Note 9 – Related Party Transactions

Notes Payable – Related Parties

The promissory notes bear interest at 5% per annum and are payable on demand. As of June 30, 2025 and December 31, 2024, the notes payable – related parties balance was $168,000, with accrued interest of $26,564 and $20,558, respectively.

Unsecured advances – related party

As of June 30, 2025 and December 31, 2024, the advances related party balance totaled $70,905.

Series 2020A 8% Unsecured Convertible Notes

In 2020, the Company sold $285,000 of Series 2020A 8% Unsecured Convertible Notes with a maturity date of November 30, 2020. The purchase price of the Note is equal to the principal amount of the Note. The Series 2020A Notes are convertible into shares of Common Stock at a conversion price of $0.50 during the life of the Note. The lenders were issued 142,500 common stock warrants with an exercise price of $0.50 per share for a term of 5 years. Two related parties purchased $60,000 of the 2020A notes. The Company evaluated the conversion option and concluded a beneficial conversion feature was present at issuance. The Company recognized the beneficial conversion feature as a debt discount and additional paid in capital as of December 31, 2020. The $237,263 debt discount will be amortized over the term of the loan. The Notes will accrue interest at the rate of 8% per annum, payable quarterly in arrears. In July 2020, $25,000 of Series 2020A 8% Unsecured Convertible Notes were converted into 50,000 shares of common stock at a conversion price of $0.50 per share. The Series 2020A 8% Unsecured Convertible Notes that were due and payable in November 2020 and are currently past due. If a default notice is received the interest rate will be 12%. As of June 30, 2025 and December 31, 2024, the balance due to a related party under these notes is $50,000, with accrued interest of $20,581 and $18,597, 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. As of June 30, 2025 and December 31, 2024, the balance due to a related party under this note was $125,000, with accrued interest of $18,739 and $16,880, respectively.

Convertible Note

On February 10, 2021, the Company entered into a debt agreement to borrow $200,000 from AJB Capital Investments LLC. 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 is amortized over the life of the note. The loan bears interest at a rate of 10% and has a six-month maturity. 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. 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. In August 2021, the note was extended six months and the interest rate was increased to 12%. The Company issued the debt holder 266,667 common shares as a commitment fee. 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. In January 2023, the Note was extended to August 11, 2023. In consideration for the extension, the principal amount of the note was increased by $10,000. The incremental value of the debt modification of $10,000 is recorded as a debt discount and amortized over the remaining life of the note ending August 11, 2023.

On January 2, 2024, Gold Express Mines, Inc. (GEM), a related party, assumed the debt from AJB Capital Investments, LLC. For consideration for the assumption of the debt, the Company issued 250,000 shares of common stock at $0.0768 per share for total of $19,200 to GEM. The assumption of the note by GEM makes GEM the primary responsible payee of a new and separate note to AJB and the Company the primary responsible payee to GEM of the original note. GEM's assumption of the note does not alter the material terms of the note. The note is currently past due.

As of June 30, 2025, the total derivative liability on the above note was adjusted to a fair value of $62,200. 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 165.17%, expected term of 0.50 years, risk-free rate of 4.29% and a dividend yield of 0%.

As of June 30, 2025 and December 31, 2024, the principal balance on the loan was $110,000, with accrued interest of $52,832 and $46,287, 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 six months ended June 30, 2025, the Company incurred consulting fees of $36,000. As of June 30, 2025 and December 31, 2024, the balance due to Rock Creek Mining Company was $168,000 and $132,000, respectively.

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.

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: