MAGELLAN COPPER & GOLD Corp 10-Q

Item 1. Financial Statements Magellan Gold Corporation Consolidated Balance Sheets (Unaudited) June 30, 2023 December 31, 2022 ASSETS Current assets Cash $ 2,795 $ 743 Prepaid expenses and other current assets 853 5,950 Total current assets 3,648 6,693 Mineral rights and properties 1,100,000 – Development costs 194,274 194,274 Total assets $ 1,297,922 $ 200,967 LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 194,329 $ 195,418 Accounts payable - related party 37,750 19,750 Accrued liabilities 214,088 206,468 Convertible note payable, net - related party 185,000 185,000 Convertible note payable, net 528,997 620,978 Accrued interest - related parties 32,261 24,868 Accrued interest 159,812 127,684 Advances payable - related party 21,190 21,190 Advances payable 18,223 18,223 Notes payable 99,000 78,000 Notes payable - related party 53,000 53,000 Derivative liability 77,548 148,165 Total current liabilities 1,621,198 1,698,744 Total liabilities 1,621,198 1,698,744 Commitments and contingencies – – Shareholders' deficit: Preferred shares, 25,000,000 shares Series A preferred stock - $ 10.00 stated value; 2,500,000 authorized; 0 shares issued and outstanding – – Common shares, $ 0.001 par value; 1,000,000,000 shares authorized; 19,487,072 and 12,772,786 shares issued and outstanding, respectively 19,487 12,773 Additional paid-in capital 19,265,467 18,019,192 Accumulated deficit ( 19,608,230 ) ( 19,529,742 ) Shareholders' deficit: ( 323,276 ) ( 1,497,777 ) Total liabilities and shareholders' deficit $ 1,297,922 $ 200,967 See accompanying notes to the unaudited consolidated financial statements 3 Magellan Gold Corporation Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating expenses: General and administrative expenses $ 67,620 $ 31,211 $ 101,565 $ 99,808 Total operating expenses 67,620 31,211 101,565 99,808 Operating loss 67,620 31,211 101,565 99,808 Other income (expense): Interest expense ( 28,792 ) ( 94,318 ) ( 47,540 ) ( 160,007 ) Gain (loss) on change in derivative liability 48,845 ( 306,552 ) 70,617 ( 277,012 ) Total other income (expense) 20,053 ( 400,870 ) 23,077 ( 437,019 ) Net loss $ ( 47,567 ) $ ( 432,081 ) $ ( 78,488 ) $ ( 536,827 ) Basic net loss per common share $ ( 0.00 ) $ ( 0.04 ) $ ( 0.00 ) $ ( 0.05 ) Diluted net loss per common share $ ( 0.00 ) $ ( 0.04 ) $ ( 0.00 ) $ ( 0.05 ) Basic weighted average 19,487,072 11,650,033 18,898,280 11,546,218 Diluted weighted average 19,487,072 11,650,033 18,898,280 11,546,218 See accompanying notes to the unaudited consolidated financial statements 4 Magellan Gold Corporation Consolidated Statements of Shareholders' Deficit For the six months ended June 30, 2023 and 2022 (Unaudited) Additional Common Stock Paid - in Accumulated Shares Par Value Capital Deficit Total Balance, December 31, 2022 12,772,786 $ 12,773 $ 18,019,192 $ ( 19,529,742 ) $ ( 1,497,777 ) Shares issued for cash 1,714,286 1,714 238,286 – 240,000 Shares issued for the acquisition of mineral properties 5,000,000 5,000 995,000 – 1,000,000 Stock based compensation – – 6,315 – 6,315 Net loss – – – ( 30,921 ) ( 30,921 ) Balance, March 31, 2023 19,487,072 19,487 19,258,793 ( 19,560,663 ) ( 282,383 ) Stock based compensation – – 6,674 – 6,674 Net loss – – – ( 47,567 ) ( 47,567 ) Balance, June 30, 2023 19,487,072 $ 19,487 $ 19,265,467 $ ( 19,608,230 ) $ ( 323,276 ) Balance, December 31, 2021 11,340,403 $ 11,341 $ 17,692,236 $ ( 17,969,813 ) $ ( 266,236 ) Shares issued as deferred finance costs 180,000 180 53,820 – 54,000 Stock based compensation – – 12,615 – 12,615 Net loss – – – ( 104,746 ) ( 104,746 ) Balance, March 31, 2022 11,520,403 11,521 17,758,671 ( 18,074,559 ) ( 304,367 ) Shares issued as deferred finance costs 233,334 233 69,767 – 70,000 Stock based compensation – – 5,993 – 5,993 Net loss – – – ( 432,081 ) ( 432,081 ) Balance, June 30, 2022 11,753,737 $ 11,754 $ 17,834,431 $ ( 18,506,640 ) $ ( 660,455 ) See accompanying notes to the unaudited consolidated financial statements 5 Magellan Gold Corporation Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2023 2022 Operating activities: Net loss $ ( 78,488 ) $ ( 536,827 ) Adjustments to reconcile net loss to net cash used in operating activities: Accretion of discounts on notes payable 8,019 122,362 Stock based compensation 12,989 18,608 (Gain) loss on change in derivative liability ( 70,617 ) 277,012 Changes in operating assets and liabilities: Prepaid expenses and other assets 5,097 5,652 Accounts payable and accrued liabilities 11,232 2,260 Accounts payable - related party 18,000 – Accrued interest 39,521 25,645 Net cash used in operating activities ( 54,247 ) ( 85,288 ) Investing activities: Cash paid for development costs – ( 769 ) Cash