Global Alumina Releases Second Quarter 2008 Results



    TORONTO, Aug. 12 /CNW/ -- Global Alumina Corporation (TSX: GLA.U) (the
"Company" or "Global Alumina"), a corporation participating in a joint venture
to develop an alumina refinery, mine and associated infrastructure in the
bauxite-rich region of the Republic of Guinea (the "Project"), announced today
its financial and operating results for the three and six month periods ended
June 30, 2008.  The text of the quarterly unaudited financial statements and
management's discussion and analysis can be viewed or printed from the
Company's SEDAR reference page at www.sedar.com. All dollar amounts are in
U.S. dollars.
    
    Second Quarter 2008 Financial Highlights(1)
    
    -- From April 1, 2008 through June 30, 2008, the Company contributed
capital to the Project joint venture totalling $13 million to fund its
one-third share of construction and development costs.
    -- As at June 30, 2008 and August 12, 2008 respectively, the Company had
unrestricted cash of $20.8 million and $20.1 million, restricted cash
totalling $60.2 million and $54.3 million in its escrow account to fund future
Project capital calls and a $108.9 million subscription payments receivable.
    -- For the three and six months ended June 30, 2008 the Company recorded
net losses of $1.86 million ($0.01 per share) and $3.34 million ($0.02 per
share) respectively, compared with net income of $84.29 million ($0.41 per
share) and $78.37 million ($0.38 per share) for the same period in 2007.
    
    -- Interest income for the quarter was $521,355.
    
    The Company expects that funds on hand as of August 12, 2008 will be
sufficient to enable it to meet its corporate operating expense requirements
through 2012 and to fund its one-third share of Project development cash calls
at least through to finalization of debt financing for the Project.
    
    Significant Corporate Events
    
    During the second quarter of 2008, the board of directors of Guinea
Alumina Corporation Ltd. ("Guinea Alumina") approved a revised interim budget
of $137.6 million for the period from January 2008 through August 2008. Guinea
Alumina's costs capitalized into construction in progress for the quarter were
$36.4 million and included funding for continued Project site works and
development, including work on the container quay at the port in Kamsar,
foundation piling, and major earthworks at the refinery site, substantial
completion of earthworks for the railway, geotechnical investigations and
clearing at the port and container quay, and continued engineering procurement
and construction management services and corporate and staffing costs for the
Project through the period bringing total construction in progress from
inception to $352.5 million.  During the quarter the joint venture partners
contributed $37.5 million towards the interim budget (with one joint venture
partner contributing the remainder of its second quarter capital calls of $1.5
million in the third quarter of 2008).  The joint venture board is expected to
consider for approval before September 30, 2008 a final Project development
plan based on the bankable feasibility study of the Project that was completed
in the first quarter of 2008.
    The Corporation's joint venture partners have not yet made payment of the
first and second deferred subscription payments of approximately $75.55
million in aggregate for their interest in the Project.  On June 23, 2008 the
Corporation made a formal demand for payment to each of the joint venture
partners.  At a joint venture shareholders' meeting held July 31, 2008, the
joint venture partners agreed a process by which the transfer of the mining
concession for the Project would be confirmed.
    Guinea Alumina is in the process of raising up to $2.45 billion of
long-term, senior secured project debt financing to fund a portion of the cost
of developing the Project.  The Project lenders have been identified, a
detailed term sheet for the financing is under negotiation and active
discussions with the lenders and their advisors are ongoing.  The Corporation
expects that lender commitments will be in place by year end and that
financial closing will occur by March 31, 2009.
    On June 8, 2007, the Government of Guinea through the Ministry of Mines
and Geology, established the Interministerial Committee for Renegotiation of
Conventions and Agreements Mining ("CIRCAM").  CIRCAM is in the process of
reviewing mineral resource agreements between the Government of Guinea and
foreign corporations.  To date no formal communication has been received by
CIRCAM or the Government of Guinea with respect to Guinea Alumina's agreements
with the Government of Guinea and the Corporation does not expect that any of
the rights of Guinea Alumina and its Guinean subsidiary will be affected by
the review.

    
    (1) Unless otherwise stated, all financial figures discussed in this
        announcement are unaudited, prepared in accordance with Canadian
        generally accepted accounting principles for interim financial
        statements, expressed in U.S. dollars as at June 30, 2008, and
        represent comparisons between the three and six month periods ended
        June 30, 2008 and the equivalent periods ended June 30, 2007.
    About Global Alumina
    
    Global Alumina and its joint venture partners are developing a 3.6
million metric tons per annum nominal capacity alumina refinery located in the
bauxite-rich region of the Republic of Guinea.  The joint venture partners in
the Project are Global Alumina International, Ltd., a wholly owned subsidiary
of the Company, BHP Billiton, Dubai Aluminium Company Limited and Mubadala
Development Company PJSC.  The Project is one of the most advanced new
projects in Guinea with the refinery already in feasibility stage and critical
path infrastructure and site work already underway.  Global Alumina is
positioned to be one of the only companies focused solely on alumina
production and sales.  The Company offers a first mover advantage over other
projects in the region and an opportunity for socially responsible investing
in a country that holds over one-third of the world's bauxite resources.
Global Alumina is headquartered in Saint John, New Brunswick with operations
in Boke, Guinea and has administrative offices in New York, London, Montreal
and Conakry, Guinea. For further information visit the company's website at
www.globalalumina.com.
    
