Edgar Filing: MAGELLAN GOLD Corp

Year Ended December 31, 2012

Advances

Repayments

Silver Saddle Resources, LLC

UNITED STATES

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________

Commission file number 333-174287

MAGELLAN GOLD CORPORATION
(Name of Registrant in its Charter)


Nevada (State or other jurisdiction of incorporation or organization)	27-3566922 I.R.S. Employer Identification Number

2010A Harbison Drive # 312, Vacaville, CA 95687
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (707) 884-3766

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

Yes [ ] No [ X ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [ X ]

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of

Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ X ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity, as of June 30, 2012 is $11,279,917.

The number of shares outstanding of the registrant’s common stock, as of March 29, 2013 is 48,869,091.

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes:

None.

Safe Harbor for Forward-looking Statements

In General

This report contains statements that plan for or anticipate the future. In this report, forward-looking statements are generally identified by the words "anticipate," "plan," "believe," "expect," "estimate," and the like.

With respect to our mineral exploration business, these forward-looking statements include, but are not limited to, statements regarding the following:


	*	the risk factors set forth below under “Risk Factors”;

	*	risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions);

	*	uncertainties inherent in our exploratory and developmental activities, including risks relating to permitting and regulatory delays;

	*	our future business plans and strategies;

	*	our ability to commercially develop our mining interests.;

	*	changes that could result from our future acquisition of new mining properties or businesses;

	*	expectations regarding competition from other companies;

	*	effects of environmental and other governmental regulations;

	*	the worldwide economic downturn and difficult conditions in the global capital and credit markets; and

	*	our ability to raise additional financing necessary to conduct our business.

Forward looking statements may include estimated mineral reserves and resources which could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ materially from those projected in the forward-looking statements include:


	*	the risk factors set forth below under “Risk Factors”;

	*	changes in the market prices of precious minerals, including gold; and

	*	uncertainties inherent in the estimation of ore reserves.

Readers are cautioned not to put undue reliance on forward-looking statements. We disclaim any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.

In light of the significant uncertainties inherent in the forward-looking statements made in this Report, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

INTRODUCTION

About Our Company

Magellan Gold Corporation was formed and organized effective September 28, 2010, under the laws of the State of Nevada. We are an exploration stage company and our principal business is the acquisition and exploration of mineral resources in Arizona, California and Nevada. We have not presently determined whether the properties to which we have mining rights contain mineral deposits that are economically recoverable.

We were formed and organized by Athena Silver Corporation (“Athena”), a Delaware corporation, and by John C. Power and John D. Gibbs, two of the control persons and principal shareholders of Athena. Effective September 2010, we issued an aggregate of 33 million shares of common stock to our founders in consideration of $.0025 per share: 30 million shares were issued to Messrs. Power and Gibbs and 3 million shares were issued to Athena. During 2011, the majority of the shares issued to Athena were distributed, in the nature of a spin-off dividend of such shares, to the shareholders of Athena, as of a Record Date of December 31, 2010, pro rata.

Our initial focus was on two mining leases secured in 2010 to explore 70 unpatented lode claims known as the “Secret Claims” in Washoe County, Nevada and 10 unpatented lode claims known as the “Randall Claims” in Churchill County, Nevada.

During 2011, we hired consulting geologists to review our exploration opportunities and recommend work programs. In March 2011, we also secured an option to lease 9 patented mining claims as part of the “Secret Claims” project area. During 2011 and 2012, on advice from our consulting geologist, we hired an outside firm to collect soil samples over our Secret claims in a standardized grid. In November 2011 and May 2012, we collected and assayed 85 and 217 soil samples, respectively, in the project area. After consideration of the results from our soil survey, the costs of our annual lease obligations to maintain these claims, the remote location of the project and our other opportunities that Magellan had secured that were deemed more attractive by management, we dropped our option to lease the 9 patented claims in June 2012 and did not renew our mining lease in September 2012 for the 70 unpatented lode claims.

In May 2012, we filed a notice with the BLM for permission to drill and trench on our Randall claims. The BLM notified us that our proposed project area conflicted with lands that were held by the State of Nevada under Federal Aid Highway Material Site Rights-of-Way and that a material site is not open to entry or location under the general mining laws. As a result, we did not renew our Randall Claims lease in August of 2012.

In August 2012, we entered into an option agreement to purchase “The Silver District” project consisting of 85 unpatented lode mining claims, 4 patented lode claims, an Arizona mining lease of 154.66 acres and 23 unpatented mill site claims, totaling over 2,000 acres in Lap Paz County, Arizona. In addition to our option payments to Columbus Silver to acquire the project, the underlying claims are also subject to third party lease and or purchase obligations and net smelter royalties of varying percentages.

Magellan is obligated to make material payments during 2013 to maintain its option on the Silver District properties.

Magellan also staked fifty (50) unpatented lode mining claims known as the “Sacramento Mountains” project totaling approximately 1,000 acres, in which they have a 100% unencumbered interest, on Federal (BLM) land in October 2012 and filed the claims with the BLM in January 2013. The Project is located in the northwest corner of the Sacramento Mountains approximately 10 miles WNW of Needles, California.

Our primary focus during the next twelve months will be to further explore, and, if warranted and feasible, permit and pursue exploration drilling to further develop these mineral properties subject to available funding.

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.

Our principal executive offices are currently located at 2010A Harbison Drive # 312, Vacaville, CA 95687. Our telephone number is (707) 884-3766, and our Internet website is www.magellangoldcorp.com.

Conflicts of Interests

Athena Silver Corporation is a company under common control. Mr. Power is our President and director and is also a director and CEO of Athena. Mr. Power and Mr. Gibbs are significant investors in both Magellan and Athena.

Silver Saddle Resources, LLC (“Silver Saddle”) is a private company under common control. Mr. Power and Mr. Gibbs are significant investors and managing members of Silver Saddle.

Magellan, Athena and Silver Saddle are exploration stage companies and each is 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 position from those that could have resulted had Magellan, Athena and Silver Saddle been autonomous. In addition, the common ownership could result in significant conflicts of interest both in terms of the allocation of working capital as well as under the doctrine of corporate opportunity, inasmuch as all three entities are engaged in mineral exploration in the United States. Messr. Power and Gibbs have not adopted any policy or guidelines to mitigate the potential adverse effects of their conflicting interests between and among, Magellan, Athena and Silver Saddle.

While the foregoing may mitigate the conflicts of interest inherent in the interlocking interests, it will not eliminate all potential future conflicts. Investors in Magellan should be cognizant that the interests of Magellan may, in the future, be in conflict with the other activities of Magellan’s control persons.

Our Properties

Our primary focus during the next twelve months, and depending on available resources, will be to acquire, explore, and if warranted and feasible, permit and develop our remaining mineral properties.

We have two material mineral properties that we currently intend to engage in exploration activities and, if commercially recoverable deposits are found, mineral development activities. To date, we have only begun preliminary exploration work.

The following map illustrates the location of our significant properties in the States of Arizona and California:

[f10k2012v13001.jpg]

SILVER DISTRICT, LA PAZ COUNTY, ARIZONA

Effective August 28, 2012, Magellan entered into an Option Agreement with Columbus Silver Corporation, a Nevada corporation (“Columbus”), which Option Agreement grants the Company the right to acquire all of Columbus’ interest in its Silver District properties located in La Paz County, Arizona. Magellan paid Columbus an initial $63,200 on signing the Option and an additional $50,000 before December 31, 2012.

The terms of the option agreement require another $400,000 payment due on December 31, 2013 and a final $500,000 payment due December 31, 2014.

Magellan is also be required to maintain the Property in good standing by making required lease and maintenance payments to third parties. During 2013, Magellan will be required to pay underlying purchase/option payments on patented claims of $30,000 (Paid on Jan 31, 2013) and $7,500 in August 2013 and claim maintenance renewal fees to the BLM of $15,120 and a combination of work program/lease renewal with the State of Arizona in the amount of $3,750 also in August 2013.

During the term of the Option, Magellan will have the right to undertake exploration activities on the Property.

The Silver District Property consists of 85 unpatented lode mining claims, 4 patented lode claims, an Arizona mining lease of 154.66 acres and 23 unpatented mill site claims, totaling over 2,000 acres is approximately 80 kilometers (50 miles) north of Yuma in southwest Arizona.

PATENTED CLAIMS UNDER COLUMBUS SILVER OPTION

Red Cloud Patented Mining Claim – MS 749; Parcel #301-34-003 La Paz Co. Assessor

JAMES G. BLAINE Patented Mining Claim – MS 1258-A Parcel #301-31-001 La Paz Co. Assessor

BLACK ROCK; Patented Mining Claim – MS 291 Parcel #301-34-002 La Paz Co. Assessor

PACIFIC; Patented Mining Claim – MS 292 Parcel #301-34-002 La Paz Co. Assessor

ARIZONA STATE MINING LEASE UNDER COLUMBUS SILVER OPTION

MINERAL EXPLORATION PERMIT #08-114891 - ARIZONA STATE LEASE SIGNED: Sept. 24, 2010 154.66 ACRES

UNPATENTED CLAIMS HELD UNDER COLUMBUS SILVER OPTION


Plata No. 1(3^rd am)	AMC# 44189
Plata No. 2 (2^nd Am.)	AMC# 44190
POP #1 (2dAm.)	AMC# 43990
POP #2 (2d Am.)	AMC# 43991
POP #3 (2d Am)	AMC# 43992
POP #4 (2d Am)	AMC# 43993
POP #5 (2d Am)	AMC# 43994
POP #6 (2d Am)	AMC# 43995
POP #7 (2d Am)	AMC# 43996
POP #8 (2d Am)	AMC# 43997
POP #9 (2d Am)	AMC# 43998
POP #10 (2d Am)	AMC# 43999
POP #11 (2d Am)	AMC# 44000
POP #13 (2dAm)	AMC# 44002
POP #14 (2dAm)	AMC# 44003
POP #15 (2dAm)	AMC# 44004
POP #16 (2dAm)	AMC# 44005
POP #17 (Am)	AMC# 44006
POP #19 (Am)	AMC# 44008
POP #21 (Am)	AMC# 44010
POP #22 (Am)	AMC# 44011
POP #24 (2d Am	AMC# 44013
POP #25 (2d Am	AMC# 44014
POP #26 (2d Am	AMC# 44015
POP #27 (2d Am	AMC# 44016
POP #28 (2d Am	AMC# 44017
POP #29 (2d Am	AMC# 44018


POP #30 (Am)	AMC# 44019
POP #31 (Am)	AMC# 44020
POP #32 (Am)	AMC# 44021
POP #37 (2d Am)	AMC# 44026
POP #38 (2d Am)	AMC# 44027
POP #43 (Am)	AMC# 44032
POP #50 – POP #51	AMC# 207723-207724
POP #53 – POP #57	AMC# 207725-207729
POP #62	AMC# 207734
RUF #1	AMC # 129269
RUF #2	AMC # 129270
RUF #5	AMC # 129273
RUF #9	AMC # 129277
RUF #10	AMC# 129278
RUF #12	AMC# 129280
RUF #13	AMC# 129281
RUF #14	AMC# 129282
RUF #15	AMC# 129283
RUF #17	AMC# 129285
RUF #18	AMC# 129286
RUF #22	AMC# 129290
RUF #23	AMC# 129291
RUF #24	AMC# 129292
MIL #1	AMC # 129261
MIL #2	AMC# 129262
MIL #3	AMC# 129263
MIL #4	AMC# 129264
MIL #5	AMC# 129265
MIL #6	AMC# 129266
G + W #2	AMC # 129255
G + W #3	AMC # 129256
G + W #4	AMC # 129257
PL-1 – PL-2	AMC # 366944-366945
Arch	AMC # 366937
RU 1 – RU 3	AMC # 366947-366949
CH-1 – CH-6	AMC # 366938-366943
POP 39	AMC # 366946
A-1	AMC # 369924
RIHO	AMC # 369925
MAX 13-26	AMC # 386562-386575
Ruth #1 Amended	AMC # 42216
Ruth #3 Amended	AMC# 44218
Ruth #5 Amended	AMC# 44220
Ruth #7 Amended	AMC# 44222
Plata No. 3 Amended	AMC# 44191
Plata No. 5 Amended	AMC# 44193
Plata No. 6 Amended	AMC# 44194
Plata No.10 Amended	AMC# 44195
Plata No.11 Amended	AMC# 44196
Plata No.12 Amended	AMC# 44197
Plata No.14	AMC# 44199
Plata No.15 Amended	AMC# 44200
Chuck No.5	AMC# 44208
Chuck No.7	AMC# 44210
Chuck No.9	AMC# 44212

In addition to our option payments to Columbus Silver to acquire the project, the claims are also subject to third party lease and or purchase obligations and/or net smelter royalties of varying percentages.

