10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended September 30, 2015

¨ 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.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	98-0232244 (I.R.S. Employer Identification No.)
#100 - 2360 West Horizon Ridge Pkwy. Henderson, Nevada (Address of principal executive offices)	89052 (Zip code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x
(Do not check if a smaller reporting company)

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

Yes ¨ No x

As of November 20, 2015, the registrant had 154,306,537 outstanding shares of common stock.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

SEARCHLIGHT MINERALS CORP. 

CONDENSED CONSOLIDATED BALANCE SHEETS 

(UNAUDITED)

	September 30, 2015			December 31, 2014
ASSETS
Current assets
Cash	$	1,230,358		$	584,976
Prepaid expenses		96,373			75,214
Assets held for sale		-			227,500
Total current assets		1,326,731			887,690
Property and equipment, net		6,654,223			7,717,762
Assets held for sale, non-current portion		-			227,500
Restricted cash		227,345			-
Slag project		121,865,365			121,829,655
Land - smelter site and slag pile		5,916,150			5,916,150
Land		1,696,242			1,696,242
Deferred financing fees		79,073			97,401
Reclamation bond and deposits, net		14,566			14,566
Total non-current assets		136,452,964			137,499,276
Total assets	$	137,779,695		$	138,386,966
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	976,433		$	897,951
Accounts payable - related party		339,111			21,539
VRIC payable, current portion - related party		569,288			315,552
Convertible debt, net of discount		3,263,853			-
Derivative liability - convertible debt		465,359			-
Total current liabilities		5,614,044			1,235,042
Long-term liabilities
VRIC payable, net of current portion - related party		128,856			382,592
Convertible debt, net of discount		-			3,087,380
Derivative liability - convertible debt		-			1,218,619
Deferred tax liability		48,224,926			27,547,468
Total long-term liabilities		48,353,782			32,236,059
Total liabilities		53,967,826			33,471,101
Commitments and contingencies - Note 16
Stockholders' equity
Common stock, $0.001 par value; 400,000,000 shares authorized, 154,306,537 and 144,153,748 shares, respectively, issued and outstanding		154,306			144,153
Additional paid-in capital		163,940,513			160,177,521
Accumulated deficit		(80,282,950	)		(55,405,809	)
Total stockholders' equity		83,811,869			104,915,865
Total liabilities and stockholders' equity	$	137,779,695		$	138,386,966

See Accompanying Notes to these Consolidated Financial Statements

F-1

SEARCHLIGHT MINERALS CORP. 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 

(UNAUDITED)

	For the three months ended						For the nine months ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Revenue	$	-		$	-		$	-		$	-
Operating expenses
Mineral exploration and evaluation expenses		674,637			396,409			1,770,453			1,482,176
Mineral exploration and evaluation expenses - related party		60,000			75,983			180,360			231,543
Administrative - Clarkdale site		26,682			34,080			91,244			83,912
General and administrative		590,130			504,629			1,285,513			1,662,929
General and administrative - related party		46,674			40,636			152,281			129,352
Loss (gain) on asset dispositions		-			18,095,234			(2,548	)		18,140,349
Depreciation		352,988			378,181			1,068,325			1,136,174
Total operating expenses		1,751,111			19,525,152			4,545,628			22,866,435
Loss from operations		(1,751,111	)		(19,525,152	)		(4,545,628	)		(22,866,435	)
Other income (expense)
Rental revenue		5,100			6,105			15,300			21,775
Other expense		(10,591	)		(18,659	)		(10,591	)		(18,659	)
Change in fair value of derivative liabilities		224,943			125,635			753,260			329,430
Interest expense		(139,820	)		(131,735	)		(413,475	)		(391,430	)
Interest and dividend income		791			-			1,451			516
Total other income (expense)		80,423			(18,654	)		345,945			(58,368	)
Loss before income taxes		(1,670,688	)		(19,543,806	)		(4,199,683	)		(22,924,803	)
Income tax (expense) benefit		(21,795,143	)		7,440,766			(20,677,458	)		8,747,063
Net loss	$	(23,465,831	)	$	(12,103,040	)	$	(24,877,141	)	$	(14,177,740	)
Comprehensive loss	$	(23,465,831	)	$	(12,103,040	)	$	(24,877,141	)	$	(14,177,740	)
Loss per common share - basic and diluted
Net loss	$	(0.15	)	$	(0.09	)	$	(0.17	)	$	(0.10	)
Weighted average common shares outstanding -
Basic		153,298,984			135,768,318			149,390,171			135,768,318
Diluted		153,298,984			135,768,318			149,390,171			135,768,318

See Accompanying Notes to these Consolidated Financial Statements

F-2

SEARCHLIGHT MINERALS CORP. 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(UNAUDITED)

	For the nine months ended
	September 30, 2015			September 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(24,877,141	)	$	(14,177,740	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,068,325			1,136,174
Stock based compensation		228,732			62,947
Stock based expenses		41,588			-
(Gain) loss on asset dispositions and impairment		(2,548	)		18,140,349
Amortization of prepaid expense		235,024			263,493
Amortization of debt financing fees and debt discount		194,801			180,197
Deferred income taxes		20,677,458			(8,747,063	)
Change in fair value of derivative liabilities		(753,260	)		(329,430	)
Loss on interest settled in shares		10,666			19,005
Accounts payable settlement		(378,136	)		-
Changes in operating assets and liabilities:
Restricted cash		(227,345	)		-
Prepaid expenses		(256,183	)		(204,576	)
Reclamation bond and deposits		-			(325	)
Accounts payable and accrued liabilities		982,360			1,236,483
Net cash used in operating activities		(3,055,659	)		(2,420,486	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from property and equipment dispositions, net		457,548			245,943
Purchase of property and equipment		(4,786	)		(64,206	)
Net cash provided by investing activities		452,762			181,737
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuance		3,270,451			575,000
Stock issuance costs		(22,172	)		-
Proceeds from convertible notes		-			69,000
Payments on VRIC payable - related party		-			(120,000	)
Net cash provided by financing activities		3,248,279			524,000
NET CHANGE IN CASH		645,382			(1,714,749	)
CASH AT BEGINNING OF PERIOD		584,976			2,065,824
CASH AT END OF PERIOD	$	1,230,358		$	351,075
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
SUPPLEMENTAL INFORMATION
Interest paid, net of capitalized amounts	$	46,011		$	154,735
Income taxes paid	$	-		$	-
Non-cash investing and financing activities:
Accounts payable satisifed by contribution of capital	$	-		$	50,000
Common stock issued in satisfaction of accrued interest	$	243,880		$	-
Common stock subscribed in satisfaction of accrued interest	$	-		$	126,700

See Accompanying Notes to these Consolidated Financial Statements

F-3

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Description of business - Searchlight Minerals Corp. (the “Company”) has been in the exploration stage 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 United Kingdom (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 the Company 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.” (“Phage”).

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 and its Board of Directors approved a change in its name from Phage to "Searchlight Minerals Corp.” effective June 23, 2005.

Going concern - The accompanying consolidated financial statements were prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raise substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business it must raise additional equity or debt capital and continue cost cutting measures. There can be no assurance that the Company will be able to achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management.

If the Company continues to incur operating losses and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations and 2) the Company’s inability to fully implement its current business plan. There can be no assurance that the Company will successfully improve its liquidity position. The accompanying consolidated financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty.

F-4

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

As of September 30, 2015, the Company had cumulative net losses of $80,282,950 from operations and had not commenced its commercial mining and mineral processing operations; rather it is still in the exploration stage. For the nine month period ended September 30, 2015, the Company incurred a net loss of 24,877,141, had negative cash flows from operating activities of $3,055,659 and will incur additional future losses due to planned continued exploration expenses. In addition, the Company had a working capital deficit totaling $4,287,313 at September 30, 2015.

To address liquidity constraints, the Company will seek additional sources of capital through the issuance of equity or debt financing. Additionally, the Company has reduced expenses and elected to defer payment of certain obligations. Cash conservation measures include, but are not limited to, the deferred payment where available of outsourced consulting fees, current and future board fees, officer salaries, monthly professional fees, and the Verde River Iron Company, LLC (“VRIC”) monthly payable. These activities have reduced the required cash outlay of the Company’s business significantly. The Company is focused on continuing to reduce costs and obtaining additional funding. There is no assurance that such funding will be available on terms acceptable to the Company, or at all. If the Company raises additional funds by selling additional shares of capital stock, securities convertible into shares of capital stock or the issuance of convertible debt, the ownership interest of the Company’s existing common stock holders will be diluted.

Basis of presentation - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company’s fiscal year-end is December 31.

These condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. All such adjustments are, in the opinion of management, of a normal recurring nature with the exception of recording a full valuation allowance on certain deferred tax assets as discussed in Note 15. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on April 13, 2015.

Principles of consolidation - The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Clarkdale Minerals, LLC (“CML”) and Clarkdale Metals Corp. (“CMC”). Significant intercompany accounts and transactions have been eliminated.

Use of estimates - The preparation of financial statements in conformity with U.S. GAAP 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. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include the valuation of stock-based compensation and derivative liabilities, impairment analysis of long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates.

F-5

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Capitalized interest cost - The Company capitalizes interest cost related to acquisition, development and construction of property and equipment which is designed as integral parts of the manufacturing process. The capitalized interest is recorded as part of the asset it relates to and will be amortized over the asset’s useful life once production commences.

Mineral properties - Costs of acquiring mineral properties are capitalized upon acquisition. Exploration costs and costs to maintain mineral properties are expensed as incurred while the project is in the exploration stage. Once mineral reserves are established, development costs and costs to maintain mineral properties are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the proven and probable reserves.

Mineral exploration and development costs - Exploration expenditures incurred prior to entering the development stage are expensed and included in mineral exploration and evaluation expense.

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 15 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 operating expenses.

Impairment of long-lived assets - The Company reviews and evaluates its long-lived assets for impairment at each balance sheet date due to its planned exploration stage losses and documents such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property.

The tests for long-lived assets in the exploration, development or production stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.

The Company's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value.

Deferred financing fees – Deferred financing fees represent fees paid in connection with obtaining debt financing. These fees are amortized using the effective interest method over the term of the financing.

F-6

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Convertible notes – derivative liabilities – The Company evaluates the embedded features of convertible notes to determine if they are required to be bifurcated and recorded as a derivative liability. If more than one feature is required to be bifurcated, the features are accounted for as a single compound derivative. The fair value of the compound derivative is recorded as a derivative liability and a debt discount. The carrying value of the convertible notes is recorded on the date of issuance at its original value less the fair value of the compound derivative.

The derivative liability is measured at fair value on a recurring basis with changes reported in other income (expense). Fair value is determined using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The debt discount is amortized to non-cash interest expense using the effective interest method over the life of the notes. If a conversion of the underlying note occurs, a proportionate share of the unamortized amount is immediately expensed.

Reclamation and remediation costs - For its exploration stage properties, the Company accrues the estimated costs associated with environmental remediation obligations in the period in which the liability is incurred or becomes determinable. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense. The costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule.

Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early stage nature of the exploration project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations in the period an estimate is revised.

The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to reclamation accruals. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known.

