Firesteel oil sands affiliate raises $2.2 million in Phase 1 of financing

    Trading Symbol: FTR - TSX: V

    VANCOUVER, Jan. 2 /CNW/ - Mr. Walter Wakula, President and CEO of
Firesteel Resources Inc. ("Firesteel"), and Chairman of the Board of
Blacksteel Oil Sands Inc. ("Blacksteel" or the "Company") is pleased to
announce that Firesteel's oil sands affiliated subsidiary Blacksteel has
closed Phase 1 of a second non-brokered private placement financing. This
announcement is not an offer to sell nor a solicitation of an offer to buy any
securities of either Blacksteel or Firesteel.
    The private placement financing raised $2.2 million and consisted of
issuing 305,500 common shares at a price of $1.50 per share and 967,310 flow
through common shares at a price of $1.80 per share to accredited investors in
Canada. Blacksteel will use proceeds from the financing to fund drilling and
exploration activities on its Raven and Whitemud oil sands projects located in
the Peace River area of northern Alberta.
    Blacksteel has engaged the independent engineering firm of DeGolyer and
MacNaughton to undertake a study to determine the number of barrels of oil
sands resources on Blacksteel's properties. This report is expected to be
completed early in January and Firesteel will issue a news release at that
time to announce the results. Phase 2 of this financing is expected to be
undertaken later in January after release of the results of this engineering
    In announcing the results of this private placement Mr. Wakula said,
"Phase 1 of this financing has allowed Blacksteel to satisfy year-end investor
demand for its flow-through shares. Phase 2 of this financing will enable the
Company to offer its shares to investors who wish to rebalance their portfolio
risk for the new year. Investors will be able to participate in the
significant expected potential of these oil sands deposits based on the
greater certainty afforded by an independent engineering assessment of
Blacksteel's resource barrels."

    Firesteel is a junior exploration company which explores for and develops
quality precious and base metal prospects in British Columbia, the NWT and
Mexico, and oil sands properties in Alberta. The company has recently been
actively drilling and trenching on its Copper Creek property in northern
British Columbia with strong indications of copper and gold mineralization.
Firesteel has also entered the oil sands business with the acquisition of
leases and exploration of its land holdings in the Peace River area of
northern Alberta through its Blacksteel Oil Sands affiliate.


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. Forward-looking Information: Certain statements may constitute forward-looking statements.Such forward-looking statements involve risks, uncertainties and other factors, which may cause actual results, performance or achievements of the Corporation to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. %SEDAR: 00004336E

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