---

**UNITED STATES****SECURITIES AND EXCHANGE COMMISSION**Washington, DC 20549

FORM 10-QSB

[ x ] Quarterly Report pursuant to Section 13 or 15(d) of the
  Securities Exchange Act of 1934

For the quarterly period ended June 30, 2006

[]
  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of
  1934

For the transition period  ________  to  ________

COMMISSION FILE NUMBER000-30995

SEARCHLIGHT MINERALS CORP.(Name of small business issuer in its charter)

|NEVADA                                                 | 98-0232244                          
|------------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation
      or | (I.R.S. Employer Identification No.)
|organization)                                          |                                     
|                                                       |                                     
|                                                       |                                     
|#120 - 2441 West Horizon Ridge Parkway                 |                                     
|Henderson, NV                                          | 89052                               
|(Address of principal executive offices)               | (Zip Code)                          
|                                                       |                                     
|**(702) 939-5247**                                     |                                     
|Issuer's telephone number                              |                                     

**N/A**
  Former name, former address and former fiscal year, if changed since last report

Check whether the issuer: (1) filed all reports required to be
  filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
  for such shorter period that the registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days. Yes
  [ x ]No []

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

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date: As of August
  4, 2006, the Issuer had 67,231,000 shares of common stock outstanding.

Transitional Small Business Disclosure Format (check one): Yes
  []
  No [ x ]

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PART I - FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS.
|------- | ---------------------

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the six months ended June 30, 2006 are
not necessarily indicative of the results that can be expected for the year
ending December 31, 2006.

As used in this Quarterly Report on Form 10-QSB, the terms
"we, "us, "our, Searchlight and the Company mean Searchlight Minerals
Corp. unless otherwise indicated. All dollar amounts in this Quarterly Report
are in U.S. dollars unless otherwise stated.

2

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SEARCHLIGHT MINERALS CORP. 
  (AN EXPLORATION STAGE COMPANY) 
  BALANCE SHEETS 
  (UNAUDITED)

|                                                              |   |            |   |   |              |  
|------------------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                              |   | June 30,   |   |   | December 31, |  
|                                                              |   | 2006       |   |   | 2005         |  
|                                                              |   |            |   |   |              |  
|ASSETS                                                        |  
|                                                              |   |            |   |   |              |  
|Current assets                                                |   |            |   |   |              |  
|Cash                                                          | $ | 5,508,917  |   | $ | 705,856      |  
|Employee advance                                              |   | 31,245     |   |   | -            |  
|                                                              |   |            |   |   |              |  
|Total current assets                                          |   | 5,540,162  |   |   | 705,856      |  
|                                                              |   |            |   |   |              |  
|Property and equipment, net                                   |   | 27,974     |   |   | 15,136       |  
|Mining claims                                                 |   | 127,134    |   |   | 127,134      |  
|Joint venture agreement                                       |   | 690,000    |   |   | 690,000      |  
|Deposits                                                      |   | 180,500    |   |   | 180,500      |  
|                                                              |   |            |   |   |              |  
|Total assets                                                  | $ | 6,565,770  |   | $ | 1,718,626    |  
|                                                              |   |            |   |   |              |  
|                                                              |   |            |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                          |  
|                                                              |   |            |   |   |              |  
|Current liabilities                                           |   |            |   |   |              |  
|Accounts payable                                              | $ | 794,586    |   | $ | 783,246      |  
|Loan payable - former officers and directors                  |   | 382,792    |   |   | 379,877      |  
|Loan payable                                                  |   | -          |   |   | 15,000       |  
|                                                              |   |            |   |   |              |  
|Total current liabilities                                     |   | 1,177,378  |   |   | 1,178,123    |  
|                                                              |   |            |   |   |              |  
|Total liabilities                                             |   | 1,177,378  |   |   | 1,178,123    |  
|                                                              |   |            |   |   |              |  
|Stockholders' equity                                          |   |            |   |   |              |  
|Common stock, $0.001 par value; 400,000,000 shares            |   |            |   |   |              |  
|authorized, 65,831,000
      and 52,150,000 shares issued and |   |            |   |   |              |  
|outstanding at June 30, 2006 and
      December 31, 2005      |   |            |   |   |              |  
|respectively                                                  |   | 65,831     |   |   | 52,150       |  
|Additional paid-in capital                                    |   | 12,884,379 |   |   | 6,083,298    |  
|Common stock subscribed                                       |   | -          |   |   | 270,000      |  
|Accumulated other comprehensive loss                          |   | (121,606   | ) |   | (109,837     | )
|Accumulated deficit during development
      stage            |   | (7,440,212 | ) |   | (5,755,108   | )
|                                                              |   |            |   |   |              |  
|Total stockholders'
      equity                              |   | 5,388,392  |   |   | 540,503      |  
|                                                              |   |            |   |   |              |  
|Total liabilities and stockholders' equity                    | $ | 6,565,770  |   | $ | 1,718,626    |  

See Accompanying Notes to Financial Statements

F-1

---

SEARCHLIGHT MINERALS CORP. 
  (AN EXPLORATION STAGE COMPANY) 
  STATEMENTS OF OPERATIONS 
  (UNAUDITED)

|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   | For the period from |  
|-------------------------------------------------- | - | ----------------------------------- | - | - | --------------------------------- | - | - | ---------- | - | - | ---------- | - | - | ------------------- | -
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   | January 14, 2000    |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   | (Date of Inception) |  
|                                                   |   | For the three months ended June 30, |   |   | For the six months ended June 30, |   |   | Through    |  
|                                                   |   | 2006                                |   |   | 2005                              |   |   | 2006       |   |   | 2005       |   |   | June 30, 2006       |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Revenue                                            | $ | -                                   |   | $ | -                                 |   | $ | -          |   | $ | -          |   | $ | -                   |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Operating expenses                                 |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Research and development                           |   | -                                   |   |   | -                                 |   |   | -          |   |   | -          |   |   | 1,900,095           |  
|Mining exploration expenses                        |   | 620,796                             |   |   | 49,606                            |   |   | 1,022,888  |   |   | 62,350     |   |   | 1,909,911           |  
|General and administrative                         |   | 441,518                             |   |   | 48,669                            |   |   | 654,852    |   |   | 518,276    |   |   | 3,121,780           |  
|Depreciation                                       |   | 2,173                               |   |   | -                                 |   |   | 2,966      |   |   | -          |   |   | 239,090             |  
|Impairment loss on intangible assets               |   | -                                   |   |   | -                                 |   |   | -          |   |   | -          |   |   | 173,234             |  
|Impairment loss on property and
      equipment    |   | -                                   |   |   | -                                 |   |   | -          |   |   | -          |   |   | 86,683              |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Total operating expenses                           |   | 1,064,487                           |   |   | 98,275                            |   |   | 1,680,706  |   |   | 580,626    |   |   | 7,430,793           |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Loss from operations                               |   | (1,064,487                          | ) |   | (98,275                           | ) |   | (1,680,706 | ) |   | (580,626   | ) |   | (7,430,793          | )
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Other income (expense):                            |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Other income                                       |   | -                                   |   |   | -                                 |   |   | -          |   |   | -          |   |   | 282,142             |  
|Loss on equipment disposition                      |   | (4,398                              | ) |   | -                                 |   |   | (4,398     | ) |   | -          |   |   | (4,398              | )
|Interest expense, net                              |   | -                                   |   |   | -                                 |   |   | -          |   |   | -          |   |   | (300,000            | )
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Total other income (expense)                       |   | (4,398                              | ) |   | -                                 |   |   | (4,398     | ) |   | -          |   |   | (22,256             | )
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Loss from operations before                        |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|provision for income taxes                         |   | (1,068,885                          | ) |   | (98,275                           | ) |   | (1,685,104 | ) |   | (580,626   | ) |   | (7,453,049          | )
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Income tax benefit                                 |   | -                                   |   |   | -                                 |   |   | -          |   |   | -          |   |   | 12,837              |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Net loss                                           |   | (1,068,885                          | ) |   | (98,275                           | ) |   | (1,685,104 | ) |   | (580,626   | ) |   | (7,440,212          | )
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Other Comprehensive Loss                           |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Foreign currency translation adjustment            |   | -                                   |   |   | -                                 |   |   | (11,769    | ) |   | 24,148     |   |   | (121,606            | )
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Comprehensive Loss                                 |   | (1,068,885                          | ) |   | (98,275                           | ) |   | (1,696,873 | ) |   | (556,478   | ) |   | (7,561,818          | )
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Loss per common share - basic                      |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Net loss                                           | $ | (0.02                               | ) | $ | (0.01                             | ) | $ | (0.03      | ) | $ | (0.02      | ) |   |                     |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Weighted average common shares outstanding
      - |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Basic                                              |   | 58,120,099                          |   |   | 19,150,000                        |   |   | 57,007,481 |   |   | 27,078,177 |   |   |                     |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Loss per common share - diluted                    |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Net loss                                           | $ | (0.01                               | ) | $ | (0.01                             | ) | $ | (0.02      | ) | $ | (0.02      | ) |   |                     |  
|                                                   |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Weighted average common shares outstanding
      - |   |                                     |   |   |                                   |   |   |            |   |   |            |   |   |                     |  
|Diluted                                            |   | 89,570,231                          |   |   | 19,150,000                        |   |   | 84,439,039 |   |   | 27,078,177 |   |   |                     |  

See Accompanying Notes to Financial Statements

F-2

---

SEARCHLIGHT MINERALS CORP. 
  (AN EXPLORATION STAGE COMPANY) 
  STATEMENT OF STOCKHOLDERS' EQUITY 
  (UNAUDITED)

|                                       |  |              |   |   |            |   |   |                       |   |   | Accumulated         |   |   |            |  |   |              |   |   | Accumulated    |   |   |            |  
|-------------------------------------- |  | ------------ | - | - | ---------- | - | - | --------------------- | - | - | ------------------- | - | - | ---------- |  | - | ------------ | - | - | -------------- | - | - | ---------- | -
|                                       |  |              |   |   |            |   |   |                       |   |   | Other               |   |   | Common     |  |   |              |   |   | Deficit During |   |   | Total      |  
|                                       |  | Common Stock |   |   | Additional |   |   | Comprehensive         |   |   | Stock               |   |   | Deferred   |  |   | Exploration  |   |   | Stockholders'  |  
|                                       |  | Shares       |   |   | Amount     |   |   | Paid-in
      Capital |   |   | Income
      (Loss) |   |   | Subscribed |  |   | Compensation |   |   | Stage          |   |   | Equity     |  
|Balance, January 14, 2000              |  | -            |   | $ | -          |   | $ | -                     |   | $ | -                   |   | $ | -          |  | $ | -            |   | $ | -              |   | $ | -          |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Issuance of common stock               |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|(recapitalized)                        |  | 50,000,000   |   |   | 50,000     |   |   | (25,000               | ) |   | -                   |   |   | -          |  |   | -            |   |   | (24,999        | ) |   | 1          |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Effect of foreign currency translation |  | -            |   |   | -          |   |   | -                     |   |   | 3,059               |   |   | -          |  |   | -            |   |   | -              |   |   | 3,059      |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Net loss                               |  | -            |   |   | -          |   |   | -                     |   |   | -                   |   |   | -          |  |   | -            |   |   | (235,028       | ) |   | (235,028   | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Balance, December 31, 2000             |  | 50,000,000   |   |   | 50,000     |   |   | (25,000               | ) |   | 3,059               |   |   | -          |  |   | -            |   |   | (260,027       | ) |   | (231,968   | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Issuance of common stock in            |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|reverse merger                         |  | 10,300,000   |   |   | 10,300     |   |   | (5,150                | ) |   | -                   |   |   | -          |  |   | -            |   |   | (5,150         | ) |   | -          |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Effect of foreign currency translation |  | -            |   |   | -          |   |   | -                     |   |   | (2,619              | ) |   | -          |  |   | -            |   |   | -              |   |   | (2,619     | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Net loss                               |  | -            |   |   | -          |   |   | -                     |   |   | -                   |   |   | -          |  |   | -            |   |   | (765,179       | ) |   | (765,179   | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Balance, December 31, 2001             |  | 60,300,000   |   |   | 60,300     |   |   | (30,150               | ) |   | 440                 |   |   | -          |  |   | -            |   |   | (1,030,356     | ) |   | (999,766   | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Capital contribution                   |  | -            |   |   | -          |   |   | 1,037,126             |   |   | -                   |   |   | -          |  |   | -            |   |   | -              |   |   | 1,037,126  |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Beneficial conversion feature          |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|associated with debt                   |  | -            |   |   | -          |   |   | 300,000               |   |   | -                   |   |   | -          |  |   | -            |   |   | -              |   |   | 300,000    |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Effect of foreign currency translation |  | -            |   |   | -          |   |   | -                     |   |   | (70,248             | ) |   | -          |  |   | -            |   |   | -              |   |   | (70,248    | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Net loss                               |  | -            |   |   | -          |   |   | -                     |   |   | -                   |   |   | -          |  |   | -            |   |   | (1,179,396     | ) |   | (1,179,396 | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Balance, December 31, 2002             |  | 60,300,000   |   |   | 60,300     |   |   | 1,306,976             |   |   | (69,808             | ) |   | -          |  |   | -            |   |   | (2,209,752     | ) |   | (912,284   | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Debt exchanged for common stock        |  | 48,000,000   |   |   | 48,000     |   |   | 1,152,000             |   |   | -                   |   |   | -          |  |   | -            |   |   | -              |   |   | 1,200,000  |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Deferred compensation                  |  | -            |   |   | -          |   |   | 12,583                |   |   | -                   |   |   | -          |  |   | (12,583      | ) |   | -              |   |   | -          |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Amortization of deferred               |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|compensation                           |  | -            |   |   | -          |   |   | -                     |   |   | -                   |   |   | -          |  |   | 10,387       |   |   | -              |   |   | 10,387     |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Effect of foreign currency translation |  | -            |   |   | -          |   |   | -                     |   |   | (50,755             | ) |   | -          |  |   | -            |   |   | -              |   |   | (50,755    | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Net loss                               |  | -            |   |   | -          |   |   | -                     |   |   | -                   |   |   | -          |  |   | -            |   |   | (1,233,117     | ) |   | (1,233,117 | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Balance, December 31, 2003             |  | 108,300,000  |   |   | 108,300    |   |   | 2,471,559             |   |   | (120,563            | ) |   | -          |  |   | (2,196       | ) |   | (3,442,869     | ) |   | (985,769   | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Amortization of deferred               |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|compensation                           |  | -            |   |   | -          |   |   | -                     |   |   | -                   |   |   | -          |  |   | 2,196        |   |   | -              |   |   | 2,196      |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Effect of foreign currency translation |  | -            |   |   | -          |   |   | -                     |   |   | (109,982            | ) |   | -          |  |   | -            |   |   | -              |   |   | -          |  
|Net loss                               |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   | (590,462       | ) |   |            |  
|Net comprehensive loss                 |  | -            |   |   | -          |   |   | -                     |   |   | -                   |   |   | -          |  |   | -            |   |   |                |   |   | (700,444   | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Balance, December 31, 2004             |  | 108,300,000  |   |   | 108,300    |   |   | 2,471,559             |   |   | (230,545            | ) |   | -          |  |   | -            |   |   | (4,033,331     | ) |   | (1,684,017 | )
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Issuance of stock options for          |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|1,000,000 shares of common stock       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|to two officers                        |  | -            |   |   | -          |   |   | 133,062               |   |   | -                   |   |   | -          |  |   | -            |   |   | -              |   |   | 133,062    |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Issuance of stock options for          |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|500,000 shares of common stock         |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|in satisfaction of debt                |  | -            |   |   | -          |   |   | 300,000               |   |   | -                   |   |   | -          |  |   | -            |   |   | -              |   |   | 300,000    |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Return and cancellation of             |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|70,000,000 shares of common            |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|stock                                  |  | (70,000,000  | ) |   | (70,000    | ) |   | 70,000                |   |   | -                   |   |   | -          |  |   | -            |   |   | -              |   |   | -          |  
|                                       |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|Issuance of common stock               |  |              |   |   |            |   |   |                       |   |   |                     |   |   |            |  |   |              |   |   |                |   |   |            |  
|for 20 mining concessions              |  | 1,400,000    |   |   | 1,400      |   |   | 38,600                |   |   | -                   |   |   | -          |  |   | -            |   |   | -              |   |   | 40,000     |  

See Accompanying Notes to Financial Statements

F-3

---

SEARCHLIGHT MINERALS CORP. 
  (AN EXPLORATION STAGE COMPANY) 
  STATEMENT OF STOCKHOLDERS' EQUITY 
  (UNAUDITED)

|                                          |  |              |  |  |            |  |  |                       |   |  | Accumulated   |   |  |            |   |  |              |  |  | Accumulated    |   |  |            |  
|----------------------------------------- |  | ------------ |  |  | ---------- |  |  | --------------------- | - |  | ------------- | - |  | ---------- | - |  | ------------ |  |  | -------------- | - |  | ---------- | -
|                                          |  |              |  |  |            |  |  |                       |   |  | Other         |   |  | Common     |   |  |              |  |  | Deficit During |   |  | Total      |  
|                                          |  | Common Stock |  |  | Additional |  |  | Comprehensive         |   |  | Stock         |   |  | Deferred   |   |  | Exploration  |  |  | Stockholders'  |  
|                                          |  | Shares       |  |  | Amount     |  |  | Paid-in
      Capital |   |  | Income (Loss) |   |  | Subscribed |   |  | Compensation |  |  | Stage          |   |  | Equity     |  
|Issuance of common stock                  |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|in satisfaction of debt, $0.625 per share |  | 200,000      |  |  | 200        |  |  | 124,800               |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 125,000    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock for cash,        |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Reg. S - Private Placement,               |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$0.25 per share, net of                   |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$205,250 commissions                      |  | 6,390,000    |  |  | 6,390      |  |  | 1,369,070             |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 1,375,460  |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock for cash,        |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Reg. S - Private Placement,               |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$0.25 per share, net of                   |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$135,000 commission                       |  | 5,400,000    |  |  | 5,400      |  |  | 1,194,947             |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 1,200,347  |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock for cash,        |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Reg. D 506 - Private Placement,           |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$0.25 per share                           |  | 460,000      |  |  | 460        |  |  | 114,540               |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 115,000    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of stock options for             |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|1,500,000 shares of common stock          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|to three officers                         |  | -            |  |  | -          |  |  | 266,720               |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 266,720    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Common stock subscribed                   |  | -            |  |  | -          |  |  | -                     |   |  | -             |   |  | 270,000    |   |  | -            |  |  | -              |   |  | 270,000    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Effect of foreign currency translation    |  | -            |  |  | -          |  |  | -                     |   |  | 120,708       |   |  | -          |   |  | -            |  |  | -              |   |  | -          |  
|Net loss                                  |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  | (1,721,777     | ) |  | -          |  
|Net comprehensive loss                    |  | -            |  |  | -          |  |  | -                     |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | (1,601,069 | )
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Balance, December 31, 2005                |  | 52,150,000   |  |  | 52,150     |  |  | 6,083,298             |   |  | (109,837      | ) |  | 270,000    |   |  | -            |  |  | (5,755,108     | ) |  | 540,503    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock for cash,        |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Reg. D - Private Placement,               |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$0.45 per share, net of                   |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$87,750 commission                        |  | 3,900,000    |  |  | 3,900      |  |  | 1,663,350             |   |  | -             |   |  | (270,000   | ) |  | -            |  |  | -              |   |  | 1,397,250  |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock                  |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|related to exercise of warrants           |  | 1,225,000    |  |  | 1,225      |  |  | (1,225                | ) |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | -          |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of stock options for             |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|120,000 shares of common stock            |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|to two officers                           |  | -            |  |  | -          |  |  | 20,864                |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 20,864     |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of stock options for             |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|500,000 shares of common stock            |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|to two directors                          |  | -            |  |  | -          |  |  | 122,420               |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 122,420    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of stock options for             |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|100,000 shares of common stock            |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|to two directors                          |  | -            |  |  | -          |  |  | 24,484                |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 24,484     |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock for cash         |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Reg. S - Private Placement,               |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$0.625 per share                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|from exercise of warrants                 |  | 6,125,000    |  |  | 6,125      |  |  | 3,822,000             |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 3,828,125  |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock for cash         |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Reg. S - Private Placement,               |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$0.375 per share                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|from exercise of warrants                 |  | 1,768,500    |  |  | 1,768      |  |  | 661,420               |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 663,188    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock for cash         |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Reg. S - Private Placement,               |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|$0.625 per share                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|from exercise of warrants                 |  | 612,500      |  |  | 613        |  |  | 382,200               |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 382,813    |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of stock options for             |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|100,000 shares of common stock            |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|to officer for recruitment                |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|amortized over vesting period.            |  | -            |  |  | -          |  |  | 1,309                 |   |  | -             |   |  | -          |   |  | -            |  |  | -              |   |  | 1,309      |  
|                                          |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  
|Issuance of common stock to               |  |              |  |  |            |  |  |                       |   |  |               |   |  |            |   |  |              |  |  |                |   |  |            |  

See Accompanying Notes to Financial Statements

F-4

---

SEARCHLIGHT MINERALS CORP. 
  (AN EXPLORATION STAGE COMPANY) 
  STATEMENT OF STOCKHOLDERS' EQUITY 
  (UNAUDITED)

|                                       |  |              |  |   |            |  |   |                       |  |   | Accumulated   |   |   |            |  |   |              |  |   | Accumulated    |   |   |            |  
|-------------------------------------- |  | ------------ |  | - | ---------- |  | - | --------------------- |  | - | ------------- | - | - | ---------- |  | - | ------------ |  | - | -------------- | - | - | ---------- | -
|                                       |  |              |  |   |            |  |   |                       |  |   | Other         |   |   | Common     |  |   |              |  |   | Deficit During |   |   | Total      |  
|                                       |  | Common Stock |  |   | Additional |  |   | Comprehensive         |  |   | Stock         |   |   | Deferred   |  |   | Exploration  |  |   | Stockholders'  |  
|                                       |  | Shares       |  |   | Amount     |  |   | Paid-in
      Capital |  |   | Income (Loss) |   |   | Subscribed |  |   | Compensation |  |   | Stage          |   |   | Equity     |  
|officer for recruitment                |  | 50,000       |  |   | 50         |  |   | 102,950               |  |   | -             |   |   | -          |  |   | -            |  |   | -              |   |   | 103,000    |  
|                                       |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|Issuance of stock options for          |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|50,000 shares of common stock          |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|to employee for recruitment            |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|amortized over vesting period.         |  | -            |  |   | -          |  |   | 1,309                 |  |   | -             |   |   | -          |  |   | -            |  |   | -              |   |   | 1,309      |  
|                                       |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|Effect of foreign currency translation |  | -            |  |   | -          |  |   | -                     |  |   | (11,769       | ) |   | -          |  |   | -            |  |   | -              |   |   | -          |  
|                                       |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|Net loss June 30, 2006                 |  | -            |  |   | -          |  |   | -                     |  |   | -             |   |   | -          |  |   | -            |  |   | (1,685,104     | ) |   | -          |  
|                                       |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|Net comprehensive loss                 |  | -            |  |   | -          |  |   | -                     |  |   | -             |   |   | -          |  |   | -            |  |   | -              |   |   | (1,696,873 | )
|                                       |  |              |  |   |            |  |   |                       |  |   |               |   |   |            |  |   |              |  |   |                |   |   |            |  
|Balance, June 30, 2006                 |  | 65,831,000   |  | $ | 65,831     |  | $ | 12,884,379            |  | $ | (121,606      | ) | $ | -          |  | $ | -            |  | $ | (7,440,212     | ) | $ | 5,388,392  |  

See Accompanying Notes to Financial Statements

F-5

---

SEARCHLIGHT MINERALS CORP. 
  (AN EXPLORATION STAGE COMPANY) 
  STATEMENTS OF CASH FLOWS 
  (UNAUDITED)

|                                                                    |   |                                   |   |   |          |   |   | Period from         |  
|------------------------------------------------------------------- | - | --------------------------------- | - | - | -------- | - | - | ------------------- | -
|                                                                    |   |                                   |   |   |          |   |   | January 14, 2000    |  
|                                                                    |   |                                   |   |   |          |   |   | (Date of inception) |  
|                                                                    |   | For the six months ended June 30, |   |   | through  |  
|                                                                    |   | 2006                              |   |   | 2005     |   |   | June
      30, 2006 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                |   |                                   |   |   |          |   |   |                     |  
|Net loss                                                            | $ | (1,685,104                        | ) | $ | (580,626 | ) | $ | (7,440,212          | )
|Adjustments to reconcile loss from operating                        |   |                                   |   |   |          |   |   |                     |  
|to net cash
      used in operating activities:                     |   |                                   |   |   |          |   |   |                     |  
|Amortization of debt
      discount                                 |   | -                                 |   |   | -        |   |   | 300,000             |  
|Depreciation                                                        |   | 2,966                             |   |   | -        |   |   | 239,090             |  
|Expenses paid with
      stock issuance                             |   | 103,000                           |   |   | 453,933  |   |   | 521,728             |  
|Stock
      based compensation                                      |   | 170,386                           |   |   | -        |   |   | 170,386             |  
|Impairment loss                                                     |   | -                                 |   |   | -        |   |   | 259,917             |  
|Loss
      on asset disposition                                     |   | 4,398                             |   |   | -        |   |   | (224,238            | )
|Write-off of fixed
      assets                                     |   | -                                 |   |   | 1,349    |   |   | 1,349               |  
|Changes in operating assets and
      liabilities:                  |   |                                   |   |   |          |   |   |                     |  
|Amounts receivable                                                  |   | -                                 |   |   | -        |   |   | 11,005              |  
|Other
      current assets                                          |   | (31,245                           | ) |   | (2,000   | ) |   | (211,745            | )
|Accounts payable and
      accrued liabilities                      |   | 14,255                            |   |   | (17,719  | ) |   | 632,222             |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Net cash used in operating activities                               |   | (1,421,344                        | ) |   | (145,063 | ) |   | (5,740,498          | )
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|CASH FLOW FROM INVESTING ACTIVITIES                                 |   |                                   |   |   |          |   |   |                     |  
|Cash paid on mineral property
      claims                          |   | -                                 |   |   | (19,572  | ) |   | (777,134            | )
|Cash paid for intangible assets                                     |   | -                                 |   |   | -        |   |   | (180,068            | )
|Purchase of fixed assets                                            |   | (20,202                           | ) |   | -        |   |   | (308,837            | )
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Net cash used in investing activities                               |   | (20,202                           | ) |   | (19,572  | ) |   | (1,266,039          | )
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|CASH FLOW FROM FINANCING ACTIVITIES                                 |   |                                   |   |   |          |   |   |                     |  
|Proceeds from stock issuance                                        |   | 1,397,250                         |   |   | -        |   |   | 4,088,058           |  
|Proceeds from exercise of warrants
      for stock                  |   | 4,874,126                         |   |   | -        |   |   | 4,874,126           |  
|Proceeds from borrowings from related party                         |   | -                                 |   |   | -        |   |   | 2,880,201           |  
|Proceeds from borrowings on loan
      payable                      |   | -                                 |   |   | 170,000  |   |   | 519,035             |  
|Proceeds from subscribed stock                                      |   | -                                 |   |   | -        |   |   | 270,000             |  
|Payment on notes payable                                            |   | (15,000                           | ) |   | -        |   |   | (15,000             | )
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Net cash provided by financing
      activities                     |   | 6,256,376                         |   |   | 170,000  |   |   | 12,616,420          |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|EFFECT OF FOREIGN CURRENCY EXCHANGE RATE ON
      CASH              |   | (11,769                           | ) |   | -        |   |   | (100,966            | )
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|NET CHANGE IN CASH                                                  |   | 4,803,061                         |   |   | 5,365    |   |   | 5,508,917           |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|CASH AT BEGINNING OF YEAR                                           |   | 705,856                           |   |   | 295      |   |   | -                   |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|CASH AT END OF PERIOD                                               | $ | 5,508,917                         |   | $ | 5,660    |   | $ | 5,508,917           |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|SUPPLEMENTAL INFORMATION                                            |   |                                   |   |   |          |   |   |                     |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Interest Paid                                                       | $ | -                                 |   | $ | -        |   | $ | 50,751              |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Income Taxes Paid                                                   | $ | -                                 |   | $ | -        |   | $ | -                   |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Non-cash financing activities:                                      |   |                                   |   |   |          |   |   |                     |  
|Stock options for common stock issued in satisfaction
      of debt | $ | -                                 |   | $ | 300,000  |   | $ | 1,200,000           |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Stock issued for conversion                                         |   |                                   |   |   |          |   |   |                     |  
|of accounts payable,
      200,000 shares at $0.625                 | $ | -                                 |   | $ | -        |   | $ | 125,000             |  
|                                                                    |   |                                   |   |   |          |   |   |                     |  
|Stock issued for compensation                                       |   |                                   |   |   |          |   |   |                     |  
|50,000 shares at $2.06                                              | $ | 103,000                           |   | $ | -        |   | $ | 103,000             |  

See Accompanying Notes to Financial Statements

F-6

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SEARCHLIGHT MINERALS CORP.
  (AN EXPLORATION STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS
  (UNAUDITED)

|1. | BASIS OF PRESENTATION
|-- | ---------------------

The accompanying unaudited financial statements have been prepared
  in accordance with Securities and Exchange Commission requirements for interim
  financial statements. Therefore, they do not include all of the information
  and footnotes required by accounting principles generally accepted in the United
  States for complete financial statements. The financial statements should be
  read in conjunction with the Form 10-KSB for the year ended December 31, 2005
  of Searchlight Minerals Corp. (the "Company").

The interim financial statements present the balance sheet, statements
  of operations and cash flows of the Company. The financial statements have been
  prepared in accordance with accounting principles generally accepted in the
  United States.

The interim financial information is unaudited. In the opinion
  of management, all adjustments necessary to present fairly the financial position
  as of June 30, 2006 and the results of operations and cash flows presented herein
  have been included in the financial statements. Interim results are not necessarily
  indicative of results of operations for the full year.

The preparation of financial statements in conformity with accounting
  principles generally accepted in the United States requires management to make
  estimates and assumptions that affect the reported amounts of assets and liabilities
  and disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenues and expenses during the reporting
  period. Actual results could differ from those estimates.

|2. | GOING CONCERN
|-- | -------------

Going concern The Company incurred cumulative net
  losses of approximately $7,440,212 from operations as of June 30, 2006, has
  not commenced its mining operations, and is still in the exploration stage,
  raising substantial doubt about the Companys ability to continue as a
  going concern.

Management plans to fund its future operations through the issuance
  of debt or equity financing, but there can be no assurance the Company will
  be successful in accomplishing its objectives.

The ability of the Company to continue as a going concern is
  dependent on additional sources of capital and the success of the Companys
  plan. The financial statements do not include any adjustments that might be
  necessary if the Company is unable to continue as a going concern.

|3. | NEW ACCOUNTING PRONOUNCEMENTS
|-- | -----------------------------

In May 2005, the FASB issued SFAS No. 154, Accounting Changes
  and Error Corrections, a replacement of APB No. 20 and FASB Statement No. 3
  (SFAS No. 154). SFAS No. 154 requires retrospective application
  to prior periods financial statements of a voluntary change in accounting
  principle unless it is impracticable. APB Opinion No. 20 Accounting Changes,
  previously required that most voluntary changes in accounting principle be recognized
  by including in net income of the period of the change the cumulative effect
  of changing to the new accounting principle. This statement is effective for
  our Company as of January 1, 2006. The Company does not believe that the adoption
  of SFAS No. 154 will have a material impact on our financial statements.

