The following discussions of the Company's results of operations and financial position should be read in conjunction with the financial statements and notes pertaining to them that appear elsewhere in this Form 10-Q. Please read in conjunction with the section of this Form 10Q entitled "Part II-Item 1A. Risk Factors", and note that this discussion contains forward-looking statements. This discussion focuses on the manner in which the Company will operate in the next year, as well as prospects for the future and the manner in which events and uncertainties known to management would cause reported financial information to not be necessarily indicative of future operating results or of the future financial condition.

Overview

Magnus is a mineral exploration company that specializes in identifying, acquiring and developing precious and base metal properties. Magnus' objective is to develop a balanced global portfolio of early-to-advanced stage projects. Magnus is currently focused on gold projects in China and Africa. In China, the Company's key mineral project is the Huidong property, in which the Company holds a 90% interest, which interest may increase when Magnus' Modification Agreement with Team 209 (described under "Property Agreements - Property Agreements - China - Yunnan Long Teng Mining Ltd. - Huidong Property") is consummated. In Africa, the Company has a 100% interest in four mineral properties in Uganda, Mubende, Lugazi, Mwerusandu and Mitoma, and has the right to earn a 60% interest in a fifth property, Mashonga.

The Company was incorporated under the laws of the State of Nevada, USA on April 4, 2001 and has a July 31st fiscal year end.

The current addresses, telephone and facsimile numbers of the offices of the Company are:

Canadian Office     United States Office  China Office       United Kingdom Office Uganda Office

1055 West Hastings  101 Convention Center Dushimingyuan      1 Berkeley St.        Plot 1A
Street, Suite 550   Drive, 7th Floor      Bldg.              London                Mugwanya Road
Vancouver, BC       Las Vegas, Nevada     No. A-2708,        United Kingdom        Entebbe, Uganda
Canada              89109                 Central            W1J 8DJ               Tel: +256(0)
V6E 2E9             Tel: (702) 873-3488   Renmin Road        Tel: 44-207-016-8844  7734 63095
Tel: (604) 694-1432 Fax: (702) 221-0904   Kunming City,      Fax: 44-207-016-9100
Fax: (604) 602-1499                       Yunnan
                                          Province, 650031
                                          People's Republic
                                          of China
                                          Tel:
                                          86--871--3642422
                                          Fax: 86- 871-
                                          3642420

The price of the Company's common stock was quoted for trading on the over-the-counter bulletin board ("OTCBB") since March 25, 2003. On November 14, 2007, the Company received notice of the suspension of the quotation of its shares on the OTCBB for one year for late filing of annual and/or quarterly reports, and on December 6, 2007 the Company's shares were removed from quotation on the OTCBB. The Company's shares are now quoted for trading on the Pink Sheets over-the-counter quotation system under the symbol "MGNU".

Property Agreements

Property Agreements - China

Through its joint venture agreements described below, the Company currently has interests, or contingent interests, in two properties in China: the Huidong Property, comprising 83.29 square kilometers in Sichuan Province; and the Mangshi Property, comprising 113.96 square kilometers in Yunnan Province.

Yunnan Long Teng Mining Ltd. - Huidong Property

On July 6, 2004, the Company signed a formal cooperative joint venture contract (the "Huidong Agreement") with Team 209 to form a new cooperative joint venture company, Yunnan Long Teng Mining Ltd. ("Long Teng Mining"), a Sino-foreign Chinese corporation, to carry out minerals exploration and development in an 83.29 square kilometer area of Huidong County in Sichuan Province. Under the Huidong Agreement, if either Magnus or Team 209 acquires any further mining rights for the area surrounding the exploration license areas then the respective party must, on a first priority basis, transfer such mining rights to Long Teng Mining for a fee permitted by law or at an appropriate price.

The operations of the joint venture company are managed under the control of Magnus. Magnus is to contribute $5,000,000 as an equity investment into Long Teng Mining and Team 209 is responsible for transferring certain gold and copper exploration permits for the Huidong Property to Long Teng Mining. Upon full capital contributions by Magnus and the transfer of the exploration permits by Team 209, Magnus will own 90% and Team 209 will own 10% of Long Teng Mining.

