Global Alumina Releases Third Quarter 2012 Results

              Global Alumina Releases Third Quarter 2012 Results

PR Newswire

TORONTO, Nov. 13, 2012

TORONTO, Nov. 13, 2012 /PRNewswire/ --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 nine month periods
ended September 30, 2012. 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 All dollar amounts
are in U.S. dollars.

Third Quarter 2012 Financial Highlights

  oIn the first nine months of 2012 the joint venture partners contributed
    capital of $40.2 million towards the approved Project budget with the
    Company contributing its $13.4 million one-third share.
  oAt September 30, 2012, Guinea Alumina Corporation, Ltd. ("Guinea Alumina",
    the joint venture company) had capitalized into construction in progress
    approximately $729.5 million, of which approximately $9.6 million relates
    to the third quarter of 2012.
  oAs of September 30, 2012, the Company had unrestricted cash of $3.4
    million and escrowed cash totalling $3.3 million in its escrow account to
    fund future Project capital calls. 
  oDuring the third quarter, Guinea Alumina's board of directors approved
    additional Project funding of $15.2 million for the period from October
    2012 through March 2013. Global Alumina will be responsible for its
    one-third share.
  oAs announced on November 1, 2012, the Company and the Broken Hill
    Proprietary Company Limited ("BHP Billiton") entered into a sale and
    purchase agreement (the "SPA") which is described in the Subsequent Events
    section below. The Company considers the BHP Billiton transaction to be a
    unique opportunity for it to reacquire additional Project interests for
    nominal consideration and to continue developing the Project with the
    other joint venture partners whose strategic interests in forwarding the
    Project remain closely aligned with that of the Company. As a result of
    the nominal consideration agreed to in the SPA for BHP Billiton's
    interests, accounting standards require the Company to record a non-cash
    impairment charge of $132.1 million in the third quarter of 2012 and
    reduce the carrying value of its one-third interest in Guinea Alumina to
    $20.0 million, to reflect the amount contractually agreed between the
    Company and BHP Billiton for BHP Billiton's one-third share of Guinea
  oFor the three and nine months ended September 30, 2012, respectively, the
    Company reported a net loss of $95,526,060 million ($0.50 per share) and
    $98,826,992 ($0.54 per share), compared to a net loss of $10,750,757
    ($0.06 per share) and $25,716,539 ($0.14 per share) for the same periods
    in 2011.
  oExcluding the non-cash impacts of the impairment charge and the changes to
    the derivative valuation, the Company would have reported a net loss for
    the three and nine months ended September 30, 2012 of $0.4 million ($0.00
    per share) and $2.8 million ($0.02 per share), respectively, compared to a
    net loss of $1.1 million ($0.01 per share) and $3.3 million ($0.02 per
    share) for the same periods in 2011.

At usage rates that the Company currently expects in 2012, funds in escrow
will be sufficient to meet its one-third share of Project equity requirements
through November 2012, and unrestricted funds will be sufficient to enable it
to meet its corporate operating expense requirements through August 2013.

Bruce Wrobel, CEO, commented, "Subsequent to the close of our third quarter,
we entered into a transformational agreement to purchase BHP Billiton's stake
in the Project, setting the stage for a more efficient Project ownership
structure and for accelerated development of one of the world's largest
low-cost alumina refineries. Along with our remaining partners, DUBAL and
Mubadala, we remain firmly focused on advancing the Project, aiming to
capitalize on the expected long-term global supply-demand gap in alumina,
while providing economic and social benefits to the people of Guinea and
enhanced value for our shareholders."

Subsequent Events

On November 1, 2012 the Company announced it had entered into the SPA with BHP
Billiton for the acquisition of its one-third interest in the Project. Under
the existing Project shareholders' agreement, each of Dubai Aluminium Company
Limited ("DUBAL") and MCD Industry Holding Company LLC ("Mubadala"), the other
two Project joint venture partners in the Project, has the right to purchase
its proportionate share of the interests to be sold under the SPA. Global
Alumina's ownership interest in the Project will increase from its current
33.3% to a level between 50.0% and 66.7% depending on whether each of DUBAL
and Mubadala either exercises or waives its right to purchase its
proportionate share of the interests to be sold under the SPA.

The purpose of the SPA is to facilitate the exit of BHP Billiton from the
ownership of GAC and to consolidate ownership of GAC among the remaining
owners. The SPA is expected to enhance the Company's shareholder value as it:
(1) removes an owner whose strategic focus has shifted away from development
of the Project; and (2) will result in an increase in both the Company's
ownership interest in the Project and associated rights to the Project's
alumina production, by 50% to 100%.