In November 2005, the FASB issued FASB Staff Position FAS 115-1
  and FAS 124-1, The Meaning of Other-Than-Temporary Impairment and Its
  Application to Certain Investments (FSP 115-1), which

F-7

---

provides guidance on determining when investments in certain
  debt and equity securities are considered impaired, whether that impairment
  is other-than-temporary, and on measuring such impairment loss. FSP 115-1 also
  includes accounting considerations subsequent to the recognition of an other-than
  temporary impairment and requires certain disclosures about unrealized losses
  that have not been recognized as other-than-temporary impairments. FSP 115-1
  is required to be applied to reporting periods beginning after December 15,
  2005. We do not expect the adoption of FSP 115-1 will have a material impact
  on our financial condition or results of operations.

In February 2006, the Financial Accounting Standards Board (FASB)
  issued SFAS No. 155, Accounting for Certain Hybrid Financial Instrumentsan
  Amendment of FASB Statements No. 133 and 140 (SFAS No. 155).
  SFAS No. 155 allows financial instruments that contain an embedded derivative
  and that otherwise would require bifurcation to be accounted for as a whole
  on a fair value basis, at the holders election. SFAS No. 155 also clarifies
  and amends certain other provisions of SFAS No. 133 and SFAS No. 140. This statement
  is effective for all financial instruments acquired or issued in fiscal years
  beginning after September 15, 2006. We do not expect that the adoption of SFAS
  No. 155 will have a material impact on our financial condition or results of
  operations.

In March 2006, the FASB issued SFAS No. 156, Accounting
  for Servicing of Financial Assetsan Amendment of FASB Statement No. 140
  (SFAS No. 156). SFAS No. 156 provides guidance on the accounting
  for servicing assets and liabilities when an entity undertakes an obligation
  to service a financial asset by entering into a servicing contract. This statement
  is effective for all transactions in fiscal years beginning after September
  15, 2006. We do not expect that the adoption of SFAS No. 156 will have a material
  impact on our financial condition or results of operations.

|4. | LOAN PAYABLE  FORMER OFFICERS AND DIRECTORS
|-- | --------------------------------------------

As of June 30, 2006, loans payable totaling $382,792 consists
  of borrowings from former officers and directors of the Company. The balance
  bear no interest, is unsecured, and is due on demand.

|5. | STOCKHOLDERS EQUITY
|-- | --------------------

During the six months ended June 30, 2006, the Companys
  stockholders activities consisted of the following:

| | a) | On January 18, 2006 the Company issued 3,900,000 shares
        of common stock for cash at $0.45 per share related to the U.S. private
        placement offering opened December 7, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | b) | On February 14, 2006, the Company issued 1,225,000 shares
        of common stock and warrants to purchase an additional 608,000 shares
        of common stock with an exercise price of $0.625 until June 1, 2006. These
        are related to the penalty shares and warrants for the late registration
        of shares with the Securities and Exchange Commission pursuant to the
        Private Placements completed in September 2005. Pursuant to the Private
        Placements, subscribers received penalty units consisting of a share and
        warrant. The penalty units were exercisable into 1/10thof
        a unit issued in the private placement if a registrations statement on
        Form SB-2 was not declared effective within four months and one day of
        the closing date of the private placements. The Registration Statement
        was not effective prior to the filing deadline resulting in the issuance
        of the penalty units.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | c) | On June 21, 2006, the Company issued 8,506,000 shares
        of common stock from the exercise of warrants resulting in cash proceeds
        of $4,874,126. Warrants exercised were for 6,125,000 shares at $0.625
        per share, 1,768,500 shares at $0.375 per share and 612,500 at $0.625
        per share. Each of the warrants was set to expire in June 2006 and all
        were exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | d) | On June 23, 2006, the Company issued 50,000 shares at
        $2.06 per share as consideration for an employment contract entered into
        on June 14, 2006 with a new Chief Financial Officer. In addition,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-8

---

the Company advanced $33,084 for withholding
  taxes required to be paid on total compensation of $103,000. The advance is
  to be repaid bi-monthly with full payment to be made in December 2006.

|6. | OPTION PLAN
|-- | -----------

On April 7, 2006, the Board of Directors of Searchlight adopted
  the 2006 Stock Option Plan (the "Plan"). Under the terms of the Plan, options
  to purchase up to 40,000,000 shares of common stock that may be granted to our
  employees, officers, directors, and eligible consultants of Searchlight. The
  Plan provides that the option price be the fair market value of the stock at
  the date of grant as determined by the Board of Directors. Options granted become
  exercisable and expire as determined by the Board of Directors. The maximum
  aggregate number of shares of our common stock that may be optioned and sold
  under the Plan will be increased effective the first day of each of our fiscal
  quarters, beginning with the fiscal quarter commencing July 1, 2006, by an amount
  equal to the lesser of: (i) 15% of the total increase in the number of shares
  of common Stock outstanding during the previous fiscal quarter; or (ii) a lesser
  number of shares of common stock as may be determined by the board of Searchlight.

During the six months ended June 30, 2006, the Company issued
  granted stock options as follows:

| | a) | On April 7, 2006 the Company granted incentive stock
        options for the purchase of 120,000 shares of common stock at $1.70 per
        share. The options were granted equally to two officers, are fully vested
        and expire on April 7, 2011.                                                                     
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                 
| | b) | On June 6, 2006, the Company granted nonqualified stock
        options for the purchase of 500,000 shares of common stock at $2.40 per
        share. The options were granted to equally to two directors, are fully
        vested and expire on June 6, 2011.                                                               
| |    |                                                                                                                                                                                                                                                                                                                                 
| | c) | On June 6, 2006, the Company granted nonqualified stock
        options for the purchase of 100,000 shares of common stock at $2.40 per
        share. The options were granted to equally to two directors, are fully
        vested and expire on June 6, 2011.                                                               
| |    |                                                                                                                                                                                                                                                                                                                                 
| | d) | On June 14, 2006, the Company granted nonqualified stock
        options for the purchase of 100,000 shares of common stock at $2.06 per
        share. The options were granted as a recruitment incentive to the Chief
        Financial Officer and vest 50% on June 14, 2007 and the remaining 50%
        on June 14, 2008.
| |    |                                                                                                                                                                                                                                                                                                                                 
| | e) | On June 14, 2006, the Company granted nonqualified stock
        options for the purchase of 50,000 shares of common stock at $2.06 per
        share. The options were granted as a recruitment incentive to an employee
        and vest 50% on December 14, 2006 and the remaining 50% on June 14, 2007.                     

Compensation expense for quarter and six months ended related
  to granting of stock options was $170,386.

|7. | SUBSEQUENT EVENT
|-- | ----------------

On July 27, 2006, the Company issued 1,400,000 shares to the
  owners of the Searchlight Claims. This issuance is the second of four required
  share payments to complete the acquisition of the searchlight claims totaling
  5,600,000 shares.

F-9

---

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
|------- | ----------------------------------------------------------

FORWARD LOOKING STATEMENTS

The information in this discussion contains forward-looking
statements. These forward-looking statements involve risks and uncertainties,
including statements regarding our capital needs, business strategy and
expectations. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as may,
will, should, expect, plan, intend, anticipate, believe,
estimate, predict, potential or continue, the negative of such terms or
other comparable terminology. These statements reflect the current views of
management with respect to future events and are subject to risks, uncertainties
and other factors that may cause our actual results, performance or
achievements, or industry results, to be materially different from those
described in the forward-looking statements. Such risks and uncertainties
include those set forth under the caption "Management's Discussion and Analysis
or Plan of Operation" and elsewhere in this Quarterly Report. In evaluating
these statements, you should consider various factors, including the risks
discussed below, and, from time to time, in other reports we file with the
United States Securities and Exchange Commission (the SEC), including our
Annual Reports on Form 10-KSB and our Current Reports on Form 8-K.

INTRODUCTION

We are an exploration stage company engaged in the acquisition
and exploration of mineral properties. We have entered into mineral option
agreements to acquire an interest in 20 mineral claims (the Searchlight
Claims) representing an area of 3,200 acres located in Clark County, south of
Searchlight, Nevada. On October 24, 2005, we acquired an interest in a joint
venture agreement (the JV Agreement) dated May 20, 2005 between Nanominerals
Corp. and Verde River Iron Company, LLC, a Nevada limited liability company
(Verde) pursuant to which we have the option to acquire up to 50% of the
Clarkdale Slag Project. The JV Agreement was entered into for the purpose of
funding the processing of a copper smelter slag pile located on a parcel of land
consisting of approximately 200 acres in Clarkdale, Arizona (the Clarkdale Slag
Project). Upon completion of a drilling and sampling program to determine if
the project is feasible, we intend to re-process the slag pile using an
extraction process developed using industry standard metallurgy. We acquired our
interest in the Clarkdale Slag Project pursuant to an assignment agreement with
Nanominerals Corp. dated for reference June 1, 2005 (the Assignment
Agreement), as amended August 31, 2005 and October 24, 2005, pursuant to which
Nanominerals assigned all of its interest in the JV Agreement to us.

We have not earned any revenues to date and do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. Our current plan of operation is to conduct mineral
exploration activities on the Searchlight Claims in order to assess whether they
possess mineral reserves capable of commercial extraction, and drilling and
sampling activities on the Clarkdale Slag Project site in order to assess
whether the slag possesses a mineral inventory capable of commercial extraction.
The agreements pursuant to which we acquired our interests in the Searchlight
Claims and Clarkdale Slag Project provide that we must make a series of cash
payments over certain time periods, expend certain minimum amounts on the
exploration of the properties or contribute our share of ongoing expenditures.
If we fail to make such payments or expenditures in a timely fashion, we may
lose our interest in those properties.

3

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RECENT CORPORATE DEVELOPMENTS

We experienced the following significant corporate developments
since the completion of our last fiscal quarter ended March 31, 2006:

|1. | On July 27, 2006, we issued 1,400,000 shares to the
      owners of the Searchlight Claims. The issuance was completed pursuant to
      Section 4(2) of the Securities Act. As of July 27, 2006, we have presently
      issued 2,800,000 of the 5,600,000 shares of our common stock required to
      complete our acquisition of the Searchlight Claims. See Unregistered
      Sales Of Equity Securities And Use Of Proceeds, below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | In June, 2006, we raised $4.87 million from the exercise
      of 100% of the outstanding warrants issued in connection with the three
      private placements closed in September, 2005. In connection with the
      exercise of the warrants, 8.506 million shares were issued to the warrant
      holders increasing our outstanding common shares to approximately 65.78
      million shares. The shares were issued pursuant to Regulation S to non-US
      subscribers and pursuant to Rule 506 of Regulation D of the Securities Act
      to US subscribers. See Unregistered Sales Of Equity Securities And Use Of
      Proceeds, below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | On June 14, 2006, we entered into an employment agreement
      with Melvin L. Williams (the Employment Agreement) to act as our Chief
      Financial Officer. Pursuant to the terms of the Employment Agreement, Mr.
      Williams is to be paid an annual salary of $60,000 based on 300- 400 hours
      worked and a bonus consisting of 50,000 restricted shares of our common
      stock and 100,000 options to purchase additional shares of our common
      stock. The options are exercisable at a price of $2.06 per share for a
      period of five years until June 14, 2011, with the options vesting 50% on
      the first anniversary of the execution of the Employment Agreement and the
      remainder on the second anniversary of the execution of the agreement. Mr.
      Williams is also eligible for a discretionary bonus to be determined based
      on factors considered relevant by our board of directors, and may be
      granted, subject to the approval of the board, incentive stock options to
      purchase shares of our common stock in such amounts and at such times as
      the board, in its absolute discretion, may from time to time determine.
      The term of the Employment Agreement is for an indefinite period, unless
      otherwise terminated pursuant to the terms of the Employment Agreement. In
      the event that the Employment Agreement is terminated by us other than for
      cause, we will provide Mr. Williams with payment equal to three months of
      his monthly remuneration. On June 14, 2006, we issued 50,000 restricted
      shares of our common stock to Melvin L. Williams pursuant to the
      Employment Agreement between Searchlight and Mr. Williams. The shares were
      issued pursuant to Section 4(2) of the Securities Act. See Unregistered
      Sales Of Equity Securities And Use Of Proceeds, below.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4. | On June 14, 2006, in connection with the appointment of
      Melvin Williams as our Chief Financial Officer, Carl S. Ager resigned as
      our Chief Financial Officer. Mr. Ager will continue to serve as Secretary,
      Treasurer and as a member of the board of directors. In place of Mr. Ager,
      Melvin Williams was appointed as our Chief Financial Officer. Mr. Williams
      is a certified public accountant with over 18 years' experience in the
      public accounting industry with the firm of Cupit, Milligan, Ogden and
      Williams in Reno, Nevada. During this period, he provided auditing,
      consulting, merger/acquisition, valuation and tax services to private and
      publicly traded companies in the manufacturing, technology, mining,
      healthcare and service industries, as well as to various nonprofit
      organizations. From 1984 until 1987, Mr. Williams served on the accounting
      staff of the University of Oregon Foundation, a private fund raising
      entity that also maintains endowment and trust investments for the
      continuing support of the University.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5. | On June 6, 2006, we granted the following stock options
      pursuant to our 2006 stock incentive plan: (a) 250,000 to Ian R. McNeil,
      our President and a member of our board of directors, (b) 250,000 to Carl
      S. Ager, our Treasurer, Secretary and a member of our board of directors,
      (c) 50,000 to K. Ian Matheson, a member of our board of directors, and (d)
      50,000 to Robert D.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

4

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|    | McDougal, a member of our board of directors. Each of the
      options entitles the holder thereof to purchase additional shares of our
      common stock at a price of $2.40 per share, exercisable for a period of
      five years until June 6, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6.  | On May 31, 2006, we commenced the drilling of nine
      additional holes at our Clarkdale Slag Project in Clarkdale, Arizona. The
      drilling activities, along with the analysis of the drill cuttings derived
      from the nine new holes and three previously drilled holes, will be
      analyzed under Chain of Custody (COC) parameters by Mountain States
      R&D International ("MSDRI"), an independent engineering firm based in
      Tucson, Arizona. When drilling of the nine holes has been completed and
      the results of all 18 holes have been analyzed by MSRDI, we expect to have
      more accurate estimate of the grade and tonnage of precious and base
      metals present in the Clarkdale Slag pile.                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7.  | In April, 2006, we received COC results from the first
      six of nine holes drilled at the Clarkdale Slag Project. Nine
      widely-spaced holes (totaling 675 feet) were drilled as part of a Minerals
      Inventory Study being conducted by MSRDI on our behalf.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8.  | On April 7, 2006, we granted 60,000 incentive stock
      options pursuant to our 2006 stock incentive plan to Carl S. Ager, our
      Treasurer, Secretary and a member of our board of directors, and 60,000
      incentive stock options to Ian R, McNeil, our President and a member of
      our board of directors, to purchase additional shares of our common stock
      at a price of $1.70 per share, exercisable for a period of five years
      until April 7, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9.  | On April 7, 2006, our board of directors adopted our 2006
      Stock Option Plan (the "Plan"). Under the terms of the Plan, options to
      purchase up to 40,000,000 shares of our common stock may be granted to our
      employees, officers, directors, and eligible consultants of Searchlight.
      The Plan provides that the option price be the fair market value of the
      stock at the date of grant as determined by the board of directors.
      Options granted become exercisable and expire as determined by the board
      of directors. The maximum aggregate number of shares of our common stock
      that may be optioned and sold under the Plan will be increased effective
      the first day of each of our fiscal quarters, beginning with the fiscal
      quarter commencing July 1, 2006, by an amount equal to the lesser of: (i)
      15% of the total increase in the number of shares of common stock
      outstanding during the previous fiscal quarter; or (ii) a lesser number of
      shares of common stock as may be determined by our board.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10. | In March, 2006, we entered into an engineering services
      agreement (the Engineering Services Agreement) with Cimetta Engineering
      and Construction Co., Inc. (Cimetta), pursuant to which Cimetta agreed
      to provide engineering services in connection with the design and
      development of an initial two ton per hour test module and a 2,000 ton per
      day processing facility for our Clarkdale Slag Project site in Arizona.
      Pursuant to the terms of the Engineering Services Agreement, we agreed to
      pay $115,000 for the cost to complete Phase I of the
  construction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

PLAN OF OPERATION

The following discussion and analysis summarizes our plan of
operation for the next twelve months, our results of operations for the six
months ended June 30, 2006 and changes in our financial condition from our year
ended December 31, 2005. The following discussion should be read in conjunction
with the Managements Discussion and Analysis or Plan of Operation included in
our Annual Report on Form 10-KSB for the year ended December 31, 2005.

Plan Of Operation

Our current plan of operation is to continue to conduct mineral
exploration activities on the Searchlight Claims and drilling and sampling
activities for the Clarkdale Slag Project to assess whether the slag

5

---

possesses a mineral inventory capable of commercial extraction.
The agreements pursuant to which we acquired our interests in the Searchlight
Claims and Clarkdale Slag Project provide that we must make a series of cash
payments over certain time periods, expend certain minimum amounts on the
exploration of the properties or contribute Searchlights share of ongoing
expenditures. If we fail to make such payments or expenditures in a timely
fashion, we may lose our interests in those properties.

Searchlight Project

Our current plan of operation is to conduct mineral exploration
activities on the Searchlight Claims in order to assess whether they possess
mineral reserves capable of commercial extraction. We have developed an
exploration work program for the Searchlight Project. We filed a surety bond in
the amount of approximately $180,500 for Phase I and Phase II with the BLM, and
have commenced the two phase exploration program approved in connection with the
terms of our reclamation permit.

The initial work program (Phase 1) for the Searchlight Claims
will focus on analysis of surface samples to determine the best method to
extract precious metals from this material for the drill program. Extraction
tests on several Chain-of-Custody (COC) surface samples are in progress at
Arrakis, Inc. (Arrakis). After this work is completed, an 18-hole drill
program will be undertaken by independent engineers to determine the tonnage and
extractable grades from the property. Should these results prove favorable, then
Phase will consist of infill drilling, bulk sampling and pilot leach tests to
determine the commercial feasibility of the project. The scope and cost of Phase
2 will be determined after Phase 1 is complete.

Current Status of Exploration of Clarkdale Slag
Project

In the Fall of 2005, drilling commenced on our Clarkdale Slag
Project under chain-of-custody (COC) sampling by Mountain States R&D
International Inc. (MSRDI). To date, we have drilled 18 holes (SD1 18) in the
slag pile all under the supervision of MSRDI and adhered to COC. These holes
were drilled as part of a Mineral Study being conducted by MSRDI on our behalf.
Sample preparation and analysis is being performed under MSRDIs COC. The
following results from the first six drill holes (SD1-6) were reported to us by
MSRDI:

SD1 Drill Hole

Footage
      CopperCu (%)
      ZincZn (%)
      IronFe (%)SD10.0  8.9
    0.95
    1.73
    30.88.9  19.0
    0.76
    1.68
    29.719.0  30.0
    0.77
    1.73
    30.430.0  39.5
    0.52
    1.94
    29.839.5  55.0
    0.45
    1.75
    31.00.0  55.0 Composite
    0.70
    2.10
    32.1


SD2 Drill Hole

Footage
      CopperCu (%)
      ZincZn (%)
      IronFe (%)SD20.0  9.5
    0.71
    1.69
    30.09.5  19.0
    1.06
    1.80
    31.219.0  30.0
    0.70
    1.79
    29.930.0  40.0
    0.43
    1.97
    31.4


6

---

40.0  50.0
      0.46
      1.95
      31.350.0  60.0
      0.58
      1.75
      31.40.0  60.0
      Composite
      0.73
      2.13
      34.6


SD1-SD6 Drill Holes

Drill Hole
      CompositeFootage
      GoldAu (opt)
      CopperCu (%)
      ZincZn (%)
      IronFe (%)SD1
    0.0  55.0
    0.210
    0.70
    2.10
    32.1SD2
    0.0  60.0
    0.213
    0.73
    2.13
    34.6SD3
    0.0  50.0
    0.196
    0.37
    3.11
    33.2SD3
    50.0  109.0
    0.256
    0.37
    2.88
    33.5SD4
    0.0  50.0
    0.169
    0.42
    3.25
    33.0SD4
    50.0  80.0
    0.224
    0.35
    3.35
    31.2SD5
    0.0  50.0
    0.227
    0.38
    2.33
    30.3SD5
    50.0  89.0
    0.231
    0.40
    2.24
    30.1SD6
    0.0  50.0
    0.216
    0.36
    3.04
    32.5


Drilling Program and Metallurgical Testing

We retained Dr. Richard F. Hewlett as the Project Manager for
our Clarkdale Slag Project. Under the guidance of Dr. Hewlett, we contracted
Mountain States R&D International Inc. (MSRDI) of Tucson, AZ to execute a
Minerals Study. The above results are for the first six drill holes reported to
us from MSRDI. MSRDI performed the copper, zinc, and iron analysis using the
fusion assay method, followed by atomic absorption (AA). Gold analysis was
performed by Arrakis, Inc., under the chain-of-custody of MSRDI, using 4-acid
total digestion followed by graphite furnace atomic absorption (GFAA).

Analysis of the remaining 12 drill holes is expected in the
third quarter. When the results of all 18 holes have been analyzed by MSRDI, we
expect to have a more accurate estimate of the grade and tonnage of precious and
base metals present in the Clarkdale Slag pile.

We intend to conclude our Minerals Study (Phase 1) in the
coming months which will include receipt of COC results from all 18 drill holes
as well as verification of the grade and reserves. The Bankable Feasibility
Study (Phase 2) is expected to include additional metallurgical tests and a two
ton per hour test module. We have commenced assembling this test module pilot
plant in Phoenix, Arizona, which is designed to establish the metals processing
and recovery circuit that is expected to be incorporated into a commercial-scale
facility at Clarkdale next year. Once this work is completed, construction and
start up (Phase 3) is estimated to take one year.

