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. The Company has a 100% interest in eight mineral properties in Uganda at Mubende, Lugazi, Mitoma, Mwerusandu, Rubindi, Kigumba, Kidera and Nyanga. The Company has withdrawn from two agreements which gave a right to earn a 60% interest in a ninth property, Mashonga, and a right to earn an 80% interest in a tenth property, Ibanda. The Company previously had the Huidong gold project in China which has been sold, but there is an amount of RMB 13.5 million in proceeds of the sale that remains to be collected.

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       Uganda Office
280 Nelson Street     Plot 1A
Suite 115             Mugwanya Road
Vancouver, BC         Entebbe, Uganda
Canada                Tel: +256(0) 7734 63095
V6B 2E2
Tel: (604) 694-1432

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 - Africa

In Africa, the Company, through its indirect wholly-owned subsidiaries, African Mineral Fields Limited and AB Mining Ltd. (each of which are wholly-owned by the Company's wholly-owned subsidiary, African Mineral Fields Inc. ("AMF")), has a 100% interest in eight mineral properties in Uganda, the Mubende Property, the Lugazi Property, the Mitoma Property, the Mwerusandu Property, the Rubindi Property, the Kigumba Property, the Kidera Property and the Nyanga Property. The Company also had a right, to earn a 60% interest in the Mashonga Property, and a right to earn an 80% interest in the Ibanda Property. The Company has withdrawn from both of these joint venture agreements at Mashonga and Ibanda.

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. Flemish is a third party property vendor in relation 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 is being paid.

In addition to the licenses transferred to Magnus under the License Transfer Agreement, Magnus received an additional exploration license covering 147.63 sq. km. During 2008, three licenses were renewed for a period of two years, each with a 50% reduction in area, so that the Mwerusandu Property is now comprised of four exploration licenses covering 175.43 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 land 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 is being paid.

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. During 2008, four licenses were renewed for a period of two years with a 50% reduction in area and one license was relinquished. The Mitoma Property is now comprised of seven exploration licenses covering 359.49 sq. km.

During 2008, a limited infill soil survey was completed at the Kabira license on the Mitoma Property. Some 43 soil samples were collected to test previous anomalies delineated in previous exploration. The results do not indicate an extensive zone of anomalous soil values.

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). In addition, under the Mubende Agreement AMF was required to issue additional AMF common shares, to a maximum of 300,000 additional 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.

During 2008 a total of 1,001 soil samples and 46 rock grab samples were collected on the Mubende Property along regional lines to test the edges of a large granite batholith. The Company believes that the numerous gold and tungsten occurrences on the Property as well as alluvial mining operations to the west of the Property have a source from the edges of this granite body. The results of the soil and rock surveys do not show any gold anomalism in the samples, with gold values in soils above detection limit averaging 4ppb and a maximum value of 28ppb.

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. During the year, one license was renewed for a period of two years, with a 50% reduction in area, so that the Lugazi Property is now comprised of five exploration licenses covering 1,487.69 sq. km.

A reverse circulation drilling program was completed on the Lugazi Property in 2008 which tested three prominent gold-in-soil geochemical anomalies. The 31 hole, 2,037m program tested these three anomalous zones which were co-incident with magnetic rich horizons along lithological strike. The RC holes were drilled at about 50m intervals along a fence across the soil anomaly, and were designed to investigate the nature of the weathered profile to an average depth of some
65m. As no previous gold mineralisation has been reported from this belt the Company sought to understand the source of the anomalous gold in soils and attempt to identify possible structures that could be followed up during subsequent phases of exploration. This drilling is the culmination of early stage exploration at Lugazi which commenced in May 2006.

The most significant RC drill results include:

† 4m at 0.98 g/t gold from 18m in LUG006 at the Kiyola target (incl. 2m at 1.3g/t)

† 2m at 0.50 g/t gold from 64m in LUG007 at the Kiyola target

† 2m at 1.50 g/t gold from 2m in LUG017 at the Nantula target

† 2m at 1.20 g/t gold from 9m in LUG028 at the Katente target

A regional geochemical program has also uncovered potential new gold targets on other parts of the Lugazi belt.

On a more regional scale, a total of 1,456 soil samples were collected along regional lines, planned to investigate additional gold, as well as base metal rich horizons. The results of these soils have not demonstrated an anomalous gold trend. A zone of low level gold was indicated on a single north-south line, with values between 20 and 30 ppb. Infill sampling did not extend this zone to the west or east. The nickel and chromium values of these samples did not show anomalism related to a buried source for base metals.

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 partially contiguous to AMF's Mitoma Property in Uganda (the "Mashonga Property"). Under the Mashonga Agreement, Magnus had 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 a minimum US$4 million in property exploration expenditures and completing a pre-feasibility study on the property by August 30, 2012. Magnus' joint venture partners had the right to accept

common shares of Magnus in lieu of the cash payments. As of December 1, 2008, Magnus had paid US$70,000 to its joint venture partners.

