The following management discussion and analysis of financial condition and results of operations should be read in connection with the accompanying unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this report and the audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the fiscal year ended December 31, 2008.

OVERVIEW

Wits Basin Precious Minerals Inc. (with its subsidiaries "we," "us," "our," "Wits Basin" or the "Company") is a minerals exploration and development company based in Minneapolis, Minnesota. As of June 30, 2009, we own a past producing gold mine in Colorado (Bates-Hunter Mine), a 35% equity interest in Kwagga Gold (Barbados) Limited, which holds rights to properties located in South Africa
(the FSC Project), a 50% equity interest in China Global Mining Resources (BVI)
Ltd, which is limited initially to a 1% distribution right, (which owns an iron ore mine and processing plant in the People's Republic of China, the "PRC") and certain rights in the Vianey Concession in Mexico. The following is a summary of our projects:

China Global Mining Resources

On March 17, 2009, we entered into a joint venture with London Mining, Plc, a United Kingdom corporation ("London Mining") for the purpose of acquiring the processing plant of Nanjing Sudan Mining Co. Ltd ("Sudan") and the iron ore mine of Xiaonanshan Mining Co. Ltd ("Xiaonanshan") (the Sudan and Xiaonanshan collectively are referred to as the "PRC Properties"). Pursuant to that certain LM Subscription Agreement, London Mining purchased 100 ordinary A Shares of China Global Mining Resources (BVI) Ltd, a British Virgin Islands corporation and at the time, a wholly owned subsidiary of ours ("CGMR (BVI)") for $38.75 million, which A Shares constitute a 50% equity interest in CGMR (BVI). We hold the remaining 50% equity interest in the form of 100 ordinary B Shares. The A Shares carry a preference with respect to return of capital and distributions until London Mining receives an aggregate of $44.5 million in return of capital or distributions and certain other conditions are met. On March 17, 2009, CGMR (BVI), through its wholly owned subsidiary China Global Mining Resources Limited, a Hong Kong corporation ("CGMR HK"), acquired the PRC Properties. The Company will account for this joint venture on the equity method of accounting. If and when distributions become available, the Company will receive 1% while London Mining will receive 99%. It took until April 2009 for CGMR (BVI) to complete all of the necessary change over processes in order to be in control of operations at the PRC Properties. For the remainder of 2009, CGMR (BVI) plans to increase magnetite concentrate production capacity in the range of 450,000 tonnes per year. A comprehensive geological and engineering study of the deposits and operations will be conducted in an effort to provide improvements.

Bates-Hunter Mine

On June 12, 2008, we completed the acquisition of the Bates-Hunter Mine, a prior producing gold mine located in Central City, Colorado, which included real property, mining claims, permits and equipment (the "Bates-Hunter Mine"). We consummated the acquisition by transferring our right to purchase the Bates-Hunter Mine to a newly created wholly owned subsidiary of ours, the Hunter Bates Mining Corporation, pursuant to a formal asset purchase agreement dated September 20, 2006, in which we issued a limited recourse promissory note for Cdn$6,750,000 and issued 3,620,000 shares of our common stock. Through August of 2008, a total of 12,039 feet of surface drilling was accomplished, which provided detailed data, which has been added to our existing 3-D map of the region. With the surface drilling program completed in August 2008, no further exploration activities will be conducted at the Bates-Hunter Mine until such time as we have sufficient funds.

Kwagga Gold (Barbados)

We hold a 35 percent equity interest in Kwagga Gold (Barbados) Limited ("Kwagga Barbados"), which, through its wholly owned subsidiary Kwagga Gold (Proprietary) Limited, a South Africa company ("Kwagga Pty"), holds mineral exploration rights in South Africa. This project is referred to as the "FSC Project" and is located adjacent to the historic Witwatersrand Basin. In August 2005, we completed our last drillhole. On December 12, 2007, we entered into an agreement with AfriOre International (Barbados) Limited ("AfriOre"), the holder of the other 65 percent of Kwagga Barbados, whereby we may acquire all of AfriOre's interest of Kwagga Barbados. We have submitted documentation to obtain the consent of South Africa's Minister of Minerals and Energy, who oversees the Department of Minerals and Energy (the "DME") to allow for the sale of the controlling interest in Kwagga Pty to a U.S. company, which is still under review. Other than maintenance of property and prospecting rights and our submission to the DME, no other exploration activities will be conducted until consent is issued by the DME and we have sufficient funds.

