Severstal Resources extends offer for shares of PBS Coals Limited (formerly, Penfold Capital Acquisition Corporation)

    MOSCOW and TORONTO, Oct. 10 /CNW/ - OAO Severstal (LSE: SVST; RTS: CHMF,
"Severstal"), one of the world's leading metals and mining companies,
announced that 7027940 Canada Limited (the "Offeror"), an affiliate of
Severstal, has extended the expiration date for its offer to purchase all
outstanding shares of PBS Coals Limited (formerly, Penfold Capital Acquisition
Corporation) (TSX: PBS), at an offer price of C$8.30 cash per share, to
11:59 p.m. (Toronto time) on October 20, 2008.
    The Offer has been extended to allow for the receipt of confirmation from
the Committee on Foreign Investment in the United States under the Exon-Florio
Amendment to the Defense Production Act of 1950, as amended, that no
second-stage investigation will be initiated in respect of the joint
application submitted by Severstal and PBS Coals Corporation.
    Shares representing approximately 94% of the outstanding shares of PBS
Coals Limited have been tendered and not withdrawn pursuant to the offer.
    The Offeror will file its Notice of Extension with Canadian regulatory
authorities and mail copies to all shareholders of PBS Coals Limited shortly.
    Severstal Resources has retained RBC Capital Markets as financial advisor
and Torys LLP  in New York and Toronto as legal counsel.

    About Severstal Resources:

    Severstal Resources is a leading feedstock supplier in Russia to the
iron-and-steel industry which manages the mining assets of Severstal.
Severstal Resources incorporates the Karelsky Okatysh and Olcon iron ore
complexes and Vorkutaugol, a coal mining complex. Stalmag, a niobium
production facility is also part of Severstal Resources. In 2007, these
operations produced 7.6 million tonnes of coking-coal, 1.8 million tonnes of
steam coal, 10 million tonnes of iron-ore pellets and 4.7 million tonnes of
iron-ore concentrate. In 2007, Severstal Resources established a gold business
segment, which totalled 5.3 tonnes of gold output over the past year.
    In May, 2008 Severstal Resources reached an agreement to purchase up to a
61.5% stake in African Iron Ore Group Ltd, which owns the exploration rights
for an iron ore deposit in the Putu Range area of Liberia, West Africa.

    About Severstal:

    OAO Severstal is an international steel producer with a listing on the
Russian Trading System and the London Stock Exchange. Incorporated in 1993,
the company focuses on high value added and unique niche products and has a
successful track record of acquiring and integrating high-quality assets in
North America and Europe. Severstal owns mining assets in Russia, thus
securing its supplies of raw materials. In 2007, Severstal produced
17.5 million tonnes of steel With revenues of US$15.2 billion, EBITDA of
US$3.7 billion and earnings per share of US$1.92.

    Forward Looking Statements:

    This communication may contain projections and other forward-looking
statements regarding future events or the future financial performance of OAO
Severstal (Severstal). Forward looking statements are identified by terms such
as "expect," "believe," "anticipate," "estimate," "intend," "will," "could,"
"may" or "might", the negative of such terms, or other similar expressions.
Severstal wishes to caution you that these statements are only predictions and
that actual events or results may differ materially. Severstal does not intend
to update these statements to reflect events and circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. Factors
that could cause the actual results to differ materially from those contained
in projections or forward-looking statements of Severstal may include, among
others, general economic conditions in the markets in which Severstal
operates, the competitive environment in, and risks associated with operating
in, such markets, market change in the steel and mining industries, as well as
many other risks affecting Severstal and its operations.

For further information:

For further information: For SeverStal, Dmitry Druzhinin, Investor
Relations, Olga Antonova, Public Relations, +7 495 540 7766; or Taylor
Rafferty for Severstal, Michael Henson, (212) 889-4350 (o), (917) 902-0767
(m); John Dudzinsky, (212) 889-4350 (o), (646) 715-2980 (m)

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