Firesteel and Blacksteel engage investment bank for $30 million IPO

    Trading Symbol: FTR - TSX: V

    VANCOUVER, July 22 /CNW/ - Mr. Walter Wakula, President and CEO of
Firesteel Resources Inc. ("Firesteel" or the "Company"), and Chairman of the
Board of Blacksteel Oil Sands Inc. ("Blacksteel") is pleased to announce that
the Company and Blacksteel have entered into a agreement with an investment
banking firm ("Investment Bank") to use its best efforts to raise $30 million
as part of a potential transaction to acquire all of the issued and
outstanding common shares, warrants and options ("Securities") of Blacksteel,
including 4,023,000 common shares owned by Firesteel ("Agreement").
    Under terms of this Agreement the Investment Bank will arrange for these
Securities to be purchased by a newly formed publicly traded company
("Pubco"). Pubco will, by the closing date scheduled on or before
February 28, 2009 ("Closing"), be a reporting issuer listed for trading on a
recognized Canadian or US stock exchange or quotation system. Pubco will
purchase each Blacksteel common share for $0.50 in cash plus one half of one
Pubco common share. Pubco shares will be issued at a price of no less than
$3.00 per share. On an undiluted book value basis each Blacksteel common share
would thus have an indicated book value of $2.00 per share immediately after
the sale of this share to Pubco. Although a Closing date has been established
within the agreement, there is no guarantee at this time that this transaction
will close.
    A further condition of this Agreement is for Pubco to raise a minimum
$30 million by Closing and Pubco must have a minimum of $30 million in cash
and cash equivalents at Closing. Pubco will offer to exchange warrants and
options issued by Blacksteel for Pubco warrants and options issued on terms
equivalent to the Blacksteel Securities.
    The parties to the Agreement have undertaken to complete their respective
due diligence by September 30, 2008, finalize documentation, including a
take-over bid circular, enter into a formal agreement by October 31, 2008 and
obtain all required regulatory and shareholder approvals by Closing. At
Closing Pubco must have a maximum 10 million common shares issued and
outstanding with respect to the minimum $30 million equity requirement, may
have additional common shares issued and outstanding which shall have been
sold for at least $3.00 per share and must have no more than 5 million common
shares issued and outstanding on a fully diluted basis as consideration for
other purposes. At Closing Blacksteel must have no more than 12,692,938 common
shares outstanding plus up to 1,500,000 common shares authorized for issue in
a private placement currently being undertaken by Blacksteel plus any shares
issued on exercise of warrants and options prior to Closing. At Closing
Blacksteel must have clear title to a 100% working interest in its oil sands
leases and a minimum $1,850,000 in cash and cash equivalents plus any net
proceeds from its current private placement.
    Firesteel and other major Blacksteel shareholders must agree to escrow
their Pubco common shares for a period of one year after the date these shares
are issued. Firesteel has also agreed to an appropriate "lock up" or support
agreement whereby the Company will agree to vote in favour of and will tender
its Blacksteel common shares in support of this transaction.
    Further to Firesteel's news release dated July 3, 2008, tranche 1 of the
private placement by Firesteel for the secondary offering of up to 700,000
Blacksteel shares at $1.50 per share is expected to close by July 25, 2008.
    In announcing this proposed acquisition transaction Mr. Wakula said; "We
are absolutely thrilled that Firesteel will be able to realize over $8 million
in cash and Pubco shares as part of this transaction and that Blacksteel will,
through Pubco, be able to raise $30 million in public equity markets. For
Firesteel, these funds together with the $1 million currently being raised,
will enable the Company to significantly advance its minerals exploration
projects, including bringing its Copper Creek Project to the resource
definition stage. As for Blacksteel, the funds will be used to further develop
the Raven and Whitemud projects, prove up resources, assist in the development
of the pilot facility at the Raven property and acquire additional land
    Firesteel is a junior exploration company which explores for and
discovers quality precious and base metal prospects in the resource rich
Stikine Arch area of British Columbia, and in the NWT and Mexico. Firesteel
has been actively drilling and trenching on its Copper Creek property in
northern British Columbia with strong showings of copper and gold
mineralization. Firesteel maintains its interests in the oil sands business
through its 40 percent shareholding in Blacksteel Oil Sands Inc., a junior oil
sands exploration company.


SOURCES INC. "Walter Wakula" ---------------------------- Walter Wakula, President and CEO The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. Advisory Regarding Forward Looking Statements This news release contains forward-looking statements which include, but are not limited to: statements regarding future drilling, expectations for exploration prospects, expectations as to financing, as well as operations plans, outlook, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although Firesteel believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Results of the Company may be affected by a variety of variables and risks associated with mineral and oil and gas exploration, production and transportation, such as loss of market, volatility of commodity prices, currency fluctuations, imprecision of resource and reserve estimates, environmental risks, competition from other producers, ability to access sufficient debt and equity capital from internal and external sources, ability to generate sufficient cash flow from operations to meet its current and future obligations, and risks associated with existing and potential future lawsuits and regulatory actions made against the Company; as a consequence, actual results could differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement and are made as of the date of this news release. Unless otherwise required by applicable securities laws, the Company does not intend nor does it undertake any obligation to update or review any forward-looking statements to reflect subsequent information, event, results or circumstances or otherwise. %SEDAR: 00004336E

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