What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-06-01 compared with 2021-04-15 · 119 added, 537 removed, 19 unchanged (97% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Effective May 2012, our common stock was

approved for quotation on the OTC Bulletin Board under the ticker symbol “MAGE.”

The Company’s shares are now

quoted on the OTCQB of the OTC Markets Group, Inc.

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Effective May 2012, our common stock was approved

for quotation on the OTC Bulletin Board under the ticker symbol “MAGE.” The Company’s shares are now quoted on the OTCQB

of the OTC Markets Group, Inc.

The following sets forth the high and low trading prices for the periods shown:

10 unchanged sentences

As of April 7, 2022 there were approximately 89 record owners of the Company's common stock.

The OTC.QB is a registered quotation service

that displays real-time quotes, last sale prices and volume information in over-the-counter (OTC) securities.

An OTC equity security

generally is any equity that is not listed or traded on NASDAQ or a national securities exchange.

The OTCQB is not an issuer listing

service, market or exchange.

Although the OTCQB does not have any listing requirements, per se, to be eligible for quotation on

the OTCQB, issuers must remain current in their filings with the SEC or applicable regulatory authority.

Our Board of Directors may declare and

pay dividends on outstanding shares of common stock out of funds legally available therefore in its sole discretion;

date, no dividends have been paid on common stock and we do not anticipate the payment of dividends in the foreseeable future.

Trading in our common stock is subject

to rules adopted by the SEC regulating broker dealer practices in connection with transactions in "penny stocks."

disclosure rules applicable to penny stocks require a broker dealer, prior to a transaction in a penny stock not otherwise exempt

from the rules, to deliver a standardized risk disclosure document prepared by the SEC.

That disclosure document advises an investor

that investment in penny stocks can be very risky and that the investor's salesperson or broker is not an impartial advisor but

rather paid to sell the shares.

The disclosure contains further warnings for the investor to exercise caution in connection with

an investment in penny stocks, to independently investigate the security, as well as the salesperson with whom the investor is

working and to understand the risky nature of an investment in this security.

The broker dealer must also provide the customer

with certain other information and must make a special written determination that the penny stock is a suitable investment for

the purchaser and receive the purchaser's written agreement to the transaction.

Further, the rules require that, following the

proposed transaction, the broker provide the customer with monthly account statements containing market information about the prices

of the securities.

The OTC.QB is a registered quotation service that

displays real-time quotes, last sale prices and volume information in over-the-counter (OTC) securities.

An OTC equity security generally

is any equity that is not listed or traded on NASDAQ or a national securities exchange.

The OTCQB is not an issuer listing service, market

Although the OTCQB does not have any listing requirements, per se, to be eligible for quotation on the OTCQB, issuers must

remain current in their filings with the SEC or applicable regulatory authority.

Our Board of Directors may declare and pay dividends

on outstanding shares of common stock out of funds legally available therefore in its sole discretion;

however, to date, no dividends

have been paid on common stock and we do not anticipate the payment of dividends in the foreseeable future.

Trading in our common stock is subject to rules

adopted by the SEC regulating broker dealer practices in connection with transactions in "penny stocks." Those disclosure rules

applicable to penny stocks require a broker dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver

a standardized risk disclosure document prepared by the SEC.

That disclosure document advises an investor that investment in penny stocks

can be very risky and that the investor's salesperson or broker is not an impartial advisor but rather paid to sell the shares.

The disclosure

contains further warnings for the investor to exercise caution in connection with an investment in penny stocks, to independently investigate

the security, as well as the salesperson with whom the investor is working and to understand the risky nature of an investment in this

The broker dealer must also provide the customer with certain other information and must make a special written determination

that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.

the rules require that, following the proposed transaction, the broker provide the customer with monthly account statements containing

market information about the prices of the securities.

Recent Sales of Unregistered Securities

The following is a summary of sales of

unregistered securities undertaken by the Company.

The share, per share and price per share information have been adjusted to give

retroactive effect to the Reverse Split.

Effective February 19, 2018, the Company completed the sale of Units, each Unit consisting of one share of common stock and one

The securities were sold exclusively to persons who qualified as “accredited investors”

within the meaning

of Rule 501(a) of Regulation D under the Securities Act.

