Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period

Commission File Number: 000-30371

DYNARESOURCE, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	94-1589426
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
222 W. Las Colinas Blvd., Suite 1910 North Tower Irving, TX	75039
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(972) 869-9400

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    None

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of May 20, 2024, there were 23,371,708 shares of Common Stock of the registrant outstanding.

TABLE OF CONTENTS


PART I.	FINANCIAL STATEMENTS

ITEM 1.	Unaudited Condensed Interim Consolidated Financial Statements	3

	Notes to Unaudited Condensed Interim Consolidated Financial Statements	8

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	28

ITEM 4.	Controls and Procedures	28

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	29

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

ITEM 3.	Defaults Upon Senior Securities	29

ITEM 4.	Mine Safety Disclosures	29

ITEM 5.	Other Information	29

ITEM 6.	Exhibits	30

CERTIFICATIONS


EXHIBIT 31.1		CHIEF EXECUTIVE OFFICER CERTIFICATION

EXHIBIT 31.2		CHIEF FINANCIAL OFFICER CERTIFICATION

EXHIBIT 32.1		CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

MARCH 31, 2024 AND DECEMBER 31, 2023


	2024			2023
	(Unaudited)			(Audited)
ASSETS
Current assets
Cash	$	1,972,389		$	5,603,713
Accounts receivable		1,146,660			880,473
Inventories		2,083,801			2,089,194
Foreign tax receivable		6,017,531			4,434,958
Other current assets		1,181,986			1,137,162
Total current assets		12,402,367			14,145,500
Property and equipment (net of accumulated
depreciation and amortization of $19,582 and $12,239)		95,691			103,034
Right-of-use assets, net		815,630			848,822
Mining concessions		4,132,678			4,132,678
Deferred tax asset, net		4,264,115			4,264,115
Foreign tax receivable		12,356,116			11,768,613
Other assets		177,733			175,588
TOTAL ASSETS	$	34,244,330		$	35,438,350

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	5,054,071		$	2,768,634
Accrued expenses		9,005,788			7,727,621
Derivative liabilities		1,717,200			1,797,341
Note payable		9,262,500			9,750,000
Current portion of operating lease payable		113,462			104,117
Installment notes payable		2,315,382			2,259,432
Total current liabilities		27,468,403			24,407,145
Operating lease payable, less current portion		771,051			825,762
Deferred tax liability		334,236			334,236
Asset retirement obligation		203,033			198,468
TOTAL LIABILITIES		28,776,723			25,765,611
TEMPORARY EQUITY
Series C Senior Convertible Preferred Stock, $0.0001 par value, 1,734,992 shares authorized, issued and outstanding		4,337,480			4,337,480
Series D Senior Convertible Preferred Stock, $0.0001 par value, 3,000,000 shares authorized, 760,000 shares issued and outstanding		1,520,000			1,520,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock, $0.01 par value, 40,000,000 shares authorized 23,371,708 and 23,371,708 issued and outstanding		233,717			233,717
Preferred rights		40,000			40,000
Additional paid-in-capital		61,509,032			61,509,032
Treasury stock, 37,180 shares each period, at cost		(95,023	)		(95,023	)
Accumulated other comprehensive income		900,939			697,700
Accumulated deficit		(62,978,538	)		(58,570,167	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		(389,873	)		3,815,259
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	34,244,330		$	35,438,350

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited)


	2024			2023
REVENUE	$	9,428,856			11,953,079
COSTS AND EXPENSES OF MINING OPERATION
Production cost applicable to sales		1,895,757			1,711,262
Mine production costs		3,755,357			2,529,437
Mine exploration costs		2,459,217			2,216,949
Facilities expansion costs		787,809			285,078
Exploration drilling		920,485			497,400
Camp, warehouse and facilities		1,445,225			1,082,179
Transportation costs		995,867			746,063
Property holding costs		44,047			39,521
General and administrative		1,202,041			2,965,593
Accretion expense		4,565			—
Depreciation and amortization		7,343			—
TOTAL OPERATING EXPENSES		13,517,713			12,073,482
NET OPERATING LOSS		(4,088,857	)		(120,403	)
OTHER INCOME (EXPENSE)
Foreign currency gains		28,077			18,254
Interest expense		(427,888	)		(116,308	)
Derivative mark-to-market gain		80,141			169,434
Other income		156			3,705
TOTAL OTHER INCOME (EXPENSE)		(319,514	)		75,085

NET LOSS BEFORE TAXES		(4,408,371	)		(45,318	)
INCOME TAXES BENEFIT		—			77,023

NET INCOME (LOSS)	$	(4,408,371	)	$	31,705
DEEMED DIVIDEND FOR SERIES C & D PREFERRED		(58,575	)		(58,575	)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(4,466,946	)	$	(26,870	)

LOSS PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.
Basic loss per common share	$	(0.19	)	$	(0.00	)
Weighted average shares outstanding – Basic		23,371,708			22,246,654
Diluted loss per common share	$	(0.19	)	$	(0.00	)
Weighted average shares outstanding – Diluted		23,371,708			22,246,654

OTHER COMPREHENSIVE INCOME
Unrealized foreign currency translation gain		203,239			91,241
TOTAL OTHER COMPREHENSIVE INCOME		203,239			91,241
TOTAL COMPREHENSIVE INCOME (LOSS)	$	(4,205,132	)	$	122,946

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited)


	Preferred A				Common				Preferred		Preferred		Paid In		Treasury		Treasury			Other Comp		Accumulated
	Shares		Amount		Shares		Amount		Rights		Amount		Capital		Shares		Amount			Income		Deficit			Totals

	THREE MONTHS ENDED MARCH 31, 2023

Balance January 1, 2023		1,000	$	1		22,246,654	$	222,467		1	$	40,000	$	56,889,031		12,180	$	(34,773	)	$	112,078	$	(44,036,663	)	$	13,192,141

Other Comprehensive Income																					91,241					91,241

Net Income																							31,705			31,705

Balance, March 31, 2023		1,000	$	1		22,246,654	$	222,467		1	$	40,000	$	56,889,031		12,180	$	(34,773	)	$	203,319	$	(44,004,958	)	$	13,315,087

	THREE MONTHS ENDED MARCH 31, 2024

Balance January 1, 2024		—	$	-		23,731,708	$	233,717		1	$	40,000	$	61,509,032		37,180	$	(95,023	)	$	697,700	$	(58,570,167	)	$	3,815,259

Other Comprehensive Income																					203,239					203,239

Net Loss																							(4,408,371	)		(4,408,371	)

Balance, March 31, 2024		-	$	-		23,731,708	$	233,717		1	$	40,000	$	61,509,032		37,180	$	(95,023	)	$	900,939	$	(62,978,538	)	$	(389,873	)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023

(Unaudited)


	2024			2023
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net income (loss)	$	(4,408,371	)	$	31,705
Adjustments to reconcile net income (loss) to cash used in operating activities
Derivatives mark-to-market gain		(80,141	)		(169,434	)
Accretion expense		4,565			—
Depreciation and amortization		7,343			—
Right-of-use asset amortization		33,192			19,358
Deferred tax asset		—			(77,023	)
Change in operating assets and liabilities
Accounts receivable		(266,187	)		(1,160,955	)
Inventories		5,393			371,930
Foreign tax receivable		(2,170,076	)		(1,544,980	)
Other assets		(46,969	)		(261,771	)
Accounts payable		2,285,437			112,016
Accrued expenses		1,278,167			2,534,906
Customer advances		—			(150,000	)
CASH FLOWS USED IN OPERATING ACTIVITIES		(3,357,647	)		(294,248	)

CASH FLOWS USED IN FINANCING ACTIVITIES
Payments of note payable		(487,500	)		—
Operating lease payments		(45,366	)		(28,868	)
CASH FLOWS USED IN FINANCING ACTIVITIES		(532,866	)		(28,868	)

Effects of foreign currency		259,189			250,186
NET DECREASE IN CASH		(3,631,324	)		(72,930	)
CASH AT BEGINNING OF PERIOD		5,603,713			19,177,138
CASH AT END OF PERIOD	$	1,972,389		$	19,104,208

SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$	214,794		$	—
Cash paid for income taxes	$	—		$	—

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

DYNARESOURCE, INC.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities, History and Organization

DynaResource, Inc. (the “Company” or “DynaResource”) was organized September 28, 1937, as a California corporation under the name of West Coast Mines, Inc. In 1998, the Company re-domiciled to Delaware and changed its name to DynaResource, Inc. The Company is in the business of acquiring, investing in, and developing precious metal properties, and the production of precious metals.

The Company has one wholly owned subsidiary in the United States, DynaMéxico US Holding, LLC and three wholly owned subsidiaries in México, DynaResource de México, S.A. de C.V. (“DynaMéxico”), Mineras de DynaResources S.A. de C.V. (“DynaMineras”) and DynaResource Operaciones de San Jose De Gracia S.A. de C.V. (“DynaOperaciones”). Although the Company considers the three Mexican subsidiaries to be wholly owned, each has issued one qualifying share to a second shareholder as required under Mexican law, with such qualifying shares held by either US Holding or DynaResource’s Chief Executive Officer. DynaMéxico owns a portfolio of mining concessions that currently comprises its 100% interest in the San José de Gracia Project (“SJG”) in northern Sinaloa State, México.

Principles of Consolidation

The unaudited condensed interim consolidated financial statements include the accounts of DynaResource, Inc., as well as the Company’s wholly owned subsidiaries DynaMéxico, DynaMineras and DynaOperaciones. All significant intercompany transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated.

Significant Accounting Policies

The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenues and expenses. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these unaudited, condensed, interim consolidated financial statements.

The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. Management acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that: (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods presented.

Basis of Presentation

These unaudited condensed consolidated interim financial statements reflect the accounts of the Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for all periods presented. Certain information and footnote disclosures normally included in the audited annual consolidated financial statements prepared in accordance with GAAP have been omitted or condensed. These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying value in the normal course of business for the foreseeable future. The information included in these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. These unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments), which, in the opinion of management, are necessary for the fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Use of Estimates

In order to prepare unaudited condensed interim consolidated financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the unaudited condensed interim consolidated financial statements and determines whether contingent assets and liabilities, if any, are

disclosed in the unaudited condensed interim consolidated financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based.

Exploration Stage Issuer (No Reserves Disclosed)

The definitions of Measured Mineral Resource, Mineral Reserve and Mineral Resource are set forth in SEC Regulation S-K, Item 1300 (“Reg. S-K, Item 1300”).

Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.

Mineral reserve is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.

Mineral resource is a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.

As of March 31, 2024, the Company continues to meet the definition of an exploration stage issuer which is defined as an issuer that has no material property with established proven and probable mineral reserves as defined by Regulation S-K, Item 1300.

Segment Information

The Company operates as one segment: test mining and milling gold-silver concentrate for sale from its location in Mexico.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. As of March 31, 2024, the Company has $1,625,819 in deposits in U.S. banks in excess of the FDIC limit. The Company does not have any cash equivalents as of March 31, 2024 and December 31, 2023. The Company reduces this risk by maintaining such deposits at high quality financial institutions that management believes are creditworthy.

Accounts Receivable and Allowances for Doubtful Accounts

Accounts receivable consists of trade receivables which are recorded net of allowance for doubtful accounts for the sale of metal concentrate, as well as net of an embedded derivative based on mark-to-market adjustments for outstanding provisional invoices based on forward metal prices. The allowance for accounts receivable is recorded when receivables are considered to be uncollectible. As of March 31, 2024 and December 31, 2023 no allowance has been made, as management believes all accounts receivable are fully collectable.

Mined Tonnage Inventory

Mined tonnage inventory represents ore that has been mined and is available for further processing. The stockpiles of mined tonnage are measured by estimating the number of tonnes added and removed from the stockpile, an estimate of the contained metals (based on assay data) and the estimated metallurgical recovery rates. Costs are allocated to stockpiles based on the relative values of material stockpiled and processed using current mining costs incurred, including applicable overhead. Material is removed at each stockpile’s average cost per tonne. Stockpiles are carried at the lower of average cost of net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metal prices, less the estimated cost to complete production and bring the product to sale.

Concentrate Inventory

Concentrate inventory includes metal concentrates located either at the Company’s facilities or in transit to its customer’s port. Concentrate inventories are carried at the lower of cost of production or net realizable value based on current metals prices.

Foreign Tax Receivable

Foreign tax receivable is comprised of recoverable value-added taxes (“IVA”) charged by the Mexican government on goods and services rendered. Under certain circumstances, these taxes are recoverable by filing a tax return. Amounts paid for IVA are tracked and held as receivables until the funds are received by the Company.

Property and Equipment

Substantially all property and equipment at the Company’s mines, including design, engineering, mine construction, and installation of equipment are expensed as incurred, as the Company has not established proven and probable reserves on any of its properties. Only certain types of mining equipment which have alternative uses or significant salvage value, may be capitalized without proven and probable reserves.

Office furniture and equipment are depreciated on a straight-line method over estimated economic lives ranging from 3 to 5 years. Leasehold improvements, which relate to the Company’s corporate office, are being amortized over the term of the lease which is 52 months.

Mine Development Costs

Mine development costs are expensed as incurred and include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines, and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines.

When proven and probable reserves (as defined by Reg. S-K, Item 1300) exist, development costs are capitalized. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production would also be capitalized. Costs of start-up activities and costs incurred to maintain current production or to maintain assets are charged to operations as incurred. Costs of abandoned projects are charged to operations upon abandonment. All capitalized costs would be amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves.

Certain costs to design and construct mining and processing facilities may be incurred prior to establishing proven and probable reserves. As no proven and probable reserves have been established on any of the Company’s properties, the design, construction and development costs are not capitalized at any of the Company’s properties.

Mining Concessions

The Company’s mining concessions include acquired interests in development and exploration stage properties and are considered tangible assets. The amount capitalized relating to the Company’s mining concessions represents its fair value at the time of acquisition. If it is determined that the deferred costs related to a property are not recoverable over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination is made. The amounts at which mining concessions and the related costs are recorded do not necessarily reflect present or future values.

