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$” mean U.S. dollars.

The following MD&A provides the perspective of management of the Company on the financial position and financial performance of the Company and its consolidated subsidiaries for the three and six month periods ended June 30, 2026 and June 30, 2025. This MD&A provides information to assist readers of, and should be read in conjunction with the Company’s June 30, 2026 condensed interim consolidated financial statements and the accompanying notes thereto and the December 31, 2025 audited consolidated financial statements and the accompanying notes thereto. The condensed interim consolidated financial statements have been prepared in accordance with International Financial Accounting Standards as issued by the International Accounting Standards Board (“IASB”) (“IFRS Accounting Standards”).

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-GAAP 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 twelve month period ended December 31, 2025 (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 Company’s other public disclosure documents available on SEDAR+ and EDGAR.

This MD&A is dated as of July 28, 2026. This document has been approved and authorized for issue by the Board of Directors on July 28, 2026. 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 U.S. dollar, which reflects the Company’s operational exposure to the U.S. dollar. The Company uses the Canadian dollar as its presentation currency. In accordance with IFRS Accounting Standards, 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 six month periods ended June 30, 2026 and June 30, 2025 are provided below:

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 imposed and threatened tariffs, including the impact, timing and resolution thereof, trends in the pricing of steel, the anticipated decline in the Company’s capacity utilization costs and capital expenditures, the Company’s expected annual raw and EAF-based liquid steel production capacity and reduction in carbon emissions, the Company’s future as a leading producer of green steel, the potential impacts of inflationary pressures, the Company’s ability to preserve and strengthen near-term liquidity and financial flexibility, labor availability, global supply chain disruptions on costs, the 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 potential borrowings under the Company’s credit facilities, and the Company’s strategy, plans or future financial or operating performance. 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 the Annual Information Form. Although it is not possible to identify all of these factors, they include, among others, the following:

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.

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 publicly traded securities are listed on the Toronto Stock Exchange (TSX) and the Nasdaq Stock Market (“Nasdaq”) under the trading symbols ‘ASTL’ and ‘ASTLW’. 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 a producer of hot and cold rolled steel products 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.

Transition to EAF Steelmaking

The President of the United States has issued various executive orders and related measures (collectively, the “Trade Actions”) imposing tariffs on products imported from Canada, including tariffs under Section 232 of the Trade Expansion Act of 1962 (the “S232 Tariffs”). Pursuant to these Trade Actions, a 25% ad valorem tariff was imposed on all steel and aluminum articles and certain derivative products, without exclusions. These tariffs became effective March 4, 2025, were briefly paused on March 6, 2025, and reinstated on March 12, 2025. On June 4, 2025, the tariffs were increased to 50% for all steel and aluminum imports into the United States. On August 15, 2025, the U.S. Department of Commerce expanded the scope of the tariffs to include an additional 407 categories of steel and aluminum derivative products.  In 2026, the United States continued to expand and enforce the scope of these measures, including through the addition and clarification of further downstream and derivative steel and aluminum products subject to the 50% tariff. As of July 2026, these tariffs remain in effect at the 50% level, with expanded product coverage, and continue to have a sustained and material adverse impact on Canadian steel producers’ access to the U.S. market and on North American steel trade flows.

As previously disclosed, the Company had planned to continue blast furnace production through 2027 during a staged transition to EAF steelmaking. However, beginning in early 2025 and intensifying in June 2025, the unprecedented Trade Actions and escalating trade tensions with the United States materially and adversely affected the North American steel market. The scope and magnitude of these Trade Actions was unprecedented and fundamentally disrupted the Company’s established U.S. sales channels. In addition, tariffs on derivative products reduced demand for Canadian-manufactured finished goods exported into the United States, which in turn materially impacted domestic Canadian steel demand. The combined effect was an irreparable contraction in addressable markets for the Company’s integrated blast furnace production. These external market conditions represented a fundamental change to the continued operation of the Company’s integrated blast furnace and coke oven facilities. As a result, the Company's blast furnace and coke-making operations became commercially and technically unviable, and production was permanently halted. The Company's ongoing transition to EAF steelmaking, which had been planned as a gradual, multi-year process through 2027, became the sole remaining production pathway.

On September 28, 2025, the Company’s Board of Directors (the “Board”) approved a plan to permanently exit coal-based integrated steelmaking operations and accelerate the transition to low-carbon steel production through its new electric arc furnace (“EAF”) facility. On January 18, 2026, production was permanently halted at blast furnace No. 7 and the associated coke batteries, ending 125 years of coal-based steelmaking operations at the Company. Following the transition, the Company is focusing its operations on EAF-based steel production, with an increased emphasis on discrete plate products and reduced coil production, while aligning its product mix with prevailing demand conditions in the Canadian steel market.

The Company is now solely relying on liquid steel production from the EAF process route. With EAF production now underway, the Company is advancing toward a more flexible, cost-effective, and environmentally responsible steelmaking model that supports long-term shareholder value.

Ramp-up activities for the EAF project are progressing in line with expectations. The Unit One furnace and associated melt shop assets are performing as designed, with quality metrics achieved across a range of plate and hot-rolled coil product grades. The Q-One power system and other key process components have demonstrated stable and reliable performance, supporting consistent metallurgical quality and process control. Operations are currently running on a full 24-hour-per-day schedule.

The Company’s Response to Tariffs

As discussed above, the President of the United States issued Trade Actions imposing tariffs on products imported from Canada, including tariffs under Section 232 of the Trade Expansion Act of 1962. As of July 2026, pursuant to these Trade Actions, a 50% tariff for all steel and aluminum imports to the United States remains in effect on steel the Company imports into the United States.

The ongoing impact of the Trade Actions, including tariffs on steel and derivative products, together with prolonged trade uncertainty, has continued to contribute to significant volatility in both the U.S. and Canadian markets. In addition to adversely impacting the Company’s access to the U.S. steel market, the tariffs on derivative products have also negatively affected Canadian manufacturing demand for steel used in converted products destined for the U.S. market. As a result, the Trade Actions have adversely affected steel demand in both the United States and Canada. Ongoing concerns regarding supply chain disruptions, market access and changing customer purchasing patterns have further contributed to market instability. In addition, uncertainty surrounding U.S. trade policy has contributed to volatility in foreign exchange markets, including the U.S. dollar exchange rate, which impacts the Company’s sales and cost structure through changes in raw material costs (principally scrap steel), pricing competitiveness, and cross-border trade dynamics.

In most cases, the Company has not been able to pass tariff costs through to customers. Unlike the predominantly contract-based U.S. steel market, the Canadian steel market is more heavily weighted toward spot market transactions. As a result, the Company has experienced a widening pricing imbalance between the U.S. and Canadian markets, with Canadian transactional pricing declining below comparable U.S. pricing levels. The Company believes this imbalance has been driven by increased supply into the Canadian market from domestic producers, the continued shipment of steel products into Canada by U.S. steel manufacturers, and increased import offers from offshore producers at prices believed to be below fair market value. During the three and six month periods ended June 30, 2026, the Company incurred direct tariff costs of C$18.7 million and C$46.1 million, respectively (June 30, 2025 – C$64.1 million and C$74.6 million, respectively). During the three and six month periods ended June 30, 2026, steel shipments to the United States represented 23% and 26%, respectively, of total steel shipments (June 30, 2025 – 54% and 53%, respectively).

As discussed above, the Company exited its coal-based integrated steelmaking operations in January 2026 and accelerated the transition to EAF steelmaking. In connection with this plan, on December 1, 2025, the Company issued layoff notices (the “Layoffs”) to 1,005 unionized employees, to take effect March 23, 2026. The Layoffs resulted in expected severance costs totaling C$45.8 million, which were recognized in the consolidated statements of net loss for the twelve month period ended December 31, 2025. To align production with prevailing market conditions, the Company intends to focus on the manufacturing and sale of discrete plate and to scale back coil production, with predominant emphasis on the Canadian market. As EAF production ramps up, the Company expects to align product offerings with domestic demand.