paid for mineral rights ( 100,000 ) – Net cash used in investing activities ( 100,000 ) ( 769 ) Financing activities: Proceeds from notes payable from third parties 21,000 40,000 Proceeds from notes payable from related parties – 30,000 Repayment of advances from third parties ( 4,701 ) – Repayment of convertible debt ( 100,000 ) – Proceeds from sale of common stock 240,000 – Net cash provided by financing activities 156,299 70,000 Net change in cash 2,052 ( 16,057 ) Cash at beginning of period 743 18,766 Cash at end of period $ 2,795 $ 2,709 Supplemental disclosure of cash flow information Cash paid for interest $ – $ 17,333 Cash paid for income taxes $ – $ – Non-cash financing and investing activities: Common stock issued for deferred financing costs $ – $ – Expenses paid on behalf of the Company $ 4,701 $ 938 Shares issued for the acquisition of mineral properties $ 1,000,000 $ – Conversion of Series A preferred stock and accrued dividend $ – $ 124,000 See accompanying notes to the consolidated financial statements 6 MAGELLAN GOLD CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 – Organization, Basis of Presentation, and Nature of Operations Organization and Nature of Operations Magellan Gold Corporation (“we” “our”, “us”, the “Company” or “Magellan”) was incorporated on September 28, 2010, under the laws of the State of Nevada. Our principal business is the acquisition and exploration of mineral resources. We have not presently determined whether the properties to which we have mining rights contain mineral reserves that are economically recoverable. Note 2 – Summary of Significant Accounting Policies Basis of Presentation We prepare our financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction with the audited financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December 31, 2022. Our consolidated financial statements include our accounts and the accounts of our 100% owned subsidiaries, Clearwater and M Gold. All intercompany transactions and balances have been eliminated. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Net Loss per Common Share We compute basic net loss per common share by dividing our net loss attributable to common shareholders by our weighted-average number of common shares outstanding during the period. Computation of diluted net loss per common share adds the weighted-average number of potential common shares outstanding to the weighted-average common shares outstanding, as calculated for basic net loss per share, except for instances in which there is a net loss. For the six months ended June 30, 2023, 72,000 stock options, 117,500 warrants, and 2,053,780 shares issuable from convertible notes were considered for their dilutive effects. For the six months ended June 30, 2022, 72,000 stock options, 117,500 warrants, and 1,916,904 shares issuable from convertible notes were considered for their dilutive effects. Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification. The Company’s sequencing policy is to evaluate for reclassification contracts with the earliest maturity date first. 7 Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. Liquidity and Going Concern Our 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 June 30, 2023, we had a working capital deficit of $ 1,617,550 , we had not yet generated any significant revenues or achieved profitable operations and we have accumulated losses of $ 19,608,230 . We expect to incur further losses in the development of our business, all of which raises substantial doubt as to 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, of which there can be no assurance. 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 financing will occur. Note 3 – Mineral Rights and Properties Center Star Gold Mine On July 1, 2020, the Company entered into a Stock Purchase Agreement to acquire Clearwater Gold Mining Corporation (“Clearwater”) which owns certain unpatented mining claims in Idaho County, Idaho that include the historic Center Star Gold Mine (“Center Star”) near Elk City, Idaho. As a result of the Clearwater acquisition, Gregory Schifrin, the sole shareholder of Clearwater, was appointed to serve as a member of the Company’s Board on July 1, 2020. In consideration for 100% of the issued and outstanding shares of Clearwater, the Company has agreed to pay Clearwater’s sole shareholder 1,000,000 shares of Magellan common stock, $125,000 convertible note and $25,000 in cash. The 1,000,000 shares are to be issued to the shareholder on and under the terms as follows: 250,000 shares at the time of closing, 250,000 shares at the time the Center Mine receives its permit to reopen the main portal of the mine, 250,000 shares at the point the main portal have been reopened and 250,000 shares two-years from closing concurrent the pay-off of the $125,000 convertible note. During the year ended December 31, 2022, the Company issued 250,000 shares for the acquisition of Clearwater valued at $ 37,500 . 