Water Stone Shards can be found at the bottom of lakes and looks like sand with blue waves in it. It is similar to clay in color. When you are mining or looking for these, it is advisable to bring a couple of signs with you. When you stack two on top of each other, air blocks are created, allowing you to breath and making it easier to see the ore. The ore is easy to spot, as it gives off some light. Once the ore is broken, it drops 1 Water Stone Shard. 9 of those crafted together makes a Water Stone.