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Item 1. Financial Statements

2021-11-15 compared with 2021-08-13 · 378 added, 306 removed, 334 unchanged (67% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2021

September 30, 2021

December 31, 2020

20 unchanged sentences

Shareholders' equity (deficit):

Preferred shares, 25,000,000 shares

Series A preferred stock - $ 10.00 stated value;

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

2,500,000 authorized;

0 and 192,269 shares issued and outstanding, respectively

11 unchanged sentences

Total liabilities and shareholders' equity (deficit)

See accompanying notes

to the unaudited consolidated financial statements

See accompanying notes to the

unaudited consolidated financial statements

MAGELLAN GOLD CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

5 unchanged sentences

Loss on settlement of liabilities

Loss on conversion of debt

( 2,110,047 )

( 1,309,588 )

Loss on change in derivative liability

1 unchanged sentence

( 2,388,349 )

( 2,197,240 )

Net loss from continuing operations

1 unchanged sentence

( 3,074,938 )

( 2,490,805 )

Net loss from discontinued operations, net of tax

1 unchanged sentence

( 3,106,537 )

( 2,521,054 )

Series A preferred stock dividend

2 unchanged sentences

( 3,273,948 )

( 2,640,530 )

Other comprehensive income:

12 unchanged sentences

Common shares outstanding

See accompanying notes

to the unaudited consolidated financial statements

See accompanying notes to the unaudited consolidated financial statements

MAGELLAN GOLD CORPORATION

Consolidated Statements of Shareholders' Deficit

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

For the three and nine months ended September 30, 2021 and 2020

Accumulated Other

6 unchanged sentences

Exercise of warrants

Common stock issued for settlement

Common stock issued for settlement liabilities

Stock based compensation

5 unchanged sentences

Series A preferred stock dividend

Conversion of Series A preferred

stock and accrued dividend

Conversion of Series A preferred stock and accrued dividend

( 1,922,690 )

1 unchanged sentence

( 17,319,954 )

Stock based compensation

Balance, September 30, 2021

$ ( 17,781,107 )

$ ( 106,030 )

Balance, December 31, 2019

5 unchanged sentences

Disposition of assets, related party

Other comprehensive

Other comprehensive loss

Balance, March 31, 2020

1 unchanged sentence

( 1,137,593 )

Debt discount from warrants and beneficial

conversion feature

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

Stock and warrants issued for convertible notes and accrued interest

Series A preferred stock dividend

3 unchanged sentences

( 14,543,255 )

Debt discount from warrants and beneficial conversion feature

Stock based compensation

Stock issued for purchase of Clearwater Gold Mining Corp

Stock issued for warrants and cash

Stock and warrants issued for services

Stock and warrants issued for convertible notes and accrued interest

Preferred shares returned and cancelled in exchange for Gulf+Western Industries, Inc.

Series A preferred stock dividend

Balance, September 30, 2020

$ ( 15,176,673 )

See accompanying notes

to the unaudited consolidated financial statements

See accompanying notes to the unaudited consolidated financial statements

MAGELLAN GOLD CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended June 30,

ended September 30,

Operating activities:

Net loss from continuing operations

Net loss from continuing

$ ( 1,868,026 )

$ ( 3,074,938 )

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

operating activities:

Adjustments to reconcile net loss

from continuing operations to net cash used in operating activities:

Accretion of discounts on notes payable

6 unchanged sentences

Accrued interest

Net cash used in operating activities from continuing operations

Net cash used in operating activities from discontinued operations

Net cash used in operating activities

from continuing operations

Net cash used

in operating activities from discontinued operations

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

Cash paid for mineral rights

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 related parties

Payments on advances from third parties

Proceeds from advances from third parties

Proceeds from exercise of warrants

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

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

Payments on advances from related

Payments on advances from

third parties

Proceeds from advances from third

Proceeds from sale of common stock

Net cash provided by financing activities

from continuing operations

Net cash provided

by financing activities from discontinued operations

Net cash provided

by financing activities

Effect of foreign currency exchange

3 unchanged sentences

Supplemental disclosure of cash flow information

Cash paid for interest

Cash paid for income taxes

for income taxes

Non-cash financing and investing activities:

Series A preferred stock dividend

Expenses paid on behalf of the Company

Common stock issued for settlement liabilities

Disposition of assets, related party

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

to the unaudited consolidated financial statements

Series A preferred stock

Expenses paid on behalf

of the Company

Common stock and warrants

issued for settlement liabilities

Disposition of assets,

related party

Conversion of debt and

accrued interest

Debt discount created by derivative liability

Debt discount from warrants

and beneficial conversion feature

Common stock issued

for accounts payable

Conversion of Series

A preferred stock and accrued dividend

Preferred stock returned

and cancelled

Noncash consideration

for purchase of Clearwater Gold Mining Corp

Noncash consideration

for development costs

See accompanying notes to the unaudited consolidated financial statements

MAGELLAN GOLD CORPORATION

25 unchanged sentences

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

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

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

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, 2020.

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

3 unchanged sentences

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

On August 25, 2020 the Company, formed 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

12 unchanged sentences

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.

months ended September 30, 2021, 72,000 of stock options, 4 23,635 of warrants, and 1,260,338 shares issuable from convertible notes were

considered for their dilutive effects.

For the nine months ended September 30, 2020, 72,000 of stock options, 2,038,635 of warrants, 242,269

shares issuable from Series A Preferred Stock and 990,978 shares issuable from convertible notes were considered for their dilutive effects.

Derivative Financial Instruments

24 unchanged sentences

continue as a going concern.

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

At September 30, 2021, we had a working capital deficit of $ 1,299,535 , we had not yet generated any significant

revenues or achieved profitable operations and we have accumulated losses of $ 17,781,107 .

22 unchanged sentences

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

As of June 30, 2021, the total purchase

As of September 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 –

1 unchanged sentence

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

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.

As of September 30, 2021 and December 31, 2020,

the Company had $ 193,505 and $ 112,968 in capitalized development cost to develop gold resources at Center Star, respectively.

Note 4 – Disposition of Business

39 unchanged sentences

statements of cash flows.

Schedule of discontinued operations

June 30, 2021

June 30, 2020

of discontinued operations

Cost of sales

Exploration costs

General and administrative expenses

Operating loss

Other expense

Net loss from discontinued operations

and administrative expenses

loss from discontinued operations

Note 5 – Fair Value of Financial Instruments

21 unchanged sentences

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

Fair value at December 31, 2020

Derivative liability

There were no transfers between Level 1, 2 or

3 during the period.

The table below presents the change in the fair

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

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

of fair value measurements on a recurring basis

value at September 30, 2021

value at December 31, 2020

There were no transfers

between Level 1, 2 or 3 during the period.

The table below

presents the change in the fair value of the derivative liability during the nine months ended September 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

Fair value on the date of issuance

recorded as a debt discount

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

Fair value as of September 30, 2021

Unsecured advances

– related party

During the nine

months ended September 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 September 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

Derivative Liability

Series 2019A 10% Unsecured Convertible Notes

In 2019, the Company sold $ 135,000 of Series 2019A

Unsecured advances

During the nine

months ended September 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 .

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

7 – Convertible Note Payable and Derivative Liability

10% Unsecured Convertible Notes

In 2019, the Company

sold $ 135,000

of Series 2019A 10 %

Unsecured Convertible Notes.

The purchase price of the Note is equal to the principal amount of the Note.

The Series 2019A Notes are

convertible into shares of Common Stock at a conversion price of $ 1.00 during the life of the Note.

The lenders were issued 100,000 common

stock warrants with an exercise price of $2.00 per share.

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 August and December 2019.

The $ 135,000 debt discount is amortized over the term of the

The Notes will accrue interest at the rate of 10% per annum, payable quarterly in arrears.

The Notes mature twelve (12) months from

the date of issue.

The maturity date can be extended at the option of the Company for an additional one (1) year.

There are two Series

2019A 10% Unsecured Convertible Notes that were due and payable in August 2020 and are currently past due and in default.

interest rate on the notes is 12%.

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 .

On October 1, 2019, the Company sold a 10 % Unsecured

Convertible Note for $ 145,978 due on demand to settle accounts payable.

The purchase price of the 10% Unsecured Convertible Note is equal

to the principal amount of the Note.

The 10% Unsecured Convertible Note is convertible into shares of Common Stock at a conversion price

of $ 1.00 during the life of the Note.

convertible into shares of Common Stock at a conversion price of $ 1.00

during the life of the Note.

The lenders were issued 100,000 common stock warrants with an

exercise price of $2.00 per share.

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

The Company recognized the beneficial conversion feature as a debt discount and additional paid in capital in October 2019.

The Company recognized the beneficial conversion feature and relative fair value of the warrants as a debt discount and

additional paid in capital in August and December 2019.

The $ 135,000

debt discount is amortized over the term of the loan.

The Notes will accrue interest at the

rate of 10% per annum, payable quarterly in arrears.

The Notes mature twelve (12) months from the date of issue.

The maturity date can

be extended at the option of the Company for an additional one (1) year.