SACRAMENTO MOUNTAINS PROJECT

The Sacramento Project is located approximately 10 miles WNW of Needles, California in the northwest corner of the Sacramento Mountains.

Magellan staked fifty (50) unpatented lode mining claims (SMF 1-50), in which they have a 100% unencumbered interest, on Federal (BLM) land in October 2012.

BLM Claim No.

Claim Name

CAMC 0305871 – CAMC 0305920

SMF 1 – 50

This property is currently without known reserves and our proposed program is exploratory in nature.

Pony Express Claims

On November 18, 2010, we staked two unpatented lode mining claims (the “Pony Express Claims”) giving us the right to explore, develop and conduct mining operations on these claims located in Churchill County, Nevada. As we staked the claims ourselves, there is no mineral lease governing our rights to explore the Pony Express Claims except for our annual obligations to renew the claims with the Bureau of Land Management and Churchill County. These claims consist of:

BLM Claim No.

Claim Name

BLM# NMC1036374

Pony Express #1

BLM# NMC1036375

Pony Express #10

This property is currently without known reserves and we currently have no exploration plans for these claims.

Discontinued Mineral Interests

Secret Canyon Claims:

In September 2010, we signed a 10 year mining lease to explore, develop and conduct mining operations on 70 unpatented lode mining claims located in Washoe County, Nevada. In March 2011, we also signed a one year option to explore a group of nine patented claims and the right to enter into a 10 year mining lease with option to purchase this group of nine claims. The patented claims under the option were surrounded by our unpatented claims. Together, these 79 claims are referred to as the “Secret Canyon Claims.”

Lease Agreement without further obligation to the owners effective June 15, 2012. As a result, we wrote off $25,468 of capitalized mineral rights applicable to the Cowles Option and included this cost in abandonment of mineral rights in our statements of operations for the year ended December 31, 2012

Effective September 28, 2012, after considering the results of our Secret Canyon Claims soil sample surveys, the costs to maintain the lease and remote location of the claims, other opportunities with Magellan we decided to terminate our mining lease with RS Gold, LLC covering the remaining Secret Canyon Claims without further obligation and expensed our previously capitalized costs to acquire these mineral rights in the amount of $64,261 which is included in abandonment of mineral rights in our statements of operations for the year ended December 31, 2012.

Randall Claims:

We had a 10 year mining lease to explore, develop and conduct mining operations on 10 unpatented lode mining claims located in Churchill County, Nevada.

In July 2012 we received notice from the Bureau of Land Management that our application to perform exploration work on our Randall Claims was not approved and as a result, we impaired 100% the carrying value of our mineral rights applicable to our Randall Claims as of June 30, 2012, and recognized an impairment expense of $13,307 in our statements of operations.

Unpatented Mining Claims: The Mining Law of 1872

Except for the Arizona State Mineral Lease and patented claims held under the Silver District Option, our mineral rights consist of leases covering "unpatented" mining claims created and maintained in accordance with the U.S. General Mining Law of 1872, or the “General Mining Law.” Unpatented mining claims are unique U.S. property interests, and are generally considered to be subject to greater title risk than other real property interests because the validity of unpatented mining claims is often uncertain. The validity of an unpatented mining claim, in terms of both its location and its maintenance, is dependent on strict compliance with a complex body of federal and state statutory and decisional law that supplement the General Mining Law. Also, unpatented mining claims and related rights, including rights to use the surface, are subject to possible challenges by third parties or contests by the federal government. In addition, there are few public records that definitively control the issues of validity and ownership of unpatented mining claims. We have not filed a patent application for any of our unpatented mining claims that are located on federal public lands in the United States and, under possible future legislation to change the General Mining Law, patents may be difficult to obtain.

Our exploration, development and mining rights relate to patented and unpatented mining claims covering federal and State lands in Arizona, California and Nevada. Some of our patented and unpatented claims are held under the Silver District Option with Columbus Silver.

Location of mining claims under the General Mining Law, is a self-initiation system under which a person physically stakes an unpatented mining claim on public land that is open to location, posts a location notice and monuments the boundaries of the claim in compliance with federal laws and regulations and with state location laws, and files notice of that location in the county records and with the Bureau of Land Management (“BLM”). Mining claims can be located on land as to which the surface was patented into private ownership under the Stockraising Homestead Act of 1916, 43 U.S.C. §299, but the mining claimant cannot injure, damage or destroy the surface owner's permanent improvements and must pay for damage to crops caused by prospecting. Discovery of a valuable mineral deposit, as defined under federal law, is essential to the validity of an unpatented mining claim and is required on each mining claim individually.

The location is made as a lode claim for mineral deposits found as veins or rock in place, or as a placer claim for other deposits. While the maximum size and shape of lode claims and placer claims are established by statute, there are no limits on the number of claims one person may locate or own. The General Mining Law also contains provision for acquiring five-acre claims of non-mineral land for mill site purposes. A mining operation typically is comprised of many mining claims.

The holder of a valid unpatented mining claim has possessory title to the land covered thereby, which gives the claimant exclusive possession of the surface for mining purposes and the right to mine and remove minerals from the claim. Legal title to land encompassed by an unpatented mining claim remains in the United States, and the government can contest the validity of a mining claim. The General Mining Law requires the performance of annual assessment work for each claim, and subsequent to enactment of the Federal Land Policy and Management Act of 1976, 43 U.S.C. §1201 et seq., mining claims are invalidated if evidence of assessment work is not timely filed with BLM. However, in 1993 Congress enacted a provision requiring payment of $140 per year claim maintenance fee in lieu of performing assessment work, subject to an exception for small miners having less than 10 claims. No royalty is paid to the United States with respect to minerals mined and sold from a mining claim. In addition, in Nevada, holders of unpatented mining claims are required to pay the county recorder of the county in which the claim is situated an annual fee of $10.50 per claim.

The General Mining Law provides a procedure for a qualified claimant to obtain a mineral patent (i.e., fee simple title to the mining claim) under certain conditions. It has become much more difficult in recent years to obtain a patent. Beginning in 1994, Congress imposed a funding moratorium on the processing of mineral patent applications which had not reached a designated stage in the patent process at the time the moratorium went into effect. Additionally, Congress has considered several bills in recent years to repeal the General Mining Law or to amend it to provide for the payment of royalties to the United States and to eliminate or substantially limit the patent provisions of the law.

Mining claims are conveyed by deed, or leased by the claimant to the party seeking to develop the property. Such a deed or lease (or memorandum of it) needs to be recorded in the real property records of the county where the property is located, and evidence of such transfer needs to be filed with BLM. It is not unusual for the grantor or lessor to reserve a royalty, which as to precious metals often is expressed as a percentage of net smelter returns.

Patented Mining Claims

Patented mining claims, such as the ones included in our Silver District Option, are mining claims on federal lands that are held in fee simple by the owner. No maintenance fees or royalties are payable to the BLM; however lease payments and royalties are payable under the operative leases.

LOCATION, HISTORY AND GEOLOGY OF OUR PROPERTIES

SILVER DISTRICT

The property covers the heart of the historic Silver District in La Paz County, approximately 80 kilometers (50 miles) north of Yuma in southwest Arizona.

This property is currently without known reserves and our proposed program is exploratory in nature.

[f10k2012v13002.jpg]

Location, Access and Composition

The Silver District is located approximately 50 miles by road north of Yuma, Arizona on the southeast flank of the Trigo Mountains. Access to the property via a 4WD vehicle from Yuma is seasonally good, with 34 miles of paved or well maintained gravel road and another 14 miles of seasonally maintained two track roads to the Red Cloud Mine, in the southwestern corner of the district.

North on US 95 from Yuma. Turn on the road to Martinez Lake approximately 2 1/2 miles north of the Imperial Dam turn-off ( from US 95N);after turning west, you travel through the Yuma Proving Grounds about 6 or 7 miles. There is a trailer park-type settlement on the east side of the lake and a sign to Martinez Lake, turn right (North) towards Wildlife Refuge and that road is known as the Red Cloud mine Road. Stay on Red Cloud Mine road along the wash and actually passes back through a corner of the Yuma Proving Grounds and leads to the Red Cloud Mine.

[f10k2012v13003.jpg]

The “Silver District” project consists of 85 unpatented lode mining claims, 4 patented lode claims, an Arizona mining lease of 154.66 acres and 23 unpatented mill site claims, totaling over 2,000 acres in Lap Paz County, Arizona.

In addition to our option payments to Columbus Silver to acquire the project, the underlying claims are also subject to third party lease and or purchase obligations and net smelter royalties of varying percentages.

History

The Silver District was discovered in 1862 and supported small but significant silver-lead production, largely from underground operations at the Red Cloud and Clip (Blaine patented claim) mines, during the ten year period from 1883 to 1893. Recorded production is estimated at 1.56 million ounces silver and 2.33 million pounds lead. There have been occasional small scale development activities since that time and the area remains a site for collection of high value, specimen wulfenite crystals.

Modern exploration, principally shallow drilling, metallurgical test work and a number of scoping studies to evaluate development of the silver and fluorspar deposits of the District, was carried out intermittently from 1973 through 1992 by Gulf + Western Industries through its New Jersey Zinc subsidiary, Orbex Resources and its successor companies, Silver Glance Resources and Silverspar Minerals. A total of 465 holes for an aggregate length of 62,866 feet were drilled during this period. The project has been largely inactive since that time.

Columbus Silver acquired the project in 2004 and has focused its efforts largely on re-consolidation of the property position, organization and compilation of technical records and limited field mapping and sampling.

Power and Water

There are no modern mine developments or equipment on the property. The Red Cloud Mine property has a covered shop and full time watchman with living facilities. It also has a water well and a small diesel generator. There is no commercial water or power available at the site and no work has been done to date to access what sources may be available for a commercial operation.

Geology

The Silver District deposits, consisting of variable silver and lead-zinc mineralization in massive quartz-calcite-fluorspar-barite veins and breccia zones, occur within three major north to north-northwest trending vein systems with a collective strike length of about eight miles. The veins are hosted by Tertiary volcanic and volcaniclastic rock formations, which overly an older, possibly Pre-Cambrian crystalline to metamorphic basement. Potential ore-grade silver (lead-zinc), fluorspar and barite deposits occur as pod-like bodies within all three vein systems. Various historic resource estimates, all pre-dating NI 43-101 reporting standards, have been carried out by past operators in the District.

EXPLORATION PLANS

Subject to available funding, the following is our exploration plans for the Silver District.

Past explorers in the District identified a number of outcropping ore bodies (some of which saw production in the late 19^th and early 20^th centuries) and defined new and larger resources to moderate depths with drilling. These known occurrences are the exposed portions of three long, through going fault trends in the

District. Potential for the discovery of additional mineralization is likely to be at depth below known ore bodies and along the fault trends in between known ore bodies. The best methods for pursuing this objective are drilling at depth below know ore bodies, using geology as a targeting tool and remote sensing tools such as geophysics to look for blind (non-outcropping) mineralization in the unexplored areas described. Positive results from geophysical surveys would likely require testing with a drill. Both of these approaches will need to be progressive, with drilling and geophysical orientation over the best know mineralization on one fault or vein trend, as defined by geological review. Currently, the known mineralization at the historic Red Cloud and Papago mines would be our initial exploration targets.

Geological mapping, with rock sampling and assaying, will help guide the drilling and geophysical surveying for the next six to twelve months. The geophysical survey will be designed to test for sulfide mineralization within the vein structure below the currently known resources at Red Cloud and Papago and, if successful, will be used in future campaigns to test for similar mineralization under other historic resource areas in the district and the unexplored areas between them. Drilling of geologically and geophysically defined targets will initially be done by coring to provide control on the geology of the vein system and to help in characterizing the mineralization and grades therein.

The geological survey will cost approximately $100,000 for this phase of work and subsequent computer modeling of the new mineralization and known resources. The orientation geophysical surveying will cost approximately $50,000. Drilling and assaying of approximately 6000 feet of core to test the current geological and expected geophysical targets will cost approximately $350,000.

This program is progressive in that drilling is dependent on successful targeting by geology or geophysics and follow-up drilling is dependent on success in the initial holes.

The exploration program will be supervised by Douglas R Bowden, a consulting geologist based in Sparks, Nevada. Mr. Bowden has over 35 years of experience in mining exploration in the United States, Canada and Mexico and is a licensed geologist in the State of Utah.

SACRAMENTO MOUNTAINS PROJECT

This property is currently without known reserves and our proposed program is exploratory in nature.

Location, Access and Composition

The Sacramento Project is located approximately 10 miles WNW of Needles, California in the northwest corner of the Sacramento Mountains. The northern end of the Project is immediately south of I-40 and existing utility service roads and 4WD roads provide access to the entirety of the project area.

