~~222 W. Las Colinas Blvd., Suite 1910 North Tower, Irving, Texas 75039~~(972) 868-9066

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 ~~past~~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:~~ 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, ~~or a~~ smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange ~~Act:~~Act.

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)~~13(a) of the Exchange Act. ~~Yes~~ ☐ ~~No ☒~~

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

As of ~~September 30, 2022,~~November 16, 2023, there were ~~20,746,654 shares~~23,246,654 shares of Common Stock of the registrant outstanding.

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

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2022~~2023 AND ~~2021~~2022


	Three Months Sept. 30, 2022			Three Months Sept. 30, 2021			Nine Months Sept. 30, 2022			Nine Months Sept. 30, 2021			Three Months September 30, 2023			Three Months September 30, 2022			Nine Months September 30, 2023			Nine Months September 30, 2022

REVENUES	$	8,032,557		$	10,467,058		$	28,623,070		$	25,906,083		$	6,115,370		$	8,032,557		$	28,980,618		$	28,623,070
COSTS AND EXPENSES OF MINING OPERATIONS
Production Costs Applicable to Sales		964,172			756,898			2,876,902			1,917,049			2,226,265			964,172			5,993,040			2,876,902
Mine Production Costs		1,946,981			1,135,938			4,786,236			3,385,340			2,553,369			1,946,981			8,022,328			4,786,236
Mine Exploration Costs		1,335,437			1,151,020			3,792,405			3,437,009			2,854,863			1,335,437			7,318,836			3,792,405
Facilities Expansion Costs		1,773,385			579,432			4,744,792			579,432			401,464			1,773,385			1,226,135			4,744,792
Exploration Drilling		770,892			-			1,993,082			-			569,261			770,892			1,694,536			1,993,082
Camp, Warehouse and Facilities		911,284			697,446			3,147,312			1,956,168			1,379,782			911,284			3,888,241			3,147,312
Transportation		572,772			374,974			1,682,986			968,672			736,836			572,772			2,277,385			1,682,986
Property Holding Costs		39,312			36,866			112,093			116,516			48,824			39,312			130,015			112,093
General and Administrative		1,033,820			1,085,187			3,177,917			2,252,156			1,429,879			1,033,820			6,660,862			3,177,917
Depreciation and Amortization		812			812			2,437			2,437			4,896			812			4,896			2,437
Total Operating Expenses		9,348,867			5,818,573			26,316,162			14,614,779			12,205,439			9,348,867			37,216,274			26,316,162

NET OPERATING INCOME (LOSS)		(1,316,310	)		4,648,485			2,306,908			11,291,304			(6,090,069	)		(1,316,310	)		(8,235,656	)		2,306,908

OTHER INCOME (EXPENSE)
Foreign Currency Gains (Losses)		9,919			(258,006	)		47,709			(121,725	)		(80,815	)		9,919			(46,588	)		47,709
Interest Expense		(103,544	)		(372,336	)		(345,049	)		(1,102,755	)		(121,079	)		(103,544	)		(345,254	)		(345,049	)
Derivatives Mark-to-Market Gain (Loss)		(169,445	)		(3,743,797	)		1,993,836			(3,928,913	)		(705,079	)		(169,445	)		(142,802	)		1,993,836
Arbitration Award Expense		-			-			-			(1,111,111	)
Other Income		649			581			1,688			581			561			649			1,868			1,688
Total Other Income (Expense)		(262,421	)		(4,373,558	)		1,698,184			(6,263,923	)		(906,412	)		(262,421	)		(532,776	)		1,698,184

NET INCOME (LOSS) BEFORE TAXES		(1,578,731	)		274,927			4,005,092			5,027,381			(6,996,481	)		(1,578,731	)		(8,768,432	)		4,005,092

INCOME TAXES		-			-			-			-
INCOME TAXES (BENEFIT)														(1,045,355	)		-			(2,256,570	)		-

NET INCOME (LOSS)	$	(1,578,731	)	$	274,927		$	4,005,092		$	5,027,381		$	(5,951,126	)	$	(1,578,731	)	$	(6,511,862	)	$	4,005,092
DEEMED DIVIDEND FOR SERIES C AND SERIES D PREFERRED	$	(58,574	)		(43,374	)		(175,724	)		(130,124	)
DEEMED DIVIDEND FOR SERIES C AND D PREFERRED														(58,575	)		(58,574	)		(175,724	)		(175,724	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(1,637,305	)	$	231,553		$	3,829,368		$	4,897,257		$	(6,009,701	)	$	(1,637,305	)	$	(6,687,586	)	$	3,829,368

EARNINGS (LOSS) PER SHARE DATA ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC:

Basic Earnings (Loss) per Common Share	$	(0.08	)	$	0.01		$	0.20		$	0.28		$	(0.27	)	$	(0.08	)	$	(0.30	)	$	0.20
Diluted Earnings (Loss) per Common Share	$	(0.08	)	$	0.01		$	0.20		$	0.28		$	(0.27	)	$	(0.08	)	$	(0.30	)	$	0.20

Weighted Average Shares Outstanding, Basic		20,746,654			17,722,825			19,005,593			17,722,825			22,558,129			20,746,654			22,455,445			19,005,593
Weighted Average Shares Outstanding, Diluted		20,746,654			17,722,825			19,005,593			17,722,825			22,558,129			20,746,654			22,455,445			19,005,593

OTHER COMPREHENSIVE INCOME (LOSS)
OTHER COMPREHENSIVE INCOME

Foreign Currency Exchange Gains (Losses)		(185,059	)		69,421			(174,043	)		(301,986	)		(210,050	)		(185,059	)		141,167			(174,043	)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		(185,059	)		69,421			(174,043	)		(301,986	)		(210,050	)		(185,059	)		141,167			(174,043	)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	(1,763,790	)	$	344,348		$	3,831,049		$	4,725,395		$	(6,161,176	)	$	(1,763,790	)	$	(6,370,695	)	$	3,831,049

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

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

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2022,~~2023 AND ~~2021~~2022


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

THREE MONTHS ENDED SEPTEMBER 30, 2021
Balance, June 30, 2021		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	50,407,333			516,480		$	(1,474,486	)	$	66,685		$	(54,504,374	)	$	(5,287,613	)
																															THREE MONTHS ENDED SEPTEMBER 30, 2022
Treasury Stock Issued for Services														(11,634	)		(20,967	)		59,858									48,224

Other Comprehensive Income																							69,421						69,421

Net Income (Loss)																										274,927			274,927

Balance, September 30, 2021		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	50,395,699			495,513		$	(1,414,628	)	$	136,106		$	(54,229,447	)	$	(4,895,041	)

THREE MONTHS ENDED SEPTEMBER 30, 2022
Balance, June 30, 2022		1,000	$	1		20,746,654	$	207,467		1	$	40,000	$	56,022,782			12,180		$	(34,773	)	$	(236,649	)	$	(45,138,642	)	$	10,860,186			1,000		$	1			20,746,654	$	207,467		1	$	40,000	$	56,022,782			12,180		$	(34,773	)	$	(236,649	)	$	(45,138,642	)	$	10,860,186

Other Comprehensive Income																							(185,059	)					(185,059	)																									(185,059	)					(185,059	)

Net Income (Loss)																										(1,578,731	)		(1,578,731	)																												(1,578,731	)		(1,578,731	)

Balance, September 30, 2022		1,000	$	1		20,746,654	$	207,467		1	$	40,000	$	56,022,782			12,180		$	(34,773	)	$	(421,708	)	$	(46,717,373	)	$	9,096,396			1,000		$	1			20,746,654	$	207,467		1	$	40,000	$	56,022,782			12,180		$	(34,773	)	$	(421,708	)	$	(46,717,373	)	$	9,096,396

NINE MONTHS ENDED SEPTEMBER 30, 2021
Balance January 1, 2021		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	50,407,333			516,480		$	(1,474,486	)	$	438,092		$	(59,256,828	)	$	(9,668,660	)
																															THREE MONTHS ENDED SEPTEMBER 30, 2023
Treasury Stock Issued for Services														(11,634	)		(20,967	)		59,858									48,224

Balance, June 30, 2023																																-		$	-			22,246,654	$	222,467		1	$	40,000	$	55,639,032			37,180		$	(95,023	)	$	463,295		$	(44,597,399	)	$	11,672,372

Issuance of Common Stock																																						1,000,000		10,000						4,990,000															5,000,000

Other Comprehensive Income																							(301,986	)					(301,986	)																									(210,050	)					(210,050	)

Net Income (Loss)																										5,027,381			5,027,381																													(5,951,126	)		(5,951,126	)

Balance, September 30, 2021		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	50,395,699			495,513		$	(1,414,628	)	$	136,106		$	(54,229,447	)	$	(4,895,041	)
Balance, September 30, 2023																																-		$	-			23,246,654	$	232,467		1	$	40,000	$	60,629,032			37,180		$	(95,023	)	$	253,245		$	(50,548,525	)	$	10,511,196

NINE MONTHS ENDED SEPTEMBER 30, 2022
																															NINE MONTHS ENDED SEPTEMBER 30, 2022

Balance January 1, 2022		1,000	$	1		18,091,293	$	180,913		1	$	40,000	$	50,632,400			12,180		$	(34,773	)	$	(247,665	)	$	(50,722,465	)	$	(151,589	)		1,000		$	1			18,091,293	$	180,913		1	$	40,000	$	50,632,400			12,180		$	(34,773	)	$	(247,665	)	$	(50,722,465	)	$	(151,589	)

Stock Warrant Exercised						2,655,361		26,554						5,390,382															5,416,936									2,655,361		26,554						5,390,382															5,416,936

Other Comprehensive Income																							(174,043	)					(174,043	)																									(174,043	)					(174,043	)

Net Income (Loss)																										4,005,092			4,005,092																													4,005,092			4,005,092

Balance, September 30, 2022		1,000	$	1		20,746,654	$	207,467		1	$	40,000	$	56,022,782			12,180		$	(34,773	)	$	(421,708	)	$	(46,717,373	)	$	9,096,396			1,000		$	1			20,746,654	$	207,467		1	$	40,000	$	56,022,782			12,180		$	(34,773	)	$	(421,708	)	$	(46,717,373	)	$	9,096,396

																															NINE MONTHS ENDED SEPTEMBER 30, 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

Issuance of Common Stock																																						1,000,000		10,000						4,990,000															5,000,000

Purchase of Series A Stock																																																	1,000			(1,250,000	)								(1,250,000	)

Cancellation of Series A Stock																																(1,000	)		(1	)										(1,249,999	)		(1,000	)		1,250,000									-

Acquisition of Treasury Stock																																																	25,000			(60,250	)								(60,250	)

Other Comprehensive Income																																																							141,167						141,167

Net Income (Loss)																																																										(6,511,862	)		(6,511,862	)

Balance, September 30, 2023																																-		$	-			23,246,654	$	232,467		1	$	40,000	$	60,629,032			37,180		$	(95,023	)	$	253,245		$	(50,548,525	)	$	10,511,196

