Bluestone Resources : 2022 2nd Quarter Financial Statements

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six Months Ended June 30, 2022 and 2021

(Unaudited)

Bluestone Resources Inc.

Consolidated Statements of Financial Position (Expressed in United States dollars - Unaudited)

	Notes	June 30, 2022	December 31, 2021
Current assets
Cash and cash equivalents		$2,887,373	$18,285,126
Accounts receivable		314,372	87,859
Equity securities		176,864	247,636
Prepaid expenses and other current assets		313,923	253,032
Inventory		112,994	89,208
		3,805,526	18,962,861
Non-current assets
Restricted cash		1,768,853	1,769,168
Property, plant and equipment	3	24,959,094	22,221,840
Exploration and evaluation asset		30,126,433	30,126,433
Total assets		$60,659,906	$73,080,302
Current liabilities
Trade and other payables	4	$4,826,246	$4,839,224
Loan payable	5	1,000,000	-
		5,826,246	4,839,224
Non-current liabilities
Other liabilities	4	2,500,348	2,792,496
Rehabilitation provisions		8,845,245	8,630,047
Deferred income tax liabilities		1,453,283	1,536,443
Total liabilities		18,625,122	17,798,210
Shareholders' equity
Share capital	6	179,762,083	178,674,062
Reserves		11,738,147	11,093,459
Accumulated other comprehensive income		11,287,493	11,260,395
Deficit		(160,752,939)	(145,745,824)
Total shareholders' equity		42,034,784	55,282,092
Total liabilities and shareholders' equity		$60,659,906	$73,080,302

Events after the reporting period (notes 3)

Approved on August 16, 2022, on behalf of the Board of Directors:
"Zara Boldt"	"Jack Lundin"
Zara Boldt, Director	Jack Lundin, Director

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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Bluestone Resources Inc.

Consolidated Statements of Loss and Comprehensive Loss (Expressed in United States dollars - Unaudited)

		Three Months	Three Months	Six Months Ended	Six Months Ended
	Notes	Ended June 30, 2022	Ended June 30, 2021	June 30, 2022	June 30, 2021
Operating expenses
Exploration and evaluation expenses	7	$5,745,900	$5,158,765	$10,972,172	$10,451,217
General and administration
Advertising and promotion		45,818	69,497	116,624	282,452
Corporate listing and filing fees		17,509	13,080	78,144	71,023
Office and general		378,642	320,997	767,448	581,102
Professional fees		247,670	108,669	389,010	164,250
Salaries and wages		873,399	779,708	1,419,400	1,520,709
Share-based compensation	6	229,370	481,061	858,478	1,177,727
		(7,538,308)	(6,931,777)	(14,601,276)	(14,248,480)
Other income (expenses)
Interest income		62,343	103,473	88,478	227,562
Finance expenses		(78,265)	(4,858)	(94,829)	(64,914)
Accretion expense		(112,185)	(105,254)	(222,951)	(209,226)
Loss on disposal of property, plant and
equipment		(106,743)	(21,385)	(102,842)	(13,462)
Foreign exchange loss		(153,318)	(469,303)	(154,038)	(754,045)
Loss before income tax		(7,926,476)	(7,429,104)	(15,087,458)	(15,062,565)
Income tax (expense) recovery		(390,975)	(108,156)	80,343	245,645
Net loss		(8,317,451)	(7,537,260)	(15,007,115)	(14,816,920)
Other comprehensive income items
that will not be reclassified to net loss:
(Loss) gain on equity securities		(141,140)	36,722	(67,679)	-
Translation adjustment		(41,438)	831,230	94,777	1,430,059
Comprehensive loss		($8,500,029)	($6,669,308)	($14,980,017)	($13,386,861)
Weighted average number of common
shares outstanding - basic and diluted		151,149,788	150,144,563	150,917,393	147,567,280
Basic and diluted loss per common
share		($0.06)	($0.05)	($0.10)	($0.10)

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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Bluestone Resources Inc.

Consolidated Statements of Changes in Shareholders' Equity (Expressed in United States dollars - Unaudited)

		Share capital
					Accumulated
					other		Total
					comprehensive		shareholders'
	Notes	Shares	Amount	Reserves	income	Deficit	equity
Balance, January 1, 2021		143,547,376	$168,677,315	$10,702,958	$10,805,015	($116,530,315)	$73,654,973
Share-based compensation	6	-	-	1,177,727	-	-	1,177,727
Exercise of options	6	526,667	780,453	(156,287)	-	-	624,166
Exercise of warrants		6,084,440	8,927,467	(951,242)	-	-	7,976,225
Comprehensive income (loss) for the period		-	-	-	1,430,059	(14,816,920)	(13,386,861)
Balance, June 30, 2021		150,158,483	$178,385,235	$10,773,156	$12,235,074	($131,347,235)	$70,046,230
Balance, January 1, 2022		150,358,483	$178,674,062	$11,093,459	$11,260,395	($145,745,824)	$55,282,092
Loan consideration	5	152,400	238,376	-	-	-	238,376
Share-based compensation	6	-	-	858,478	-	-	858,478
Exercise of options	6	646,800	849,645	(213,790)	-	-	635,855
Comprehensive income (loss) for the period		-	-	-	27,098	(15,007,115)	(14,980,017)
Balance, June 30, 2022		151,157,683	$179,762,083	$11,738,147	$11,287,493	($160,752,939)	$42,034,784

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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Bluestone Resources Inc. Consolidated Statements of Cash Flows (Expressed in United States dollars - Unaudited)

		Six Months Ended	Six Months Ended
	Notes	June 30, 2022	June 30, 2021
Cash used in operating activities
Net loss for the period		($15,007,115)	($14,816,920)
Adjustments for:
Accretion expense		222,951	209,226
Depreciation	3	167,294	179,626
Share-based compensation	6	858,478	1,177,727
Interest income		(88,478)	(227,562)
Loss on disposal of property, plant and equipment		106,732	26,339
Income tax recovery		(80,343)	(245,645)
Non-cash foreign exchange loss		125,831	804,139
Changes in non-cash working capital:
Accounts receivable		(195,097)	29,381
Prepaid expenses and other current assets		213,428	272,173
Inventory		(23,786)	(30,689)
Trade and other payables		(1,159,429)	(412,757)
Cash used in operating activities		(14,859,534)	(13,034,962)
Cash used in investing activities
Purchase of property, plant and equipment		(2,145,647)	(4,451,644)
Interest received		55,785	492,745
Cash used in investing activities		(2,089,862)	(3,958,899)
Cash generated by financing activities
Funds received from Loan	5	1,000,000	-
Loan fees		(40,685)	(4,500)
Proceeds from exercise of options		635,855	624,166
Proceeds from exercise of warrants		-	7,976,225
Lease principal repayments		-	(26,971)
Interest paid		-	(3,403)
Cash generated by financing activities		1,595,170	8,565,517
Effects of foreign exchange rate changes on cash and cash equivalents		(43,527)	622,591
Decrease in cash and cash equivalents		(15,397,753)	(7,805,753)
Cash and cash equivalents, beginning of the period		18,285,126	49,334,074
Cash and cash equivalents, end of the period		$2,887,373	$41,528,321

Supplemental cash flow information (note 11)

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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