UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  Amendment
No. 1
 TO
 Form
10-Q
 ON
 Form
10-Q/A
  x
              Quarterly
      report pursuant Section 13 or 15(d) of the Securities Exchange Act of
      1934
 For the
quarterly period ended March 31, 2008
  o
              Transition
      report pursuant Section 13 or 15(d) of the Securities Exchange Act of
      1934
 For the
transition period from _______ to _______.
  Commission
file number 000-30995
  SEARCHLIGHT
MINERALS CORP.
  (Exact
name of registrant as specified in its charter)
  Nevada
                (State
      or other jurisdiction of incorporation or organization)
              98-0232244
                (I.R.S.
      Employer Identification No.)#120 - 2441 West Horizon Ridge
      Pkwy.
                Henderson,Nevada
                (Address
      of principal executive offices)
              89052
                (Zip
      code)
  (702) 939-5247
 (Registrant’s telephone number, including area
code)
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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       Noo
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
 
 Large
      accelerated filer o
                Accelerated
      filer xNon-accelerated
      filer o
                Smaller
      reporting company o
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
  Yes o       No x
 
 As of
July 6, 2009, the registrant had 106,468,637 outstanding shares of common
stock.
  
  EXPLANATORY
NOTE
  On
November 8, 2007, the management of Searchlight Minerals
Corp.  (“Searchlight”, the “Company”, or as used in the context of
“we”, “us” or “our”) concluded that our audited financial statements for the
years ended December 31, 2006 and 2005, and our unaudited interim financial
statements for the periods ended March 31, 2005 through June 30, 2007 needed to
be restated and should not be relied upon.
  On May
5, 2008, our management concluded that our audited financial statements for the
year ended December 31, 2007, and our unaudited interim financial statements for
the period ended September 30, 2007 needed to be restated and should not be
relied upon.
  This
Amendment No. 1 (the “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the
three months ended March 31, 2008 (the “2008 First Quarter 10-Q”) is being filed
with the Securities and Exchange Commission (the “SEC”) to update the
presentation of comparative financial periods from prior periods which have been
restated as discussed in our amended filings for the periods ended March 31,
2005 through December 31, 2007 and the period from January 14, 2000 (date of
inception) through December 31, 2007.
  This
amendment also reflects a reclassification of certain immaterial items in the
financial statements for the period ended March 31, 2008 and the three month
period then ended, including the reclassifications of:
  ·      accounting
fees from general and administrative expense to general and administrative
expense - related party;
  ·      rental
revenue from operating revenue to other revenue; and
  ·      interest
expense from operating expenses to other expenses.;
  In
addition, we are concurrently filing Reports on Form 10-K/A to amend and restate
our financial statements for the annual periods in fiscal years 2005 through
2006 and our consolidated financial statements for the annual periods in fiscal
year 2007 and Reports on Form 10-Q/A to amend and restate our financial
statements for the quarterly periods ended March 31, 2005 through September 30,
2005, March 31, 2006 through September 30, 2006, and our consolidated financial
statements for the quarterly periods ended March 31, 2007 through September 30,
2007.
  We
have restated certain items on our balance sheets and statements of
operations.  On our balance sheets: (i) mineral properties have been
restated to include the market value of certain shares issued by us under the
terms of our option agreements for the mineral claims making up the Searchlight
Gold Project; and (ii) the Clarkdale Slag Project has been restated to include
revision of acquisition costs related to issuance of warrants, consideration of
certain terms with respect to future payments that should have been recorded as
contingent consideration and related deferred future income tax liability in
connection with our acquisition of Transylvania International,
Inc.  (“Transylvania”).  Our statements of operations have
been restated to reclassify net losses prior to January 1, 2005 as losses from
discontinued operations.  Our statement of operations for the year
ended December 31, 2006 has been restated to reclassify foreign currency
translation adjustments to general and administrative
expense.  Related to this issue, our balance sheet for the period
ended December 31, 2006 has been restated to reclassify accumulated other
comprehensive loss as accumulated deficit during the exploration
stage.
  Searchlight
Claims - We initially valued the total transaction based on actual costs
incurred by the former owner of $87,134, plus $40,000, represented by $2,000 per
claim, for a total acquisition price of $127,134.  The Searchlight
Gold Project mineral properties have been restated in the financial statements
to reflect payments made by issuance of 1,400,000 shares at $0.35 on July 7,
2005, 1,400,000 shares at $2.20 on July 27, 2006 and 1,400,000 shares at $3.22
on June 29, 2007 at the market values on the dates of issuance.  The
impact of this restatement had the following impact on our balance sheets for
the periods ended September 30, 2005 through December 31, 2006 and our
consolidated balance sheets for the periods ended March 31, 2007 through
December 31, 2007:
 
 ·
                increasing
      the mineral property by $450,000 for the shares issued and by $242,308 for
      the deferred future income tax liability assumed for a total increase of
      $692,308 for the periods ended September 30, 2005, December 31, 2005,
      March 31, 2006 and June 30,
2006.
  
  ·
                cumulative
      increase to the mineral asset by $3,530,000 for the shares issued and by
      $1,774,156 for the deferred future income tax liability assumed for a
      total increase of $5,304,156 for the periods ended September 30, 2006,
      December 31, 2006 and March 31,
2007.
 
 ·
                cumulative
      increase to the mineral asset by $8,038,000 for the shares issued and by
      $4,537,124 for the deferred future income tax liability assumed for a
      total increase of $12,575,124 for the period ended June 30,
      2007.
 
 ·
                increasing
      the mineral asset by $450,000 for the shares issued on July 7, 2005 and by
      $242,308 for the related deferred tax liability assumed and by $385,846
      for the recomputation of deferred tax liability as a result of the
      Clarkdale Slag Project restatement for a total increase of $1,078,154 for
      the period ended September 30,
2007.
  ·
                increasing
      the mineral asset by $1,182,594 for the recomputation of the deferred tax
      liability as a result of the Clarkdale Slag Project restatement for the
      period ended December 31, 2007.
  Joint
Venture Agreement - During the second quarter of 2008, we also determined that
the accounting treatment for the 12,000,000 warrants issued to Nanominerals
Corp.  (“Nanominerals”) and its designates in connection with the
assignment of the option for the Clarkdale Slag Project approved on June 1, 2005
was not appropriate.  We have assigned a value to the warrants of
$1,310,204 by using the sales price of shares of common stock issued in
connection with a private placement conducted at the time the warrants were
issued.  The adjustment also included the deferred future income tax
liability assumed of $608,277 for a total increase in purchase consideration of
$1,918,481.  Nanominerals is one of our principal stockholders, and is
an affiliate of two members of our executive management and board of directors,
Ian R. McNeil and Carl S. Ager.
  The
value of the warrants, as restated, was computed using the binomial lattice
method based on the following assumptions:
  Dividend
      yield
                      
                      
                      —Expected
      volatility
                      
                      
                      79
                      %Risk-free
      interest rate
                      
                      
                      3.91
                      %Expected
      life (years)
                      
                      
                      9.6
  This
restatement had the effect of increasing the joint venture and merger option
agreements by $1,918,481 on our balance sheets for the periods ended September
30, 2005, December 31, 2005, March 31, 2006, June 30, 2006, September 30, 2006
and December 31, 2006.
  Clarkdale
Slag Project – On February 15, 2007, we entered into an agreement and plan of
merger with Transylvania. Pursuant to the agreement Transylvania merged with and
into our wholly owned subsidiary, Clarkdale Minerals LLC. This agreement
superseded the original Clarkdale Slag Project option assignment. During the
second quarter of 2008, we identified certain errors in our previously issued
financial statements related to our purchase accounting treatment of the
acquisition of Transylvania, and the resultant computation of future deferred
income tax liability assumed.  We have restated certain items on our
consolidated balance sheets and statements of operations as
follows:
  ·
                amounts
      recorded for the Clarkdale Slag Project on our consolidated balance sheets
      have been restated to reflect changes to the purchase accounting of the
      acquisition of Transylvania based on the acquisition agreement and the
      recomputation of the value of the 12,000,000 warrants issued to
      Nanominerals Corp., and its designates in connection with the assignment
      of the option for the Clarkdale Slag Project.  The amount
      recorded for the Clarkdale Slag Project was also affected by the
      recomputation of the deferred future federal and state income tax
      liability in connection with our acquisition of the Clarkdale Slag
      Project.
  
  ·
                amounts
      recorded for the Searchlight Gold Project on our consolidated balance
      sheets have been restated to include the impact of the recomputation of
      the deferred future income tax liability and state income tax
      liability.  This recomputation was required because changes made
      to the acquisition accounting of the Clarkdale Slag Project affected the
      computation of the deferred future income tax liability related to the
      mineral claims making up the Searchlight Gold
  Project.
  ·
                our
      consolidated statement of operations for each of the periods ended March
      31, 2007, June 30, 2007, September 30, 2007 and December 31, 2007 has been
      restated to reflect the recomputation of the tax benefits related to net
      operating losses as a result of changes to the purchase accounting for the
      Clarkdale Slag Project.  There was no other impact on the
      results of operations.
  ·
                our
      consolidated statement of operations for the three months ended March 31,
      2007 has been restated to reclassify related party mineral exploration and
      evaluation expense not stated separately in previous
      reports.  There was no change to the underlying expense or
      results of operations as previously
  reported.
  During
the second quarter of 2008, we determined that the acquisition accounting method
used in prior periods to record the purchase accounting for the Clarkdale Slag
Project was not appropriate for the 2007 acquisition of
Transylvania.  The adjustments included revision of the acquisition
accounting related to payment terms and conditions contained in the acquisition
agreement.  The overall recorded acquisition purchase consideration
was reduced by $7,546,217 with a corresponding reduction in recorded liabilities
of $7,546,217.  The recorded liabilities were adjusted, as
follows:
  ·
                the
      recorded current portion (relating to the $30,000 monthly obligation due
      to VRIC) decreased on the balance sheet by
  $227,174.
  ·
                the
      recorded long-term portion (relating to the $30,000 monthly obligation due
      to VRIC) decreased on the balance sheet by
  $919,043.
  ·
                the
      payment due to VRIC (with respect to the date that a feasibility study
      relating to the Clarkdale Slag Project establishes that the project is
      economically viable and “bankable,” or the “Project Funding Date”)
      decreased on the balance sheet by
  $6,400,000.
  We
have accounted for the payments based on the Project Funding Date and the
payments based on future cash flow as contingent consideration.  If
the contingency requirements are met, the purchase price of the Clarkdale Slag
Project will be adjusted accordingly at that time.
  The
restatement had the following impact on our balance sheets for the periods ended
March 31, 2007 through December 31, 2007:
 
 ·
                increasing
      the acquisition cost of the Slag Project by $1,918,481 for the warrants
      issued in connection with the option assignment and by $14,925,422 for the
      deferred tax liability assumed and decreasing the acquisition cost by
      $7,546,217 for the contingent payment terms for a total increase of
      $9,297,686 for the periods ended March 31, 2007 and June 30,
      2007.
 
 ·
                increasing
      the acquisition cost of the Slag Project by $1,918,481 for the warrants
      issued in connection with the option assignment and by $10,801,018 for the
      deferred tax liability assumed and decreasing the acquisition cost by
      $7,546,217 for the contingent payment terms for a total increase of
      $5,173,282 for the period ended September 30,
  2007.
 
 ·
                increasing
      the acquisition cost of the Slag Project by $1,918,481 for the warrants
      issued in connection with the option assignment and decreasing the
      acquisition cost by $4,121,755 for the deferred tax liability assumed and
      by $7,546,217 for the contingent payment terms for a total decrease of
      $9,749,491 for the period ended December 31,
  2007.
  
  The
original terms of the underlying purchase agreement were unchanged and this
adjustment had no effect on the acquisition agreement.
  Discontinued
Operations - The statements of operations from the date of inception through the
periods ended March 31, 2005, June 30, 2005, September 30, 2005, December 31,
2005, March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006
and the consolidated statements of operations from the date of inception through
the periods ended March 31, 2007, June 30, 2007, September 30, 2007, December
31, 2007 have been restated to reclassify net losses prior to January 1, 2005 as
discontinued operations.  On February 10, 2005, we announced that we
were changing our business from biotechnology to becoming a mineral exploration
company, dedicated to the discovery and exploration of gold and other precious
metal deposits.  Activity between January 1 and February 10, 2005
consisted of minor general and administrative expenses and as a result was not
included in loss from discontinued operations.
  Foreign
Currency Translation Reclassification - The statement of operations for the year
ended December 31, 2006, has been restated to reclassify foreign currency
translation adjustment as general and administrative expense.  Foreign
currency translation adjustment was related to translation of accounts payable
assumed as part of our change of business in 2005.  This restatement
had the impact of increasing net loss and eliminating other comprehensive loss
for the year ended December 31, 2006 by $11,769.  Related to the same
issue, the balance sheet at December 31, 2006 has been restated to reclassify
accumulated other comprehensive loss as accumulated deficit during exploration
stage.  These restatements had the impact of eliminating accumulated
other comprehensive loss and increasing accumulated deficit during exploration
stage at December 31, 2006 by $121,606.
  The
restatements had no impact on our cash or cash flows.
  This
Form 10-Q/A sets forth the 2008 First Quarter Form 10-Q in its
entirety.  This Form 10-Q/A includes items that have been changed as a
result of the restatements made in our 2005 First Quarter Form 10-QSB through
the 2007 Annual Report on Form 10-KSB, and the items that are unchanged from the
2005 First Quarter Form 10-QSB through the 2007 Annual Report on Form
10-KSB.  This Form 10-Q/A also includes revisions and additional
disclosures in response to comments from the SEC’s staff included in a series of
comment letters from the staff to us with respect to our currently pending
Registration Statement on Form S-/1/A (File No. 333-132929).
  Other
than the amending of the disclosures relating to the restatements made to our
2005 First Quarter Form 10-QSB through the 2007 Annual Report on Form 10-KSB,
and responding to the staff’s comments, no other material modifications or
updates have been made to the 2008 First Quarter Form
10-Q.  Information not affected by items described above remains
unchanged and reflects the disclosures made at the time of, and as of the dates
described in, the 2008 FirstQuarter Form
10-Q.  This Form 10-Q/A does not describe events occurring after the
2008 First Quarter Form 10-Q (including with respect to exhibits), or modify or
update disclosures (including forward-looking statements) which may have been
affected by events or changes in facts occurring after the date of the 2008
FirstQuarter Form
10-Q.  Accordingly, this Form 10-Q/A should be read in its historical
context and in conjunction with our filings made with the SEC subsequent to the
filing of the 2008 First Quarter Form 10-Q, as information in such filings may
update or supersede certain information contained in this Form
10-Q/A.
  Item 6
of Part II of this Form 10-Q/A has been amended to contain the currently-dated
certifications from our principal executive officer and principal financial
officer, as required by Section 302 and 906 of the Sarbanes-Oxley Act of
2002.
  
  TABLE OF
CONTENTS
 
 PART
      I – FINANCIAL INFORMATION
              7Item
      1. Financial Statements
              7Item
      2.  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
              34Item
      3.  Quantitative and Qualitative Disclosures About Market
      Risk
              50Item
      4.  Controls and Procedures
              50PART
      II - OTHER INFORMATION
              53Item
      1.  Legal Proceedings
              53Item
      1A.  Risk Factors
              53Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds
              53Item
      3.  Defaults Upon Senior Securities
              53Item
      4.  Submission of Matters to a Vote of Security
      Holders
              53Item
      5.  Other Information
              54Item
      6.  Exhibits
              54SIGNATURES
              55
  
 
  PART
I – FINANCIAL INFORMATION
  Item
1. Financial Statements


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


CONSOLIDATED
BALANCE SHEETS


(UNAUDITED)





March
      31, 2008
                              
                              
                              December
      31, 2007ASSETSCurrent
      assetsCash
                              
                              $
                              17,184,152
                              
                              
                              $
                              12,007,344Prepaid
      expenses
                              
                              
                              173,628
                              
                              
                              
                              192,789Total
      current assets
                              
                              
                              17,357,780
                              
                              
                              
                              12,200,133Property
      and equipment, net
                              
                              
                              6,574,027
                              
                              
                              
                              5,064,460Mineral
      properties
                              
                              
                              12,702,258
                              
                              
                              
                              12,702,258Slag
      project
                              
                              
                              120,766,877
                              
                              
                              
                              120,766,877Land
      - smelter site and slag pile
                              
                              
                              5,916,150
                              
                              
                              
                              5,916,150Land
                              
                              
                              3,300,000
                              
                              
                              
                              3,300,000Reclamation
      bond and deposits
                              
                              
                              183,000
                              
                              
                              
                              183,000Total
      non-current assets
                              
                              
                              149,442,312
                              
                              
                              
                              147,932,745Total
      assets
                              
                              $
                              166,800,092
                              
                              
                              $
                              160,132,878LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable
                              
                              $
                              774,954
                              
                              
                              $
                              849,910Accounts
      payable - related party
                              
                              
                              57,382
                              
                              
                              
                              41,974VRIC
      payable, current portion - related party
                              
                              
                              183,451
                              
                              
                              
                              179,830Capital
      lease payable, current portion
                              
                              
                              23,239
                              
                              
                              
                              22,983Total
      current liabilities
                              
                              
                              1,039,026
                              
                              
                              
                              1,094,697Long-term
      liabilitiesVRIC
      payable, net of current portion - related party
                              
                              
                              2,106,287
                              
                              
                              
                              2,153,530Capital
      lease payable, net of current portion
                              
                              
                              58,411
                              
                              
                              
                              64,317Deferred
      tax liability
                              
                              
                              50,256,029
                              
                              
                              
                              50,619,658Total
      long-term liabilities
                              
                              
                              52,420,727
                              
                              
                              
                              52,837,505Total
      liabilities
                              
                              
                              53,459,753
                              
                              
                              
                              53,932,202Stockholders'
      equityCommon
      stock, $0.001 par value; 400,000,000 sharesauthorized,
      104,116,641and 96,865,391shares,respectively,
      issued and outstanding
                              
                              
                              104,117
                              
                              
                              
                              96,865Additional
      paid-in capital
                              
                              
                              123,996,014
                              
                              
                              
                              116,223,907Common
      stock subscribed
                              
                              
                              61,000
                              
                              
                              
                              108,000Accumulated
      deficit during exploration stage
                              
                              
                              (10,820,792
                              )
                              
                              
                              (10,228,096
                              )Total
      stockholders' equity
                              
                              
                              113,340,339
                              
                              
                              
                              106,200,676Total
      liabilities and stockholders' equity
                              
                              $
                              166,800,092
                              
                              
                              $
                              160,132,878




See
Accompanying Notes to these Consolidated Financial Statements


7


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


CONSOLIDATED
STATEMENTS OF OPERATIONS


(UNAUDITED)





For
      the period fromJanuary
      14, 2000(Date
      of Inception)For
      the three months ended
                                                
                                                
                                                ThroughMarch
      31, 2008
                                                
                                                
                                                March
      31, 2007
                                                
                                                
                                                March
      31, 2008Revenue
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -Operating
      expensesMineral
      exploration and evaluation expenses
                                                
                                                
                                                114,518
                                                
                                                
                                                
                                                295,308
                                                
                                                
                                                
                                                4,176,228Mineral
      exploration and evaluation expenses - related party
                                                
                                                
                                                90,000
                                                
                                                
                                                
                                                90,000
                                                
                                                
                                                
                                                945,000Administrative
      - Clarkdale site
                                                
                                                
                                                235,140
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                748,899General
      and administrative
                                                
                                                
                                                591,851
                                                
                                                
                                                
                                                333,450
                                                
                                                
                                                
                                                4,192,541General
      and administrative - related party
                                                
                                                
                                                16,403
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                48,824Depreciation
                                                
                                                
                                                15,123
                                                
                                                
                                                
                                                2,789
                                                
                                                
                                                
                                                60,133Total
      operating expenses
                                                
                                                
                                                1,063,035
                                                
                                                
                                                
                                                721,547
                                                
                                                
                                                
                                                10,171,625Loss
      from operations
                                                
                                                
                                                (1,063,035
                                                )
                                                
                                                
                                                (721,547
                                                )
                                                
                                                
                                                (10,171,625
                                                )Other
      income (expense):Rental
      revenue
                                                
                                                
                                                9,300
                                                
                                                
                                                
                                                7,620
                                                
                                                
                                                
                                                45,710Loss
      on equipment disposition
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (4,526
                                                )Interest
      expense
                                                
                                                
                                                (950
                                                )
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (3,012
                                                )Interest
      and dividend income
                                                
                                                
                                                98,360
                                                
                                                
                                                
                                                33,898
                                                
                                                
                                                
                                                489,723Total
      other income (expense)
                                                
                                                
                                                106,710
                                                
                                                
                                                
                                                41,518
                                                
                                                
                                                
                                                527,895Loss
      before income taxes
                                                
                                                
                                                (956,325
                                                )
                                                
                                                
                                                (680,029
                                                )
                                                
                                                
                                                (9,643,730
                                                )Income
      tax benefit
                                                
                                                
                                                363,629
                                                
                                                
                                                
                                                270,094
                                                
                                                
                                                
                                                2,966,106Loss
      from continuing operations
                                                
                                                
                                                (592,696
                                                )
                                                
                                                
                                                (409,935
                                                )
                                                
                                                
                                                (6,677,624
                                                )Discontinued
      operations:Loss
      from discontinued operations
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (4,143,168
                                                )Net
      loss
                                                
                                                $
                                                (592,696
                                                )
                                                
                                                $
                                                (409,935
                                                )
                                                
                                                $
                                                (10,820,792
                                                )Loss
      per common share - basic and dilutedLoss
      from continuing operations
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.01
                                                )Loss
      from discontinued operations
                                                
                                                
                                                0.00
                                                
                                                
                                                
                                                0.00Net
      loss
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.01
                                                )Weighted
      average common shares outstanding - Basic and diluted
                                                
                                                
                                                101,430,625
                                                
                                                
                                                
                                                77,717,438





See
Accompanying Notes to these Consolidated Financial Statements




8


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY


(UNAUDITED)





AccumulatedCommon
                    
                    
                    Deficit During
                    
                    
                    TotalCommon Stock
                    
                    
                    Additional
                    
                    
                    Stock
                    
                    
                    Exploration
                    
                    
                    Stockholders'Shares
                    
                    
                    Amount
                    
                    
                    Paid-in Capital
                    
                    
                    Subscribed
                    
                    
                    Stage
                    
                    
                    EquityBalance, December 31,
      2007
                    
                    
                    96,865,391
                    
                    
                    $
                    96,865
                    
                    
                    $
                    116,223,907
                    
                    
                    $
                    108,000
                    
                    
                    $
                    (10,228,096
                    )
                    
                    $
                    106,200,676Issuance
      of common stock for cash, $0.65 per share from exercise of
      warrants
                    
                    
                    3,890,000
                    
                    
                    
                    3,890
                    
                    
                    
                    2,524,610
                    
                    
                    
                    (65,000
                    )
                    
                    
                    -
                    
                    
                    
                    2,463,500Issuance
      of common stock for cash Reg. S - Private Placement, $1.60 per
      share
                    
                    
                    1,637,500
                    
                    
                    
                    1,638
                    
                    
                    
                    2,618,362
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,620,000Issuance
      of common stock for cash Reg. D - Private Placement, $1.60 per
      share
                    
                    
                    1,643,750
                    
                    
                    
                    1,644
                    
                    
                    
                    2,628,356
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,630,000Issuance
      of common stock as commission in connection with  foreign
      offering
                    
                    
                    80,000
                    
                    
                    
                    80
                    
                    
                    
                    (80
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Amortization
      of stock options issued to officer over vesting period
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    859
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    859Common
      stock subscribed for directors' compensation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    18,000
                    
                    
                    
                    -
                    
                    
                    
                    18,000Net
      loss March 31, 2008
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (592,696
                    )
                    
                    
                    (592,696
                    )Balance,
      March 31, 2008
                    
                    
                    104,116,641
                    
                    
                    $
                    104,117
                    
                    
                    $
                    123,996,014
                    
                    
                    $
                    61,000
                    
                    
                    $
                    (10,820,792
                    )
                    
                    $
                    113,340,339





See
Accompanying Notes to these Consolidated Financial Statements


9





SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(UNAUDITED)




Period fromJanuary 14, 2000(Date of inception)For the three months ended
                                      
                                      
                                      throughMarch 31, 2008
                                      
                                      
                                      March 31, 2007
                                      
                                      
                                      March 31, 2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                                      
                                      $
                                      (592,696
                                      )
                                      
                                      $
                                      (409,935
                                      )
                                      
                                      $
                                      (10,820,792
                                      )Deduct:
      Loss from discontinued operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (4,143,168
                                      )Loss
      from continuing operations
                                      
                                      
                                      (592,696
                                      )
                                      
                                      
                                      (409,935
                                      )
                                      
                                      
                                      (6,677,624
                                      )Adjustments
      to reconcile loss from operating to net cash used in operating
      activities:Depreciation
                                      
                                      
                                      15,123
                                      
                                      
                                      
                                      2,789
                                      
                                      
                                      
                                      60,133Stock
      based expenses
                                      
                                      
                                      18,859
                                      
                                      
                                      
                                      129,293
                                      
                                      
                                      
                                      977,022Loss
      on disposition of fixed assets
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      5,875Amortization
      of prepaid expense
                                      
                                      
                                      43,222
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      213,635Changes
      in operating assets and liabilities:Other
      current assets
                                      
                                      
                                      (24,062
                                      )
                                      
                                      
                                      (13
                                      )
                                      
                                      
                                      (387,264
                                      )Other
      assets
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (183,000
                                      )Accounts
      payable and accrued liabilities
                                      
                                      
                                      (144,275
                                      )
                                      
                                      
                                      (242,713
                                      )
                                      
                                      
                                      22,051Deferred
      income taxes
                                      
                                      
                                      (363,629
                                      )
                                      
                                      
                                      (270,094
                                      )
                                      
                                      
                                      (2,966,106
                                      )Net
      cash used in operating activities
                                      
                                      
                                      (1,047,458
                                      )
                                      
                                      
                                      (790,673
                                      )
                                      
                                      
                                      (8,935,278
                                      )Net
      cash used in operating activities from discontinued
      operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (2,931,324
                                      )CASH
      FLOW FROM INVESTING ACTIVITIESCash
      paid on mineral property claims
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (87,134
                                      )Cash
      paid for joint venture and merger option
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (890,000
                                      )Cash
      paid to VRIC on closing date
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (9,900,000
                                      )
                                      
                                      
                                      (9,900,000
                                      )Cash
      paid for additional acquisition costs
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (82,158
                                      )
                                      
                                      
                                      (130,105
                                      )Capitalized
      interest
                                      
                                      
                                      (46,378
                                      )
                                      
                                      
                                      (17,942
                                      )
                                      
                                      
                                      (208,551
                                      )Purchase
      of property and equipment
                                      
                                      
                                      (1,393,584
                                      )
                                      
                                      
                                      (5,746
                                      )
                                      
                                      
                                      (5,590,966
                                      )Net
      cash used in investing activities
                                      
                                      
                                      (1,439,962
                                      )
                                      
                                      
                                      (10,005,846
                                      )
                                      
                                      
                                      (16,806,756
                                      )Net
      cash used in investing activities from discontinued
      operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (452,618
                                      )CASH
      FLOW FROM FINANCING ACTIVITIESProceeds
      from stock issuance
                                      
                                      
                                      7,713,500
                                      
                                      
                                      
                                      21,453,817
                                      
                                      
                                      
                                      43,489,500Stock
      issuance costs
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (611,230
                                      )
                                      
                                      
                                      (677,570
                                      )Principal
      payments on capital lease payable
                                      
                                      
                                      (5,650
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (34,589
                                      )Principal
      payments on deferred purchase liability
                                      
                                      
                                      (43,622
                                      )
                                      
                                      
                                      (42,058
                                      )
                                      
                                      
                                      (211,450
                                      )Proceeds
      from subscribed stock
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      360,000Net
      cash provided by financing activities
                                      
                                      
                                      7,664,228
                                      
                                      
                                      
                                      20,800,529
                                      
                                      
                                      
                                      42,925,891Net
      cash provided by financing activities from discontinued
      operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      3,384,237NET
      CHANGE IN CASH
                                      
                                      
                                      5,176,808
                                      
                                      
                                      
                                      10,004,010
                                      
                                      
                                      
                                      17,184,152CASH
      AT BEGINNING OF PERIOD
                                      
                                      
                                      12,007,344
                                      
                                      
                                      
                                      3,684,248
                                      
                                      
                                      
                                      -CASH
      AT END OF PERIOD
                                      
                                      $
                                      17,184,152
                                      
                                      
                                      $
                                      13,688,258
                                      
                                      
                                      $
                                      17,184,152








10




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


Period fromJanuary 14, 2000(Date of inception)For the three months ended
                                                              
                                                              
                                                              throughMarch 31, 2008
                                                              
                                                              
                                                              March 31, 2007
                                                              
                                                              
                                                              March 31, 2008CONSOLIDATED
      STATEMENTS OF CASH FLOWS (continued)SUPPLEMENTAL
      INFORMATIONInterest
      Paid, net of capitalized amounts
                                                              
                                                              $
                                                              (950
                                                              )
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              51,863Income
      Taxes Paid
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              -Non-cash
      investing and financing activities:Capital
      equipment purchased through financing
                                                              
                                                              $
                                                              84,727
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              129,417Assets
      acquired for common stock issued for the acquisition
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              66,879,375
                                                              
                                                              
                                                              $
                                                              66,879,375Assets
      acquired for common stock issued for mineral
properties
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              8,078,000Assets
      acquired for liabilities incurred in the acquisition
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              2,628,188
                                                              
                                                              
                                                              $
                                                              2,628,188Net
      deferred tax liability assumed
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              48,076,734
                                                              
                                                              
                                                              $
                                                              53,584,304Merger
      option payment applied to the acquisition
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              200,000
                                                              
                                                              
                                                              $
                                                              200,000Reclassify
      joint venture option agreement to slag project
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              690,000
                                                              
                                                              
                                                              $
                                                              690,000Warrants
      issued in connection with joint venture option agreement related to slag
      project
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              1,310,204Stock
      options for common stock issued in satisfaction of
debt
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              1,500,000Capitalization
      of related party liability to equity
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              742,848Stock
      issued for conversion of accounts payable, 200,000 shares at
      $0.625
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              -
                                                              
                                                              
                                                              $
                                                              125,000




See
Accompanying Notes to these Consolidated Financial Statements




11


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


1.
              DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
    POLICIES
 
 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, 2007 of Searchlight Minerals Corp. (the
“Company”).
 
 The
interim financial statements present the balance sheets, 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.
 
 These
financial statements have been prepared by the Company without audit, and
include all adjustments (which consist solely of normal recurring adjustments)
which, in the opinion of management, are necessary for a fair presentation of
financial position and results of operations. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted,
although the Company believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these financial
statements be read in conjunction with the Company’s audited financial
statements and the notes thereto for the year ended December 31,
2007.
 
 Description of
business – Searchlight Minerals Corp. is an exploration stage company and
the Company has not yet realized any revenues from its planned
operations.  The Company is primarily focused on the exploration,
acquisition and development of mining and mineral properties.  Upon
the location of commercially minable reserves, the Company plans to prepare for
mineral extraction and enter the development stage.
  History - The Company
was incorporated on January 12, 1999 pursuant to the laws of the State of Nevada
under the name L.C.M. Equity, Inc.  From 1999 to 2005, the Company
operated primarily as a biotechnology research and development company with its
headquarters in Canada and an office in the UK.  On November 2, 2001,
the Company entered into an acquisition agreement with Regma Bio Technologies,
Ltd. pursuant to which Regma Bio Technologies, Ltd. entered into a reverse
merger with us with the surviving entity named “Regma Bio Technologies Limited”.
On November 26, 2003, the Company changed its name from “Regma Bio Technologies
Limited” to “Phage Genomics, Inc.”
  In
February, 2005, the Company announced its reorganization from a biotechnology
research and development company to a company focused on the development and
acquisition of mineral properties. In connection with its reorganization the
Company entered into mineral option agreements to acquire an interest in the
Searchlight Claims. The Company has consequently been considered an exploration
stage enterprise. Also in connection with its corporate restructuring, its board
of directors approved a change in its name from “Phage Genomics, Inc.” (Phage)
to "Searchlight Minerals Corp.” effective June 23, 2005.
  Principles of
consolidation – The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries, Clarkdale Minerals,
LLC (CML) and Clarkdale Metals, Corp. (CMC).  Significant intercompany
accounts and transactions have been eliminated.
  12
 SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1.
                      DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 Going concern - The
Company incurred cumulative net losses of $10,820,792 as of March 31, 2008 and
has not commenced its mining and mineral processing operations, rather, still in
the exploration stage, raising substantial doubt about the Company’s ability to
continue as a going concern.
 
 The
Company will seek additional sources of capital 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.
 
 Reclassifications –
Certain amounts in the financial statements have been reclassified to conform to
current period presentation.
 
 The
Company reclassified from general and administrative expense to loss from
discontinued operations $120,708 related to a foreign currency translation gain
for the period from January 14, 2000 (date of inception) through March 31, 2008.
The Company also reclassified from operating revenue to other revenue $9,300,
$7,620 and $45,710 related to rental revenue for the periods ended March 31,
2008 and 2007 and the period from January 14, 2000 (date of inception) through
March 31, 2008, respectively. In addition, the Company reclassified from
operating expenses to other expense $950, $0 and $3,012 related to interest
expense for the periods ended March 31, 2008 and 2007 and the period from
January 14, 2000 (date of inception) through March 31, 2008, respectively. The
Company also reclassified from general and administrative expense to general and
administrative expense – related party $7,160 related to related party
accounting fees for the period from January 14, 2000 (date of inception) through
March 31, 2008.
 