Vianey Mine Concession

On October 31, 2007, we executed an amendment to the formal joint venture agreement with Journey Resources Corp., a corporation formed under the laws of the Province of British Columbia ("Journey") and Minerales Jazz S.A. De C.V., a corporation duly organized pursuant to the laws of Mexico and a wholly owned subsidiary of Journey. Pursuant to the terms of the amendment, we own a 50 percent undivided beneficial interest in "located mineral claims" in the property known as the Vianey Mine Concession located in the State of Guerrero, Mexico ("Vianey"). Based on our further due diligence on the Vianey Mine, we have determined that it is necessary to increase the size of the land package in order for this property to be a viable large scale exploration endeavor (we also have taken into consideration the spot price for silver metals as well). Inquiries and communications have been disseminated to the adjacent properties, regarding possible purchase of land, rights or some type of further joint venture to accomplish an increased footprint. Journey remains the operator of the project and has other specific tasks to be performed. Until such time as we have determined what options are available for an increase in land rights and development, no funds will be expended at the Vianey until such time as we have obtained dedicated funding.

As of June 30, 2009, we possess only a few pieces of equipment and we employ insufficient numbers of personnel necessary to actually explore and/or mine for minerals. Therefore, we are substantially dependent on the third party contractors we engage to perform such operations. As of the date of this Report, we do not claim to have any mineral reserves at the Bates-Hunter Mine, the FSC Project or the Vianey.

In the future, we will continue to seek new areas for exploration and the rights that would allow us to be either owners or participants. These rights may take the form of direct ownership of mineral exploration or, like our interest in Kwagga Barbados; these rights may take the form of ownership interests in entities holding exploration rights. Previously, our main focus was only in gold exploration projects, future projects will involve other minerals, such as our entry into the Chinese iron ore properties.

Our principal office is located at 900 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota 55402-8773. Our telephone number is (612) 349-5277 and our Internet address is www.witsbasin.com. Our securities trade on the Over-the-Counter Bulletin Board under the symbol "WITM."

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30, 2008.

Revenues

We had no revenues from continuing operations for the three and six months ended June 30, 2009 and 2008. Furthermore, we do not anticipate having any future revenues until an economic mineral deposit is discovered or unless we make further acquisitions or complete other mergers or joint ventures with business models that allow us to report such results.

Operating Expenses

General and administrative expenses were $658,222 for the three months ended June 30, 2009 as compared to $2,245,547 for the same period in 2008. Of the $658,222 recorded for 2009, $423,945 relates to non-cash charges for stock based compensation. Of the $2,245,547 expenses recorded in 2008, approximately $970,000 relates to stock based compensation expenses, $346,000 relates to our due diligence with respect to potential acquisitions of China mining properties (travel and visa requirements, site visits and significant costs with consultants), and $465,000 relates to public relations services, consulting fees, shareowner services. General and administrative expenses were $1,803,676 for the six months ended June 30, 2009 as compared to $3,474,409 for the same period in 2008. Of the $1,803,676 expenses recorded in 2009, approximately $848,000 relates to stock based compensation expenses and approximately $331,000 relates to our efforts in China mining properties. Of the $3,474,409 expenses recorded in 2008, approximately $1,217,000 relates to stock based compensation expenses, $715,000 relate to our due diligence with respect to potential acquisitions of China mining properties (travel and visa requirements, site visits and significant costs with consultants), and $729,000 relates to public relations services, consulting fees, shareowner services. We anticipate that our operating expenses will increase during the year due to our continued plans for acquisition financing and due diligence on other exploration projects.

Exploration expenses were $51,377 for the three months ended June 30, 2009 as compared to $917,491 for the same period in 2008. Exploration expenses for 2009 relate to the Bates-Hunter Mine, other international projects we are investigating and direct costs related to our prior attempt to sell the 65 percent of the FSC Project to Communications DVR Inc ("DVR"), a Canadian capital pool company, which they terminated their intent in June 2009. Exploration expenses for 2008 relate primarily to the expenditures at the Bates-Hunter Mine and a $150,000 loss we recorded relating to the termination agreement of the Shanxi Hua Ze Nickel Smelting Co., a nickel mining operation located in the PRC. Exploration expenses were $95,789 for the six months ended June 30, 2009 as compared to $1,482,525 for the same period in 2008. Exploration expenses for 2009 relate to the Bates-Hunter Mine, other international projects we are investigating and direct costs related to our prior attempt to sell the 65 percent of the FSC Project to DVR. Exploration expenses for 2008 relate primarily to the expenditures at the Bates-Hunter Mine and a $150,000 loss we recorded relating to the termination agreement of the nickel mine. We anticipate the rate of exploration spending will continue to decrease during the year, unless we secure dedicated funding for a project.

Depreciation and amortization expenses were $26,431 for the three months ended June 30, 2009 as compared to $8,153 for the same period in 2008. Depreciation and amortization expenses were $52,862 for the six months ended June 30, 2009 as compared to $12,280 for the same period in 2008. Prior to the acquisition of the Bates-Hunter Mine property in June 2008, we made normal purchases of various pieces of equipment necessary to operate and de-water the property. After the acquisition of the Bates-Hunter Mine, we allocated the purchase price to the land, buildings and additional equipment acquired. Depreciation on allowable assets is calculated on a straight-line method over the estimated useful life, presently ranging from two to twenty years.

We recorded $1,764 in losses for the six months ended June 30, 2009 related to an advance of funds to the FSC project and our recognition of loss attributable to CGMR (BVI). In November 2008, we entered into a bridge financing arrangement with Hawk, whereby Hawk made a loan to us of $60,000 as AfriOre informed us that they would not be providing any additional funding and that it was our responsibility to maintain the permits and land claims of the FSC Project. We will recognize 100% of this $60,000 advance as an equity loss in an unconsolidated affiliate to coincide with the funds being dispersed by Kwagga Barbados, all of which relate to such permit and land claim maintenance.

Other Income and Expenses

Our other income and expense consists of interest income, interest expense, gains from deconsolidation of our wholly owned subsidiaries and non-cash foreign currency adjustments. Interest income for the three months ended June 30, 2009 was $0 compared to $215 for the same period in 2008. Interest income for the six months ended June 30, 2009 was $9 compared to $432 for the same period in 2008. We expect that future interest income will be low during the next twelve months as our cash balances remain very low.

Interest expense for the three months ended June 30, 2009 was $1,514,189 compared to $498,840 for the same period in 2008. Interest expense for the six months ended June 30, 2009 was $2,827,262 compared to $1,373,120 for the same period in 2008. Interest expense for 2009 includes approximately $580,000 in principal loan interest payments and accruals with the balance representing the amortization of original issue discount, the costs attributable to beneficial conversion features relating to the issuance of common stock and warrants and the extinguishment of the old debt and a re-issuance of new debt with China Gold, LLC. We expect interest expense to continue to increase during 2009, at amounts greater than previously recorded due to our continued need for cash.

On December 17, 2008, we created a new British Virgin Islands corporation and wholly owned subsidiary of ours, CGMR (BVI), to serve as the joint venture entity with London Mining. On March 17, 2009, we entered into a subscription agreement and a shareholders' agreement with London Mining, whereby they acquired a 50% equity interest in CGMR (BVI). London Mining paid an aggregate of $38.75 million for 100 A Shares. The shareholders' agreement set forth certain preferences of their A Shares, including: (i) governance terms applicable to CGMR (BVI); (ii) the A Shares carry a preference with respect to return of capital and distributions; and (iii) board seats. Since we do not exercise significant influence over the operations or financial policies and will initially receive only 1% of the distributions, pursuant to the guidance of FAS 160: Noncontrolling Interests in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51, we recorded a gain in the deconsolidation of CGMR (BVI) for the three months ended March 31, 2009 of $1,461,078. The gain is comprised primarily of $1,073,578 in unpaid accrued liabilities assumed by the joint venture.

With the consummation of the Bates-Hunter Mine acquisition in June 2008, we are recording direct non-cash gains and losses due to our dealings with the recourse promissory note, denominated in Canadian Dollars of Cdn$6,750,000. We recorded a $478,217 loss for the three months ended June 30, 2009 as compared to $113,358 for the same period in 2008 calculated by the difference in exchange rates between the US Dollar and the Canadian Dollar. We recorded a $347,321 loss for the six months ended June 30, 2009 as compared to $113,358 for the same period in 2008. LM is entitled to receive 99% of the distributions of CGMR (BVI), while we will receive a 1% distribution. To determine our share of net income or loss for our investment in the CGMR (BVI) joint venture, we considered the substance over form and the underlying values required in the LM agreements.

Liquidity and Capital Resources

Liquidity is a measure of an entity's ability to secure enough cash to meet its contractual and operating needs as they arise. We have funded our operations and satisfied our capital requirements primarily through the sale of securities and debt financing. We do not anticipate generating sufficient net positive cash flows from our operations to fund the next twelve months. We had a working capital deficit of $8,778,111 at June 30, 2009. Cash and cash equivalents were $24,244 at June 30, 2009, representing a decrease of $206,485 from the cash and cash equivalents of $230,729 at December 31, 2008.

Our cash reserves are basically depleted at June 30, 2009. We need to raise additional capital to pay for our basic operational needs, which is approximately $275,000 per month. If we are not able to raise additional working capital, we may have to cutback on operational expenditures or cease operations altogether.

