Firesteel sells 5.7% of its Blacksteel shares for $401,250; Grants stock options

Trading Symbol: FTR- TSX:V

VANCOUVER, Aug. 27 /CNW/ - The Board of Directors ("Board") of Firesteel Resources Inc. ("Firesteel" or the "Company") is pleased to announce that Firesteel has completed phase 1 the first tranche ("Phase 1") of a non-brokered private placement of 700,000 common shares of its 4.7 million share holdings in affiliated company Blacksteel Oil Sands Inc. ("Blacksteel"). Details of this offering were announced in the Company's June 17, 2008 news release. In Phase 1 of the offering a total of 267,500 shares (5.7% of Firesteel's holdings) were sold by Firesteel at $1.50 per share for gross proceeds of $401,250. Net cash proceeds to the Company after finders' fees and costs related to the offering were $372,300. Proceeds of the offering will be used for Firesteel's 2008 minerals exploration program and for general corporate purposes. The Company's exploration program is ready for execution pending completion of this private placement and a planned private placement of Firesteel common share units. Details of these will be announced in a subsequent news release.

The Company is also pleased to announce that it will record a pre-tax gain on sale of $337,800 with respect to this sale of Blacksteel shares. It will record a gain on sale of $92,800 in its interim consolidated financial statements for the fiscal quarter ending July 31, 2008, and a gain on sale of $245,000 for the second fiscal quarter ending October 31, 2008.

In announcing this sale of Blacksteel shares Mr. Walter Wakula, President and CEO of Firesteel, said; "We are thrilled at the value being built in Blacksteel and at the significant profit we have been able to generate from disposition of only 5.7% of our holdings."

The Board also announces that it has granted incentive stock options to seven directors, officers and consultants of the Company subject to regulatory approval. The stock options are for the purchase of 1,180,000 common shares of Firesteel at an exercise price of $0.10 per share. The options were granted effective August 27, 2008 for past service and performance since March of last year and shall expire on August 27, 2011. Under a vesting schedule, one third of these options shall vest immediately, one third on August 27, 2009 with the remaining one third vesting on August 27, 2010. The options were granted in accordance with the Company's stock option plan approved by the shareholders and the Company's stock option policy approved by the Board.

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 shareholding in Blacksteel Oil Sands Inc., a private junior oil sands exploration company.

    
    ON BEHALF OF THE BOARD OF DIRECTORS OF
    FIRESTEEL RESOURCES 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 the sale of Blacksteel shares, future financings, anticipated financial relults, future drilling, expectations for exploration prospects, 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. While Firesteel assumes a market for the Blacksteel shares shares will develop, there may be no market for the Blacksteel shares and Firesteel may not be able to complete the private placement of additional shares of Blacksteel nor any further sales in respect of such. Results of the Company may be affected by a variety of variables and risks associated with mineral 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, events, results, circumstances or otherwise.

Contacts

please contact us at (604) 669-5768

1-888-669-5768 or visit our web site at www.firesteelresources.com