Historically, the Company secured key raw materials under annual and multi-year supply agreements to support its integrated steel operations and cross-border business. In response to the impacts of the Trade Actions as previously discussed, the Company issued notices asserting that certain raw material and other supply agreements had been frustrated. The Company has initiated and is responding to legal proceedings relating to certain supply agreements, including proceedings arising from the Company’s position that certain agreements have been frustrated as a result of the unprecedented Trade Actions described above. The Company’s position is that these external governmental actions fundamentally altered the essential purpose of those agreements, rendering continued performance radically different from that originally contemplated by the parties and fundamentally frustrating the common purpose of those agreements. Management continues to monitor these proceedings and will recognize provisions where a present obligation exists and a reliable estimate of loss can be made. While the Company believes these claims are without merit and intends to vigorously defend them, an adverse outcome in certain matters could have a material adverse effect on the Company’s consolidated financial condition or results of operations.

The Company is further exploring liquidity tools and funding programs that could support its current operations and enable strategic diversification of products, including LETL Facilities, as defined and described further below.

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 involving the release of an oil-based lubricant from its hot mill in Sault Ste. Marie, a portion of which entered the St. Mary's River. Provincial and federal regulators investigated the incident and laid charges under applicable Environmental Laws. During the six month period ended June 30, 2026, the Company entered into a settlement with the applicable federal and provincial authorities that resolved all charges arising from the incident. The settlement did not have, and is not expected to have, a material adverse effect on the Company's financial position, results of operations or cash flows.

The Company has implemented operational and procedural enhancements designed to reduce the risk of similar incidents and continues to monitor and improve its environmental management systems.

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.

Sustainability Report

As part of our commitment to continue to augment our transparency and accountability on environmental, social and governance (“ESG”), Algoma published its 2025 Sustainability Report (the “report”) on June 4, 2026. Algoma aims to be a climate change leader and contributor toward a sustainable and environmentally responsible future for Canadian steel production. The report is designed to align with market-leading, investor preferred sustainability disclosure frameworks, such as the Sustainability Accounting Standards Board and the recommendations of the Task Force on Climate-related Financial Disclosures. The report sets out the Company’s sustainability strategy, and its approach to mitigating sustainability risks and capturing sustainability opportunities, and provides an update on the Company’s sustainability performance.

Oversight of sustainability matters is embedded in the Company’s governance structure. The Board holds ultimate accountability for sustainability-related risks and opportunities, including those related to climate. The Nominating and Governance Committee supports the Board in overseeing these matters, in coordination with other Board committees, and regularly reports to the full Board. The full report can be reviewed on our corporate website at www.algoma.com. Unless and to the extent specifically referred to herein, neither the Company’s sustainability reports nor the information on its website shall be deemed to be incorporated by reference into this MD&A.

Structural Corridor Collapse

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. 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. 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.

The Company and its insurers have reached a full and final settlement of C$145.0 million, net of applicable deductibles, of which C$45.0 million was recognized in other income during the six month period ended June 30, 2026 in the condensed interim consolidated statements of net loss. During the six month period ended June 30, 2025, the Company recognized insurance proceeds of C$50.0 million, which were also presented in other income in the condensed interim consolidated statements of net loss.

LETL Facilities

On November 14, 2025, the Company entered into agreements with Canada Enterprise Emergency Funding Corporation (“CEEFC”) under the Large Enterprise Tariff Loan program and the Ministry of Northern Economic Development and Growth to secure a C$500 million governmental loan comprised of a C$400 million loan facility from the Government of Canada and a C$100 million loan facility from the Province of Ontario (collectively, the “LETL Facilities”).

Each facility consists of: 20% secured loan facility, ranking junior to the Company’s existing first lien Revolving Credit Facility and its 9.125% Senior Secured Second Lien Notes; and 80% unsecured loan facility. Amounts may be drawn monthly for up to 36 months following closing, subject to satisfaction of customary conditions precedent. Individual monthly advances are capped and may be suspended if: tariffs affecting the Company’s exports to the United States fall below certain thresholds for a sustained period; or the Company’s liquidity exceeds C$700 million (excluding availability on the LETL).

Maturity. The LETL Facilities mature seven years from the closing date, with no scheduled amortization prior to maturity.

Interest. Interest accrues at Term CORRA (3-month) + 200 basis points, increasing by 200 basis points on each anniversary after year three. The Company may elect to capitalize interest (PIK) during the first two years, subject to certain conditions.

Ranking and Security. The secured portion of the LETL Facilities ranks third-lien, junior to the Company’s existing asset-based lending facility and Senior Secured Second Lien Notes, and pari passu with certain other government facilities. The unsecured portion ranks pari passu with other unsecured indebtedness of the Company.

Use of Proceeds. Loan proceeds may be used for operating expenses; ordinary course obligations; and capital expenditures consistent with the Company’s business plan. Proceeds may not be used to repay existing indebtedness, fund acquisitions or make investments outside the ordinary course of business, subject to certain exceptions.

Warrants. In connection with the unsecured portion of the LETL Facilities, the Company issued warrants to purchase common shares of Algoma Steel Group Inc. The principal terms include: exercise price of C$11.08 per share; 10-year term; and vesting proportionately as advances are drawn under the unsecured facility. The warrants also include customary anti-dilution protections, registration rights, and a repurchase right allowing the Company to repurchase the warrants following repayment of the LETL Facilities at fair market value or the in-the-money amount.

Covenants and Restrictions. While the LETL Facilities remain outstanding, the Company is subject to customary covenants, including restrictions relating to: payment of dividends and share repurchases; incurrence of additional indebtedness; transactions with non-arm’s length parties; mergers, acquisitions and asset sales; and transfers of Canadian operations outside Canada. The Company must also maintain compliance with certain financial covenants under its existing credit facilities.

Executive Compensation Restrictions. For a specified period, the Company is subject to limitations on executive compensation for named executive officers.

The LETL Facilities contain customary representations, warranties, reporting obligations, and events of default, including cross-default provisions, insolvency events and change-of-control triggers.

Copies of the foregoing documents are available under the Company’s profiles on SEDAR+ at www.sedarplus.ca and on the SEC’s EDGAR website at www.sec.gov.

Strategic Arrangement

On January 26, 2026, the Company announced that its wholly owned subsidiary, Algoma Steel Inc., entered into a binding Memorandum of Understanding (MOU) with Hanwha Ocean Co. Ltd. to establish a long-term strategic arrangement with an aggregate potential value of U.S. $250.0 million comprised of (i) a cash contribution of U.S. $200.0 million towards the potential development of a structural steel beam mill and (ii) anticipated purchases of the Company’s products with an aggregate value of up to U.S. $50.0 million for use in connection with its Canadian Patrol Submarine Project (“CPSP”)-related commitments. The MOU was subject to Hanwha Ocean Co. Ltd. being awarded and entering into an effective contract under the CPSP and the negotiation and execution of definitive agreements with the Company. On July 6, 2026, the Government of Canada announced that Thyssenkrupp Marine Systems was selected under the CPSP procurement process. As a result, the Company's MOU with Hanwha Ocean Co. Ltd. relating to the CPSP has been suspended. The MOU will remain suspended unless and until Hanwha Ocean is selected by the Government of Canada as the contractor for the CPSP.

On April 7, 2026, the Company announced the formation of Roshel Algoma Defence, a joint venture with Roshel Inc., a Canadian-owned defence manufacturer of armoured vehicles. The joint venture is expected to support the development of domestic ballistic steel and related manufacturing capabilities in Canada.

Factors Affecting Financial Performance

The Company’s financial performance is significantly influenced by the cost and availability of key inputs and by global and regional market dynamics affecting steel prices and demand. Historically, the Company’s costs were primarily driven by commodity prices, including those for iron ore, coal, coke, scrap, electricity, and natural gas. Under EAF steelmaking, the Company’s most significant costs driven by commodity prices primarily include scrap, electricity, and natural gas. Inflationary pressures or volatility in these input costs can materially affect profitability. These pressures may arise from global supply and demand imbalances, geopolitical tensions, trade policies, currency exchange fluctuations, natural disasters, or other macroeconomic factors beyond the Company’s control. Sustained increases in raw material or energy prices can erode profit margins and impair the Company’s ability to maintain competitive pricing. In addition, volatility in input markets can complicate supply chain management, increase working capital requirements, and affect the timely and cost-effective procurement of essential materials.

As the Company transitioned to EAF steelmaking in early 2026, the procurement of sufficient quantities of high-quality scrap steel has become a critical factor in operational efficiency and cost competitiveness. Access to scrap depends on collection volumes, regional recycling rates, industrial activity, and competition among regional EAF producers. The Company’s geographic location provides proximity to major scrap markets and waterborne transportation routes; however, economic access to scrap sources and freight logistics across the Great Lakes system are key to maintaining reliable supply and cost-effective delivery. Market dislocations, export restrictions, or transportation constraints could adversely affect the Company’s ability to secure scrap at competitive prices.

