What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-13 compared with 2021-05-17 · 286 added, 489 removed, 354 unchanged (69% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2021

June 30, 2021

December 31, 2020

4 unchanged sentences

Development costs

LIABILITIES AND SHAREHOLDERS' DEFICIT

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities:

12 unchanged sentences

Commitments and contingencies

Shareholders' deficit:

Preferred shares, 25,000,000 shares Series A preferred stock - $10.00

stated value;

2,500,000 authorized;

192,269 shares issued and outstanding

Shareholders' equity (deficit):

Preferred shares, 25,000,000 shares

Series A preferred stock - $ 10.00 stated value;

0 and 192,269 shares issued and outstanding, respectively

Series B preferred stock - $ 1,250.00 stated value;

5,000 authorized;

none shares issued and outstanding

no shares issued and outstanding

Common shares, $0.001 par value;

1,000,000,000 shares

1,000,000,000 shares authorized;

11,340,412 and 7,098,394 shares issued and outstanding, respectively

3 unchanged sentences

( 15,832,969 )

Shareholders' deficit:

Total liabilities and shareholders' deficit

Shareholders' equity (deficit):

Total liabilities and shareholders' equity (deficit)

See accompanying notes

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses:

4 unchanged sentences

Interest expense

Gain on change in derivative liability

Loss on settlement of liabilities

Loss on conversion of debt

( 1,309,588 )

Loss on change in derivative liability

Total other income (expense)

( 2,122,508 )

( 2,197,240 )

Net loss from continuing operations

( 2,246,088 )

( 1,406,873 )

( 2,490,805 )

Net loss from discontinued operations, net of tax

( 2,246,644 )

( 1,406,873 )

( 2,521,054 )

Series A preferred stock dividend

Net loss attributable to common shareholders

( 2,306,382 )

( 1,486,985 )

( 2,640,530 )

Other comprehensive income:

2 unchanged sentences

Net comprehensive loss

$ ( 664,979 )

$ ( 2,306,382 )

$ ( 1,486,985 )

$ ( 2,571,894 )

Basic and diluted net loss per common share:

8 unchanged sentences

Consolidated Statements of Shareholders' Deficit

For the three months ended March 31, 2021 and 2020

For the three and six months ended June 30, 2021 and 2020

Accumulated Other

Series A Preferred Stock

Additional Paid-in

Accumulated Other Comprehensive Income

Comprehensive

Income (Loss)

Balance, December 31, 2020

1 unchanged sentence

$ ( 363,094 )

Common stock issued for services

Exercise of warrants

Common stock issued for settlement

Stock based compensation

Series A preferred stock dividend

Disposition of assets, related party

Other comprehensive loss

Balance, March 31, 2021

( 16,654,975 )

Exercise of warrants

Stock based compensation

Series A preferred stock dividend

Conversion of Series A preferred

stock and accrued dividend

( 1,922,690 )

Balance, June 30, 2021

$ ( 17,319,954 )

Balance, December 31, 2019

$ ( 11,902,725 )

Exercise of warrants

Common stock issued for settlement liabilities

$ ( 1,161,091 )

Common stock issued for services

Stock based compensation

Series A preferred stock dividend

Disposition of assets, related party

Other comprehensive

Balance, March 31, 2020

( 12,236,873 )

( 1,137,593 )

Debt discount from warrants and beneficial

conversion feature

Stock issued for services

Stock and warrants issued for liabilities

Stock and warrants issued for convertible

notes and accrued interest

Series A preferred stock dividend

( 2,246,644 )

Balance, June 30, 2020

$ ( 14,543,255 )

$ ( 826,348 )

See accompanying notes

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended March 31,

Six months ended June 30,

Operating activities:

Net loss from continuing operations

Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:

$ ( 1,406,873 )

$ ( 2,490,805 )

Adjustments to reconcile net loss from continuing operations to net cash used in

operating activities:

Accretion of discounts on notes payable

Stock based compensation

Gain on change in derivative liability

Loss on settlement of liabilities

Loss on change in derivative liability

Changes in operating assets and liabilities:

5 unchanged sentences

Net cash used in operating activities

Investing activities:

Cash paid for development costs

Net cash used in investing activities from continuing operations

Net cash used in investing activities from discontinued operations

Net cash used in investing activities

Financing activities:

Payments on convertible debt from third parties

Proceeds from convertible debt from third parties

Proceeds from convertible debt from related parties

Proceeds from advances from related parties

Payments on advances from third parties

Payments on advances from related parties

Payments on advances from third parties

Proceeds from advances from third parties

Proceeds from exercise of warrants

Net cash provided by (used in) financing activities from continuing operations

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

12 unchanged sentences

Disposition of assets, related party

Debt discount created by derivative liability

Conversion of debt and accrued interest

Discounts on convertible notes

Common stock issued for accounts payable

Conversion of Series A preferred stock and accrued dividend

See accompanying notes

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 –

Organization, Basis of Presentation, and Nature of

Note 1 – Organization, Basis of Presentation, and Nature of

Organization and Nature of Operations

Magellan Gold Corporation (“we”

“our”,

“us”, the “Company”

or “Magellan”) was incorporated on September 28, 2010, under the laws

Magellan Gold Corporation (“we” “our”,

“us”, the “Company” or “Magellan”) was incorporated on September 28, 2010, under the laws

of the State of Nevada.

11 unchanged sentences

loans from executive management and significant shareholders to fund our operations as we have not generated any significant revenue.

Note 2 –

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

We prepare our financial statements in accordance

with accounting principles generally accepted in the United States (“GAAP”).

The accompanying unaudited interim consolidated

2 unchanged sentences

opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

results for the three months ended March 31, 2021 are not necessarily indicative of the results for the full year.

While we believe that

the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction with

the audited financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December 31,

results for the three and six months ended June 30, 2021 are not necessarily indicative of the results for the full year.

While we believe

that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction

with the audited financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December

On July 1, 2020, the Company entered into a Stock

Purchase Agreement to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims

in Idaho County, Idaho.

1 unchanged sentence

The project area is located 45 miles from Grangeville, Idaho and near the town of Elk City, Idaho.

On August 25, 2020, the Company, a new wholly

owned subsidiary, M Gold Royalty (“M Gold”), to expand into the royalty business.

On August 25, 2020 the Company, formed a new

wholly owned subsidiary, M Gold Royalty (“M Gold”), to expand into the royalty business.

M Gold Royalty will engage in organically

6 unchanged sentences

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the

United States of America (“U.S.

GAAP”).

United States of America (“U.S.

Net Loss per Common Share

compute basic net loss per common share by dividing our net loss attributable to common shareholders by our weighted-average number of

common shares outstanding during the period.

Computation of diluted net loss per common share adds the weighted-average number of potential

common shares outstanding to the weighted-average common shares outstanding, as calculated for basic net loss per share, except for instances

in which there is a net loss.

For the three months ended March 31, 2021, 72,000 of stock options, 1,808,635 of warrants, 192,269 shares

issuable from Series A Preferred Stock and 1,236,527 shares issuable from convertible notes were considered for their dilutive effects.

For the three months ended March 31, 2020, 72,000 of stock options, 335,000 of warrants, 242,269 shares issuable from Series A Preferred

Stock and 430,978 shares issuable from convertible notes were

considered for their dilutive effects.

We compute basic net loss per common share by

dividing our net loss attributable to common shareholders by our weighted-average number of common shares outstanding during the period.

Computation of diluted net loss per common share adds the weighted-average number of potential common shares outstanding to the weighted-average

common shares outstanding, as calculated for basic net loss per share, except for instances in which there is a net loss.

months ended June 30, 2021, 72,000 of stock options, 423,635 of warrants, and 1,283,375 shares issuable from convertible notes were considered

for their dilutive effects.

For the six months ended June 30, 2020, 72,000 of stock options, 2,281,135 of warrants, 242,269 shares issuable

from Series A Preferred Stock and 550,978 shares issuable from convertible notes were considered for their dilutive effects.

Derivative Financial Instruments

Fair value accounting requires bifurcation

of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their

fair value for accounting purposes.

In assessing the convertible debt instruments, management determines if the convertible debt

host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.

the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of

these instruments as derivative financial instruments under ASC 815.

The Company applies the guidance in ASC 815-40-35-12 to

determine the order in which each convertible instrument would be evaluated for derivative classification.

The Company’s

sequencing policy is to evaluate for reclassification contracts with the earliest maturity date first.

Fair value accounting requires bifurcation of

embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value

for accounting purposes.

In assessing the convertible debt instruments, management determines if the convertible debt host instrument

is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement.

If the instrument is not

considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative

financial instruments under ASC 815.

The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible

instrument would be evaluated for derivative classification.

The Company’s sequencing policy is to evaluate for reclassification

contracts with the earliest maturity date first.

Once determined, derivative liabilities are adjusted

11 unchanged sentences

continue as a going concern.

At March 31, 2021 we had a working capital deficit of $1,500,718, we had not yet generated any significant

At June 30, 2021, we had a working capital deficit of $ 1,120,747 , we had not yet generated any significant

revenues or achieved profitable operations and we have accumulated losses of $ 17,319,954 .

7 unchanged sentences

stock but cannot assure than any future financings will occur.

Note 3 –

Mineral Rights and Properties

Note 3 – Mineral Rights and Properties

Center Star Gold Mine

On July 1, 2020, the Company entered into a Stock

Purchase Agreement to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims

in Idaho County, Idaho that include the historic Center Star Gold Mine (“Center Star”) near Elk City, Idaho.

Purchase Agreement to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims

in Idaho County, Idaho that include the historic Center Star Gold Mine (“Center Star”) near Elk City, Idaho.

As a result of

the Clearwater acquisition, Gregory Schifrin, the sole shareholder of Clearwater, was appointed to serve as a member of the Company’s

Board on July 1, 2020.

In consideration for 100% of the issued and outstanding shares of Clearwater, the Company has agreed to pay Clearwater’s

sole shareholder 1,000,000 shares of Magellan common stock, $125,000 convertible note and $25,000 in cash.

4 unchanged sentences

250,000 shares two-years from closing concurrent the pay-off of the $125,000 convertible note.

As of March 31, 2021, the total purchase

price for the Clearwater was determined to be $1,000,000 which consisted of $12,500 cash paid, $12,500 accrued in accounts payable –

As of June 30, 2021, the total purchase

price for the Clearwater was determined to be $1,000,000 which consisted of $ 12,500 cash paid, $ 12,500 accrued in accounts payable –

related party, a $ 125,000 convertible promissory note, and 1,000,000 shares of common stock with a fair value of $ 850,000 .

concluded the transaction qualified as an asset acquisition and all such acquisition costs have been capitalized.

As of March 31, 2021 and December 31, 2020, the

Company had $112,968 in capitalized development cost to develop gold resources at Center Star.

Note 4 –

Disposition of Business

As of June 30, 2021 and December 31, 2020, the

Company had $ 149,695 and $ 112,968 in capitalized development cost to develop gold resources at Center Star, respectively.

