Sinchao Reports 2010 Q3 Financial Results
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/15/11 -- Sinchao Metals Corp. ('Sinchao' or the 'Company') (TSX VENTURE: SMZ) reports that for the third quarter ended December 31, 2010, it incurred a loss of $243,412 or $0.00 per share compared to a loss of $258,114 or $0.00 for the same period in 2009. For the nine months ended December 31, 2010, the Company incurred a loss of $615,747 or $0.01 per share compared to a loss of $187,091 for the same period in 2009.
Overview
Sinchao Metals Corp. 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. This South American nation has a long tradition of mining and infrastructure to support the mining industry.
Sinchao is a Canadian-based exploration and development company. The Company is a subsidiary of Andean American Gold Corp., ('Andean') which owns approximately 60.13% of the outstanding shares.
The Sinchao mineral properties are located within the Yanacocha-Hualgayoc mining district in the department of Cajamarca, Northern Peru, and the Company subject to financing is proposing a drill program 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 was previously recommended in order to test the extensions of the Breccia Zone to the northwest and the Skarn Zone to the southeast. Further drilling will be required beyond the 5,000m with the intention to complete metallurgical studies.
No drilling took place during the nine months ended December 31, 2010 and future drilling will be initiated after agreements are reached with the local communities.
Potential additional mineralization has been identified previously at the Hydrothermal Breccia and Skarn Zones and extensions to the Epithermal Zone. This is exclusive of the 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 and is posted on Sedar.
Results of Operations
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Three months Three months Nine months Nine months
ended ended ended ended
December 31 December 31 December 31 December 31
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2010 2009 2010 2009
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Loss before tax $ 243,412 $ 258,114 $ 615,747 $ 187,091
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Loss per share $ 0.00 $ 0.00 $ 0.01 $ 0.00
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Total assets $31,558,173 $31,289,860
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Working capital deficit $ 1,498,416 $ 871,118
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Mineral properties $31,452,191 $31,276,627
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Share Capital:
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Outstanding 76,327,800 70,817,800
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Options 3,575,000 2,855,000
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Cash Flow and Liquidity
At December 31, 2010 the Company had a working capital deficit of $1,498,416, compared to $871,118 at December 31, 2009. Sinchao's net cash increase/ (decrease) for the nine months ended December 31, 2010 was ($1,009,980) ($800,000 to repay Andean) and $15,992 for the same period in 2009.
During the nine months ended September 30, 2010, the Company issued 50,000 common shares and subsequent to the quarter ended December 31, 2010, 300,000 stock options were exercised.
The information above should be reviewed in conjunction with the Company's unaudited consolidated financial statements, management discussion and analysis, for the three and nine months ended December 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.
On behalf of Sinchao Metals Corp.,
Bruce Ramsden, Vice President, Finance and CFO
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.
Contacts:
Sinchao Metals Corp.
Bruce Ramsden
Vice President, Finance and CFO
416-368-9500
bramsden@aaggold.com or info@sinchaometals.com
www.smzmetals.com