Overview

The following discussion and analysis of the operations, results, and financial position of Gemco Minerals Inc. ("Gemco","We" or the "Company"), for the nine months ended February 28, 2009 should be read in conjunction with the February 28, 2009 Consolidated Financial Statements and the related Notes. These documents are available at www.sedar.com. The Company is traded on the Nasdaq OTC Exchange under the symbol GMML. The effective date of this report is December 15, 2008.

Corporate Organization

The Company was incorporated in the State of Florida on August 21, 1997 under the name of Project I Corp. On October 18, 2001 the Company changed its name to Firstline Environmental Solutions Inc. and traded under the symbol FEMS. On July 18, 2002 Firstline Environmental Solutions Inc., conducted a reverse takeover with Firstline Recovery Systems Inc., which is now a wholly owned subsidiary of the Company. On March 24, 2006, the Company changed its name to Gemco Minerals, Inc. and in accordance with the name change, the Company's common stock has assigned 368634 10 1 as its new Cusip Number and effective April 10, 2006, the Company's trading symbol was changed to GMML. Our statutory registered agent's office is located at #210 - 7695 SW - 104 Street, Miami, FL 33156 and our business office is located at #203 - 20189 56th Ave, Langley, BC, V3A 3Y6. Our telephone number is 866-848-2940.

Our Current Business

Mining - Precious Metals

We are engaged in the acquisition and exploration of mineral properties in the Province of British Columbia. Our primary focus is the exploration of our Burns Group Property, located 45 miles east of Quesnel, British Columbia. Our plan of operations is to carry out mineral exploration activities at the Burns Group property as advised by a combination of professional recommendations located in historical documents as well as recent recommendations made in Gemco Minerals Inc. most recently published NI43-101 technical report for the property dated December 15, 2007.

We are an exploration stage company and all of our properties are presently in the exploration stage. To date, we do not have any commercially viable reserves on any of our properties. There is no assurance that a commercially viable mineral deposit exists on any of our mineral properties.

Further exploration will be required before a final evaluation as to the economic and legal feasibility of mining of any of our properties is determined. There is no assurance that further exploration will result in a final evaluation that a commercially viable mineral deposit exists on any of our mineral properties.

We continue to expand our Burns Group property by acquiring strategically located mineral claims adjacent to our existing property. The most recent acquisition occurred in May and June 2006 when Gemco acquired an additional 2,792 acres (1,129 hectares) of mineral tenure to bring the Burns Group property to a total of 12,685 contiguous acres (5,134 hectares).

The Company first commenced its work program on the Burns Group property in June 2006. Trenching, geochemistry and SP geophysical surveys were conducted over soil anomalies near Oregon Gulch. Dip needle and SP geophysical surveys combined with general reconnaissance exploration in the vicinity of the Perkins Showing and Perkins Gulch were also reported. Assessment reports for the 2006 season were submitted to the Ministry of Energy, Mines and Petroleum Resources by Angelique Justason and Brad Davies.

In the 2007 and 2008 seasons, Gemco contracted Tenorex GeoServices to begin the expansion of the Burns Grid adjacent several surface workings and the historical Perkins showing where, in 1902, 10 tonnes of rock was processed and produced 311 grams gold as described in Gemco's NI43-101 report published in November 2007. 2.4 line kilometers (Lkm) of self-potential geophysical surveys over 9.0 Lkm of new grid were extended to the south of prior surveys completed in 2002 in an effort to locate an extension of the known mineralization: an assessment report outlining the findings and subsequent recommendations was submitted to the Ministry of Energy, Mines and Petroleum Resources.

Robert "Ned" Reid, PGeo, and Angelique Justason published Gemco Minerals Inc. NI43-101 technical report titled "Summary of Mineral Exploration Activities at the Mount Burns Claim Group" dated December 15, 2007. On the recommendations of the NI43-101 technical report, Gemco is preparing for a trenching and surface diamond drill hole program to define previously outlined geochemical and geophysical anomalies and follow the anomalous "northwest trend" which extends from Mount Nelson to Mount Burns.

An internal report was also made by Tenorex GeoServices summarizing the professional recommendations of various geologists working on the property from 2000 through to 2007 in an effort to define a strategic and focused field program for the Burns Group Gold Property. With this report and the recommendations presented within the NI43-101 technical report an aggressive and detailed exploration program was outlined for the 2008 field season, some of which has been deferred to the 2009 season, and includes the following:

o Continue expansion of the geo-grid on Mount Burns
o Establish survey control on the property
o Trail upgrade and maintenance program
o Detailed geologic mapping
o 50 line kilometers of self-potential geophysical surveying
o Beep mat reconnaissance surveys of key areas at previously defined airborne geophysical anomalies in addition to surveying all roads and trails
o Follow up on geophysical surveys with trenching and channel sampling projects
o Conduct a surface diamond drill hole program in key target areas
o Expand grassroots prospecting to the more remote perimeter of the property
o Compile all historical and current exploration / mining data into an online interactive map-server application for use by company geologists and the public

Detailed research and the compilation of archived historical reports and maps are also ongoing. Already the research has significantly advanced the knowledge and value of the Burns Group gold/silver property.

In June 2007, Gemco acquired of 66.67% of the outstanding shares of EKG Minerals Inc. ("EKG"). EKG is a British Columbia registered private company which holds 100% interest in the 1181.64 hectare (2920 acre) gold/silver `Tom' claim group, also internally referred to as the 'Snowflake' property, located north of Oliver, BC. Tenorex GeoServices was contracted in the summer of 2007 to conduct assessment work on the property and a geophysical technical report was submitted to the BC Ministry of Energy and Mines upon completion of several days field work at the property. Physical and technical exploration activities were recorded on the property in 2008. On February 25, 2009 EKG's interest in the `Snowflake' mineral property was disposed for proceeds of $9,889 ($12,500 CDN

Gemco also has 100% interest in two placer properties in the Cariboo region:
namely the Hawk LPM (lease of placer minerals) located four kilometers from Barkerville and the Joytown LPM which is located near the headwaters of Cunningham Creek. A permit to conduct placer testing operations is currently being prepared for the Joytown LPM at Cunningham Creek for the 2009 field season.

Mexico Property

Gemco has entered into a 50/50 joint venture partnership with Mexican registered Canamex Corporation. Canamex has been in the precious metal extraction research industry over the last twelve years. Gemco's initial joint venture with Canamex involves testing on a 250 hectare placer claim for its industrial minerals and gold values. The property has access and foreshore rights to the Pacific Ocean and is located on the Baja Peninsula of Mexico.

Further, Gemco has an option to purchase 100 percent interest in two additional placer claims. These properties consist of over 600 hectares, are approximately 27 kms in length of a dry arroyo with varying widths and several meters in depth. Preliminary testing shows estimates of a potential recovery of 5 million tonnes of alluvial magnetite and ilmenite mineral product.

In June 2007, the Company mandated Mr. Jaime Noguera Perez of Estero Servicios Ambientales Engineering (Estero) to conduct a works program to collect, review and evaluate existing geological information, conduct all field work, geological mapping, sourcing all information on applicable regulations and requirements for permits to extract up to 300,000 tonnes of material the first year of operation and up to 2,000,000 tonnes per year thereafter. In August 2007, the Company received a progress report from Estero indicating that all field work has been completed and Estero is preparing an executive report which will be submitted to the Mining office in Mexico City for final approval and attainment of permits to undertake mining operations. Gemco has incorporated a wholly owned subsidiary in Mexico, named Black Stone Industries S.A. de C.V., which will carry out all future business activities on behalf of Gemco in Mexico.

The Company will also engage an independent firm to review Estero's report and prepare an in-depth 43-101 technical report to meet standards and requirements for raising capital. The Company has expended over $75,000 to date on its Mexico property for costs including; the environmental study, management of the claims, attainment of permits, consulting and regulatory fees. Further, a balance of $20,000 will be paid upon Black Stone Industries S.A. de C.V. receiving the final mining permits.

Natural Mineral Products

The Company continues in the business development for the magnetite natural mineral product trade named "Eco-Blast", as well as its Ilmenite "Talon Blast Abrasive" mineral product. These are environmentally safe products used in the industrial abrasive industry as outlined further below.