Note 4 – Disposition of Business

Mexico Operations

On March 3, 2017 the Company entered into a Memorandum

of Understanding (“MOU”) with Rose Petroleum plc (“Rose”), a multi-asset natural resource business, to purchase

an operating floatation plant that also includes a precious metals leach circuit and associated assets, licenses and agreements (together,

the “SDA Mill”) located in the State of Nayarit, Mexico.

Prior to closing, all of the assets and operations

related to the SDA Mill were transferred to a newly incorporated entity, Minerales Vane 2 S.A.

(“Minerales Vane 2”).

Effective November 30, 2017, the Company’s newly incorporated wholly owned subsidiary, Magellan Acquisition Corporation (“MAC”),

acquired 100% of the issued and outstanding shares of Minerales Vane 2 (“MV2”).

(“Minerales Vane 2”).

Effective November 30, 2017, the Company’s newly incorporated wholly owned subsidiary, Magellan Acquisition Corporation (“MAC”),

acquired 100% of the issued and outstanding shares of Minerales Vane 2 (“MV2”).

Effective March 31, 2020 the Company entered into

an Agreement to Accept Collateral in Full Satisfaction of Obligations (the “Agreement”) with certain holders of Promissory

Notes (the “Lenders”) due December 31, 2019 (the “Notes”) in the aggregate principal amount of $1.05 million.

The Company is indebted under the Notes to the Lenders and the Company’s obligations to the Lenders are secured by a Stock Pledge

and Security Agreement covering 100 shares of common stock of Magellan Acquisition Corporation and one (1) share of MV2 (the “Collateral”)

an Agreement to Accept Collateral in Full Satisfaction of Obligations (the “Agreement”) with certain holders of Promissory

Notes (the “Lenders”) due December 31, 2019 (the “Notes”) in the aggregate principal amount of $1.05 million.

The Company is indebted under the Notes to the Lenders and the Company’s obligations to the Lenders are secured by a Stock Pledge

and Security Agreement covering 100 shares of common stock of Magellan Acquisition Corporation and one (1) share of MV2 (the “Collateral”)

held under a Collateral Agent Agreement.

2 unchanged sentences

The Notes matured on December 31, 2019 and remain unpaid and in default.

The Lenders have accelerated the Company’s

indebtedness.

6 unchanged sentences

On July 21, 2020, the Company entered into a Stock

Purchase agreement with Tri Power Resources, LLC to sell 1,000 shares representing 100% ownership of Gulf+Western Industries, Inc (“Gulf+Western”)

to Tri Power in consideration for the return and cancellation of 50,000 shares of the Company’s Series A Preferred Stock with a

Purchase agreement with Tri Power Resources, LLC to sell 1,000 shares representing 100% ownership of Gulf+Western Industries, Inc (“Gulf+Western”)

to Tri Power in consideration for the return and cancellation of 50,000 shares of the Company’s Series A Preferred Stock with a

stated value of $10 per share.

1 unchanged sentence

Tri Power Resources, LLC.

the related party nature of the above transactions, the gain of $206,860 associated with the disposals were recorded to additional

paid in capital.

Due to the related party nature of the above transactions,

the gain of $ 206,860 associated with the disposals were recorded to additional paid in capital.

The agreements qualify as a discontinued operation

in accordance with U.S.

As a result, operating results and cash flows related to the Gulf+Western, MAC and MV2 operations have been

reflected as discontinued operations in the Company’s consolidated statements of operations and comprehensive loss and consolidated

As a result, operating results and cash flows related to the Gulf+Western, MAC and MV2 operations have

been reflected as discontinued operations in the Company’s consolidated statements of operations and comprehensive loss and consolidated

statements of cash flows.

March 31, 2021

March 31, 2020

Schedule of discontinued operations

June 30, 2021

June 30, 2020

Cost of sales

4 unchanged sentences

Net loss from discontinued operations

Note 5 –

Fair Value of Financial Instruments

Note 5 – Fair Value of Financial Instruments

Financial assets and liabilities recorded at fair

1 unchanged sentence

inputs used to measure fair value into the following levels:

Level 1 –

Quoted market prices in active

Level 1 – Quoted market prices in active

markets for identical assets or liabilities at the measurement date.

Level 2 –

Quoted prices for similar

Level 2 – Quoted prices for similar

assets or liabilities in active markets;

1 unchanged sentence

or other inputs that are observable and can be corroborated by observable market data.

Level 3 –

Inputs reflecting management’s

Level 3 – Inputs reflecting management’s

best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date.

6 unchanged sentences

Fair Value Measurements

The Company’s assets and liabilities recorded

at fair value have been categorized based upon a fair value hierarchy.

The following table presents information about

the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value

hierarchy of those assets and liabilities as of March 31, 2021 and December 31, 2020:

Fair value at March 31, 2021

the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value

hierarchy of those assets and liabilities as of June 30, 2021 and December 31, 2020:

Schedule of Fair Value, Assets and Liabilities Measured on Recurring

Fair value at June 30, 2021

Derivative liability

4 unchanged sentences

The table below presents the change in the fair

value of the derivative liability during the three months ended March 31, 2021:

value of the derivative liability during the six months ended June 30, 2021:

Schedule of fair value of the derivative liability

Fair value as of December 31, 2020

Fair value on the date of issuance recorded as a debt discount

Gain on change in fair value of derivatives

Fair value as of March 31, 2021

Note 6 –

Unsecured advances –

related party

During the three months ended March 31, 2021,

a Director paid of expenses on behalf the Company of $30,252.

As of March 31, 2021, the advances from related party balance were $40,252.