There were a total of 10 accredited investors who participated in the

The sale of the securities was undertaken without registration under the Securities Act in reliance upon an exemption

from registration requirements under Regulation D of the Securities Act.

The securities were purchased for investment purposes,

not with a view to distribution and were subject to restrictions on transfer.

On May 18, 2018, the Company issued 100,000 shares of common stock to the Company’s principal shareholder and creditor as

repayment in full of $100,000 in principal advances made to the Company pursuant to an Agreement to Convert Debt.

The individual

qualified as an “accredited investor”

within the meaning of Rule 501(a) of Regulation D under the Securities Act.

securities, which were taken for investment and were subject to appropriate transfer restrictions, were issued without registration

under the Securities Act in reliance upon the exemption provided in Section 4(a)2 of the Securities Act.

Effective June 1, 2018, the Company completed the sale of 250,000 Units, each Unit consisting of one share of common stock and

The securities were sold exclusively to persons who qualified as “accredited investors”

within the meaning

of Rule 501(a) of Regulation D under the Securities Act.

There were a total of six accredited investors who participated in the

The sale of the securities was undertaken without registration under the Securities Act in reliance upon an exemption

from registration requirements under Rule 506 of Regulation D of the Securities Act.

The securities were purchased for investment

purposes, not with a view to distribution and were subject to restrictions on transfer.

On June 20, 2018, the Company issued 60,000 shares of common stock to one investor pursuant to the exercise of issued and outstanding

The securities were issued without registration under the Securities Act in reliance upon an exemption from registration

requirements under Section 4(a)(2) of the Securities Act.

The securities were purchased for investment purposes, not with a view

to distribution and were subject to restrictions on transfer.

On June 20, 2018, the Company issued 20,000 shares of common stock pursuant to the exercise of issued and outstanding warrants

by one warrant holder.

The securities were issued without registration under the Securities Act in reliance upon an exemption from

registration requirements under Section 4(a)(2) of the Securities Act.

The securities were purchased for investment purposes, not

with a view to distribution and were subject to restrictions on transfer.

On July 25, 2018, the Company issued 98,100 shares of common stock to its CEO as repayment in full of $90,000 in accrued but unpaid

compensation and $8,100 in cash advances made to the Company pursuant to an Agreement to Convert Debt.

The individual qualified

as an “accredited investor”

within the meaning of Rule 501(a) of Regulation D under the Securities Act.

The securities,

which were taken for investment and were subject to appropriate transfer restrictions, were issued without registration under the

Securities Act in reliance upon the exemption provided in Section 4(a)2 of the Securities Act.

On August 13, 2018, the Company issued 20,000 shares of common stock to its CEO pursuant to a Restricted Stock Award Agreement.

The 20,000 shares were issued as a result of meeting certain vesting requirements contained in the Restricted Stock Award Agreement.

The individual qualified as an “accredited investor”

within the meaning of Rule 501(a) of Regulation D under the Securities

The securities, which were taken for investment and were subject to appropriate transfer restrictions, were issued without

registration under the Securities Act in reliance upon the exemption provided in Section 4(a)2 of the Securities Act.

On August 30, 2018 the Company completed the sale of 90,000 Units at a price of $1.00 per Unit.

Each Unit consisted of one share

of Common Stock and one Warrant.

There was a total of one accredited investor who participated in the offering.

The sale of the

securities was undertaken without registration under the Securities Act in reliance upon an exemption from registration requirements

under Rule 506 of Regulation D of the Securities Act.

The securities were purchased for investment purposes, not with a view to

distribution and were subject to restrictions on transfer.

On August 29, 2018, the Company issued 40,000 shares of common stock to one investor pursuant to the exercise of an issued and

outstanding Warrant.

The securities were issued without registration under the Securities Act in reliance upon an exemption from

registration requirements under Section 4(a)(2) of the Securities Act.

The securities were purchased for investment purposes, not

with a view to distribution and were subject to restrictions on transfer.

On September 25, 2018, the Company issued 20,261 shares of common stock as partial consideration under a data share agreement.

The shares were valued at $1.00 per share.

The individual qualified as an “accredited investor”

within the meaning

of Rule 501(a) of Regulation D under the Securities Act.

