UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Amendment
No. 1


TO


Form
10-QSB


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 June 30, 2006




 ̈
            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    No  ̈




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  ̈
            Accelerated
      filer xNon-accelerated
      filer  ̈
            Smaller
      reporting company  ̈(Do
      not check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).




Yes
 ̈    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-QSB for
the three months ended June 30, 2006 (the “2006 Second Quarter 10-QSB”) is being
filed with the Securities and Exchange Commission (the “SEC”) to restate our
financial statements as of June 30, 2006 and for the three and six months ended
June 30, 2006 and 2005, and the period from January 14, 2000 (date of inception)
through June 30, 2006.  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.
  1
  ·
              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.
  2
  ·
              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.
  3
  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.
  A
description of the restatements made to our financial statements is provided at
Note 10 to the  financial statements included with this
report.
  This
Form 10-Q/A sets forth the 2006 Second Quarter Form 10-QSB in its
entirety.  This Form 10-Q/A includes items that have been changed as a
result of the restatement and the items that are unchanged from the 2006 Second
Quarter Form 10-QSB.
  Other
than the amending of the disclosures relating to the restatement and responding
to the staff’s comments, no other modifications or updates have been made to the
2006 Second Quarter 10-QSB.  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 2006 Second Quarter
10-QSB.  This Form 10-Q/A does not describe events occurring after the
2006 Second Quarter 10-QSB (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 2006
Second Quarter 10-QSB.  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 2006 Second Quarter 10-QSB, 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.


4




PART
I - FINANCIAL INFORMATION




ITEM 1.  FINANCIAL
STATEMENTS.




SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 BALANCE
SHEETS
 (UNAUDITED)
(RESTATED)
  June
      30, 2006
              
              
              December
      31, 2005(restated)ASSETSCurrent
      assetsCash
              
              $
              5,508,917
              
              
              $
              705,856Employee
      advance
              
              
              31,245
              
              
              
              -Total
      current assets
              
              
              5,540,162
              
              
              
              705,856Property
      and equipment, net
              
              
              27,974
              
              
              
              15,136Mineral
      properties
              
              
              819,442
              
              
              
              819,442Joint
      venture agreement
              
              
              2,608,481
              
              
              
              2,608,481Reclamation
      bond
              
              
              180,500
              
              
              
              180,500Deferred
      tax asset
              
              
              110,288
              
              
              
              -Total
      non-current assets
              
              
              3,746,685
              
              
              
              3,623,559Total
      assets
              
              $
              9,286,847
              
              
              $
              4,329,415LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable
              
              $
              794,586
              
              
              $
              783,246Loan
      payable - related party
              
              
              382,792
              
              
              
              379,877Loan
      payable
              
              
              -
              
              
              
              15,000Total
      current liabilities
              
              
              1,177,378
              
              
              
              1,178,123Long-term
      liabilitiesDeferred
      tax liability
              
              
              -
              
              
              
              450,940Total
      long-term liabilities
              
              
              -
              
              
              
              450,940Total
      liabilities
              
              
              1,177,378
              
              
              
              1,629,063Stockholders'
      equityCommon
      stock, $0.001 par value; 400,000,000 sharesauthorized,
      65,831,000 and 52,150,000 shares,respectively,
      issued and outstanding
              
              
              65,831
              
              
              
              52,150Additional
      paid-in capital
              
              
              14,644,583
              
              
              
              7,843,502Common
      stock subscribed
              
              
              -
              
              
              
              270,000Accumulated
      deficit during exploration stage
              
              
              (6,600,945
              )
              
              
              (5,465,300
              )Total
      stockholders' equity
              
              
              8,109,469
              
              
              
              2,700,352Total
      liabilities and stockholders' equity
              
              $
              9,286,847
              
              
              $
              4,329,415
  See
Accompanying Notes to Financial Statement
  5
 
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 STATEMENTS
OF OPERATIONS
 (UNAUDITED)
(RESTATED)
  For
      the period fromJanuary
      14, 2000(Date
      of Inception)For
      the three months ended
                  
                  
                  For
      the six months ended
                  
                  
                  ThroughJune
      30, 2006
                  
                  
                  June
      30, 2005
                  
                  
                  June
      30, 2006
                  
                  
                  June
      30, 2005
                  
                  
                  June
      30, 2006(restated)
                  
                  
                  
                  
                  
                  (restated)
                  
                  
                  
                  
                  
                  (restated)Revenue
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Operating
      expensesMineral
      exploration and evaluation expenses
                  
                  
                  497,046
                  
                  
                  
                  49,606
                  
                  
                  
                  775,388
                  
                  
                  
                  62,350
                  
                  
                  
                  1,662,411Mineral
      exploration and evaluationexpenses
      - related party
                  
                  
                  123,750
                  
                  
                  
                  -
                  
                  
                  
                  247,500
                  
                  
                  
                  -
                  
                  
                  
                  247,500General
      and administrative
                  
                  
                  441,518
                  
                  
                  
                  48,669
                  
                  
                  
                  666,621
                  
                  
                  
                  197,405
                  
                  
                  
                  1,500,425Depreciation
                  
                  
                  2,173
                  
                  
                  
                  -
                  
                  
                  
                  2,966
                  
                  
                  
                  -
                  
                  
                  
                  3,916Total
      operating expenses
                  
                  
                  1,064,487
                  
                  
                  
                  98,275
                  
                  
                  
                  1,692,475
                  
                  
                  
                  259,755
                  
                  
                  
                  3,414,252Loss
      from operations
                  
                  
                  (1,064,487
                  )
                  
                  
                  (98,275
                  )
                  
                  
                  (1,692,475
                  )
                  
                  
                  (259,755
                  )
                  
                  
                  (3,414,252
                  )Other
      income (expense)Loss
      on equipment disposition
                  
                  
                  (4,398
                  )
                  
                  
                  -
                  
                  
                  
                  (4,398
                  )
                  
                  
                  -
                  
                  
                  
                  (4,398
                  )Total
      other income (expense)
                  
                  
                  (4,398
                  )
                  
                  
                  -
                  
                  
                  
                  (4,398
                  )
                  
                  
                  -
                  
                  
                  
                  (4,398
                  )Loss
      before income taxes
                  
                  
                  (1,068,885
                  )
                  
                  
                  (98,275
                  )
                  
                  
                  (1,696,873
                  )
                  
                  
                  (259,755
                  )
                  
                  
                  (3,418,650
                  )Income
      tax benefit
                  
                  
                  280,614
                  
                  
                  
                  -
                  
                  
                  
                  561,228
                  
                  
                  
                  -
                  
                  
                  
                  960,873Loss
      from continuing operations
                  
                  
                  (788,271
                  )
                  
                  
                  (98,275
                  )
                  
                  
                  (1,135,645
                  )
                  
                  
                  (259,755
                  )
                  
                  
                  (2,457,777
                  )Discontinued
      operations:Gain
      (loss) from discontinued operations
                  
                  
                  -
                  
                  
                  
                  60,963
                  
                  
                  
                  -
                  
                  
                  
                  85,111
                  
                  
                  
                  (4,143,168
                  )Net
      Loss
                  
                  $
                  (788,271
                  )
                  
                  $
                  (37,312
                  )
                  
                  $
                  (1,135,645
                  )
                  
                  $
                  (174,644
                  )
                  
                  $
                  (6,600,945
                  )Loss
      per common share - basic and diluted:Net
      loss
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.02
                  )
                  
                  $
                  (0.01
                  )Weighted
      average common shares outstanding -Basic
      and diluted
                  
                  
                  58,125,044
                  
                  
                  
                  19,150,000
                  
                  
                  
                  57,043,807
                  
                  
                  
                  27,078,177
 See
Accompanying Notes to Financial Statement
  6
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 STATEMENT
OF STOCKHOLDERS' EQUITY
 (UNAUDITED)
(RESTATED)
  AccumulatedCommon
                    
                    
                    Deficit
      During
                    
                    
                    TotalCommon
      Stock
                    
                    
                    Additional
                    
                    
                    Stock
                    
                    
                    Exploration
                    
                    
                    Stockholders'Shares
                    
                    
                    Amount
                    
                    
                    Paid-in
      Capital
                    
                    
                    Subscribed
                    
                    
                    Stage
                    
                    
                    EquityBalance,
      January 14, 2000
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Issuance
      of common stock(recapitalized)
                    
                    
                    50,000,000
                    
                    
                    
                    50,000
                    
                    
                    
                    (25,000
                    )
                    
                    
                    -
                    
                    
                    
                    (24,999
                    )
                    
                    
                    1Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (231,969
                    )
                    
                    
                    (231,969
                    )Balance,
      December 31, 2000
                    
                    
                    50,000,000
                    
                    
                    
                    50,000
                    
                    
                    
                    (25,000
                    )
                    
                    
                    -
                    
                    
                    
                    (256,968
                    )
                    
                    
                    (231,968
                    )Issuance
      of common stock inreverse
      merger
                    
                    
                    10,300,000
                    
                    
                    
                    10,300
                    
                    
                    
                    (5,150
                    )
                    
                    
                    -
                    
                    
                    
                    (5,150
                    )
                    
                    
                    -Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (767,798
                    )
                    
                    
                    (767,798
                    )Balance,
      December 31, 2001
                    
                    
                    60,300,000
                    
                    
                    
                    60,300
                    
                    
                    
                    (30,150
                    )
                    
                    
                    -
                    
                    
                    
                    (1,029,916
                    )
                    
                    
                    (999,766
                    )Capital
      contribution
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,037,126
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,037,126Beneficial
      conversion featureassociated
      with debt
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    300,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    300,000Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,249,644
                    )
                    
                    
                    (1,249,644
                    )Balance,
      December 31, 2002
                    
                    
                    60,300,000
                    
                    
                    
                    60,300
                    
                    
                    
                    1,306,976
                    
                    
                    
                    -
                    
                    
                    
                    (2,279,560
                    )
                    
                    
                    (912,284
                    )Debt
      exchanged for common stock
                    
                    
                    48,000,000
                    
                    
                    
                    48,000
                    
                    
                    
                    1,152,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,200,000Deferred
      compensation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    12,583
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Amortization
      of deferredcompensation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    10,387Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,283,872
                    )
                    
                    
                    (1,283,872
                    )Balance,
      December 31, 2003
                    
                    
                    108,300,000
                    
                    
                    
                    108,300
                    
                    
                    
                    2,471,559
                    
                    
                    
                    -
                    
                    
                    
                    (3,563,432
                    )
                    
                    
                    (985,769
                    )Amortization
      of deferredcompensation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,196Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (700,444
                    )
                    
                    
                    (700,444
                    )Balance,
      December 31, 2004
                    
                    
                    108,300,000
                    
                    
                    
                    108,300
                    
                    
                    
                    2,471,559
                    
                    
                    
                    -
                    
                    
                    
                    (4,263,876
                    )
                    
