Firesteel inks $20.6 mln funding deal with Pandion

Vancouver-based junior mining company Firesteel Resources Inc (TSX-V: FTR) has raised US$20.6 million in funding under a prepaid forward gold purchase agreement. The agreement was made with an affiliate of Pandion Mine Finance, a U.S. mining investment firm. The funds raised will be used by the company to restart production at the Laiva Gold Mine near Raahe, Finland and retire certain creditor obligations. Firesteel plans to eventually acquire 100 percent of the Laiva project. Pandion is backed by Mks Pamp Group and Ospraie Management.

PRESS RELEASE

Firesteel Resources Inc. Concludes Joint Venture Agreement with Nordic Mines AB and Concurrently Closes US$20.6 Million Financing to Restart the Laiva Gold Mine in Finland

December 11, 2017

FIRESTEEL RESOURCES INC. (TSX-V: FTR) (“Firesteel” or the “Company”) today announced that it has closed the Joint Venture Agreement (the “JV Agreement”) with Nordic Mines AB (“Nordic”) (announced on Sept 11, 2017) and now owns a controlling 60% interest in Nordic Mines Marknad AB (“Marknad”). In addition, Firesteel has received the US$20,600,000 in funds under the Prepaid Forward Gold Purchase Agreement (“PPF Agreement”) with PFL Raahe Holdings LP (“PFL”) (announced on November 14, 2017). PFL is a limited partnership organized under the laws of the Province of Ontario and an investment vehicle controlled by Pandion Mine Finance, LP (“Pandion”).

The vast majority of such funds received are being invested in Nordic Marknad and Nordic OY, with the balance being funded into Firesteel.

Under the JV Agreement, Firesteel will be the operator of the Laiva Mine and intends to soon acquire the remaining 40% of the equity in Nordic Marknad in exchange for Firesteel common shares. The shares issued under the proposed 40% buy-out transaction will initially be issued to NOMI, but it is intended that such shares of the Company will ultimately be distributed to the shareholders of NOMI pro rata.

The proceeds of the PPF Agreement will be substantially used to fund the restart of production at the Laiva Mine and the payment of certain outstanding creditor obligations including all obligations under the existing composition plan involving Nordic OY.

Production is expected to resume in 6-8 months.

Commenting on these developments, Michael Hepworth, President and CEO of Firesteel stated, “Now that we have closed this deal, production is our primary focus. As a result, the Firesteel team will be in Finland on 3rd of January and will immediately kick-off the already developed work plans, to restart the mine. Most of the management team are in place and this team will begin work immediately restarting the mine. Production is expected to start during the summer of 2018.”

Funds will be allocated to the acquisition of additional capital equipment to update and refine existing infrastructure, efficiency upgrades, debt reduction and the commencement of mining operations.

The Company has received conditional approval from the TSX-V for the transactions contemplated by both the JV Agreement and PPF Agreement.

About the Company
Firesteel is an exploration-stage junior mining company engaged in the acquisition and exploration of prospective precious and base metal properties in Canada and stable jurisdictions around the world. Firesteel is currently working to evolve from an exploration company to becoming a junior producer.

On April 7, 2017, Firesteel first announced the signing of heads of agreement with Nordic Mines AB to form a joint venture to operate and eventually acquire 100% of Nordic Mines Marknad, a wholly owned subsidiary of Nordic Mines AB. Nordic Mines Marknad owns 100% of Nordic Mines OY, the operator of the fully permitted and past producing Laiva Mine near Raahe in Finland.

Firesteel recently completed an updated 43-101 resource estimate prepared in accordance with NI 43-101 guidelines and CIM standards (Firesteel Press release dated August 21, 2017). The results of that study include:
(See results here.)

Disclosure: Companies typically rely on comprehensive feasibility reports on mineral reserve estimates to reduce the risks and uncertainties associated with a production decision. The Company has not completed a feasibility study on, nor has the Company completed a mineral reserve estimate at the Laiva Mine and as such the financial and technical viability is deemed to have higher risk than if this work had been completed. Based on historical engineering and geological reports, historical production data and current engineering work completed or in process by Firesteel, the Company intends to move forward with the development of this asset.

The Company further cautions that it is not basing any production decision on a feasibility study of mineral reserves demonstrating economic and technical viability, and therefore there is a much greater risk of failure associated with its production decision. In addition, readers are cautioned that inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves.

Firesteel currently has one highly prospective property in British Colombia.

The Star property is currently operated under a Joint Venture agreement between Firesteel (49%) and Prosper Gold. (TSX-V: PGX) (51%).

About Pandion Mine Finance, LP
Pandion is an affiliate of PFL Raahe Holdings LP and is a mining-focused investment firm backed by MKS PAMP Group and Ospraie Management, LLC that provides flexible financing solutions to developing mining companies.

Qualified Person
The scientific and technical information in this news release has been reviewed and approved by Paul Sarjeant, P.Geo., a Qualified Person under National Instrument 43-101 and a director of the Company.

For a detailed overview of Firesteel Resources Inc. please visit:
www.FiresteelResources.com

For further information, please contact:
Michael Hepworth
President and Chief Executive Officer
(416) 419 5192
mhepworth@firesteelresources.com
www.firesteelresources.com

Photo courtesy of Firesteel Resources Inc