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

	2022			2021
CASH FLOWS FROM OPERATING ACTIVITES:
Net income	$	4,005,092		$	5,027,381
Adjustments to reconcile net income to cash provided by (used in) operating activities
Change in Derivatives		(1,993,836	)		3,928,913
							2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)							$	(6,511,862	)	$	4,005,092
Adjustments to reconcile net income (loss) to cash used in operating activities
Change in Fair Value of Derivatives								142,802			(1,993,836	)
Depreciation and Amortization		2,437			2,437			4,896			2,437
Amortization of Loan Discount		-			411,935
Stock Issued for Services		-			48,224
Deferred Taxes								(2,256,570	)		-
Change in Operating Assets and Liabilities
Accounts Receivable		(365,616	)		(125,252	)		(88,341	)		(365,616	)
Inventories		(832,909	)		(1,428,944	)		911,732			(832,909	)
Foreign Tax Receivable		(3,501,836	)		(1,670,554	)		(4,937,939	)		(3,501,836	)
Operating Lease Assets								(349,298	)		72,396
Other Assets		(342,402	)		(270,129	)		(390,347	)		(342,402	)
Operating Lease Assets		72,396			64,301
Appeal Bond		-			1,111,111
Accounts Payable		985,620			(419,323	)		98,698			985,620
Accrued Expenses		40,903			1,381,360			1,136,889			40,903
Customer Advances		(1,875,000	)		6,750,000			400,000			(1,875,000	)
Operating Lease Liabilities		(76,576	)		(64,077	)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES		(3,881,727	)		14,747,383
Lease Liabilities								350,534			(76,576	)
CASH FLOWS USED IN OPERATING ACTIVITIES								(11,488,806	)		(3,881,727	)

CASH FLOWS FROM FINANCING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment								(115,273	)		-
CASH FLOWS USED IN INVESTING ACTIVITIES								(115,273	)		-

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Sale of Common Stock								5,000,000			-
Proceeds from Exercise of Stock Warrants		5,416,936			-			-			5,416,936
Payments of Convertible Notes Payable		(543,279	)		-
Purchase of Series A Preferred Stock								(1,250,000	)		-
Acquisition of Treasury Stock								(60,250	)		-
Payments of Notes Payable		(83,258	)		(47,936	)		-			(626,537	)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES		4,790,399			(47,936	)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES								3,689,750			4,790,399

Effects of Foreign Currency Exchange		(139,224	)		(371,173	)
Effects of Foreign Currency								374,276			(139,224	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		769,448			14,328,274
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS								(7,540,053	)		769,448
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		15,719,238			1,504,016			19,177,138			15,719,238
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	16,488,686			15,832,290		$	11,637,085		$	16,488,686

SUPPLEMENTAL DISCLOSURES
Cash Paid for Interest	$	62,729		$	391,436		$	-		$	62,729
Cash Paid for Income Taxes	$	-		$	-		$	200,000		$	-

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

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.

~~In 2000,~~The Company has one wholly owed subsidiary in the ~~Company formed a~~United States, DynaMéxico US Holding, LLC and three wholly owned ~~subsidiary,~~subsidiaries in México, DynaResource de México, S.A. de C.V.~~, chartered in México~~ (“DynaMéxico”)~~. This Company was formed to acquire, invest in~~, Mineras de DynaResources S.A. de C.V. (“DynaMineras”), and ~~develop resource properties in México.~~DynaResource Operaciones de San Jose De Gracia S.A. de C.V. (“DynaOperaciones”) DynaMéxico owns a portfolio of mining concessions that currently ~~includes~~comprises its ~~interests~~100% interest in the San José de Gracia Project (“SJG”) in northern Sinaloa State, México. The SJG District covers 9,920 hectares (24,513 acres) on the west side of the Sierra Madre ~~mountain~~Mountain range. The Company currently ~~owns 100%~~own 100% of the outstanding capital of DynaMéxico. ~~A 20% minority interest in DynaMéxico was held by Goldgroup Resources Inc., a wholly owned subsidiary of Goldgroup Mining Inc. Vancouver BC (“Goldgroup”) until February 24, 2020.~~

In 2005, the Company formed DynaResource Operaciones de San José De Gracia S.A. de C.V. (“DynaOperaciones”) and acquired control of Mineras de DynaResource, S.A. de C.V. (formerly Minera Finesterre S.A. de C.V., “DynaMineras”). The Company owns 100% of DynaMineras.

The Company elected to become a voluntary reporting issuer in Canada in order to avail itself of Canadian regulations regarding reporting for mining properties and, more specifically, National Instrument 43-101 (“NI 43-101”). This regulation sets forth standards for reporting resources in a mineral property and is a reporting standard widely recognized in the mining industry.

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 financial statements.

The financial statements and notes are representations of the Company’s management, which is ~~responsible~~responsi ble 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)(1) recorded transactions are valid; 2)(2) valid transactions are recorded; and 3)(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

~~The~~These unaudited condensed consolidated interim financial statements reflect the accounts of the Company ~~prepares its unaudited~~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. 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, 2022 included in the Company’s Annual Report on Form 10-K for the ~~accrual basis~~year ended December 31, 2022. These unaudited interim condensed consolidated financial statements reflect all adjustments (consisting of ~~accounting~~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.

Correction of an Error

The derivative liability in the Company’s December 31, 2022 balance sheet presented herein has been corrected to $2,172,417 from $2,334,377 from the Company’s Form 10-K which was filed with the Securities and Exchange Commission on April 17, 2023. The error was a typographical error made in that single line item and it did not impact any other financial statement balances including total liabilities, net income, earnings per share, or management compensation.

Use of Estimates

In order to prepare unaudited condensed interim consolidated financial statements in conformity with accounting principles generally accepted in the United ~~States.~~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.

Principles of Consolidation

The unaudited condensed interim consolidated financial statements include the accounts of DynaResource, Inc., as well as ~~DynaResource de Mé~~the Company’s wholly owned subsidiaries DynaMéxico, ~~S.A. de C.V. (100% ownership), DynaResource Operaciones S.A. de C.V. (100% ownership)~~DynaOperaciones and ~~Mineras de DynaResource S.A. de C.V. (100% ownership).~~DynaMineras. All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated.

~~Table of Contents~~

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 September 30, ~~2022,~~2023, the Company ~~had $15,595,559 of~~has $10,898,988 in deposits in U.S. ~~Banks~~banks in excess of the FDIC limit. ~~Management does not believe that~~In addition, the Company isdoes not have any cash equivalents as of September 30, 2023. The Company reduces this risk by maintaining such deposits at ~~risk of loss on cash.~~high quality financial institutions that management believes are creditworthy.

Accounts Receivable and Allowances for Doubtful Accounts

The Company maintains an allowance for doubtful accounts ~~receivable is recorded when receivables are considered to be doubtful of collection.~~based upon its customers’ financial condition and payment history, and its historical collection experience and expected collectability. As of September 30, ~~2022,~~2023 and December 31, ~~2021, respectively,~~2022, no allowance has been deemed necessary.

Foreign Tax Receivable

Foreign ~~Tax Receivable~~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 remitted. ~~The total amounts of the IVA receivable as of September 30, 2022, and December 31, 2021 are $8,244,016 and $4,742,180, respectively.~~

Inventory

~~Inventory~~

Inventories are carried at the lower of cost or net realizable value and consist of mined tonnage, gravity and flotation concentrates, and gravity tailings or flotation feed material. ~~The inventories are $2,943,112 and $2,110,203 as of September 30, 2022, and December 31, 2021, respectively.~~

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 September 30, ~~2022,~~2023, the Company ~~fits~~meets 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 ~~disclosed.~~as defined by Regulation S-K, Item 1300.

Property, Plant & Equipment

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~~Property~~

Substantially all ~~mine development costs,~~property, plant 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 ~~has~~have alternative uses or significant salvage value, may be capitalized without proven and probable reserves. ~~Depreciation is computed using the straight-line method.~~

Office furniture and equipment are ~~being~~ 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 ~~of 10 years.~~which is 52 months.

Design, Construction, and Development Costs: Mine development costs 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, and the property is a commercially minable property.~~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 on a standby basis 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, and accordingly, substantially all such costs are expensed as incurred, resulting in the Company reporting higher operating costs than if such expenditures had been capitalized. Additionally, the Company does not have a corresponding depreciation or amortization of these costs going forward since such costs were expensed as incurred as opposed to being capitalized. As a result of these and other differences, the Company’s financial statements may not be comparable to the financial statements of mining companies that have established reserves.

Mineral Property Interests

Mineral property interests include acquired interests in development and exploration stage properties and are considered tangible assets. The amount capitalized relating to a mineral property interest represents its fair value at the time of acquisition. When a property does not contain mineralized material that satisfies the definition of proven and probable reserves, such as with the San José de Gracia Property, capitalized costs and mineral property interests are amortized using the straight-line method once production begins. As of September 30, 2022, the mining interests have been in the pilot production stage and therefore, no amortization has been expensed. Mining properties consist of 33 mining concessions covering approximately 9,920 hectares at the San José de Gracia ~~property, the basis of which are amortized on the unit of production method based on estimated recoverable resources.~~property. 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 mineral properties and the related costs are recorded do not necessarily reflect present or future values.

Impairment of Assets: 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.

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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. ·	~~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, and at least annually.~~needed. As of the date of this filing, no events have occurred that would require the write-down of any assets. As of September 30, ~~2022,~~2023 and December 31, ~~2021,~~2022, no indications of impairment existed.

Asset Retirement Obligation

As the Company is not obligated to remediate the mining properties, no Asset Retirement Obligation (“ARO”) has been established. 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 of these 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 a 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, ~~are charged to operations and expensed as incurred. Exploration,~~including exploration, development, direct field costs and related administrative costs are expensed in the period incurred.

Leases

Effective January 1, 2019, 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).

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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 September 30, ~~2022,~~2023 and December 31, ~~2021~~2022 (Mexican Pesos per one U.S. dollar):

~~Sept. 30,~~

~~2022~~

~~Dec.~~

~~31,~~

~~2021~~

~~Exchange Rate at Period End Pesos~~

~~20.12~~

~~20.48~~


	September 30, 2023		December 31, 2022
Current Exchange Rate		17.42		19.48

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 September 30, ~~2022,~~2023 and ~~September 30, 2021~~2022 (Mexican Pesos per one U.S. dollar):

~~Sept. 30,~~

~~2022~~

~~Sept. 30,~~

~~2021~~

~~Weighted Average Exchange Rate for the Nine Months Ended Pesos~~

~~20.25~~

~~20.13~~


	September 30, 2023		September 30, 2022
Weighted Average Exchange Rate for the Nine Months Ended		17.79		20.25

The Company recorded currency transaction gains (losses) of ~~$47,709~~$(46,558) and ~~$(121,725)~~$47,709 for the nine months ended September 30, 2023 and 2022, ~~and 2021,~~ 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 is taxed isin accordance with applicable Mexican tax law ~~rates.~~

~~Use of Estimates~~

~~In order to prepare unaudited 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 consolidated financial statements and determines whether contingent assets and liabilities, if any, are disclosed in the unaudited 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.enacted rates.

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 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~~Contracts with ~~customers~~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.

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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. The revenue is adjusted upon final settlement of the sale. The chief risk associated with the recognition of sales on a provisional basis is the fluctuation (if any) between the estimated quantities of precious metals base on the initial assay and the actual recovery from treatment and processing.

~~As of September 30, 2022, there are $7,375,000 in customer deposit liabilities for payments received in advance, all of which are expected to be settled in 2022.~~

During the nine months ended September 30, ~~2022,~~2023, and the year ended December 31, ~~2021,~~2022, there ~~was $9,250,000~~were $9,350,000 and ~~$1,500,000~~$9,250,000, respectively of revenue recognized during the period from customer deposit liabilities (deferred contract revenue) from prior periods, and ~~$0 of~~no customer deposits were refunded to the customer due to order cancellation.

~~We have elected to account for shipping~~Shipping and handling costs asare considered fulfillment costs after the customer obtains control of the goods.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, receivables, payables and long-term debt. ~~The carrying amount of cash,~~Cash, receivables and payables ~~approximates~~approximate fair value because of the short-term nature of these items. ~~The carrying amount~~As of September 30, 2023 and December 31, 2022, there were no long-term ~~debt approximates~~assets or liabilities, measured at their estimated fair ~~value due~~value.

Earnings (Loss) Per Share

Earnings (loss) per share, attributable to the ~~relationship between the interest rate on long-term debt and the Company’s incremental risk adjusted borrowing rate.~~

~~Per Share Amounts~~

~~Earnings per share~~common equity holders of DynaResource, 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 ~~are~~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 ~~convertible notes and~~ are excluded from ~~the~~ diluted earnings

(loss) per share computation in periods where the Company has incurred a net loss attributable to the common equity holders or where the average stock price was below the exercise price of the respective potentially dilutive common share, as their effect would be considered anti-dilutive.

~~The~~ For the three and nine months ended September 30, 2023, the Company had ~~warrants outstanding at September 30, 2022 which upon exercise, would result in the issuance of 892,165 shares of common stock. The warrants are exercisable at $.01 per share.~~

The Company had warrants outstanding at December 31, 2021 which upon exercise, would result in the issuance of 3,060,998 shares of common stock. Of these warrants, 2,168,833 were exercisable at $2.04 per share and 892,615 were exercisable at $.01 per share. The Company also had convertible debt instruments as of December 31, 2021 which, upon conversion at valuations of $2.50 per share, would result in the issuance of 217,312 shares of common stock.

Nine Months
Ended
Sept. 30,
2022

Nine Months
Ended
Sept. 30,
2021

Net income (loss) attributable to common shareholders

$ 3,829,368

$ 4,897,257

Weighted average number of common shares outstanding, Basic

19,005,593

17,722,825

Diluted weighted average number of common shares outstanding

19,005,593

17,722,825

Basic earnings per share

$ 0.20

$ 0.28

Diluted earnings per share

$ 0.20

$ 0.28

~~As of September 30, 2022, 892,165 shares~~3,644,121 of potentially dilutive common ~~stock related to outstanding stock warrants were~~shares that have been excluded from ~~the~~ diluted earnings per share, ~~calculation because the ratio of expenses related to the shares to issuable shares exceeded the basic earnings per share and therefore~~as their effect would be ~~anti-dilutive.~~

At September 30, 2021, 2,168,833 shares of potentially dilutive common stock related to outstanding stock warrants and 224,103 shares of potentially dilutive common stock related to convertible debt were excluded from the diluted earnings per share calculation because the exercise and conversion prices exceeded the average stock price and therefore their effect would be anti-dilutive. In addition, at September 30, 2021, 1,260,634 of potentially dilutive common stock related to outstanding warrants and 2,089,098 shares of potentially dilutive common stock related to convertible debt were excluded from the diluted earnings per share calculation because the ratio of expenses relatedconsidered anti-dilutive due to the ~~shares~~net loss for the three and nine months attributable to ~~issuable shares exceeded~~ the ~~basic earnings per share and therefore their effect would be anti-dilutive.~~common equity holders.

Related Party Transactions

~~FASB~~ ASC 850, ~~“Related~~“Related Party ~~Disclosures”~~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 is also a related party if it 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.

Mining properties consist of the San José de Gracia concessions. Mining Concessions were ~~$4,132,678 and $4,132,678 at~~$4,132,678 as of September 30, ~~2022~~2023 and December 31, ~~2021, respectively.~~2022. There was no depletion expense during the nine months ended September 30, 2023 and 2022, ~~and 2021.~~as the Company is an exploration stage issuer (See Note 1).

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NOTE 7-6 - 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) ~~twenty million and one thousand (20,001,000)~~20,001,000 shares of Preferred Stock, par value ~~$0.0001~~$0.0001 per share (“Preferred Stock”), of which ~~1,000 shares are designated as Series A Preferred Stock,~~ 1,734,992 are designated as Series C Preferred Stock, and 3,000,000 shares are designated as Series D Preferred Stock and (ii) ~~forty million (40,000,000)~~40,000,000 shares of Common Stock, par value ~~$0.01~~$0.01 per share (“Common Stock”). As of September 30, ~~2022, 15,265,008~~2023, 15,266,008 shares of Preferred Stock remain undesignated.

Series A Preferred Stock

~~The~~As of December 31, 2022, Company ~~has~~had designated 1,000 shares of its Preferred Stock as Series A, having a par value of ~~$0.0001~~$0.0001 per share. Holders of the Series A Preferred Stock have the right to elect a majority of the Board of Directors of the Company. ~~The Company issued~~ As of December 31, 2022, there were 1,000 shares of Series A Preferred Stock ~~to its CEO. At, September 30, 2022 and December 31, 2021, there were 1,000 shares of~~outstanding. On April 19, 2023, the Company repurchased the Series A Preferred Stock ~~outstanding.~~from its Chief Executive Officer (“CEO”) (see Note 13 – Related Party Transactions). The Series A Preferred shares were subsequently cancelled. On July 17, 2023, the Company amended the Amended and Restated Certificate of Incorporation to remove the designation of the Series A Preferred Stock.

Series C Senior Convertible Preferred Stock

AtAs of September 30, ~~2022~~2023 and December 31, ~~2021~~2022 there were 1,734,992 ~~and 1,734,992~~ Series C Preferred shares outstanding. As of September 30, ~~2022,~~2023, these Series C Preferred Shares are convertible to common shares at ~~$2.04~~$1.95 per share or redeemable in cash at the shareholder’s option and ~~include~~includes 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 ~~4.0%~~4% of ~~$4,337,480~~$4,337,480 payable annually on June ~~30. At~~30th. As of September 30, ~~2022,~~2023, dividends for the years 2016 to ~~2022~~2023 totaling ~~$1,053,777~~$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

~~Financing Agreement with Golden Post Rail, LLC, a Texas Limited Liability Company, (“Golden Post”) and with Shareholders of DynaResource, Inc.~~

On May 14, 2020, the Company closed an additional financing ~~agreement with Golden Post, and with certain individual shareholders, and related agreements. A summary of the transactions~~ and related agreements ~~is set forth below:~~

Pursuant to the May 14, 2020 Note Purchase Agreement (the “NPA”) among the Company, Golden Post Rail, LLC (the “Lead Purchaser”), and the other parties listed on Exhibit A of the NPA thereto (the “Remaining Purchasers”):

~~Golden Post acquired the following securities~~:

		~~(a)~~	A convertible promissory note (the “Golden Post Note”) payable to Golden Post in the principal amount of $2,500,000, bearing interest at 10%, and maturing two years from the date of execution. The Golden Post Note is convertible, at the option of Golden Post, into shares of Series D Senior Convertible Preferred Stock (the “Series D Preferred”) at a conversion price of $2.00 per share; and

		~~(b)~~	A common stock purchase warrant (the “2020 Warrant”) for the purchase of 783,976 shares of the Company’s common stock, at an exercise price of $0.01 per share, and maturing on the 10-year anniversary of the date of issuance. The 2020 Warrant contains anti-dilution provisions.

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~~The Remaining Purchasers acquired the following securities~~:

		~~(a)~~	Convertible promissory notes (the “Remaining Notes”) in the aggregate principal amount of $1,400,000, bearing interest at 10%, and maturing two years from the date of issuance. The Remaining Notes are convertible, at the option of each individual Remaining Purchaser, into shares of Series D Preferred at a conversion price of $2.00 per share; and

		~~(b)~~	Common stock purchase warrants (the “Remaining Purchasers Warrants”) for the purchase of an aggregate of 439,026 shares of the Company’s common stock, at an exercise price of $0.01 per share, and maturing on the 10-year anniversary of the date of issuance. The Remaining Purchasers Warrants contain anti-dilution provisions.

Also pursuant to the NPA, the Company and the Lead Purchaser agreed to amend the common stock purchase warrant dated September 30, 2015 (the “2015 Warrant”), issued to the Lead Purchaser in connection with that certain Securities Purchase Agreement dated as of May 6, 2015. The 2015 Warrant contemplates the purchase, upon exercise, of 2,166,527 shares (subject to adjustment) of the Company’s common stock and matured September 30, 2020 (the “Termination Date”). The amendment to the 2015 Warrant provides that, following the expiration of the 2015 Warrant, the Company will issue to the Lead Purchaser a new warrant (the “New Warrant”), substantially in the same form of the 2015 Warrant, representing the right to purchase the number of shares of the Company’s common stock that were still subject to purchase upon exercise of the 2015 Warrant, if any. The New Warrant has a maturity date of September 30, 2022.

	3.	As part of the transaction contemplated by the NPA, the Company executed an Amended and Restated Registration Rights Agreement pursuant to which Golden Post may require the Company to register the shares of common stock which may be issued upon (i) the conversion of the Series C Preferred, (ii) the conversion of the Series D Preferred, and (iii) the shares of common stock issuable upon the exercise of the 2015 Warrant, the 2020 Warrant, and a compensatory warrant issued to the Lead Purchaser on May 13, 2020 (described below under the heading “Compensatory Issuances”), including any additional shares of common stock issuable pursuant to anti-dilution provisions of such securities.

	4.	Pursuant to the transaction contemplated by the NPA, the Company held a special meeting of Company stockholders, to solicit stockholder approval of (a) an amendment of the Company’s certificate of incorporation to increase the number of authorized shares of common stock from 25,000,000 shares to 40,000,000 shares, and (b) an amendment of the Certificate of Designations of the Series C Preferred, in order to (a) extend the maturity date of the Series C Preferred by an additional two (2) years, (ii) add an equity cap in respect of the conversion of Series C Preferred into common stock of the Company, and (iii) add certain restrictions on the ability of the Company to issue Series C Preferred. The special meeting was held on July 13, 2020, and Company stockholders approved each item referenced above.

5.	On May 13, 2020, one business day prior to the NPA, the Company issued to the Lead Purchaser the following: (i) a common stock purchase warrant for 2,306 shares, at an exercise price of $0.01 per share, and maturing on the 7-year anniversary of the date of issuance (the “Compensatory Warrant”); and (ii) 1,771 shares of Series C Preferred. These issuances were occasioned by the Company’s obligations under the Securities Purchase Agreement dated as of May 6, 2015.

6.	In order to accommodate the issuance of the additional 1,771 shares of Series C Preferred, on May 13, 2020 the Company filed with the Secretary of State of Delaware a Certificate of Increase of Series C Senior Convertible Preferred Stock, to increase the number of shares of preferred stock designated as Series C Preferred from 1,733,221 shares to 1,734,992 shares.

7.		Also on May 13, 2020, the Company filed with the Secretary of State of Delaware a Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of Preferred Stock and Qualifications, Limitations and Restrictions thereof of Series D Senior Convertible Preferred Stock, contemplating the authorization of 3,000,000 shares of Series D Preferred.

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~~On October 11, 2021. the Company filed an amended designation of Series D Preferred~~ with ~~the State of Delaware.~~

~~Retirement of Convertible Debt~~

certain shareholders. On October 7, 2021, the Company paid ~~$2,500,000~~$2,500,000 to repurchase one ~~note that was convertible into Series D Preferred.~~note.

The remaining ten noteholders of notes convertible into Series D Preferred Stock elected to convert their notes totaling ~~$1,520,000~~$1,520,000 into Series D Preferred Stock at ~~$2.00~~$2.00 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 September 30, 2023 dividends for the year 2022 totaling $60,800 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 ~~stock holder~~stockholder at any time following maturity, the Series D Preferred ~~shares are~~Stock is classified as “temporary equity” on the balance sheet.

Due to the anti-dilutive provisions contained in the May 6, 2015, Securities Purchase Agreement, the Series C Preferred and the 2015 Warrant, the Company incurred derivative liabilities upon issuance of these securities. On May 14, 2020, in connection with the Series D Convertible Note financing, the expiration dates for the Series C Preferred and the 2015 Warrant were extended to September 30, 2022. In addition, a new derivative liability was incurred due to the issuance of additional warrants. At December 31, 2021, the total derivative liability was $3,898,914, which included $1,019,431 for the Series C Preferred, $1,320,380 in connection with the 2015 Warrant, and $1,559,103 in connection with the additional warrants. As of September 30, 2022, only the additional warrants derivative liability remained, for a total derivative liability of $1,905,078. The 2015 Warrant was exercised on September 28, 2022 at an above market price, resulting in no derivative liability. The Series C Preferred shares are convertible at an above market price or redeemable by the holder on demand. The deemed dividends on the Series C and D Preferred Stock for the nine months ~~ending~~ended September 30, 2023 and 2022, were $175,724and ~~September 30, 2021, were $130,124 and $130,124 respectively. The deemed dividends for the Series D Preferred for the nine months ending September 30, 2022 and 2021 were $45,600 and $0,~~$175,724, respectively. As the Company has not declared these dividends, it is required ~~only~~ as an item “below” the net income ~~(loss)~~ amount on the accompanying unaudited condensed interim consolidated statements of ~~income (loss).~~income.

Preferred Stock (Undesignated)

In addition to the ~~1,000 shares designated as Series A Preferred Stock and the~~ 1,734,992 shares designated as Series C Preferred ~~Shares~~Stock, and the 3,000,000 shares designated as Series D Preferred Stock, the Company is authorized to issue an additional ~~15,265,008~~15,266,008 shares of Preferred Stock, having a par value of ~~$0.0001~~$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. AtAs of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, 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 of 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~~$0.01 per share. These shares have full voting rights. AtAs of September 30, ~~2022~~2023, and December 31, ~~2021,~~2022, there were ~~20,746,654~~23,246,654 and ~~18,091,293~~22,246,654 shares ~~outstanding, respectively.~~outstanding. No dividends were declared or paid ~~for~~during the ~~periods~~nine months ended September 30, ~~2022~~2023 and ~~2021, respectively.~~2022.

~~Table of Contents~~

Preferred Rights

The Company issued “Preferred Rights” for the rights to percentages of revenues generated from the San José de Gracia Pilot Production Plant and received ~~$784,500~~$784,500 for these rights. The “Preferred Rights” are reflected in stockholders’ equity. As of September 30, ~~2022, $744,500~~2023, $744,500 had been repaid, leaving a current balance of ~~$40,000 and $40,000~~$40,000 as of September 30, ~~2022~~2023, and December 31, ~~2021, respectively.~~2022.

Stock Issuances

On ~~June 28, 2022,~~August 4, 2023 the Company issued ~~2,655,361~~1,000,000 shares of common stock ~~upon the exercise of warrants to purchase 2,655,361 shares, by one warrant holder~~ for ~~$2.04 a share.~~$5,000,000 cash consideration.

~~On October 18, 2021, the Company issued 368,468 shares of common stock upon the exercise of warrants to purchase 368,468 shares, by five warrant holders for $.01 a share.~~

Treasury Stock

During the nine months ended September 30, ~~2022 no~~2023, 25,000 shares of the Company’s common stock ~~held in treasury (treasury stock)~~previously issued for services were ~~issued.~~

~~During the year ending December 31, 2021, 504,300 treasury shares were issued, in consideration of services provided~~returned to the ~~Company.~~Company as part of a settlement of fees.

~~Outstanding~~There were 37,180 and 12,180 shares of treasury ~~shares total 12,180 and 12,180 at~~stock outstanding as of September 30, ~~2022~~2023 and December 31, ~~2021, respectively.~~2022.

Warrants

~~Warrants~~2023 activity

~~2022 activity~~

AtAs of September 30, ~~2022,~~2023, 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. On June 28, 2022 one warrant holder exercised a warrant to purchase a total of 2,655,361 shares of common stock for $2.04 a share.~~stock:


	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Intrinsic Value
Balance as of December 31, 2022		892,165	$	0.01		7.37		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Balance as of September 30, 2023		892,165		0.01		6.62		-
Exercisable as of September 30, 2023		892,165	$	0.01		6.62		-

~~2021 activity~~

~~At December 31, 2021,~~A derivative liability was incurred at the Company had outstanding warrants to purchase 3,060,998 shares of common stock. On October 18, 2021, five warrant holders exercised warrants to purchase 368,468 shares of common stock for $0.01 a share.

Number
of Shares

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life (Years)

Intrinsic
Value

Balance at December 31, 2020

3,429,466

$ 1.30

4.40

-

Granted

-

$ -

-

-

Exercised

368,468

$ 0.01

-

-

Forfeited

-

$ -

-

-

Balance at December 31, 2021

3,060,998

$ 1.46

2.79

-

Granted

-

$ -

-

-

Exercised

2,166,775

$ 2.04

-

-

Forfeited

2,058

$ 2.04

-

-

Balance at September 30, 2022

892,165

$ 0.01

7.62

-

Exercisable at September 30, 2022

892,165

$ 0.01

7.62

-

~~Table of Contents~~

~~NOTE 8 - RELATED PARTY TRANSACTIONS~~

~~Dynacap Group Ltd.~~

~~The Company paid $143,750 and $128,500 to Dynacap Group, Ltd. (an entity controlled by the CEO~~issuance of the ~~Company) for consulting and other fees during the periods ended~~Series D warrants in 2020. As of September 30, ~~2022, and 2021, respectively.~~2023, the derivative liability totaled $2,315,219. See Note 8 below.

~~The Company’s components of lease cost are as follows:~~

Period Ended

Sept. 30, 2022

Operating Lease - Office Lease

$ 65,769

Operating Lease - Ground Lease

68,501

Short Term Lease Costs

12,037

Variable Lease Costs

-

TOTAL

$ 146,307

Weighted average remaining lease term and weighted average discount rate are as follows:

Weighted Average Remaining Lease Term (Years) - Operating Leases

10.12

Weighted Average Discount Rate - Operating Leases

12.50 %

Estimated future minimum lease obligations are as follow for the years ending September 30:

YEAR

2022

$ 121,033

2023

94,074

2024

96,896

2025

99,803

2026

102,797

Thereafter

684,885

Total

$ 1,199,488

Less Imputed Interest

(590,113 )
OPERATING LEASE PAYABLE

$ 609,375

NOTE 108 - DERIVATIVE ~~LIABILITIES~~LIABILITY

Warrants Issued With the Notes Convertible Into Series D Preferred

~~Series C Preferred Stock~~

As discussed in Note 7,6, the Company analyzed the ~~embedded~~ conversion features of the promissory notes convertible into Series CD Preferred ~~Stock~~ and determined that the ~~stock~~Warrants issued with such notes qualified as a derivative ~~liability and is~~liability. The fair value was required to be ~~bifurcated and accounted for as such since~~allocated among the ~~host~~notes, the notes’ conversion features, and the ~~embedded instrument are not clearly~~warrants, and ~~closely related.~~then remeasured at each reporting date. The Company performed a valuation of the conversion feature. 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.

~~Table of Contents~~

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 Series C Preferred Stock based on the assumptions below:

2022

2021

Annual volatility rate

0 %

147 %
Risk free rate

4.22 %

0.73 %
Remaining Term

0.00 years

0.50 years

Fair Value of common stock

$ 2.14

$ 1.75

For the nine and twelve months ended September 30, 2022 and December 31, 2021, 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 nine and twelve months ended September 30, 2022 and December 31, 2021.~~

Period Ended

2022

2021

Fair value of derivative (stock), beginning of period

$ 1,019,431

$ 601,313

Change in fair value of derivative

(1,019,431 )

418,118

Fair value of derivative on the date of issuance

-

-

Fair value of derivative (stock), end of period

$ -

$ 1,019,431

~~2015 Warrant~~

As discussed in Note 7, the Company analyzed the embedded conversion features of the Series C Preferred Stock and determined that the 2015 Warrant (acquired at the same time as the Series C Preferred Stock) qualified as a derivative liability and is required to be bifurcated and accounted for as such since the host and the embedded instrument are not clearly and closely related. The Company performed a valuation of the conversion feature. 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.

2022

2021

Annual volatility rate

0 %

147 %
Risk free rate

4.22 %

0.73 %
Remaining Term

0.00 years

0.50 years

Fair Value of common stock

$ 2.14

$ 1.75

~~Table of Contents~~

For the nine and twelve months ended September 30, 2022, and December 31, 2021, 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 periods ended September 30, 2022, and December 31, 2021.~~

Period Ended

2022

2021

Fair value of derivative (warrant), beginning of period

$ 1,320,380

$ 817,613

Change in fair value of derivative

(1,320,380 )

502,767

Fair value of derivative on the date of issuance

-

-

Fair value of derivative (warrant), end of period

$ -

$ 1,320,380

~~Warrants issued with the Notes convertible into Series D Preferred~~

As discussed in Note 7, the Company analyzed the conversion features of the promissory notes convertible into Series D Preferred and determined that the 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 warrants, and then remeasured at each reporting date. The Company performed a valuation of the conversion feature. 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.

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:

	2022			2021
Period Ended							September 30, 2023			December 31, 2022
Annual volatility rate		119	%		147	%		126	%		116	%
Risk free rate		4.22	%		0.73	%		5.03	%		4.41	%
Remaining Term	7.62 years			8.37 years			6.62 years			7.37 years
Fair Value of common stock	$	2.14		$	1.75		$	2.60		$	2.44

For the nine and twelve months ended September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, 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 nine and twelve months ended September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

Period Ended

2022

2021

Fair value of derivative (warrants), beginning of period

$ 1,559,103

$ 952,634

Fair value of derivative on the date of issuance

-

-

Exercise of warrants

-

(659,558 )
Change in fair value of derivative

345,975

1,266,027

Fair value of derivative (warrants), end of period

$ 1,905,078

$ 1,559,103

~~Table of Contents~~

Table of Contents
Period Ended

September 30,
2023

December 31,
2022

Fair value of derivative (warrants), beginning of period

$
2,172,417

$
1,559,103

Exercise of warrants

-

-

Change in fair value of derivative

142,802

613,314

Fair value of derivative (warrants), end of period

$
2,315,219

$
2,172,417

The Company paid $143,750 to Dynacap Group, Ltd. (“Dynacap”, an entity formerly controlled by the CEO of the Company) for consulting and other fees during the period ended September 30, 2022. There were no fees paid to Dynacap or any other related party for the nine months ended September 30, 2023.

On April 19, 2023, the Company repurchased the Series A Preferred Stock from the CEO. There are no other related party transactions that require disclosure.

~~The Company has evaluated events commencing September 30, 2022 and through the date the financial statements were issued, and determined no items required disclosure.~~

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

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. These statements may use words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our management’s beliefs and assumptions, using information currently available to us. These forward-looking statements are subject to risks, uncertainties and assumptions, including but not limited to, (i) risks inherent in the mining business (including risks related to the development of large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (ii) changes in the market prices of precious metals and in the cost of mining and refining ores, (iii) the uncertainties inherent in the Company’s production, exploratory and developmental activities, including risks relating to permitting and regulatory delays (including the impact of government shutdowns), ground conditions and grade and recovery variability, (iv) any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), (v) the uncertainties inherent in the estimation of mineral reserves and resources, (vi) changes that could result from the Company’s future acquisition of new mining properties or businesses, (vii) the Company’s reliance on a single purchaser to whom the Company markets its production, (viii) the effects of environmental and other governmental regulations in the United States and México, (ix) the effects of changes in the general economic environment, including inflationary pressures, bank depositary risks, and the threat of recession, (x) the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, and (xi) the Company’s ability to raise additional financing necessary to conduct its business. Readers are cautioned not to put undue reliance on forward-looking statements risks, uncertainties and assumptions discussed in this report.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statement you read in this report reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by this paragraph. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any change in its views or expectations. The Company can give no assurance that forward looking statements will prove to be correct.

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 ~~precious and base metals~~the prolific San Jose de Gracia high grade gold project in México.

We currently conduct ~~operations~~activities in México through our operating ~~subsidiaries.~~subsidiary DynaResource de México SA de CV. (“DynaMéxico”). We currently own ~~80%~~100% of the outstanding shares of ~~DynaResource de México, S.A. de C.V. (“DynaMéxico”), and~~ DynaMéxico, ~~currently holds 20% of its outstanding shares recovered from Goldgroup Resources Inc.~~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. We also own 100% of Mineras de DynaResource S.A. de C.V. (“DynaMineras”), the exclusive operator of the San José de Gracia Project, under contract with DynaMéxico. DynaOperaciones is the exclusive management company for registered employees.

The Company continues its business plan of test mining and pilot milling operations at ~~San José de Gracia, which is~~SJG, and to improve, increase and expand test mining and pilot milling operations and generally, to increase production of gold ~~ounces.~~ounces, and since 2022 to continue exploration activities at SJG with the target to increase primarily 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 75average of 100 tons per 24-hour operating day, to a current ~~400~~average of approximately 550 tons per 24-hour operating ~~day, and during second quarter 2022~~day. During the first half of 2024, the Company expects to achieve production ~~output~~capacity from test mining and milling activities, to an average of ~~600~~approximately 750 tons per 24-hour operating day. (Note the Summary of Test Mining and Pilot Mill Operations ~~for 2018 to 2022~~ below).

Since January 2017, the Company has expended ~~over 27~~approximately $24 million USD in ~~non-operating~~non-recurring costs, generally classified as project improvements and expansion costs which have been expensed in the ~~company’s~~Company’s financial statements. These funds have been provided primarily from cash flows from operations. ~~An itemized list of these non-operating~~

Of the approximately $24 million in non-recurring costs, ~~is described below:~~the Company has spent the following on facilities expansion:

Mill Expansion:	$	5,893,000

Mill Expansion			$	7,093,000
Tailings Pond Expansion		1,464,000		1,464,000
Machinery and Equipment		2,143,000		3,140,000
Mining Camp Expansion		146,000		272,000
Medical Facility		126,000
Total			$	11,969,000


The Company has spent the following amounts on mine development:

Mine Development - San Pablo		2,748,000	$	2,748,000
Mine Expansion - San Pablo East		915,000		915,000
Mine Expansion - Tres Amigos		1,599,000		1,599,000
Exploration Drilling		2,028,000		3,610,000
SIG Mining Concessions		2,014,000		2,014,000
Surface Rights and Permitting		792,000		1,036,000
Debt Retirement		3,528,000
Legal Fees		4,043,000
Total	$	27,439,000	$	11,922,000

The Company is currently reporting all costs of ~~mine~~test mining operations, project improvements, and project expansion as expenses in accordance with the United States ~~General Accepted Accounting Principal (GAAP) requirements.~~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~~carry-forward from México operations of ~~$18.5~~$8 million USD which is available to offset future taxable earnings.

Test mining and pilot milling operations in 2022 yielded 137,740 tons of material, test mined from underground access and processed through pilot milling plant operations. These test pilot operations in ~~2021~~2022 yielded ~~97,088 Tons mined and processed from underground test mining activity and pilot milling operations; and the production~~approximately 28,988 gross ounces of ~~approximately 26,728 gross Oz Au,~~gold recovered, and net of dry weight ~~adjustments~~and provisional assay at the buyer’s facilities ~~the production~~ of approximately ~~22,566 Oz Au. The Company reports net revenue~~25,554 ounces of ~~$35,886,046 net of buyer’s price discount and refining and treatment costs.~~gold sold.

~~Summary of Test Mining and Pilot Mill Operations~~Quarterly Results for the ~~nine months ended~~Nine Months Ended September 30, 2023 and 2022:

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. 2022 estimated tonnage has been adjusted down from those included in the table presented in the September 30, 2022 Form 10-Q to reflect management’s updated estimates of tonnage processed and ~~2021:~~of gold recovered and delivered for sale.

Test pilot operations in ~~Q1 2022~~three months ended March 31, 2023 yielded ~~27,511~~53,258 tons mined and processed through mill ~~operations (306~~facility (an average of 592 tons per day) ; and the recovery of ~~7,110~~8,204 gross Au Oz Au resulting in sales of ~~6,000~~6,810 gross Au Oz contained in gold-silver concentrates, and ~~the receipt~~sales of ~~$10,492,503 in revenues~~$11,953,079, net of buyer’s price discount, refining and treatment costs.

Test pilot operations in ~~Q2 2022~~three months ended June 30, 2023 yielded ~~33,655~~51,409 tons mined and processed through mill ~~operations (370~~facility (average of 565 tons per day) ; and the recovery of ~~7,834~~7,173 gross Au Oz Au resulting in sales of ~~6,004~~7,438 gross Au Oz contained in gold-silver concentrates, and ~~the receipt~~sales of ~~$10,492,511 in revenues~~$13,505,752 of revenue, net of buyer’s price discount, refining and treatment costs. The ~~Company record a negative adjustment to~~ revenue ~~of $337,969~~ from three months ended June 30, 2023 was offset by adjustments in final settlements of $(2,593,583) on provisional settlements recorded on prior ~~periods deliveries providing~~period shipments. Consistent with ongoing practice, the final settlement assays can lag up to a ~~net revenue~~period of ~~$10,098,010 for~~six months due to Buyer’s receipt of final assay from the ~~quarter.~~independent assay firm.

Test pilot operations in ~~Q3 2022~~three months ended September 30, 2023 yielded ~~39,040~~48,700 tons mined and processed through mill ~~operations (424~~facility (average of 529 tons per day) ; and the recovery of ~~9,551~~6,469 gross Au Oz Au resulting in sales of ~~7,370~~6,005 gross Au Oz contained in gold-silver concentrates, and ~~the receipt~~sales of ~~$9,235,141 in revenues~~$10,653,248, net of buyer’s price discount, refining and treatment costs. The ~~Company record a negative adjustment to~~ revenue ~~of $1,202,584~~ from three months ended June 30, 2023 was offset by adjustments in final settlements of $(4,537,878) on provisional settlements recorded on prior period shipments. The Company is working with the buyer and the independent assay firm to develop processes to shorten the lag period on the final settlement assays and as of September 30, 2023, all settlements prior to July 10, 2023 have been processed. The Company and buyer are also working to identify the source of the differences in the assays that occurred since the installation of the new milling equipment in late 2022 and believes as of September 30, 2023 the sources of the differences in the preliminary assays have been addressed and modified.

Reported recovery percentage in the nine months ended September 30, 2023 is less than the recovery percentage reported in the nine months ended September 30, 2022 as a result of the expansion of the Company’s mill operations, and a resulting decrease in operating efficiency. The Company added two ball mills to the mill facility in fourth quarter 2022, which commenced test mill operations with increased capacity in 2023. With this additional capacity, the Company achieved an increase in tonnage processed from 92,350 in the nine months ended September 30, 2022 (average of 338 tons per day) to 153,367 during the nine months ended September 30, 2023 (average of 562 tons per day), and during the same periods the Company reported a decrease in feed grade from 8.74 g/t Au to 5.84 g/t Au. The decrease in recovery percentage from 80% to 75.90% was a result of processing different types of ore on a larger scale, testing activities and adjustments to the operating inputs of the new ball mills. We believe the test mill operations will achieve increased efficiencies as we gain experience with larger volumes of material processed. However, the Company believes the reported recovery percentage may continue to be a reduced percentage from prior periods, ~~deliveries providing~~as we process larger volumes of material.

The drop in the feed grade at the pilot plant facility is a ~~net revenue~~result of ~~$8,032,557~~dilution experienced in the test mining activities, and partially due to the increase in test mining tonnage. To increase the tonnage of higher-grade test mining material available for test mill processing, the ~~quarter.~~Company has commenced the opening to another test mining area of SJG. The Company expects to achieve the access to additional test mining areas at SJG during the fourth quarter of 2023 and first quarter of 2024.

~~DynaMineras~~The Company expects to continue its test underground mining activity and pilot milling operations in ~~the third quarter 2022,~~2024, and projects an increased ~~output~~capacity of ~~500~~an average of approximately 750 tons per 24-hour operating day ~~from the mine and mill~~ during the ~~quarter.~~first half of 2024.

Results for the ~~three~~Three and ~~nine months ended~~Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

REVENUE. The Company processed 100,206 tons (367 per day) during the first nine months of 2022 compared to 66,695 tons (244 per day) in 2021. As a result of the increased volume the grade of ore processed dropped from 9.48 g/t Au per ton in the prior year to 8.67 g/t Au per ton for the current year. In addition the percentage of ore recovered has dropped from 89% to 80%. The net result is an increase of ounces recovered from 18,141 in 2021 to 22,314 in the first nine months of 2022. This resulted in an increase in gross ounces sold from 16,036 in 2021 to 17,823 in 2022, increasing revenues from $25,906,083 to $28,623,070REVENUE: Revenue for the nine months ended September 30, ~~2021~~2023 and 2022 ~~respectively.~~

~~Revenues~~was $28,980,618 and $28,623,070. The increase was a result of an increase in tonnage mined and processed during the nine months ended September 30, 2023 from 92,350 tons in 2022 to 153,367 in 2023 offset by a reduction in the feed grade of the material processed from 8.74 g/t au in the nine months ending September 30, 2022 to 5.84 g/t au per ton for the ~~quarter~~nine months ended September 30, 2023. The decrease was also due to the Company processing ore from different mines with different mineralogy as well as running increased tonnage through two large ball mills. The running of the greater tonnage also caused challenges in the mill operations regarding crushing size and the speed and thickness of the slurry coming from the ball mills. In addition, the Company’s recovery rates declined from 80.0% in the nine months ended September 30, 2022 ~~and~~to 75.90% in the nine months ended September 30, ~~2021 were $8,032,557~~2023, due primarily to the reduced efficiency while implementing two new ball mills into the pilot mill operations. Revenue for the three months ended September 30, 2023 and ~~$10,467,058,~~2022 was $6,115,370 and $8,032,557. The decrease was ~~the~~a result of the Company recording adjustments in final settlements related to provisional settlements from prior periods of $(4,537,878). The adjustments in final settlements resulted from the difference between the assays used to calculate the preliminary settlements at the time of delivery, for which the Company received a ~~decrease in the grade of ore from 10.13 g/t Au per ton in 2021 to 7.61 per g/t Au per ton in 2022~~preliminary payment, and the ~~recovery percentage from 83%~~assays used to ~~79%.~~calculate the final

settlements which were performed by an independent third-party lab. The ~~Company’s net revenue for~~Company believes the ~~quarter reflected an negative adjustment of $1,202,584 for final settlement of provisional invoices reported in prior quarters.~~factors contributing to these discrepancies have been resolved.

PRODUCTION COSTS RELATED TO ~~SALES.~~SALES: Production costs related to sales for the nine months ended September 30, 2023 and 2022 were $5,993,040 and ~~September 30, 2021 were $2,876,902 and $1,917,049, respectively.~~$2,876,902. Production ~~cost~~costs for the three months ended September 30, 2023 and 2022 were $2,226,265 and ~~2021 were $964,172 and $756,898, respectively.~~$964,172. These are expenses directly related to the test milling, packaging and shipping of primarily gold ~~and other precious metals product.~~concentrates. The increase is ~~consistent with~~a result of the increase in ~~tonnage process.~~the volume of test mining and milling activities from an average of 338 tons per day in the nine months ended September 30, 2022 to an average of 562 tons per day in the nine months ended September 30, 2023.

MINE PRODUCTION ~~COSTS. Mine~~COSTS: Costs associated with test mining activities (mine production ~~costs~~costs) for the nine months ended September 30, 2023 and 2022 were $8,022,328 and ~~2021 were $4,786,236 and $3,385,340 respectively and $1,946,981 and $1,135,938~~$4,786,236. Mine production costs for the three months ended September 30, 2023 and 2022 were $2,553,369 and ~~2021, respectively.~~$1,946,981. 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 ~~mill. The increase is consistent with~~pilot mill facility.During the ~~increase in tonnage mined. Cost per ton~~nine months ended September 30, 2023, the Company test mined 144,428 tons of ~~ore mined increase from $42 per ton in 2021~~material compared to ~~$45 per ton~~107,543 tons in the ~~current year.~~nine months ended September 30, 2022.

MINE EXPLORATION ~~COSTS.~~COSTS: Mine exploration costs for the nine months ended September 30, 2023 and 2022 were $7,318,836 and ~~2021 were $3,792,405 and 3,437,009 respectively and $1,335,437 and $1,151,020~~$3,792,405. Costs for the three months ended September 30, 2023 and 2022 were $2,854,863 and ~~2021, respectively. These were~~$1,335,437. Mine exploration costs are the costs of extracting waste material in order to reach the ~~materials~~tonnage of material to be extracted for ~~processing. The~~processing at the pilot mill facility. For the nine months ended September 30, 2023 the Company ~~allocates total mining costs between production and~~mined 134,039 tons of waste ~~based on tonnage on a monthly basis. Mine exploration cost remained at approximately 13% of revenue from year~~compared to ~~year.~~85,017 in the nine months ended September 30, 2022. The increase ~~cost~~in mine exploration costs was largely due to the initiative to open an additional area at SJG for test mining activities commencing in the third quarter of ~~mining was offset by a drop in waste tonnage as a percentage of total tonnage mined.~~2023.

FACILITIES EXPANSION COSTS: Facilities expansion costs for the nine months ended September 30, 2023 and 2022 were $1,226,135 and ~~2021~~$4,744,792. Expansion costs for the three months ended September 30, 2023 and 2022 were ~~$4,744,792~~$401,464 and ~~579,432, respectively.~~$1,773,385. The major ~~expense was~~expenses reported for the nine months ended September 30, 2022 were the expansion of the tailings pond and the acquisition and preparation for the installation of two new ~~Ball Mill which upon completion will increase processing capacity~~ball mills. The major expenses reported in the nine months ended September 30, 2023 have been additions to ~~700 tons a day. The Company expects~~ the ~~expansion~~ball mill installations and related improvements to ~~be complete by October These are cost which would normally be capitalized under U.S Gaap but are expensed under Reg. S-K, Item 1300 because of~~ the ~~Company is~~mill facility, and mining infrastructure for the access to an ~~exploration stage issuer lacking proven and probable reserves.~~additional test mining area at SJG.

EXPLORATION ~~DRILLING.~~DRILLING: During the 1^stfirst quarter of 2022, the Company ~~begin~~began an exploration drilling program for the purposes of updating the Company’s CND NI 43-101 Mineral Resource Estimate. ~~Total cost of~~Exploration expenditures for the ~~exploratory drilling program in the first~~ nine months ofended September 30, 2023 and 2022 ~~was $1,993,082 including $770,892 in~~were $1,694,536 and $1,993,082. Exploration Costs for the ~~3rd quarter.~~three months ended September 30, 2023 and 2022 were $569,261 and $770,892.

~~TRANSPORTATION. Transportation~~CAMP, WAREHOUSE AND FACILITIES: Camp, warehouse and support facility costs for the nine months ended September 30, 2023 and 2022 were $3,888,241 and ~~2021 were $1,682,986 and $968,672, respectively. Transportation cost~~$3,147,312. Costs for the three months ended September 30, 2023 and 2022 were $1,379,782 and ~~2021 were $572,772 and $374,974, respectively.~~$911,284. These ~~were~~represent the costs of ~~transporting~~supporting the ~~product to the customer for treatment and sale. The increase in reflective of the increase in fuel and transportation costs.~~

CAMP, WAREHOUSE AND SUPPORT FACILITIES. Camp, warehouse and support facility cost for the nine months September 30, 2022 and 2021 were $3,147,312 and $1,956,168 respectively and 911,284 and $697,446 for the three months ended September 30, 2022 and 2021, respectively. These were the support costs of thetest mining facilities including housing, food, security and warehouse operations. The ~~increases were~~increase in costs recorded for the nine months ended September 30, 2023 was a result of the ~~Company’s~~ increase in test mining ~~operations~~activity as a result of the facilities expansion and the increase in exploration costs.

TRANSPORTATION: Transportation costs for the nine months ended September 30, 2023 and 2022 were $2,277,385 and $1,682,986. Costs for the three months ended September 30, 2023 and 2022 were $736,836 and $572,772. 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.~~COSTS: Property holding costs for the nine months ended September 30, 2023 and 2022 were $130,015 and ~~2021~~$112,093. Costs for the three months ended September 30, 2023 and 2022 were ~~$112,093~~$48,824 and ~~$116,516, respectively.~~$39,312. These costs were primarily taxes on mining concessions, ~~taxes,~~ leases on land and other direct costs of maintaining the SJG property. These ~~cost~~costs are relatively consistent from year to year regardless of the level of mining activity.

GENERAL AND ADMINISTRATIVE ~~EXPENSES.~~EXPENSE: General and administrative expenses for the nine months ended September 30, 2023 and 2022 were $6,660,862 and ~~2021 were $3,177,917 and $2,252,156, respectively. General and administrative costs~~$3,177,917. Costs for the three months ended September 30, 2023 and 2022 were $1,429,879 and ~~2021 were 1,033,820~~$1,033,820. These general and ~~1,085,187 respectively. These~~administrative expenses were the costs of operating the Company not directly associated with the ~~mine~~test mining and pilot mill operations including management, accounting, and legal expenses. The increase in costs in 2023 was primarily an increase in legal fees ~~associated ongoing legal~~as discussed in the legal summary, including a non-recurring legal expense of $3,000,000 tied to the successful outcome of litigation and due to an overall increase in administrative costs supporting the ~~Companies~~Company’s increase in activity.

OTHER INCOME (EXPENSE).: Other income (expense) for the nine months ended September 30, 2023 and 2022 was $(532,776) and ~~2021 was 1,698,184 and $(6,263,923),~~$1,698,184, respectively. Included in ~~this category~~other income in 2023 was interest expense of $(345,254), change in derivative of $(142,802), currency exchange loss of $(46,588) and miscellaneous income of $1,868. The increase in the derivative liability was primarily due to

the increase in the Company’s common stock value. There was a benefit in the nine months ended September 30, 2022 from the maturity of two of the underlying securities which eliminated those derivatives. Included in other income in 2022 was interest expense of $(345,049), change in derivative of $1,993,836, currency ~~transaction~~exchange gain ~~(loss)~~ of $47,709 and miscellaneous income of ~~1,688.~~$1,688. Other income (expense) for the three months ended September 30, 2023, and 2022 was $(906,412) and $(262,421), respectively. Included in ~~this category~~other income (expense) in ~~2021~~2023 was interest expense of ~~$(1,102,755)~~$(121,079), change in derivative of ~~$(3,928,913)~~$(705,079), currency ~~transaction gain (loss)~~exchange loss of ~~$(121,725)~~$(80,815) and ~~a one-time arbitration award expense~~miscellaneous income of ~~$1,111,111.~~$561. The ~~decrease~~increase in the derivative liability was primarily due to ~~maturity~~the increase of ~~two of the underlying securities and~~ the Company’s common stock ~~value remaining under the conversion terms. The decrease~~value. Included in other income (expense) in 2022 was interest expense ~~was the result~~ of ~~a reduction~~$(103,544), change in ~~the Company’s debt. For a more detailed explanation~~derivative liability of ~~the 2021 arbitration award see Legal Proceedings.~~$(169,445), currency exchange gain of $9,919 and miscellaneous income of $649.

OTHER COMPREHENSIVE ~~INCOME (LOSS).~~INCOME: Other comprehensive income ~~(loss)~~ includes the Company’s net income ~~(loss)~~ plus the unrealized currency ~~translation~~exchange gain ~~(loss)~~ for the period. The Company’s other comprehensive ~~loss~~income for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 consisted of unrealized currency gains (losses) of ~~$(174,043)~~$141,167 and ~~$(301,986)~~$(174,043), respectively. The change is due to the variances in the ~~peso~~currency exchange rates between the US Dollar and Mexican Peso throughout the two periods. The Company’s other comprehensive income for the three months ended September 30, 2023 and 2022 consisted of unrealized currency losses of $(210,050) and $(185,059), respectively. The change is due to the variances in the currency exchange rates between the US Dollar and Mexican Peso throughout the two periods.

As of September 30, ~~2022,~~2023, the Company had negative working capital of ~~$10,640,537,~~$1,177,309 comprised of current assets of ~~$29,627,568~~$22,231,383 and current liabilities of ~~$18,987,031.~~$23,408,692. This represented ~~an increase~~a decrease of ~~$9,292,826~~$10,612,269 from the working capital ~~of $1,347,711~~ maintained by the Company of $11,789,578 as of December 31, ~~2021.~~2022. The primary ~~reasons~~reason for the ~~increase were funds generated from~~decrease was due to a decrease in the Company’s ~~operating profit and proceeds from the exercise of stock warrants.~~cash.

Net cash ~~provided by (used in)~~used in operations for the nine months ended September 30, ~~2022 and 2021~~2023 was $(11,488,806) compared to a use of $(3,881,727) ~~and $14,747,383, respectively.~~during the nine months ended September 30, 2022. The decrease in the ~~funds provided~~cash flow from operations was ~~a result~~primarily due to the ~~decrease~~Company’s loss in ~~operating income~~2023, primarily attributed to the ongoing expenses of expansion and increased output in the ~~increase~~nine months ended September 30, 2023.

Net cash used in ~~receivables~~investing activities was $115,273 for the nine months ending September 30, 2023. There were no cash investing activities in 2022. Additionally expenditures reported for the expansion of mining facilities, which totaled $1,226,135 and ~~inventory required by increase operations.~~$4,744,792 during the nine months ended September 30, 2023 and 2022, 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 provided by ~~(used in)~~financing activities for the nine months ended September 30, 2023 and 2022 was $3,689,750 and $4,790,399, respectively. The net cash provided by financing activities for the nine months ended September 30, 2023 were generated from the sale of common stock offset by the purchase of the Series A preferred stock previously held by the Company’s CEO. The net cash provided by financing activities in the nine months ended September 30, 2022 was derived from the exercise and purchase of common stock warrants.

Through September 30, 2023, the Company’s available liquidity and operations have been financed primarily through its operations and the revenue generated from the sale of product. The revenue from operations was supplemented by proceeds from the sale of common stock and customer advances as well as cash flow from operations.

Although the Company has incurred net losses and net cash outflows from operating activities and investing activities for the nine months ended September 30, ~~2022 and 2021 was $0 and $0, respectively. Expenditures necessary~~2023, there were many expenses which were made that were not expended for the ~~expansion~~production of revenue, such as exploration drilling. 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 arrangements, and a draw down on the Company’s revolving line of credit, which was approved by the Board of Directors in October 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 mine opened. Future capital requirements will depend on many factors, including the Company’s rate of mining, ~~operations totaled $~~milling and ~~$0 in~~exploration activities and growth. To the ~~nine months ended September 30, 2022~~extent that existing capital and ~~2021, respectively, $4,744,792 which would normally have been included in this category were expenses due~~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’s being an exploration stage issuer as defined in SEC Reg. S-K, Item 1300.~~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.

Net cash provided by (used in) financing activities for the nine months ended September 30, 2022 and 2021 was $4,790,399 and $(47,936), respectively. The 2021 usage represented principal payments on long-term debt. The 2022 source of funds was proceeds from the exercise of stock warrants, offset by payments to reduce debt.

As of September 30, ~~2022, we~~2023, the Company did not have any off-balance sheet arrangements, which have or are ~~reasonably~~ likely to have a material adverse effect on our financial condition, results of operations or liquidity.

The ~~Plan~~Company’s plan of operation for the next twelve months includes ~~DynaMineras~~ continuing the improvement and expansion of the test mining and pilot milling operations at SJG. The Company commenced its ~~testing~~test mining and pilot milling activities in fall 2015, at the rate of an average of approximately 100 tons per 24-hour operating ~~day from the mine and approximately the same output from the processing plant.~~day. Over the past ~~five~~seven years, the Company has gradually increased its output to a current average of approximately ~~300~~600 tons per 24-hour operating day from the ~~mines~~test mining activity and ~~processing plant.~~test milling facility. In ~~2022~~the nine months ended September 30, 2023, the Company ~~anticipates completion~~completed the current planned expansion of ~~expansion~~the pilot mill facility with the installation and addition to ~~reach a capacity~~pilot plant operations of ~~700 tons per 24-hour operating days from the processing plant.~~two new ball mills. The Company expects to ~~operate at approximately 600 tons per day~~increase efficiency of activities in the fourth quarter of ~~2022.~~2023 and first half of 2024, and to achieve an additional increase in capacity to an average of approximately 800 tons per 24-hour operating day. As of September 30, 2023, the Company is conducting test mining activity at approximately 75% mill capicity.

The Company funds its general and administrative expenses in the US from the cash flow from the Company’s operating ~~subsidiaries, DynaMineras and DynaOperaciones. These amounts are eliminated~~subsidiary in ~~consolidation.~~México. The Company believes that cash on hand and ~~including~~the cash flow to be generated from its current test mining and pilot mill operations, is adequate to fund its ongoing general and administrative expenses through the subsequent twelve months. In 2023 a portion of mine exploration and mine expansion was funded through the sale of common stock.

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 September 30, ~~2022.~~2023. This evaluation was accomplished under the supervision and with the participation of our ~~chief executive officer /~~ principal executive officer and principal financial officer, assisted by our financial consultant, who concluded that our disclosure controls and procedures are ~~not~~ 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 ~~mean~~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.

The Company ~~has~~did not ~~made~~make any change in its internal control over financial reporting ~~that occurred~~ 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.

~~2014 Arbitration Proceeding filed~~There were no material developments during the period covered by ~~Goldgroup Resources Inc.~~

~~On March 14, 2014, Goldgroup filed for arbitration~~this report on Form 10-Q in the ~~United States with~~legal proceedings previously publicly disclosed by the ~~American Arbitration Association (“~~~~AAA~~Company.”), seeking monetary and nonmonetary relief, and citing the Earn In/Option Agreement as the basis for its filing. On August 25, 2016, the AAA issued a ruling in favor of Goldgroup against the Company and DynaMéxico (the “~~Arbitration Award~~~~”). On May 9, 2019, the United States District Court for the District of Colorado (the “~~~~Colorado U.S. District Court~~~~”) confirmed the Arbitration Award.~~

~~On May 20, 2021, the Company and DynaMéxico agreed~~From time to ~~release the $1.111 million bond that had been posted, and paid an additional $4,054 in interest, in full satisfaction of the monetary portion of the Arbitration Award. Since that~~ time, the Company ~~has fully performed~~is involved in legal matters in the ~~non-monetary portion~~ordinary course of ~~the Arbitration Award, which included the election of a Goldgroup designee~~its business. The Company intends to ~~the board of DynaMéxico, yet Goldgroup continues to challenge~~defend itself vigorously against any such claims. It is the Company’s ~~actions before the Colorado U.S. District Court.~~

~~On December 9, 2014, DynaMéxico filed~~policy to accrue for amounts related to lawsuits brought against it if it is probable that a ~~commercial lawsuit against Goldgroup, its parent company Goldgroup Mining Inc., and the AAA, in the Thirty Sixth Civil Court in the Federal District of México (the “~~~~Trial Court~~~~”), under file 1120 number / 2014 (the “~~~~DynaMéxico Trial~~”). In the DynaMéxico Trial, DynaMéxico sought to terminate the U.S.-based arbitration proceedings, and requested that substantial damages (in the amount of US $50 million) be awarded to DynaMéxico against Goldgroup. On October 5, 2015, the Trial Court awarded DynaMéxico damages in excess of US $48 million.

~~Goldgroup has appealed the $48 million damages award on multiple occasions, yet the award stands and~~liability has been ~~affirmed by a variety~~incurred and an amount can be reasonably estimated. Although the outcome of ~~Mexican courts, including the highest court in the land. Even in the face of multiple rejections of its arguments before Mexican courts, Goldgroup continues~~such matters cannot be predicted with certainty and no assurances can be given with respect to ~~raise baseless and unfounded objections to the award.~~

On October 5, 2016, the Trial Court (the same court which made the $48 million damages award) approved a grant to DynaMéxico of a lien (referred to by the court as an “Embargo”) upon the shares of DynaMéxico held by Goldgroup in certificate form. ~~On February 20, 2020~~, a México City court issued a final judgment, effectively foreclosing on all shares of DynaMéxico formerly held by Goldgroup, and awarding those shares to DynaMéxico. Those shares are now legally owned, and physically held, by DynaMéxico. Consequently, Goldgroup currently owns no shares of DynaMéxico under Mexican law, which requires physical possession of shares to evidence ownership.

~~The award to DynaMéxico of the shares formerly owned by Goldgroup, does not satisfy the $48 million damages award in favor of DynaMéxico.~~

~~On December 5, 2020,~~such matters, the Company ~~and DynaMéxico filed an Original Petition for Recognition~~believes that the outcome of ~~the $48 million damages award~~those ordinary-course matters in ~~favor~~which it is currently involved will not have a materially adverse effect on its results of ~~DynaMéxico, in US. District Court in Dallas County, Texas (the “~~~~Texas U.S. District Court~~operations, liquidity, or financial position.”), under principles of international comity. On May 12, 2021, The Texas U.S. District Court issued a ruling stating the Court was not obligated to recognize the $48 million damages award in the United States. On May 14, 2021, the Company and DynaMéxico filed a Notice of Appeal of that ruling.

~~On June 28, 2022, Golden Post Rail, LLC exercised its warrant to acquire 2,655,361~~As previously disclosed in a Current Report on Form 8-K, on August 4, 2023, the Company issued 1,000,000 shares of ~~the Company’s common stock at a price of $2.04~~Common Stock, par value $0.01 per share, to Ocean Partners UK Limited for ~~a total exercise price~~$5,000,000 USD cash consideration. The offer and sale of ~~$5,416,936. The warrant was granted on May 6, 2015 with an original maturity date~~the shares of ~~September 30, 2020,~~Common Stock were exempt from registration under Section 4(a)(2) of the Securities Act of 1933 because they were subject to private negotiation between the Company and the ~~period~~purchaser and did not involve any public offering of ~~exercise was extended for two years in 2020.~~securities.

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.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. The signature for each undersigned Registrant shall be deemed to relate only to matters having reference to such Registrant and any subsidiaries thereof.

~~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	~~(IRS Employer~~ ~~Identification No.)~~75039
(Address of principal executive offices)	(Zip Code)


Large ~~Accelerated Filer~~accelerated filer	☐	~~Accelerated Filer~~☐	Accelerated filer	☐
Non-accelerated ~~Filer~~filer	☐	~~Smaller Reporting Company~~☒	Smaller reporting company	☒
Emerging growth company		☐


PART I.	FINANCIAL STATEMENTS

ITEM 1.	Unaudited Condensed Interim Consolidated Financial Statements		3

	Notes to Unaudited Condensed Interim Consolidated Financial Statements		7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2519

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		2924

ITEM 4.	Controls and Procedures	~~Controls and Procedures~~	24	29

PART II.	OTHER INFORMATION	~~OTHER INFORMATION~~

ITEM 1.	Legal Proceedings	~~Legal Proceedings~~	25	30

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		3025

ITEM 3.	Defaults Upon Senior Securities		3025

ITEM 4.	Mine Safety Disclosures	~~Mine Safety Disclosures~~	25	31

ITEM 5.	Other Information	~~Other Information~~	25	31

ITEM 6.	Exhibits	~~Exhibits~~	26	31

~~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


	2023			2022
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	11,637,085		$	19,177,138
Accounts receivable		812,983			724,642
Inventories		1,809,079			2,720,811
Foreign tax receivable		6,444,547			9,355,863
Other current assets		1,527,689			1,145,501
Total current assets		22,231,383			33,123,955
Property and equipment (net of accumulated
depreciation and amortization of $4,896 and $119,154)		110,377			-
Right-of-use assets, net		899,771			550,473
Mining concessions		4,132,678			4,132,678
Deferred tax asset		5,226,980			2,970,410
Foreign tax receivable		7,849,255			-
Other assets		173,555			165,396

TOTAL ASSETS	$	40,623,999		$	40,942,912
LIABILITIES. TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,156,578		$	2,057,880
Accrued expenses		6,893,850			5,756,961
Customer advances		9,750,000			9,350,000
Derivative liabilities		2,315,219			2,172,417
Current portion of operating lease payable		91,685			28,868
Installment notes payable		2,201,360			1,968,251
Total current liabilities		23,408,692			21,334,377
Operating lease payable, less current portion		846,631			558,914
TOTAL LIABILITIES		24,255,323			21,893,291
TEMPORARY EQUITY
Series C Senior Convertible Preferred Stock, $0.0001 par value, 1,734,992 shares authorized, issued and outstanding, as of September 30, 2023 and December 31, 2022, respectively		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 as of September 30, 2023 and December 31, 2022, respectively		1,520,000			1,520,000
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS’ EQUITY
Preferred Stock, Series A, $0.0001 par value, 0 and 1,000 shares authorized, 0 and 1,000 issued and outstanding		-			1
Common Stock, $0.01 par value, 40,000,000 shares authorized 23,246,654 and 22,246,654 issued and outstanding		232,467			222,467
Preferred rights		40,000			40,000
Additional paid-in-capital		60,629,032			56,889,031
Treasury stock, 37,180 and 12,180 shares each period, at cost		(95,023	)		(34,773	)
Accumulated other comprehensive income		253,245			112,078
Accumulated deficit		(50,548,525	)		(44,036,663	)
TOTAL STOCKHOLDERS’ EQUITY		10,511,196			13,192,141
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY	$	40,623,999		$	40,942,912


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


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


~~DYNARESOURCE, INC.~~Delaware	94-1589426
~~(Exact name of small business issuer as specified in its charter)~~

	2022			2021
ASSETS
Current Assets
Cash and Cash Equivalents	$	16,488,686		$	15,719,238
Accounts Receivable		942,734			577,118
Inventories		2,943,112			2,110,203
Foreign Tax Receivable		8,244,016			4,742,180
Other Current Assets		1,009,020			667,742
Total Current Assets		29,627,568			23,816,481

Mining Equipment and Fixtures (Net of Accumulated
Depreciation of $118,862 and $116,425)		292			2,729
Operating Lease		575,985			648,381
Mining Concessions		4,132,678			4,132,678
Other Assets		163,298			162,174

TOTAL ASSETS	$	34,499,821		$	28,762,443

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable	$	2,261,299		$	1,275,679
Accrued Expenses		5,481,107			5,440,204
Customer Advances		7,375,000			9,250,000
Derivative Liabilities		1,905,078			3,898,914
Convertible Notes Payable - Series I & II		-			543,279
Installment Notes Payable		1,914,086			1,962,525
Current Portion of Operating Lease Payable		50,461			98,169
Total Current Liabilities		18,987,031			22,468,770

Operating Lease Payable, Less Current Portion		558,914			587,782

TOTAL LIABILITIES		19,545,945			23,056,552
TEMPORARY EQUITY
Series C Senior Convertible Preferred Stock, $0.0001 par value, 1,734,992 shares designated, issued and outstanding		4,337,480			4,337,480
Series D Senior Preferred Stock, $0.0001 par value, 3,000,000 shares designated, 760,000 shares issued and outstanding		1,520,000			1,520,000

COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock, Series A, $0.0001 par value, 1,000 shares designated, issued and outstanding		1			1
Common Stock, $0.01 par value, 40,000,000 shares authorized, 20,746,654 and 18,091,293 issued and outstanding		207,467			180,913
Preferred Rights		40,000			40,000
Additional Paid In Capital		56,022,782			50,632,400
Treasury Stock, 12,180 shares		(34,773	)		(34,773	)
Accumulated Other Comprehensive Income		(421,708	)		(247,665	)
Accumulated Deficit		(46,717,373	)		(50,722,465	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		9,096,396			(151,589	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	34,499,821		$	28,762,443

	2022		2021
Mined Tonnage	$	2,866,094	$	2,042,633
Gold-Silver Concentrates		77,018		67,570
Total Inventories	$	2,943,112	$	2,110,203


	2023		2022
Mined tonnage	$	1,745,067	$	2,610,116
Gold-Silver concentrates		64,012		110,695
Total inventories	$	1,809,079	$	2,720,811

	Period Ended
	Sept. 30, 2022
Operating Lease - Office Lease	$	65,769
Operating Lease - Ground Lease		68,501
Short Term Lease Costs		12,037
Variable Lease Costs		-
TOTAL	$	146,307

Weighted average remaining lease term and weighted average discount rate are as follows:

Weighted Average Remaining Lease Term (Years) - Operating Leases		10.12
Weighted Average Discount Rate - Operating Leases		12.50	%

Estimated future minimum lease obligations are as follow for the years ending September 30:

YEAR
2022	$	121,033
2023		94,074
2024		96,896
2025		99,803
2026		102,797
Thereafter		684,885
Total	$	1,199,488
Less Imputed Interest		(590,113	)
OPERATING LEASE PAYABLE	$	609,375

			Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Fair Value Measurement at September 30, 2022 Using:
									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 September 30, 2023:
Liabilities:
Derivative Liabilities	$	1,905,078	$	-	$	-	$	1,905,078	$	2,315,219	$	-	$	-	$	2,315,219
Totals	$	1,905,078	$	-	$	-	$	1,905,078	$	2,315,219	$	-	$	-	$	2,315,219
Fair Value Measurement at December 31, 2021
Fair Value Measurement as of December 31, 2022:
Liabilities:
Derivative Liabilities	$	3,898,914	$	-	$	-	$	3,898,914	$	2,172,417	$	-	$	-	$	2,172,417
Totals	$	3,898,914	$	-	$	-	$	3,898,914	$	2,172,417	$	-	$	-	$	2,172,417

Balance December 31, 2020	$	2,081,435
Exchange Rate Adjustment		(57,504	)
2021 Principal Payments		(61,406	)
Balance December 31, 2021		1,962,525
Exchange Rate Adjustment		34,819
2022 Principal Payments		(83,258	)
Balance September 30, 2022	$	1,914,086


Balance December 31, 2022	$	1,968,251
Exchange rate adjustment		233,109
2023 principal payments		-
Balance September 30, 2023	$	2,201,360


EXHIBIT 31.1


	2022			2021			2023			2022
Leasehold improvements	$	9,340		$	9,340		$	21,274		$	9,340
Office equipment		31,012			31,012			42,493			31,012
Office furniture and fixtures		78,802			78,802			24,453			78,802
Sub-total		119,154			119,154
Less: Accumulated depreciation		(118,862	)		(116,425	)
Total Property	$	292		$	2,729
Other								27,053			—
Subtotal								115,273			119,154
Less: Accumulated depreciation and amortization								(4,896	)		(119,154	)
Total Property and Equipment							$	110,377		$	—

	• The Company will deliver 100% of its produced concentrates to the buyer and provider of the RCL, through December 31, 2026, with evergreen annual extensions thereafter until either party terminates with at least 365 days’ notice; • An initial RCL was established by the buyer in the amount of $3.75M USD. • On May 1, 2021, the RCL increased to an amount equal to 80% of the prior 3 months’ revenue. • Each successive month, the RCL 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 RCL shall never be less than $3.75M USD. • The RCL will be interest free for 45 days. • The RCL is to be repaid through deliveries of concentrates or cash within 120 days. • Beginning in September 2023, up to $10M of the RCL 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 RCL 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 Company will deliver 100% of its produced concentrates to the buyer and provider of the RCL, through December 31, 2022; unless extended by the Company;~~
	·	~~An initial RCL was established by buyer in the amount of $3.75M USD;~~
	·	~~On May 1, 2021, the RCL increased to an amount equal to 80% of the prior 3 months’ revenue;~~
	·	~~Each successive month, the RCL shall be adjusted according to the Company’s prior 3 months’ revenue;~~
	·	~~The RCL shall never be less than $3.75M USD;~~
	·	~~The RCL will be interest free for 45 days;~~
	·	~~The RCL is to be repaid through deliveries of concentrates or cash within 120 days;~~

~~(1)~~	~~$2.5M advance on February 4, 2021. Settled on March 26, 2021~~
~~(2)~~	~~$3.75M advance on March 30, 2021. Settled on May 12, 2021~~
~~(3)~~	~~$3.75M advance on May 12, 2021. Settled on June 16, 2021~~
~~(4)~~	~~$6.75M advance on June 18, 2021. Settled on August 5, 2021~~
~~(5)~~	~~$8.25M advance on August 9, 2021. Settled on September 27, 2021~~
~~(6)~~	~~$8.25M advance on September 29, 2021. Settled on November 17, 2021~~
~~(7)~~	~~$8.25M advance on November 19, 2021. Settled on December 20, 2021~~
~~(8)~~	~~$9.25M advance on December 30, 2021. Settled on February 25, 2022~~
~~(9)~~	~~$8.175M advance on February 25, 2022. Settled on March 30, 2022~~
~~(10)~~	~~$7.875M advance on March 30, 2022. Settled on May 13, 2022~~
~~(11)~~		~~$8.875M advance on May 19, 2022. Settled on June 27, 2022~~
~~(12)~~		~~$8.75M advance on June 28, 2022. Settled on August 15, 2022~~
~~(13)~~			~~$7.80M advance on August 19, 2022. Settled on September 28, 2022~~
~~(14)~~			~~$7.375M advance on September 29, 2022.~~


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


Exhibit Number;		Name of Exhibit
~~31.1~~10.1		Amendment Agreement dated as of August 2, 2023 by and between DynaResource Inc. and MK Metal Trading México de CV (incorporated by reference to Form 8-K dated August 10, 2023).
10.2		Stock Purchase Agreement dated as of August 2, 2023 by and between DynaResource, Inc. and Ocean Partners UK Limited. (incorporated by reference to Form 8-K dated August 10, 2023).
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.

	~~DynaResource, Inc.~~
	DynaResource, Inc.

Date: November ~~1, 2022~~17, 2023	By:	/s/ K.W. (“K.D.”) Diepholz
		~~K.W. (“KD”) Diepholz,~~
		~~Chairman / CEO~~K.W. (“K.D.”) Diepholz,

~~/s/ K.D. Diepholz~~		~~/s/ Rene LF Mladosich~~
~~K. D. Diepholz, Chairman~~		~~Rene LF Mladosich~~Chairman / Chief Executive Officer / Acting Chief Financial Officer

~~/s/ Dr. Jose Vargas Lugo~~		~~/s/ Dale G. Petrini~~
~~Dr. Jose Vargas Lugo~~		~~Dale G. Petrini~~

~~/s/ John C. Wasserman~~		~~/s/ Phillip Rose~~
~~John C. Wasserman~~		~~Phillip Rose~~

~~November 1, 2022~~
~~Dated~~