Mr. Michael Garcia reports

ALGOMA STEEL GROUP REPORTS FISCAL THIRD QUARTER 2024 FINANCIAL RESULTS

Algoma Steel Group Inc. has released its results for the fiscal third quarter ended Dec. 31, 2023. Unless otherwise specified, all amounts are in Canadian dollars.

Business Highlights and Fiscal 2024 to Fiscal 2023 Third Quarter Comparisons

• Consolidated revenue of $615.4 million, compared to $567.8 million in the prior-year quarter.
• Consolidated loss from operations of $36.9 million, compared to a loss from operations of $65.7 million in the prior-year quarter.
• Net loss of $84.8 million, compared to a net loss of $69.8 million in the prior-year quarter.
• Adjusted EBITDA of $(1.0) million and Adjusted EBITDA margin of (0.2)%, compared to $(35.9) million and (6.3)% in the prior-year quarter (See "Non-IFRS Measures" below).
• Cash flows used in operations of $47.4 million, compared to cash flows used in operations of $128.6 million in the prior-year quarter.
• Shipments of 516,068 tons, compared to 458,341 tons in the prior-year quarter.
• Completed extensive planned seasonal maintenance on time and within budget.
• Paid quarterly dividend of US$0.05/share.

In addition, subsequent to the quarter end, the Company restored partial coke-making capabilities and completed necessary repairs at the blast furnace, following operational challenges related to the unexpected collapse of a structure supporting utilities piping at the coke-making plant on January 20, 2024.

Michael Garcia, the Company's Chief Executive Officer, commented, "We delivered results in the fiscal third quarter that were consistent with our previously disclosed outlook, accomplished against a challenging backdrop that included the remaining impact of the UAW strike and a heavy seasonal maintenance quarter. Improved market fundamentals coupled with the settlement of the strike in October led to a rebound in pricing which based on the lagging nature of our order book is expected to positively impact pricing realizations beginning in our fiscal fourth quarter."

Mr. Garcia added, "As an update to our January 20th and January 23rd announcements regarding the collapse of a structure supporting utilities piping at our coke-making plant corridor, limited coke making operations continue and, as we develop our revised production plan, we will continue to evaluate our requirement for purchased coke to supplement our current inventories. We've finished all of the necessary repairs at the blast furnace following the related operational outage and have begun gradually restarting the furnace, increasing energy input as conditions permit. Based on our current assessment, we anticipate producing usable hot metal within the next seven days. We aim to return to full production within the next two weeks. The outage at the blast furnace and limited coke production are collectively expected to negatively impact shipments, costs and profitability in the fourth fiscal quarter."

"Our transformative EAF project continues to advance in line with our expectations with commissioning expected to start by late 2024. As of December 31, 2023, we had invested a total of $509.9 million in its development, which represents approximately 60% of the anticipated total project cost. Importantly, project commitments to date total approximately $750 million with approximately 7% tied to time and material contracts, while the balance is fixed price in nature. We expect to contract the majority of the remaining costs by the end of the current quarter. We look forward to what promises to be an important and exciting year in the story of Algoma."

Third Quarter Fiscal 2024 Financial Results

Third quarter revenue totaled $615.4 million, compared to $567.8 million in the prior year quarter. As compared with the prior year quarter, steel revenue was $556.9 million, compared to $512.0 million, and revenue per ton of steel sold was $1,192, compared to $1,239. Loss from operations was $36.9 million, compared to a loss of $65.7 million in the prior-year quarter.

The year over year improvement was primarily due to increased steel shipment volumes as a result of improved market conditions and resolving the temporary downstream finishing constraints for plate that occurred during the three-month period ended December 31, 2022. Further, higher cost of steel revenue as a result of increased shipment volumes was partially offset by a decrease in pricing for natural gas, purchased coke, alloys and power.

Net loss in the third quarter was $84.8 million, compared to a loss of $69.8 million in the prior-year quarter. The increase was primarily due to the change in fair value of warrant liabilities, share-based compensation liabilities, and earnout liabilities, a decrease in income tax recovery, an increase in foreign exchange losses, and an increase in financing charges, which more than offset the improvements in loss from operations.

Adjusted EBITDA in the third quarter was $(1.0) million, compared with $(35.9) million for the prior-year quarter. This resulted in an Adjusted EBITDA margin of (0.2)%. Average realized price of steel net of freight and non-steel revenue was $1,079 per ton, compared to $1,116 per ton in the prior-year quarter. Cost per ton of steel products sold was $1,027, compared to $1,157 in the prior-year quarter. Shipments for the third quarter increased by 12.6% to 516,068 tons, compared to 458,341 tons in the prior-year quarter due primarily to the reasons mentioned above. See "Non-IFRS Measures" below for an explanation of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.