Unsecured advances –third party

During the three months ended March 31, 2021,

the Company received $605 in cash advances, had expenses paid on behalf of $276 and made repayments on advances of $420.

As of March 31,

Loss on change in fair value of derivatives

Fair value as of June 30, 2021

Note 6 – Advances

Unsecured advances – related party

During the six months ended June 30, 2021, a Director

paid expenses on behalf of the Company of $ 30,252 and the Company made payments on advances of $20,000.

As of June 30, 2021, the advances

from related party balance were $ 20,252 .

Unsecured advances –third party

During the six months ended June 30, 2021, the

Company received $ 605 in cash advances, had expenses paid on its behalf of $ 276 and made repayments on advances of $ 30,420 .

30, 2021, the advances from third party balance were $ 18,223 .

Note 7 –

Convertible Note Payable and

Note 7 – Convertible Note Payable and

Derivative Liability

19 unchanged sentences

interest rate on the notes is 12%.

As of March 31, 2021, the balance due under these notes net of unamortized discount of $0, is $75,000,

As of June 30, 2021, the balance due under these notes net of unamortized discount of $ 0 , is $ 75,000 ,

with accrued interest of $ 12,945 .

10 unchanged sentences

10% per annum payable quarterly, accruing from the date of issuance.

As of March 31, 2021, the balance due under these notes net of unamortized

As of June 30, 2021, the balance due under these notes net of unamortized

discount of $ 0 , is $ 145,978 , with accrued interest of $ 25,476 .

15 unchanged sentences

50,000 shares of common stock at a conversion price of $0.50 per share.

As of March 31, 2021, the balance due to a related party under

As of June 30, 2021, the balance due to a related party under

these notes net of unamortized discount of $ 0 , is $ 60,000 , with accrued interest of $ 5,218 .

As of March 31, 2021, the balance due to a

As of June 30, 2021, the balance due to a

third party under these notes net of unamortized discount of $ 0 , is $ 200,000 , with accrued interest of $ 16,231 .

2 unchanged sentences

Secured Convertible Note to a related party for the as part of the purchase of Clearwater Mining Corporation.

The secured convertible

note matures on July 1, 2022 and will accrue interest at the rate of 3% per annum, payable yearly in arrears beginning July 1, 2021.

Note is convertible into shares of Common Stock at a conversion price of $0.50 during the life of the Note.

The Company evaluated the

conversion option and concluded a beneficial conversion feature was present at issuance.

The Company recognized the beneficial conversion

feature and relative fair value of the warrants as a debt discount and additional paid in capital in July 2019.

The $87,500 debt discount

will be amortized over the term of the loan.

Amortization expense of $10,788 was recognized during the three months ended March 31, 2020.

As of March 31, 2021, the balance due to a related party under this note net of unamortized discount of $54,777, is $70,223, with accrued

interest of $2,805.

The convertible note is

secured by common stock of the Company, matures on July 1, 2022 and will accrue interest at the rate of 3 % per annum, payable yearly in

arrears beginning July 1, 2021.

The Note is convertible into shares of Common Stock at a conversion price of $ 0.50 during the life of

The Company evaluated the conversion option and concluded a beneficial conversion feature was present at issuance.

recognized the beneficial conversion feature and relative fair value of the warrants as a debt discount and additional paid in capital

in July 2019.

The $ 87,500 debt discount will be amortized over the term of the loan.

Amortization expense of $ 21,695 was recognized during

the six months ended June 30, 2020.

As of June 30, 2021, the balance due to a related party under this note net of unamortized discount

of $ 43,870 , is $ 81,130 , with accrued interest of $ 3,740 .

AJB Convertible Note

3 unchanged sentences

fees recorded as a discount, which will be amortized over the life of the note.

The loan bears interest at a rate of 10% and has a six-month

The unpaid principal is convertible into shares of the Company’s common stock at the conversion price.

The conversion

price shall be the less of 90% of the lowest trading price during the previous twenty (20) trading day period ending on the issuance date,

or during the previous twenty (20) trading day period ending on date of conversion of this note.

The Company issued the debtholder 266,667

common shares as a commitment fee.

Due to the variable conversion feature the note conversion feature was bifurcated from the note and

recorded as a derivative liability.

The day one derivative liability was $95,715 was recorded as a discount on the convertible notes payable.

As of March 31, 2021, the balance on the loan, net of unamortized discount of $81,818, is $118,182, with accrued interest of $321.

As of March 31, 2021, the total derivative liability

on the above note was adjusted to a fair value of $86,616.

During the three months ended March 31, 2021, $38,897 of the discount was amortized

leaving an unamortized balance of $81,818.

The fair value of the conversion option was estimated using the Black-Scholes option pricing

model and the following assumptions during the period:

fair value of stock $0.92 1.03, volatility of 91.27% - 103.48% based on a comparable

company peer group, expected term of 0.50 years, risk-free rate of 0.05% - 0.06% and a dividend yield of 0%.

Note 8 –

Stockholders’

The loan is secured by common stock of the Company, bears

interest at a rate of 10 % and has a six-month maturity.

The unpaid principal is convertible into shares of the Company’s common

stock at the conversion price.

The conversion price shall be the less of 90% of the lowest trading price during the previous twenty (20)

trading day period ending on the issuance date, or during the previous twenty (20) trading day period ending on date of conversion of

The Company issued the debtholder 266,667 common shares as a commitment fee.

Due to the variable conversion feature the note

conversion feature was bifurcated from the note and recorded as a derivative liability.

The day one derivative liability was $ 95,715 was

recorded as a discount on the convertible notes payable.

As of June 30, 2021, the balance on the loan, net of unamortized discount of

$ 26,826 , is $ 173,173 , with accrued interest of $ 645 .