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 June 30, 2023 and December 31, 2022, the Clearwater mineral rights and properties balance totaled $ 0 . As of June 30, 2023 and December 31, 2022, the Company had $ 194,274 in capitalized development cost to develop gold resources at Center Star. 8 Golden Idaho Project On January 3, 2023, the Company entered into an asset purchase agreement with Gold Express Mines, Inc (“Golden Express”). Pursuant to the agreement, the Seller sold the following 1) Golden, Idaho Project located in Idaho County, Idaho and consisting of seventy-two unpatented mining claims 2) Seafoam District - located in Custer County, Idaho and consisting of five unpatented mining claims 3) Blacktail District - located in Lemhi County, Idaho and consisting of eight unpatented mining claims 4) Big-it Project- located in Shoshone County, Idaho consisting of twenty-five unpatented mining claims and a mineral lease over three unpatented mining claims and 94.86 acres of real property and 5) Terror Gulch (Capparelli Group) located in Shoshone County, Idaho consisting of twelve unpatented mining claims. As of March 31, 2023, the total purchase price for the acquisition was determined to be $ 1,000,000 which consisted of 5,000,000 shares of common stock with a fair value of $ 1,000,000 . The Company concluded the transaction qualified as an asset acquisition and all such acquisition costs have been capitalized. The Company concluded the purchase of a single set of assets qualified as an asset acquisition and all such acquisition costs have been capitalized as mineral rights and properties on the balance sheet. As of June 30, 2023, the Gold Express mineral rights and properties balance totaled $ 1,000,000 . Kris Project On June 6, 2023, the Company entered into a memorandum of understanding for earn-in agreement(“MOU”) with Gold Express Mines, Inc. Per the MOU, the Company agreed to earn-in for up to 50% working interest in Kris Project, which has 69 unpatented mining claims located in Plumus County, CA. In March 2023, the Company paid Gold Express Mines, Inc. $ 100,000 , which was recorded as a deposit, and shall spend $400,000 on the Kris Project in allowable expenditures over the next thirty-six months, assuming permitting for the work is obtained. In the event that permitting delays the exploration and other work programs, the earn-in period shall be extended accordingly. Allowable expenditures are sampling, drilling, assaying, geologic mapping and mine site improvements made or performed directly on the existing mine site or expanded mine site. Consulting fees for work directly benefiting the Project are also allowed including management of work, preparation of reports, and planning for Future work. Claim maintenance fees on the existing claims are also allowable expenditures, as are the costs of future land acquisitions which are deemed to benefit the Kris Project, and which are approved by both parties beforehand. As part of the agreement, the Company shall make the Bureau of Land Management claim maintenance fees on the existing claims no later than August 15, 2023, and by August 15 th in ensuing years during the earn-in period. The Company shall pay for the annual Plumus County “notice of intent to hold” recording costs and any other Plumus County fees or taxes which accrue during the earn-in period. These shall all be allowable expenses under the earn-in agreement. As of June 30, 2023, the $ 100,000 deposit paid to Golden Express for the MOU was reclassed to mineral rights and properties on the balance sheet. Note 4 – Fair Value of Financial Instruments Financial assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels: Level 1 – Quoted market prices in active markets for identical assets or liabilities at the measurement date. Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data. Level 3 – Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying values for cash and cash equivalents, prepaid assets, accounts payable and accrued liabilities, related party line of credit and notes payable approximate their fair value due to their short-term maturities. 