12.1
0.39	0.35	155	0.58	0.62	14.2
0.44	0.44	113	0.65	0.72	15.6
0.43	0.55	82	0.74	0.82	17.0
0.48	0.64	64	0.85	0.90	110.3

Examples of Contained Metals:

Tonnes	Copper lbs	Gold ozs	Silver ozs	Eq. Lbs Copper
237	2.45	3.73	92	4.04
Million	Billion	Million	Million	Billion grading 0.77% Copper Eq*

416	3.3	4.4	123	5.71
Million	Billion	Million	Million	Billion grading 0.62% Copper Eq*

*based on US$1.50/lb copper, US$600/oz gold and US$8/oz silver.

	Notes:
1.	Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by the inability to obtain required environmental and other regulatory approval, environmental or operating permits. The estimate may also be materially affected by global economic conditions such as the price of gold and silver, the price of oil and other commodities utilized in the production of gold and silver. Unknown geologic or hydrologic conditions or other unknown factors may materially affect the resource estimates.
2.	Metallurgical recoveries and net smelter returns have not yet been determined. There has been no metallurgical work done at the Sinchao Property to date.
3.	Victor Jaramillo, P. Geo., of Discover Geological Consultants Inc. is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the resource estimates.
4.	The quantity and grade of the potential mineralization is conceptual in nature, and there has been insufficient exploration to define a mineral resource. It is uncertain if further exploration will result in the targets being delineated as mineral resources.

Results of Operations

Twelve months ended March 31	2010	2009
Loss before income tax	$807,826	$1,341,685
Loss per share	$0.01	$0.02
Total assets	$32,463,297	$31,037,756
Working capital deficit	$781,582	$450,731
Mineral properties	$31,231,617	$30,464,292
Share Capital:
Outstanding	75,977,800	70,103,514
Warrants	-	11,750,000
Options	2,855,000	2,365,000

Cash Flow and Liquidity

At March 31, 2010 the Company had a working capital deficit of $781,582, compared to $450,731 at March 31, 2009. Sinchao's net cash used for the year ended March 31, 2010 was $1,016,090 and ($3,541,292) for the same period in 2009.

During the year ended March 31, 2010, the Company issued 5,160,000 common shares for cash proceeds of $1,032,000. Share issue costs totaled $15,910.

The information above should be reviewed in conjunction with the Company's audited consolidated financial statements, management discussion and analysis, for the year ended March 31, 2010 that will be available shortly on 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. The technical disclosure in this news release has been reviewed by Andrew Gourlay, P.Geol., Geological Consultant and a Qualified Person as defined by National Instrument 43-101.

Certain of the information contained in this news release constitutes 'forward-looking statements' within the meaning of securities laws. Such forward-looking statements, including but not limited to those with respect to the prices of metals and minerals, purchase payments, royalty payments, estimated future production and estimated costs of future production involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any forecast results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of metals and minerals, the actual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the documents of the Company filed from time to time with the British Columbia Securities Commission.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.