MAGELLAN COPPER & GOLD Corp 10-K

ITEM 9A. CONTROLS AND PROCEDURES. The SEC, as required by Section 404 of the Sarbanes-Oxley Act, adopted rules requiring every company that files report with the SEC to include a management report on the effectiveness of disclosure controls and procedures in its periodic reports and an annual assessment of the effectiveness of its internal control over financial reporting in its annual report. Disclosure Controls and Procedures Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported, within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures. Our management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives. Our management, with the participation of our CEO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Report. Based upon this evaluation, our CEO concluded that our disclosure controls and procedures were not effective because of the identification of material weaknesses in our internal control over financial reporting which are described below. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 25 Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on this evaluation, management concluded that that our internal control over financial reporting was not effective as of December 31, 2023. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, concluded we have a material weakness due to lack of segregation of duties and a limited corporate governance structure. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our system of internal control. Therefore, while there are some compensating controls in place, it is difficult to ensure effective segregation of accounting and financial reporting duties. Management reported material weaknesses related to the following: · Lack of segregation of duties in certain accounting and financial reporting processes including the initiation, processing, recording and approval of disbursements; · Lack of a formal review process that includes multiple levels of review. · Lack of independent directors. While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full-time staff. We believe that this is typical in many exploration stage companies. We may not be able to fully remediate the material weakness until we commence mining operations at which time we would expect to hire more staff. We will continue to monitor and assess the costs and benefits of additional staffing. This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the SEC rules that permit us to provide only management’s report in this Annual Report. Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures: We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, management concluded that the design and operation of our disclosure controls and procedures were not effective as of such date to provide assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management as appropriate, to allow timely decisions regarding disclosures. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENTS INSPECTIONS. None. 26 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Directors and Executive Officers Our current executive officers and directors are: Name Age Position Michael Lavigne 67 CEO & Director John Ryan 62 CFO & Director Howard Crosby 71 Director Greg Schifrin 64 Director Gregory Schifrin, age 64, was appointed Director on July 1, 2020. Mr. Schifrin, age 64, has been a Geologist for more than 35 years, specializing in precious, base metals, rare earth and uranium exploration and development. Previously he served as the CEO and a member of the Board of Director at Blackrock Gold Corp. Michael Lavigne, age 66, was appointed CEO and Director on August 1, 2020. Mr. Lavigne has been involved in the mining industry since 1975, when he worked underground for Hecla Mining Company. After completing law school, Mr. Lavigne started a registered broker-dealer specializing in mining and resource companies. He was a member and on the board of directors for the Spokane Stock Exchange and was involved in several financings for exploration-stage companies. Mr. Lavigne has served in management and board positions for several exploration companies with projects in Idaho, Montana, Nevada, Utah, Wyoming and Alaska. Additionally, Mr. Lavigne is owner and Managing Partner of Capital Peak Partners, LLC, which provides consulting services in the area of corporate and business development to a number of mining companies. Mr. Lavigne received his BA in Accounting from the University of Idaho and JD from the Gonzaga University School of Law. John P. Ryan, age 62, was appointed CFO and Director on December 27, 2023. Mr. Ryan has in numerous board and management positions of junior resource companies for the past thirty years. Since May 2021 Mr. Ryan has served as the Secretary of Key Metals Corp., a mining company with development state projects in Chile. Since December 2021, Mr. Ryan has served as a Vice President and Director of LGX Energy, Inc., an oil and gas exploration company. Since June 2020, Mr. Ryan has served as the Chief Executive Officer and Chairman of the board of directors of Gold Express Mines, Inc., a multi-commodity mining company focused on the discovery, development, and production of precious and base metal assets. Since September 2013, Mr. Ryan has served as Chief Executive Officer of Premium Exploration, Inc., a gold exploration company. From November 2016 to September 2020, Mr. Ryan served as a director of Bunker Hill Mining Corp., a development stage mining company, and for a portion of that time Mr. Ryan also served as Interim CEO. Mr. Ryan obtained his Bachelor of Science degree in mining engineering from the University of Idaho in 1985, and his Juris Doctor from Boston College Law School in 1992. Howard Crosby, age 71, was appointed Director on December 27, 2023. Mr. Crosby has extensive experience as a director and investor in mining companies and has extensive experience in corporate finance. Mr. Crosby founded LGX Energy Corp., an oil and gas exploration company, and since December 2021 has served as its Chief Executive Officer. Since 2000, Mr. Crosby has served as the President of Crosby Enterprises, a consulting firm focused on the natural resources space including oil, gas, and mining. Since September 2020, Mr. Crosby has served as Vice President and director of Gold Express Mines, Inc., a multi-commodity mining company focused on the discovery, development, and production of precious and base metal assets, and since October 2014 has served as the Chairman of the board of Desert Hawk Gold Corp., a gold mining company. From 2005 to 2016, Mr. Crosby served as a director of White Mountain Titanium Corp., a titanium company, and a company he founded. From 2015 to 2018, Mr. Crosby served as director of Bunker Hill Mining Corp., a mining company and from 2015 to 2018. From 2006 to 2009, he served as a director of U.S. Silver Corporation, a mining company producing silver, lead, and zinc. From 2004 to 2006, Mr. Crosby served as a director of High Plains Uranium, Inc., a minerals company, and from 1993 to 2005, he served as the Chief Executive Officer of Cadence Resources Corp., a natural resources company. Mr. Crosby obtained his bachelor’s degree in history from the University of Idaho in 1975. 