Preliminary capital costs for the Clarkdale Slag Project are
estimated as follows:

PHASE
      DESCRIPTION
      CAPITAL
        COSTS ($)Phase 1
      Property Payments
      $500,000Mineral Study
      $500,000Phase 2
      Bankable Feasibility Study
      $3,000,000Phase 3
      Construction & Start Up
        Plant Construction & Related Costs
      $15,200,000Property Payments
      $6,500,000Working Capital
      $5,300,000Total Capital Costs
      $31,000,000




---



Cash Requirements

Our estimated expenses for the next twelve months are as
follows:

|EXPENSE                                |            | COST
      ($)
|-------------------------------------- | ---------- | --------------
|Administrative Expenses                |            | $200,000      
|Legal and Accounting Expenses          |            | $100,000      
|Consulting Services                    |            | $100,000      
|Clarkdale Slag Project                 |            |               
|- Property Payments                    | $500,000   |               
|-
      Mineral Inventory Study        | $500,000   |               
|-
      OPCO Payment/Feasibility Study | $3,000,000 |               
|Total Clarkdale Slag Project           |            | $4,000,000    
|Searchlight Gold Project               |            |               
|-
      Sampling and Testing           | $100,000   |               
|- Drill Program                        | $550,000   |               
|Total Searchlight Gold Project         |            | $650,000      
|Total Amounts Spent to date            |            | $(1,100,000)  
|TOTAL                                  |            | $3,950,000    

We recorded a net operating loss before income taxes of
$1,685,104 for the six months ended June 30, 2006 and have an accumulated
deficit of $7,440,212 since inception. As at the date of this Quarterly Report,
we had cash of approximately $5,508,917 and for the next twelve months,
management anticipates that the minimum cash requirements to fund our proposed
exploration program and our continued operations will be $3,950,000.
Accordingly, we have sufficient funds to meet our planned expenditures over the
next twelve months.

RESULTS OF OPERATIONS

Second Quarter and Six Month Summary

|             | Second Quarter Ended June 30 |           | Six Months Ended June 30
|------------ | ---------------------------- | --------- | ------------------------
|             |                              |           | Percentage              
|             | 2006                         | 2005      | Increase /              
|             |                              |           | (Decrease)              
|Revenue      | $-                           | $-        | N/A                     
|             |                              |           |                         
|Expenses     | (1,068,885)                  | (98,275)  | 987.6%                  
|             |                              |           |                         
|Net Loss (1) | $(1,068,885)                 | $(98,275) | 987.6%                  

8

---

Note:

|(1) | Net loss excludes Foreign Currency Translation Adjustment
      of $(11,769) and $24,148 for the six months ended June 30, 2006 and 2005,
      respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue

We are presently in the exploration stage of our business, have
not earned any revenues to date, and do not anticipate earning revenues until
such time as we enter into commercial production of the Clarkdale Slag Project,
the Searchlight Claims or other mineral properties we may acquire from time to
time.

Expenses

Our expenses for the quarters ended June 30, 2006 and June 30,
2005 are outlined in the table below:

|                            | Second Quarter Ended June 30 |         | Six Months Ended June 30
|--------------------------- | ---------------------------- | ------- | ------------------------
|                            |                              |         | Percentage              
|                            | 2006                         | 2005    | Increase /              
|                            |                              |         | (Decrease)              
|Mining exploration expenses | $620,796                     | $49,606 | 1,151.5%                
|General and administrative  | 441,518                      | 48,669  | 807.2%                  
|Depreciation                | 2,173                        | -       | 100.0%                  
|Total Expenses              | $1,064,487                   | $98,275 | 983.2%                  

We incurred operating expenses in the amount of $1,685,104 for
the six moths ended June 30, 2006 as compared to $580,626 for the six months
ended June 30, 2005. Operating expenses for the six months ended June 30, 2006
increased by 189.5% as compared to the comparable period in 2005 largely due to:
(i) increased mineral exploration expenses in connection with the acquisition of
our interest in the Clarkdale Slag Project and Searchlight Project and
associated increases in our mineral exploration activities, and (ii) increased
general and administrative expenses due to increased professional fees
associated with the completion of our private placements, the preparation of our
registration statement on Form SB-2 and compliance with our reporting
obligations under the Exchange Act.

**Liquidity and Financial Condition**

|Working Capital                   |                        |                            |                      
|--------------------------------- | ---------------------- | -------------------------- | ---------------------
|                                  |                        |                            | Percentage           
|                                  | At June
      30, 2006 | At December
      31, 2005 | Increase / (Decrease)
|Current Assets                    | $5,540,162             | $705,856                   | 684.9%               
|Current Liabilities               | (1,177,378)            | (1,178,123)                | (0.1)%               
|Working Capital Surplus (Deficit) | $4,362,784             | $(472,267)                 | 1,023.8%             

9

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|Cash Flows                                       |                     |                    
|------------------------------------------------ | ------------------- | -------------------
|                                                 | Six Months Ended    | Six Months Ended   
|                                                 | June
      30, 2006 | June
      30, 2005
|Cash Flows used in Operating Activities          | $(1,421,344)        | $(145,063)         
|Cash Flows used in Investing Activities          | (20,202)            | (19,572)           
|Cash Flows from Financing Activities             | 6,256,376           | 170,000            
|Effect of Foreign Currency Exchange Rate on Cash | (11,769)            | -                  
|Net Increase (decrease) in Cash During Period    | $4,803,061          | $5,365             

The increase in our working capital surplus of $4,362,784 as at
June 30, 2006 as compared to a working capital deficit of $472,267 as at
December 31, 2005 was primarily due to the increase in cash flows from financing
activities of $1,397,250 from private placements of our securities completed
during the six months ended June 30, 2006, and $4,874,126 from the exercise of
100% of the outstanding warrants in June, 2006, issued in connection with
private placements closed in September, 2005. In connection with the exercise of
the warrants, 8.506 million of our shares of common stock were issued to the
warrant holders. See Sale of Unregistered Securities, below.

Future Financings

Our plan of operation calls for significant expenses in
connection with the exploration of the Searchlight Claims, and drilling and
sampling activities on the Clarkdale Slag Project which will require us to
obtain additional financing. We recorded a net operating loss before income
taxes of $1,685,104 for the six months ended June 30, 2006 and have an
accumulated deficit of $7,440,212 since inception. As at the date of this
Quarterly Report we had cash of approximately $5,508,917 and for the next twelve
months, management anticipates that the minimum cash requirements to fund our
proposed exploration program and our continued operations will be $3,950,000.
Accordingly we have sufficient funds to meet our planned expenditures over the
next twelve months. However, in order to complete our planned exploration
activities and development of our mineral properties, we will need to seek
additional financing.

Obtaining additional financing would be subject to a number of
factors, including the market prices for the mineral property and gold. These
factors may make the timing, amount, terms or conditions of additional financing
unavailable to us. Since our inception, we have used our common stock to raise
money for our operations and for our property acquisitions. We have not attained
profitable operations and are dependent upon obtaining financing to pursue our
plan of operation. For these reasons, our independent auditors believe that
there exists a substantial doubt about our ability to continue as a going
concern.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

We have identified certain accounting policies, described
below, that are the most important to the portrayal of our current financial
condition and results of operations.

Use of Estimates

In preparing the financial statements in conformity with accounting
  principles generally accepted in the United States, management is required to
  make estimates and assumptions that affect the reported amounts of assets and
  liabilities and the disclosure of contingent liabilities at the date of the
  financial statements and revenues and expenses during the reported period. Actual
  results could differ from these estimates.

10

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Property and Equipment

Property and equipment are stated at cost less accumulated
depreciation. Depreciation is calculated using the straight-line method over
four years with the exception of leasehold improvements. Leasehold improvements
are depreciated on a straight-line basis over the term of the lease.

Exploration Stage Company

We have been in the exploration stage since our restructuring
and have not yet realized any revenues from our planned operations. We are
primarily engaged in the acquisition and exploration of mining properties. Upon
the location of commercially minable reserves, we plan to prepare for mineral
extraction and enter the development stage.

Mineral Property Acquisition and Exploration Costs

We expense all costs related to the acquisition and exploration
of mineral properties in which we have secured exploration rights prior to
establishment of proven and probable reserves. To date, we have not established
the commercial feasibility of any exploration prospects; therefore, all costs
are being expensed.

Depreciation, Amortization and Capitalization

We record depreciation and amortization when appropriate, using
both straight-line and declining balance methods over the estimated useful life
of the assets (five to seven years). Expenditures for maintenance and repairs
are charged to expense as incurred. Additions, major renewals and replacements
that increase the property's useful life are capitalized. Property sold or
retired, together with the related accumulated depreciation, is removed from the
appropriate accounts and the resultant gain or loss is included in net
income.

RISKS AND UNCERTAINTIES

We lack an operating history and have losses which we expect
to continue into the future. As a result, we may have to suspend or cease
exploration activities and if we do not obtain additional financing, our
business will fail.

We were incorporated on January 12, 1999 and, since that time,
had been engaged in the business of biotechnology research and development. In
February, 2005, we restructured our business focus to that of mineral
exploration. We have no exploration history upon which an evaluation of our
future success or failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon:

- our ability to locate a profitable mineral property; and
- our ability to generate revenues from such mineral property.

Our plan of operation calls for significant expenses in connection
  with the exploration of the Searchlight Claims, and drilling and sampling activities
  on the Clarkdale Slag Project, which will require us to obtain additional financing.
  We recorded a net operating loss before income taxes of $1,685,104 for the six
  months ended June 30, 2006 and have an accumulated deficit of $7,440,212 since
  inception. As at June 30, 2006, we had cash of $5,508,917 and, for the next
  twelve months, management anticipates that the minimum cash requirements to
  fund our proposed exploration program and our continued operations will be $3,950,000.
  Accordingly, we have sufficient funds to meet our planned expenditures over
  the next twelve months. However, if we continue our plan of operation beyond
  the next twelve months, we will need to seek additional financing to meet our
  planned expenditures.

11

---

Obtaining additional financing would be subject to a number of
factors, including the market prices for the mineral property and base and
precious metals. These factors may make the timing, amount, terms or conditions
of additional financing unavailable to us. Since our inception, we have used our
common stock to raise money for our operations and for our property
acquisitions. We have not attained profitable operations and are dependent upon
obtaining financing to pursue our plan of operation. For these reasons, our
independent auditors believe that there exists a substantial doubt about our
ability to continue as a going concern.

Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.

You should be aware of the difficulties normally encountered by
new mineral exploration companies and the high rate of failure of such
enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be made by us in
the exploration of the mineral claims may not result in the discovery of mineral
deposits. If funding is not available, we may be forced to abandon our
operations.