North American steel pricing is determined largely by global supply-demand conditions, international trade policies, import volumes, and regional economic performance. Competitive pressures are influenced by global steelmaking overcapacity, fluctuations in raw material costs, and domestic and foreign trade policies of various trading countries. North American producers compete with producers in Europe, China, and other Asian countries—regions where export decisions are sometimes guided more by domestic economic or political policies than by prevailing market forces. Trade policies between Canada and the United States, as well as import measures affecting the broader North American market, have a material impact on domestic demand, selling prices, and overall industry margins.

Ongoing uncertainty surrounding trade relations between the United States and Canada—including the potential for continuing tariffs, quotas, or other restrictions on cross-border steel and raw material trade—has a direct impact on market stability, pricing dynamics, and investment confidence in both countries. Changes in U.S. trade policy can alter the flow of steel and scrap materials across the border, affecting regional supply-demand balances and price differentials between the U.S. Midwest and Central Canadian markets. The Company’s exposure to these dynamics can influence input costs, realized selling prices, and overall competitiveness within the North American steel market.

According to the World Steel Association, crude steel production across the 70 reporting countries reached approximately 157.9 million tonnes in May 2026, representing a 0.3% decrease over May 2025, with China accounting for roughly 54% of global output (World Steel Association, “May 2026 crude steel production and 2026 global crude steel production total,” June 23, 2026). The Organization for Economic Cooperation and Development (OECD) continues to report challenging global conditions characterized by persistent excess capacity. As of the latest estimates, global steelmaking capacity stands at approximately 2,445 million metric tonnes, projected to exceed demand by more than 721 million tonnes by 2027 - equivalent to roughly 48 times the size of the Canadian steel industry. Current investment data indicate that 165 million tonnes of new gross capacity are under construction worldwide and expected to come online between 2025 and 2027, further contributing to competitive intensity and potential pricing pressure.

Overall Results

Net Loss

The Company’s net loss for the three month period ended June 30, 2026 was C$96.0 million compared to net loss of C$110.6 million for the three month period ended June 30, 2025, resulting in a C$14.6 million decrease in net loss. The decrease is primarily due to an increase in insurance proceeds (C$45.0 million), foreign exchange gain (C$50.3 million), and a change in fair value of Initial Public Offering (“IPO”) and LETL Warrant (as defined herein) liabilities (C$2.5 million). This was offset, in part, by an increase in loss from operations (C$49.1 million) for reasons described below in Loss from Operations and a decrease in income tax recovery (C$38.9 million).

The Company’s net loss for the six month period ended June 30, 2026 was C$255.4 million compared to net loss of C$135.1 million for the six month period ended June 30, 2025, resulting in a C$120.3 million increase in net loss. The increase is primarily due to a decrease in income tax recovery (C$65.3 million), an increase in loss from operations (C$62.7 million) for reasons described below in Loss from Operations, a change in fair value of Initial Public Offering (“IPO”) and LETL Warrant (as defined herein) liabilities (C$42.3 million), a change in fair value of share-based compensation liability (C$10.3 million), and a decrease in finance income (C$4.2 million). This was offset, in part, by an increase in foreign exchange gain (C$65.5 million).

Loss from Operations

The Company’s loss from operations for the three month period ended June 30, 2026 was C$134.2 million compared to C$85.1 million for the three month period ended June 30, 2025, resulting in a C$49.1 million increase in loss from operations. The increase is primarily driven by lower steel shipments, resulting from weakening market conditions, particularly due to the S232 Tariffs which impacted the Company’s export sales. This was offset, in part, by increased plate shipment volume both in aggregate and as a percentage of sales, a decrease in labour and other fixed costs, and a decrease in administrative and selling expenses (C$2.1 million), as described below.

The Company’s loss from operations for the six month period ended June 30, 2026 was C$287.7 million compared to C$225.0 million for the six month period ended June 30, 2025, resulting in a C$62.7 million increase in loss from operations. The increase is primarily driven by lower steel shipments, resulting from weakening market conditions, particularly due to the S232 Tariffs which impacted the Company’s export sales. This was offset, in part, by increased plate shipment volume both in aggregate and as a percentage of sales, a decrease in labour and other fixed costs, and a decrease in administrative and selling expenses (C$6.1 million), as described below.

Non-GAAP Financial Measures

In this MD&A, we use certain non-GAAP measures to evaluate the performance of the Company. These terms do not have any standardized meaning prescribed under IFRS Accounting Standards 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 Accounting Standards 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 Accounting Standards. As described below, the terms “EBITDA,” “Adjusted EBITDA,” “Adjusted EBITDA margin,” “Adjusted EBITDA per ton,” “Average Net Sales Realization” (“NSR”), “Cost of Steel Products Sold” 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 Accounting Standards. 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 IPO and LETL Warrants, earnout rights, share-based compensation liabilities, share-based compensation related to the Company’s Omnibus Long Term Incentive Plan, derivatives, certain inventory adjustments, impairment loss, legal settlements and legacy contracts, severance costs, stranded inventory and capacity utilization, as described below. Legal settlements and legacy contracts includes costs associated with the resolution of claims, settlements, legacy contractual matters and related legal costs. 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 Accounting Standards, and should not be considered as alternatives to income from operations or any other measure of performance prescribed by IFRS Accounting Standards. 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 Accounting Standards 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 management and investors with additional information for comparison of our operating results across different time periods. 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 each of EBITDA and Adjusted EBITDA to its most comparable IFRS Accounting Standards financial measure, 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, capacity utilization, as described below, legal settlements and legacy contracts and carbon tax (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 Accounting Standards 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 Accounting Standards. 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 Accounting Standards results using such measures only as a supplement.

Steel Revenue and Cost of Sales

(i) Cost of steel revenue includes the cost of steel tariffs. See "Tariffs" for further discussion.

(ii) See "Non-GAAP Measures" for information regarding the limitations of using average net sales realization on steel sales, cost of steel products sold and cost per ton of steel products sold.

(iii) Represents steel revenue, being revenue less (a) freight included in revenue and (b) non-steel revenue divided by the number of tons of steel shipments during the applicable period.

Revenue and steel revenue decreased by 54.6% and 53.8%, respectively, due to lower steel shipments during the three month period ended June 30, 2026 as compared to the three month period ended June 30, 2025. The Company’s revenue per ton of steel sold and average NSR on steel sales per ton shipped was C$1,474 and C$1,361, respectively, for the three month period ended June 30, 2026 (June 30, 2025 – C$1,249 and C$1,132, respectively), an increase of 18.0% and 20.2%, respectively, primarily due to increased plate shipment volume both in aggregate and as a percentage of sales. Steel shipment volumes decreased by 61.6% during the three month period ended June 30, 2026 as compared to the three month period ended June 30, 2025 due to weakening market conditions, particularly due to the S232 Tariffs which impacted the Company’s export sales and resulted in over-supply of the Canadian market at reduced transactional pricing.

Revenue and steel revenue decreased by 49.0% and 48.5%, respectively, due to lower steel shipments during the six month period ended June 30, 2026 as compared to the six month period ended June 30, 2025. The Company’s revenue per ton of steel sold and average NSR on steel sales per ton shipped was C$1,393 and C$1,268, respectively, for the six month period ended June 30, 2026 (June 30, 2025 – C$1,175 and C$1,059, respectively), an increase of 18.6% and 19.7%, respectively, primarily due to increased plate shipment volume both in aggregate and as a percentage of sales. Steel shipment volumes decreased by 57.0% during the six month period ended June 30, 2026 as compared to the six month period ended June 30, 2025 due to weakening market conditions, particularly due to the S232 Tariffs which impacted the Company’s export sales and resulted in over-supply of the Canadian market at reduced transactional pricing.

