MAGELLAN COPPER & GOLD Corp 10-Q

Item 1. Financial Statements Magellan Copper & Gold Inc. (Formerly Magellan Gold Corporation) Consolidated Balance Sheets (Unaudited) September 30, 2024 December 31, 2023 ASSETS Current assets Cash $ 16,042 $ 99 Total current assets 16,042 99 Mineral rights and properties 522,565 100,000 Total assets $ 538,607 $ 100,099 LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 223,104 $ 236,322 Accounts payable - related party 127,750 73,750 Accrued liabilities 214,089 214,089 Convertible note payable, net - related party 285,000 185,000 Convertible note payable, net 380,978 530,978 Accrued interest - related parties 94,064 39,778 Accrued interest 190,060 204,197 Advances payable - related party 70,905 21,875 Advances payable 73,438 39,338 Notes payable 68,000 100,000 Notes payable - related party 168,000 53,000 Derivative liability 30,871 86,443 Total current liabilities 1,926,259 1,784,770 Total liabilities 1,926,259 1,784,770 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; 26,157,635 and 19,577,072 shares issued and outstanding, respectively 26,158 19,577 Additional paid-in capital 19,850,972 19,289,530 Accumulated deficit ( 21,264,782 ) ( 20,993,778 ) Shareholders' deficit: ( 1,387,652 ) ( 1,684,671 ) Total liabilities and shareholders' deficit $ 538,607 $ 100,099 See accompanying notes to the unaudited consolidated financial statements 3 Magellan Copper & Gold Inc. (Formerly Magellan Gold Corporation) Consolidated Statements of Operations (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Operating expenses: General and administrative expenses $ 107,170 $ 59,194 $ 279,351 $ 160,759 Total operating expenses 107,170 59,194 279,351 160,759 Operating loss ( 107,170 ) ( 59,194 ) ( 279,351 ) ( 160,759 ) Other income (expense): Interest expense ( 21,958 ) ( 21,359 ) ( 63,554 ) ( 68,899 ) Gain on conversion of debt 16,329 – 16,329 – Gain (loss) on change in derivative liability 46,197 ( 100,693 ) 55,572 ( 30,076 ) Total other income (expense) 40,568 ( 122,052 ) 8,347 ( 98,975 ) Net loss $ ( 66,602 ) $ ( 181,246 ) $ ( 271,004 ) $ ( 259,734 ) Basic net loss per common share $ ( 0.00 ) $ ( 0.01 ) $ ( 0.01 ) $ ( 0.01 ) Diluted net loss per common share $ ( 0.00 ) $ ( 0.01 ) $ ( 0.01 ) $ ( 0.01 ) Basic weighted average 25,412,072 19,497,833 25,301,725 19,100,327 Diluted weighted average 25,412,072 19,497,833 25,301,725 19,100,327 See accompanying notes to the unaudited consolidated financial statements 4 Magellan Copper & Gold Inc. (Formerly Magellan Gold Corporation) Consolidated Statements of Shareholders' Deficit For the nine months ended September 30, 2024 and 2023 (Unaudited) Additional Common Stock Paid - in Accumulated Shares Par Value Capital Deficit Total Balance, December 31, 2023 19,577,072 $ 19,577 $ 19,289,530 $ ( 20,993,778 ) ( 1,684,671 ) Shares issued for the acquisition of mineral properties 5,500,000 5,500 417,065 – 422,565 Stock based compensation 335,000 335 44,573 – 44,908 Net loss – – – ( 130,265 ) ( 130,265 ) Balance, March 31, 2024 25,412,072 25,412 19,751,168 ( 21,124,043 ) ( 1,347,463 ) Stock based compensation – – 6,587 – 6,587 Net loss – – – ( 74,137 ) ( 74,137 ) Balance, June 30, 2024 25,412,072 25,412 19,757,755 ( 21,198,180 ) ( 1,415,013 ) Shares issued for the conversion of debt and accrued interest 745,563 746 87,304 – 88,050 Stock based compensation – – 5,913 – 5,913 Net loss – – – ( 66,602 ) ( 66,602 ) Balance, September 30, 2024 26,157,635 $ 26,158 $ 19,850,972 $ ( 21,264,782 ) $ ( 1,387,652 ) Balance, December 31, 2022 12,772,786 $ 12,773 $ 18,019,192 $ ( 19,529,742 ) ( 1,497,777 ) Shares issued for cash 1,714,286 1,714 238,286 – 240,000 Shares issued for the acquisition of mineral properties 5,000,000 5,000 995,000 – 1,000,000 Stock based compensation – – 6,315 – 6,315 Net loss – – – ( 30,921 ) ( 30,921 ) Balance, March 31, 2023 19,487,072 19,487 19,258,793 ( 19,560,663 ) ( 282,383 ) Stock based compensation – – 6,674 – 6,674 Net loss – – – ( 47,567 ) ( 47,567 ) Balance, June 30, 2023 19,487,072 19,487 19,265,467 ( 19,608,230 ) ( 323,276 ) Shares issued for cash 90,000 90 12,510 – 12,600 Stock based compensation – – 7,594 – 7,594 Net loss – – – ( 181,246 ) ( 181,246 ) Balance, September 30, 2023 19,577,072 $ 19,577 $ 19,285,571 $ ( 19,789,476 ) $ ( 484,328 ) See accompanying notes to the unaudited consolidated financial statements 5 Magellan Copper & Gold Inc. (Formerly Magellan Gold Corporation) Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2024 2023 Operating activities: Net loss $ ( 271,004 ) $ ( 259,734 ) Adjustments to reconcile net loss to net cash used in operating activities: Accretion of discounts on notes payable – 10,000 Stock based compensation 57,408 20,583 Gain on conversion of debt ( 16,329 ) – Loss (gain) on change in derivative liability ( 55,572 ) 30,076 Changes in operating assets and liabilities: Prepaid expenses and other assets – 5,950 Accounts payable and accrued liabilities 45,412 41,470 Accounts payable - related party 54,000 36,000 Accrued interest 63,528 58,898 Net cash used in operating activities ( 122,557 ) ( 56,757 ) Investing activities: Cash paid for mineral rights – ( 100,000 ) Net cash used in investing activities – ( 100,000 ) Financing activities: Proceeds from notes payable from related parties 115,000 – Proceeds from notes payable from third parties – 21,000 Repayment of notes payable from third parties ( 1,000 ) – Proceeds from advances from third parties 24,500 – 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 138,500 168,899 Net change in cash 15,943 12,142 Cash at beginning of period 99 743 Cash at end of period $ 16,042 $ 12,885 Supplemental disclosure of cash flow information Cash paid for interest $ – $ – Cash paid for income taxes $ – $ – Non-cash financing and investing activities: Expenses paid on behalf of the Company $ 58,630 $ 4,701 Shares issued for the acquisition of mineral properties $ 422,565 $ 1,000,000 Shares issued for the conversion of debt and accrued interest $ 104,379 $ – See accompanying notes to the unaudited consolidated financial statements 6 MAGELLAN COPPER & GOLD INC. (FORMERLY MAGELLAN GOLD CORPORATION) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 – Organization, Basis of Presentation, and Nature of Operations Organization and Nature of Operations Magellan Copper & Gold Inc. (“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. On August 1, 2024, the Company amended its articles of incorporation to change their name from Magellan Gold Corporation to Magellan Copper & Gold Inc. 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, to advance the exploration efforts on one or more of the Company’s copper project, Blue Jacket, Copper Cliff or Copper Butte 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 We prepare our financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction with the audited financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December 31, 2023. Our consolidated financial statements include our accounts and the accounts of our 100% owned subsidiaries, Clearwater and M Gold. All intercompany transactions and balances have been eliminated. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 7 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 nine months ended September 30, 2024, 72,000 stock options, 117,500 warrants, and 1,934,720 shares issuable from convertible notes were considered for their dilutive effects. For the nine months ended September 30, 2023, 72,000 stock options, 117,500 warrants, and 2,518,755 shares issuable from convertible notes were considered for their dilutive effects. Derivative Financial Instruments Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification. The Company’s sequencing policy is to evaluate for reclassification contracts with the earliest maturity date first. Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. Recent Accounting Pronouncements The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. Liquidity and Going Concern Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. At September 30, 2024, we had a working capital deficit of $ 1,910,217 , we had not yet generated any significant revenues or achieved profitable operations and we have accumulated losses of $ 21,264,782 . We expect to incur further losses in the development of our business, all of which raises substantial doubt as to our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due, of which there can be no assurance. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock but cannot assure that any future financing will occur. 8 Note 3 – Mineral Rights and Properties Kris Project On June 6, 2023, the Company entered a memorandum of understanding for earn-in agreement (“MOU”) with Gold Express Mines, Inc. (“GEM”). Per the MOU, the Company agreed to earn-in for up to 50% working interest in the 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. As of September 30, 2024, the $ 100,000 deposit paid to Golden Express for the MOU remained in mineral rights and properties on the balance sheet. Blue Jacket and Cuprum Project 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. As of September 30, 2024, the total purchase price for the acquisition was determined to be $ 422,565 which consisted of 5,500,000 shares of common stock with a fair value of $ 422,565 . As of the date of this filing, the Company and GEM have not completed the assignment of leases and the 500,000 shares related to assignment have not been issued. The Company concluded the transaction qualified as an asset acquisition and all such acquisition costs have been capitalized. The Company concluded the purchase of a single set of assets qualified as an asset acquisition and all such acquisition costs have been capitalized as mineral rights and properties on the balance sheet. As of September 30, 2024, the GEM mineral rights and properties balance totaled $ 422,565 . Note 4 – Fair Value of Financial Instruments Financial assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels: Level 1 – Quoted market prices in active markets for identical assets or liabilities at the measurement date. Level 2 – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data. Level 3 – Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying values for cash and cash equivalents, prepaid assets, accounts payable and accrued liabilities, related party line of credit and notes payable approximate their fair value due to their short-term maturities. 9 Fair Value Measurements The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy. The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2024 and December 31, 2023: Schedule of fair value of liabilities Level 1 Level 2 Level 3 Fair value at September 30, 2024 Liabilities: Derivative liability $ – $ – $ 30,871 $ 30,871 Level 1 Level 2 Level 3 Fair value at December 31, 2023 Liabilities: Derivative liability $ – $ – $ 86,443 $ 86,443 There were no transfers between Level 1, 2 or 3 during the period. The table below presents the change in the fair value of the derivative liability during the nine months ended September 30, 2024: Schedule of fair value of the derivative liability Fair value as of December 31, 2023 $ 86,443 Gain on change in fair value of derivatives ( 55,572 ) Fair value as of September 30, 2024 $ 30,871 Note 5 – Notes payable, Convertible Note Payable and Derivative Liability Unsecured advances During the nine months ended September 30, 2024, third parties advanced $ 24,500 in cash and paid $ 58,630 of expenses on the Company’s behalf. The advances are unsecured, non-interest bearing and are payable on demand. As of September 30, 2024 and December 31, 2023, the advances balance totaled $ 73,438 and $ 39,338 , respectively. Notes payable On September 11, 2024, the Company entered into a debt conversion agreement to issue a total of 265,693 shares of our common stock for the conversion of $ 31,000 in principal, $ 6,197 of interest and recognized a gain of $ 5,820 . As of September 30, 2024 and December 31, 2023, the notes payable balance was $ 68,000 and $ 100,000 , with accrued interest of $ 19,843 and $ 17,301 , respectively. The promissory notes bear interest at 12 % per annum and are payable on demand. 10 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 September 30, 2024 and December 31, 2023, the balance due under these notes is $ 75,000 , with accrued interest of $ 42,237 and $ 35,481 , 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 September 30, 2024 and December 31, 2023, the balance due under this note is $ 145,978 , with accrued interest of $ 72,989 and $ 62,031 , 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%. During the nine months ended September 30, 2024, $ 10,000 was reclassed from convertible notes related party to convertible notes third party. On September 20, 2024, the Company entered into a debt conversion agreement to issue a total of 479,870 shares of our common stock for the conversion of $ 50,000 in principal, $ 17,182 of interest and recognized a gain of $ 10,509 . As of September 30, 2024 and December 31, 2023, the balance due to a third party under these notes is $ 160,000 and $ 200,000 , with accrued interest of $ 54,991 and $ 56,297 , respectively. 11 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. On January 2, 2024, GEM, a related party, assumed the debt from AJB Capital Investments, LLC. As of September 30, 2024 and December 31, 2023, the balance on the loan was $ 0 and $ 110,000 , net of discount of $ 0 , with accrued interest of $ 0 and $ 33,087 , respectively. Note 6 – Stockholders’ Deficit Common stock During the nine months ended September 30, 2024, the Company issued 85,000 shares of common stock with a fair value of $ 20,938 to a board member of the Company for services provided. 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 September 30 2024, the Company had 128,000 shares available for future grants. 12 Stock option activity within the 2017 Equity Incentive Plan and warrant activity outside the plan, for the nine months ended September 30, 2024 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, 2023 72,000 $ 2.00 117,500 $ 0.50 Granted – – – – Cancelled – – – – Expired – – – – Exercised – – – – Outstanding at September 30, 2024 72,000 $ 2.00 117,500 $ 0.50 Exercisable at September 30, 2024 72,000 $ 2.00 117,500 $ 0.50 As of September 30, 2024, the outstanding stock options have a weighted average remaining term of 3.07 years and have no intrinsic value, and the outstanding stock warrants have a weighted average remaining term of 0.68 years and have 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 September 30, 2024, all the unpatented mineral claims are believed by the Company Management to be in good standing. 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 September 30, 2024 and December 31, 2023, 750,000 and 615,000 restricted stock units may be settled in shares of common stock, respectively. During the nine months ended September 30, 2024, the Company recognized $ 17,270 of stock-based compensation related to the agreement, respectively. 13 Note 9 – Related Party Transactions Notes Payable – Related Parties As of December 31, 2023, the notes payable – related parties balance was $ 53,000 , with accrued interest of $ 9,409 . The promissory notes bear interest at 12% per annum and are payable on demand. During the nine months ended September 30, 2024, the Company entered into four unsecured promissory notes with GEM totaling $ 115,000 . The promissory notes bear interest at 5 % per annum and are payable on demand. As of September 30, 2024 and December 31, 2023, the notes payable – related parties balance was $ 168,000 and $ 53,000 , with accrued interest of $ 17,523 and $ 9,409 , respectively. Unsecured advances – related party During the nine months ended September 30, 2024, a related party paid $ 49,030 of expenses on the Company’s behalf. As of September 30, 2024 and December 31, 2023, the advances related party balance totaled $ 70,905 and $ 21,875 , 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%. During the nine months ended September 30, 2024, $ 10,000 was reclassed from convertible notes related party to convertible notes third party. As of September 30, 2024 and December 31, 2023, the balance due to a related party under these notes is $ 50,000 and $ 60,000 , with accrued interest of $ 17,600 and $ 17,238 , 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 September 30, 2024 and December 31, 2023, the balance due to a related party under this note was $ 125,000 , with accrued interest of $ 15,945 and $ 13,130 , respectively. 14 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. On January 2, 2024, GEM, a related party, assumed the debt from AJB Capital Investments, LLC. For consideration for the assumption of debt, the Company issued 250,000 shares of common stock at $ 0.0768 per share for total of $ 19,200 to GEM, for the assumption of the AJB convertible note. As of September 30, 2024, the total derivative liability on the above note was adjusted to a fair value of $ 30,871 . The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions during the period: fair value of stock $0.12, volatility of 71.30%, expected term of 0.50 years, risk-free rate of 4.38% and a dividend yield of 0%. As of September 30, 2024, the balance on the loan was $ 110,000 , with accrued interest of $ 42,996 . 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 nine months ended September 30, 2024, the Company incurred consulting fees of $ 54,000 . 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 is a significant investor and managing member of Silver Saddle. Magellan and Silver Saddle are both exploration stage companies involved in the business of acquisition and exploration of mineral resources. 15 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 As of September 30, 2024, Mr. Malhotra is no longer considered a related party, and therefore all amounts due to him have been reclassified out of related party accounts. Accrued interest due to related parties is included in our consolidated balance sheets as follows: Schedule of accrued interest due to related parties September 30, 2024 December 31, 2023 Accrued interest payable – Mr. Gibbs $ 25,435 $ 19,730 Accrued interest payable – Mr. Joseph Lavigne 6,349 4,277 Accrued interest payable – Mr. Schifrin 15,945 13,130 Accrued interest payable – Gold Express Mines, Inc. 46,335 – Accrued interest payable – Mr. Malhotra – 2,641 $ 94,064 $ 39,778 16