SVST.L Regulatory News (SVST)

PRESS RELEASE

Severstal announces increase oF holding in crew gold and

further operational data FOR ITS GOLD BUSINESS

- Increases holding in Crew Gold to 93.38% -

- Gold production, resources and reserves data published -

- JORC resources in excess of 22moz -

Moscow, Russia - September 14, 2010 - OAO Severstal (LSE: SVST; RTS: CHMF) ("Severstal" or "the Company"), one of the world's leading integrated steel and mining companies, announces an increase in its shareholding of Crew Gold Corporation ("Crew Gold") and further operational data for its gold business.

CREW GOLD

Severstal has signed a binding agreement for the purchase of Endeavour Financial Corporation's entire stake in Crew Gold of 46,203,403 common shares ("Common Shares") at a price of US$4.65 per share (the "Transaction"). Following the Transaction, Severstal Gold N.V., a subsidiary of Severstal, will own 99,845,011 Common Shares, representing approximately 93.38% of the issued and outstanding Common Shares. Closing of the Transaction is anticipated to occur not later than 17 September 2010. Crew Gold operates the LEFA mining project in Guinea, West Africa. Severstal first acquired an interest in Crew Gold in February 2010.

SEVERSTAL'S GOLD BUSINESS

In addition and in accordance with the commitment given at the time of its H1 results announcement, Severstal is releasing today selected operational and resource data for its gold division ("the Gold Business") in order to increase its transparency and demonstrate its contribution to Severstal.

The Gold Business is an established international, pure-gold producer focused on emerging markets with currently eight producing mines, two development projects, five advanced exploration projects and a broad portfolio of early exploration projects and licenses located across West Africa in Guinea and Burkina Faso, Kazakhstan and the Russian Federation.

As previously announced, the Gold Business has continued its growth and development whilst delivering strong financial results in H1 2010 (six months ended 30 June 2010). Specifically, in H1 2010, the Gold Business achieved revenue of $301 million, representing a 41% increase from $213 million in H1 2009, while H1 2010 normalised EBITDA increased by 61% to $156 million from $97 million in H1 2009. This strong financial performance was driven by an increase in production volumes and a rising gold price. These figures do not include Crew Gold's results, which have been consolidated in the Gold Business' financials as of July 26, 2010 when the Company increased its ownership of Crew Gold to 50.17%.

Production

During the period from the financial year ended 31 December 2007 to the financial year ended 31 December 2009, the annual production of the Gold Business increased from approximately 5 Koz to 529 Koz(1). For the financial year ending 31 December 2010, the Company expects total gold production to range between 640 and 670 Koz (on a fully consolidated basis including Crew Gold) with the plan to increase its gold production to 1.0 Moz in the next three years.

Note: Crew Gold produced 177.6 Koz in 2009 and 105.3 Koz in H1 2010

(1) Excludes 5.4 Koz (gold equivalent) of silver production.

Resources and reserves

As of 1 July 2010, the Company had 9 Moz of Proven and Probable gold reserves according to the JORC Code, while its Measured, Indicated and Inferred resources according to the JORC code amounted to 22 Moz of gold (on a 100% basis including Crew Gold) and 103 Moz of silver (includes 50% of Prognoz Silver).

Summary of Gold Reserve Estimates*

Summary of Gold Resource Estimates (Including Gold Reserves)*

* As at 1 July 2010

The Gold Business continues to make significant investments into reserve expansion of its existing assets as well as new exploration projects. Its exploration and resource evaluation expenditures budget for 2011 is over US$100 million.

Nikolai Zelenski, CEO of the Gold Business, commented:

"Acquiring practically full control of Crew Gold will enable us to accelerate the ongoing improvement in our operational and financial efficiency. Crew Gold adds further opportunity for growth and enhanced profitability in our business.

"The data published today highlights how our investment strategy has helped us to build a leading international multi-site gold producer in just three years."

Full financial statements are available at http://www.severstal.com/eng/ir/conferences_presentations/

***

ОАО Severstal is one of the world's leading integrated steel and mining companies. The Company's shares are traded on the Russian Trading System (CHMF), MICEX (CHMF, RTS) and LSE (SVST). With assets in Russia, Ukraine, Kazakhstan, Italy, France, the USA and Africa, Severstal reported revenue of over $13 billion and EBITDA of $844 million in 2009*. The Company was also ranked 13th in Metal Bulletin's 2009 global ranking of Top Steelmakers, producing 16.7 million tonnes of crude steel. As of June 30, 2010, Severstal is the 3rd largest steel producer in Russia, the 4th largest steel producer in the US, and the 2nd largest steelmaker in Italy (via Lucchini in which Severstal has a 49% stake). Severstal's mining assets in Russia and the USA mean that the Company has strong self-sufficiency in coking coal and iron ore in Russia, and good self-sufficiency in coking coal in the USA. Severstal's gold business, part of its Resources Division, is Russia's second largest gold producer.

* Figures from Severstal annual report and include Lucchini.

For further information, please contact:

Severstal, Investor Relations

Vladimir Zaluzhsky

T: +7 (495) 926-77-66

M: +7 (925) 006-51-80

vladimir.zaluzhsky@severstal.com 

Severstal, Public Relations

Sergey Loktionov,

+7 495 9267767 ext. 6446#

sergey.loktionov@severstal.com

Severstal's financial advisor - Morgan Stanley International Limited

Peter Bacchus

Managing Director

T: +44 (0) 778 994 3482

Severstal's financial communications agent - Hudson Sandler

Andrew Hayes / Maria Ignatova

T: +44 (0) 20 7796 4133

 http://www.rns-pdf.londonstockexchange.com/rns/6724S_-2010-9-14.pdf