9 Fair Value Measurements The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy. The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of June 30, 2023 and December 31, 2022: Schedule of fair value assets and liabilities Level 1 Level 2 Level 3 Fair value at June 30, 2023 Liabilities: Derivative liability $ – $ – $ 77,548 $ 77,548 Level 1 Level 2 Level 3 Fair value at December 31, 2022 Liabilities: Derivative liability $ – $ – $ 148,165 $ 148,165 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, 2023: Schedule of fair value of the derivative liability Fair value as of December 31, 2022 $ 148,165 Loss on change in fair value of derivatives ( 70,617 ) Fair value as of June 30, 2023 $ 77,548 Note 5 – Notes payable, Convertible Note Payable and Derivative Liability Notes payable During the year ended December 31, 2022, the Company entered into unsecured promissory notes totaling $ 78,000 . During the six months ended June 30, 2023, the Company entered into an unsecured promissory note totaling $21,000. The promissory notes bear interest at 12 % per annum and are payable on demand. As of June 30, 2023 and December 31, 2022, the notes payable balance was $99,000 and $ 78,000 , with accrued interest of $ 11,965 and $ 6,130 , respectively. Series 2019A 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 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 June 30, 2023 and December 31, 2022, the balance due under these notes is $ 75,000 , with accrued interest of $ 30,944 and $ 26,481 , respectively. 10 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, 2023 and December 31, 2022, the balance due under this note is $ 145,978 , with accrued interest of $ 54,672 and $ 47,433 , respectively. Series 2020A 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 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. 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. The Series 2020A 8% Unsecured Convertible Notes that were due and payable in November 2020 and are currently past due. If a default notice is received the interest rate will be 12%. As of June 30, 2023 and December 31, 2022, the balance due to a third party under these notes is $ 200,000 , with accrued interest of $ 48,231 and $ 40,297 , respectively. 3% Secured Convertible Note On July 1, 2020, the Company issued a $125,000 Secured Convertible Note to a related party 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 Note. The Company evaluated the conversion option and concluded a beneficial conversion feature was present at issuance. The Company recognized the beneficial conversion feature and relative fair value of the warrants as a debt discount and additional paid in capital in July 2019. The $87,500 debt discount will be amortized over the term of the loan. Amortization expense of $21,815 was recognized during the year ended December 31, 2022. As of June 30, 2023 and December 31, 2022, the balance due to a related party under this note was $ 125,000 , with accrued interest of $ 11,240 and $ 9,380 , respectively. 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. In August 2021, the note was extended six months and the interest rate was increased to 15%. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price shall be the less of 90% of the lowest trading price during the previous twenty (20) trading day period ending on the issuance date, or during the previous twenty (20) trading day period ending on date of conversion of this note. The Company issued the debt holder 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 of $ 95,715 was recorded as a discount on the convertible notes payable. On February 9, 2022, the Company extended the maturity to May 10, 2022. In consideration of the extension, the Company issued the debt holder 180,000 shares of common stock valued at $ 54,000 . The incremental value of the debt modification of $54,000 will be recorded over the remaining life of the note ending May 10, 2022. On May 11, 2022, the Company agreed to a second amendment to extend the maturity of the AJB note to August 10, 2022. In consideration for the extension, the Company issued 233,334 shares of common stock at a price of $0.30 per share for a total value of $ 70,000 . The incremental value of the debt modification of $ 70,000 will be recorded over the remaining life of the note ending August 10, 2022. On August 9, 2022, the Company agreed to a third amendment to extend the maturity of the AJB note to November 9, 2022. In consideration for the extension, the Company issued 233,334 shares of common stock at a price of $0.24 per share for a total value of $ 56,000 . The incremental value of the debt modification of $56,000 will be recorded over the remaining life of the note ending November 9, 2022. Th AJB Convertible Note is due and payable in November 2023. In January 2023, the Note was extended to August 11, 2023. In consideration for the extension, the principal amount of the note was increased by $ 10,000 . The incremental value of the debt modification of $ 10,000 will be recorded as a debt discount and amortized over the remaining life of the note ending August 11, 2023. During the six months ended June 30, 2023, the Company amortized $ 8,019 of debt discount. During the six months ended June 30, 2023, the Company repaid $ 100,000 of principal on this note. 11 As of June 30, 2023, the total derivative liability on the above note was adjusted to a fair value of $ 77,548 . During the six months ended June 30, 2023, the Company recognized an additional $ 10,000 of debt discount and a day one loss of $2,136 related to the $ 10,000 increase in principal amount of the AJB. The debt discount will be amortized over the remaining life of the note ending August 11, 2023. 