27 Involvement in Certain Legal Proceedings During the last 10 years, except as further discussed below, none of our directors or officers has: a. had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; b. been convicted in a criminal proceeding or subject to a pending criminal proceeding; c. been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or d. been found by a court of competent jurisdiction in a civil action, the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. With respect to Mr. Crosby and Mr. Ryan, both Mr. Crosby and Mr. Ryan were and are currently Directors of Premium Exploration (USA) Inc., a Nevada corporation and a subsidiary of Premium Exploration, Inc., a British Columbia corporation. Premium Exploration (USA) Inc. filed for Chapter 11 bankruptcy protection in June 2015 and exited bankruptcy in August 2016. Mr. Crosby and Mr. Ryan were also Directors of Northstar Offshore Group LLC, an oil and gas development company which entered bankruptcy in March 2016 and was liquidated in June 2017. Mr. Crosby and Mr. Ryan are also currently Directors of Desert Hawk Gold Corp. a Nevada corporation which recently filed for Chapter 11 bankruptcy protection in April 2024. Family Relationships No family relationships exist among our directors. Additionally, there do not exist any arrangements or understandings between any director and any other person pursuant to which any director was elected as such. Director Independence Our common stock is listed on the OTC Pink Market of the OTC Markets Group, Inc. inter-dealer quotation systems, which does not have director independence requirements. Nevertheless, for purposes of determining director independence, we have applied the definition set forth in NASDAQ Rule 4200(a)(15). Two of our four directors, Michael Lavigne and John Ryan, are officers of the corporation and are not considered independent. Board Meetings During the years ended December 31, 2023 and 2022, our Board members engaged in frequent informal discussions; and all Board actions have been undertaken by unanimous written consent. Committees of the Board of Directors We currently do not have standing audit, compensation, or nominating committees of the Board of Directors. We plan to form audit, compensation, and nominating committees when it is necessary to do so to comply with federal securities laws or to meet listing requirements of a stock exchange or the Nasdaq Capital Market. Compliance with Section 16(a), Beneficial Ownership Under the Securities Laws of the United States, our directors, executive (and certain other) officers, and any persons holding more than ten percent (10%) of our common stock during any part of our most recent fiscal year are required to report their ownership of common stock and any changes in that ownership to the SEC. Specific due dates for these reports have been established and we are required to report in this Report any failure to file by these dates. During the year ended December 31, 2023, all these filing requirements were satisfied by our officers, directors, and ten-percent holders. In making these statements, we have relied on the written representation of our directors and officers or copies of the reports that they have filed with the Commission. 28 Code of Ethics We have adopted a Code of Ethics that apples to, among other persons, our company’s principal executive officer, as well as persons performing similar functions. As adopted, our Code of Ethics sets forth written guidelines to promote: · honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; · full, fair, accurate, timely and understandable disclosure in all reports and documents that we file with, or submit to, the SEC and in other public communications made by us that are within the executive officer’s area of responsibility; · compliance with applicable governmental laws, rules, and regulations; · the prompt internal reporting of violations of the Code; and · accountability for adherence to the Code. Our Code of Ethics is on file with the SEC. We will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to: Magellan Gold Corporation, 602 Cedar St., Ste. 205, Wallace, ID 83873. ITEM 11. EXECUTIVE COMPENSATION Director Compensation Our directors receive no compensation for their services as director. Executive Compensation The following table sets forth all compensation paid to our Named Executive Officers for the years ended December 31, 2023 and 2022: SUMMARY COMPENSATION TABLE Name and Principal Salary Bonus Stock Awards Option Awards Non equity Incentive Plan Compen- sation Nonqualified Deferred Compensation Earnings All Other Compen- sation Total Position Year ($) ($) ($) ($) ($) ($) ($) ($) Michael Lavigne, CEO and Director (1) (2) 2023 – – 24,542 – – – – 24,542 2022 – – 35,888 – – – – 35,888 John Ryan, CFO and Director (3) 2023 – – – – – – – – __________________ (1) Michael B. Lavigne was appointed CEO and as a Director on August 1, 2020. (2) Effective August 1, 2020, the Company and Michael B. 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, 2023, 615,000 restricted stock units may be settled in shares of Common Stock. During the year ended December 31, 2023, the Company recognized $24,542 of expense related to the agreement. As of December 31, 2022, 435,000 restricted stock units may be settled in shares of Common Stock. During the year ended December 31, 2022, the Company recognized $35,888 of expense related to the agreement. (3) John Ryan was appointed CFO and as a Director on December 27, 2023. As of the date of this filing the Board has not set his annual compensation and has not yet awarded Mr. Ryan stock and option awards. 29 Restricted Stock Unit Agreement Effective August 1, 2020, the Company, and Michael B. 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, 2023 and 2022, 615,000 and 435,000 restricted stock units may be settled in shares of common stock, respectively. During the years ended December 31, 2023 and 2022, the Company recognized $24,542 and $35,888 of stock-based compensation related to the agreement, respectively. Employment Agreements 2017 Equity Incentive Plan We have not adopted any equity compensation or stock option plans, except as follows: The Board of Directors of the Company concluded, to attract and hire key technical personnel and management, as our Company grows, it will be necessary to offer option packages in order to compete effectively with other companies seeking the support of these highly qualified individuals. After careful consideration, the Board recommended the approval of the Company’s 2017 Equity Incentive Plan as being in the best interests of Stockholders. 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. 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 non-statutory 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. Non-statutory stock options granted under the 2017 Plan are intended not to qualify as incentive stock options under the Code. As of the date of this Annual Report, there have been grants made under the Plan exercisable to purchase 72,000 shares of common stock. Indemnification of Directors and Officers Nevada Revised Statutes provide that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Nevada Revised Statutes also provide that to the extent that a director, officer, employee, or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense. Our Articles of Incorporation authorize us to indemnify our directors and officers to the fullest extent permitted under Nevada Revised Statutes. Our bylaws set forth the procedures that must be followed for directors and officers to receive indemnity payments from us. 30 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth information with respect to beneficial ownership of our common stock by: * each person who beneficially owns more than 5% of our common stock; * each of our executive officers named in the Management section; * each of our directors; and * all executive officers and directors as a group. The following table shows the number of shares owned and the percentage of outstanding common stock owned as of April 10, 2024 . Each person has sole voting and investment power with respect to the shares shown, except as noted. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership (2) Ownership as a Percentage of Outstanding Common Shares (3) John Gibbs 807 Wood N Creek Ardmore, OK 73041 4,331,775 (4) 16.77% Gold Express Mines, Inc. 12,250,000 ) 47.43% Michael Lavigne (5) – (5) – % John Ryan – – % Greg Schifrin 1,535,715 5.95% Howard Crosby 90,000 0.35% All officers and directors as a group (four persons) 1,590,715 6.29% ____________________________ (1) Unless otherwise stated, address is 602 Cedar St., Ste. 205, Wallace, ID 83873 (2) Under SEC Rules, we include in the number of shares owned by each person, the number of shares issuable under outstanding options or warrants if those options or warrants are exercisable within 60 days of the date of this Annual Report. In calculating percentage ownership, we calculate the ownership of each person who owns exercisable options by adding (i) the number of exercisable options for that person only to (ii) the number of total shares outstanding and dividing that result into (iii) the total number of shares and exercisable options owned by that person. (3) Shares and percentages beneficially owned are based upon 25,827,072 shares outstanding on April 10, 2024 . (4) Includes 3,582,159 shares owned individually, warrant exercisable to purchase 25,000 shares of Common Stock at $0.20 per share, 1,000 shares owned by Redwood Microcap Fund, Inc. controlled by Mr. Gibbs. And 723,616 shares owned by Tri Power Resources, Inc., controlled by Mr. Gibbs. (5) Does not include an aggregate of 615,000 Restricted Stock Units that may be settled for shares of common stock under certain circumstances. 31 Securities Authorized for Issuance Under Equity Compensation Plans The following table contains information about our equity compensation plans as of December 31, 2023. Equity Compensation Plan Information Number of securities remaining available Weighted- for future issuance average under equity Number of securities to be exercise price of compensation plans issued upon exercise of outstanding (excluding securities outstanding options, options, warrants reflected in Plan Category warrants and rights and rights column (a)) (a) (b) (c) Equity compensation plans approved by security holders – $ – – Equity compensation plans not approved by security holders – – Total – $ – – Our equity compensation plan is the 2017 Equity Incentive Plan. 32 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Except as disclosed herein, there have been no transactions or proposed transactions in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years in which any of our directors, executive officers or beneficial holders of more than 5% of the outstanding shares of our common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest. Management Fees At December 31, 2023 and 2022, $7,000 of the management fees owed to prior management had not been paid and are included in accounts payable on the accompanying consolidated balance sheets. Accrued Interest – Related Parties Accrued interest due to related parties is included in our consolidated balance sheets as follows: December 31, 2023 December 31, 2022 Accrued interest payable – Mr. Gibbs $ 19,730 $ 12,130 Accrued interest payable – Mr. Joseph Lavigne 4,277 1,517 Accrued interest payable – Mr. Schifrin 13,130 9,380 Accrued interest payable – Mr. Malhotra 2,641 1,841 $ 39,778 $ 24,868 Notes Payable – Related Parties As of December 31, 2023 and 2022, the unsecured promissory notes with related parties totaled $53,000 with accrued interest of $9,409 and $3,049, respectively. The promissory notes bear interest at 12% per annum and are payable on demand. Unsecured advances – related party During the year ended December 31, 2023, Gold Express Mines, Inc. paid $685 of expenses on the Company’s behalf. During the year ended December 31, 2022, the CEO of the Company paid $938 of expenses on the Company’s behalf. During the year ended December 31, 2021, a director paid expenses on behalf of the Company of $30,528 and the Company made payments on advances of $20,000. As of December 31, 2023 and 2022, the advances from related party balance were $21,875 and $21,190, 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 December 31, 2023 and 2022, the balance due to a related party under these notes is $60,000, with accrued interest of $17,238 and $12,438, respectively. 33 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 December 31, 2023 and 2022, the balance due to a related party under this note was $125,000, with accrued interest of $13,130 and $9,380, respectively. 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 years ended December 31, 2023 and 2022, the Company incurred consulting fees of $72,000 and $6,000 related to this agreement, respectively. Promissory Note On January 2, 2024, we entered into an agreement (the “Agreement”) with Gold Express Mines, Inc., a Nevada corporation (“GEM”), pursuant to which, among other things (i) the Company consented to the assignment by AJB Capital Investments LLC, a Delaware limited liability company (“AJB”), of all of AJB’s right, title, obligation, liability and interest in, to and under that certain Promissory Note, dated February 2021 in the original principal amount of $200,000 (the “Promissory Note”) issued by the Company to AJB; (ii) the Company represented that it has taken all necessary corporate action to accept the resignations of Mark Rodenbeck and Deepak Maholtra as members of the board of directors (the “Board”) of the Company and appoint John P. Ryan, President, Chief Executive Officer and a director of GEM, and Howard Crosby, a director of GEM, to the Board; (iii) the Company agreed that at any time prior to December 29, 2026, if GEM provides notice to the Company to designate a person to serve as a member of the board of directors of the Company, the Company will use its reasonable best efforts to elect such person to the board of directors of the Company as promptly as practicable following receipt of such notice; and (iv) the Company issued to GEM 250,000 shares our common stock. GEM owns 47.3% of our common stock. The aggregate principal amount of the Promissory Note outstanding is $110,000. The Promissory Note bears interest at a rate of 12% per annum. The unpaid principal amount of the Promissory Note 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 Promissory Note is past due and payable. GEM Purchase Agreement On January 4, 2024, we entered into a purchase agreement (the “Purchase Agreement”) with GEM, pursuant to which, among other things (i) the Company agreed to purchase certain mineral assets owned and controlled by GEM for a purchase price equal to 5,500,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and (ii) GEM agreed to assign to the Company a certain lease for mineral properties (the “Cuprum Lease”) for a purchase price of 500,000 shares of Common Stock (collectively, the “Transactions”). The Purchase Agreement contains representations, warranties and covenants customary for a transaction of this size and nature. The Company expects the closing of the Transactions to occur no later than January 31, 2024, subject to certain closing conditions, including, but not limited to, (i) GEM delivering a quitclaim deed transferring the unpatented mining claims; and (ii) GEM receiving all required consents to transfer Cuprum Lease. John Ryan, our CFO and a director, is the President, Chief Executive Officer and a director of GEM, and Howard Crosby, a director, is a director of GEM. GEM owns 47.3% of our common stock. 