 The
Company believes these reclassifications are appropriate and in accordance with
Regulation S-X, rule 5-03 – Income Statements.  There was no effect on the
consolidated financial statements for the periods ended March 31, 2008 and 2007
and the period from January 14, 2000 (date of inception) through March 31, 2008
as a result of these reclassifications.
 
 Use of estimates -
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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.
 
 Mineral rights - The
Company capitalizes acquisition and option costs of mineral property
rights.  The amount capitalized represents fair value of the mineral
rights acquired.
  13
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1.
              DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 
 The
Company capitalizes acquisition and option costs of mineral rights as tangible
assets in accordance with Emerging Issues Task Force abstract 04-02 (“EITF
04-02”), “Whether Mineral Rights are Tangible or Intangible Assets and Related
Issues”.  Upon commencement of commercial production, the mineral
rights will be amortized using the unit-of-production method over the life of
the mineral rights.  If the Company does not continue with exploration
after the completion of the feasibility study, the mineral rights will be
expensed at that time. The Company evaluates the carrying value of capitalized
mining costs and related property and equipment costs, to determine if these
costs are in excess of their recoverable amount whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. The
periodic evaluation of carrying value of capitalized costs and any related
property and equipment costs are based upon expected future cash flows and/or
estimated salvage value in accordance with Statement of Financial Accounting
Standards (SFAS) No. 144, “Accounting for Impairment or Disposal of Long-Lived
Assets.”
 
 Capitalized interest
cost - The Company capitalizes interest cost related to acquisition,
development and construction of property and equipment which is designed as
integral parts of the manufacturing process.  The capitalized interest
is recorded as part of the asset it relates to and is amortized over the asset’s
useful life once production commences.  Interest cost capitalized was
$46,378 and $17,942 for the periods ended March 31, 2008 and 2007,
respectively.
 
 Exploration costs –
Mineral exploration costs are expensed as incurred.
 
 Expenses of offering
- The Company accounts for specific incremental costs directly to a proposed or
actual offering of securities as a direct charge against the gross proceeds of
the offering.
 
 Property and
equipment – Property and equipment are stated at cost less accumulated
depreciation. Depreciation is provided principally on the straight-line method
over the estimated useful lives of the assets, which are generally 3 to 39
years. The cost of repairs and maintenance is charged to expense as incurred.
Expenditures for property betterments and renewals are capitalized. Upon sale or
other disposition of a depreciable asset, cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in other income
(expense).
 
 The
Company periodically evaluates whether events and circumstances have occurred
that may warrant revision of the estimated useful life of property and equipment
or whether the remaining balance of property and equipment should be evaluated
for possible impairment. If events and circumstances warrant evaluation, the
Company uses an estimate of the related undiscounted cash flows over the
remaining life of the fixed assets in measuring their
recoverability.
  Impairment of long-lived
assets – The Company reviews and evaluates long-lived assets for
impairment when events or changes in circumstances indicate the related carrying
amounts may not be recoverable. The assets are subject to impairment
consideration under SFAS No. 144 if events or circumstances indicate that their
carrying amount might not be recoverable.  As of March 31, 2008,
exploration is progressing in accordance with the Company’s plan of operations
and no events or circumstances have happened to indicate the related carrying
values of the properties may not be recoverable. When the Company determines
that a SFAS 144 impairment analysis should be done, the analysis will be
performed using the rules of EITF 04-03, “Mining Assets: Impairment and Business
Combinations.”
  14
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1.
                DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 
 Various
factors could impact our ability to achieve forecasted production schedules.
Additionally, commodity prices, capital expenditure requirements and reclamation
costs could differ from the assumptions the Company may use in cash flow models
used to assess impairment. The ability to achieve the estimated quantities of
recoverable minerals from exploration stage mineral interests involves further
risks in addition to those factors applicable to mineral interests where proven
and probable reserves have been identified, due to the lower level of confidence
that the identified mineralized material can ultimately be mined
economically.
 
 Material
changes to any of these factors or assumptions discussed above could result in
future impairment charges to operations.
 
 Discontinued
operations - On February 10, 2005, the Company announced that it was
reorganizing itself and changing its focus from biotech to becoming a mineral
exploration company, dedicated to the discovery and exploration of gold and
other precious metal deposits.  Activity between January 1 and
February 10, 2005 consisted of minor general and administrative expenses and as
a result was not included in loss from discontinued operations. The consolidated
unaudited statement of operations for the period of January 14, 2000 (date of
inception) through March 31, 2008 contains net losses prior to January 1, 2005
of $4,143,168 from discontinued operations.
 
 Asset retirement
obligation - The Company has adopted Statement of Financial Accounting
Standard No. 143 (“SFAS 143”), “Accounting for Asset Retirement Obligations”,
which requires that an asset retirement obligation (“ARO”) associated with the
retirement of a tangible long-lived asset be recognized as a liability in the
period in which it is incurred and becomes determinable, with an offsetting
increase in the carrying amount of the associated asset.  The cost of
the tangible asset, including the initially recognized ARO, is depleted, such
that the cost of the ARO is recognized over the useful life of the
asset.  The ARO is recorded at fair value, and accretion expense is
recognized over time as the discounted liability is accreted to its expected
settlement value.  The fair value of the ARO is measured using
expected future cash flow, discounted at the Company’s credit-adjusted risk-free
interest rate.  To date, no significant asset retirement obligation
exists due to the early stage of exploration.  Accordingly, no
liability has been recorded.
 
 Fair value of financial
instruments - The Company’s financial instruments consist of accounts
payable, accrued liabilities, capital lease payable and mineral property
purchase obligations. The carrying value of these financial instruments
approximates their fair value based on their liquidity or their short-term
nature.  The Company is not exposed to significant interest or credit
risk arising from these financial instruments.
 
 Revenue recognition -
Revenues are recognized during the period in which the revenues are earned.
Costs and expenses are recognized during the period in which they are
incurred.
  Research and
development - All research and development expenditures are expensed as
incurred.
  15
  
 SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
  Earnings (loss) per
share - The Company follows SFAS No. 128, “Earnings Per Share” and SFAS
No. 150, “Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity,” which establish standards for the
computation, presentation and disclosure requirements for basic and diluted
earnings per share for entities with publicly-held common shares and potential
common stock issuances. Basic earnings (loss) per share are computed by dividing
net income by the weighted average number of common shares
outstanding.  In computing diluted earnings per share, the weighted
average number of shares outstanding is adjusted to reflect the effect of
potentially dilutive securities, such as stock options and
warrants.  Common stock equivalent shares are excluded from the
computation if their effect is antidilutive. Weighted average of common stock
equivalents, which include stock options and warrants to purchase common stock,
on March 31, 2008 and December 31, 2007 that were not included in the
computation of diluted EPS because the effect would be antidilutive were
24,430,625 and 25,352,207, respectively.
 
 Income taxes - The
Company accounts for its income taxes in accordance with Statement of Financial
Accounting Standard No. 109 (“SFAS 109”), “Accounting for Income Taxes” which
requires recognition of deferred tax assets and liabilities for future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date.
 On
July 13, 2006, the FASB issued Financial Interpretation (“FIN”) No. 48,
“Accounting for Uncertainty in Income Taxes – An Interpretation of FASB
Statement No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in an entity’s financial statements in accordance
with SFAS No. 109, and prescribes a recognition threshold and measurement
attributes for financial statement disclosure of tax positions taken or expected
to be taken on a tax return.  Under FIN 48, the impact of an uncertain
income tax position on the income tax return must be recognized at the largest
amount that is more-likely-than-not to be sustained upon audit by the relevant
taxing authority. An uncertain income tax position will not be recognized if it
has less than 50% likelihood of being sustained.  Additionally, FIN 48
provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition.  The Company
adopted the provision of FIN 48 on January 1, 2007, which did not have any
impact on the consolidated financial statements.
 
 For
acquired properties, that do not constitute a business as defined in Emerging
Issues Task Force No. 98-03 (“EITF 98-03”), deferred income tax liability is
recorded on GAAP basis over income tax basis using statutory federal and state
rates. The resulting estimated future federal and state income tax liability
associated with the temporary difference between the acquisition consideration
and the tax basis is computed in accordance with EITF 98-11 “Accounting for
Acquired Temporary Differences in Certain Purchase Transactions That Are Not
Accounted for as Business Combinations” and SFAS 109, and is reflected as an
increase to the total purchase price which is then applied to the underlying
acquired assets in the absence of there being a goodwill component associated
with the acquisition transactions.
  16
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
  Stock-based
compensation - On December 16, 2004, the FASB issued SFAS
No. 123R, “Share-Based Payment”, which replaces SFAS No. 123,
“Accounting for Stock-Based Compensation” and supersedes APB Opinion
No. 25, “Accounting for Stock Issued to Employees.” SFAS No. 123R requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on the grant date
fair value of the award. SFAS No. 123R was to be effective for interim or annual
reporting periods beginning on or after June 15, 2005, but in April 2005 the SEC
issued a rule that will permit most registrants to implement SFAS No. 123R at
the beginning of their next fiscal year, instead of the next reporting period as
required by SFAS No. 123R. The pro forma disclosures previously permitted under
SFAS No. 123 no longer will be an alternative to financial statement
recognition. Under SFAS No. 123R, the Company must determine the appropriate
fair value model to be used for valuing share-based payments, the amortization
method for compensation cost and the transition method to be used at date of
adoption. The transition methods include prospective and retroactive adoption
option. Under the retroactive option, prior periods may be restated either as of
the beginning of the year of adoption or for all periods presented. The
prospective method requires that compensation expense be recorded for all
unvested stock options and restricted stock at the beginning of the first
quarter of adoption of SFAS No. 123R, while the retroactive methods would record
compensation expense for all unvested stock options and restricted stock
beginning with the first period restated. The Company adopted the requirements
of SFAS No. 123R for the fiscal year beginning after December 31,
2004.
 
 New accounting
pronouncements – On March 19, 2008 the FASB issued SFAS No. 161,
“Disclosures About Derivative Instruments and Hedging
Activities.”  This statement is intended to improve financial
reporting about derivative instruments and hedging activities by requiring
enhanced disclosures. This statement is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. The Company is currently evaluating the
impact that SFAS 161 will have on the consolidated financial
statements.
 
 In
February 2008, the FASB staff issued Staff Position No. 157-2 “Effective Date of
FASB Statement No. 157” (“FSP FAS 157-2”).  FSP FAS 157-2 delayed the
effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities,
except for items that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually).  The provisions
of FSP FAS 157-2 are effective for the Company’s fiscal year beginning January
1, 2009.  SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. The Company is currently evaluating
the potential impact of adopting this statement on the Company’s consolidated
financial position, results of operations or cash flows.
 
 In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations,”
which amends SFAS No. 141, and provides revised guidance for recognizing
and measuring identifiable assets and goodwill acquired, liabilities assumed,
and any noncontrolling interest in the acquiree. It also provides disclosure
requirements to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. SFAS No. 141(R) is
effective for the Company’s fiscal year beginning January 1, 2009 and is to
be applied prospectively. The Company is currently evaluating the potential
impact of adopting this statement on the Company’s consolidated financial
position, results of operations or cash flows.
  17
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
  In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests
in Consolidated Financial Statements - an amendment of ARB No. 51”
which establishes accounting and reporting standards pertaining to ownership
interests in subsidiaries held by parties other than the parent, the amount of
net income attributable to the parent and to the noncontrolling interest,
changes in a parent’s ownership interest, and the valuation of any retained
noncontrolling equity investment when a subsidiary is deconsolidated.
SFAS No. 160 also establishes disclosure requirements that clearly
identify and distinguish between the interests of the parent and the interests
of the noncontrolling owners. SFAS No. 160 is effective for the
Company’s fiscal year beginning January 1, 2009. The Company is currently
evaluating the potential impact of adopting this statement on the Company’s
consolidated financial position, results of operations or cash
flows.
 
 In
September 2007, the FASB published Proposed FASB Staff Position (“FSP”) No.
APB 14-a, “Accounting for Convertible Debt Instruments That May Be Settled
in Cash upon Conversion.” The proposed FSP applies to convertible debt
instruments that, by their stated terms, may be settled in cash (or other
assets) upon conversion, including partial cash settlement, unless the embedded
conversion option is required to be separately accounted for as a derivative
under SFAS 133. Convertible debt instruments within the scope of the
proposed FSP are not addressed by the existing APB 14. The proposed FSP
would require that the liability and equity components of convertible debt
instruments within the scope of the proposed FSP shall be separately accounted
for in a manner that reflects the entity’s nonconvertible debt borrowing rate.
This will require an allocation of the convertible debt proceeds between the
liability component and the embedded conversion option (i.e., the equity
component). The difference between the principal amount of the debt and the
amount of the proceeds allocated to the liability component would be reported as
a debt discount and subsequently amortized to earnings over the instrument’s
expected life using the effective interest method.  FSP No. APB 14-a
is effective for the Company’s fiscal year beginning January 1, 2009 and early
adoption is not permitted. The Company is currently evaluating the impact that
Proposed FSP may have on the consolidated financial statements of the
Company.
 
 In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities — Including an amendment of
FASB Statement No. 115” (“SFAS 159”), which permits entities to choose
to measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. SFAS 159 also establishes presentation and disclosure
requirements designed to facilitate comparisons between entities that choose
different measurement attributes for similar types of assets and liabilities.
SFAS 159 does not affect any existing accounting literature that requires
certain assets and liabilities to be carried at fair value, nor eliminate
disclosure requirements included in other accounting standards, including
requirements for disclosures about fair value measurements included in
SFAS 157, “Fair Value Measurements,” and SFAS 107, “Disclosures about
Fair Value of Financial Instruments.” SFAS 159 is effective for our fiscal
year beginning after November 15, 2007.  The Company has adopted
SFAS 159 as of January 1, 2008. There was no impact on our consolidated
financial position, results of operations or cash flows.
  18
 SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
  2.
              PROPERTY AND
      EQUIPMENT
  Property
and equipment consisted of the following as of March 31, 2008 and December 31,
2007:
 
 March
      31,
                          2008
                        
                        
                        December
      31,
                          2007Furniture
      and fixtures
                        
                        $
                        34,694
                        
                        
                        $
                        34,694Lab
      equipment
                        
                        
                        2,804
                        
                        
                        
                        2,804Computers
      and equipment
                        
                        
                        34,260
                        
                        
                        
                        32,594Income
      property
                        
                        
                        309,750
                        
                        
                        
                        309,750Construction
      in progress
                        
                        
                        5,856,060
                        
                        
                        
                        4,408,796Capitalized
      interest
                        
                        
                        208,550
                        
                        
                        
                        162,173Vehicles
                        
                        
                        38,175
                        
                        
                        
                        38,175Site
      equipment
                        
                        
                        148,586
                        
                        
                        
                        119,2036,632,879
                        
                        
                        
                        5,108,189Less
      accumulated depreciation
                        
                        
                        58,852
                        
                        
                        
                        43,729$
                        6,574,027
                        
                        
                        $
                        5,064,460
 
 Depreciation
expense was $15,123 and $2,789 for the three months ended March 31, 2008 and
2007, respectively.
  19
  
 SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 3.
                  CLARKDALE SLAG
      PROJECT
  On
February 15, 2007, the Company completed a merger with Transylvania
International, Inc. (“TI”) which provided the Company with 100% ownership of the
Clarkdale Slag Project in Clarkdale Arizona, through its wholly owned subsidiary
CML.  This acquisition superseded the joint venture option agreement
to acquire a 50% ownership interest as a joint venture partner pursuant to
Nanominerals Corp. (“NMC”) interest in a joint venture agreement (“JV
Agreement”) dated May 20, 2005 between NMC and Verde River Iron Company, LLC
(“VRIC”). Subsequent to the acquisition, Mr. Harry Crockett joined the Company’s
board of directors. VRIC is an affiliate of Mr. Crockett.
  The
Company believes the acquisition of the Clarkdale Slag Project was beneficial
because it provides for 100% ownership of the properties and fosters greater
opportunity to finance and further develop the project.
  This
merger was treated as a statutory merger for tax purposes whereby, CML was the
surviving merger entity.
 
