Drilling Continues to Deliver High Grade Intercepts: 3.2 meters of 18.5 g/t Au and 1 meter of 38.5 g/t Au

February 27, 2019 – VANCOUVER, BRITISH COLUMBIA – Bluestone Resources Inc. (TSXV:BSR | OTCQB:BBSRF) (TSXV:BSR | OTCQB:BBSRF) (“Bluestone” or the “Company”) is pleased to announce additional infill drill results from resource conversion drilling underway at its high-grade Cerro Blanco Gold project. Two LM-75 diamond drill rigs are currently situated within the North Zone of the Cerro Blanco underground workings and are targeting key veins in the upper part of the Cerro Blanco resource that can be converted to the Measured and Indicated Resource categories by infill drilling.

The primary focus of the program is to upgrade the Inferred Resources identified during the previous infill drill program completed in 2018. In addition, this program is also designed to define new resources along known veins in the mine plan that extend outside of the current resource envelope.

Bluestone recently announced results of a Feasibility Study on the high-grade Cerro Blanco Gold project (see press release January 29th, 2019) where one of the principal recommendations for optimizing and further enhancing the project was through potential conversion of a portion of the 360,000 ounces of Inferred Resources to Measured and Indicated Resources through infill drilling.

Table 1. Significant Intercepts (this Press Release)

HOLE ID

FROM (meters)

TO (meters)

CORE INTERVAL

TRUE WIDTH

Au g/t

Ag g/t

VEIN ID

UGCB18-108

48.7

50.1

1.4

1.4

4.4

4.2

VN_01

 

63.4

64.4

1.0

1.0

38.5

51.5

VN_02

UGCB18-111

57.5

58.7

1.2

0.9

6.7

13.8

VN_01

 

67.0

68.0

1.0

1.0

12.5

13.0

 

91.1

92.1

1.0

1.0

9.8

13.9

VN_02

 

94.3

99.0

4.7

3.6

6.0

17.6

VN_03

 

103.8

105.1

1.3

1.3

6.1

3.9

VN_05

UGCB18-112

70.6

71.6

1.0

1.0

8.2

12.1

VN_01

 

76.5

77.5

1.0

1.0

4.7

12.2

 

108.0

109.1

1.2

1.1

8.3

5.7

VN_02

 

110.2

111.4

1.2

1.2

4.6

6.2

 

113.4

114.1

0.7

0.7

4.5

3.6

VN_03

UGCB18-113

12.4

14.3

2.0

2.0

4.5

2.2

 

47.6

49.6

2.0

1.9

13.1

24.4

VN_02

 

53.7

55.7

2.0

2.0

5.1

10.7

VN_05

UGCB19-114

47.4

48.4

1.0

1.0

4.4

6.4

 

56.3

59.7

3.4

2.9

7.1

18.4

VN_02

 

59.7

61.7

2.0

1.9

8.0

7.1

VN_05

 

65.8

67.1

1.2

1.1

18.6

33.8

VN_06

UGCB19-115

61.3

62.2

0.9

0.9

4.1

7.7

 

64.1

65.1

1.0

1.0

4.9

10.1

VN_01

 

92.2

93.3

1.1

1.1

37.9

24.6

VN_02

 

97.8

101.0

3.2

2.1

18.5

20.9

VN_03

including

97.8

99.5

1.7

1.1

30.7

35

VN_03

Notes: Intervals in bold are cited in the text of the news release. Hole coordinates and azimuth/dip information accompany the plan view attached to this release.

Holes UGCB18-107, 108, 111, 112 and 115 were drilled at various angles and directions from Platform 01-N within the main North Ramp of the underground workings. Holes UGCB19-113 and 114 were both drilled from Platform 04-N, also in the North Ramp. The principal objective of all holes was the interception of Vein VN_02, a primary vein with a total of 46,800 ounces in the Inferred category as per the current resource estimate (154,500 tonnes grading 9.4 g/t Au). This vein was intercepted in all holes with best intercepts drilled being 38.5 g/t Au over 1 meter in Hole UGCB18-108, and 37.9 g/t over 1.1 meters in Hole UGCB19-115. Hole UGCB18-107, drilled upwards to test the higher reaches of the veins also intercepted the vein albeit with narrower width and low grade owing to its proximity to the lower contact of the Salinas Unit, a silicified conglomerate that forms a cap over the deposit.

Drilling is continuing and further results will be reported as received. A plan view showing drill hole locations can be accessed by clicking HERE.

Quality Analysis and Quality Control

Assay results listed within this release were performed by Inspectorate Laboratories (“Inspectorate”), a division of Bureau Veritas, which are ISO 17025 accredited laboratories. Logging and sampling are undertaken on site at Cerro Blanco by Company personnel under a QA/QC protocol developed by Bluestone. Samples are transported in security-sealed bags to Inspectorate, Guatemala City, Guatemala, for sample preparation. Sample pulps are shipped to Inspectorate Laboratories in Vancouver, BC, Canada or Reno, NV, USA, and assayed using industry-standard assay techniques for gold and silver. Gold and silver were analyzed by a 30-gram charge with atomic absorption and/or gravimetric finish for values exceeding 5 g/t Au and 100 g/t Ag. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material, and replicate samples. Quality control is further assured by Bluestone’s QA/QC program, which involves the insertion of blind certified reference materials (standards) and field duplicates into the sample stream to independently assess analytical precision and accuracy of each batch of samples as they are received from the laboratory. A selection of samples is submitted to ALS Chemex Laboratories in Vancouver for check analysis and additional quality control.

Qualified Person

David Cass, P.Geo., Vice President Exploration, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 and has reviewed and verified that the technical information set out above in this news release is accurate and therefore approves this written disclosure of the technical information.

PDAC Convention

Bluestone Resources will be attending the 2019 Prospectors and Developers Association of Canada Convention, to be held at the Metro Toronto Convention Centre March 3-6. Please stop by the Discovery Group Booth #2813 on the Investors Exchange Floor to meet Bluestone Management and view samples of drill core from Cerro Blanco.

Investor Relations Services

As part of Bluestone’s capital markets initiatives planned throughout the year, the Company has retained Integral Wealth Securities Limited (“Integral”) to provide market-making services in accordance with TSX Venture Exchange (“TSXV”) policies. In consideration of the services provided by Integral, Bluestone will pay Integral a monthly cash fee of $7,000. Integral will not receive shares or options as compensation; however, Integral and its clients may have or may acquire a direct interest in the securities of Bluestone. Bluestone and Integral are unrelated and unaffiliated entities. Integral is a member of the Investment Industry Regulatory Organization of Canada and can access all Canadian stock exchange and alternative trading systems. The capital and securities required for any trade undertaken by Integral as principal will be provided by Integral. The agreement has a minimum term of three months and an anticipated total cost of $21,000.

As part of this initiative, Bluestone has engaged Native Ads Inc. (“Native Ads”) to provide and manage a digital media marketing campaign for the Company. The Company has entered into an agreement with Native Ads for a total cost of $65,000 and neither Native Ads nor any of its directors and officers own any securities of the Company. The agreement has a term of eight weeks. In addition, Momentum Public Relations Inc. (“Momentum”) will assist in increasing public awareness of the Company by helping with the Company’s corporate communications and marketing activities. Momentum has been retained for a term of three months for a total cost of $50,000.

About Bluestone Resources

Bluestone Resources Inc. (TSXV:BSR | OTCQB:BBSRF) (TSXV:BSR | OTCQB:BBSRF) is a mineral exploration and development company that is focused on advancing its 100%-owned Cerro Blanco Gold and Mita Geothermal projects located in Guatemala. A Feasibility Study on Cerro Blanco returned robust economics with a quick pay back. The average annual production is projected to be 146,000 ounces per year over the first three years of production with all-in sustaining costs of $579/oz (as defined per World Gold Council guidelines, less corporate general and administration costs). The Company trades under the symbol “BSR” on the TSX Venture Exchange and “BBSRF” on the OTCQB.

Neither the 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.

This press release contains “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). All statements, other than statements of historical fact, that address activities, events or developments that Bluestone Resources Inc. (“Bluestone” or the “Company”) believes, expects or anticipates will or may occur in the future including, without limitation: the conversion of the inferred mineral resources; increasing the amount of measured mineral and indicated mineral resources; the proposed timeline and benefits of further drilling; the proposed timeline and benefits of the Feasibility Study; statements about the Company’s plans for its mineral properties; Bluestone’s business strategy, plans and outlook; the future financial or operating performance of Bluestone; capital expenditures, corporate general and administration expenses and exploration and development expenses; expected working capital requirements; the future financial estimates of the Cerro Blanco Project economics, including estimates of capital costs of constructing mine facilities and bringing a mine into production and of sustaining capital costs, estimates of operating costs and total costs, net present value and economic returns; proposed production timelines and rates; funding availability; resource estimates; and future exploration and operating plans are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to Bluestone and often use words such as “expects”, “plans”, “anticipates”, “estimates”, “intends”, “may” or variations thereof or the negative of any of these terms.

All forward-looking statements are made based on the Company’s current beliefs as well as various assumptions made by them and information currently available to them. Generally, these assumptions include, among others: the ability of Bluestone to carry on exploration and development activities; the price of gold, silver and other metals; there being no material variations in the current tax and regulatory environment; the exchange rates among the Canadian dollar, Guatemalan quetzal and the United States dollar remaining consistent with current levels; the presence of and continuity of metals at the Cerro Blanco Project at estimated grades; the availability of personnel, machinery and equipment at estimated prices and within estimated delivery times; metals sales prices and exchange rates assumed; appropriate discount rates applied to the cash flows in economic analyses; tax rates and royalty rates applicable to the proposed mining operation; the availability of acceptable financing; anticipated mining losses and dilution; success in realizing proposed operations; anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process.

Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements and, even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, Bluestone. Factors that could cause actual results or events to differ materially from current expectations include, among other things: risks relating to variations in the mineral content within the mineral identified as mineral resources from that predicted; risks and uncertainties related to expected production rates, timing and amount of production and total costs of production; risks and uncertainties related to ability to obtain or maintain necessary licenses, permits, or surface rights; risks associated with technical difficulties in connection with mining development activities; risks and uncertainties related to the accuracy of mineral resource estimates and estimates of future production, future cash flow, total costs of production and diminishing quantities or grades of mineral resources; risks associated with geopolitical uncertainty and political and economic instability in Guatemala; risks and uncertainties related to interruptions in production; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; uncertain political and economic environments and relationships with local communities; variations in rates of recovery and extraction; developments in world metals markets; risks related to fluctuations in currency exchange rates; as well as those factors discussed under “Risk Factors” in the Company’s Amended and Restated Annual Information Form.

Any forward-looking statement speaks only as of the date on which it was made, and except as may be required by applicable securities laws, Bluestone disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Bluestone believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to their inherent uncertainty. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.

Non-IFRS Financial Performance Measures

The Company has included certain non-International Financial Reporting Standards (“IFRS”) measures in this new release. The Company believes that these measures, in addition to measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company and to compare it to information reported by other companies. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures presented by other issuers.

All-in sustaining costs

The Company believes that all-in sustaining costs (“AISC”) more fully defines the total costs associated with producing gold.

The Company calculates AISC as the sum of refining costs, third party royalties, site operating costs, sustaining capital costs and closure capital costs all divided by the gold ounces sold to arrive at a per ounce amount. Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied. Differences may also arise due to a different definition of sustaining versus non-sustaining capital.

Total cash costs

Total cash costs is a common financial performance measure in the gold mining industry but has no standard meaning. The Company reports total cash costs on a gold ounce sold basis. The Company believes that, in addition to measures prepared in accordance with IFRS, such as revenue, certain investors can use this information to evaluate the Company’s performance and ability to generate operating earnings and cash flow from its mining operations. Management uses this metric as an important tool to monitor operating cost performance.

Total cash costs include (cost of sales such as mining, processing, maintenance and site administration, royalties, selling costs and by-product credits) to arrive at total cash costs per ounce of gold sold. Other companies may calculate this measure differently.

AISC and total cash costs reconciliation

ASIC and total cash costs are calculated based on the definitions published by the World Gold Council (“WGC”) (a market development organization for the gold industry comprised of and funded by 18 gold mining companies from around the world). The WGC is not a regulatory organization.

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