As of June 30, 2021, the total derivative

liability on the above note was adjusted to a fair value of $ 103,107 .

During the six months ended June 30, 2021, $ 93,889

of the discount was amortized leaving an unamortized balance of $ 26,825 .

The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions

during the period:

fair value of stock $ 0.90 - 1.03 , volatility of 91.27 % - 105.28 % based on a comparable company peer group,

expected term of 0.50 years, risk-free rate of 0.05 % - 0.06 % and a dividend yield of 0 %.

Note 8 – Stockholders’ Deficit

On February 10, 2021, the Company issued the 266,667

common shares as a commitment fee.

The shares were valued at $0.92, the closing price of the Company’s stock on February 10, 2021.

During the three months ended March 31, 2021, the Company recognized $245,334 of stock based compensation related to this issuance.

The shares were valued at $ 0.92 , the closing price of the Company’s stock on February 10, 2021.

During the six months ended June 30, 2021, the Company recognized $ 245,334 of stock-based compensation related to this issuance.

On August 6, 2020, the Company entered into a

1 unchanged sentence

As consideration for its services under the Agreement, the Company agreed to pay to

the consultant 261,538 restricted shares of the Company’s common stock.

The shares were valued at $ 1.56 , the closing price of the

Company’s stock on August 6, 2020.

As of December 31, 2020, the Company had not issued the shares and accrued $ 136,000 related to

this agreement.

During the three months ended March 31, 2021,

the Company issued the 261,538 shares related to this agreement, settled the prior year accrual of $136,000 for 2020 services and recognized

$102,000 of stock based compensation for services provided in the first quarter of 2021.

During the three months ended March 31, 2021,

the Company received net proceeds of $10,000 from the exercise of 50,000 warrants.

On July 15, 2020, the Company issued 500,000 shares

for services rendered pursuant to two investor relations agreements:

200,000 shares under a Services Agreement and 300,000 shares under

a Consulting Agreement.

The shares were valued at $1.29, the closing price of the Company’s stock on July 15, 2020.

Agreement is $7,500 per month and has a term of twelve months The Consulting Agreement is $7,500 per month and has an initial term of

If the Consulting Agreement is not terminated at least thirty days prior to the end of the initial term, the term will continue

for an additional six months.

During the three months ended March 31, 2020 the Company recognized $161,125 of expense related to these

During the six months ended June 30, 2021, the

Company issued the 261,538 shares related to this agreement, settled the prior year accrual of $ 136,000 for 2020 services and recognized

$ 204,000 of stock-based compensation for services provided during the six months ended June 30, 2021.

During the six months ended June 30, 2021, the

Company received net proceeds of $ 10,000 from the exercise of 50,000 warrants.

On July 15, 2020, the Company issued 500,000 shares for

services rendered pursuant to two investor relations agreements:

200,000 shares under a Services Agreement and 300,000 shares under a

Consulting Agreement.

The shares were valued at $1.29, the closing price of the Company’s stock on July 15, 2020.

The Services Agreement

is $7,500 per month and has a term of twelve months The Consulting Agreement is $7,500 per month and has an initial term of six months.

If the Consulting Agreement is not terminated at least thirty days prior to the end of the initial term, the term will continue for an

additional six months.

During the six months ended June 30, 2021 the Company recognized $ 322,250 of expense related to these shares.

Preferred Stock

In September 2020, the Company established a Series

B Convertible Preferred Stock (“Series B Preferred”) and authorized an aggregate of 5,000 shares with a par value of $0.001

per share and a stated value of $1,250.00 per share.

2 unchanged sentences

Dividends on the share of Series B Preferred shall be cumulative.

During the three months ended March 31, 2021,

the Company accrued $48,067 for the Series A preferred stock dividend.

Stock Options and the 2017 Equity Incentive

During the six months ended June 30, 2021, the

Company accrued $ 80,112 for the Series A preferred stock dividend.

Effective May 31, 2021, the Company received notices

of Conversion from five of its Series A Convertible Preferred stockholders that they had elected to convert a total of 192,269 shares

of Series A Convertible Preferred Stock into an aggregate of 1,922,690 shares of Common Stock and $356,123 in accrued but unpaid dividends

on the Series A Shares into an aggregate of 356,123 shares of Common Stock Each share of Series A Convertible Preferred Stock was convertible

into ten shares of Common Stock.

The Conversion Price of the Dividend Shares was $1.00 per share.

On June 30, 2021, the Company issued

2,278,813 shares of common stock for the conversion of preferred stock and accrued dividends.

Stock Warrants, Stock Options and the 2017

Equity Incentive Plan:

Under the 2017 Equity Incentive Plan, the Company

2 unchanged sentences

both incentive and nonstatutory stock options, (2) stock bonuses, (3) rights to purchase restricted stock and (4) stock appreciation rights.

As of March 31, 2021, the Company had 128,000 shares available for future grant.

As of June 30, 2021, the Company had 128,000 shares available for future grant.

On September 15, 2020, John Gibbs, a related party,

transferred 330,000 warrants to purchase common stock back to the Company.

Deepak Malhotra, a member of the board, received 300,000 of

the transferred warrants as compensation for services to be performed over a one year term.

The warrants were valued $386,764 and will

recognized over the one year service period.

During the three months ended March 31, 2021, the Company recognized $96,691 of expense related

to the issuance of these warrants.

The remaining 30,000 warrants were transferred to three 2018A 10% Unsecured Convertible noteholder

as inducements to convert their notes.

See Note 7 –

Convertible Note Payable.

