Global Alumina Releases Second Quarter 2009 Results

TORONTO, Aug. 12 /CNW/ -- Global Alumina Corporation (TSX: GLA.U) (the"Company" or "Global Alumina"), a corporation participating in a joint ventureto develop an alumina refinery, mine and associated infrastructure in thebauxite-rich region of the Republic of Guinea (the "Project"), announced todayits financial and operating results for the three and six month periods endedJune 30, 2009. The text of the quarterly unaudited financial statements andmanagement's discussion and analysis can be viewed or printed from theCompany's SEDAR reference page at www.sedar.com. All dollar amounts are inU.S. dollars. Second Quarter 2009 Financial Highlights(1)-- In the first six months of 2009, the Company contributed capital tothe Project joint venture totalling $28 million to fund its one-thirdshare of construction and development costs. -- As of June 30, 2009, the joint venture company, Guinea Alumina Corporation, Ltd. ("Guinea Alumina"), had capitalized intoconstruction in progress approximately $577.6 million, of which $17.2 million relates to second quarter 2009. -- The joint venture approved a cumulative work plan and budget of $15.8 million from July 2009 through September 2009. -- As at June 30, 2009 the Company had unrestricted cash of $22.7 million and escrowed cash of $62.0 million for funding future Project capital calls and certain indemnities and warranties given to the joint venture. -- For the three and six months ended June 30, 2009, respectively, the Company reported net losses of $2,241,949 ($0.01 per share) and 3,615,827 ($0.02 per share), compared with net losses of $1,861,516 ($0.01 per share) and $3,340,879 ($0.02 per share) for the sameperiods in 2008. -- Interest income for the quarter was $196,408. Assuming the development plan for the Project has not been approved andthe joint venture continues spending at the current rate, the Company's fundsin escrow will be sufficient to meet its one-third share of Project equityrequirements and unrestricted funds will be sufficient to enable it to meetits corporate operating expense requirements, in each case, through June 2012. (1) Unless otherwise stated, all financial figures discussed in thisannouncement are unaudited, prepared in accordance with Canadian generallyaccepted accounting principles for interim financial statements, expressed inU.S. dollars as at June 30, 2009, and represent comparisons between the threeand six month periods ended June 30, 2009 and the equivalent period ended June30, 2008. Significant Corporate EventsSubstantial Issuer BidOn July 10, 2009 the Company commenced a substantial issuer bid for up to$8 million of its outstanding common shares (the "Issuer Bid") by way of a"Dutch auction" with a range of tender prices available to shareholdersbetween $0.40 and $0.65 per share, inclusive. The Dutch auction tenderprocess allows shareholders to individually select the price, within thespecified range, at which they are willing to sell all or a portion of theircommon shares. When the Issuer Bid expires, the Company will select thelowest tendered price from the range of prices allowing it to buy up to $8million of the common shares tendered to the bid. All shares tendered at orbelow the selected price level will be bought at the selected price level,subject to pro ration in the event that the aggregate cost to purchase all ofthe shares exceeds $8 million. The Issuer Bid will expire on August 17, 2009at 5:00 p.m. (Toronto time), unless the Company extends it. The Company willannounce the purchase price and the results of the Issuer Bid by 9:00 a.m. thefollowing business day. The Issuer Bid circular, offer to purchase andrelated documents are available through SEDAR on the Company's reference pageand can be accessed through the Internet at www.sedar.com. About Global AluminaGlobal Alumina and its joint venture partners are developing a 3.6million metric tons per annum nominal capacity alumina refinery located in thebauxite-rich region of the Republic of Guinea. The joint venture partners inthe Project are Global Alumina International, Ltd., a wholly owned subsidiaryof the Company, BHP Billiton, Dubai Aluminium Company Limited and MubadalaDevelopment Company PJSC. The Project is one of the most advanced newprojects in Guinea with the refinery already in feasibility stage and criticalpath infrastructure and site work already underway. Global Alumina ispositioned to be one of the only companies focused solely on aluminaproduction and sales. The Company offers a first mover advantage over otherprojects in the region and an opportunity for socially responsible investingin a country that holds over one-third of the world's bauxite resources. Global Alumina's registered office is in Saint John, New Brunswick and GlobalAlumina has administrative offices in New York and Montreal. For furtherinformation visit the company's website at www.globalalumina.com. Forward Looking InformationCertain information in this press release is "forward lookinginformation", which reflects management's expectations regarding the Company'sfuture growth, results of operations, performance and business prospects andopportunities. In this release, the words "may", "would", "could", "should","will", "intend", "plan", "anticipate", "believe", "seek", "propose","estimate" and "expect" and similar expressions, as they relate to the Companyand its assets and interests, are often, but not always, used to identifyforward looking information. Such forward looking information