MOSCOW and TORONTO, Oct. 10, 2008 (Canada NewsWire via COMTEX) ----OAO Severstal (LSE: SVST; RTS: CHMF, "Severstal"), one of the world's leading metals and mining companies, announced that 7027940 Canada Limited (the "Offeror"), an affiliate of Severstal, has extended the expiration date for its offer to purchase all outstanding shares of PBS Coals Limited (formerly, Penfold Capital Acquisition Corporation) (TSX: PBS), at an offer price of C$8.30 cash per share, to 11:59 p.m. (Toronto time) on October 20, 2008.

The Offer has been extended to allow for the receipt of confirmation from the Committee on Foreign Investment in the United States under the Exon-Florio Amendment to the Defense Production Act of 1950, as amended, that no second-stage investigation will be initiated in respect of the joint application submitted by Severstal and PBS Coals Corporation.

Shares representing approximately 94% of the outstanding shares of PBS Coals Limited have been tendered and not withdrawn pursuant to the offer.

The Offeror will file its Notice of Extension with Canadian regulatory authorities and mail copies to all shareholders of PBS Coals Limited shortly.

Severstal Resources has retained RBC Capital Markets as financial advisor and Torys LLP in New York and Toronto as legal counsel.

About Severstal Resources:

Severstal Resources is a leading feedstock supplier in Russia to the iron-and-steel industry which manages the mining assets of Severstal. Severstal Resources incorporates the Karelsky Okatysh and Olcon iron ore complexes and Vorkutaugol, a coal mining complex. Stalmag, a niobium production facility is also part of Severstal Resources. In 2007, these operations produced 7.6 million tonnes of coking-coal, 1.8 million tonnes of steam coal, 10 million tonnes of iron-ore pellets and 4.7 million tonnes of iron-ore concentrate. In 2007, Severstal Resources established a gold business segment, which totalled 5.3 tonnes of gold output over the past year.

In May, 2008 Severstal Resources reached an agreement to purchase up to a 61.5% stake in African Iron Ore Group Ltd, which owns the exploration rights for an iron ore deposit in the Putu Range area of Liberia, West Africa.

About Severstal:

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

Forward Looking Statements:

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

SOURCE: 7027940 Canada Limited

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

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