At the Mashonga Property a preliminary soil sample program was completed over targets with high-grade trench and rock sample values from previous exploration activities, as well as from regional soil lines, to investigate additional targets. In total 127 soil samples were collected; results were mixed, showing good anomalous values over one target while having inconsistent values over the other target. The Company also conducted an alteration mapping survey using PIMA analysis of surface rock samples. The alteration pattern indicated an important transition from acidic to alkaline regime along a prominent northwest structure. An RC drill program was conducted at the Mashonga mine site during the summer 2008. A total of 667m was completed in 7 holes beneath the Mashonga mine.

The RC drill holes intersected a sequence of sericite schist in contact with a mafic schist and granite-pegmatite-quartz veining. Sulphide mineralisation in the form of disseminated pyrite was noted within each of the holes.

The drilling conditions at Mashonga proved to be very difficult and as a result none of the 7 holes reached the planned depth. Hole MA-7 was abandoned after 25m, without reaching the targeted mineralised zone. The assay results show that gold mineralization is confined to the extents of the mine workings, but gold values are lower than previous grab samples from the targeted shear zone. As previously reported, gold values up to 874 g/t were reported from a grab sample underground and trench intersections reported 4.6m at 24.7 g/t and 2.4m at 59.6 g/t gold. There is a broad east-west correlation in peak copper values with highs often close to pegmatite mafic boundaries.

There are several other targets that Company management intended to drill at Mashonga but was unable to due to the difficulties experienced by the drilling contractor at the Mashonga mine target area. The Company is also cognizant, that the discontinuous, podiform nature of mineralization associated with shear zones can be difficult to intersect in limited drill programs such as the one just completed.

The most significant RC drill results include:

† 1m at 0.51 g/t gold from 37m in MA-1 beneath the mine workings

† 2m at 0.10 g/t gold from 111m in MA-1 beneath the mine workings

† 3m at 0.12 g/t gold from 54m in MA-2 beneath the mine workings

† 3m at 1.12 g/t gold from 81m in MA-2 beneath the mine workings

† 3m at 3.22 g/t gold from 96m in MA-2 beneath the mine workings

† 3m at 2.55 g/t gold from 114m in MA-2 beneath the mine workings

† 3m at 0.40 g/t gold from 0m in MA-6 west of the mine workings

† 3m at 0.11 g/t gold from 66m in MA-6 west of the mine working

As of July 31, 2008, Magnus had made $181,489 of direct exploration expenditures on the Mashonga Property.

The Company withdrew from the Mashonga joint venture in December 2008.

Ibanda Property

On May 1, 2008, the Company entered into an earn-in agreement (the "Ibanda Agreement") with Canmin-Gold Limited, a subsidiary of IBI Corporation, respecting a mineral exploration license covering 332.70 square kilometers of land contiguous in southwest Uganda, northeast of the Mashonga Property (the "Ibanda Property"). Under the Ibanda Agreement, Magnus has the right to earn a 5% interest in the Ibanda Property for each $150,000 of expenditures that it makes and may earn up to an 80% interest by making an aggregate of $2 million in expenditures on the property within five years. Upon Magnus earning an 80% interest in the Property, the parties may form a joint venture under which each party will be required to contribute its proportionate share of further expenditures or have its interest be diluted.

Exploration at Ibanda commenced during 2008 with soil samples and rock samples being collected over previous gold-in-soil anomalies defined by a previous explorer in the late 1990's. The sampling at Ibanda was completed at two locations in the central and western parts of the licence. A total of 685 soil samples at 25m sampling intervals were collected at 500m line spacing. These samples were taken at 30cm depth, dried and sieved to -80 mesh fraction and submitted to SGS labs in Mwanza for low level gold determination by aqua regia.

The results of the soil sampling showed no continuous gold anomalism. The results did show one point low-level anomalies, with values reaching a maximum of 50 ppb gold. Based on the results of this sampling, the results reported by Roraima need to be taken into context. They reported very high soil values (up to 11,170 ppb) but these values were not repeated during the Company's soil program.

The Company withdrew from the Ibanda joint venture in December 2008.

Other Projects

On May 12, 2008, a mineral exploration license covering 363 square kilometers of land in western Uganda (the "Kigumba Property") was granted to the Company. A 20km long uranium anomaly on the license was picked up by processing the data from the airborne geophysical survey which is being flown over 80% of Uganda. Since acquiring this licence, three additional licences totalling 1402.55 square kilometers were also acquired under the name of the Company's indirect wholly-owned subsidiary, AB Mining Ltd.

The Company has completed a series of hand scintillometer readings along lines across the radiometrics uranium anomaly. A total of 108 readings were taken at 50m stations on lines between 500m and 2km intervals. The results of the ground survey do indicate elevated CPS values reaching 75 CPS especially along the northern edge of the airborne anomaly. A total of 108 soil samples were also collected and have been processed awaiting submission to the labs.

On May 12, 2008, a mineral exploration license covering 291 square kilometers of land in southwestern Uganda (the "Rubindi Property") was granted to the Company. Since acquiring this licence, an additional licence covering 429 square kilometers was also acquired under the name of AB Mining Ltd.

On June 30, 2008, a mineral exploration license covering 485 square kilometers of land in central Uganda (the "Kidera Property") was granted to the Company. The Company intends to evaluate this project for tantalum, rare earth metals and diamonds.

On June 30, 2008, a mineral exploration license covering 23.28 square kilometers of land in central Uganda (the "Nyanga Property") was granted to the Company. The Company intends to evaluate the tantalum potential at this project.

Property Agreements - China

Through its joint venture agreements described below, the Company previously had 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 May 28, 2008, Magnus executed an agreement (the "Transfer Agreement") with Mr. Jinzang Lai ("Lai") under which Magnus agreed to sell its 90% interest in Yunnan Long Teng Mining Ltd., which owns the exploration license underlying the Huidong gold exploration property in Sichuan Province, China to Lai. Under the Transfer Agreement, Magnus was to receive; (i) 7,000,000 yuan (approximately US $1,000.000) within seven days of the execution of the Transfer Agreement; (ii) a further 7,000,000 yuan within seven days of the successful renewal of the exploration license underlying the Huidong property; (iii) a further 4,900,000 yuan within seven days of the transfer of Magnus' 90% interest in Yunnan Long

Teng Mining Ltd. to Lai; and (iv) a further 2,100,000 yuan within seven days of the transfer of the remaining 10% interest in Yunnan Long Teng Mining Ltd. held by Team 209 to Lai, whether directly from Team 209 or indirectly from Team 209 to Magnus and then to Lai. In addition, Magnus was to retain a 3% net smelter royalty on any minerals produced from the Huidong property under the exploration license in the future, which were to be paid quarterly. In late May 2008, Lai forwarded the first payment of 7,000,000 yuan to Magnus. The exploration license underlying the property was successfully renewed by the relevant Chinese authorities and 100% of the ownership interest in the company that possesses the license, Long Teng Mining Ltd., has been transferred to Lai.

On November 12, 2008 the Company collected a further RMB 1,000,000 (approximately $146,000) of the proceeds of sale of Long Teng. On November 16, 2008, the Company signed an amending agreement with the purchaser of Long Teng to amend the due dates of the remaining outstanding proceeds. Under the amendment, RMB 1,000,000 (approximately $146,000) was due for payment by November 30, 2008, RMB 4,000,000 (approximately $584,000) was due for payment by December 31, 2008, RMB 4,000,000 was due for payment by January 31, 2009 and RMB 4,000,000 was due for payment by February 28, 2009. The amendment also made the Company liable for RMB 300,000 (approximately $44,000) of additional costs incurred by the purchaser to settle pre-existing liabilities of Long Teng. The additional liability will be paid by reduction of the final payment under the agreement.

On November 21, 2008 the Company collected RMB 420,000 (approximately $61,000) of the amount due by November 30.

As of 17 June 2009, Magnus has received RMB 8.42 million. On the 17 June 2009, Magnus signed an amended sale agreement requiring the Lai group to pay Magnus RMB 13.5 million within 10 days of the signing of the agreement. Magnus agreed to waive its right to a previously agreed 3% NSR on mineral production and late payments due according to the November 2008 contract in return for an additional 1.38 million RmB payment that is included in the 13.5 million RmB total payment. If the Lai group does not pay Magnus the 13.5 million RmB then Magnus has the right to take back its ownership of Long Teng Mining Ltd. without refunding any payments received previously from the Lai group or Magnus may elect to continue to accrue a 10% penalty, RMB 1,228,000, per month until the Company is paid by the Lai group.

On July 6, 2004, the Company signed a formal cooperative joint venture contract (the "Huidong Agreement") with Geological Brigade Team 209 of the Nuclear Industry of Yunnan Province ("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.

On May 12, 2008, 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 held 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), would 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. Magnus was also required to pay 1 million RMB (approximately US$130,000) to Team 209 for previous services provided by Team 209 to Long Teng Mining and Western and payment of all the liabilities of Western within 10 days after all documents submitted to governmental departments receive approval.

Yunnan Western Mining Co., Ltd. - Mangshi Property

Under the Modification Agreement (described above), Magnus 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 was consummated and accordingly the Company no longer has an interest in the 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 held the rights to the Mangshi Property, a mineral exploration property comprising approximately 113.96 square kilometres in Yunnan Province. Golden River had the right to earn a 90% interest in Western Mining, with Team 209 retaining the other 10%.

Employees

As of April 30, 2009, the Company had no full-time employees (over and above its directors, officers and consultants).

In Uganda, the Company's operating subsidiary in Uganda, African Mineral Fields Limited, employs three persons: one accountant and two housekeepers.

The Company employs one person in China who continues to assist in dealing with matters relating to Long Teng and further payments due to Magnus for the sale of its equity interest in Long Teng.

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

N/A

Government Regulation

Mining operations and exploration activities are subject to various national, state, provincial and local laws and regulations in the United States, Canada, and Uganda 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.

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 the United States, Canada and 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, and Uganda. These laws often change 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

. . .