Feb. 6, 2006 — Dofasco Inc. reported net income of $28.4 million on net sales of $1324.3 million for the quarter and net income of $171.0 million on net sales of $4562.9 million for the year ended December 31, 2005.

Fourth Quarter Results—The $28.4 million net income ($0.37 per share) compares to net income of $96.8 million ($1.26 per share) in the fourth quarter of 2004. Net sales, $1324.3 million, compare to net sales of $1113.1 million in the fourth quarter of 2004.

Consolidated net income for the fourth quarter reflected good results at the corporation's Mining Operations and Gallatin Steel segments offset by a loss at Dofasco's Steel Operations business segment. Financial results for the Steel Operations segment, which includes Dofasco's Hamilton operations, were negatively impacted by continued high input costs and various production issues. A number of non-operating items had a net unfavorable impact of approximately $9 million (11 cents per share).

Full Year Results—The $171.0 million net income ($2.21 per share) compares to $376.9 million ($4.92 per share) in 2004. Net sales of $4562.9 million compare to net sales of $4224.9 million in 2004.

In addition to the negative impact of high input costs and various production issues, results also reflect recent volatility in the North American pricing environment. In 2004, robust global flat rolled steel demand led to a rapid escalation of U.S. spot market selling prices over the first three quarters of the year, reaching a record level of US $740 per ton as published by CRU International Inc. in September 2004. Increased levels of imports into North America in the second half of 2004 resulted in higher inventories throughout the supply chain, which led to a decline in industry-reported prices of approximately US $100 per ton during the fourth quarter. In 2005, the high inventory levels, combined with softening end-user demand, resulted in a further decline in published hot band spot prices of more than US $200, reaching a low of US $425 per ton in August before recovering to US $550 per ton for the fourth quarter, as reported by CRU.

Management Comments—Commenting on the year's results, Dofasco's President and CEO Don Pether said, "We are pleased by our two recent acquisitions, Quebec Cartier Mining Co. and the Copperweld automotive and mechanical tubing businesses, and by their performance to date. In addition, Gallatin continued its excellent operational performance with record annual shipments. Gallatin's earnings performance was only surpassed by record results in 2004." Mr. Pether continued, "However, in Hamilton, Dofasco faced a number of challenges in 2005. Profitability was negatively impacted by significantly higher costs for purchased slabs, raw materials and energy and a significant drop in market pricing. Hamilton employees continued to remain focused in the face of these challenges and in the midst of the completion of the No. 2 Blast Furnace rebuild and working towards completion of Phase 1 of the Finishing Division Improvement Program."

Consolidated gross income for the fourth quarter of 2005 was $123.6 million, a 44% decline from gross income of $219.7 million for the same quarter of 2004. This decrease is mainly the result of significantly lower results at Steel Operations and lower results at Gallatin Steel. On the positive side, the results of the corporation's Mining Operations segment increased significantly as a result of the impact of the acquisition of Quebec Cartier Mining Co. (QCM) and improved results at Wabush Resources. For the year ended December 31, 2005, consolidated gross income was $536.2 million compared to $836.2 million in 2004.

Steel Operations Results—For the quarter ended December 31, 2005, Steel Operations gross income was $9.9 million, a significant decrease from the $173.1 million generated in the fourth quarter of 2004. Gross income for the year ended December 31, 2005 was $291.3 million, compared to $654.1 million gross income in 2004. As in previous quarters, the results of the Steel Operations segment were largely driven by the corporation's Hamilton operations.

Hamilton Operations Results—Fourth quarter shipments were 1,020,000 tons, virtually unchanged from the 1,019,000 tons shipped in the fourth quarter of 2004. Average revenue per ton of steel shipped from Hamilton was $758 per ton in the fourth quarter, which compares to $870 per ton in the fourth quarter of 2004. The decrease in revenue per ton was driven by a substantial decrease in selling prices across all products and the impact of a stronger Canadian dollar, which averaged $0.85 in the fourth quarter of 2005 versus $0.82 in the fourth quarter of 2004. In the third quarter, various short-term operating interruptions caused some shipments to be delayed until the fourth quarter. As a result, fourth quarter revenue per ton was also negatively impacted, since these shipments were influenced by the third quarter spot market prices (which were well below the fourth quarter levels).