Fair value of financial instruments - The Company’s financial instruments consist principally of derivative liabilities and the VRIC payable. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels defined as follows:

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

F-7

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

The Company’s financial instruments consist of the VRIC payable (described in Note 9), derivative liabilities and convertible notes (described in Note 7). The VRIC payable and the convertible notes are classified within Level 2 of the fair value hierarchy. The fair value of the VRIC payable approximates carrying value as the imputed interest rate is considered to approximate a market interest rate. The fair value of the convertible notes approximates carrying value as the interest rate is considered to approximate a market interest rate.

The Company calculates the fair value of its derivative liabilities using various models which are all Level 3 inputs. The fair value of the derivative warrant liability (described in Note 6) is calculated using the Binomial Lattice model, and the fair value of the derivative liability - convertible notes (described in Note 8) is calculated using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The change in fair value of the derivative liabilities is classified in other income (expense) in the consolidated statement of operations. The Company generally does not use derivative financial instruments to hedge exposures to cash flow, market or foreign currency risks.

There have been no changes in the valuation techniques used for the derivative liabilities. The Company does not have any non-financial assets or liabilities that it measures at fair value. During the nine months ended September 30, 2015 and 2014, there were no transfers of assets or liabilities between levels.

Per share amounts - Basic earnings (loss) per share is computed by dividing net income (loss) 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. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as when the exercise price of the instrument exceeds the fair market value of the Company’s common stock and when a net loss is reported. The dilutive effect of convertible debt securities is reflected in the diluted earnings (loss) per share calculation using the if-converted method. Conversion of the debt securities is not assumed for purposes of calculating diluted earnings (loss) per share if the effect is anti-dilutive. 73,162,932 and 37,054,430 stock options, warrants and common shares issuable upon the conversion of notes were outstanding as of September 30, 2015 and 2014, respectively, but were not considered in the computation of diluted earnings per share as their inclusion would be anti-dilutive.

Stock-based compensation - Stock-based compensation awards are recognized in the consolidated financial statements based on the grant date fair value of the award which is estimated using the Binomial Lattice option pricing model. The Company believes that 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 the actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock.

The fair value of performance-based stock option grants is determined on their grant date through the use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements.

F-8

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

The Company accounts for stock options issued to non-employees based on the estimated fair value of the awards using the Binomial Lattice option pricing model. The measurement of stock-based compensation to non-employees is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in the Company’s consolidated statements of operations during the period the related services are rendered.

Income taxes - For interim reporting periods, the Company uses the annualized effective tax rate (“AETR”) method to calculate its income tax provision. Under this method, the AETR is applied to the interim year-to-date pre-tax losses to determine the income tax benefit or expense for the year-to-date period. The income tax benefit or expense for a quarter represents the difference between the year-to-date income tax benefit or expense for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the Company’s annual operating results and AETR.

The Company follows the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

For acquired properties that do not constitute a business, a deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with Accounting Standards Codification (“ASC”) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, 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-9

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Recent accounting standards - From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In November 2014, the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The ASU clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. The ASU is effective for fiscal years and interim periods beginning after December 15, 2015. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

F-10

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2. RESTRICTED CASH

At September 30, 2015, restricted cash amounted to $227,345 and consisted of funds designated for debt collateral.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30, 2015							December 31, 2014
	Cost		Accumulated Depreciation			Net Book Value		Cost		Accumulated Depreciation			Net Book Value
Furniture and fixtures	$	38,255	$	(37,868	)	$	387	$	38,255	$	(37,476	)	$	779
Lab equipment		249,061		(249,061	)		-		249,061		(247,356	)		1,705
Computers and equipment		71,407		(59,926	)		11,481		68,558		(54,025	)		14,533
Vehicles		47,675		(45,983	)		1,692		47,675		(45,458	)		2,217
Slag conveyance equipment		300,916		(300,916	)		-		300,916		(300,916	)		-
Demo module building		6,630,063		(4,361,115	)		2,268,948		6,630,063		(3,863,860	)		2,766,203
Grinding circuit		913,679		(19,167	)		894,512		913,679		(11,667	)		902,012
Extraction circuit		938,352		(415,750	)		522,602		938,352		(274,997	)		663,355
Leaching and filtration		1,300,618		(1,235,587	)		65,031		1,300,618		(1,040,494	)		260,124
Fero-silicate storage		4,326		(2,055	)		2,271		4,326		(1,731	)		2,595
Electrowinning building		1,492,853		(709,105	)		783,748		1,492,853		(597,141	)		895,712
Site improvements		1,677,844		(684,647	)		993,197		1,675,906		(591,259	)		1,084,647
Site equipment		360,454		(352,114	)		8,340		360,454		(338,588	)		21,866
Construction in progress		1,102,014		-			1,102,014		1,102,014		-			1,102,014
	$	15,127,517	$	(8,473,294	)	$	6,654,223	$	15,122,730	$	(7,404,968	)	$	7,717,762

Depreciation expense was $352,988 and $378,181 for the three months ended September 30, 2015 and 2014, respectively and $1,068,325 and $1,136,174 for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, construction in progress included the gold, copper, and zinc extraction circuits and electrowinning equipment at the Clarkdale Slag Project.

The Company rents corporate office space on month-to-month terms from a related party as further discussed in Note 19. Total rent expense was $5,068 and $7,305 for the three months ended September 30, 2015 and 2014 respectively and $15,070 and $24,219 for the nine months ended September 30, 2015 and 2014, respectively.

On March 9, 2015, the Company completed the sale of three parcels of land for net proceeds of $457,548 with half of the net proceeds designated for operating purposes and the remaining half designated for debt and is recorded as restricted cash on the consolidated balance sheet.

F-11

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. CLARKDALE SLAG PROJECT

On February 15, 2007, the Company completed a merger with Transylvania International, Inc. (“TI”) which provided the Company with 100% ownership of the Clarkdale Slag Project in Clarkdale, Arizona, through its wholly owned subsidiary CML. This acquisition superseded the joint venture option agreement to acquire a 50% ownership interest as a joint venture partner pursuant to Nanominerals Corp. (“NMC”) interest in a joint venture agreement (“JV Agreement”) dated May 20, 2005 between NMC and VRIC. One of the Company’s former directors was an affiliate of VRIC. The former director joined the Company’s board subsequent to the acquisition.

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

The Company believes 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 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 Emerging Issues Task Force (“EITF”) 98-03 (which has been superseded by ASC 805-10-25-1) 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 ASC 805-10-55-4, and the Company recorded the acquisition as a purchase of assets.

The $130.3 million purchase price was comprised of a combination of the cash paid, the deferred tax liability assumed in connection with the acquisition, and the fair value of our common shares issued, based on the closing market price of our common stock, using the average of the high and low prices of our common stock on the closing date of the acquisition. The Clarkdale Slag Project is without known reserves and the project is exploratory in nature in accordance with Industry Guides promulgated by the Commission, Guide 7 paragraph (a)(4)(i). As required by ASC 930-805-30, Mining – Business Combinations – Initial Recognition, and ASC 740-10-25-49-55, Income Taxes – Overall – Recognition – Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, the Company then allocated the purchase price among the assets as follows (and also further described in this Note 4 to the financial statements): $5,916,150 of the purchase price was allocated to the slag pile site, $3,300,000 to the remaining land acquired, and $309,750 to income property and improvements. The remaining $120,766,877 of the purchase price was allocated to the Clarkdale Slag Project, which has been capitalized as a tangible asset in accordance with ASC 805-20-55-37, Use Rights. Upon commencement of commercial production, the asset will be amortized using the unit-of-production method over the life of the Clarkdale Slag Project.

F-12

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. CLARKDALE SLAG PROJECT (continued)

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

a) The Company paid $200,000 in cash to VRIC on the execution of a letter agreement;

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

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

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

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

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

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

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

g) The Company has agreed to pay VRIC an additional amount of $3,500,000 from the net cash flow of the Clarkdale Slag Project. The Company has accounted for this as a contingent payment and upon meeting the contingency requirements, the purchase price of the Clarkdale Slag Project will be adjusted to reflect the additional consideration.

Under the original JV Agreement, the Company agreed to pay NMC a 5% royalty on NSR payable from the Company’s 50% joint venture interest in the production from the Clarkdale Slag Project. Upon the assignment to the Company of VRIC’s 50% interest in the Joint Venture Agreement in connection with the reorganization with TI, the Company continues to have an obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project. On July 25, 2011, the Company agreed to pay NMC an advance royalty payment of $15,000 per month effective January 1, 2011. The advance royalty payment is more fully discussed in Note 16.

F-13

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. CLARKDALE SLAG PROJECT (continued)

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

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

The following table reflects the components of the Clarkdale Slag Project:

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

The Company agreed to continue to pay VRIC $30,000 per month until the earlier of the Project Funding Date or the tenth anniversary of the date of the execution of the letter agreement. As of September 30, 2015 and December 31, 2014, the cumulative interest cost capitalized and included in the Slag Project was $1,098,488 and $1,062,778 respectively.

The following table sets forth the change in the Slag Project for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30, 2015		December 31, 2014
Slag Pile, beginning balance	$	121,829,655	$	121,759,811
Capitalized interest costs		35,710		69,844
Slag Pile, ending balance	$	121,865,365	$	121,829,655

F-14

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at September 30, 2015 and December 31, 2014 consisted of the following:

	September 30, 2015		December 31, 2014
Trade accounts payable	$	583,058	$	728,021
Accrued compensation and related taxes		347,247		88,293
Accrued interest		46,128		81,637
	$	976,433	$	897,951

Accounts payable – related party are discussed in Note 19.

6. DERIVATIVE WARRANT LIABILITY

Related to a private placement completed on November 12, 2009, the Company issued 6,341,263 warrants to purchase shares of common stock. The warrants had an initial expiration date of November 12, 2012 and an initial exercise price of $1.85 per share. The warrants have anti-dilution provisions, including provisions for the adjustment to the exercise price and to the number of warrants granted if the Company issues common stock or common stock equivalents at a price less than the exercise price.

The Company determined that the warrants were not afforded equity classification because the warrants are not considered to be indexed to the Company’s own stock due to the anti-dilution provisions. In addition, the Company determined that the anti-dilution provisions shield the warrant holders from the dilutive effects of subsequent security issuances and therefore the economic characteristics and risks of the warrants are not clearly and closely related to the Company’s common stock. Accordingly, the warrants are treated as a derivative liability and are carried at fair value.

On November 1, 2012, October 25, 2013 and November 11, 2014, the Company’s Board of Directors unilaterally determined, without any negotiations with the warrant holders to amend these private placement warrants. The expiration date of the warrants was extended for one year at each extension. The current expiration date is November 12, 2015. In all other respects, the terms and conditions of the warrants remained the same.