For the three month period ended June 30, 2026, the Company’s cost of steel revenue decreased by 40.1% to C$352.3 million (June 30, 2025 – C$588.5 million), and the cost of steel products sold decreased by 52.6% to C$256.1 million (June 30, 2025 – C$540.1 million). The decrease in cost of steel revenue is primarily due to lower steel shipments, particularly due to the S232 Tariffs, and a decrease in labour and other fixed costs. This was offset, in part, by legal settlements and legacy contracts (C$11.2 million), resulting from the accelerated transition to EAF steelmaking. The decrease in cost of steel products sold, which excludes depreciation, capacity utilization, as described below, legal settlements and legacy contracts and carbon tax, was driven mainly by lower steel shipments, and a decrease in labour and other fixed costs. Cost per ton of steel products sold was C$1,411 for the three month period ended June 30, 2026 (June 30, 2025 – C$1,144), which was primarily due to worse fixed cost absorption due to lower steel production volumes.

For the six month period ended June 30, 2026, the Company’s cost of steel revenue decreased by 35.7% to C$745.8 million (June 30, 2025 – C$1,160.7 million), and the cost of steel products sold decreased by 51.6% to C$520.1 million (June 30, 2025 – C$1,074.0 million). The decrease in cost of steel revenue is primarily due to lower steel shipments, particularly due to the S232 Tariffs, and a decrease in labour and other fixed costs. This was offset, in part, by legal settlements and legacy contracts (C$11.2 million), resulting from the accelerated transition to EAF steelmaking. The decrease in cost of steel products sold, which excludes depreciation, capacity utilization, as described below, legal settlements and legacy contracts and carbon tax, was driven mainly by lower steel shipments, and a decrease in labour and other fixed costs. Cost per ton of steel products sold was C$1,284 for the six month period ended June 30, 2026 (June 30, 2025 – C$1,140), which was primarily due to worse fixed cost absorption due to lower steel production volumes.

Capacity utilization represents the excess fixed costs carried by the Company during the three and six month periods ended June 30, 2026 beyond what was required to operate the EAF and the downstream operations supplied by the EAF at the volumes produced. These costs are primarily labour, equipment leases and rentals, fixed utilities, and maintenance costs associated with legacy assets and the Company’s previous operating configuration. These costs are expected to decline over the course of the next three months and be fully eliminated by the fourth quarter of 2026.

As discussed above in The Company’s Response to Tariffs, the Company was subject to 25% tariffs on outbound steel shipments to the United States, effective March 4, 2025, paused on March 6, 2025, and then reinstated March 12, 2025. Starting June 4, 2025, the tariffs on outbound steel shipments to the United States were increased to 50%. For the three and six month periods ended June 30, 2026, direct tariff costs of C$18.7 million and C$46.1 million, respectively, were included in Cost of Sales (June 30, 2025 – C$64.1 million and C$74.6 million, respectively).

The Company’s costs associated with tariffs on inbound purchases from the United States were negligible for the three and six month periods ended June 30, 2026 and June 30, 2025.

Non-steel Revenue

The Company’s non-steel revenue for the three month period ended June 30, 2026 was C$0.5 million (June 30, 2025 – C$10.6 million). The decrease of C$10.1 million was primarily due to decreased revenue on braize, tar, slag and light oil due to the transition to EAF steelmaking.

The Company’s non-steel revenue for the six month period ended June 30, 2026 was C$3.9 million (June 30, 2025 – C$13.4 million). The decrease of C$9.5 million was primarily due to decreased revenue on braize, tar, and light oil due to the transition to EAF steelmaking. This was offset, in part, by increased revenue on ore fines.

Administrative and Selling Expenses

As illustrated in the table above, the Company’s administrative and selling expenses for the three month period ended June 30, 2026 were C$28.9 million (June 30, 2025 – C$31.0 million). The decrease in administrative and selling expenses of C$2.1 million is primarily due to a decrease in personnel expenses (C$4.2 million) and insurance (C$0.6 million). This was offset, in part, by an increase in allowance for doubtful accounts (C$0.9 million), share-based compensation expense (C$0.7 million), software licenses (C$0.6 million), professional, consulting, legal and other fees (C$0.3 million), and other administrative and selling (C$0.2 million).

The Company’s administrative and selling expenses for the six month period ended June 30, 2026 were C$55.8 million (June 30, 2025 – C$61.9 million). The decrease in administrative and selling expenses of C$6.1 million is primarily due to a decrease in personnel expenses (C$4.5 million), insurance (C$0.7 million), allowance for doubtful accounts (C$0.7 million), other administrative and selling (C$0.3 million), and share-based compensation expense (C$0.2 million). This was offset, in part, by an increase in software licenses (C$0.4 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 Second Lien Notes (the “2029 Notes”), LETL Facilities, 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 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 June 30, 2026 were C$21.4 million (June 30, 2025 – C$18.5 million). The increase of C$2.9 million in finance costs is driven by interest on the LETL Facilities (C$2.8 million), accretion of governmental loan benefits (C$2.7 million), interest on the revolving credit facility (C$0.6 million), revolving credit facility fees (C$0.3 million), and interest on financing arrangement (C$0.3 million). This was offset, in part, by revaluation of discount rate for environmental liabilities (C$2.2 million) and other interest expense (C$1.5 million), which is primarily due to the interest benefit on the LETL Facilities.

The Company’s finance costs for the six month period ended June 30, 2026 were C$32.9 million (June 30, 2025 – C$36.3 million). The decrease of C$3.4 million in finance costs is driven by governmental loan amendment fair value benefit (C$7.0 million), other interest expense (C$4.6 million), which is primarily due to the amendment of the governmental loan with the Ministry of Energy, Northern Development and Mines of the Province of Ontario and the interest benefit on the LETL Facilities, revaluation of discount rate for environmental liabilities (C$2.2 million), and interest on Senior Secured Second Lien Notes (C$0.6 million). This was offset, in part, by an increase in interest on the LETL Facilities (C$4.2 million), accretion of governmental loan benefits (C$3.5 million), interest on the Revolving Credit Facility (C$2.6 million), and interest on financing arrangement (C$0.6 million).

The Company’s finance income for the three month period ended June 30, 2026 was C$0.5 million (June 30, 2025 – C$2.5 million). The decrease of C$2.0 million in finance income is primarily due to a decrease in interest income as a result of a lower cash balance.

The Company’s finance income for the six month period ended June 30, 2026 was C$1.1 million (June 30, 2025 – C$5.3 million). The decrease of C$4.2 million in finance income is primarily due to a decrease in interest income as a result of a lower cash balance.

The Company’s interest on pension and other post-employment benefit obligations for the three and six month periods ended June 30, 2026 was C$3.5 million and C$7.1 million, respectively (June 30, 2025 – C$3.9 million and C$7.9 million, respectively). The decrease is primarily due to a smaller net liability at December 31, 2025 being only partially offset by an increase in discount rates as at December 31, 2025 that were used to determine the expense for the period of January 1, 2026 to December 31, 2026.

The Company’s foreign exchange gain for the three month period ended June 30, 2026 was C$18.8 million (June 30, 2025 – loss of C$31.5 million). The foreign exchange gain for the six month period ended June 30, 2026 was C$33.1 million (June 30, 2025 – loss of C$32.4 million). These foreign exchange movements reflect the effect of U.S. 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 June 30, 2026 was C$47.8 million and C$47.9 million, respectively (June 30, 2025 – nil and C$50.0 million, respectively) and represents primarily insurance proceeds.

Pension and Post-Employment Benefits

As illustrated in the table above, the Company’s pension expense for the three month periods ended June 30, 2026 and June 30, 2025 was C$4.0 million and C$5.7 million, respectively, representing a decrease of C$1.7 million. The Company’s post-employment benefit expense for the three month periods ended June 30, 2026 and June 30, 2025 was C$2.5 million and C$3.0 million, respectively, representing a decrease of C$0.5 million. The decrease in pension expense and decrease in post-employment expense is due to an increase in discount rates used to determine the expense beginning January 1, 2026, coupled with the reduction in pension current service cost as a result of the Layoffs. The expense decrease is also a result of reflecting experience gains from the statutory pension actuarial funding valuation and the non-pension actuarial valuation.

The Company’s pension expense for the six month periods ended June 30, 2026 and June 30, 2025 was C$8.1 million and C$11.4 million, respectively, representing a decrease of C$3.3 million. The Company’s post-employment benefit expense for the six month periods ended June 30, 2026 and June 30, 2025 was C$5.1 million and C$6.0 million, respectively, representing a decrease of C$0.9 million. The decrease in pension expense and decrease in post-employment expense is due to an increase in discount rates used to determine the expense beginning January 1, 2026, coupled with the reduction in pension current service cost as a result of the Layoffs. The expense decrease is also a result of reflecting experience gains from the statutory pension actuarial funding valuation and the non-pension actuarial valuation.

