Searchlight Minerals 10K/A 2006 Annual report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

Form 10-KSB

Form 10-K/A

(Mark One)

x	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2006.

¨	Transition report pursuant to 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.

(Name of registrant as specified in its charter)

Nevada	98-0232244
State or other jurisdiction of incorporation or organization	I.R.S. Employer Identification Number

#120 - 2441 West Horizon Ridge Pkwy.
Henderson, Nevada	89052
Address of principal executive offices	Zip Code

(702) 939-5247
Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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. (Check one):

Large accelerated filer ¨	Accelerated filer x
Non-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

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2008 (75,279,081 shares) was approximately $156,580,200 (computed based on the closing sale price of the common stock at $2.08 per share as of such date). Shares of common stock held by each officer and director and each person owning more than ten percent of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of the affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of common stock of the issuer outstanding as of July 6, 2009 was 106,468,637.

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-K/A”) to our Annual Report on Form 10-KSB for the year ended December 31, 2006 (the “2006 10-KSB”) is being filed with the Securities and Exchange Commission (the “SEC”) to restate our financial statements as of December 31, 2006 and for the twelve months ended December 31, 2006 and 2005, and the period from January 14, 2000 (date of inception) through December 31, 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.

cumulative increase to the mineral asset by $8,038,000 for the shares issued and by $4,537,124 for the deferred future income tax liability assumed for a total increase of $12,575,124 for the period ended June 30, 2007.

increasing the mineral asset by $450,000 for the shares issued on July 7, 2005 and by $242,308 for the related deferred tax liability assumed and by $385,846 for the recomputation of deferred tax liability as a result of the Clarkdale Slag Project restatement for a total increase of $1,078,154 for the period ended September 30, 2007.

increasing the mineral asset by $1,182,594 for the recomputation of the deferred tax liability as a result of the Clarkdale Slag Project restatement for the period ended December 31, 2007.

Joint Venture Agreement - During the second quarter of 2008, we also determined that the accounting treatment for the 12,000,000 warrants issued to Nanominerals Corp. (“Nanominerals”) and its designates in connection with the assignment of the option for the Clarkdale Slag Project approved on June 1, 2005 was not appropriate. We have assigned a value to the warrants of $1,310,204 by using the sales price of shares of common stock issued in connection with a private placement conducted at the time the warrants were issued. The adjustment also included the deferred future income tax liability assumed of $608,277 for a total increase in purchase consideration of $1,918,481. Nanominerals is one of our principal stockholders, and is an affiliate of two members of our executive management and board of directors, Ian R. McNeil and Carl S. Ager.

The value of the warrants, as restated, was computed using the binomial lattice method based on the following assumptions:

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

This restatement had the effect of increasing the joint venture and merger option agreements by $1,918,481 on our balance sheets for the periods ended September 30, 2005, December 31, 2005, March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006.

Clarkdale Slag Project – On February 15, 2007, we entered into an agreement and plan of merger with Transylvania. Pursuant to the agreement Transylvania merged with and into our wholly owned subsidiary, Clarkdale Minerals LLC. This agreement superseded the original Clarkdale Slag Project option assignment. During the second quarter of 2008, we identified certain errors in our previously issued financial statements related to our purchase accounting treatment of the acquisition of Transylvania, and the resultant computation of future deferred income tax liability assumed. We have restated certain items on our consolidated balance sheets and statements of operations as follows:

amounts recorded for the Clarkdale Slag Project on our consolidated balance sheets have been restated to reflect changes to the purchase accounting of the acquisition of Transylvania based on the acquisition agreement and the recomputation of the value of the 12,000,000 warrants issued to Nanominerals Corp., and its designates in connection with the assignment of the option for the Clarkdale Slag Project. The amount recorded for the Clarkdale Slag Project was also affected by the recomputation of the deferred future federal and state income tax liability in connection with our acquisition of the Clarkdale Slag Project.

amounts recorded for the Searchlight Gold Project on our consolidated balance sheets have been restated to include the impact of the recomputation of the deferred future income tax liability and state income tax liability. This recomputation was required because changes made to the acquisition accounting of the Clarkdale Slag Project affected the computation of the deferred future income tax liability related to the mineral claims making up the Searchlight Gold Project.

our consolidated statement of operations for each of the periods ended March 31, 2007, June 30, 2007, September 30, 2007 and December 31, 2007 has been restated to reflect the recomputation of the tax benefits related to net operating losses as a result of changes to the purchase accounting for the Clarkdale Slag Project. There was no other impact on the results of operations.

our consolidated statement of operations for the three months ended March 31, 2007 has been restated to reclassify related party mineral exploration and evaluation expense not stated separately in previous reports. There was no change to the underlying expense or results of operations as previously reported.

During the second quarter of 2008, we determined that the acquisition accounting method used in prior periods to record the purchase accounting for the Clarkdale Slag Project was not appropriate for the 2007 acquisition of Transylvania. The adjustments included revision of the acquisition accounting related to payment terms and conditions contained in the acquisition agreement. The overall recorded acquisition purchase consideration was reduced by $7,546,217 with a corresponding reduction in recorded liabilities of $7,546,217. The recorded liabilities were adjusted, as follows:

the recorded current portion (relating to the $30,000 monthly obligation due to VRIC) decreased on the balance sheet by $227,174.

the recorded long-term portion (relating to the $30,000 monthly obligation due to VRIC) decreased on the balance sheet by $919,043.

the payment due to VRIC (with respect to the date that a feasibility study relating to the Clarkdale Slag Project establishes that the project is economically viable and “bankable,” or the “Project Funding Date”) decreased on the balance sheet by $6,400,000.

We have accounted for the payments based on the Project Funding Date and the payments based on future cash flow as contingent consideration. If the contingency requirements are met, the purchase price of the Clarkdale Slag Project will be adjusted accordingly at that time.

The restatement had the following impact on our balance sheets for the periods ended March 31, 2007 through December 31, 2007:

increasing the acquisition cost of the Slag Project by $1,918,481 for the warrants issued in connection with the option assignment and by $14,925,422 for the deferred tax liability assumed and decreasing the acquisition cost by $7,546,217 for the contingent payment terms for a total increase of $9,297,686 for the periods ended March 31, 2007 and June 30, 2007.

increasing the acquisition cost of the Slag Project by $1,918,481 for the warrants issued in connection with the option assignment and by $10,801,018 for the deferred tax liability assumed and decreasing the acquisition cost by $7,546,217 for the contingent payment terms for a total increase of $5,173,282 for the period ended September 30, 2007.

increasing the acquisition cost of the Slag Project by $1,918,481 for the warrants issued in connection with the option assignment and decreasing the acquisition cost by $4,121,755 for the deferred tax liability assumed and by $7,546,217 for the contingent payment terms for a total decrease of $9,749,491 for the period ended December 31, 2007.

The original terms of the underlying purchase agreement were unchanged and this adjustment had no effect on the acquisition agreement.

Discontinued Operations - The statements of operations from the date of inception through the periods ended March 31, 2005, June 30, 2005, September 30, 2005, December 31, 2005, March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006 and the consolidated statements of operations from the date of inception through the periods ended March 31, 2007, June 30, 2007, September 30, 2007, December 31, 2007 have been restated to reclassify net losses prior to January 1, 2005 as discontinued operations. On February 10, 2005, we announced that we were changing our business from biotechnology to becoming a mineral exploration company, dedicated to the discovery and exploration of gold and other precious metal deposits. Activity between January 1 and February 10, 2005 consisted of minor general and administrative expenses and as a result was not included in loss from discontinued operations.

Foreign Currency Translation Reclassification - The statement of operations for the year ended December 31, 2006, has been restated to reclassify foreign currency translation adjustment as general and administrative expense. Foreign currency translation adjustment was related to translation of accounts payable assumed as part of our change of business in 2005. This restatement had the impact of increasing net loss and eliminating other comprehensive loss for the year ended December 31, 2006 by $11,769. Related to the same issue, the balance sheet at December 31, 2006 has been restated to reclassify accumulated other comprehensive loss as accumulated deficit during exploration stage. These restatements had the impact of eliminating accumulated other comprehensive loss and increasing accumulated deficit during exploration stage at December 31, 2006 by $121,606.

The restatements had no impact on our cash or cash flows.

A description of the restatements made to our financial statements is provided at Note 16 to the financial statements included with this report.

This Form 10-K/A sets forth the 2006 10-KSB in its entirety. This Form 10-K/A includes items that have been changed as a result of the restatement and the items that are unchanged from the 2006 10-KSB.

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 10-KSB. 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 10-KSB. This Form 10-K/A does not describe events occurring after the 2006 10-KSB (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 10-KSB. Accordingly, this Form 10-K/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 10-KSB, as information in such filings may update or supersede certain information contained in this Form 10-K/A.

Item 13 of Part III of this Form 10-K/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.

INDEX

GLOSSARY OF TECHNICAL TERMS		6

PART I		7

ITEM 1.	DESCRIPTION OF BUSINESS.	7
ITEM 2.	DESCRIPTION OF PROPERTY.	13
ITEM 3.	LEGAL PROCEEDINGS	28
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	28

PART II		28

ITEM 5.	MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.	28
ITEM 6.	MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.	31
ITEM 7.	FINANCIAL STATEMENTS.	41
ITEM 8.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	42
ITEM 8A.	CONTROLS AND PROCEDURES.	42
ITEM 8B.	OTHER INFORMATION.	44

PART III		44

ITEM 9.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.	44
ITEM 10.	EXECUTIVE COMPENSATION.	48
ITEM 11.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.	51
ITEM 12.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.	54
ITEM 13.	EXHIBITS	57
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	62

SIGNATURES		63

GLOSSARY OF TECHNICAL TERMS

The following defined technical terms are used in this Annual Report on Form 10-KSB:

Bankable Feasibility Study	A feasibility study that is prepared in such depth and detail as would be acceptable to lending institutions in the United States.

Drilling	The process of boring a hole in the rock to obtain a sample for determination of metal content. "Reverse Circulation Drilling" involves chips of rock being forced back through the center of the drill pipe using air or water. "Sonic Drilling" provides highly representative, continuous core samples or any overburden formation, generally without the use of water, air or mud.

Exploration	The process of using prospecting, geological mapping, geochemical and geophysical surveys, drilling, sampling and other means to detect and perform initial evaluations of mineral deposits.

Federal Placer Claims	Mineral claims up to 160 acres, located on federal land under the U.S. Mining Law of 1872. See below definition of "Placer".

Igneous	A type of rock which has been formed by the consolidation of magma, a molten substance from the earth’s core.

Lode	Mineral in place in the host rock, as in "lode gold".

Lode Source	The lode mineral deposit from which placer minerals have been derived by erosion.

Mineralization	The concentration of metals and their chemical compounds within a body of rock.

Ore	A natural mineral compound of the elements of which one at least is a metal (e.g., copper, lead, molybdenum, zinc, gold). The term is applied more loosely to all metalliferous rock and occasionally to the compounds of nonmetallic substances and industrial minerals such as, sulphur ore. In economic terms, an ore is a mineral of sufficient value as to quality and quantity that it may be mined at a profit.

Placer	Mineral, which has been separated from its host rock by natural processes

Quartz	A mineral whose composition is silicon dioxide. A crystalline form of silica.

Reserve	For the purposes of this Annual Report: that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves consist of: (1) Proven (Measured) Reserves. Reserves for which: (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established. (2) Probable (Indicated) Reserves. Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.


SEM/EDS	Scanning Electron Microscopy/Energy Dispersive Spectroscopy

Structural	Pertaining to geologic structure.

Tails	Refuse remaining after ore (or slag) has been processed.

Vein	An occurrence of ore with an irregular development in length, width and depth usually from an intrusion of igneous rock.

PART I

ITEM 1.

DESCRIPTION OF BUSINESS.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report on Form 10-KSB constitute "forward-looking statements". These statements, identified by words such as “plan”, "anticipate", "believe", "estimate", "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. 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 Form 10-KSB. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-QSB and our current reports on Form 8-K.

As used in this Annual Report, the terms "we", "us", "our", “Searchlight”, and the “Company” means Searchlight Minerals Corp. and its subsidiaries, unless otherwise indicated. All dollar amounts in this Annual Report are expressed in U.S. dollars unless otherwise indicated.

Introduction

We are an exploration stage company engaged in the acquisition and exploration of mineral properties and slag reprocessing projects. Our business is presently focused on our two mineral projects: (i) the Clarkdale Slag Project, located in Clarkdale, Arizona, pursuant to which we seek to recover precious and base metals from the reprocessing of slag material produced from the smelting of copper ores from former mines in the Jerome, Arizona area; and (ii) the Searchlight Gold Project, which involves exploration for precious metals on mining claims near Searchlight, Nevada.

Our current plan of operation on the Clarkdale Slag Project during the next twelve months is to complete our materials study, continue our pilot testing and site work in Clarkdale, construct our first “unit” (module) of production and, subject to positive results from our pre-feasibility studies and the results from our one unit module of production, finance and construct the processing facility. If the results from our pre-feasibility studies and the production results from the operation of our one unit module are not sufficiently positive for us to proceed with the construction of our proposed processing facility we will have to scale back or abandon our proposed operations on the Clarkdale Slag Project.

Our current plan of operation on the Searchlight Gold Project is to continue the metallurgical testing program to determine the most favorable production-scale extraction methods to optimize recovery of precious metals, drill for reserves (18 holes) and to perform a pre-feasibility study. 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 properties.

Corporate History

We were 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, we operated primarily as a biotechnology research and development company with headquarters in Canada and an office in the UK. On November 2, 2001, we 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 February 2, 2004, we changed our name from “Regma Bio Technologies Limited” to “Phage Genomics, Inc.” In February 2005, we announced our reorganization from a biotechnology research and development company to a company focused on the exploration and acquisition of mineral properties. In connection with our reorganization we entered into mineral option agreements to acquire an interest in the Searchlight Claims. Also in connection with our corporate restructuring, our board of directors approved a change in our name from “Phage Genomics, Inc.” to "Searchlight Minerals Corp.” effective June 23, 2005.

On January 10, 2007 we incorporated two wholly owned subsidiaries: Clarkdale Metals Corp, a Nevada corporation and Clarkdale Minerals LLC, a Nevada limited liability corporation. Clarkdale Minerals LLC was formed for the purpose of completing the merger with Transylvania International, Inc pursuant to our Agreement and Plan of Merger with Transylvania International, Inc. dated February 15, 2007. See “Description of Property”, below.

Restatement

As described in Note 16 to our financial statements included herein, we have restated our financial statements as of and for the year ended December 31, 2006, to revise the acquisition accounting for the Searchlight Minerals Claims and the Joint Venture Agreement, and to reclassify all activities prior to January 1, 2005 to discontinued operations.

The Searchlight Claims mineral properties have been restated to reflect payment made by issuance of 1,400,000 shares at $0.35 per share on July 7, 2005 and 1,400,000 shares at $2.20 per share on July 27, 2006 at the market value on the date of issuance and a deferred future income tax liability assumed as part of the initial contingent issuance of securities, the value of which has been added to the acquisition costs of the underlying mineral properties. Pursuant to EITF 98-11, we valued the shares issued to obtain mineral properties at their market price at the date of the issue.

The impact of this restatement had the effect of increasing the mineral property 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.

The Company restated the joint venture agreement as of December 31, 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.

The statement of operations for the period from January 14, 2000 (date of inception) through December 31, 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 year ended December 31, 2006, has been restated to reclassify $11,769 of other comprehensive loss, which consisted of foreign currency adjustment related to 2004 activity, as discontinued operations. The restatement also reflects the income tax benefit of $1,122,457.

Recent Corporate Developments

We have experienced the following significant corporate developments since the commencement of our fiscal fourth quarter ended December 31, 2006 through the date of this filing:

1.	On March 22, 2007, we closed a private placement offering for gross proceeds of $6,678,483 (the "March Offering"). The securities sold pursuant to the March Offering were issued to non-US investors in accordance with the terms of Regulation S of the Securities Act of 1933. In connection with the March Offering, we entered into an Agency Agreement with D&D Securities Company (“D&D") dated March 21, 2007 (the "Agency Agreement"). The securities were sold to subscribers on a best efforts agency basis. Pursuant to the terms of the Agency Agreement, we sold an aggregate of 2,226,161 units for gross proceeds of $6,678,483, with each unit consisting of one share of our common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of US$4.50 per share. The warrants are callable by Searchlight if its common stock trades above $6.50 per share for 20 consecutive trading days. Also under the terms of the March Offering we agreed to use our best efforts to file with the Securities and Exchange Commission a registration statement on Form SB -2, or on such other form as is available, registering the offered securities within four months and one day after the closing of the March Offering. An aggregate commission and corporate finance fee totaling $525,386 was paid by us to the Agent in connection with the March Offering and the Agent also received warrants to purchase 75,175 shares of our common stock at a price of US$4.50 per share, exercisable for a period of two years from the closing date.

2.	On February 23, 2007, we closed a private placement offering and issued 4,520,666 units for aggregate gross proceeds of $13,562,002 to accredited investors resident in the United States pursuant to Regulation D of the Securities Act (the “US Offering”). Each unit consisted of one share of our common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of $4.50 per share. The warrants are callable by us if our common stock trades above $6.50 per share for 20 consecutive trading days. Pursuant to the terms of the US Offering, we agreed to use our best efforts to file a registration statement declared effective by the SEC within four months of the closing date of the US Offering. We agreed not to exercise our call rights until the registration statement registering the securities underlying the units sold has been declared effective by the SEC. We further agreed to keep the registration statement effective pursuant to Rule 415 of the Securities Act for a period of eighteen months following the date the registration statement is declared effective by the SEC. A portion of the US Offering was sold on a best efforts agency basis. Commissions paid to agents in connection with the US Offering totaled $381,990 and the agents also received warrants to purchase 90,870 shares of our common stock at a price of $4.50 per share, exercisable for a period of two years from the closing date.

3.	Also on February 23, 2007, we closed a private placement offering and issued 575,000 units for aggregate gross proceeds of $1,725,000 to non -US investors pursuant to Regulation S of the Securities Act (the “February Offering”). Each unit consisted of one share of our common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of $4.50 per share. he warrants are callable by Searchlight if its common stock trades above $6.50 per share for 20 consecutive trading days. Pursuant to the terms of the February Offering, we agreed to use our best efforts to file a registration statement declared effective by the SEC within four months of the closing date of the February Offering. We agreed not to exercise our call rights until the registration statement registering the securities underlying the units sold has been declared effective by the SEC. We further agreed to keep the registration statement effective pursuant to Rule 415 of the Securities Act for a period of eighteen months following the date the registration statement is declared effective by the SEC. Commissions paid to agents in connection with the February Offering totaled $111,100 and the agents also received warrants to purchase 12,300 shares of our common stock at a price of $4.50 per share, exercisable for a period of two years from the closing date.

4.	Effective February 16, 2007, we entered into amendments to our employment agreements with the following executives: (i) we increased the salary of Ian McNeil, President, from $108,000 to $190,000 per year; (ii) we increased the salary of Carl Ager, Vice President, Secretary and Treasurer, from $80,000 to $160,000 per year; and (iii) we increased the salary of Melvin Williams, Chief Financial Officer, from $60,000 to $130,000 per year based on 600-800 hours of service annually. Also on February 16, 2007 in connection with the amendments to the executive employment agreements, our board of directors also approved the following stock option grants pursuant to our 2006 Stock Option Plan: (i) Ian McNeil received 24,800 options; (ii) Carl Ager received 24,800 options; and (iii) Melvin Williams received 18,600 options. Each option is exercisable to acquire a share of our common stock at a price of $4.04 (the closing price on February 16, 2007), vesting on the grant date and expiring five years from the grant date.

5.	On February 16, 2007, Ian Matheson resigned as a member of our board of directors and the board appointed Harry B. Crockett to fill the vacancy created by Mr. Matheson’s resignation. There was no disagreement between Mr. Matheson and Searchlight regarding any matter relating to its operations, policies or practices. Harry B. Crockett is the managing member of Verde River Iron Company, LLC a private Nevada limited liability company which was the prior owner of the slag pile underlying the Clarkdale Slag Project. Mr. Crockett serves as a court appointed receiver serving various Superior Courts throughout California having served in this capacity over the last 15 years. Mr. Crockett has previously served as an Executive Vice President of American Savings, specializing in troubled debt and troubled assets as well as serving as Chairman of the Make A Wish Foundation of San Joaquin County, a charitable foundation serving the needs of terminally ill children. Mr. Crockett holds a Bachelor Of Arts degree from Golden Gate University in San Francisco California and a California Real Estate Brokers license. Mr. Crockett also has a pilot license with a single and multi engine land and instrument ratings.

6.	Effective February 16, 2007, we dismissed our independent registered public accounting firm, Kyle L. Tingle, CPA, LLC (“KLT”). The decision to change accountants was recommended by our audit committee and approved by the board of directors on February 16, 2007. On February 16, 2007, the board of directors appointed Brown Armstrong, Paulden, McCown, Starbuck, Thornburgh & Keeter Accountancy Corporation as our new independent registered public accounting firm following the dismissal of KLT.

7.	On February 15, 2007, we entered into an agreement and plan of merger with Clarkdale Minerals LLC, Verde River Iron Company, LLC and Transylvania International, Inc. (“TI”), pursuant to which TI merged with and into our wholly owned subsidiary, Clarkdale Minerals LLC, with Clarkdale Minerals LLC as the sole surviving corporation. The acquisition of TI was completed in accordance with the terms and conditions of the Letter Agreement dated November 22, 2006, as amended February 15, 2007 among Searchlight, Verde River Iron Company, LLC, Harry B. Crockett and Gerald Lembas. Pursuant to our acquisition of TI we now have a 100% interest in the property underlying a slag pile located in Clarkdale, Arizona from which we seek to recover base and precious metals through the reprocessing of slag material, subject to payment of certain royalties. See “Description of Property” below.

Searchlight and Clarkdale Projects

We hold interests in two mineral projects, our Clarkdale Slag Project and our Searchlight Gold Project. Our plan of operation for each of our projects is discussed below:

Clarkdale Slag Project

The properties comprising our Clarkdale Slag Project are discussed in detail under the heading “Description of Property” in this Annual Report.

Our current plan of operation on the Clarkdale Slag Project for the next twelve months is to complete our materials study, continue our pilot testing and site work in Clarkdale, and construct our first “unit” (module) of production. As of the date of this Annual Report, we have drilled 18 holes (SD1-18) in the slag pile under the supervision of Mountain States R&D International Inc. (“MSRDI”). These holes were drilled as part of a materials study being conducted by MSRDI on our behalf. Sample preparation and analysis was performed under MSRDI’s chain of custody sampling.

If the results from our pre-feasibility studies on the Clarkdale Slag Project and the production results from the operation of our one unit module are not sufficiently positive for us to proceed with the construction of our proposed processing facility we will have to scale back or abandon our proposed operations on the Clarkdale Slag Project.

Searchlight Gold Project

The properties comprising the Searchlight Claims and our exploration activities on the Searchlight Claims are discussed in detail under the heading “Description of Property” in this Annual Report.

In early 2007, we received the initial results of the metallurgical and analytical analysis on the chain of custody surface samples and bulk samples (6 tons) taken from the project area by Arrakis Inc. Our current plan of operation on the Searchlight Gold Project is to continue the metallurgical testing program to determine the most favorable production-scale extraction methods to optimize recovery of precious metals, drill for reserves (18 holes) and to perform a pre-feasibility study. The agreements pursuant to which we acquired our interests in the Searchlight Claims provide that we must make a series of stock and lease 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 interest in those properties.

We have commenced an exploration work program for the Searchlight Project. We filed a surety bond in the amount of $27,528 for Phase I and $153,031 for Phase II of our exploration program with the Bureau of Land Management (“BLM”), and have commenced the two phase exploration program approved in connection with the terms of our reclamation permit, see “Searchlight Project and Reclamation Permit”, below.

Competition

We are an exploration stage company. We compete with other mineral resource exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration. This competition could adversely impact on our ability to finance further exploration on our mineral properties.

Compliance With Government Regulation

Our Searchlight Claims are comprised of non-patented placer mining claims located on federal land managed by the U.S. Bureau of Land Management. Mining activities on the Searchlight Claims must be carried out in accordance with a permit issued by the Bureau of Land Management. Mining activities on the Searchlight Claims are currently being carried out under a permit approved by the Bureau of Land Management under a 2005 plan of operation for mining activity submitted by us to the Bureau of Land Management. See “Searchlight Project and Reclamation Permit” below.

Our operations on the Clarkdale Slag Project will also require compliance with applicable permits under Arizona State law and require some upgrade of existing facilities as the project develops. A conditional use permit for our planned activities on the Clarkdale Slag Project has been obtained from local authorities subject to final site plan approval. Operations will require some upgrade of existing facilities as the project develops. Air quality, water quality and building permits have been received by the Company from the Arizona Department of Environmental Quality. URS Corporation, an international engineering company has been involved with the permitting of the Clarkdale Slag Project with state and local authorities. Pursuant to the engineering services agreement between URS Corporation and VRIC dated March 21, 2005, URS is to complete a Class II environmental application based on planned equipment and processing applications with Arizona Department of Environmental Quality for quarrying and metals recovery operations. URS Corporation, an international engineering company has been involved with the permitting of the project with state and local authorities.

Permit applications are submitted under a tri-agency application, and are reviewed by agencies of the State of Nevada and State of Arizona governments, including the Department of Natural Resources, and the Department of Environmental Conservation, and Fish and Game. We post a reclamation bond annually in an amount required by the State of Nevada for each acre of proposed disturbance exceeding reclaimed acreage in a permit period. Presently, we have posted the appropriate bonding, and as a matter of company policy, endeavor to reclaim disturbed areas to equal or exceed any new disturbance.

Our mining operation is regulated by Mine Safety Health Administration (“MSHA”). MSHA inspectors periodically visit our project to monitor health and safety for the workers, and to inspect equipment and installations for code requirements. All of our workers have completed MSHA safety training and must take refresher courses annually when working on our project. A safety officer for the project is also on site.

Other regulatory requirements monitor the following:

	(a)	Explosives and explosives handling.
	(b)	Use and occupancy of site structures associated with mining.
	(c)	Hazardous materials and waste disposal.
	(d)	State Historic site preservation.
	(e)	Archaeological and paleontological finds associated with mining.

Federal Claim Maintenance Fees

In order to maintain our Searchlight Claims each year we must pay a maintenance fee of $125 per claim to the Nevada State Office of the Bureau of Land Management by August 31st. We have paid the required maintenance fees and filed the affidavits required in order to extend the claims to August 31, 2007.

Research and Development Expenditures

We have not incurred any expenditures over the past two fiscal years ended December 31, 2006 on research and development. We expended $2,519,932 on mineral exploration and evaluation expenses in connection with our exploration programs on the Searchlight Project and Clarkdale Slag Project during fiscal 2006.

Employees

As of the date of this Annual Report on Form 10-KSB, we have one employee other than our officers and directors. See “Executive Compensation - Employment Contracts”, below.

Subsidiaries

We have two wholly owned subsidiaries, Clarkdale Minerals LLC, a Nevada limited liability corporation and Clarkdale Metals Corp., a Nevada corporation.

Patents, Trademarks and Licenses

We do not own, either legally or beneficially, any patent or trademark and we are not party to any licensing agreements.

ITEM 2.

DESCRIPTION OF PROPERTY.

On July 20, 2006, we entered into lease agreement with Burnett & Williams, LLC, a Nevada limited liability company (“B&W”) for the lease of our head office consisting of approximately 900 square feet located at Suite 120-2441 W. Horizon Ridge Parkway, Henderson NV 89052 at a rate of $4,000 per month. The lease expired on November 30, 2006. We are continuing to rent the office space at the rate of $4,000 on a month to month basis with no formal contract.

Following our acquisition of Transylvania International, Inc. we hold title to the following real properties located in Clarkdale, Arizona:

	Yavapai County Assessor/
Location	Parcel No.	Description of Property
Clarkdale, Arizona	400-01-007E	Parcels of vacant land comprising approximately 600 acres
	400-02-001
	400-01-007F
	400-05-017D
	400-06-001Y
	400-05-006A
	400-06-002C
	400-05-013F
	400-05-013G
	400-05-001E
	400-05-001F
919 Main Street, Clarkdale, Arizona	400-03-158	Commercial building
Clarkdale, Arizona	Parcel I	Lots 1 and 2, Block 44, town of Clarkdale according to the plat of record in Book 5 of Maps, page 85, records of Yavapai County, Arizona.
Clarkdale, Arizona	Parcel II	A portion of the Northeast quarter of Section 20, Township 16 North, Range 3 East of the Gila and Salt River Base and Meridian, Yavapai County, Arizona
Clarkdale, Arizona	Parcel III	A parcel of land located in the Southeast quarter of Section 19, and the Southwest quarter of Section 20, Township 16 North, Range 3 East, Gila and Salt River Base and Meridian, Yavapai County, Arizona
Clarkdale, Arizona	Parcel IV	A parcel of land located in the North half of Section 20, Township 16 North, Range 3 East, Gila and Salt River Base and Meridian, Yavapai County, Arizona
Clarkdale, Arizona	Parcel V	A portion of Sections 17, 18, 19 and 20, Township 16 North, Range 3 East, Gila and Salt River Base and Meridian, Yavapai County, Arizona.

Our interest in the above noted properties is subject to certain ongoing payments and royalties that are discussed in more detail below under the heading “Clarkdale Slag Project”, and “Royalty Agreements”. Our interest in the Searchlight Claims is discussed in more detail below under the heading “Searchlight Claims.”

Acquisition of Clarkdale Slag Project

On November 22, 2006, we entered into a Letter Agreement (the “Letter Agreement”), as amended on February 15, 2007, among Verde River Iron Company, LLC (“VRIC”), Harry B. Crockett and Gerald Lembas for the purpose of acquiring all of the outstanding shares of Transylvania International, Inc. ("TI"), a wholly owned subsidiary of VRIC, which has title to the property underlying a slag pile located in Clarkdale, Arizona from which we are seeking to recover base and precious metals through the reprocessing of slag material (the “Clarkdale Slag Project”).

Under the terms of the Letter Agreement, in order to exercise the option to acquire all of the outstanding securities of TI, we were required to provide notice of the exercise of the option on or before January 8, 2007 and close the acquisition by February 15, 2007. Effective on January 8, 2007, we exercised our option to acquire all of the outstanding shares of TI and on February 15, 2007 we completed the acquisition of TI in accordance with the terms of the Letter Agreement and the Agreement and Plan of Merger (the “Merger Agreement”) dated February 15, 2007 between Searchlight, VRIC, TI and Clarkdale Minerals LLC (“Clarkdale LLC”), our wholly owned subsidiary formed for the purposes of the merger of TI and Clarkdale LLC. The merger was effected on February 15, 2007.

We believe the acquisition of the Clarkdale Slag Project was beneficial because it provides for 100% ownership of the properties, thereby eliminating the need to finance and further develop the project in a joint venture environment.

This merger was treated as a statutory merger for tax purposes whereby, CML was surviving merger entity.

Closing of the TI acquisition occurred on February 15, 2007, (the “Closing Date”) and was subject to, among other things, the following terms and conditions:

	(i)	We paid $200,000 in cash to VRIC on the execution of the Letter Agreement;

	(ii)	We paid $9,900,000 in cash to VRIC on the Closing Date;

	(iii)	We issued 16,825,000 shares of our common stock, valued at $3.975 per share using the average of the high and low on the Closing Date, to the designates of VRIC pursuant to Section 4(2) and Regulation D of the Securities Act of 1933;

In addition to the cash and equity consideration paid and issued upon closing, the acquisition agreement contains the following payment terms and conditions:


	(iv)	We agreed to continue to pay VRIC $30,000 per month until the earlier of: (i) the date that is 90 days after receipt of a bankable feasibility study by Searchlight (the “Project Funding Date”), or (ii) the tenth anniversary of the date of the execution of the Letter Agreement;

The acquisition agreement also contains additional contingent payment terms which are based on the Project Funding Date as defined in the agreement.


	(v)	We agreed to pay VRIC $6,400,000 on the Project Funding Date;

	(vi)	We have agreed to pay VRIC a minimum annual royalty of $500,000, commencing on the Project Funding Date (the “ Advance Royalty”), and an additional royalty consisting of 2.5% of the “net smelter returns” on any and all proceeds of production from the Clarkdale Slag Project (the “Project Royalty”). The Advance Royalty remains payable until the first to occur of: (1) the end of the first calendar year in which the Project Royalty equals or exceeds $500,000; or (2) February 15, 2017. In any calendar year in which the Advance Royalty remains payable, the combined Advance Royalty and Project Royalty will not exceed $500,000 in any calendar year; and,

(vii)

We agreed to pay VRIC an additional amount of $3,500,000 from the net cash flow of the Clarkdale Slag Project.

The agreement is governed under the laws of Nevada and superseded all prior agreements between the parties including the JV Agreement. The closing of the Merger Agreement occurred on February 15, 2007. The Articles of Merger of TI and Clarkdale LLC were filed and effected with the Nevada Secretary of State on February 15, 2007. Following completion of the Merger, Clarkdale Minerals LLC, our wholly owned subsidiary became the sole surviving corporation. In connection with the Merger Agreement, VRIC and its designates received 16,825,000 restricted shares of our common stock representing 18.4% of our issued and outstanding shares as at April 4, 2007. The securities were issued pursuant to Regulation D and Section 4(2) of the Securities Act of 1933.

Prior to our acquisition of TI we entered into an assignment agreement (the “Assignment Agreement”) with Nanominerals Corp. (“NMC”), dated for reference June 1, 2005, as amended August 31, 2005, and October 24, 2005 pursuant to which NMC assigned to us all of its interest in the Joint Venture Agreement dated May 20, 2005 between Nanominerals Corp. and Verde River Iron Company, LLC. Pursuant to the terms of the Assignment Agreement, we completed the acquisition of all of Nanominerals Corp.’s interest in the JV Agreement and fulfilled our obligations under the terms and conditions of the Assignment Agreement, which included the following conditions: we paid Nanominerals $690,000 in respect of certain payments made by Nanominerals Corp. towards the acquisition of the Clarkdale Slag Project made pursuant to the terms of the JV Agreement; we assigned Nanominerals a 5% net smelter return royalty payable from Searchlight’s share of production from the Clarkdale Slag Project; we appointed sufficient nominees of Nanominerals to Searchlight’s board of directors to constitute a majority of the board following execution of the Assignment Agreement; we issued to Nanominerals and its designates 12,000,000 warrants to purchase shares of the common stock of Searchlight exercisable for a term of 10 years from the date of the Assignment Agreement at an exercise price of $0.375 per share; we provided confirmation to Nanominerals that Searchlight received funds of $2,000,000 pursuant to Searchlight’s private placement offering of its securities to accredited investors in the U.S. and to accredited investors outside of the U.S.

Pursuant to our acquisition of TI, we now hold 100% title to the Clarkdale Slag Project through our wholly owned subsidiary, with our interest in the project subject to certain ongoing payments and royalties outlined above. We intend to continue to pursue our stated plan of operation on the Clarkdale Slag Project pursuant to which we intend to process slag from a copper smelter slag pile located at the Clarkdale Slag Project site, and extract byproducts from the slag for commercial resale.

CLARKDALE SLAG PROJECT

Location, Access and History

The Clarkdale Slag Project is located at Clarkdale, Arizona, USA some 107 miles north of Phoenix and about 50 miles southwest from Flagstaff, Arizona in Yavapai County, see Figure 1, below. We acquired our interest in the Clarkdale Slag Project pursuant to our Letter Agreement and Merger Agreement with VRIC and TI as described above under the heading “Acquisition of Clarkdale Slag Project”. The project is located at 3,480’ elevation on approximately 800 acres deeded acres of industrial zoned land near the town of Clarkdale (3,600 residents). It contains the old smelter site and a slag pile available for processing. The slag was produced as smelter rejects from processing copper ores, principally from Jerome, during the period 1915-1952, when the Clarkdale smelter was one of the largest copper smelters in the world. Jerome, some 6 miles west of Clarkdale at elevation 5,435’, is a historic mining district, which produced copper extracted from massive sulfide deposits mined at Jerome (1889-1952) and smelted at both Jerome (1889-1915) and Clarkdale (1915-1952).

Improvements in technology over the last 50 years have now advanced to the point where re-processing of the slag at Clarkdale for gold, silver, copper, zinc, and ferro-silicates may be considered economic. If the final feasibility of the project confirms the project is economical, we expect to build a processing facility at Clarkdale. See “Current Status”, below.

Clarkdale Slag Pile and Metallurgy

The slag pile occupies approximately 45 acres and is up to 100 feet thick. The Scanning Electron Microscopy/Energy Dispersive Spectroscopy (SEM/EDS) data indicates that there is a variation in the slag material due to the varying amount of sulfides contained within the different types of smelter sourced slag in the pile, to variations in liberation by different grinders, and to variations in the extraction processes used to report these metals. It is for all these reasons that care will be exercised in determining the extractable grade for the pile during the materials study by our independent engineers. Drilling, assaying and extraction testing of the slag pile by independent engineers commenced in June 2005, see “Current Status of Exploration of Clarkdale Slag Project” below. To our knowledge there have been no prior attempts to exploit the slag pile or determine its economic feasibility.

Prior grinding, assaying, leach and extraction testing (1991-2005) of composite bulk samples from the slag pile (>200 sites) has indicated that the copper, zinc, gold and silver are readily extractable by standard known technology. The tails are ferro-silicates, saleable as cement additives to the local cement plant and other users. The slag has a glassy, volcanic lava-like appearance. It contains some thin layers of rocky material which appear to have been undigested from the smelter. SEM/EDS analysis of the slag has shown that Copper-Zinc is contained within blebs of Iron-Copper-Zinc sulfides of dimensions of less than 0.3 -20 microns. The iron occurs as iron-metal and iron-oxide of dimensions of less than 5 microns. All these materials are contained in an amorphous/nano-crystalline matrix of calcium-iron-aluminum silicate. Based on the mineralogy of the source of the smelter feed (Jerome), the gold-silver values are entrapped within the sulfide blebs.

Between the fourth quarter of 2005 and the third quarter of 2006, a drilling and sampling program was implemented at our Clarkdale Slag Project under strict chain-of-custody sampling by Mountain States R&D International Inc. A total of 18 holes comprising more than 1,700 feet were drilled as part of a materials study being conducted by Mountain States R&D International Inc. (“MSRDI”) on our behalf. MSRDI also obtained a 2-ton bulk sample comprised of samples taken over the 45-acre surface of the slag pile. Approximately 750 lbs. of this sample were subsequently processed at our pilot plant in Phoenix, Arizona, see “Current Status of Exploration of Clarkdale Slag Project” below. The processing facility is expected to be zero discharge as it is expected to recycle all water and we intend to sell or to dispose of all products off-site. Certification of the process design and metal extraction will be determined during operation of the first module of production in the planned processing facility at Clarkdale, Arizona.

There have been many advances in technology over the last ten years that have made re-processing of slag pile more economical. One of the more significant achievements is the development of new mills capable of grinding the hard and abrasive slag found at Clarkdale. These mills use tougher ceramic components, rather than standard steel, are more cost efficient due to lower power requirements and can liberate the metals for extraction, even from tough materials such as the Clarkdale slag. A second significant improvement is the advancement of Ion-Exchange resin technology. Ion-Exchange resins are designated to replace current solvent extraction liquids because they are environmentally benign. These man-made collectors can selectively recover, with pin-point accuracy, specific metals and/or compounds. This eliminates the costs and environmental problems associated with previously used circuits for Copper/Zinc recovery. Use of Ion-Exchange resins is common in commercial mining operations around the world.

Permitting and Design

The process design and equipment selection are planned for both an initial test module and a planned leach and extraction plant at Clarkdale. All required buildings and services are currently available (with moderate cost upgrades) at the site. These include office, lab and processing buildings as well as road, rail, power, telephone, water, storm drain and sewage.

A conditional use permit for our planned activities on the Clarkdale Slag Project has been obtained from local authorities subject to final site plan approval. Operations will require some upgrade of existing facilities as the project develops. URS Corporation, an international engineering company has been involved with the permitting of the Clarkdale Slag Project with state and local authorities. Pursuant to the engineering services agreement between URS Corporation and VRIC dated March 21, 2005, URS is to complete a Class II environmental application based on planned equipment and processing applications with Arizona Department of Environmental Quality for quarrying and metals recovery operations. In consideration of the services provided by URS under the agreement we agreed to pay URS $23,835.

The materials study, expected to be completed in the second quarter of 2007, is expected to show total and “processable” tonnage as well as the grade study completed by independent engineers. In the third quarter of 2007, we hope to complete our pilot testing and site work which will include finalizing the metallurgy and flow sheet, optimizing the processing protocols and begin rehabilitating the operations site. We then anticipate our first module of production, designed to determine the economics of the project and serve as final feasibility of the project, to be completed in the fourth quarter of 2007. If the feasibility of the project proves economic, financing and construction of the processing facility is expected to commence in the first quarter of 2008 subject to the Company obtaining the necessary additional financing.

Until such time as we have established economic feasibility of the Clarkdale Slag Project through our pre-feasibility studies and the operation of our one unit module of production from the slag pile, there is no assurance that we will proceed to the construction of our proposed processing facility. If the results from our pre-feasibility studies and the production results from the operation of our one unit module are not sufficiently positive for us to proceed with the construction of our processing facility we will have to scale back or abandon our proposed operations on the Clarkdale Slag Project.

Current Status

Our current plan of operation on the Clarkdale Slag Project is to complete our materials study, continue our pilot testing and site work in Clarkdale, construct our first “unit” (module) of production. Pursuant to our 2006 exploration program, we have drilled a total of 18 holes (SD1-18), comprising more than 1,700 feet, in the slag pile all under the chain-of-custody (“COC”) supervision of MSRDI. These holes were drilled as part of a materials study being conducted by MSRDI on our behalf. Sample preparation and analysis were performed under COC by MSRDI. During our fiscal year ended December 31, 2006, we received COC analysis results from the eighteen drill holes and a 750-pound bulk sample taken from the slag pile located on our Clarkdale Slag Project. The following composite drill results and bulk sample analysis were reported to us by MSRDI:

Summary of Drilling and Sampling Results

	Gold		Silver		Copper		Zinc		Iron
Results	Au (opt)*		Ag (opt)*		Cu (%)		Zn (%)		Fe (%)
18 Drill Hole Average		0.46		0.13		0.37		2.47		33.1
750-pound Bulk Sample Average		0.42		0.06		0.35		2.88		31.0

1. Drill Hole Results

	Composite		Gold		Silver		Copper		Zinc		Iron
Drill Hole	Footage		Au (opt)*		Ag (opt)*		Cu (%)		Zn (%)		Fe (%)
SD1		0.0 – 55.0		0.210		-		0.70		2.10		32.1
SD2		0.0 – 60.0		0.213		-		0.73		2.13		34.6
SD3		0.0 – 109.0		0.228		-		0.37		2.99		33.4
SD4		0.0 – 80.0		0.190		-		0.39		3.29		32.3
SD5		0.0 – 89.0		0.229		-		0.39		2.29		30.2
SD6		0.0 – 50.0		0.216		-		0.36		3.04		32.5
SD7		0.0 – 111.5		0.667		0.249		0.26		3.10		36.2
��SD8		0.0 – 117.5		0.716		0.140		0.29		2.79		33.3
SD9		0.0 – 114.0		0.633		0.153		0.34		2.43		32.7
SD10		0.0 – 112.5		0.669		0.110		0.32		2.57		33.5
SD11		0.0 – 131.0		0.571		0.127		0.32		2.18		33.4
SD12		0.0 – 89.0		0.428		0.109		0.31		1.99		32.1
SD13		0.0 – 127.5		0.590		0.114		0.39		2.86		33.3
SD14		0.0 – 107.5		0.538		0.139		0.36		2.14		33.0
SD15		0.0 – 89.0		0.483		0.143		0.33		1.96		32.8
SD16		0.0 – 118.0		0.633		0.125		0.31		2.49		34.8
SD17		0.0 – 116.0		0.657		0.116		0.30		2.36		35.0
SD18		0.0 – 36.0		0.390		0.070		0.22		1.70		31.3
Average				0.46		0.13		0.37		2.47		33.1
* opt (ounces per ton)

MSRDI performed the copper, zinc, and iron analysis using the fusion assay method, followed by atomic absorption. Gold and silver analysis was performed by Arrakis, under COC of MSRDI, using an acid total digestion method followed by atomic absorption.