                    
                    (1,684,017
                    )Issuance
      of stock options for1,000,000
      shares of common stockto
      two officers
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    133,062
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    133,062Issuance
      of stock options for500,000
      shares of common stockin
      satisfaction of debt
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    300,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    300,000Return
      and cancellation of70,000,000
      shares of commonstock
                    
                    
                    (70,000,000
                    )
                    
                    
                    (70,000
                    )
                    
                    
                    70,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Issuance
      of 12,000,000 warrantsin
      consideration of joint ventureoption
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,310,204
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,310,204Issuance
      of common stockfor
      mining claims
                    
                    
                    1,400,000
                    
                    
                    
                    1,400
                    
                    
                    
                    488,600
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    490,000
    7
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 STATEMENT
OF STOCKHOLDERS' EQUITY
 (UNAUDITED)
(RESTATED)
 AccumulatedCommon
                    
                    
                    Deficit
      During
                    
                    
                    TotalCommon
      Stock
                    
                    
                    Additional
                    
                    
                    Stock
                    
                    
                    Exploration
                    
                    
                    Stockholders'Shares
                    
                    
                    Amount
                    
                    
                    Paid-in
      Capital
                    
                    
                    Subscribed
                    
                    
                    Stage
                    
                    
                    EquityIssuance
      of common stockin
      satisfaction of debt, $0.625 per share
                    
                    
                    200,000
                    
                    
                    
                    200
                    
                    
                    
                    124,800
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    125,000Issuance
      of common stock for cash,Reg.
      S - Private Placement,$0.25
      per share, net of$205,250
      commissions
                    
                    
                    6,390,000
                    
                    
                    
                    6,390
                    
                    
                    
                    1,369,070
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,375,460Issuance
      of common stock for cash,Reg.
      S - Private Placement,$0.25
      per share, net of$135,000
      commission
                    
                    
                    5,400,000
                    
                    
                    
                    5,400
                    
                    
                    
                    1,194,947
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,200,347Issuance
      of common stock for cash,Reg.
      D 506 - Private Placement,$0.25
      per share
                    
                    
                    460,000
                    
                    
                    
                    460
                    
                    
                    
                    114,540
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    115,000Issuance
      of stock options for1,500,000
      shares of common stockto
      three officers
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    266,720
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    266,720Common
      stock subscribed
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    270,000
                    
                    
                    
                    -
                    
                    
                    
                    270,000Net
      loss
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,201,424
                    )
                    
                    
                    (1,201,424
                    )Balance,
      December 31, 2005
                    
                    
                    52,150,000
                    
                    
                    
                    52,150
                    
                    
                    
                    7,843,502
                    
                    
                    
                    270,000
                    
                    
                    
                    (5,465,300
                    )
                    
                    
                    2,700,352Issuance
      of common stock for cash,Reg.
      D - Private Placement,$0.45
      per share, net of$87,750
      commission
                    
                    
                    3,900,000
                    
                    
                    
                    3,900
                    
                    
                    
                    1,663,350
                    
                    
                    
                    (270,000
                    )
                    
                    
                    -
                    
                    
                    
                    1,397,250Issuance
      of common stockrelated
      to exercise of warrants
                    
                    
                    1,225,000
                    
                    
                    
                    1,225
                    
                    
                    
                    (1,225
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Issuance
      of stock options for120,000
      shares of common stockto
      two officers
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    20,864
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    20,864Issuance
      of stock options for500,000
      shares of common stockto
      two directors
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    122,420
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    122,420Issuance
      of stock options for100,000
      shares of common stockto
      two directors
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    24,484
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    24,484Issuance
      of common stock for cashReg.
      S - Private Placement,$0.625
      per sharefrom
      exercise of warrants
                    
                    
                    6,125,000
                    
                    
                    
                    6,125
                    
                    
                    
                    3,822,000
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,828,125Issuance
      of common stock for cashReg.
      S - Private Placement,$0.375
      per sharefrom
      exercise of warrants
                    
                    
                    1,768,500
                    
                    
                    
                    1,768
                    
                    
                    
                    661,420
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    663,188Issuance
      of common stock for cashReg.
      S - Private Placement,$0.625
      per sharefrom
      exercise of warrants
                    
                    
                    612,500
                    
                    
                    
                    613
                    
                    
                    
                    382,200
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    382,813Issuance
      of stock options for100,000
      shares of common stockto
      officer for recruitmentamortized
      over vesting period.
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,309
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,309Issuance
      of common stock toofficer
      for recruitment
                    
                    
                    50,000
                    
                    
                    
                    50
                    
                    
                    
                    102,950
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    103,000Issuance
      of stock options for50,000
      shares of common stockto
      employee for recruitmentamortized
      over vesting period.
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,309
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,309Net
      loss (restated)
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,135,645
                    )
                    
                    
                    (1,135,645
                    )Balance,
      June 30, 2006 (restated)
                    
                    
                    65,831,000
                    
                    
                    $
                    65,831
                    
                    
                    $
                    14,644,583
                    
                    
                    $
                    -
                    
                    
                    $
                    (6,600,945
                    )
                    
                    $
                    8,109,469
  See
Accompanying Notes to Financial Statement
  8
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 STATEMENTS
OF CASH FLOWS
 (UNAUDITED)
(RESTATED)
  Period
      fromJanuary
      14, 2000(Date
      of inception)For
      the six months ended
                        
                        
                        throughJune
      30, 2006
                        
                        
                        June
      30, 2005
                        
                        
                        June
      30, 2006(restated)
                        
                        
                        
                        
                        
                        (restated)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                        
                        $
                        (1,135,645
                        )
                        
                        $
                        (174,644
                        )
                        
                        $
                        (6,600,945
                        )Deduct:
      Gain (loss) from discontinued operations
                        
                        
                        -
                        
                        
                        
                        85,111
                        
                        
                        
                        (4,143,168
                        )Loss
      from continuing operations
                        
                        
                        (1,135,645
                        )
                        
                        
                        (259,755
                        )
                        
                        
                        (2,457,777
                        )Adjustments
      to reconcile loss from continuing operationsto
      net cash used in operating activities:Depreciation
                        
                        
                        2,966
                        
                        
                        
                        -
                        
                        
                        
                        3,916Stock
      based expenses
                        
                        
                        273,386
                        
                        
                        
                        133,062
                        
                        
                        
                        673,168Loss
      on disposition of fixed assets
                        
                        
                        4,398
                        
                        
                        
                        1,349
                        
                        
                        
                        5,747Changes
      in operating assets and liabilities:
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        -Other
      current assets
                        
                        
                        (31,245
                        )
                        
                        
                        (2,000
                        )
                        
                        
                        (31,245
                        )Other
      assets
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (180,500
                        )Accounts
      payable and accrued liabilities
                        
                        
                        14,255
                        
                        
                        
                        (17,719
                        )
                        
                        
                        37,424Deferred
      income taxes
                        
                        
                        (561,228
                        )
                        
                        
                        -
                        
                        
                        
                        (960,873
                        )Net
      cash used in operating activities
                        
                        
                        (1,433,113
                        )
                        
                        
                        (145,063
                        )
                        
                        
                        (2,910,140
                        )Net
      cash used in operating activities from discontinued
      operations
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (2,931,324
                        )CASH
      FLOW FROM INVESTING ACTIVITIESCash
      paid on mineral property claims
                        
                        
                        -
                        
                        
                        
                        (19,572
                        )
                        
                        
                        (87,134
                        )Cash
      paid for joint venture agreement
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (690,000
                        )Purchase
      of fixed assets
                        
                        
                        (20,202
                        )
                        
                        
                        -
                        
                        
                        
                        (36,287
                        )Net
      cash used in investing activities
                        
                        
                        (20,202
                        )
                        
                        
                        (19,572
                        )
                        
                        
                        (813,421
                        )Net
      cash used in investing activities from discontinued
      operations
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (452,618
                        )CASH
      FLOW FROM FINANCING ACTIVITIESProceeds
      from stock issuance
                        
                        
                        6,271,376
                        
                        
                        
                        -
                        
                        
                        
                        8,962,183Proceeds/payments
      on loan payable
                        
                        
                        (15,000
                        )
                        
                        
                        170,000
                        
                        
                        
                        -Proceeds
      from subscribed stock
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        270,000Net
      cash provided by financing activities
                        
                        
                        6,256,376
                        
                        
                        
                        170,000
                        
                        
                        
                        9,232,183Net
      cash provided by financing activities from discontinued
      operations
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        3,384,237NET
      CHANGE IN CASH
                        
                        
                        4,803,061
                        
                        
                        
                        5,365
                        
                        
                        
                        5,508,917CASH
      AT BEGINNING OF PERIOD
                        
                        
                        705,856
                        
                        
                        
                        295
                        
                        
                        
                        -CASH
      AT END OF PERIOD
                        
                        $
                        5,508,917
                        
                        
                        $
                        5,660
                        
                        
                        $
                        5,508,917SUPPLEMENTAL
      INFORMATIONInterest
      Paid
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        50,751Income
      Taxes Paid
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Non-cash
      investing and financing activities:Stock
      and options for common stock issued in satisfaction of
      debt
                        
                        $
                        -
                        
                        
                        $
                        300,000
                        
                        
                        $
                        1,500,000Stock
      issued for conversion ofaccounts
      payable, 200,000 shares at $0.625
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        125,000Assets
      acquired for common stock issued for the acquisition
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        490,000Warrants
      issued in connection with joint venture optionagreement
      related to slag project
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        1,310,204Net
      deferred tax liability assumed
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        913,776
 See
Accompanying Notes to Financial Statement
  9
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
 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, 2005 of
Searchlight Minerals Corp. (the “Company”).
 
 The
interim financial statements present the balance sheets, statements of
operations, stockholders’ equity, 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,
except as described in note 10) 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 notes thereto for the year ended
December 31, 2005.
 
 Description of
business – Searchlight Minerals Corp. is considered an exploration stage
company since its formation 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.
  10
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
 1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 
 Going concern - The
Company incurred cumulative net losses of $6,600,945 from operations as of June
30, 2006 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.
 
 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.
 
 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.”
 
 Exploration costs –
Mineral exploration costs are expensed as incurred.
  11
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 
 Property and
equipment – Property and equipment is 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 lives 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 property and equipment 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 June 30, 2006 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 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.”
  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.
 
 Reclassifications –
Certain amounts in the prior period financial statements have been reclassified
to conform to current period presentation.
  12
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 
 Asset retirement
obligation - The Company has adopted Statement of Financial Accounting
Standards 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 – Financial Accounting Standards Statement No. 107,
“Disclosure About Fair Value of Financial Instruments”, requires the Company to
disclose, when reasonably attainable, the fair market values of its assets and
liabilities which are deemed to be financial instruments. The carrying amounts
and estimated fair values of the Company’s financial instruments approximate
their fair value due to the short-term nature.
 