As disclosed in Note 4 to the December 31, 2025 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 June 30, 2026, the Company recorded an actuarially determined gain to the accrued defined pension liability and accrued other post-employment benefit obligation in other comprehensive loss of C$36.4 million (June 30, 2025 – loss of C$1.7 million), a difference of C$38.1 million. The gain for the three month period ended June 30, 2026 was due to positive asset returns, offset, in part, by a decrease in discount rates. The loss for the three month period ended June 30, 2025 was primarily due to negative asset returns, offset, in part, by an increase in discount rates.

For the six month period ended June 30, 2026, the Company recorded an actuarially determined gain to the accrued defined pension liability and accrued other post-employment benefit obligation in other comprehensive loss of C$41.7 million (June 30, 2025 – C$2.2 million), a difference of C$39.5 million. The gain for the six month period ended June 30, 2026 was due to positive asset returns, offset, in part, by a decrease in discount rates. The gain for the six month period ended June 30, 2025 was primarily due to an increase in discount rates.

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 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 June 30, 2026, total Carbon Tax recognized in cost of sales was C$7.5 million (June 30, 2025 – C$10.4 million). The change is primarily due to a decrease in carbon dioxide equivalent emissions. This was offset, in part, by an increase in carbon tax per ton.

For the six month period ended June 30, 2026, total Carbon Tax recognized in cost of sales was C$13.5 million (June 30, 2025 – C$13.9 million). The change is primarily due to a decrease in carbon dioxide equivalent emissions. This was offset, in part, by a true-up of the estimated cost pertaining to the twelve month period ended December 31, 2025 and an increase in carbon tax per ton.

Income Taxes

For the three month period ended June 30, 2026, the Company’s deferred income tax recovery and current income tax expense were nil and C$2.0 million, compared to deferred income tax expense and current income tax recovery of C$0.5 million and C$37.4 million, respectively, for the three month period ended June 30, 2025. The decrease in deferred income tax expense is a result of the Company not recognizing a deferred tax asset on the basis that it is not probable that it will be recovered. The decrease in current income tax recovery is a result of the lack of available taxable income in the preceding three years to carry the current year loss back to recover taxes paid.

For the six month period ended June 30, 2026, the Company’s deferred income tax recovery and current income tax expense were nil and C$2.0 million, compared to deferred income tax recovery and current income tax recovery of C$1.5 million and C$61.8 million, respectively, for the six month period ended June 30, 2025. The decrease in deferred income tax expense is a result of the Company not recognizing a deferred tax asset on the basis that it is not probable that it will be recovered. The decrease in current income tax recovery is a result of the lack of available taxable income in the preceding three years to carry the current year loss back to recover taxes paid.

As at June 30, 2026, income taxes receivable of C$209.2 million (December 31, 2025 – C$201.8 million) are presented in the condensed interim consolidated statements of financial position. This balance represents taxes to be recovered as a result of carrying the loss back from calendar year 2025 to reduce taxable income in calendar year 2022 to recover taxes paid.

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 June 30, 2026, there were 105,661,468 common shares issued and outstanding, and no preferred shares issued and outstanding.

IPO Warrants

As at June 30, 2026, 24,178,999 IPO Warrants remain outstanding with an estimated fair value of $0.03 per IPO Warrant based on the market price of the IPO Warrants, for which the Company recognized a liability of C$0.9 million ($0.6 million) (December 31, 2025 – C$2.5 million; $1.8 million) in IPO Warrant liability on the condensed interim consolidated statements of financial position. For the three and six month periods ended June 30, 2026, a gain of C$2.4 million and C$1.6 million, respectively, on change in the fair value of the IPO Warrant liability is presented in the condensed interim consolidated statements of net loss. For the three and six month periods ended June 30, 2025, a loss of C$4.6 million and a gain of C$34.5 million, respectively, on change in fair value of the IPO Warrant liability is presented in the condensed interim consolidated statements of net loss. The IPO Warrants will expire on October 19, 2026.

The IPO Warrants, with a strike price of $11.50, are currently out of the money. Should Algoma’s share price increase, these IPO 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 IPO Warrants at a nominal price of $0.01 per IPO Warrant. For more information please see Algoma’s IPO Warrant agreement which is available on SEDAR+ and on EDGAR.

LETL Warrants

In connection with the LETL Facilities, the Company issued warrants to purchase Common Shares to CEEFC and the Province of Ontario (collectively, the “LETL Warrants”).

The Company issued 5,415,162 warrants to CEEFC and 1,353,791 warrants to the Province of Ontario. Each LETL Warrant entitles the holder to purchase one Common Share at an exercise price of C$11.08 per share, subject to adjustments as discussed below. The LETL Warrants are governed by warrant agreements dated November 14, 2025 between the Company and CEEFC and between the Company and the Province of Ontario (collectively, the “Government Warrant Agreements”).

The LETL Warrants may be exercised at any time following vesting and prior to November 14, 2035, after which time any unexercised vested warrants will expire and be of no further force or effect. The number of LETL Warrants that are vested at any time is determined based on the aggregate principal amount of advances made under the applicable unsecured loan agreement relative to the total unsecured commitment under the LETL Facilities. Any LETL Warrants that have not vested as of the day following the end of the applicable availability period under the relevant LETL Facilities will expire and terminate. During the first year following the closing of the LETL Facilities, holders may only exercise up to one-half of their vested LETL Warrants at any time.

Provided that the Company repays in full all obligations under the LETL Facilities on or prior to November 14, 2032, the Company will have a one-time right, exercisable within 15 days of such repayment, to repurchase all LETL Warrants then held by the applicable holder.

The exercise price and the number of Common Shares issuable upon exercise of the LETL Warrants are subject to adjustment in certain circumstances, including in the event of stock dividends, extraordinary dividends, share subdivisions or consolidations, rights offerings, special distributions, or certain recapitalizations, reorganizations, mergers or consolidations involving the Company.

The LETL Warrants are not transferable prior to the expiry of the Company’s repurchase right, except to affiliates of the applicable holder. Following the expiry of such repurchase right, the holders may transfer the LETL Warrants to any person other than a competitor of the Company, subject to compliance with applicable securities laws.

Earnout

As at June 30, 2026, 598,139 earnout rights remain outstanding with an estimated fair value of $4.05 per unit based on the market price of the Company’s common shares, for which an earnout liability of C$3.4 million ($2.4 million) (December 31, 2025 – C$3.7 million; $2.7 million) was recognized in the condensed interim consolidated statements of financial position. During the six month period ended June 30, 2026, 57,314 earnout rights were settled for common shares. During the year ended December 31, 2025, earnout rights were settled for 75,000 common shares. Change in the fair value of the earnout liability for the three and six month periods ended June 30, 2026 of nil is presented in the condensed interim consolidated statements of net loss. Loss on change in the fair value of the earnout liability for the three month period ended June 30, 2025 of C$1.3 million and gain of C$3.1 million for the six month period ended June 30, 2025, is presented in the condensed interim consolidated statements of net loss Continuity of earnout rights are as follows:

Replacement Long Term Incentive Plan (“LTIP”)

As at June 30, 2026, 2,335,924 Replacement LTIP Awards remain outstanding with an estimated fair value of $4.05 per unit based on the market price of the Company’s common shares, for which the Company recognized a liability of C$13.4 million ($9.5 million) (December 31, 2025 – C$14.1 million; $10.3 million) in share-based payment compensation liability in the condensed interim consolidated statements of financial position. During the six month period ended June 30, 2026, 179,342 units were settled for common shares. Gain on change in the fair value of the share-based payment compensation liability for the three and six month periods ended June 30, 2026 of C$0.1 million and nil is presented in the condensed interim consolidated statements of net loss. Loss on change in the fair value of the share-based payment compensation liability for the three month period ended June 30, 2025 of C$5.1 million and gain of C$10.3 million for the six month period ended June 30, 2025, is presented in the condensed interim consolidated statements of net loss.

Continuity of Replacement LTIP units are as follows:

Omnibus Long Term Incentive Plan (“LTIP”)

Deferred share units (“DSUs”)

For the three and six month periods ended June 30, 2026, the Company recorded a share-based payment compensation expense of C$0.7 million and C$1.4 million, respectively, in administrative and selling expense on the condensed interim consolidated statements of net loss and contributed surplus (deficit) on the condensed interim consolidated statements of financial position. During the six month period ended June 30, 2026, 100,835 DSUs were settled for common shares. For the three and six month periods ended June 30, 2025, the Company recorded a share-based payment compensation expense of C$0.4 million and C$0.7 million, respectively, in administrative and selling expense on the condensed interim consolidated statements of net loss and contributed surplus (deficit) on the condensed interim consolidated statements of financial position.