The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Mineral properties are monitored for impairment based on factors such as mineral prices, government regulation and taxation, the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and its continued plans to fund exploration programs on the property.

For operating mines, recoverability is measured by comparing the undiscounted future net cash flows to the net book value. When the net book value exceeds future net undiscounted cash flows, an impairment loss is measured and recorded based on the excess of the net book value over fair value. Fair value for operating mines is determined using a combined approach, which uses a discounted cash flow model for the existing operations and a market approach for the fair value assessment of exploration land claims. Future cash flows are estimated based on quantities of recoverable mineralized material, expected gold and silver prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term “recoverable mineralized material” refers to the estimated amount of gold or other commodities that will be obtained after considering losses during processing and treatment of mineralized material. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset

groups. The Company’s estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, and silver, commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties.

The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following:

•

estimated recoverable ounces of gold, silver or other precious minerals;

•

estimated future commodity prices;

•

estimated expected future operating costs, capital expenditures and reclamation expenditures.

A write-down to fair value will be recorded when the expected future cash flow is less than the net book value of the property, or when events or changes in the property indicate that carrying amounts are not recoverable. This analysis will be completed as needed. As of the date of this filing, no events have occurred that would require the write-down of any assets. As of March 31, 2024 and December 31, 2023, no indications of impairment existed.

Asset Retirement Obligation (“ARO”)

The Company records a liability based on the best estimate of costs for site closure and reclamation activities that the Company is legally or contractually required to remediate. The provision for closure and reclamation liabilities is estimated using expected cash flows based on engineering and environmental reports and accreted to full value over time through periodic charges to income.

During 2023, a significant upgrade was made to the milling facility and therefore, an ARO was established as of December 31, 2023 at the estimated costs to decommission the plant and tailings pond at the end of the estimated live of the mines in operation as of December 31, 2023. As the Company is an exploration stage property that does not qualify for asset capitalization, the costs associated with the obligation are charged to operations.

Changes in regulations or laws, any instances of non-compliance with laws or regulations that result in fines, or any unforeseen environmental contamination could result in a material impact to the amounts charged to operations for reclamation and remediation. Significant judgments and estimates are made when estimating the fair value of AROs. Expected cash flows relating to AROs could occur over long periods of time and the assessment of the extent of environmental remediation work is highly subjective. Considering all the factors that go into the determination of an ARO, the fair value of the AROs can materially change over time.

Property Holding Costs

Holding costs to maintain the property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs.

Exploration Costs

Exploration costs, including exploration, development, direct field costs and related administrative costs are expensed in the period incurred.

Leases

The Company adopted ASC 842, which requires recognition of a right-of-use asset and lease liability for all leases at the commencement date based on the present value of lease payments over the lease term. Additional qualitative and quantitative disclosures regarding the Company’s leasing arrangements are also required. The Company adopted ASC 842 prospectively and elected the package of transition practical expedients that does not require reassessment of (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and non-lease components, which consist principally of common area maintenance charges, for all classes of underlying assets and to exclude leases with an initial term of 12 months or less.

Transactions In and Translations of Foreign Currency

The functional currency for the subsidiaries of the Company is the Mexican Peso. As a result, the financial statements of the subsidiaries have been translated from Mexican Pesos into U.S. dollars using (i) year-end exchange rates for balance sheet accounts, and (ii) the weighted average exchange rate of the reporting period for all income statement accounts. Foreign currency translation gains and losses are reported as a separate component of stockholders’ equity and comprehensive income (loss).

Foreign currency transactions are translated into the functional currency of the respective currency of the entity or division, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in foreign currency at period-end exchange rates are recognized in profit or loss. Non-monetary items that are not re-translated at period end are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value, which are translated using the exchange rates as at the date when fair value was determined. Gains and losses are recorded in the statement of operations and comprehensive income (loss).

The unaudited financial statements of the subsidiaries should not be construed as representations that Mexican Pesos have been, could have been or may in the future be converted into U.S. Dollars at such rates or any other rates.

Relevant exchange rates used in the preparation of the unaudited financial statements for the subsidiaries are as follows for the periods ended March 31, 2024 and December 31, 2023 (Mexican Pesos per one U.S. dollar):


	March 31, 2024		December 31, 2023
Current Exchange Rate		16.56		16.97

Relevant exchange rates used in the preparation of the income statement portion of unaudited financial statements for the subsidiaries are as follows for the periods ended March 31, 2024 and 2023 (Mexican Pesos per one U.S. dollar):


	March 31, 2024		March 31, 2023
Weighted Average Exchange Rate for the Three Months Ended		16.98		18.66

The Company recorded currency transaction gains of $28,077 and $18,254 for the three months ended March 31, 2024 and 2023, respectively.

Income Taxes

The Company accounts for income taxes under ASC 740 “Income Taxes” using the liability method, recognizing certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives the deferred income tax charge or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

Income from the Company’s subsidiaries in México are taxed in accordance with applicable Mexican tax law.

Uncertain Tax Position

The Company is subject to income taxes in the U.S. and other foreign jurisdictions, with respect to which some of the outcome is uncertain. The evaluation of the Company’s uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws. The Company establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that it becomes uncertain based upon one of the following conditions: (1) the tax position is not "more likely than not" to be sustained, (2) the tax position is "more likely than not" to be sustained, but for a lesser amount, or (3) the tax position is "more likely than not" to be sustained, but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent, regulations, rulings and case law and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions taken. Although management believes the Company’s reserves are reasonable, no assurance can be given that the final outcome of these uncertainties will not be different from that which is reflected in the Company’s reserves. A number of years may elapse before a particular uncertain tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments varies depending on the tax jurisdiction. Any tax benefit that is or has been reserved because of a failure to meet the "more likely than not" recognition threshold would be recognized in income tax expense in the first interim period when the uncertainty disappears under any one of the following conditions: (1) the tax position is "more likely than not" to be sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired.

Comprehensive Income (Loss)

ASC 220 “Comprehensive Income” establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose consolidated financial statements. The Company’s comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), consisting of unrealized net gains and losses on the translation of the assets and liabilities of its foreign operations.

Revenue Recognition

The Company follows ASC 606 “Revenue from Contracts with Customers”. The Company generates revenue by selling gold and silver concentrate material produced from its mining operations. The Company recognizes revenue for gold and silver concentrate production, net of treatment and refining costs, when it satisfies the performance obligation of transferring control of the concentrate to the customer. This is generally when the material is delivered to the customer facility for treatment and processing, as the customer has the ability (upon such delivery) to direct the use of and obtain substantially all the remaining benefits from the material and the customer has the risk of loss.

The amount of revenue recognized is initially recorded on a provisional basis based on the contract price and the estimated metal quantities based on assay data. Adjustments to the provisional sales prices are made to take into account the mark-to-market changes based on the forward prices of metals until final settlement occurs. The changes in price between the provisional sales price and final sales price are considered an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the concentrate at the quoted metal prices at the time of delivery. The embedded derivative, which does not qualify for hedge accounting, is adjusted to market through revenue at final settlement. Market changes in the prices of metals between the delivery and final settlement dates will result in adjustments to revenues related to previously recorded sales of concentrate. The chief risk associated with the recognition of sales on a provisional basis is the fluctuation (if any) between the estimated quantities of the precious metals based on the initial assay and the actual recovery from treatment and processing.

During the three months ended March 31 2024 and 2023, there were $0 and $9,350,000 respectively of revenue recognized during the period from customer deposit liabilities (deferred contract revenue) from prior periods, and no customer deposits were refunded to the customer due to order cancellation.

Shipping and handling costs are considered fulfillment costs after the customer obtains control of the goods.

Derivative Financial Instruments

Certain warrants are treated as derivative financial liabilities. The estimated fair value, based on the Black-Scholes model, is adjusted on a quarterly basis with gains or losses recognized in the statements of operations and comprehensive income (loss). The Black-Scholes model is based on significant assumptions such as volatility, dividend yield, and expected term.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts receivable, accounts payable, note payable and installment notes payable and derivative liabilities. The carrying amount of cash, accounts receivable, accounts payable and note payable approximates fair value because of the short-term nature of these items. The carrying amount of installment notes payable debt approximates fair value due to the relationship between the interest rate on installment notes payable debt and the Company’s incremental risk adjusted borrowing rate. The fair value of derivative liabilities is based on the Black-Scholes model.

Earnings (Loss) Per Share

Earnings (loss) per share, attributable to the common equity holders of the Company, are calculated in accordance with ASC 260 “Earnings per Share”. The weighted average number of common shares outstanding during each period is used to compute basic earnings (loss) per share. Diluted earnings (loss) per share is computed using the weighted average number of shares and potentially dilutive common shares outstanding. Potentially dilutive common shares are additional common shares assumed to be exercised. Potentially dilutive common shares consist of stock warrants and convertible preferred shares and are excluded from diluted earnings (loss) per share computation in periods where the Company has incurred a net loss, as their effect would be considered anti-dilutive.

The Company’s Series C Preferred Stock and related outstanding dividends are convertible into 2,853,721 shares of Common Stock as of March 31, 2024 and 2023, respectively. The Company’s Series D Preferred Stock and related outstanding dividends are convertible into 820,800 shares of common stock as of March 31, 2024 and 2023. During the periods ended March 31, 2024 and 2023, the Company had warrants outstanding to purchase 892,165 shares of common stock. These shares related to these potentially dilutive common shares are excluded in the weighted average diluted shares outstanding for the periods ended March 31, 2024 and 2023 as including them would be anti-dilutive.

Related Party Transactions

FASB ASC 850, “Related Party Disclosures” requires companies to include in their financial statements, disclosures of material related party transactions. The Company discloses all material related party transactions. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

Significant Judgments, Estimates and Assumptions

The preparation of financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. These judgments, estimates and assumptions are regularly evaluated and are based on management’s experience and knowledge of the relevant facts and circumstances. While management believes the estimates to be reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

The areas which require significant judgment and estimates that management has made at the financial reporting date, that could result in a material change to the carrying amounts of assets and liabilities, in the event actual results differ from the assumptions made, relate to, but are not limited to the following:

Significant judgments:

•

the determination of income tax is inherently complex and requires making certain estimates and assumptions about future events;

•

quantitative and qualitative factors used in the assessment of impairment of the Company’s mineral property;

•

the analysis of resource calculations, drill results, etc. which can impact the Company’s assessment of impairment, and provisions, if any, for environmental rehabilitation and restoration; and

•

the valuation of derivatives liabilities requires management to determine the most appropriate valuation model and inputs to the valuation model.

Reclassification

Amounts in the Condensed Interim Consolidated Statement of Cash Flows related to right-of-use-assets and operating lease payments for the three months ended March 31, 2023, have been reclassified to conform to the current year presentation.

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. The Company is currently evaluating the potential impact of the adoption of this new guidance on our Consolidated Financial Statements and related disclosures.

NOTE 2 - INVENTORIES

Inventories are carried at the lower of cost or fair value and consist of mined tonnage, gravity-flotation concentrates, and gravity tailings (or flotation feed material). Inventory balances as of March 31, 2024 and December 31, 2023 were as follows:


	2024		2023
Mined tonnage	$	1,930,424	$	2,061,149
Gold-Silver concentrates		153,377		28,045
Total inventories	$	2,083,801	$	2,089,194

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of March 31, 2024 and December 31, 2023:


	2024			2023
Leasehold improvements	$	21,274		$	21,274
Office equipment		42,493			42,493
Office furniture and fixtures		24,453			24,453
Other		27,053			27,053
Subtotal		115,273			115,273
Less: Accumulated depreciation and amortization		(19,582	)		(12,239	)
Total property and equipment, net	$	95,691		$	103,034

Depreciation and amortization have been provided over each asset’s estimated useful life. Depreciation and amortization expense was $7,343 and $0 for the three months ended March 31, 2024 and 2023, respectively.

NOTE 4 - MINING CONCESSIONS

Mining properties consist of the San José de Gracia concessions. Mining Concessions were $4,132,678 as of March 31, 2024 and December 31, 2023. There was no depletion expense during the three months ended March 31, 2024 and 2023, as the Company is an exploration stage issuer (See Note 1).

NOTE 5 - ACCRUED LIABILITIES

As of March 31, 2024 and December 31, 2023, the Company had the following accrued liabilities:


	March 31,		December 31,
	2024		2023
Accrued interest	$	2,625,231	$	2,352,869
Accrued mining expenses		2,562,258		2,104,938
Accrued payroll taxes		1,331,409		1,122,644
Other accrued liabilities		2,486,890		2,147,170
Total accrued liabilities	$	9,005,788	$	7,727,621

NOTE 6 - DERIVATIVE LIABILITY

Warrants Issued With the Notes Convertible Into Series D Preferred

In fiscal 2020, the Company closed a financing agreement with Golden Post Rail, LLC (“Golden Post”) and certain shareholders whereby the Company issued convertible promissory notes that bore interest at 10% and were convertible into shares of Series D Senior Convertible Preferred Stock and common stock purchase warrants (“2020 warrants”) at an exercise price of $0.01 per share, with an expiry of ten years. These 2020 warrants contain anti-dilution provisions. See Note 11. The Company analyzed the conversion features of the promissory notes convertible into Series D Preferred Stock and determined that the 2020 warrants and remaining purchaser warrants issued with such notes qualified as a derivative liability. The fair value was required to be allocated among the notes, the notes’ conversion features, and the 2020 warrants and remaining purchaser warrants, and then remeasured at each reporting date. The Company performed a valuation of the conversion feature of the 2020 warrants and remaining purchaser warrants. In performing the valuation, the Company applied the guidance in ASC 820, “Fair Value Measurements”, to nonfinancial assets and liabilities that are recognized or disclosed at fair value on a nonrecurring basis. ASC 820 defines fair value as 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 (exit price). To measure fair value, the Company incorporates assumptions that market participants would use in pricing the asset or liability and utilizes market data to the maximum extent possible.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The Company considered the inputs in this valuation to be level 3 in the fair value hierarchy under ASC 820 and used an equity simulation model to determine the value of conversion feature of the Warrants issued with the notes convertible into Series D Preferred based on the assumptions below:


Period Ended	March 31, 2024			December 31, 2023
Annual volatility rate		126	%		123	%
Risk free rate		4.59	%		4.23	%
Remaining term	6.12 years			6.37 years
Fair value of common stock	$	1.93		$	2.02

For the three and twelve months ended March 31, 2024 and December 31, 2023, an active market for the Company’s common stock did not exist. Accordingly, the fair value of the Company’s common stock was estimated using a valuation model with level 3 inputs.

The below table represents the change in the fair value of the derivative liability during the three and twelve months ended March 31, 2024 and December 31, 2023.


Period Ended	March 31, 2024			December 31, 2023
Fair value of derivative (warrants), beginning of period	$	1,797,341		$	1,905,078
Exercise of warrants		-			-
Change in fair value of derivative		(80,141	)		(107,737	)
Fair value of derivative (warrants), end of period	$	1,717,200		$	1,797,341

NOTE 7 - ADVANCE CREDIT LINE FACILITY/CUSTOMER ADVANCES

On February 4, 2021, the Company entered into an Advance Credit Line Facility and Purchase Agreement (the “ACL”), with a commercial buyer. On August 2, 2023, the ACL was extended through December 2026 in an Amendment Agreement (the “Amendment”). Under the terms of the ACL and Amendment:

•

The Company will deliver 100% of its produced concentrates to the buyer and provider of the ACL, through December 31, 2026, with evergreen annual extensions thereafter until either party terminates with at least 365 days’ notice;

•

An initial ACL was established by the buyer in the amount of $3.75M USD.

•

On May 1, 2021, the ACL increased to an amount equal to 80% of the prior 3 months’ revenue.

•

Each successive month, the ACL shall be adjusted according to the Company’s prior 3 months’ revenue to a maximum advance line of $17.5 million as specified in the Amendment.

•

The ACL shall never be less than $3.75M USD.

•

The ACL will be interest free for 45 days.

•

The ACL is to be repaid through deliveries of concentrates or cash within 120 days.

•

Beginning in September 2023, up to $10M of the ACL advance may be converted into a one-year installment loan bearing interest at 3M SOFR + 7.5% and amortized as follows: Month 1, interest only; Month 2-11, 5% principal plus interest; and Month 12, final 50% principal plus interest. Converting the advance amount into an installment loan will reduce the available on a pro rata percentage basis;

•

If the ACL is converted into an installment loan subsequent deliveries during the term of the loan will be paid in cash within ten days of delivery;

•

The Amendment provides the buyer with a right of first refusal during the Offtake Agreement, to provide offtake financing and purchase other concentrates (zinc, silver, copper, etc) and dore from the Company’s open pit and underground operations.

The ACL was included under Customer Advances on the unaudited, condensed, interim consolidated balance sheet, prior to December 1, 2023.

Deposits under the Advance Credit Line Facility

Under the terms of the ACL, the Company received the following advances from the buyer (in millions):

(1)

$9.35 advance on December 28, 2022. Settled on February 16, 2023.

(2)

$9.60 advance on February 21, 2023. Settled on March 31, 2023.

(3)

$9.20 advance on March 31, 2023. Settled on May 17, 2023.

(4)

$9.85 advance on May 18, 2023. Settled on June 28, 2023.

(5)

$10.0 advance on June 29, 2023. Settled on August 14, 2023.

(6)

$10.75 advance on August 17, 2023. Settled on September 16, 2023.

(7)

$9.75 advance on September 29, 2023. Converted to a one-year note payable on December 1, 2023. (Note 8).

NOTE 8 - NOTE PAYABLE

On December 1, 2023, the Company exercised its option under the ACL to convert the outstanding ACL balance of $9,750,000 into a one-year note payable bearing interest at 3M SOFR + 7.5%. The note is repayable as follows: Month 1, interest only; Month 2-11, 5% principal plus interest; and Month 12, final 50% principal plus interest.

NOTE 9 – INSTALLMENT NOTES PAYABLE

In June 2018, the Company entered into financing agreements for the unpaid mining concession taxes on the Francisco Arturo mining concession for the year ended December 31, 2017 and the period ending June 30, 2018 in the amount of $1,739,392. The Company paid an initial 20% payment of $347,826 and financed the balance over 36 months at an interest rate of 22% per annum.

In February 2019, the Company entered into a financing agreement for unpaid mining concession taxes on the Francisco Arturo mining concession for the year ended December 31, 2018 in the amount of $335,350. The Company paid an initial 20% payment of $67,070 and financed the balance over 36 months at an interest rate of 22% per annum.

In June 2018, the Company applied for a reduction of the Francisco Arturo mining concession, from 69,121 hectares to 3,280 hectares. On July 31, 2018, the application for reduction was approved and the Company paid an initial amount of 985,116 MNP (Pesos), for the second semester 2018 mining concessions taxes on the reduced Francisco Arturo mining concession. The Company continues to accrue an amount of $22,500 (USD) per semester (six months) on the reduced Francisco Arturo mining concession.

As of June 2019, the Company ceased making monthly payments on the above noted Francisco Arturo concession notes and has petitioned the Hacienda (Mexican federal tax authority) for a reduction in the liability which is pro-rata to the reduction in the Francisco Arturo concession. For financial reporting purposes the Company continues to carry all notes (to finance unpaid mining concession taxes) at their unpaid principal amount and accrues interest on a monthly basis. As of March 31, 2024, $2,423,991 of accrued interest on the notes was included in accrued liabilities on the unaudited consolidated balance sheet.

In October 2019, the Company entered into a financing agreement for unpaid mining concession taxes on the core mining concessions in the amount of $299,474. The Company paid an initial 20% payment of $59,895 and financed the balance over 36 months at an interest rate of 22%.

The following is a summary of the activity during the three months ended March 31, 2024:


Balance December 31, 2023	$	2,259,432
Exchange rate adjustment		55,950
2024 principal payments		—
Balance March 31, 2024	$	2,315,382

NOTE 10 - ASSET RETIREMENT OBLIGATION

During 2023, a significant upgrade was made to the milling facility and therefore, an ARO has been established as of December 31, 2023 at the estimated undiscounted costs totaling $316,800 to decommission the plant and tailings pond at the end of the estimated

live of the mines in operation as of December 31, 2023, discounted using credit-adjusted, risk-free interest rate of 9.2%. As this is

an exploration stage property that does not qualify for asset capitalization, the costs associated with the obligation are charged to

operations.

Asset retirement obligation consists of the following as of March 31, 2024 and December 31, 2023:


	March 31,		December 31,
	2024		2023
Asset retirement obligation at beginning of year	$	198,468	$	-
Additions to ARO liability		—		198,468
Accretion		4,565		—
Asset retirement obligation at end of year	$	203,033	$	198,468

NOTE 11 - STOCKHOLDERS’ EQUITY

The total number of shares of all classes of capital stock which the corporation has the authority to issue is 60,001,000 shares, consisting of (i) 20,001,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”), of which 1,734,992 are designated as Series C Preferred Stock, and 3,000,000 shares are designated as Series D Preferred Stock and (ii) 40,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”). As of March 31, 2024, 15,266,008 shares of Preferred Stock remain undesignated.

Series A Preferred Stock

As of March 31, 2024 and December 31, 2023 no shares of Preferred A stock were outstanding. On April 19, 2023, the Company repurchased the Series A Preferred Stock from its Chief Executive Officer (“CEO”). The Series A Preferred shares were subsequently cancelled. On July 17, 2023, the Company amended its certification of incorporation to cancel the Series A Preferred Stock.

Series C Senior Convertible Preferred Stock

As of March 31, 2024 and December 31, 2023 there were 1,734,992 Series C Preferred shares outstanding. As of March 31, 2024, these Series C Preferred Shares are convertible to common shares at $1.95 per share or redeemable in cash at the shareholder’s option and include anti-dilution protection. The Series C Preferred Shares may receive a 4% per annum dividend, payable if available, and in arrears. The dividend is calculated at 4% of $4,337,480 payable annually on June 30th. As of March 31, 2024, dividends for the years 2016 to 2024 totaling $1,227,276 were in arrears.

Due to the nature of the Series C Preferred Shares as mandatorily redeemable, the Series C Preferred Shares are classified as “temporary equity” on the balance sheet.

Series D Senior Convertible Preferred Stock

On May 14, 2020, the Company closed an additional financing and related agreements with certain shareholders totaling $4,020,000 which was convertible into Series D Senior Preferred Stock. The noteholders also received the 2020 warrants, as outlined in Note 6, for the purchase of an aggregate of 1,260,633 shares of the Company’s common stock at an exercise price of $.01 a share.

On October 7, 2021, the Company paid $2,500,000 to repurchase one note. The remaining ten noteholders elected to convert their notes totaling $1,520,000 into Series D Preferred Stock at $2.00 per share. Concurrently with the note conversion the noteholders exercised 368,468 of the 2020 warrants to purchase 368,468 shares of the Company’s common stock at $.01 per share. On October 18, 2021, the Company issued 760,000 shares of Series D Preferred Stock for these notes. The Series D Preferred Stock may receive a 4% per annum dividend, payable if available, and in arrears. The dividend is calculated at 4.0% of $1,520,000 payable annually on October 18th. As of December 31, 2023 dividends for the years 2022 and 2023 totaling $121,600 were in arrears.

Due to the nature of the Series D Preferred as mandatorily redeemable by the Company at the election of the Series D Preferred stockholder at any time following maturity, the Series D Preferred Stock is classified as “temporary equity” on the balance sheet.

The deemed dividends on the Series C and D Preferred Stock for the three months ended March 31, 2024 and 2023, were $58,575 and $58,575, respectively. As the Company has not declared these dividends, it is required as an item “below” the net income (loss) amount on the accompanying unaudited condensed interim consolidated statements of income.

Preferred Stock (Undesignated)

In addition to the 1,734,992 shares designated as Series C Preferred Stock, and the 3,000,000 shares designated as Series D Preferred Stock, the Company is authorized to issue an additional 15,266,008 shares of Preferred Stock, having a par value of $0.0001 per share. The Board of Directors of the Company has authority to issue the Preferred Stock from time to time in one or more series, and with

respect to each series of the Preferred Stock, to fix and state by the resolution the terms attached to the Preferred Stock. As of March 31, 2024 and December 31, 2023, there were no other shares of Preferred Stock outstanding.

The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all the foregoing respects and in any other manner. The Board of Directors may increase the number of shares of Preferred Stock designated for any existing series by a resolution adding to such series authorized and unissued shares of Preferred Stock not designated for any other series. Unless otherwise provided in a particular Preferred Stock designation, the Board of Directors may decrease the number of shares of Preferred Stock designated for any existing series by a resolution subtracting from such series authorized and unissued shares of Preferred Stock designated for such existing series, and the shares so subtracted shall become authorized, unissued and undesignated shares of Preferred Stock.

Common Stock

The Company is authorized to issue 40,000,000 common shares at a par value of $0.01 per share. These shares have full voting rights. As of both March 31, 2024, and December 31, 2023, there were 23,371,708 shares of common stock outstanding. No dividends were declared or paid during the three months ended March 31, 2024 and 2023.

Preferred Rights

The Company issued “Preferred Rights” and received $784,500 for these rights. This has been reflected as “Preferred Rights” in stockholders’ equity in the accompanying consolidated balance sheets. As of March 31, 2024, $744,500 had been repaid, leaving a current balance of $40,000 as of March 31, 2024 and December 31, 2023.

Stock Issuances

On August 4, 2023 the Company issued 1,000,000 shares of common stock for $5,000,000 cash consideration.

Treasury Stock

During the year ended December 31, 2023, 25,000 shares of the Company’s common stock previously issued for services were returned to the Company as part of a settlement of fees.

There were 37,180 shares of treasury stock outstanding as of March 31, 2024 and December 31, 2023.

2023 Activity

As of March 31, 2024, the Company had outstanding warrants, which were a part of the issuance of notes convertible into Series D Convertible Preferred Stock in 2020, to purchase 892,165 shares of common stock:


	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Intrinsic Value
Balance as of December 31, 2023		892,165	$	0.01		6.37		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Balance as of March 31, 2024		892,165		0.01		6.12		-
Exercisable as of March 31, 2024		892,165	$	0.01		6.12		-

A derivative liability was incurred at the issuance of the Series D warrants in 2020. As of March 31, 2024, the derivative liability totaled $1,717,200. See Note 6 above.

NOTE 12 – STOCK BASED COMPENSATION

On February 19, 2024, pursuant to the newly adopted DynaResource, Inc. 2024 Equity Incentive Plan, the Company awarded a board member options to purchase up to 400,000 shares of Common Stock of the Company, par value $0.01 per share, for an exercise price of $5.00 per share, with such options vesting in 25% increments on each of the first four anniversaries of the date of the award.

Under ASC 718, the fair value of the options at the date of issuance was determined using the Black Scholes model and will not be adjusted for subsequent changes in fair value. Expense is recorded annually, upon vesting, on a prorata basis over the vesting period. The Company recognizes forfeitures as they occur.

The inputs utilized in calculating the fair value are as follows:


Period Ended	March 31, 2024			December 31, 2023
Annual volatility rate		127.93	%		—
Risk free rate		4.36	%		—
Remaining Term	4				—
Fair Value of stock options	$	1.15			—

NOTE 13 - INCOME TAXES

The Company has adopted ASC 740-10, “Income Taxes”, which requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable (deferred tax liability) or benefit (deferred tax asset). Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Our income tax expense and effective income tax rate are significantly impacted by the mix of our domestic and foreign earnings before income taxes. The Mexican applicable statutory rate is 30% which is higher than the U.S. federal and state combined statutory rate of approximately 21%.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Concession Taxes

The Company is required to pay taxes in México in order to maintain mining concessions owned by DynaMéxico. Additionally, the Company is required to incur a minimum amount of expenditures each year for all concessions held. The minimum expenditures are calculated based upon the land area, as well as the age of the concessions. Amounts spent in excess of the minimum may be carried forward indefinitely over the life of the concessions and are adjusted annually for inflation. Based on Management’s recent business activities and current and forward plans and considering expenditures on mining concessions from 2002 to 2017 and continuing expenditures in current and forward activities, the Company does not anticipate that DynaMéxico will have any difficulties meeting the minimum annual expenditures for the concessions ($388 - $2,400 Mexican Pesos per hectare). DynaMéxico retains sufficient carry- forward amounts to cover over 10 years of the minimum annual expenditure (as calculated at the 2017 minimum, adjusted for annual inflation of 4%).

Leases

In addition to the surface rights held by DynaMéxico pursuant to the Mining Act of México and its Regulations (Ley Minera y su Reglamento), DynaMineras maintains access and surface rights to the SJG Project pursuant to a 20-year Land Lease Agreement. The 20 Year Land Lease Agreement with the Santa Maria Ejido Community surrounding San Jose de Gracia was dated January 6, 2014 and continues through January 2033. It covers an area of 4,399 hectares surrounding the main mineral resource areas of SJG and provides for annual lease payments on January 1st each year by DynaMineras, in the amount of $1,359,443 Pesos (approximately $76,000 USD) adjusted for inflation based on the Mexico minimum wage increase. Rent is $5,296,950 Pesos (approximately $321,000 USD) for the year ended December 31, 2024, which will be paid during the second quarter of 2024. The Land Lease Agreement provides DynaMineras with surface access to the core resource areas of SJG (4,399 hectares) and allows for all permitted mining and exploration activities.

The Company leases office space for its corporate headquarters in Irving, Texas. In February 2023, the Company entered into a 52- month extension of the lease with additional office space. As part of the agreement, the lease term commenced and the Company received four months free rent upon completion of the finish out of the new space. The expansion was completed and the Company moved into the office space effective August 1, 2023. The Company makes tiered lease payments on the first of each month.

The Company determines if a contract is or contains a lease at inception. As of March 31, 2024, the Company has two operating leases: 52 months lease for office space with a remaining term of 44 months and the twenty-year ground lease in association with its México mining operations with a remaining term of approximately ten years. Variable lease costs consist primarily of variable common area maintenance, storage, parking and utilities. The Company’s leases do not have any residual value guarantees or restrictive covenants.

As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. These discount rates for leases are calculated using the Company’s interest rate of promissory notes.

NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The ASC 820 guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 Inputs - Quoted prices for identical instruments in active markets.

Level 2 Inputs - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs - Instruments with primarily unobservable value drivers.

As of March 31, 2024 and December 31, 2023, the Company’s financial assets and liabilities were measured at fair value using Level 3 inputs, with the exception of cash, which was valued using Level 1 inputs. A description of the valuation of the Level 3 inputs is discussed in Note 6.


	Total		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Fair Value Measurement as of March 31, 2024:
Liabilities:
Derivative Liabilities	$	1,717,200	$	-	$	-	$	1,717,200
Totals	$	1,717,200	$	-	$	-	$	1,717,200
Fair Value Measurement as of December 31, 2023:
Liabilities:
Derivative Liabilities	$	1,797,341	$	-	$	-	$	1,797,341
Totals	$	1,797,341	$	-	$	-	$	1,797,341

NOTE 16 - CUSTOMER CONCENTRATION

For the periods ended March 31, 2024 and December 31, 2023, one customer accounted for 100% of revenue and accounts receivable.

NOTE 17 – GEOGRAPHICAL CONCENTRATIONS

The Company operates as one segment: test mining and pilot mining gold-silver concentrate for sale from its location in Mexico, and had the following geographic concentrations as of March 31, 2024 and December 31, 2023:



	Mexico		United States		Total
March 31, 2024
Mineral property	$	4,132,678	$	—	$	4,132,678
Property and equipment, net		—		95,691		95,691
Current assets		10,394,111		2,008,256		12,402,367
Other assets		15,828,208		1,785,386		17,613,594
Total assets	$	30,354,997	$	3,889,333	$	34,244,330

December 31, 2023
Mineral property	$	4,132,678	$	—	$	4,132,678
Property and equipment, net		—		103,034		103,034
Current assets		8,475,858		5,669,642		14,145,500
Other assets		15,271,752		1,785,386		17,057,138
Total assets	$	27,880,288	$	7,558,062	$	35,438,350

NOTE 18 – RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2024 and 2023, the Company paid or accrued $87,500 and $100,000 in management fees to directors. As of March 31, 2024, $187,500 of amounts included in accounts payable are due to related parties.

NOTE 19 - SUBSEQUENT EVENTS

The Company has evaluated events from March 31, 2024, through the date whereupon these condensed, interim consolidated financial statements were issued and has described below the events subsequent to the end of the period:

In April 2024, as part of the Company’s organizational, operating and tax strategy in Mexico, the Company purchased Minera de Alica S.A. de C.V., a Mexican corporation with no assets, liabilities or activity for 95,000 pesos (approximately $5,600 USD).

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to in this report as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to in this report as the Exchange Act. Forward-looking statements are not statements of historical fact but rather reflect our current expectations, estimates and predictions about future results and events. relating to our mining business, including resource estimates, exploration efforts, results and expenditures, development initiatives at the San Jose de Gracia Project, estimated production and capacity, costs, capital expenditures, expenses, recoveries, gold prices, sufficiency of assets, ability to discharge liabilities, liquidity management, financing needs, environmental compliance expenditures, environmental, social and governance (“ESG”) and human capital management initiatives, risk management strategies, including capital resources and use, cash flow maximization, mine life and other strategic initiatives. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,” “hopes,” “may,” “should,” “plan,” “projected,” “contemplates,” “anticipates” or similar words and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Forward-looking information in this report includes, but is not limited to, statements regarding the beliefs, plans, expectations or intentions of management, as of the date of this presentation, regarding: (i) DynaResource, Inc.’s (the “Company”) ability to develop its exploration assets via operational cash flow from gold concentrate production; and (ii) the Company’s plans and expectations regarding its proposed 2024 exploration program for its San Jose de Gracia Project. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that these expectations and assumptions will prove to be correct. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including, without limitation, risks related to: (1) fluctuations in commodity pricing, specifically gold and silver; (2) the Company’s ability to retain or engage qualified employees or contractors necessary to conduct mill operations at its San Jose de Gracia Facility; (3) a decreased demand for gold, silver and other minerals; (4) unexpected difficulties with the milling and the extraction of minerals from the Company’s projects; (5) unexpected interruptions and problems encountered in the operation of the San Jose de Gracia Facility; (6) factors that delay or cause difficulties in timing of shipments of concentrates by the Company; (7) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges; (8) the possibility that the Company may not have sufficient capital to operate its San Jose de Gracia Facility or facilitate the further exploration of San Jose de Gracia; (9) inflationary pressures; (10) continued access to financing sources; (11) government orders that may require temporary suspension of operations or effects on our suppliers (12) the effects of environmental and other governmental regulations and government shut-downs; (13) the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries; and (14) our ability to raise additional financing necessary to conduct our business, make payments or refinance our debt and (15) other factors beyond the Company’s control.

There is a significant risk that such forward-looking statements will not prove to be accurate. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Given the current state of the global financial markets, global commodity markets, especially the recent volatility in gold and silver prices and current economic conditions, any forward-looking statements or projections may be impacted significantly. Consequently, there is no representation by the Company that actual results achieved will be the same as those forecast. You are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Company

The Company is a minerals investment, management, and exploration company, and currently conducting test mining and pilot milling operations through an operating subsidiary in México, with specific focus on the prolific San Jose de Gracia high grade gold project in México.

We conduct activities in México through our operating subsidiary DynaResource de México SA de CV (“DynaMéxico”). We own 100% of the outstanding shares of DynaMéxico, and DynaMéxico owns 100% of mining concessions, equipment, camp and related facilities which comprise the San José de Gracia Property (“SJG”), in northern Sinaloa State, México.

In addition to investing in the increase and expansion of its test mining and milling activities at SJG in 2023, the Company has focused on corporate governance, with the intention of meeting the listing requirements for other exchanges in the US and/or Canada.

Project Improvements, Expansion and Increased Output (2017 To Present)

The Company continues its business plan of test mining and pilot milling operations at SJG, and to improve, increase and expand test mining and pilot milling operations and generally, to increase production of gold ounces, and since 2022 to continue exploration activities at SJG with the target to increase primary gold resources. Since the January 2015 startup of the test mining and milling activities at SJG, the Company has increased daily output from an initial average of 100 tons per 24-hour operating day, to a current average of approximately 750 tons per 24-hour operating day.

Since January 2017, the Company has expended approximately $30 million USD in non-recurring costs, generally classified as project improvements and expansion costs which have been expensed in the Company’s financial statements. These funds have been provided primarily from cash flows from operations.

Of the approximately $30 million in non-recurring costs, the Company has spent the following on facilities expansion:


Mill Expansion	$	7,893,000
Tailings Pond Expansion		1,464,000
Machinery and Equipment		3,353,000
Mining Camp Expansion		272,000
Total	$	12,982,000


The Company has spent the following amounts on mine development:

Mine Development - San Pablo	$	4,968,000
Mine Development - La Mochomera		397,000
Mine Expansion - San Pablo East		915,000
Mine Expansion - Tres Amigos		1,599,000
Exploration Drilling		5,914,000
SIG Mining Concessions		2,014,000
Surface Rights and Permitting		1,353,000
Total	$	17,160,000

The Company is currently reporting all costs of test mining operations, project improvements, and project expansion as expenses in accordance with the United States Securities & Exchange Commission requirements for an exploration stage company. The result of expensing all costs is that the Company has accumulated a net loss carry-forward from México operations of approximately $8 million USD which is available to offset future taxable earnings.

Summary of Test Mining and Pilot Mill Operations

Annual Results from 2018 to 2023:


Year	Estimated Total Tons Mined & Processed		Estimated Reported Mill Feed Grade (g/t Au)		Estimated Reported Recovery %			Estimated Gross Gold Concentrates Recovered (Au oz.)		Net Gold (1) Concentrates Sold (Au oz.)
2018		52,038		9.82		86.11	%		14,147		13,418
2019		66,031		5.81		86.86	%		10,646		9,713
2020		44,218		5.65		87.31	%		7,001		5,828
2021		97,088		9.67		88.79	%		26,728		22,566
2022		137,740		8.18		80.00	%		28,988		25,554
2023		198,518		5.58		76.50	%		27,252		24,829

Test mining and pilot milling operations in 2023 yielded 198,518 tons of material, test mined from underground access and processed through pilot milling plant operations. These test pilot operations in 2023 yielded approximately 27,252 gross ounces of gold recovered, and net of dry weight and provisional assay at the buyer’s facilities of approximately 24,829 ounces of gold sold.

Quarterly Results for the Three Months Ended March 31, 2024 and 2023


	Estimated Total Tons Mined & Processed		Estimated Reported Mill Feed Grade (g/t Au)		Estimated Reported Recovery %			Estimated Gross Gold Concentrates Recovered (Au oz.)		Net Gold (1) Concentrates Sold (Au oz.)
Three Months Ended March 31, 2024		61,601		4.46		79.25	%		6,994		4,730
Three Months Ended March 31, 2023		53,258		6.91		69.39	%		8,204		6,810

(1)

Gold concentrate sold during the period is not equal to gold concentrate recovered during the period due to timing of shipments to buyer, and due to buyer’s discount for the purchase of gold concentrate, and due to any adjustment from dry weight and assay in provisional settlements with buyer.

Mill tonnage processed, feed grade and recovery rates are estimates based on internal reports of assays and estimated weights of tonnage mined and shipped to the plant.

Test pilot operations in three months ended March 31, 2024 yielded 61,601 tons mined and processed through mill facility (an average of 677 tons per day during the quarter) and the recovery of 6,994 gross Au Oz resulting in sales of 4,730 gross Au Oz contained in gold-silver concentrates, and sales of $9,428,856, net of buyer’s price discount, refining and treatment costs.

Test pilot operations in three months ended March 31, 2023 yielded 53,258 tons mined and processed through mill facility (an average of 592 tons per day) and the recovery of 8,204 gross Au Oz resulting in sales of 6,810 gross Au Oz contained in gold-silver concentrates, and sales of $11,953,079, net of buyer’s price discount, refining and treatment costs.

The drop in the feed grade at the pilot plant facility is a result of dilution experienced in the test mining activities, and partially due to the increase in test mining tonnage within SJG. To increase the tonnage of test mining material available for test mill processing, the Company opened a test mining area at San Pablo during the fourth quarter of 2023. An additional test mining area was opened in May 2024, at La Mochomera, which is an area anticipated to provide higher feed grade material.

Additional Test Mining and Mill Operations Disclosure

The Company expects to continue its test underground mining activity and pilot milling operations in 2024, and projects an increased capacity of an average of approximately 800 tons per 24-hour operating day during the second quarter of 2024 and to build processing capacity to an average of 900 to 1,000 tons per day in the second half of 2024.

Results for the Three Months Ended March 31, 2024 and 2023

REVENUE: Revenue for the three months ended March 31, 2024 and 2023 was $9,428,856 and $11,953,079. The decrease was a result of a reduction in the feed grade of the material processed from 6.91 g/t au in the three months ending March 31, 2023 to 4.46 g/t au per ton for the three months ended March 31, 2024. The drop in the feed grade at the pilot plant facility is a result of dilution experienced in the test mining activities, and largely due to the increase in test mining tonnage.

PRODUCTION COSTS RELATED TO SALES: Production costs related to sales for the three months ended March 31, 2024 and 2023 were $1,895,757 and $1,711,262. These are expenses directly related to the test milling, packaging and shipping of gold-silver concentrates. The increase is a result of the increase in the volume of test mining and milling activities from an average of 592 tons per day in the three months ended March 31, 2023 to an average of 677 tons per day in the three months ended March 31, 2024.

MINE PRODUCTION COSTS: Costs associated with test mining activities (mine production costs) for the three months ended March 31, 2024 and 2023 were $3,755,357 and $2,529,437. The Company allocates total test mining costs between production and waste based on tonnage mined. These costs were directly related to the extraction of mine tonnage to be processed at the pilot mill facility. During the three months ended March 31, 2024, the Company test mined 61,877 tons of material compared to 45,499 tons in the three months ended March 31, 2023.

MINE EXPLORATION COSTS: Mine exploration costs for the three months ended March 31, 2024 and 2023 were $2,459,217 and $2,216,949. Mine exploration costs are the costs of extracting waste material in order to reach the tonnage of material to be extracted for processing at the pilot mill facility. For the three months ended March 31, 2024 the Company mined 49,847 tons of waste compared to 40,677 in the three months ended March 31, 2023.

FACILITIES EXPANSION COSTS: Facilities expansion costs for the three months ended March 31, 2024 and 2023 were $787,809 and $285,078. The major expenses reported for the three months ended March 31, 2023 was the second phase of expansion of the milling facility. The major expenses reported in the three months ended March 31, 2024 have been some additions to the mill facility and mining infrastructure for the access to an additional test mining area at SJG.

EXPLORATION DRILLING: During the first quarter of 2022, the Company began an exploration drilling program for the purpose of updating the Company’s CND NI 43-101 Mineral Resource Estimate. Exploration expenditures for the three months ended March 31, 2024 and 2023 were $920,485 and $497,400. The Company expects the updated report in the second half of 2024.

CAMP, WAREHOUSE AND FACILITIES: Camp, warehouse and support facility costs for the three months ended March 31, 2024 and 2023 were $1,445,225 and $1,082,179. These represent the costs of supporting the test mining facilities including housing, food, security and warehouse operations. The increase in costs recorded for the three months ended March 31, 2024 was a result of the increase in test mining activity as a result of the facilities expansion.

TRANSPORTATION: Transportation costs for the three months ended March 31, 2024 and 2023 were $995,867 and $746,063. These costs relate to the transporting of the primarily gold concentrates to the customer for treatment and sales. The increase in costs is primarily due to an increase in tonnage of ore hauled from mine to plant and an overall increase in fuel and transportation costs.

PROPERTY HOLDING COSTS: Property holding costs for the three months ended March 31, 2024 and 2023 were $44,047 and $39,251. These costs were primarily taxes on mining concessions, leases on land and other direct costs of maintaining the SJG property. These costs are relatively consistent from year to year regardless of the level of mining activity.

GENERAL AND ADMINISTRATIVE EXPENSE: General and administrative expenses for the three months ended March 31, 2024 and 2023 were $1,202,041 and $2,965,593. These general and administrative expenses were the costs of operating the Company not directly associated with the test mining and pilot mill operations including management, accounting, and legal expenses. The decrease in costs in 2024 was primarily a decrease in legal fees.

ACCRETION EXPENSE. Accretion expense for the three months ended March 31, 2024 and 2023 was $4,565 and $0. The Company began accreting its asset retirement obligation on January 1, 2024, related to estimated costs to decommission the pilot milling plant and tailings pond at the estimated live of the mines in operation at the establishment of the ARO in 2023 as a result of the expansion of the pilot milling operation.

OTHER INCOME (EXPENSE): Other income (expense) for the three months ended March 31, 2024 and 2023 was $(319,514) and $75,085, respectively. Included in other income in 2024 was interest expense of $427,888, change in derivative of $80,141, currency exchange gains of $28,077 and miscellaneous income of $156. The decrease in the derivative liability was primarily due to the decrease in the Company’s common stock value. The increase in interest expense was due to the conversion of the Company’s ACL to an installment note in December of 2023. Included in other income in 2023 was interest expense of $116,308, change in derivative of $169,434, currency exchange gain of $18,254 and miscellaneous income of $3,705.

OTHER COMPREHENSIVE INCOME: Other comprehensive income includes the Company’s net income (loss) plus the unrealized currency exchange gain for the period. The Company’s other comprehensive income for the three months ended March 31, 2024 and 2023 consisted of unrealized currency gains of $203,239 and $91,241, respectively. The change is due to the variances in the currency exchange rates between the US Dollar and Mexican Peso throughout the two periods.

Liquidity and Capital Resources

As of March 31, 2024, the Company had negative working capital of $15,066,036 comprised of current assets of $12,402,367 and current liabilities of $27,468,403. This represented an increase of $4,804,391 from the negative working capital maintained by the Company of $10,261,645 as of December 31, 2023 as a result of an increase in cash used in operations during the first quarter of 2024 and an increase in the Company’s accounts payable and accrued liabilities as of March 31, 2024.

Net cash used in operations for the three months ended March 31, 2024 was $3,357,647 compared to a use of $294,248 during the three months ended March 31, 2023. The decrease in the cash flow from operations was primarily due to the Company’s loss in 2024 primarily attributed to the ongoing expenses of expansion and a decrease in revenue for the quarter.

The Company had no investing activities during the three months ended March 31, 2024 and 2023. Expenditures reported for the expansion of mining facilities, which totaled $787,809 and $285,078 during the three months ended March 31, 2024 and 2023, respectively, would normally have been included in this category but were expensed due to the company’s lack of proven and probable reserves at the SJG Project, which therefore, requires the Company to expense costs as incurred related to expansion of test mining and milling activities.

Net cash used in financing activities for the three months ended March 31, 2024 and 2023 was $532,866 and $28,868, respectively. The net cash used by financing activities for the three months ended March 31, 2024 was used for principal payments on the RCL and operating lease payments.

Through March 31, 2024, the Company’s available liquidity and operations have been financed primarily through its operations and the revenue generated from the sale of product and from proceeds of the ACL the Company received in December 2023.

Although the Company has incurred net losses and net cash outflows from operating activities and investing activities for the three months ended March 31, 2024, there were many expenses which were made that were not expended for the production of revenue, such as exploration drilling and mine expansion costs. If these expenses had not been made, the Company’s net loss would have been minimized. The Company believes it’s cash and cash receipts from its revenue arrangement and the proceeds of the ACL received in December 2023 will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months from the date these financial statements were available for issuance. Additionally, the Company believes its revenue will be greater due to material being mined from the additional mines opened and improvements made to the productivity of the milling activities. Future capital requirements will depend on many factors, including the Company’s rate of mining, milling and exploration activities and growth. To the extent that existing capital and revenue growth are not sufficient to fund future activities, the Company may need to raise capital through additional equity or debt financings. Additional funds may not be available on terms favorable to the Company or at all. Failure to raise additional capital, if needed, could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

Off-Balance Sheet Arrangements

As of March 31, 2024, the Company did not have any off-balance sheet arrangements, which have or are likely to have a material adverse effect on our financial condition, results of operations or liquidity.

Plan of Operation

The Company’s plan of operation for the next twelve months is to continue the improvement and expansion of the test mining and pilot milling activities and exploration drilling at SJG.

During the first six months of 2024, the Company plans to continue to increase mining and milling an average of approximately 800 tons of material a day, with that rate increasing to an average of approximately 1,000 tons a day during the second half of 2024. The Company opened a second mine in late 2023 and is consistently test mining additional material during the first quarter of 2024. The Company opened a third mine during May 2024 in an area anticipated to provide higher feed grade material.

The Company expects to increase efficiency of activities in the second quarter of 2024 and is anticipating the ability to extract higher grade ore from the two new mines opened. As of March 31, 2024, the Company is conducting test mining activity at approximately 80% of the pilot milling capacity.

The Company plans to continue its exploration drilling program with two to three rigs on site. Management and geologists will make decisions based on the drill results, corporate strategies and market conditions, surface mapping, sampling and target generation. The Company has contracted with a "Qualified Person" within the meaning of subpart 1300 of Regulation S-K and Canadian Standard NI 43-101 to interpret the data collected in order to compile a formal Mineral Resource Estimate update in 2024.

Capital Expenditures

The Company’s primary capital expenditures relate to the test mining and pilot milling activities of the SJG Project. The Company expanded its pilot milling plant in 2022 and early 2023 with the addition and installation of two ball mills and expanded the tailings pond operation with water being recycled to the plant. The Company has continued to refine the milling process throughout 2023 with the addition of front and back-end concentrators and utilization of the original mill for grinding. All capital expenditures are expensed as the Company is an exploration stage issuer under subpart 1300 of Regulation S-K.

Exploration Stage

The Company is currently an exploration stage issuer and is reporting all costs of mine operations, improvements, and expansion as expenses in accordance with Section 1300 of Regulation S-K and US GAAP requirements, and therefore the above costs are not reflected as capitalized assets on the Company’s balance sheet. The Company has started test mining, milling and extraction activities prior to determining mineral reserves.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2024. This evaluation was accomplished under the supervision and with the participation of our principal executive officer and principal financial officer, assisted by our financial consultant, who concluded that our disclosure controls and procedures are effective as of the end of the period covered by this Form 10-Q. For purposes of this section, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We recognize the importance of having effective controls in place to manage risks and ensure the integrity of our financial reporting. We are committed to continuously improving our control environment through ongoing monitoring, testing, and remediation of control deficiencies. Our management team is actively involved in overseeing the effectiveness of our controls, and we have established a culture of accountability and transparency to ensure that all employees understand their roles and responsibilities in maintaining a strong control environment. We are also investing in technology to streamline our control processes and reduce the risk of errors and fraud. We believe that these efforts will enable us to develop a high level of control effectiveness.

Changes in Internal Control over Financial Reporting

The Company did not make any change in its internal control over financial reporting during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

There were no material developments during the period covered by this report on Form 10-Q in the legal proceedings previously publicly disclosed by the Company.

From time to time, the Company is involved in legal matters in the ordinary course of its business. The Company intends to defend itself vigorously against any such claims. It is the Company’s policy to accrue for amounts related to lawsuits brought against it if it is probable that a liability has been incurred and an amount can be reasonably estimated. Although the outcome of such matters cannot be predicted with certainty and no assurances can be given with respect to such matters, the Company believes that the outcome of those ordinary-course matters in which it is currently involved will not have a materially adverse effect on its results of operations, liquidity, or financial position.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

As the Company has no mines located in the United States or any of its territories, the disclosure required by this Item is not applicable.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS


Exhibit Number;		Name of Exhibit
31.1		Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


	DynaResource, Inc.

Date: May 20, 2024	By:	/s/ K.W. (“K.D.”) Diepholz
		K.W. (“K.D.”) Diepholz,
		Chairman / Chief Executive Officer / Acting Chief Financial Officer

EXHIBIT 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, K.W. (“K.D.”) DIEPHOLZ, certify that:

I have reviewed this report on Form 10-Q of DYNARESOURCE, INC.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

Disclosed in this report any change to the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and,

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and,

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 20, 2024


/s/ K.W. (“K.D.”) Diepholz
K.W. (“KD”) Diepholz;
Chief Executive Officer

EXHIBIT 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, K.W. (“K.D.”) DIEPHOLZ, certify that:

I have reviewed this report on Form 10-Q of DYNARESOURCE, INC.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 20, 2024


/s/ K.W. (“K.D.”) Diepholz
K.W. (“KD”) Diepholz;
Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of DynaResource, Inc. on Form 10-Q for the period ended March 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ K.W. (“K.D.”) Diepholz
K.W. (“K.D.”) Diepholz
Chief Executive Officer Dated: May 20, 2024

/s/ K.W. (“K.D.”) Diepholz
K.W. (“K.D.”) Diepholz;
Chief Financial Officer Dated: May 20, 2024

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 20, 2024
Cover [Abstract]
Entity Registrant Name	DYNARESOURCE, INC.
Entity Central Index Key	0001111741
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding		23,371,708
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-30371
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	94-1589426
Entity Address Address Line 1	222 W. Las Colinas Blvd.
Entity Address Address Line 2	Suite 1910 North Tower
Entity Address City Or Town	Irving
Entity Address State Or Province	TX
Entity Address Postal Zip Code	75039
City Area Code	972
Local Phone Number	869-9400
Entity Interactive Data Current	Yes

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash	$ 1,972,389	$ 5,603,713
Accounts receivable	1,146,660	880,473
Inventories	2,083,801	2,089,194
Foreign tax receivable	6,017,531	4,434,958
Other current assets	1,181,986	1,137,162
Total current assets	12,402,367	14,145,500
Property and equipment (net of accumulated depreciation and amortization of $19,582 and $12,239)	95,691	103,034
Right-of-use assets, net	815,630	848,822
Mining concessions	4,132,678	4,132,678
Deferred tax asset, net	4,264,115	4,264,115
Foreign tax receivable	12,356,116	11,768,613
Other assets	177,733	175,588
TOTAL ASSETS	34,244,330	35,438,350
Current liabilities:
Accounts payable	5,054,071	2,768,634
Accrued expenses	9,005,788	7,727,621
Derivative liabilities	1,717,200	1,797,341
Note payable	9,262,500	9,750,000
Current portion of operating lease payable	113,462	104,117
Installment notes payable	2,315,382	2,259,432
Total current liabilities	27,468,403	24,407,145
Operating lease payable, less current portion	771,051	825,762
Deferred tax liability	334,236	334,236
Asset retirement obligation	203,033	198,468
TOTAL LIABILITIES	28,776,723	25,765,611
TEMPORARY EQUITY
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $0.01 par value, 40,000,000 shares authorized 23,371,708 and 23,371,708 issued and outstanding	233,717	233,717
Preferred rights	40,000	40,000
Additional paid-in-capital	61,509,032	61,509,032
Treasury stock, 37,180 shares each period, at cost	(95,023)	(95,023)
Accumulated other comprehensive income	900,939	697,700
Accumulated deficit	(62,978,538)	(58,570,167)
TOTAL STOCKHOLDERS EQUITY (DEFICIT)	(389,873)	3,815,259
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS EQUITY (DEFICIT)	34,244,330	35,438,350
Series C Senior Convertible Preferred Stock
TEMPORARY EQUITY
Senior Convertible Preferred Stock	4,337,480	4,337,480
Series D Senior Convertible Preferred Stock
TEMPORARY EQUITY
Senior Convertible Preferred Stock	$ 1,520,000	$ 1,520,000

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Accumulated depreciation and amortization	$ 19,582	$ 12,239
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Shares Authorized	40,000,000	40,000,000
Common Stock, Shares Issued	23,371,708	23,371,708
Common Stock, Shares Outstanding	23,371,708	23,371,708
Treasury Stock	37,180	37,180
Preferred Stock, Par Value	$ 0.0001
Series C Senior Convertible Preferred Stock
Preferred Stock, Par Value	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	1,734,992	1,734,992
Preferred Stock, Shares Issued	1,734,992	1,734,992
Preferred Stock, Shares Outstanding	1,734,992	1,734,992
Series D Senior Convertible Preferred Stock
Preferred Stock, Par Value	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	3,000,000	3,000,000
Preferred Stock, Shares Issued	760,000	760,000
Preferred Stock, Shares Outstanding	760,000	760,000

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
REVENUE	$ 9,428,856	$ 11,953,079
COSTS AND EXPENSES OF MINING OPERATION
Production cost applicable to sales	1,895,757	1,711,262
Mine production costs	3,755,357	2,529,437
Mine exploration costs	2,459,217	2,216,949
Facilities expansion costs	787,809	285,078
Exploration drilling	920,485	497,400
Camp, warehouse and facilities	1,445,225	1,082,179
Transportation costs	995,867	746,063
Property holding costs	44,047	39,521
General and administrative	1,202,041	2,965,593
Accretion expense	4,565	0
Depreciation and Amortization	7,343	0
TOTAL OPERATING EXPENSES	13,517,713	12,073,482
NET OPERATING LOSS	(4,088,857)	(120,403)
OTHER INCOME (EXPENSE)
Foreign currency gains	28,077	18,254
Interest expense	(427,888)	(116,308)
Derivative mark-to-market gain	80,141	169,434
Other income	156	3,705
TOTAL OTHER INCOME (EXPENSE)	(319,514)	75,085
NET LOSS BEFORE TAXES	(4,408,371)	(45,318)
INCOME TAXES BENEFIT	0	77,023
NET INCOME (LOSS)	(4,408,371)	31,705
DEEMED DIVIDEND FOR SERIES C AND D PREFERRED	(58,575)	(58,575)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (4,466,946)	$ (26,870)
LOSS PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.
Basic loss per common share	$ (0.19)	$ 0
Weighted average shares outstanding - Basic	23,371,708	22,246,654
Diluted loss per common share	$ (0.19)	$ 0
Weighted average shares outstanding - Diluted	23,371,708	22,246,654
OTHER COMPREHENSIVE INCOME
Unrealized foreign currency translation gain	$ 203,239	$ 91,241
TOTAL OTHER COMPREHENSIVE INCOME	203,239	91,241
TOTAL COMPREHENSIVE INCOME (LOSS)	$ (4,205,132)	$ 122,946

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) (Unaudited) - USD ($)	Total	Series A Preferred Stocks	Common Stock	Preferred Stock	Paid In Capital	Treasury Stock	Other Comp Income	Accumulated Deficit
Balance, shares at Dec. 31, 2022		1,000	22,246,654	1		12,180
Balance, amount at Dec. 31, 2022	$ 13,192,141	$ 1	$ 222,467	$ 40,000	$ 56,889,031	$ (34,773)	$ 112,078	$ (44,036,663)
Other Comprehensive Income	91,241						91,241
Net Income (Loss)	31,705							31,705
Balance, shares at Mar. 31, 2023		1,000	22,246,654	1		12,180
Balance, amount at Mar. 31, 2023	13,315,087	$ 1	$ 222,467	$ 40,000	56,889,031	$ (34,773)	203,319	(44,004,958)
Balance, shares at Dec. 31, 2023		0	23,731,708	1		37,180
Balance, amount at Dec. 31, 2023	3,815,259	$ 0	$ 233,717	$ 40,000	61,509,032	$ (95,023)	697,700	(58,570,167)
Other Comprehensive Income	203,239						203,239
Net Income (Loss)	(4,408,371)							(4,408,371)
Balance, shares at Mar. 31, 2024		0	23,731,708	1		37,180
Balance, amount at Mar. 31, 2024	$ (389,873)	$ 0	$ 233,717	$ 40,000	$ 61,509,032	$ (95,023)	$ 900,939	$ (62,978,538)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net income (loss)	$ (4,408,371)	$ 31,705
Adjustments to reconcile net income (loss) to cash used in operating activities
Derivatives mark-to-market gain	(80,141)	(169,434)
Accretion expense	4,565	0
Depreciation and amortization	7,343	0
Right-of-use asset amortization	33,192	19,358
Deferred tax asset	0	(77,023)
Change in operating assets and liabilities
Accounts receivable	(266,187)	(1,160,955)
Inventories	5,393	371,930
Foreign tax receivable	(2,170,076)	(1,544,980)
Other assets	(46,969)	(261,771)
Accounts payable	2,285,437	112,016
Accrued expenses	1,278,167	2,534,906
Customer advances		(150,000)
CASH FLOWS USED IN OPERATING ACTIVITIES	(3,357,647)	(294,248)
CASH FLOWS USED IN FINANCING ACTIVITIES
Payments of note payable	(487,500)	0
Operating lease payments	(45,366)	(28,868)
CASH FLOWS USED IN FINANCING ACTIVITIES	(532,866)	(28,868)
Effects of foreign currency	259,189	250,186
NET DECREASE IN CASH	(3,631,324)	(72,930)
CASH AT BEGINNING OF PERIOD	5,603,713	19,177,138
CASH AT END OF PERIOD	1,972,389	19,104,208
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	214,794	0
Cash paid for income taxes	$ 0	$ 0

Nature of Activities and Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Nature of Activities and Significant Accounting Policies

NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Activities, History and Organization

Principles of Consolidation

Significant Accounting Policies

Basis of Presentation

Use of Estimates

Exploration Stage Issuer (No Reserves Disclosed)

The definitions of Measured Mineral Resource, Mineral Reserve and Mineral Resource are set forth in SEC Regulation S-K, Item 1300 (“Reg. S-K, Item 1300”).

Segment Information

The Company operates as one segment: test mining and milling gold-silver concentrate for sale from its location in Mexico.

Cash and Cash Equivalents

Accounts Receivable and Allowances for Doubtful Accounts

Mined Tonnage Inventory

Concentrate Inventory

Foreign Tax Receivable

Property and Equipment

Mine Development Costs

Mining Concessions

The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following:

•

estimated recoverable ounces of gold, silver or other precious minerals;

•

estimated future commodity prices;

•

estimated expected future operating costs, capital expenditures and reclamation expenditures.

Asset Retirement Obligation (“ARO”)

Property Holding Costs

Exploration Costs

Exploration costs, including exploration, development, direct field costs and related administrative costs are expensed in the period incurred.

Leases

Transactions In and Translations of Foreign Currency


	March 31, 2024		December 31, 2023
Current Exchange Rate		16.56		16.97


	March 31, 2024		March 31, 2023
Weighted Average Exchange Rate for the Three Months Ended		16.98		18.66

The Company recorded currency transaction gains of $28,077 and $18,254 for the three months ended March 31, 2024 and 2023, respectively.

Income Taxes

Income from the Company’s subsidiaries in México are taxed in accordance with applicable Mexican tax law.

Uncertain Tax Position

Comprehensive Income (Loss)

Revenue Recognition

Shipping and handling costs are considered fulfillment costs after the customer obtains control of the goods.

Derivative Financial Instruments

Fair Value of Financial Instruments

Earnings (Loss) Per Share

Related Party Transactions

Significant Judgments, Estimates and Assumptions

Significant judgments:

•

the determination of income tax is inherently complex and requires making certain estimates and assumptions about future events;

•

quantitative and qualitative factors used in the assessment of impairment of the Company’s mineral property;

•

the analysis of resource calculations, drill results, etc. which can impact the Company’s assessment of impairment, and provisions, if any, for environmental rehabilitation and restoration; and

•

the valuation of derivatives liabilities requires management to determine the most appropriate valuation model and inputs to the valuation model.

Reclassification

Recently Issued Accounting Standards

Inventories

3 Months Ended

Mar. 31, 2024

INVENTORIES

Inventories

NOTE 2 - INVENTORIES


	2024		2023
Mined tonnage	$	1,930,424	$	2,061,149
Gold-Silver concentrates		153,377		28,045
Total inventories	$	2,083,801	$	2,089,194

Property and Equipment

3 Months Ended

Mar. 31, 2024

PROPERTY PLANT EQUIPMENT

Property and Equipment

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of March 31, 2024 and December 31, 2023:


	2024			2023
Leasehold improvements	$	21,274		$	21,274
Office equipment		42,493			42,493
Office furniture and fixtures		24,453			24,453
Other		27,053			27,053
Subtotal		115,273			115,273
Less: Accumulated depreciation and amortization		(19,582	)		(12,239	)
Total property and equipment, net	$	95,691		$	103,034

Mining Concessions

3 Months Ended

Mar. 31, 2024

Mining Concessions [Abstract]

Mining Concessions

NOTE 4 - MINING CONCESSIONS

Accrued Liabilities

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

Accrued Liabilities

NOTE 5 - ACCRUED LIABILITIES

As of March 31, 2024 and December 31, 2023, the Company had the following accrued liabilities:


	March 31,		December 31,
	2024		2023
Accrued interest	$	2,625,231	$	2,352,869
Accrued mining expenses		2,562,258		2,104,938
Accrued payroll taxes		1,331,409		1,122,644
Other accrued liabilities		2,486,890		2,147,170
Total accrued liabilities	$	9,005,788	$	7,727,621

Derivative Liability

3 Months Ended

Mar. 31, 2024

DERIVATIVE LIABILITIES

Derivative Liability

NOTE 6 - DERIVATIVE LIABILITY

Warrants Issued With the Notes Convertible Into Series D Preferred


Period Ended	March 31, 2024			December 31, 2023
Annual volatility rate		126	%		123	%
Risk free rate		4.59	%		4.23	%
Remaining term	6.12 years			6.37 years
Fair value of common stock	$	1.93		$	2.02

The below table represents the change in the fair value of the derivative liability during the three and twelve months ended March 31, 2024 and December 31, 2023.


Period Ended	March 31, 2024			December 31, 2023
Fair value of derivative (warrants), beginning of period	$	1,797,341		$	1,905,078
Exercise of warrants		-			-
Change in fair value of derivative		(80,141	)		(107,737	)
Fair value of derivative (warrants), end of period	$	1,717,200		$	1,797,341

Advance Credit Line Facility/Customer Advances

3 Months Ended

Mar. 31, 2024

REVOLVING CREDIT LINE FACILITY

Advance Credit Line Facility/Customer Advances

NOTE 7 - ADVANCE CREDIT LINE FACILITY/CUSTOMER ADVANCES

•

An initial ACL was established by the buyer in the amount of $3.75M USD.

•

On May 1, 2021, the ACL increased to an amount equal to 80% of the prior 3 months’ revenue.

•

Each successive month, the ACL shall be adjusted according to the Company’s prior 3 months’ revenue to a maximum advance line of $17.5 million as specified in the Amendment.

•

The ACL shall never be less than $3.75M USD.

•

The ACL will be interest free for 45 days.

•

The ACL is to be repaid through deliveries of concentrates or cash within 120 days.

•

If the ACL is converted into an installment loan subsequent deliveries during the term of the loan will be paid in cash within ten days of delivery;

•

The ACL was included under Customer Advances on the unaudited, condensed, interim consolidated balance sheet, prior to December 1, 2023.

Deposits under the Advance Credit Line Facility

Under the terms of the ACL, the Company received the following advances from the buyer (in millions):

(1)

$9.35 advance on December 28, 2022. Settled on February 16, 2023.

(2)

$9.60 advance on February 21, 2023. Settled on March 31, 2023.

(3)

$9.20 advance on March 31, 2023. Settled on May 17, 2023.

(4)

$9.85 advance on May 18, 2023. Settled on June 28, 2023.

(5)

$10.0 advance on June 29, 2023. Settled on August 14, 2023.

(6)

$10.75 advance on August 17, 2023. Settled on September 16, 2023.

(7)

$9.75 advance on September 29, 2023. Converted to a one-year note payable on December 1, 2023. (Note 8).

Notes Payable

3 Months Ended

Mar. 31, 2024

NOTES PAYABLE

Notes Payable

NOTE 8 - NOTE PAYABLE

Installment Notes Payable

3 Months Ended

Mar. 31, 2024

Installment Notes Payable [Abstract]

Installment Notes Payable

NOTE 9 – INSTALLMENT NOTES PAYABLE

The following is a summary of the activity during the three months ended March 31, 2024:


Balance December 31, 2023	$	2,259,432
Exchange rate adjustment		55,950
2024 principal payments		—
Balance March 31, 2024	$	2,315,382

Asset Retirement Obligation

3 Months Ended

Mar. 31, 2024

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligation

NOTE 10 - ASSET RETIREMENT OBLIGATION

live of the mines in operation as of December 31, 2023, discounted using credit-adjusted, risk-free interest rate of 9.2%. As this is

an exploration stage property that does not qualify for asset capitalization, the costs associated with the obligation are charged to

operations.