For the six months ended June 30, 2009 and 2008, we had net cash used in operating activities of $1,012,348 and $2,299,078, respectively. During 2009, our primary capital requirement has been the funding of expenses related to our entrance into Chinese business opportunities, which we paid out approximately $284,000. During 2008 we paid out approximately $731,000 for Chinese opportunities.

For the six months ended June 30, 2009 and 2008, we had net cash used in investing activities of $0 and $92,785, respectively. In 2008, the Company outlaid $64,680 in acquisition costs for the Bates-Hunter Mine and $28,105 in equipment purchases.

For the six months ended June 30, 2009 and 2008, we had net cash provided by financing activities of $805,863 and $2,264,342, respectively. During 2009, we received cash proceeds of $6,220,000 from debt financing and repaid $5,384,041 of debt. During 2008, (i) through the sale of common stock (net of offering costs) and the exercise of warrants, we raised $1,323,743, (ii) we received cash proceeds of $1.23 million from debt financing and (iii) repaid $250,000 of debt.

The following table summarizes our debt as of June 30, 2009:

      O/S Amount        Accrued Interest        Maturity Date            Type
      $   110,000       $           2,160   December 8, 2008 (1)     Conventional
      $    50,000       $           1,068   December 31, 2008 (1)    Conventional
      $   512,391       $          10,168   February 11, 2009 (1)   Convertible (2)
      $    25,000       $           1,199    March 20, 2009 (1)      Conventional
      $   110,000       $          17,810    March 31, 2009 (1)     Convertible (3)
      $    50,000                      (4 )   July 29, 2009 (1)      Conventional
      $ 1,000,000       $          63,101      August 22, 2009      Convertible (5)
      $    60,000       $           3,886      August 31, 2009       Conventional
      $ 5,337,066       $         186,698     February 15, 2010      Conventional
      $   100,000       $           4,249     February 26, 2010     Convertible (6)
      $    50,000       $             329       March 8, 2010        Conventional
      $    30,000                      (7 )    April 11, 2010        Conventional
      $   511,590       $          10,826      April 27, 2012       Convertible (8)
      $ 5,750,000       $          87,322     January 31, 2014       Conventional
      $ 5,670,170 (9)                 (10 )   December 31, 2015      Conventional

1. Currently past due and being renegotiated; original terms apply in the default period.

2. Convertible at the lesser of $0.18 per share or 85% of the lowest VWAP (volume-weighted average price) for the 10 trading days preceding the conversion notice date.

3. Convertible at $0.20 per share.

4. Promissory note was issued with $10,000 OID and accrues no interest. Note was issued to Mr. Stoica, who current serves as a member of our board of directors.

5. Convertible at $0.10 per share.

6. Convertible at the greater of our common stocks current market trading price or $0.05 per share.

7. Zero percent interest with preferential repayment from any Chilean projects.

8. Convertible at $0.20 per share.

9. Includes $217,112 of current portion (the equivalent of Cdn$250,000 at June 30, 2009) currently past due and being renegotiated; original terms apply in the default period.
10. Interest does not begin accruing until January 1, 2010.

As part of the completion of the LM Subscription Agreement, the parties completed the issuance of a promissory note of CGMR (BVI) issued in favor of Wits Basin in the principal amount of $4.8 million (the "WB Note"), issued in consideration of our transfer to CGMR (BVI) of 100% of the equity of CGMR HK which was effected on December 23, 2008. Due to this sale occurring between two commonly controlled entities, no gain was recorded by the Company, see - Note
10. The WB Note does not bear interest, and has a maturity date of December 31, 2014. Pursuant to the WB Note, CGMR (BVI) is not required to make payments until 2011, and annual payments thereafter are based on a percentage of the outstanding principal under the WB Note. All payments of the WB Note prior to maturity will be subject to the available profits of CGMR (BVI). Any payments under the WB Note are required to be used to make payments toward any outstanding note obligations of ours in favor of China Gold.

Summary

Our existing sources of liquidity will not provide enough cash to fund operations for the next twelve months. As of the date of this Report, we have estimated our cash needs over the next twelve months to be approximately $11,500,000 (which includes approximately $8,300,000 for repayment of debt, assuming some or all of such notes that are not converted into equity prior to maturity. Additionally, should any projects or mergers be completed during 2009, additional funds will be required. We will continue our attempt to raise additional capital. Some of the possibilities available to us are through private equity transactions, to develop a credit facility with a lender or the exercise of options and warrants. However, such additional capital may not be available to us at acceptable terms or at all. In the event that we are unable to obtain additional capital, we would be forced to reduce operating expenditures and/or cease operations altogether.

Off Balance Sheet Arrangements

During the six months ended June 30, 2009, we did not engage in any off balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.