TORONTO, ON – May 21, 2007 – 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 Sangar&eactute;di 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 Sangar&eactute;di 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 www.sedar.com.
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