In connection with the proposed purchase of BHP Billiton's interest in the
Project and to fund future Project development and its operating costs, the
Company plans to raise additional capital through the private placement of its
securities. The Company has retained RK Equity Capital Markets as its
financial advisor in connection with the financing. Any offering of the
securities of Global Alumina will be subject to the prior approval of the
Toronto Stock Exchange (the "TSX") and is expected to require the approval of
the shareholders of Global Alumina. The Company expects to provide additional
details regarding the offering in a management information circular that will
be sent to its shareholders in due course.

Other Corporate Developments

On September 6, 2012 the Company adopted a share compensation plan (the
"SCP"). Pursuant to the SCP, directors and key employees and consultants of
the Company ("Key Employees") are eligible to participate in the SCP while
such persons are employed by, provide services to, or hold an office with, the
Company. The SCP provides that participants may elect to receive all or a
portion of their quarterly board retainer, bonus, salary or consulting fees in
shares of the Company issued from treasury. The number of shares issued is
determined by the applicable elected compensation being divided by the closing
trading price of the shares on the TSX on the date of issue. The SCP will (a)
increase the shareholdings of participating directors and Key Employees to
further align their interest with those of the Company and its shareholders
and (b) preserve the cash of the Company by providing non-cash compensation to

About Global Alumina

Global Alumina is in a joint venture through its wholly owned subsidiary,
Global Alumina International, Ltd., with BHP Billiton, Dubai Aluminium Company
Limited and Mubadala Development Company PJSC, to develop an alumina refinery
in the bauxite-rich region of the Republic of Guinea. Global Alumina is
headquartered in Saint John, New Brunswick and has administrative offices in
New York, London and Montreal. For further information visit the Company's
website at

Forward Looking Information

Certain information in this press 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 its assets and interests, 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 agreement to purchase additional interests in the Project;
the adequacy of the Company's cash resources and its ability to continue to
fund the Project or and purchase of interests in the Project; the decision to
proceed with the Project and the ability of the joint venture partners to
agree on timing of development of the Project; the decisions of the joint
venture with respect to conduct of the Project; fair value estimates of the
Project; expectations regarding the financing of the Project, the amount,
nature and timing of capital expenditures to complete the Project; future
production levels; expectations regarding the negotiation of contractual
rights; prices for alumina and aluminium; operating and other costs; political
developments in Guinea and recognition by the new political regime in Guinea
of historical agreements negotiated by the previous government, general
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 inability of the Company to source new funding for the
purchase of interests in the Project or to fund its on-going expenses pending
a sale of the Company and continue as a going concern; ongoing political
events in Guinea and the transition to a new government and the policies of
such new government; the current political and economic risks of investing in
a developing country; a decision by the joint venture partners not to proceed
with the Project; material changes to the cost estimates and time estimates
for development of the Project; unanticipated liabilities of Global Alumina at
the corporate level and the inability of the Company to obtain additional
financing to fund corporate expenses; the accuracy of the assumptions used to
determine the fair value of the Project; the possibility that the value of the
Company's assets could deteriorate; operational risks such as access to
infrastructure and skilled labour; the inability of the Company to raise
additional financing to fund its share of future development costs of the
Project; the Company's dependence on an interest in a single asset; the
possible forfeiture of the 690 square kilometre mining concession area near
Sangarédi in certain circumstances; construction risks such as cost overruns,
delays and shortages of labour, materials or equipment; currency fluctuations;
price volatility of alumina, aluminium or raw materials and certain other
factors related to the Project and the factors related to the business of the
Company discussed under the heading "Risk Factors" in the Company's Annual
Information Form.

The forward looking information contained in this release is based on the
following principal assumptions: that market conditions will not be materially
adverse to the Company raising additional capital prior to completing
financing of the Project and the Project will remain a viable asset; that the
data, estimates and projections in the bankable feasibility study of the
Project are within the range of accuracy suggested therein and the conclusions
reached therein are still valid as of the date of this release; that general
economic and political conditions will not be adverse to proceeding with and
completing 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 resume
and be successfully concluded; 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 once
approved the development plan for the Project is conducted according to
schedule; that general economic factors and trends relating to construction
costs remain constant or improve and that the future political and economic
climate in Guinea has no material adverse effect on the Project and the new
political regime arising from the transition to a new government continues to
recognize agreements negotiated by the previous government. Although the
forward looking information contained in this release 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
Global Alumina assumes no obligation to update or revise it to reflect new
events or circumstances, except as required by applicable law.

For further information, please contact:

Michael Cella           Susan Borinelli
Global Alumina          Breakstone Group
212 351 0010            646 330 5907

SOURCE Global Alumina Corporation

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