There are two Series 2019A 10% Unsecured Convertible Notes that

were due and payable in August 2020 and are currently past due and in default.

The default interest rate on the notes is 12%.

As of September

30, 2021, the balance due under these notes net of unamortized discount of $ 0 ,

is $ 75,000 ,

with accrued interest of $ 15,213 .

On October 1, 2019,

the Company sold a 10 %

Unsecured Convertible Note for $ 145,978

due on demand to settle accounts payable.

The purchase price of the 10% Unsecured Convertible

Note is equal to the principal amount of the Note.

The 10% Unsecured Convertible Note is convertible into shares of Common Stock at a

conversion price of $ 1.00

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 as a debt discount and

additional paid in capital in October 2019.

The debt discount will be amortized over the term of the loan.

The 10% Unsecured Convertible Note will accrue interest at the rate of

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

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 .

Series 2020A 8% Unsecured Convertible Notes

In 2020, the Company sold $ 285,000 of Series 2020A

The 10% Unsecured Convertible

Note will accrue interest at the rate of 10% per annum payable quarterly, accruing from the date of issuance.

As of September 30, 2021,

the balance due under these notes net of unamortized discount of $ 0 ,

is $ 145,978 ,

with accrued interest of $ 29,156 .

8% Unsecured Convertible Notes

In 2020, the Company

sold $ 285,000

of Series 2020A 8 %

Unsecured Convertible Notes with a maturity date of November 30, 2020.

The purchase price of the Note is equal to the principal amount

The Series 2020A Notes are convertible into shares of Common Stock at a conversion price of $ 0.50 during the life of the

The lenders were issued 142,500 common stock warrants with an exercise price of $ 0.50 per share for a term of 5 years.

parties purchased $60,000 of the 2020A notes.

The Company evaluated the conversion option and concluded a beneficial conversion feature

was present at issuance.

The Company recognized the beneficial conversion feature as a debt discount and additional paid in capital as

of December 31, 2020.

The $ 237,263 debt discount will be amortized over the term of the loan.

The Notes will accrue interest at the rate

of 8% per annum, payable quarterly in arrears.

In July 2020, $25,000 of Series 2020A 8% Unsecured Convertible Notes were converted into

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

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 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 .

3% Secured Convertible Note

On July 1, 2020, the Company issued a $ 125,000

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

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

On February 10, 2021, the Company entered into

a debt agreement to borrow $ 200,000 .

The secured note has an original issuance discount of $ 16,000 along with $ 9,000 in legal and finder

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

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

The Series 2020A Notes are convertible into shares of Common Stock at a conversion price of $ 0.50

during the life of the Note.

The lenders were issued 142,500

common stock warrants with an exercise price of $ 0.50

per share for a term of 5

Two related parties purchased $60,000 of the 2020A notes.

The Company evaluated the

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

The Company recognized the beneficial conversion

feature as a debt discount and additional paid in capital as of December 31, 2020.

The $ 237,263

debt discount will be amortized over the term of the loan.

The Notes will accrue interest

at the rate of 8% per annum, payable quarterly in arrears.

In July 2020, $25,000 of Series 2020A 8% Unsecured Convertible Notes were

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

As of September 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 $ 6,428 .

As of September 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 $ 20,264 .

3% Secured Convertible

On July 1, 2020,

the Company issued a $ 125,000

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

Mining Corporation.

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

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.

debt discount will be amortized over the term of the loan.

Amortization expense of $ 32,723

was recognized during the nine months ended September 30, 2020.

As of September 30, 2021,

the balance due to a related party under this note net of unamortized discount of $ 32,842 ,

is $ 92,158 ,

with accrued interest of $ 4,685 .

AJB Convertible

On February 10,

2021, the Company entered into a debt agreement to borrow $ 200,000 .

The secured note has an original issuance discount of $ 16,000

along with $ 9,000

in legal and finder fees recorded as a discount, which will be amortized over the life of

The loan is secured by common stock of the Company, bears interest at a rate of 10 %

and has a six-month maturity.

In August 2021, the note was extended six months and the interest rate was increased to 15%.

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 September 30, 2021, the

balance on the loan, net of unamortized discount of $ 0

is $ 200,000 ,

with accrued interest of $ 333 .

As of September

30, 2021, the total derivative liability on the above note was adjusted to a fair value of $ 118,084 .

During the nine months ended September 30, 2021, $ 120,714

of the discount was amortized leaving an unamortized balance of $ 0 .

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

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

fair value of stock $ 0.90

volatility of 91.27 %

based on a comparable company peer group, expected term of 0.50

years, risk-free rate of 0.05 %

and a dividend yield of 0 %.

