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Item 7. Management’s Discussion and Analysis

2024-04-18 compared with 2023-07-17 · 89 added, 60 removed, 77 unchanged (66% of the section changed)

2 unchanged sentences

“our,” and “us” to refer to Magellan Gold Corporation.

The following discussion and analysis provides

The following discussion and analysis provide

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

22 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

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.

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

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.

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.

In conjunction

with the Clearwater acquisition, Gregory Schifrin, the sole shareholder of Clearwater, was appointed on July 1, 2020 to serve as a member

of the Company’s Board.

The Company acquired 100% of the issued and outstanding shares of Clearwater in consideration of 1,000,000

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

The contracted share issuance was to be made in

increments as progress was achieved on gaining access to the mine.

To date 750,000 shares have been issued and 250,000 shares are still

pending issuance.

With respect to the convertible secured note, $125,000 plus accrued interest is currently due for payment.

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, 2023 and 2022, the Clearwater mineral rights and properties balance totaled $0.

As of December 31, 2023

and 2022, the Company had $0 and $194,274 in capitalized development costs for the Center Star Project, respectively.

On January 3, 2023, the Company entered into an

asset purchase agreement with Gold Express Mines, Inc (“Gold 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.

During the year ended December 31, 2023, the Company evaluated the mineral rights and properties for

impairment and recorded an impairment expense of $1,000,000.

As of December 31, 2023, the Gold Express mineral rights and properties balance

On June 6, 2023, the Company entered 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 74 unpatented mining claims located in Plumas 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.

If 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 Plumas County “notice of intent to hold” recording costs

and any other Plumas County fees or taxes which accrue during the earn-in period.

These shall all be allowable expenses under the earn-in

As of December 31, 2023, the $100,000 deposit paid to Golden Express for the MOU was reclassed to mineral rights and properties

on the balance sheet.

Results of Operations for the Years Ended December 31, 2023 and

7 unchanged sentences

Interest expense

Gain (loss) on change in derivative liability

Gain on change in derivative liability

Total other income (expense)

4 unchanged sentences

operating expenses included general and administrative expenses of $1,424,336 as compared to $1,280,383 during the year ended December

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.

The $143,953 increase is primarily associated with the $1,194,274 impairment expense related to the Golden Idaho project and

development costs during the year ended December 31, 2023.

Other income (expenses)

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

during the year ended December 31, 2021.

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.

During the year ended December 31, 2023, total

other expenses were $39,700 as compared to $279,546 during the year ended December 31, 2022.

The $239,846 change was related to a $180,912

decrease in interest expense and a $58,934 increase in derivative liability related to the gain in derivative liability in 2023.

Liquidity and Capital Resources:

5 unchanged sentences

unable to continue as a going concern.

At December 31, 2022, we had not yet generated any significant revenues or achieved profitable

operations and we have accumulated losses of $19,529,742.

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.

At December 31, 2023, we had not yet generated any revenues or achieved profitable operations and

we have accumulated losses of $20,993,778.

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

During the year ended December 31, 2023, the Company

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

entered into unsecured promissory notes totaling $22,000.

During the year ended December 31, 2022, the Company

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

Additionally, the Company received $287,000

of proceeds from the exercise of warrants.

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

We anticipate that additional funding will be

10 unchanged sentences

Cash at end of period

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

a $1,692,051 working capital deficit.

At December 31, 2023, we had $99 in cash and a $1,784,671 working capital

This compares to $743 in cash and a working capital deficit of $1,692,051 at December 31, 2022.

Net cash used in operating activities during the

year ended December 31, 2023 was $70,543 and was mainly comprised of our $1,464,036 net loss during the year, adjusted by $1,194,274 of

impairment expense, stock compensation of $24,542, accretion of discounts on notes payable of $10,000 and $61,722 gain on change in derivative

In addition, it reflects changes in operating assets and liabilities of $226,399.

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

2 unchanged sentences

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.

year ended December 31, 2023 was $100,000 which was comprised of cash payments for mineral properties.

Net cash used in investing activities during the

year ended December 31, 2022 was $769 which was comprised of cash payments for development costs.

Net cash provided by financing activities during

the year ended December 31, 2023 was $169,899 comprised of $22,000 proceeds from notes payable and $252,600 proceeds from sale of common

stock which were offset by $100,000 repayment of convertible debt and the repayment of advances from related parties of $4,701.

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.

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.

are 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.

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