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FIRESTEEL PROVIDES CORPORATE UPDATE AND PLAN FOR A NEW BEGINNING

^{Published on 2010-10-08 10:56:07 - Market Wire}
 

Trading Symbol: FTR- TSX: V

VANCOUVER, Oct 8 /CNW/ - Firesteel Resources Inc. (TSXV:FTR) ("Firesteel" or the "Company") is pleased to provide a corporate update based on its recently released financial statements and management discussion and analysis statement and to announce its plan for a new beginning contained therein.

The Company, on September 29, 2010, filed and posted its interim unaudited consolidated financial statements and notes thereto for the three and six months periods ended July 31, 2010 and associated management discussion and analysis statement (the "MD&A") (together, the "Second Quarter 2010 Financial Statements"). These should be read in conjunction with this news release and may be viewed on the Canadian Securities Administrators website SEDAR at [ www.sedar.com ].

The following highlights were identified by Firesteel's management during the period reported:

HIGHLIGHTS

Corporate

Financial

Properties and Exploration Operations

BACKGROUND

Capital market volatility and uncertain economic conditions for the past 18 months had negatively impacted company valuations through 2009 and much of 2010 and had significantly reduced investor appetite for investment in high risk, early stage minerals exploration companies like Firesteel. This combined with the uncertainty created by Firesteel's law suit with Brett with respect to the ROK-Coyote Property has made it difficult for Firesteel to issue new equity during the past year.

Notwithstanding the lack of substantially no new equity capital throughout this period, which includes the period being reported, Firesteel prudently managed the scarce capital it had. The Company managed this capital without significant dilution of the Company's stock at low market valuations, maintained liquidity and strengthened its balance sheet primarily by slowly monetizing its Blacksteel holdings and by reducing its costs to the minimum required for a publicly traded company. Through all this Firesteel's shareholders have stood by the Company with encouragement and support and we are advised that larger shareholders have substantially maintained their equity positions in the Company. The Board and management of Firesteel wish to thank its shareholders for being patient and maintaining this confidence in the Company, its team and the excellent ongoing prospects for its mineral properties.

With economic circumstances now improved and equity markets more stable Firesteel believes it is timely to put this chapter behind it and move forward with its plan for a new beginning which is described in more detail below.

OUTLOOK

Firesteel is strategically well positioned for future growth with a solid value proposition. Its ROK/Coyote Property is adjacent to Imperial Metals' Red Chris mine development which has 276 million tonnes of proven and probable reserves already booked (Imperial Metals Corporation Annual Information Form dated March 31, 2010), and grades on its 2010 drill programs testing as high as 1.08% copper, 1.46 grams per tonne gold ("g/t Au") and 4.28 grams per tonne silver over a 317.5 meter interval on hole RC10-393. (Imperial Metals Corporation news release dated August 5, 2010) Firesteel's Copper Creek Property also has excellent potential with grades to date being as good as or better than most known alkaline porphyry copper-gold deposits in British Columbia and with mineralization occurring close to surface. Drilling has confirmed grades with values as high as 0.85% copper and 0.24 g/t Au over 12.45 meters for hole CC2007-02 and averaging 0.43% copper and 0.23 g/t Au over this 213.83 meter hole. The Company also has a mineral property inventory in British Columbia, the North West Territories and Mexico. Rounding out Firesteel's value proposition is its 16.0% investment in Blacksteel which has 1.3 billion barrels of bitumen originally in place with 104.8 million barrels potentially recoverable, and 432 million cubic feet of gross proved, probable and possible natural gas reserves (Blacksteel Energy Inc SEDAR filings of Filing Statement Disclosure Schedule dated November 30, 2009 and Form NI51-101 F1 reserve report filing dated August 26, 2010).

PLAN FOR A NEW BEGINNING

The board and management of Firesteel believe that the Company has turned the corner after this extremely difficult 18 month period and is ready for a new beginning. Economic growth in Canada and internationally has returned, though with slowing momentum and with some risk of a double dip recession. Equity and commodity markets have rebounded. The international financial system has been injected with fresh liquidity through the combined actions of the IMF and the world's central banks. Interest rates are at historical lows and investors are looking for higher returns and appear more willing to take increased risk. The Company believes that investor appetite is returning for investment in high risk, early stage minerals exploration companies such as Firesteel. Based on these factors the Company is testing the equity market at this time with a private placement offering of securities (fully described in Firesteel news release dated September 24, 2010) to raise up to $635,000.

Firesteel is now launching its Plan for a New Beginning (the "Plan"). This Plan includes launching a minimum $1.8 million exploration program on Firesteel's ROK - Coyote Property over 4 years under an option arrangement with a top minerals explorer. The Plan also includes testing the ground in 3 directions (east, west and north) on Firesteel's Copper Creek Property to determine the aerial extent of mineralization on this property and to determine the edges of the chargeability anomaly. This will consist of a $2 million program commencing immediately with a prospecting project and continuing into the 2011 and 2012 summer exploration seasons including IP and magnetometer surveys, trenching and a 30 to 40 hole diamond drilling program which includes step out holes to further outline the mineralized zone. Future news releases will provide more details about these exploration programs as they are fine tuned and rolled out. Finally, the Plan foresees Firesteel maintaining its exposure to oil sands and conventional oil and gas operations through its Blacksteel shareholdings and, as value builds in this company, to reduce these shareholdings over the next three years at optimum pricing to help finance Firesteel's core mineral exploration activities with minimal share dilution.

Richard Young, P. Eng is a Qualified Person under National Instrument 43-101 and has reviewed and approved the technical content in this news release. He is a consulting geologist for and is independent of Firesteel.

Firesteel is a junior minerals exploration company which explores for and develops quality precious and base metal prospects in the resource rich Stikine Arch area of British Columbia, and in the NWT and Mexico.  The Company has been exploring its Copper Creek and ROK - Coyote discovery properties in northern British Columbia with strong showings of copper and gold mineralization. Firesteel maintains its interests in the oil and gas business through its 16 percent shareholding in Blacksteel Energy Inc. (TSXV:BEY)

ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRESTEEL RESOURCES INC.

"Walter Wakula"

__________________________________

Walter Wakula, Chairman of the Board

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.  Users of forward-looking statements are cautioned that actual results may vary from forward-looking statements contained herein. Forward-looking statements include, but are not limited to: expectations, opinions, forecasts, projections and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". While the Company has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared, the statements are not a guarantee of the Company's s future performance or of the outcome of the private placement of securities, Firesteel's value proposition, the Plan, settlement of the legal action with Brett and negotiations with Brett and Lions Gate Metals Inc. in this news release (together, the "Significant Matters") and all outcomes are subject to risks, uncertainties, assumptions and other factors which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements.  Although the Company 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.  The ability of Firesteel to complete the Significant Matters may be affected by a variety of variables and risks including the ability to obtain the necessary approvals, complete the formal agreements, obtain the necessary rulings and judgments and satisfy regulatory requirements related to the matters contemplated by the Significant Matters.  In the event that the Significant Matters are completed the ability of the Company to derive any benefit therefrom will be subject to a variety of variables and risks such as loss of market, copper and gold prices, currency fluctuations, 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 current and future obligations, and risks associated with 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 new 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.