Magellan staked fifty (50) unpatented lode mining claims (SMF 1-50) or approximately 1,000 acres, in which they have a 100% unencumbered interest, on Federal (BLM) land in October 2012. The claims were properly recorded in the San Bernardino County and with the Bureau of Land Management. The claims are currently in good standing until September 1 2013, by which time Federal maintenance fees of $140 per claim ($7,000) must be paid to the BLM in Sacramento. In addition, a Notice of Intent to Hold must be recorded in San Bernardino County.

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Power and Water

Commercial power is available on U.S. Highway 40. The availability of water is unknown at this time.

Geology

The Company’s claim block consists of a sequence of Mid-Tertiary volcanic and sedimentary rocks series that unconformably overlie a much older, possibly Pre-Cambrian metamorphic and crystalline complex that also dominates the central core of the Sacramento Mountains. The entire sequence has been eroded and much of the flanks of the mountains, including the Company’s property, is covered by a gravel pediment or active gravel washes. A number of epithermal veins of quartz-calcite-barite composition cut the volcanic and sedimentary rocks and, in some places, have historically been explored for copper, silver and gold. The veins occur as swarms of discrete thinner veins within wider zones that may be tens of feet wide and several hundred feet long. The veins dip moderately to steeply and strike directions vary. There is some evidence in other parts of the Sacramento Mountains that the unconformity between the Tertiary and basement rocks may be mineralized, but the unconformity is not exposed on the Property and lies at an unknown depth below surface outcroppings of Tertiary rocks. The Company intends to identify and target those veins that might likely continue to depth and also the unconformity below those projections

History

There are a number of historic pits, trenches, shafts and adits on various outcroppings within the claim block that probably date to the 1890s, and some may have been reopened in the 1920s. Modern exploration began in the early to mid 1980s by such mining companies as Duval, AMAX, Goldfields (London) and Fischer-Watt Mining. Further work was completed in the area by Fischer-Watt in the mid 1990’s. Exploration activities by these mining companies included surface mapping and geochemical sampling and limited programs of localized drilling near some of the historic workings. There is only limited anecdotal record of these activities in the Public Domain.

Current State of Exploration

All activities to date have been and those proposed will be entirely exploratory in nature.

The claim group comprises a “green fields” or “grass roots” exploration target. Only the historic diggings of over 100 years ago remain from past activities. Exploration to date has been limited to land acquisition and preliminary field examination of old workings as shown on USGS Quadrangle maps. AMAX reportedly drilled one RC hole near one of the historic workings within the Company’s current claim block that may have encountered anomalous gold values. The Company intends to examine all outcroppings within the claim block and sample those that may be associated with mineralization. This work may also include sampling stream sediments, soils and vegetation. The workings that AMAX may have targeted with drilling in the past will be examined with an eye to some initial core drilling by the Company. The property has no known reserves.

Silver-gold mineralization is contained in quartz-calcite veins that cut Tertiary volcanic and volcaniclastic rocks in the Sacramento Mountains. This epithermal system comprises numerous vein outcroppings throughout the claim block controlled by the Company. Evidence of past prospecting activities dating from the 1890s to the 1930s include historic pits, trenches, shallow shafts and adits on outcropping vein sets. Limited exploration by Fischer-Watt Gold and AMAX in the 1980s included an RC hole drilled by AMAX in the northern part of the claim block that reportedly encountered anomalous gold values adjacent to exposed veining in outcrop. The vein has been intermittently traced for over 3000 feet along strike. Exploration of the exposed vein system and extensions under cover will initially entail core drilling to test

down dip from mineralization exposed in the largest adit and to twin the AMAX RC hole. Minor geologic mapping with rock sampling and assaying will be needed to put the drilling into geological context. A geophysical survey of the immediate drill area may be useful in tracing the vein to depth and a possible intersection of it at depth with the regional unconformity between the Tertiary section and the underlying metamorphic basement, a second target for mineralization.

Subject to available funding, the following is our exploration plans for the Sacramento Mountains.

The proposed exploration program can be accomplished within a six month period, with summer months being difficult for exploration due to high temperatures. Drilling and assaying 1500’ of core in two holes will cost approximately $90,000. A geophysical orientation survey and interpretation will cost approximately $15,000. Geologic supervision and mapping plus assaying will cost an additional $25,000. Subsequent drilling will depend on positive results from the initial drilling and the geophysics. The project includes outcroppings of other vein sets that have not been mapped and sampled by the Company that may represent targets in their own right.

PONY EXPRESS CLAIMS

In November 2010, we located, staked and filed two unpatented lode mining claims with the BLM giving us the right to explore, develop and conduct mining operations on these claims. These two claims, the Pony Express #1 (BLM# NMC1036374) and the Pony Express #10 (BLM# NMC1036375), cover approximately 40 acres and are located in the Sand Springs Mining District in Churchill County, Nevada. We do not plan to conduct significant exploration activities on these claims during the next twelve months and currently, these claims are not material to our business.

OUR EXPLORATION PROCESS

Our exploration program is designed to acquire, explore and evaluate exploration properties in an economically efficient manner. We have not at this time identified or delineated any mineral reserves on any of our properties.

Our current focus is primarily on the exploration of our Silver District (Arizona) and Sacramento Mountains Project. To date, we have collected a limited number of samples from our Pony Express claims. Currently, our contract geologists collect samples and deliver them to third party labs for analysis. We plan to develop a more formal sample collection and analysis process in the near future; this process will include appropriate quality assurance and quality control procedures.

Subject to our ability to raise the necessary funds, we may acquire additional exploration properties near our existing properties and implement exploration programs that may cover these future properties or on our Pony Express Claims at various times as we deem prudent.

We expect our exploration work on a given property to proceed generally in three phases. Decisions about proceeding to each successive phase will take into consideration the completion of the previous phases and our analysis of the results of those phases.

The first phase is intended to determine whether a prospect warrants further exploration and involves:

researching the available geologic literature;

interviewing geologists, mining engineers and others familiar with the prospect sites;

conducting geologic mapping, geophysical testing and geochemical testing;

examining any existing workings, such as trenches, prospect pits, shafts or tunnels;

digging trenches that allow for an examination of surface vein structures as well as for efficient reclamation, re-contouring and re-seeding of disturbed areas; and,

analyzing samples for minerals that are known to have occurred in the test area.

Subject to obtaining the necessary permits in a timely manner, the first phase can typically be completed on an individual property in several months at a cost of less than $200,000.

The second phase is intended to identify any mineral deposits of potential economic importance and would involve:

examining underground characteristics of mineralization that were previously identified;

conducting more detailed geologic mapping;

conducting more advanced geochemical and geophysical surveys;

conducting more extensive trenching; and

conducting exploratory drilling.

Subject to obtaining the necessary permits in a timely manner, the second phase can typically be completed on an individual property in nine to twelve months at a cost of less than $1 million. None of our properties has reached the second phase.

The third phase is intended to precisely define depth, width, length, tonnage and value per ton of any deposit that has been identified and would involve:

drilling to develop the mining site;

conducting metallurgical testing; and

obtaining other pertinent technical information required to define an ore reserve and complete a feasibility study.

Depending upon the nature of the particular deposit, the third phase on any one property could take one to five years or more and cost well in excess of $1 million. None of our properties has reached the third phase.

We intend to explore and develop our properties ourselves, although our plans could change depending on the terms and availability of financing and the terms or merits of any joint venture proposals.

PLAN OF EXPLORATION

We intend to conduct further exploration on our Silver District (Arizona) and Sacramento Mountains Project (California) during 2013 in the manner previously described. We have not allocated any funds for exploration on our Pony Express Claims. Our 2013 plan of exploration is contingent upon securing additional loans or equity funding.

GOLD PRICES

Our operating results are substantially dependent upon the world market prices of gold. We have no control over gold prices, which can fluctuate widely. The volatility of such prices is illustrated by the following table, which sets forth the high and low prices of gold (as reported by www.kitco.com) per ounce during the periods indicated:



	Year Ended December 31,
	2012		2011		2010
	HIGH	LOW	HIGH	LOW	HIGH	LOW
GOLD	$1,791.75	$1,540.00	$1,895.00	$1,319.00	$1,421.00	$1,058.00

These historical prices are not indicative of future gold prices.

MARKETING

All of our mining operations, if successful, will produce precious metals in doré form or a concentrate that contains precious metals.

We plan to refine and market our precious metals doré and concentrates using a geographically diverse group of third party smelters and refiners. The loss of any one smelter or refiner may have a material adverse effect if alternate smelters and refiners are not available. We believe there is sufficient global capacity available to address the loss of any one smelter or refiner.

HEDGING ACTIVITES

Our strategy is to provide shareholders with leverage to changes in gold prices by selling gold production at market prices. We may sell gold from our future mines, if any, both pursuant to forward contracts and at spot prices prevailing at the time of sale. We may also enter into derivative contracts to protect the selling price for certain anticipated gold production and to manage risks associated with commodities and foreign currencies.

GOVERNMENT REGULATION

General

Our activities are and will be subject to extensive federal, state and local laws governing the protection of the environment, prospecting, mine development, production, taxes, labor standards, occupational health, mine safety, toxic substances and other matters. The costs associated with compliance with such regulatory requirements are substantial and possible future legislation and regulations could cause additional expense, capital expenditures, restrictions and delays in the development and continued operation of our properties, the extent of which cannot be predicted. In the context of environmental permitting, including the approval of reclamation plans, we must comply with known standards and regulations which may entail significant costs and delays. Although we are committed to environmental responsibility and believe we are in substantial compliance with applicable laws and regulations, amendments to current laws and regulations, more stringent implementation of these laws and regulations through judicial review or administrative action or the adoption of new laws could have a materially adverse effect upon our results of operations.

Federal Environmental Laws

Certain mining wastes from extraction and beneficiation of ores are currently exempt from the extensive set of Environmental Protection Agency (“EPA”) regulations governing hazardous waste, although such wastes may be subject to regulation under state law as a solid or hazardous waste. The EPA has worked on a program to regulate these mining wastes pursuant to its solid waste management authority under the Resource Conservation and Recovery Act (“RCRA”). Certain ore processing and other wastes are currently regulated as hazardous wastes by the EPA under RCRA. If our future mine wastes, if any, were treated as hazardous waste or such wastes resulted in operations being designated as a “Superfund” site under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) for cleanup, material expenditures would be required for the construction of additional waste disposal facilities or for other remediation expenditures. Under CERCLA, any present owner or operator of a Superfund site or an owner or operator at the time of its contamination generally may be held liable and may be forced to undertake remedial cleanup action or to pay for the government’s cleanup efforts. Such owner or operator may also be liable to governmental entities for the cost of damages to natural resources, which may be substantial. Additional regulations or requirements may also be imposed upon our future tailings and waste disposal, if any, in Nevada under the Federal Clean Water Act (“CWA”) and state law counterparts. We have reviewed and considered current federal legislation relating to climate change and we do not believe it to have a material effect on our operations. Additional regulation or requirements under any of these laws and regulations could have a materially adverse effect upon our results of operations.

EMPLOYEES AND CONSULTANTS

We have only one part-time employee, Mr. Power, who devotes approximately 25% of his time and attention to our business. We have agreed to pay Mr. Power $2,500 per month for his services.

We rely heavily on the services of consulting engineers and geologists.

ITEM 1A – RISK FACTORS.

An investment in our securities is speculative and involves a high degree of risk. Please carefully consider the following risk factors, as well as the possibility of the loss of your entire investment, before deciding to invest in our securities.

Risks Related to our Business

Due to our history of operating losses our auditors are uncertain that we will be able to continue as a going concern.

Our financial statements have been prepared assuming that we will continue as a going concern. Due to our continuing operating losses and negative cash flows from our operations, the reports of our auditors issued in connection with our financial statements for the fiscal year ended December 31, 2012, and the period from September 28, 2010 (our inception), through December 31, 2012, contain explanatory paragraphs indicating that the foregoing matters raised substantial doubt about our ability to continue as a going concern. We cannot provide any assurance that we will be able to continue as a going concern.

We have no history of or experience in mineral production.

We have no history of or experience in producing gold or other metals. In addition, our management lacks technical training and experience with exploring for, starting and/or operating a mine. With no direct training or experience in these areas, our management may not be fully aware of many of the specific requirements related to working within this industry. Their decisions and choices may not take into account standard engineering or managerial approaches mineral exploration companies commonly use. Our operations, earnings and ultimate financial success could suffer due to our management’s lack of experience in this industry. As a result, we would be subject to all of the risks associated with establishing a new mining operation and business enterprise. We may never successfully establish mining operations, and any such operations may not achieve profitability.

Our principal shareholders and control persons are also principal shareholders and control persons of Athena and Silver Saddle, which could result in conflicts with the interests of minority stockholders.

Messrs. Gibbs and Power are control persons and principal shareholders of Magellan, Athena and Silver Saddle. Magellan, Athena and Silver Saddle are engaged in mineral exploration activities, although in different geographical regions. While the geographical focus of the companies is different, numerous conflicts could arise in the future. For example, Messrs. Gibbs and Power have provided the majority of working capital for all three companies to date, and in the likely event that these companies require additional capital in the future their resources may be inadequate to finance the activities of all. In addition, if new prospects become available, a conflict may exist with respect to which company to offer those opportunities. Messrs. Gibbs and Power have not developed a conflict of interest policy to mitigate the potential adverse effects of these conflicts and as a result these conflicts represent a significant risk to the shareholders of the Company. Conflicts for access to limited resources and opportunities cannot be eliminated completely, and investors should be aware of their potential.

Our principal executive officer intends to devote only a limited amount of his time and attention to our business.

Mr. Power is the principal executive officer of both Magellan and Athena. He anticipates that he will only devote approximately 25% of his time and attention to our business. This limited focus could result in significant delays in our exploration activities and ability to generate revenues and profits, if any, in the future.

We have no proven or probable reserves.

We are currently in the exploration stage and have no proven or probable reserves, as those terms are defined by the Securities and Exchange Commission (“SEC”) on any of our properties.

In order to demonstrate the existence of proven or probable reserves under SEC guidelines, it would be necessary for us to advance the exploration of our Properties by significant additional delineation drilling to demonstrate the existence of sufficient mineralized material with satisfactory continuity which would provide the basis for a feasibility study which would demonstrate with reasonable certainty that the mineralized material can be economically extracted and produced. We do not have sufficient data to support a feasibility study with regard to the Properties, and in order to perform the drill work to support such feasibility study, we must obtain the necessary permits and funds to continue our exploration efforts. It is possible that, even after we have obtained sufficient geologic data to support a feasibility study on the Properties, such study will conclude that none of the identified mineral deposits can be economically and legally extracted or produced. If we cannot adequately confirm or discover any mineral reserves of precious metals on the Properties, we may not be able to generate any revenues. Even if we discover mineral reserves on the Properties in the future that can be economically developed, the initial capital costs associated with development and production of any reserves found is such that we might not be profitable for a significant time after the initiation of any development or production. The commercial viability of a mineral deposit once discovered is dependent on a number of factors beyond our control, including particular attributes of the deposit such as size, grade and proximity to infrastructure, as well as metal prices. In addition, development of a project as significant as the ones we might be planning will likely require significant debt financing, the terms of which could contribute to a delay of profitability.

The exploration of mineral properties is highly speculative in nature, involves substantial expenditures and is frequently non-productive.

Mineral exploration is highly speculative in nature and is frequently non-productive. Substantial expenditures are required to:

• establish ore reserves through drilling and metallurgical and other testing techniques;

• determine metal content and metallurgical recovery processes to extract metal from the ore; and,

• design mining and processing facilities.

If we discover ore at the Properties, we expect that it would be several additional years from the initial phases of exploration until production is possible. During this time, the economic feasibility of production could change. As a result of these uncertainties, there can be no assurance that our exploration programs will result in proven and probable reserves in sufficient quantities to justify commercial operations.

Even if our exploration efforts at the Properties are successful, we may not be able to raise the funds necessary to develop the Properties.

If our exploration efforts at the Properties are successful, our current estimates indicate that we would be required to raise approximately $50 million in external financing to develop and construct the mines. Sources of external financing could include bank borrowings and debt and equity offerings, but financing has become significantly more difficult to obtain in the current market environment. The failure to obtain financing would have a material adverse effect on our growth strategy and our results of operations and financial condition. We currently have no specific plan to obtain the necessary funding and there exist no agreements, commitments or arrangements to provide us with the financing that we will need. There can be no assurance that we will commence production at any of our Properties or generate sufficient revenues to meet our obligations as they become due or obtain necessary financing on acceptable terms, if at all, and we may not be able to secure the financing necessary to begin or sustain production at the Properties. Our failure to raise needed funding could also result in our inability to meet our future royalty and work commitments under our mineral leases, which could result in a forfeiture of our mineral interest altogether and a default under other financial commitments. In addition, should we incur significant losses in future periods, we may be unable to continue as a going concern, and we may not be able to realize our assets and settle our liabilities in the normal course of business at amounts reflected in our financial statements included or incorporated herein by reference.

We may not be able to obtain permits required for development of the Properties.

In the ordinary course of business, mining companies are required to seek governmental permits for expansion of existing operations or for the commencement of new operations. We will be required to obtain numerous permits for our Properties. Obtaining the necessary governmental permits is a complex and time-consuming process involving numerous jurisdictions and often involving public hearings and costly undertakings. Our efforts to develop the Properties may also be opposed by environmental groups. In addition, mining projects require the evaluation of environmental impacts for air, water, vegetation, wildlife, cultural, historical, geological, geotechnical, geochemical, soil and socioeconomic conditions. An Environmental Impact Statement would be required before we could commence mine development or mining activities. Baseline environmental conditions are the basis on which direct and indirect impacts of the Properties are evaluated and based on which potential mitigation measures would be proposed. If the Properties were found to significantly adversely impact the baseline conditions, we could incur significant additional costs to avoid or mitigate the adverse impact, and delays in the development of Properties could result.

Permits would also be required for, among other things, storm-water discharge; air quality; wetland disturbance; dam safety (for water storage and/or tailing storage); septic and sewage; and water rights appropriation. In addition, compliance must be demonstrated with the Endangered Species Act and the National Historical Preservation Act.

The mining industry is intensely competitive.

The mining industry is intensely competitive. We may be at a competitive disadvantage because we must compete with other individuals and companies, many of which have greater financial resources, operational experience and technical capabilities than we do. Increased competition could adversely affect our ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future. We may also encounter increasing competition from other mining companies in our efforts to locate acquisition targets, hire experienced mining professionals and acquire exploration resources.

Our future success is subject to risks inherent in the mining industry.

Our future mining operations, if any, would be subject to all of the hazards and risks normally incident to developing and operating mining properties. These risks include:

• insufficient ore reserves;

• fluctuations in metal prices and increase in production costs that may make mining of reserves uneconomic;

• significant environmental and other regulatory restrictions;

• labor disputes; geological problems;

• failure of underground stopes and/or surface dams;

• force majeure events; and

• the risk of injury to persons, property or the environment.

Our future profitability will be affected by changes in the prices of metals.

If we establish reserves, and complete development of a mine, our profitability and long-term viability will depend, in large part, on the market price of gold. The market prices for metals are volatile and are affected by numerous factors beyond our control, including:

• global or regional consumption patterns;

• supply of, and demand for, gold and other metals;

• speculative activities;

• expectations for inflation; and,

• political and economic conditions.

The aggregate effect of these factors on metals prices is impossible for us to predict. Decreases in metals prices could adversely affect our ability to finance the exploration and development of our properties, which would have a material adverse effect on our financial condition and results of operations and cash flows. There can be no assurance that metals prices will not decline. As reported on the website www.kitco.com, during the three-year period ended December 31, 2012, the high and low settlement prices for gold were $1,859.00 and $1,058.00 per ounce, respectively.

The price of gold may decline in the future. If the price of gold is depressed for a sustained period, we may be forced to suspend operations until the prices increase, and to record asset impairment write-downs. Any continued or increased net losses or asset impairments would adversely affect our financial condition and results of operations.

We are subject to significant governmental regulations.

Our operations and exploration and development activities are subject to extensive federal, state, and local laws and regulations governing various matters, including:

• environmental protection;

• management and use of toxic substances and explosives;

• management of natural resources;

• exploration and development of mines, production and post-closure reclamation;

• taxation;

• labor standards and occupational health and safety, including mine safety; and

• historic and cultural preservation.

Failure to comply with applicable laws and regulations may result in civil or criminal fines or penalties or enforcement actions, including orders issued by regulatory or judicial authorities enjoining or curtailing operations or requiring corrective measures, installation of additional equipment or remedial actions, any of which could result in us incurring significant expenditures. We may also be required to compensate private parties suffering loss or damage by reason of a breach of such laws, regulations or permitting requirements. It is also possible that future laws and regulations, or a more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspensions of any future operations and delays in the exploration of our properties.

Changes in mining or environmental laws could increase costs and impair our ability to develop our properties.

From time to time the U.S. Congress may consider revisions in its mining and environmental laws. It remains unclear to what extent new legislation may affect existing mining claims or operations. The effect of any such revisions on our operations cannot be determined conclusively until such revision is enacted; however, such legislation could materially increase costs on properties located on federal lands, such as ours, and such revision could also impair our ability to develop the Properties and to explore and develop other mineral projects.

Mineral exploration and development inherently involves significant and irreducible financial risks. We may suffer from the failure to find and develop profitable mineral deposits.

The exploration for and development of mineral deposits involves significant financial risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. Unprofitable efforts may result from the failure to discover mineral deposits. Even if mineral deposits are found, such deposits may be insufficient in quantity and quality to return a profit from production, or it may take a number of years until production is possible, during which time the economic viability of the project may change. Few properties which are explored are ultimately developed into producing mines. Mining companies rely on consultants and others for exploration, development, construction and operating expertise.

Substantial expenditures are required to establish ore reserves, extract metals from ores and, in the case of new properties, to construct mining and processing facilities. The economic feasibility of any development project is based upon, among other things, estimates of the size and grade of ore reserves, proximity to infrastructures and other resources (such as water and power), metallurgical recoveries, production rates and capital and operating costs of such development projects, and metals prices. Development projects are also subject to the completion of favorable feasibility studies, issuance and maintenance of necessary permits and receipt of adequate financing.

Once a mineral deposit is developed, whether it will be commercially viable depends on a number of factors, including: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; government regulations including taxes, royalties and land tenure; land use, importing and exporting of minerals and environmental protection; and mineral prices. Factors that affect adequacy of infrastructure include: reliability of roads, bridges, power sources and water supply; unusual or infrequent weather phenomena; sabotage; and government or other interference in the maintenance or provision of such infrastructure. All of these factors are highly cyclical. The exact effect of these factors cannot be accurately predicted, but the combination may result in not receiving an adequate return on invested capital.

Significant investment risks and operational costs are associated with our exploration activities. These risks and costs may result in lower economic returns and may adversely affect our business.

Mineral exploration, particularly for gold, involves many risks and is frequently unproductive. If mineralization is discovered, it may take a number of years until production is possible, during which time the economic viability of the project may change.

Development projects may have no operating history upon which to base estimates of future operating costs and capital requirements. Development project items such as estimates of reserves, metal recoveries and cash operating costs are to a large extent based upon the interpretation of geologic data, obtained from a limited number of drill holes and other sampling techniques, and feasibility studies. Estimates of cash operating costs are then derived based upon anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body, expected recovery rates of metals from the ore, comparable facility and equipment costs, anticipated climate conditions and other factors. As a result, actual cash operating costs and economic returns of any and all development projects may materially differ from the costs and returns estimated, and accordingly, our financial condition and results of operations may be negatively affected.

Our failure to satisfy the financial commitments under the agreements controlling our rights to explore on our current prospects could result in our loss of those potential opportunities.

We hold all of our mineral interests under agreements and commitments that require ongoing financial obligations, including work commitments. Our failure to satisfy those obligations could result in a loss of those interests. In such an event, we would be required to recognize an impairment of the assets currently reported in our financial statements.

We are required to obtain government permits to begin new operations. The acquisition of such permits can be materially impacted by third party litigation seeking to prevent the issuance of such permits. The costs and delays associated with such approvals could affect our operations, reduce our revenues, and negatively affect our business as a whole.

Mining companies are required to seek governmental permits for the commencement of new operations. Obtaining the necessary governmental permits is a complex and time-consuming process involving numerous jurisdictions and often involving public hearings and costly undertakings. The duration and success of permitting efforts are contingent on many factors that are out of our control. The governmental approval process may increase costs and cause delays depending on the nature of the activity to be permitted, and could cause us to not proceed with the development of a mine. Accordingly, this approval process could harm our results of operations.

Any of our future acquisitions may result in significant risks, which may adversely affect our business.

An important element of our business strategy is the opportunistic acquisition of operating mines, properties and businesses or interests therein within our geographical area of interest. While it is our practice to engage independent mining consultants to assist in evaluating and making acquisitions, any mining properties or interests therein we may acquire may not be developed profitably or, if profitable when acquired, that profitability might not be sustained. In connection with any future acquisitions, we may incur indebtedness or issue equity securities, resulting in increased interest expense, or dilution of the percentage ownership of existing shareholders. We cannot predict the impact of future acquisitions on the price of our business or our common stock. Unprofitable acquisitions, or additional indebtedness or

issuances of securities in connection with such acquisitions, may impact the price of our common stock and negatively affect our results of operations.

Our ability to find and acquire new mineral properties is uncertain. Accordingly, our prospects are uncertain for the future growth of our business.

Because mines have limited lives based on proven and probable ore reserves, we may seek to replace and expand our future ore reserves, if any. Identifying promising mining properties is difficult and speculative. Furthermore, we encounter strong competition from other mining companies in connection with the acquisition of properties producing or capable of producing gold. Many of these companies have greater financial resources than we do. Consequently, we may be unable to replace and expand future ore reserves through the acquisition of new mining properties or interests therein on terms we consider acceptable. As a result, our future revenues from the sale of gold or other precious metals, if any, may decline, resulting in lower income and reduced growth.

Changes in the corporate and securities laws and regulations are likely to increase our costs.

The Sarbanes-Oxley Act of 2002 (“SOX”), which became law in July 2002, has required changes that affect our corporate governance, securities disclosure and compliance practices. In response to the requirements of SOX, the SEC and major stock exchanges have promulgated new rules and listing standards covering a variety of subjects. Compliance with these new rules and listing standards are likely to increase our general and administrative costs, and we expect these to continue to increase in the future. In particular, we are required to include our management report on internal control as part of our annual report for the year ending December 31, 2012, pursuant to Section 404 of SOX. We are in the process of evaluating our internal control systems in order (i) to allow management to report on our internal controls, as required by these laws, rules and regulations, (ii) to provide reasonable assurance that our public disclosure will be accurate and complete, and (iii) to comply with the other provisions of Section 404 of SOX. We cannot be certain as to the timing of the completion of our evaluation, testing and remediation actions or the impact these may have on our operations. Furthermore, there is no precedent available by which to measure compliance adequacy. If we are not able to implement the requirements relating to internal controls and all other provisions of Section 404 in a timely fashion or achieve adequate compliance with these requirements or other requirements of SOX, we might become subject to sanctions or investigation by regulatory authorities such as the SEC or FINRA. Any such action may materially adversely affect our reputation, financial condition and the value of our securities, including our common stock. We expect that SOX and these other laws, rules and regulations will increase legal and financial compliance costs and will make our corporate governance activities more difficult, time-consuming and costly. We also expect that these new requirements will make it more difficult and expensive for us to obtain director and officer liability insurance.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, this would harm our business and the trading price of our stock.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide financial reports or prevent fraud, our business reputation and operating results could be harmed. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

Nevada law and our by-laws protect our directors from certain types of lawsuits.

Nevada law provides that our directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as directors. Our by-laws require us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing shareholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

Risks Related to Our Stock

Future issuances of our common stock could dilute current shareholders and adversely affect the market if it develops.

We have the authority to issue up to 100 million shares of common stock and 25 million shares of preferred stock and to issue options and warrants to purchase shares of our common stock, without shareholder approval. Future share issuances are likely due to our need to raise additional working capital in the future. Those future issuances will likely result in dilution to our shareholders. In addition, we could issue large blocks of our common stock to fend off unwanted tender offers or hostile takeovers without further shareholder approval, which would not only result in further dilution to investors in this offering but could also depress the market value of our common stock, if a public trading market develops.

We may issue preferred stock that would have rights that are preferential to the rights of our common stock that could discourage potentially beneficial transactions to our common shareholders.

An issuance of shares of preferred stock could result in a class of outstanding securities that would have preferences with respect to voting rights and dividends and in liquidation over our common stock and could, upon conversion or otherwise, have all of the rights of our common stock. Our Board of Directors' authority to issue preferred stock could discourage potential takeover attempts or could delay or prevent a change in control through merger, tender offer, proxy contest or otherwise by making these attempts more difficult or costly to achieve. The issuance of preferred stock could impair the voting, dividend and liquidation rights of common stockholders without their approval.

There is currently an illiquid market for our common shares, and shareholders may be unable to sell their shares for an indefinite period of time.

There is presently an illiquid market for our common shares. There is no assurance that a liquid market for our common shares will ever develop in the United States or elsewhere, or that if such a market does develop that it will continue.

Over-the-counter stocks are subject to risks of high volatility and price fluctuation.

We have not applied to have our shares listed on any stock exchange or on the NASDAQ Capital Market, and we do not plan to do so in the foreseeable future. The OTC market for securities has experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as commodity prices and the investment markets generally, as well as economic conditions and quarterly variations in our results of operations, may adversely affect the market price of our common stock and make it more difficult for investors to sell their shares.

Trading in our securities is on an electronic bulletin board established for securities that do not meet NASDAQ listing requirements. As a result, investors will find it substantially more difficult to dispose of our securities. Investors may also find it difficult to obtain accurate information and quotations as to the price of, our common stock.

Our stock price may be volatile and as a result, shareholders could lose all or part of their investment. The value of our shares could decline due to the impact of any of the following factors upon the market price of our common stock:

failure to meet operating budget;

decline in demand for our common stock;

operating results failing to meet the expectations of securities analysts or investors in any quarter;

downward revisions in securities analysts' estimates or changes in general market conditions;

investor perception of the mining industry or our prospects; and

general economic trends.

In addition, stock markets have experienced extreme price and volume fluctuations and the market prices of securities have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of our common stock.

Outstanding shares that are eligible for future sale could adversely impact a public trading market for our common stock, if a public trading market develops.

All of the shares of common stock that were distributed under the Athena spin-off dividend are free-trading shares. In addition, in the future, we may offer and sell shares without registration under the Securities Act. All of such shares will be "restricted securities" as defined by Rule 144 ("Rule 144") under the Securities Act and cannot be resold without registration except in reliance on Rule 144 or another applicable exemption from registration. Under Rule 144, our non-affiliates can sell restricted shares held for at least six months, subject only to the restriction that we made available public information as required by Rule 144. Our affiliates can sell restricted securities after six months, subject to compliance with the volume limitation, manner of sale, Form 144 filing and current public information requirements. No shares of our common stock are currently eligible for resale under Rule 144.

No prediction can be made as to the effect, if any, that future sales of restricted shares of common stock, or the availability of such common stock for sale, will have on the market price of the common stock prevailing from time to time. Sales of substantial amounts of such common stock in the public market, or the perception that such sales may occur, could adversely affect the then prevailing market price of the common stock.

Owners of our common stock are subject to the “penny stock” rules.

Since our shares are not listed on a national stock exchange or quoted on the Nasdaq Market within the United States, trading in our shares on the OTC market is subject, to the extent the market price for our shares is less than $5.00 per share, to a number of regulations known as the "penny stock rules". The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC, to provide the customer with additional information including current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer's account, and to make a special written determination that the penny stock is a suitable investment for the investor and

receive the investor’s written agreement to the transaction. To the extent these requirements may be applicable they will reduce the level of trading activity in the secondary market for our shares and may severely and adversely affect the ability of broker-dealers to sell our shares, if a publicly traded market develops.

We do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the value of our stock.

We have never paid any cash dividends on any shares of our capital stock, and we do not anticipate that we will pay any dividends in the foreseeable future. Our current business plan is to retain any future earnings to finance the expansion of our business. Any future determination to pay cash dividends will be at the discretion of our Board of Directors, and will be dependent upon our financial condition, results of operations, capital requirements and other factors as our board of directors may deem relevant at that time. If we do not pay cash dividends, our stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

Nevada law and our by-laws protect our directors from certain types of lawsuits.

Nevada law provides that our directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as directors. Our by-laws require us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

ITEM 1B. – UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES

Mining Properties

Descriptions of our mining properties are contained in the Business discussion in this Report.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4.

REMOVED AND RESERVED

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATEDSTOCKHOLDER MATTERS

Effective May 2012, our common stock was approved for quotation on the OTC Bulletin Board under the ticker symbol “MAGE.” The following sets forth the high and low trading prices for the periods shown:


	2012
		High	Low

Second quarter ended June 30	$	1.00	$ 0.10
Third quarter ended September 30	$	0.15	$ 0.41
Fourth quarter ended December 31	$	0.15	$ 0.15

The bid and ask prices of the Company's common stock as of December 31, 2012 were $0.15 and $0.25 respectively, as reported on the OTCBB. The OTCBB prices are bid and ask prices which represent prices between broker-dealers and do not include retail mark-ups and mark-downs or any commissions to the broker-dealer. The prices do not reflect prices in actual transactions. As of March 19, 2013, there were approximately 55 record owners of the Company's common stock.

The OTC Bulletin Board is a registered quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter (OTC) securities. An OTC equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. The OTCBB is not an issuer listing service, market or exchange. Although the OTCBB does not have any listing requirements, per se, to be eligible for quotation on the OTCBB, issuers must remain current in their filings with the SEC or applicable regulatory authority.

Our Board of Directors may declare and pay dividends on outstanding shares of common stock out of funds legally available therefore in its sole discretion; however, to date, no dividends have been paid on common stock and we do not anticipate the payment of dividends in the foreseeable future.

Trading in our common stock is subject to rules adopted by the SEC regulating broker dealer practices in connection with transactions in "penny stocks." Those disclosure rules applicable to penny stocks require a broker dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the SEC. That disclosure document advises an investor that investment in penny stocks can be very risky and that the investor's salesperson or broker is not an impartial advisor but rather paid to sell the shares. The disclosure contains further warnings for the investor to exercise caution in connection with an investment in penny stocks, to independently investigate the security, as well as the salesperson with whom the investor is working and to understand the risky nature of an investment in this security. The broker dealer must also provide the customer with certain other information and must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. Further, the rules require that, following the proposed transaction, the broker provide the customer with monthly account statements containing market information about the prices of the securities.

Recent Sales of Unregistered Securities

None, except as previously reported.

EQUITY COMPENSATION PLAN INFORMATION

We have not adopted any equity compensation plans.

Number of

securities to be

issued upon

exercise of

outstanding

options,

warrants and

rights

Weighted

average

exercise

price of

outstanding

options,

warrants

and rights

Number of securities

remaining available

for future issuances

under equity

compensation plans

(excluding securities

reflected in column

Equity compensation plans approved by

security holders

-0-

$0.00

-0-

Equity compensation plans not approved

by security holders⁽¹⁾

$0.00

-0-

Total

$0.00

-0-

ITEM 6.

SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by the Exchange Act and are not required to provide the information required under this item.

ITEM 7. 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 Gold Corporation.

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Report. The discussion of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.

Forward-Looking Statements

Some of the information presented in this Form 10-Q constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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. We are an exploration stage company and 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.

During 2011 we began exploration work on our Secret Canyon Claims including collecting and assaying 85 soil samples from our claims. In May 2012 we collected and assayed an additional 217 soil samples from our Secret Canyon Claims. Results applicable to our group of 70 unpatented claims were encouraging. Results applicable to our mineral rights pertaining to our nine patented Cowles Option claims were less encouraging and as a result, on June 15, 2012, we gave notice to the owners that we terminated the Option and Mining Lease Agreement without further obligation to the owners effective June 15, 2012. As a result, we wrote off $25,468 of capitalized mineral rights applicable to the Cowles Option and included this cost in abandonment of mineral rights in our statements of operations.

In 2010, we entered into a mining lease which granted us a 10 year right to explore, develop and conduct mining operations on a group of 70 unpatented lode mining claims, included as part of our Secret Canyon Claims, situated in Washoe County, Nevada. The lease required annual renewals. Effective September 28, 2012, we declined to renew the lease without further obligation and expensed our previously capitalized costs to acquire these mineral rights in the amount of $64,261, which is included in abandonment of mineral rights in our statements of operations.

Our primary focus during the next twelve months, and depending on available resources, will be to acquire, explore, and if warranted and feasible, permit and develop our remaining mineral properties.

Results of Operations

Results of Operations for the Years Ended December 31, 2012 and 2011.


	Years Ended December 31,
	2012		2011
Operating expenses:
Exploration costs	$	58,592	$	21,486
Other operating costs		1,504		—
General and administrative expenses		272,670		113,725
Abandonment of mineral rights		89,729		—
Impairment of mineral rights		13,307		—
Total operating expenses		435,802		135,211

Operating loss		(435,802)		(135,211	)

Other income (expense):
Interest expense		(4,888)		(1,284)

Net loss	$	(440,690)	$	(136,495	)

Operating expenses

During the year ended December 31, 2012, our total operating expenses were $435,802 as compared to $135,211 during the year ended December 31, 2011.

During 2012 we incurred $58,592 of exploration costs as compared to $21,486 during the same period in 2011. A significant portion of our 2012 costs was associated with our Secret Canyon Claims leases totaling $28,715. Total exploration costs for 2012 are comprised of assay and geochemical analysis costs totaling $17,023, geologist professional fees totaling $15,682, staking expenses totaling $13,307, fees and licenses totaling $7,940, and other exploration costs totaling $4,857.

Exploration costs totaled $21,486 for the year ended December 31, 2011 and were comprised of assay and geochemical analysis costs totaling $12,565, geologist professional fees totaling $8,049 and other exploration costs totaling $872.

Environmental costs for the year ended December 31, 2012 totaled $1,504, and were comprised of certain permitting costs associated with the Randall Claims. No environmental costs were incurred during the year ended December 31, 2011.

General and administrative expenses totaling $272,670 for the year ended December 31, 2012 were comprised of accounting and audit fees totaling $56,618, legal fees totaling $26,647, management fees to Mr. Power totaling $30,000, investor relations costs of $10,649 and other fees of $3,756. In addition, $145,000 of non-cash financing costs relating to certain related party sales of common stock is included in general and administrative expenses for the year ended December 31, 2012. General and administrative expenses totaling $113,725 for the year ended December 31, 2011 were comprised of accounting and audit fees totaling $23,389, legal fees totaling $39,630, management fees to Mr. Power totaling $30,000, investor relations costs of $16,770 and other general and administrative costs of $3,936.

Effective June 15, 2012, after considering the results of our Secret Canyon Claims soil sample surveys, we decided to terminate our mineral rights agreement under the Cowles Option without further obligation and expensed our previously capitalized costs to acquire these mineral rights in the amount of $25,468 which is included in abandonment of mineral rights in our statements of operations.

Effective September 28, 2012, after considering the results of our Secret Canyon Claims soil sample surveys, the costs to maintain the lease and remote location of the claims, we decided to terminate our mining lease with RS Gold, LLC without further obligation and expensed our previously capitalized costs to acquire these mineral rights in the amount of $64,261 which is included in abandonment of mineral rights in our statements of operations.

We did not incur mineral rights abandonment or impairment charges during 2011.

Interest expense for the years ended December 31, 2012 and 2011 totaled $4,888 and $1,284, respectively, and is attributable to our related party notes payable which accrue interest at the rate of 6% per year. On July 13, 2012, Mr. Power was paid $1,029 representing accrued interest due him on a $20,000 note payable.

Liquidity and Capital Resources:

We intend to meet our cash requirements for the next 12 months through a combination of debt and equity financing by way of private placements, and by utilization of our line of credit established in December 2012. We currently do not have any arrangements in place to complete private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.

Effective December 31, 2012, we entered into a line of credit arrangement with John D. Gibbs, a significant investor, to facilitate timely cash flows for the Company’s operations. The line of credit provides for a maximum balance of $250,000, and accrues interest at 6%, which is payable from time to time and due at maturity. At December 31, 2012 the line of credit had a balance of $115,000. The line of credit expires and becomes due on December 31, 2014.

Our primary priority is to retain our reporting status with the SEC, which means that we will first ensure that we have sufficient capital to cover our legal and accounting expenses. Once these costs are accounted for, in accordance with how much financing we are able to secure, we will focus on exploration and

development of our mineral properties. We will likely not expend funds on the remainder of our planned activities unless we have the required capital.

Cash Flows

A summary of our cash provided by and used in operating, investing and financing activities is as follows:


	Years Ended December,
	2012		2011

Net cash used in operating activities	$	(166,348)	$	(98,421	)
Net cash used in investing activities		(123,200)		(28,286	)
Net cash provided by financing activities		293,850		85,000

Net increase (decrease) in cash		4,302		(41,707	)
Cash and cash equivalents, beginning of period		107		41,814
Cash and cash equivalents, end of period	$	4,409	$	107

As of December 31, 2012, we had $4,409 in cash and a $235,062 working capital deficit. During the year ended December 31, 2012, we experienced a $4,302 net increase in cash.

Net cash used in operating activities during the nine months ended September 30, 2012, was $166,348 and was mainly comprised of our $(440,690) net loss during the period. This amount was offset by non-cash financing costs of $145,000, common stock issued for services of $3,000, non-cash write-downs and impairment of certain mineral rights totaling $103,036, plus a $12,218 increase in accounts payable, a $7,088 increase in amounts due to related parties, and a $4,000 decrease in prepaid expenses during the period.

During the year ended December 31, 2012, we used $123,200 of cash in investing activities during the period, comprise primarily of $113,200 for the purchase of an option agreement with Columbus Silver Corporation, which grants the Company the right to acquire all of Columbus’ interest in its Silver District properties located in La Paz County, Arizona. In addition, advance minimum royalty payments applicable to our Secret Canyon Claims mineral rights were also paid in the amount of $10,000. Effective June 15, 2012, we terminated this agreement without further obligation and expensed this payment and other previously capitalized costs to acquire these mineral rights totaling $25,468 which is included in abandonment of mineral rights in our statements of operations.

During the year ended December 31, 2011, we used $28,286 of cash in investing activities during the period comprised of: $5,000 to acquire an Option to explore and lease claims in our Secret Canyon Project in Washoe County, Nevada; $10,000 to renew this Option for an additional six months; $12,818 for federal, state and county filing and recording fees; and $468 in legal fees.

During the year ended December 31, 2012, cash provided by financing activities was $293,850. Effective December 31, 2012, we entered into a line of credit arrangement with John D. Gibbs, a significant investor, to facilitate timely cash flows for the Company’s operations. Upon establishment of the credit line, a total of $65,000 representing term loans previously made by Mr. Gibbs, was transferred to the line of credit balance. In addition, in December 2012, the Company drew $50,000 from the facility to make a required payment under the option agreement with Columbus Silver Corporation, which grants the

Company the right to acquire all of Columbus’ interest in its Silver District properties located in La Paz County, Arizona. Also, during the year ended December 31, 2012, Mr. Power advanced the Company $30,710, of which $25,060 has been repaid.

Finally, during the year ended December 31, 2012, we sold 13,349,491 common shares to Mr. Gibbs, a significant shareholder, for $213,200 cash. Also during the year Mr. Gibbs advanced the Company $25,000, which was subsequently converted to 2,500,000 shares of common stock in January 2012.

During the year ended December 31, 2011, borrowings from Mr. Power and Mr. Gibbs on term notes payable provided $60,000 of cash from financing activities. In addition, Mr. Gibbs advanced the Company $25,000, which was converted to common stock during the year ended December 31, 2012 as discussed above.

Effective December 31, 2012, we entered into a Credit Agreement with Mr. Gibbs pursuant to which Mr. Gibbs agreed to make additional working capital advances to the Company up to a maximum line balance of $250,000. Advances accrue interest at the rate of 6% per annum with the credit line balance, including accrued interest, due and payable on December 31, 2014. As of March 31, 2013, the outstanding line balance under the Credit facility was $160,000.

Off Balance Sheet Arrangements

We do not have and have never had any off-balance sheet arrangements.

Recent Accounting Pronouncements:

Recently issued Financial Accounting Standards Board Accounting Standards Codification guidance has either been implemented or is not significant to us.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Not applicable.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required by this item are located in Item 15 beginning on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.

CONTROLS AND PROCEDURES

The SEC, as required by Section 404 of the Sarbanes-Oxley Act, adopted rules requiring every company that files reports 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 a material weakness in our internal control over financial reporting which is 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.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2012. 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. Based on this evaluation, management concluded that that our internal control over financial reporting was not effective as of December 31, 2012. Our CEO 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 a material weakness resulting from the combination of the following significant deficiencies:

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.

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, including John C. Power, our President who is also our Principal Accounting Officer, as appropriate, 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, including Mr. Power, 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, Mr. Power concluded that the design and operation of our disclosure controls and procedures were 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 quarter ended December 31, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

Our current executive officers and directors are:


Name	Age	Position
John C. Power	50	President, Secretary and Director

John C. Power has served as President, Secretary and director since our inception in September 2010.

Mr. Power has also served as a director of Athena Silver Corporation since its inception in December 2003 and has served as Athena’s President from December 2005 to December 2007 and from January 2009 to the present and has served as Athena’s Secretary since January 2007.

Mr. Power is also a co-managing member since 2011 of Silver Saddle Resources, LLC that owns mining claims in Nevada.

From March 2010 to present, Mr. Power has severed as co-Managing Member of Ryan Air Exposition, LLC, a private California holding company that invests in antique airplanes. Mr. Power has served as President and director of Alta California Broadcasting, Inc., which operated radio stations, from December 1993 to March 2007; and President and director of Four Rivers Broadcasting, Inc., also a radio broadcaster, from May 1997 to March 2005 and Vice President from March 2005 to the present. Mr. Power has served as Co-Managing Member of Wyoming Resorts, LLC, which owns and operates an historic hotel in Thermopolis, Wyoming, since June 1997; and Mr. Power has served as President of Power Curve, Inc., a private investment company, since 1986. Mr. Power has also been the managing member of Best of Sea Ranch, LLC since December 2004 which operates through a joint venture a vacation home rental business in The Sea Ranch California. Mr. Power has been a general partner of Power Vacaville, LP a real estate investment firm since January 2008. Mr. Power also serves as the vice-president and director of The Tide Community Broadcasting, Inc. since July 2012

From September 2008 to March 2012, Mr. Power served as an officer and director of Hungry Hunter, Inc., a private California-based restaurant enterprise. From March 2008 until February 2010, Mr. Power served as a director of Reserve Energy Corporation, a small private oil and gas exploration and production company; and was Managing Member of Montana Resorts, LLC, which is a holding company for Yellowstone Gateway Resorts, LLC,(from May 2002 until May 2008; and was Managing Member of Yellowstone Gateway Resorts, LLC, which owned and operated the Gallatin Gateway Inn, from May 2002 until May 2008. On November 16, 2004, Yellowstone Gateway Resorts, LLC filed a voluntary petition in bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in response to an adverse arbitration award in favor of a former employee. Yellowstone Gateway Resorts, LLC was successfully reorganized under Chapter 11.

Mr. Power attended, but did not receive a degree from, Occidental College and University of California at Davis.

Involvement in Certain Legal Proceedings

During the last 10 years, except as disclosed above, none of our directors or officers has:

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;

been convicted in a criminal proceeding or subject to a pending criminal proceeding;

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

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.

On June 1, 1998, the SEC issued an Order instituting proceedings alleging, among other things, that Mr. Power violated Section 10(b) of the Exchange Act and Rule 10(b)(5) promulgated thereunder by participating in a manipulation through his personal account of the public trading market for the stock of Premier Concepts, Inc., from approximately June 1994 through December 1994. On November 15, 2005, the US Court of Appeals for the District of Columbia Circuit issued an Opinion and Order dismissing the matter.

Our executive officers are elected at the annual meeting of our Board of Directors held after each annual meeting of our shareholders. Our directors are elected at the annual meeting of our shareholders. Each director and executive officer holds office until his successor is duly elected and qualified, until his resignation or until he is removed in the manner provided by our by-laws.

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.

Conflicts of Interest

Silver Saddle Resources, LLC (“Silver Saddle”) is a private company under common control. Mr. Power and Mr. Gibbs are significant investors and managing members of Silver Saddle.

Magellan, Athena and Silver Saddle are exploration stage companies and each is involved in the business of acquisition and exploration of mineral resources.

Power and Gibbs have not adopted any policy or guidelines to mitigate the potential adverse effects of their conflicting interests between and among, Magellan, Athena and Silver Saddle.

Director Independence

Our common stock is listed on the OTC Bulletin Board’s 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). John C. Power, our sole director would not be considered “independent” under the NASDAQ rule due to the fact that John C. Power is an officer and sole director.

Board Meetings

During the year ended December 31, 2012, our Board held no meetings and has taken numerous actions 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, 2012, all of these filing requirements were satisfied by our officers, directors, and ten- percent holders except for Mr. Gibbs who failed to file three reports covering three transactions in a timely fashion. 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.

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, 2010A Harbison Drive # 312, Vacaville, CA 95687.

ITEM 11. EXECUTIVE COMPENSATION

Director Compensation

Our sole director, Mr. Power, receives no compensation for his services as director.

Executive Compensation

The following table sets forth all compensation paid to Mr. Power since our inception in September 2010:

SUMMARY COMPENSATION TABLE

Name

and

Principal

Position

Year

Salary

($)

Bonus ($)

Stock

Awards

($)

Options

Awards ($)

Non equity

Incentive Plan

Compensation ($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation ($)

Total

($)

John C. Power, President

2012

2011

30,000

Mr. Power is our only executive officer. We entered into a consulting agreement with Mr. Power at the rate of $30,000 per year for his part-time service as our President. Mr. Power devotes approximately 25% of his time and attention to our business.

We did not have outstanding equity awards at December 31, 2011 and 2012.

Employment Agreements

We do not have any written employment agreements other than the above-referenced consulting agreement with any of our executive officers; nor do we have or maintain key man life insurance on Mr. Power.

Equity Incentive Plan

We have not adopted any stock option, equity or other incentive equity plan and have no immediate plans to do so.

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 in order for directors and officers to receive indemnity payments from us.

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 March 31, 2013. 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	36,953,791		(4)	75.62%

John C. Power	10,005,609		(5)	20.47%

All officers and directors as a group (one person)	10,005,609			20.47%


(1)	Unless otherwise stated, address is 2010A Harbison Drive # 312, Vacaville, CA 95687.

(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 48,869,091 shares outstanding on March 31, 2013.

(4)	Includes 466,500 shares owned by TriPower Resources, Inc., of which John D. Gibbs is President and controlling shareholder and includes 50,000 shares owned by Redwood MicroCap Fund, Inc., of which John D. Gibbs is President and controlling shareholder.

(5)	Includes 2,000 shares of common stock owned by John Power as custodian for Robert Henry Josiah Power, a minor. Mr. Power disclaims any pecuniary interest in the shares held as custodian.

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.

Related Parties

Athena Silver Corporation is a company under common control. Mr. Power is also a director and CEO of Athena. 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 a private company under common control. Mr. Power and 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.

Management Fees

On January 1, 2011, we entered into a month-to-month management agreement with Mr. Power requiring a monthly payment, in advance, of $2,500 as consideration for the day-to-day management of Magellan. During the year ended December 31, 2012, we incurred $30,000 of management fees to Mr. Power and these costs are included in general and administrative expenses in our statements of operations.

Notes Payable – Related Parties

Effective August 23, 2011, we entered into an unsecured loan from Mr. Power, evidenced by a $20,000 promissory note. The promissory note bears interest at 6% per annum and the principal plus all accrued interest are due on January 1, 2013. By amendment No. 1 to the promissory note, all principal plus accrued and unpaid interest is due upon demand.

Effective August 23, 2011, we entered into an unsecured loan from Mr. Gibbs, evidenced by a $40,000 promissory note. The promissory note bears interest at 6% per annum and the principal plus all accrued interest are due on January 1, 2013.

Effective February 28, 2012, we entered into an unsecured loan from Mr. Gibbs, evidenced by a $25,000 promissory note. The promissory note bears interest at 6% per annum and the principal plus all accrued interest are due upon demand.

Effective December 31, 2012, we entered into an unsecured credit agreement with Mr. Gibbs with a maximum line balance of $250,000. The current outstanding line balance is evidenced by $160,000 in credit notes. The promissory notes bears interest at 6% per annum and the principal plus all accrued interest are due December 31, 2014.

Due to Related Parties

Accounts payable, accrued interest payable and unsecured, non-interest bearing advances from related parties are included in due to related parties in our balance sheets as follows:


	December 31,
		2012	2	2011

Accounts payable – Mr. Power	$	7,500	$	4,271
Accrued interest payable – related parties		5,143		1,284

Due to related parties - total	$	12,643	$	5,555

Advances Payable – Related Parties

Accounts payable, accrued liabilities and accrued interest payable to related parties are included in due to related parties in our balance sheets as follows:


	December 31, 2012		December 31, 2011
Accounts payable – Mr. Power	$	--	$	4,271
Accrued management fees – Mr. Power		7,500		--
Accrued interest payable – related parties		5,143		1,284
Due to related parties - total	$	12,643	$	5,555

We borrowed and repaid non-interest bearing advances from/to related parties as follows:


Year Ended December 31, 2012
		Advances		Repayments
Mr. Gibbs (through issuance of shares)	$	-	$	25,000
Mr. Power, including entities controlled by Mr. Power		30,710		25,060
	$	30,710	$	50,060


Year Ended December 31, 2011
		Advances		Repayments
Athena Silver Corporation	$	13,000	$	13,000
Silver Saddle Resources, LLC		10,000		10,000
Mr. Gibbs		25,000		0
Mr. Power		15,500		15,500
	$	63,500	$	38,500

Due from Related Parties

We made non-interest bearing advances to related parties and received repayments during the same period as follows:


Year Ended December 31, 2011
	Advances		Repayments
Athena Silver Corporation	$	10,000	$	10,000
Mr. Power		6,000		6,000
	$	16,000	$	16,000

Other Related Party Transaction

Subsequent Events

During 2013, Magellan has drawn $45,000 in its line of credit with its majority shareholder to fund its operations.

Subsequent to December 31, 2012, Mr. Power has made short-term advances of $14,800 and received repayment of short-term advances in the amount of $10,900.

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 in order to attract and retain independent directors. We believe that the costs associated with maintaining such insurance is prohibitive at this time.

ITEM 14.

PRINCIPAL ACCOUNTANTING 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.

The aggregate fees billed for the fiscal years 2012 and 2011 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:


	2012	2011
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	$12,200	$9,400
Audit-related fees - related to the performance of audit or review of financial statements not reported under "audit fees"	0	0
Tax fees - tax compliance, tax advice and tax planning	0	0
All other fees - services provided by our principal accountants other than those identified above	0	0
Total fees	$12,200	$9,400

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.

PART IV

ITEM15 – 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
(7)			14.1	Code of Ethics
*			31	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*			32	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE
		XBRL Instance* XBRL Taxonomy Extension Schema* XBRL Taxonomy Extension Calculation* XBRL Taxonomy Extension Definition* XBRL Taxonomy Extension Labels* XBRL Taxonomy Extension Presentation*

(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 23, 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.

Filed herewith

MAGELLAN GOLD CORPORATION

(An Exploration Stage Company)

TABLE OF CONTENTS


	Page

Report of Independent Registered Public Accounting Firm	1

Balance Sheets	2

Statements of Expenses	3

Statement of Shareholders’ Deficit	4

Statements of Cash Flows	5

Notes to Financial Statements	6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of

Magellan Gold Corporation (An Exploration Stage Company)

Vacaville, California

We have audited the accompanying balance sheets of Magellan Gold Corporation (An Exploration Stage Company) (the “Company”) as of December 31, 2012 and 2011, and the related statements of expenses, stockholders’ deficit and cash flows for the year ended December 31, 2012 and the periods from September 28, 2010 (inception) through December 31, 2012 and 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting

Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the periods then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated significant revenue and has a working capital deficit. These conditions raise significant doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

April 4, 2013

F-1


MAGELLAN GOLD CORPORATION
(An Exploration Stage Company)

BALANCE SHEETS


			December 31, 2012	December 31, 2011
ASSETS
Current Assets
	Cash and cash equivalents		$ 4,409	$ 107
	Prepaid expenses		-	4,000

		Total current assets	4,409	4,107

Mineral rights			117,671	97,507

Total assets			$ 122,080	$ 101,614

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
	Accounts payable		$ 86,178	$ 73,960
	Line of credit - related party		115,000	-
	Due to related parties		12,643	5,555
	Advances payable - related parties		5,650	25,000
	Notes payable - related parties		20,000	60,000

		Total current liabilities	239,471	164,515


Shareholders' deficit:
Preferred shares, $.001 par value, 25,000,000 shares authorized, no shares issued and outstanding			-	-
			-	-
Common shares - $0.001 par value; 100,000,000 shares authorized, 48,869,091 and 33,000,000 shares issued and outstanding			48,869	33,000


	Additional paid-in capital		419,831	49,500
	Accumulated deficit during exploration stage		(586,091)	(145,401)
Total shareholders' deficit			(117,391)	(62,901)

Total liabilities and shareholders' deficit			$ 122,080	$ 101,614

The accompanying notes are an integral part of these financial statements.

F-2


MAGELLAN GOLD CORPORATION
(An Exploration Stage Company)

STATEMENTS OF OPERATIONS

			Years ended December 31,		Inception (September 28, 2010) through
			2012	2011	December 31, 2012

Operating expenses:
	Exploration costs		$ 58,592	$ 21,486	$ 80,579
	Other operating costs		1,504	-	1,504
	General and administrative expenses		272,670	113,725	394,800
	Abandonment of mineral rights		89,729	-	89,729
	Impairment of mineral rights		13,307	-	13,307

		Total operating expenses	435,802	135,211	579,919

Operating loss			(435,802)	(135,211)	(579,919)

Other income (expense):
	Interest expense		(4,888)	(1,284)	(6,172)
Net loss			$ (440,690)	$ (136,495)	$ (586,091)

Basic and diluted net loss per common share			$ (0.01)	$ (0.00)
Basic and diluted net loss per common share			$ (0.01)	$ (0.00)

Basic and diluted weighted-average common shares outstanding			43,570,810	33,000,000
			43,570,810	33,000,000

The accompanying notes are an integral part of these financial statements.

F-3


MAGELLAN GOLD CORPORATION An Exploration Stage Company Statement of Shareholders' Deficit For the period from September 28, 2010 (Date of Inception) through December 31, 2012
	Preferred Stock			Common Stock				Additional Paid-in		Accumulated
	Shares	Amount		Shares		Par Value		Capital		Deficit		Total
Balance, September 28, 2010	-	$ -		-		$ -		$ -		$ -		$ -
Issuance of common shares at $0.0025 per share for settlement of advances payable - related parties, December 2010	-	-		7,391,840		7,392		11,088		-		18,480
Issuance of common shares at $0.0025 per share for cash, December 2010	-	-		25,608,160		25,608		38,412		-		64,020
Net loss	-	-		-		-		-		(8,906)		(8,906)
Balance, December 31, 2010	-	-		33,000,000		33,000		49,500		(8,906)		73,594
Net loss	-			-		-		-		(136,495)		(136,495)
Balance, December 31, 2011	-	-		33,000,000		$ 33,000		$ 49,500		(145,401)		(62,901)
Issuance of common shares at $0.01 per share for settlement of advances payable - related parties, January 2012	-	-		2,500,000		2,500		22,500		-		25,000
Issuance of common shares at $0.01 per share for cash, Jan 2012				2,500,000		2,500		22,500				25,000
Issuance of common shares at $0.01 per share for cash, April 2012	-	-		2,500,000		2,500		22,500		-		25,000
Issuance of common shares at $0.01 per share for cash, May 2012	-	-		2,500,000		2,500		22,500		-		25,000
Issuance of common shares at $0.01 per share for cash, June 2012	-	-		1,500,000		1,500		13,500		-		15,000
Issuance of common shares at $0.01 per share for cash, July 2012	-	-		3,000,000		3,000		27,000		-		30,000
Issuance of common shares at $0.055 per share for cash, August 2012	-	-		1,149,091		1,149		62,051		-		63,200
Issuance of common shares at $0.15 per share for services, October 2012	-	-		20,000		20		2,980		-		3,000
Issuance of common shares at $0.15 per share for cash, October 2012	-	-		200,000		200		29,800		-		30,000
Compensation expense	-	-		-		-		145,000		-		145,000
Net loss	-		-		-		-		-		(440,690)		(440,690)
Balance, December 31, 2012	-		$ -		48,869,091		$ 48,869		$ 419,831		$ (586,091)		$(117,391)

The accompanying notes are an integral part of these financial statements.

F-4


MAGELLAN GOLD CORPORATION
(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

				Years Ended December 31,		Inception (September 28, 2010) through
				2012	2011	December 31, 2012
Operating activities:
	Net loss			$ (440,690)	$ (136,495)	$ (586,091)
	Adjustments to reconcile net loss to net cash
		used in operating activities:
			Non-cash financing costs	145,000	-	145,000
			Common stock issued for services	3,000	-	3,000
			Abandonment of mineral rights	89,729	-	89,729
			Impairment of mineral rights	13,307	-	13,307
		Changes in operating assets and liabilities:
			Prepaid expenses	4,000	(4,000)	-
			Accounts payable and accrued expenses	12,218	36,519	56,178
			Due to related parties	7,088	5,555	12,643
		Net cash used in operating activities		(166,348)	(98,421)	(266,234)

Investing activities:
	Advances to related parties			(21,000)	-	(21,000)
	Repayments of advances to related parties			21,000	-	21,000
	Acquisition of mineral rights			(123,200)	(28,286)	(190,707)
		Net cash used in investing activities		(123,200)	(28,286)	(190,707)

Financing activities:
	Proceeds from advances from related parties			30,710	25,000	136,188
	Payments on advances from related parties			(25,060)	-	(52,058)
	Proceeds from notes payable - related parties			75,000	60,000	100,000
	Proceeds from sale of common stock			213,200	-	277,220
		Net cash provided by financing activities		293,850	85,000	461,350

Net increase (decrease) in cash				4,302	(41,707)	4,409
Cash at beginning of period				107	41,814	-
Cash at end of period				$ 4,409	$ 107	$ 4,409
Supplemental disclosure of cash flow information
	Cash paid for interest			$ 1,029	$ -	$ 1,029
	Cash paid for income taxes			$ -	$ -	$ -

Supplemental disclosure of non-cash investing and
	financing activities:
Increase of accounts payable applicable to acquisition of mineral rights				$ -	$ 30,000	$ 30,000
				$ -	$ 30,000	$ 30,000
Common shares issued for advances payable- related parties				$ 25,000	$ -	$ 43,480
Common shares issued for advances payable- related parties				$ 25,000	$ -	$ 43,480
		Reclass of note payable- related party to line of credit		$ 40,000	$ -	$ 40,000

The accompanying notes are an integral part of these financial statements.

F-5

MAGELLAN GOLD CORPORATION

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

Note 1 – Nature and Continuance of Operations

Nature of Operations

Magellan Gold Corporation (“we” “our”, “us” or Magellan”) was incorporated on September 28, 2010, under the laws of the State of Nevada. We are an exploration stage company and 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.

