VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 29, 2011) - Sinchao Metals Corp. (News - Market indicators) ('Sinchao' or the 'Company') reports that for the three months ended March 31, 2011, it incurred a loss of $10,972,352 or $0.15 per share compared to a loss of $620,735 or $0.01 per share for the same period in 2010. For the twelve months ended March 31, 2011, the Company incurred a loss of $11,588,099 or $0.15 per share compared to a loss of $807,826 or $0.01 per share for the same period in 2010.

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 59.8% 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.

COMPANY HIGHLIGHTS

CORPORATE

• On June 29, 2010, the company announced the appointment of Bruce Ramsden as Vice President Finance and Chief Financial Officer.

• In November 2010, John Huguet announced that he would be stepping down as Chairman and Chief Executive Officer of the Company, effective December 31, 2010, and David Rae would be appointed a Director, Chairman and Chief Executive Officer, effective January 1, 2011. John Huguet is no longer involved in the affairs of the Company.

• In January 2011, Nick Demare announced his resignation from the Board of Sinchao.

OTHER SIGNIFICANT EVENTS

PROJECT

On February 7, 2011, Sinchao announced that it had conducted a review of its properties earlier this year and determined that title to the claims of four of the properties comprising the Sinchao Project were not properly transferred to a subsidiary of Andean, the party that had purported to transfer the claims to Sinchao. As a result neither Andean nor Sinchao holds any proprietary interest in the claims, which claims contain approximately 40% of the inferred resource previously disclosed by Sinchao. Sinchao has been striving to reach an agreement with the parties that Andean originally dealt with in order to remedy the deficiencies in title, however it has been unable to reach such an agreement. Sinchao is therefore not optimistic that it will be able to remedy the deficiencies in title, and has written the project down by $11,306,431 to management's best estimate of its fair value, which takes into account the proportion of resources no longer accessible, and the market value of the company as a whole. In addition to the four properties mentioned above, Sinchao has also determined that six other properties believed to have been acquired at the time of Sinchao's formation had previously lapsed and thus are not held by the Company. These properties are not material to Sinchao's operations.

FINANCIAL POSITION

As at March 31, 2011, Sinchao had a cash and cash equivalent position of $68,483, and a working capital deficiency of $1,456,351. The Company will need to raise additional funds or borrow the funds from Andean American Gold Corp. ("Andean"), formerly Andean American Mining Corp., its majority shareholder.

RESULTS OF OPERATIONS

1. During April 2011, 58,333 common shares were issued at $0.20 for options that were exercised.
2. Subsequent to year end March 31, 2011, 1,041,667 stock options expired.

Cash Flow and Liquidity

At March 31, 2011 the Company had a working capital deficit of $1,456,351, compared to $781,582 at March 31, 2010. Sinchao's net cash increase/ (decrease) for the twelve months ended March 31, 2011 was ($950,998) ($800,000 to repay Andean) and $1,016,934 for the same period in 2010.

During the twelve months ended March, 2011, the Company issued 350,000 common shares and subsequent to the quarter ended March 31, 2011, 58,333 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 twelve months ended March 31, 2011 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.