The securities, which were taken for investment and were subject to appropriate

transfer restrictions, were issued without registration under the Securities Act in reliance upon the exemption provided in Section

4(a)2 of the Securities Act.

On various dates between July and October, 2018, the Company issued an aggregate of 236,000 shares to two institutional investors

pursuant to the partial conversion of convertible promissory notes.

The two institution investors each qualified as an “accredited

investor”

within the meaning of Rule 501(a) of Regulation D under the Securities Act.

The securities, which were taken for

investment and were subject to appropriate transfer restrictions, were issued without registration under the Securities Act in

reliance upon the exemption provided in Section 4(a)2 of the Securities Act.

In November and December, 2018, the Company sold an aggregate of $120,000 in Units, each Unit consisting of one share of Common

Stock, one Warrant exercisable to purchase two shares of Common stock at a price of $2.00 per share, and one Warrant exercisable

to purchase two shares of Common Stock at a price of $3.00 per shares.

The Units were sold to two investors, each of whom qualified

as an “accredited investor”

within the meaning of Rule 501(a) of Regulation D under the Securities Act.

The securities,

which were taken for investment and were subject to appropriate transfer restrictions, were issued without registration under the

Securities Act in reliance upon the exemption provided in Section 4(a)2 and Rule 506(b) of Regulation D under the Securities Act.

In October 2018, the Company sold an aggregate of $205,000 in convertible notes (the “Series 2018 Notes”).

2018A Notes were sold to five investors, each of whom qualified as an “accredited investor”

within the meaning of Rule

501(a) of Regulation D under the Securities Act.

The securities, which were taken for investment and were subject to appropriate

transfer restrictions, were issued without registration under the Securities Act in reliance upon the exemption provided in Section

4(a)2 and Rule 506(b) of Regulation D under the Securities Act.

In December 2018, the Company sold an aggregate of $150,000 in convertible notes (the “Series 2018B Notes”).

2018A Notes were sold to 2 investors, each of whom qualified as an “accredited investor”

within the meaning of Rule

501(a) of Regulation D under the Securities Act.

The securities, which were taken for investment and were subject to appropriate

transfer restrictions, were issued without registration under the Securities Act in reliance upon the exemption provided in Section

4(a)2 and Rule 506(b) of Regulation D under the Securities Act.

In October 2018, the Company sold an aggregate of $160,700 in bridge notes (the “Bridge Notes”).

The Bridge Notes were

sold to two investors, each of whom qualified as an “accredited investor”

within the meaning of Rule 501(a) of Regulation

D under the Securities Act.

The securities, which were taken for investment and were subject to appropriate transfer restrictions,

were issued without registration under the Securities Act in reliance upon the exemption provided in Section 4(a)2 and Rule 506(b)

of Regulation D under the Securities Act.

the year ended December 31, 2019, the Company raised $30,000 through the sale of 30,000 Units at a price of $1.00 per Unit.

unit consists of one share of common stock and four common stock warrants.

Two of the warrants expire on May 8, 2019 and are exercisable

The other two warrants expire on August 8, 2019 and are exercisable at $3.00.

The warrants expiring on May 8, 2019 were

extended until May 28, 2019 and the exercise price was reduced to $1.00 per share.

On July 31, 2019 all of the stock warrants were

extended until October 31, 2019 and they all expired unexercised.

The following is a summary of sales of unregistered

securities undertaken by the Company.

The share, per share and price per share information have been adjusted to give retroactive effect

to the Reverse Split.

May 31, 2020, the Company agreed to issue 86,270 common shares to settle of accounts payable related to services provided in 2019 and

2020 of $17,254.

The transaction was exempt under Section 4(a)(2).

May 31, 2020, the Company agreed to issue 687,500 common shares and warrants to settle advances from third parties of $42,500 and settle

advances from related parties of $95,000.

Additionally, the Company issued 1,183,635 common shares and warrants to settle convertible

notes payable of $236,727 including accrued interest.

The common shares had a fair value of $486,250 resulting in a loss on settlement

of liabilities of $348,750.

The transactions were exempt under Section 4(a)(2)

the year ended December 31, 2020, the Company received net proceeds of $38,500 from the exercise of 155,000 warrants.

