Jan. 23, 2006 — Stelco Inc.’s Court-appointed Monitor has filed its forty-eighth report regarding the company's Court-supervised restructuring. The Report provides updated information regarding terms for the $600 million asset based loan and the $375 million bridge loan; the composition of Stelco’s new Board; and outlook. The Monitor expresses the view that there has been considerable progress in resolving issues this week.

Term sheets — The Report notes that finalization of the $600 million asset based loan and the $375 million bridge loan, conditions precedent to implementation of the restructuring plan, are critical components of the liquidity and financing contemplated for the restructured Stelco. The Report states that Stelco advised the Court that it expected to be in a position to deliver term sheets in the matter of these loan facilities to the Monitor by 5:00 p.m. on Saturday, Jan. 21. The Report notes that the letters and term sheets delivered to the Monitor by the company are appended to the Report, and that the term sheets have been approved by Stelco's board of directors, subject to obtaining the approval of the credit committees of the asset based loan providers. The Report notes that the asset based loan providers will recommend that such approval be granted.

Conditions Precedent — The Report notes that the term sheets contain certain conditions precedent to implementation of the financings, which the Monitor notes is not unusual for exit financing at this stage of a major CCAA restructuring. The Report adds that the parties to the loan facilities have indicated to the Monitor that they are committed to working to fulfill those conditions precedent.

The Report notes that the parties to the asset based loan have indicated that they have reached sufficient consensus between themselves and with the Province. As a result, the parties have indicated that they do not believe that any issues remain which could reasonably be expected to prevent the transactions contemplated in the term sheet from being implemented.

The Report notes that the parties to the bridge loan have indicated to the Monitor that details concerning the condition with respect to the proposed corporate reorganization of Stelco remain to be finalized. At the same time, the Report adds that the parties have confirmed to the Monitor that, subject to obtaining Court approval of the proposed reorganization, they do not believe that any issues remain which could reasonably be expected to prevent the transactions contemplated in the bridge loan term sheet from being implemented.

The Monitor indicates that the Province has confirmed that, to the extent that the transactions contemplated in the term sheets affect pensions and related liabilities, the Province is committed to working with the parties to satisfy the conditions precedent in the term sheets. The Report adds that the Province has confirmed that it is also committed to working to resolve any remaining issues that may affect pension and related liabilities arising from the proposed corporate reorganization.

Outlook — The Report states that, as is typical in restructurings of this size and complexity, there is significant work to be done to settle definitive documentation and to implement the contemplated transactions. The Monitor states that it is optimistic that the transactions contemplated by the term sheets can be implemented.

Board composition — The Report notes that the Monitor has been in discussion with counsel for the Informal Committee of Senior Bondholders regarding the composition of the new board of directors. The Report adds that the bondholders have proposed that Mr. Dennis Belcher be appointed to the new board in lieu of the vacant spot currently designated for Stelco's next Chief Executive Officer. The Report notes that the three significant equity holders and the Company have agreed to this change, and that Mr. Belcher is prepared to stand as a director of the board on plan implementation. The Report adds that it is contemplated that, after the plan implementation date, the board will be expanded to add Stelco's next Chief Executive Officer when that position is filled. The Monitor indicates its understanding that the issue of the composition of the new board is now resolved.

Dennis Belcher held increasingly senior executive positions during more than 40 years in Canada's financial services industry, principally with The Bank of Nova Scotia. He retired as Executive Vice President, Credit and Risk Management of that bank in 2002. He has served as a director on the boards of a number of public companies, and has authored publications dealing with such matters as risk assessment, restructuring and project financing.

Stelco Inc. is a large, diversified steel producer involved in major segments of the steel industry through its integrated steel business, minimills and manufactured products businesses.