 The
Company applied EITF 98-03 with regard to the acquisition of the Clarkdale Slag
Project. The Company determined that the acquisition of the Clarkdale Slag
Project did not constitute an acquisition of a business, as that term is defined
in EITF 98-03, and the Company recorded the acquisition as a purchase of
assets.
  The
Company also formed a second wholly owned subsidiary CMC, for the purpose of
developing a processing plant at the Clarkdale Slag Project.
  The $130
million purchase price was comprised of a combination of the cash paid, the
deferred tax liability assumed in connection with the acquisition, and the fair
value of our common shares issued, based on the closing market price of our
common stock, using the average of the high and low prices of our common stock
on the closing date of the acquisition. The Clarkdale Slag Project is without
known reserves and the project is exploratory in nature in accordance with
Industry Guides promulgated by the Commission, Guide 7 paragraph (a)(4)(i). As
required by EITF 04-03 paragraph 2 and EITF 98-11, the Company then allocated
the purchase price among the assets as follows (and also further described in
this Note 3 to the financial statements): $5,916,150 of the purchase price was
allocated to the slag pile site, $3,300,000 to the remaining land acquired, and
$309,750 to income property and improvements. The purchase price allocation to
the real properties were based on fair market values determined using an
independent real estate appraisal firm (Scott W. Lindsay, Arizona Certified
General Real Estate Appraiser No. 30292). The remaining $120,766,877 of the
purchase price was allocated to the Slag Project, which has been capitalized as
a tangible asset in accordance with EITF 04-02. Upon commencement of commercial
production, the material will be amortized using the unit-of-production method
over the life of the Slag Project.
  20
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 3.   CLARKDALE SLAG PROJECT
– (continued)
 
 Closing
of the TI acquisition occurred on February 15, 2007 (the “Closing Date”) and was
subject to, among other things, the following terms and
conditions:
 
 a)
              The
      Company paid $200,000 in cash to VRIC on the execution of the Letter
      Agreement;
 
 b)
              The
      Company paid  $9,900,000 in cash to VRIC on the Closing
      Date;
 
 c)
              The
      Company issued 16,825,000 shares of its common stock, valued at $3.975 per
      share, using the average of the high and low on the Closing Date to the
      designates of VRIC on the closing pursuant to Section 4(2) and Regulation
      D of the Securities Act of
1933;
 
 In
addition to the cash and equity consideration paid and issued upon closing, the
acquisition agreement contains the following payment terms and
conditions:
  d)
              The
      Company agreed to continue to pay VRIC $30,000 per month until the earlier
      of: (i) the date that is 90 days after receipt of a bankable feasibility
      study by the Company (the “Project Funding Date”), or (ii) the tenth
      anniversary of the date of the execution of the letter
      agreement;
  The
acquisition agreement also contains additional contingent payment terms which
are based on the Project Funding Date as defined in the
agreement:
  e)
              The
      Company has agreed to pay VRIC $6,400,000 on the Project Funding
      Date;
  f)
              The
      Company has agreed to pay VRIC a minimum annual royalty of $500,000,
      commencing on the Project Funding Date (the “Advance Royalty”), and an
      additional royalty consisting of 2.5% of the “net smelter returns” on any
      and all proceeds of production from the Clarkdale Slag Project (the
      “Project Royalty”).  The Advance Royalty remains payable until
      the first to occur of: (1) the end of the first calendar year in which the
      Project Royalty equals or exceeds $500,000; or (2) February 15,
      2017.  In any calendar year in which the Advance Royalty remains
      payable, the combined Advance Royalty and Project Royalty will not exceed
      $500,000 in any calendar year,
and,
  g)
              The
      Company has agreed to pay VRIC an additional amount of $3,500,000 from the
      net cash flow of the Clarkdale Slag
Project.
  The
Company has accounted for this as a contingent payment and upon meeting the
contingency requirements, the purchase price of the Clarkdale Slag Project will
be adjusted to reflect the additional consideration.
  21


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





3.
            CLARKDALE SLAG PROJECT
      –(continued)





The
following table reflects the recorded purchase consideration for the Slag
Project:





Purchase
      price:Cash
      payments
                  
                  $
                  10,100,000Joint
      venture option acquired in 2005 for cash
                  
                  
                  690,000Warrants
      issued for joint venture option
                  
                  
                  1,918,481Common
      stock issued
                  
                  
                  66,879,375Monthly
      payments, current portion
                  
                  
                  167,827Monthly
      payments, net of current portion
                  
                  
                  2,333,360Acquisition
      costs
                  
                  
                  127,000Total
      purchase price
                  
                  
                  82,216,043Net
      deferred income tax liability assumed - slag project
                  
                  
                  48,076,734$
                  130,292,777




The following table reflects the
components of the Slag Project:




Allocation
      of acquisition cost:Slag
      project (including net deferred tax liability assumed of
      $48,076,734)
                  
                  $
                  120,766,877Land
      - slag pile site
                  
                  
                  5,916,150Land
                  
                  
                  3,300,000Income
      property and improvements
                  
                  
                  309,750Net
      assets acquired
                  
                  $
                  130,292,777





For
the three months ended March 31, 2007, TI operations were limited to minor
rental activity revenue of approximately $10,000 and rental expenses and
property holding costs of approximately $8,000 for net pre tax income of
approximately $2,000.


22


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





4.
            MINERAL PROPERTIES -
      MINING CLAIMS





As of
March 31, 2008 mining claims consisted of 3,200 acres located near Searchlight,
Nevada. The 3,200 acre property is staked as twenty 160 acre claims, most of
which are also double-staked as 142 twenty acre claims.





The
mining claims were acquired during 2005 with issuance of 1,400,000 shares of the
Company’s common stock and the provision that the Company, at its option, issue
an additional 1,400,000 shares each year in June for three remaining
years.  If at any time before each subsequent issuance of shares, the
Company does not choose to continue the transaction, it is under no obligation
to issue further shares and would no longer hold the mining
claims.





On August
26, 2005, the Company paid $180,500 to the Bureau of Land Management as a bond
for future reclamation work in Searchlight, Nevada.





The
mining claims are capitalized as tangible assets in accordance with EITF
04-02.  Upon commencement of commercial production, the claims will be
amortized using the unit-of-production method over the life of the
claims.  If the Company does not continue with exploration after the
completion of the feasibility study, the claims will be expensed at that
time.





The
Company reviews and evaluates long-lived assets for impairment when events or
changes in circumstances indicate the related carrying amount may not be
recoverable. The assets are subject to impairment consideration under SFAS No.
144 if events or circumstances indicate that their carrying amount might not be
recoverable. As of March 31, 2008, exploration on these properties is
progressing in accordance with the Company’s plan of operations and no events or
circumstances have happened to indicate the related carrying values of the
properties may not be recoverable. When the Company determines that a SFAS 144
impairment analysis should be done, the analysis will be performed using the
rules of EITF 04-03, “Mining Assets: Impairment and Business
Combinations.”





The
following table summarizes the changes of mineral properties for the periods
ended March 31, 2008 and December 31, 2007:





Total
      mineral properties balance, December 31, 2006
                    
                    $
                    5,431,290Share
      issuance to obtain mineral properties, June 29, 2007
                    
                    
                    4,508,000Net
      deferred income tax liability assumed
                    
                    
                    2,762,968Total
      mineral properties balance, March 31, 2008 and December  31,
      2007
                    
                    $
                    12,702,258


23


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)




5.
            CAPITAL LEASE
      PAYABLE




The
Company leases equipment under a capital lease. The capital lease payable
consisted of the following at March 31, 2008 and December 31,
2007,




Lender
                Collateral
                
                Monthly
                  Payment
                
                
                Interest
                  Rate
                
                Maturity
                
                March 31,
                  2008
                
                
                December 31,
                  2007Caterpillar
      Financial Services Corporation
                Equipment
                
                $
                2,200
                
                
                
                4.45
                %
                Jul-11
                
                $
                81,650
                
                
                $
                87,30081,650
                
                
                
                87,300Capital
      lease payable, current portion
                
                
                
                
                
                
                
                
                
                
                
                (23,239
                )
                
                
                (22,983
                )Capital
      lease payable, net of current portion
                
                
                
                
                
                
                
                
                
                
                $
                58,411
                
                
                $
                64,317





The
following table represents future minimum lease payments on the capital lease
for each of the twelve month periods ending March 31,





2009
                        
                        $
                        26,4012010
                        
                        
                        26,4012011
                        
                        
                        26,4012012
                        
                        
                        8,800Thereafter
                        
                        
                        —Total
      future minimum lease payments
                        
                        $
                        88,033Imputed
      interest
                        
                        
                        (6,353
                        )Present
      value of future minimum lease payments
                        
                        $
                        81,650





The
following assets acquired under the capital lease and the related amortization
were included in property, plant and equipment at March 31, 2008 and December
31, 2007,





March 31,
                    2008
                  
                  
                  December 31,
                    2007Site
      Equipment
                  
                  $
                  116,239
                  
                  
                  $
                  116,239Accumulated
      amortization
                  
                  
                  (19,373
                  )
                  
                  
                  (16,952
                  )$
                  96,866
                  
                  
                  $
                  99,287


24


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





6.
            CLARKDALE ACQUISITION
      PAYABLE





Pursuant
to the Clarkdale acquisition agreement the Company agreed to pay VRIC $30,000
per month until the Project Funding Date.





The
Company has recorded a liability for this commitment using imputed interest
based on its best estimate of future cash flows. The effective interest rate
used was 8.00%, resulting in an initial present value of $2,501,187 and imputed
interest of $1,128,813. The expected term used was 10 years which represents the
maximum term the VRIC liability is payable if the Company does not obtain
Project Funding.





The
following table represents future principal payments on VRIC payable for the
years ending March 31,





2009
                  
                  $
                  183,4512010
                  
                  
                  198,6772011
                  
                  
                  215,1672012
                  
                  
                  233,0262013
                  
                  
                  252,367Thereafter
                  
                  
                  1,207,050$
                  2,289,738VRIC
      payable, current portion
                  
                  
                  (183,451
                  )VRIC
      payable, net of current portion
                  
                  $
                  2,106,287





The
acquisition agreement also contains payment terms which are based on the Project
Funding Date as defined in the agreement. The terms of and conditions of these
payments are discussed in more detail in Note 3.


25


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7.
            STOCKHOLDERS’
      EQUITY





During
the three months ended March 31, 2008, the Company’s stockholders’ equity
activity consisted of the following:





a)
            On
      March 31, 2008, the Company awarded 2,670 shares each to its two non
      officer directors pursuant to its directors’ compensation
      policy.  The share award was priced at $3.37 and has been
      recorded as directors’ compensation expense of $18,000 and common stock
      subscribed as of March 31, 2008.





b)
            On
      February 7, 2008, the Company completed a private placement offering for
      gross proceeds of $2,620,000 to non-US persons in reliance of Regulation S
      promulgated under the Securities Act of 1933. A total of 1,637,500 units
      were issued at a price of $1.60. Each unit sold consisted of one share of
      the Company’s common stock and one-half of one share purchase
      warrants.  Each whole share purchase warrant entitles the holder
      to purchase one additional share of the Company’s common stock at a price
      of $2.40 per share for a period of two years from the date of issuance. A
      total of 80,000 shares of the Company’s common stock were issued by the
      Company as commission to agents in connection with the
      offering.





c)
            On
      February 7, 2008, the Company completed a private placement offering for
      gross proceeds of $2,630,000 to US accredited investors pursuant to Rule
      506 of Regulation D promulgated under the Securities Act of 1933. A total
      of 1,643,750 units were issued at a price of $1.60. Each unit sold
      consisted of one share of the Company’s common stock and one-half of one
      share purchase warrants.  Each whole share purchase warrant
      entitles the holder to purchase one additional share of the Company’s
      common stock at a price of $2.40 per share for a period of two years from
      the date of issuance.  There was no commission paid or payable
      to agents in connection with this
offering.





d)
            On
      January 30, 2008, the Company received gross proceeds of $2,528,500 by
      issuing an aggregate of 3,890,000 shares of its common stock on the
      exercise of warrants issued by the Company in January,
      2006.  Each warrant entitled the holder to purchase one share of
      the Company’s common stock at a price of $0.65 per share on or before
      January 18, 2008.  The warrant holders delivered their notices
      of exercise, and paid the exercise price of $0.65 per share, prior to
      January 18, 2008 expiration date. A total of 3,690,000 shares were issued
      to US accredited investors as defined in Rule 501 of Regulation D
      promulgated under the Securities Act of 1933.  An additional
      200,000 shares were issued to one non-US person as defined in Regulation S
      of the Securities Act.





Warrants
associated with the 2008 equity issuances do not constitute a registration
rights payment arrangement.


26


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





8.
            OPTION
      PLAN





On April
30, 2007, the Board of Directors adopted the 2007 Stock Option Plan (the “2007
Plan”) and determined to cease granting any further options under the Company’s
2006 Stock Option Plan. Under the terms of the 2007 Plan, options to purchase up
to 40,000,000 shares of common stock of the Company may be granted to eligible
Participants.  On May 8, 2007, the Board of Directors determined to
cease granting any further options under the Company’s 2003 Nonqualified Stock
Option Plan and amended the number of shares of the Company’s common stock
available for issuance under the 2007 Plan to a maximum of
4,000,000.





The 2007
Plan provides that the option price for incentive stock options be the fair
market value of the stock at the date of the grant and the option price for
non-qualified stock options be no less than 85% of the fair market value of the
stock at the date of the grant.  The maximum term of an option shall
be established for that option by the Board of Directors or, if not so
established, shall be ten years from the grant date. Options granted under the
2007 Plan become exercisable and expire as determined by the Board of
Directors.





During
the three months ended March 31, 2008, the Company did not grant any stock
options awards, stock awards or any other equity incentive plan
awards.




Expenses
for the three months ended March 31, 2008 and 2007 related to vesting and
granting of stock options were $859 and $129,293, respectively and are included
in general and administrative expense.





Stock options –
During the three months ended March 31, 2008, the Company did not grant stock
options.  As of March 31, 2008 stock options outstanding totaled
3,652,946 with a weighted average strike price of $0.93 per
share.





The
following table summarizes the Company’s stock option activity for the three
months ended March 31, 2008:





Number of
                      Shares
                    
                    
                    Weighted
                      Average
                      Exercise PriceBalance,
      December 31, 2007
                    
                    
                    3,652,946
                    
                    
                    $
                    0.93Options
      granted and assumed
                    
                    
                    —
                    
                    
                    
                    —Options
      expired
                    
                    
                    —
                    
                    
                    
                    —Options
      cancelled
                    
                    
                    —
                    
                    
                    
                    —Options
      exercised
                    
                    
                    —
                    
                    
                    
                    —Balance,
      March 31, 2008
                    
                    
                    3,652,946
                    
                    
                    $
                    0.93





The
Company estimates the fair value of these options granted by using the Binomial
Lattice option pricing-model with the following assumptions used for
grants:





2008
                        
                        
                        2007Dividend
      yield
                        
                        
                        —
                        
                        
                        —Expected
      volatility
                        
                        
                        —
                        
                        
                        76.6%Risk-free
      interest rate
                        
                        
                        —
                        
                        
                        2.88%
      to 4.68%Expected
      life (years)
                        
                        
                        —
                        
                        
                        2
      to 4.25


27


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





8.
            OPTION PLAN
      (continued)





The
Company believes this model provides the best estimate of fair value due to its
ability to incorporate inputs that change over time, such as volatility and
interest rates, and to allow for actual exercise behavior of option holders.





The
Company estimates expected volatility using a representative peer group average,
because of limited historical equity transactions of the Company.  The
risk-free interest rate is based on the implied yield available on U.S. Treasury
zero-coupon issues over equivalent lives of the options.




The
expected life of employee stock options represents the weighted-average period
the stock options are expected to remain outstanding and is a derived output of
the Binomial Lattice model. The expected life of employee stock options is
impacted by all of the underlying assumptions and calibration of the Company’s
model. The Binomial Lattice model estimates the probability of exercise as a
function of these two variables based on the entire history of exercises and
cancellations on all past option grants made by the Company.





The
following table summarizes the changes of Company’s stock options subject to
vesting for the three months ended March 31, 2008:





Number of
                      Shares
                    
                    
                    Weighted Average
                      Grant Date
                      Fair ValueUnvested,
      December 31, 2007
                    
                    
                    50,000
                    
                    
                    $
                    0.21Options
      granted
                    
                    
                    —
                    
                    
                    
                    —Options
      vested
                    
                    
                    —
                    
                    
                    
                    —Options
      cancelled
                    
                    
                    —
                    
                    
                    
                    —Unvested,
      March 31, 2008
                    
                    
                    50,000
                    
                    
                    $
                    0.21





As of
March 31, 2008, there was no material unrecognized compensation cost related to
unvested share-based compensation arrangements granted.





Stock
options/warrants – During the three months ended March 31, 2008 the
Company granted stock warrants related to common stock issued through a private
placement totaling 1,640,625 with a strike price of $2.40 per
share.





The value
of the warrants was allocated against additional paid in capital as part of the
overall offering cost of the private placement.