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 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

one-year investor relations consulting agreement.

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 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.

The shares were valued at $ 0.92 ,

the closing price of the Company’s stock on February 10, 2021.

During the nine months ended September 30, 2021, the Company recognized

of stock-based compensation related to this issuance.

On August 6, 2020,

the Company entered into a one-year investor relations consulting agreement.

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 nine months ended September 30, 2021, the Company issued

shares related to this agreement, settled the prior year accrual of $ 136,000

for 2020 services and recognized $ 272,000

of stock-based compensation for services provided during the nine months ended September

During the nine

months ended September 30, 2021, the Company received net proceeds of $ 287,000

from the exercise of 1,435,000

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

to two investor relations agreements:

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 nine months ended September 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.

The holders of outstanding Series B Preferred shall be entitled to receive dividends

at the annual rate of 10% based on the stated value per share.

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

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.

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.

The holders of outstanding Series B Preferred

shall be entitled to receive dividends at the annual rate of 10% based on the stated value per share.

Dividends on the share of Series

B Preferred shall be cumulative.

During the nine

months ended September 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

is authorized to grant rights to acquire up to a maximum of 200,000 shares of common stock.

The 2017 Plan provides for the grant of (1)

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

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.

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.

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 is authorized to grant rights to acquire up to a maximum of 200,000 shares of common stock.

Plan provides for the grant of (1) both incentive and nonstatutory stock options, (2) stock bonuses, (3) rights to purchase restricted

stock and (4) stock appreciation rights.

As of September 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.

The warrants were accounted

for as if they were returned and re-granted.

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 nine months ended September 30, 2021, the Company recognized $ 257,842

of expense related to the issuance of these warrants.

Malhotra exercised 50,000 warrants

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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:

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

During the nine months ended September 30, 2021, the Company recognized $ 194,687

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.

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

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 nine months ended September 30, 2021 is as follows:

Schedule of stock option and warrant activity

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Outstanding at December 31, 2020

( 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

Outstanding at September 30, 2021

Exercisable at September 30, 2021

As of September

30, 2021, the outstanding stock options have a weighted average remaining term of 6.07

years and has no intrinsic value, and the outstanding stock warrants have a weighted average

remaining term of 1.37

years and an intrinsic value of $ 312,131 .

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

Note 10 – Executive Employment Agreement

Effective August 1, 2020, the Company and Michael

Lavigne, executed a Restricted Stock Unit Agreement pursuant to which the Company agreed to grant to Mr.

Lavigne, in consideration of

services to be rendered as President, CEO and Director, restricted stock units consisting of 15,000 units for each month of service.

vested stock units will be settled in shares of common stock upon or as soon as practicable (a) upon written request any time after December

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

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

in shares of common stock.

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

Conflicts of Interests

Athena Silver Corporation (“Athena”)

is a company under common control.

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 year.

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

10 – Executive Employment Agreement

Effective August

1, 2020, the Company and Michael Lavigne, executed a Restricted Stock Unit Agreement pursuant to which the Company agreed to grant to

Lavigne, in consideration of services to be rendered as President, CEO and Director, restricted stock units consisting of 15,000

units for each month of service.

The vested stock units will be settled in shares of common stock upon or as soon as practicable (a)

upon written request any time after December 31, 2020 or (b) following the termination date, whichever occurs first.

As of September

30, 2021, 210,000

restricted stock units may be settled in shares of common stock.

During the nine months ended

September 30, 2021, the Company recognized $ 133,965

of stock-based compensation related to the agreement.

11 – Related Party Transactions

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.

Silver Saddle Resources,

LLC is also a company under common control.

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

Saddle Resources, LLC is also a company under common control.

Gibbs are significant investors and managing members of Silver Saddle.

Magellan and Silver

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

The existence of common

ownership and common management could result in significantly different operating results or financial position from those that could

have resulted had Magellan, Athena and Silver Saddle been autonomous.

As of March 31, 2021, Mr.

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

Accrued interest due to related parties is included

in our consolidated balance sheets as follows:

Schedule of accrued interest payable

June 30, 2021

December 31, 2020

Accrued interest payable – Mr.

Magellan and Silver Saddle are both exploration stage companies involved in the business of acquisition and exploration of mineral resources.

existence of common ownership and common management could result in significantly different operating results or financial position from

those that could have resulted had Magellan, Athena and Silver Saddle been autonomous.

As of March 31,

Power and Dr.

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

Accrued interest

due to related parties is included in our consolidated balance sheets as follows:

Schedule of related party transactions (accrued interest)

Accrued interest payable –

Accrued interest payable – Dr.

2 unchanged sentences

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