34 Deferred Compensation 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, 2023 and 2022, 615,000 and 435,000 restricted stock units may be settled in shares of common stock, respectively. During the years ended December 31, 2023 and 2022, the Company recognized $24,542 and $35,888 of stock-based compensation related to the agreement, respectively. Director Independence Our common stock is not listed on a national securities exchange or inter-dealer quotation system. Under NASDAQ Rule 5605(a)(2) and Item 407(a) of Regulation S-K, a director is not considered to be independent if he or she is also an executive officer of the corporation. Our director is considered an executive officer under Rule 3b-7 of the Exchange Act. Therefore, our director is not independent. As a result of our limited operating history and minimal resources, we believe that we will have difficulty in attracting independent directors. In addition, we would likely be required to obtain directors’ and officers’ insurance coverage to attract and retain independent directors. We believe that the costs associated with maintaining such insurance is prohibitive at this time. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES We understand the need for our principal accountants to maintain objectivity and independence in their audit of our financial statements. To minimize relationships that could appear to impair the objectivity of our principal accountants, our Board of Directors has restricted the non-audit services that our principal accountants may provide to us primarily to tax services and audit-related services. We are only to obtain non-audit services from our principal accountants when the services offered by our principal accountants are more effective or economical than services available from other service providers, and, to the extent possible, only after competitive bidding. These determinations are among the key practices adopted by the Board of Directors. Our Board has adopted policies and procedures for pre-approving work performed by our principal accountants. 35 The aggregate fees billed for the fiscal years 2023 and 2022 for professional services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by our accountants in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows: 2023 2022 Audit fees – audit of annual financial statements and review of financial statements included in our quarterly reports, services normally provided by the accountant in connection with statutory and regulatory filings $ 58,000 $ 57,000 Audit-related fees – related to the performance of audit or review of financial statements not reported under “audit fees” – – Tax fees – tax compliance, tax advice and tax planning – – All other fees – services provided by our principal accountants other than those identified above – – Total fees $ 58,000 $ 57,000 After careful consideration, the Board of Directors has determined that payment of the audit fees is in conformance with the independent status of our principal independent accountants. 36 PART IV ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Ex. No. Title (1) 3.1 Certificate of Incorporation filed September 28, 2010 (1) 3.2 Bylaws (4) 3.3 Amended and Restated Bylaws (6) 3.4 Second Amended and Restated Bylaws (1) 4.1 Specimen Common Stock Certificate (1) 10.1 Cowles’ Option and Mining Lease (1) 10.2 Mining Lease – Randall Claims (1) 10.3 Assignment of Randall Mining Lease Agreement (1) 10.4 Mining Lease – Secret Claims (1) 10.5 Consulting Agreement (2) 10.6 Promissory Note Dated August 23, 2011, in favor of John C. Power (2) 10.7 Promissory Note Dated August 23, 2011, in favor of John D. Gibbs (3) 10.8 First Amendment to Mining Lease – Secret Claims (3) 10.9 Second Amendment to Mining Lease – Randall Claims (5) 10.10 Promissory Note Dated February 28,2012, in favor of John D. Gibbs (7) 10.11 Third Amendment to Mining Lease – Randall Claims (8) 10.12 Option Agreement – Columbus Silver (9) 10.13 Amendment No. 1 to Promissory Note in favor of John C. Power (10) 10.14 Credit Agreement dated December 31, 2012 in favor of John D. Gibbs (11) 10.15 Amendment No. 1 to Silver District Option Agreement (12) 10.16 Allonge and Modification Agreement with John D. Gibbs (13) 10.17 Promissory Note in favor of John Power (14) 10.18 Silver District / Columbus Silver Purchase Agreement (14) 10.19 Promissory Note in favor of Clifford Neuman (15) 10.20 Second Allonge and Modification Agreement with John D. Gibbs (16) 10.21 Employment Agreement – W. Pierce Carson (17) 10.22 Employment Agreement – W. Pierce Carson (Magellan) (18) 10.23 Agreement and Plan of Merger (19) 10.24 Mining Option Agreement (19) 10.25 Lock-Up/Voting Trust Agreement (19) 10.26 Intuitive Pty, Ltd. Agreement (19) 10.27 Mining Clip LLC Agreement (19) 10.28 Promissory Note (20) 10.29 Memorandum of Understanding (7) 14.1 Code of Ethics (21) 10.30 Consulting Agreement (21) 10.31 Promissory Note in favor of W. Pierce Carson (21) 10.32 Promissory Note in favor of John Power (21) 10.33 Promissory Note in favor of John Gibbs (22) 10.34 Promissory Note in favor of John Power (22) 10.35 Stock Pledge Agreement (23) 10.36 Amendment No. 1 to Memorandum of Understanding (24) 10.37 Stock Purchase Agreement (25) 10.38 Confirmation Letter (26) 10.39 Amendment to Stock Purchase Agreement (27) 10.40 Certificate of Amendment (28) 10.41 Securities Purchase Agreement (28) 10.42 Promissory Note (29) 10.43 Securities Purchase Agreement (29) 10.44 Promissory Note 37 Ex. No. Title (30) 10.45 Interim Milling Agreement (31) 10.46 Amendment No. 2 to Stock Purchase Agreement (31) 10.47 Closing Escrow Agreement (31) 10.48 Form of Secured Note (31) 10.49 Form of Stock Pledge Agreement (31) 10.5 Form of Security Agreement (31) 10.51 Form of Collateral Agent Agreement (32) 10.52 Termination Agreement (33) 10.53 Combined financial statements of SDA Mill as of and for the periods ended November 30, 2017 and December 31, 2016 (33) 10.54 Magellan Gold Corporation Unaudited Pro Forma Condensed Combined Financial Information (34) 10.55 Amendment No. 1 to EMA Financial Note (35) 10.56 Amendment No. 1 to Auctus Fund Note (36) 10.57 Agreement to Convert Debt (37) 10.58 Restricted Stock Award Agreement (38) 10.59 Convertible Promissory Note (39) 10.6 Securities Purchase Agreement (40) 10.61 Agreement for Exploration (41) 10.62 Amendment to Agreement for Exploration (42) 10.63 EMA Amendment (43) 10.64 Auctus Amendment (44) 10.65 Promissory Note (45) 10.66 Securities Purchase Agreement (46) 10.67 Amendment No. 1 Convertible Promissory Note (47) 10.68 Letter Agreement (48) 10.69 Form of 10% Convertible Promissory Note – Note Offering (49) 10.7 Form of 36% Convertible Promissory Note – Bridge Note Offering (50) 10.71 Restricted Stock Unit Agreement (51) 10.72 Deferred Compensation and Equity Award Plan (52) 10.73 Certificate of Designations – Series A Convertible Preferred Stock (53) 10.74 Option to Purchase Agreement (54) 10.75 Letter of Intent (55) 10.76 Agreement to Accept Collateral in Full Satisfaction of Obligations (56) 10.77 Share Purchase Agreement (57) 10.78 Promissory Note (58) 10.79 Stock Pledge Agreement (59) 10.8 Security Agreement (60) 10.81 Stock Purchase Agreement (61) 10.82 Restricted Stock Unit Agreement (62) 10.83 Restricted Stock Unit Agreement (63) 10.84 Promissory Note (64) 10.85 Securities Purchase Agreement (65) 10.86 Agreement, dated as of December 29, 2023, by and between Magellan Gold Corporation and Gold Express Mines, Inc. (66) 10.87 Purchase Agreement, dated January 7, 2024, by and between Magellan Gold Corporation and Gold Express Mines, Inc. 31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(A) And 15d-14(A) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002 31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(A) And 15d-14(A) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)* 101.SCH Inline XBRL Taxonomy Extension Schema Document** 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document** 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document** 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document** 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document** 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)** 38 (1) Incorporated by reference as an Exhibit to Form S-1 as filed with the Commission on May 18, 2011. (2) Incorporated by reference to the Registrant’s Current Report on Form 8-K, as filed with the Commission on August 25, 2011. (3) Incorporated by reference as an Exhibit to Quarterly Report on Form 10-Q as filed with the Commission on November 14, 2011. (4) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on February 7, 2012. (5) Incorporated by reference as an Exhibit to Current Report on Form 8-K/A-1 as filed with the Commission on March 29, 2012. (6) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on March 30, 2012. (7) Incorporated by reference as an Exhibit to Annual Report on Form 10-K as filed with the Commission on March 30, 2012. (8) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 30, 2012. (9) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on February 4, 2013. (10) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on February 4, 2013. (11) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 23, 2013. (12) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on January 2, 2014. (13) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on April 29, 2014. (14) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on October 2, 2014. (15) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on February 3, 2015. (16) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on June 11, 2015. (17) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on June 2, 2016. (18) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on July 27, 2016. (19) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on October 27, 2016. (20) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on March 7, 2017. (21) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on June 20, 2017. (22) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on July 21, 2017. (23) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 1, 2017. (24) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on September 12, 2017. (25) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on October 11, 2017. (26) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on October 18, 2017. (27) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on October 30, 2017. (28) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on November 6, 2017. (29) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on November 7, 2017. (30) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on November 8, 2017. (31) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on December 6, 2017. (32) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on January 10, 2018. (33) Incorporated by reference as an Exhibit to Current Report on Form 8-K/A as filed with the Commission on April 24, 2018. (34) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on June 19, 2018. (35) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on June 19, 2018. (36) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on July 30, 2018. (37) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on July 30, 2018. (38) Incorporated by reference as an Exhibit to Current Report on Form 8-K/A as filed with the Commission on August 1, 2018. (39) Incorporated by reference as an Exhibit to Current Report on Form 8-K/A as filed with the Commission on August 1, 2018. (40) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 20, 2018. (41) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 20, 2018. (42) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 24, 2018. (43) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 24, 2018. (44) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 24, 2018. (45) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on August 24, 2018. (46) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on September 5, 2018. (47) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on September 25, 2018. (48) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on November 6, 2018. (49) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on November 6, 2018. (50) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on June 26, 2019. (51) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on June 26, 2019. 39 (52) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on October 7, 2019. (53) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on October 18, 2019. (54) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on January 15, 2020. (55) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on May 7, 2020. (56), (57), (58), (59) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on July 20, 2020. (60), (61) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on July 30, 2020. (62) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on November 12, 2020. (63), (64) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on April 23, 2021. (65) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on January 8, 2024. (66) Incorporated by reference as an Exhibit to Current Report on Form 8-K as filed with the Commission on January 11, 2024. * Filed herewith. ** Furnished, not filed. 40 MAGELLAN GOLD CORPORATION FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 MAGELLAN GOLD CORPORATION TABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 206 ) F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F- 4 Consolidated Statements of Shareholders’ Deficit F- 5 Consolidated Statements of Cash Flows F- 6 Notes to Consolidated Financial Statements F- 7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Magellan Gold Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Magellan Gold Corporation and its subsidiary (collectively, the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Going Concern Matter The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the Board of Directors and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ MaloneBailey, LLP www.malonebailey.com We have served as the Company's auditor since 2011. Houston, Texas April 17, 2024 F- 2 Magellan Gold Corporation Consolidated Balance Sheets December 31, 2023 December 31, 2022 ASSETS Current assets Cash $ 99 $ 743 Prepaid expenses and other current assets – 5,950 Total current assets 99 6,693 Mineral rights and properties 100,000 – Development costs – 194,274 Total assets $ 100,099 $ 200,967 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accounts payable $ 236,322 $ 195,418 Accounts payable - related party 73,750 19,750 Accrued liabilities 214,089 206,468 Convertible note payable, net - related party 185,000 185,000 Convertible note payable, net 530,978 620,978 Accrued interest - related parties 39,778 24,868 Accrued interest 204,197 127,684 Advances payable - related party 21,875 21,190 Advances payable 39,338 18,223 Notes payable 100,000 78,000 Notes payable - related party 53,000 53,000 Derivative liability 86,443 148,165 Total current liabilities 1,784,770 1,698,744 Total liabilities 1,784,770 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; 19,577,072 and 12,772,786 shares issued and outstanding, respectively 19,577 12,773 Additional paid-in capital 19,289,530 18,019,192 Accumulated deficit ( 20,993,778 ) ( 19,529,742 ) Shareholders’ deficit: ( 1,684,671 ) ( 1,497,777 ) Total liabilities and shareholders’ deficit $ 100,099 $ 200,967 See accompanying notes to the consolidated financial statements F- 3 Magellan Gold Corporation Consolidated Statements of Operations Years Ended December 31, 2023 2022 Operating expenses: General and administrative expenses $ 230,062 $ 242,883 Impairment expense 1,194,274 1,037,500 Total operating expenses 1,424,336 1,280,383 Operating loss 1,424,336 1,280,383 Other expense: Interest expense ( 101,422 ) ( 282,334 ) Gain on change in derivative liability 61,722 2,788 Total other expense ( 39,700 ) ( 279,546 ) Net loss $ ( 1,464,036 ) $ ( 1,559,929 ) Basic net loss per common share $ ( 0.08 ) $ ( 0.13 ) Diluted net loss per common share $ ( 0.08 ) $ ( 0.13 ) Basic weighted average 19,220,493 11,743,426 Diluted weighted average 19,220,493 11,743,426 See accompanying notes to the consolidated financial statements F- 4 Magellan Gold Corporation Consolidated Statements of Shareholders’ Deficit For the years ended December 31, 2023 and 2022 Additional Common Stock Paid-in Accumulated Shares Par Value Capital Deficit Total Balance, December 31, 2021 11,340,403 $ 11,341 $ 17,692,236 $ ( 17,969,813 ) $ ( 266,236 ) Shares issued for purchase of Clearwater Gold Mining Corp 250,000 250 37,250 – 37,500 Shares issued as deferred finance costs 646,668 646 179,354 – 180,000 Stock based compensation 535,715 536 110,352 – 110,888 Net loss – – – ( 1,559,929 ) ( 1,559,929 ) Balance, December 31, 2022 12,772,786 12,773 18,019,192 ( 19,529,742 ) ( 1,497,777 ) Shares issued for cash 1,804,286 1,804 250,796 – 252,600 Shares issued for the acquisition of mineral properties 5,000,000 5,000 995,000 – 1,000,000 Stock based compensation – – 24,542 – 24,542 Net loss – – – ( 1,464,036 ) ( 1,464,036 ) Balance, December 31, 2023 19,577,072 $ 19,577 $ 19,289,530 $ ( 20,993,778 ) $ ( 1,684,671 ) See accompanying notes to the consolidated financial statements F- 5 Magellan Gold Corporation Consolidated Statements of Cash Flows Years Ended December 31, 2023 2022 Operating activities: Net loss $ ( 1,464,036 ) $ ( 1,559,929 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment expense 1,194,274 1,037,500 Accretion of discounts on notes payable 10,000 201,815 Stock based compensation 24,542 110,888 Gain on change in derivative liability ( 61,722 ) ( 2,788 ) Changes in operating assets and liabilities: Prepaid expenses and other assets 5,950 4,141 Accounts payable and accrued liabilities 75,026 ( 11,050 ) Accounts payable - related party 54,000 7,250 Accrued interest 91,423 63,919 Net cash used in operating activities ( 70,543 ) ( 148,254 ) 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 22,000 78,000 Proceeds from notes payable from related parties – 53,000 Repayment of advances from third parties ( 4,701 ) – Repayment of convertible debt ( 100,000 ) – Proceeds from sale of common stock 252,600 – Net cash provided by financing activities 169,899 131,000 Net change in cash ( 644 ) ( 18,023 ) Cash at beginning of period 743 18,766 Cash at end of period $ 99 $ 743 Supplemental disclosure of cash flow information Cash paid for interest $ – $ 17,333 Cash paid for income taxes $ – $ – Non-cash financing and investing activities: Expenses paid on behalf of the Company $ 26,501 $ 938 Shares issued for the acquisition of mineral properties $ 1,000,000 $ – Conversion of Series A preferred stock and accrued dividend $ – $ 180,000 Noncash consideration for purchase of Clearwater Gold Mining Corp $ – $ 37,500 See accompanying notes to the consolidated financial statements F- 6 MAGELLAN GOLD CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. Our primary focus is to explore and develop mineral properties in the United States. Effective March 31, 2020, we divested our subsidiary holding all our international assets and plan to advance our Center Star Gold Project and our Kris Project towards resource definition and eventual development, and possibly to acquire additional mineral rights and conduct additional exploration, development and permitting activities. Our mineral lease payments, mineral claim annual holding costs, permitting applications and exploration and development efforts will require additional capital. 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. Note 2 – Summary of Significant Accounting Policies Basis of Presentation 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. The Company 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. On August 25, 2020, the Company, formed a new wholly owned subsidiary, M Gold Royalty (“M Gold”), to expand into the royalty business. This subdivision of the Company may be discontinued in the near future. Our consolidated financial statements include our accounts and the accounts of our 100% owned subsidiary, 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”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the period presented. We make our estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term. Fair Value of Financial Instruments We value our financial assets and liabilities using fair value measurements. Our financial instruments primarily consist of cash, prepaid expenses, other current assets, accounts payable, accrued liabilities, amounts due to related parties and notes payable to related parties. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount of cash, accounts payable, accrued liabilities, notes payable to related parties and other amounts due to related parties approximates fair value because of the short-term nature of these financial instruments. F- 7 Concentrations of Credit Risk Our financial instruments which potentially subject us to credit risk are our cash and cash equivalents. We maintain our cash and cash equivalents at reputable financial institutions and currently we are not exposed to significant credit risk. Cash and Cash Equivalents We consider all amounts on deposit with financial institutions and highly liquid investments with an original maturity of three months or less to be cash equivalents at the date of purchase. Mineral Rights We have determined that our mineral rights meet the definition of mineral rights, as defined by accounting standards, and are tangible assets. As a result, our direct costs to acquire or lease mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with leasing or acquiring patented and unpatented mining claims; leasing mining rights including lease signature bonuses, lease rental payments and advance minimum royalty payments; and options to purchase or lease mineral properties. If we establish proven and probable reserves for a mineral property and establish that the mineral property can be economically developed, mineral rights will be amortized over the estimated useful life of the property following the commencement of commercial production or expensed if it is determined that the mineral property has no future economic value or if the property is sold or abandoned. For mineral rights in which proven and probable reserves have not yet been established, we assess the carrying values for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The net carrying value of our mineral rights represents the fair value at the time the mineral rights were acquired less accumulated depletion and any abandonment or impairment losses. Proven and probable reserves have not been established for mineral rights as of December 31, 2023. During the years ended December 31, 2023 and 2022 the Company evaluated mineral rights and properties for impairment and recorded impairment expense of $ 1,194,274 and $ 1,037,500 , respectively. Impairment of Long-lived Assets and Mining Rights We continually monitor events and changes in circumstances that could indicate that our carrying amounts of long-lived assets, including mineral rights, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through their undiscounted expected future cash flow. If the future undiscounted cash flow is less than the carrying amount of these assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Property and equipment is amortized on a straight-line basis over its estimated life: · Office and Warehouse – 10 years Notes Payable – Related Parties Notes payable to related parties are classified as current liabilities as either the note holders can control the repayment dates of the notes or maturity dates are within one year of the reported balance sheet date. F- 8 Exploration Costs Mineral exploration costs are expensed as incurred. When it has been determined that it is economically feasible to extract minerals and the permitting process has been initiated, exploration costs incurred to further delineate and develop the property are considered pre-commercial production costs and will be capitalized and included as mine development costs in our balance sheets. Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements and the effect of net operating losses based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. At December 31, 2023 and 2022, the Company had no uncertain tax positions. 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 year ended December 31, 2023, 72,000 stock options, 117,500 warrants, and 2,991,341 shares issuable from convertible notes were considered for their dilutive effects. For the year ended December 31, 2022, 72,000 stock options, 117,500 warrants, and 2,700,379 shares issuable from convertible notes were considered for their dilutive effects. Stock-based Compensation The Company determines the fair value of stock option awards granted to employees and nonemployees in accordance with FASB ASC Topic 718 – 10. Compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. 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. 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. F- 9 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 December 31, 2023, we had a working capital deficit of $ 1,784,671 , we had not yet generated any significant 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 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. 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 than any future financings 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. In conjunction with 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. 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 as follows 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. 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, 2023 and 2022, the Clearwater mineral rights and properties balance totaled $ 0 . During the year ended December 31, 2023, the Company evaluated the development costs for impairment and recorded an impairment expense of $ 194,274 . As of December 31, 2023 and 2022, the Company had $ 0 and $ 194,274 in capitalized development cost to develop gold resources at Center Star. Asset Purchase Agreement of January 2023 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 twenty-six 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. In August 2023, the Company reduced the number of claims at the Seafoam District to three claims, reduced the number of claims at the Blacktail District to five claims, reduced the number of claims at the Big-It Extension claims from twenty-five to nine claims, and reduced the Golden Project claims from seventy-two to forty-one claims. 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 totaled $ 0 . F- 10 Kris Project 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 is comprised of 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 agreement. 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. 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, accounts payable, advances payable, accrued interest, accrued liabilities, and notes payable approximate their fair value due to their short-term maturities. 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 December 31, 2023 and 2022: Schedule of fair value of liabilities Level 1 Level 2 Level 3 Fair value at December 31, 2023 Liabilities: Derivative liability $ – $ – $ 86,443 $ 86,443 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. F- 11 The table below presents the change in the fair value of the derivative liability during the year ended December 31, 2021: Schedule of fair value of the derivative liability Fair value as of December 31, 2021 $ 150,953 Gain on change in fair value of derivatives ( 2,788 ) Fair value as of December 31, 2022 148,165 Gain on change in fair value of derivatives ( 61,722 ) Fair value as of December 31, 2023 $ 86,443 Note 5 – Debt Unsecured advances During the year ended December 31, 2023, the Company received non-cash advances of $ 25,816 and repaid $ 4,701 . As of December 31, 2023 and December 31, 2022, the advances balance totaled $ 39,338 and $ 18,223 , respectively. Notes payable. During the year ended December 31, 2022, the Company entered unsecured promissory notes totaling $ 78,000 . During the year ended December 31, 2023, the Company entered an unsecured promissory note totaling $ 22,000 . The promissory notes bear interest at 12 % per annum and are payable on demand. As of December 31, 2023 and 2022, the notes payable balance was $ 100,000 and $ 78,000 , with accrued interest of $ 17,301 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 December 31, 2023 and 2022, the balance due under these notes is $ 75,000 , with accrued interest of $ 35,481 and $ 26,481 , respectively. 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 December 31, 2023 and 2022, the balance due under this note is $ 145,978 , with accrued interest of $ 62,031 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 December 31, 2023 and 2022, the balance due to a third party under these notes is $ 200,000 , with accrued interest of $ 56,297 and $ 40,297 , respectively. F- 12 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 12%. 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 and is currently past due. 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 year ended December 31, 2023, the Company amortized $ 10,000 of debt discount. During the year ended December 31, 2023, the Company repaid $ 100,000 of principal on this note. As of December 31, 2023, the total derivative liability on the above note was adjusted to a fair value of $ 86,443 . During the year ended December 31, 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 range of assumptions during the period: fair value of stock $0.06 - $0.20, volatility of 237.73% -261.18% based on a comparable company peer group, expected term of 0.50 years, risk-free rate of 4.76% - 5.47% and a dividend yield of 0%. As of December 31, 2023 and 2022, the balance on the loan was $ 110,000 and $ 200,000 , net of discount of $ 0 , with accrued interest of $ 33,087 and $ 7,400 , respectively. Note 6 – Stockholders’ Deficit Common Stock 2023 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 . On September 19, 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. 2022 On February 9, 2022, the Company extended the maturity of a convertible note to May 10, 2022 . In consideration of the extension, the Company issued the debtholder 180,000 shares of common stock valued at $ 54,000 . F- 13 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 . 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 . During the year ended December 31, 2022, the Company issued Gregory Schifrin 250,000 shares related to the Clearwater acquisition and 537,715 shares for services provided in 2022. 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 non-statutory stock options, (2) stock bonuses, (3) rights to purchase restricted stock and (4) stock appreciation rights. As of December 31, 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 years ended December 31, 2023 and 2022 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, 2021 72,000 $ 2.00 423,635 $ 0.28 Granted – – – – Cancelled – – – – Expired – – – – Exercised – – ( 306,135 ) 0.20 Outstanding at December 31, 2022 72,000 2.00 117,500 0.50 Granted – – – – Cancelled – – – – Expired – – – – Exercised – – – – Outstanding at December 31, 2023 72,000 $ 2.00 117,500 $ 0.50 Exercisable at December 31, 2023 72,000 $ 2.00 117,500 $ 0.50 As of December 31, 2023, the outstanding stock options have a weighted average remaining term of 3.82 years and had no intrinsic value, and the outstanding stock warrants have a weighted average remaining term of 1.43 years and had no intrinsic value. As of December 31, 2022, the outstanding stock options have a weighted average remaining term of 4.82 years and had no intrinsic value, and the outstanding stock warrants have a weighted average remaining term of 2.43 years and had no intrinsic value. Note 7 – Commitments and Contingencies Mining Claims We currently own directly or hold indirectly through mineral leases or other contracts a total of 192 unpatented mining claims. To maintain these claims, annual payments are required to be made to the United States Bureau of Land Management by the 1st of September of each year. Additionally, state laws impose additional filings and fees which are required to be made with the Recorder’s Office in the local county in which the claims are located. Additionally, some counties impose property taxes on unpatented mining claims which are due at various dates. As of December 31, 2023, all the unpatented mineral claims are believed by the Company Management to be in good standing. F- 14 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 December 31, 2023 and 2022, 615,000 and 435,000 restricted stock units may be settled in shares of common stock, respectively. During the years ended December 31, 2023 and 2022, the Company recognized $ 24,542 and $ 35,888 of stock-based compensation related to the agreement, respectively. 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 . The promissory notes bear interest at 12% per annum and are payable on demand. As of December 31, 2023 and 2022 the notes payable – related parties balance was $ 53,000 , with accrued interest of $ 9,409 and $ 3,049 , respectively. Unsecured advances – related party During the year ended December 31, 2023, the Gold Express Mines, Inc. paid $ 685 of expenses on behalf of the Company. During the year ended December 31, 2022, the CEO paid $ 938 of expenses on behalf of the Company. As of December 31, 2023 and December 31, 2022, the advances related party balance totaled $ 21,875 and $ 21,190 , 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 December 31, 2023 and 2022, the balance due to a related party under these notes is $ 60,000 , with accrued interest of $ 17,238 and $ 12,438 , 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 December 31, 2023 and 2022, the balance due to a related party under this note was $ 125,000 , with accrued interest of $ 13,130 and $ 9,380 , respectively. 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 years ended December 31, 2023 and 2022, the Company incurred consulting fees of $ 72,000 and $ 6,000 related to this agreement, respectively. F- 15 Conflicts of Interests Athena Silver Corporation (“Athena”) is a company under common control. Mr. Gibbs is a significant investor in both Magellan and Athena. Magellan and Athena are both exploration stage companies involved in the business of acquisition and exploration of mineral resources. Silver Saddle Resources, LLC is also a company under common control. Mr. Gibbs are significant investors and managing members of Silver Saddle. Magellan and Silver Saddle are both exploration stage companies involved in the business of acquisition and exploration of mineral resources. Gold Express Mines, Inc. (“GEM”) is a company under common control. Mr. Crosby and Mr. Ryan are both on the board and/or hold management roles in both Magellan and GEM. Magellan and GEM are both exploration stage companies involved in the business of acquisition and exploration of mineral resources. The existence of common ownership and common management could result in significantly different operating results or financial positions from those that could have resulted had Magellan, Athena, Silver Saddle and Gold Express been autonomous. Accrued Interest - Related Parties Accrued interest due to related parties is included in our consolidated balance sheets as follows: Schedule of accrued interest due to related parties December 31, 2023 December 31, 2022 Accrued interest payable – Mr. Gibbs $ 19,730 $ 12,130 Accrued interest payable – Joseph Lavine 4,277 1,517 Accrued interest payable – Mr. Schifrin 13,130 9,380 Accrued interest payable – Mr. Malhotra 2,641 1,841 $ 39,778 $ 24,868 Note 10 – Income Taxes Our net operating loss carry forward as of December 31, 2023 was $ 4,841,000 , which may be used to offset future income taxes. Our net operating loss carry forward as of December 31, 2022 was $ 4,544,000 , which may be used to offset future income taxes. Our reconciliation between the expected federal income tax benefit computed by applying the federal statutory rate to our net loss and the actual benefit for taxes on net loss for 2023 and 2022 is as follows: Schedule of components of income tax benefit Years Ended December 31, 2023 2022 Expected federal income tax benefit at statutory rate 62,358 $ 60,378 State taxes 10,393 10,063 Change in valuation allowance ( 72,751 ) ( 70,441 ) Income tax benefit $ – $ – Our deferred tax assets as of December 31, 2023 and 2022 were as follows: Schedule of deferred tax assets December 31, 2023 2022 Deferred tax asset 1,185,934 $ 1,113,183 Valuation allowance ( 1,185,934 ) ( 1,113,183 ) Deferred tax assets, net of allowance $ – $ – F- 16 Note 11 – Subsequent Events On January 2, 2024, Gold Express Mines, Inc., a related party, assumed the debt from AJB Capital Investments, LLC. The Company issued 250,000 shares of common stock to Gold Express, Inc. (“GEM”) for the assumption of the AJB convertible note. On January 4, 2024, the Company entered into a purchase agreement with GEM, pursuant to which, among other things (i) the Company agreed to purchase certain mineral assets owned and controlled by GEM for a purchase price equal to 5,500,000 shares of the Company’s common stock, par value $0.001 per share; and (ii) GEM agreed to assign to the Company a certain lease for mineral properties for a purchase price of 500,000 shares of common stock. After December 31, 2023, the Company entered into three unsecured promissory notes with GEM totaling $75,000. The promissory notes bear interest at 5% per annum and are payable on demand. F- 17 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. MAGELLAN GOLD CORPORATION Date: April 17, 2024 By: /s/ Michael B. Lavigne Chief Executive Officer, President and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE /s/ Michael B. Lavigne Chief Executive Officer, President and Director April 17, 2024 Michael B. Lavigne (Principal Executive Officer) /s/ John P. Ryan Chief Financial Officer and Director April 17, 2024 John P. Ryan (Principal Financial and Accounting Officer) /s/ Greg Schifrin Director April 17, 2024 Greg Schifrin /s/ Howard Crosby Director April 17, 2024 Howard Crosby 41