2. Surface Bulk Sample Results

Sample

Composite

Gold

Silver

Copper

Zinc

Iron

Detail

Au (opt)**

Ag (opt)**

Cu (%)

Zn (%)

Fe (%)

SS1B-1

Surface Bulk

Sample

0.361

0.285

0.36

3.00

33.8

SS1B-2

Surface Bulk

Sample

0.422

ND*

0.35

2.80

30.4

SS1B-3

Surface Bulk

Sample

0.428

ND*

0.33

2.90

30.4

SS1B-4	Surface Bulk Sample	0.444	ND*		0.36	2.80	29.8
SS1B-5	Surface Bulk Sample	0.434	ND*		0.34	2.90	30.6
Average		0.42		0.06	0.35	2.88	31.0

* ND (None Detected)

** opt (ounces per ton)

Under COC, MSRDI collected a 4,000-pound bulk sample comprised of material taken over the entire surface of the 45-acre slag pile. MSRDI milled 750 pounds of this material through our pilot plant located in Phoenix, Arizona, and subsequently performed the copper, zinc, and iron analysis using the fusion assay method, followed by atomic absorption. Gold and silver analysis of the bulk sample was also performed by MSRDI using the fire assay method followed by atomic absorption.

Drilling Program

We retained Dr. Richard F. Hewlett as the Project Manager for our Clarkdale Slag Project. Under the guidance of Dr. Hewlett, we contracted MSRDI to execute a materials study. 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 sampling of MSRDI, using 4-acid total digestion followed by graphite furnace atomic absorption (GFAA). A total of 18 holes comprising more than 1,700 feet were drilled as part of a materials study being conducted by MSRDI on behalf of Searchlight. MSRDI also obtained a 2-ton bulk sample comprised of samples taken over the 45-acre surface of the slag pile. Approximately 750 lbs. of this sample were subsequently processed at our pilot plant, then located in Phoenix, Arizona. The drilling on the Clarkdale Slag Project was performed by Boart Longyear Company and was completed using sonic drills. MSRDI had complete control over the samples from the time they were recovered from the drill through the analytical process. MSRDI also oversaw the drilling.

The materials study, expected to be completed in the second quarter of 2007, is expected to show total and “processable” tonnage as well as the grade study completed by independent engineers. In the third quarter of 2007, we hope to complete our pilot testing and site work which will include finalizing the metallurgy and flow sheet, optimizing the processing protocols and begin rehabilitating the operations site. We then anticipate our first module of production, designed to determine the economics of the project and serve as final feasibility of the project, to be completed in the fourth quarter of 2007. If the feasibility of the project proves economic, financing and construction of the proposed processing facility will commence in the first quarter of 2008, subject to the Company obtaining the necessary additional financing.

The following is an outline of the proposed milestones and expenditures on the Clarkdale Slag Project for the next twelve months:

	Work	Target Date	Budget
1. Materials Study		Complete in
•	Complete total and “processable” tonnage and	Second Quarter	$	50,000
	grade study by independent engineers	2007

2. Pilot Testing/Site Work
•	Complete pilot testing, finalize metallurgy and flow	Complete in
	sheet and optimize processing protocols	Third Quarter	$	300,000
•	Rehabilitate site – upgrade services and buildings	2007
	where necessary, project site maintenance, etc.

3. First Module of Production

	Work	Target Date	Budget
•	Construct, operate and optimize one “unit” (module)
	of production
•	Determine the economics of the project, taking into	Complete in
	consideration the recoverable amounts of minerals,	Fourth Quarter	$	7,000,000
	metal prices, processing costs, project development	2007
	costs, environmental issues, etc.
•	This will serve as final feasibility of project

4. Processing Facility – Finance and Construct

•	Finalize Project Financing, including property	Commence in
	payments of approximately $7,000,000	First Quarter
•	Develop Site – Upgrade services and buildings,	2008 (Subject to	$	70,000,000
	ensure proper staffing, etc.	positive results
•	Construct Processing Facility – order and install	from Phase 2
	equipment, ensure all components work effectively,	and 3 above)
	etc.
•	Start up Processing Facility

			$	77,350,000
			($22,350,000 in
	TOTAL
			next 12
			months)

The above timeline and costs are preliminary estimates only, actual costs may be significantly higher once the Company has completed the feasibility studies and received results from production of its initial test module. Until such time as Searchlight has established economic feasibility of the Clarkdale Slag Project through its pre-feasibility studies and the operation of its one unit module of production from the slag pile there is no assurance that the Company will proceed to the construction of the proposed processing facility referred to in the table above. If the results from our pre-feasibility studies and the production results from the operation of our one unit module are not sufficiently positive for us to proceed with the production of our processing facility we will have to scale back or abandon our proposed operations on the Clarkdale Slag Project.

The above timeline and costs also do not take into account possible delays that may arise. If we experience any difficulties or delays during our plan of operation, it could take substantially longer and more costly for us to complete construction of plant facilities or complete any property studies. The above is also subject to the Company obtaining the necessary additional financing.

SEARCHLIGHT CLAIMS

Location, Access and History of Exploration

The Searchlight Project is a 3,200-acre placer gold project, with underlying hard rock potential, located about 50 miles south of Las Vegas and 2 miles south of Searchlight, Nevada. See Figure 2, below. Access is by vehicle from Highway 95. The mining claims were staked by the owners on Federal land (BLM) as 160-acre association placer mining claims. Searchlight has a four year option to acquire these claims subject to certain terms and conditions.

The Searchlight Claims are located in parts of Sections 1, 12-13 and 24-25 of Township 29 South, Range 63 East and Sections 19 and 30 of Township 29 South, Range 64 East Clark County Nevada. The names of the claims and their federal serial numbers are as described below:

Nevada Mineral Claim	BLM Number
Rio Raga 300	600834
Rio Raga 301	600835
Rio Raga 302	600836
Rio Raga 303	600837
Rio Raga 304	600838
Rio Raga 305	600839
Rio Raga 306	715676
Rio Raga 307	600841
Rio Raga 308	600842
Rio Raga 309	600843
Rio Raga 310	699996
Rio Raga 311	699997
Rio Raga 312	600846
Rio Raga 313	600847
PV Brown 193	854993
PV Brown 301	854994
P V Red #11	791232
P V Red #12	791233
P V Red #13	791234
P V Red #14	791235

The Searchlight District is a well known gold camp. Mining occurred in the area during the period 1900-1950 where some 250,000 ounces of gold were produced from quartz-sulphide-hematite veins to depths of greater than 1,000 feet with minor placer gold produced. Exploration work by the claim owners on the Searchlight Project, during the period 1989-2005, indicated a potential for gold mineralization within the claim block. We have an approved Plan of Operation with the Bureau of Land Management for drilling 18 test holes throughout the claim block and for mining a 36 acre pit on the RR304 claim.

Acquisition of Searchlight Claims

On February 10, 2005, we entered into option agreements (the “Option Agreements”) with the owners (collectively, the “Claim Owners”) of the Searchlight Claims. Prior to entering into the Option Agreements with Searchlight, each Claim Owner optioned its interest in the Searchlight Claim it owned to Searchlight Minerals, Inc. (“SMI”), a company controlled by K. Ian Matheson, a former director and executive officer of the Company. Under the terms of the Option Agreements, each Claim Owner and SMI acknowledged and agreed, among other things, to the following (the “Acknowledgements”): (i) the assignment of SMI’s interest in the Searchlight Claims to Searchlight; (ii) the right of reimbursement of K. Ian Matheson and his related companies for amounts advanced to SMI, including $85,000 advanced to SMI; (iii) that following the issuance of an aggregate of 5,600,000 shares (post-split) of the common stock of Searchlight to the Claim Owners, all of the Claim Owner’s rights and interests in the Searchlight Claims will be vested in Searchlight; (iv) the appointment of K. Ian Matheson as director and officer of Searchlight to proceed with a restructuring of the business of Searchlight; and (v) during the term of the agreement, to allow Searchlight and its authorized agents to have exclusive rights to access the Searchlight Claims for all purposes including prospecting, exploring, developing, trenching, stripping, excavating, sampling and conducting any and all exploration and development activities for the purpose to determining the mineral or metal content of the property and the right to remove from the property all such materials and minerals deemed necessary to properly test, explore or develop the property.

In consideration of the Acknowledgments, Searchlight agreed, among other things to: (i) complete a corporate restructuring of its business by March 31, 2005; (ii) include any shares of its common stock issued to the Claim Owners in any subsequent registration statement filed by Searchlight under the Securities Act; (iii) make all regulatory or government payments required to maintain the Searchlight Claims in good standing during the term of the agreement, and (iv) issue to the Claim Owners an aggregate of 5,600,000 (post-split) restricted shares in the common stock of Searchlight in the following manner:

	(a)	1,400,000 shares on or before June 30, 2005, which shares have been issued;
	(b)	1,400,000 shares on or before June 30, 2006, which shares have been issued;
	(c)	1,400,000 shares on or before June 30, 2007; and
	(d)	1,400,000 shares on or before June 30, 2008.

We will not acquire title to the Searchlight Claims until we complete the issuance of shares of our common stock to each Claim Owner in accordance with the terms of the Option Agreements. We are presently in good standing under our Option Agreements.

Searchlight Project and Reclamation Permit

The intent of our exploration work program is to continue the metallurgical testing to determine the most favorable production-scale extraction methods to optimize recovery of precious metals, drill for reserves (18 holes) and to perform a pre-feasibility study. We expect to rent a drill rig and employ drillers to conduct the drilling. Independent geologists and engineers are expected to be engaged to certify the work. Budget for this work is estimated at approximately $1,000,000.

On April 22, 2005, we received a reclamation permit from the Nevada Bureau of Mining Regulation and Reclamation (“BMRR”) for our proposed work program on certain of the Searchlight Claims. Pursuant to the terms of the reclamation permit, we received the authorization to proceed with the reclamation of the mine located on the Rio Raga 304 claim and to pursue our planned exploration program on certain of our claims, in the following manner:

EXPLORATION PHASE	PROJECT	LOCATION	SIZE

Phase I - Exploration Program	Drilling of 18 Sites	Section 1, 12, 13, 24 and 25 T. 29 S., R. 63 E. and portions of Sections 19 and 30, T. 29S., R. 64 E., MDM, Clark County, Nevada	1.8 Acres

Phase II – Mine Reclamation	Pit and Set Backs Plant Site Access Road	Section 13, T. 29S., R. 63 E., MDM, Clark County, Nevada	41.5 Acres 3.2 Acres 1 Acre

The permit is valid for the life of the project and becomes effective upon receipt of an acceptable surety by the BMRR. We posted a cash bond in the amount of $180,500 with the U.S. Bureau of Land Management (“BLM”), in accordance with the terms of our reclamation permit for the Searchlight project granted by the Nevada Bureau of Mining Regulation and Reclamation on April 22, 2005.

In accordance with the terms of our reclamation permit for the Searchlight Project, metallurgical studies have been performed on the Searchlight Project site. Chain of Custody surface samples and bulk samples have been taken from the project area and analytical work on the samples has begun. In January 2007, we received some preliminary results for the Searchlight Project. The results and analysis are described below under the heading “Current Status of Exploration of Searchlight Claims.”

Geology

The Searchlight Project is located over a north-south basin filled with unconsolidated detritus and bounded by outcropping Miocene volcanic and intrusive rocks. Outcrops of basement Precambrian gneiss indicate considerable uplift has occurred. Interpretation of satellite infrared images indicates a major east-west Fracture Zone, some six miles wide, cross-cuts the basin underlying the Project area. The gold at Searchlight was mined principally from quartz-sulphide-hematite veins that trended east-west. This is clearly related to the above mentioned Searchlight-Mammoth Fracture Zone. Detritus fill and hydrothermal overprints are postulated to be the source of the ultra fine gold (<20 microns) found underlying the Project area.

Metallurgy

Previous work on the Searchlight Project has shown that the gold occurs as minute particles in both the detritus grains and in the hydrothermally derived precipitates, which overprints the valley fill. It has taken years of research to develop extraction methods capable of dealing with this unique mineralogy.

During 2004-2005 some 34 surface samples were analyzed for gold by the property owners on material collected from surface sites. At each sample site some 10 kg (22lbs) of –1/4” screened material was collected and split into 200-1,000g samples for testing. Each sample was then prepared for assay. This included drying, grinding, blending, etc. Normally 15-30g samples were fire assayed with gravimetric finish for final results.

Preliminary statistical analysis of the data from this work indicates the high variance of fire assay extraction is directly correlated to the sample preparation method and/or the small sample size used. Historical data on the Project indicates that leach tests on larger samples are a more reliable analytical method than fire assaying of small samples. For these reasons and to verify the property owners’ results, an independent metallurgical testing firm was retained to take chain of custody samples, to test the samples for precious metals, to determine extractable grades by leaching large samples (500–1,000g), and to report on the results.

The firm selected to do this work was Arrakis, Inc. (“Arrakis”) of Denver, Colorado. Leach tests by Arrakis have confirmed the presence of extractable gold at the locations sampled.

Work Program of Searchlight Claims

The work program for the Searchlight Project, expected to be completed by the third quarter of 2007, is focused on continuing the metallurgical testing program which includes independent metallurgical testing, bulk sampling, concentration tests, milling and leaching and extraction tests to optimize recovery of precious metals. A drilling and pre-feasibility program, which will include an 18-hole drill program, chain-of-custody sampling and assaying of drill hole material, pilot plant tests and a pre-feasibility report, is then anticipated to begin in the fourth quarter of 2007.

The following is an outline of the proposed milestones and expenditures on the Searchlight Gold Project for the next twelve months:

	Work	Target Date	Budget

1. Metallurgical Testing Program
•	Continue independent metallurgical testing program,
	bulk sampling, concentration, milling, leaching and	Complete in Third	$	400,000
	extraction tests to optimize recovery of precious metals	Quarter 2007
•	Update independent engineering report with results
	from metallurgical testing program

2. Drilling and Pre -Feasibility Program
•	Permitted to drill 18 holes
•	Chain-of-custody independent oversight of drilling
	program by qualified engineering firm, including	Begin in Fourth	$	600,000
	sampling and assaying drill hole material	Quarter 2007
•	Independent engineering report outlining drilling
	program results, reserve estimation, pilot plant tests
	and pre-feasibility study
			$	1,000,000
	TOTAL		(approximately
			$700,000 in next
			12 months)

Current Status of Exploration of Searchlight Claims

We filed a surety bond in the amount of $27,528 for Phase I and $153,031 for Phase II with the Bureau of Land Management, and have commenced the two phase exploration program approved in connection with the terms of our reclamation permit. During the year ended December 31, 2006, metallurgical studies were performed on the Searchlight Project site. In early 2007, we received the initial results of metallurgical testing conducted by our independent engineering consultants, Arrakis, on chain of custody surface samples collected from our Searchlight Project.

Metallurgical testing by Arrakis using the process of total digestion has consistently revealed a feed grade of 0.37 ounces per ton (opt) gold or better in the Searchlight Project samples. Preliminary tests indicate that the “head” ore grade may be concentrated. Metallurgical extraction, using autoclave leaching, has been successful in extracting 80% of the gold into solution. Work is continuing to optimize these processes and finalize a potential commercial extraction protocol for the Searchlight Gold Project. Once this is completed, drilling for reserves is expected to determine the commercial feasibility of the project.

The table below provides an overview of the results from metallurgical tests completed, to date, by Arrakis:

Chain of Custody Results Summary

COC Tests(1)	Feed Grade Gold (opt)* (1)(2)	Extracted Grade Gold (opt)* (1)(2)	Leach Method(1)
Bench Leach Tests
SP4 – 500grams	0.58	0.24 – 0.42	48 hr Leach
SP4 – 50lbs head	0.54
Con 1	1.56	0.36	96 hr leach
Con 2	0.93	0.75	96 hr leach
Bulk Leach Tests
BL1 - 1,000 lbs	0.58	0.25	48 hr Leach
BL2 - 1,000 lbs	0.58	0.22	48 hr Leach
BL3 – 9,000 lbs head

COC Tests(1)	Feed Grade Gold (opt)* (1)(2)	Extracted Grade Gold (opt)* (1)(2)	Leach Method(1)
1,674 lbs cons	0.90	0.21	72 hr Leach
Autoclave Tests
TP2-12 – 200 grams	0.34 – 0.39	0.03 – 0.26	1.5 hr Autoclave
TP8 – 200 grams	0.37	0.16	1.5 hr Autoclave
TP9 (TP8 tails)		0.14	1.5 hr Autoclave
Total		0.30	3.0 hr Autoclave

Notes

*	opt (ounces per ton)

(1)

Gold analysis was performed by Arrakis, Inc. under chain-of-custody parameters. Analysis of all head ore samples was done by 3 ac id digestion in a Milestone Ethos Plus microwave sample digester and analyzed by a Perkin Elmer 5100 graphite furnace atomic adsorption (GFAA) system with Zeeman background correction. Pregnant solutions from all bench and bulk tests were analyzed for Au using calibration blanks and standards corrected with matching sample matrix to the specific solution being read.

(2)	Feed Grade is the initial gold content in the sample. Extracted Grade is the amount of gold leached into solution.

Results of the chain of custody surface samples are provided below:

Surface Sample I.D.		Feed Grade
		Au
		(opt)*
SS5		0.39
SS6		0.48
SS7		0.55
SS8		0.69
* opt (ounces per ton)

While the feed grade of the preliminary samples indicated significant gold content, the grade recovered into solution from sample SS8 in a somewhat standard bottle roll leach test approximated 0.19 opt gold.

Following this initial sampling, Arrakis tested a variety of bench scale leach methods in order to improve extraction of the gold. The bench testing and optimization of leach conditions improved the extraction efficiency to 72% and outlined a protocol for bulk leach testing. To further the work program, six tons of COC bulk samples were collected from the Searchlight property on September 14, 2005. Results from analyses of the bulk samples were as follows:

Bulk Test I.D.	Feed Grade	Extracted Grade Au
	Au	(opt)*
	(opt)*
BL 1	0.58	0.25
BL 2	0.58	0.22
BL 3	0.90	0.21
* opt (ounces per ton)

Arrakis has begun work on examining pressure leaching via autoclave to enhance both the kinetics and extraction efficiency of gold from solution. A series of 11 autoclave tests were conducted using 200-gram samples in a Parr 1 liter pressure reactor. Solution analysis was completed by Arrakis, Inc. The results of such tests are summarized in the following table:

Autoclave Test I.D.*	Feed Grade	Extracted Grade
	Au	Au
	(opt)**	(opt)**
TP2	0.37	0.07
TP3	0.39	0.08

Autoclave Test I.D.*	Feed Grade	Extracted Grade
	Au	Au
	(opt)**	(opt)**
TP4	0.38	0.03
TP5	0.37	0.15
TP6	0.34	0.19
TP7	0.37	0.03
TP8	0.37	0.16
TP9	0.37	0.14
TP10	0.37	0.23
TP11	0.37	0.26
TP12	0.37	0.15

Notes:

*	All samples approximated 200 grams in 1 liter of solution. Leach time for all samples approximated 90 min and the sample for TP7 was dead roasted prior to leaching.

**	opt (ounces per ton)

The current work plan for the Searchlight Gold Project is to continue the metallurgical testing program to determine the most favourable production-scale extraction methods to optimize recovery of precious metals. Once these results are obtained, we intend to embark on an 18 hole drilling program and perform a pre-feasibility study.

Royalty Agreements

Pursuant to the terms of the Letter Agreement dated November 22, 2006, as amended February 15, 2007, among Searchlight, Verde River Iron Company, LLC, Harry B. Crockett and Gerald Lembas, we are required to pay Verde River Iron Company, LLC a royalty (the “Royalty”) consisting of 2.5% of the Net Smelter Returns (as defined in the LA), on any and all proceeds of production from the Clarkdale Slag Project; and pay to VRIC $500,000 annually (subject to Force Majeure) commencing on the Project Funding Date (the “Advance Royalty”), with no deduction or offset against the Royalty, except that the combined Royalty and Advance Royalty shall not exceed $500,000 in any calendar year; and, the Advance Royalty shall end forever on the first to occur between: (1) the end of the first calendar year in which the Royalty equals or exceeds $500,000; or (2) the date that is ten (10) years after the date the Agreement is executed by the parties.

Pursuant to the terms of our Assignment Agreement with Nanominerals Corp., as amended August 31, 2005 and October 24, 2005, we are required to pay Nanominerals Corp. a royalty on the interest in the Clarkdale Slag Project assigned by Nanominerals to us, equal to 5% of the Net Smelter Returns (as defined in the Assignment Agreement) resulting from the processing and extraction of minerals from the Clarkdale Slag Project. Due to our recent acquisition of Transylvania International, Inc., and the resulting 100% ownership of the Clarkdale Slag Project, this Net Smelter Returns royalty to Nanominerals Corp. now equals 2.5% of total production of the project.

ITEM 3. LEGAL PROCEEDINGS.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our shares are currently trading on the Over-The-Counter Bulletin Board under the symbol “SRCH”. The high and the low bid prices for our shares for the last two fiscal years of actual trading, as quoted in the over-the-counter bulletin board, as applicable, were:

QUARTER	HIGH ($)			LOW ($)

1st Quarter 2005	$	1.45		$	0.21
2nd Quarter 2005	$	1.15		$	0.51
3rd Quarter 2005	$	1.50		$	0.35
4th Quarter 2005	$	1.18	(1)	$	0.62	(1)
1st Quarter 2006	$	2.05		$	0.39
2nd Quarter 2006	$	3.12		$	1.35
3rd Quarter 2006	$	2.50		$	1.45
4th Quarter 2006	$	4.50		$	1.50

Notes

(1)	As adjusted to reflect a two for one stock split effected on September 30, 2005.

The trades reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.

Holders of Our Common Stock

As of April 4, 2007, we have 260 registered stockholders holding 91,377,827 shares of our issued and outstanding common stock.

Dividends

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

We would not be able to pay our debts as they become due in the usual course of business; or

Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our Articles of Incorporation.

We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

Since our previous fiscal year ended December 31, 2005, we have completed the following unregistered sales of our securities:

On March 22, 2007, we closed a private placement offering for gross proceeds of $6,678,483 (the "March Offering"). The securities sold pursuant to the March Offering were issued to non -US investors in accordance with the terms of Regulation S of the Securities Act of 1933. In connection with the March Offering, we entered into an Agency Agreement with D&D Securities Company (“D&D") dated March 21, 2007 (the "Agency Agreement"). The securities were sold to subscribers on a best efforts agency basis. Pursuant to the terms of the Agency Agreement, we sold an aggregate of 2,226,161 units for gross proceeds of $6,678,483, with each unit consisting of one share of our common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of US$4.50 per Share. The warrants are callable by Searchlight if its common stock trades above $6.50 per share for 20 consecutive trading days. Also under the terms of the March Offering we agreed to use our best efforts to file with the Securities and Exchange Commission a registration statement on Form SB -2, or on such other form as is available, registering the offered securities within four months and one day after the closing of the March Offering. An aggregate commission and corporate finance fee totaling $525,386 was paid by us to the Agent in connection with the March Offering and the Agent also received warrants to purchase 75,175 shares of our common stock.

On February 23, 2007, we closed a private placement offering and issued 4,520,666 units for aggregate gross proceeds of $13,562,002 to accredited investors resident in the United States pursuant to Regulation D of the Securities Act (the “US Offering”). Each unit consisted of one share of our common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of $4.50 per share. The warrants are callable by us if our common stock trades above $6.50 per share for 20 consecutive trading days. Pursuant to the terms of the US Offering, we agreed to use our best efforts to file a registration statement declared effective by the SEC within four months of the closing date of the US Offering. We agreed not to exercise our call rights until the registration statement registering the securities underlying the units sold has been declared effective by the SEC. We further agreed to keep the registration statement effective pursuant to Rule 415 of the Securities Act for a period of eighteen months following the date the registration statement is declared effective by the SEC. A portion of the US Offering was sold on a best efforts agency basis. Commissions paid to agents in connection with the US Offering totaled $381,990 and the agents also received warrants to purchase 90,870 shares of our common stock at a price of $4.50 per share, exercisable for a period of two years from the closing date.

Also on February 23, 2007, we closed a private placement offering and issued 575,000 units for aggregate gross proceeds of $1,725,000 to non -US investors pursuant to Regulation S of the Securities Act (the “February Offering”). Each unit consisted of one share of our common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of $4.50 per share. The warrants are callable by us if our common stock trades above $6.50 per share for 20 consecutive trading days. Pursuant to the terms of the February Offering, we agreed to use our best efforts to file a registration statement declared effective by the SEC within four months of the closing date of the February Offering. We agreed not to exercise our call rights until the registration statement registering the securities underlying the units sold has been declared effective by the SEC. We further agreed to keep the registration statement effective pursuant to Rule 415 of the Securities Act for a period of eighteen months following the date the registration statement is declared effective by the SEC. Commissions paid to agents in connection with the February Offering totaled $111,100 and the agents also received warrants to purchase 12,300 shares of our common stock at a price of $4.50 per share, exercisable for a period of two years from the closing date.

On February 15, 2007, we approved the issuance of 16,825,000 shares of our common stock to five investors in connection with the Agreement and Plan of Merger dated February 15, 2007. The issuance was completed pursuant to Section 4(2) and Regulation D of the Securities Act on the basis that each investor was a sophisticated investor and was in a position of access to relevant material information regarding our operations. Each investor delivered appropriate investment representations satisfactory to us with respect to this transaction and consented to the imposition of restrictive legends upon the certificates evidencing such share certificates.

On July 27, 2006, we approved the issuance of 1,400,000 shares of our common stock to 18 mineral claim owners in connection with the Option Agreements dated February 8, 2005 among us and the mineral claim owners. The issuance was completed pursuant to Section 4(2) of the Securities Act on the basis that each claim owner was a sophisticated investor and was in a position of access to relevant and material information regarding our operations. Each claim owner delivered appropriate investment representations satisfactory to us with respect to this transaction and consented to the imposition of restrictive legends upon the certificates evidencing such shares.

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.

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.

In February, 2006 we issued a total of 1,225,000 shares of our common stock and warrants to purchase an additional 608,000 shares of our common stock exercisable at a price of $0.625 until June 1, 2006 to subscribers of our three private placements completed in September, 2005 (the “September 2005 Private Placements”). Pursuant to the terms of each of the September 2005 Private Placements, subscribers received non-transferable warrants (the “Penalty Units”) exercisable into 1/10th of a unit issued in the September 2005 Private Placements for no additional consideration if a registration statement on Form SB-2 (the “Registration Statement”) registering the resale of the units issued pursuant to the September 2005 Private Placements was not declared effective by the SEC within four months and one day after the closing of the September 2005 Private Placements (the “Filing Deadline”). Searchlight’s Registration Statement was not declared effective by the SEC before the Filing Deadline and, as a result, we issued the Penalty Units to the subscribers of the September 2005 Private Placements. The issuances were completed pursuant to Rule 506 of Regulation D of the Securities Act for US subscribers and Regulation S of the Securities Act for non-US subscribers. All securities issued were 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.

On January 18, 2006, we closed our Private Placement of 39 units at a price of $45,000 per unit to raise gross proceeds of US$1.755 Million (the “Private Placement”). The Private Placement units were issued to accredited investors resident in the United States pursuant to Regulation D of the Securities Act of 1933 (the “Securities Act”). Each unit (a ”Unit”) consisted of 100,000 Shares of our common stock (a “Share”), 100,000 Share purchase warrants with each warrant entitling the subscriber to purchase one additional Share for a period of two years from the closing of the Private Placement at an exercise price equal to US$0.65 per Share. The securities were sold on a best efforts agency basis by S&P Investors, Inc. (the "Agent"). In connection with the Private Placement, the Agent received a fee of US$87,750 and warrants to purchase 390,000 shares at a price of US$0.65 per share for a period of two years from the closing of the Private Placement. The sales were completed pursuant to Rule 506 of Regulation D of the Securities Act. All securities issued were 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.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Plan of Operation

Our current plan of operation on the Clarkdale Slag Project is to complete our materials study, continue our pilot testing and site work in Clarkdale, and construct our first “unit” (module) of production. For the Searchlight Gold Project, the plan of operation is to continue the metallurgical testing program to determine the most favorable production-scale extraction methods to optimize recovery of precious metals, drill for reserves (18 holes) and to perform a pre-feasibility study.

Clarkdale Slag Project

The properties comprising our Clarkdale Slag Project are discussed in detail under the heading “Description of Property” in this Annual Report.

As of the date of this Annual Report, we have drilled 18 holes (SD1-18) in the slag pile under the supervision of Mountain States R&D International Inc. (“MSRDI”). These holes were drilled as part of a materials study being conducted by MSRDI on our behalf. Sample preparation and analysis was performed under MSRDI’s chain of custody sampling.

Our current plan of operation on the Clarkdale Slag Project is to complete our materials study, continue our pilot testing and site work in Clarkdale, construct our first “unit” (module) of production and finance. The materials study, expected to be completed in the second quarter of 2007, is expected to show total and “processable” tonnage as well as the grade study completed by independent engineers. In the third quarter of 2007, we hope to complete our pilot testing and site work which will include finalizing the metallurgy and flow sheet, optimizing the processing protocols and begin rehabilitating the operations site. We then anticipate our first module of production, designed to determine the economics of the project and serve as final feasibility of the project, to be completed in the fourth quarter of 2007. If the feasibility of the project proves economic, financing and construction of the processing facility is expected to commence in the first quarter of 2008.

Searchlight Gold Project

The properties comprising the Searchlight Claims and our exploration activities on the Searchlight Claims are discussed in detail under the heading “Description of Property” in this Annual Report.

In early 2007, we received the initial results of the metallurgical and analytical analysis on the chain of custody surface samples and bulk samples (6 tons) samples taken from the project area by Arrakis Inc. Our current plan of operation on the Searchlight Gold Project is to continue the metallurgical testing program to determine the most favorable production-scale extraction methods to optimize recovery of precious metals, drill for reserves (18 holes) and to perform a pre-feasibility study. The metallurgical testing program which includes independent metallurgical testing, bulk sampling, concentration tests, milling and leaching and extraction tests to optimize recovery of precious metals is expected to be completed in the third quarter of 2007. A drilling and pre-feasibility program, which will include an 18-hole drill program, chain-of-custody sampling and assaying of drill hole material, pilot plant tests and a pre-feasibility report, is then anticipated to begin in the fourth quarter of 2007.

The agreements pursuant to which we acquired our interests in the Searchlight Claims provide that we must make a series of stock and lease 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 interest in those properties.

We have developed an exploration work program for the Searchlight Project. We filed a surety bond in the amount of $27,528 for Phase I and $153,031 for Phase II of our exploration program with the Bureau of Land Management (“BLM”), and have commenced the two phase exploration program approved in connection with the terms of our reclamation permit, see “Searchlight Project and Reclamation Permit”, below.

Cash Requirements

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

EXPENSE	COST

Administrative Expenses	$	2,000,000

Legal and Accounting Expenses	$	600,000

Consulting Services	$	1,000,000

Clarkdale Slag Project
• Materials Study	$	50,000
• Pilot Testing/Site Work	$	300,000
• First Module of Production	$	7,000,000
• Processing Facility (begin)	$	15,000,000
	$	22,350,000

Searchlight Gold Project
• Metallurgical Testing Program	$	400,000
• Drilling and Feasibility Program (begin)	$	300,000
	$	700,000

TOTAL	$	26,650,000

We recorded a net loss of $2,540,978 for the year ended December 31, 2006 and have an accumulated deficit of $8,006,278 since inception. As at the date of this Annual Report we had cash of approximately $13,000,000 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 $26,650,000. Accordingly we do not have sufficient funds to meet our planned expenditures over the next twelve months and will need to obtain further financing to fund our operations. See “Future Financings”, below.

RESULTS OF OPERATIONS

Summary of Year End Results

	Year Ended December 31,
							Percentage
	2006			2005			Increase /
	(restated)						(Decrease)
Revenue	$	—		$	—			n/a
Operating Expenses		(3,736,079	)		(1,721,777	)		117.0	%
Total Other Income (Expense)		72,644			—			n/a
Income Tax Benefit		1,122,457			399,645			180.9	%
Gain from Discontinued Operations		—			120,708			(100.0	)%

Net Loss	$	(2,540,978	)	$	(1,201,424	)		111.5	%

Revenue

We are presently in the exploration stage of our business, and have not earned any revenues from our planned mineral operations to date. We did not generate any revenues from inception in 2000 through the year ended December 31, 2006. We do not anticipate earning revenues from our planned mineral operations until such time as we enter into commercial production of the Clarkdale Slag Project, the Searchlight Gold Project or other mineral properties we may acquire from time to time, and of which there are no assurances.

Operating Expenses

The major components of our operating expenses are outlined in the table below:

	Year Ended December 31,
					Percentage
	2006		2005		Increase /
	(restated)				(Decrease)
Mineral exploration and evaluation expenses	$	2,024,932	$	887,023		128.3	%
Mineral exploration and evaluation expenses – related party		495,000		—		n/a
General and administrative		1,209,838		833,804		45.1	%
Depreciation		6,309		950		564.1	%
Total Operating Expenses	$	3,736,079	$	1,721,777		117.0	%

Total operating expenses during fiscal 2006 increased by 117.0% as compared to fiscal 2005 primarily due to the fact that: (i) we had increased mineral exploration expenses in connection with our 2006 drilling and sampling program on the Clarkdale Slag Project and Searchlight Claims; and (ii) our general and administrative expenses increased primarily due to increased professional fees associated with the acquisition of Transylvania International, Inc. and the completion of our equity financings and the preparation of our registration statement on Form SB-2.

Liquidity and Financial Condition

Working Capital

	At December 31, 2006 (restated)		At December 31, 2005			Percentage Increase / (Decrease)
Current Assets	$	3,790,483	$	705,856			437	%
Current Liabilities		1,583,306		1,178,123			34.4	%
Working Capital Surplus (Deficit)	$	2,207,177	$	(472,267	)		567.3	%

Cash Flows

	Year Ended
	December 31, 2006 (restated)			Year Ended December 31, 2005
Cash Flows used in Operating Activities	$	(3,052,236	)	$	(1,477,027	)
Cash Flows used in Investing Activities		(225,748	)		(793,219	)
Cash Flows from Financing Activities		6,256,376			2,975,807

Net Increase (Decrease) in Cash During Period	$	2,978,392		$	705,561

Summary of Financing Activities

During fiscal 2006 we completed the following financings to fund our proposed exploration program and our continued operations:

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. 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.

On January 18, 2006 we closed a private placement of 39 units at a price of $45,000 per unit to raise gross proceeds of US$1.755 million.

Subsequent to our fiscal year ended December 31, 2006 we raised a total of $21,965,485 through private placements of our securities. See “Recent Sales of Unregistered Securities”, above.

Working Capital. The increase in our working capital to a surplus of $2,207,177 at December 31, 2006 from a deficit of $472,267 at December 31, 2005 was primarily due to the increase in cash flows from financing activities of $6,256,376 from private placements of our securities completed during the year ended December 31, 2006 and exercises of warrants during fiscal 2006. See “Recent Sales of Unregistered Securities”, above.

Equity Compensation. 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 common stock that may be granted to our employees, officers, directors, and eligible consultants of Searchlight. The Plan provides that the option price be the fair market value of the stock at the date of grant as determined by the Board of Directors. Options granted become exercisable and expire as determined by the Board of Directors. The maximum aggregate number of shares of our common stock that may be optioned and sold under the Plan will be increased effective the first day of each of our fiscal quarters, beginning with the fiscal quarter commencing July 1, 2006, by an amount equal to the lesser of: (i) 15% of the total increase in the number of shares of common Stock outstanding during the previous fiscal quarter; or (ii) a lesser number of shares of common stock as may be determined by the board of Searchlight. During the year ending December 31, 2006 we issued stock options under the Plan to acquire a total of 870,000 shares of our common stock to directors, officers and an employee with exercise prices ranging from $1.70 to $2.06 per share.

Subsequent to the completion of our fiscal 2006, on February 16, 2007 in connection with the amendments to the executive employment agreements, our board of directors also approved the following stock option grants pursuant to our Plan: (i) Ian R. McNeil received 24,800 options; (ii) Carl S. Ager received 24,800 options; and (iii) Melvin Williams received 18,600 options. Each option is exercisable to acquire a share of our common stock at a price of $4.04 (the closing price on February 16, 2007), vesting on the grant date and expiring five years from the grant date.

Future Financings

Our plan of operation calls for significant expenses in connection with our Clarkdale Slag Project and Searchlight Gold Project. We recorded a net loss of $2,540,978 for the year ended December 31, 2006 and have an accumulated deficit of $8,006,278 since inception. As at the date of this Annual Report we have cash of approximately $13,000,000 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 $26,650,000. Accordingly we do not have sufficient funds to meet our planned expenditures over the next twelve months and 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 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 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.

Mineral Rights

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, the mineral rights will be expensed at that time.

We evaluate the carrying value of capitalized mining costs and 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 of Disposal of Long-Lived Assets.”

Exploration Costs

Mineral exploration costs are expensed as incurred.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is principally provided 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 fixed assets in measuring their recoverability.

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 in January 12, 1999 and since that time were engaged in the business of biotechnology research and development. In February, 2005, we changed our business to mineral exploration. We have a limited history upon which an evaluation of our future success or failure can be made. Our net loss since inception is $8,006,278. Our ability to achieve and maintain profitability and positive cash flow is dependent upon, among other things:

our ability to locate a profitable mineral property;


	·	positive results from our feasibility studies on the Searchlight Claims and the Clarkdale Slag Project;

	·	positive results from the operation of our initial test module on the Clarkdale Slag Project; and

our ability to generate revenues.

Our plan of operation calls for significant expenses in connection with the exploration of the Searchlight Gold Project and drilling and sampling activities on the Clarkdale Slag Project, which will require us to obtain additional financing. We recorded a net loss of $2,540,978 for the fiscal year ended December 31, 2006 and have an accumulated deficit of $8,006,278 as at December 31, 2006. As at the date of this Annual Report, we had cash of approximately $13,000,000 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 $26,650,000. Accordingly we do not have sufficient funds to meet our planned expenditures over the next twelve months and will need to obtain further financing to fund our operations.

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 there exists a substantial doubt about our ability to continue as a going concern.

Because our management does not have formal training specific to the technicalities of mineral exploration, there is a higher risk 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.

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 claim 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 assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will most likely fail.

If the price of base and precious metals declines, our financial condition and ability to obtain future financings will be impaired.

The price of base and precious metals is affected by numerous factors, all of which are beyond our control. Factors that tend to cause the price of base and precious metals to decrease include the following:

(a)

Sales or leasing of base and precious metals by governments and central banks;

(b)

A low rate of inflation and a strong US dollar;

(c)

Speculative trading;

(d)

Decreased demand for base and precious metals in industrial, jewelry and investment uses;

(e)

High supply of base and precious metals from production, disinvestment, scrap and hedging;

(f)

Sales by base and precious metals producers and foreign transactions and other hedging transactions; and

(g)

Devaluing local currencies (relative to base and precious metals price in US dollars) leading to lower production costs and higher production in certain major base and precious metals producing regions.

Our business is dependent on the price of base and precious metals. We have not undertaken hedging transactions in order to protect us from a decline in the price of base and precious metals. A decline in the price of base and precious metals may also decrease our ability to obtain future financings to fund our planned exploration programs.

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.

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 mineralized material 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) and building a production facility. Until such time as we have established economic feasibility of the Clarkdale Slag Project through our pre-feasibility studies and the operation of our one unit module of production from the slag pile, there is no assurance that we will proceed to the construction of a proposed processing facility. If the results from our pre-feasibility studies and the production results from the operation of our one unit module are not sufficiently positive for us to proceed with the construction of our proposed processing facility we will have to scale back or abandon our proposed operations on the Clarkdale Slag Project. At such time that we deem appropriate, a bankable feasibility study will be undertaken. T here 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.

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

There are several governmental regulations that materially restrict mineral exploration. We are subject to the laws of the State of Nevada and applicable federal laws as we carry out our exploration program on the Searchlight Claims. 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. While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program.

If we become subject to increased environmental laws and regulation, our operating expenses may increase.

Our exploration operations are regulated by both US Federal and Nevada and Arizona state environmental laws that relate to the protection of air and water quality, hazardous waste management and mine reclamation. These regulations will impose operating costs on us. If the regulatory environment for our operations changes in a manner that increases costs of compliance and reclamation, then our operating expenses would increase with the result that our financial condition and operating results would 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 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.

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 governmental 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;

(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. See “Description of Business - Compliance with Government Regulation”, below.

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

Since our inception we have relied on such 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, your percentage interest in us will be lower. This condition is often referred to as "dilution". The result of this could reduce the value of your stock.

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

Our common stock is considered to be a “penny stock” since it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Securities Exchange Act of 1934 (the “Exchange Act”). Our common stock is a “penny stock” because it meets one or more of the following conditions (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange; (iii) it is not quoted on the Nasdaq Stock Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.

The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

ITEM 7. FINANCIAL STATEMENTS.

			Page
1.		Reports of Independent Registered Public Accounting Firm	F-1
2.		Audited Financial Statements for the year ended December 31, 2006, including:
	a.	Balance Sheets as at December 31, 2006 and December 31, 2005;	F-3
	b.	Statements of Operations for the years ended December 31, 2006, December 31, 2005, and for the period from inception to December 31, 2006;	F-4
	c.	Statements of Stockholders’ Equity (Deficiency); and	F-5
	d.	Statements of Cash Flows for the years ended December 31, 2006, December 31, 2005, and for the period from inception to December 31, 2006;	F-7
	e.	Notes to Financial Statements.	F-8

BROWN ARMSTRONG PAULDEN

McCOWN STARBUCK THORNBURGH & KEETER

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Searchlight Minerals Corp.