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.

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 year ended December 31, 2021, the Company recognized $245,334 of stock-based

compensation related to this issuance.

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 year ended December 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 $272,000 of stock-based compensation

for services provided during the year ended December 31, 2021.

the year ended December 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.

In June 2021, the Company issued an aggregate of 2,278,813 shares of common stock in consideration of (i) the conversion of an

aggregate of 192,269 shares of Series A Preferred Stock and (ii) an aggregate of $356,123 in accrued interest on the Series A

Preferred Stock.

The shares were issued to two investors, each of whom qualified as an “accredited investor” within the

meaning of Rule 501(a) of Regulation D under the Securities Act.

The securities, which were taken for investment and were subject to

appropriate transfer restrictions, were issued without registration under the Securities Act in reliance upon the exemption provided

in Section 4(a)2 and Rule 506(b) of Regulation D under the Securities Act.

Unless otherwise noted, all of the foregoing transactions

were undertaken in reliance upon the exemption contained in Section 4(a)(2) of the Securities Act of 1933.

INCENTIVE COMPENSATION

Equity Incentive Plan

Effective September 1, 2017, the 2017 Equity

Incentive Plan was approved by written consent of stockholders holding 75% of the Company’s outstanding common stock, and

was adopted by the Board of Directors.

The Company is authorized to grant rights to acquire up to a maximum of 200,000 shares of

common stock under the Plan, giving retroactive effect to the Reverse Split.

The Plan is authorized to grant incentive stock options

that qualify under Section 422 of the Internal Revenue Code of 1986, as amended.

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 (collectively, "Stock Awards").

Incentive stock options granted under the 2017 Plan are intended to qualify as

"incentive stock options"

within the meaning of Section 422 of the Code.

Nonstatutory stock options granted under the

2017 Plan are intended not to qualify as incentive stock options under the Code.

Effective September 1, 2017, the Equity Incentive

Plan was approved by written consent of stockholders holding 75% of the Company’s outstanding common stock and was adopted by the

Board of Directors.

The Company is authorized to grant rights to acquire up to a maximum of 200,000 shares of common stock under the Plan,

giving retroactive effect to the Reverse Split.

The Plan is authorized to grant incentive stock options that qualify under Section 422

of the Internal Revenue Code of 1986, as amended.

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

(collectively, "Stock Awards").

Incentive stock options granted under the 2017 Plan are intended to qualify as "incentive

stock options" within the meaning of Section 422 of the Code.

Nonstatutory stock options granted under the 2017 Plan are intended

not to qualify as incentive stock options under the Code.

Arrangements with CEO

When he was first engaged as President,

CEO and Director of G+W in June 2015, W.

Pierce Carson was granted shares of G+W representing 15% of the total issued and outstanding

shares of G+W.

In July 2016, we completed a reverse triangular

merger pursuant to which a newly formed merger subsidiary was merged into Gulf + Western, and the 15% equity interest in Gulf +

Western owned by Mr.

Carson was converted into 172,479 shares of Magellan common stock.

As a result of the merger, Gulf + Western

became a wholly-owned subsidiary of Magellan.

On June 1, 2016 we executed an employment

agreement with Dr.

Carson in which he assumed the positions of President and Chief Executive Officer of Magellan Gold Corporation.

The agreement also provided that Dr.

Carson be appointed a Director of Magellan Gold Corporation, and effective June 30, 2016,

Carson was appointed a Director of Magellan.

This agreement was further extended in

2017 and 2018.

In June 2019, Dr.

Carson resigned as the

President and Chief Executive Officer of Magellan Gold Corporation.

Carson also resigned from all other positions with the

Company and its affiliates and subsidiaries.

At December 31, 2019 a total of $110,000

and $18,469 of salary and associated payroll tax obligations, respectively, is accrued in connection with the agreement and included

in accrued liabilities on the accompanying consolidated balance sheets.

Effective June 1, 2019, the Company and

Effective June 1, 2019, the Company and David

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

Drips, in consideration

of services to be rendered as President, CEO and Director, restricted stock units consisting of 10,000 units for each month of

The units will vest upon successful completion of a $1.25 million financing on or before November 30, 2019.

Upon settlement

if the common stock is less than $1.50 addition shares will be issued such that each month of service will have a value of $15,000.

The completion of a $1.25 million financing did not happen as of November 30, 2019 and as such the Company is working to negotiate

fair settlement and payment for Mr.

Drips, in consideration of services

to be rendered as President, CEO and Director, restricted stock units consisting of 10,000 units for each month of service.

will vest upon successful completion of a $1.25 million financing on or before November 30, 2019.

Upon settlement if the common stock

is less than $1.50 addition shares will be issued such that each month of service will have a value of $15,000.

The completion of a $1.25

million financing did not happen as of November 30, 2019 and as such the Company is working to negotiate fair settlement and payment for

Drips providing services.

As of December 31, 2019, $92,000 has been accrued under this arrangement.

As of December 31, 2021 and 2020, $78,000 has been accrued under this arrangement.

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.

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 December 31, 2021 and 2020, 255,000 and 75,000

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

During the years ended December 31, 2021 and 2020, the

Company recognized $162,465 and $84,600 of stock-based compensation related to the agreement, respectively.

SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by the Exchange

Act and are not required to provide the information required under this item.

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.

The following discussion and analysis provides

information that management believes is relevant for an assessment and understanding of our results of operations and financial

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 years ended December 31, 2019 and 2018.

Forward-Looking Statements

Some of the information presented in this

Form 10-K 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,

Our principal business is the acquisition and exploration of mineral resources.

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 limited operations to

date and we rely upon the sale of our securities and borrowings from significant investors to fund our operations, as we have not

generated any revenue.

In August 2012, we entered into an option

agreement and subsequently purchased the “Silver District”

project consisting of 85 unpatented lode mining claims,

4 patented lode claims, a Arizona State Exploration Permit of 154.66 acres and 23 unpatented mill site claims, totaling over 2,000

acres in La Paz County, Arizona.

Since our acquisition, we have increased our land position in the Silver District by staking two

unpatented lode mining claims, leased two additional patented claims and have increased our Arizona State Exploration Permit to

334.85 acres.

On September 30, 2014, we formed and organized

a new wholly-owned subsidiary, Gulf + Western Industries, Inc., a Nevada corporation (“Gulf+Western”

or “G+W”),

to own our Silver District mining interests.

On October 1, 2014 we completed the transfer of those assets from Magellan to G+W.

At the time of the transfer, Magellan owned all the outstanding common stock of G+W.

Effective December 31, 2014, Magellan pledged

all its ownership interest in G+W to Mr.

Gibbs, a significant shareholder in the Company, as security for outstanding amounts

under a line of credit agreement between Magellan and Mr.

During the year ended December 31, 2019, the total amount owed

under the credit agreement was $1,174,188, which includes $869,550 of principal and $304,638 of accrued interest was settled with

the issuance of Series A Preferred Stock.

On October 24, 2016, the Company entered into a Mining Option

Agreement (“Agreement”) between and among Rio Silver Inc., a Canadian company (“Rio Silver”), Minera Rio

Plata S.A.C., a Peruvian company and subsidiary of Rio Silver (“Minera”), and Magellan Gold Peru S.A.C., a Peruvian

company and wholly owned subsidiary of the Company (“Magellan Peru”) pursuant to which Rio Silver through Minera, granted

to the Company the sole and exclusive option to acquire an undivided 50% interest in and to property located in central Peru.

the terms of the Agreement, the Company has the right to earn an undivided 50% interest in the Niñobamba Silver/Gold Project

in central Peru.

To earn its 50% interest, the Company must spend $2.0 million in exploration activities in the project over three

The Niñobamba project is comprised of five concessions that total 36.5 square kilometers (9.026 acres).

December 31, 2017, the Company agreed with Rio Silver to terminate the option agreement, thereby terminating the Company’s

option to earn an interest in the Niñobamba Silver/Gold Project.

The Company retained its ownership of Rio Silver stock.

On November 30, 2017, the Company purchased

from Rose Petroleum plc (“Rose”) a mineral processing mill operation located in the state of Navarit, Mexico (the “SDA

Mill”) as well as its associated assets, licenses and agreements.

Magellan previously paid a $50,000 option payment, and

an additional $100,000 option-to-purchase extension.

The $100,000 option extension payment was applied against the cash portion

of the purchase price.

The purchase price for the SDA Mill consisted

of $850,000 cash, a $50,000 promissory note, the $50,000 non-refundable option payment, the $100,000 for the option-to-purchase

payment, and 284,017 shares of common stock (the “Shares”).

The note is non-interest bearing and has been paid in full.

The Shares will be held in escrow for a period of 12 months and the Company has the option to repurchase the Shares from Rose for

the sum of $500,000 in the first six months and $550,000 in months seven to twelve.

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.

On October 17, 2017, the Company amended

the agreement to include the acquisition of Minerales Vane Operaciones ("MVO") (the entity that provides labor to the

Mill) for $2,500.

In January 2018 the Company paid the purchase price and obtained legal control of MVO.

MVO is the sister entity

which was organized for the purpose of employing all personnel of the SDA mill.

The acquisition of MVO will not result in the acquisition

of any additional assets or liabilities.

The Company entered into an agreement giving

it the right to acquire the El Dorado Gold-Silver Property, a 50 hectare mining concession located near the village of Las Minitas,

which lies 50 kilometers south of Magellan’s SDA Flotation Plant at Acaponeta, Nayarit State.

Magellan intends to advance

El Dorado towards production as a matter of priority.

The project has excellent road and rail infrastructure, and the Company plans

to truck the ore from El Dorado to the SDA Plant for processing.

El Dorado is situated within a district of epithermal vein systems

from which historic mining produced high grades.

Effective March 31, 2020 Magellan Gold

Corporation, a Nevada corporation (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 Minerales Vane 2 S.A.

de CV (“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 an 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.

Effective July 1, 2020, 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 include 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, Idaho.

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 in cash.

Of the 1,000,000 shares, 750,000 have been issued and 250,000 shares will be issued two years from the closing concurrent with the pay-off

of the secured promissory note.

The cash consideration of $25,000 was paid and the balance of $125,000 is evidenced by a secured promissory

note due in two years.

The Note is secured by the Clearwater shares and assets.

Our primary focus is 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.

Our permitting applications and exploration and development efforts will require additional

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.

Results of Operations for the Years Ended December 31,

2020 and 2019

Years ended December 31,

Operating expenses:

General and administrative expenses

Total operating expenses

Operating loss

Other income (expense):

Interest expense

Loss on extinguishment of debt

Loss on settlement of liabilities

Change in derivative liability

Total other income (expense)

Net loss from continuing operation

Net loss from discontinued operation

$ (3,714,634 )

$ (5,135,800 )

Operating expenses

During the year ended December 31, 2020, our total

operating expenses included general and administrative expenses of $1,175,110 as compared to $1,008,917 during the year ended December

The $166,193 increase is primarily associated with increases in investor relations, stock based compensation and legal fees

offset with decreases in travel expenses

Other income (expenses)

Interest expense for the year ended December 31,

2020 and 2019 totaled $424,858 and $526,273, respectively.

The decrease in interest expense is related to the conversion of debt to equity

during the year ended December 31, 2020.

Loss on settlement of liabilities for the year

ended December 31, 2020 totaled $2,110,047.

The loss on settlement was a result of settlement of convertible debt and advances for common

shares and warrants during the year ended December 31, 2020.

Loss on extinguishment of debt for the year ended

December 31, 2019 totaled $3,151,314.

The loss on extinguishment of debt was a result of settlement of debt on September 30, 2019, which

is discussed in detail in the footnotes.

Other income for the year ended December 31, 2020

of $26,980 was related to the NVX option and Small Business Administration Economic Injury Disaster Loan Grant.

Discontinued operations

The net loss from discontinued operations

during the years ended December 31, 2020 and 2019 totaled $31,599 and $461,753, respectively.

Net loss from discontinued operations

represent the Mexico operations and Gulf+Western that were disposed of in March 2020 and July 2020, respectively.

change is due to the limited operations of the Mexico and Gulf+Western assets in 2020.

Liquidity and Capital Resources:

Our audited 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 December 31, 2020, we had not yet generated any significant revenues or

achieved profitable operations and we have accumulated losses of $15,832,969.

We expect to incur further losses in the development

of our business, all of which casts 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 year ended December 31, 2020,

the Company sold $285,000 of Series 2020A 8% Unsecured Convertible Notes with a maturity date of November 30, 2020.

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

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 years.

During the year ended December 31, 2019,

the Company raised $30,000 through the sale of 30,000 units at a price of $1.00 per unit.

Each unit consists of one share of common

stock and four common stock warrants.

Two of the warrants expire on May 8, 2019 and are exercisable at $2.00.

The other two warrants

expire on August 8, 2019 and are exercisable at $3.00.

In April 2019 the warrants expiring on May 8, 2019 were extended until May

28, 2019 and the exercise price was reduced to $1.00 per share.

As of May 31, 2019 these warrants were extended to July 31, 2019.

On July 31, 2019, these warrants were extended to October 31, 2019 and expired unexercised.

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.

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

During the year ended December 31, 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.

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 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.

Additionally, the Company received $514,955

of proceeds from advances from related and third parties, of which $345,450 was settled with the issuance Series A Preferred Stock

in September 2019.

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:

Years ended December 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 used in investing activities from continuing operations

Net cash used in investing activities from discontinued operations

Net cash used in investing activities

Net cash provided by financing activities from continuing operations

Net cash provided by financing activities from discontinued operations

Net cash used in financing activities

Effect of foreign currency exchange

Net change in cash and cash equivalents

Cash and cash equivalents beginning of period

Cash and cash equivalents end of period

At December 31, 2020, we had a $1,476,062 working

capital deficit.

This compares to cash of $167 and a working capital deficit of $2,494,426 at December 31, 2019.

At December 31, 2020, we had $1 in cash

and a $1,476,062 working capital deficit.

This compares to cash of $167 and a working capital deficit of $2,494,426 at December

Net cash used in operating activities from

continuing operations during the year ended December 31, 2020 was $136,802 and was mainly comprised of our $3,683,035 net loss

during the year, adjusted by a non-cash charges of $2,153,183 for loss on settlement of liabilities, $634,921 of stock compensation

and accretion of discounts on notes payable of $346,781.

In addition, it reflects changes in operating assets and liabilities of

Net cash used in operating activities from continuing

operations during the year ended December 31, 2019 was $221,970 and was mainly comprised of our $4,674,047 net loss during the year, adjusted

by a non-cash charges of $12,457 gain on investment, $3,259,365 for loss on extinguishment of debt, $423,399 of stock compensation and

accretion of discounts on notes payable of $210,445.

In addition, it reflects changes in operating assets and liabilities of $571,325.

Net cash used in operating activities from

discontinued operations of during the years ended December 31, 2020 and 2019 of $51,491 and $207,034, respectively, are related

to the disposal of the Mexico and Gulf+Western operations.

Net cash used in investing activities from

continuing operations during the year ended December 31, 2020 was $113,828 and was comprised of cash payments of $101,328 in development

costs and $12,500 for mineral rights for Clearwater Mining Corporation.

Net cash used in investing activities from

discontinued operations during the year ended December 31, 2019 was $75,000 related to the disposal of Mexico operations.

Net cash provided by financing activities

from continuing operations during the year ended December 31, 2020 was $233,319 comprised $38,500 proceeds from the sale of common

stock and warrants, $235,000 proceeds from convertible debt from third parties, $60,000 proceeds from convertible debt from related

parties, $45,830 proceeds from advances from related parties, $20,000 proceeds on advances from third parties, offset by $10,000

payments on convertible notes from third parties and $156,011 payments on advances from related parties.

Net cash provided by financing activities

from continuing operations during the year ended December 31, 2019 was $457,246 comprised $30,000 proceeds from the sale of common

stock and warrants, $135,000 proceeds from convertible debt from third parties, $482,455 proceeds from advances from related parties,

$32,500 proceeds on advances from third parties, offset by $222,709 payments on advances from related parties.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required by this

item are located in Item 15 beginning on page F-1 of this Annual Report on Form 10-K and are incorporated herein

by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We are a smaller reporting company as defined by the Exchange Act and

are not required to provide the information required under this item.

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-K

Item 5. Market for Registrant’s Common Equity