UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2024

Commission File Number 001-40924

ALGOMA STEEL GROUP INC.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

105 West Street

Sault Ste. Marie, Ontario

P6A 7B4, Canada

(705) 945-2351

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☐   Form 40-F ☒

INCORPORATION BY REFERENCE

Exhibits 99.2 and 99.3 of this Form 6-K are incorporated by reference into the Registration Statement on Form S-8 (Commission File No. 333-264063) and the Registration Statement on Form F-10 (Commission File No. 333-272816) of the Registrant, Algoma Steel Group Inc.

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EXHIBIT INDEX

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Exhibit 99.1

MEDIA RELEASE

November 6, 2024

Algoma Steel Group Reports Fiscal Second Quarter 2025 Financial Results

Second Quarter Results In-Line with Previously Announced Expectations

Transformative Electric Arc Furnace (EAF) Commissioning Activities Expected to Start on Schedule During the Fourth Quarter of Calendar 2024; Substantially all of Expected Project Budget Now Fully Contracted

Change in Fiscal Year end from March 31 to December 31, beginning December 31, 2024

SAULT STE. MARIE, ONTARIO (November 6, 2024) – Algoma Steel Group Inc. (NASDAQ: ASTL; TSX: ASTL) (“Algoma” or “the Company”), a leading Canadian producer of hot and cold rolled steel sheet and plate products, today announced results for its fiscal second quarter ended September 30, 2024.

Unless otherwise specified, all amounts are in Canadian dollars.

Business Highlights and Fiscal 2025 to Fiscal 2024 Second Quarter Comparisons

Michael Garcia, the Company’s Chief Executive Officer, commented, “Our fiscal second quarter results reflect solid operational performance in the face of persistent market headwinds, allowing us to deliver shipments and Adjusted EBITDA within our previous guidance ranges. Despite challenging market conditions, our planned ramp up in plate production following completion of our plate mill modernization project continued in the quarter and the associated benefits from a greater mix of value-added products helped offset a steep decline in steel prices.”

Mr. Garcia continued, “This is an incredibly exciting time at our site as we prepare to initiate commissioning activities on schedule for our transformative EAF project. Our project team has worked tirelessly alongside our vendors including equipment providers and subcontractors to secure substantially all remaining budgeted

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YOUR PARTNER IN STEEL. SINCE 1901

items, significantly reducing remaining project budget risk. Our contracted commitments now total approximately $870 million and as we move closer to completion of both EAFs, we anticipate the completion of the remaining contracts, including those structured as time and materials, within 5% of the upper end of our previously announced budget range.”

Garcia continued “We are also excited to announce that Algoma’s EAF project is eligible under Ontario’s Ministry of the Environment, Conservation and Parks Emissions Performance Program. Under this program, Algoma has applied for, and expects to receive, reimbursement for carbon taxes paid since 2022, driving down the net cash costs of the EAF project. We remain on target to achieve steel production at the first EAF by the end of the first quarter 2025, positioning us among North America’s greenest steel producers as we seek to deliver enhanced long-term shareholder value.”

Second Quarter Fiscal 2025 Financial Results

Second quarter revenue totaled $600.3 million, compared to $732.6 million in the prior-year quarter. As compared with the prior-year quarter, steel revenue was $539.0 million, compared to $665.8 million, and revenue per ton of steel sold was $1,153, compared to $1,334.

Loss from operations was $83.6 million, compared to income from operations of $36.8 million in the prior-year quarter. The decrease was primarily due to lower steel shipments, greater consumption of purchased coke, and weakening market conditions, which was partially offset by improvements in value-add products as a percentage of sales mix.

Net loss in the second quarter was $106.6 million, compared to net income of $31.1 million in the prior-year quarter. The decrease was driven primarily by the factors described above under (loss) income from operations.

Adjusted EBITDA in the second quarter was $3.5 million, compared with $81.0 million for the prior-year quarter. This resulted in an Adjusted EBITDA margin of 0.6%. Average realized price of steel net of freight and non-steel revenue was $1,036 per ton, compared to $1,213 per ton in the prior-year quarter. Cost per ton of steel products sold was $1,032, compared to $1,021 in the prior-year quarter. Shipments for the second quarter decreased by 5.2% to 520,443 tons, compared to 548,998 tons in the prior-year quarter. Also, Fiscal second quarter adjusted EBITDA was positively impacted by $28.1 million as a result of receipt of insurance proceeds of $32.1 million offset by costs of $4 million associated with the January 2024 outage resulting from the collapse of a utility corridor, supporting the steelworks. See “Non-IFRS Measures” below for an explanation of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA.

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 project continues to advance on time with commissioning activities set to begin by calendar 2024 year-end and steel production expected by the end of the first calendar quarter of 2025. As of September 30, 2024, the cumulative investment was approximately $672.3 million including approximately $61.2 million during the fiscal second quarter. Contracted commitments now total approximately $870 million and as the project moves closer to

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YOUR PARTNER IN STEEL. SINCE 1901

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completion the Company anticipates completing the remaining contracts, including time and material agreements, within 5% of the high end of the previously announced budget range.

Algoma’s EAF project qualifies for the Ontario Ministry of the Environment, Conservation and Parks Emissions Performance Program. Under this program, the Company has applied for and expects to receive reimbursement for carbon taxes paid since 2022. These reimbursements are anticipated to reduce the project’s net cash cost, and along with cash-on-hand, operating cash flow, and available borrowings from the Company’s existing undrawn credit facility, provide ample liquidity to fund the balance of the project.

Following the transformation to EAF steelmaking, the Company is anticipated to have an annual raw steel production capacity of approximately 3.7 million tons, matching its downstream finishing capacity of over 3 million tons, which is expected to reduce the Company’s annual carbon emissions by approximately 70%.

Balance Sheet and Liquidity

At quarter end, the Company had cash of $452.0 million and unused availability under its Revolving Credit Facility of $342.8 million.

Quarterly Dividend

The Board has declared a regular quarterly dividend in the amount of US$0.05 on each common share outstanding, payable on December 27, 2024 to holders of record of common shares of the Corporation as of the close of business on November 27, 2024. This dividend is designated as an “eligible dividend” for Canadian income tax purposes.

Change in Fiscal Year

The Company today announced that its Board of Directors has approved a change in Algoma’s fiscal year end from March 31 to December 31. This change is being made to better align Algoma’s reporting calendar with other companies in the industry. Algoma’s current fiscal year will end on December 31, 2024, resulting in a nine-month reporting period from April 1, 2024 to December 31, 2024. Algoma plans to provide reclassified historical financial information in the first quarter of 2025 to assist investors in evaluating the impact the change in fiscal year will have on the reported annual operating results for the years ending December 31, 2023 and 2024.

Normal Course Issuer Bid

On August 29, 2024 the Company announced the renewal of its normal course issuer bid (NCIB) after receiving approval from the Toronto Stock Exchange, authorizing the Company to acquire up to a maximum of 5,206,153 shares, or 5% of its 104,123,072 issued and outstanding shares, and up to a maximum of 1,208,950 of its Warrants, or 5% of its 24,179,000 issued and outstanding Warrants, in each case as of August 26, 2024. In accordance with TSX rules, the number of Shares that can be purchased pursuant to the NCIB is subject to current daily maximums of 12,066 Shares (which is equal to 25% of 48,264 Shares, being the average daily trading volume from February 1, 2024 to July 1, 2024) and 1,000 Warrants (as 25% of 1,059 Warrants, being the average daily trading volume from February 1, 2024 to July 1, 2024, is less than the 1,000 limit). The NCIB is also being conducted in accordance with applicable U.S. securities laws. The NCIB expires

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YOUR PARTNER IN STEEL. SINCE 1901

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on September 4, 2025 if not fully exercised. The Company did not repurchase any Shares or Warrants from the market under the NCIB during the fiscal quarter ended September 30, 2024.

