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Stelco Holdings Inc. Announces Results of its Substantial Issuer Bid

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HAMILTON, Ontario — Stelco Holdings Inc. (TSX: STLC) (“Stelco” or the “Company”) announced today that upon the terms and subject to the conditions of its previously announced substantial issuer bid (the “Offer”), the Company has taken up 10,453 additional Shares (the “Additional Shares”) that were validly deposited and not withdrawn to the Offer. The Offer expired at 5:00 p.m. (Toronto time) on September 12, 2022, and as such is now terminated.

As announced in our press release issued on August 31, 2022, the Company already took up 5,154,680 Shares that were tendered as of the Offer’s initially scheduled expiry at 5:00 p.m. (Toronto time) on August 31, 2022.

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The Company has taken up a total of 5,165,133 common shares (“Shares”) under the Offer at $35.00 per Share, representing an aggregate purchase amount of approximately $180,779,655 and 7.5% of the total number of the Company’s issued and outstanding Shares before giving effect to the Offer. After giving effect to the Offer, the Company has 63,355,691 Shares issued and outstanding.

Payment and settlement of the Additional Shares will be effected by Computershare Investor Services Inc. (the “Depositary”) in accordance with the settlement procedures described in the Offer Documents. As the total number of Shares tendered was less than the total that could have been acquired by the Company under the terms of the Offer, all Shares validly deposited and not withdrawn prior to the expiry of the Offer were acquired and no proration was required.

For Canadian federal income tax purposes, a deemed dividend arises on the repurchase of Shares under the Offer. To assist Shareholders in determining the Canadian income tax consequences of the Offer, the Company has determined that for purposes of the Income Tax Act (Canada) (the “Tax Act”), the paid-up capital per Share is estimated to be approximately $16.84 at the time of repurchase under the Offer. Shareholders should review the issuer bid circular dated July 26, 2022 for more information, including information about the tax treatment of deemed dividends (refer to Section 13 “Income Tax Considerations – Certain Canadian Federal Income Tax Considerations”). The Company designates the entire amount of the deemed dividend arising from its repurchase of Shares under the Offer as an “eligible dividend” for purposes of the Tax Act.

The “specified amount” for purposes of subsection 191(4) of the Tax Act in respect of each Share is $38.18.

Details of the Offer are described in the offer to purchase and issuer bid circular dated July 26, 2022, as well as the related letter of transmittal and notice of guaranteed delivery, each as amended by a notice of variation and extension dated September 1, 2022 (the “Offer Documents”), copies of which were filed and are available on SEDAR at www.sedar.com.

This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell the Company’s Shares.

About Stelco

Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled sheet products, as well as pig iron and metallurgical coke. With first-rate gauge, crown, and shape control, as well as uniform through-coil mechanical properties, our steel products are supplied to customers in the construction, automotive, energy, appliance, and pipe and tube industries across Canada and the United States as well as to a variety of steel service centres, which are distributors of steel products. At Stelco, we understand the importance of our business reflecting the communities we serve and are committed to diversity and inclusion as a core part of our workplace culture, in part, through active participation in the BlackNorth Initiative.

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Forward-Looking Information

This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws. Forward-looking information may relate to our future outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. These statements include, without limitation, statements regarding the settlement of purchases under the Offer.

Undue reliance should not be placed on forward-looking information. The forward-looking information in this press release is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Further, forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to, those described in this press release. Certain assumptions, risks and uncertainties in respect of: the utilization of and access to our production capacity; capital expenditures associated with accessing such production capacity; the ongoing impact of the hostilities in eastern Europe and elsewhere on the international supply chain and economy overall; the impact of COVID-19 on our business and the broader market in which we operate; upgrades to our facilities and equipment; our research and development activities associated with advanced steel grades; our ability to source raw materials and other inputs; our ability to supply to new customers and markets; our ability to effectively manage costs; our ability to attract and retain key personnel and skilled labour; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; changes in laws, rules, and regulations, including environmental and international trade regulations; and growth in steel markets and industry trends are material factors made in preparing the forward-looking information and management’s expectations contained in this press release and that may cause actual results to differ materially from the forward-looking information disclosed in this press release. Additional information about the risks and uncertainties of the Company’s business and material risk factors or assumptions on which information contained in forward‐looking statements is based is provided in the Company’s disclosure materials, including the Company’s most recently filed annual information form and any subsequently-filed interim management’s discussion and analysis, which are available under our profile on SEDAR at www.sedar.com.

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There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents our expectations as of the date of this news release and is subject to change after such date. Stelco disclaims any intention or obligation or undertaking to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220912005987/en/

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Contacts

For investor enquiries: Paul D. Scherzer, Chief Financial Officer, (905) 577-4432, [email protected]

For media enquiries: Trevor Harris, Vice-President, Corporate Affairs, (905) 577-4447, [email protected]

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