Because we anticipate our operating expenses will increase
prior to our earning revenues, we may never achieve profitability.

Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of the Searchlight Claims or the Clarkdale Slag Project, we will not
be able to earn profits or continue operations. There is no history upon which
to base any assumption as to the likelihood that we will prove successful, and
we can provide no assurances that we will generate any revenues or ever achieve
profitability. If we are unsuccessful in addressing these risks, our business
will most likely fail.

Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages as we
conduct our business.

The search for valuable minerals involves numerous hazards. As
a result, we may become subject to liability for such hazards, including
pollution and other hazards against which we cannot insure or against which we
may elect not to insure. At the present time, we have no coverage to insure
against these hazards. The payment of such liabilities may have a material
adverse effect on our financial position.

Mineral exploration is highly speculative, involves
substantial expenditures, and is frequently non-productive.

Mineral exploration involves a high degree of risk and
exploration projects are frequently unsuccessful. Few prospects that are
explored end up being ultimately developed into producing mines. To the extent
that we continue to be involved in mineral exploration, the long-term success of
our operations will be related to the cost and success of our exploration
programs. We cannot assure you that our mineral exploration efforts will be
successful. The risks associated with mineral exploration include:

- the identification of potential economic mineralization based on
  superficial analysis;
- the quality of our management and our geological and technical expertise;
  and
- the capital available for exploration and development.

12

---

Substantial expenditures are required to determine if a project
has economically minable mineralization. It may take several years to establish
proven and probable reserves and to develop and construct mining and processing
facilities. Because of these uncertainties, our current and future exploration
programs may not result in the discovery of reserves, the expansion of our
existing reserves or the further development of our mines.

If we are unable to achieve economic re-processing of
minerals from our Clarkdale Slag Project, then our financial condition and our
revenues will be adversely affected.

We are currently undertaking drilling and sampling activities
on the Clarkdale Slag Project site in order to assess whether the slag possesses
a mineral inventory capable of commercial extraction. Once the results from the
drill program are fully analyzed, we intend to undertake the next steps on the
project. These next steps may include more drilling, analytical work, and
testing of material on a larger scale (such as a test plant). At such time as we
deem appropriate, a bankable feasibility study will be undertaken. There is no
assurance that actual recoveries of base and precious metals or other minerals
re-processed from the slag pile will be economically feasible. If metal
recoveries are less than projected, then our metal sales will be less than
anticipated and may not equal or exceed the cost of mining and recovery in which
case our operating results and financial conditions will be adversely
affected.

We have no known mineral reserves and, if we cannot find
any, we will have to cease operations.

We have no mineral reserves. Mineral exploration is highly
speculative. It involves many risks and is often non-productive. Even if we are
able to find mineral reserves on our property, our production capability is
subject to further risks including:

- Costs of bringing the property into production including exploration work,
  preparation of production feasibility studies, and construction of production
  facilities, all of which we have not budgeted for;
- Availability and costs of financing;
- Ongoing costs of production; and
- Environmental compliance regulations and restraints.

The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately predicted, such as market fluctuations, the lack of milling
facilities and processing equipment near the Searchlight Claims, the success of
our drilling and sampling activities on the Clarkdale Slag Project, and such
other factors as government regulations including regulations relating to
allowable production, exporting of minerals, and environmental protection. If we
do not find a mineral reserve or define a mineral inventory containing gold,
silver, copper, zinc or iron or if we cannot explore the mineral reserve, either
because we do not have the money to do it or because it will not be economically
feasible to do it, we will have to cease operations and investors will lose
their investment.

As we undertake exploration of our mineral claims, we will
be subject to compliance with government regulation that may increase the
anticipated cost of our exploration program.

There are several government regulations that materially
restrict mineral exploration. We are required to obtain work permits, post bonds
and perform remediation work for any physical disturbance to the land in order
to comply with these laws. If we enter the production phase, the cost of
complying with permit and regulatory environment laws will be greater because
the impact on the project area is greater. Permits and regulations will control
all aspects of the production program if the project continues to that stage.
Examples of regulatory requirements include:

| | (a) | Water discharge will have to meet drinking water
      standards;      
| | --- | -----------------------------------------------------------------------
| |     |                                                                        
| | (b) | Dust generation will have to be minimal or otherwise
      re-mediated;

13

---

| | (c) | Dumping of material on the surface will have to be
      re-contoured and re-vegetated with natural vegetation;                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                 
| | (d) | An assessment of all material to be left on the surface
      will need to be environmentally benign;                                           
| |     |                                                                                                                                                 
| | (e) | Ground water will have to be monitored for any potential
      contaminants;                                                                    
| |     |                                                                                                                                                 
| | (f) | The socio-economic impact of the project will have to be
      evaluated and, if deemed negative, will have to be re-mediated;
  and            
| |     |                                                                                                                                                 
| | (g) | There will have to be an impact report of the work on the
      local fauna and flora including a study of potentially endangered
      species.

There is a risk that new regulations could increase our costs
of doing business and prevent us from carrying out our exploration program. We
will also have to sustain the cost of reclamation and environmental remediation
for all exploration work undertaken. Both reclamation and environmental
remediation refer to putting disturbed ground back as close to its original
state as possible. Other potential pollution or damage must be cleaned up and
renewed along standard guidelines outlined in the usual permits. Reclamation is
the process of bringing the land back to its natural state after completion of
exploration activities. Environmental remediation refers to the physical
activity of taking steps to remediate, or remedy, any environmental damage
caused. The amount of these costs is not known at this time as we do not know
the extent of the exploration program that will be undertaken beyond completion
of the recommended work program. If remediation costs exceed our cash reserves,
we may be unable to complete our exploration program and have to abandon our
operations.

Because our executive officers and directors do not have
formal training specific to the technicalities of mineral exploration, there is
a higher risk that our business will fail.

Our executive officers and directors do not have any formal
training as geologists or in the technical aspects of management of a mineral
exploration company. Our management lacks technical training and experience with
exploring for, starting, and operating a mine. With no direct training or
experience in these areas, our management may not be fully aware of the specific
requirements related to working within this industry. Our management's decisions
and choices may not take into account standard engineering or managerial
approaches mineral exploration companies commonly use. Consequently, our
operations, earnings, and ultimate financial success could suffer irreparable
harm due to management's lack of experience in this industry.

We may conduct further offerings in the future in which case
your shareholdings will be diluted.

Since our inception, we have relied on equity sales of our
common stock to fund our operations. We may conduct further equity offerings in
the future to finance our current projects or to finance subsequent projects
that we decide to undertake. If common stock is issued in return for additional
funds, the price per share could be lower than that paid by our current
stockholders. We anticipate continuing to rely on equity sales of our common
stock in order to fund our business operations. If we issue additional stock,
investors percentage interest in us will be lower. This condition is often
referred to as "dilution. The result of this could reduce the value of
investors stock.

Because our stock is a penny stock, stockholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation system.

14

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Because our securities constitute "penny stocks" within the
meaning of the rules, the rules apply to us and to our securities. The rules may
further affect the ability of owners of shares to sell our securities in any
market that might develop for them. As long as the trading price of our common
stock is less than $5.00 per share, the common stock will be subject to Rule
15g-9 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document prepared by the SEC, that:

| | 1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                          
| | 2. | contains a description of the broker's or dealer's duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
| |    |                                                                                                                                                                                                                                          
| | 3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
| |    |                                                                                                                                                                                                                                          
| | 4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
| |    |                                                                                                                                                                                                                                          
| | 5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
| |    |                                                                                                                                                                                                                                          
| | 6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.



|ITEM 3. | CONTROLS AND PROCEDURES.
|------- | ------------------------

There were no changes in our internal control over financial
reporting during the six months ended June 30, 2006 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

15

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PART II - OTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

None.

|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|------- | ------------------------------------------------------------

During the six months ended June 30, 2006, other than as
disclosed below, we did not complete any sales of securities that were not
registered pursuant to the Securities Act of 1933 (the "Securities Act") and
have not been reported on our previous Quarterly Reports on Form 10-QSB during
the year:

|1. | On July 27, 2006, we issued 1,400,000 shares to the
      owners of the Searchlight Claims. The issuance was completed pursuant to
      Section 4(2) of the Securities Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | On June 14, 2006, we issued 50,000 restricted shares of
      our common stock to Melvin L. Williams pursuant to the Employment
      Agreement between Searchlight and Mr. Williams in consideration for Mr.
      Williams acting as our Chief Financial Officer. The shares were issued
      pursuant to Section 4(2) of the Securities Act. The shares did not involve
      a public offering and Mr. Williams as our Chief Financial Officer has
      effective access to our files and records that contained the relevant
      information necessary for making his investment decision. Mr. Williams has
      such knowledge and experience in our financial and business matters that
      he was capable of evaluating the merits and risks of his
  investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | In June, 2006, we received $4.87 million from the
      exercise of all of the outstanding share purchase warrants issued in
      connection with the September 2005 Private Placements. Each unit of the
      Private Placements (a Unit) consisted of one share of our common stock
      (a Share), one half of one share purchase warrant with each whole
      warrant (a Warrant) entitling the subscriber to purchase one additional
      Share for a period of nine months from the closing of the private
      placement at an exercise price equal to $1.25 per Share, and one
      non-transferable warrant exercisable into one-tenth (1/10) of one Unit for
      no additional consideration if a registration statement on Form SB-2
      registering the resale of the Units is not declared effective by the SEC
      on or before the day that is four months and one day after the closing of
      the private placement. Following receipt of payment for the exercise of
      the Warrants, on June 16, 2006, we issued 8,506,000 million shares of our
      common stock to the Warrant holders. All securities issued to U.S.
      subscribers were issued pursuant to Rule 506 of Regulation D and endorsed
      with a restrictive legend confirming that the securities cannot be resold
      without registration under the Securities Act or an applicable exemption
      from the registration requirements of the Securities Act. All securities
      issued to non-US subscribers were issued pursuant to Regulation S of the
      Securities Act of 1933. Appropriate legends were affixed to the stock
      certificate issued to each non-US investor in accordance with Regulation
      S.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.                    
|------- | ----------------------------------------------------
|        |                                                     
|None.   |                                                     
|        |                                                     
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
|        |                                                     
|None.   |                                                     

16

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|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

On April 7, 2006, we adopted our 2006 Stock Option Plan (the
"Plan"). Under the terms of the Plan, options to purchase up to 40,000,000
shares of our common stock that may be granted to our employees, officers,
directors, and eligible consultants of Searchlight. The Plan provides that the
option price be the fair market value of the stock at the date of grant as
determined by the board of directors. Options granted become exercisable and
expire as determined by the board of directors. The maximum aggregate number of
shares of our common stock that may be optioned and sold under the Plan will be
increased effective the first day of each of our fiscal quarters, beginning with
the fiscal quarter commencing July 1, 2006, by an amount equal to the lesser of:
(i) 15% of the total increase in the number of shares of common stock
outstanding during the previous fiscal quarter; or (ii) a lesser number of
shares of common stock as may be determined by the board of Searchlight.