The
value of the warrants issued in 2005 in connection with the Clarkdale Slag
Project option were computed using the Binomial Lattice method were allocated to
the acquisition cost of the project and were computed based on the following
assumptions:





Dividend
      yield
                    
                    
                    —Expected
      volatility
                    
                    
                    79%Risk-free
      interest rate
                    
                    
                    3.91%Expected
      life (years)
                    
                    
                    9.6


28


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





8.
              OPTION PLAN
      (continued)





The
following table summarizes information about options/warrants granted during the
three months ended March 31, 2008:





Number of
                    Shares
                  
                  
                  Weighted
                    Average
                    Exercise PriceBalance,
      December 31, 2007
                  
                  
                  24,944,704
                  
                  
                  $
                  1.26Options/warrants
      granted and assumed
                  
                  
                  1,640,625
                  
                  
                  
                  2.40Options/warrants
      expired
                  
                  
                  —
                  
                  
                  
                  —Options/warrants
      cancelled
                  
                  
                  —
                  
                  
                  
                  —Options/warrants
      exercised
                  
                  
                  (3,890,000
                  )
                  
                  
                  (0.65
                  )Balance,
      March 31, 2008
                  
                  
                  22,695,329
                  
                  
                  $
                  1.45





9.
            PROPERTY RENTAL
      AGREEMENTS AND LEASES





The
Company, through its subsidiary CML, has the following lease and rental
agreements as lessor:





Clarkdale Arizona Central
Railroad – Lease





CML
has a month-to-month rental agreement with Clarkdale Arizona Central Railroad.
The rental payment is $1,700 per month.





Commercial Building –
Lease





CML rents
commercial building space to two tenants. The rental arrangements for both
tenants stem from expired leases and are month-to-month. Rent under these
agreements totaled $1,260 per month.





Land Lease – Wastewater
Effluent





CML
entered into a lease on August 25, 2004 with the Town of Clarkdale, AZ
(Clarkdale). The Company provides approximately 60 acres of land to Clarkdale
for disposal of Class B effluent. In return, the Company has first right to
purchase up to 46,000 gallons per day of the effluent for its use at fifty
percent (50%) of the potable water rate. In addition, if Class A effluent
becomes available, the Company may purchase that at seventy five percent (75%)
of the potable water rate.





The term
of the lease is 5 years with a one year extension available. At such time as
Clarkdale no longer uses the property for effluent disposal, and for a period of
twenty five (25) years measured from the date of the lease, the Company has a
continuing right to purchase Class B, and if available, Class A at then market
rates.


29


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





10.
              INCOME
      TAXES





The
Company is a Nevada corporation and is subject to federal and Arizona income
taxes.  Nevada does not impose a corporate income tax.





The
income tax benefit consisted of the following at March 31, 2008 and December 31,
2007,





March 31,
                    2008
                  
                  
                  December 31,
                    2007Income
      tax benefit per financial statements
                  
                  $
                  (363,406
                  )
                  
                  $
                  (1,254,833
                  )Non-deductible
      and other
                  
                  
                  661
                  
                  
                  
                  4,807Change
      in valuation allowance
                  
                  
                  (884
                  )
                  
                  
                  119,193Rate
      change
                  
                  
                  —
                  
                  
                  
                  50,458Income
      tax benefit
                  
                  $
                  (363,629
                  )
                  
                  $
                  (1,080,375
                  )





Significant
components of the Company’s net deferred income tax assets and liabilities at
March 31, 2008 and December 31, 2007 were as follows:





March 31,
                        2008
                      
                      
                      December 31,
                        2007Deferred
      income tax assetsNet
      operating loss carryforward
                      
                      $
                      3,328,275
                      
                      
                      $
                      2,964,646Option
      compensation
                      
                      
                      325,288
                      
                      
                      
                      324,962Gross
      deferred income tax asset
                      
                      
                      3,653,563
                      
                      
                      
                      3,289,608Valuation
      allowance
                      
                      
                      (322,314
                      )
                      
                      
                      (323,198
                      )3,331,249
                      
                      
                      
                      2,966,410Deferred
      income tax liabilitiesProperty,
      plant & equipment
                      
                      
                      2,974
                      
                      
                      
                      1,764Acquisition
      related liabilities
                      
                      
                      53,584,304
                      
                      
                      
                      53,584,304Net
      deferred income tax liability
                      
                      $
                      50,256,029
                      
                      
                      $
                      50,619,658





A
valuation allowance for deferred tax related to option compensation was
established for net deferred tax assets not allocated to offset acquisition
related deferred tax liabilities due to the uncertainty of realizing these
deferred tax assets based on conditions existing at March 31, 2008 and December
31, 2007.


30


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





10.
            INCOME TAXES
      (continued)





Deferred
income tax liability was recorded on GAAP basis over income tax basis using
statutory federal and state rates with the corresponding increase in the
purchase price allocation to the assets acquired.





The
resulting estimated future federal and state income tax liability associated
with the temporary difference between the acquisition consideration and the tax
basis as computed in accordance with EITF 98-11 and SFAS 109, is reflected as an
increase to the total purchase price which has been applied to the underlying
mineral and slag project assets in the absence of there being a goodwill
component associated with the acquisition transactions in accordance with EITF
98-11 and SFAS 109.





The
Company had cumulative net operating losses of approximately $8,758,617 and
$7,801,699 as of March 31, 2008 and December 31, 2007, respectively for federal
income tax purposes. The Company had cumulative state net operating losses of
approximately $2,369,943 and $1,795,792 as of March 31, 2008 and December 31,
2007, respectively. The net operating loss carryforwards will be expiring
between 2025 and 2029.





As of
January 1, 2007, the Company did not have any unrecognized tax
benefits.  The adoption of FIN 48 did not result in any cumulative
effect adjustment to the January 1, 2007 balance of the Company’s accumulated
deficit.  Upon adoption of FIN 48, the Company did not accrue for
interest and penalties as there were no unrecognized tax benefits.  If
interest and penalties were to be assessed, we would charge interest to interest
expense, and penalties to general and administrative expense.  It is
not anticipated that unrecognized tax benefits would significantly increase or
decrease within 12 months of the reporting date.





The
Company and its subsidiary file income tax returns in the United
States.  These tax returns are subject to examination by taxation
authorities provided the years remain open under the relevant statutes of
limitations, which may result in the payment of income taxes and/or decrease its
net operating losses available for carryforwards.  While the Company
believes its tax filings do not include uncertain tax positions, the results of
potential examinations or the effect of changes in tax law cannot be ascertained
at this time.  The Company currently has no tax years under
examination.


31


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





11.
            COMMITMENTS
      AND CONTINGENCIES





Lease obligations –
The Company rents office space in Henderson, Nevada.  The lease terms
expired in November 2006 and the company continues to rent the existing space
under month-to-month terms for $4,900 per month.





Rental
expense, resulting from this operating lease agreement, approximated $14,700 and
$12,000 for the three months ended March 31, 2008 and 2007,
respectively.





Employment contracts
– Ian R. McNeil, President and Chief Executive Officer. The Company has an
employment agreement with Mr. McNeil effective since January 1, 2006. Under the
terms of the agreement, as updated February 16, 2007, Mr. McNeil is paid a
salary of $190,000. Mr. McNeil is also eligible for a discretionary bonus to be
determined based on factors considered relevant by the Company’s board of
directors, and may be granted, subject to the approval of the board of
directors, incentive stock options to purchase shares of the Company’s common
stock in such amounts and at such times as the board of directors, in its
absolute discretion, may from time to time determine.  The term of the
agreement is for an indefinite period, unless otherwise terminated pursuant to
the terms of the agreement.  In the event that the agreement is
terminated by the Company other than for cause, the Company will provide Mr.
McNeil with six months written notice or payment equal to six months of his
monthly remuneration.





Carl
S. Ager, Treasurer and Secretary. The Company has an employment agreement with
Mr. Ager effective since January 1, 2006. Under the terms of the agreement, as
updated February 16, 2007, Mr. Ager is paid a salary of $160,000. Mr. Ager is
also eligible for a discretionary bonus to be determined based on factors
considered relevant by the Company’s board of directors, and may be granted,
subject to the approval of the board of directors, incentive stock options to
purchase shares of the Company’s common stock in such amounts and at such times
as the board of directors, in its absolute discretion, may from time to time
determine.  The term of the agreement is for an indefinite period,
unless otherwise terminated pursuant to the terms of the
agreement.  In the event that the agreement is terminated by the
Company other than for cause, the Company will provide Mr. Ager with six months
written notice or payment equal to six months of his monthly
remuneration.





Melvin
L. Williams, Chief Financial Officer. The Company has an employment agreement
with Mr. Williams effective since January 1, 2006. Under the terms of the
agreement, as updated February 16, 2007, Mr. Williams is paid a salary of
$130,000, based on 600-800 hours worked.  Mr. Williams is also
eligible for a discretionary bonus to be determined based on factors considered
relevant by the Company’s board of directors, and may be granted, subject to the
approval of the board of directors, incentive stock options to purchase shares
of the Company’s common stock in such amounts and at such times as the board of
directors, in its absolute discretion, may from time to time
determine.  The term of the agreement is for an indefinite period,
unless otherwise terminated pursuant to the terms of the
agreement.  In the event that the agreement is terminated by the
Company other than for cause, the Company will provide Mr. Williams with thirty
days written notice or payment equal to three months of his monthly
remuneration.





Clarkdale slag project
purchase agreement – In consideration of the acquisition of the Clarkdale
Slag Project from VRIC, the Company has agreed to certain additional
payments.  The terms of and conditions of these payments are discussed
in more detail in Note 3 and 6.


32


SEARCHLIGHT
MINERALS CORP.


(AN
EXPLORATION STAGE ENTERPRISE)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





12.
            CONCENTRATION OF
      CREDIT RISK





Financial
instruments that potentially subject the Company to concentration of credit risk
consist of cash investments.  The Company places its temporary cash
investments in United States Treasury instruments and with two financial
institutions.  Cash accounts at these financial institutions are
insured by the Federal Deposit Insurance Corporation for up to $100,000 per
financial institution.





13.
            CONCENTRATION OF
      ACTIVITY





For the
three months ended March 31, 2008, the Company purchased services from one major
vendor, Talson Corporation, which exceeded more than 10% of total purchases and
amounted to approximately $319,374.





14.
            RELATED PARTY
      TRANSACTIONS





During
the three months ended March 31, 2008, the Company utilized the services of NMC
to provide technical assistance and financing related
activities.  These services related primarily to the Clarkdale Slag
Project and the Searchlight Claims project. Mr. McNeil and Mr. Ager are
affiliated with NMC.





In
addition to the above services, NMC provided dedicated use of its laboratory,
instrumentation, milling equipment and research facilities.  NMC
provided invoices for these fees plus expenses.





For the
three months ended March 31, 2008, the Company incurred total fees and
reimbursement of expenses to NMC of $90,000 and $23,393, respectively at March
31, 2008, the Company had an outstanding balance due to NMC of
$38,735.





During
the three months ended March 31, 2008, the Company utilized Cupit, Milligan,
Ogden & Williams, CPAs (CMOW) to provide accounting support
services.  Mr. Williams is affiliated with CMOW.





The
Company incurred total fees and reimbursement of expenses to CMOW of $16,313 and
$90, respectively, for the three months ended March 31, 2008.  Fees
for services provided by CMOW do not include any charges for Mr. Williams’
time.  Mr. Williams is compensated for his time under his salary
agreement. The approximate direct benefit to Mr. Williams was $4,405 of the
above CMOW fees and expenses for the three months ended March 31, 2008. At March
31, 2008, the Company had an outstanding balance due to CMOW of
$18,647.





During
the three months ended March 31, 2007, the Company did not utilize services of
CMOW.




33




Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations
  Certain
statements in this Quarterly Report on Form 10-Q/A, or the Report, are
“forward-looking statements.”  These forward-looking statements
include, but are not limited to, statements about the plans, objectives,
expectations and intentions of Searchlight Minerals Corp., a Nevada corporation
(referred to in this Report as “we,” “us,” “our” or “registrant”) and other
statements contained in this Report that are not historical
facts.  Forward-looking statements in this Report or hereafter
included in other publicly available documents filed with the Securities and
Exchange Commission, or the Commission, reports to our stockholders and other
publicly available statements issued or released by us involve known and unknown
risks, uncertainties and other factors which could cause our actual results,
performance (financial or operating) or achievements to differ from the future
results, performance (financial or operating) or achievements expressed or
implied by such forward-looking statements.  Such future results are
based upon management’s best estimates based upon current conditions and the
most recent results of operations.  When used in this Report, the
words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate”
and similar expressions are generally intended to identify forward-looking
statements, because these forward-looking statements involve risks and
uncertainties.  There are important factors that could cause actual
results to differ materially from those expressed or implied by these
forward-looking statements, including our plans, objectives, expectations and
intentions and other factors that are discussed under the section entitled “Risk
Factors,” in this Report and in our Annual Report on Form 10-KSB for the year
ended December 31, 2007.
  The following discussion and analysis
summarizes our plan of operation for the next twelve months, our results of
operations for the three months ended March 31, 2008 and changes in our
financial condition from our year ended December 31, 2007.  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, 2007.
  Executive Overview
  We are an exploration stage company
engaged in the acquisition and exploration of mineral properties and slag
reprocessing projects.  Our business is presently focused on our two
mineral projects: (i) the Clarkdale Slag Project, located in Clarkdale, Arizona,
pursuant to which we seek to recover precious and base metals from the
reprocessing of slag material produced from the smelting of copper ores from
former mines in the Jerome, Arizona area; and (ii) the Searchlight Gold Project,
which involves exploration for precious metals on mining claims near
Searchlight, Nevada.
  34
  Clarkdale Slag
Project
  In 2007, we obtained full ownership of
the Clarkdale Slag Project through a merger with the previous owners of the
project, Transylvania International, Inc.  Since this acquisition, we
have devoted considerable effort designing and engineering our first production
module, which included finalizing the production flow sheet, sourcing and
purchasing equipment as well as the refurbishing the “module building” and
beginning construction of the “electrowinning building.”  The module
and electrowinning buildings will be used to house the first production module,
which continues to be in the development stage and has been designed to
allow the grinding, leaching, filtering and extraction of metals from the slag
material within our module and electrowinning buildings (see Figure 1
below).
  
  Figure 1. Production Module
Outline
  We have budgeted $10,950,000 for our
work program on the Clarkdale Slag Project over the next twelve
months.  In the first quarter of 2008, we began to execute on our 2008
plan of operation on the Clarkdale Slag Project which includes the completion
and operation of the first production module that is expected to process between
100 and 250 tons per day of slag material.
  The refurbishing of the module building
is nearing completion and we expect to obtain the Certificate of Occupancy from
the town ofClarkdalesoon thereafter.  The
Certificate of Occupancy will allow us to begin operating the equipment within
the module building, including the grinding, leaching, filtering and resin
extraction circuits.  The electrowinning building, which will house
the copper and zinc electrowinning circuits, is currently under construction and
expected to be completed in the third quarter of 2008.  We have
ordered or received much of the equipment necessary for the assembly of the
production module and any outstanding equipment is expected to be delivered by
early in the third quarter of 2008.
  35
  We have faced challenges during the
development of our production module, such as delays in receiving large pieces
of equipment from the manufacturers, which has consequently pushed out the
completion timeline of the module from what was originally
anticipated.  We remain encouraged, however, by the progress we have
made in the development of the first production module and remain committed to
its completion and operation, which we anticipate to begin in the third quarter
of 2008.
  We anticipate that our production module
will allow us to determine the economics of the project and serve as the basis
for the final feasibility of the project.  If the feasibility of the
project proves economically viable, we expect to commence construction of a
full-scale production facility where we intend to install subsequent modules in
parallel which would be comparable in technology, scale and cost to the initial
production module.
  We expect that there will be significant
financing requirements in order to finance the construction of a full-scale,
production facility, and cannot assure you that such funding will be available
at all or on terms that are reasonably acceptable to us.  However, if
the results from our feasibility study and the results from the operation of the
production module do not support a basis for us to proceed with the construction
of our proposed, full-scale production facility, we will have to scale back or
abandon our proposed operations on the Clarkdale Slag
Project.
  Also in our plan of operation on the
Clarkdale Slag Project over the next twelve months, we intend to continue
initial preparations on the Phase II expansion of the full-scale production
facility.  In the first quarter of 2008, we allocated approximately
$1,000,000 to be used for this effort immediately to address long lead-time
items such as grading 12 acres of land, drilling a well and preparing the
architecture and engineering drawings for the proposed full-scale production
facility.  A decision on allocating additional funds for the Phase II
expansion will be made once the first production module is operational and its
results are analyzed.
  Searchlight Gold
Project
  Since 2005, we have maintained an
ongoing exploration program on our Searchlight Gold Project.  Since
this time, we contracted with Arrakis, Inc. (“Arrakis”), an unaffiliated mining
and environmental firm, to perform a number of metallurgical tests on surface
and bulk samples taken from the project site under strict
chain-of-custody.  In 2007, results from these tests validated the
presence of gold on the project site, and identified reliable and consistent
metallurgical protocols for the analysis and extraction of gold, such as
“microwave digestion” and “autoclave” leaching.  However, autoclave
methods typically carry high capital and operating costs on large scale
projects.
  We were encouraged by these results and
in the first quarter of 2008, we approved a continuation of the metallurgical
work program with Arrakis for approximately $50,000 per month.  The
goal of this work program is to attempt to further improve upon the extraction
grades of gold from samples taken from the project and explore in more detail
the potential capital and operating costs of implementing methods, such as
autoclave leaching.
  In 2007, our ability to carry out a
drilling program on the project was halted by the suspension of the Searchlight
claim owners’ Plan of Operations due to a dispute between the United States
Bureau of Land Management (“BLM”) and one of our current principal stockholders
and former officers and directors, K. Ian Matheson, on a project unrelated to
ours.  We have taken steps to obtain a new drilling permit by
acquiring the title to the claims from the previous owners, communicating with
the BLM to address the issues, and engaging an independent consultant,
Enviroscientists, Inc., to prepare a new Plan of Operations which we intend to
submit to the BLM by the end of the second quarter of 2008.
  We have budgeted $1,000,000 to our
twelve month work program for the Searchlight Gold Project which is focused on
continuing the testing program with Arrakis, including metallurgical testing,
bulk sampling, milling, leaching and extraction tests to optimize recovery of
precious metals from samples taken from the project and exploring in more detail
the potential capital and operating costs of implementing methods, such as
autoclave leaching.  We will also continue to work with the BLM,
Enviroscientists, and our mining attorneys to help us obtain a BLM approved Plan
of Operations containing the necessary permits to carry out our desired drilling
program.  The drilling and pre-feasibility program, which we
anticipate will include an 18-hole drill program, chain-of-custody sampling and
assaying of drill hole material, pilot plant tests and a pre-feasibility report,
is anticipated to commence shortly after receiving the necessary BLM
approval.
  36
  There is no
regulatory time frame for the BLM to review our Plan of Operation.  We
understand that the average time frame for approval of a plan of operation by
the Las Vegas, Nevada branch office of the BLM since January 1, 2000 has
been approximately four years and five months.  Although we understand
that the average time frame of the application process by the Las Vegas branch
office of the BLM relating to an environmental assessment in connection with a
plan of operations is approximately eleven months, the “threatened species”
issue raised by the BLM requires the BLM to consult with the U.S. Fish and
Wildlife Service of the Department of Interior, and the BLM has no control over
the length of this consultation process in order to develop any necessary
environmental mitigation measures.  Further, although we are still
following through with our appeal regarding the closing of our Notice of Intent,
we determined that, due to the standard lengthy time required to have a
Plan of Operations approved by the BLM and should we be unsuccessful with our
appeal, it would be prudent to begin the approval process immediately by filing
a new Plan of Operations.
  Whether
we obtain an approved Notice of Intent or Plan of Operations, our work on the
project site will be limited to the scope within the Notice of Intent or Plan of
Operations.  However, the Plan of Operations approval process will
delay the start of our drilling program for an undetermined period of
time.  To perform any additional drilling or mining on the project, we
would be required to submit a new application to the BLM for approval prior to
the commencement of any such additional activities.  We do not believe
these added requirements will have a material adverse impact on our plan of
operations for the Searchlight Gold Project.  There is no assurance of
the timeline for approval by the BLM or that the BLM will grant
approval.  Our drilling and mining program on this project is
dependent on obtaining the necessary approval from the
BLM.  Therefore, if approval is not obtained, we may have to scale
back or abandon exploration efforts on the project.  If management
determines, based on any factors including the foregoing, that capitalized costs
associated with any of our mineral interests are not likely to be recovered, we
would incur a significant impairment of our investment in such property
interests on our financial
statements.
  37
  Anticipated Cash
Requirements
  Our estimated cash requirements for the
next twelve months are as follows:
  EXPENSE
              
              COSTAdministrative
      Expenses
              
              $
              2,000,000Legal and Accounting
      Expenses
              
              $
              1,000,000Consulting
      Services
              
              $
              2,000,000SUBTOTAL
              
              $
              5,000,000Clarkdale
      Slag ProjectBuilding
      Rehabilitation
              
              $
              750,000Production Module
      Assembly
              
              $
              2,500,000Production Module
      Operation
              
              $
              1,200,000Feasibility
      Study
              
              $
              500,000SUBTOTAL
              
              $
              4,950,000Searchlight
      Gold ProjectMetallurgical Testing
      Program
              
              $
              600,000Drilling and Pre-Feasibility
      Program
              
              $
              400,000SUBTOTAL
              
              $
              1,000,000TOTAL
              
              $
              10,950,000
  If the actual costs are significantly
greater than anticipated, if we proceed with our development and exploration
activities beyond what we currently have planned, or if we experience unforeseen
delays during our activities over the next twelve months, we will need to obtain
additional financing.  There are no assurances that we will be able to
obtain additional financing in an amount sufficient to meet our needs or on
terms that are acceptable to us.
  Obtaining additional financing is
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.  If adequate funds are not available or if they are not available
on acceptable terms, our ability to fund our business plan could be
significantly limited and we may be required to suspend our business
operations.  We cannot assure you that additional financing will be
available on terms favorable to us, or at all. The failure to obtain such a
financing would have a material, adverse effect on our business, results of
operations and financial condition.
  If additional funds are raised
through the issuance of equity or convertible debt securities, the percentage
ownership of current stockholders will be reduced and these securities may have
rights and preferences superior to that of current stockholders.  If
we raise capital through debt financing, we may be forced to accept restrictions
affecting our liquidity, including restrictions on our ability to incur
additional indebtedness or pay dividends.
  For these reasons, our financial
statements filed herewith include a statement that these factors raise
substantial doubt about our ability to continue as a going
concern.  Our ability to continue as a going concern will be dependent
on our raising of additional capital and the success of our business
plan.
  38
  Critical Accounting
Policies
  Use
of estimates- 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 revenue and expenses during the reporting
period.  Actual results could differ from those
estimates.
  Mineral
rights- We capitalize
acquisition and option costs of mineral property rights. The amount capitalized
represents fair value of the mineral rights acquired.
  We
capitalize acquisition and option costs of mineral rights as tangible assets in
accordance with Emerging Issues Task Force abstract 04-02.  Upon 
commencement of commercial production, the claims will be amortized using the
unit-of-production method over the life of the claim.  If we do not
continue with exploration after the completion of the feasibility study, the
claims will be expensed at that time.
  Exploration
costs- Mineral exploration
costs are expensed as incurred.
  Fixed
assets- Fixed assets are
stated at cost less accumulated depreciation. Depreciation is provided
principally on the straight-line method over the estimated useful lives of the
assets, which are generally 3 to 39 years.  The cost of repairs and
maintenance is charged to expense as incurred. Expenditures for property
betterments and renewals are capitalized.  Upon sale or other
disposition of a depreciable asset, cost and accumulated depreciation are
removed from the accounts and any gain or loss is reflected in other income
(expense).
  We periodically evaluate whether events
and circumstances have occurred that may warrant revision of the estimated
useful life of fixed assets or whether the remaining balance of fixed assets
should be evaluated for possible impairment.  If events and
circumstances warrant evaluation, we use an estimate of the related undiscounted
cash flows over the remaining life of the fixed assets in measuring their
recoverability.
  Capitalized interest cost - We
capitalize interest cost related to development and construction of property and
equipment.  The capitalized interest is recorded as part of the asset
it relates to and will be amortized over the asset’s useful life once production
commences.
  Restatement of 2007 and Prior
Financial Statements
  Overview
  During the second quarter of 2008, we
identified certain errors in our previously issued financial statements related
to our purchase accounting treatment of the acquisition of the Clarkdale Slag
Project and the resultant computation of future deferred income tax liability
assumed.We have
restated certain items on our consolidated balances sheets and statements of
operations as follows:
  ·
                Amounts recorded for the Clarkdale
      Slag Project on our consolidated balance sheets have been restated to
      reflect changes to the purchase accounting of the acquisition of
      Transylvania International, Inc. based on the acquisition agreement and
      the recomputation of the value of the 12,000,000 warrants issued to
      Nanominerals Corp. in connection with the assignment of the option for the
      Clarkdale Slag Project.  The amount recorded for the Clarkdale
      Slag Project was also affected by the recomputation of the deferred future
      federal and state income tax liability in connection with our acquisition
      of the Clarkdale Slag
Project.
  ·
                Amounts recorded for the
      Searchlight Gold Project on our consolidated balance sheets have been
      restated to include the impact of the recomputation of the deferred future
      income tax liability and state income tax liability.  This
      recomputation was required because changes made to the acquisition
      accounting of the Clarkdale Slag Project affected the computation of the
      deferred future income tax liability related to the mineral claims making
      up the Searchlight Gold Project.  Other than the impact of the
      deferred tax computation, there was no change to the purchase accounting
      of the Searchlight Gold
Project.
  ·
                Our consolidated statement of
      operations for the period from inception to December 31, 2007 has been
      restated to reflect the recomputation of the tax benefits related to net
      operating losses as a result of changes to the purchase accounting for the
      Clarkdale Slag Project.  There was no other impact on the
      results of operations.
  ·
                Our consolidated statement of
      operations for the three months ended March 31, 2007 has been restated to
      reclassify related party mineral exploration and evaluation expense not
      stated separately in previous reports.  There was no change to
      the underlying expense or results of operations as previously
      reported.
  The
restatements had no impact on our cash or cash flows.
  39
  Clarkdale Slag
Project
  Acquisition
of Transylvania International, Inc.  During the second quarter
of 2008, we determined that acquisition accounting method used in prior periods
to record the purchase accounting for the Clarkdale Slag Project was not
appropriate for the 2007 acquisition of Transylvania International,
Inc.
  The adjustments include revision of the
acquisition accounting related to payment terms and conditions contained in the
acquisition agreement.  The overall recorded acquisition purchase
consideration was reduced by $7,546,217 with a corresponding reduction in
recorded liabilities of $7,546,217.  The recorded liabilities were
adjusted, as follows:
  ·
                the recorded current portion
      (relating to the $30,000 monthly obligation due to VRIC) decreased on the
      balance sheet by $227,174
  ·
                the recorded long-term portion
      (relating tothe $30,000 monthly obligation due
      to VRIC) decreased on the balance sheet by
  $919,043
  ·
                the payment due to VRIC (with
      respect to the date that a feasibility study relating to the Clarkdale
      Slag Project proves that the project is economically viable and
      “bankable,” or the “Project Funding Date”) decreased on the balance sheet
      by $6,400,000.
  In
accordance with Statement of Financial Accounting Standards No. 141 (As Amended)
(SFAS 141) and interpretation by Staff of the Commission, we have accounted for
the payments based on the Project Funding Date and the payments based on future
cash flow as contingent consideration.  If the contingency
requirements are met, the purchase price of the Clarkdale Slag Project will be
adjusted accordingly at that time.
  The original terms of the underlying
purchase agreement were unchanged and this adjustment had no effect on the
acquisition agreement.
  Warrants
issued in connection with option assignment.  During the second quarter
of 2008, we also determined that accounting treatment for the 12,000,000
warrants to Nanominerals issued in connection with the originalClarkdale
Slag Project option assignment
made on June 1, 2005 related to the Clarkdale Slag Project was not appropriate
and we have assigned a value to the warrants of $1,310,204 by using the sales
price of shares of common stock issued in connection with aprivateplacement conducted at the time the
warrants were issued.  The adjustment also included the deferred
future income tax liability assumed of $608,277 for a total increase in purchase
consideration of $1,918,481.
  The value
of the warrants, as restated, was computed using the binomial lattice method
based on the following assumptions:
  Dividend
      yield
                --Expected
      volatility
                79%Risk-free
      interest rate
                3.91%Expected
      life (years)
                9.6
  Overall
summary of restated purchase consideration.The following table
reflects the restatement to the recorded purchase consideration for the
Clarkdale Slag Project:
  As
      Reported
                
                
                Adjustments
                
                
                As
      RestatedPurchase
    price:Cash
    payments
                
                $
                10,100,000
                
                
                $
                -
                
                
                $
                10,100,000Joint venture option acquired in
      2005 for cash
                
                
                690,000
                
                
                
                -
                
                
                
                690,000Warrants issued for joint venture
      option
                
                
                -
                
                
                
                1,918,481
                
                
                
                1,918,481Common stock
      issued
                
                
                66,879,375
                
                
                
                -
                
                
                
                66,879,375Monthly payments, current
      portion
                
                
                395,001
                
                
                
                (227,174
                )
                
                
                167,827Monthly payments, long-term
      portion
                
                
                3,252,403
                
                
                
                (919,043
                )
                
                
                2,333,360Due to VRIC
                
                
                6,400,000
                
                
                
                (6,400,000
                )
                
                
                -Acquisition
      costs
                
                
                127,000
                
                
                
                -
                
                
                
                127,000Total purchase
      price
                
                
                87,843,779
                
                
                
                (5,627,736
                )
                
                
                82,216,043Net
      deferred income tax liability assumed - slag project
                
                
                52,198,489
                
                
                
                (4,121,755
                )
                
                
                48,076,734$
                140,042,268
                
                
                $
                (9,749,491
                )
                
                $
                130,292,777
  40
  As a result of the revisions in recorded
acquisition purchase consideration, the total deferred future income tax
liability assumed for the acquisition of the Clarkdale Slag Project decreased by
$4,121,755.
  In
accordance with Emerging Issues Task Force Issue 98-11 (EITF 98-11), the
purchase price of $130 million was allocated to the assets acquired and
liabilities assumed, based on their respective fair values at the date of
acquisition.  The purchase price allocated to the real properties was
based on fair market values determined using an independent real estate
appraisal firm and the fair value of the remaining assets acquired and
liabilities assumed were based on management’s best estimates taking into
account all available information at the time.
  The following table reflects the
restated components of the Clarkdale Slag Project:
  Allocation of acquisition
      cost:Slag project (including net
      deferred tax liability assumed of $48,076,734)
                
                $
                130,516,368
                
                
                $
                (9,749,491
                )
                
                $
                120,766,877Land - slag pile
      site
                
                
                5,916,150
                
                
                
                -
                
                
                
                5,916,150Land
                
                
                3,300,000
                
                
                
                -
                
                
                
                3,300,000Income property and
      improvements
                
                
                309,750
                
                
                
                -
                
                
                
                309,750Net assets
      acquired
                
                $
                140,042,268
                
                
                $
                (9,749,491
                )
                
                $
                130,292,777
  Searchlight Gold Project
Claims
  We also restated the Searchlight Gold
Project claims as of December 31, 2007 for the effect of the deferred future
income tax liability assumed in the acquisition of the Searchlight
Claims.  The restatement of the Clarkdale Slag Project affected the
overall computation of deferred future income tax liability for the amounts of
deferred future income tax liability allocated to the Searchlight
Claims.  There were no other changes to the accounting treatment of
the acquisition of the claims.
  As
      Originally
                  Reported
                
                
                Adjustments
                
                
                As
      RestatedCash
      and shares issuance to obtain mineralproperties,
      July 7, 2005
                
                $
                577,134
                
                
                $
                --
                
                
                $
                577,134Net
      deferred income tax liability assumed
                
                
                145,090
                
                
                
                97,218
                
                
                
                242,308Mineral
      properties balance, December 31, 2005
                
                
                722,224
                
                
                
                97,218
                
                
                
                819,442Share
      issuance to obtain mineral properties, July 27, 2006
                
                
                3,080,000
                
                
                
                --
                
                
                
                3,080,000Net
      deferred income tax liability assumed
                
                
                446,472
                
                
                
                1,085,376
                
                
                
                1,531,848Mineral
      properties balance, December 31, 2006
                
                
                4,248,696
                
                
                
                1,182,594
                
                
                
                5,431,290Share
      issuance to obtain mineral properties, June 29, 2007
                
                
                4,508,000
                
                
                
                --
                
                
                
                4,508,000Net
      deferred income tax liability assumed
                
                
                2,762,968
                
                
                
                --
                
                
                
                2,762,968Total
      mineral properties balance, March 31, 2008
                
                $
                11,519,664
                
                
                $
                1,182,594
                
                
                $
                12,702,258
  41
  Restatement
of Consolidated Balance Sheet December 31, 2007
  The
following table summarizes overall restatements to our consolidated balance
sheet as of December 31, 2007 and reconciles the previously reported amounts to
the restated amounts:
  Summarized
      Consolidated Balance Sheet -
                
                As
      ReportedDecember
      31, 2007
                
                December
      31, 2007
                
                
                Adjustments
                
                
                As
      RestatedProperty
      and equipment, net (1)
                