We have audited the accompanying balance sheet of Searchlight Minerals Corp. (An Exploration Stage Company) as of December 31, 2006, and the related statements of operations, including inception cumulative data prospectively from January 1, 2006, stockholders’ equity, and cash flows for the year ended December 31, 2006. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Searchlight Minerals Corp. as of December 31, 2005, were audited by other auditors whose report dated April 10, 2006, expressed an unqualified opinion on those statements. However, there was an additional paragraph raising substantial doubt about the Company’s ability to continue as a going concern if they were unable to raise additional financing.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Searchlight Minerals Corp. as of December 31, 2006 and the results of its operations, stockholders’ equity, including inception cumulative data, and its cash flows for the year ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company has used common stock to raise money for operations and property acquisitions. The Company has not attained profitable operations and is dependent upon obtaining financing to pursue their plan of operation. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


	BROWN ARMSTRONG PAULDEN
	McCOWN STARBUCK THORNBURGH & KEETER
	ACCOUNTANCY CORPORATION

Bakersfield, California

April 13, 2007, except for Note 16,

whose date is May 12, 2008

F-1

F-2

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

BALANCE SHEETS

(RESTATED)

	December 31, 2006			December 31, 2005
	(restated)
ASSETS

Current assets
Cash	$	3,684,248		$	705,856
Prepaid expenses		106,235			-

Total current assets		3,790,483			705,856

Property and equipment, net		30,187			15,136
Mineral properties		5,431,290			819,442
Joint venture and merger option agreements		2,808,481			2,608,481
Reclamation bond and deposits		183,040			180,500

Total non-current assets		8,452,998			3,623,559

Total assets	$	12,243,481		$	4,329,415

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	888,651		$	783,246
Accounts payable - related party		311,863			-
Loan payable - related party		382,792			379,877
Loan payable		-			15,000

Total current liabilities		1,583,306			1,178,123

Long-term liabilities
Deferred tax liability		860,331			450,940

Total long-term liabilities		860,331			450,940

Total liabilities		2,443,637			1,629,063

Stockholders' equity
Common stock, $0.001 par value; 400,000,000 shares
authorized, 67,231,000 and 52,150,000 shares,
respectively, issued and outstanding		67,231			52,150
Additional paid-in capital		17,738,891			7,843,502
Common stock subscribed		-			270,000
Accumulated deficit during exploration stage		(8,006,278	)		(5,465,300	)

Total stockholders' equity		9,799,844			2,700,352

Total liabilities and stockholders' equity	$	12,243,481		$	4,329,415

See Accompanying Notes to Financial Statements

F-3

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

STATEMENTS OF OPERATIONS

(RESTATED)


							For the period from
							January 14, 2000
							(Date of Inception)
	For the Year Ended			For the Year Ended			Through
	December 31, 2006			December 31, 2005			December 31, 2006
	(restated)						(restated)

Revenue	$	-		$	-		$	-

Operating expenses
Mineral exploration and evaluation expenses		2,024,932			887,023			2,911,955
Mineral exploration and evaluation
expenses - related party		495,000			-			495,000
General and administrative		1,209,838			833,804			2,043,642
Depreciation		6,309			950			7,259

Total operating expenses		3,736,079			1,721,777			5,457,856

Loss from operations		(3,736,079	)		(1,721,777	)		(5,457,856	)

Other income (expense)
Loss on equipment disposition		(4,388	)		-			(4,388	)
Interest and dividend income		77,032			-			77,032

Total other income (expense)		72,644			-			72,644

Loss before income taxes		(3,663,435	)		(1,721,777	)		(5,385,212	)

Income tax benefit		1,122,457			399,645			1,522,102

Loss from continuing operations		(2,540,978	)		(1,322,132	)		(3,863,110	)

Discontinued operations:
Gain (loss) from discontinued operations		-			120,708			(4,143,168	)

Net loss	$	(2,540,978	)	$	(1,201,424	)	$	(8,006,278	)

Loss per common share - basic and diluted
Loss from continuing operations	$	(0.04	)	$	(0.03	)
Gain from discontinued operations		0.00			0.002

Net loss	$	(0.04	)	$	(0.02	)

Weighted average common shares outstanding -
Basic and diluted		62,075,707			50,777,096

See Accompanying Notes to Financial Statements

F-4

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

STATEMENT OF STOCKHOLDERS' EQUITY

(RESTATED)

												Accumulated
										Common		Deficit During			Total
	Common Stock						Additional			Stock		Exploration			Stockholders'
	Shares			Amount			Paid-in Capital			Subscribed		Stage			Equity

Balance, January 14, 2000		-		$	-		$	-		$	-	$	-		$	-

Issuance of common stock
(recapitalized)		50,000,000			50,000			(25,000	)		-		(24,999	)		1

Net loss		-			-			-					(231,969	)		(231,969	)

Balance, December 31, 2000		50,000,000			50,000			(25,000	)		-		(256,968	)		(231,968	)

Issuance of common stock in
reverse 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			-		-			1,037,126

Beneficial conversion feature
associated with debt		-			-			300,000			-		-			300,000

Net 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			-		-			1,200,000

Deferred compensation		-			-			12,583			-		-			-

Amortization of deferred
compensation		-			-			-			-		-			10,387

Net 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 deferred
compensation		-			-			-			-		-			2,196

Net 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 for
1,000,000 shares of common stock
to two officers		-			-			133,062			-		-			133,062

Issuance of stock options for
500,000 shares of common stock
in satisfaction of debt		-			-			300,000			-		-			300,000

Return and cancellation of
70,000,000 shares of common
stock		(70,000,000	)		(70,000	)		70,000			-		-			-

Issuance of 12,000,000 warrants
in consideration of joint venture
option		-			-			1,310,204			-		-			1,310,204

Issuance of common stock
for 20 mining claims		1,400,000			1,400			488,600			-		-			490,000

See Accompanying Notes to Financial Statements

F-5

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

STATEMENT OF STOCKHOLDERS' EQUITY

(RESTATED)

											Accumulated
								Common			Deficit During			Total
	Common Stock				Additional			Stock			Exploration			Stockholders'
	Shares		Amount		Paid-in Capital			Subscribed			Stage			Equity
Issuance of common stock
in satisfaction of debt, $0.625 per share		200,000		200		124,800			-			-			125,000
option

Issuance of common stock for cash,
Reg. S - Private Placement,
$0.25 per share, net of
$205,250 commissions		6,390,000		6,390		1,369,070			-			-			1,375,460

Issuance of common stock for cash,
Reg. S - Private Placement,
$0.25 per share, net of
$135,000 commission		5,400,000		5,400		1,194,947			-			-			1,200,347

Issuance of common stock for cash,
Reg. D 506 - Private Placement,
$0.25 per share		460,000		460		114,540			-			-			115,000

Issuance of stock options for
1,500,000 shares of common stock
to three officers		-		-		266,720			-			-			266,720

Common stock subscribed		-		-		-			270,000			-			270,000

Net loss		-		-		-			-			(1,201,424	)		(1,201,424	)

Balance, December 31, 2005		52,150,000	$	52,150	$	7,843,502		$	270,000		$	(5,465,300	)	$	2,700,352

Issuance of common stock for cash,
Reg. D - Private Placement,
$0.45 per share, net of
$87,750 commission		3,900,000		3,900		1,663,350			(270,000	)		-			1,397,250

Issuance of common stock
related to exercise of warrants		1,225,000		1,225		(1,225	)		-			-			-

Issuance of stock options for
120,000 shares of common stock
to two officers		-		-		20,864			-			-			20,864

Issuance of stock options for
500,000 shares of common stock
to two directors		-		-		122,420			-			-			122,420

Issuance of stock options for
100,000 shares of common stock
to two directors		-		-		24,484			-			-			24,484

Issuance of common stock for cash
Reg. S - Private Placement,
$0.625 per share
from exercise of warrants		6,125,000		6,125		3,822,000			-			-			3,828,125

Issuance of common stock for cash
Reg. S - Private Placement,
$0.375 per share
from exercise of warrants		1,768,500		1,768		661,420			-			-			663,188

Issuance of common stock for cash
Reg. S - Private Placement,
$0.625 per share
from exercise of warrants		612,500		613		382,200			-			-			382,813

Issuance of stock options for
100,000 shares of common stock
to officer for recruitment
amortized over vesting period.		-		-		1,309			-			-			1,309

Issuance of common stock to
officer for recruitment		50,000		50		102,950			-			-			103,000

Issuance of stock options for
50,000 shares of common stock
to employee for recruitment
amortized over vesting period.		-		-		1,309			-			-			1,309

Issuance of common stock
for mining claims (restated, see Note 16)		1,400,000		1,400		3,078,600			-			-			3,080,000

Amortization of stock options issued
to employee and officer over
vesting period		-		-		15,708			-			-			15,708

Net loss December 31, 2006 (restated)		-		-		-			-			(2,540,978	)		(2,540,978	)

Balance, December 31, 2006 (restated)		67,231,000	$	67,231	$	17,738,891		$	-		$	(8,006,278	)	$	9,799,844

See Accompanying Notes to Financial Statements

F-6

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

STATEMENTS OF CASH FLOWS

(RESTATED)

							Period from
							January 14, 2000
							(Date of inception)
	For the Year Ended			For the Year Ended			through
	December 31, 2006			December 31, 2005			December 31, 2006
	(restated)						(restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,540,978	)	$	(1,201,424	)	$	(8,006,278	)
Deduct: Gain (loss) from discontinued operations		-			120,708			(4,143,168	)
Loss from continuing operations		(2,540,978	)		(1,322,132	)		(3,863,110	)

Adjustments to reconcile loss from continuing operations
to net cash used in operating activities:
Depreciation		6,309			950			7,259
Stock based expenses		289,094			399,782			688,876
Loss on disposition of fixed assets		4,388			1,349			5,737
Changes in operating assets and liabilities:
Other current assets		(106,235	)		-			(106,235	)
Other assets		(2,540	)		(180,500	)		(183,040	)
Accounts payable and accrued liabilities		420,183			23,169			443,352
Deferred income taxes		(1,122,457	)		(399,645	)		(1,522,102	)

Net cash used in operating activities		(3,052,236	)		(1,477,027	)		(4,529,263	)
Net cash used in operating activities from discontinued operations		-			-			(2,931,324	)

CASH FLOW FROM INVESTING ACTIVITIES
Cash paid on mineral property claims		-			(87,134	)		(87,134	)
Cash paid for joint venture and merger option		(200,000	)		(690,000	)		(890,000	)
Purchase of fixed assets		(25,748	)		(16,085	)		(41,833	)

Net cash used in investing activities		(225,748	)		(793,219	)		(1,018,967	)
Net cash used in investing activities from discontinued operations		-			-			(452,618	)

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from stock issuance		6,271,376			2,690,807			8,962,183
Proceeds/payments on loan payable		(15,000	)		15,000			-
Proceeds from subscribed stock		-			270,000			270,000

Net cash provided by financing activities		6,256,376			2,975,807			9,232,183
Net cash provided by financing activities from discontinued operations		-			-			3,384,237

NET CHANGE IN CASH		2,978,392			705,561			3,684,248

CASH AT BEGINNING OF PERIOD		705,856			295			-

CASH AT END OF PERIOD	$	3,684,248		$	705,856		$	3,684,248

SUPPLEMENTAL INFORMATION

Interest Paid	$	-		$	-		$	50,751

Income Taxes Paid	$	-		$	-		$	-

Non-cash investing and financing activities:
Stock and options for common stock issued in satisfaction of debt	$	-		$	300,000		$	1,500,000

Stock issued for conversion of
accounts payable, 200,000 shares at $0.625	$	-		$	125,000		$	125,000

Assets acquired for common stock issued for mineral properties	$	3,080,000		$	490,000		$	3,570,000

Warrants issued in connection with joint venture option
agreement related to slag project	$	-		$	1,310,204		$	1,310,204

Net deferred tax liability assumed	$	1,614,147		$	913,776		$	2,744,602

See Accompanying Notes to Financial Statements

F-7

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES

Basis of presentation – These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year-end is December 31.

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.

Going concern - The Company incurred cumulative net losses of $8,006,278 from operations as of December 31, 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.

F-8

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)

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.

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 December 31, 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.”

F-9

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)

Various factors could impact the Company’s 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.

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 in recognized over time as a discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash flows, 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.

Revenue recognition - Revenues are recognized during the period in which the revenues are received. 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.

F-10

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)

Earnings (loss) per share - The Company follows SFAS No. 128, “Earnings Per Share” and SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establish standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share for entities with publicly-held common shares and potential common stock issuances. Basic earnings (loss) per share are computed by dividing net income by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as stock options and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive. Weighted average of common stock equivalents, which include stock options and warrants to purchase common stock, on December 31, 2006 and 2005 that were not included in the computation of diluted EPS because the effect would be antidilutive were, 23,666,088 and 5,177,057, 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.

Income taxes - The Company accounts for its income taxes in accordance with Statement of Financial Accounting Standards 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.

F-11

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)

Stock-based compensation - On December 16, 2004, the FASB issued Financial Accounting Standard No. 123R, “Share-Based Payment”, which replaces SFAS No. 123, “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. 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 has adopted the requirements of SFAS No. 123R for the fiscal year beginning after December 31, 2004.

New accounting pronouncements – In September 2006, the FASB issued Statement No. 158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (“SFAS 158”). SFAS 158 requires companies to recognize the over funded or under funded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS 158 requires companies to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The Company adopted SFAS 158 effective for the fiscal year ending December 31, 2006. Adoption of this statement had no impact on the Company’s financial position or results of operations.

In September 2006, the FASB issued statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007, with earlier application encouraged. Any amounts recognized upon adoption as a cumulative effect adjustment will be recorded to the opening balance of retained earnings in the year of adoption. The Company is currently evaluating the potential impact of adopting this statement on the Company’s consolidated financial position, results of operations or cash flows.

F-12

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)

In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108 (SAB 108). SAB 108 considers the effects of prior year misstatements when quantifying misstatements in the current year financial statements. It is effective for fiscal years ending after November 15, 2006. The effect of SAB 108 has been incorporated into the Company’s financial reporting.

In August 2006, the SEC published amendments to the disclosure requirements for executive and director compensation, related party transactions, director independence and other corporate governance matters, security ownership of officers and directors. The rules affect disclosure in proxy statements, annual reports and registration statements. These amendments are effective for filings for fiscal years ending on or after December 15, 2006. The effect of these amendments has been incorporated into the Company’s financial reporting.

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (“FIN 48”), which clarifies the accounting and disclosure for uncertainty in tax positions. FIN 48 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. This interpretation is effective for fiscal years beginning after December 15, 2006. The Company is currently in the process of evaluating the financial impact of this statement.

In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets: (“SFAS 156”), which requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value. SFAS 156 permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities at fair value. Adoption is required as of the beginning of the first fiscal year that begins after September, 15, 2006. The adoption of SFAS 156 is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140” (“SFAS 155”). SFAS 155 clarifies certain issues relating to embedded derivatives and beneficial interests in securitized financial assets. The provisions of SFAS 155 are effective for all financial instruments acquired or issued after fiscal years beginning after September 15, 2006. Adoption of this statement is expected to have no impact on the Company’s financial position or results of operations.

F-13

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)

Correction of an error

Searchlight Mining Claims – (See Note 3) - The Searchlight Claims mineral properties have been restated to reflect the revised consideration and the deferred future income tax liability assumed as part of the subsequent contingent issuance of securities, the value of which has been added to the acquisition costs of the underlying mineral properties. The resulting estimated future federal income tax liability associated with the temporary difference between the acquisition consideration to date of $3,657,134 and the tax basis of $127,134 as computed in accordance with SFAS 141 and SFAS 109, resulted in an increase to the total purchase price which was applied to the mineral properties asset in the absence of there being a goodwill component associated with the transaction in accordance with SFAS 141 and SFAS 109.

Clarkdale Slag Project (See Note 4) – 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 December 31, 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.

2.	PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2006 and 2005:

	2006		2005

Furniture and fixtures	$	15,600	$	7,038
Lab equipment		2,804		--
Computers and equipment		17,788		9,048

		36,192		16,086
Less accumulated depreciation		6,005		950

	$	30,187	$	15,136

Depreciation expense was $6,309 and $950 for the years ended December 31, 2006 and 2005, respectively.

F-14

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

3.	MINERAL PROPERTIES - MINING CLAIMS– AS RESTATED (See Note 16)

As of December 31, 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 December 31, 2006 mineral properties balance was $5,431,290.

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 December 31, 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.”

F-15

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

3.	MINERAL PROPERTIES - MINING CLAIMS– AS RESTATED (See Note 16) (continued)

The following table summarizes the changes of mineral properties for the years ended December 31, 2005 and 2006:

	As Reported		Adjustments			As Restated

Cash and shares issuance to obtain mineral properties, July 7, 2005	$	127,134	$	450,000	a	$	577,134
Net deferred income tax liability assumed		--		242,308	b		242,308

Mineral properties balance, December 31, 2005		127,134		692,308			819,442

Share issuance to obtain mineral properties, July 27, 2006		--		3,080,000	c		3,080,000
Net deferred income tax liability assumed		--		1,531,848	b		1,531,848

Mineral properties balance, December 31, 2006	$	127,134	$	5,304,156		$	5,431,290

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.

c.	Restate issuance of 1,400,000 shares to obtain mineral properties on July 27, 2006 at the market value of $2.20 per share on the date of issuance.

F-16

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

4.	JOINT VENTURE OPTION AGREEMENT – AS RESTATED (See Note 16) SEE SUBSEQUENT EVENTS NOTE NO. 15

On October 24, 2005, the Company completed the acquisition of an option to acquire a 50% ownership interest as a joint venture partner pursuant to Nanominerals Corp. (“NMC”) interest in a joint venture agreement (“JV Agreement”) dated May 20, 2005 between NMC and Verde River Iron Company, LLC (“Verde”). NMC is a related party entity whereby the Company’s President and Treasurer 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:

Payment to NMC of $690,000 for NMC’s investment towards the acquisition of the Clarkdale Slag Project made pursuant to the terms of the JV Agreement;

Assignment to NMC of a five percent net smelter return royalty payable from the Company’s share of production from the Clarkdale Slag Project;

Appointment of nominees of NMC to the Company’s board of directors to constitute a majority of the board;

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

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.

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 at October 24, 2005, the Company fulfilled its obligations under the terms and conditions of the Assignment Agreement.

Under the terms of the JV Agreement, the Company intended 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 byproducts from the slag for commercial resale. Pursuant to the terms of the JV Agreement, we were 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.

F-17

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

4.	JOINT VENTURE OPTION AGREEMENT – AS RESTATED (See Note 16) SEE SUBSEQUENT EVENTS NOTE NO. 15 (continued)

(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 was 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.

A principal of Verde, was 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 December 31, 2006:

	As Reported		Adjustments		As Restated

Cash consideration	$	690,000	$	--	$	690,000
Issuance of warrants		--		1,310,204		1,310,204
Net deferred income tax liability assumed		--		608,277		608,277

Joint venture agreement balance, December 31, 2006	$	690,000	$	1,918,481	$	2,608,481

5.	LOANS PAYABLE

As of December 31, 2006, the Company had fully paid the balance of the loan payable. As of December 31, 2005, a loan payable totaling $15,000 consisted of borrowings from a non-related party. The balance was, unsecured, due on demand and bore no interest rate.

6.	LOAN PAYABLE – FORMER OFFICERS AND DIRECTORS

As of December 31, 2006, loans payable to related parties totaling $382,792 consist of borrowings from former officers and directors of the Company. These individuals have not had any involvement in management of the Company since February 2005. The change in the balance from 2005 reflects an adjustment for changes in currency rates. The balances bear no interest, are unsecured, and are due on demand.

As of December 31, 2005, loans payable to related parties totaling $379,877 consist of borrowings from the former officer and director of the Company. The balance of the loan is non-interest bearing, unsecured and without any fixed repayment terms.

F-18

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

7.	STOCKHOLDER’S EQUITY

During the year ended December 31, 2006, the Company’s stockholders’ equity activities consisted of the following:

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

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 7,327,000 shares at $0.625 per share and 1,179,000 shares at $0.25 per share. Each of the warrants was set to expire between June 2 and June 7, 2006 and all were exercised

On June 14, 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 was repaid in full in December 31, 2006.

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.

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.

During the year ended December 31, 2005, the Company’s stockholders’ activities consisted of the following:

On September 30, 2005, the Company effectuated a two-for-one forward stock split on its common stock. As a result of the stock split, the Company’s authorized number of common stock increased from 200,000,000 shares to 400,000,000 shares. Accordingly, the accompanying financial statements have been adjusted on a retroactive basis for the forward stock split to the Company’s date of inception.

F-19

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

7.	STOCKHOLDER’S EQUITY (continued)

On September 7, 2005 the Company issued 5,400,000 units for $0.25 per unit, where each unit consisted of one common share and one half of one purchase warrant and one nontransferable warrant exercisable into one tenth (1/10) of one unit for no additional consideration if registration requirements are not met within four months after the closing. Each purchase warrant was exercisable into one share at a price of $0.625 and expired on June 7, 2006. Total gross proceeds of this offering were $1,350,000. In connection with this brokered offering, 540,000 Brokers Warrants, exercisable at $0.25 and expiring on June 7, 2006, were issued. Each Broker Warrant was exercisable into one common share and one half of one purchase warrant. Each purchase warrant was exercisable into one common share at $0.625 and expired on June 7, 2006.

On September 6, 2005 the Company issued 460,000 units for $0.25 per unit, where each unit consisted of one common share and one half of one purchase warrant and one nontransferable warrant exercisable into one tenth (1/10) of one unit for no additional consideration if registration requirements are not met within four months after the closing. Each purchase warrant was exercisable into one share at a price of $0.625 and expired on June 6, 2006. Total gross proceeds of this offering were $115,000.

On September 2, 2005 the Company issued 6,390,000 units for $0.25 per unit, where each unit consisted of one common share and one half of one purchase warrant and one nontransferable warrant exercisable into one tenth (1/10) of one unit for no additional consideration if registration requirements are not met within four months after the closing. Each purchase warrant was exercisable into one share at a price of $0.625 and expired on June 2, 2006. Total gross proceeds of this offering were $1,597,500. In connection with this brokered offering, 639,000 Brokers Warrants, exercisable at $0.25 and expiring on June 2, 2006, were issued. Each Broker Warrant was exercisable into one common share and one half of one purchase warrant. Each purchase warrant was exercisable into one common share at $0.625 and expired on June 2, 2006.

On July 7, 2005, the Company issued 1,400,000 shares (post stock split) of common stock for the purchase of 20 mineral claims. The Company 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. This issuance has been restated to reflect payments made by issuance of 1,400,000 shares at the market value on the date of issuance of $0.35.

On July 6, 2005, the Company issued 200,000 shares (post stock split) of common stock at $0.625 per share for reduction of debt at $125,000 as negotiated with the debtor.

On June 1, 2005, the Company approved issuance of stock warrants for 12,000,000 shares of common stock with a strike price of $0.375 per share in connection with the Clarkdale Slag Project option. Satisfaction of the financing related closing conditions of the assignment agreement were met on September 7, 2005. On October 24, 2005 the issuance of the warrants was completed. The warrants contain an expiration date of June 1, 2015.

On February 14, 2005, the Company cancelled all of the stock options that were outstanding as at December 31, 2004.

On February 11, 2005, 70,000,000 shares (post stock split) of the Company were returned to the Company and cancelled at its par value of $0.001 per share.

F-20

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

8.	STOCK OPTION PLAN AND WARRANTS

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 issued granted stock options as follows:

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.

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.

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.

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.