Average cost per ton was $755 per ton for the fourth quarter, an increase of $38 per ton over the level experienced in the same period in 2004. The increase is attributed primarily to the impact of the higher excess cost of purchased slabs in the quarter, which was approximately $26 per ton shipped higher than in the fourth quarter of 2004. Costs were also higher due to production interruptions at steelmaking operations and additional outside processing and other costs incurred in preparation for the January shutdown associated with the No. 2 Coupled Pickle Line Cold Mill (No. 2 CPCM) project, the total of which contributed approximately $20 to the higher cost per ton. Increased costs for raw materials and energy were partly offset by lower scrap costs, higher hot mill and finishing production as well as lower variable compensation expense versus the fourth quarter of 2004. As a result of these factors, gross income from Hamilton operations declined to $3.0 million in the fourth quarter compared to $158.0 million in the fourth quarter of 2004.

Gallatin Steel Results—Dofasco's 50% share of Gallatin Steel's gross income was $123.6 million for the year ended December 31, 2005, which compares to $191.9 million gross income in 2004. Gallatin Steel contributed $32.1 million of gross income in the fourth quarter of 2005, lower than the excellent results of $50.1 million reported in the fourth quarter of 2004. The decline in gross income was mainly a result of significantly lower average revenue per ton and the impact of a weaker U.S. dollar on the translation of Gallatin's results.

Shipments of 406,000 tons were the second highest quarterly shipments ever, and 32,000 tons higher than in the fourth quarter of 2004. Hot band steel production in the quarter was a record 406,000 tons. Average revenue per ton was US $546 per ton compared to US $682 per ton in the fourth quarter of 2004, a decrease of US $136 per ton reflecting considerably lower U.S. spot market selling prices. The average cost per ton shipped decreased by US $53 over the same period in 2004, primarily driven by lower average scrap costs in the quarter.

Mining Operations Results—Gross income for the corporation's Mining Operations segment, consisting of QCM and Wabush Resources, was $123.9 million for the quarter ended December 31, 2005, of which $117.7 million was contributed by QCM, compared to a loss of $4.3 million in the fourth quarter of 2004, which included only Wabush Resources.

Mining Operations average revenue per tonne for pellets and concentrate in the period was $78 reflecting the higher market pricing for both pellets and concentrate in 2005, partially offset by the unfavorable impact of the stronger Canadian dollar on sales which are denominated in U.S. dollars. Average cost per tonne shipped in the quarter was $45. For the year, Mining Operations contributed $193.7 million of gross income in 2005, a significant improvement over the loss of $9.6 million posted in 2004.

Of the Mining Operations gross income reported in the fourth quarter, $41.9 million has been eliminated on consolidation, reflecting the change in the unrealized intercompany profit in the quarter. The corresponding amount for the year ended December 31, 2005 is $71.6 million. The unrealized intercompany profit at the end of each period relates to Mining Operations profit remaining in Dofasco's pellet and steel inventories.

Copperweld Results—On October 3, 2005, Dofasco successfully completed the acquisition of certain mechanical tubing and automotive components assets of Copperweld Holding Co. Integration of the acquired Copperweld organization is ongoing. At this early stage, Copperweld is being impacted by one-time integration costs and as a result did not make a significant contribution to earnings during the quarter. Copperweld results have been included in the Steel Operations segment effective as at the acquisition date.

Credit Facility Initiated—On January 26, 2006, Dofasco's Board of Directors authorized entering into a credit facility for $300 million. On January 27, 2006, $215 million of the credit facility was drawn down to pay the break fee due to ThyssenKrupp AG.

Dofasco is a leading North American steel solutions provider. Product lines include hot rolled, cold rolled, galvanized, Extragal^(TM), Galvalume^(TM) and tinplate flat rolled steels, as well as tubular products, laser-welded blanks and Zyplex^(TM), a proprietary laminate. Dofasco's wide range of steel products is sold to customers in the automotive, construction, energy, manufacturing, pipe and tube, appliance, packaging and steel distribution industries.