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 $0.12, volatility of 242.59% based on a comparable company peer group, expected term of 0.50 years, risk-free rate of 5.47% and a dividend yield of 0%. As of June 30, 2023 and December 31, 2022, the balance on the loan was $ 108,019 and $ 200,000 , net of discount of $ 2,193 and $ 0 , with accrued interest of $ 14,000 and $ 7,400 , respectively. Note 6 – Stockholders’ Deficit Common Stock On January 12, 2023, the Company entered into a subscription agreement with a related party to issue 714,286 shares of common stock at $0.14 per share for total cash proceeds of $ 100,000 . On March 24, 2023, the Company entered into a subscription agreement with Gold Express Mines, Inc. to issue 1,000,000 shares of common stock at $0.14 for total cash proceeds of $ 140,000 . 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, 2023, the Company had 128,000 shares available for future grant. Stock option activity within the 2017 Equity Incentive Plan and warrant activity outside the plan, for the six months ended June 30, 2023 is as follows: Schedule of options and warrant activity Stock Options Stock Warrants Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at December 31, 2022 72,000 $ 2.00 117,500 $ 0.50 Granted – – – – Cancelled – – – – Expired – – – – Exercised – – – – Outstanding at June 30, 2023 72,000 $ 2.00 117,500 $ 0.50 Exercisable at June 30, 2023 72,000 $ 2.00 117,500 $ 0.50 As of June 30, 2023, the outstanding stock options have a weighted average remaining term of 4.33 years and have no intrinsic value, and the outstanding stock warrants have a weighted average remaining term of 1.93 years and have no intrinsic value. Note 7 – Commitments and Contingencies Mining Claims As part of our acquisition of the Center Star gold mine project, we acquired 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 June 30, 2023, all of these claims are in good standing. 12 Note 8 – 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. 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 June 30, 2023, 525,000 restricted stock units may be settled in shares of common stock. During the six months ended June 30, 2023, the Company recognized $ 12,989 of stock-based compensation related to the agreement. Note 9 – Related Party Transactions Notes Payable - Related Parties During the year ended December 31, 2022, the Company entered into unsecured promissory notes with related parties totaling $ 53,000 with accrued interest of $ 3,049 . The promissory notes bear interest at 12% per annum and are payable on demand. As of June 30, 2023 and December 31, 2022 the notes payable – related parties balance was $ 53,000 . Advances- Related Parties During the year ended December 31, 2022, the CEO paid $ 938 of expenses on behalf of the Company. As of June 30, 2023 and December 31, 2022, the advances related party balance totaled $ 21,190 . Accrued Interest - Related Parties Accrued interest due to related parties is included in our consolidated balance sheets as follows: Schedule of related party interest payable June 30, 2023 December 31, 2022 Accrued interest payable – Mr. Gibbs $ 15,898 $ 12,130 Accrued interest payable – Mr. Schifrin 11,240 9,380 Accrued interest payable – Mr. Malhotra 2,238 1,841 Accrued interest payable – Mr. Lavigne 2,885 1,517 $ 32,261 $ 24,868 Consulting Agreement On December 29, 2022, the Company entered into a two-year consulting agreement with Rock Creek Mining Company commencing on December 1, 2022, to provide consulting and advisory services. Michael Lavigne, the Company’s CEO, is an officer and a Director of Rock Creek Mining Company. The consulting agreement provides for compensation of $6,000 per month, payable on demand. During the six months ended June 30, 2023, the Company incurred consulting fees of $ 36,000 related to this agreement. Note 10 – Subsequent Events In September 2023, the Company received proceeds of $12,600 from an investor for the purchase of 90,000 shares of its common stock at a price of $0.14 per share. 13