    Forward Looking Information
    
    Certain information in this release is "forward looking information",
which reflects management's expectations regarding the Company's future
growth, results of operations, performance and business prospects and
opportunities.  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 Company
and the Project, are often, but not always, used to identify forward looking
information.  Such forward looking information reflects management's current
beliefs and is based on information currently available to management. Forward
looking information involves significant risks and uncertainties, should not
be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of whether or not or the times at, or by
which, such performance or results will be achieved.  In particular, this
release contains forward looking information pertaining to the following: the
achievement of milestones set out in the subscription agreement among Guinea
Alumina and its shareholders, the joint venture partners, (the "Subscription
Agreement"); the decisions of the joint venture with respect to the conduct of
the Project; the approval of the proposed development plan with respect to the
Project and the making of a decision by the joint venture partners to proceed
with the development of the Project; expectations regarding the financing of
the Project, the terms, timing and amount of financing and the sources of
financing; the amount, nature and timing of capital expenditures to complete
the Project; the timing of refinery construction and mine start up; future
production levels; expectations regarding the negotiation of contractual
rights; prices for alumina and aluminium; operating and other costs; treatment
of Guinea Alumina under the fiscal terms of the "tax exhibit" to the Basic
Agreement with the Government of Guinea (as described in the Company's Annual
Information Form, the "AIF") and the negotiation and terms of agreements
relating to the access of Guinea Alumina to and use of certain infrastructure
required for the development and operation of the Project and business
strategies and plans of management with respect to the Project.  A number of
factors could cause actual results to differ materially from the results
discussed in the forward looking information, including, but not limited to:
the failure or delay in fulfilling the conditions precedent necessary for the
subsequent subscription payments under the Subscription Agreement to become
available to the Company; the limited control by the Company of the assets and
operations of the Project and its inability to make major decisions with
respect to the Project without agreement from the other joint venture
partners; the requirement that the Company hold 85% of subscription proceeds
received pursuant to the Subscription Agreement in escrow and the possibility
the Company may need to seek additional financing to fund corporate expenses;
a delay in finalizing financing for the Project; the amount of such financing
being insufficient to fund the Project to complete development; the inability
of the Company to raise sufficient financing to fund its share of the
development costs of the Project in excess of the maximum Project debt
financing; the possibility that the Company's interest will be diluted if it
is unable to meet a capital call with respect to the Project; the current
political and economic risks of investing in a developing country; material
inaccuracies in the cost estimates and time estimates for development of the
Project; a decision of the joint venture partners not to proceed with the
Project; construction risks such as cost overruns, delays and shortages of
labour, materials or equipment; the Company's dependence on an interest in a
single asset; the possible forfeiture of the Mining Concession (as defined in
the Company's AIF) in certain circumstances; operational risks such as access
to infrastructure and skilled labour; currency fluctuations; price volatility
of alumina, aluminium or raw materials; and certain other factors related to
the Project discussed under the heading "Risk Factors" in the Company's AIF.
    The forward looking information contained in this discussion is based on
the following principal assumptions: that the data, estimates and projections
in the bankable feasibility study of the Project are within the range of
accuracy suggested therein; that the joint venture partners will agree on a
final schedule for development of the Project and will make a decision to
proceed with the Project upon approval of the development plan; that issues
relating to the Mining Concession title will be resolved to the satisfaction
of the joint venture partners and Project lenders; that general economic
conditions will not become adverse to the completion of financing for the
Project and will have no material adverse impact on the Project; that the
negotiations with prospective Project lenders and between the prospective
Project lenders and the Guinean government will be successfully concluded by
the end of 2008; that the bidding process for contracted work in connection
with the Project will be completed in a competitive manner and that actual
costs to complete work will be within the range of quotes provided by
contractors to date; that the joint venture will be able to acquire necessary
labour at currently assumed labour costs and productivity rates; that the
development plan for the Project is conducted according to schedule; that
general economic factors and trends relating to construction costs remain
constant; and that the future political and economic climate in Guinea has no
material adverse effect on the Project.  Although the forward looking
information contained in this discussion is based upon what management of the
Company believes are reasonable assumptions, Global Alumina cannot assure
investors that actual results will be consistent with this forward looking
information.  If the assumptions underlying forward looking information prove
incorrect or if other risks or uncertainties materialize, actual results may
vary materially from those anticipated in this release.  This forward looking
information is made as of the date of this release, and the Company assumes no
obligation to update or revise it to reflect new events or circumstances,
except as required by applicable law.




For further information:

For further information: Michael Cella, Global Alumina, +1-212-351-0010,
cella@globalalumina.com, Barbara Cano, Breakstone Group, +1-646-452-2334,
bcano@breakstone-group.com Web Site: http://www.globalalumina.com

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