Conference Call and Webcast Details

A webcast and conference call will be held on Thursday, November 7, 2024 at 11:00 a.m. EDT to review the Company’s fiscal second 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 at www.algoma.com. 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 Second Quarter Conference Call. To access the replay of the call, dial 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13749211.

Consolidated Financial Statements and Management’s Discussion and Analysis

The Company’s unaudited condensed interim financial statements for the three and six month periods ended September 30, 2024, and September 30, 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 at www.sec.gov and under the Company’s profile on SEDAR+ at www.sedarplus.com. These documents are also available on the Company’s website, www.algoma.com, and shareholders may receive hard copies of such documents free of charge upon request by contacting IR@algoma.com.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains “forward-looking information” under applicable Canadian securities legislation and “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”), including statements regarding trends in the pricing of steel, Algoma’s expectation to continue to pay a quarterly dividend, Algoma’s transition to EAF steelmaking, including the progress, expected costs and timing of completion and commissioning of the Company’s EAF project and for its start of steel production, Algoma’s annual raw steel production capacity and reduced carbon emissions upon completion of the EAF project, Algoma’s maintenance of the NCIB and potential use thereof, Algoma’s future as a leading producer of green steel, Algoma’s modernization of its plate mill facilities, transformation journey, ability to deliver greater and long-term value, ability to offer North America a secure steel supply and a sustainable future, and investment in its people, and processes, and statements regarding Algoma’s available liquidity and the change of its fiscal year end, and the Company’s strategy, plans or future financial or operating performance. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “design,” “pipeline,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions. Many factors could cause actual future events to differ materially from the forward-looking statements in this document. Readers should also consider the other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Information” in Algoma’s Annual Information Form, filed by Algoma with applicable Canadian securities regulatory authorities (available under the Company’s SEDAR+ profile at www.sedarplus.ca) and

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with the SEC, as part of Algoma’s Annual Report on Form 40-F (available at www.sec.gov), as well as in Algoma’s current reports with the Canadian securities regulatory authorities and SEC. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Algoma assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-IFRS Financial Measures

To supplement our financial statements, which are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), we use certain non-IFRS measures to evaluate the performance of Algoma. These terms do not have any standardized meaning prescribed within IFRS and, therefore, may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of our financial performance from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

Adjusted EBITDA, as we define it, refers to net income (loss) before amortization of property, plant, equipment and amortization of intangible assets, finance costs, interest on pension and other post-employment benefit obligations, income taxes, foreign exchange loss (gain), finance income, carbon tax, changes in fair value of warrant, earnout and share-based compensation liabilities, earnout and share-based compensation liabilities, and share-based compensation related to performance share units. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue for the corresponding period. Adjusted EBITDA is not intended to represent cash flow from operations, as defined by IFRS, and should not be considered as alternatives to net profit (loss) from operations, or any other measure of performance prescribed by IFRS. Adjusted EBITDA, as we define and use it, may not be comparable to Adjusted EBITDA as defined and used by other companies. We consider Adjusted EBITDA to be a meaningful measure to assess our operating performance in addition to IFRS measures. It is included because we believe it can be useful in measuring our operating performance and our ability to expand our business and provide management and investors with additional information for comparison of our operating results across different time periods and to the operating results of other companies. Adjusted EBITDA is also used by analysts and our lenders as a measure of our financial performance. In addition, we consider Adjusted EBITDA margin to be a useful measure of our operating performance and profitability across different time periods that enhance the comparability of our results. However, these measures have limitations as analytical tools and should not be considered in isolation from, or as alternatives to, net income, cash flow from operations or other data prepared in accordance with IFRS. Because of these limitations, such measures should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness. We compensate for these limitations by relying primarily on our IFRS results using such measures only as supplements to such results. See the financial tables below for a reconciliation of net income (loss) to Adjusted EBITDA.

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

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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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Algoma Steel Group Inc.

Condensed Interim Consolidated Statements of Net (Loss) Income

(Unaudited)

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Algoma Steel Group Inc.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)

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Algoma Steel Group Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Unaudited)

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Algoma Steel Group Inc.

Reconciliation of Net (Loss) Income to Adjusted EBITDA

For more information, please contact:

Michael Moraca

Vice President – Corporate Development and Treasurer

Algoma Steel Group Inc.

Phone: 705.945.3300

E-mail: IR@algoma.com

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Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following Management’s Discussion and Analysis (“MD&A”) contains information regarding the financial position and financial performance of Algoma Steel Group Inc. and its consolidated subsidiaries and unless the context otherwise requires, all references to “Algoma,” “the Company,”, “we,” “us,” or “our” refer to Algoma Steel Group Inc. and its consolidated subsidiaries.

We publish our condensed interim consolidated financial statements in Canadian dollars. In this MD&A, unless otherwise specified, all monetary amounts are in Canadian dollars, all references to “C$,” mean Canadian dollars and all references to “$” or “US$” and mean U.S. dollars.

The following MD&A provides the Company’s management perspective on the financial position and financial performance of the Company and its consolidated subsidiaries for the three and six month periods ended September 30, 2024 and September 30, 2023. This MD&A provides information to assist readers of, and should be read in conjunction with, the Company’s September 30, 2024 condensed interim consolidated financial statements and the accompanying notes thereto and the March 31, 2024 audited consolidated financial statements and the accompanying notes thereto. The condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and the financial information included in this MD&A is derived from the September 30, 2024 condensed interim consolidated financial statements, except as otherwise noted.

This discussion of the Company’s business may include forward-looking information with respect to the Company, including its operations and strategies, as well as financial performance and conditions, which are subject to a variety of risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Information” below. Readers are directed to carefully review the sections entitled “Non-IFRS Financial Measures” included elsewhere in this MD&A. For a discussion of risks and uncertainties that may affect the Company and its financial position and results, refer to “Risk Factors” in the annual information form for the year ended March 31, 2024 (the “Annual Information Form”) filed by the Company with the applicable Canadian securities regulatory authorities (available under the Company’s System for Electronic Document Analysis and Retrieval (“SEDAR+”) profile at www.sedarplus.ca) and filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) as part of the Company’s annual report on Form 40-F (available on the SEC’s EDGAR website at www.sec.gov), as well as in the other documents Algoma has filed with the OSC and the SEC.

This MD&A is dated as of November 5, 2024. This document has been approved and authorized for issue by the Board of Directors on November 5, 2024. Events occurring after this date could render the information contained herein inaccurate or misleading in a material respect.

Functional Currency

The Company’s functional currency is the US dollar, which reflects the Company’s operational exposure to the US dollar. The Company uses the Canadian dollar as its presentation currency. In accordance with IFRS, all amounts presented are translated to Canadian dollars using the current rate method whereby all revenues, expenses and cash flows are translated at the average rate that was in effect during the period or presented at their Canadian dollar transactional amounts and all assets and liabilities are translated at the prevailing closing rate in effect at the end of the period. Equity transactions have been translated at historical rates. The resulting net translation adjustment has been reflected in other comprehensive income or loss.

