Global Alumina Releases Second Quarter 2007 Results



    TORONTO, Aug. 14 /CNW/ -- Global Alumina Corporation (TSX: GLA.U) (the
"Company" or "Global Alumina"), a company developing an alumina refinery
located in the bauxite-rich region of the Republic of Guinea (the "Guinea
Alumina Project" or the "Project", previously the "Sangaredi Refinery
Project"), announced today its financial and operating results for the
three-month period ending June 30, 2007.(1)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.
    
    Significant Corporate Events:
    Joint Venture Transaction Completed
    
    Most significantly in the quarter, Global Alumina completed on May 17,
2007 a joint venture transaction under which it sold for aggregate proceeds of
$260 million two-thirds of its interest in Guinea Alumina Corporation, Ltd.
("Guinea Alumina") which together with its wholly-owned Guinean subsidiary,
Guinea Alumina Corporation, S.A., is the owner and developer of the Project.
The transaction resulted in a dilution gain of $151.5 million, $88.0 million
of which was recognized at completion upon receipt of the initial subscription
payment of $151.1 million and $63.4 million was deferred pending receipt of
the remaining $108.9 million of subscription payments to be paid in three
installments subject to Guinea Alumina achieving certain future milestones.
    As a result of this transaction, Global Alumina received net proceeds of
$120,066,121, recorded a subscription payment receivable of $108.9 million,
retained a one-third, joint-controlling interest in Guinea Alumina and brought
the significant interests of each of BHP Billiton (one-third), DUBAL (one-
fourth) and Mubadala (one-twelfth) as strong development partners to Guinea
Alumina.  Additionally, Guinea Alumina fully repaid the $59.7 million then
outstanding under the subscriber loan facility and increased its cash balances
by $24.7 million by means of a concurrent, pro rata capital contribution.
Invested capital in Guinea Alumina and the Project reached $320 million as of
June 30, 2007.
    As of the May 17, 2007 transaction completion, the Company's remaining
one-third interest is proportionately consolidated according to Canadian GAAP.
Consequently, the Company's pro rata share of each of the assets, liabilities,
revenues and expenses of Guinea Alumina has been combined on a line-by-line
basis with similar items in the Company's financial statements.  Historical
financial statements presented reflect 100% ownership of Guinea Alumina up to
May 17, 2007.
    
    Review of Second Quarter 2007 Results:
    
    Due to the $88.1 million dilution gain realized in the quarter, Global
Alumina realized net income of $84.3 million or $0.41 per share for the three
months ended June 30, 2007; compared with a loss of $5.0 million or $0.03 per
share for the same period in 2006.
    As of June 30, 2007, Global Alumina had consolidated assets of $327.0
million, including approximately $97.6 million in an escrow account reserved
for its one-third share of future capital requirements of Guinea Alumina, an
additional $23.3 million of unrestricted cash and $108.9 million due from its
joint venture partners.  It also had no debt, $9.7 million of payables and
accruals ($8.6 million of which represents its one-third interest in Guinea
Alumina' payables and accruals), its one-third interest of $10.6 million in
Guinea Alumina's cash, and shareholders' equity plus deferred dilution gain
equal to $317.3 million.

    Operating Milestones

    
    -- During the quarter, Guinea Alumina transitioned from a wholly-owned
       Global Alumina subsidiary to a joint venture company owned one-third by
       each of Global Alumina and BHP Billiton, one-fourth by DUBAL and one-
       twelfth by Mubadala.  The joint venture verified the historical body of
       work for the benefit of the new owners and agreed to (1) conduct a
       bankable feasibility study in accordance with BHP Billiton standards to
       be completed by yearend 2007, (2) continue the ongoing early works'
       construction program and (3) implement certain cost reduction
       opportunities identified during the new owners' verification phase.
    

    
    -- In addition to advancing the engineering and procurement work, Guinea
       Alumina's continuing early works' construction program in the quarter
       included resettlement, vocational training, refinery area clearing,
       earth works for the rail spur from the main line to the refinery site,
       storm water pond blasting and dyke construction, and installation of a
       new bridge at Boke to remove the only existing road transportation
       bottleneck for heavy construction loads from the port of Kamsar to the
       refinery site.
    

    
    -- During the quarter, Guinea Alumina capitalized an additional $27.3
       million ($9.1 million Global Alumina share) to construction in
       progress, bringing the balance as of June 30, 2007 to $234.2 million
       ($78.1 million Global Alumina share).
    

    
    -- At the end of June, Guinea Alumina was directly responsible for the
       employment of 1,191 people in Guinea, including over 1,000 Guineans.
    
    Pending completion of the bankable feasibility study, Guinea Alumina
adopted preliminary working estimates for the alumina refinery's initial
capacity at 3.2 million tonnes per year, a $3.2 billion cost to complete
construction with production commencing in 2011.  The final cost estimates and
construction schedule will depend on the completion of engineering studies and
the negotiation of construction and financing arrangements undertaken as
critical elements of Guinea Alumina's bankable feasibility study to be
completed by December 31, 2007.
    
    ABOUT GLOBAL ALUMINA
    
    Global Alumina and its joint venture partners are developing a 3.2
million tonnes per annum alumina refinery located in the bauxite-rich region
of the Republic of Guinea.  Its joint venture partners are BHP Billiton, Dubai
Aluminium Company Limited and Mubadala Development Company PJSC.  The join
venture's refinery 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 a
Saint John, New Brunswick corporation with administrative offices in New York,
London, Montreal and Conakry, Guinea and operations in Boke, Guinea. For
further information visit the company's website at www.globalalumina.com.
    
    Safe Harbor Statement
    
    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, 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. Such forward looking
information includes: the ability of the Company to satisfy the conditions
precedent t in respect of the three deferred installment subscription payments
pursuant to the subscription agreement with the joint venture partners; the
commencement or outcome of any negotiations with third parties; future
production levels; the amount, nature and timing of capital expenditures; the
timing of refinery construction and mine start up; expectations regarding the
financing of the alumina refinery project and associated infrastructure and
the sources of financing; prices for alumina and aluminum; operation and other
costs; and business strategies and plans of management. 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: a failure by
the Company to complete the conditions precedent to subsequent installments
under the subscription agreement; the political and economic risks of
investing in a developing country; the failure of the joint venture partners
to approve plans for the development of the Project after completion of a
feasibility study no later than December 31, 2007; construction risks such as
cost overruns, delays and shortages of labour, materials and equipment; the
Company's dependence on a single mining property; the possible forfeiture of
the Mining Concession (as defined in the Company's Annual Information Form
dated March 29, 2006) in certain circumstances; operational risks such as
access to infrastructure and skilled labour; price volatility of alumina,
aluminum or raw materials; and all other factors discussed under the heading
"Risk Factors" in the Company's Annual Information Form. Although the forward
looking information contained in this release is based upon what management of
the Company believes are reasonable assumptions, the Company 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 more of the risks or uncertainties materialize, actual results
may vary materially from those described in this release as intended, planned,
anticipated, believed, estimated or expected. 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.
    (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 of June 30, 2007, and represent comparisons between the three-
month period ended June 30, 2007 and the equivalent three-month period ended
June 30, 2006.




For further information:

For further information: Michael Cella of Global Alumina,
+1-212-351-0010,  cella@globalalumina.com; or Barbara Cano of Breakstone
Group,  +1-646-452-2334, bcano@breakstone-group.com, for Global Alumina
Corporation

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