Global Alumina Completes Joint Venture Agreements
May 21 2007 - 1:01AM
PR Newswire (US)
TORONTO, May 21 /PRNewswire-FirstCall/ -- Global Alumina
Corporation (the "Company") (TSX: GLA.U) announced today that the
Company, Global Alumina International, Ltd. ("GAI"), and Guinea
Alumina Corporation, Ltd. ("Guinea BVI"), and The Broken Hill
Proprietary Company Pty Limited ("BHP Billiton"), Dubai Aluminum
Company Limited and Mubadala Development Company PJSC have
completed the transaction contemplated by the share subscription
and related agreements forming the joint venture to develop and
operate the Sangaredi Alumina Refinery in the Republic of Guinea.
The transaction was completed in escrow on May 17, 2007 pending the
transfer of funds, and will be effective from and after May 17,
2007. Global Alumina has received the first US$151.1 million
installment of the aggregate US$260 million proceeds for the
issuance to the venture partners of a 66.67% interest in Guinea BVI
(BHP Billiton: 33.33%; DUBAL: 25%; and Mubadala: 8.33%), which is
developing the Sangaredi Refinery Project through its wholly-owned
Guinean subsidiary, Guinea Alumina Corporation, S.A. (the "Project
Company"). The Company, through its wholly-owned subsidiary GAI,
retains a 33.33% interest in Guinea BVI. Simultaneous with
completion, each joint venture party made its proportionate share
of a US$80 million capital contribution to Guinea BVI to repay
US$55.3 million of project-related borrowings under its loan
facility plus interest and to establish a US$24.7 million cash
reserve to fund two months of budgeted, future project
expenditures. Global Alumina also contributed an additional US$4.4
million to repay borrowings under the loan facility for corporate
costs. Upon repayment in full, the loan facility was terminated.
Guinea BVI's shareholders intend to fund its future costs with
additional capital contributions and, upon completion of a bankable
feasibility study, third-party debt. After funding its share of the
initial capital contribution to repay 100% of the debt under the
loan facility and fund two months' of expected costs, Global
Alumina has remaining US$120 million of the initial subscription
proceeds deposited: US$101.7 million in an escrow account the use
of which is restricted to prospective budgeted expenditures of the
Project Company and which is also pledged as security for warranty
and indemnity obligations under the subscription agreement; and
US$18.3 million in an unrestricted account for general corporate
purposes. The remainder of the subscription proceeds will be paid
in three additional installments due on the successful completion
of specified milestones. These milestone installments include
US$42.22 million payable within five days of the joint venture
partners' acknowledgement of the transfer of the mining concession
from the Company to the Project Company, which is expected by
September 30, 2007, US$33.33 million payable within five days of
the earlier of June 30, 2007 and ten days after completion of a
bankable feasibility study (including final construction,
contracting and financing plans) with respect to the Project,
provided such payment shall not be made until the requirements for
the first deferred subscription price are met, which is expected by
September 30, 2007, and US$33.33 million payable within five days
of the date of a binding commitment for final debt financing for
the Project, which is expected shortly after completion of the
bankable feasibility study to be completed by yearend. Each joint
venture partner has entered into an off-take agreement with the
Project Company, on similar terms and at the same price, for its
proportionate share of all available alumina production from the
project. Additional information on the joint venture agreements is
contained in material change reports filed on April 5, 2007 and May
7, 2007 which are available on the Company's reference page at
http://www.sedar.com/. About Global Alumina Global Alumina and its
joint venture partners are developing a three million tonnes per
annum alumina refinery located in the bauxite-rich region of the
Republic of Guinea (the "Sangaredi Refinery Project"). Its joint
venture partners are BHP Billiton, Dubai Aluminium Company Limited
and Mubadala Development Company PJSC. The Sangaredi 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
headquartered in Saint John, New Brunswick with operations in Bake,
Guinea and has administrative offices in New York, London, Montreal
and Conakry, Guinea. For further information visit the company's
website at http://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, 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 in respect of the three deferred installments
of the subscription price under the subscription agreement; future
production levels of the refinery project; 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 or its
subsidiaries to complete the conditions precedent to the subsequent
installments under the subscription agreement and the Company's
inability to negotiate alternative transactions; the current
political unrest in the Republic of Guinea and the political and
economic risks of investing in a developing country; the failure of
the shareholders to approve plans for the development of the
refinery 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 an interest in a single mining property;
the possible forfeiture of the Mining Concession (as defined in the
Company's Annual Information Form dated March 29, 2007) 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. DATASOURCE: Global
Alumina Corporation CONTACT: Michael Cella, Global Alumina,
+1-212-351-0010, ; or Barbara Cano, Breakstone Group,
+1-646-452-2334, Web site: http://www.globalalumina.com/
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