The currency exchange rates for the relevant periods of fiscal 2025 and fiscal 2024 are provided below:

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Cautionary Note Regarding Forward-Looking Information

This MD&A contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and “forward-looking information” under applicable Canadian securities legislation (collectively, “forward-looking statements”), that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and strategic objectives, Algoma’s expectation to pay a quarterly dividend, the expected timing of the EAF (as defined below) transformation and the resulting increase in raw steel production capacity and reduction in carbon emissions. In some cases, you can identify forward-looking statements by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “pipeline,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” or the negative of these terms or other similar expressions. 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. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our financial position, financial performance and cash flows. Although management believes that expectations reflected in forward-looking statements are reasonable, such statements involve risks and uncertainties and should not be regarded as a representation by the Company or any other person that the anticipated results will be achieved. The Company cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Our forward-looking statements are not guarantees of future performance, and actual events, results and outcomes may differ materially from our expectations suggested in any forward-looking statements due to a variety of factors, including, among others, those set forth in the section entitled “Risk factors” in our AIF for the year ended March 31, 2024. Although it is not possible to identify all of these factors, they include, among others, the following:

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The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the risks provided under “Risk Factors” in the Annual Information Form.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward- looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying assumptions will prove to be correct. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this MD&A, to conform these statements to actual results or to changes in our expectations.

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Overview of the Business

Algoma Steel Group Inc., formerly known as 1295908 B.C. Ltd. (the “Company”), was incorporated on March 23, 2021 under the Business Corporations Act of British Columbia solely for the purpose of purchasing Algoma Steel Holdings Inc. The Company’s common shares and warrants under the symbol ‘ASTL’ and ASTLW’, respectively, are listed on the Toronto Stock Exchange (TSX) and the Nasdaq Stock Market (“Nasdaq”). Algoma Steel Group Inc. is the ultimate parent holding company of Algoma Steel Inc. and does not conduct any business operations.

Algoma Steel Inc. (“ASI”), the operating company and a wholly-owned subsidiary of Algoma Steel Holdings Inc., was incorporated on May 19, 2016 under the Business Corporations Act of British Columbia. ASI is an integrated steel producer with its active operations located entirely in Sault Ste. Marie, Ontario, Canada. ASI produces sheet and plate products that are sold primarily in Canada and the United States.

Strategic Initiatives

Electric Arc Furnace (“EAF”) Transformation Project

On November 10, 2021, the Company’s Board of Directors authorized the Company’s transformation to electric arc steelmaking (the “EAF Transformation Project”), including the construction of two state-of-the-art electric-arc-furnaces to replace its existing No. 7 blast furnace and steelmaking operations (“BF7 Steelmaking”). The transformation to EAF Steelmaking is expected to decrease our annual carbon emissions by 70% compared to BF7 Steelmaking. Construction on our EAF Transformation Project began in April 2022 and the commencement of start-up activities are expected to begin prior to the end of the calendar year 2024. Through our transition to EAF Steelmaking we will contribute to the transition to a low carbon economy and support Canada in achieving its commitments under the Paris Agreement.

EAF steelmaking is a method of producing steel by melting scrap metal and other metallic inputs using an electric arc. This process is widely used in modern steel production. The EAF steelmaking facility is being built on vacant land adjacent to the current steelmaking facility to mitigate disruption to current operations and will be integrated into existing downstream equipment and facilities, thereby reducing capital expenditure requirements.

The EAF Transformation Project is expected to improve product mix, reduce fixed costs, provide significant carbon tax savings, increase production capacity and decrease the Company’s environmental footprint. The Company anticipates a 30-month construction phase for the EAF facility, with construction having started in April 2022 and commencement of commissioning activities to begin prior to calendar year-end 2024, and beginning to scale-up EAF operations thereafter. The Company has approval from the electricity regulators to connect the EAFs to the current 115kV electricity grid with the internal power generation asset known as Lake Superior Power (the “LSP Plant”). As the EAF steel production is ramped-up after commissioning, Algoma anticipates reduced dependency on its legacy BF7 Steelmaking operations as we transition to 100% EAF steel production.

The following paragraphs outline key elements and milestones of the EAF Transformation Project:

Technology

On December 2, 2021, the Company announced that it had selected Danieli & C. Officine Meccaniche S.p.A. (“Danieli”) as the sole technology provider for the EAF steelmaking facility. In connection with this agreement, Danieli will supply its latest technology solutions including AC-Digimelter technology powered by Q-One digital power systems and Q-SYM automated scrap yard. All EAF and power components have been received on the Company’s site and installation is proceeding as construction progresses.

Construction and Environmental Permitting

The contract for the structural building integrating the EAF Transformation Project was awarded on April 25, 2022, to Hamilton, Ontario-based Walters Group Inc. (“Walters”). Walters has been responsible for fabricating and erecting the main building envelope and structure in addition to the necessary emissions

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collection hoods. Pursuant to the fixed-price contract, Walters used Algoma’s steel plate products in the fabrication of heavy structural components, and has worked with local industrial contractor, SIS Manufacturing Inc., for the fabrication of these key elements. As of September 30, 2024, all EAF building structural steel has been erected, and the company has since been installing exterior roofing and cladding. Equipment installation is underway including power systems, cranes, reline station and the fume extraction systems

On March 13, 2023, the Company announced the appointment of Ellis Don Corporation as Construction Manager for completion of the EAF Transformation Project. The Construction Manager role is central to the successful planning, execution, and completion of the various construction projects. Their responsibilities encompass various aspects of project management and oversight to ensure that construction projects are completed safely, on time, within budget, and to the required quality standards.

The Company is progressing its applications for environmental operational permits through the Province’s Ministry of Environment, Conservation and Parks. The Company received ECA 5691-CJGK54 (as amended) for industrial sewage works for the disposal of process effluent and non-contact cooling water. Algoma has received approval of its abatement plan for current air emissions submitted in accordance with ECA Reg. 419/95. On September 6, 2024, Algoma submitted a proposal for an Environmental Compliance Approval (air & noise) amendment for all emissions from the site, which includes all sources at the facility, including sources during the transition to EAF steelmaking.

Budget and Project Financing

The Company previously secured an agreement with the Government of Canada through the Ministry of Innovation, Science and Economic Development Canada (ISED), whereby the Company will receive up to C$200.0 million in the form of a loan to support the EAF Transformation Project. The loan is provided through the Net Zero Accelerator Initiative of the Federal Strategic Innovation Fund (the “Federal SIF” and such loan, the “Federal SIF EAF Loan”). The repayment period will commence upon the earlier of the Company having access to full power from the provincial electricity grid to operate the EAF independently, or January 1, 2030. The annual repayment is further dependent on the Company’s performance in reducing its GHG emissions. As of September 30, 2024, the Company has received C$167.5 million from the Federal SIF EAF Loan.

In addition, the Company previously entered into an agreement (the “CIB Loan”) with the Canada Infrastructure Bank (“CIB”) with access up to C$220 million in loan financing towards the EAF Transformation Project. Given that the Company did not expect to draw on the CIB Loan, the parties agreed to terminate the agreement on March 7, 2024.

As of September 30, 2024, the cumulative investment was C$672.3 million including C$61.2 million during the fiscal second quarter. Contracted commitments now total approximately C$870 million and as the project moves closer to completion, the company anticipates completing the remaining contracts, including those structured as time and material agreements, within 5% of the upper end of the previously announced budget range.

Algoma’s EAF project is eligible under the Ontario’s Ministry of the Environment, Conservation and Parks Emissions Performance Program. Under this program, the Company has applied for, and expects to receive reimbursement for carbon taxes paid since 2022. These reimbursements are anticipated to reduce the project’s net cash cost, and along with cash-on-hand, operating cash flow, and available borrowings from the Company’s existing undrawn credit facility, provide ample liquidity to fund the balance of the project.

Access to Electricity

The Company upgraded its LSP Plant with two LM6000PC aero derivative gas turbines, multiple control systems, and a full rewind of the No. 2 generator to provide 110-115 MW of generation. These assets were commissioned in 2023 and when combined with our available grid power, the Company has enough electrical supply to operate both EAF furnaces in alternating mode and supplying our current steel capacity. As of March 31, 2024, the Company has approval from the Independent Electricity System Operator

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(“IESO”, through CAA ID: 2021-694 and 2021-695) to connect the EAFs to the current 115kV electricity grid with the LSP Plant.

The Company is progressing its discussions with the IESO, Ontario independent electricity regulator, as well as with the Ministry of Energy in respect of securing more grid power to realize the full potential of the EAF Transformation Project. On September 28, 2023, the Company received conditional approval of the next phase of the Company’s EAF Connection Proposal (CAA ID: 2021-704), providing for connecting the EAF load facility with electricity supplied from the proposed local 230kV transmission line to be constructed and operated by PUC Transmission LP. Further, on June 12, 2024, the IESO approved CAA ID: 2023-768 permitting the simultaneous operation of the EAF furnaces drawing power from the 230kV Transmission Line (as defined below) and with the LSP Plant operating at 110MW.

Significant progress has continued on long term regional power access for Northeast and Eastern Ontario. On October 23, 2023, the Ontario provincial government announced that it has issued an Order-in-Council declaring three regional transmission line projects as priorities, which includes one new line in eastern Ontario and two new lines in northeastern Ontario. These lines are expected to enable economic growth activities including among other things the production of clean steel at Algoma. The Order-in-Council will streamline the Ontario Energy Board’s (OEB) regulatory approval process for these lines. The government has also directed the OEB to amend Hydro One Network Inc. (Hydro One)’s transmission license to designate it as the transmitter responsible for the development of the three lines.

On August 27, 2024, the Ontario Energy Board (OEB) issued its Decision and Order granting PUC LP (PUC Transmission), and Hydro One Sault Ste. Marie LP (HOSSM) leave to construct high-voltage transmission facilities (230kV Transmission Line) in Sault Ste. Marie that will service Sault Ste. Marie’s west end and support Algoma’s transition to EAF steelmaking. The OEB further declared the 230kV Transmission Line a network asset without any required capital contribution from Algoma.

Iron Ore Extension

On October 2, 2023, the Company announced a two-year extension of its existing iron ore purchase contract with United States Steel Corporation (“U. S. Steel”) (NYSE: X), with an option to further extend for a third year solely at Algoma’s discretion. The extended purchase contract is anticipated to cover the expected volumes of iron ore required to complete Algoma’s transition from blast furnace to EAF steelmaking.

The extension with U. S. Steel represents another strategic milestone for Algoma as it continues on its transformative journey toward sustainable steel production through EAF steelmaking.

Plate Mill Modernization

In 2019, the Company started a plate mill modernization project (the “PMM Project”) which was completed in two phases at a total investment of C$142.7 million, which was partly funded by government loan facilities. Work at the facility is now substantially complete and we expect any remaining minor items to be completed with other planned maintenance activities over the coming year.

This strategic initiative has enhanced the capacity and quality of the Company’s discrete plate product line, which is a differentiated product capability and a key source of competitive advantage. The PMM Project has allowed the Company to satisfy higher product quality requirements of its customers with respect to surface and flatness, increase high strength capability with availability of new grades, ensure reliability of plate production with direct ship capability and increase overall plate shipment capacity through debottlenecking and automation.

The first phase focused on quality and included installation and commissioning upgrades of a new primary slab de-scaler (to improve surface quality), automated surface inspection system (to detect and map surface quality), an in- line hot leveler (to improves flatness), and end-to-end automation of the mill (which expands the Company’s grade offering). The second phase focused on productivity and included the installation and commissioning of the inline dividing shear and plate piler.

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Lime Production

In June 2023, the Company completed a C$15.4 million refurbishment project of its lime kiln production plant that processes limestone and other calcium carbonate-rich materials to produce quicklime (calcium oxide, CaO) and dolomitic lime (a mixture of calcium and magnesium oxides). Lime is an essential component of the steelmaking process, as it is used in various stages to remove impurities, control the slag composition, and adjust the chemical balance in the steelmaking process. The Company has a continuing and growing demand for lime product as it progresses through its transformation to EAF steelmaking.

Key Leadership and Governance Announcements

On September 24, 2024, Sean Donnelly was newly elected to the Company’s Board of Directors.

Environmental Matters

Steel producers such as Algoma are subject to numerous environmental laws and regulations (“Environmental Law”), including federal and provincial, relating to the protection of the environment. The Company can incur regulatory liability as well as civil liability for contamination on-site (soil, groundwater, indoor air), contaminant migration and impacts off-site including in respect of groundwater, rivers, lakes, other waterways, and air emissions.

On June 9, 2022, the Company experienced an incident where an oil-based lubricant was released from our hot mill in Sault Ste. Marie. The oil entered our water treatment facility, and some quantity of the oil was discharged into the St. Mary’s River. Following the discharge, traffic on the river was temporarily halted, the local public health authority issued a water advisory and a nearby municipality issued a precautionary emergency declaration regarding its municipal water supply. We actively worked with our response partners deploying equipment and resources to contain and mitigate the effects on the waterway and neighboring communities and to clean up the released oil, while working with local, provincial, and federal regulatory authorities. The public health authorities lifted the water advisory on June 21, 2022 and the US Coast Guard did not see any impact to shoreline or marine wild life. The provincial and federal regulators each investigated this incident. The Company was recently served with one charge under the provincial Environment Protection Act and one charge under the provincial Ontario Water Resources Act in connection with the incident, which as of the date of this report have not been resolved. The Company remains focused on maintaining compliance with environmental regulations and is dedicated to upholding our commitment to sustainable practices.

Fatal Incident Involving an Employee of a Contractor

On June 16, 2023, the Company reported a fatal incident involving an employee of a contractor who was retained to perform specialized maintenance work cleaning an out-of-service gas line. The Company investigated the fatal accident internally and worked with provincial authorities as they investigated. On May 2, 2024, the Company was served with three charges under the provincial Occupational Health & Safety Act in connection with the fatality. The Company is responding accordingly.

Environmental, Social and Governance (“ESG”) Report

On August 9, 2024, Algoma published its second annual ESG report, which provides an overview of our ESG performance during fiscal year 2024. At Algoma, we firmly acknowledge that ESG factors encompass a broad spectrum of risks and opportunities, impacting not only our organization but also our valued stakeholders, including investors, customers, suppliers, employees, governments, and the communities where we operate. Our unwavering commitment is to conduct our business activities with careful and conscientious consideration of these ESG factors that drive performance, reduce risk and develop a culture of organizational excellence.

Our vision extends beyond mere corporate responsibility; we aspire to play a pivotal role in shaping a sustainable and environmentally responsible future for Canadian steel production. Algoma is actively working towards minimizing our need for coal and mined ore as critical value chain inputs in our steelmaking process by transitioning to EAF Steelmaking, which will also decarbonize our operations. This year, we made significant progress on our EAF journey. As of September 30, 2024, we have invested C$672.3 million in its

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development. We pledge to continually innovate and incorporate eco-friendly practices throughout our production processes. Simultaneously, we remain steadfast in our dedication to the health and safety of our workforce, the prosperity of communities we operate in, and the cultivation of a diverse, inclusive, and equitable workforce.

In 2022, we conducted a formal ESG Materiality Assessment to identify and prioritize our material ESG factors which have the greatest potential to impact the value of our Company and are of most importance to our stakeholders, ensuring that we generate lasting value for our investors while upholding our commitment to long-term sustainability. The ESG Materiality Assessment is reviewed on an annual basis and updated as needed. This foundational work forms the bedrock of our overarching ESG strategy.

Transparency and accountability are integral to our ESG journey. Our reporting aligns with the Sustainability Accounting Standards Board (SASB) Standards and adheres to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to the greatest extent feasible. We are actively engaged in ongoing efforts to further harmonize our practices with these frameworks. Our second annual report provides comprehensive insights into our ESG strategy, outlines our approach to mitigating ESG risks, and underscores our commitment to harnessing ESG opportunities. Algoma notes that the ESG disclosure landscape has been evolving significantly over the past few years, notably through the establishment of the International Sustainability Standards Board (ISSB) and the ISSB’s issuance of the IFRS Sustainability Disclosure Standards, as well as the ongoing work of the Canadian Sustainability Standards Board (CSSB). Algoma is committed to monitoring the evolving disclosure landscape, including regulatory requirements as they evolve.

Our ESG approach is firmly underpinned by robust governance structures that empower us to effectively oversee and manage ESG-related risks and opportunities. Our Board of Directors assumes ultimate accountability for ESG factors, including those related to climate change. The Nominating and Governance Committee plays a pivotal role in supporting the Board by overseeing Algoma’s ESG factors, collaborating with other Board Committees, and reporting on ESG matters to the full Board.

Impact on Operations

On January 20, 2024, a structural corridor carrying various utilities crucial for the company’s coke oven battery and blast furnace operations suffered an unexpected collapse. The collapse disrupted the flow of coke oven gas from the batteries to the rest of the steelworks, as well as a portion of the natural gas and oxygen flow to specific facilities, most critically the blast furnace. The unforeseen structural collapse did not result in any injuries, but for safety reasons, various areas near the collapse were evacuated and blast furnace operations were suspended at the time of the incident. Due to the unexpected shutdown and delayed restart, the blast furnace experienced operational challenges culminating in a chilled hearth, which suspended production for a period of three weeks, during which roughly 150,000 tons of hot metal production was lost. All necessary repairs to the blast furnace have been completed.

An independent investigation revealed an unforeseen escalating overload condition, resulting in a failure of a structural support member of the utility corridor, thereby causing the subsequent cascading collapse of other support structures. Minimal production of coke resumed at all three coke oven batteries on January 23, 2024 to maintain asset integrity. When combined with inventories on hand and the availability of third party coke supplies, the Company satisfied its coke requirements for normal steelmaking operations while the repairs to the utility corridor were completed. Significant progress has been made in the reconstruction of the utility corridor and commissioning of the suction main, and coke production levels have stabilized toward the end of the quarter at roughly 90% of pre-outage volumes. Efforts continue to restore full operational functionality to the coke oven batteries, most notably the delivery and distribution of by-product gas to the steelworks.

The Company has standard insurance coverage that is intended to address events such as these, including business interruption and property damage insurance. The Company has engaged its insurers, and is in the process of submitting claims under its insurance policies for covered losses.

Management’s current estimate for the expected combined impact of lower revenues and higher costs for the duration of the outage is in the range of C$120.0 million to C$130.0 million, which was concentrated heavily in the fourth quarter of fiscal 2024. This impact was driven primarily by lost shipment volume restricted by lower

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blast furnace production. In addition, higher production costs experienced post-chill were driven by greater reliance on purchased furnace coke and natural gas, in the absence of normal volumes of internally produced coke and by-product gasses, along with greater utilization of purchased slabs. These higher costs were mitigated in part by lower labour cost enabled by a temporary partial layoff of unionized workers. Also included in this figure is higher carbon tax expense resulting from the incident.

The Company and its insurers continue to review the impact of the structural collapse and subsequent lost production as it relates to the insurance claim. As a result, no related contingent gain has been recorded as of September 30, 2024.

Factors Affecting Financial Performance

The Company’s costs are primarily driven by commodity prices, including the price of iron ore, coal, coke, electricity and natural gas, and inflation or other fluctuations in the prices of key raw materials and other inputs essential to our operations can have a substantial impact on our profitability and overall financial performance. Inflationary pressures on commodity raw material inputs can arise from various factors, including global supply and demand dynamics, geopolitical events, natural disasters, trade policies, and currency exchange rate fluctuations. These factors are often beyond our control and can lead to substantial price increases in raw materials, as well as challenges in managing our supply chain and inventory affecting our ability to secure adequate raw material supplies in a timely and cost-effective manner. Increased costs of raw materials can directly erode our profit margins, making it challenging to maintain competitive pricing in the market.

North American steel pricing is largely dependent on global supply and demand, the level of steel imports into North America, economic conditions in North America, global steelmaking overcapacity, and increased raw material prices. North American steel producers compete with many foreign producers, including those in Europe, China and other Asian countries. Competition from foreign producers is periodically intensified by weakening regional economies of their surrounding countries, and resultant decisions by these foreign producers with respect to export volumes and pricing possibly more influenced by political and economic policy considerations than by prevailing market conditions.

World crude steel production for the 71 countries reporting to the World Steel Association (worldsteel) was 144.8 million tonnes (Mt) in August 2024, a 6.5% decrease compared to August 2023. China represents approximately 55% of global crude steel production. (source: Worldsteel Association “December 2023 crude steel production and 2023 global crude steel production total” January 25, 2024). According to the Organization for Economic Cooperation and Development global steel market conditions remain challenging, with the latest forecasts suggesting sluggish demand growth. According to the latest available information, global steelmaking capacity remains high at 2,432 million metric tonnes, a level that will exceed demand by slightly more than 543 million metric tonnes. This is the equivalent to over 30 times the size of the Canadian steel industry. Additionally a total of 157 million metric tonnes of steel investment projects are either currently underway or in the planning stages around the world.

Change in Fiscal Year

On November 5, 2024 the Company’s Board of Directors approved a change in the Company’s fiscal year end from March 31 to December 31. This change is being made to better align the Company’s reporting calendar with other companies in the industry. The Company’s current fiscal year will end on December 31, 2024, resulting in a nine-month reporting period from April 1, 2024 to December 31, 2024. The Company plans to provide reclassified historical financial information in the first quarter of 2025 to assist investors in evaluating the impact the change in fiscal year will have on the reported annual operating results for the years ending December 31, 2023 and 2024.

Overall Results

Net (Loss) Income

The Company’s net loss for the three month period ended September 30, 2024 was C$106.6 million

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compared to net income of C$31.1 million for the three month period ended September 30, 2023, resulting in a C$137.7 million decrease of net income. The decrease is primarily due to the increase in loss from operations (C$120.4 million), for reasons described below in (Loss) Income from Operations, the change in fair value of warrant liability (C$27.0 million), foreign exchange loss (C$21.2 million), finance costs (C$13.8 million), and the change in fair value of share-based compensation (C$13.8 million). This was offset, in part, by an increase in other income (C$32.1 million) and income tax recovery (C$29.1 million).

The Company’s net loss for the six month period ended September 30, 2024 was C$100.5 million compared to net income of C$162.0 million for the six month period ended September 30, 2023, resulting in a C$262.5 million decrease of net income. The decrease is primarily due to the increase in loss from operations (C$297.2 million), for reasons described below in (Loss) Income from Operations, the change in fair value of warrant liability (C$28.9 million), finance costs (C$25.1 million), and the change in fair value of share-based compensation liability (C$12.0 million). This was offset, in part, by an increase in income tax recovery (C$72.7 million) and other income (C$32.1 million).

(Loss) Income from Operations

The Company’s loss from operations for the three month period ended September 30, 2024 was C$83.6 million compared to income from operations of C$36.8 million for the three month period ended September 30, 2023, resulting in a decrease of C$120.4 million. The decrease is primarily due to decreased revenue (C$132.3 million), which is a result of weakening market conditions and decreased steel shipments. This was offset, in part, by a decrease of cost of sales (C$17.6 million) due primarily to decreased shipments, partially offset by greater consumption of purchased coke.

The Company’s loss from operations for the six month period ended September 30, 2024 was C$96.1 million compared to income from operations of C$201.1 million for the six month period ended September 30, 2023, a decrease of C$297.2 million. The decrease is primarily due to decreased revenue (C$309.0 million), which is a result of weakening market conditions and decreased steel shipments. This was offset, in part, by a decrease of cost of sales (C$23.3 million) due primarily to decreased shipments, partially offset by greater consumption of purchased coke.

Non-IFRS Financial Measures

In this MD&A, we use certain non-IFRS measures to evaluate the performance of the Company. These terms do not have any standardized meaning prescribed under IFRS and, therefore, may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of our financial performance from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported in accordance with IFRS. As described below, the terms “EBITDA,” “Adjusted EBITDA,” “Adjusted EBITDA margin,” “Adjusted EBITDA per ton,” “Average Net Sales Realization” (“NSR”) and “Cost Per Ton of Steel Products Sold” are financial measures utilized by the Company in evaluating its financial results that are not defined by IFRS. EBITDA refers to net income or loss before depreciation of property, plant, equipment and amortization of intangible assets, finance costs, interest on pension and other post-employment benefit obligations and income taxes. Adjusted EBITDA refers to EBITDA before foreign exchange loss (gain), finance income, carbon tax, changes in fair value of warrants, earnout and share-based compensation liabilities, share-based compensation related to the Company’s Omnibus Long Term Incentive Plan and certain inventory write-downs. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue for the corresponding period. Adjusted EBITDA per ton is calculated by dividing Adjusted EBITDA by tons of steel products sold for the corresponding period. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations, as defined by IFRS, and should not be considered as alternatives to income from operations or any other measure of performance prescribed by IFRS. EBITDA and Adjusted EBITDA, as defined and used by the Company, may not be comparable to EBITDA and Adjusted EBITDA as defined and used by other companies.

We consider EBITDA and Adjusted EBITDA to be meaningful measures to assess our operating performance in addition to IFRS measures. These measures are included because we believe they can be useful in measuring our operating performance and our ability to expand our business and provide

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management and investors with additional information for comparison of our operating results across different time periods and to the operating results of other companies. EBITDA and Adjusted EBITDA are also used by analysts and our lenders as measures of our financial performance. In addition, we consider Adjusted EBITDA margin and Adjusted EBITDA per ton, to be useful measures of our operating performance and profitability across different time periods that enhance the comparability of our results. For a reconciliation of Adjusted EBITDA to its most comparable IFRS financial measures, see “Adjusted EBITDA” presented in this MD&A. Average Net Sales Realization refers to steel revenue less freight revenue per steel tons shipped. Average Net Sales Realization is included because it allows management and investors to evaluate our selling prices per ton of steel products sold, excluding the geographic impact of freight charges, in order to enhance comparability when comparing our sales performance to that of our competitors. Cost Per Ton of Steel Products Sold refers to cost of steel revenue less freight, depreciation, carbon tax and past service costs for pension and post-employment benefit adjustments (included in cost of steel revenue) per steel tons shipped. Cost Per Ton of Steel Products Sold allows management and investors to evaluate our cost of steel products sold on a per ton basis, excluding certain of the items that we exclude when calculating Adjusted EBITDA, to evaluate our operating performance and to enhance the comparability of our costs over different time periods. We consider each of Average Net Sales Realization and Cost Per Ton of Steel Products Sold to be meaningful measures to assess our operating performance in addition to IFRS measures.

EBITDA, Adjusted EBITDA, Average Net Sales Realization, Cost Per Ton of Steel Products Sold, Adjusted EBITDA margin and Adjusted EBITDA per ton have limitations as analytical tools and should not be considered in isolation from, or as alternatives to, net income, cash flow from operations or other data prepared in accordance with IFRS. Some of these limitations are:

In addition, in the case of Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA per ton:

Because of these limitations EBITDA, Adjusted EBITDA and the related ratios such as Adjusted EBITDA margin and Adjusted EBITDA per ton should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness. In addition, other companies, including other companies in our industry, may calculate these measures differently than we do, limiting their usefulness as comparative measures. We compensate for these limitations by relying primarily on our IFRS results using such measures only as a supplement.

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Steel Revenue and Cost of Sales

Revenue and steel revenue decreased by 18.1% and 19.0%, respectively, owing to both lower pricing and shipment volumes during the three month period ended September 30, 2024 as compared to the three month period ended September 30, 2023. The Company’s average NSR on steel sales per ton shipped was C$1,036 for the three month period ended September 30, 2024 (September 30, 2023 - C$1,213), a decrease of 14.6%. Lower pricing was resultant from weakening market conditions, and was partially offset by improvements in value-add product mix as a proportion of steel sales. Steel shipment volumes decreased by 5.2% during the three month period ended September 30, 2024 as compared to the three month period ended September 30, 2023.

Revenue and steel revenue decreased by 19.8% and 20.0%, respectively, owing to both lower pricing and shipment volumes during the six month period ended September 30, 2024 as compared to the six month period ended September 30, 2023. The Company’s average NSR on steel sales per ton shipped was C$1,110 for the six month period ended September 30, 2024 (September 30, 2023 - C$1,270), a decrease of 12.6%. Lower pricing was resultant from weakening market conditions, and was partially offset by improvements in value-add product mix as a proportion of steel sales. Steel shipment volumes decreased by 8.5% during the six month period ended September 30, 2024 as compared to the six month period ended September 30, 2023.

For the three month period ended September 30, 2024, the Company’s cost of steel revenue decreased by 2.0% to C$585.9 million (September 30, 2023 - C$598.0 million) and the cost of steel products sold decreased by 4.2% to C$537.3 million (September 30, 2023 - C$560.6 million). The overall decrease is mainly due to lower volume of steel shipments, and was partially offset by greater consumption of purchased coke, which was a consequence of the January 20, 2024 incident, as discussed above in Impact on Operations.

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For the six month period ended September 30, 2024, the Company’s cost of steel revenue increased by 0.2% to C$1,166.6 million (September 30, 2023 - C$1,164.8 million), while the cost of steel products sold decreased by 2.4% to C$1,075.4 million (September 30, 2023 - C$1,101.7 million). The increase in cost of steel revenue is mainly due to increases in carbon tax, as discussed below in Carbon Taxes, and depreciation. The decrease in cost of steel products sold, which excludes both carbon tax and depreciation, was driven mainly by lower volume of steel shipments, and was partially offset by greater consumption of purchased coke, which was a consequence of the January 20, 2024 incident, as discussed above in Impact on Operations.

Non-steel Revenue

The Company’s non-steel revenue for the three month period ended September 30, 2024 was C$14.7 million (September 30, 2023 – C$16.4 million). The decrease of C$1.7 million was primarily due to decreased revenue on ore fines.

The Company’s non-steel revenue for the six month period ended September 30, 2024 was C$21.9 million (September 30, 2023 – C$36.9 million). The decrease of C$15.0 million was primarily due to decreased revenue on scrap, ore fines, braize, and tar.

Administrative and Selling Expenses

As illustrated in the table above, the Company’s administrative and selling expenses for the three month period ended September 30, 2024, were C$36.7 million (September 30, 2023 - C$31.0 million). The increase in administrative and selling expenses of C$5.7 million is primarily due to an increase in share-based compensation expense (C$5.5 million) and insurance (C$1.8 million). This was offset, in part, by a decrease in professional, consulting, legal and other fees (C$1.8 million).

For the six month period ended September 30, 2024, the Company’s administrative and selling expenses were C$65.9 million (September 30, 2023 - C$54.4 million). The increase in administrative and selling expenses of C$11.5 million is primarily due to an increase in share-based compensation expense (C$6.0 million), insurance (C$3.0 million), personnel expenses (C$1.9 million), and software licenses (C$1.0 million). This was offset, in part, by a decrease in professional, consulting, legal and other fees (C$0.7 million).

Finance Costs, Finance Income, Interest on Pension and Other Post-employment Benefit Obligations, Foreign Exchange Gains and Losses and Other Income

The Company’s finance costs represent interest cost on the Company’s Revolving Credit Facility, Senior Secured Lien Notes (the “2029 Notes”) and interest cost on the financing arrangement described in the section entitled “Capital Resources—Financial Position and Liquidity” included elsewhere in this MD&A. Finance costs also include the amortization of transaction costs related to the Company’s debt facilities and the accretion of the benefits in respect of the Company’s governmental loan facilities in respect of the interest free loan issued by, and the grant given by the Canadian federal government as well as the low interest rate loan issued from the Ontario provincial government, all of which are discussed below (Financial Resources

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and Liquidity—Cash Flow Used in Investing Activities) and the unwinding of discounts and changes in the discount rate on the Company’s environmental liabilities.

As illustrated in the table above, the Company’s finance costs for the three month period ended September 30, 2024 were C$19.2 million (September 30, 2023 - C$5.4 million). The increase of C$13.8 million in finance costs is primarily due to interest on the 2029 Notes (C$11.0 million), revaluation of discount rate for environmental liabilities (C$2.1 million), accretion of government loan benefits (C$0.3 million), and interest on financing arrangement (C$0.2 million).

For the six month period ended September 30, 2024, the Company’s finance costs were C$35.6 million (September 30, 2023 - C$10.5 million). The increase of C$25.1 million in finance costs is primarily due to interest on the 2029 Notes (C$21.3 million), revaluation of discount rate for environmental liabilities (C$2.1 million), accretion of government loan benefits (C$0.8 million), and interest on financing arrangement (C$0.4 million).

The Company’s finance income for the three month period ended September 30, 2024, was C$7.0 million (September 30, 2023 - C$3.1 million). The increase of C$3.9 million in finance income is primarily due to an increase in interest income as result of a higher cash balance.

The Company’s finance income for the six month period ended September 30, 2024, was C$12.4 million (September 30, 2023 - C$6.4 million). The increase of C$6.0 million in finance income is primarily due to an increase in interest income as result of a higher cash balance.

The Company’s interest on pension and other post-employment benefit obligations for the three and six month periods ended September 30, 2024 was C$5.3 million and C$10.7 million, respectively (September 30, 2023 - C$4.8 million and C$9.6 million, respectively). The increase is primarily due to an increase in discount rates as at March 31, 2024 that was used to determine the 2025 fiscal year pension benefit expense.

The Company’s foreign exchange loss for the three month period ended September 30, 2024 was C$9.6 million (September 30, 2023 - gain of C$11.6 million). The foreign exchange loss for the six month period ended September 30, 2024 was C$2.8 million (September 30, 2023 - gain of C$0.6 million). These foreign exchange movements reflect the effect of US dollar exchange rate fluctuations on the Company’s Canadian dollar denominated monetary assets and liabilities.

The Company’s other income for the three and six month periods ended September 30, 2024 was C$32.1 million (September 30, 2023 – nil) and represents insurance proceeds received of C$27.9 million and receivable of C$4.2 million.

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Pension and Post-Employment Benefits

As illustrated in the table above, the Company’s pension expense for the three month period ended September 30, 2024 and September 30, 2023 were C$6.6 million and C$6.3 million, respectively, representing an increase of C$0.3 million. The Company’s post-employment benefit expense for the three month period ended September 30, 2024 and September 30, 2023 were C$3.4 million and C$3.4 million, respectively, representing an increase of nil.

For the six month period ended September 30, 2024 and September 30, 2023, the Company’s pension expense was C$13.2 million and C$12.6 million, respectively, representing an increase of C$0.6 million. The Company’s post-employment benefit expense for the six month period ended September 30, 2024 and September 30, 2023 was C$6.9 million and C$6.8 million, respectively, representing an increase of C$0.1 million.

As disclosed in Note 3 to the March 31, 2024 consolidated financial statements, all actuarial gains and losses that arise in calculating the present value of the defined benefit pension obligation net of assets and the defined benefit obligation in respect of other post-employment benefits, including the re-measurement components, are recognized immediately in other comprehensive income (loss).

For the three month period ended September 30, 2024, the Company recorded an actuarially determined loss to the accrued defined pension liability and accrued other post-employment benefit obligation in other comprehensive income of C$8.0 million (September 30, 2023 - gain of C$14.0 million), a difference of C$22.0 million. The change is primarily due to a decrease in discount rates offset, in part, by increased asset return at September 30, 2024.

For the six month period ended September 30, 2024, the Company recorded an actuarially determined gain to the accrued defined pension liability and accrued other post-employment benefit obligation in other comprehensive income of C$17.5 million (September 30, 2023 - loss of C$0.4 million), a difference of C$17.9 million. The change is primarily due to increased asset return offset, in part, by decrease in discount rates as at September 30, 2024.

Carbon Taxes

On June 28, 2019, the Company became subject to the Federal Greenhouse Gas Pollution Pricing Act (the “Carbon Tax Act”). The Carbon Tax Act was enacted with retroactive effect to January 1, 2019. The Company has chosen to remove the costs associated with the Carbon Tax Act from Adjusted EBITDA to facilitate comparison with the results of its competitors in jurisdictions not subject to the Carbon Tax Act. Since the introduction of the Carbon Tax Act, Ontario’s Emissions Performance Standards (EPS) program was developed to regulate GHG emissions from large industrial facilities by setting emissions limits that are the basis for the compliance obligations of those facilities. The program was developed as an alternative to

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the federal output-based pricing system (OBPS). The EPS program came into full effect on January 1, 2022 and Algoma is now subject to compliance under the EPS.

For the three month period ended September 30, 2024, total Carbon Tax recognized in cost of sales was C$12.5 million (September 30, 2023 - C$12.2 million). The change is primarily due to an increase in carbon dioxide equivalent emissions and carbon tax per ton.

For the six month period ended September 30, 2024, total Carbon Tax recognized in cost of sales was C$22.0 million (September 30, 2023 - C$14.7 million). The change is primarily due to an increase in carbon dioxide equivalent emissions and carbon tax per ton.

Income Taxes

For the three month period ended September 30, 2024, the Company’s deferred income tax expense and current income tax recovery were C$8.7 million and (C$25.9) million, respectively, compared to deferred income tax recovery and current income tax expense of (C$3.9) million and C$15.8 million, respectively, for the three month period ended September 30, 2023 due to loss before tax of C$123.8 million for the three month period ended September 30, 2024, compared to income before tax of C$43.0 million for the three month period ended September 30, 2023.

For the six month period ended September 30, 2024, the Company’s deferred income tax expense and current income tax recovery were C$3.4 million and (C$24.9) million, respectively, compared to deferred income tax recovery and current income tax expense of (C$10.9) million and C$62.1 million, respectively, for the six month period ended September 30, 2023 due to loss before tax of C$122.0 million for the six month period ended September 30, 2024, compared to income before tax of C$213.2 million for the six month period ended September 30, 2023.

Share Capital

The authorized share capital of the Company consists of an unlimited number of common shares without par value and an unlimited number of preferred shares without par value issuable in series.

As at September 30, 2024, there were 104,423,072 common shares issued and outstanding, and no preferred shares issued and outstanding.

Warrants

As at September 30, 2024, 24,179,000 Warrants remain outstanding with an estimated fair value of $1.73 per Warrant based on the market price of the Warrants, for which the Company recognized a liability of C$56.3 million ($41.7 million) (March 31, 2024 - C$44.9 million; $33.1 million) in warrant liability on the condensed interim consolidated statements of financial position. For the three and six month periods ended September 30, 2024, a loss of C$27.3 million and C$11.7 million, respectively, on change in the fair value of the warrant liability is presented in the condensed interim consolidated statements of net (loss) income. For the three and six month periods ended September 30, 2023, a loss of C$0.3 million and a gain of C$17.2 million, respectively, on change in the fair value of the warrant liability are presented in the condensed interim consolidated statements of net (loss) income. The Warrants will expire on October 19, 2026.

The Warrants are excluded from the calculation of diluted earnings (loss) per share when they are considered to be anti-dilutive, such as in periods where the Company incurs a Net Loss. The Warrants, with a strike price of $11.50, are currently out of the money. Should Algoma’s share price increase, these Warrants contain a call feature enabling the Company to redeem them on a cashless basis before expiration, thus limiting potential dilution. Requirements include that the closing price of the Company’s common shares reaches or exceeds $18.00 for at least 20 out of any 30 consecutive trading days, the Company may exercise the option to redeem the Warrants at a nominal price of $0.01 per warrant. For more information please review Algoma’s warrant agreement which is available on SEDAR+.

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Earnout

As at September 30, 2024, 889,054 earnout rights remain outstanding with an estimated fair value of $10.23 per unit based on the market price of the Company’s common shares, for which an earnout liability of C$12.3 million ($9.1 million) (March 31, 2024 - C$13.8 million; $10.2 million) was recognized on the condensed interim consolidated statements of financial position. During the six month period ended September 30, 2024, earnout rights were settled for 320,000 common shares. For the year ended March 31, 2024, earnout rights were settled for cash totalling C$2.5 million. Loss on change in the fair value of the earnout liability for the three and six month periods ended September 30, 2024 of C$5.4 million and C$2.9 million, respectively, are presented in the condensed interim consolidated statements of net (loss) income. Gain on change in the fair value of the earnout liability for the three and six month periods ended September 30, 2023 of C$0.7 million and C$2.7 million, respectively, are presented in the condensed interim consolidated statements of net (loss) income.

Continuity of earnout rights are as follows:

Replacement Long Term Incentive Plan (“LTIP”)

As at September 30, 2024, 2,786,372 Replacement LTIP Awards remain outstanding with an estimated fair value of $10.23 per unit based on the market price of the Company’s common shares, for which the Company recognized a liability of C$38.5 million ($28.5 million) (March 31, 2024 - C$31.9 million; $23.6 million) in share-based payment compensation liability on the condensed interim consolidated statements of financial position. During the six month period ended September 30, 2024, there were no Replacement LTIP units settled (March 31, 2024 – 356,900 units were settled). Loss on change in the fair value of the share-based payment compensation liability for the three and six month periods ended September 30, 2024 of C$12.5 million and C$6.7 million, respectively, are presented in the condensed interim consolidated statements of net (loss) income. Gain on change in the fair value of the share-based payment compensation liability for the three and six month periods ended September 30, 2023 of C$1.3 million and C$5.3 million, respectively, are presented in the condensed interim consolidated statements of net (loss) income.

Continuity of Replacement LTIP units are as follows:

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Omnibus Long Term Incentive Plan (“LTIP”)

Deferred share units (“DSUs”)

For the three and six month periods ended September 30, 2024, the Company recorded a share-based payment compensation expense of C$0.7 million and C$1.2 million, respectively, in administrative and selling expense on the condensed interim consolidated statements of net (loss) income and contributed deficit on the condensed interim consolidated statements of financial position. For the three and six month periods ended September 30, 2023, the Company recorded a share-based payment compensation expense of C$0.5 million and C$0.9 million, respectively, in administrative and selling expense on the condensed interim consolidated statements of net (loss) income and contributed deficit on the condensed interim consolidated statements of financial position.

Restricted share units (“RSU”) FY2023, FY2024 and FY2025 Plans

Performance share units (“PSU”) FY2023, FY2024 and FY2025 Plans

For the three and six month periods ended September 30, 2024, the Company recorded share-based payment compensation expense of C$7.2 million and C$7.8 million in administrative and selling expenses on the condensed interim consolidated statements of net (loss) income and contributed deficit on the condensed interim consolidated statements of financial position. For the three and six month periods ended September 30, 2023, the Company recorded share-based payment compensation expense of C$1.8 million in administrative and selling expenses on the condensed interim consolidated statements of net (loss) income and contributed deficit on the condensed interim consolidated statements of financial position.

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Adjusted EBITDA

The following table shows the reconciliation of Adjusted EBITDA to net (loss) income for the periods indicated: