Gold Project is 'Robust, Strong Acquisition Candidate'

In a July 3 research note, Haywood analyst Kerry Smith reported that Bluestone Resources Inc.'s (BSR:TSX.V) recent drill results "continue to highlight the potential to upgrade Inferred resources to the Measured and Indicated (M&I) category at Cerro Blanco" in Guatemala.

Smith reviewed the newly reported results. Of the eight holes, six were from the North zone, and two from the South zone.

Each of the North zone holes intersected multiple veins as well as individual veins around 1 meter (1m) true width and of gold grades in the 5–10 grams per ton (5–10 g/t) range.

Highlight hole, UGCB19-144, intersected 12 veins and returned 19 g/t gold over 7.5m, including 98.5 g/t gold over 1m. The rest of the North zone holes returned an average gold grade of 6.8 g/t. "We expect this ore body will have a positive grade reconciliation to the reserve model when mined, given the high-grade, nuggety nature of the deposit," commented Smith.

Results from the two South zone holes showed the best intercept to be 8.4 g/t gold over 9m.

Bluestone will continue drilling from surface throughout 2019 to finish the current 8,000m campaign.

Smith discussed the company's current Cerro Blanco resource and its makeup. He indicated that about half of the existing 357,319 ounces of Inferred resources at an average 8.1 g/t gold grade could likely be converted into M&I resources without further drilling. M&I resources currently total 1,200,000 ounces of gold at an average grade of 10.1 g/t.

However, the resource could be expanded even further, Smith highlighted. It would just likely take some time to do so. He added, "We fully expect the current defined veins will extend further along strike and new veins will also be discovered as more drilling is completed, and the resource should double to about 500,000 ounces over time."

Bluestone intends to update its current resource and reserve estimates in Q3/19 and 2020, respectively.

Looking forward, Smith pointed out that the next major step for the company and Cerro Blanco is financing, which the company aims to secure by year-end 2019. As such, and with significant infrastructure already in place there and all permits in hand, Haywood anticipates first production at Cerro Blanco by mid-2021.

"The project is very robust and is a strong acquisition candidate for midtier gold companies looking to add a shovel-ready, permitted project to their project portfolio," Smith wrote.

Haywood has a Buy rating and a CA$2.75 per share target price on Bluestone, whose stock was trading at about CA$1.03 per share at the time the report was written. "We recommend accumulating shares at current levels," wrote Smith.

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Disclosures from Haywood Securities, Bluestone Resources, July 3, 2019

Analyst Certification: I, Kerry Smith, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures
The following Important Disclosures apply for Juggernaut Exploration:
▪The Analyst(s) preparing this report (or a member of the Analysts' households) have a financial interest in Bluestone Resources.
▪ Haywood Securities, Inc. has reviewed lead projects of Bluestone Resources and a portion of the expenses for this travel have been reimbursed by the issuer.
▪ Haywood Securities, Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Bluestone Resources in the last 12 months.
Other material conflict of interest of the research analyst of which the research analyst or Haywood Securities Inc. knows or has reason to know at the time of publication or at the time of public appearance: n/a.

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