|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K.
|------- | ---------------------------------

The following exhibits are either provided with this Quarterly
Report on Form 10-QSB or are incorporated herein by reference:

|Exhibit |                        
|------- | -----------------------
|Number  | Description of Exhibits

|3.1  | Articles of Incorporation of L.C.M. Equity,
      Inc.(1)                                                                                                                                                                                
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2  | Bylaws of L.C.M. Equity, Inc.(1)                                                                                                                                                                                                         
|3.3  | Articles of Incorporation of
    Uscribble.(1)                                                                                                                                                                                           
|3.4  | Certificate of Amendment to Articles of Incorporation 
      name change to Regma Bio Technologies Limited.(3)                                                                                                                        
|3.5  | Certificate of Amendment to Articles of Incorporation 
      name change to Phage Genomics, Inc.(6)                                                                                                                                   
|3.6  | Certificate of Amendment to Articles of Incorporation 
      name change to Searchlight Minerals Corp.(12)                                                                                                                            
|3.7  | Certificate of Change to Authorized Capital Pursuant to
      NRS 78.209(13)                                                                                                                                                             
|3.8  | Amended Bylaws dated July 22,
  2005.(9)                                                                                                                                                                                                 
|3.9  | Amended Bylaws dated August 9, 2005.
    (12)                                                                                                                                                                                            
|4.1  | Specimen Stock Certificate.(1)                                                                                                                                                                                                           
|10.1 | Acquisition Agreement.(2)                                                                                                                                                                                                                
|10.2 | 2002 Nonqualified Stock Option
  Plan.(4)                                                                                                                                                                                                
|10.3 | 2003 Nonqualified Stock Option
  Plan.(5)                                                                                                                                                                                                
|10.4 | Letter Agreement between Phage Genomics, Inc.,
      Searchlight Minerals Corp., Kiminco Inc., Pass Minerals Inc., Debra L.
      Matheson, and Pilot Plant Inc. dated February 8,
  2005.(8)                                            
|10.5 | Letter Agreement between Phage Genomics Inc., Searchlight
      Minerals Corp., K. Ian Matheson, and Pilot Plant Inc. dated February 8,
      2005.(8)                                                                                   
|10.6 | Letter Agreement between Phage Genomics, Inc.,
      Searchlight Minerals Corp., K. Ian Matheson, and Bear Dog Mines Inc. dated
      February 8, 2005.(8)                                                                               
|10.7 | Letter Agreement between Phage Genomics, Inc.,
      Searchlight Minerals Corp., K. Ian Matheson, and Gold Hunter Inc. dated
      February 8, 2005.(8)                                                                                  
|10.8 | Letter Agreement between Phage Genomics, Inc.,
      Searchlight Minerals Corp., Kiminco Inc., Pass Minerals Inc., Michael D.
      Anderson, Farrell Drozd, Michael I. Matheson, and Pass Minerals Inc. dated
      February 8, 2005.(8)
|10.9 | Letter Agreement between Phage Genomics, Inc.,
      Searchlight Minerals Corp., K. Ian Matheson, and Britti Gold Inc. dated
      February 8, 2005.(8)                                                                                  

17

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|Exhibit |                        
|------- | -----------------------
|Number  | Description of Exhibits

|10.10 | Letter Agreement between Phage Genomics,
        Inc., Searchlight Minerals Corp., Kiminco Inc., Pass Minerals Inc., Michael
        D. Anderson, Geosearch Inc., Patrick I. Matheson, and Geotech Mining Inc.
        dated February 8, 2005.(8)
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.11 | Letter Agreement between Phage Genomics,
        Inc., Searchlight Minerals Corp., Kiminco Inc., Pass Minerals Inc., and
        Gold Crown Inc. dated February 8, 2005.(8)                                                                      
|10.12 | Engagement Letter dated June 17, 2005
        between Searchlight Minerals Corp. and Clarion Finanz AG.(10)                                                                                                                                      
|10.13 | Extension Agreement dated effective
        June 22, 2005 among Searchlight, K. Ian Matheson, Searchlight Minerals,
        Inc. and Pilot Plant Inc.(10)                                                                                        
|10.14 | Extension Agreement dated effective
        June 22, 2005 among Searchlight, K. Ian Matheson, Searchlight Minerals,
        Inc. and Bear Dog Mines Inc.(10)                                                                                     
|10.15 | Extension Agreement dated effective
        June 22, 2005 among Searchlight, K. Ian Matheson, Searchlight Minerals,
        Inc. and Gold Hunter Inc.(10)                                                                                        
|10.16 | Extension Agreement dated effective
        June 22, 2005 among Searchlight, K. Ian Matheson, Searchlight Minerals,
        Inc., Pass Minerals Inc., Michael D. Anderson, Farrell Drozd and Michael
        I. Matheson.(10)                    
|10.17 | Extension Agreement dated effective
        June 22, 2005 among Searchlight, K. Ian Matheson, Searchlight Minerals,
        Inc. and Britti Gold Inc.(10)                                                                                        
|10.18 | Extension Agreement dated effective
        June 22, 2005 among Searchlight, K. Ian Matheson, Searchlight Minerals,
        Inc., Geotech Mining Inc., Michael D. Anderson, Geosearch Inc. and Patrick
        B. Matheson.(10)                  
|10.19 | Extension Agreement dated effective
        June 22, 2005 among Searchlight, K. Ian Matheson, Searchlight Minerals,
        Inc. and Gold Crown Minerals Inc.(10)                                                                                
|10.20 | Assignment Agreement dated for reference
        June 1, 2005 between Searchlight Minerals Corp. and Nanominerals Corp.(11)                                                                                                                      
|10.21 | Engagement Letter dated May 9, 2005
        between Searchlight Minerals Corp. and Dominick & Dominick Securities
        Inc. (12)                                                                                                              
|10.22 | First Amendment to Assignment Agreement
        between Nanominerals Corp. and Searchlight Minerals Corp. dated August
        31, 2005.(15)                                                                                                     
|10.23 | Second Amendment to Assignment Agreement
        between Nanominerals Corp. and Searchlight Minerals Corp. dated October
        24, 2005.(14)                                                                                                   
|10.24 | Agency Agreement between Searchlight
        Minerals Corp. and Dominick & Dominick Securities Inc. dated September
        1, 2005. (18)                                                                                                        
|10.25 | Office Suite Lease Agreement between
        Burnett & Williams Executive Suites and Searchlight Minerals Corp.
        dated September 6, 2005.(15)                                                                                             
|10.26 | Finders Fee Agreement between
        Searchlight Minerals Corp. and S&P Investors, Inc. dated December
        7, 2005.(16)                                                                                                                    
|10.27 | Employment Agreement between Searchlight
        Minerals Corp. and Carl S. Ager dated as of January 1, 2006.(17)                                                                                                                                
|10.28 | Employment Agreement between Searchlight
        Minerals Corp. and Ian R. McNeil dated as of January 1, 2006.(17)                                                                                                                               
|10.29 | 2006 Stock Option Plan.(19)                                                                                                                                                                                                                      
|10.30 | Engineering
        Services Agreement dated as of May 1, 2006 with Cimetta Engineering and
        Construction Co., Inc.                                                                                                                       
|14.1  | Code of Ethics.(7)                                                                                                                                                                                                                               

18

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|Exhibit |                        
|------- | -----------------------
|Number  | Description of Exhibits

|31.1 | Certification
        of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.2 | Certification
        of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                               
|32.1 | Certification
        of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2 | Certification
        of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|99.3 | Audit Committee Charter.(7)                                                                                                                                           
|99.4 | Disclosure Committee Charter.(7)                                                                                                                                      

Notes:

|(1)  | Filed with the SEC as an exhibit to our Registration
      Statement on Form 10-SB originally filed on July 7, 2000.
|---- | --------------------------------------------------------------------------------------------------------------------
|(2)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on November 13, 2001.                
|(3)  | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on April 1, 2002.                  
|(4)  | Filed with the SEC as an exhibit to our Form S-8
      Registration Statement filed on April 10, 2002.              
|(5)  | Filed with the SEC as an exhibit to our Form S-8 filed on
      June 30, 2003.                                      
|(6)  | Filed with the SEC as an exhibit to our Form 8-K filed on
      December 22, 2003;                                  
|(7)  | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on April 13, 2004.                 
|(8)  | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on April 15, 2005.                 
|(9)  | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on July 29, 2005.                    
|(10) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on June 24, 2005.                    
|(11) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on June 16, 2005.                    
|(12) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on August 22, 2005.             
|(13) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on October 14, 2005.                 
|(14) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on October 28, 2005.                 
|(15) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on November 21, 2005.           
|(16) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on December 13, 2005.                
|(17) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on March 2, 2006.                    
|(18) | Filed with the SEC as an exhibit to our Registration
      Statement on Form SB-2 originally filed on April 3, 2006.
|(19) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on May 15, 2006.                

REPORTS ON FORM 8-K

Since the beginning of our fiscal quarter ended June 30, 2006,
we have filed the following Current Reports on Form 8-K to date:

Date of Report on Form 8-K
      (YYYY/MM/DD)
    Date of Filing with the SEC
      (YYYY/MM/DD)
    Description of the Form 8-K2006/07/27
    2006/08/02
    Disclosure of issuance of
          1,400,000 shares to claim owners of the Searchlight Claims pursuant
          to the option agreements entered into by Searchlight.2006/05/31
    2006/06/20
    Disclosure of employment agreement
          entered into by Searchlight with Melvin L. Williams; exercise of all
          of the outstanding share purchase warrants issued in connection with
          its three private placements closed in September, 2005; departures of
          principal officer and appointment of principal officer; and commencement
          of drilling additional holes on Clarkdale Slag Project.


19

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorised.

|      |                       |  |     | SEARCHLIGHT MINERALS CORP.           
|----- | --------------------- |  | --- | -------------------------------------
|      |                       |  |     |                                      
|      |                       |  |     |                                      
|Date: | August
      10, 2006 |  | By: | /s/
      Ian R. McNeil              
|      |                       |  |     | IAN R. McNEIL                        
|      |                       |  |     | President and Chief Executive Officer
|      |                       |  |     | (Principal Executive Officer )       
|      |                       |  |     |                                      
|      |                       |  |     |                                      
|      |                       |  |     |                                      
|Date: | August
      10, 2006 |  | By: | /s/
      Melvin L. Williams         
|      |                       |  |     | MELVIN L. WILLIAMS                   
|      |                       |  |     | Chief Financial Officer              
|      |                       |  |     | (Principal Financial Officer )       

---