Asset retirement obligation consists of the following as of March 31, 2024 and December 31, 2023:


	March 31,		December 31,
	2024		2023
Asset retirement obligation at beginning of year	$	198,468	$	-
Additions to ARO liability		—		198,468
Accretion		4,565		—
Asset retirement obligation at end of year	$	203,033	$	198,468

Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note [Abstract]

Stockholders' Equity

NOTE 11 - STOCKHOLDERS’ EQUITY

Series A Preferred Stock

Series C Senior Convertible Preferred Stock

Due to the nature of the Series C Preferred Shares as mandatorily redeemable, the Series C Preferred Shares are classified as “temporary equity” on the balance sheet.

Series D Senior Convertible Preferred Stock

Preferred Stock (Undesignated)

Common Stock

Preferred Rights

Stock Issuances

On August 4, 2023 the Company issued 1,000,000 shares of common stock for $5,000,000 cash consideration.

Treasury Stock

During the year ended December 31, 2023, 25,000 shares of the Company’s common stock previously issued for services were returned to the Company as part of a settlement of fees.

There were 37,180 shares of treasury stock outstanding as of March 31, 2024 and December 31, 2023.

2023 Activity


	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Intrinsic Value
Balance as of December 31, 2023		892,165	$	0.01		6.37		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Balance as of March 31, 2024		892,165		0.01		6.12		-
Exercisable as of March 31, 2024		892,165	$	0.01		6.12		-

A derivative liability was incurred at the issuance of the Series D warrants in 2020. As of March 31, 2024, the derivative liability totaled $1,717,200. See Note 6 above.

Stock Based Compensation

3 Months Ended

Mar. 31, 2024

STOCK BASED COMPENSATION

Share-Based Payment Arrangement [Text Block]

NOTE 12 – STOCK BASED COMPENSATION

The inputs utilized in calculating the fair value are as follows:


Period Ended	March 31, 2024			December 31, 2023
Annual volatility rate		127.93	%		—
Risk free rate		4.36	%		—
Remaining Term	4				—
Fair Value of stock options	$	1.15			—

Income Taxes

3 Months Ended

Mar. 31, 2024

INCOME TAXES

Income Taxes

NOTE 13 - INCOME TAXES

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

COMMITMENTS AND CONTINGENCIES

Commitments and Contingencies

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Concession Taxes

Leases

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2024

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Level 1 Inputs - Quoted prices for identical instruments in active markets.

Level 3 Inputs - Instruments with primarily unobservable value drivers.


	Total		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Fair Value Measurement as of March 31, 2024:
Liabilities:
Derivative Liabilities	$	1,717,200	$	-	$	-	$	1,717,200
Totals	$	1,717,200	$	-	$	-	$	1,717,200
Fair Value Measurement as of December 31, 2023:
Liabilities:
Derivative Liabilities	$	1,797,341	$	-	$	-	$	1,797,341
Totals	$	1,797,341	$	-	$	-	$	1,797,341

Customer Concentration

3 Months Ended

Mar. 31, 2024

CUSTOMER CONCENTRATION

Customer Concentration

NOTE 16 - CUSTOMER CONCENTRATION

For the periods ended March 31, 2024 and December 31, 2023, one customer accounted for 100% of revenue and accounts receivable.

Geographical Concentrations

3 Months Ended

Mar. 31, 2024

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Geographical Concentrations

NOTE 17 – GEOGRAPHICAL CONCENTRATIONS



	Mexico		United States		Total
March 31, 2024
Mineral property	$	4,132,678	$	—	$	4,132,678
Property and equipment, net		—		95,691		95,691
Current assets		10,394,111		2,008,256		12,402,367
Other assets		15,828,208		1,785,386		17,613,594
Total assets	$	30,354,997	$	3,889,333	$	34,244,330

December 31, 2023
Mineral property	$	4,132,678	$	—	$	4,132,678
Property and equipment, net		—		103,034		103,034
Current assets		8,475,858		5,669,642		14,145,500
Other assets		15,271,752		1,785,386		17,057,138
Total assets	$	27,880,288	$	7,558,062	$	35,438,350

Related Party Transactions

3 Months Ended

Mar. 31, 2024

RELATED PARTY TRANSACTIONS

Related Party Transactions

NOTE 18 – RELATED PARTY TRANSACTIONS

Subsequent Events

3 Months Ended

Mar. 31, 2024

SUBSEQUENT EVENTS

Subsequent Events

NOTE 19 - SUBSEQUENT EVENTS

Nature of Activities and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Nature of Activities, History and Organization

Principles of Consolidation

Significant Accounting Policies

Basis of Presentation

Use of Estimates

Exploration Stage Issuer

Exploration Stage Issuer (No Reserves Disclosed)

The definitions of Measured Mineral Resource, Mineral Reserve and Mineral Resource are set forth in SEC Regulation S-K, Item 1300 (“Reg. S-K, Item 1300”).

Segment Information

The Company operates as one segment: test mining and milling gold-silver concentrate for sale from its location in Mexico.

Cash and Cash Equivalents

Accounts Receivable and Allowances for Doubtful Accounts

Mined Tonnage Inventory

Concentrate Inventory

Foreign Tax Receivable

Property and Equipment

Mine Development Costs

Mining Concessions

The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following:

•

estimated recoverable ounces of gold, silver or other precious minerals;

•

estimated future commodity prices;

•

estimated expected future operating costs, capital expenditures and reclamation expenditures.

Asset Retirement Obligation("ARO")

Asset Retirement Obligation (“ARO”)

Property Holding Costs

Exploration Costs

Exploration costs, including exploration, development, direct field costs and related administrative costs are expensed in the period incurred.

Leases

Transactions In and Translations of Foreign Currency


	March 31, 2024		December 31, 2023
Current Exchange Rate		16.56		16.97


	March 31, 2024		March 31, 2023
Weighted Average Exchange Rate for the Three Months Ended		16.98		18.66

The Company recorded currency transaction gains of $28,077 and $18,254 for the three months ended March 31, 2024 and 2023, respectively.

Income Taxes

Income from the Company’s subsidiaries in México are taxed in accordance with applicable Mexican tax law.

Uncertain Tax Position

Comprehensive Income (Loss)

Revenue Recognition

Shipping and handling costs are considered fulfillment costs after the customer obtains control of the goods.

Derivative Financial Instruments

Fair Value of Financial Instruments

Earnings (Loss) Per Share

Related Party Transactions

Significant Judgments, Estimates and Assumptions

Significant judgments:

•

the determination of income tax is inherently complex and requires making certain estimates and assumptions about future events;

•

quantitative and qualitative factors used in the assessment of impairment of the Company’s mineral property;

•

the analysis of resource calculations, drill results, etc. which can impact the Company’s assessment of impairment, and provisions, if any, for environmental rehabilitation and restoration; and

•

the valuation of derivatives liabilities requires management to determine the most appropriate valuation model and inputs to the valuation model.

Reclassification

Recently Issued Accounting Standards

Nature of Activities and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Exchange Rates Used in Preparation of Unaudited Financial Statements


	March 31, 2024		December 31, 2023
Current Exchange Rate		16.56		16.97


	March 31, 2024		March 31, 2023
Weighted Average Exchange Rate for the Three Months Ended		16.98		18.66

Inventories (Tables)

3 Months Ended

Mar. 31, 2024

INVENTORIES

Inventories

Inventory balances as of March 31, 2024 and December 31, 2023 were as follows:


	2024		2023
Mined tonnage	$	1,930,424	$	2,061,149
Gold-Silver concentrates		153,377		28,045
Total inventories	$	2,083,801	$	2,089,194

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2024

PROPERTY PLANT EQUIPMENT

Schedule of Property and Equipment

Property and equipment consists of the following as of March 31, 2024 and December 31, 2023:


	2024			2023
Leasehold improvements	$	21,274		$	21,274
Office equipment		42,493			42,493
Office furniture and fixtures		24,453			24,453
Other		27,053			27,053
Subtotal		115,273			115,273
Less: Accumulated depreciation and amortization		(19,582	)		(12,239	)
Total property and equipment, net	$	95,691		$	103,034

Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

As of March 31, 2024 and December 31, 2023, the Company had the following accrued liabilities:


	March 31,		December 31,
	2024		2023
Accrued interest	$	2,625,231	$	2,352,869
Accrued mining expenses		2,562,258		2,104,938
Accrued payroll taxes		1,331,409		1,122,644
Other accrued liabilities		2,486,890		2,147,170
Total accrued liabilities	$	9,005,788	$	7,727,621

Derivative Liability (Tables)

3 Months Ended

Mar. 31, 2024

DERIVATIVE LIABILITIES

Summary of Inputs valuation to be Level 3 in Fair Value


Period Ended	March 31, 2024			December 31, 2023
Annual volatility rate		126	%		123	%
Risk free rate		4.59	%		4.23	%
Remaining term	6.12 years			6.37 years
Fair value of common stock	$	1.93		$	2.02

Summary of Change in the Fair Value of the Derivative Liability

The below table represents the change in the fair value of the derivative liability during the three and twelve months ended March 31, 2024 and December 31, 2023.


Period Ended	March 31, 2024			December 31, 2023
Fair value of derivative (warrants), beginning of period	$	1,797,341		$	1,905,078
Exercise of warrants		-			-
Change in fair value of derivative		(80,141	)		(107,737	)
Fair value of derivative (warrants), end of period	$	1,717,200		$	1,797,341

Installment Notes Payable (Tables)

3 Months Ended

Mar. 31, 2024

Installment Notes Payable [Abstract]

Summary of Installment Notes Payable Transaction

The following is a summary of the activity during the three months ended March 31, 2024:


Balance December 31, 2023	$	2,259,432
Exchange rate adjustment		55,950
2024 principal payments		—
Balance March 31, 2024	$	2,315,382

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2024

Stockholders' Equity Note [Abstract]

Summary of Warrants Outstanding


	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Intrinsic Value
Balance as of December 31, 2023		892,165	$	0.01		6.37		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Balance as of March 31, 2024		892,165		0.01		6.12		-
Exercisable as of March 31, 2024		892,165	$	0.01		6.12		-

Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2024

STOCK BASED COMPENSATION

Schedule of Inputs Utilized in Calculating Fair Value

The inputs utilized in calculating the fair value are as follows:


Period Ended	March 31, 2024			December 31, 2023
Annual volatility rate		127.93	%		—
Risk free rate		4.36	%		—
Remaining Term	4				—
Fair Value of stock options	$	1.15			—

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value of assets and liabilities


	Total		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Fair Value Measurement as of March 31, 2024:
Liabilities:
Derivative Liabilities	$	1,717,200	$	-	$	-	$	1,717,200
Totals	$	1,717,200	$	-	$	-	$	1,717,200
Fair Value Measurement as of December 31, 2023:
Liabilities:
Derivative Liabilities	$	1,797,341	$	-	$	-	$	1,797,341
Totals	$	1,797,341	$	-	$	-	$	1,797,341

Geographical Concentrations (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Schedule of Geographic Concentrations



	Mexico		United States		Total
March 31, 2024
Mineral property	$	4,132,678	$	—	$	4,132,678
Property and equipment, net		—		95,691		95,691
Current assets		10,394,111		2,008,256		12,402,367
Other assets		15,828,208		1,785,386		17,613,594
Total assets	$	30,354,997	$	3,889,333	$	34,244,330

December 31, 2023
Mineral property	$	4,132,678	$	—	$	4,132,678
Property and equipment, net		—		103,034		103,034
Current assets		8,475,858		5,669,642		14,145,500
Other assets		15,271,752		1,785,386		17,057,138
Total assets	$	27,880,288	$	7,558,062	$	35,438,350

Asset Retirement Obligation (Tables)

3 Months Ended

Mar. 31, 2024

Asset Retirement Obligation Disclosure [Abstract]

Schedule of Change in Asset Retirement Obligation

Asset retirement obligation consists of the following as of March 31, 2024 and December 31, 2023:


	March 31,		December 31,
	2024		2023
Asset retirement obligation at beginning of year	$	198,468	$	-
Additions to ARO liability		—		198,468
Accretion		4,565		—
Asset retirement obligation at end of year	$	203,033	$	198,468

Nature of Activities and Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 USD ($) Segment shares	Mar. 31, 2023 USD ($) shares	Dec. 31, 2023 USD ($) shares
Amortization of lease term	52 months
Bank Deposite Excess Of Fdic Limit	$ 1,625,819
Number of operating segments \| Segment	1
Cash equivalents	$ 0		$ 0
Currency transaction gains	28,077	$ 18,254
Deferred Contract Revenue	$ 0	$ 9,350,000
Warrants outstanding \| shares	892,165	892,165	892,165
Mexico
Ownership Percentage	100.00%
Minimum \| Leasehold Improvements
Property Estimate Useful Life	3 years
Maximum \| Leasehold Improvements
Property Estimate Useful Life	5 years
Series C Preferred Stock
Outstanding dividends convertible into shares of common Stock \| shares	2,853,721	2,853,721
Series D Preferred Stock
Outstanding dividends convertible into shares of common Stock \| shares	820,800	820,800

Nature of Activities and Significant Accounting Policies - Exchange Rates Used in Preparation of Unaudited Financial Statements (Details)	Mar. 31, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Current Exchange Rate	16.56	16.97

Nature of Activities and Significant Accounting Policies - Exchange Rates Used in Preparation of Income Statement (Details)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accounting Policies [Abstract]
Weighted Average Exchange Rate for the Three Months Ended	16.98%	18.66%

Inventories (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Total Inventories	$ 2,083,801	$ 2,089,194
Mined Tonnage [Member]
Total Inventories	1,930,424	2,061,149
Gold-Silver Concentrates [Member]
Total Inventories	$ 153,377	$ 28,045

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Subtotal	$ 115,273	$ 115,273
Less: Accumulated depreciation and amortization	(19,582)	(12,239)
Total property and equipment, net	95,691	103,034
Leasehold improvements
Property, Plant and Equipment [Line Items]
Subtotal	21,274	21,274
Office equipment
Property, Plant and Equipment [Line Items]
Subtotal	42,493	42,493
Office furniture and fixtures
Property, Plant and Equipment [Line Items]
Subtotal	24,453	24,453
Other
Property, Plant and Equipment [Line Items]
Subtotal	$ 27,053	$ 27,053

Property and Equipment - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
PROPERTY PLANT EQUIPMENT
Depreciation and amortization expense	$ 7,343	$ 0

Mining Concessions - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Mining Concessions [Abstract]
Mining concessions	$ 4,132,678		$ 4,132,678
Depletion expense	$ 0	$ 0

Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued interest	$ 2,625,231	$ 2,352,869
Accrued mining expenses	2,562,258	2,104,938
Accrued payroll taxes	1,331,409	1,122,644
Other accrued liabilities	2,486,890	2,147,170
Total accrued liabilities	$ 9,005,788	$ 7,727,621

Derivative Liability - Additional Information (Details) - $ / shares	Dec. 31, 2020	May 14, 2020
Convertible Notes Payable
Derivative [Line Items]
Convertible promissory notes that bore interest rate	10.00%
Series D Preferred Stock
Derivative [Line Items]
Exercise price	$ 0.01	$ 0.01
2020 Warrants
Derivative [Line Items]
Warrants expiry term	10 years

Derivative Liability - Summary of Inputs valuation to be Level 3 in Fair Value (Details) - Preferred Series D Warrant - Level 3	Mar. 31, 2024	Dec. 31, 2023
Annual Volatility Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	1.26	1.23
Risk Free Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0459	0.0423
Remaining Term
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Remaining Term	6 years 1 month 13 days	6 years 4 months 13 days
Fair Value of Common Stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0193	0.0202

Derivative Liability - Summary of Change in the Fair Value of the Derivative Liability (Details) - Preferred Series D Warrant - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Fair Value of Derivative, Beginning Balance	$ 1,797,341	$ 1,905,078
Exercise of warrants	0	0
Change in fair value of derivative	(80,141)	(107,737)
Fair Value of Derivative, Ending Balance	$ 1,717,200	$ 1,797,341

Advance Credit Line Facility/Customer Advances - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended						3 Months Ended
	Aug. 17, 2023	Jun. 29, 2023	May 18, 2023	Mar. 31, 2023	Feb. 21, 2023	Dec. 28, 2022	Mar. 31, 2024	Sep. 29, 2023	May 01, 2021	Feb. 04, 2021
REVOLVING CREDIT LINE FACILITY
Revolving credit line facility amount										$ 3,750
Amount increased revenue percentage									80.00%
Maximum advance line							$ 17,500
Revolving credit line facility maximum amount										$ 3,750
Delivery percentage										100.00%
Revolving credit line facility interest free term							45 days
Revolving credit line facility deliveries of concentrates or cash free term							120 days
Description of line of credit							Beginning in September 2023, up to $10M of the ACL advance may be converted into a one-year installment loan bearing interest at 3M SOFR + 7.5% and amortized as follows: Month 1, interest only; Month 2-11, 5% principal plus interest; and Month 12, final 50% principal plus interest.
Advance from buyer	$ 10,750	$ 10,000	$ 9,850	$ 9,200	$ 9,600	$ 9,350
Conversion of advance to note payable								$ 9,750
Advances settlement date from buyers	Sep. 16, 2023	Aug. 14, 2023	Jun. 28, 2023	May 17, 2023	Mar. 31, 2023	Feb. 16, 2023
Advance credit line facility, converted to installment note							Converted to a one-year note payable on December 1, 2023. (Note 8).

Notes Payable - Additional Information (Details)	Dec. 01, 2023 USD ($)
NOTES PAYABLE
Notes payable outstanding amount	$ 9,750,000

Installment Notes Payable - Additional Information (Details) - USD ($)	1 Months Ended
	Oct. 31, 2019	Feb. 28, 2019	Jun. 30, 2018	Mar. 31, 2024	Dec. 31, 2023
Installment Notes Payable [Line Items]
Initial financing agreement amount		$ 335,350
Financing agreement, amount	$ 299,474		$ 1,739,392
Initial payment amount	$ 59,895	$ 67,070	$ 347,826
Initial payment percentage rate	20.00%	20.00%	20.00%
Remaining finance balance term over the period	36 months	36 months	36 months
Remaining finance balance term over the period percentage rate	22.00%	22.00%	22.00%
Accrued interest				$ 2,625,231	$ 2,352,869
Reduction in the volume of mining concession			In June 2018, the Company applied for a reduction of the Francisco Arturo mining concession, from 69,121 hectares to 3,280 hectares.
Reduction in the value of initial payment amount in pesos			$ 985,116
Reduction in the value of initial payment amount			$ 22,500
Accrued Liabilities [Member]
Installment Notes Payable [Line Items]
Accrued interest				$ 2,423,991

Installment Notes Payable - Summary of Installment Notes Payable Transaction (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
Installment Notes Payable [Abstract]
Installment notes payable, beginning balance	$ 2,259,432
Exchange rate adjustment	55,950
2024 principal payments	0
Installment notes payable, ending balance	$ 2,315,382

Asset Retirement Obligation - Additional Information (Details)	Dec. 31, 2023 USD ($)
Asset Retirement Obligation Disclosure [Abstract]
Estimated undiscounted costs	$ 316,800
Credit-adjusted risk-free interest rate	9.20%

Asset Retirement Obligation - Schedule of Change in Asset Retirement Obligation (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligation at beginning of year	$ 198,468	$ 0	$ 0
Additions to ARO liability	0		198,468
Accretion	4,565	$ 0	0
Asset retirement obligation at end of year	$ 203,033		$ 198,468

Stockholders' Equity - Additional Information (Details) - USD ($)				3 Months Ended		12 Months Ended
	Aug. 04, 2023	Oct. 07, 2021	May 14, 2020	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Oct. 18, 2021	Dec. 31, 2020
Capital stock authorized issue				60,001,000
Preferred stock, par value				$ 0.0001
Amount recieved from preferred right				$ 784,500
Repaid amount under preferred right				744,500
Current balance, preferred right				$ 40,000		$ 40,000
Common stock share used for settlement of fees						25,000
Common stock, shares issued	1,000,000			23,371,708		23,371,708
Cash considerations	$ 5,000,000
Derivative Liabilities				$ 1,717,200		$ 1,797,341
Common stock, shares authorized				40,000,000		40,000,000
Common stock, par value				$ 0.01		$ 0.01
Common stock, shares outstanding				23,371,708		23,371,708
Treasury stock outstanding				37,180		37,180
2023 Activity
Common stock purchase				892,165
Series A Preferred Stock
Preferred stock shares outstanding				0		0
Preferred Stock Undesignated
Preferred stock, par value				$ 0.0001
Preferred stock, shares designated				1,734,992
Preferred stock, additional shares authorized				15,266,008
Preferred stock shares outstanding				0		0
Series C Preferred Stock
Preferred stock, shares designated				1,734,992
Deemed dividends				$ 58,575	$ 58,575
Series C Senior Preferred Stock
Total arrears on dividend				$ 1,227,276
Preferred stock shares outstanding				1,734,992		1,734,992
Conversion price per shares				$ 1.95
Shares dividend receive per annum				4.00%
Dividend payable				$ 4,337,480
Series D Preferred Stock
Preferred stock, shares designated				3,000,000
Total arrears on dividend						$ 121,600
Dividend payable per annum				4.00%
Common stock, shares issued				368,468
Dividend payable				$ 1,520,000
Convertible note into preferred stock			$ 4,020,000
Number of shares issued for purchase of warrants			1,260,633
Exercise price			$ 0.01					$ 0.01
Preferred stock, shares issued							760,000
Convertible note into preferred stock		$ 1,520,000
Convertible note into preferred stock price per share		$ 2
Derivative Liabilities				1,717,200
Deemed dividends				$ 58,575	$ 58,575
Convertible note repurchase amount		$ 2,500,000
Common stock, par value				$ 0.01
Common stock purchase				368,468
Common Stock
Common stock, par value				$ 0.01
Common stock, shares outstanding				23,371,708		23,371,708
Stockholder Equity
Preferred stock, shares authorized				20,001,000

Stockholders' Equity - Summary of Warrants Outstanding (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Stockholders' Equity Note [Abstract]
Number of Shares, Beginning Balance	892,165
Number of Shares, Granted	0
Number of Shares, Exercised	0
Number of Shares, Forfeited	0
Number of Shares, Ending Balance	892,165	892,165
Number of Shares, Exercisable	892,165
Weighted Average Exercise Price, Beginning Balance	$ 0.01
Weighted Average Exercise Price, Granted	0
Weighted Average Exercise Price, Exercised	0
Weighted Average Exercise Price, Forfeited	0
Weighted Average Exercise Price, Ending Balance	0.01	$ 0.01
Weighted Average Exercise Price, Exercisable	$ 0.01
Weighted Average Remaining Contractual Life, Beginning Balance		6 years 4 months 13 days
Weighted Average Remaining Contractual Life, Granted	0 years
Weighted Average Remaining Contractual Life, Exercised	0 years
Weighted Average Remaining Contractual Life, Forfeited	0 years
Weighted Average Remaining Contractual Life, Ending Balance	6 years 1 month 13 days
Weighted Average Remaining Contractual Life, Exercisable	6 years 1 month 13 days
Intrinsic Value, Beginning Balance	$ 0
Intrinsic Value, Granted	0
Intrinsic Value, Exercised	0
Intrinsic Value, Forfeited	0
Intrinsic value, Ending Balance	0	$ 0
Intrinsic Value, Excercisable	$ 0

Stock Based Compensation (Additional Information) (Details) - $ / shares	Feb. 19, 2024	Mar. 31, 2024	Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock, par value		$ 0.01	$ 0.01
DynaResource, Inc [Member] \| 2024 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options to purchase	400,000
Common stock, par value	$ 0.01
Exercise Price	$ 5
Percentage Of Options Vesting	25.00%

Stock Based Compensation - Schedule of Inputs Utilized in Calculating Fair Value (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
Share-Based Payment Arrangement, Disclosure [Abstract]
Annual volatility rate	127.93%
Risk free rate	4.36%
Remaining Term	4 years
Fair Value of stock options	$ 1.15

Income Taxes - Additional Information (Details)	3 Months Ended
Income Taxes - Additional Information (Details)	Mar. 31, 2024
Mexican
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate, Percent	30.00%

Commitments and Contingencies - Additional Information (Details)		3 Months Ended
	Jan. 06, 2014	Mar. 31, 2024 MXN ($)	Mar. 31, 2024 USD ($)
Concession taxes, description		the Company does not anticipate that DynaMéxico will have any difficulties meeting the minimum annual expenditures for the concessions ($388 - $2,400 Mexican Pesos per hectare). DynaMéxico retains sufficient carry- forward amounts to cover over 10 years of the minimum annual expenditure (as calculated at the 2017 minimum, adjusted for annual inflation of 4%).	the Company does not anticipate that DynaMéxico will have any difficulties meeting the minimum annual expenditures for the concessions ($388 - $2,400 Mexican Pesos per hectare). DynaMéxico retains sufficient carry- forward amounts to cover over 10 years of the minimum annual expenditure (as calculated at the 2017 minimum, adjusted for annual inflation of 4%).
DynaMineras
Lease payment annually		$ 1,359,443
Rent expense		$ 5,296,950
Land Lease Agreement
Lease agreement term	20 years
Lease payment annually			$ 76,000
Rent expense			$ 321,000
Land Lease Agreement \| DynaMineras
Land area		4,399 hectares	4,399 hectares

Fair Value of Financial Instruments - Fair Value of Assets and Liabilities (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Liabilities:
Derivative Liabilities	$ 1,717,200	$ 1,797,341
Total Liabilities	1,717,200	1,797,341
Level 1
Liabilities:
Derivative Liabilities	0	0
Total Liabilities	0	0
Level 2
Liabilities:
Derivative Liabilities	0	0
Total Liabilities	0	0
Level 3
Liabilities:
Derivative Liabilities	1,717,200	1,797,341
Total Liabilities	$ 1,717,200	$ 1,797,341

Customer Concentration - Additional Information (Details) - Customer Concentration Risk - One Customer	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Accounts Receivable
Concentration of risk	100.00%	100.00%
Revenue
Concentration of risk	100.00%	100.00%

Geographical Concentrations - Additional Information (Details) - Segment	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Segment Reporting Information [Line Items]
Number of operating segments	1
Mexico \| Test-Mining and Pilot Milling Gold-Silver Concentrate
Segment Reporting Information [Line Items]
Number of operating segments	1	1

Geographical Concentrations - Schedule of Geographic Concentration (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property and equipment, net	$ 95,691	$ 103,034
Current assets	12,402,367	14,145,500
TOTAL ASSETS	34,244,330	35,438,350
Geographic Concentrations
Mineral property	4,132,678	4,132,678
Property and equipment, net	95,691	103,034
Current assets	12,402,367	14,145,500
Other assets	17,613,594	17,057,138
TOTAL ASSETS	34,244,330	35,438,350
Mexico \| Geographic Concentrations
Mineral property	4,132,678	4,132,678
Current assets	10,394,111	8,475,858
Other assets	15,828,208	15,271,752
TOTAL ASSETS	30,354,997	27,880,288
United States \| Geographic Concentrations
Property and equipment, net	95,691	103,034
Current assets	2,008,256	5,669,642
Other assets	1,785,386	1,785,386
TOTAL ASSETS	$ 3,889,333	$ 7,558,062

Related Party Transactions - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Accounts payable	$ 5,054,071		$ 2,768,634
Related Party [Member]
Accounts payable	187,500
Director [Member]
Board compensation and management fees expense	$ 87,500	$ 100,000

Subsequent Events - Additional Information (Details) - 1 months ended Apr. 30, 2024	MXN ($)	USD ($)
Subsequent Event \| Minera de Alica S.A. de C.V.
No assets, liabilities or activity transferred amount	$ 95,000	$ 5,600

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