What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-07-17 compared with 2022-06-01 · 38 added, 171 removed, 99 unchanged (68% of the section changed)

27 unchanged sentences

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

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,

an 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.

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

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.

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

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

The Niñobamba

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

Effective 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.

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.

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

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The Note is secured by the Clearwater shares and assets.

During the year ended December 31, 2022, the Company evaluated

the mineral rights and properties for impairment and recorded an impairment expense of $1,037,500.

As of December 31, 2022 and 2021, the

mineral rights and properties balance totaled $0 and $1,000,000, respectively.

Our primary focus is to advance our Idaho gold

4 unchanged sentences

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

Results of Operations for the Years Ended December 31,

2021 and 2020

Results of Operations for the Years Ended December 31, 2022 and

Years Ended December 31,

1 unchanged sentence

General and administrative expenses

Impairment expense

Total operating expenses

2 unchanged sentences

Interest expense

Loss on settlement of liabilities

Loss on change in derivative liability

Gain (loss) on change in derivative liability

Total other income (expense)

Net loss from continuing operations

Net loss from discontinued operation

$ (1,559,929 )

3 unchanged sentences

operating expenses included general and administrative expenses of $1,280,383 as compared to $1,770,847 during the year ended December

The $595,737 increase is primarily associated with increases in rent, audit fees and stock-based compensation which were offset

by decreases in consulting fees and investor relation fees.

The $490,464 decrease is primarily associated with decreases in stock-based compensation and investor relation expenses and

the $1,037,500 increase in impairment expense related to the Center Star Gold Mine.

Other income (expenses)

Interest expense for the year ended December 31,

2021 and 2020 totaled $230,647 and $424,858, respectively.

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

year ended December 31, 2022, total other expenses were $279,546 as compared to$ 285,885

during the year ended December 31, 2021.

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.

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 year ended December 31, 2020 totaled $31,599.

Net loss from discontinued operations represents the Mexico operations and Gulf+Western

that were disposed of in March 2020 and July 2020, respectively.

The $6,339 change was related to a$51,687 increase in interest

expense which was offset by a $58,026 increase in derivative liability related to the gain in derivative liability in 2022.

Liquidity and Capital Resources:

13 unchanged sentences

During the year ended December 31, 2022, the Company

entered into unsecured promissory notes totaling $78,000 and unsecured promissory notes with related parties totaling $53,000.

During the year ended December 31, 2021, the Company

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

1 unchanged sentence

of proceeds from the exercise of warrants.

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.

The purchase 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.

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

We anticipate that additional funding will be

4 unchanged sentences

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

Net cash used in investing

Net cash provided by financing

Net change in cash

Cash at beginning of period

Cash at end of period

At December 31, 2022, we had $743 in cash and

a $1,692,051 working capital deficit.

This compares to no cash and a working capital deficit of $1,476,062 at December 31, 2020.

Net cash used in operating activities from continuing

operations during the year ended December 31, 2021 was $312,882 and was mainly comprised of our $2,056,732 net loss during the year, adjusted

by $1,454,580 of stock compensation and accretion of discounts on notes payable of $164,465.

In addition, it reflects changes in operating

assets and liabilities of $69,567.

Net cash used in operating activities from continuing

operations during the year ended December 31, 2020 was $136,803 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 $411,347.

Net cash used in operating activities from discontinued

operations during the years ended December 31, 2021 and 2020 of $0 and $51,491, 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, 2021 was $80,537 which was comprised of cash payments for development costs.

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 provided by financing activities from

continuing operations during the year ended December 31, 2021 was $412,185 comprised $287,500 proceeds from the sale of common stock and

warrants, $175,000 proceeds from convertible debt from third parties, $605 proceeds from advances from related parties, offset by $30,420

payments on convertible notes from third parties and $20,000 payments on advances from related parties.

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

This compares to $18,766 in cash and a working capital deficit of $1,459,741 at December 31, 2021.

Net cash used in operating activities during the

year ended December 31, 2022 was $148,254 and was mainly comprised of our $1,559,929 net loss during the year, adjusted by $1,037,500

of impairment expense, $110,888 of stock compensation and accretion of discounts on notes payable of $201,815.

In addition, it reflects

changes in operating assets and liabilities of $64,260.

Net cash used in operating activities during the

year ended December 31, 2021 was $312,882 and was mainly comprised of our $2,056,732 net loss during the year, adjusted by $1,454,580

of stock compensation and accretion of discounts on notes payable of $164,465.

In addition, it reflects changes in operating assets and

liabilities of $69,567.

Net cash used in investing activities during the

years ended December 31, 2022 and 2021 was $769 and $80,537, respectively which was comprised of cash payments for development costs.

Net cash provided by financing activities during

the year ended December 31, 2022 was $131,000 comprised of $78,000 proceeds from notes payable and $53,000 proceeds from notes payable

from related parties.

Net cash provided by financing activities during

the year ended December 31, 2021 was $412,185 comprised $287,500 proceeds from the sale of common stock and warrants, $175,000 proceeds

from convertible debt from third parties, $605 proceeds from advances from related parties, offset by $30,420 payments on convertible

notes from third parties and $20,000 payments on advances from related parties.

4 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-K

Item 7. Management’s Discussion and Analysis