Stock option activity within the 2017 Equity Incentive

Plan and warrant activity outside the plan, for the nine months ended March 31, 2021 is as follows:

The warrants were accounted for as if they were returned and

Deepak Malhotra, a member of the board, received 300,000 of the transferred warrants as compensation for services to be performed

over a one year term.

The warrants were valued $386,764 and will recognized over the one year service period.

During the six months ended

June 30, 2021, the Company recognized $ 193,382 of expense related to the issuance of these warrants.

Malhotra exercised 50,000 warrants

in the third quarter of 2020.

On May 31, 2021, Mr.

Malhotra’s remaining 250,000 warrants were extended until May 31, 2022.

The incremental

value of the warrant modification of $194,687 will be recorded over the remaining service period ending September 30, 2021.

six months ended June 30, 2021, the Company recognized $48,671 of expense related to the warrant modification.

In May 2021, John Gibbs, a related party, transferred

75,000 warrants and five other warrant holders transferred 1,310,000 warrants to purchase common stock to various other holders.

transferred warrants were all set to expire on May 31, 2021 and had an exercise price of $0.20.

In May 2021, 1,185,000 of the warrants

were exercised resulting in proceeds to the Company of $237,000.

On May 31, 2021 the remaining 200,000 transferred warrants were extended

to May 31, 2022.

These remaining warrants were exercised in June 2021 and resulted in proceeds to the Company of $40,000.

Stock option activity within the 2017 Equity

Incentive Plan and warrant activity outside the plan, for the six months ended June 30, 2021 is as follows:

Schedule of stock option and warrant activity

Stock Options

5 unchanged sentences

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Exercisable at March 31, 2021

As of March 31, 2021, the outstanding stock options

( 1,435,000 )

Outstanding at June 30, 2021

Exercisable at June 30, 2021

As of June 30, 2021, the outstanding stock options

have a weighted average remaining term of 6.33 years and has no intrinsic value, and the outstanding stock warrants have a weighted average

remaining term of 1.75 years and an intrinsic value of $ 261,295 .

Note 9 –

Commitments and Contingencies

Note 9 – Commitments and Contingencies

Mining Claims

As part of our acquisition of the Center Star

gold mine project, we acquire 15 Bureau of Land Management (“BLM”) unpatented mining claims and subsequently staked another

16 unpatented mining claims.

In order to maintain the BLM lode \ claims, annual payments are required before the end of August of each

As of March 31, 2021, all of these claims are in good standing.

Note 10 –

Executive Employment Agreement

As of June 30, 2021, all of these claims are in good standing.

Note 10 – Executive Employment Agreement

Effective August 1, 2020, the Company and Michael

4 unchanged sentences

31, 2020 or (b) following the termination date, whichever occurs first.

As of March 31, 2021, 120,000 restricted stock units may be settled

As of June 30, 2021, 165,000 restricted stock units may be settled

in shares of common stock.

During the three months ended March 31, 2021, the Company recognized $46,200 of stock based compensation related

During the six months ended June 30, 2021, the Company recognized $ 86,265 of stock-based compensation related

to the agreement.

Note 11 –

Related Party Transactions

Note 11 – Related Party Transactions

Conflicts of Interests

Athena Silver Corporation (“Athena”) is a company under

common control.

Athena Silver Corporation (“Athena”)

is a company under common control.

Gibbs is a significant investor in both Magellan and Athena.

Magellan and Athena are both exploration stage companies

involved in the business of acquisition and exploration of mineral resources.

Magellan and Athena are both exploration

stage companies involved in the business of acquisition and exploration of mineral resources.

Silver Saddle Resources,

7 unchanged sentences

As of March 31, 2021, Mr.

Power and Dr.

are no longer considered related parties, and therefore all amounts due to them have been reclassified out of related party accounts.

Carson are no longer considered related parties, and therefore all amounts due to them have been reclassified out of related

party accounts.

Accrued Interest - Related Parties

1 unchanged sentence

in our consolidated balance sheets as follows:

March 31, 2021

Schedule of accrued interest payable

June 30, 2021

December 31, 2020

Accrued interest payable –

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We use the terms “Magellan,”

“we,”

“our,”

and “us”

to refer to Magellan Gold Corporation.

following discussion and analysis provides information that management believes is relevant for an assessment and understanding of our

results of operations and financial condition.

This information should be read in conjunction with our audited financial statements, which

are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 ,

and our interim unaudited financial statements and notes thereto included with this report in Part I, Item 1.

COVID-19 Pandemic

In December 2019, a novel

strain of coronavirus (“COVID-19”) emerged in China.

On March 11, 2020, the World Health Organization declared the outbreak

of COVID-19 a pandemic.

The outbreak has now spread to the United States and infections have been reported globally.

The COVID-19 pandemic

is rapidly evolving.

The information in this Annual Report is based on data currently available to us and will likely change as the pandemic

As COVID-19 continues to spread throughout areas in which we operate, we believe the outbreak has the potential to have a

material negative impact on our operating results and financial condition.

The extent of the impact of COVID-19 on our operational

and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our operators,

employees and vendors, and the impact on the Company’s ability to obtain debt and equity financing to fund ongoing exploration activities,

all of which are uncertain and cannot be predicted.

Given these uncertainties, we cannot reasonably estimate the related impact

to our business, operating results and financial condition.

We expect the trends

highlighted above with respect to the impact of the COVID-19 pandemic to continue and, in some cases, accelerate.

The extent of the COVID-19

pandemic’s continued effect on our operational and financial performance will depend on future developments, including the duration,

spread and intensity of the outbreak, the pace at which jurisdictions across the country re-open and restrictions begin to lift, the availability

of government financial support to our business, tenants and operators and whether a resurgence of the outbreak occurs.