We have only recently begun operations and we rely upon the sale of our securities as well as advances and loans from our President and significant shareholders to fund our operations as we have not generated any revenue.

Liquidity and Going Concern

Our 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 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, 2012, we had not yet generated any revenues or achieved profitable operations and we have accumulated losses of $586,091 since our inception. We expect to incur further losses in the development of our business, all of which casts substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We may also seek to obtain loans from officers, directors or significant shareholders.

On December 31, 2012 we entered into a $250,000 line of credit arrangement with a significant shareholder. This transaction is further discussed in Note 4.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

Our financial statements are stated in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States (“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.

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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.

Reclassifications

Certain reclassifications may have been made to our prior years’ financial statements to conform to our current year presentation. These reclassifications have no effect on our previously reported results of operations or retained earnings.

Exploration Stage Company

We are an exploration stage company and accordingly, all losses accumulated since inception have been considered as part of our exploration stage activities.

Fair Value of Financial Instruments

We value our financial assets and liabilities using fair value measurements. Our financial instruments primarily consist of cash and cash equivalents, 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 and cash equivalents, 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.

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.

Mineral Rights

We have determined that our mining 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

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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, 2012. No impairment loss was recognized during the period from September 28, 2010 (our inception) through December 31, 2011. However, during the year ended December 31, 2012, we incurred certain impairment and abandonment charges. At December 31, 2012 mineral rights totaling $117,671 were net of $103,036 of impairment and abandonment charges. See Note 3 for discussion of impairment.

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.

Notes Payable – Related Parties

Notes payable to related parties are classified as current liabilities as the note holders have the ability to control the repayment dates of the notes.

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.

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. During the period from September 28, 2010 (our inception) through December 31, 2012, there were no potential common shares outstanding.

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Stock-based Compensation

The Company determines the fair value of stock option awards granted to employees in accordance with FASB ASC Topic 718 – 10 and to non-employees in accordance with FASB ASC Topic 505 – 50.

New Accounting Standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update. Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our financial statements upon adoption.

Recently Adopted Accounting Standards

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Note 3 – Mineral Rights:

As of December 31, 2012 and 2011, our mineral rights consist of the following:


	December 31, 2012		December 31, 2011
Secret Canyon Claims	$	-	$	79,729
Randall Claims		-		13,307
Pony Express Claims		4,471		4,471
Silver District Claims		113,200		-
Total Mineral Rights	$	117,671	$	97,507

Secret Canyon Claims

On March 15, 2011, we purchased a twelve-month Option to explore a group of nine patented claims in Washoe County, Nevada, included as part of our Secret Canyon Claims, along with the right to renew the Option for an additional six months. The Option granted us the right to enter into a Mining Lease during the Option period. On April 4, 2012, the Option was amended to extend the Option term from March 15, 2012, to June 15, 2012, in consideration for a cash payment of $10,000. Effective June 15, 2012, we terminated this agreement without further obligation and expensed our previously capitalized costs to acquire these mineral rights in the amount of $25,468 which is included in abandonment of mineral rights in our statements of operations.

On September 28, 2010, we entered into a mining lease which granted us a 10 year right to explore, develop and conduct mining operations on a group of 70 unpatented lode mining claims, included as part of our Secret Canyon Claims, situated in Washoe County, Nevada. The lease required annual renewals. Effective September 28, 2012, we declined to renew the lease without further obligation and expensed our previously capitalized costs to acquire these mineral rights in the amount of $64,261, which is included in abandonment of mineral rights in our statements of operations.

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Randall Claims

On October 2, 2010, we were assigned a mining lease with RS Gold, LLC from John C. Power our President and director, which granted us the remaining term of a 10 year lease executed on August 18, 2010, giving us the right to explore, develop and conduct mining operations on a group of 10 unpatented lode mining claims situated in Churchill County, Nevada. Under the terms of the lease, the lessor would receive a production royalty of up to three percent of net smelter returns. The lease required us to make annual advance minimum royalty payments to the lessor ranging from $10,000 to $50,000 per year over the life of the lease. We had the right to extend the lease term for an additional 10 years.

On July 16, 2012, we received notice from the Bureau of Land Management that our application to perform certain exploration work on our Randall Claims was not approved and as a result, we impaired 100% of our mineral rights applicable to our Randall Claims and recognized an impairment charge of $13,307 effective June 30, 2012. We have declined to renew the lease, which renewal was due on August 18, 2012, and believe any further payments that may have been defined under the original lease are no longer applicable.

Pony Express Claims

On November 18, 2010, we filed two unpatented lode mining claims giving us the right to explore, develop and conduct mining operations on these claims located in Churchill County, Nevada.

Silver District Claims

On August 28, 2012, we entered into an option agreement with Columbus Silver Corporation, which grants the Company the right to acquire all of Columbus’ interest in its Silver District properties located in La Paz County, Arizona. We paid Columbus an initial $63,200 on signing of the option. The funds to make the initial payment were obtained through the sale of common stock to John D. Gibbs, a significant investor. In addition, we made a $50,000 payment in December 2012 as required under the option agreement. These transactions are more fully discussed in Note 4 and Note 5.

The Silver District property consists of 108 unpatented mining claims, four patented claims held under lease agreements, and one state lease, totaling over 2,000 acres. The property is subject to third party net smelter royalties of varying percentages. We also must make payments under the option agreement to maintain the underlying claims, leases and purchases contracts.

Note 4 – Line of Credit – Related Parties:

Effective December 31, 2012, we entered into a line of credit arrangement with John D. Gibbs, a significant investor, to facilitate timely cash flows for the Company’s operations. The line of credit provides for a maximum balance of $250,000, and accrues interest at 6% annually. The line of credit expires and becomes due on December 31, 2014.

At the effective date of the line of credit, Mr. Gibbs was owed a total of $65,000 from previous loans, $40,000 of which was from the previous year and $25,000 of which was received during the current year. These amounts were converted to the line of credit at December 31, 2012 and are included in the line of credit balance at December 31, 2012. In addition, on December 31, 2012 the Company drew an additional $50,000 on the line of credit to facilitate a required payment due for our Silver District claim as discussed in Note 3. At December 31, 2012 a total of $115,000 was outstanding on the credit facility.

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Accrued interest on the credit facility was $4,524 at December 31, 2012, and is included in Due to related parties on the accompanying balance sheet.

Note 5 – Notes Payable – Related Parties:

Effective February 28, 2012, we entered into an unsecured loan from John D. Gibbs, a significant investor, evidenced by a $25,000 promissory note. The promissory note bears interest at 6% per annum and is due upon demand. As discussed in Note 4, this note was converted into the line of credit in December 2012.

Then, effective August 23, 2011, we entered into an unsecured loan from Mr. Gibbs, a significant investor, evidenced by a $40,000 promissory note. The promissory note bears interest at 6% per annum and is due January 1, 2013. As discussed in Note 4, this note was converted into the line of credit in December 2012.

Effective August 23, 2011, we entered into an unsecured loan from John Power, the Company’s sole executive officer, evidenced by a $20,000 promissory note. The promissory note bears interest at 6% per annum and was to mature on January 1, 2013. Effective December 31, 2012, the Company agreed to convert the Note to payable on demand with thirty days notice from the lender. On July 13, 2012, Mr. Power was paid $1,029 representing all accrued interest on the note through June 30, 2012.

Note 6 - Commitments and Contingencies:

Under the Columbus Silver - Silver District option, we are required to make a $400,000 payment due December 31, 2013, and a final $500,000 payment due December 31, 2014 to complete the purchase. We are also required to make payments under the option agreement to maintain the underlying claims, leases and purchase contracts.

Note 7 – Shareholders’ Equity:

During the period, we issued common shares to Mr. Gibbs, a related party, as follows:


Year Ended December 31, 2012
	Common Shares Issued	Price per Share		Cash Proceeds Received		In Satisfaction of Advances Payable – Related Parties
January 24, 2012	2,500,000	$	0.01	$	—	$	25,000
January 24, 2012	2,500,000		0.01		25,000		—
April 10, 2012	2,500,000		0.01		25,000		—
May 31, 2012	2,500,000		0.01		25,000		—
June 28, 2012	1,500,000		0.01		15,000		—
July 10, 2012	3,000,000		0.01		30,000		—
August 28, 2012	1,149,091		0.055		63,200		—
October 17, 2012	200,000		0.15		30,000		—

The May 31, 2012 sale of common stock was valued at $0.02 per share based on the last trading price prior to the transaction. The difference between the cash proceeds and the total value of the transaction in the amount of $25,000 was charged as a non-cash compensation expense and is included in General and administrative expenses for the year ended December 31, 2012.

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The June 28, 2012 sale of common stock was valued at $0.03 per share based on the last trading price prior to the transaction. The difference between the cash proceeds and the total value of the transaction in the amount of $30,000 was charged as a non-cash compensation expense and is included in General and administrative expenses for the year ended December 31, 2012.

The July 10, 2012 sale of common stock was valued at $0.04 per share based on the last trading price prior to the transaction. The difference between the cash proceeds and the total value of the transaction in the amount of $90,000 was charged as a non-cash compensation expense and is included in General and administrative expenses for the year ended December 31, 2012.

On October 3, 2012 the Company entered into an agreement with a third party to provide certain online marketing services. The agreement specified the work to be performed between October 3^rd and December 31, 2012. The service provider was to receive 20,000 shares of the Company’s common stock with a value of $3,000. On October 3, 2012, a total of 20,000 shares were issued to the service provider at a value of $0.15 per share, which equaled the closing price of the Company’s common stock on that date.

Note 8 – Related Party Transactions:

Conflicts of Interests

Silver Saddle Resources, LLC is also a company under common control. Mr. Power and 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.

Management Fees

On January 1, 2012, we extended, for one year, our month-to-month management agreement with Mr. Power requiring a monthly payment, in advance, of $2,500 as consideration for the day-to-day management of Magellan.

Management fees to Mr. Power totaling $30,000 for both the years ended December 31, 2012 and 2011 are included in general and administrative expenses in our statement of operations.

All management fees due Mr. Power for through December 31, 2012 have been paid with the exception of $7,500 which has been accrued and is included in Due to related parties in the accompanying balance sheet at December 31, 2012.

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Due from Related Parties

We made non-interest bearing advances to related parties and received repayments during the same period as follows:


Year Ended December 31, 2011
	Advances		Repayments
Athena Silver Corporation	$	10,000	$	10,000
Mr. Power		6,000		6,000
	$	16,000	$	16,000

Due to Related Parties

Accounts payable, accrued liabilities and accrued interest payable to related parties are included in due to related parties in our balance sheets as follows:


	December 31, 2012		December 31, 2011
Accounts payable – Mr. Power	$	-	$	4,271
Accrued management fees – Mr. Power		7,500		-
Accrued interest payable – related parties		5,143		1,284
Due to related parties - total	$	12,643	$	5,555

Advances Payable – Related Parties

Advances payable to related parties are as follows:


	December 31, 2012		December 31, 2011
Mr. Power	$	5,650	$	—
Mr. Gibbs		—		25,000
Total advances payable – related parties	$	5,650	$	25,000

We borrowed and repaid non-interest bearing advances from/to related parties as follows:


Year Ended December 31, 2012
		Advances		Repayments
Mr. Gibbs (through issuance of shares)	$	-	$	25,000
Mr. Power, including entities controlled by Mr. Power		30,710		25,060
	$	30,710	$	50,060

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Year Ended December 31, 2011
		Advances		Repayments
Athena Silver Corporation	$	13,000	$	13,000
Silver Saddle Resources, LLC		10,000		10,000
Mr. Gibbs		25,000		0
Mr. Power		15,500		15,500
	$	63,500	$	38,500

On January 24, 2012, we repaid the $25,000 advance payable to Mr. Gibbs by issuing 2,500,000 common shares valued at $25,000, or $0.01 per share. See also Note 7.

Note 9- 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 the years ended December 31, 2012 and period from September 28, 2010( date of inception) through December 31, 2011, are as follows:


	Period Ended December 31,
	2012		2011
Expected federal income tax benefit at statutory rate	$	205,614	$	47,773
Change in valuation allowance		(205,614)		(47,773)
Income tax benefit	$	—	$	—

Our gross net operating loss carry-forwards available to offset future income for federal tax purposes are $586,091 as of December 31, 2012. These NOLs expire on various dates through 2032.

Note 10 – Subsequent Events

During 2013, Magellan has drawn $45,000 in its line of credit with its majority shareholder to fund its operations.

Subsequent to December 31, 2012, Mr. Power has made short-term advances of $14,800 and received repayment of short-term advances in the amount of $10,900.

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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 4, 2013	By__/s/ John C. Power_ John C. Power, President, Principal Executive Officer, Principal Accounting Officer, Secretary & 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/ John C. Power______ John C. Power	President, Principal Executive Officer, Principal Accounting Officer, Secretary & Director	April 4, 2013