                $
                4,902,287
                
                
                $
                162,173
                
                
                $
                5,064,460Mineral
      properties (2)
                
                
                11,519,664
                
                
                
                1,182,594
                
                
                
                12,702,258Slag
      project (3)
                
                
                130,516,368
                
                
                
                (9,749,491
                )
                
                
                120,766,877Total
      assets
                
                
                168,537,602
                
                
                
                (8,404,724
                )
                
                
                160,132,878VRIC
      payable, current portion (3)
                
                
                106,303
                
                
                
                73,527
                
                
                
                179,830Due
      to VRIC (3)
                
                
                6,400,000
                
                
                
                (6,400,000
                )
                
                
                -VRIC
      payable, net of current portion (3)
                
                
                3,211,101
                
                
                
                (1,057,571
                )
                
                
                2,153,530Deferred
      tax liability (4)
                
                
                53,875,079
                
                
                
                (3,255,421
                )
                
                
                50,619,658Total
      liabilities
                
                
                64,571,667
                
                
                
                (10,639,465
                )
                
                
                53,932,202Additional
      paid-in capital (3)
                
                
                114,913,703
                
                
                
                1,310,204
                
                
                
                116,223,907Accumulated
      deficit during exploration stage (5)
                
                
                (11,152,633
                )
                
                
                924,537
                
                
                
                (10,228,096
                )Total
      stockholders’ equity
                
                
                103,965,935
                
                
                
                2,234,741
                
                
                
                106,200,676Total
      liabilities and stockholders’ equity
                
                $
                168,537,602
                
                
                $
                (8,404,724
                )
                
                $
                160,132,878
  42
  Restatement of Consolidated
Statement of Operations March 31, 2007
  The
following table summarizes overall restatements to the consolidated statements
of operations for the three months ended March 31, 2007 and for the period from
January 14, 2000 (date of inception) through December 31, 2007, and reconciles
the previously reported amounts to the restated amounts:
  Summarized
      Consolidated Statement of Operations -For
      the three months ended March 31, 2007
                
                As
      Reported
                
                
                Adjustments
                
                
                As
      RestatedMineral
      exploration and evaluation expenses (6)
                
                $
                385,308
                
                
                $
                (90,000
                )
                
                $
                295,308Mineral
      exploration and evaluationexpenses
      - related party (6)
                
                
                -
                
                
                
                90,000
                
                
                
                90,000Total
      operating expenses
                
                
                721,547
                
                
                
                -
                
                
                
                721,547Loss
      from operations
                
                
                (713,927
                )
                
                
                -
                
                
                
                (713,927
                )Income
      tax benefit (5)
                
                
                -
                
                
                
                270,094
                
                
                
                270,094Net
      loss
                
                $
                (680,029
                )
                
                $
                270,094
                
                
                $
                (409,935
                )Loss
      per common share
                
                $
                (0.01
                )
                
                
                -
                
                
                $
                (0.01
                )Summarized
      Consolidated Statement of Operations -For
      the period from January 14, 2000 (date of inception)Through
      December 31, 2007
                
                As
      Reported
                
                
                Adjustments
                
                
                As
      RestatedTotal
      operating expenses
                
                $
                8,989,944
                
                
                $
                -
                
                
                $
                8,989,944Loss
      from operations
                
                
                (8,953,534
                )
                
                
                -
                
                
                
                (8,953,534
                )Loss
      from operations before income tax
                
                
                (8,566,697
                )
                
                
                -
                
                
                
                (8,566,697
                )Income
      tax benefit (5)
                
                
                1,677,940
                
                
                
                924,536
                
                
                
                2,602,476Net
      loss
                
                $
                (11,152,632
                )
                
                $
                924,536
                
                
                $
                (10,228,096
                )
  Notes to
the restatement adjustments set forth in the tables above are, as
follows:
  (1)
                Restated
      for capitalization of interest related to deferred purchase
      liability.
 (2)
                Restated
      for computation of deferred tax liability assumed in mineral property
      acquisition.
 (3)
                  Restated
      for revision of the acquisition accounting related to payment terms and
      conditions contained in the acquisition agreement and the resulting
      deferred tax liability assumed in the
  acquisition.
 (4)
                Restated
      for deferred tax computation related to acquisition
      accounting.
 (5)
                Restated
      for deferred tax benefit related to mineral property
      acquisition.
 (6)
                Reclassified
      related party mineral exploration and evaluation
  expense.
 Results of
Operations
  The following table illustrates a
summary of our results of operations or the periods listed
below:
  Quarter Ended March
      31,2008
              
              
              2007
              
              
              Percent
                Increase/(Decrease)Revenue
              
              $
              --
              
              
              $
              --
              
              
              
              n/aOperating
      Expenses
              
              
              (1,063,035
              )
              
              
              (721,547
              )
              
              
              47.3
              %Other
      Income
              
              
              106,710
              
              
              
              41,518
              
              
              
              157
              %Income tax
      benefit
              
              
              363,629
              
              
              
              270,094
              
              
              
              34.6
              %Net
    Loss
              
              $
              (592,696
              )
              
              $
              (409,935
              )
              
              
              44.6
              %
  43
  Revenue
  We are currently in the exploration
stage of our business, have not earned any revenues from our planned mineral
operations to date.  We do not anticipate earning revenues from our
planned mineral operations until such time as we enter into commercial
production of the Clarkdale Slag Project, the Searchlight Gold Project or other
mineral properties we may acquire from time to time, and of which there are no
assurances.
  Operating Expenses
  The major components of our operating
expenses are outlined in the table below:
  Quarter Ended March
      31,2008
              
              
              2007
              
              
              Percent
                Increase/(Decrease)Mineral exploration and evaluation
      expenses
              
              $
              114,518
              
              
              $
              295,308
              
              
              
              (61.2
              )
      %Mineral exploration and evaluationexpenses – related
      party
              
              
              90,000
              
              
              
              90,000
              
              
              
              0.0
              %Administrative – Clarkdale
      site
              
              
              235,140
              
              
              
              -
              
              
              
              n/aGeneral and
      administrative
              
              
              591,851
              
              
              
              333,450
              
              
              
              77.5
              %General and administrative –
      related party
              
              
              16,403
              
              
              
              -
              
              
              
              n/aDepreciation
              
              
              15,123
              
              
              
              2,789
              
              
              
              442
              %Interest
      expense
              
              
              950
              
              
              
              -
              
              
              
              n/aTotal Operating
      Expenses
              
              $
              1,063,035
              
              
              $
              721,547
              
              
              
              47.3
              %
  Operating expenses increased to
$1,063,035 in the quarter ended March 31, 2008 from $721,547 in the quarter
ended March 31, 2007.  Operating expense increased in the quarter
ended March 31, 2008 primarily as a result of increases in general and
administrative expenses and Clarkdale site administrative expenses, offset by
decreases in mineral exploration and evaluation
expenses.
  General and administrative expenses
increased to $591,851 in the quarter ended March 31, 2008 from $333,450 in the
quarter ended March 31, 2007.  General and administrative expenses
increased primarily as a result of (i) increased professional and administrative
expenses associated with the completion of our equity financings, the
preparation of our 2007 annual report on Form 10-KSB, legal and accounting fees;
(ii) increased management fees related to the administration of the Clarkdale
Slag Project site; and (iii) increased compensation paid to our executive
officers and our directors.
  Included in general and administrative
expenses for the three months ended March 31, 2008 and 2007 were compensation
expenses related to the option vesting and option grants of $859 and $129,293,
respectively.  On April 30, 2007, we adopted our 2007 Stock Option
Plan (the “2007 Plan”). Under the terms of the 2007 Plan, as amended May 8,
2007, options to purchase up to 4,000,000 shares of common stock may be granted
to our employees, officers, directors, and eligible consultants under such
plan.
  As of March 31, 2008, 107,246 options
have been granted under the 2007 Plan with an exercise price ranging from $1.75
to $3.45 per share.  The options are fully vested and expire in
various proportions on June 15, 2009 and December 14, 2007.  During
the year ended December 31, 2007, we issued options to acquire 75,700 shares of
common stock under our 2006 Stock Option Plan to three of our executive officers
and an employee with an exercise price of $4.04 per share.  The
options are fully vested and expire on February 16, 2012.
  44
  In
addition, we incurred $16,403 in the quarter ended March 31, 2008 for general
and administrative expenses for accounting support services to Cupit, Milligan,
Ogden & Williams, CPAs, an affiliate of Melvin L. Williams, our Chief
Financial Officer.  These accounting support services included
bookkeeping input for the Clarkdale facility, assistance in preparing working
papers for quarterly and annual reporting, and preparation of federal and state
tax filings. These expenses do not include any fees for Mr. Williams’ time in
directly supervising the support staff. Mr. Williams’ compensation has been
provided in the form of salary.  The approximate direct benefit to Mr.
Williams was $4,405 of the above Cupit Milligan’s fees and expenses for the
three months ended March 31, 2008.  During the three months ended
March 31, 2007, the Company did not utilize the services of Cupit
Milligan.
  Mineral exploration and evaluation
expenses decreased to $114,518 in the quarter ended March 31, 2008 from $295,308
in the quarter ended March 31, 2007.  Mineral exploration and
evaluation expenses decreased primarily as a result of our focus on our
construction efforts for the Clarkdale Slag Project.
  Included in mineral exploration and
evaluation expenses were the amounts of $90,000 and $90,000 paid in the quarters
ended March 31, 2008 and 2007, respectively, to Nanominerals Corp. (one of our
principal stockholders and an affiliate of Ian R. McNeil, our Chief Executive
Officer and President and a director, and Carl S. Ager, our Vice President,
Secretary and Treasurer and a director) for technical assistance, including
providing us with the use of its laboratory, instrumentation, milling equipment
and research facilities with respect to our Searchlight Gold Project and
Clarkdale Slag Project and financing related activities, including providing
assistance to us when potential financiers performed technical due diligence on
our projects and made technical presentation to potential investors in
connection with the exploration and development of our mineral projects, and
reimbursement of expenses provided by Nanominerals in connection with the
exploration and development of our mineral projects.
  Further we paid $235,140 for
administrative expenses relating to the Clarkdale Slag Project in the quarter
ended March 31, 2008. We did not pay such expenses in the quarter ended March
31, 2007.
  For the quarter ended March 31, 2008, we
purchased services from one major vendor, Talson Corporation, which exceeded
more than 10% of total purchases and amounted to approximately
$319,374.For the quarter ended March 31, 2007, we purchased
services from two major vendors Dr. Hewlett and Nanominerals that exceeded more
than 10% of total purchases and amounted to approximately $110,000 and $90,000,
respectively.
  Other Income and
Expenses
  Total other income increased to
$106,710 in the quarter ended March 31, 2008 from $41,518 in the quarter ended
March 31, 2007.  The increase in total other income primarily resulted
from an increase in interest and dividend income.
  Income Tax Benefit
  Income tax benefit increased to $363,629
in the quarter ended March 31, 2008 from $270,094 in the quarter ended March 31,
2007.  The increase in income tax benefit primarily resulted from the
increase in net operating losses in the quarter ended March 31, 2008 from the
quarter ended March 31, 2007.
  45
  Net Loss
  The aforementioned factors resulted in a
net loss of $592,696, or $0.01 per common share, for the quarter ended March 31,
2008, as compared to a net loss of $409,935, or $0.01 per common share, for the
quarter ended March 31, 2007.
  As of March 31, 2008 and 2007, we had
cumulative net operating loss carryforwards of approximately $8,758,617 and
$3,546,810, respectively for federal income taxes.  As of March 31,
2008 we had cumulative net operating losses of approximately $2,369,943 and no
material loss carryforwards as of March 31, 2007 for state income tax
purposes.  The net operating loss carryforwards expire between 2025
and 2028.
  Liquidity and Capital
Resources
  Historically, we have financed our
operations primarily through the sale of common stock and other convertible
equity securities. In 2007 and the first quarter of 2008, we conducted the
followingprivateplacements of our
securities:
  ·
              On February 7, 2008, we completed
      two concurrentprivateplacement offerings for gross
      proceeds of $5,250,000 to non-US persons and to US accredited
      investors.  A total of 3,281,250 units were issued at a price of
      $1.60. Each unit sold consisted of one share of our common stock and
      one-half of one share purchase warrants.  Each whole share
      purchase warrant entitles the holder to purchase one additional share of
      our common stock at a price of $2.40 per share for a period of two years
      from the date of issuance.  A total of 80,000 shares of our
      common stock were issued as commission to agents in connection with these
      offerings.
  ·
              On January 30, 2008, we received
      gross proceeds of $2,528,500 and issued an aggregate of 3,890,000 shares
      of our common stock on the exercise of warrants we issued in January,
      2006.  Each warrant entitled the holder to purchase one share of
      our common stock at a price of $0.65 per share on or before January 18,
      2008.  The warrant holders delivered their notices of exercise,
      and paid the exercise price of $0.65 per share, prior to January 18, 2008
      expiration date.
  These agreements do not include
contractual penalty provisions for failure to comply with these registration
rights provisions.  Further, we are not a party to any other
agreements which require us to pay liquidated damages in the future for failure
to register securities for sale.
  Working
Capital
  The following is a summary of our
working capital at March 31, 2008:
  At March 31,
      2008
              
              
              At December 31,
      2007
              
              
              Percent
                Increase/(Decrease)Current
    Assets
              
              $
              17,357,780
              
              
              $
              12,200,133
              
              
              
              42.3
              %Current
      Liabilities
              
              
              (1,039,026
              )
              
              
              (1,094,697
              )
              
              
              (5.1
              )
      %Working
    Capital
              
              $
              16,318,754
              
              
              $
              11,105,436
              
              
              
              46.9
              %
  As of
March 31, 2008, we had an accumulated deficit of $10,820,792. As of March 31,
2008, we had working capital of $16,318,754, compared to working capital of
$11,105,436 as of March 31, 2007. The increase in our working capital was
primarily attributable to the completion of our private placements in 2008
partially offset by our net loss. Cash was $17,184,152 as of March 31, 2008, as
compared to $12,007,344 as of December 31, 2007.  Property and
equipment increased to $6,574,027 as of March 31, 2008 from $5,064,460 as of
December 31, 2007.  The increase primarily resulted from site
improvements and equipment acquisitions at the Clarkdale Slag
Project.
  46
  Included in long term liabilities in the
accompanying consolidated financials statements is a balance of $50,256,029 for
deferred tax liability relating to the Clarkdale Slag Project and Searchlight
Gold Project.  A deferred income tax liability was recorded on the
excess of fair market value for the asset acquired over income tax basis at a
combined statutory federal and state rate of 38% with the corresponding increase
in the purchase price allocation of the assets acquired.
  Cash Flows
  The following is a summary of our uses
of cash for the periods set forth below:
  Quarter Ended March
      31,2008
              
              
              2007
              
              
              Percent
                Increase/(Decrease)Cash Flows used in OperatingActivities
              
              $
              (1,047,458
              )
              
              $
              (790,673
              )
              
              
              32.5
              %Cash Flows used in InvestingActivities
              
              
              (1,439,962
              )
              
              
              (10,005,846
              )
              
              
              (85.6
              )
      %Cash Flows provided by FinancingActivities
              
              
              7,664,228
              
              
              
              20,800,529
              
              
              
              (63.2
              )
      %Net Increase in Cash During
      Period
              
              $
              5,176,808
              
              
              $
              10,004,010
              
              
              
              (48.3
              )
      %
  Net cash used in operating activities
increased to $1,047,458 in the quarter ended March 31, 2008 from $790,673 in the
quarter ended March 31, 2007.  The increase in cash used in operating
activities was primarily due to operating losses from our exploration activity
and general and administrative expenses, offset by non-cash elements which were
primarily related to change in deferred tax liability of $363,629 and change in
accounts payable and accrued liabilities of $144,275.
  We used $1,439,962 in investing
activities in the quarter ended March 31, 2008, as compared to $10,005,846 in
the quarter ended March 31, 2007.  The decrease in the quarter ended
March 31, 2008 was primarily a result of the payment to Verde River Iron Company
(“VRIC”), an affiliate of a member of our board of directors, Harry B. Crockett,
of $9,900,000 in connection with the acquisition of VRIC’s wholly owned
subsidiary, Transylvania, in the quarter ended March 31, 2007, offset by
property and equipment purchases of $1,393,584 relating to the Clarkdale Slag
Project in the quarter ended March 31, 2008.
  Net cash provided by financing
activities was $7,664,228 for the quarter ended March 31, 2008 compared to
$20,800,529 for the quarter ended March 31, 2007.  Net cash provided
by financing activities in the quarter ended March 31, 2008 primarily resulted
from the receipt of $5,250,000 from the proceeds ofprivateplacements of our securities and
$2,528,500 from the exercise of warrants, offset by $43,622 of cash paid to VRIC
based on our $30,000 monthly obligation to VRIC under the terms of theTransylvaniareorganization agreement. Net cash
provided by financing activities in the quarter ended March 31, 2007 primarily
resulted from the receipt of $21,453,817 from the gross proceeds ofprivateplacements of our
securities.
  We have not attained profitable
operations and are dependent upon obtaining financing to pursue our plan of
operation.  Our ability to achieve and maintain profitability and
positive cash flow will be dependent upon, among other
things:
  ·
              our ability to locate a profitable
      mineral property;
  47
  ·
              positive results from our
      feasibility studies on the Searchlight Gold Project and the Clarkdale Slag
      Project;
  ·
              positive results from the
      operation of our initial test module on the Clarkdale Slag Project;
      and
  ·
              our ability to generate
      revenues.
  We may not generate sufficient revenues
from our proposed business plan in the future to achieve profitable
operations.  If we are not able to achieve profitable operations at
some point in the future, we eventually may have insufficient working capital to
maintain our operations as we presently intend to conduct them or to fund our
expansion plans. In addition, our losses may increase in the future as we expand
our business plan.  These losses, among other things, have had and
will continue to have an adverse effect on our working capital, total assets and
stockholders’ equity.  If we are unable to achieve profitability, the
market value of our common stock will decline and there would be a material
adverse effect on our financial condition.
  Our plan of operation calls for
significant expenses in connection with the development of the Clarkdale Slag
Project and the exploration of the Searchlight Gold Project.  Over the
next twelve months, our management anticipates that the minimum cash
requirements for funding our proposed exploration and development program and
our continued operations will be approximately $16,950,000. As of March 31,
2008, we had cash reserves in the amount of $17,184,152.  Our cash
position now exceeds our anticipated 12 month budget of
$16,950,000.  Although this amount is sufficient to meet our
anticipated costs for our development and exploration activities during the next
twelve months, the actual costs of completing those activities may be greater
than anticipated.  If the actual costs are significantly greater than
anticipated, if we proceed with our development and exploration activities
beyond what we currently have planned, or if we experience unforeseen delays
during our activities over the next twelve months, we will need to obtain
additional financing.  There are no assurances that we will be able to
obtain additional financing in an amount sufficient to meet our needs or on
terms that are acceptable to us.
  Obtaining additional financing is
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.  If adequate funds are not available or if they are not available
on acceptable terms, our ability to fund our business plan could be
significantly limited and we may be required to suspend our business
operations.  We cannot assure you that additional financing will be
available on terms favorable to us, or at all. The failure to obtain such a
financing would have a material, adverse effect on our business, results of
operations and financial condition.
  If additional funds are raised through
the issuance of equity or convertible debt securities, the percentage ownership
of current stockholders will be reduced and these securities may have rights and
preferences superior to that of current stockholders.  If we raise
capital through debt financing, we may be forced to accept restrictions
affecting our liquidity, including restrictions on our ability to incur
additional indebtedness or pay dividends.
  For these reasons, our financial
statements filed herewith include a statement that these factors raise
substantial doubt about our ability to continue as a going
concern.  Our ability to continue as a going concern will be dependent
on our raising of additional capital and the success of our business
plan.
  Off-Balance Sheet
Arrangements
  None.
  48
  Recent Accounting
Pronouncements
  On March
19, 2008 the FASB issued SFAS No. 161, “Disclosures About Derivative Instruments
and Hedging Activities.”  This statement is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures.  This statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged.  We are
currently evaluating the impact that SFAS 161 will have on the consolidated
financial statements.
  In
February 2008, the FASB staff issued Staff Position No. 157-2 “Effective Date of
FASB Statement No. 157” (“FSP FAS 157-2”).  FSP FAS 157-2 delayed the
effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities,
except for items that are recognized or disclosed at fair value in the financial
statements on a recurring basis (at least annually).  The provisions
of FSP FAS 157-2 are effective for our fiscal year beginning January 1,
2009.  SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. We are currently evaluating the
potential impact of adopting this statement on our consolidated financial
position, results of operations or cash flows.
  In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations,” which
amends SFAS No. 141, and provides revised guidance for recognizing and measuring
identifiable assets and goodwill acquired, liabilities assumed, and any
noncontrolling interest in the acquiree.  It also provides disclosure
requirements to enable users of the financial statementsto evaluate the nature and financial
effects of the business combination.  SFAS No. 141(R) is effective for
our fiscal year beginning January 1, 2009 and is to be applied prospectively. We
are currently evaluating the potential impact of adopting this statement on our
consolidated financial position, results of operations or cash
flows.
  In December 2007, the FASB issued SFAS
No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an
amendment of ARB No. 51” which establishes accounting and reporting standards
pertaining to ownership interests in subsidiaries held by parties other than the
parent, the amount of net income attributable to the parent and to the
noncontrolling interest, changes in a parent’s ownership interest, and the
valuation of any retained noncontrolling equity investment when a subsidiary is
deconsolidated. SFAS No. 160 also establishes disclosure requirements that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS No. 160 is effective for our fiscal
year beginning January 1, 2009.  We are currently evaluating the
potential impact of adopting this statement on our consolidated financial
position, results of operations or cash flows.
  In
September 2007, the FASB published Proposed FASB Staff Position (“FSP”) No. APB
14-a, “Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion.”  The proposed FSP applies to convertible debt
instruments that, by their stated terms, may be settled in cash (or other
assets) upon conversion, including partial cash settlement, unless the embedded
conversion option is required to be separately accounted for as a derivative
under SFAS 133.  Convertible debt instruments within the scope of the
proposed FSP are not addressed by the existing APB 14. The proposed FSP would
require that the liability and equity components of convertible debt instruments
within the scope of the proposed FSP shall be separately accounted for in a
manner that reflects the entity’s nonconvertible debt borrowing
rate.  This will require an allocation of the convertible debt
proceeds between the liability component and the embedded conversion option
(i.e., the equity component).  The difference between the principal
amount of the debt and the amount of the proceeds allocated to the liability
component would be reported as a debt discount and subsequently amortized to
earnings over the instrument’s expected life using the effective interest
method. FSP No. APB 14-a is effective for our fiscal year beginning January
1, 2009 and early adoption is not permitted.  We are currently
evaluating the impact that Proposed FSP may have on our financial position,
results of operations and cash flows.
  49
  In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities - Including an amendment of FASB
Statement No. 115” (“SFAS 159”), which permits entities to choose to measure
many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value.  The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. SFAS 159 also establishes presentation and disclosure requirements
designed to facilitate comparisons between entities that choose different
measurement attributes for similar types of assets and liabilities. SFAS 159
does not affect any existing accounting literature that requires certain assets
and liabilities to be carried at fair value, nor eliminate disclosure
requirements included in other accounting standards, including requirements for
disclosures about fair value measurements included in SFAS 157, “Fair Value
Measurements,” and SFAS 107, “Disclosures about Fair Value of Financial
Instruments.” SFAS 159 is effective for our fiscal year beginning after November
15, 2007.  We have adopted SFAS 159 as of January 1,
2008.  There was no impact on our consolidated financial position,
results of operations or cash flows.
  Item
3.  Quantitative and Qualitative Disclosures About Market
Risk
  Not applicable.
  Item
4.  Controls and Procedures
  NOTE:
This Item 4. Controls and Procedures has been updated to reflect the restatement
of our 2005, 2006 and 2007 financial statements, as discussed above in the
Introductory Explanatory Note and in Item 2 under the section heading
“Restatements.”
 
 Evaluation
of Disclosure Controls and Procedures
 
 This
Quarterly Report on Form 10-Q/A represents an amended filinG for the covered
period.  In connection with this amendment to our Quarterly Report for
the period ended March 31, 2008, our management reevaluated the effectiveness of
our disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act of 1934, as amended (the “Exchange Act”)) as of
the end of the period covered by this report.
 
 Subsequently,
we discovered material weaknesses in our internal control over financial
reporting.  For this reason, in reevaluating the adequacy of our
disclosure controls and procedures as of the end of the period covered by this
report, our management has determined that our disclosure controls and
procedures were not adequate.  In evaluating whether our disclosure
controls and procedures were effective as of March 31, 2008, management
considered the impact of the restatements to our 2005 First Quarter Form 10-QSB
through our 2007 Annual Report on Form 10-KSB, as outlined in Item 2, as well as
our control environment.
 
 Our
management is responsible for establishing and maintaining an adequate system of
internal control over financial reporting as required by Sarbanes-Oxley (SOX)
Section 404A.  Our system of internal control over financial reporting
is designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America.  Our internal control over financial
reporting includes those policies and procedures that:
 
 ·
                pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect our transactions and dispositions of our
      assets;
  ·
                provide
      reasonable assurance that our transactions are recorded as necessary to
      permit preparation of our financial statements in accordance with
      accounting principles generally accepted in the United States of America,
      and that our receipts and expenditures are being made only in accordance
      with authorizations of our management and our directors;
      and
  ·
                provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use, or disposition of our assets that could
      have a material effect on the financial
  statements.
  Because
of its inherent limitations, a system of internal control over financial
reporting can provide only reasonable assurance and may not prevent or detect
misstatements.  Further, because of changes in conditions,
effectiveness of internal controls over financial reporting may vary over
time.  Our system contains self monitoring mechanisms, and actions are
taken to correct deficiencies as they are identified.
  During
the fourth quarter of 2008, in the course of preparing for our year end
evaluation of effectiveness of our system of internal control over financial
reporting based on the framework in Internal Control-Integrated
Framework  issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) and SEC guidance on conducting such assessments, our
management concluded that our system of internal control over financial
reporting was not effective as of the year ended December 31, 2007 and the three
month period ended March 31, 2008 which resulted in the restatements described
above.  Although management does not anticipate making restatements to
the financial statements for the periods ended March 31, 2008, June 30, 2008 and
September 30, 2008, management believes that our weakness in internal controls
continued during such periods.
  50
  Management
has identified internal control deficiencies which resulted in the material
restatements described above, which, in management’s judgment, represented
material weakness in internal control over financial reporting.  The
control deficiencies related to controls over the accounting and disclosure for
complex transactions to ensure such transactions were recorded as necessary to
permit preparation of financial statements and disclosure in accordance with
generally accepted accounting principles.  Specifically, the control
deficiency which resulted in the restatements above, which has since been
remediated, was management’s failure to consult an outside expert regarding the
initial accounting for certain complex transactions.  Such complex
transactions included:
  ·
                capital
      asset acquisitions; and
  ·
                accounting
      for income taxes.
  The
internal control deficiencies associated with capital asset acquisitions related
to the acquisition accounting method used to recordthe issuance of warrants
in connection with the assignment of the option for the Clarkdale Slag Project,
and the 2007 acquisition of Transylvania, and the internal control deficiencies
associated with accounting for income taxes related to the purchase accounting
treatment of the issuance of warrants in connection with the assignment of the
option for the Clarkdale Slag Project, the acquisition of the Clarkdale Slag
Project, and the resultant computation of future deferred income tax liability
assumed.
 
 A
material weakness in internal controls is a significant deficiency, or
combination of significant deficiencies, that results in more than a remote
likelihood that a material misstatement of the financial statements would not be
prevented or detected on a timely basis by us.
 
 Our
management is responsible for establishing and maintaining an adequate system of
disclosure controls and procedures designed to provide reasonable assurance that
the information required to be disclosed by us in reports that we file and
submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms. Disclosure
controls also are designed to reasonably assure that such information is
accumulated and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosures. Disclosure controls include components of
internal control over financial reporting, which consists of control processes
designated to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements in accordance
with United States generally accepted accounting principles.
 
 We
have determined that our material weakness in its internal controls over
financial reporting was also a weakness in our disclosure controls and
procedures, since such weakness related to the disclosure controls which provide
us with reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles.
 
 In
designing and evaluating the disclosure controls and procedures, our management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives and in reaching a reasonable level of assurance our management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
 Based
on its assessment, including consideration of the aforementioned material
weaknesses, and the criteria discussed above, our management has concluded that
our disclosure controls and procedures were not effective as of March 31, 2008
to provide reasonable assurance that information required to be disclosed by us
in the reports that we file under the Exchange Act is recorded, processed, and
summarized within the appropriate periods.
 
 Management
will continue to evaluate the effectiveness of our disclosure controls and
procedures on an ongoing basis, and has taken action and implemented
improvements as necessary.
  Changes
in Internal Controls over Financial Reporting
  While
no changes to our internal control over financial reporting or disclosure
controls and procedures were made to rectify the material weakness during the
period covered by this report because such weakness was not known at that
time,subsequent to
the period we remediated this weakness in part by appointing an independent
director who will participate in the review our internal controls and who has
been appointed to our audit committee.  We also have consulted with a
third party financial consultant who has assisted in our restatement regarding
our capital acquisition and accounting for income taxes.  Management
has:
  51
  ·
                completed
      a review and updated risk assessment of all of our financial controls and
      procedures;
  ·
                provided
      additional training of financial
staff;
  ·
                purchased
      additional research materials and
services;
  ·
                shortened
      the financial closing process to allow more time for a thorough
      review;
  ·
                  reviewed
      and instituted controls for each weakness; and·
                  adopted
      a policy to consult outside experts on complex accounting
      issues.
 52
  PART II - OTHER INFORMATION
  Item
1.  Legal Proceedings
  From time to time, we are a party to
claims and legal proceedings arising in the ordinary course of
business.  Our management evaluates our exposure to these claims and
proceedings individually and in the aggregate and provides for potential losses
on such litigation if the amount of the loss is determinable and the loss is
probable.
  We believe that there are no material
litigation matters at the current time.  Although the results of such
litigation matters and claims cannot be predicted with certainty, we believe
that the final outcome of such claims and proceedings will not have a material
adverse impact on our financial position, liquidity, or results of
operations.
  Item
1A.  Risk Factors
  In
addition to the other information set forth in this Report, you should carefully
consider the factors discussed in the section entitled “Risk Factors” in our
Annual Report on Form 10-KSB for the year ended December 31, 2007, which to our
knowledge have not materially changed.  Those risks, which could
materially affect our business, financial condition or future results, are not
the only risks we face. Additional risks and uncertainties not currently known
to us or that we currently deem to be immaterial also may materially adversely
affect our business, financial condition and/or operating results.
  Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds
  On
January 30, 2008, we received gross proceeds of $2,528,500 and issued an
aggregate of 3,890,000 shares of our common stock on the exercise of warrants we
issued in January, 2006.  Each warrant entitled the holder to purchase
one share of our common stock at a price of $0.65 per share on or before January
18, 2008.  The warrant holders delivered their notices of exercise,
and paid the exercise price of $0.65 per share, prior to January 18, 2008
expiration date.  These securities were issued pursuant to the
provisions of Regulation D and Regulation S of the Securities
Act.
  On
February 7, 2008, we completed two concurrent private placement offerings for
gross proceeds of $5,250,000 to non-US persons and to US accredited
investors.  A total of 3,281,250 units were issued at a price of $1.60
per unit.  Each unit sold consisted of one share of our common stock
and one-half of one share purchase warrants.  Each whole share
purchase warrant entitles the holder to purchase one additional share of our
common stock at a price of $2.40 per share for a period of two years from the
date of issuance.  A total of 80,000 shares of our common stock were
issued as commission to agents in connection with these
offerings.  These securities were issued pursuant to the provisions of
Regulation D and Regulation S of the Securities Act.
  On
March 31, 2008, we issued 5,340 shares of our common stock to our non-management
directors.  These shares were issued pursuant to the director
compensation policy for our non-management directors based on a price of $3.37
per share with respect to 5,340 shares, being the closing price of our common
stock on March 31, 2008, the last trading day of the first quarter of
2008.  These securities were issued pursuant to Section 4(2) of the
Securities Act.
  Item
3.  Defaults Upon Senior Securities
  None.
  Item
4.  Submission of Matters to a Vote of Security Holders
  No matters were submitted to our
stockholders, through the solicitation of proxies or otherwise, during the first
quarter of the year ended March 31, 2008.
  53
  Item
5.  Other Information
  Not
applicable.
  Item
6.  Exhibits
  EXHIBIT
      TABLE
                
                The
      following is a complete list of exhibits filed as part of the Quarterly
      Report on Form 10-Q, some of which are incorporated herein by reference
      from the reports, registration statements and other filings of the issuer
      with the Securities and Exchange Commission, as referenced
      below:Reference
      Number
              Item31.1
              Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200231.2
              Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200232
              Certifications
      of Chief Executive Officer and Chief Financial Officer Pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002
  54
 
 SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
  SEARCHLIGHT
      MINERALS CORP.
                a
      Nevada corporationDate:
      July 6, 2009
              By:
              /s/ Ian R. McNeilIan
      R. McNeilPresident
      and Chief Executive Officer
                (Principal Executive
      Officer)Date:
      July 6, 2009
              By:
              /s/
      Melvin L. WilliamsMelvin L.
      WilliamsChief
      Financial Officer
                (Principal Accounting
      Officer)
 
 55