Bluestone Resources : Q3 2021 Financial Statements

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2021 and 2020

(Unaudited)

Bluestone Resources Inc.

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

	Notes	September 30, 2021	December 31, 2020
Current assets
Cash and cash equivalents		$31,812,009	$49,334,074
Accounts receivable		69,702	373,537
Equity securities		229,984	297,730
Prepaid expenses and other current assets		320,735	412,149
Inventory		115,548	81,007
		32,547,978	50,498,497
Non-current assets
Restricted cash		1,766,307	1,748,584
Property, plant and equipment	3	14,201,894	4,645,876
Exploration and evaluation asset		30,126,433	30,126,433
Total assets		$78,642,612	$87,019,390
Current liabilities
Trade and other payables	4	$4,316,707	$2,980,812
		4,316,707	2,980,812
Non-current liabilities
Other liabilities	4	1,911,297	-
Rehabilitation provisions		8,752,204	8,436,427
Deferred income tax liabilities		1,613,764	1,947,178
Total liabilities		16,593,972	13,364,417
Shareholders' equity
Share capital	5	178,385,235	168,677,315
Reserves		10,960,945	10,702,958
Accumulated other comprehensive income		11,178,876	10,805,015
Deficit		(138,476,416)	(116,530,315)
Total shareholders' equity		62,048,640	73,654,973
Total liabilities and shareholders' equity		$78,642,612	$87,019,390

Events after the reporting period (note 3)

Approved on November 16, 2021, 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 Ended	Three Months Ended	Nine Months Ended	Nine Months Ended
	Notes	September 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020
Operating expenses
Exploration and evaluation expenses	6	$6,314,282	$5,672,863	$16,765,499	$13,704,579
General and administration
Advertising and promotion		59,030	114,612	341,482	322,576
Corporate listing and filing fees		22,934	3,362	93,957	51,465
Office and general		340,137	188,728	921,239	540,974
Professional fees		58,831	334,127	223,081	1,405,233
Salaries and wages		715,350	903,252	2,236,059	2,742,272
Share-based compensation	5	187,790	206,123	1,365,517	975,326
		(7,698,354)	(7,423,067)	(21,946,834)	(19,742,425)
Other income (expenses)
Interest income		76,970	155,350	304,532	310,403
Finance expenses		(5,236)	(162,899)	(70,150)	(474,892)
Accretion expense		(106,551)	(139,566)	(315,777)	(411,749)
Other (loss) income		-	(11,189)	(13,462)	43,412
Foreign exchange gain (loss)		528,902	(512,988)	(225,143)	(358,282)
Loss before income tax		(7,204,269)	(8,094,359)	(22,266,834)	(20,633,533)
Income tax recovery (expense)		75,088	(544,939)	320,733	(489,246)
Net loss		(7,129,181)	(8,639,298)	(21,946,101)	(21,122,779)
Other comprehensive income items
that will not be reclassified to net loss:
(Loss) gain on equity securities		(68,749)	450,140	(68,749)	462,917
Translation adjustment		(987,449)	1,324,510	442,610	3,047,291
Comprehensive loss		($8,185,379)	($6,864,648)	($21,572,240)	($17,612,571)
Weighted average number of common
shares outstanding - basic and diluted		150,158,483	143,231,017	148,440,506	115,536,297
Basic and diluted loss per common
share		($0.05)	($0.06)	($0.15)	($0.18)

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, 2020		81,898,123	$96,107,883	$12,502,950	$4,561,233	($85,847,353)	$27,324,713
Bought deal financing, net of fees		52,578,000	62,706,915	-	-	-	62,706,915
Credit facility consideration		85,000	98,012	-	-	-	98,012
Share-based compensation	5	-	83,951	891,375	-	-	975,326
Exercise of options	5	5,198,333	8,027,654	(2,469,185)	-	-	5,558,469
Exercise of warrants	5	3,777,920	1,638,480	(430,121)	-	-	1,208,359
Comprehensive income (loss) for the period		-	-	-	3,510,208	(21,122,779)	(17,612,571)
Balance, September 30, 2020		143,537,376	$168,662,895	$10,495,019	$8,071,441	($106,970,132)	$80,259,223
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	5	-	-	1,365,517	-	-	1,365,517
Exercise of options	5	526,667	780,453	(156,288)	-	-	624,165
Exercise of warrants	5	6,084,440	8,927,467	(951,242)	-	-	7,976,225
Comprehensive income (loss) for the period		-	-	-	373,861	(21,946,101)	(21,572,240)
Balance, September 30, 2021		150,158,483	$178,385,235	$10,960,945	$11,178,876	($138,476,416)	$62,048,640

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)

		Nine Months Ended	Nine Months Ended
	Notes	September 30, 2021	September 30, 2020
Cash used in operating activities
Net loss for the period		($21,946,101)	($21,122,779)
Adjustments for:
Accretion expense		315,777	411,749
Depreciation	3	245,903	347,015
Share-based compensation	5	1,365,517	975,326
Interest income		(304,532)	(130,701)
Finance expenses		8,671	114,929
Other loss		18,436	11,189
Change in non-current other liabilities		659,819	-
Income tax (recovery) expense		(320,733)	488,892
Non-cash foreign exchange loss		261,414	523,926
Changes in non-cash working capital:
Accounts receivable		36,679	(226,342)
Prepaid expenses and other current assets		92,054	97,412
Inventory		(34,541)	13,540
Trade and other payables		148,137	(452,211)
Cash used in operating activities before income taxes paid		(19,453,500)	(18,948,055)
Income taxes paid		-	(5,168)
Cash used in operating activities		(19,453,500)	(18,953,223)
Cash used in investing activities
Purchase of property, plant and equipment		(7,345,886)	(158,588)
Interest received		576,667	130,701
Cash used in investing activities		(6,769,219)	(27,887)
Cash generated by financing activities
Proceeds from equity financing		-	65,414,119
Equity financing fees		-	(2,707,204)
Proceeds from exercise of options		624,165	5,558,469
Proceeds from exercise of warrants		7,976,225	1,208,359
Funds received from loans		-	10,000,000
Repayment of loans		-	(10,000,000)
Credit facility fees		(4,500)	(467,897)
Lease principal repayments		(27,195)	(77,624)
Interest paid		(4,171)	(78,679)
Cash generated by financing activities		8,564,524	68,849,543
Effects of foreign exchange rate changes on cash and cash equivalents		136,130	2,448,132
(Decrease) increase in cash and cash equivalents		(17,522,065)	52,316,565
Cash and cash equivalents, beginning of the period		49,334,074	3,030,330
Cash and cash equivalents, end of the period		$31,812,009	$55,346,895

Supplemental cash flow information (note 10)

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

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