June 23, 2006 — Rodney B. Mott, President and CEO of Stelco Inc. spoke to shareholders on Thursday, June 22 about the company's current state of business, current priorities, and outlook for the business.

In the meeting, Mott announced that on June 21, members of the United Steelworkers Local 1005 ratified a four-year labor agreement. The existing labor contract was scheduled to expire July 31, 2006.

In his presentation, Mott also provided new material information regarding a number of items, including estimated financial and production targets, cost cutting initiatives and EBITDA targets. As part of the cost-cutting effort, Mott detailed a plan to reduce Stelco’s workforce by approximately 15% of the current employee base. The reduction is to be achieved through retirements, attrition, a salaried and hourly employee buyout plan and severance packages. Although the estimated cost of the program is $25 million, depending on participation, Stelco anticipates the resulting annual savings to be in the area of $45 million.

Stelco has identified an estimated $65 million in additional cost savings per year through a number of other initiatives, including production volumes, changes to salaried employee benefits plans, procurement strategies, energy management and elimination of contractors.

Regarding revenue growth, Stelco expects to be able to achieve revenue exceeding $3 billion per year through a combination of an increased volume target of 4.8 million tons per year, optimum product mix, and pricing. The revenue target represents an increase of 33% over 2005 revenue. Stelco has also set a productivity objective of 1,220 tons per employee, a 40% increase over current levels.

Stelco’s forecast for 2006 capital spending is $160 million, of which $54 million is expected to be spent in the second half of 2006. On a sustainable basis, the company's annual capital investment program is expected to be $100 million.

Through a combination of increased volumes, savings from headcount reductions and other initiatives, assuming current market conditions going forward, the company believes that EBITDA exceeding $400 million per year is achievable. Stelco says it expects to achieve these targets through a productive and engaged workforce, increased energy self-sufficiency, a reduced cost base, and reduced working capital.

Mott also announced that the Government of Canada has cancelled its previously announced commitment to contribute $30 million to the cost of the company's proposed near-term electricity cogeneration projects through the Partnership Fund. While the company expressed its disappointment with the Government's decision, it looks forward to continued dialogue to determine possible future funding mechanisms. Stelco remains committed to the use of cogeneration as a means of utilizing waste heat streams, enhancing competitiveness and improving environmental performance.

Stelco also announced that Colin Osborne, Vice President of Strategy and Business Development and former Chief Operating Officer of Stelco, has elected to resign as an officer of Stelco effective July 1, 2006. Colin had been a key part of the Stelco executive team, having joined the company in 1987 and held a number of executive positions in the areas of operations and strategy.

Stelco is one of Canada's largest publicly traded steel companies. It is focused on its two Ontario-based integrated steel businesses located in Hamilton and in Nanticoke, which produce high quality value-added hot rolled, cold rolled, coated sheet and bar products.