Due to these uncertainties,

we are not able at this time to estimate the ultimate impact of the COVID-19 pandemic on our business, results of operations, financial

condition and cash flows but it could be material.

Forward-Looking Statements

Some of the information presented in this Form

10-Q constitutes “forward-looking statements”.

These forward-looking statements include, but are not limited to, statements

that include terms such as “may,”

“will,”

“intend,”

“anticipate,”

“estimate,”

“expect,”

“continue,”

“believe,”

“plan,”

or the like, as well as all statements that are

not historical facts.

Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to

differ materially from current expectations.

Although we believe our expectations are based on reasonable assumptions within the bounds

of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially from expectations.

All forward-looking statements speak only as

of the date on which they are made.

We undertake no obligation to update such statements to reflect events that occur or circumstances

that exist after the date on which they are made.

We were incorporated on September 28, 2010, in

Our principal business is the acquisition and exploration of mineral properties in the United States.

We have not presently determined

whether the properties to which we have mineral rights contain mineral reserves that are economically recoverable.

We have only had exploration and project development

operations to date and we rely upon the sale of our securities and borrowings from officers, directors and other significant investors

to fund our operations, as we have not generated any revenue.

Magellan entered into a stock purchase agreement

to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims in Idaho County.

Idaho that includes the historic Center Star Gold Mine near Elk City, Idaho.

The Center Star Mine hosts high grade gold mineralization

that was discovered in the early 1900’s.

There was periodic historic production and development work done under different ownership

through the 1980s.

With the high-grade gold mineralization present, Magellan will be evaluating the historic mine data to assess the potential

to develop a gold resource at Center Star.

The project area is located 45 miles from Grangeville, Idaho and near the town of Elk City,

In consideration for 100% of the issued and outstanding

shares of Clearwater, Magellan has agreed to pay its sole shareholder 1,000,000 shares of Magellan common stock and $150,000.

The 1,000,000

shares will be issued (i) 250,000 shares at closing (ii) 250,000 shares at the time the Center Mine receives its permit to reopen the

main portal of the mine, (iv) 250,000 shares at the point the main portal has been reopened and (iv) 250,000 shares two years from the

closing concurrent with the pay-off of the secured promissory note.

The cash consideration of $25,000 will be paid within 30 days of closing

and the balance of $125,000 to be evidenced by a secured promissory note due in two years.

The Note will be secured by the Clearwater

shares and assets.

Magellan has issued 750,000 of the 1,000,000 shares and has paid $12,500 of the required $25,000 payment.

Effective March 31, 2020, we divested our subsidiary

holding all of our international assets and plan to advance our Idaho gold project towards resource definition and eventual development,

and possibly to acquire additional mineral rights and conduct additional exploration, development and permitting activities.

lease payments, permitting applications and exploration and development efforts will require additional capital.

We rely upon the sale

of our securities as well as advances and loans from executive management and significant shareholders to fund our operations as we have

not generated any significant revenue.

Effective March 31, 2020 the Company entered into

an Agreement to Accept Collateral in Full Satisfaction of Obligations (the “Agreement”) with certain holders of Promissory

Notes (the “Lenders”) due December 31, 2019 (the “Notes”) in the aggregate principal amount of $1.05 million.

The Company is indebted under the Notes to the Lenders and the Company’s obligations to the Lenders are secured by a Stock Pledge

and Security Agreement covering 100 shares of common stock of Magellan Acquisition Corporation and one (1) share of MV2 (the “Collateral”)

held under a Collateral Agent Agreement.

Magellan Acquisition Corp.

and MV2 own the SDA Mill and El Dorado prospect in Nayarit, Mexico.

The Notes matured on December 31, 2019 and remain unpaid and in default.

The Lenders have accelerated the Company’s

indebtedness.

Pursuant to terms set forth in the Agreement, the Lenders have agreed to accept the Collateral in full satisfaction of the

Notes and unconditionally and irrevocably waive any entitlement or right to receive payment of (i) the initial 10% Financing Fee included

in the principal amount of the Notes, (ii) the 5% Rollover Fee agreed to in an Allonge and Modification Agreement.

The effective date

of the Agreement was March 31, 2020.

On July 21, 2020, the Company entered into a Stock

Purchase agreement with Tri Power Resources, LLC to sell 1,000 shares representing 100% ownership of Gulf+Western Industries, Inc (“Gulf+Western”)

to Tri Power in consideration for the return and cancellation of 50,000 shares of the Company’s Series A Preferred Stock with a

stated value of $10 per share.

John Gibbs, a majority shareholder in the Company, is the Managing Member and Chief Executive Officer of

Tri Power Resources, LLC.

As a result of these agreements, the assets, liabilities

and operations of the Gulf+Western, MAC and MV2 have been reflected as discontinued operations in the Company’s consolidated balance

sheets, consolidated statements of operations, consolidated statements of cash flows and consolidated statements of other comprehensive

income (loss) for the periods presented.

Certain prior period amounts have been reclassified

to conform to the current period financial statement presentation, including the discontinued operations presentation resulting from the

disposition of the Company’s Gulf+Western, MAC and MV2 operations in 2020.

Results of Operations for the three months ended March 31, 2021

Three months ended March 31,

Operating expenses:

General and administrative expenses

Total operating expenses

Operating loss

Other income (expense):

Interest expense

Gain on change in derivative liability

Total other income (expense)

Net loss from continuing operations

Net loss from discontinued operation

Operating expenses

During the three months ended March 31, 2021,

our total operating expenses included general and administrative expenses of $719,437 as compared to $169,985 during the three months

ended March 31, 2020.