 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.
  Earnings (loss) per
share - The Company follows Statement of Financial Accounting Standard
No. 128 (“SFAS 128”), “Earnings Per Share” and Statement of Financial Accounting
Standard No. 150 (“SFAS 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 June 30, 2006 and 2005 that were not included in the computation of diluted
EPS because the effect would be antidilutive were, 27,230,287 and 2,502,762,
respectively.
 
 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.
  13
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
 1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
  Income taxes - The
Company accounts for its income taxes in accordance with the Statement of
Financial Accounting 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.
 
 For
acquired properties that do not constitute a business as defined in Emerging
Issues Task Force Issue No. 98-03 (“EITF 98-03”), “Determining Whether a
Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business”,
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.
 
 Stock-based
compensation - On December 16, 2004, the FASB issued Statement of
Financial Accounting Standard No. 123R (“SFAS 123R”), “Share-Based
Payment”, which replaces Statement of Financial Accounting Standard No. 123
(“SFAS 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. 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.
  14
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 
 New accounting
pronouncements – In May 2005, the FASB issued SFAS No. 154, “Accounting
Changes and Error Corrections, a replacement of APB No. 20 and FASB Statement
No. 3” (“SFAS No. 154”). SFAS No. 154 requires retrospective application to
prior periods’ financial statements of a voluntary change in accounting
principle unless it is impracticable. APB Opinion No. 20 “Accounting Changes,”
previously required that most voluntary changes in accounting principle be
recognized by including in net income of the period of the change the cumulative
effect of changing to the new accounting principle. This statement is effective
for years beginning after January 1, 2006. The adoption of this statement had
little or no effect on the Company’s financial position, results of operations,
and disclosures.
 
 In
November 2005, the FASB issued FASB Staff Position FAS 115-1 and FAS 124-1, “The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments” (“FSP 115-1”), which provides guidance on determining when
investments in certain debt and equity securities are considered impaired,
whether that impairment is other-than-temporary, and on measuring such
impairment loss. FSP 115-1 also includes accounting considerations subsequent to
the recognition of an other-than temporary impairment and requires certain
disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. FSP 115-1 is required to be applied to
reporting periods beginning after December 15, 2005.  The adoption of thisguidancehad little or no effect on the
Company’s financial position, results of operations, and
disclosures.
 
 In
February 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
155, “Accounting for Certain HybridFinancial
Instruments—an Amendment of FASB Statements No. 133 and 140” (“SFAS No. 155”).
SFAS No. 155 allows financial instruments that contain an embedded derivative
and that otherwise would require bifurcation to be accounted for as a whole on a
fair value basis, at the holders’ election. SFAS No. 155 also clarifies and
amends certain other provisions of SFAS No. 133 and SFAS No. 140. This statement
is effective for all financial instruments acquired or issued in fiscal years
beginning after September 15, 2006. Adoption of this statement is not expected
to have a material impact on the Company’s financial
statements.
 
 In
March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial
Assets—an Amendment of FASB Statement No. 140” (“SFAS No. 156”). SFAS No. 156
provides guidance on the accounting for servicing assets and liabilities when an
entity undertakes an obligation to service a financial asset by entering into a
servicing contract. This statement is effective for all transactions in fiscal
years beginning after September 15, 2006.  Adoption of this statement
is not expected to have a material impact on the Company’s financial
statements.
 
 Correction of an
Error - Searchlight Mining
Claims – (See Note 3) – The Company restated the Searchlight Mining Claims as ofMarch 31, 2006. The Company originally valued
the transaction at $127,134 for cash paid and shares valued at $40,000,
or $2,000 per claim. The Company determined that pursuant to EITF 98-11, the
shares should have been valued at their market price on the date of the issue.
The restatement of the Searchlight
Claims mineral properties also reflects the deferred future income tax liability
assumed, the value of which has been added to the acquisition costs of the
underlying mineral properties. The impact of this restatement had the effect of
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.
  15
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  1.
                  DESCRIPTION OF
      BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
      (continued)
 
 Joint venture agreement – (See Note 4)
– The Company restated the joint venture agreement as ofJune 30, 2006. The Company originally valued
the transaction at the agreed upon cash price of $690,000 and no value
was given to the 12,000,000 warrants issued. The Company restated the valuation
of the warrants by using the market price of common stock issued in connection
with a private placement conducted at the time the warrants were issued. The
restated value of the warrants was $1,310,204. The restatement also included the
deferred future income tax liability assumed of $608,277 for a total increase in
purchase consideration of $1,918,481.
 
 Discontinued
operations - The statement of operations for the period from January 14,
2000 (date of inception) through June 30, 2006 has been restated to reclassify
net losses prior to January 1, 2005 as 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 foreign currency translation
adjustment, which has been included in loss from discontinued
operations.
 
 The
statement of operations for the six months ended June 30, 2006, has been
restated to reclassify $11,769 of foreign currency translation adjustment
related to 2004 activity as general and administrative expense. The restatement
also reflects the income tax benefit of $280,614 and $561,228 for the three and
six months ended June 30, 2006, respectively.
  16
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  2.
                  PROPERTY AND
      EQUIPMENT
 
 Property
and equipment consisted of the following as of June 30, 2006 and December 31,
2005:
 
 June
      30,
                    2006
                  
                  
                  December
      31, 2005Furniture
      and fixtures
                  
                  $
                  13,315
                  
                  
                  $
                  7,038Computers
      and equipment
                  
                  
                  17,331
                  
                  
                  
                  9,04830,646
                  
                  
                  
                  16,086Less
      accumulated depreciation
                  
                  
                  2,672
                  
                  
                  
                  950$
                  27,974
                  
                  
                  $
                  15,136
 
 Depreciation
expense was $2,966 and $0 for the six months ended June 30, 2006 and 2005,
respectively.
 
 3.
                  MINERAL PROPERTIES -
      MINING CLAIMS – AS RESTATED (See Note
  10)
 
 As of
June 30, 2006 mining claims consisted of 3,200 acres located near Searchlight,
Nevada. The 3,200 acre property is staked as twenty 160 acre claims. At June 30,
2006 mineral properties balance was $819,442.
 
 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
claim.  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 June 30, 2006 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 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.”
  17
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  3.
                  MINERAL PROPERTIES -
      MINING CLAIMS – AS RESTATED (See Note 10)
      (continued)
 
 The
following table summarizes the impact of the restatement on the historical
balances of the mineral properties for the period ended June 30,
2006:
 
 As
      Reported
                  
                  
                  Adjustments
                  
                  
                  
                  
                  As
      RestatedCash
      and shares issuance to obtain mineralproperties,
      July 7, 2005
                  
                  $
                  127,134
                  
                  
                  $
                  450,000
                  
                  
                  a
                  
                  $
                  577,134Net
      deferred income tax liability assumed
                  
                  
                  --
                  
                  
                  
                  242,308
                  
                  
                  b
                  
                  
                  242,308Mineral
      properties balance, June 30, 2006
                  
                  $
                  127,134
                  
                  
                  $
                  692,308
                  
                  
                  
                  
                  $
                  819,442
 
 The
      restatement adjustments are as
follows:
 
 a.
                  Restate
      issuance of 1,400,000 shares to obtain mineral properties on July 7, 2005
      at the market value of $0.35 per share on the date of
      issuance.
 b.
                  Restate
      for the resulting estimated future income tax liability associated with
      the temporary difference between tax basis and acquisition value, which
      was applied to the mineral asset in the absence of there being a goodwill
      component associated with the
transaction.
 
 4.
                  JOINT VENTURE
      AGREEMENT – AS RESTATED (See Note
10)
 
 On
October 24, 2005, the Company completed the acquisition of all of Nanominerals
Corp. (“NMC”) interest in a joint venture agreement (“JV Agreement”) dated May
20, 2005 between NMC and Verde River Iron Company, LLC (“Verde”).  NMC
is a related party entity whereby the Company’s President and Chief Financial
Officer have an ownership interest.  The JV Agreement will allow the
processing and extraction of minerals from a copper smelter slag pile located on
a parcel of land consisting of approximately 200 acres in Clarkdale, Arizona
(“Clarkdale Slag Project”).  The acquisition consideration of NMC’s
interest in the JV Agreement fulfilled are as follows:
 
 (i)
                  Payment
      to NMC of $690,000 in respect of certain payments made by NMC towards the
      acquisition of the Clarkdale Slag Project made pursuant to the terms of
      the JV Agreement;
 (ii)
                  Assignment
      to NMC of a five percent net smelter return royalty payable from the
      Company’s share of production from the Clarkdale Slag
      Project;
 (iii)
                  Appointment
      of nominees of NMC to the Company’s board of directors to constitute a
      majority of the board;
 (iv)
                  Issuance
      to NMC or its designates, warrants to purchase 12,000,000 shares (post
      stock split) of the Company’s common stock at exercise price of $0.375 per
      share (post stock split) exercisable for a term of 10 years;
      and
 (v)
                  Provide
      confirmation to NMC, that the Company has received funds of $2,000,000
      pursuant to its private placement offering of its securities to accredited
      investors in the U.S. and to accredited investors outside the
      U.S.
  18
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  4.
                  JOINT VENTURE
      AGREEMENT – AS RESTATED (See Note 10)
    (continued)
 
 Additionally,
the Company entered into an amendment (the “Amended Assignment Agreement”) to
the Assignment Agreement, for the purpose of clarifying the Company’s obligation
to pay NMC a royalty equal to 5% of the Net Smelter Returns (as defined in the
Amended Assignment Agreement) resulting from the processing and extraction of
minerals from the Clarkdale Slag Project. As of October 24, 2005, the Company
fulfilled its obligations under the terms and conditions of the Assignment
Agreement.
 
 Following
the acquisition of NMC’s interest in the Clarkdale Slag Project, the Company is
presently proceeding with the joint venture with Verde. Under the terms of the
JV Agreement, the Company intends to form a jointly owned limited liability
operating company (“OPCO”) to pursue a four phase work program for the purpose
of processing up to 2/3 or 20,000,000 tons minimum of slag from a copper smelter
slag pile located at the Clarkdale Slag Project site, to extract by products
from the slag for commercial resale. Pursuant to the terms of the JV
Agreement, we are subject to the following, payments and
conditions:
  (i)
                  The Company is required to fund
      all expenditures for Phase I of the work program and we must pay
      $3,000,000 into OPCO’s account within 14 days of the completion of Phase
      I. At the time the Company makes the $3,000,000 payment to OPCO, Verde
      agrees to transfer all right to process the Clarkdale Slag Project slag
      pile to OPCO and grant the Company a license to use the project site for
      the project.
  (ii)
                  After completion of a bankable
      feasibility study in Phase II, the Company is required to contribute
      $27,000,000 (“Project Funding Payment”) to OPCO within 90 days of receipt
      of the study.
  (iii)
                  Verde is not required to
      contribute any funds for project
  expenses.
  (iv)
                  In the event of termination by
      either party, provided that Phase II has been completed, Verde agreed to
      assign 10% of its net operating profits from the project to the Company
      until it receives an amount equal to two times the amount of its total
      investment in the
project.
  (v)
                  A principal of Verde, will be
      paid an amount of $10,000,000 from the Project Funding Payment, the
      Initial Payment (as further defined in the JV Agreement) and net cash flow
      of the project before any money is distributed to the Company and
      Verde.
  The
following table summarizes the impact of the restatement on the historical
balances of the joint venture agreement reported for the period ended June 30,
2006:
 
 As
      Reported
                  
                  
                  Adjustments
                  
                  
                  As
      RestatedCash
      consideration
                  
                  $
                  690,000
                  
                  
                  $
                  -
                  
                  
                  $
                  690,000Issuance
      of warrants
                  
                  
                  -
                  
                  
                  
                  1,310,204
                  
                  
                  
                  1,310,204Net
      deferred income tax liability assumed
                  
                  
                  -
                  
                  
                  
                  608,277
                  
                  
                  
                  608,277Joint
      venture agreement balance,March
      31, 2006
                  
                  $
                  690,000
                  
                  
                  $
                  1,918,481
                  
                  
                  $
                  2,608,481
  19
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  5.
                  LOAN PAYABLE – RELATED
      PARTY
 
 As of
June 30, 2006, loan payable to related parties totaling $382,792 consists of
borrowings from former officers and directors of the Company. The balance bears
no interest, is unsecured, and is due on demand.
 
 6.
                  STOCKHOLDERS’
      EQUITY
 
 During
the six months ended June 30, 2006 the Company’s stockholders’ equity activity
consisted of the following:
 
 a)
                  On
      June 23, 2006, the Company issued 50,000 shares at $2.06 per share as
      consideration for an employment contract entered into on June 14, 2006
      with a new Chief Financial Officer. In addition, the Company advanced
      $33,084 for withholding taxes required to be paid on total compensation of
      $103,000. The advance is to be repaid bi-monthly with full payment to be
      made in December 2006.
 
 b)
                  On
      June 21, 2006, the Company issued 8,506,000 shares of common stock from
      the exercise of warrants resulting in cash proceeds of $4,874,126.
      Warrants exercised were for 6,125,000 shares at $0.625 per share,
      1,768,500 shares at $0.375 per share and 612,500 at $0.625 per share. Each
      of the warrants was set to expire in June 2006 and all were
      exercised.
 
 c)
                  On
      February 9, 2006, the Company issued 1,225,000 shares of common stock and
      warrants to purchase an additional 612,500 shares of common stock with an
      exercise price of $0.625 expiring between June 2 and June 7,
      2006.  These are related to the penalty shares and warrants for
      the late registration of shares with the Securities and Exchange
      Commission pursuant to the private placements completed in September
      2005.  Pursuant to the private placements, subscribers received
      penalty units consisting of one share and one half of one share purchase
      warrant.  The penalty units were exercisable into 1/10th
      of the total number of units issued in the private placement if a
      registration statement on Form SB-2 was not declared effective within four
      months and one day of the closing date of the private
      placements.  The Registration Statement was not effective prior
      to the filing deadline resulting in the issuance of the penalty
      units.
 
 d)
                  On
      January 18, 2006, the Company issued 39 units for $45,000 per unit where
      each unit consisted of 100,000 shares and 100,000 purchase
      warrants.  Each purchase warrant is exercisable into one share
      at a price of $0.65 expiring on January 18, 2008.  Total gross
      proceeds for this offering were
$1,755,000.
 
 Warrants
associated with the 2006 equity issuances do not constitute a registration
payment arrangement.
  20
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
 7.
                  STOCK OPTION
      PLAN
 
 On
April 7, 2006, the Board of Directors adopted the 2006 Stock Option Plan (the
"Plan").  Under the terms of the Plan, options to purchase up to
40,000,000 shares of common stock that may be granted to our employees,
officers, directors, and eligible consultants of Searchlight. The Plan provides
that the option price be the fair market value of the stock at the date of grant
as determined by the Board of Directors. Options granted become exercisable and
expire as determined by the Board of Directors. The maximum aggregate number of
shares of our common stock that may be optioned and sold under the Plan will be
increased effective the first day of each of our fiscal quarters, beginning with
the fiscal quarter commencing July 1, 2006, by an amount equal to the lesser of:
(i) 15% of the total increase in the number of shares of common stock
outstanding during the previous fiscal quarter; or (ii) a lesser number of
shares of common stock as may be determined by the Board of
Directors.
  During
the year ended December 31, 2006, the Company granted stock options as
follows:
 
 a)
                  On
      June 14, 2006, the Company granted nonqualified stock options for the
      purchase of 50,000 shares of common stock at $2.06 per
      share.  The options were granted as a recruitment incentive to
      an employee and vest 50% on December 14, 2006 and the remaining 50% on
      June 14, 2007. The options contain an expiration date of June 14,
      2008.
 
 b)
                  On
      June 14, 2006, the Company granted nonqualified stock options for the
      purchase of 100,000 shares of common stock at $2.06 per
      share.  The options were granted as a recruitment incentive to
      the Chief Financial Officer and vest 50% on June 14, 2007 and the
      remaining 50% on June 14, 2008. The options contain an expiration date of
      June 14, 2011.
 
 c)
                  On
      June 6, 2006, the Company granted nonqualified stock options for the
      purchase of 100,000 shares of common stock at $2.40 per
      share.  The options were granted equally to two directors, are
      fully vested and expire on June 6,
2011.
 
 d)
                  On
      June 6, 2006, the Company granted nonqualified stock options for the
      purchase of 500,000 shares of common stock at $2.40 per
      share.  The options were granted equally to two
      officer/directors, are fully vested and expire on June 6,
      2011.
 
 e)
                  On
      April 7, 2006 the Company granted stock options for the purchase of
      120,000 shares of common stock at $1.70 per share.  The options
      were granted equally to two officers, are fully vested and expire on April
      7, 2011.
 
 Expense
for the three and six months ended June 30, 2006 related to vesting and granting
of stock options were $170,386 and are included in general and administrative
expense.
  21
 
 SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
 8.
                  COMMITMENTS AND
      CONTINGENCIES
 
 Employment contracts
– Ian R. McNeil, President and Chief Executive Officer. The Company entered into
an employment agreement with Ian R. McNeil effective January 1,
2006.  Pursuant to the terms of the agreement, Mr. McNeil is to be
paid an annual salary of $108,000 in consideration of which Mr. McNeil agreed to
act as the Company’s President and Chief Executive Officer. On December 31,
2005, Mr. McNeil received a one time bonus of $36,000 upon execution of the
agreement. Mr. McNeil is also eligible for 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 entered into an employment
agreement with Carl S. Ager effective January 1, 2006.  Pursuant to
the terms of the agreement, Mr. Ager is to be paid an annual salary of $80,000
in consideration of which Mr. Ager agreed to act as the Company’s Treasurer and
Secretary. On December 31, 2005, Mr. Ager received a one time bonus of $26,666
upon execution of the agreement. Mr. Ager is also eligible for 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 entered into an
employment agreement with Melvin L. Williams effective June 14,
2006.  Pursuant to the terms of the agreement, Mr. Williams is to be
paid an annual salary of $60,000 based on 300-400 hours worked and bonus
consisting of 50,000 restricted shares of the Company’s common stock and 100,000
options to purchase additional shares of common stock at a price of $2.06 per
share exercisable for a period of five years until June 14, 2011, with the
options vesting 50% on the first anniversary of the execution of the agreement,
in consideration of which Mr. Williams agreed to act as the Company’s Chief
Financial Officer.  Mr. Williams is also eligible for 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.
 
 9.
                  SUBSEQUENT
      EVENTS
  On
July 27, 2006, the Company issued 1,400,000 shares to the owners of the
Searchlight Claims. This issuance is the second of four required share payments
to complete the acquisition of the Searchlight Claims totaling 5,600,000
shares.
  22
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
 10.
                  RESTATEMENT
  Searchlight Mining
Claims – Mineral properties have been restated to reflect payment made by
issuance of 1,400,000 shares at $0.35 on July 7, 2005 at the market values on
the date of issuance.  This restatement had the impact of increasing
the mineral properties and additional paid-in capital, mineral properties also
increased for deferred income tax liability assumed. Changes in amounts are
reflected in tabular format as noted below.
 
 Joint venture agreement– The warrants issued in connection with the assignment of the original
Slag Project option have been restated to reflect the recomputation of the value
of the 12,000,000 warrants issued as consideration for the option to acquire a
mineral interest in the Slag Project of $1,918,481, (including related deferred
tax liability assumed of $608,277) which was computed based on private placement
stock price at the time the warrants were issued. The original terms of the
underlying option agreement were unchanged and this adjustment had no effect on
the agreement.
 
 Discontinued
operations – The statement of operations for the period from January 14,
2000 (date of inception) through June 30, 2006 has been restated to reclassify
net losses prior to January 1, 2005 as 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 foreign currency translation adjustment, which has
been included in loss from discontinued operations.
 
 The
statement of operations for the six months ended June 30, 2006, has been
restated to reclassify $11,769 of foreign currency translation adjustment
related to 2004 activity as general and administrative expense. The restatement
also reflects the income tax benefit of $280,614 and $561,228 for the three and
six months ended June 30, 2006, respectively.
 
 The
following table summarizes the balance sheet of the Company as of June 30, 2006
and reconciles the reported amounts to the restated amounts:
 
 Summarized
      Balance Sheet -June
      30, 2006
                  
                  As
      Reported
                  
                  
                  Adjustments
                  
                  
                  
                  
                  As
      RestatedMineral
      properties
                  
                  $
                  127,134
                  
                  
                  $
                  692,308
                  
                  
                  a
                  
                  $
                  819,442Joint
      venture agreement
                  
                  
                  690,000
                  
                  
                  
                  1,918,481
                  
                  
                  b
                  
                  
                  2,608,481Deferred
      tax asset
                  
                  
                  --
                  
                  
                  
                  110,288
                  
                  
                  c
                  
                  
                  110,288Total
      assets
                  
                  
                  6,565,770
                  
                  
                  
                  2,721,077
                  
                  
                  a,b
                  
                  
                  9,286,847Total
      liabilities
                  
                  
                  1,177,378
                  
                  
                  
                  --
                  
                  
                  
                  
                  
                  1,177,378Additional
      paid-in capital
                  
                  
                  12,884,379
                  
                  
                  
                  1,760,204
                  
                  
                  a,b
                  
                  
                  14,644,583Accumulated
      other comprehensive loss
                  
                  
                  (121,606
                  )
                  
                  
                  121,606
                  
                  
                  d
                  
                  
                  --Accumulated
      deficit during exploration stage
                  
                  
                  (7,440,212
                  )
                  
                  
                  839,267
                  
                  
                  d,e
                  
                  
                  (6,600,945
                  )Total
      stockholders' equity
                  
                  
                  5,388,392
                  
                  
                  
                  2,721,077
                  
                  
                  
                  
                  
                  8,109,469Total
      liabilities and stockholders' equity
                  
                  $
                  6,565,770
                  
                  
                  $
                  2,721,077
                  
                  
                  
                  
                  $
                  9,286,847
  23
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
 10.
                  RESTATEMENT
      (continued)
 
 The
following table summarizes the statement of operations for the six months ended
June 30, 2006 and reconciles the reported amounts to the restated
amounts:
 
 Summarized
      Statement of Operations -For
      the six months ended June 30, 2006
                  
                  As
      Reported
                  
                  
                  Adjustments
                  
                  
                  
                  
                  As
      RestatedMineral
      exploration and evaluation expenses
                  
                  $
                  1,022,888
                  
                  
                  $
                  (247,500
                  )
                  
                  f
                  
                  $
                  775,388Mineral
      exploration and evaluation expenses –related
      party
                  
                  
                  --
                  
                  
                  
                  247,500
                  
                  
                  f
                  
                  
                  247,500General
      and administrative
                  
                  
                  654,852
                  
                  
                  
                  11,769
                  
                  
                  g
                  
                  
                  666,621Total
      operating expenses
                  
                  
                  1,680,706
                  
                  
                  
                  11,769
                  
                  
                  g
                  
                  
                  1,692,475Loss
      from operations
                  
                  
                  (1,680,706
                  )
                  
                  
                  (11,769
                  )
                  
                  g
                  
                  
                  (1,692,475
                  )Loss
      before income taxes
                  
                  
                  (1,685,104
                  )
                  
                  
                  (11,769
                  )
                  
                  g
                  
                  
                  (1,696,873
                  )Income
      tax benefit
                  
                  
                  --
                  
                  
                  
                  561,228
                  
                  
                  e
                  
                  
                  561,228Net
      loss
                  
                  
                  (1,685,104
                  )
                  
                  
                  549,459
                  
                  
                  e,g
                  
                  
                  (1,135,645
                  )Foreign
      currency translation adjustment
                  
                  $
                  (11,769
                  )
                  
                  $
                  11,769
                  
                  
                  g
                  
                  $
                  --
 
 The
following table summarizes the statement of operations for the three months
ended June 30, 2006 and reconciles the reported amounts to the restated
amounts:
 
 Summarized
      Statement of Operations -For
      the three months ended June 30, 2006
                  
                  As
      Reported
                  
                  
                  Adjustments
                  
                  
                  
                  
                  As
      RestatedMineral
      exploration and evaluation expenses
                  
                  $
                  620,796
                  
                  
                  $
                  (123,750
                  )
                  
                  f
                  
                  $
                  497,046Mineral
      exploration and evaluation expenses –related
      party
                  
                  
                  --
                  
                  
                  
                  123,750
                  
                  
                  f
                  
                  
                  123,750Total
      operating expenses
                  
                  
                  1,064,487
                  
                  
                  
                  --
                  
                  
                  
                  
                  
                  1,064,487Loss
      from operations
                  
                  
                  (1,064,487
                  )
                  
                  
                  --
                  
                  
                  
                  
                  
                  (1,064,487
                  )Loss
      before income taxes
                  
                  
                  (1,068,885
                  )
                  
                  
                  --
                  
                  
                  
                  
                  
                  (1,068,885
                  )Income
      tax benefit
                  
                  
                  --
                  
                  
                  
                  280,614
                  
                  
                  e
                  
                  
                  280,614Net
      loss
                  
                  $
                  (1,068,885
                  )
                  
                  $
                  280,614
                  
                  
                  e
                  
                  $
                  (788,271
                  )
  24
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  10.
                  RESTATEMENT
      (continued)
 
 The
following table summarizes statement of operations for the period from January
14, 2000 (Date of Inception) through June 30, 2006, and reconciles the reported
amounts to the restated amounts:
 
 Summarized
      Statement of Operations -For
      the period from January 14, 2000 (Date of Inception)Through
      June 30, 2006
                  
                  As
      Reported
                  
                  
                  Adjustments
                  
                  
                  
                  
                  As
      RestatedResearch
      and development
                  
                  $
                  1,900,095
                  
                  
                  $
                  (1,900,095
                  )
                  
                  h
                  
                  $
                  --Mineral
      exploration and evaluation expenses
                  
                  
                  1,909,911
                  
                  
                  
                  (247,500
                  )
                  
                  f
                  
                  
                  1,662,411Mineral
      exploration and evaluationexpenses
      - related party
                  
                  
                  --
                  
                  
                  
                  247,500
                  
                  
                  f
                  
                  
                  247,500General
      and administrative
                  
                  
                  3,121,780
                  
                  
                  
                  (1,621,355
                  )
                  
                  i
                  
                  
                  1,500,425Depreciation
                  
                  
                  239,090
                  
                  
                  
                  (235,174
                  )
                  
                  j
                  
                  
                  3,916Impairment
      loss on intangible assets
                  
                  
                  173,234
                  
                  
                  
                  (173,243
                  )
                  
                  k
                  
                  
                  --Impairment
      loss on property and equipment
                  
                  
                  86,683
                  
                  
                  
                  (86,683
                  )
                  
                  l
                  
                  
                  --Total
      operating expenses
                  
                  
                  7,430,793
                  
                  
                  
                  (4,016,541
                  )
                  
                  m
                  
                  
                  3,414,252Loss
      from operations
                  
                  
                  (7,430,793
                  )
                  
                  
                  4,016,541
                  
                  
                  m
                  
                  
                  (3,414,252
                  )Other
      income
                  
                  
                  282,142
                  
                  
                  
                  (282,142
                  )
                  
                  n
                  
                  
                  --Interest
      expense, net
                  
                  
                  (300,000
                  )
                  
                  
                  300,000
                  
                  
                  o
                  
                  
                  --Total
      other income (expense)
                  
                  
                  (22,256
                  )
                  
                  
                  17,858
                  
                  
                  n,o
                  
                  
                  (4,398
                  )Loss
      before income taxes
                  
                  
                  (7,453,049
                  )
                  
                  
                  4,034,399
                  
                  
                  
                  
                  
                  (3,418,650
                  )Income
      tax benefit
                  
                  
                  12,837
                  
                  
                  
                  948,036
                  
                  
                  e,p
                  
                  
                  960,873Net
      loss
                  
                  
                  (7,440,212
                  )
                  
                  
                  839,267
                  
                  
                  e,q
                  
                  
                  (6,600,945
                  )Foreign
      currency translation adjustment
                  
                  
                  (121,606
                  )
                  
                  
                  121,606
                  
                  
                  q
                  
                  
                  --Loss
      from discontinued operations
                  
                  $
                  --
                  
                  
                  $
                  (4,143,168
                  )
                  
                  r
                  
                  $
                  (4,143,168
                  )
 
 The
restatements had no impact on the Company’s cash or cash flows.
  25
  SEARCHLIGHT
MINERALS CORP.
 (AN
EXPLORATION STAGE ENTERPRISE)
 NOTES
TO FINANCIAL STATEMENTS
 (UNAUDITED)
(RESTATED)
  10.
                  RESTATEMENT
      (continued)
 
 The
restatement adjustments are as follows:
 
 a.
                  Restate
      issuance of 1,400,000 shares to obtain mineral properties on July 7, 2005
      at the market value of $0.35 per share on the date of
      issuance.  The resulting estimated future income tax liability
      associated with the temporary difference between the tax basis and
      acquisition value was applied to the mineral asset in the absence of there
      being a goodwill component associated with the
      transaction.
 b.
                  Restate
      issuance of warrants in 2005 in connection with the Clarkdale Slag Project
      option of $1,918,481 (comprising of related deferred tax liability assumed
      of $608,277 and an increase to stockholders’ equity of $1,310,204) which
      was computed based on private placement stock price at the time the
      warrants were issued.
 c.
                  Restate
      for computation of deferred tax asset related to mineral property
      acquisition.
 d.
                  Reclassify
      accumulated other comprehensive loss prior to 2005 from a biotechnology
      research and development business as discontinued
      operations.
 e.
                  Restate
      for deferred income tax benefit related to mineral property
      acquisitions.
 f.
                  Reclassify
      related party mineral exploration and evaluation
    expense.
 g.
                  Reclassify
      foreign currency translation adjustment from the period ended March 31,
      2006 as general and administrative
expense.
 h.
                  Reclassify
      research and development expense incurred prior to 2005 as discontinued
      operations.
 i.
                  Reclassify
      general and administrative expense incurred prior to 2005 as discontinued
      operations.
 j.
                  Reclassify
      depreciation expense incurred prior to 2005 as discontinued
      operations.
 k.
                  Reclassify
      impairment loss on intangible assets incurred prior to 2005 as
      discontinued operations.
 l.
                  Reclassify
      impairment loss on property and equipment incurred prior to 2005 as
      discontinued operations.
 m.
                  Reclassify
      operating expenses incurred prior to 2005 as discontinued
      operations.
 n.
                  Reclassify
      other income earned prior to 2005 as discontinued
      operations.
 o.
                  Reclassify
      interest expense incurred prior to 2005 as discontinued
      operations.
 p.
                  Reclassify
      income tax benefit prior to 2005 as discontinued
      operations.
 q.
                  Reclassify
      accumulated other comprehensive loss prior to 2005 from a biotechnology
      research and development business as discontinued
      operations.
 r.
                  Reclassify
      net losses prior to 2005 as discontinued
  operations.
  26


ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION.




FORWARD
LOOKING STATEMENTS




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




INTRODUCTION




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




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




RESTATEMENT




On
November 8, 2008, the management of the Company concluded that the unaudited
interim financial statements for the period ending March 31, 2006 needed to be
restated and should not be relied upon.  The financial statements were
restated for the following:




Searchlight Mining
Claims – Mineral properties have been restated to reflect payment made by
issuance of 1,400,000 shares at $0.35 on July 7, 2005 at the market values on
the date of issuance.  This restatement had the impact of increasing
the mineral properties and additional paid-in capital, mineral properties also
increased for deferred income tax liability assumed.


27


Joint venture agreement– The warrants issued in connection with the assignment of the original
Slag Project option have been restated to reflect the recomputation of the value
of the 12,000,000 warrants issued as consideration for the option to acquire a
mineral interest in the Slag Project of $1,918,481, (including related deferred
tax liability assumed of $608,277) which was computed based on private placement
stock price at the time the warrants were issued.  The original terms
of the underlying option agreement were unchanged and this adjustment had no
effect on the agreement.




Discontinued
operations – The statement of operations for the period from January 14,
2000 (date of inception) through June 30, 2006 has been restated to reclassify
net losses prior to January 1, 2005 as 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 foreign currency translation
adjustment, which has been included in loss from discontinued
operations.




The
statement of operations for the six months ended June 30, 2006, has been
restated to reclassify $11,769 of foreign currency translation adjustment
related to 2004 activity as general and administrative expense.  The
restatement also reflects the income tax benefit of $280,614 and $561,228 for
the three and six months ended June 30, 2006, respectively.