reflectsmanagement's current beliefs and is based on information currently availableto management. Forward looking information involves significant risks anduncertainties, should not be read as a guarantee of future performance orresults, and will not necessarily be accurate indications of whether or not orthe times at, or by which, such performance or results will be achieved. Inparticular, this release contains forward looking information pertaining tothe following: the decisions of the joint venture with respect to the conductof the Project; the approval of the proposed development plan with respect tothe Project and the making of a decision by the joint venture partners toproceed with the development of the Project and the timing of such decision;the adequacy of the Company's cash resources; expectations regarding thefinancing of the Project; the amount, nature and timing of capitalexpenditures to complete the Project; the timing of refinery construction andmine start up; general business strategies and plans of management withrespect to the Project; and the number and price of shares the Company maypurchase pursuant to its Issuer Bid. A number of factors could cause actualresults to differ materially from the results discussed in the forward lookinginformation, including, but not limited to: recent political events in Guineaand the establishment of a new government and the policies of such newgovernment; the current political and economic risks of investing in adeveloping country; a decision by the joint venture partners to delay theProject or not to proceed with the Project; material changes to the costestimates and time estimates for development of the Project; unanticipatedliabilities of Global Alumina at the corporate level and the possibility theCompany may need to seek additional financing to fund corporate expenses;operational risks such as access to infrastructure and skilled labour; thelimited control by the Company of the assets and operations of the Project andits inability to make major decisions with respect to the Project withoutagreement from the other joint venture partners; the failure or delay inobtaining debt financing for the Project; the amount of debt financingavailable to the Project being insufficient to fund the Project to completedevelopment; the inability of the Company to raise sufficient financing tofund its share of the development costs of the Project in excess of themaximum Project debt financing; the Company's dependence on an interest in asingle asset; the possible forfeiture of the Mining Concession (as defined inthe Company's Annual Information Form dated March 26, 2009) in certaincircumstances; construction risks such as cost overruns, delays and shortagesof labour, materials or equipment; the possibility that the Company's interestwill be diluted if it is unable to meet a capital call with respect to theProject; currency fluctuations; price volatility of alumina, aluminium or rawmaterials and certain other factors related to the Project and the factorsrelated to the business of the Company discussed under the heading "RiskFactors" in the Company's Annual Information Form dated March 26, 2009. The forward looking information contained in this discussion is based onthe following principal assumptions: that the data, estimates and projectionsin the bankable feasibility study of the Project are within the range ofaccuracy suggested therein; that the joint venture partners will agree on atimely schedule for development of the Project and will make a decision toproceed with the Project upon approval of the development plan by the end of2010 and that notice to proceed will be given within six months thereafter;that general economic conditions will not be adverse to the completion offinancing for the Project and will have no material adverse impact on theProject; that once the decision is made to proceed with the Project, theCompany will be able to finance its shares of Project costs; that thenegotiations with prospective Project lenders and between the prospectiveProject lenders and the Guinean government will resume and be successfullyconcluded; that the bidding process for contracted work in connection with theProject will be completed in a competitive manner and that actual costs tocomplete work will be within the range of quotes provided by contractors todate; that the joint venture will be able to acquire necessary labour atcurrently assumed labour costs and productivity rates; that once approved thedevelopment plan for the Project is conducted according to schedule; thatgeneral economic factors and trends relating to construction costs remainconstant or improve and that the future political and economic climate inGuinea has no material adverse effect on the Project and that the newpolitical regime continues to recognize agreements negotiated by the previousgovernment. Although the forward looking information contained in thisdiscussion is based upon what management of the Company believes arereasonable assumptions, Global Alumina cannot assure investors that actualresults will be consistent with this forward looking information. If theassumptions underlying forward looking information prove incorrect or if otherrisks or uncertainties materialize, actual results may vary materially fromthose anticipated in this release. This forward looking information is madeas of the date of this press release, and Global Alumina assumes no obligationto update or revise it to reflect new events or circumstances, except asrequired by applicable law.