Restricted share units (“RSU”) FY2024, FY2025, CY2025 and CY2026 Plans

Performance share units (“PSU”) FY2024, FY2025, CY2025 and CY2026 Plans

For the three and six month periods ended June 30, 2026, the Company recorded share-based payment compensation expense of C$3.6 million and C$5.6 million, respectively, in administrative and selling expenses on the condensed interim consolidated statements of net loss and contributed surplus (deficit) on the condensed interim consolidated statements of financial position. For the three and six month periods ended June 30, 2025, the Company recorded share-based payment compensation expense of C$3.1 million and C$6.4 million, respectively, in administrative and selling expenses on the condensed interim consolidated statements of net loss and contributed surplus (deficit) on the condensed interim consolidated statements of financial position.

EBITDA and Adjusted EBITDA

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

(i) Financial instruments at fair value are comprised of IPO and LETL Warrant liabilities, earnout liability, share-based payment compensation liability and derivatives.

(ii) See "Non-GAAP Measures" for information regarding the limitations of using EBITDA and Adjusted EBITDA.

(iii) Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of revenue.

EBITDA for the three month period ended June 30, 2026 increased by C$41.8 million primarily due to insurance proceeds (C$45.0 million), increased plate shipment volume both in aggregate and as a percentage of sales, a decrease in labour and other fixed costs, foreign exchange gain (C$50.3 million), and change in fair value of financial instruments (C$9.0 million). This was offset, in part, by low production volumes and legal settlements and legacy contracts (C$11.2 million), resulting from the accelerated transition to EAF steelmaking.

EBITDA for the six month period ended June 30, 2026 decreased by C$81.5 million primarily due to low production volumes, legal settlements and legacy contracts (C$11.2 million), resulting from the accelerated transition to EAF steelmaking, and a change in fair value of financial instruments (C$55.7 million). This was offset, in part, by increased plate shipment volume both in aggregate and as a percentage of sales, a decrease in labour and other fixed costs, and foreign exchange gain (C$65.5 million).

Adjusted EBITDA for the three month period ended June 30, 2026 increased by C$46.2 million and Adjusted EBITDA per ton increased by C$144.6 per ton compared to the three month period ended June 30, 2025 primarily due to insurance proceeds (C$45.0 million), increased plate shipment volume both in aggregate and as a percentage of sales, and a decrease in labour and other fixed costs. This was offset, in part, by lower steel shipments.

Adjusted EBITDA for the six month period ended June 30, 2026 increased by C$64.0 million and Adjusted EBITDA per ton increased by C$46.9 per ton compared to the six month period ended June 30, 2025 primarily due to increased plate shipment volume both in aggregate and as a percentage of sales and a decrease in labour and other fixed costs. This was offset, in part, by lower steel shipments.

Financial Resources and Liquidity

Summary of Cash Flows

Cash Flow Generated by Operating Activities

For the three month period ended June 30, 2026, cash used in operating activities was C$79.4 million (June 30, 2025 – C$37.9 million). The increase in cash used in operating activities for the three month period ended June 30, 2026 was due primarily to the net effect from changes in non-cash working capital and for the same reasons mentioned above in Loss from Operations.

For the six month period ended June 30, 2026, cash used in operating activities was C$91.6 million (June 30, 2025 – generation of C$54.2 million). The increase in cash used in operating activities for the six month period ended June 30, 2026 was due primarily to the net effect from changes in non-cash working capital and for the same reasons mentioned above in Loss from Operations.

Further impacting cash generated by operating activities is the net effect from changes in non-cash working capital as presented below:

Cash Flow Used In Investing Activities

For the three month period ended June 30, 2026, cash used in investing activities was C$29.0 million (June 30, 2025 – C$82.4 million), due to acquiring property, plant and equipment for C$29.0 million (June 30, 2025 – C$97.4 million), offset, in part, by insurance proceeds received for property damage of nil (June 30, 2025 – C$15.0 million).

For the six month period ended June 30, 2026, cash used in investing activities was C$49.4 million (June 30, 2025 – C$209.4 million), due to acquiring property, plant and equipment for C$49.4 million (June 30, 2025 – C$224.4 million), offset, in part, by insurance proceeds received for property damage of nil (June 30, 2025 – C$15.0 million).

Cash Flow Used In Financing Activities

For the three month period ended June 30, 2026, generation of cash in financing activities was C$104.7 million (June 30, 2025 – cash used C$12.7 million). The increase in generation of cash in financing activities of C$117.4 million is primarily due to a receipt of government loans (C$111.3 million), a reduction in dividends paid (C$14.8 million), and a decrease of repayment of government loans (C$6.2 million). This was offset, in part, by a decrease in net bank indebtedness advanced (C$11.7 million) and an increase in interest paid (C$2.8 million).

For the six month period ended June 30, 2026, generation of cash in financing activities was C$124.0 million (June 30, 2025 – cash used C$18.0 million). The increase in generation of cash in financing activities of C$142.0 million is primarily due to a receipt of government loans (C$238.8 million), a reduction in dividends paid (C$14.8 million), and a decrease of repayment of government loans (C$12.4 million). This was offset, in part, by a decrease in net bank indebtedness repaid (C$115.4 million) and an increase in interest paid (C$5.4 million).

Capital Resources - Financial Position and Liquidity

The Company historically has made approximately C$120 million of capital expenditures annually in order to sustain existing production facilities which is anticipated to decrease as the Company fully transitions to EAF steel making. Furthermore, the Company has made significant capital investment relating to its modernization and expansion program including substantial investment in EAF steelmaking.

As at June 30, 2026, the Company had cash of C$62.6 million (December 31, 2025 – C$77.5 million), had unused availability under its Revolving Credit Facility of C$206.7 million ($145.5 million) after taking into account C$68.7 million ($48.4 million) of outstanding letters of credit, and had unused availability under the LETL Facilities of C$168.0 million (December 31, 2025 – C$417.0 million). At December 31, 2025, the Company had drawn C$170.2 million ($124.2 million) under its Revolving Credit Facility, and there was C$194.5 million ($141.9 million) of unused availability after taking into account C$66.1 million ($48.2 million) of outstanding letters of credit.

The Revolving Credit Facility is governed by a conventional borrowing base calculation comprised of eligible accounts receivable plus eligible inventory plus cash. At June 30, 2026, there was C$73.4 million ($51.6 million) drawn on this facility. The Company is required to maintain a calculated borrowing base. Any shortfall in the borrowing base will trigger a mandatory loan repayment in the amount of the shortfall, subject to certain cure rights including the deposit of cash into an account controlled by the agent. As at June 30, 2026 and June 30, 2025, the Company has complied with these requirements.

On November 30, 2018, the Company secured the following debt financing:

On March 29, 2019, the Company secured an agreement with the Minister of Industry of the Government of Canada, whereby the Company will receive C$15.0 million in the form of a grant and C$15.0 million in the form of an interest free loan through the Federal SIF. On March 25, 2024, the Company amended the agreement and will repay the interest free loan portion of this funding in equal annual payments beginning on April 30, 2027 and ending on April 30, 2034.

On November 26, 2021, the Company, together with the Government of Canada, entered into an agreement in the form of a loan up to C$200.0 million from the SIF. Under the terms of the Federal SIF EAF Loan, the Company will be reimbursed for certain defined capital expenditures incurred to transition from blast furnace steel production to EAF steel production between March 3, 2021 and December 31, 2025. Annual repayments of the Federal SIF EAF Loan will be scalable based on the Company’s GHG emission performance.

On December 7, 2023, the Company completed a financing arrangement with the Bank of Montreal for total cash consideration of C$11.7 million. The financing arrangement bears interest at 7.5% with monthly payments of C$0.1 million. During the six month period ended June 30, 2026, the Company made principal payments totalling C$0.5 million (June 30, 2025 – C$0.5 million). At June 30, 2026, current portion totalling C$1.1 million is presented in current portion of other long-term liabilities on the condensed interim consolidated statements of financial position (December 31, 2025 – C$1.0 million).

On July 24, 2025, the Company completed a financing arrangement with the Bank of Montreal for total cash consideration of C$10.4 million. The financing arrangement bears interest at 7.7% with monthly payments of C$0.1 million, maturing July 2030. During the six month period ended June 30, 2026, the Company made principal payments totalling C$0.6 million (June 30, 2025 – nil). At June 30, 2026, current portion totalling C$1.2 million is presented in current portion of other long-term liabilities on the condensed interim consolidated statements of financial position (December 31, 2025 – nil).

On August 8, 2024, the Company entered into an Installment Payment Contract (the “IPC”) with the Bank of Montreal to provide financing to purchase equipment. On September 3, 2025, the Company finalized its IPC with the Bank of Montreal as all financing was provided to purchase the equipment. The total amount financed was C$5.1 million at 7.4% interest with monthly payments of C$0.1 million, maturing September 2030. During the six month period ended June 30, 2026, the Company made principal payments totalling C$0.3 million (June 30, 2025 – nil).

On April 5, 2024, the Company’s indirect wholly-owned subsidiary, ASI, issued an aggregate of $350.0 million of 9.125% 2029 Notes due April 15, 2029. The 2029 Notes are guaranteed on a senior secured basis by ASI’s immediate parent company and all of ASI’s subsidiaries. Interest payments are due April 15 and October 15, having commenced on October 15, 2024. The principal balance of the 2029 Notes is due for repayment on April 15, 2029. Prior to the maturity date, the Company can exercise various rights to redeem the 2029 Notes in whole or in part at a specific redemption price. In some cases, the redemption of the 2029 Notes is only permitted upon the occurrence of a specific event. The intended use of net proceeds from the offering of the 2029 Notes is general corporate purposes, adding strength and flexibility to ASI’s balance sheet.

As discussed above in LETL Facilities, on November 14, 2025, the Company entered into agreements with CEEFC under Federal LETL program and the Ministry of Northern Economic Development and Growth, the Provincial LETL, to secure a C$500 million governmental loan comprised of a C$400 million loan facility from the Government of Canada and a C$100 million loan facility from the Province of Ontario. The LETL Facilities will be provided proportionately for which 20% shall be secured, ranking junior to the Company’s existing first lien Revolving Credit Facility and the Senior Secured Second Lien Notes, with the remaining 80% of the LETL Facilities being unsecured. The Company has drawn C$265.6 million and C$66.4 million gross loan proceeds and paid interest in kind totalling C$3.7 million and C$0.9 million, for the Federal LETL and Provincial LETL, respectively.

The Revolving Credit Facility, the Federal AMF Loan, the Provincial MENDM Loan, the Federal SIF EAF Loan and the LETL Facilities are expected to service the Company’s principal liquidity needs (to finance working capital, fund capital expenditures and for other general corporate purposes) until the maturity of these facilities.

During the three and six month periods ended June 30, 2026, the Company did not declare or pay any dividends to shareholders (June 30, 2025 – C$7.3 million and C$14.8 million, respectively).

Contractual Obligations and Off Balance Sheet Arrangements

The following table presents, at June 30, 2026, the Company’s undiscounted obligations and commitments to make future payments under contracts and contingent commitments. The following figures assume that the June 30, 2026, Canadian/U.S. dollar exchange rate of $1.00 = C$0.7037 remains constant throughout the periods indicated.

As noted above, on September 28, 2025, in response to the Trade Actions, the Board approved an operational plan to commence the exit from blast furnace and coke oven operations and to accelerate the transition to EAF steelmaking. In connection with the EAF transition, and as described in greater detail under The Company’s Response to Tariffs, the Company issued notices asserting that certain raw material and other supply agreements had been frustrated and has initiated and is responding to legal proceedings relating to certain supply agreements, including proceedings arising from the Company’s position that certain agreements have been frustrated. Management continues to monitor these proceedings and will recognize provisions where a present obligation exists and a reliable estimate of loss can be made. While the Company believes these claims are without merit and intends to vigorously defend them, an adverse outcome in certain matters could have a material adverse effect on the Company’s consolidated financial condition or results of operations.

Purchase obligations - capital represent the Company’s contractual obligations across the periods indicated above for the EAF capital project.

Off balance sheet arrangements include letters of credit, and operating lease obligations. At June 30, 2026, the Company had C$68.7 million ($48.4 million) (December 31, 2025 – C$66.1 million; $48.2 million) of outstanding letters of credit.

As discussed above, the Company maintains defined benefit pension plans and other post-employment benefit plans. At June 30, 2026, the Company’s net obligation in respect of its defined benefit pension plans was C$105.7 million (December 31, 2025 – C$153.0 million) and the Company’s obligation in respect of its other post-employment benefits plans was C$194.9 million (December 31, 2025 – C$193.0 million).

The Company’s short-term and long-term obligations, commitments and future payments under contract are expected to be financed through cash flow from operations, funds from the Company’s Revolving Credit Facility and funds from the LETL Facilities. Any default in the Company’s ability to meet such commitments and future payments could have a material and adverse effect on the Company.

Related Party Transactions

As at June 30, 2026, there were no transactions, ongoing contractual or other commitments with related parties, except for remuneration of the Company’s key management personnel.

Financial Instruments

The Company’s financial assets and liabilities (financial instruments) include cash, restricted cash, accounts receivable, bank indebtedness, accounts payable and accrued liabilities, other current liabilities, severance cost liability, IPO and LETL Warrant liabilities, earnout liability, long-term governmental loans, Senior Secured Second Lien Notes and other financing arrangements.

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument or non-financial derivative contract. Financial instruments are disclosed in Note 25 to the June 30, 2026 condensed interim consolidated financial statements.

Financial Risk Management

The Company’s activities expose it to a variety of financial risks including credit risk, liquidity risk, interest rate risk and market risk. The Company may use derivative financial instruments to hedge certain of these risk exposures. The use of derivatives is based on established practices and parameters, which are subject to the oversight of the Board of Directors. The Company does not utilize derivative financial instruments for trading or speculative purposes.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises primarily from the Company’s receivables from customers. The Company has an established credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes a review of the potential customer’s financial information, external credit ratings and bank and supplier references. Credit limits are established for each new customer and customers that fail to meet the Company’s credit requirements may transact with the Company only on a prepayment basis.

The maximum credit exposure at June 30, 2026 is the carrying amount of accounts receivable of C$213.3 million (December 31, 2025 – C$192.7 million). At June 30, 2026, there was one customer account greater than 10% of the carrying amount of accounts receivable. At December 31, 2025, there was one customer account greater than 10% of the carrying amount of accounts receivable. As at June 30, 2026, C$9.0 million, or 4.2% (December 31, 2025 – C$9.3 million, or 5.4%), of accounts receivable were more than 90 days old.

The Company establishes an allowance for doubtful accounts that represents its estimate of losses in respect of accounts receivable. The main components of this allowance are a specific provision that relates to individual exposures and a provision for expected losses that have been incurred but not yet identified. The allowance for doubtful accounts at June 30, 2026 was C$8.7 million (December 31, 2025 – C$9.0 million), as disclosed in Note 9 to the June 30, 2026 condensed interim consolidated financial statements.

The Company may be exposed to certain losses in the event of non-performance by counterparties to derivative financial instruments such as commodity price contracts and foreign exchange contracts. The Company mitigates this risk by entering into transactions with highly rated major financial institutions.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages liquidity risk by maintaining borrowing capacity under its Revolving Credit Facility and governmental loans. The Company continuously monitors and reviews actual and forecasted cash flows to ensure adequate liquidity and anticipate liquidity requirements. The Company’s objectives and processes for capital management, including the management of long-term debt, are described in Note 6 to the December 31, 2025 consolidated financial statements.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and commodity prices, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk. During the six month periods ended June 30, 2026 and June 30, 2025, the Company was not a party to agreements to hedge the commodity price risk associated with the revenue on the sale of steel. When the Company is party to hedging agreements, these activities are carried out under the oversight of the Company’s Board of Directors.

Currency risk

The Company is exposed to currency risk on purchases, labour costs and pension and other post retirement employment benefits liabilities that are denominated in Canadian dollars. The prices for steel products sold in Canada are derived mainly from price levels in the U.S. market in U.S. dollars converted into Canadian dollars at the prevailing exchange rates. As a result, a stronger U.S. dollar relative to the Canadian dollar increases the Company’s Canadian dollar selling prices for sales within Canada.

Interest rate risk

Interest rate risk is the risk that the value of the Company’s assets and liabilities will be affected by a change in interest rates. The Company’s interest rate risk mainly arises from the interest rate impact on its banking facilities and debt. The Company may manage interest rate risk through the periodic use of interest rate swaps.

For the three and six month periods ended June 30, 2026, a one percent increase (or decrease) in interest rates would have decreased (or increased) net income (loss) by C$0.2 million and C$0.6 million, respectively. For the three and six month periods ended June 30, 2025, a one percent increase (or decrease) would not have decreased (or increased) net income (loss).

Commodity price risk

The Company is subject to price risk from fluctuations in the market prices of commodities, including scrap, electricity, and natural gas. The Company enters into supply agreements for certain of these commodities as disclosed in Note 21 to the June 30, 2026 condensed interim consolidated financial statements. To manage risks associated with future variability in cash flows attributable to certain commodity purchases, the Company may use derivative instruments with maturities of 12 months or less to hedge the commodity price risk associated with the cost of natural gas and the revenue on the sale of steel. At June 30, 2026 and June 30, 2025, the Company had no commodity-based swap contracts.

Critical Accounting Estimates

As disclosed in Note 5 to the December 31, 2025 consolidated financial statements, the preparation of financial statements in conformity with IFRS Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the years or periods.

Significant items subject to such estimates and assumptions include the going concern assessment, allowance for doubtful accounts, carrying amount and useful life of property, plant and equipment and intangible assets, defined benefit retirement plans and income tax expense and scientific research and development investment tax credits. Further, Note 4 to the December 31, 2025 consolidated financial statements discloses the basis for determining the fair value of the IPO and LETL Warrants, earnout and share-based compensation liabilities. Actual results could differ from those estimates.

Allowance for doubtful accounts

Management analyzes accounts receivable to determine the allowance for doubtful accounts by assessing the collectability of receivables owing from each individual customer. This assessment takes into consideration certain factors including the age of outstanding receivables, customer-operating performance, historical payment patterns and current collection efforts, relevant forward-looking information and the Company’s security interests, if any.

Useful lives of property, plant and equipment and Intangible assets

The Company reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period, and whenever events or circumstances indicate a change in useful life. Effective September 28, 2025, the Company reduced the useful lives of assets pertaining to blast furnace and basic oxygen steelmaking as a result of the Company’s Board of Directors approving an operational plan to commence the exit from blast furnace and coke production and to accelerate the transition to EAF steelmaking. The useful lives of blast furnace and basic oxygen steelmaking assets have been reduced and are fully depreciated as at December 31, 2025.

Impairment of property, plant and equipment and Intangible assets

Determining whether property, plant and equipment and intangible assets are impaired requires the Company to determine the recoverable amount of the Cash Generating Unit (“CGU”) to which the asset is allocated. To determine the recoverable amount of the CGU, management is required to estimate its fair value. To calculate the value of the CGU in use, management determines expected future cash flows, which involves, among other items, forecasted steel selling prices, forecasted tons shipped, costs and volume of production, growth rate, and the estimated selling costs, using an appropriate discount rate.

During the year ended December 31, 2025, as a result of current economic conditions there were two indicators of impairment in regards to the Company’s single Cash Generating Unit (“CGU”). The two indicators identified were the Section 232 tariffs imposed by the United States (“U.S.”) pertaining to the steel manufacturing industry and the Company’s carrying value of the net assets exceeded its market capitalization. The Company performed an impairment test and determined that the carrying amount exceeded the Company’s recoverable amount and an impairment loss of C$503.4 million was recorded in the consolidated statements of net loss for the year ended December 31, 2025. At June 30, 2026, there were no indicators of impairment in regards to the Company’s CGU.

Defined Benefit Retirement Plans

The Company’s determination of employee benefit expense and obligations requires the use of assumptions such as the discount rate applied to determine the present value of all future cash flows expected in the plan. Since the determination of the cost and obligations associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results could differ from estimated results which are based on assumptions.

Taxation

The Company computes and recognizes an income tax provision in each of the jurisdictions in which it operates. Actual amounts of income tax expense and scientific research and experimental development investment tax credits only become final upon filing and acceptance of the returns by the relevant authorities, which occur subsequent to the issuance of the condensed interim consolidated financial statements.

Additionally, the estimation of income taxes includes evaluating the recoverability of deferred income tax assets based on an assessment of the ability to use the underlying future tax deductions before they expire against future taxable income. The assessment is based upon existing tax laws and estimates of future taxable income. To the extent estimates differ from the final tax return, net (loss) income will be affected in a subsequent period. The Company will file tax returns that may contain interpretations of tax law and estimates. Positions taken and estimates utilized by the Company may be challenged by the relevant tax authorities. Rulings that result in adjustments to tax returns filed will be recorded in the period where the ruling is made known to the Company.

Material Accounting Policies

The Company’s condensed interim consolidated financial statements have been prepared using consistent accounting policies described in Note 4 to the Company’s annual consolidated financial statements for the year ended December 31, 2025 and the nine month period ended December 31, 2024.

Standards and Interpretations issued and not yet adopted

Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements. IFRS 18 replaces IAS 1, Presentation of Financial Statements and sets out requirements for the presentation and disclosure of information in general purpose financial statements.

The new Standard introduces the following significant changes to the structure of a company’s financial statements:

The Company is currently reviewing the impacts of new categories and subtotals on its statements of net loss and reviewing its current non-GAAP measures to identify MPMs requiring disclosure, as well as reviewing relevant aggregation and disaggregation of financial information.

The standard applies to annual reporting periods beginning on or after January 1, 2027 and is to be applied retrospectively, with early adoption permitted.

Disclosure Controls and Procedures and Internal Controls Over Financial Reporting

In compliance with the provisions of National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings, we have filed certificates signed by our Chief Executive Officer (“CEO”) and by our Chief Financial Officer (“CFO”) that, among other things, report on (i) their responsibility for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”) for the Company; and (ii) the design of DC&P and the design of ICFR.

Management, including our CEO and CFO, does not expect that the disclosure controls or internal controls over financial reporting of the Company will prevent or detect all errors and all fraud or will be effective under all potential future conditions. A control system is subject to inherent limitations and, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Further, the design of a control system must reflect that there are resource constraints, and the benefits of controls must be considered relative to their costs. Inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by individual acts of some persons, by collusion of two or more people or by management override of the controls. Due to the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. The design of any control system is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential conditions. Projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Disclosure Controls and Procedures

The CEO and the CFO have designed DC&P, or have caused them to be designed under their supervision, in order to provide reasonable assurance that:

Internal Controls Over Financial Reporting

The CEO and CFO have also designed ICFR, or have caused them to be designed under their supervision, in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The control framework used to design our ICFR is based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Internal Control – Integrated Framework (2013 framework).

Changes in Internal Controls Over Financial Reporting

No changes were made to our ICFR during six month period ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our ICFR.

Selected Quarterly Information

1 - For fiscal year ended December 31, 2025 and onwards, period end date refers to the following: "Q1" - March 31, "Q2" - June 30, "Q3" - September 30, and "Q4" - December 31. Effective for fiscal year ended December 31, 2024, the Company changed its year end from March 31 to December 31. Therefore, for fiscal years prior to December 31, 2025, period end date refers to the following: "Q1" - June 30, "Q2" - September 30",  "Q3" - December 31, and "Q4" - March 31.

2 - The definition and reconciliation of these non-IFRS measures are included in the "Non-IFRS Financial Measures" section of this MD&A.

3 - During the nine month period ended December 31, 2024, the Company issued 755,730 common shares upon exercise of earnout rights, Replacement LTIP units and vesting of Omnibus Plan LTIP units.

4 - During the year ended December 31, 2025, the Company issued 75,000 common shares upon exercise of earnout rights.

5 - During the six month period ended June 30, 2026, the Company issued 727,666 common shares upon exercise of earnout rights, Replacement LTIP units, Deferred Share Units and vesting of Omnibus Plan LTIP units.

As at June 30, 2026, 105,661,468 common shares were outstanding.

Trend Analysis

The Company’s financial performance for Q2 2026 increased from Q1 2026, primarily due to an increase in Adjusted EBITDA per net ton (“nt”). The following discussion reflects the Company’s trend analysis in chronological order:

Revenue:

Net (loss) income: