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Global Alumina Releases Third Quarter 2012 Results
Edited by : AL CIRCLE
4 min read
Global Alumina Corporation, 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, 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 www.sedar.com. All dollar amounts are in U.S. dollars.
Third Quarter 2012 Financial Highlights
--In 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.
--At 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.
--As 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.
--During 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.
--As 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 Alumina.
--For 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.
--Excluding 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."
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 participants.
Third Quarter 2012 Financial Highlights
--In 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.
--At 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.
--As 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.
--During 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.
--As 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 Alumina.
--For 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.
--Excluding 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."
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 participants.
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