Global Alumina Releases Year-End 2011 Results

Global Alumina Corporation CA:GLA.U +7.89% (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 its financial and operating results for the year ended December 31, 2011.

The text of the annual audited 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.

2011 Financial Highlights

As a result of continued delays in developing the Project, the Company undertook an impairment review to determine whether the carrying amount of Global Alumina's investment in Guinea Alumina exceeded its recoverable amount. As a result of this review Global Alumina's investment in Guinea Alumina was written down from $251.8 million to $156.3 million, and a $95.5 million non-cash impairment charge was recorded in the Company's financial results for the year ended December 31, 2011. To determine the recoverable amount of its investment in Guinea Alumina, the Company calculated estimated future cash flows to/from Guinea Alumina and discounted them to a present value. Calculation of a discounted present value of its investment in Guinea Alumina necessarily requires extensive use of estimates and assumptions about the Project's development and construction schedule and costs, future production and sales volumes, future commodity prices, discount rates, foreign exchange rates, future capital and operating costs, the amount and cost of debt financing and other factors. Actual results could be different. If in the future the Company receives a binding offer to buy it or its assets, or if the indicators, estimates and assumptions used in its estimated recoverable amount calculation that created the impairment loss change, then the Company would be required to perform the formal impairment test again at that time using the then current circumstances, and adjust the carrying amount to reflect the higher of the offer price or the revised discounted present value calculation, including the possible increase to the impairment or the possible recovery of the previously impaired amount.

The Company determined that its agreement to bear the full benefits and burdens of two Guinea Alumina off-take agreements entered into before Completion created an embedded derivative for accounting purposes. The Company therefore calculated a fair value of the embedded derivative as of January 1, 2010, December 31, 2010 and December 31, 2011 and set up the necessary accounts to record the embedded derivative's fair value as of each period and its fair value changes between periods. The Company's revised statements of financial position recorded the derivative as a $62.5 million long-term liability as of December 31, 2011. Calculation of the derivative's fair value necessarily requires extensive use of estimates and assumptions. The derivative's fair value is an accounting representation of the opportunity benefit or cost of the Company's off-take arrangements, is highly sensitive to the assumed long-term price of alumina, and is a non-cash item.

For the year ended December 31, 2011 the Company reported a net loss of $130.6 million ($0.71 per share), including the $95.5 million impairment charge and $44.4 million net loss on derivative instrument, compared to a net loss of $14.5 million ($0.08 per share), including the $15.6 million net loss on derivative instrument, for the same period in 2010.

In 2011, the joint venture partners contributed capital of $54.0 million towards the approved Project budget with the Company contributing its $18.0 million one-third share.

As at December 31, 2011, the Company had unrestricted cash of $6.0 million and restricted cash totalling $16.6 million in its escrow account to fund future Project capital calls.

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 September 2012, and unrestricted funds will be sufficient to enable it to meet its corporate operating expense requirements through September 2013. The Company does not currently expect to raise additional financing and does not expect to provide further equity funding to the Project after September 2012.

The Project joint venture partners have been unable to agree on the timing of development of the Project. Currently the joint venture partners are discussing options regarding restructuring ownership in the Project.