With respect to the $5,000,000 equity investment into Long Teng Mining by Magnus, Magnus is required to contribute not less than $460,000 within three months after the issuance of the Long Teng Mining business license; $1,000,000 within twenty four (24) months after the issuance of the Long Teng Mining business license; $1,550,000 within thirty-six (36) months after the issuance of the Long Teng Mining business license; and based on the results of the exploration by Long Teng Mining, if required, an additional $1,990,000 within forty-eight (48) months after the issuance of the Long Teng Mining business license (the business license was issued on July 29, 2004; see below). The capital contribution by Magnus is subject to certain conditions precedent being satisfied. If further funding is required for carrying out more exploration and development activities, Magnus will be responsible for providing such funding; however, Team 209 will remain a 10% owner of Long Teng Mining.

On July 29, 2004, the Huidong Agreement was approved by the Chinese Government and a business license for Long Teng Mining was issued. The exploration license for the Huidong property was successfully transferred into Long Teng Mining on July 27, 2005.

As of January 31, 2008 Magnus had made $3,509,969 in capital contributions to Long Teng Mining, and under the terms of the Huidong Agreement Magnus currently holds a 90% interest in the Huidong Property.

On May 12, 2007, the Company entered into an Agreement for Modification of Joint Venture Rights & Interests (the "Modification Agreement") with Team 209. Under the Modification Agreement, the Company, which currently holds a 90% interest in Long Teng Mining and a 90% interest in Yunnan Western Mining Co., Ltd. ("Western", which holds the mineral rights to the Mangshi Property, described below), will obtain the remaining 10% interest in Long Teng Mining from Team 209 in exchange for transferring the Company's 90% interest in Western to Team 209. The Modification Agreement was subsequently amended on November 15, 2007. Under the amended Modification Agreement, Magnus is required to make the following payments: (1) 430,000 RMB (approximately US$58,000) to Team 209 for outstanding salaries and benefits owing to the staff of Team 209 who previously worked for Long Teng Mining, 170,000 RMB of which will be paid from Long Teng Mining's account, 160,000 RMB of which will be paid from Western's account and 100,000 RMB of which will be deemed to have been paid in exchange for Team 209 retaining certain office equipment of Long Teng Mining; and (2) 2,200,000 RMB (approximately US$294,000) for drilling expenditures, 500,000 RMB of which is required to be paid by the end of November 2007, 800,000 RMB of which will be deemed to have been paid in exchange for Team 209 retaining four vehicles, 300,000 RMB of which is required to be paid by the end of 2007 and 600,000 RMB of which is required to be paid by June 30, 2008. The Modification Agreement is expected to be consummated in the near future. To facilitate ease of Chinese regulatory approvals, Magnus intends to find another Chinese joint venture partner to hold a small interest in the Huidong Property, and Magnus is currently seeking a new joint venture partner.

Yunnan Western Mining Co., Ltd. - Mangshi Property

On November 25, 2005, Magnus acquired 100% of the issued and outstanding shares of Golden River Resources Corp., a private British Columbia company ("Golden River"), which was owned by First Fortune Investments Inc. Golden River is a party to a co-operative joint venture agreement dated August 29, 2003 (the "Mangshi Agreement") with Team 209. Under the Mangshi Agreement, Golden River and Team 209 formed Western, a sino-foreign joint venture company which holds the rights to the Mangshi Property, a mineral exploration property comprising approximately 113.96 square kilometres in Yunnan Province. Golden River has the right to earn a 90% interest in Western, with Team 209 retaining the other 10%.

Under the Modification Agreement (described above), Magnus has agreed to transfer its interest in Western to Team 209 in exchange for Team 209's interest in Long Teng Mining, and Magnus will not be conducting further exploration or expending further capital on the Mangshi Property. The Modification Agreement is expected to be consummated in the near future. Accordingly, Magnus' management no longer believes the Mangshi Property to be material to the Company.

Property Agreements in Africa

In Africa, the Company, through its wholly-owned subsidiary, African Mineral Fields Inc. ("AMF"), has a 100% interest in four mineral properties in Uganda, the Mubende Property, the Lugazi Property, the Mwerusandu Property and the Mitoma Property, and has the right to earn a 60% interest in another mineral property, the Mashonga Property.