The $549,452 increase is primarily associated with increases in investor relations, officer compensation, stock

based compensation and offset with decreases in consulting expenses.

Other income (expense)

During the three months ended March 31, 2021,

total other expense was $54,502 as compared to $74,732 during the three months ended March 31, 2020.

The $20,230 change is related to

the decrease in interest which was offset with gain on change in derivative liability.

Discontinued operations

The net loss from discontinued operations during

the three months ended March 31, 2020 totaled $29,693.

Net loss from discontinued operations represents the Mexico operations that were

disposed of in March 2020.

Liquidity and Capital Resources

Our unaudited consolidated financial statements

have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during

the next fiscal year.

Asset realization values may be significantly different from carrying values as shown in our consolidated financial

statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be

unable to continue as a going concern.

At March 31, 2020, we had not yet generated sufficient revenues or achieved profitable operations

and we have accumulated losses of $16,654,975.

We expect to incur further losses in the development of our business, all of which raises

substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern depends on our ability

to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when

they come due.

During the three months ended March 31, 2021,

the Company entered into a debt agreement to borrow $200,000 and received $175,000 in cash proceeds.

Additionally, the Company received $10,000 of

proceeds from the exercise of warrants.

We anticipate that additional funding will be

in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common

stock but cannot assure that any future financings will occur.

A summary of our cash provided by and used in

operating, investing and financing activities is as follows:

Three months ended March 31,

Net cash used in operating activities from continuing operations

Net cash used in operating activities from discontinued operations

Net cash used in operating activities

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

Net cash provided by (used in) financing activities

Effect of foreign currency exchange

Net change in cash and cash equivalents

Cash beginning of period

Cash end of period

At March 31, 2021, we had $85,088 in cash and

a $1,500,718 working capital deficit.

This compares to cash of $0 and a working capital deficit of $1,476,062 at December 31, 2020.

cash used in operating activities from continuing operations during the three months ended March 31, 2021 was $100,097 and was mainly

comprised of our $773,939 net loss during the period, adjusted by a non-cash charges of $651,350 of

stock compensation, gain on change in derivative liability of $9,099 and accretion of discounts on notes payable of $49,685.

it reflects changes in operating assets and liabilities of $18,094 .

During the three months ended March 31, 2021,

net cash provided by financing activities from continuing operations was $185,185 comprised of $175,000 proceeds from convertible debt

from third parties, $10,000 proceeds from exercise of warrants, $605 proceeds on advances from third parties, offset by $420 payments

on advances from third parties.

Off Balance Sheet Arrangements

We do not have and have never had any off-balance

sheet arrangements.

Summary of Significant Accounting Policies

Basis of Presentation and Principles of

Consolidation

Our consolidated financial statements include

our accounts and the accounts of our 100% owned subsidiary, Clearwater Gold Mining Corporation and M Gold Royalty.

All intercompany transactions

and balances have been eliminated.

Our consolidated financial statements have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

GAAP”).

Use of Estimates

The preparation of financial statements in conformity

GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during

the period presented.

We make our estimate of the ultimate outcome for

these items based on historical trends and other information available when the financial statements are prepared.

Changes in estimates

are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes

We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the

time they were made.

Actual results could differ from these estimates, making it possible that a change in these estimates could occur

in the near term.

Fair Value of Financial Instruments

We value our financial assets and liabilities

using fair value measurements.

Our financial instruments primarily consist of cash and cash equivalents, accounts payable, accrued liabilities,

amounts due to related parties and notes payable to related parties.

Fair value is based on the price that would be received to sell

an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

amount of cash and cash equivalents, accounts payable, accrued liabilities, notes payable to related parties and other amounts due to

related parties approximates fair value because of the short-term nature of these financial instruments.

Concentrations of Credit Risk

Our financial instruments which potentially subject

us to credit risk are our cash.

We maintain our cash at reputable financial institutions and currently, we are not exposed to significant

Cash and Cash Equivalents

We consider all amounts on deposit with financial

institutions and highly liquid investments with an original maturity of three months or less to be cash equivalents at the date of purchase.

Notes Payable –

Related Parties

Notes payable to related parties are classified

as current liabilities as the note holders either have the ability to control the repayment dates of the notes or the notes are due within

twelve months of the balance sheet date.

Net Loss per Common Share

We compute basic net loss per common share by

dividing our net loss attributable to common shareholders by our weighted-average number of common shares outstanding during the period.

Computation of diluted net loss per common share adds the weighted-average number of potential common shares outstanding to the weighted-average

common shares outstanding, as calculated for basic net loss per share, except for instances in which there is a net loss.

For the three

months ended March 31, 2021 and 2020, potential common shares associated with convertible notes payable and outstanding warrants to purchase

common stock have been omitted from the net loss per common share computation as they are anti-dilutive due to the net loss for these

Stock-based Compensation

The Company measures the cost of employee services

received in exchange for an award of equity instruments (share-based payments, or SBP) based on the grant-date fair value of the award.

That cost is recognized over the period during which an employee is required to provide service in exchange for the SBP award—the

requisite service period (vesting period).

For SBP awards subject to conditions, compensation is not recognized until the performance

condition is probable of occurrence.

The grant-date fair value of share options is estimated using the Black-Scholes-Merton option-pricing

The Company adopted ASU 2018-07 which aligns the accounting for share-based payment awards issued to employees and nonemployees.

Recently Adopted Accounting Standards

The Company does not believe that any recently

issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying

financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Not applicable.

Accrued interest payable – Mr.

Accrued interest payable – Dr.

Accrued interest payable – Mr.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements