MAGELLAN COPPER & GOLD Corp 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS We use the terms “Magellan,” “we,” “our,” and “us” to refer to Magellan Copper & Gold Corp. The following discussion and analysis provide information that management believes is relevant for an assessment and understanding of our results of operations and financial condition. This information should be read in conjunction with our audited financial statements, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and our interim unaudited financial statements and notes thereto included with this report in Part I, Item 1. Forward-Looking Statements Some of the information presented in this Form 10-Q constitutes “forward-looking statements”. These forward-looking statements include, but are not limited to, statements that include terms such as “may,” “will,” “intend,” “anticipate,” “estimate,” “expect,” “continue,” “believe,” “plan,” or the like, as well as all statements that are not historical facts. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from current expectations. Although we believe our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially from expectations. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. Overview We were incorporated on September 28, 2010, in Nevada. Our principal business is the acquisition and exploration of mineral resources. We have not presently determined whether the properties to which we have mineral rights contain mineral reserves that are economically recoverable. We have only had limited operations to date, and we rely upon the sale of our securities and borrowings from significant investors to fund our operations, as we have not generated any revenue. On January 3, 2023, the Company entered into an asset purchase agreement with Gold Express Mines, Inc (“Gold Express”). Pursuant to the agreement, the Seller sold the following properties which the Company acquired: 1) the Golden, Idaho Project located in Idaho County, Idaho and consisting of seventy-two unpatented mining claims 2) the Seafoam District - located in Custer County, Idaho and consisting of five unpatented mining claims 3) the Blacktail District - located in Lemhi County, Idaho and consisting of eight unpatented mining claims 4) the 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) the Terror Gulch Project (or 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 consisting of 5,000,000 shares of the Company common stock with a fair value of $1,000,000. 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. 16 On June 6, 2023, the Company entered a memorandum of understanding for an earn-in agreement(“MOU”) with Gold Express Mines, Inc. Per the MOU, the Company agreed to earn-in for up to a 50% working interest in the Kris Project, which consists 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 committed to spend $400,000 on the Kris Project in allowable expenditures over the next thirty-six months, assuming permitting for the work is obtained. 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. If permitting delayed the exploration and other work programs, the earn-in period would be extended accordingly. Allowable expenditures included 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 were also allowed including management of work, preparation of reports, and planning for future work. Claim maintenance fees on the existing claims were also allowable expenditures, as were 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 agreed to pay 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 also agreed to 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 were to be allowable expenses under the earn-in agreement. However, due to lack of funding the Company failed to pay the claim maintenance fees and county fees in both August 2023 and August 2024 and such fees were paid for by Gold Express. On January 4, 2024 the Company entered into a second asset purchase agreement with Gold Express. Pursuant to this agreement, the Seller sold the following to the Company: 1) the Copper Butte Project located in Pinal County, Arizona and consisting of 66 unpatented mining claims 2) the Blue Jacket Project located in Idaho County, Idaho and consisting of 79 unpatented mining claims and 3) the Copper Cliff Project located in Adams County, Idaho and consisting of 71 unpatented mining claims and an assignment of a mineral lease with option to purchase covering several adjoining patented mining claims. The total purchase price for the acquisition for the three projects was 5,500,000 shares of the Company's common stock with a fair market value of $422,565. As of the date of this filing, the Company and GEM have not completed the assignment of the mineral lease and 500,000 shares related to the lease assignment have therefore not been issued. 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. On February 2, 2025, the Company canceled the Kris Project Earn-In and entered into a new memorandum of understanding (“MOU”) for an earn-in agreement with Gold Express Mines, Inc. In accordance with this second MOU, the Company agreed to earn-in for up to 45% of the working interest in the Cable Mine Project. This Project's land package consists of 480 acres of patented mining claims and 500 acres of unpatented mining claims. Under the terms of the agreement, over the next 24 months (subject to obtaining permitting) the Company will spend $500,000 on the project in allowable expenses. In conjunction with the termination of the Kris Project earn-in, the Company was credited with $100,000 from its prior investment in the Kris Project towards the $500,000 work requirement on the Cable Project. This leaves a net balance of $400,000 of allowable work expenditures to be completed towards the earn-in the Cable Project. As of September 30, 2025, the Cable Project mineral rights and properties balance was $100,000. Our current focus is to advance the Cable Project Earn-In and the 100% owned Copper Butte Project towards resource definition and eventual development. Secondarily, we may acquire additional mineral projects which could add earlier revenue to the Company. The Company is currently severely restrained by access to capital and any plans with respect to its existing or future projects are subject to availability of capital on reasonable terms. In the past, and for the foreseeable future, we will continue to rely upon the sale of our securities as well as advances and loans from executive management, and also from significant shareholders, to fund our operations as we do not generate consistent revenue. Prospective investors should note that there is no assurance that additional capital will be available to the Company to carry out its stated work plans. 17 Results of Operations for the three months ended September 30, 2025 and 2024 Three months ended September 30, 2025 2024 Operating expenses: General and administrative expenses $ 31,603 $ 107,170 Total operating expenses 31,603 107,170 Operating loss (31,603 ) (107,170 ) Other income (expense): Interest expense (18,264 ) (21,958 ) Gain on conversion of debt – 16,329 Gain (loss) on change in derivative liability (103,410 ) 46,197 Total other income (expense) (121,674 ) 40,568 Net loss $ (153,277 ) $ (66,602 ) Operating expenses During the three months ended September 30, 2025, our total operating expenses included general and administrative expenses of $31,603 as compared to $107,170 during the three months ended September 30, 2024. The $75,567 change was mainly related to a decrease in claim fees and professional fees. Other income (expense) During the three months ended September 30, 2025, total other expense was $121,674 as compared to other income of $40,568 during the three months ended September 30, 2024. The $162,242 change was mainly related to change in derivative liability. Results of Operations for the nine months ended September 30, 2025 and 2024 Nine months ended September 30, 2025 2024 Operating expenses: General and administrative expenses $ 136,953 $ 279,351 Total operating expenses 136,953 279,351 Operating loss (136,953 ) (279,351 ) Other income (expense): Interest expense (59,671 ) (63,554 ) Gain (loss) on conversion of debt (19,950 ) 16,329 Gain (loss) on change in derivative liability (118,452 ) 55,572 Total other income (expense) (198,073 ) 8,347 Net loss $ (335,026 ) $ (271,004 ) 18 Operating expenses During the nine months ended September 30, 2025, our total operating expenses included general and administrative expenses of $136,953 as compared to $279,351 during the nine months ended September 30, 2024. The $142,398 change was mainly related to a decrease in stock-based compensation, claim fees and professional fees. Other income (expense) During the nine months ended September 30, 2025, total other expense was $198,073 as compared to other income of $8,347 during the nine months ended September 30, 2024. The $206,420 change was mainly related to interest expense on debt, change in derivative liability and loss on conversion of debt. Liquidity and Capital Resources Our unaudited 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, 2025, we had not yet generated sufficient revenues or achieved profitable operations, and we have accumulated losses of $22,098,614. We expect to incur further losses in the development of our business, all of which raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due, 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 debt or equity financing will occur. Cash Flows A summary of our cash provided by and used in operating, investing and financing activities is as follows: Nine months ended September 30, 2025 2024 Net cash used in operating activities $ (27,118 ) $ (122,557 ) Net cash provided by financing activities 26,610 138,500 Net change in cash (508 ) 15,943 Cash beginning of period 896 99 Cash end of period $ 338 $ 16,042 19 At September 30, 2025, we had $388 in cash and a $2,105,675 working capital deficit. This compares to cash of $896 and a working capital deficit of $1,981,883 at December 31, 2024. Net cash used in operating activities during the nine months ended September 30, 2025 was $27,118 and was mainly comprised of our $335,026 net loss during the period, adjusted by non-cash charges of $20,252 of stock compensation, loss on conversion of debt of $19,950 and a loss on change in derivative liability of $118,452. In addition, it reflects changes in operating assets and liabilities of $149,254. Net cash used in operating activities during the nine months ended September 30, 2024 was $122,557 and was mainly comprised of our $271,004 net loss during the period, adjusted by non-cash charges of $57,408 of stock compensation and a gain on change in derivative liability of $55,572. In addition, it reflects changes in operating assets and liabilities of $162,940. During the nine months ended September 30, 2025, net cash provided by financing activities was $26,610 comprised of $140,000 in proceeds from sale of common stock offset by repayment of notes payable of $20,000 and repayment of advances of $93,390. During the nine months ended September 30, 2024, net cash provided by financing activities was $138,500 comprised of proceeds from notes payable related parties and advances from third parties which were offset by repayment of notes payable. Off Balance Sheet Arrangements We do not have and have never had any off-balance sheet arrangements. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto. We consider critical accounting policies to be those that require more significant judgments and estimates in the preparation of our financial statements, including the following: long lived assets; intangible assets valuations; and income tax valuations. Management relies on historical experience and other assumptions believed to be reasonable in making its judgment and estimates. Actual results could differ materially from those estimates. Management believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change. 20 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.