RECENT
CORPORATE DEVELOPMENTS




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




1.
            On
      July 27, 2006, we issued 1,400,000 shares to the owners of the Searchlight
      Claims. The issuance was completed pursuant to Section 4(2) of the
      Securities Act.  As of July 27, 2006, we have presently issued
      2,800,000 of the 5,600,000 shares of our common stock required to complete
      our acquisition of the Searchlight Claims.  See “Unregistered
      Sales Of Equity Securities And Use Of Proceeds,”
  below.




2.
            In
      June, 2006, we raised $4.87 million from the exercise of 100% of the
      outstanding warrants issued in connection with the three private
      placements closed in September, 2005.  In connection with the
      exercise of the warrants, 8.506 million shares were issued to the warrant
      holders increasing our outstanding common shares to approximately 65.78
      million shares.  The shares were issued pursuant to Regulation S
      to non-US subscribers and pursuant to Rule 506 of Regulation D of the
      Securities Act to US subscribers.  See “Unregistered Sales Of
      Equity Securities And Use Of Proceeds,”
below.




3.
            On
      June 14, 2006, we entered into an employment agreement with Melvin L.
      Williams (the “Employment Agreement”) to act as our Chief Financial
      Officer.  Pursuant to the terms of the Employment Agreement, Mr.
      Williams is to be paid an annual salary of $60,000 based on 300- 400 hours
      worked and a bonus consisting of 50,000 restricted shares of our common
      stock and 100,000 options to purchase additional shares of our common
      stock.  The options are exercisable at a price of $2.06 per
      share for a period of five years until June 14, 2011, with the options
      vesting 50% on the first anniversary of the execution of the Employment
      Agreement and the remainder on the second anniversary of the execution of
      the agreement.  Mr. Williams is also eligible for a
      discretionary bonus to be determined based on factors considered relevant
      by our board of directors, and may be granted, subject to the approval of
      the board, incentive stock options to purchase shares of our common stock
      in such amounts and at such times as the board, in its absolute
      discretion, may from time to time determine.  The term of the
      Employment Agreement is for an indefinite period, unless otherwise
      terminated pursuant to the terms of the Employment
      Agreement.  In the event that the Employment Agreement is
      terminated by us other than for cause, we will provide Mr. Williams with
      payment equal to three months of his monthly remuneration.  On
      June 14, 2006, we issued 50,000 restricted shares of our common stock to
      Melvin L. Williams pursuant to the Employment Agreement between
      Searchlight and Mr. Williams. The shares were issued pursuant to Section
      4(2) of the Securities Act.  See “Unregistered Sales Of Equity
      Securities And Use Of Proceeds,”
below.


28




4.
            On
      June 14, 2006, in connection with the appointment of Melvin Williams as
      our Chief Financial Officer, Carl S. Ager resigned as our Chief Financial
      Officer. Mr. Ager will continue to serve as Secretary, Treasurer and as a
      member of the board of directors.  In place of Mr. Ager, Melvin
      Williams was appointed as our Chief Financial Officer.  Mr.
      Williams is a certified public accountant with over 18 years experience in
      the public accounting industry with the firm of Cupit, Milligan, Ogden and
      Williams in Reno, Nevada.  During this period, he provided
      auditing, consulting, merger/acquisition, valuation and tax services to
      private and publicly traded companies in the manufacturing, technology,
      mining, healthcare and service industries, as well as to various nonprofit
      organizations.  From 1984 until 1987, Mr. Williams served on the
      accounting staff of the University of Oregon Foundation, a private fund
      raising entity that also maintains endowment and trust investments for the
      continuing support of the
University.




5.
            On
      June 6, 2006, we granted the following stock options pursuant to our 2006
      stock incentive plan: (a) 250,000 to Ian R. McNeil, our President and a
      member of our board of directors, (b) 250,000 to Carl S. Ager, our
      Treasurer, Secretary and a member of our board of directors, (c) 50,000 to
      K. Ian Matheson, a member of our board of directors, and (d) 50,000 to
      Robert D. McDougal, a member of our board of directors.  Each of
      the options entitles the holder thereof to purchase additional shares of
      our common stock at a price of $2.40 per share, exercisable for a period
      of five years until June 6, 2011.




6.
            On
      May 31, 2006, we commenced the drilling of nine additional holes at our
      Clarkdale Slag Project in Clarkdale, Arizona.  The drilling
      activities, along with the analysis of the drill cuttings derived from the
      nine new holes and three previously drilled holes, will be analyzed under
      Chain of Custody (COC) parameters by Mountain States R&D International
      ("MSDRI"), an independent engineering firm based in Tucson,
      Arizona.  When drilling of the nine holes has been completed and
      the results of all 18 holes have been analyzed by MSRDI, we expect to have
      more accurate estimate of the grade and tonnage of precious and base
      metals present in the Clarkdale Slag
pile.




7.
            In
      April, 2006, we received COC results from the first six of nine holes
      drilled at the Clarkdale Slag Project. Nine widely-spaced holes (totaling
      675 feet) were drilled as part of a Minerals Inventory Study being
      conducted by MSRDI on our behalf.




8.
            On
      April 7, 2006, we granted 60,000 incentive stock options pursuant to our
      2006 stock incentive plan to Carl S. Ager, our Treasurer, Secretary and a
      member of our board of directors, and 60,000 incentive stock options to
      Ian R, McNeil, our President and a member of our board of directors, to
      purchase additional shares of our common stock at a price of $1.70 per
      share, exercisable for a period of five years until April 7,
      2011.




9.
            On
      April 7, 2006, our board of directors adopted our 2006 Stock Option Plan
      (the "Plan").  Under the terms of the Plan, options to purchase
      up to 40,000,000 shares of our common stock may be granted to our
      employees, officers, directors, and eligible consultants of Searchlight.
      The Plan provides that the option price be the fair market value of the
      stock at the date of grant as determined by the board of
      directors.  Options granted become exercisable and expire as
      determined by the board of directors.  The maximum aggregate
      number of shares of our common stock that may be optioned and sold under
      the Plan will be increased effective the first day of each of our fiscal
      quarters, beginning with the fiscal quarter commencing July 1, 2006, by an
      amount equal to the lesser of: (i) 15% of the total increase in the number
      of shares of common stock outstanding during the previous fiscal quarter;
      or (ii) a lesser number of shares of common stock as may be determined by
      our board.


29




10.
            In
      March, 2006, we entered into an engineering services agreement (the
      “Engineering Services Agreement”) with Cimetta Engineering and
      Construction Co., Inc. (“Cimetta”), pursuant to which Cimetta agreed to
      provide engineering services in connection with the design and development
      of an initial two ton per hour test module and a 2,000 ton per day
      processing facility for our Clarkdale Slag Project site in
      Arizona.  Pursuant to the terms of the Engineering Services
      Agreement, we agreed to pay $115,000 for the cost to complete Phase I of
      the construction.




PLAN
OF OPERATION




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




Plan
Of Operation




Our
current plan of operation is to continue to conduct mineral exploration
activities on the Searchlight Claims and drilling and sampling activities for
the Clarkdale Slag Project to assess whether the slag possesses a mineral
inventory capable of commercial extraction.  The agreements pursuant
to which we acquired our interests in the Searchlight Claims and Clarkdale Slag
Project provide that we must make a series of cash payments over certain time
periods, expend certain minimum amounts on the exploration of the properties or
contribute Searchlight’s share of ongoing expenditures.  If we fail to
make such payments or expenditures in a timely fashion, we may lose our
interests in those properties.




Searchlight
Project




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




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




Current
Status of Exploration of Clarkdale Slag Project




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


30




SD1
Drill Hole




Footage
                
                Copper
                  Cu (%)
                
                
                Zinc
                  Zn (%)
                
                
                Iron
                  Fe (%)SD10.0 –
8.9
                
                
                0.95
                
                
                
                1.73
                
                
                
                30.88.9 –
    19.0
                
                
                0.76
                
                
                
                1.68
                
                
                
                29.719.0 –
    30.0
                
                
                0.77
                
                
                
                1.73
                
                
                
                30.430.0 –
    39.5
                
                
                0.52
                
                
                
                1.94
                
                
                
                29.839.5 –
    55.0
                
                
                0.45
                
                
                
                1.75
                
                
                
                31.00.0 – 55.0
      Composite
                
                
                0.70
                
                
                
                2.10
                
                
                
                32.1




SD2
Drill Hole




Footage
                
                Copper
                  Cu (%)
                
                
                Zinc
                  Zn (%)
                
                
                Iron
                  Fe (%)SD20.0 –
9.5
                
                
                0.71
                
                
                
                1.69
                
                
                
                30.09.5 –
    19.0
                
                
                1.06
                
                
                
                1.80
                
                
                
                31.219.0 –
    30.0
                
                
                0.70
                
                
                
                1.79
                
                
                
                29.930.0 –
    40.0
                
                
                0.43
                
                
                
                1.97
                
                
                
                31.440.0 –
    50.0
                
                
                0.46
                
                
                
                1.95
                
                
                
                31.350.0 –
    60.0
                
                
                0.58
                
                
                
                1.75
                
                
                
                31.40.0 – 60.0
      Composite
                
                
                0.73
                
                
                
                2.13
                
                
                
                34.6




SD1-SD6
Drill Holes




Drill
    Hole
                  
                  Composite
                    Footage
                  
                  
                  Gold
                    Au (opt)
                  
                  
                  Copper
                    Cu (%)
                  
                  
                  Zinc
                    Zn (%)
                  
                  
                  Iron
                    Fe (%)SD1
                  
                  
                  0.0 – 55.0
                  
                  
                  
                  0.210
                  
                  
                  
                  0.70
                  
                  
                  
                  2.10
                  
                  
                  
                  32.1SD2
                  
                  
                  0.0 – 60.0
                  
                  
                  
                  0.213
                  
                  
                  
                  0.73
                  
                  
                  
                  2.13
                  
                  
                  
                  34.6SD3
                  
                  
                  0.0 – 50.0
                  
                  
                  
                  0.196
                  
                  
                  
                  0.37
                  
                  
                  
                  3.11
                  
                  
                  
                  33.2SD3
                  
                  
                  50.0 – 109.0
                  
                  
                  
                  0.256
                  
                  
                  
                  0.37
                  
                  
                  
                  2.88
                  
                  
                  
                  33.5SD4
                  
                  
                  0.0 – 50.0
                  
                  
                  
                  0.169
                  
                  
                  
                  0.42
                  
                  
                  
                  3.25
                  
                  
                  
                  33.0SD4
                  
                  
                  50.0 –
    80.0
                  
                  
                  
                  0.224
                  
                  
                  
                  0.35
                  
                  
                  
                  3.35
                  
                  
                  
                  31.2SD5
                  
                  
                  0.0 – 50.0
                  
                  
                  
                  0.227
                  
                  
                  
                  0.38
                  
                  
                  
                  2.33
                  
                  
                  
                  30.3SD5
                  
                  
                  50.0 –
    89.0
                  
                  
                  
                  0.231
                  
                  
                  
                  0.40
                  
                  
                  
                  2.24
                  
                  
                  
                  30.1SD6
                  
                  
                  0.0 – 50.0
                  
                  
                  
                  0.216
                  
                  
                  
                  0.36
                  
                  
                  
                  3.04
                  
                  
                  
                  32.5


31




Drilling
Program and Metallurgical Testing




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




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




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




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




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


32




Cash
Requirements




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




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




We
recorded a net operating loss before income taxes of $1,696,873 for the six
months ended June 30, 2006 and have an accumulated deficit of $6,600,945 since
inception.  As at the date of this Quarterly Report, we had cash of
approximately $5,508,917 and for the next twelve months, management anticipates
that the minimum cash requirements to fund our proposed exploration program and
our continued operations will be $3,950,000.  Accordingly, we have
sufficient funds to meet our planned expenditures over the next twelve
months.