Mwerusandu Property

On November 8, 2007, Magnus entered into a license transfer agreement (the "License Transfer Agreement") with Flemish Investments Limited ("Flemish") under which Flemish agreed to transfer 100% of the right, title and interest to the licenses comprising the Mwerusandu Property (comprised of three mineral exploration licenses covering a total of 57.7 square kilometers of land in Uganda) and the Mitoma Property (described below) to Magnus. The Ugandan Department of Geological Survey and Mines ratified the transfer of the licenses on December 20, 2007, and accordingly Magnus now holds a 100% interest in the Mwerusandu Property. Flemish is entitled to receive from Magnus a net smelter returns royalty on the Mwerusandu Property on a sliding scale between 0.5% (if the gold price is below $250/oz.) and 2.1% (if the gold price is above $1,200/oz.), depending on the price of gold when the NSR royalty is being paid.

As of January 31, 2008, Magnus has made $57,579 of direct exploration expenditures on the Mwerusandu Property. In addition to the licenses transferred to Magnus under the License Transfer Agreement, Magnus received an additional exploration license covering 147.63 sq. km., so that the Mwerusandu Property is now comprised of four exploration licenses covering 205.33 sq. km.

Mitoma Property

Under the License Transfer Agreement, Flemish also agreed to transfer 100% of the right, title and interest to the licenses comprising the Mitoma Property (comprised of six mineral exploration licenses for a total of 279.0 square kilometers of property in Uganda) to Magnus. The Ugandan Department of Geological Survey and Mines ratified the transfer of the licenses on December 20, 2007, and accordingly Magnus now holds a 100% interest in the Mitoma Property. Flemish is entitled to receive from Magnus a net smelter returns royalty on the Mitoma Property on a sliding scale between 0.5% (if the gold price is below $250/oz.) and 2.1% (if the gold price is above $1,200/oz.), depending on the price of gold when the NSR royalty is being paid.

As of January 31, 2008, Magnus has made $102,433 of direct exploration expenditures on the Mitoma Property. In addition to the licenses transferred to Magnus under the License Transfer Agreement, Magnus received an additional

two exploration licenses covering 159.49 sq. km., so that the Mitoma Property is now comprised of eight exploration licenses covering 438.49 sq. km.

Mubende Property

On September 1, 2006, AMF entered into an agreement (the "Mubende Agreement") with Flemish Investments Limited ("Flemish") under which AMF purchased a 100% right, title and interest in and to the mineral exploration licenses respecting 780 square kilometers of land in central Uganda (the "Mubende Property"). The purchase price paid by AMF for the Mubende Property was US$25,000 and the issuance of 250,000 common shares of AMF (since exchanged for Magnus shares pursuant to the AMF Acquisition Agreement). In addition, under the Mubende Agreement AMF was required to issue an additional AMF common share, to a maximum of 300,000 additional AMF common shares, to Flemish for each economically mineable ounce of gold on the Mubende Property that is proven to be a measured and indicated resource. To date, there is not a measured or indicated resource on the Mubende Property, and accordingly no additional shares have been issued to Flemish.

Since acquiring the Mubende Property, AMF has received an additional exploration license covering 71.20 sq. km., so that the Mubende Property is now comprised of three exploration licenses covering 851.20 sq. km.

Lugazi Property

AMF also acquired a 100% right, title and interest in and to a mineral exploration license covering 261 square kilometers of land in central Uganda (the "Lugazi Property") on September 1, 2006 under an agreement (the "Lugazi Agreement") with Flemish. The terms of the Lugazi Agreement are the same as those of the Mubende Agreement, and to date there is not a measured or indicated resource on the Lugazi Property and no additional shares have been issued to Flemish. Since acquiring the Lugazi Property, AMF has received four additional exploration licenses covering 1,359.17 sq. km., so that the Lugazi Property is now comprised of five exploration licenses covering 1,620.17 sq. km.

Mashonga Property

On August 30, 2007, AMF entered into a joint venture agreement (the "Mashonga Agreement") with a consortium of Ugandan businessmen respecting two mineral exploration licenses and three location licenses covering 460.87 square kilometers of land contiguous to AMF's Mitoma Property in Uganda (the "Mashonga Property"). Under the Mashonga Agreement, Magnus has the right to earn a 60% interest in the Mashonga Property by making aggregate cash payments of US$650,000 to its joint venture partners, making US$4 million in property exploration expenditures and completing a pre-feasibility study on the property by August 30, 2012. Magnus' joint venture partners have the right to accept common shares of Magnus in lieu of the cash payments. As of January 31, 2008, Magnus had paid US$40,000 to its joint venture partners and had commenced exploration on the Mashonga Property. Once Magnus has earned its 60% interest in the Mashonga Property, the parties may form a new joint venture company to further explore and develop the Property.

Other Projects

The Company actively investigates other areas in search of additional properties and additional joint venture opportunities.

Employees

As of January 31, 2008, the Company had three full-time employees (over and above its directors, officers and consultants) employed at the Company's office in Vancouver, British Columbia (two in an administrative capacity and one as a bookkeeper).

In Uganda, the Company employs two persons, Chris Picken, as Country Manager, and Emmanuel Mwajombe, as Senior Geologist. The Company's operating subsidiary in Uganda, African Mineral Fields Limited, employs eight additional persons: one senior geologist, one accountant, three technicians, one administrator and two housekeepers.

The Company's Chinese joint venture company with respect to the Huidong Property, Long Teng Mining, employs three persons in China. In addition, contract workers and groups are used by the Company on an ad hoc basis to assist in conducting the exploration programs, and the number used may fluctuate based on the exploration activities going on at any given time.

The Company also uses consultants with specific skills to assist with various aspects of its project evaluation, due diligence, acquisition initiatives, corporate governance and property management.

Transactions with Related Parties / Subsequent Events

On February 1, 2008, the Company issued an aggregate of 3,341,841 units (each a "Unit") for an aggregate of Cdn$836,416 (at a price of Cdn$0.25 per Unit). Each Unit consists of one share of common stock of the Company and one-half of one share purchase warrant, with each whole warrant entitling the holder to purchase one additional share of common stock of the Company at Cdn$0.50 per warrant share until two years from the date of issuance of the warrants. The Company paid $35,000 in cash and issued 115,350 shares of common stock to a consultant as a finder's fee in connection with the issuance of Units.

On February 18, 2008, the Company issued 272,000 common shares to an investor which had subscribed for units of the Company in May 2007 and had received registration rights in connection with its investment. The registration rights provided that the Company would owe liquidated damages to the investor if the shares issued in the investment were not registered with the SEC by a certain date, which had passed. The investor agreed to receive 272,000 common shares of the Company in full and final settlement of the liquidated damages owed by the Company to the investor under such registration rights.

On March 13, 2008, the Company:

º amended the terms of 543,500 warrants by: extending the term of the warrants from their original expiry date of March 16, 2008 to September 16, 2009; and reducing the exercise price of the warrants from $2.00 to $0.75;
º amended the terms of 334,124 warrants by: extending the term of the warrants from their original expiry date of April 10, 2008 to October 10, 2009; and reducing the exercise price of the warrants from $2.40 to $0.75; and
º amended the terms of 175,000 warrants by: extending the term of the warrants from their original expiry date of November 23, 2008 to May 23, 2010; and reducing the exercise price of the warrants from $2.00 to $0.75.

Government Regulation

Mining operations and exploration activities are subject to various national, state, provincial and local laws and regulations in the United States, Canada, Uganda and China, as well as other jurisdictions, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.

In China, joint venture agreements, business licenses for joint venture companies, and the acquisition and transfer of exploration and mining permits are all acquired subject to government approval. Such approval may involve many levels of government (i.e. federal, provincial, county and/or city approval), and the Company cannot guarantee that all such approvals will be successfully obtained even where a joint venture has been successfully established.
Moreover, even where joint venture agreements are approved by the applicable level(s) of government and business licenses are issued, there can be no guarantee that the transfer and/or acquisition of exploration and/or mining permits will be approved, nor can the Company guarantee that such approvals will be obtained from all levels of government required for such approval.

The Company believes that it is and will continue to be in compliance in all material respects with applicable statutes and the regulations passed in China and in Uganda. There are no current orders or directions relating to the Company with respect to the foregoing laws and regulations.

Environmental Regulation

The Company's exploration projects are subject to various federal, state and local laws and regulations governing protection of the environment in North America, Uganda and China. These laws are continually changing and, as a general matter, are becoming more restrictive. The Company's policy is to conduct business in a way that safeguards public health and the environment. The Company believes that its operations are conducted in material compliance with applicable laws and regulations.

Changes to current local, state or federal laws and regulations in the jurisdictions where the Company operates or may operate in the future could require additional capital expenditures and increased operating costs. Although the Company is unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of its projects.

In the preceding year, there were no material environmental incidents or non-compliance with any applicable environmental regulations. The Company estimates that it will not incur material capital expenditures for environmental control facilities during the current fiscal year.

Competition

Magnus is a grassroots mineral exploration company. The mineral exploration industry is competitive, with many companies competing for the limited number of precious and base metals acquisition and exploration opportunities that are economic under current or foreseeable metals prices, as well as for available investment funds. With metal prices at their current levels, activity in the industry has increased dramatically, and competition is also high for the recruitment of qualified personnel and equipment.

The Company believes no single company has sufficient market power to affect the price or supply of gold or other minerals in the world market.

Outlook

Mineral prices rose during the year. At January 31, 2007, the price of gold was $652.30 per ounce compared to $925.30 at January 31, 2008, representing an increase of approximately 41%. Management believes that this trend will continue, and as a result the properties that are owned and controlled by the Company which contain mineralized material could gain in value. However, there is no assurance that gold prices will continue to rise.

The Company does not currently generate operating cash flows. Subject to sustained mineral prices, management expects to generate revenues and cash flows in the future.

The Company had a working capital deficiency of $2,384,884 at January 31, 2008.

Total cash requirements stipulated under the Company's Huidong Agreement with Team 209 of China calls for a $5,000,000 equity investment into Yunnan Long Teng Mining Ltd. by Magnus.

Under the Huidong Agreement, Magnus is required to contribute not less than $460,000 within three months after the issuance of the joint venture company business license; $1,000,000 within twenty four (24) months after the issuance of the joint venture company business license; $1,550,000 within thirty-six (36) months after the issuance of the joint venture company business license; and based on the results of the exploration by the joint venture company, if required, an additional $1,990,000 within forty-eight (48) months after the issuance of the joint venture company business license. As of January 31, 2008

the Company had contributed $3,509,969 to the joint venture company. The business license for the joint venture company was approved and issued on July 29, 2004. Thus, the Company met the contribution obligations required to be made by the third anniversary of the business license issuance.

Total cash requirements stipulated under the Company's Mashonga Agreements is $4,650,000. Under the Mashonga Agreement, Magnus has the right to earn a 60% interest in the Mashonga Property by making aggregate cash payments of US$650,000 to its joint venture partners, making US$4,000,000 in property exploration expenditures and completing a pre-feasibility study on the property by August 30, 2012. Magnus' joint venture partners have the right to accept common shares of Magnus in lieu of the cash payments. As of January 31, 2008, Magnus had paid US$40,000 to its joint venture partners and had made US$26,549 in property expenditures.

The Company will need to raise additional funds through private placements in order to meet its future investment requirements in the above properties. While the Company has been successful in raising money by private placements in the past, there are no guarantees that the Company will be successful in the future. Management believes, however, that absent sufficient funding through a private placement or some other financing the Company will not generate sufficient revenue to cover any shortfall in the next year.

Results from Operations

Summary

The Company's consolidated net loss for the three months ended January 31, 2008 was $806,047 or $0.02 per share compared to the consolidated net loss for the corresponding period in the previous year of $1,413,778 or $0.03 per share for a net decrease of $607,731. The largest expense was related to stock-based compensation and the second largest expense was related to the cost of exploration of the properties in China and Uganda (see "Property Agreements").

Mineral production and revenue

As we are still an exploration stage company and in the exploration stage of development on our two Chinese properties and five Ugandan properties, we have not, as of yet, produced any revenues nor produced any minerals.

Exploration, property evaluation and holding costs

The Company is committed to contribute at least $3,010,000 to the Long Teng Mining joint venture company within 36 months of July 29, 2004, of which $3,509,969 was contributed by January 31, 2008. In addition, the Company is committed to contribute a total of at least $1,500,000 to the Mangshi joint venture by December 31, 2006, and $1,500,470 was contributed by January 31, 2008. However, the Company will no longer be subject to the joint venture capital contribution requirements upon consummation of the Modification Agreement with Team 209, as further described under "Property Agreements - Property Agreements - China - Yunnan Long Teng Mining Ltd. - Huidong Property", above.

The Company incurred exploration licenses expense of $32,686 and geological expenses of $334,385 in the three months ended January 31, 2008 compared to $2,752 and $305,328 respectively in the corresponding period in the previous year (including expenses in China which have been presented in loss from operations held for sale in the accompanying financial statements). The increase of $58,991 is due to the exploration expenses incurred on the African projects.

Corporate administration and investor relations

Corporate administrative and investor relations costs were $107,069 in the current quarter compared to $82,531 in the corresponding period in the previous year, representing a decrease of $24,538. The increase is due to the increase in activity in the Uganda projects more than offsetting decrease in activity in China. Included in these costs are travel expenses for executives and . . .