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 years ended December 31, 2006 and 2005 related to vesting and granting of stock options were $186,094 and $399,782, respectively and are included in general and administrative expense.

Stock options – During the years ended December 31, 2006 and 2005, the Company granted stock options to employees and directors totaling 870,000 and 3,000,000, respectively, with a weighted average strike price of $2.25 and $0.35 per share, respectively. Certain stock options were exercisable upon grant and have an expiration date of five years after grant. As of December 31, 2006 stock options outstanding totaled 3,870,000 with a weighted average strike price of $0.77 per share.

F-21

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

8.	STOCK OPTION PLAN AND WARRANTS (continued)

The following table summarizes the Company’s stock option activity for the years ended December 31, 2006 and 2005:

	Number of Shares			Weighted Average Exercise Price
Balance December 31, 2004		3,833,000		$	1.01
Options cancelled		(3,833,000	)		1.01
Options granted and assumed		3,000,000			0.35
Options expired		--			--
Options exercised		--			--

Balance, December 31, 2005		3,000,000			0.35
Options granted and assumed		870,000			2.25
Options expired		--			--
Options cancelled		--			--
Options exercised		--			--

Balance, December 31, 2006		3,870,000		$	0.77

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

	2006			2005

Dividend yield		--			--
Expected volatility		85	%		85	%
Risk-free interest rate	4.89% to 5.08		%	3.65% to 4.39		%
Expected life (years)		4.25		4.6 to 4.8

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

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

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

F-22

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

8.	STOCK OPTION PLAN AND WARRANTS (continued)

The following table summarizes information about options granted during the year ended December 31, 2006:

Number of Options Granted During 2006		Exercise Price Equals, Exceeds Or Is Less than Mkt. Price of Stock On Grant Date	Weighted Average Exercise Price		Range of Exercise Price		Weighted Average Fair Value
	--	Equals	$	--	$	-- to $ --	$	--
	--	Exceeds	$	--	$	-- to $ --		--
	870,000	Less Than	$	2.24	$	1.70 to $2.06	$	0.10

	870,000	Less Than	$	2.24	$	1.70 to $2.06	$	0.10

The following table summarizes information about options granted during the year ended December 31, 2005:

Number of Options Granted During 2005		Exercise Price Equals, Exceeds Or Is Less than Mkt. Price of Stock On Grant Date	Weighted Average Exercise Price		Range of Exercise Price		Weighted Average Fair Value
	--	Equals	$	--	$	-- to $ --	$	--
	--	Exceeds	$	--	$	-- to $ --		--
	3,000,000	Less than	$	0.35	$	0.25 to $0.44	$	0.16

	3,000,000	Less than	$	0.35	$	0.25 to $0.44	$	0.16

Stock options/warrants - During the year ended December 31, 2006 the Company granted stock warrants related to common stock issued through a private placement totaling 3,900,000 with a strike price of $0.65 per share and stock warrants totaling 390,000 were issued to underwriters of the private placement with a strike price of $0.65 per share.

The Company also granted warrants related to common stock totaling 612,500 which were granted in accordance with registration provisions of the September 2005 financing with a strike price of $0.625 per share.

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

During the year ending December 31, 2006 the Company issued stock options for 870,000 shares of common stock to directors, officers and an employee with strike price ranging from $1.70 to $2.06 per share.

F-23

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

8.	STOCK OPTION PLAN AND WARRANTS (continued)

Stock options/warrants - During the year ended December 31, 2005, the Company granted stock warrants related to common stock issued through a private placement totaling 6,125,000 with a strike price of $0.625 per share. Additionally, stock warrants exercisable into common stock totaling 1,768,500 shares were issued to underwriters of the private placement with an average strike price of $0.375 per share and stock warrants related to the September 2005 financing exercisable into 1,225,000 shares with no consideration, based on registration requirements not being met. The value of the warrants was allocated against additional paid in capital as part of the overall offering cost of the private placement.

During the year ending December 31, 2005, the Company acquired the interest in a joint venture agreement, as discussed in Note 4, which included stock warrants for 12,000,000 shares of common stock, with a strike price of $0.375 per share. The value of these warrants was computed using the Binomial Lattice method and was allocated to the acquisition cost of the project and was computed based on the following assumptions:

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

During the year ending December 31, 2005, the Company issued stock options for 500,000 shares of common stock for satisfaction of debt totaling $300,000 with a strike price of $0.25 per share.

The following table summarizes information about options/warrants granted during the years ended December 31, 2006 and 2005:

	Number of Shares			Weighted Average Exercise Price
Balance December 31, 2004		--			--
Options/warrants cancelled		--			--
Options/warrants granted and assumed		24,118,500		$	0.42
Options/warrants expired		--			--
Options/warrants exercised

Balance, December 31, 2005		24,118,500			0.42
Options/warrants granted and assumed		5,772,500			0.55
Options/warrants expired		--			--
Options/warrants cancelled		--			--
Options/warrants exercised		(9,731,000	)		(0.50	)

Balance, December 31, 2006		20,160,000		$	0.51

F-24

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

9.	INCOME TAXES

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

The income tax benefit consisted of the following at December 31, 2006 and 2005,

	December 31, 2006			December 31, 2005

Income tax benefit based on statutory tax rate	$	(1,278,083	)	$	(602,623	)
Non-deductible and other		3,294			475
Change in valuation allowance		64,694			202,503
Release of valuation allowance related to acquisition		82,299			--
Rate change		5,339			--

Income tax benefit	$	(1,122,457	)	$	(399,645	)

Significant components of the Company’s net deferred income tax assets at December 31 were as follows:

	December 31, 2006			December 31, 2005
Deferred income tax assets:

Net operating loss carryforward	$	1,667,592		$	462,837
Option compensation		205,057			139,924

Gross deferred income tax asset		1,872,649			602,761
Valuation allowance		(204,005	)		(202,503	)
		1,668,644			400,258
Deferred income tax liabilities

Property, plant & equipment		1,052			613
Acquisition related liabilities		2,527,923			850,585

Net deferred income tax liability	$	860,331		$	450,940

A valuation allowance for deferred tax related to option compensation was established for net deferred tax assets not allocated to offset acquisition related deferred tax liabilities due to the uncertainty of realizing these deferred tax assets based on conditions existing at December 31, 2006 and 2005.

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

F-25

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

9.	INCOME TAXES (continued)

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

The Company had cumulative net operating losses of approximately $4,764,549 and $1,308,387 as of December 31, 2006 and 2005, respectively for federal income tax purposes. The net operating loss carryforwards will be expiring between 2025 and 2026. The Company had no loss carryforwards for state income tax purposes.

10.	COMMITMENTS AND CONTINGENCIES

Lease obligations – The Company rents office space in Henderson Nevada. The lease terms expired in November 2006 and the Company continues to rent the existing space under month-to-month terms for $4,000 per month.

Rental expense, resulting from this operating lease agreement, approximated $43,613 for the year ended December 31, 2006.

Employment contracts – Ian R. McNeil. 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. On December 30, 2005, Mr. McNeil received a one time bonus of $36,000 on execution of the agreement, in consideration of which Mr. McNeil agreed to act as the Company’s President and Chief Executive Officer. 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.

Subsequent to December 31, 2006, on February 16, 2007, the Company increased the salary of Mr. McNeil under this agreement to $190,000 with no material changes to the overall terms of the agreement.

F-26

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

10.	COMMITMENTS AND CONTINGENCIES (continued)

Carl S. Ager. 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. On December 30, 2005, Mr. Ager received a one time bonus of $26,666 on execution of the agreement, in consideration of which Mr. Ager agreed to act as the Company’s Treasurer and Secretary. 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.

Subsequent to December 31, 2006, on February 16, 2007, the Company increased the salary of Mr. Ager under this agreement to $160,000 with no material changes to the overall terms of the agreement.

Melvin L. Williams. 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.

Subsequent to December 31, 2006, on February 16, 2007, the Company increased the salary of Mr. Williams under this agreement to $130,000, based on an increase in hours worked to 600-800 hours worked and no other material changes to the overall terms of the agreement.

Verde River Iron Company. In consideration of the acquisition of the Clarkdale Slag Project, the Company has agreed to certain additional payments. The terms of and conditions of these payments are discussed in more detail in Note 15.

11.	CONCENTRATION OF CREDIT RISK

Financial instruments that potential subject the Company to concentration of credit risk consist of cash investments. The Company places its temporary cash investments with one financial institution. Cash accounts at the financial institution are insured by the Federal Deposit Insurance Corporation for up to $100,000 per financial institution.

F-27

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

12.	CONCENTRATION OF ACTIVITY

For the year ended December 31, 2006, the Company purchased services from one major vendor (NMC) that exceeded more than 10% of total purchases and amounted to approximately $495,000. The vendor is considered a related party and is more fully discussed the related party note that follows.

13.	RELATED PARTY TRANSACTIONS

During the years ended December 31, 2006 and 2005, the Company utilized the services of NMC to provide technical assistance and financing related activities. NMC was reimbursed expenses during 2005. Commencing in 2006, NMC invoiced $300,000 for technical assistance and financing related activities. These services related primarily to the Clarkdale Slag Project and the Searchlight Claims Project. Mr. McNeil and Mr. Ager are affiliated with NMC.

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

For the year ended December 31, 2006, the Company incurred total fees and reimbursement of expenses to NMC of $495,000 and $271,103, respectively at December 31, 2006, the Company had an outstanding balance due to NMC of $311,863.

In February 2005, the Company entered into mineral options agreements to acquire an interest in 20 mineral claims (“Searchlight Claims”) representing an area of 3,200 acres located in Clark County, south of Searchlight, Nevada, and agreed to pay a management fee of $3,500 per month to Pass Minerals, an entity controlled by a shareholder of the Company, for management services provided regarding the reorganization of the Company and the development of assaying and testing procedures for the Searchlight Claims. The management fee agreement was terminated by mutual agreement of the board and board member in September 2006.

14.	SUBSEQUENT EVENTS – FINANCING (UNAUDITED)

On March 22, 2007 the Company closed a private placement offering for gross proceeds of $6,678,483 (the "March Offering"). The securities sold pursuant to the March Offering were issued to non-US investors in accordance with the terms of Regulation S of the Securities Act of 1933. In connection with the March Offering, the Company entered into an Agency Agreement with D&D Securities Company (“D&D") dated March 21, 2007 (the "Agency Agreement"). The securities were sold to subscribers on a best efforts agency basis. Pursuant to the terms of the Agency Agreement, the Company sold an aggregate of 2,226,161 units for gross proceeds of $6,678,483, with each unit consisting of one share of its common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of US$4.50 per Share. The warrants are callable by Searchlight if its common stock trades above $6.50 per share for 20 consecutive trading days. Also under the terms of the March Offering the Company agreed to use its best efforts to file with the Securities and Exchange Commission a registration statement on Form SB-2, or on such other form as is available, registering the offered securities within four months and one day after the closing of the March Offering. An aggregate commission and corporate finance fee totalling $525,386 was paid by the company to the Agent in connection with the March Offering and the Agent also received warrants to purchase 75,175 shares of its common stock.

F-28

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

14.	SUBSEQUENT EVENTS – FINANCING (UNAUDITED) (continued)

On February 23, 2007, the Company closed a private placement offering and issued 4,520,666 units for aggregate gross proceeds of $13,562,002 to accredited investors resident in the United States pursuant to Regulation D of the Securities Act (the “US Offering”). Each unit consisted of one share of its common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of $4.50 per share. The warrants are callable by us if its common stock trades above $6.50 per share for 20 consecutive trading days. Pursuant to the terms of the US Offering, the Company agreed to use its best efforts to file a registration statement declared effective by the SEC within four months of the closing date of the US Offering. The Company agreed not to exercise its call rights until the registration statement registering the securities underlying the units sold has been declared effective by the SEC. The Company further agreed to keep the registration statement effective pursuant to Rule 415 of the Securities Act for a period of eighteen months following the date the registration statement is declared effective by the SEC. A portion of the US Offering was sold on a best efforts agency basis. Commissions paid to agents in connection with the US Offering totalled $381,990 and the agents also received warrants to purchase 90,870 shares of its common stock at a price of $4.50 per share, exercisable for a period of two years from the closing date.

Also on February 23, 2007, the Company closed a private placement offering and issued 575,000 units for aggregate gross proceeds of $1,725,000 to non-US investors pursuant to Regulation S of the Securities Act (the “February Offering”). Each unit consisted of one share of its common stock and one half of one share purchase warrant with each whole warrant entitling the subscriber to purchase one additional share for a period of two years from the closing date at an exercise price of $4.50 per share. The warrants are callable by us if its common stock trades above $6.50 per share for 20 consecutive trading days. Pursuant to the terms of the Non-US Offering, the Company agreed to use its best efforts to file a registration statement declared effective by the SEC within four months of the closing date of the February Offering. The Company agreed not to exercise its call rights until the registration statement registering the securities underlying the units sold has been declared effective by the SEC. The Company further agreed to keep the registration statement effective pursuant to Rule 415 of the Securities Act for a period of eighteen months following the date the registration statement is declared effective by the SEC. Commissions paid to agents in connection with the February Offering totalled $111,100 and the agents also received warrants to purchase 12,300 shares of its common stock at a price of $4.50 per share, exercisable for a period of two years from the closing date.

On February 15, 2007, the Company approved the issuance of 16,825,000 shares of its common stock to five investors in connection with the Agreement and Plan of Merger dated February 15, 2007. The issuance was completed pursuant to Section 4(2) and Regulation D of the Securities Act on the basis that each investor was a sophisticated investor and was in a position of access to relevant material information regarding its operations. Each investor delivered appropriate investment representations satisfactory to us with respect to this transaction and consented to the imposition of restrictive legends upon the certificates evidencing such share certificates.

F-29

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

15.	SUBSEQUENT EVENT – MERGER WITH TRANSYLVANIA INTERNATIONAL, INC. (UNAUDITED)

On February 15, 2007, the Company completed a merger with Transylvania International, Inc. (TI) which provided the Company with 100 % ownership of the Clarkdale Slag Project in Clarkdale Arizona, through its wholly owned subsidiary Clarkdale Minerals LLC (CML). This acquisition superseded the joint venture option agreement to acquire a 50% ownership interest as a joint venture partner pursuant to NMC interest in a JV Agreement dated May 20, 2005 between NMC and Verde River Iron Company, LLC (“VRIC”).

The Company believes the acquisition of the Clarkdale Slag Project was beneficial because it provides for 100% ownership of the properties, thereby eliminate the need to finance and further develop the projects in a joint venture environment.

This merger was treated as a statutory merger for tax purposes whereby, CML was the surviving merger entity.

The Company applied EITF 98-03 with regard to the acquisition of the Clarkdale Slag Project. The Company determined that the acquisition of the Clarkdale Slag Project did not constitute an acquisition of a business, as that term is defined in EITF 98-03, and the Company recorded the acquisition as a purchase of assets.

The Company also formed a second wholly owned subsidiary Clarkdale Metals Corp., for the purpose of developing a processing plant at the Clarkdale Slag Project.

Closing of the TI acquisition occurred on February 15, 2007 (the “Closing Date”) and was subject to, among other things, the following terms and conditions:

The Company paid $200,000 in cash to VRIC on the execution of the Letter Agreement;

The Company paid $9,900,000 in cash to VRIC on the Closing Date;

The Company issued 16,825,000 shares of its common stock, valued at $3.975 per share using the average of the high and low on the Closing Date, to the designates of VRIC pursuant to Section 4(2) and Regulation D of the Securities Act of 1933;

In addition to the cash and equity consideration paid and issued upon closing, the acquisition agreement contains the following payment terms and conditions:

The Company agreed to continue to pay VRIC $30,000 per month until the earlier of: (i) the date that is 90 days after receipt of a bankable feasibility study by the Company (the “Project Funding Date”), or (ii) the tenth anniversary of the date of the execution of the letter agreement;

F-30

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

15.	SUBSEQUENT EVENT – MERGER WITH TRANSYLVANIA INTERNATIONAL, INC. (UNAUDITED) (continued)

The acquisition agreement also contains additional contingent payment terms which are based on the Project Funding Date as defined in the agreement;

The Company agreed to pay VRIC $6,400,000 on the Project Funding Date;

The Company has agreed to pay VRIC a minimum annual royalty of $500,000, commencing on the Project Funding Date (the “Advance Royalty”), and an additional royalty consisting of 2.5% of the “net smelter returns” on any and all proceeds of production from the Clarkdale Slag Project (the “Project Royalty”). The Advance Royalty remains payable until the first to occur of: (1) the end of the first calendar year in which the Project Royalty equals or exceeds $500,000; or (2) February 15, 2017. In any calendar year in which the Advance Royalty remains payable, the combined Advance and Project Royalties will not exceed $500,000 in any calendar year; and

The Company agreed to pay VRIC an additional amount $3,500,000 from the net cash flow of the Clarkdale Slag Project.

F-31

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

16.	RESTATEMENT

Searchlight Mining Claims – Mineral properties have been restated to reflect payments made by issuance of 1,400,000 shares at $0.35 on July 7, 2005 and 1,400,000 shares at $2.20 on July 27, 2006 at the market values on the dates 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.

Clarkdale Slag Project – 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.

The following table summarizes the balance sheet of the Company as of December 31, 2006 and reconciles the reported amounts to the restated amounts:

Summarized Balance Sheet -
December 31, 2006	As Reported			Adjustments			As Restated

Mineral properties	$	127,134		$	5,304,156	a	$	5,431,290
Joint venture and merger option agreements		890,000			1,918,481	b		2,808,481
Total assets		5,020,844			7,222,637			12,243,481
Deferred tax liability		--			860,331	c		860,331
Total liabilities		1,583,306			860,331	c		2,443,637
Additional paid-in capital		12,898,687			4,840,204	a,b		17,738,891
Accumulated other comprehensive loss		(121,606	)		121,606	d		-
Accumulated deficit during exploration stage		(9,406,774	)		1,400,496	d,e		(8,006,278	)
Total stockholders' equity		3,437,538			6,362,306			9,799,844
Total liabilities and stockholders' equity	$	5,020,844			7,222,637		$	12,243,481

F-32

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

16.	RESTATEMENT (continued)

The following table summarizes the statement of operations for the year ended December 31, 2006 and reconciles the reported amounts to the restated amounts:

Summarized Statement of Operations -
For the year ended December 31, 2006	As Reported			Adjustments				As Restated

Mineral exploration and evaluation expenses	$	2,519,932		$	(495,000	)	f	$	2,024,932
Mineral exploration and evaluation expenses – related party		--			495,000		f		495,000
General and administrative		1,198,069			11,769		g		1,209,838
Total operating expenses		3,724,310			11,769		g		3,736,079
Loss from operations		(3,724,310	)		(11,769	)	g		(3,736,079	)
Income tax benefit		--			1,122,457		e		1,122,457
Net loss		(3,651,666	)		1,110,688		e,g		(2,540,978	)
Foreign currency translation adjustment	$	(11,769	)	$	11,769		g	$	--

The following table summarizes statement of operations for the period from January 14, 2000 (Date of Inception) through December 31, 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 December 31, 2006	As Reported			Adjustments				As Restated

Research and development	$	1,900,095		$	(1,900,095	)	h	$	--
Mineral exploration and evaluation expenses		3,406,955			(495,000	)	f		2,911,955
Mineral exploration and evaluation expenses - related party		--			495,000		f		495,000
General and administrative		3,664,997			(1,621,355	)	i		2,043,642
Depreciation		242,433			(235,174	)	j		7,259
Impairment loss on intangible assets		173,234			(173,234	)	k		--
Impairment loss on property and equipment		86,683			(86,683	)	l		--
Total operating expenses		9,474,397			(4,016,541	)	m		5,457,856
Loss from operations		(9,474,397	)		4,016,541		m		(5,457,856	)
Other income		282,142			(282,142	)	n		--
Interest expense, net		(300,000	)		300,000		o		--
Total other income (expense)		54,786			17,858		n,o		72,644
Loss before income taxes		(9,419,611	)		4,034,399				(5,385,212	)
Income tax benefit		12,837			1,509,265		e,p		1,522,102
Net loss		(9,406,774	)		1,400,496		e,q		(8,006,278	)
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.

F-33

SEARCHLIGHT MINERALS CORP.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

(RESTATED)

16.	RESTATEMENT (continued)

The restatement adjustments are as follows:

Restate issuance of 1,400,000 shares to obtain mineral properties on July 7, 2005 at the market value of $0.35 per share and 1,400,000 on July 27, 2006 at the market value of $2.20 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.

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.

Restate for computation of deferred tax liability assumed in mineral property acquisition.

Reclassify accumulated other comprehensive loss prior to 2005 from a biotechnology research and development business as discontinued operations.

Restate for deferred income tax benefit related to mineral property acquisitions.

Reclassify related party mineral exploration and evaluation expense.

Reclassify foreign currency translation adjustment from the period ended March 31, 2006 as general and administrative expense.

Reclassify research and development expense incurred prior to 2005 as discontinued operations.

Reclassify general and administrative expense incurred prior to 2005 as discontinued operations.

Reclassify depreciation expense incurred prior to 2005 as discontinued operations.

Reclassify impairment loss on intangible assets incurred prior to 2005 as discontinued operations.

Reclassify impairment loss on property and equipment incurred prior to 2005 as discontinued operations.

Reclassify operating expenses incurred prior to 2005 as discontinued operations.

Reclassify other income earned prior to 2005 as discontinued operations.

Reclassify interest expense incurred prior to 2005 as discontinued operations.

Reclassify income tax benefit prior to 2005 as discontinued operations.

Reclassify accumulated other comprehensive loss prior to 2005 from a biotechnology research and development business as discontinued operations.

Reclassify net losses prior to 2005 as discontinued operations.

F-34

ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On February 16, 2007, we appointed Brown Armstrong, Paulden, McCown, Starbuck, Thornburgh & Keeter Accountancy Corporation (“Brown Armstrong”) as our new independent registered public accounting firm following the dismissal of our prior independent registered public accounting firm Kyle L. Tingle CPA, LLC (“KLT”), which occurred on February 16, 2007. The decision to change accountants was recommended by our audit committee and approved by our board of directors on February 16, 2007.

KLT performed the audit of our financial statements for the year ended December 31, 2005. During this period and the subsequent interim period through February 16, 2007, there were no disagreements with KLT on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to KLT’s satisfaction would have caused KLT to make reference to the subject matter of the disagreements in connection with KLT’s report, nor were there any "reportable events" as such term is defined in Item 304(a)(3) of Regulation S-B, promulgated under the Securities Exchange Act of 1934, as amended.

The audit report of KLT for our year ended December 31, 2005 did not contain an adverse opinion, or a disclaimer of opinion, or qualification or modification as to uncertainty, audit scope, or accounting principles, other than the uncertainty that we might not be able to operate as a going concern.

ITEM 8A.

CONTROLS AND PROCEDURES.

NOTE: This Item 8A. 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 6 under the section heading “Restatements.”

Evaluation of Disclosure Controls and Procedures

This Annual Report on Form 10-K/A presents a restatement of the financial statements for the covered period. In connection with this amendment to our Annual Report for the period ended December 31, 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 December 31, 2006, management considered the impact of the restatement to our interim financial statements for the twelve month period ended December 31, 2006, as outlined in Item 6, 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 December 31, 2006.

In addition, our management has concluded that management’s failure to consult an outside expert regarding the initial accounting for certain complex transactions represented material weaknesses in our disclosure controls and procedures as of December 31, 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 December 31, 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.

Changes in Internal Controls over Financial Reporting

While no changes to our disclosure controls and procedures were made to rectify the material weakness during the period covered by this report because such weakness was not known at that time, subsequent to the period we remediated this weakness in part by appointing an independent director who will participate in the review our internal controls and who has been appointed to our audit committee. We also have consulted with a third party financial consultant who has assisted in our restatement regarding our capital acquisition and accounting for income taxes. Management has:

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.

ITEM 8B.

OTHER INFORMATION.

None.

PART III

ITEM 9.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Our executive officers and directors and their respective ages and titles as of April 4, 2007 are as follows:

Name	Age	Position
Ian R. McNeil	35	Director, Chief Executive Officer and President
Carl S. Ager	32	Director, Vice President, Secretary and Treasurer
Melvin L. Williams	46	Chief Financial Officer
Robert D. McDougal	74	Director
Harry B. Crockett	66	Director

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years:Ian R. McNeil, Chief Executive Officer, President and Director. Mr. McNeil has been a member of our board of directors since July 25, 2005 and our Chief Executive Officer and President since October 7, 2005. Mr. McNeil has been involved in starting his own businesses and has worked in executive positions for both large and small companies. Since June of 2003, Mr. McNeil has been president of Nanominerals Corp. Mr. McNeil graduated with a Bachelor of Commerce degree from the University of Victoria in 1996. During his time at Nanominerals, Mr. McNeil helped define much of the corporate strategy, raised money and ran the day to day operations. The final task that McNeil completed for Nanominerals was the successful negotiation of the Clarkdale Slag Project acquisition. Prior to joining Nanominerals, Mr. McNeil was the director of operations for the eSolutions division of TELUS Corporation (2000-2003) a large telecommunications company based in Canada. While at TELUS Mr. McNeil managed a team of over a 100 people spread over 3 geographical offices.

Carl S. Ager, Vice President, Secretary and Treasurer. Mr. Ager has been a member of our board of directors since July 25, 2005 and our Vice President, Secretary and Treasurer since October 7, 2005. In 1997, Mr. Ager obtained his Bachelor of Applied Sciences – Engineering Geophysics degree from Queen’s University in Kingston, Ontario. Since January, 2003, Mr. Ager has been President of CSA Management Corp, a private Nevada corporation which provides consulting services to mineral exploration companies. Mr. Ager has also served as Vice President of Nanominerals Corp since June 2003. Prior to joining Nanominerals and CSA Management, Mr. Ager’s experience included working as an investment executive for Scotia McLeod, one of Canada’s leading full-service brokerage firms (2000-2002).

Melvin L. Williams, Chief Financial Officer. Mr. Williams has been our Chief Financial Officer since June 14, 2006. 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 non-profit 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. Mr. Williams, a member of the American Institute of Certified Public Accountants (AICPA) since 1989, is also a member of the Nevada Society of CPAs (NSCPA) and the Institute of Management Accountants (IMA). He earned a Bachelor of Business Administration degree at the University of Oregon in 1983.

Robert D. McDougal, Director. Mr. McDougal is a member of our board of directors. He is a Certified Public Accountant. He began practicing public accounting in 1973 and established his own practice in 1981. The major portion of the practice is with mining and mining related clients including public companies, private companies’ partnerships and individuals. He was a Director and Officer of GEXA Gold Corporation, a publicly traded mining company, from 1985 to 2001. Mr. McDougal was one of the founders of Millennium Mining Corporation which has been merged into Gold Summit Corporation, a publicly traded company. He is the managing partner of GM Squared, LLC, which holds numerous mining claims. He served on the Nevada Society of Certified Public Accountants Committee on Natural Resources for seven years, four years as chairman. Prior to this time Mr. McDougal spend 20 years in the United States Air Force, retiring with the rank of Major.

Harry B. Crockett, Director. Mr. Crockett is the managing member of Verde River Iron Company, LLC a private Nevada limited liability company which was the prior joint venture partner with Searchlight on our Clarkdale Slag Project and the prior owner of the Clarkdale Slag Project. Mr. Crockett serves as a court appointed receiver serving various Superior Courts throughout California having served in this capacity over the last 15 years. Mr. Crockett has previously served as an Executive Vice President of American Savings, specializing in troubled debt and troubled assets as well as serving as Chairman of the Make a wish foundation of San Joaquin County, a charitable foundation serving the needs of terminally ill children. Mr. Crockett holds a Bachelor Of Arts degree from Golden Gate University in San Francisco California and a California Real Estate Brokers license. Mr. Crockett also has a pilot license with a single and multi engine land and instrument ratings.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

Family Relationships

Ian R. McNeil, our President, Chief Executive Officer and member of our board of directors is the brother in law of Carl S. Ager, our Vice President, Secretary and Treasurer and member of our board of directors.

Committees of the Board Of Directors

Audit Committee

We have an audit committee and audit committee charter. Our audit committee is presently comprised of Robert D. McDougal. A copy of Searchlight’s audit committee charter was filed as an exhibit with to our Current Report on Form 8-K filed with the SEC on September 27, 2006. Our audit committee is responsible for: (1) selection and oversight of its independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by Searchlight’s employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and (5) funding for the outside auditory and any outside advisors engagement by the audit committee.

On September 8, 2006 we adopted a revised audit committee charter and a whistle blower policy. The purpose of the amendments to the audit committee charter is to expand on the role of the audit committee’s relationship with external auditors and the primary committee responsibilities. The purpose of the whistle blower policy adopted by Searchlight is to encourage all employees to disclose any wrongdoing that may adversely impact us, our shareholders, employees, investors, or the public at large. The policy also sets forth (i) an investigative process of reported acts of wrongdoing and retaliation and (ii) procedures for reports of questionable auditing, accounting and internal control matters from employees on a confidential and anonymous basis and from other interested third parties.

Audit Committee Financial Expert

Robert McDougal, a member of our audit committee and our board of directors is our “audit committee financial expert” as defined by applicable rules of the SEC.

Disclosure Committee and Charter

We have a disclosure committee and disclosure committee charter. Our disclosure committee is presently comprised of Carl S. Ager, Ian R. McNeil and Robert D. McDougal. A copy of the disclosure committee charter was filed as an exhibit to Searchlight’s Form 10-KSB for the year ended December 31, 2003. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about Searchlight and the accuracy, completeness and timeliness of its financial reports.

Shareholder Nominations of Directors

Shareholders who wish to submit nominees for consideration by the board for election as a director of the Company may do so by submitting in writing such nominees’ names in compliance with the procedures as described below, to the Company’s Secretary. A shareholder’s nomination must contain:

	-	A statement that the writer is a shareholder and is proposing a candidate for consideration by the board of directors;

	-	The name of and contact information for the candidate;

	-	A statement of the candidate’s business and educational experience;

	-	Information regarding each of the factors listed above, sufficient to enable the board of directors to evaluate the candidate;

	-	A statement detailing any relationship or understanding between the proposing shareholder and the candidate;

	-	A statement that the candidate is willing to be considered and willing to serve as a director if nominated and elected; and

	-	A statement of the number of shares of the Company’s common stock that the nominating shareholder holds of record or in which shareholder has a beneficial interest and the number of such shares that have been held for more than one year.

The Company does not pay a fee to any third party to identify or evaluate or assist in the identification or evaluation of potential nominees to its board of directors. All directors are expected to attend the annual meeting and their attendance is recorded in the minutes.

Shareholder Communication with the Board of Directors

Shareholders desiring to communicate with our board of directors on matters other than director nominations should submit their communication in writing to the Chairperson of the Board of Directors, c/o Carl S Ager, Secretary, Searchlight Minerals Corp., #120 - 2441 W. Horizon Ridge Pkwy, Henderson, NV, 89052 and identify themselves as a shareholder. The Secretary will forward all such communication to the Chairperson of the Board for a determination as to how to proceed.

CODE OF ETHICS

We adopted a Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer, Corporate Controller and certain other finance executives, which is a "code of ethics" as defined by applicable rules of the SEC. Our Code of Ethics is attached as an exhibit to our Current Report on Form 8-K filed on September 8, 2006. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors and executive officers and beneficial holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership and reports of changes in ownership of our equity securities. As of the date of this Report, and based solely on our review of the copies of such reports furnished to us and written representations from the directors and executive officers, we believe that all reports needed to be filed by current Section 16 reporting persons have been filed in a timely manner for the year ended December 31, 2007, with the exception of the following:

Nanominerals, one of our principal stockholders and an affiliate of Ian R. McNeil and Carl S. Ager, who are our executive officers and members of our board of directors, was delinquent in: (a) the filing of a Form 3 (Initial Statement of Beneficial Ownership of Securities) relating to an event occurring in 2005 and which remained delinquent at December 31, 2006; and (b) the reporting of three transactions on Form 4 (Statement of Changes in Beneficial Ownership of Securities) relating to transactions occurring in 2006 and which remained delinquent at December 31, 2006;

Ian R. McNeil, one of our directors and our Chief Executive Officer, was delinquent in the reporting of one transaction in 2005 on Form 4 which was reported on a delinquent basis on one report and which was reported on a delinquent basis on one report in 2006;

Carl S. Ager, one of our directors and our Vice President, Secretary and Treasurer was delinquent in the reporting of one transaction in 2005 on Form 4 which was reported on a delinquent basis on one report and which was reported on a delinquent basis on one report in 2006;

Robert D. McDougal, one of our directors, was delinquent in the reporting of one transaction in 2005 on Form 4 and which was reported on a delinquent basis on one report in 2006; and

K. Ian Matheson, one of our principal stockholders and former directors, was delinquent in the reporting of fourteen transactions in 2006 on Form 4 which were reported on a delinquent basis on five reports.

ITEM 10.

EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table summarizes all compensation recorded by us in the most recent fiscal year ended December 31, 2006 for our principal executive officer, each of our other two most highly compensated executive officers serving as such whose annual compensation exceeded $100,000, and up to two additional individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as an executive officer of our company at the end of our fiscal year. Such officers are referred to herein as our “Named Executive Officers.”


										Non-		Non-
										Equity		qualified		All Other
Name &										Incentive		Deferred
		Salary		Bonus		Stock		Option		Plan		Compen-		Compen-		Total
Principal								Awards		Compen-		sation		sation
Position	Year	($)		($)		Awards		(1)		sation		Earnings		($)		($)

Ian R. McNeil,	2006		108,000		—		—		71,642		—		—		—		179,642
Director,
President and	2005		36,000		—		—		88,908		—		—		—		124,906
CEO(2)

Carl S. Ager,	2006		80,000		—		—		71,642		—		—		—		151,642
Director, Vice
President,	2005		26,666		—		—		115,572		—		—		—		115,572
Treasurer, and
Secretary (3)

Melvin L.	2006		32,500		—		103,000		9,163		—		—		—		144,663
Williams, Chief
Financial	2005		—		—		—		—		—		—		—		—
Officer(4)

Notes:

(1)	The dollar value of stock awards and option awards are calculated in accordance with Statement of Financial Account Standard (“SFAS”) 123R,Share Based Payments.

(2)	Mr. McNeil was appointed as Searchlight’s President and CEO on October 7, 2005. Mr. McNeil entered into an employment agreement on January 1, 2006 for an annual salary of $108,000.

(3)	Mr. Ager was appointed as Searchlight’s Secretary, Treasurer and CFO on October 7, 2005. Mr. Ager entered into an employment agreement on January 1, 2006 pursuant to which he receives an annual salary of $80,000. On June 14, 2006, Mr. Ager resigned as CFO and was replaced with Melvin L. Williams.

(4)	Mr. Williams was appointed as Searchlight’s Chief Financial Officer on June 14, 2006. Mr. Williams entered into an employment agreement on June 14, 2006 pursuant to which he is paid an annual salary of $60,000.

Outstanding Equity Awards At Fiscal Year-End

The following table provides information concerning unexercised options for each of our Named Executive Officers outstanding as of December 31, 2006.

						Equity
						Incentive Plan
			Number of			Awards:
	Number of		Securities			Number of
	Securities		Underlying			Securities					Number of
	Underlying		Unexercised			Underlying					Shares or Units
	Unexercised		Options			Unexercised		Option		Option	of Stock that
Name and	Options (#)		(#)			Unearned		Exercise		Expiration	Have Not
Principal Position	Exercisable		Unexercisable			Options		Price		Date	Vested (#)
Ian R. McNeil		500,000		—			—	$	0.44	Nov 11, 2010		—
Director, President		60,000		—			—		1.70	Apr 7, 2011		—
and CEO		250,000		—			—		2.40	Jun 6, 2011		—
Carl S. Ager		500,000		—			—	$	0.44	Nov 11, 2010		—
Director, Vice		60,000		—			—		1.70	Apr 7, 2011		—
President,		250,000		—			—		2.40	Jun 6, 2011		—
Treasurer and
Secretary
Melvin L. Williams		—		50,000	(1)		—	$	2.05	Jun 14, 2011		—
Chief Financial		—		50,000	(2)		—		2.05	Jun 14, 2011		—
Officer

Notes:

(1)	50,000 options will vest on June 14, 2007.

(2)	50,000 options will vest on June 14, 2008.

Director Compensation

The following table summarizes the compensation paid to Searchlight’s directors for the fiscal year ended December 31, 2006.

	Fees								Nonqualified
	Earned or						Non- Equity		Deferred
	Paid in		Stock		Option		Incentive Plan		Compensation		All Other
	Cash		Awards		Awards		Compensation		Earnings		Compensation		Total
Name	($)		($)(1)		($)(1)		($)		($)		($)		($)
Ian R. McNeil		—		—		71,642		—		—		108,000		179,642
Carl S. Ager		—		—		71,642		—		—		80,000		151,642
K. Ian Matheson(2)		—		—		12,242		—		—		28,000		40,242
Robert D. McDougal(3)		9,000		—		12,242		—		—		24,000		45,242

Notes:

(1)	The dollar value of stock awards and options awards are calculated in accordance with Statement of Financial Accounts (“SFAS”) 123R,Share Based Payments.

(2)

In September, 2006, Mr. K. Ian Matheson, a member of our board of directors, terminated his monthly $3,500 management fee. Prior to September, 2006 in connection with our corporate restructuring in fiscal 2005, we agreed to pay a management fee of $3,500 per month to Pass Minerals Inc., a company controlled by Mr. Matheson, for management services provided by Mr. Matheson respecting the reorganization of Searchlight and the development of assaying and testing procedures for the Searchlight Claims.

(3)	In addition to director fees, Mr. McDougal received $24,000 for additional services relating to the Clarkdale Slag Project acquisition.

COMPENSATION ARRANGEMENTS

We pay out of town independent directors a fee of $1,000 per directors meeting attended. We also periodically grant stock incentive options to our directors in consideration for them providing their services as directors. Our 2006 Stock Option Plan and 2003 Non-Qualified Stock Option Plan permit the grant of incentive stock options to our directors.

We conduct our business through agreements with consultants and arms-length third parties. Currently, we have a verbal agreement with our consulting geologists to provide us with consulting services on request.

EMPLOYMENT CONTRACTS

Other than as described below, we are not party to any employment contracts with our officers and directors.

Ian R. McNeil. We 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. On December 30, 2005, Mr. McNeil received a one time bonus of $36,000 on execution of the agreement, in consideration of which Mr. McNeil agreed to act as our President and Chief Executive Officer. Mr. McNeil 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 our 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 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 us other than for cause, we will provide Mr. McNeil with six months written notice or payment equal to six months of his monthly salary. Effective on February 16, 2007, we entered into an amendment to our employment agreement with Mr. McNeil. Pursuant to the terms of the amended employment agreement, we increased the salary of Mr. McNeil from $108,000 to $190,000 per year.

Carl S. Ager. We 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. On December 30, 2005, Mr. Ager received a one time bonus of $26,666 on execution of the agreement, in consideration of which Mr. Ager agreed to act as our Treasurer and Secretary. Mr. Ager 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 our 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 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 us other than for cause, we will provide Mr. Ager with six months written notice or payment equal to six months of his monthly salary. Effective on February 16, 2007, we entered into an amendment to our employment agreement with Mr. Ager. Pursuant to the terms of the amended employment agreement, we increased the salary of Mr. Ager from $80,000 to $160,000 per year.

Melvin L. Williams. We entered into an employment agreement with Melvin L. Williams, as amended, effective June 14, 2006. Pursuant to the terms of the employment agreement, as amended, 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 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 Employment Agreement and the remainder on the second anniversary of the execution of the agreement, in consideration of which Mr. Williams agreed to act as our Chief Financial Officer. In the event the employment agreement is terminated without cause an amount equal to three month’s salary is payable to Mr. Williams in a lump sum as full and final payment of all amounts payable under the agreement. Effective on February 16, 2007, we entered into an amendment to our employment agreement with Mr. Williams. Pursuant to the terms of the amended employment agreement, we increased the salary of Mr. Williams from $60,000 to $130,000 per year based on 600-800 hours of work per year.

ITEM 11.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of April 4, 2007 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors and each of our named executive officers, and (iii) officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.

	Name And Address	Amount And Nature Of			Percentage Of
Title Of Class	Of Beneficial Owner	Beneficial Ownership			Common Stock(1)

DIRECTORS AND OFFICERS

Common Stock	Ian R. McNeil Chief Executive Officer, President and Director #120 - 2441 West Horizon Ridge Parkway, Henderson, NV 89052		17,242,394	(3)		18.70	%
Common Stock	Carl S. Ager Secretary, Treasurer and Director #120 - 2441 West Horizon Ridge Parkway, Henderson, NV 89052		17,242,394	(4)		18.70	%
Common Stock	Melvin L Williams Chief Financial Officer #120 - 2441 West Horizon Ridge Parkway, Henderson, NV 89052		168,600	(6)		*
Common Stock	Robert D. McDougal Director #120 - 2441 West Horizon Ridge Parkway, Henderson, NV 89052		779,114	(5)		*
Common Stock	Harry B. Crockett Director #120 - 2441 West Horizon Ridge Parkway, Henderson, NV 89052		8,917,250	(7)		9.76	%
Common Stock	All Officers and Directors as a Group (5 persons)		28,349,752			30.25	%

HOLDERS OF MORE THAN 5% OF OUR COMMON STOCK

Common Stock	K. Ian Matheson Former Director 2215 Lucerne Circle Henderson, NV 89014		13,923,504	(2)		13.93	%
Common Stock	Harry B. Crockett Director #120 - 2441 West Horizon Ridge Parkway, Henderson, NV 89052		8,917,250	(7)		9.76	%
Common Stock	Nanominerals Corp. 3500 Lakeside Court, Suite 206 Reno, NV 89509		16,000,000	(8)		17.51	%
Common Stock	Centrum Bank AG Kirchstrasse 3, Postfach 1168 FL-9490 Vaduz, Liechtenstein		4,884,000			5.34	%
Common Stock	Gerald A. Lembas Unit 290 10040 E. Happy Valley Road Scottsdale, AZ 85255		5,047,500			5.52	%

Notes

*	Less than 1%.

(1)

Applicable percentage of ownership is based on 91,377,827 common shares outstanding as of April 4, 2007, plus any securities held by such security holder exercisable for or convertible into common shares within sixty (60) days after April 4, 2007 in accordance with Rule 13d -3(d)(1) under the Securities Exchange Act of 1934, as amended.

(2)

Includes 3,660,002 shares held directly by K. Ian Matheson, 1,276,002 shares held by Mr. Matheson’s spouse, 87,500 shares held by Pass Minerals Inc., a company controlled by Mr. Matheson, 70,000 shares held by Kiminco Inc., 280,000 shares held by Gold Crown Minerals Inc and a warrant to purchase an additional 8,000,000 shares of Searchlight and incentive stock options to purchase an additional 550,000 shares of Searchlight. Mr. Matheson has voting and investment power over the majority of the shares of Kiminco Inc. and Gold Crown Minerals Inc.

(3)

Consists of 407,594 shares held directly by Ian R. McNeil, options to acquire an additional 834,800 shares of our common stock. For purposes of Rule 13d-3 of the Exchange Act, Mr. McNeil may be deemed to be a beneficial owner of the 16,000,000 shares owned by Nanominerals by virtue of his ownership interest and position in Nanominerals. However, Mr. McNeil disclaims ownership of all but 2,800,000 of the shares owned by Nanominerals, which reflects his 17.5% ownership interest in Nanominerals. See footnote (8) below.

(4)

Consists of 407,594 shares held directly by Carl S. Ager, options to acquire an additional 834,800 shares of our common stock. For purposes of Rule 13d-3 of the Exchange Act, Mr. McNeil may be deemed to be a beneficial owner of the 16,000,000 shares owned by Nanominerals by virtue of his ownership interest and position in Nanominerals. However, Mr. Ager disclaims ownership of all but 2,800,000 of the shares owned by Nanominerals, which reflects his 17.5% ownership interest in Nanominerals. See footnote (8) below.

(5)	Consists of 229,114 shares held directly by Robert D. McDougal and options to acquire an additional 550,000 shares of our common stock.

(6)	Consists of 50,000 shares held directly by Melvin L. Williams and options to acquire an additional 118,600 shares of our common stock.

(7)	Consists of 8,917,250 shares held by the Harry B. Crockett, as Trustee of the Marcia and Harry Crockett 2004 Family Trust UA dated April 24, 2004.

(8)

Nanominerals is a private Nevada corporation beneficially owned by Ian R. McNeil, Carl S. Ager and Charles Ager. Ian R. McNeil and Carl S. Ager are each directors and officers of Nanominerals and each holds 17.5% of the outstanding common stock of Nanominerals. On January 17, 2006, Nanominerals acquired 16,000,000 shares of our common stock for a total purchase price of $4,640.50 from Mr. Matheson.

Securities Authorized for Issuance Under Equity Compensation Plans

In 2006, our board of directors approved the 2006 Stock Option Plan (the “2006 Plan”). Under the terms of the 2006 Plan, options to purchase up to 40,000,000 shares of our common stock may be granted to our officers, directors, employees and permitted consultants of our company. The 2006 Plan provides that exercise price be not less than 85% of the Fair Market Value of the common stock on the date of the grant.

In 2003, our board of directors approved the 2003 Non-qualified stock option plan (the "2003 Plan"). Under the terms of the 2003 Plan, options to purchase up to 50,000,000 shares of our common stock may be granted to our employees, officers, directors, and eligible consultants of our company. The 2003 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. We filed a registration statement on Form S-8 under the Securities Act of 1933, on June 30, 2003, to register the 50,000,000 shares of our common stock reserved for issuance under the 2003 Plan on March 30, 2004.

The following table sets forth certain information concerning all equity compensation plans previously approved by stockholders and all previous equity compensation plans not previously approved by stockholders, as of the most recently completed fiscal year.

EQUITY COMPENSATION PLAN INFORMATION AS AT DECEMBER 31, 2006

				Number of securities
				remaining available for
	Number of securities to	Weighted-average		issuance under equity
	be issued upon exercise	exercise price of		compensation plans
	of outstanding options,	outstanding options,		(excluding securities
	warrants and rights	warrants and rights		reflected in column (a))
Plan Category	(a)	(b)		(c)

Equity Compensation Plans approved by security holders	Nil		N/A		N/A

Equity Compensation Plans not approved by security holders	3,870,000	$	0.77		39,130,000

Total	3,870,000	$	0.77		39,130,000

2006 Stock Option Plan

On April 7, 2006, we established our 2006 Stock Option Plan (the “2006 Plan”). The purpose of the 2006 Plan is to enhance the long-term stockholder value of the Company by offering opportunities to our directors, officers, employees and eligible consultants and any entity that directly or indirectly is in control of or is controlled by the Company (a “Related Company”) to acquire and maintain stock ownership in the Company in order to give these persons the opportunity to participate in our growth and success, and to encourage them to remain in our service or a Related Company.

The 2006 Plan is administered by our Board of Directors or by a committee of two or more non-employee directors appointed by our Board of Directors (the "Plan Administrator"). Subject to the provisions of the 2006 Plan, the Plan Administrator has full and final authority to grant the awards of stock options and to determine the terms and conditions of the awards and the number of shares to be issued pursuant thereto. Options granted under the 2006 Plan may be either "incentive stock options," which qualify for special tax treatment under the Internal Revenue Code of 1986, as amended, (the "Code"), nonqualified stock options or restricted shares.

All of our employees and members of our Board of Directors are eligible to be granted options. Individuals who have rendered or are expected to render advisory or consulting services to us are also eligible to receive options. The maximum number of shares of our Common Stock with respect to which options or rights may be granted under the 2006 Plan to any participant is 10,000,000 shares with the number of authorized shares under the 2006 Plan increasing on the first day of each quarter beginning with the fiscal quarter commencing April 1, 2006 by the lesser of the following amounts: (1) 15% of the total increase in the number of shares of Common Stock outstanding during the previous fiscal quarter; or (2) a lesser number of shares of Common Stock as may be determined by the Board, subject to certain adjustments to prevent dilution.

The exact terms of the option granted are contained in an option agreement between us and the person to whom such option is granted. Eligible employees are not required to pay anything to receive options. The exercise price for incentive stock options must be no less than 75% of the fair market value of the Common Stock on the date of grant. The exercise price for nonqualified stock options is determined by the Plan Administrator in its sole and complete discretion. An option holder may exercise options from time to time, subject to vesting. Options will vest immediately upon death or disability of a participant and upon certain change of control events.

The Plan Administrator may amend the 2006 Plan at any time and in any manner, subject to the following: (1) no recipient of any award may, without his or her consent, be deprived thereof or of any of his or her rights thereunder or with respect thereto as a result of such amendment or termination; and (2) any outstanding incentive stock option that is modified, extended, renewed, or otherwise altered must be treated in accordance with Section 424(h) of the Code.

The 2006 Plan terminates on April 7, 2016 unless sooner terminated by action of our Board of Directors. All awards granted under the 2006 Plan expire ten years from the date of grant, or such shorter period as is determined by the Plan Administrator. No option is exercisable by any person after such expiration. If an award expires, terminates or is canceled, the shares of our Common Stock not purchased thereunder may again be available for issuance under the 2006 Plan.

We have not yet filed a registration statement under the Securities Act of 1933 to register the shares of our Common Stock reserved for issuance under the 2006 Plan.

ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

None of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, other than as noted in this section:

(i)

Any of our directors or officers;

(ii)

Any person proposed as a nominee for election as a director;

(iii)

Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;

(iv)

Any of our promoters; and

(v)

Any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.

As of December 31, 2006, loans payable totaling $382,792 consists of borrowings from former officers and directors of Searchlight. The balance bears no interest, is unsecured, and is due on demand.

We entered into a Letter Agreement, as amended February 15, 2007, dated November 22, 2006 among Searchlight, VRIC, Harry B. Crockett and Gerald Lembas. One of our directors, Mr. Crockett, is the sole manager of VRIC and holds 70% of the membership of VRIC. In connection with the acquisition of TI, Mr. Crockett indirectly received 8,917,250 shares of our common stock. The shares issuance is discussed in detail under the heading “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Also, the Letter Agreement requires Searchlight to make certain payments and royalties to VRIC. The payments are discussed in detail under the heading “Description of Property.”

We 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. On December 30, 2005, Mr. McNeil received a one time bonus of $36,000 on execution of the agreement, in consideration of which Mr. McNeil agreed to act as our President and Chief Executive Officer. Mr. McNeil 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 our 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 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 us other than for cause, we will provide Mr. McNeil with six months written notice or payment equal to six months of his monthly salary. Effective on February 16, 2007, we entered into an amendment to our employment agreement with Mr. McNeil. Pursuant to the terms of the amended employment agreement, we increased the salary of Mr. McNeil from $108,000 to $190,000 per year.

We 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. On December 30, 2005, Mr. Ager received a one time bonus of $26,666 on execution of the agreement, in consideration of which Mr. Ager agreed to act as our Treasurer and Secretary. Mr. Ager 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 our 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 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 us other than for cause, we will provide Mr. Ager with six months written notice or payment equal to six months of his monthly salary. Effective on February 16, 2007, we entered into an amendment to our employment agreement with Mr. Ager. Pursuant to the terms of the amended employment agreement, we increased the salary of Mr. Ager from $80,000 to $160,000 per year.

We entered into an employment agreement with Melvin L. Williams, as amended, effective June 14, 2006. Pursuant to the terms of the employment agreement, as amended, 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 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 Employment Agreement and the remainder on the second anniversary of the execution of the agreement, in consideration of which Mr. Williams agreed to act as our Chief Financial Officer. In the event the employment agreement is terminated without cause an amount equal to three month’s salary is payable to Mr. Williams in a lump sum as full and final payment of all amounts payable under the agreement. Effective on February 16, 2007, we entered into an amendment to our employment agreement with Mr. Williams. Pursuant to the terms of the amended employment agreement, we increased the salary of Mr. Williams from $60,000 to $130,000 per year based on 600-800 hours of work per year.

On June 30, 2006, we approved the issuance of 1,400,000 shares (adjusted in accordance with the 2:1 split) of our common stock to 18 mineral claim owners in connection with the Option Agreements dated February 8, 2005 among us and the mineral claim owners. Among the claim owners receiving the 1,400,000 shares was Debra Matheson, the spouse of K. Ian Matheson received 35,000 shares, Pass Minerals Inc., a company controlled by Mr. Matheson received 52,500 shares, Kiminco Inc., a company controlled by Mr. Matheson received 35,000 shares, and Gold Crown Minerals Inc., a company controlled by Mr. Matheson received 140,000 shares. Geotech Mining Inc. and Geosearch Inc. each received 70,000 shares, and are controlled by Charles Ager and Carol Ager, respectively, who are the parents of Carl Ager.

Nanominerals Corp. (“NMC”) is a private Nevada corporation principally engaged in the business of mineral exploration and development. NMC presently holds 17.9% of our issued and outstanding shares of common stock. Two of our directors Carl S. Ager and Ian R. McNeil, are officers and stockholders of NMC. Messrs. Ager and McNeil each hold 1,000,000 shares of the issued and outstanding common stock of NMC, representing an aggregate of 35% of the outstanding common stock of NMC. Pursuant to the terms of the Assignment Agreement, in consideration of the assignment of NMC’s rights in the Clarkdale Slag Project to us, we agreed, among other things to pay NMC $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 and issue to NMC or its designates, 6,000,000 warrants to purchase shares of our common stock exercisable for a term of 10 years from the date of the Assignment Agreement at an exercise price of $0.75 per share. We issued to NMC a warrant (the “Warrants”) to purchase 10,000,000 shares of our common stock at an exercise price of $0.375 per share expiring June 1, 2015, pursuant to Section 4(2) of the Securities Act of 1933. The Warrants are restricted securities as defined in the Securities Act. The Warrants were subsequently transferred by NMC. The issuance was made to NMC whose principals are sophisticated investors, and, through its relationship with us, NMC was in a position of access to relevant and material information regarding our operations. Carl S. Ager and Ian R. McNeil by virtue of their positions in us and NMC may be considered our promoters.

During 2005 and 2006, we utilized the services of NMC to provide technical assistance and financing related activities. NMC was reimbursed expenses during 2005. Commencing in 2006, NMC invoiced $300,000 for technical assistance and financing related activities. These services related primarily to the Clarkdale Slag Project and Searchlight Gold Project. In addition to the above fees, NMC provided dedicated use of its laboratory, instrumentation, milling equipment and research facilities. NMC provided invoices for these fees plus expenses. For the year ended December 31, 2006, we incurred total fees and reimbursement of expenses to NMC of $495,000 and $271,103, respectively at December 31, 2006, we had an outstanding balance due to NMC of $311,863.

On June 30, 2005, we approved the issuance of 700,000 (pre-split) shares of our common stock to 18 mineral claim owners in connection with the Option Agreements dated February 8, 2005 among us and the mineral claim owners. Among the claim owners receiving the 700,000 (pre-split) shares was Debra Matheson, the spouse of K. Ian Matheson received 17,500 shares, Pass Minerals Inc., a company controlled by Mr. Matheson received 26,250 shares, Kiminco Inc., a company controlled by Mr. Matheson received 17,500 shares, and Gold Crown Minerals Inc., a company controlled by Mr. Matheson received 70,000 shares, Geosearch Inc. and Geotech Mining Inc. each received 35,000 shares, both companies are controlled by Charles Ager who is the father of Carl Ager.

We agreed to pay a management fee of $3,500 per month to Pass Minerals Inc., a company controlled by Mr. Matheson, for management services provided regarding the reorganization of Searchlight and the development of assaying and testing procedures for the Searchlight Claims. The management fee agreement was terminated by mutual agreement of the board and Mr. Matheson in September 2006.

Director Independence

Our common stock is listed on the OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements. For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. The board of directors has determined that Robert McDougal is the sole independent director serving on our board of directors. During the fiscal year ended December 31, 2006, Mr. McDougal served on our Audit committee and disclosure committee.

ITEM 13.

EXHIBITS.

Exhibit
Number		Description of Exhibits
3.1		Articles of Incorporation of L.C.M. Equity, Inc.(1)
3.2		Bylaws of L.C.M. Equity, Inc.(1)
3.3		Certificate of Amendment to Articles of Incorporation(2)
3.4		Certificate of Amendment to Articles of Incorporation(3)
3.5		Certificate of Amendment to Articles of Incorporation(12)
3.6		Certificate of Change to Authorized Capital (13)
3.7		Amended Bylaws dated August 9, 2005. (12)
4.1		Specimen Stock Certificate. (1)
4.2		Form of US Warrant Certificate dated February 23, 2007(26)
4.3		Form of US Broker’s Warrant Certificate dated February 23, 2007(26)
4.4		Form of non-US Warrant Certificate dated February 23, 2007(26)
4.5		Form of non-US Broker’s Warrant Certificate dated February 23, 2007(26)
4.6		Form of Warrant Certificate dated March 21, 2007(27)
4.7		Form of Broker’s Warrant Certificate dated March 21, 2007(27)
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 Inc., 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, Inc., K. Ian Matheson, and Pilot Plant Inc. dated February 8, 2005. (8)
10.6		Letter Agreement between Phage Genomics, Inc ., Searchlight Minerals, Inc., K. Ian Matheson, and Bear Dog Mines Inc. dated February 8, 2005. (8)
10.7		Letter Agreement between Phage Genomics, Inc ., Searchlight Minerals, Inc., K. Ian Matheson, and Gold Hunter Inc. dated February 8, 2005. (8)
10.8		Letter Agreement between Phage Genomics, Inc ., Searchlight Minerals, Inc., Kiminco Inc., Pass Minerals Inc., Michael D. Anderson, Farrell Drozd, Michael I. Matheson, and Pass Minerals Inc. dated February 8, 2005. (8)
10.9		Letter Agreement between Phage Genomics, Inc ., Searchlight Minerals, Inc., K. Ian Matheson, and Britti Gold Inc. dated February 8, 2005. (8)
10.10		Letter Agreement between Phage Genomics, Inc ., Searchlight Minerals, Inc., 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, Inc., 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 Minerals Corp., K. Ian Matheson, Searchlight Minerals, Inc. and Pilot Plant Inc.(10)
10.14		Extension Agreement dated effective June 22, 2005 among Searchlight Minerals Corp., K. Ian Matheson, Searchlight Minerals, Inc. and Bear Dog Mines Inc.(10)
10.15		Extension Agreement dated effective June 22, 2005 among Searchlight Minerals Corp., K. Ian Matheson, Searchlight Minerals, Inc. and Gold Hunter Inc.(10)
10.16		Extension Agreement dated effective June 22, 2005 among Searchlight Minerals Corp.,, 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 Minerals Corp., K. Ian Matheson, Searchlight Minerals, Inc. and Britti Gold Inc.(10)
10.18		Extension Agreement dated effective June 22, 2005 among Searchlight Minerals Corp., 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 Minerals Corp., 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		First Amendment to Assignment Agreement between Nanominerals Corp. and Searchlight Minerals Corp. dated August 31, 2005. (15)
10.22		Second Amendment to Assignment Agreement between Nanominerals Corp. and Searchlight Minerals Corp. dated October 24, 2005. (14)
10.23		Office Suite Lease Agreement between Burnett & Williams Executive Suites and Searchlight Minerals Corp. dated September 6, 2005. (15)
10.24		Finders’ Fee Agreement between Searchlight Minerals Corp. and S&P Investors, Inc. dated December 7, 2005. (16)
10.25		Employment Agreement between Searchlight Minerals Corp. and Carl S. Ager dated as of January 1, 2006(17)
10.26		Employment Agreement between Searchlight Minerals Corp. and Ian R. McNeil dated as of January 1, 2006(17)
10.27		Employment Agreement between Searchlight Minerals Corp. and Melvin L. Williams dated as of June 14, 2006(18)
10.28		2006 Stock Option Plan. (19)
10.29		Engineering Services Agreement dated as of May 1, 2006 with Cimetta Engineering and Construction Co. (20)
10.30		Office Suite Lease Agreement b between Burnett & Williams Executive Suites and Searchlight Minerals Corp. dated July 20, 2006. (9)

10.31		Contract for Engineering Services between URS Corporation and Verde River Iron Company LLC dated March 21, 2005. (9)
10.32		Contract for Drilling Services dated May 23, 2006 between Boart Longyear Company and Searchlight Minerals Corp. and Contact for Services dated October 17, 2005 between Boart Longyear Company and Searchlight Minerals Corp. (9)
10.33		Letter Agreement dated November 22, 2006 among Verde River Iron Company, LLC, Harry B. Crockett, Gerald Lembas and Searchlight Minerals Corp. (22)
10.34		Notice of Exercise Option. (23)
10.35		Amendment No. 1 to Letter Agreement dated February 15, 2007. (24)
10.36		Agreement and Plan of Merger dated February 15, 2007 between Verde River Iron Company, LLC, Transylvania International, Inc., Clarkdale Minerals LLC and Searchlight Minerals Corp. (24)
10.37		Special Warranty Deed dated February 15, 2007. (24)
10.38		Bill of Sale dated February 15, 2007. (24)
10.39		Agreement between Transylvania International, Inc. and Reynold P. Radoccia, Architect dated November 14, 2005. (24)
10.40		Effluent lease dated August 25, 2004 between Town of Clarkdale, Transylvania International, Inc. and Verde River Iron Company, LLC. (24)
10.41		Articles of Merger between Transylvania International, Inc. and Clarkdale Minerals LLC dated February 15, 2007. (24)
10.42		First Amendment to Employment Agreement dated February 16, 2007 between Searchlight Minerals Corp. and Ian McNeil.(25)
10.43		First Amendment to Employment Agreement dated February 16, 2007 between Searchlight Minerals Corp. and Carl Ager. (25)
10.44		First Amendment to Employment Agreement dated February 16, 2007 between Searchlight Minerals Corp. and Melvin Williams.(25)
10.45		Non-exclusive Agency Agreement dated February 9, 2007 between Empire Financial Group, Inc. and Searchlight Minerals Corp. (26)
10.46		Agency Agreement dated January 30, 2007 between S&P Investors, Inc. and Searchlight Minerals Corp. (26)
10.47		Agency Agreement dated January 31, 2007 between Zuri Invest Limited and Searchlight Minerals Corp. (26)
10.48		Agency Agreement dated March 21, 2007 between D&D Securities Company and Searchlight Minerals Corp. (27)
14.1		Code of Ethics.(21)
21.1		List of Subsidiaries. *

23.1		Consent of Dr. Richard F. Hewlett
23.2		Consent of Nanominerals Corp.
23.3		Consent of Mountain States R&D International Inc.
23.4		Consent of Arrakis, Inc.
23.5		Consent of Brown Armstrong Paulden McCown Starbuck Thornburgh & Keeter Accountancy Corporation
23.6		Consent of Kyle L. Tingle, CPA, LLC
31.1		Certification of Chief Executive Officer as adopted pursuant to Section 302 of the Sarbanes -Oxley Act of 2002.
31.2		Certification of Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes -Oxley Act of 2002.
32.1		Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes -Oxley Act of 2002.
99.1		Audited Financial Statements of Transylvania International, Inc. for the years ended December 31, 2006 and December 31, 2005.(24)
99.2		Audit Committee Charter. (21)
99.3		Disclosure Committee Charter. (6)

Notes:

(1)	Filed with the SEC as an exhibit to our Registration Statement on Form 10-SB originally filed on July 11, 2000.
(2)	Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on April 1, 2002.
(3)	Filed with the SEC as an exhibit to our Form 8-K filed on December 22, 2003;
(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 Annual Report on Form 10-KSB filed on April 13, 2004.
(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 Second Amended Registration Statement on Form SB-2/A filed on October 30, 2006.
(10)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on June 24, 2005.
(11)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on June 16, 2005.
(12)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on August 22, 2005.
(13)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on October 14, 2005.
(14)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on October 28, 2005.
(15)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on November 21, 2005.
(16)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 13, 2005.

(17)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on March 2, 2006.
(18)	Filed with the SEC as an exhibit to our Registration Statement on Form SB-2 originally filed on April 3, 2006.
(19)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10 -QSB filed on May 15, 2006.
(20)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on August 14, 2006.
(21)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 27, 2006.
(22)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on November 28, 2006.
(23)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 16, 2007.
(24)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 22, 2007.
(25)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 23, 2007.
(26)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on March 5, 2007.
(27)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on March 29, 2007.
*	Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on April 17, 2007.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed for the two most recently completed fiscal years ended December 31, 2006 and December 31, 2005 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included our Quarterly Reports on Form 10-QSB and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

	Year Ended December 31, 2006		Year Ended December 31, 2005
Audit Fees	$	7,800	$	5,850
Audit Related Fees		6,750		—
Tax Fees		—		—
All Other Fees		—		—
Total	$	14,550	$	5,850

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit and permissible non-audit services to be performed by our independent auditors during the fiscal year. Before we engage an independent public accountant to render audit or non-audit services, the engagement is approved by our audit committee or the engagement to render services is entered into pursuant to pre-approval policies and procedures established by the audit committee. The pre-approval policy adopted by our audit committee on September 8, 2006 to permit pre-approval of non-audit services is attached as specified in the charter of the audit committee, which was filed as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on September 27, 2006.

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.

By:	/s/ Ian R. McNeil
	IAN R. McNEIL
	President and Chief Executive Officer
	Director
	(Principal Executive Officer)
	Date: July 6, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ Ian R. McNeil
	IAN R. McNEIL
	President and Chief Executive Officer
	Director
	(Principal Executive Officer)
	Date: July 6, 2009

By:	/s/ Melvin L. Williams
	MELVIN L. WILLIAMS
	Chief Financial Officer
	(Principal Financial Officer)
	Date: July 6, 2009

Searchlight Minerals (SRCH) Inactive 10-K/A2006 FY Annual report (amended)