Coke-making Plant Utilities Structure Update

As previously disclosed, on January 20, 2024, there was a collapse of a structure supporting utilities piping at the Company's coke-making plant. No injuries occurred during the event. Additionally, for safety reasons, blast furnace operations were suspended at the time of the incident. The blast furnace experienced operational challenges upon initial restart due to unforeseen impacts related to the piping collapse.

Limited production of coke resumed at three coke-production units on January 23, which, when combined with inventories on hand and the availability of third-party coke supplies, is currently expected to fulfill the Company's requirements for normal steelmaking production while the repair plan is developed. All necessary repairs to the blast furnace have been completed, and the furnace is now undergoing a gradual restart process. Additional energy will be added to the furnace as conditions permit. Based on current information, usable hot metal is expected to be produced within the next seven days, with a return to full production anticipated within the next two weeks. Algoma has standard insurance coverage that is intended to address circumstances such as these, including business interruption insurance. The Company is in the process of submitting claims under its insurance policies for covered losses.

Mr. Garcia commented, "Thanks to the fast response and hard work of our entire team, we were able to quickly resume limited coke-making capacity, and as of today we have restarted the blast furnace and continue ramping to normal production levels. The outage at the blast furnace and limited coke production are, however, collectively expected to negatively impact shipments, costs and profitability in the fiscal fourth quarter."

Electric Arc Furnace

The Company has made substantial progress on the construction of two new state-of-the-art electric arc furnaces ("EAF") to replace its existing blast furnace and basic oxygen steelmaking operations. The anticipated project timing and budget remain consistent with the outlook provided in the fiscal fourth quarter 2023 earnings release. As of December 31, 2023, the cumulative investment was approximately $509.9 million of the total projected cost of $825 million to $875 million. Project commitments to date total approximately $750 million with approximately 7% tied to time and material contracts, while the balance is fixed price in nature. We believe that we remain on track for commissioning late in calendar 2024. Following the transformation to EAF steelmaking, Algoma's facility is expected to reach an annual raw steel production capacity of approximately 3.7 million tons, matching its downstream finishing capacity, and to generate an approximate 70% reduction in the Company's annual carbon emissions.

Quarterly Dividend

The Board has declared a regular quarterly dividend in the amount of US$0.05 on each common share outstanding, payable on March 29, 2024, to holders of record of common shares of the Company as of the close of business on February 29, 2024. This dividend is designated as an "eligible dividend" for Canadian income tax purposes.

Conference Call and Webcast Details

A webcast and conference call will be held on Wednesday, February 7, 2024 at 11:00 a.m. EDT to review the Company's fiscal third quarter results, discuss recent events, and conduct a question-and-answer session.

The live webcast and archived replay of the conference call can be accessed on the Investors section of the Company's website. For those unable to access the webcast, the conference call will be accessible domestically or internationally by dialing 877-425-9470 or 201-389-0878, respectively. Upon dialing in, please request to join the Algoma Steel Third Quarter Conference Call. To access the replay of the call, dial 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13743566.

Consolidated Financial Statements and Management's Discussion and Analysis

The Company's unaudited condensed interim consolidated financial statements for the three and nine months ended December 31, 2023, and Management's Discussion & Analysis thereon are available under the Company's profile on the U.S. Securities and Exchange Commission's ("SEC") EDGAR website and under the Company's profile on SEDAR+.

About Algoma Steel Group Inc.

Based in Sault Ste. Marie, Ontario, Canada, Algoma is a fully integrated producer of hot and cold rolled steel products including sheet and plate. Driven by a purpose to build better lives and a greener future, Algoma is positioned to deliver responsive, customer-driven product solutions to applications in the automotive, construction, energy, defense, and manufacturing sectors. Algoma is a key supplier of steel products to customers in North America and is the only producer of discrete plate products in Canada. Its state-of-the-art Direct Strip Production Complex ("DSPC") is one of the lowest-cost producers of hot rolled sheet steel (HRC) in North America.

Algoma is on a transformation journey, modernizing its plate mill and adopting electric arc technology that builds on the strong principles of recycling and environmental stewardship to significantly lower carbon emissions. Today Algoma is investing in its people and processes, working safely, as a team to become one of North America's leading producers of green steel.

As a founding industry in their community, Algoma is drawing on the best of its rich steelmaking tradition to deliver greater value, offering North America the comfort of a secure steel supply and a sustainable future as your partner in steel.

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