Bluestone Resources : 1st Quarter

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2023 and 2022

(Unaudited)

Bluestone Resources Inc.

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

	Notes	March 31, 2023	December 31, 2022
Current assets
Cash		$1,861,487	$1,743,139
Accounts receivable		181,572	207,461
Equity securities		163,253	192,310
Prepaid expenses and other current assets		118,010	231,251
Inventory		96,296	71,026
		2,420,618	2,445,187
Non-current assets
Restricted cash		1,739,163	1,745,365
Property, plant and equipment	3	22,748,998	23,639,371
Exploration and evaluation asset		30,126,433	30,126,433
Total assets		$57,035,212	$57,956,356
Current liabilities
Trade and other payables	4	$4,919,451	$5,161,780
Loan payable	5	8,000,000	6,000,000
		12,919,451	11,161,780
Non-current liabilities
Other liabilities	4	938,364	1,365,009
Rehabilitation provisions		9,535,548	9,319,388
Deferred income tax liabilities		1,733,699	1,565,886
Total liabilities		25,127,062	23,412,063
Shareholders' equity
Share capital	6	180,000,654	179,878,018
Reserves		12,650,942	12,170,642
Accumulated other comprehensive income		10,920,893	10,934,467
Deficit		(171,664,339)	(168,438,834)
Total shareholders' equity		31,908,150	34,544,293
Total liabilities and shareholders' equity		$57,035,212	$57,956,356

Nature of operations and liquidity risk (note 1)

Approved on May 2, 2023, on behalf of the Board of Directors:
"Zara Boldt"	"Peter Hemstead"
Zara Boldt, Director	Peter Hemstead, 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 Ended	Three Months Ended
	Notes	March 31, 2023	March 31, 2022
Operating expenses
Exploration and evaluation expenses	7	$1,344,263	$5,226,272
General and administration
Salaries and wages		574,868	546,001
Share-based compensation	6	480,300	629,108
Office and general		205,485	388,806
Professional fees		83,296	141,340
Corporate listing and filing fees		49,348	60,635
Advertising and promotion		20,053	70,806
		(2,757,613)	(7,062,968)
Other income (expenses)
Interest income		44,037	26,135
Finance expenses		(179,931)	(16,564)
Accretion expense		(216,160)	(110,766)
Gain on disposal of property, plant & equipment		98,456	-
Other income		-	3,901
Foreign exchange loss		(39,363)	(720)
Loss before income tax		(3,050,574)	(7,160,982)
Income tax (expense) recovery		(174,931)	471,318
Net loss		(3,225,505)	(6,689,664)
Other comprehensive (loss) income items that will not be reclassified to net loss:
(Loss) gain on equity securities		(29,242)	73,461
Translation adjustment		15,668	136,215
Comprehensive loss		($3,239,079)	($6,479,988)
Weighted average number of common shares outstanding - basic and diluted		151,261,519	150,682,416
Basic and diluted loss per common share		($0.02)	($0.04)

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, 2022		150,358,483	$178,674,062	$11,093,459	$11,260,395	($145,745,824)	$55,282,092
Loan consideration		150,000	234,670	-	-	-	234,670
Share-based compensation	6	-	-	629,108	-	-	629,108
Exercise of options	6	546,800	718,560	(180,967)	-	-	537,593
Comprehensive income (loss) for the period		-	-	-	209,676	(6,689,664)	(6,479,988)
Balance, March 31, 2022		151,055,283	$179,627,292	$11,541,600	$11,470,071	($152,435,488)	$50,203,475
Balance, January 1, 2023		151,236,141	$179,878,018	$12,170,642	$10,934,467	($168,438,834)	$34,544,293
Loan consideration		83,226	122,636	-	-	-	122,636
Share-based compensation	6	-	-	480,300	-	-	480,300
Comprehensive loss for the period		-	-	-	(13,574)	(3,225,505)	(3,239,079)
Balance, March 31, 2023		151,319,367	$180,000,654	$12,650,942	$10,920,893	($171,664,339)	$31,908,150

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)

		Three Months Ended	Three Months Ended
	Notes	March 31, 2023	March 31, 2022
Cash used in operating activities
Net loss for the period		($3,225,505)	($6,689,664)
Adjustments for:
Accretion expense		216,160	110,766
Depreciation	3	71,353	84,269
Share-based compensation	6	480,300	629,108
Interest income		(44,037)	(26,135)
Finance expenses		122,636	-
Gain on disposal of property, plant and equipment		(98,456)	-
Income tax expense (recovery)		174,931	(471,318)
Non-cash foreign exchange loss (gain)		26,001	(7,064)
Changes in non-cash working capital:
Accounts receivable		(19,528)	27,581
Prepaid expenses and other current assets		113,534	(336,156)
Inventory		(25,270)	(33,440)
Trade and other payables		(683,095)	(184,125)
Cash used in operating activities		(2,890,976)	(6,896,178)
Cash generated by (used in) investing activities
Purchase of property, plant and equipment		(202,730)	(1,269,889)
Proceeds from disposal of plant and equipment		1,120,206	-
Interest received		89,562	14,843
Cash generated by (used in) investing activities		1,007,038	(1,255,046)
Cash generated by financing activities
Funds received from Loan	5	2,000,000	-
Loan fees		-	(40,265)
Proceeds from exercise of options		-	537,593
Cash generated by financing activities		2,000,000	497,328
Effects of foreign exchange rate changes on cash		2,286	141,444
Increase (decrease) in cash		118,348	(7,512,452)
Cash, beginning of the period		1,743,139	18,285,126
Cash, end of the period		$1,861,487	$10,772,674

Supplemental cash flow information (note 11)

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

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