RESULTS
OF OPERATIONS




Second
Quarter and Six Month Summary




Second Quarter Ended June
      30
                            
                            
                            Six Months Ended June
    30Percentage
                            
                            
                            
                            
                            
                            
                            
                            
                            Percentage2006
                            
                            
                            2005
                            
                            
                            Increase
      /
                            
                            
                            2006
                            
                            
                            2005
                            
                            
                            Increase
      /(Decrease)
                            
                            
                            
                            
                            
                            
                            
                            
                            (Decrease)(restated)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (restated)Revenue
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            N/A
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            
                            N/AOperating
      Expenses
                            
                            
                            (1,064,487
                            )
                            
                            
                            (98,275
                            )
                            
                            
                            983.2
                            %
                            
                            
                            (1,692,475
                            )
                            
                            
                            (259,755
                            )
                            
                            
                            551.6
                            %Other
      Income (Expense)
                            
                            
                            (4,398
                            )
                            
                            
                            -
                            
                            
                            
                            n/a
                            
                            
                            
                            (4,398
                            )
                            
                            
                            -
                            
                            
                            
                            n/aIncome
      Tax Benefit
                            
                            
                            280,614
                            
                            
                            
                            -
                            
                            
                            
                            n/a
                            
                            
                            
                            561,228
                            
                            
                            
                            -
                            
                            
                            
                            n/aGain
      from Discontinued Operations
                            
                            
                            -
                            
                            
                            
                            60,963
                            
                            
                            
                            (100.0
                            )%
                            
                            
                            -
                            
                            
                            
                            85,111
                            
                            
                            
                            (100.0
                            )%Net
      Loss
                            
                            $
                            (788,271
                            )
                            
                            $
                            (37,312
                            )
                            
                            
                            2012.6
                            %
                            
                            $
                            (1,135,645
                            )
                            
                            $
                            (174,644
                            )
                            
                            
                            550.3
                            %


33




Revenue




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




Operating
Expenses




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




Second Quarter Ended June
      30
                
                
                Six Months Ended June
    30Percentage
                
                
                
                
                
                
                
                
                Percentage2006
                
                
                2005
                
                
                Increase
      /
                
                
                2006
                
                
                2005
                
                
                Increase
      /(restated)
                
                
                
                
                
                (Decrease)
                
                
                (restated)
                
                
                
                
                
                (Decrease)Mineral
      exploration and evaluation expenses
                
                $
                497,046
                
                
                $
                49,606
                
                
                
                9019.9
                %
                
                $
                775,388
                
                
                $
                62,350
                
                
                
                1,143.6
                %Mineral
      exploration and evaluation expenses – related party
                
                
                123,750
                
                
                
                -
                
                
                
                n/a
                
                
                
                247,500
                
                
                
                -
                
                
                
                n/aGeneral
      and administrative
                
                
                441,518
                
                
                
                48,669
                
                
                
                807.2
                %
                
                
                666,621
                
                
                
                197,405
                
                
                
                237.7
                %Depreciation
                
                
                2,173
                
                
                
                -
                
                
                
                100.0
                %
                
                
                2,966
                
                
                
                -
                
                
                
                n/aTotal
      Operating Expenses
                
                $
                1,064,487
                
                
                $
                98,275
                
                
                
                983.2
                %
                
                $
                1,692,475
                
                
                $
                259,755
                
                
                
                551.6
                %




We
incurred operating expenses in the amount of $1,692,475 for the six moths ended
June 30, 2006 as compared to $259,755 for the six months ended June 30,
2005.  Operating expenses for the six months ended June 30, 2006
increased by 551.6% as compared to the comparable period in 2005 largely due to:
(i) increased mineral exploration expenses in connection with the acquisition of
our interest in the Clarkdale Slag Project and Searchlight Project and
associated increases in our mineral exploration activities, and (ii) increased
general and administrative expenses due to increased professional fees
associated with the completion of our private placements, the preparation of our
registration statement on Form SB-2 and compliance with our reporting
obligations under the Exchange Act.




Liquidity and Financial
Condition




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





Cash FlowsSix
      Months Ended
                            
                            
                            Six
      Months EndedJune 30, 2006
                            
                            
                            June 30, 2005(restated)Cash
      Flows used in Operating Activities
                            
                            $
                            (1,433,113
                            )
                            
                            $
                            (145,063
                            )Cash
      Flows used in Investing Activities
                            
                            
                            (20,202
                            )
                            
                            
                            (19,572
                            )Cash
      Flows from Financing Activities
                            
                            
                            6,256,376
                            
                            
                            
                            170,000Net
      Increase in Cash During Period
                            
                            $
                            4,803,061
                            
                            
                            $
                            5,365


34




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




Future
Financings




Our
plan of operation calls for significant expenses in connection with the
exploration of the Searchlight Claims, and drilling and sampling activities on
the Clarkdale Slag Project which will require us to obtain additional financing.
We recorded a net operating loss before income taxes of $1,696,873for the six
months ended June 30, 2006 and have an accumulated deficit of $6,600,945 since
inception.  As at the date of this Quarterly Report we had cash of
approximately $5,508,917 and for the next twelve months, management anticipates
that the minimum cash requirements to fund our proposed exploration program and
our continued operations will be $3,950,000.  Accordingly we have
sufficient funds to meet our planned expenditures over the next twelve
months.  However, in order to complete our planned exploration
activities and development of our mineral properties, we will need to seek
additional financing.




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




Off-Balance
Sheet Arrangements




None.




Critical
Accounting Policies




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




Use
of Estimates




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




Property
and Equipment




Property
and equipment is 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 lives 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,
we use an estimate of the related undiscounted cash flows over the remaining
life of the property and equipment in measuring their
recoverability.




35




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 (“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 we do not continue with exploration after the
completion of the feasibility study, the mineral rights will be expensed at that
time.  We evaluate 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.”




Exploration
Costs




Mineral
exploration costs are expensed as incurred.




RISKS
AND UNCERTAINTIES




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




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




·
            our
      ability to locate a profitable mineral property;
  and




·
            our
      ability to generate revenues from such mineral
  property.




Our
plan of operation calls for significant expenses in connection with the
exploration of the Searchlight Claims, and drilling and sampling activities on
the Clarkdale Slag Project, which will require us to obtain additional
financing. We recorded a net operating loss before income taxes of $1,696,873
for the six months ended June 30, 2006 and have an accumulated deficit of
$6,600,945 since inception. As at June 30, 2006, we had cash of $5,508,917 and,
for the next twelve months, management anticipates that the minimum cash
requirements to fund our proposed exploration program and our continued
operations will be $3,950,000. Accordingly, we have sufficient funds to meet our
planned expenditures over the next twelve months. However, if we continue our
plan of operation beyond the next twelve months, we will need to seek additional
financing to meet our planned expenditures.




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




36




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




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




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




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




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




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




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




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




·
            the
      identification of potential economic mineralization based on superficial
      analysis;




·
            the
      quality of our management and our geological and technical expertise;
      and




·
            the
      capital available for exploration and
  development.




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




37




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




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




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




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




·
            Costs
      of bringing the property into production including exploration work,
      preparation of production feasibility studies, and construction of
      production facilities, all of which we have not budgeted
    for;




·
            Availability
      and costs of financing;




·
            Ongoing
      costs of production; and




·
            Environmental
      compliance regulations and
restraints.




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




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




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




(a)
              Water
      discharge will have to meet drinking water
  standards;
  (b)
              Dust
      generation will have to be minimal or otherwise
    re-mediated;
  (c)
              Dumping
      of material on the surface will have to be re-contoured and re-vegetated
      with natural vegetation;
  (d)
              An
      assessment of all material to be left on the surface will need to be
      environmentally benign;
  38
  (e)
              Ground
      water will have to be monitored for any potential
      contaminants;
  (f)
              The
      socio-economic impact of the project will have to be evaluated and, if
      deemed negative, will have to be re-mediated;
  and
  (g)
              There
      will have to be an impact report of the work on the local fauna and flora
      including a study of potentially endangered
  species.




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




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




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




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




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




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




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




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




39




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


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




ITEM
      3.
              CONTROLS
      AND PROCEDURES.




NOTE:
This Item 3. Controls and Procedures has been updated to reflect the restatement
of our 2005 and 2006 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 presents a restatement of the financial statements for the covered
period. In connection with this amendment to our Quarterly Report for the
period ended June 30, 2006, 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 assessing whether our disclosure controls and procedures
were effective as of June 30, 2006, management considered the impact of the
restatement to our interim financial statements for the six month period ended
June 30, 2006, as outlined in Item 2, as well as our control
environment.





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.





Based
on the reevaluation, our management has concluded that the lack of adequate
additional research materials and support staff represented a material weakness
in our disclosure controls and procedures as of June 30, 2006.




In
addition, our management has concluded that management’s failure to consult an
outside expert regarding the initial accounting for certain complex
transactions  also represented material weaknesses in our disclosure
controls and procedures as of June 30, 2006.  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 record the share issuances made to acquire the Searchlight
Claims, the issuance of warrants in connection with the assignment of the option
for the Clarkdale Slag Project, and the internal control deficiencies associated
with accounting for income taxes related to the purchase accounting treatment of
the share issuances made to acquire the Searchlight Claims, the issuance of
warrants in connection with the assignment of the option for the Clarkdale Slag
Project, and the resultant computation of future deferred income tax liability
assumed.





Accordingly, our management has
concluded that our disclosure controls and procedures were not effective as of
June 30, 2006 to provide reasonable assurance that information required to be
disclosed by us in the reports that we file is recorded, processed, and
summarized within the appropriate periods.




40




Changes in Internal Controls over
Financial Reporting




Based on the reevaluation as
described above, our management concluded in prior periods starting with March
31, 2005, that the lack of a qualified Chief Financial Officer represented a
material weaknesses in our disclosure controls and procedures.  On
June 14, 2006, we remediated this weakness by appointing Melvin L. Williams as
our Chief Financial Officer.  Mr. Williams has extensive U.S. GAAP
experience, a B.B.A. in Business Administration from the University of Oregon,
and has been a CPA in the State of Nevada since 1989.





In addition, subsequent to this
period we remediated the weakness of management’s failure to consult an outside
expert 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:





·
            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.




41




PART
II - OTHER INFORMATION




ITEM 1.
              LEGAL
      PROCEEDINGS.
  None.
  ITEM 2.
              UNREGISTERED SALES OF EQUITY
      SECURITIES AND USE OF
PROCEEDS.




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




1.
              On
      July 27, 2006, we issued 1,400,000 shares to the owners of the Searchlight
      Claims. The issuance was completed pursuant to Section 4(2) of the
      Securities Act.
  2.
              On
      June 14, 2006, we issued 50,000 restricted shares of our common stock to
      Melvin L. Williams pursuant to the Employment Agreement between
      Searchlight and Mr. Williams in consideration for Mr. Williams acting as
      our Chief Financial Officer.  The shares were issued pursuant to
      Section 4(2) of the Securities Act.  The shares did not involve
      a public offering and Mr. Williams as our Chief Financial Officer has
      effective access to our files and records that contained the relevant
      information necessary for making his investment decision. Mr. Williams has
      such knowledge and experience in our financial and business matters that
      he was capable of evaluating the merits and risks of his
      investment.
  3.
              In
      June, 2006, we received $4.87 million from the exercise of all of the
      outstanding share purchase warrants issued in connection with the
      September 2005 Private Placements.  Each unit of the Private
      Placements (a” Unit”) consisted of one share of our common stock (a
      “Share”), one half of one share purchase warrant with each whole warrant
      (a “Warrant”) entitling the subscriber to purchase one additional Share
      for a period of nine months from the closing of the private placement at
      an exercise price equal to $1.25 per Share, and one non-transferable
      warrant exercisable into one-tenth (1/10) of one Unit for no additional
      consideration if a registration statement on Form SB-2 registering the
      resale of the Units is not declared effective by the SEC on or before the
      day that is four months and one day after the closing of the private
      placement.  Following receipt of payment for the exercise of the
      Warrants, on June 16, 2006, we issued 8,506,000 million shares of our
      common stock to the Warrant holders.  All securities issued to
      U.S. subscribers were issued pursuant to Rule 506 of Regulation D and
      endorsed with a restrictive legend confirming that the securities cannot
      be resold without registration under the Securities Act or an applicable
      exemption from the registration requirements of the Securities
      Act.  All securities issued to non-US subscribers were issued
      pursuant to Regulation S of the Securities Act of
      1933.  Appropriate legends were affixed to the stock certificate
      issued to each non-US investor in accordance with Regulation
      S.
  ITEM 3.
              DEFAULTS UPON SENIOR
      SECURITIES.
 
 None.
 
 ITEM 4.
              SUBMISSION OF MATTERS TO A VOTE
      OF SECURITY HOLDERS.
 
 None.
 
 ITEM 5.
              OTHER
      INFORMATION.




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




42




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




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




Exhibit
                Number
              
              Description of Exhibits3.1
              
              Articles
      of Incorporation of L.C.M. Equity, Inc.(1)3.2
              
              Bylaws
      of L.C.M. Equity, Inc.(1)3.3
              
              Articles
      of Incorporation of Uscribble.(1)3.4
              
              Certificate
      of Amendment to Articles of Incorporation – name change to “Regma Bio
      Technologies Limited.”(3)3.5
              
              Certificate
      of Amendment to Articles of Incorporation – name change to “Phage
      Genomics, Inc.”(6)3.6
              
              Certificate
      of Amendment to Articles of Incorporation – name change to “Searchlight
      Minerals Corp.”(12)3.7
              
              Certificate
      of Change to Authorized Capital Pursuant to NRS 78.209(13)3.8
              
              Amended
      Bylaws dated July 22, 2005.(9)3.9
              
              Amended
      Bylaws dated August 9, 2005. (12)4.1
              
              Specimen
      Stock Certificate.(1)10.1
              
              Acquisition
      Agreement.(2)10.2
              
              2002
      Nonqualified Stock Option Plan.(4)10.3
              
              2003
      Nonqualified Stock Option Plan.(5)10.4
              
              Letter
      Agreement between Phage Genomics, Inc., Searchlight Minerals Corp.,
      Kiminco Inc., Pass Minerals Inc., Debra L. Matheson, and Pilot Plant Inc.
      dated February 8, 2005.(8)10.5
              
              Letter
      Agreement between Phage Genomics Inc., Searchlight Minerals Corp., K. Ian
      Matheson, and Pilot Plant Inc. dated February 8, 2005.(8)10.6
              
              Letter
      Agreement between Phage Genomics, Inc., Searchlight Minerals Corp., K. Ian
      Matheson, and Bear Dog Mines Inc. dated February 8, 2005.(8)10.7
              
              Letter
      Agreement between Phage Genomics, Inc., Searchlight Minerals Corp., K. Ian
      Matheson, and Gold Hunter Inc. dated February 8, 2005.(8)10.8
              
              Letter
      Agreement between Phage Genomics, Inc., Searchlight Minerals Corp.,
      Kiminco Inc., Pass Minerals Inc., Michael D. Anderson, Farrell Drozd,
      Michael I. Matheson, and Pass Minerals Inc. dated February 8, 2005.(8)
  43
  10.9
              
              Letter
      Agreement between Phage Genomics, Inc., Searchlight Minerals Corp., K. Ian
      Matheson, and Britti Gold Inc. dated February 8, 2005.(8)10.10
              
              Letter
      Agreement between Phage Genomics, Inc., Searchlight Minerals Corp.,
      Kiminco Inc., Pass Minerals Inc., Michael D. Anderson, Geosearch Inc.,
      Patrick I. Matheson, and Geotech Mining Inc. dated February 8, 2005.(8)10.11
              
              Letter
      Agreement between Phage Genomics, Inc., Searchlight Minerals Corp.,
      Kiminco Inc., Pass Minerals Inc., and Gold Crown Inc. dated February 8,
      2005.(8)10.12
              
              Engagement
      Letter dated June 17, 2005 between Searchlight Minerals Corp. and Clarion
      Finanz AG.(10)10.13
              
              Extension
      Agreement dated effective June 22, 2005 among Searchlight, K. Ian
      Matheson, Searchlight Minerals, Inc. and Pilot Plant Inc.(10)10.14
              
              Extension
      Agreement dated effective June 22, 2005 among Searchlight, K. Ian
      Matheson, Searchlight Minerals, Inc. and Bear Dog Mines Inc.(10)10.15
              
              Extension
      Agreement dated effective June 22, 2005 among Searchlight, K. Ian
      Matheson, Searchlight Minerals, Inc. and Gold Hunter Inc.(10)10.16
              
              Extension
      Agreement dated effective June 22, 2005 among Searchlight, K. Ian
      Matheson, Searchlight Minerals, Inc., Pass Minerals Inc., Michael D.
      Anderson, Farrell Drozd and Michael I. Matheson.(10)10.17
              
              Extension
      Agreement dated effective June 22, 2005 among Searchlight, K. Ian
      Matheson, Searchlight Minerals, Inc. and Britti Gold Inc.(10)10.18
              
              Extension
      Agreement dated effective June 22, 2005 among Searchlight, K. Ian
      Matheson, Searchlight Minerals, Inc., Geotech Mining Inc., Michael D.
      Anderson, Geosearch Inc. and Patrick B. Matheson.(10)10.19
              
              Extension
      Agreement dated effective June 22, 2005 among Searchlight, K. Ian
      Matheson, Searchlight Minerals, Inc. and Gold Crown Minerals Inc.(10)10.20
              
              Assignment
      Agreement dated for reference June 1, 2005 between Searchlight Minerals
      Corp. and Nanominerals Corp.(11)10.21
              
              Engagement
      Letter dated May 9, 2005 between Searchlight Minerals Corp. and Dominick
      & Dominick Securities Inc. (12)10.22
              
              First
      Amendment to Assignment Agreement between Nanominerals Corp. and
      Searchlight Minerals Corp. dated August 31, 2005.(15)10.23
              
              Second
      Amendment to Assignment Agreement between Nanominerals Corp. and
      Searchlight Minerals Corp. dated October 24, 2005.(14)10.24
              
              Agency
      Agreement between Searchlight Minerals Corp. and Dominick & Dominick
      Securities Inc. dated September 1, 2005. (18)10.25
              
              Office
      Suite Lease Agreement between Burnett & Williams Executive Suites and
      Searchlight Minerals Corp. dated September 6, 2005.(15)10.26
              
              Finders’
      Fee Agreement between Searchlight Minerals Corp. and S&P Investors,
      Inc. dated December 7, 2005.(16)10.27
              
              Employment
      Agreement between Searchlight Minerals Corp. and Carl S. Ager dated as of
      January 1, 2006.(17)
  44
  10.28
              
              Employment
      Agreement between Searchlight Minerals Corp. and Ian R. McNeil dated as of
      January 1, 2006.(17)10.29
              
              2006
      Stock Option Plan.(19)10.30
              
              Engineering Services Agreement dated as of May 1,
      2006 with Cimetta Engineering and Construction Co., Inc.*14.1
              
              Code
      of Ethics.(7)31.1
              
              Certification of Chief Executive Officer
      pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.31.2
              
              Certification of Chief Financial Officer
      pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
              
              Certification ofChief Executive Officer and Chief Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002.99.3
              
              Audit
      Committee Charter.(7)99.4
              
              Disclosure
      Committee Charter.(7)
  Notes:
  (1)
              Filed
      with the SEC as an exhibit to our Registration Statement on Form 10-SB
      originally filed on July 7, 2000.
  (2)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      November 13, 2001.
  (3)
              Filed
      with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on
      April 1, 2002.
  (4)
              Filed
      with the SEC as an exhibit to our Form S-8 Registration Statement filed on
      April 10, 2002.
  (5)
              Filed
      with the SEC as an exhibit to our Form S-8 filed on June 30,
      2003.
  (6)
              Filed
      with the SEC as an exhibit to our Form 8-K filed on December 22,
      2003;
  (7)
              Filed
      with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on
      April 13, 2004.
  (8)
              Filed
      with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on
      April 15, 2005.
  (9)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on July
      29, 2005.
  (10)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on June
      24, 2005.
  (11)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on June
      16, 2005.
  (12)
              Filed
      with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on
      August 22, 2005.
  (13)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      October 14, 2005.
  (14)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      October 28, 2005.
  (15)
              Filed
      with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on
      November 21, 2005.
  45
  (16)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      December 13, 2005.
  (17)
              Filed
      with the SEC as an exhibit to our Current Report on Form 8-K filed on
      March 2, 2006.
  (18)
              Filed
      with the SEC as an exhibit to our Registration Statement on Form SB-2
      originally filed on April 3, 2006.
  (19)
              Filed
      with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on
      May 15, 2006.
  *
              Filed
      with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on
      August 14, 2006.




REPORTS
ON FORM 8-K




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




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




46




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.Date:
            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
      Financial Officer )




47