Blacksteel Energy Inc.
TSX VENTURE : BEY

Blacksteel Energy Inc.

September 18, 2014 15:15 ET

Blacksteel Energy Inc. Announces $1,500,000 Private Placement

CALGARY, ALBERTA--(Marketwired - Sept. 18, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES

Blacksteel Energy Inc. (TSX VENTURE:BEY) ("Blacksteel" or the "Corporation") is pleased to announce that it intends to raise up to $1,500,000 by way of a non-brokered private placement (the "Offering") of units ("Units") of the Corporation at a price of $0.15 per Unit. Subject to certain limitations discussed below, the Offering is open to all existing shareholders of the Corporation, and any existing shareholders interested in participating in the Offering should contact the Corporation pursuant to the contact information set forth below. The Offering is expected to close on or about September 30, 2014, and the Offering is subject to TSX Venture Exchange Inc. ("TSXV") final acceptance.

The Offering

The maximum Offering is 10,000,000 Units for gross proceeds of $1,500,000. The Offering is not subject to any minimum aggregate subscription. Each Unit will consist of one common share in the capital of Blacksteel (the "Common Share") and one-half of a Common Share purchase warrant ("Warrant"). Each whole Warrant shall be exercisable into one Common Share at a price of $0.25 for eighteen (18) months from the date of closing of the Offering. Each Warrant is subject to accelerated expiry provisions such that if at any time after the completion of the Offering the average weighted trading price of the Common Shares on the TSXV is at least $0.35 for twenty consecutive days, the Corporation may give notice to the holders that each Warrant will expire 30 days from the date of providing such notice.

A finder's fee of up to 6% of the gross proceeds of the Offering may be paid in cash on all or any portion of the Offering. In addition, finder's warrants exercisable into Common Shares of Blacksteel may be issued in an amount up to 6% of the number of Units sold under the Offering. Finder's warrants will be exercisable into Common Shares at a price of $0.15 per Common Share for a period of one year from the date of issuance of such finder's warrants.

The proceeds of the Offering will be used to repay outstanding debt, working capital and general corporate purposes. Assuming the entire $1,500,000 Offering is completed, the use of proceeds will be as follows: (a) working capital ($300,000); (b) finder's fees, legal and TSXV fees ($115,000); (c) accounts payable ($460,000); and (d) general corporate purposes ($625,000). If the Proposed Transaction (as defined below) is completed, the funds allocated to general corporate purposes will be used to fund the cash component of the Proposed Transaction and acquisition and deployment of capital assets.

Although the Corporation intends to use the proceeds of the Offering as described above, the actual allocation of net proceeds may vary from the uses set forth above, depending on future operations or unforeseen events or opportunities. It is not currently anticipated that any of proceeds of the Offering will be used for payments to Related Parties of the Corporation (as defined in the policies of the TSX Venture). If the Offering is not fully subscribed, the Corporation will apply the proceeds of the Offering to the above uses in priority and in such proportions as the Board of Directors and Management of the Corporation determine is in the best interests of the Corporation.

The securities issued in connection with the Offering will be subject to a hold period expiring four months and one day from the date of issuance of such securities.

Existing Shareholder Exemption

Depending on demand and regulatory requirements, a portion of the Offering may be made pursuant to the existing shareholder exemption (the "Existing Shareholder Exemption") contained in Multilateral CSA Notice 45-313 and the various corresponding blanket orders and rules of participating jurisdictions (the Existing Shareholder Exemption is not available in Ontario or Newfoundland and Labrador). In addition to conducting the Offering pursuant to the Existing Shareholder Exemption, the Offering will also be conducted pursuant to other available prospectus exemptions, including sales to accredited investors and close personal friends and business associates of directors and officers of the Corporation.

The Corporation has set September 17, 2014 as the record date for the purpose of determining existing shareholders entitled to purchase Units pursuant to the Existing Shareholder Exemption. Subscribers purchasing Units under the Existing Shareholder Exemption will need to represent in writing that they meet certain requirements of the Existing Shareholder Exemption, including that they were, on or before the record date, a shareholder of the Corporation (and still are a shareholder). The aggregate acquisition cost to a subscriber under the Existing Shareholder Exemption cannot exceed $15,000 unless that subscriber has obtained advice obtained from a registered investment dealer regarding the suitability of the investment. The Corporation will accept qualifying subscriptions of $5000 or larger. Unless the Corporation determines to increase the gross proceeds of the Offering and receives TSX Venture approval for such increase, if subscriptions received for the Offering based on all available exemptions exceed the maximum Offering amount of $1,500,000, Units will be allocated pro rata amongst all subscribers qualifying under all available exemptions.

Proposed Transaction and Concurrent Financing

The Offering is being completed in conjunction with Blacksteel's current brokered private placement of subscription receipts for up to $15,000,000 (the "Brokered Financing") through a syndicate of agents led by Canaccord Genuity Corp. (collectively, the "Agents"). The Brokered Financing is being completed in contemplation of Blacksteel's proposed acquisition (the "Proposed Transaction") of Alcan Fluid Disposal Ltd., Peace Drilling and Research Ltd. and Integrated Resource Technologies Ltd. For additional details on the Brokered Financing, please refer to the Corporation's press release dated September 4, 2014 and for more details on the Proposed Transaction, please refer to the Corporation's press releases of June 3, 2014 and September 4, 2014. The Offering is being completed without any involvement of the Agents.

Blacksteel Energy Inc.

Blacksteel is a junior oil and gas company involved in the exploration, exploitation, development and production of petroleum and natural gas resources. The Corporation has a 100% working interest in a four section petroleum and natural gas lease in the Del Bonita Area of Southern Alberta, which it believes may have Bakken potential. It also has a 25% working interest in one section of land in the Crossfield area, which the Corporation believes is oil prospective in the Elkton formation.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information: This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. In particular, this news release contains forward-looking information regarding the Offering and the use of proceeds of the Offering. There can be no assurance that such forward-looking information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such forward-looking information. This forward-looking information reflects Blacksteel's current beliefs and is based on information currently available to Blacksteel and on assumptions Blacksteel believes are reasonable. These assumptions include, but are not limited to: TSX Venture Exchange acceptance of the Offering; future costs and expenses being based on historical costs and expenses, adjusted for inflation; and market demand for, and market acceptance of, the Offering. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of Blacksteel to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; capital market conditions and market prices for securities and junior market securities; the actual results of Blacksteel's business operations including its exploration operations; oil and gas company market conditions and the market conditions of the oil and gas industry in general; competition; changes in legislation, including environmental legislation, affecting Blacksteel; timing and availability of external financing on acceptable terms; and lack of qualified, skilled labour or loss of key individuals. A description of additional assumptions used to develop such forward-looking information and a description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Blacksteel's disclosure documents on the SEDAR website at www.sedar.com. Although Blacksteel has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Blacksteel does not undertake to update any forward-looking information except in accordance with applicable securities laws.

Contact Information