Recent environmental regulations throughout North America have restricted the use of traditional abrasives like silica-sand and some slags. This is particularly true in the blast cleaning (sand blasting) market where 5 million tons of abrasives are used each year. Magnetite and Ilmenite have emerged as less health damaging and more environmentally friendly alternatives to the traditional non-recyclable abrasives. The specific particle size of natural magnetite product performs optimally in blast cleaning applications and can be recycled. ECO-Blast and Talon Blast Abrasive are the branded blast abrasives of the Company using magnetite and Ilmenite blends.

Tests have shown these products to be effective replacements for more traditional blast mediums in terms of cost and performance and significantly superior in terms of environmental impact and recyclability. Powertech Labs Inc. conducted an analysis on the magnetite product, which approved the product for use by the BC Ministry of Environment and Parks. A number of comparison demonstration tests were also conducted by Ross-Rex Industries Inc. using Talon blast and competitive/alternative products and the results have been very positive as posted on Gemco's website.

The Company recently entered into an Exclusive Supply Agreement with Teichert and Son Inc., a California corporation doing business as Teichert Aggregates (Teichert). This contract pertains to the exclusive distribution rights of the minerals known as Ilmenite and Magnetite. Teichert produces Ilmenite and Magnetite as a by-product from its aggregate mining operations, and currently has an estimated 25,000 tons stored on-site in Central California.

These rights allow the Company to distribute and sell this product as a blast medium in the industrial abrasive industry in both Western U.S. and Canada. The Term of the Agreement is for a period of 5 years with an option for an additional 5 years, if agreeable by both parties. As part of the Agreement, the Company has agreed to purchase a minimum tonnage per contract year in order to maintain fixed pricing terms.

The effective commencement date of production is dependent on the Company first obtaining California Air Regulation Board approval for the use of these products as a blast medium and then establishing a drying, screening and bagging plant at a nearby location. In conjunction with Teichert, the Company has initiated the CARB test and the Company management is negotiating with a U.S. company for a site on which to locate the drying and bagging facility.

On December 2, 2008 the Company announced it had entered into an Agreement (the Agreement) for the sale of ilmenite and magnetite industrial minerals (the Product) with R.A. Temple Inc. (Temple), a California corporation.

The Product will be sourced from the Company's location in Sacramento, California, under its Exclusive Supply Agreement with Teichert Aggregate Inc. as announced May 27th, 2008, and will be sold under the Company's Black Talon brand name.

Temple may purchase up to 7,000 tons of ilmenite and magnetite per annum, from the commencement date, on a pre-determined pricing framework for a period of five years. The commencement date of the first shipment shall be no later April 1, 2009, which provides time for the Company to complete its California Air Regulation Board (CARB) standard approval for the use of this product as a blast medium and to establish a drying, screening and bagging plant at a nearby location.

Temple has supplied both blast abrasives and equipment to the metal finishing and water-jet cutting industry in the western region of the United States for over 28 years. As part of the Agreement, the Company also grants Temple exclusive distributorship for the Product in the State of Nevada and Northern California.

Results of Operations - Gemco Minerals Inc. Nine Months Ended February 28, 2009

During the nine months ended February 28, 2009 the Company recorded an operating loss of $118,973 as compared to an operating loss of $230,800 for the nine months ended February 28, 2008, and recorded a net loss after other items of $166,526 as compared to a net loss of $265,539 for the nine months ended February 28, 2008. This is a decrease in operating loss of $111,827 and a decrease in the net loss of $99,013. The net loss represents $0.0072 per common share. The Company incurred $118,973 in operating expenses which consist mainly of: mineral property costs of $33,428 (2008 - $112,927), management and consulting fees, including accruals and share issuance, of $78,000 (2007 - $54,000), investor relations of $9,750 (2007 - $21,422) and professional fees of $15,357 (2007 - $15,454). The Company also recorded other items totaling $46,646 for the nine months ending February 28, 2009, which is an increase of $11,908 compared to the $34,738 in other items for the nine months ending February 28, 2008. This included interest and bank charges of $44,830. Other items also included $1,816 for a loss on disposal of mineral rights and $36,546 for the interest generated on the mortgage investment, with a corresponding writedown for impairment, as described in Note 5(g) and Note 3 of the financial statements respectively.

The Company has not yet generated any revenues from its Mineral Exploration Program. Our ability to emerge from the exploration stage and conduct mining operations is dependent, in large part, upon our raising additional equity financing

As of February 28, 2009, Gemco had total liabilities of $686,627, which is an increase of $55,739 as compared to $630,888 liabilities recorded at May 31, 2008. The Company's liabilities consist of $42,685 in accounts payable, $79,368 due to related parties, $71,374 due to shareholders and $493,200 in notes payable, of which $317,634 are due to related parties. The increase in liabilities is due primarily to additional amounts loaned from related parties during the period net of adjustments in the U.S. exchange rate for amounts denominated in Canadian funds.

The Company's current assets at February 28, 2009, consisted of $159 in cash which reduced by $3,118 from $3,277 as at May 31, 2008. Total assets as of February 28, 2009 were $417,394 with mineral claims recorded at $99,273, equipment net of amortization at $42,961, and investments of $275,000 for the mortgage held on real property as disclosed in Note 3(b) of the financial statements.

Selected Annual Information
The following are highlights of financial data on the Company for the most
recently completed three financial years:

                                     Fiscal Year Ended May 31,
                                2008             2007             2006
                             ----------        ---------       ----------
Loss before Income Tax       $ (376,307)       $ (97,937)      $ (422,013)
Net Loss                       (376,307)         (97,937)        (422,013)
Loss Per Share                    (0.02)           (0.01)           (0.02)
Total Assets                    439,279          174,319          198,460
Total Liabilities               630,888          573,237          817,639

Liquidity and Capital Resources

The Company's assets are recorded at the lower of cost or market value. The total assets at February 28, 2009 were $417,394 net of amortization. The Company had a working capital deficiency of $686,468 at February 28, 2009 compared to a working capital deficiency of $627,611 as of May 31, 2008. The majority of Gemco's assets are long-term in nature and thus considered to be of lower liquidity. It is the Company's intention to liquidate the mortgage denoted above at the earliest reasonable opportunity to fund the Company. The Company's cash inflow has been generated mainly from shareholder loans, related party and short-term loans and subscription of common stock with minimal revenues and government incentive programs since inception.

Management continually reviews its overall capital and funding needs to ensure that the capital base can support the estimated needs of the business. These reviews take into account current business needs as well as the Company's future capital requirements. Based upon these reviews, to take advantage of strong market conditions and to fully implement our expansion strategy, management believes that the Company will continue to increase our net capital through the proceeds from sales of our securities. The Company currently maintains minimal cash balances and is funded by management and shareholder loans to satisfy monthly cash requirements in the interim of raising external funding.

The Company cannot currently meet its cash requirements without, future sale of shares or its current management and/or advances or loans from controlling shareholders or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity during the development phase. There is no assurance that the Company will be able to obtain additional funding through the sales of additional shares or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company. It is the intent of management and controlling shareholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. Management has developed a business plan to address the company's net capital deficiency. This includes raising capital through its current SB2 Prospectus and optioning some of the company's mineral claims to other exploration companies.

Forward-Looking Statements

From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause a deviation or divergence from the anticipated results or expectations contained in the forward looking statements and the Company's actual results. The risks and uncertainties that may affect the operations, performance, development and results of the Company's business include but are not limited to the following: lack of operating capital, revenue and capital resources; reliance upon joint venture members to provide technical and financial expertise to operations; the ability of the Company to access an economically viable energy deposit; the ability of the Company to recover natural resources, if found, and to deliver them to a refiner or distributor in an economically viable manner.

Risks and Uncertainties

Mining - The Company is engaged in mineral exploration and development, which involves a high degree of risk, and few properties are ultimately developed into producing mines. There is no assurance that the Company's future exploration and development activities will result in any discoveries of commercial bodies of ore. Whether an ore body will be commercially viable depends on a number of factors including the particular attributes of the deposit such as size, grade and proximity to infrastructure, as well as mineral prices and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in a mineral deposit being unprofitable.

Cash Flows and Funding - The Company periodically requires equity financing to maintain its working capital position. There is no assurance that the Company will be able to obtain financing, as required, in the future.

Environmental and Permitting - Mineral exploration and development is subject to extensive regulation concerning environmental protection and there is no assurance the Company will be able to obtain all necessary permits and approvals in order to carry out its exploration activities.