failed @import on sass

So I have done this plenty of times with no problems at all but this is a new 5.2 app and I am having a wired issue with @import.

So my very simple sass file like so.

\\app.scss
@import "node_modules/bootstrap/scss/bootstrap";
@import "variables";

Its importing bootstrap fine but its not importing my variables file. Screenshot if it helps. http://d.pr/i/10Cr8

And my gulp file.

elixir(function(mix) {
    mix.sass('app.scss');
});

You really cant get any easier than this.. I have it in multiple other sites...

Error

{ [Error: resources/assets/sass/app.scss
Error: File to import not found or unreadable: variables
       Parent style sheet: stdin
        on line 2 of stdin
>> @import "variables";
   ^

Anyone else have this problem with 5.2 or had this before?