With respect to the extensions, the Company did not recognize any additional expense as the fair values of the warrants were calculated at zero using the Binomial Lattice model with the following assumptions:

	November 11, 2014		October 25, 2013		November 1, 2012
Risk-free interest rate		0.14%		0.11%		0.19%
Expected volatility		142.72%		114.79%		94.94%
Expected life (years)		1.0		1.0		1.0

F-15

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. DERIVATIVE WARRANT LIABILITY (continued)

As of September 30, 2015, the cumulative adjustment to the warrants was as follows: (i) the exercise price was adjusted from $1.85 per share to $1.27 per share, and (ii) the number of warrants was increased by 2,805,766 warrants. In connection with the financing completed with Luxor Capital Partners, L.P. and its affiliates (“Luxor”) on June 7, 2012, Luxor waived its right to the anti-dilution adjustments on 4,252,883 warrants it holds from the 2009 private placement. Future anti-dilution adjustments were not waived. The adjusted exercise price of those warrants is $1.29 per share. During the nine month period ended September 30, 2015, the warrants increased by 993,332 as a result of dilutive issuances.

The total warrants accounted for as a derivative liability were 9,147,029 and 8,153,697 as of September 30, 2015 and December 31, 2014, respectively.

The following table sets forth the changes in the fair value of derivative liability for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30, 2015		December 31, 2014
Beginning balance	$	-	$	(81,574	)
Adjustment to warrants		-		-
Change in fair value		-		81,574
Ending balance	$	-	$	-

The Company estimates the fair value of the derivative liabilities by using the Binomial Lattice pricing-model, with the following assumptions used for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30, 2015		December 31, 2014
Dividend yield		-		-
Expected volatility		30.46% - 65.70%		29.38% - 153.76%
Risk-free interest rate		0.00% - 0.14%		0.02% - 0.26%
Expected life (years)		0.10 - 0.60		0.10 – 1.0

The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. Significant increases or decreases in inputs would result in a significantly lower or higher fair value measurement.

F-16

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7. CONVERTIBLE NOTES

On September 18, 2013, the Company completed a private placement of secured convertible notes (the “Notes”) to certain investors resulting in gross proceeds of $4,000,000. At issuance, the Notes were convertible into shares of common stock at $0.40 per share, subject to certain adjustments. The term of the Notes is five years, but as of September 30, 2015, the Notes can be called within one year. The Notes bear interest at 7% which is payable semi-annually. The Notes have customary provisions relating to events of default including an increase in the interest rate to 9%. The Notes are secured by a first priority lien on all of the assets of the Company including its subsidiaries. At September 30, 2015, the first priority lien included $227,345 of restricted cash specifically dedicated to debt collateral.

The Company has agreed not to incur any additional secured indebtedness or any other indebtedness with a maturity prior to that of the Notes without the written consent of the holders of the majority-in-interest of the Notes. In the event of a change of control of the Company, the Notes will become due and payable at 120% of the principal balance. The holders of the Notes had the right to purchase, pro rata, up to $600,000 of additional separate notes by the first anniversary of the issuance date on the same general terms and conditions as the original Notes. On September 10, 2014, $69,000 of additional notes were issued.

At September 30, 2015, the Notes were convertible into 10,433,333 shares of common stock at $0.39 per share, as adjusted for anti-dilutive provisions and the if-converted value equaled the principal amount of the Notes. Certain embedded features in the Notes were required to be bifurcated and accounted for as a single compound derivative and reported at fair value as further discussed in Note 8.

At issuance, the fair value of the compound derivative was $1,261,285 and was recorded as both a derivative liability and a debt discount. The debt discount is being amortized to interest expense over the term of the Notes and the derivative liability is carried at fair value until conversion or maturity. The carrying value of the convertible debt, net of discount was comprised of the following:

	September 30, 2015			December 31, 2014
Convertible notes at face value	$	4,069,000		$	4,000,000
Issuance of additional notes		-			69,000
Unamortized discount		(805,147	)		(981,620	)
Convertible notes, net of discount	$	3,263,853		$	3,087,380

The Company incurred $126,446 of financing fees related to the Notes. Such amounts were capitalized and are being amortized to interest expense over the term of the Notes. The effective interest rate on the Notes is 15.4% which included the following for the nine month periods ended:

	September 30, 2015		September 30, 2014
Interest rate at 7%	$	213,612	$	209,798
Amortization of debt discount		176,473		163,244
Amortization of deferred financing fees		18,327		16,953
Total interest expense on convertible notes	$	408,412	$	389,995

F-17

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8. DERIVATIVE LIABILITY – CONVERTIBLE NOTES

As further discussed in Note 7, the Company has issued $4,069,000 of convertible notes. The Notes are convertible at any time into shares of common stock at $0.39 per share.

The Notes have several embedded conversion and redemption features. The Company determined that two of the features were required to be bifurcated and accounted for under derivative accounting as follows:

1. The embedded conversion feature includes a provision for the adjustment to the conversion price if the Company issues common stock or common stock equivalents at a price less than the exercise price. Derivative accounting was required for this feature due to this anti-dilution provision.

2. One embedded redemption feature requires the Company to pay 120% of the principal balance due upon a change of control. Derivative accounting was required for this feature as the debt involves a substantial discount, the option is only contingently exercisable and its exercise is not indexed to either an interest rate or credit risk.

These two embedded features have been accounted for together as a single compound derivative. The Company estimated the fair value of the compound derivative using a model with estimated probabilities and inputs calculated by the Binomial Lattice model and present values. The assumptions included in the calculations are highly subjective and subject to interpretation. Assumptions used for the nine months ended September 30, 2015 and 2014 included redemption and conversion estimates/behaviors, estimates regarding future anti-dilutive financing agreements and the following other significant estimates:

	September 30, 2015		September 30, 2014
Expected volatility		101.46 - 105.61%		96.46 – 107.84%
Risk-free interest rate		0.92 - 1.13%		1.25 – 1.73%
Expected life (years)		2.0		2.5 - 3.0

The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. Significant increases or decreases in inputs would result in a significantly lower or higher fair value measurement.

The following table sets forth the changes in the fair value of the derivative liability for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30, 2015			December 31, 2014
Beginning balance	$	1,218,619		$	755,709
Issuance of convertible debt		-			9,519
Change in fair value		(753,260	)		453,391
Ending balance	$	465,359		$	1,218,619

F-18

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9. VRIC PAYABLE - RELATED PARTY

Pursuant to the Clarkdale acquisition agreement, the Company agreed to pay VRIC $30,000 per month until the Project Funding Date. Mr. Harry Crockett was an affiliate of VRIC and served on the Company’s Board of Directors subsequent to the acquisition until he passed away in 2010.

The Company has recorded a liability for this commitment using imputed interest based on its best estimate of its incremental borrowing rate. The effective interest rate used was 8.00%, resulting in an initial present value of $2,501,187 and a debt discount of $1,128,813. The discount is being amortized over the expected term of the debt using the effective interest method. The expected term used was 10 years which represents the maximum term the VRIC liability is payable if the Company does not obtain project funding.

Interest costs related to this obligation were $10,342 and $16,753 for the three months periods ended September 30, 2015 and 2014, respectively and $35,710 and $54,566 for the nine months periods ended September 30, 2015 and 2014, respectively. Interest costs incurred have been capitalized and included in the Slag Project. To address liquidity constraints, the Company has deferred payment of the VRIC payable effective May 1, 2014. On December 18, 2014, VRIC relinquished $255,000 of payments due to them. The relinquishment was recorded as a contribution of capital.

The following table represents future minimum payments on the VRIC payable for each of the twelve month periods ending September 30:

2016	$	630,000
2017		131,195
Thereafter		-
Total minimum payments		761,195
Less: amount representing interest		(63,051	)
Present value of minimum payments		698,144
VRIC payable, current portion		569,288
VRIC payable, net of current portion	$	128,856

The acquisition agreement also contains payment terms which are based on the Project Funding Date as defined in the agreement. The terms and conditions of these payments are discussed in more detail in Notes 4 and 16.

F-19

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10. STOCKHOLDERS’ EQUITY

During the nine month period ended September 30, 2015, the Company’s stockholders’ equity activity consisted of the following:

a) On September 18, 2015, the Company issued 327,900 units to certain convertible note holders for settlement of $114,765 interest due to them. Each unit consists of one share of the Company’s common stock at $0.35 per share and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock. The Company recognized a loss on the settlement of $10,666.

b) On July 30, 2015, the Company completed a private placement offering for gross proceeds of $775,400. A total of 2,215,429 units were issued at a price of $0.35. Each unit consists of one share of the Company’s common stock and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock. Financing fees related to this placement were $9,468.

c) On May 21, 2015, the Company completed a private placement offering for gross proceeds of $995,050. A total of 2,843,000 units were issued at a price of $0.35. Each unit consists of one share of the Company’s common stock and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock. Financing fees related to this placement were $12,704.

d) On March 25, 2015, the Company completed a private placement offering for gross proceeds of $1,500,000 with Luxor. A total of 4,250,000 units will be issued at a price of $0.3529. Each unit consists of one share of the Company’s common stock and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock.

e) On March 18, 2015, the Company issued 516,460 shares of common stock at a price of $0.25 per share to certain convertible note holders as consideration for cancellation of an aggregate of $129,115 for interest payments due on the convertible notes as of March 18, 2015. The remaining note holders received interest payments in cash.

During the nine month period ended September 30, 2014, the Company’s stockholders’ equity activity consisted of the following:

a) On September 9, 2014, the Company approved the issuance of a private placement of the Company’s securities at a purchase price of $0.20 per Unit. Each Unit consists of one share of the Company’s common stock and one half of a common stock purchase warrant exercisable at $0.30 per share and expiring five years from the date of issuance.

As of September 30, 2014, the Company had received subscriptions for the purchase of these Units. $575,000 of proceeds were received by September 30, 2014 and were recorded as common stock subscribed. Additionally, 633,000 Units were subscribed to by convertible note holders in consideration of $126,700 of interest payments due on September 18, 2014. The first closing of the private placement was completed on October 24, 2014.

F-20

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10. STOCKHOLDERS’ EQUITY

The following summarizes the exercise price per share and expiration date of our outstanding warrants issued to investors and vendors to purchase common stock at September 30, 2015:

Shares Underlying Outstanding Warrants		Exercise Price		Expiration Date
	3,410,526	$	1.27	November 2015
	5,736,501		1.29	November 2015
	7,042,387		1.85	November 2015
	1,000,000		0.375	June 2016
	3,000,000		0.375	June 2017
	316,752		0.30	September 2019
	2,197,496		0.30	October 2019
	1,000,000		0.30	November 2019
	1,498,750		0.30	December 2019
	3,981,000		0.50	December 2019
	4,250,000		0.50	March 2020
	2,843,000		0.50	May 2020
	2,215,429		0.50	July 2020
	327,900		0.50	September 2020
	38,819,741

Subsequent to quarter end, all of the warrants scheduled to expire in November 2015 were extended to November 30, 2016 as further explained in Note 20.

F-21

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

11. STOCK-BASED COMPENSATION

Stock-based compensation includes grants of stock options and purchase warrants to eligible directors, employees and consultants as determined by the board of directors.

Stock option plans - The Company has adopted several stock option plans, all of which have been approved by the Company’s stockholders that authorize the granting of stock option awards subject to certain conditions. At September 30, 2015, the Company had 5,425,576 of its common shares available for issuance for stock option awards under the Company’s stock option plans.

At September 30, 2015, the Company had the following stock option plans available:

· 2009 Incentive Plan – The terms of the 2009 Incentive Plan, as amended, allow for up to 7,250,000 options to be issued to eligible participants. Under the plan, the exercise price is generally equal to the fair market value of the Company’s common stock on the grant date and the maximum term of the options is generally ten years. No participants shall receive more than 500,000 options under this plan in any one calendar year. For grantees who own more than 10% of the Company’s common stock on the grant date, the exercise price may not be less than 110% of the fair market value on the grant date and the term is limited to five years. The plan was approved by the Company’s stockholders on December 15, 2009 and the amendment was approved by the Company’s stockholders on May 8, 2012. As of September 30, 2015, the Company had granted 3,437,500 options under the 2009 Incentive Plan with a weighted average exercise price of $0.68 per share and had 3,812,500 options remaining available for issuance. As of September 30, 2015, 3,397,500 of the options granted were outstanding.

· 2009 Directors Plan - The terms of the 2009 Directors Plan, as amended, allow for up to 2,750,000 options to be issued to eligible participants. Under the plan, the exercise price may not be less than 100% of the fair market value of the Company’s common stock on the grant date and the term may not exceed ten years. No participants shall receive more than 250,000 options under this plan in any one calendar year. The plan was approved by the Company’s stockholders on December 15, 2009 and the amendment was approved by the Company’s stockholders on May 8, 2012. As of September 30, 2015, the Company had granted 2,184,877 options under the 2009 Directors Plan with a weighted average exercise price of $0.70 per share and had 565,123 options remaining available for issuance. As of September 30, 2015, 2,138,022 of the options granted were outstanding.

· 2007 Plan - Under the terms of the 2007 Plan, options to purchase up to 4,000,000 shares of common stock may be granted to eligible participants. Under the plan, the option price for incentive stock options is the fair market value of the stock on the grant date and the option price for non-qualified stock options shall be no less than 85% of the fair market value of the stock on the grant date. The maximum term of the options under the plan is ten years from the grant date. The 2007 Plan was approved by the Company’s stockholders on June 15, 2007. As of September 30, 2015, the Company had granted 2,952,047 options under the 2007 Plan with a weighted average exercise price of $0.61 per share and had 1,047,953 options remaining available for issuance. As of September 30, 2015, 2,763,618 of the options granted were outstanding.

As of September 30, 2015, the Company had granted 15,610,714 options and warrants outside of the aforementioned stock option plans with a weighted average exercise price of $0.48 per share. As of September 30, 2015, all of the options and warrants granted were outstanding.

F-22

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

11. STOCK-BASED COMPENSATION (continued)

Non-Employee Directors Equity Compensation Policy – Non-employee directors have a choice between receiving $9,000 value of common stock per quarter, where the number of shares is determined by the closing price of the Company’s stock on the last trading day of each quarter, or a number of options, limited to 18,000, to purchase twice the number of shares of common stock that the director would otherwise receive if the director elected to receive shares, with an exercise price based on the closing price of the Company’s common stock on the last trading day of each quarter.

Stock warrants – Upon approval of the Board of Directors, the Company may grant stock warrants to consultants for services performed.

Valuation of awards – At September 30, 2015, the Company had options outstanding that vest on two different types of vesting schedules, service-based and performance-based. For both service-based and performance-based stock option grants, the Company estimates the fair value of stock-based compensation awards by using the Binomial Lattice option pricing model with the following assumptions used for the nine month periods ended:

	September 30, 2015		September 30, 2014
Risk-free interest rate		0.24% - 1.75%		0.39% - 1.73%
Dividend yield		-		-
Expected volatility		91.23% - 110.32%		98.65% - 105.87%
Expected life (years)		0.30 - 4.75		2.00 - 4.25

The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options.

The expected life of awards represents the weighted-average period the stock options or warrants are expected to remain outstanding and is a derived output of the Binomial Lattice model. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model.

F-23

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

11. STOCK-BASED COMPENSATION (continued)

Stock-based compensation activity – During the nine months ended September 30, 2015, the Company granted stock-based awards as follows:

a) On September 30, 2015, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.22 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on September 30, 2020. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

b) On August 28, 2015, the Company granted stock options for the purchase of 3,804,000 shares of common stock. The per share exercise price shall be equal to the greater of $0.50 or the closing price of the Company’s common stock on December 18, 2015. The options were granted to certain officers, directors, employees and consultants, will be fully vested on December 19, 2015 and expire on December 19, 2020.

c) On August 28, 2015, the Company granted warrants for the purchase of 2,591,714 shares of common stock at an exercise price of $0.50 per share. The warrants were granted to three of the Company’s consultants for services provided, are fully vested and expire on August 28, 2020.

d) On June 30, 2015, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.25 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on June 30, 2020. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

e) On March 31, 2015, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.33 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on March 31, 2020. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

f) On March 23, 2015, the Company’s Board of Directors unilaterally determined to amend 659,890 stock options by extending their expiration dates. The options were granted at various dates between October 6, 2008 and December 31, 2010 and have a weighted average exercise price of $0.83 per share. The expiration dates of all of the options were extended by twelve months. In all other respects, the terms and conditions of the extended options remain the same. The modification resulted in additional expense of $31,544.

F-24

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

11. STOCK-BASED COMPENSATION (continued)

During the nine month period ended September 30, 2014, the Company granted stock-based awards as follows:

a) On September 30, 2014, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.22 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on September 30, 2019. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

b) On June 30, 2014, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.24 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on June 30, 2019. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

c) On March 31, 2014, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.26 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on March 31, 2019. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

d) On January 13, 2014, the Company extended the expiration date of 200,000 warrants issued to a consultant. The expiration date was extended from January 13, 2014 to January 13, 2016. All other terms were unchanged. The modification resulted in additional expense of $5,011.

Expenses related to the vesting, modifying and granting of stock-based compensation awards were $177,725 and $11,300 for the three months ended September 30, 2015 and 2014, respectively and $228,732 and $62,947 for the nine month period ended September 30, 2015 and 2014, respectively. Such expenses have been included in general and administrative and mineral exploration and evaluation expense.

F-25

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

11. STOCK-BASED COMPENSATION (continued)

The following table summarizes the Company’s stock-based compensation activity for the nine month period ended September 30, 2015:

	Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2014		17,387,745		$	0.24	$	0.55		4.53
Options/warrants granted		6,557,714			0.07		0.49		5.09
Options/warrants expired		(35,605	)		0.31		0.84		-
Options/warrants exercised		-			-		-		-
Outstanding, September 30, 2015		23,909,854		$	0.20	$	0.53		4.12	$	-
Exercisable, September 30, 2015		19,805,854		$	0.21	$	0.53		3.93	$	-

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the quarter ended September 30, 2015 in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable.

Unvested awards - The following table summarizes the changes of the Company’s stock-based compensation awards subject to vesting for the nine month period ended September 30, 2015:

	Number of Shares Subject to Vesting			Weighted Average Grant Date Fair Value
Unvested, December 31, 2014		350,000		$	0.93
Options/warrants granted		3,804,000			0.09
Options/warrants vested		(50,000	)		0.55
Unvested, September 30, 2015		4,104,000		$	0.16

For the three month periods ended September 30, 2015 and 2014, the total grant fair value of shares vested was $27,708 and $27,708, respectively. For the nine month periods ended September 30, 2015 and 2014 the total grant date fair value of shares vested was $27,708 and $102,439, respectively. As of September 30, 2015, there was $262,468 of total unrecognized compensation cost related to unvested stock-based compensation awards. The weighted average period over which the related expense will be recognized was 0.23 years as of September 30, 2015. Included in the total of unvested stock options at September 30, 2015, was 250,000 performance-based stock options. At September 30, 2015, management determined that achievement of the performance targets was probable. The weighted average period over which the related expense will be recognized was 0.25 years as of September 30, 2015.

F-26

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

12. STOCKHOLDER RIGHTS AGREEMENT

The Company adopted a Stockholder Rights Agreement (the “Rights Agreement”) in August 2009 to protect stockholders from attempts to acquire control of the Company in a manner in which the Company’s Board of Directors determines is not in the best interest of the Company or its stockholders.  Under the agreement, each currently outstanding share of the Company’s common stock includes, and each newly issued share will include, a common share purchase right.  The rights are attached to and trade with the shares of common stock and generally are not exercisable.  The rights will become exercisable if a person or group acquires, or announces an intention to acquire, 15% or more of the Company’s outstanding common stock. The Rights Agreement was not adopted in response to any specific effort to acquire control of the Company.  The issuance of rights had no dilutive effect, did not affect the Company’s reported earnings per share and was not taxable to the Company or its stockholders. 

The Company has agreed to waive the 15% limitation currently in the Rights Agreements with respect to Luxor, and to allow Luxor to become the beneficial owners of up to 26% of the Company’s common stock, without being deemed to be an “acquiring person” under the Rights Agreement.

13. PROPERTY RENTAL AGREEMENTS AND LEASES

The Company, through its subsidiary CML, has the following rental agreement as lessor:

Clarkdale Arizona Central Railroad – rental – CML rents land to Clarkdale Arizona Central Railroad on month-to-month terms at $1,700 per month.

14. GAIN ON SETTLEMENT

During the second quarter of 2015, the Company settled certain amounts due to a vendor for a gain of $378,136.

15. INCOME TAXES

The income tax expense of $21,795,143 for the three months ended September 30, 2015 reflects an effective tax rate of 1305%, which is higher than the effective tax rate of (38)% for the three months ended September 30, 2014.  The income tax expense of $20,677,458 for the nine months ended September 30, 2015 reflects an effective tax rate of 492%, which is higher than the effective tax rate of (38)% for the nine months ended September 30, 2014. The increases in rates for each period are attributed to a change in judgment regarding the need for a full valuation allowance on all of the beginning-of-year and current year deferred tax assets arising from federal and state net operating loss carryforwards, property, plant and equipment and stock based compensation. The change in judgment with respect to the application of the valuation allowance resulted from delays in receiving third party validation of the Company’s production process and as such, the Company’s timeline to production remains uncertain. The valuation allowance recorded on the beginning-of-year deferred tax assets was $20,756,645.

The effective tax rates of 1305% and 492% for the three and nine months ended September 30, 2015, respectively, differed from the U.S. statutory rate of 35%, primarily due to federal and state valuation allowances on all of the Company’s deferred tax assets as discussed above.

F-27

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

15. INCOME TAXES (continued)

The overall effective income tax rate for the year could be different from the effective tax rate for the three and nine months ended September 30, 2015. A summary of our deferred tax assets and liabilities as well as the Company’s federal and state net operating loss carryforwards are included in Note 14 “Income Taxes” in our Annual Report on Form 10-K for the year ended December 31, 2014.

The Company and its subsidiaries file income tax returns in the United States. These tax returns are subject to examination by taxation authorities provided the years remain open under the relevant statutes of limitations, which may result in the payment of income taxes and/or decreases in its net operating losses available for carryforward. The Company has losses from inception to date, and thus all years remain open for examination. While the Company believes that its tax filings do not include uncertain tax positions, the results of potential examinations or the effect of changes in tax law cannot be ascertained at this time. The Company does not have any tax returns currently under examination by the Internal Revenue Service.

16. COMMITMENTS AND CONTINGENCIES

Severance agreements – The Company has severance agreements with two executive officers that provide for various payments if the officer’s employment agreement is terminated by the Company, other than for cause. At September 30, 2015, the total potential liability for severance agreements was $112,500.

Clarkdale Slag Project royalty agreement - NMC - Under the original JV Agreement, the Company agreed to pay NMC a 5% royalty on NSR payable from the Company’s 50% joint venture interest in the production from the Clarkdale Slag Project. Upon the assignment to the Company of VRIC’s 50% interest in the Joint Venture Agreement in connection with the reorganization with Transylvania International, Inc., the Company continues to have an obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project.

Purchase consideration Clarkdale Slag Project - In consideration of the acquisition of the Clarkdale Slag Project from VRIC, the Company has agreed to certain additional contingent payments. The acquisition agreement contains payment terms which are based on the Project Funding Date as defined in the agreement:

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

b) 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 NSR 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: (i) the end of the first calendar year in which the Project Royalty equals or exceeds $500,000 or (ii) 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; and,

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

The Advance Royalty shall continue for a period of ten years from the Agreement Date or until such time that the Project Royalty shall exceed $500,000 in any calendar year, at which time the Advance Royalty requirement shall cease.

F-28

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

16. COMMITMENTS AND CONTINGENCIES (continued)

On July 25, 2011, the Company and NMC entered into an amendment (the “Third Amendment”) to the assignment agreement between the parties dated June 1, 2005. Pursuant to the Third Amendment, the Company agreed to pay advance royalties (the “Advance Royalties”) to NMC of $15,000 per month (the “Minimum Royalty Amount”) effective as of January 1, 2011. The Third Amendment also provides that the Minimum Royalty Amount will continue to be paid to NMC in every month where the amount of royalties otherwise payable would be less than the Minimum Royalty Amount, and such Advance Royalties will be treated as a prepayment of future royalty payments. In addition, fifty percent of the aggregate consulting fees paid to NMC from 2005 through December 31, 2010 were deemed to be prepayments of any future royalty payments. As of December 31, 2010, aggregate consulting fees previously incurred amounted to $1,320,000, representing credit for advance royalty payments of $660,000.

Total advance royalty fees were $45,000 and $45,000 for the three month periods ended September 30, 2015 and 2014, respectively and $135,000 and $135,000 for the nine month periods ended September 30, 2015 and 2014, respectively. Advanced royalty fees have been included in mineral exploration and evaluation expenses – related party on the statements of operations.

Development agreement - In January 2009, the Company submitted a development agreement to the Town of Clarkdale for development of an Industrial Collector Road (the “Road”). The purpose of the Road is to provide the Company the capability to transport supplies, equipment and products to and from the Clarkdale Slag Project site efficiently and to meet stipulations of the Conditional Use Permit for the full production facility at the Clarkdale Slag Project.

The timing of the development of the Road is to be within two years of the effective date of the agreement. The effective date shall be the later of (i) 30 days from the approving resolution of the agreement by the Council, (ii) the date on which the Town of Clarkdale obtains a connection dedication from separate property owners who have land that will be utilized in construction of the Road, or (iii) the date on which the Town of Clarkdale receives the proper effluent permit. The contingencies outlined in (ii) and (iii) above are beyond control of the Company.

The Company estimates the initial cost of construction of the Road to be approximately $3,500,000 and the cost of additional enhancements to be approximately $1,200,000 which will be required to be funded by the Company. Based on the uncertainty of the contingencies, this cost is not included in the Company’s current operating plans. Funding for construction of the Road will require obtaining project financing or other significant financing. As of the date of this filing, these contingencies had not changed.

Registration Rights Agreement - In connection with the June 7, 2012 private placement, the Company entered into a Registration Rights Agreement (“RRA”) with the purchasers. Pursuant to the RRA, the Company agreed to certain demand registration rights. These rights include the requirement that the Company file certain registration statements within a specified time period and to have these registration statements declared effective within a specified time period. The Company also agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions. If the Company is not able to comply with these registration requirements, the Company will be required to pay cash penalties equal to 1.0% of the aggregate purchase price paid by the investors for each 30 day period in which a registration default, as defined by the RRA, exists. The maximum penalty is equal to 3.0% of the purchase price which amounts to $121,500. As of the date of this filing, the Company does not believe the penalty to be probable and accordingly, no liability has been accrued.

F-29

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

16. COMMITMENTS AND CONTINGENCIES (continued)

Registration Rights Agreement - In connection with the September 18, 2013 convertible notes issuance, the Company entered into a RRA with the investors. Pursuant to the RRA, the Company agreed to file a registration statement covering the resale of the shares of common stock issuable upon conversion of the notes and the additional notes allowed for under the agreement. Pursuant to the RRA, the Company agreed to certain demand registration rights. These rights include the requirement that the Company file certain registration statements within a specified time period and to have these registration statements declared effective within a specified time period. The Company also agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions. The Purchasers will also be granted piggyback registration rights with respect to such shares. If the Company is not able to comply with these registration requirements, the Company will be required to pay cash penalties equal to 1.0% of the purchase price. The maximum penalty is equal to 3.0% of the purchase price which amounts to $120,000 for the convertible notes and $18,000 for the additional notes. As of the date of this filing, the Company does not believe the penalty to be probable and accordingly, no liability has been accrued.

17. CONCENTRATION OF CREDIT RISK

The Company maintains its cash accounts in financial institutions. Cash accounts at these financial institutions are insured by the Federal Deposit Insurance Corporation (the “FDIC”) for up to $250,000 per institution. The Company has never experienced a material loss or lack of access to its cash accounts; however, no assurance can be provided that access to the Company’s cash accounts will not be impacted by adverse conditions in the financial markets. At September 30, 2015, the Company had $921,654 of deposits in excess of FDIC insured limits.

18. CONCENTRATION OF ACTIVITY

The Company currently utilizes a mining and environmental firm to perform significant portions of its mineral property and metallurgical exploration work programs. A change in the lead mining and environmental firm could cause a delay in the progress of the Company’s exploration programs and would cause the Company to incur significant transition expense and may affect operating results adversely.

19. RELATED PARTY TRANSACTIONS

NMC - The Company utilizes the services of NMC to provide technical assistance and financing related activities. In addition, NMC provides the Company with use of its laboratory, instrumentation, milling equipment and research facilities. One of the Company’s executive officers, Mr. Ager, is affiliated with NMC. The Company and NMC agreed to an advance royalty of $15,000 per month and to reimburse NMC for actual expenses incurred and consulting services provided.

The Company has an existing obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project. The royalty agreement and advance royalty payments are more fully discussed in Note 16.

F-30

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

19. RELATED PARTY TRANSACTIONS (continued)

The following table provides details of transactions between the Company and NMC for the three and nine months ended:

	Three Months Ended September 30, 2015		Three Months Ended September 30, 2014		Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2014
Reimbursement of expenses	$	-	$	983	$	360	$	6,143
Consulting services provided		15,000		30,000		45,000		90,400
Advance royalty payments		45,000		45,000		135,000		135,000
Mineral and exploration expense – related party	$	60,000	$	75,983	$	180,360	$	231,543

The Company had outstanding balances due to NMC of $193,725 and $13,365 at September 30, 2015 and December 31, 2014, respectively. Additionally, during the nine month period ended September 30, 2014, NMC paid $50,000 of the Company’s expenses. Such amount was recorded as a contribution of capital.

Cupit, Milligan, Ogden & Williams, CPAs - The Company utilizes CMOW to provide accounting support services. CMOW is an affiliate of the Company’s CFO, Mr. Williams. Fees for services provided by CMOW do not include any charges for Mr. Williams’ time. Mr. Williams is compensated for his time under his employment agreement.

The following table provides details of transactions between the Company and CMOW and the direct benefit to Mr. Williams for the three and nine month periods ended:

	Three Months Ended September 30, 2015		Three Months Ended September 30, 2014		Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2014
Accounting support services	$	41,606	$	33,331	$	137,211	$	105,133
Direct benefit to CFO	$	12,066	$	12,999	$	39,791	$	41,002

The Company had an outstanding balance due to CMOW of $145,386 and $8,174 as of September 30, 2015 and December 31, 2014, respectively.

Financial Consulting Services - Beginning in October of 2014, the Company utilized five individuals to provide financial consulting services. During the third quarter of 2015 the Company entered into consulting agreements with three of these individuals, all of the consultants provided similar services. One of these individuals is the son of the Company's CEO, in consideration for his services, the Company issued to him 2,063,143 warrants to purchase common stock at an exercise price of $0.50 per share, which the Company has valued at an aggregate of $70,112. The warrants are fully vested and expire five years from the date of grant.

F-31

SEARCHLIGHT MINERALS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

19. RELATED PARTY TRANSACTIONS (continued)

Ireland Inc. – The Company leases corporate office space on month-to-month terms from Ireland Inc. (“Ireland”). NMC is a shareholder in both the Company and Ireland. Additionally, one of the Company’s directors is the CFO, Treasurer and a director of Ireland and the Company’s CEO provides consulting services to Ireland.

Total rent expense incurred to Ireland was $5,068 and $7,305 for the three month periods ended September 30, 2015 and 2014, respectively, and $15,070 and $24,219 for the nine month periods ended September 30, 2015 and 2014, respectively. No amounts were due to Ireland as of September 30, 2015 or December 31, 2014.

20. SUBSEQUENT EVENT

Warrant extension - On November 12, 2015, the Company approved an amendment to the expiration dates of certain outstanding warrants to purchase up to an aggregate of 16,189,414 shares of the Company’s common stock. Prior to the amendment, these warrants were set to expire on November 12, 2015. After the amendment, these warrants are set to expire on November 30, 2016. The terms and conditions of these warrants remain the same in all other respects. These warrants were originally issued in connection with the Company’s February 23, 2007, March 22, 2007, December 26, 2007, February 7, 2008 and November 12, 2009 private placements. The Company calculated the fair value of the warrants using the Binomial Lattice model with the following assumptions, outputs and results:

Risk-free interest rate	0.47%
Expected volatility	88.50%
Expected life	1 year
Fair value	$ -

F-32

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Quarterly Report on Form 10-Q, or the Report, are “forward-looking statements.” These forward-looking statements include, but are not limited to, statements about the plans, objectives, expectations and intentions of Searchlight Minerals Corp., a Nevada corporation (referred to in this Report as “we,” “us,” “our” or “registrant”) and other statements contained in this Report that are not historical facts. Forward-looking statements in this Report or hereafter included in other publicly available documents filed with the Securities and Exchange Commission, or the Commission, reports to our stockholders and other publicly available statements issued or released by us involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such future results are based upon management’s best estimates based upon current conditions and the most recent results of operations. When used in this Report, the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” and similar expressions are generally intended to identify forward-looking statements, because these forward-looking statements involve risks and uncertainties. There are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including our plans, objectives, expectations and intentions and other factors that are discussed under the section entitled “Risk Factors,” in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2014.

The following discussion and analysis summarizes our plan of operation for the next twelve months, our results of operations for the three and nine month periods ended September 30, 2015 and changes in our financial condition from our year ended December 31, 2014. The following discussion should be read in conjunction with the Management’s Discussion and Analysis or Plan of Operation included in our Annual Report on Form 10-K for the year ended December 31, 2014.

We are an exploration stage company engaged in a slag reprocessing project and the acquisition and exploration of mineral properties. Our business is presently focused on the Clarkdale Slag Project, located in Clarkdale, Arizona, which is a reclamation project to recover precious and base metals from the reprocessing of slag produced from the smelting of copper ore mined at the United Verde Copper Mine in Jerome, Arizona.

Since our involvement in the Clarkdale Slag Project, our goal has been to demonstrate the economic feasibility of the project by determining a commercially viable method to extract precious and base metals from the slag material. We believe that in order to demonstrate this, we must successfully operate four major steps of our production process: crushing and grinding, leaching, continuous process operation, and extraction of gold from solution.

Our Production Process

1. Crushing and Grinding. The first step of our production process involves grinding the slag material from rock-size chunks into sand-size grains (minus-20 mesh size). Because of the high iron content and the glassy/siliceous nature of the slag material, grinding the slag material creates significant wear on grinding equipment. Batch testing with various grinders produced significant wear on the equipment to render them unviable for a continuous production facility.

High pressure grinding rolls (HPGR) are commonly used in the mining industry to crush ore and have shown an ability to withstand very hard and abrasive ores. Tests using HPGRs on our slag material showed that grinding our slag material on a continuous basis did not produce wear on the equipment beyond the expected levels.

 2

When we tested the HPGR-ground slag in our autoclave process, results showed liberation of gold, which our technical team believes is due to the micro-fractures imparted to the slag during the HPGR grinding process.  The technical team also believes that the high pressures that exist in the autoclave (see autoclave discussion in 2. below) environment are able to drive the leach solution into the micro-fracture cracks created in the slag material by the HPGR crusher, thereby dissolving the gold without having to employ a more expensive process to grind the slag material to a much finer particle size.

We believe that the HPGR is a viable grinder for our production process because it appears to have solved our grinding equipment wear issue and the HPGR produces ground slag from which gold can be leached into solution in an autoclave process.

2. Leaching. The second step of our production process involves leaching gold from the ground slag material using the autoclave process. Autoclaving, a proven technology that is widely used within the mining industry, is a chemical leach process that utilizes elevated temperature and pressure in a closed autoclave system to extract precious and base metals from the slag material. Our independent consultant, Arrakis Inc. (“Arrakis”) has performed over 200 batch autoclave tests under various leach protocols and grind sizes as well as numerous pilot-scale autoclave tests in our 900-liter autoclave. Arrakis’ test results have consistently leached approximately 0.5 ounces per ton (opt) of gold into solution. In addition, these results indicate that autoclaving does not dissolve significant levels of iron and silica into solution, will improve our ability to recover gold from solution and thus improve process technical feasibility. The operating conditions identified by Arrakis thus far are mild to moderate compared with most current autoclaves and are anticipated to result in lower capital, operating and maintenance costs.

3. Continuous Operation. The third step in our production process involves being able to perform the leaching step in a larger continuous operation. While lab and bench-scale testing provides critical data for the overall development of a process, economic feasibility can only be achieved if the process can be performed in a continuous operation.

During the second quarter of 2012, we received the results of tests conducted by an independent Australian metallurgical testing firm whereby they conducted autoclave tests under various conditions, using the pressure oxidative leach (“POL”) method in a four-compartment, 25-liter autoclave. The completion of a continuous 14 hour test with 100% mechanical availability (i.e. no “down time”) demonstrates the ability of a pilot autoclave to process the Clarkdale slag material on a continuous basis. The pilot multi-compartment autoclave is routinely used to simulate operating performance in a full-scale commercial autoclave as part of a bankable feasibility study.

In addition, the PLS that was produced from the 14 hour continuous run was analyzed by the Australian testing firm. Analysis using the AAS/ICP-OES method resulted in approximately 0.2 - 0.6 opt of gold extracted into solution. The 0.2 opt was achieved during the startup of the test run. After making adjustments to the pH, volume of the leach solution and other process parameters, the higher 0.6 opt was obtained toward the completion of the test. Our independent technical consultants believe we can replicate these higher test results in future test runs.

We believe that the POL autoclave method in a large multi-compartment autoclave has shown to be viable for our production process because it can operate on a continuous basis and leaches higher levels of gold and much lower levels of iron and silica into solution than other methods. The results from POL autoclaving testing were comparable to bench-scale and pilot-scale autoclave tests performed by Arrakis.

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4. Extraction. The fourth and final step in our production process involves being able to extract and recover metallic gold from PLS. Economic feasibility can only be achieved if a commercially viable method of metallic gold recovery is determined. In addition, the recovery of metallic gold will not only define the most cost-effective method of such recovery, but will also provide a better definition to the total process system mass balance and help reduce any discrepancy in analytical tests. Recovery of gold beads provides the ability to determine more accurately the amount of gold that was recovered from leach solution. Simple weighing of the gold bead and having the weight of the initial slag sample used to provide the bead gives a more accurate determination of an extractable gold grade in the slag sample. In this effort, we and our consultants are continuing to perform tests to recover gold from solution, using carbon, ion exchange resin technologies, or other commonly used methods of extracting gold from solution.

To provide additional PLS which is necessary to expedite the gold recovery tests and commercial viability of the project, we acquired and have been operating a large batch titanium autoclave (approximately 900 liter capacity). Numerous tests have been conducted in this autoclave in an effort to optimize the process parameters in order to maximize gold extraction from the slag material. The latter tests have resulted in gold metal recovery of 0.38 opt, with a back-calculated average slag head grade of 0.46 opt, resulting in an average 84% recovery of the gold in the slag material.

We have been performing tests whereby the slag material is pretreated prior to processing it in the autoclave. These tests indicate that pretreatment, by melting the slag at high temperature, aids in the recovery of the gold from solution derived from the autoclave.  We believe that the high temperature process aids in breaking down the refractory coating on the gold particles that are subsequently put into solution after the autoclaving of the slag material and also separates out the iron that makes up approximately one third of the untreated slag material.

The heat treated slag material, after the removal of the iron is, for ease of reference, hereinafter referred to as glass.  This processed glass material contains the gold and, because of the heat treatment process, is now easily and readily assayed by standard fire assay techniques. It is anticipated that incorporating this additional step into our flow chart renders process optimization testing much easier and will allow this phase of the development program to be concluded more quickly.

Significant Technical Achievements

In 2014, the precise nature of the gold contained in the Clarkdale slag was determined. Test work done with high resolution microscopes – a Scanning Electron Microscope (“SEM”) and a Transmission Electron Microscope (“TEM”) – have photographed and measured the gold contained within sulfides and further encapsulated by a highly refractory silicate very resistant to thermal and chemical attack. This explains the difficulty in fire assaying the gold or using ambient temperature strong reagent leaching. Further, the gold is present as colloids (very small particles) less than 100 nm in size which is 1,000 times less than the width of a human hair. (This microscopic size is in the range of most of the gold contained within the Carlin Trend in Nevada – one of North America’s richest gold deposits that went undetected for decades due to the small “invisible” gold particles. The Carlin Trend material was also very difficult to assay and process until the true nature and deportment of the gold was determined.) The temperature required to break the silicate coating of the Clarkdale slag material exceeds standard fire assay temperature which is why the gold is not captured in the lead collector used in a standard fire assay. Specialized grinding using high pressure grinding rolls (HPGR) and high temperature leaching used in the current proposed process flow diagram aid in breaking this coating, oxidizing the sulfide, and converting the gold from a colloid to a charged ionic form in solution.

Testing using this process thus far has verified the prior test results achieved and reported by us of gold grades between 0.4 to 0.6 ounces per ton (average).  The processed material being derived from the heat treated slag is also much easier to be analyzed using standard analytical techniques.  Small autoclave tests conducted on the glass from the heat treatment have produced up to an 85% extraction of gold into the pregnant leach solution (PLS) solution.

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Other Positive Developments

In addition to the breakthrough discussed above, as a byproduct of this new process, the high temperature pre-treatment produces a high quality iron product grading over 95% iron content in a pelletized form. The high quality of the iron and its pellet size form make it a readily marketable product for sale to the China, Korea, or India markets. We believe that this high grade iron product will secure a premium price selling either into the scrap iron or pig iron market. Test work is continuing in an effort to maximize iron content while maintaining gold recovery.

The existing railroad spur on the Clarkdale Project Site connects to a major railroad for low cost transportation to a seaport or domestic market. It is believed that this pre-treatment process may pay for itself or provide a net cash flow from the sale of the iron. To examine the efficacy of this concept, we engaged Samuel Engineering of Denver, Colorado to perform a preliminary assessment and marketing study. This study suggests that a marketable high grade iron product could be made and sold as a byproduct to generate net cash flow or reduce the overall costs of producing gold. Toward this end we have commenced contacting commercial iron producers for expressions of interest.

Pilot Autoclave Test Results

In the fourth quarter of 2014, three successful pilot autoclave tests, which consisted of heat treating the Clarkdale slag material prior to autoclave processing, confirmed feed grades of 0.3 to 0.6 opt gold contained in the slag material and gold recoveries of 0.25 to 0.50 ounces per ton. The percentage recoveries ranged from 79% to 94%, with an 84% average recovery. The first two tests (the highest recovered gold values) were conducted from fresher ground slag material that was pulverized using high pressure grinding rolls (HPGR). A third test was conducted from older HPGR-pulverized material and resulted in the lowest recovered gold value referred to above. We believe the third test was negatively affected by oxide layers that commonly form on the surface of older (aged) ground slag material.

A fourth pilot autoclave test was unable to be completed due to a mechanical problem with the autoclave. Even though it was pronounced a failed test and not included in the above results, the fourth test nonetheless produced a gold grade of 0.2 opt.

Two of the successful tests included processing the pre-treated slag through the autoclave twice. This simulates, to a degree, what is commonly done in large commercial multi-compartment autoclaves to achieve optimum extraction. One of the tests involved a single autoclave run. Therefore, a total of five pilot-scale autoclave tests were successfully conducted with the high temperature pre-treatment. These tests resulted in the processing of over 1,200 kg of raw slag and the production of over 3,800 liters of gold-bearing solutions. The gold contained in these solutions is now being recovered as metallic gold.

High temperature pre-treatment allows the refractory material from the Clarkdale Slag Project to be fire assayed, resulting in the recovery of gold beads, and all results have been reported by fire assay.

Whereas previously reported slag material gold grade results were similar to those reported above, the most recent tests resulted in higher percentage recoveries of the gold from solution (as gold beads) using a variety of standard processes (i.e., electro-winning, direct precipitation, activated carbon, and ion exchange resins). All of these commonly used processes represent “off the shelf” technologies utilized globally in base and precious metals processing.

The methodology that consistently provided the highest percentage recovery of metal from solution in the most recent tests was an ion exchange resin process, which was originally used in our plant in Clarkdale, Arizona.

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An additional benefit of utilizing the large-capacity heat treating unit prior to the large-capacity pilot autoclave is that high grade ‘pig iron’ has been produced, containing a greater than 95% iron content, whereas previously reported results at bench-scale levels resulted in 75% - 85% iron extraction. The 95%-plus iron product commands a much higher price, and we believe that it may be able to profitably sell such pig iron into the domestic scrap iron market. If such sales of pig iron can be realized, we can eliminate the cost of overseas transport while simultaneously obtaining a much higher price per ton. In addition, the original railroad line to the Clarkdale Slag Project site is intact and has been well maintained. The cost of upgrading the line for pig iron transport would be minimal relative to the cost of new railroad construction. It is currently anticipated that this additional byproduct, if buyers are found, will further enhance the commercial profitability of the Clarkdale Slag Project by improving recoverable gold grades and generating an additional revenue stream.

Current Work Program

We are currently working on the following key steps in an effort to move expeditiously towards commercial operation:

1. Thermal Pre-treatment Testing: Previous testing on slag material conducted by us on material from our Clarkdale Slag Project indicated that a high quality iron product could be produced from the slag material by using a thermal pre-treatment step prior to the autoclave process, which is designed to extract the gold. We conducted such tests to determine whether high quality iron could be produced from the slag material with the goal that the resulting iron may be sold at a price, which could at a minimum, pay for the cost of producing it and perhaps produce an additional cash flow above and beyond the revenue that we may receive from the extraction of gold from the slag pile. We also believe that the iron-removing pre-treatment of the slag material in this manner results in greater gold extraction from the autoclave process.

In the second quarter of 2015, we awarded a contract to Midrex Technologies, Inc. (“Midrex”) to run bench scale testing in their test facility in Charlotte, N.C. to determine if their technology could produce a high quality iron product from the Company’s slag material in a more cost effective manner than previously used by us.

The report provided in connection with these tests by Midrex states: “This work successfully demonstrated the technical suitability of using Midrex’s FASTMET® technology to allow iron to be removed from copper slag. Up to 97.8% iron metallization was achieved in bench scale box furnace testing, exceeding the goal of 90.0% iron metallization. FASTMET® DRI was then melted in a crucible furnace separating the iron metal from the residual iron-lean slag. 350 grams of this resulting slag was ground and representative samples were sent to Searchlight for gold analysis. This report satisfies the deliverables contracted under proposal no. MTI-9502-99 and presents the evolution of the mix chemistries and bench scale testing.”

We believe that the Midrex technology uses much less costly natural gas coupled with a flux additive which also provides thermal energy, compared with our previously used method which uses electricity as its energy source. Since the leading cost source in the production of iron from the slag material is energy, we believe that the net result is a projected significant cost savings by using the Midrex technology.It is our intent to have Midrex perform additional bench tests and pilot scale tests to confirm these test results and to scale up their process.

We have also had discussions with Midrex on their potential interest in participating in a commercial scale project to produce iron from our slag pile.

An initial test performed by us on the glass (the resulting product following Midrex’s removal of the iron from the slag material) has shown the presence of gold. However, additional testing needs to be performed in order to quantify the amount of gold contained in the glass as well as to determine the optimal autoclave chemistry to use on the glass.

A work plan is being assembled with Midrex to include performing a pilot scale test which will allow a much larger quantity of glass to be produced for additional bench and pilot scale autoclave testing. Midrex’s pilot scale test unit is anticipated to process 50 to 100 kilograms of slag material per hour, thus producing sufficient glass for the Company to run pilot scale tests in our 900 liter autoclave which requires 100 kilograms of material per test run.

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2. Autoclave Optimization

We have installed certain required components to switch from using chlorine reagents to chlorine gas for the autoclave process. We believe that this will not only significantly lower supply costs on the commercial unit but will eliminate the potential problems of salt formation in the autoclave. We anticipate that this will also simplify and increase recovery of gold from the pregnant leach solution (PLS) derived from the autoclave process.

Initial test work conducted with the chlorine gas system has indicated that this system, used in lieu of the previous chlorine chemical system, provides a much higher oxidizing capability at a much lower total reagent cost, reduces the salt load in solution and therefore, eliminating the piping plugging problems encountered in previous autoclave test runs.Once additional bench autoclave tests have been completed to finalize the chemical and operating conditions, the 900 liter pilot autoclave will be operated to verify results to date at a larger scale.

3. Third Party Review and Verification

We have hired an independent team of well qualified and experienced experts to complete a technical review of the project. It is anticipated that a favorable report from this review would be used to facilitate the financing of the bankable feasibility study and commercial production facility.

Critical Accounting Policies

Use of estimates - The preparation of financial statements in conformity with GAAP requires us 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. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring estimates and assumptions include the valuation of stock-based compensation and derivative liabilities, impairment analysis of long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates.

Mineral properties - Costs of acquiring mineral properties are capitalized upon acquisition. Exploration costs and costs to maintain mineral properties are expensed as incurred while the project is in the exploration stage. Development costs and costs to maintain mineral properties are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the proven and probable reserves.

Mineral exploration and development costs - Exploration expenditures incurred prior to entering the development stage are expensed and included in “Mineral exploration and evaluation expenses.”

Capitalized interest cost - We capitalize interest cost related to acquisition, development and construction of property and equipment which is designed as integral parts of the manufacturing process of the project. The capitalized interest is recorded as part of the asset it relates to and will be amortized over the asset’s useful life once production commences.

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 15 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 operating expenses.

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Impairment of long-lived assets - We review and evaluate our long-lived assets for impairment at each balance sheet date due to our planned exploration stage losses and document such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as our continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property.

The tests for long-lived assets in the exploration, development or production stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.

Our policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value.

Stock-based compensation - Stock-based compensation awards are recognized in the consolidated financial statements based on the grant date fair value of the award which is estimated using the Binomial Lattice option pricing model. We believe that 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 the actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock.

The fair value of performance-based stock option grants is determined on their grant date through the use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements.

We account for stock options issued to non-employees based on the estimated fair value of the awards using the Binomial Lattice option pricing model. The measurement of stock-based compensation to non-employees is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in our consolidated statements of operations during the period the related services are rendered.

Derivative warrant liability - We have certain warrants with anti-dilution provisions, including provisions for the adjustment to the exercise price and to the number of warrants granted if we issue common stock or common stock equivalents at a price less than the exercise price. We determined that these warrants were not afforded equity classification because they embody risks not clearly and closely related to the host contract. Accordingly, the warrants are treated as a derivative liability and are carried at fair value.

We calculate the fair value of the derivative liability using the Binomial Lattice model, a Level 3 input. The change in fair value of the derivative liability is classified in other income (expense) in the consolidated statement of operations. We generally do not use derivative financial instruments to hedge exposures to cash flow, market or foreign currency risks. We are not exposed to significant interest or credit risk arising from these financial instruments.

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Convertible notes – derivative liabilities - We evaluate the embedded features of convertible notes to determine if they are required to be bifurcated and recorded as a derivative liability. If more than one feature is required to be bifurcated, the features are accounted for as a single compound derivative. The fair value of the compound derivative is recorded as a derivative liability and a debt discount. The carrying value of the convertible notes was recorded on the issuance date at its original value less the fair value of the compound derivative.

The derivative liability is measured at fair value on a recurring basis with changes reported in other income (expense). Fair value is determined using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The debt discount is amortized to non-cash interest expense using the effective interest method over the life of the notes. If a conversion of the underlying note occurs, a proportionate share of the unamortized amount is immediately expensed.

Income taxes – For interim reporting periods, we use the annualized effective tax rate (“AETR”) method to calculate our income tax provision. Under this method, the AETR is applied to the interim year-to-date pre-tax losses to determine the income tax benefit or expense for the year-to-date period. The income tax benefit or expense for a quarter represents the difference between the year-to-date income tax benefit or expense for the current year-to-date period less such amount for the immediately preceding year-to-date period. We consider the impact of all known events in their estimation of the Company’s annual operating results and AETR.

We follow the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. We record a valuation allowance against any portion of those deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

For acquired properties that do not constitute a business, a deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with Accounting Standards Codification (“ASC”) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, 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.

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Results of Operations

The following table illustrates a summary of our results of operations for the periods set forth below:

	Three Months Ended September 30,									Nine Months Ended September 30,
	2015			2014			Percent Increase/ (Decrease)			2015			2014			Percent Increase/ (Decrease)
Revenue	$	-		$	-			n/a		$	-		$	-			n/a
Operating expenses		(1,751,111	)		(19,525,152	)		(91.0	)%		(4,545,628	)		(22,866,435	)		(80.1	)%
Other income (expense)		80,423			(18,654	)		(531.1	)%		345,945			(58,368	)		(692.7	)%
Income tax (expense) benefit		(21,795,143	)		7,440,766			(392.9	)%		(20,677,458	)		8,747,063			(336.4	)%
Net loss	$	(23,465,831	)	$	(12,103,040	)		93.9	%	$	(24,877,141	)	$	(14,177,740	)		75.5	%

Revenue. We are currently 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 nine months ended September 30, 2015. 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 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:

	Three Months Ended September 30,							Nine Months Ended September 30,
	2015		2014		Percent Increase/ (Decrease)			2015			2014		Percent Increase/ (Decrease)
Mineral exploration and evaluation expenses	$	674,637	$	396,409		70.2	%	$	1,770,453		$	1,482,176		19.4	%
Mineral exploration and evaluation expenses – related party		60,000		75,983		(21.0	)%		180,360			231,543		(22.1	)%
Administrative – Clarkdale site		26,682		34,080		(21.7	)%		91,244			83,912		8.7	%
General and administrative		590,130		504,629		16.9	%		1,285,513			1,662,929		(22.7	)%
General and administrative – related party		46,674		40,636		14.9	%		152,281			129,352		17.7	%
Loss on asset disposition		-		18,095,234		n/a			(2,548	)		18,140,349		(100.0	)%
Depreciation		352,988		378,181		(6.7	)%		1,068,325			1,136,174		(6.0	)%
Total operating expenses	$	1,751,111	$	19,525,152		(91.0	)%	$	4,545,628		$	22,866,435		(80.1	)%

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Nine month period ended September 30, 2015 and 2014. Operating expenses decreased by 80.1% to $4,545,628 during the nine month period ended September 30, 2015 from $22,866,435 during the nine month period ended September 30, 2014. Operating expenses decreased primarily as a result of writing off the Searchlight Claims in the third quarter of 2014.

Mineral exploration and evaluation expenses increased to $1,770,453 during the nine month period ended September 30, 2015 from $1,482,176 during the nine month period ended September 30, 2014. The increase is attributed to hiring and utilizing additional consultants to provide advisory services related to the assay process, estimated resource, extraction processes and possible financing for the Clarkdale Project during the nine month period ended September 30, 2015.

Mineral exploration and evaluation expenses – related party decreased to $180,360 during the nine month period ended September 30, 2015 from $231,543 for the nine month period ended September 30, 2014. These expenses relate to services provided to us by Nanominerals Corp. (“NMC”). NMC is one of our principal stockholders and an affiliate of Carl S. Ager, our Vice President, Secretary and Treasurer and a director. We utilize the services of NMC to provide technical assistance and financing related activities. In addition, NMC provides us with use of its laboratory, instrumentation, milling equipment and research facilities. We pay NMC an advance royalty payment of $15,000 per month and reimburse NMC for actual expenses incurred and consulting services provided. The decrease is attributed to less metallurgical consulting work performed by NMC in 2015.

Administrative – Clarkdale site expenses increased to $91,244 during the nine month period ended September 30, 2015 from $83,912 for the nine month period ended September 30, 2014. Administrative costs at the Clarkdale site increased due to a reduction of certain consulting in the first quarter of 2014 resulting in less administrative costs.

General and administrative expenses decreased to $1,285,513 during the nine month period ended September 30, 2015 from $1,662,929 during the nine month period ended September 30, 2014. The decrease was the result of a change in contract with our legal counsel from a set monthly retainer to actual charges incurred and to a settlement of certain invoices with a vendor resulting in an expense reduction of $378,136.

General and administrative – related party amounted to $152,281 and $129,352 for the nine month periods ended September 30, 2015 and 2014, respectively. These expenses include accounting support services and rent expense. The accounting support services are performed by Cupit, Milligan, Ogden & Williams, CPAs, an affiliate of Melvin L. Williams, our Chief Financial Officer. Rent payments are made to Ireland Inc. for corporate office space. NMC is a shareholder in both Searchlight and Ireland. Additionally, one of our directors is the CFO, Treasurer and a director of Ireland and our CEO provides consulting services to Ireland.

Accounting expenses – related party increased to $137,211 during the nine month period ended September 30, 2015 from $105,133 for the nine month period ended September 30, 2014. These fees do not include any fees for Mr. Williams’ time in directly supervising the support staff. Mr. Williams’ compensation has been provided in the form of salary. The direct benefit to Mr. Williams was $39,791 and $41,002 of the above fees for the nine month periods ended September 30, 2015 and 2014, respectively. The change was due to an increase in the volume and complexity of equity transactions, an increase in anti-dilutive adjustments and derivative accounting.

Rent expense – related party was $15,070 and $24,219 during the nine month periods ended September 30, 2015 and 2014, respectively. The decrease is attributed to the reduction in rent expense per the rent agreement.

Gain (loss) on disposition of assets amounted to $2,548 and $(18,140,349) for the nine month periods ended September 30, 2015 and 2014, respectively. The loss in 2014 was comprised of the write off of the Searchlight claims, a loss on the sale of a building and lot and writing down land that was classified as held for sale. The gain in 2015 resulted from finalization of the sale of land in the first quarter of 2015.

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Depreciation expense decreased to $1,068,325 during the nine month period ended September 30, 2015 from $1,136,174 during the nine month period ended September 30, 2014. The decrease was due to certain assets becoming fully depreciated.

Three month period ended September 30, 2015 and 2014. Operating expenses decreased to $1,751,111 during the three month period ended September 30, 2015 from $19,525,152 during the three month period ended September 30, 2014. Operating expenses decreased primarily as a result of writing off the Searchlight Claims in the third quarter of 2014.

Mineral exploration and evaluation expenses increased to $674,637 during the three month period ended September 30, 2015 from $396,409 during the three month period ended September 30, 2014. The increase is attributed to utilizing additional consultants to provide advisory services related to the assay process, estimated resource, extraction processes and possible financing for the Clarkdale Project during the third quarter of 2015.

Mineral exploration and evaluation expenses – related party decreased to $60,000 during the three month period ended September 30, 2015 from $75,983 during the three month period ended September 30, 2014. The decrease is due to NMC providing less consulting services during the three month period ended September 30, 2015.

Administrative – Clarkdale site decreased to $26,682 during the three month period ended September 30, 2015 from $34,080 for the three month period ended September 30, 2014.

General and administrative expenses increased to $590,130 during the three month period ended September 30, 2015 from $504,629 during the three month period ended September 30, 2014. The increase was primarily the result of granting 6,395,714 stock options and warrants to directors, officers, employees and consultants in the third quarter of 2015 which was partially offset by a reduction in legal fees due to a change in contract with our legal counsel from a set monthly retainer to actual charges incurred.

General and administrative – related party amounted to $46,674 and $40,636 for the three month periods ended September 30, 2015 and 2014, respectively. These expenses include accounting support services and rent expense as further discussed below.

Accounting expenses – related party increased to $41,606 during the three month period ended September 30, 2015 from $33,331 for the three month period ended September 30, 2014. These fees do not include any fees for Mr. Williams’ time in directly supervising the support staff. Mr. Williams’ compensation has been provided in the form of salary. The direct benefit to Mr. Williams was $12,066 and $12,999 of the above fees for the three month periods ended September 30, 2015 and 2014, respectively. The increase in fees is attributed to normal workflow fluctuations.

Rent expense– related party was $5,068 and $7,305 during the three month periods ended September 30, 2015 and 2014, respectively. The decrease is due to a reduction in the monthly rent per the rent agreement.

Loss on disposition of assets amounted to zero and $18,095,234 for the three month periods ended September 30, 2015 and 2014, respectively. The amount in 2014 was comprised of the write off of the Searchlight claims, adjustment to the loss on the sale of a building and lot and writing down land that was classified as held for sale. There were no dispositions or assets held for sale during the three month period ended September 30, 2015.

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Depreciation expense decreased to $352,988 during the three month period ended September 30, 2015 from $378,181 during the three month period ended September 30, 2014. The decrease is due to certain assets becoming fully depreciated.

Other Income and Expenses

Nine month periods ended September 30, 2015 and 2014. Total other income (expense) amounted to $345,945 during the nine month period ended September 30, 2015 and $(58,368) during the nine month period ended September 30, 2014. At September 30, 2015, our derivative liabilities had shorter lives resulting in reduced valuations and a larger gain on the change in fair value as compared to September 30, 2014.

Three month periods ended September 30, 2015 and 2014. Total other income (expense) amounted to $80,423 during the three month period ended September 30, 2015 and $(18,654) during the three month period ended September 30, 2014. At September 30, 2015, our derivative liabilities had shorter lives resulting in reduced valuations and a larger gain on the change in fair value as compared to September 30, 2014.

Income Tax (Expense) Benefit

Nine month periods ended September 30, 2015 and 2014. We recognized income tax expense of $20,677,458 for the nine month period ended September 30, 2015 compared to an income tax benefit of $8,747,063 for the nine month period ended September 30, 2014. The change was due to placing a full valuation allowance on deferred tax assets arising from net operating loss carryforwards, property, plant and equipment and stock based compensation in the third quarter of 2015.

Three month periods ended September 30, 2015 and 2014. We recognized income tax expense of $21,795,143 for the three month period ended September 30, 2015 compared to an income tax benefit of $7,440,766 for the month period ended September 30, 2014. The change was due to placing a full valuation allowance on deferred tax assets arising from net operating loss carryforwards, property, plant and equipment and stock based compensation in the third quarter of 2015.

Net Loss

Nine month periods ended September 30, 2015 and 2014. The aforementioned factors resulted in a net loss of $24,877,141, or $0.17 per common share, for the nine month period ended September 30, 2015, as compared to a net loss of $14,177,740, or $0.10 per common share, for the nine month period ended September 30, 2014.

Three month periods ended September 30, 2015 and 2014. The aforementioned factors resulted in a net loss of $23,465,831, or $0.15 per common share, for the three month period ended September 30, 2015, as compared to a net loss of $12,103,040, or $0.09 per common share, for the three month period ended September 30, 2014.

Liquidity and Capital Resources

Historically, we have financed our operations primarily through the sale of common stock and other convertible equity securities.

During the nine month period ended September 30, 2015, we completed the following offerings:

 13

Purchase of Additional Securities

On September 18, 2015, 9 note holders (“Note Holders”) of our secured convertible promissory notes (“Notes”) that were issued pursuant to a Secured Convertible Note Purchase Agreement entered into on September 18, 2013, elected to purchase “Units” of the Company’s securities in consideration of cancellation of amounts owed by the Company to such Note Holders for their September 18, 2015 interest on such Notes (the “September Interest Payment”), at a rate of $0.35 per Unit. Each Unit consists of one share of our common stock and one common stock purchase warrant. Each warrant is exercisable at $0.50 and expires five years after the issuance date. In the aggregate, $114,765 of the $142,415 of interest owed was cancelled in exchange for 327,900 units. Such Note Holders included Luxor Capital Partners, LP and certain of its affiliates, Martin Oring, one of our directors, and our Chief Executive Officer and President, and certain of Mr. Oring’s affiliates.

In connection with the issuance of such Units, we entered a registration rights agreement (the “September Registration Rights Agreement”), dated September 18, 2015, with the Note Holders.

Pursuant to the September Registration Rights Agreement, we have agreed to file a Form S-3 registration statement with the Securities and Exchange Commission (the “SEC”) within 90 calendar days after the Company is permitted under the Securities Act and any SEC guidance to file such registration statement and we will use our commercial best efforts to cause such registration statement to become effective as promptly as possible. The registration statement shall cover the resale of the shares of common stock issued to Note Holders in exchange for the cancellation of the September Interest Payment.

We also have agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions pursuant to Rule 144 of the Securities Act of 1933, as amended, (the “Securities Act”). The Note Holders will also be granted piggyback registration rights with respect to such shares.

Completion of Private Placement

On July 30, 2015, we completed a private placement (the “Offering”) of our securities to certain accredited investors. The securities were issued and sold in reliance on exemptions from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D thereunder.

In the Offering, we sold 2,215,429 “Units” of the Company’s securities at a purchase price of $0.35 per Unit, resulting in aggregate gross proceeds to us of $775,400. We intend to use the net proceeds from the Offering for general working capital purposes.

Each Unit consists of one (1) share of the Company’s common stock, $0.001 par value per share (the “Common Stock”); and one common stock purchase warrant. Each warrant will entitle the warrant holder to purchase one (1) share of the Company’s Common Stock, at an exercise price (the “Warrant Exercise Price”) of $0.50 per share (the “Warrants,” and as exercised, collectively, the “Warrant Shares”). Such Warrants will expire five years from the date of issuance.

In connection with the Offering, we entered into a subscription agreement and a registration rights agreement (the “Registration Rights Agreement”) with each Investor.

Pursuant to the Registration Rights Agreement, we have agreed to file a Form S-3 registration statement with the SEC within 90 calendar days after the Company is permitted under the Securities Act and any SEC guidance to file such registration statement, and we will use our commercial best efforts to cause such registration statement to become effective as promptly as possible. The registration statement shall cover the resale of the shares issued to the Investors in the Offering, as well as any Warrant Shares (assuming that on the date of determination the Warrants are exercised in full).

We also have agreed to file and keep continuously effective such additional registration statements until all of the shares of Common Stock registered thereunder have been sold or may be sold without volume restrictions pursuant to Rule 144 of the Securities Act. The Investors will also be granted piggyback registration rights with respect to such shares.

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Completion of Private Placement

On May 21, 2015, we completed a private placement (the “Offering”) of our securities to five (5) investors (the “Investors”). The securities were issued and sold in reliance on exemptions from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D thereunder.

In the Offering, we sold 2,843,000 “Units” of the Company’s securities at a purchase price of $0.35 per Unit, resulting in aggregate gross proceeds to us of $995,050. We intend to use the net proceeds from the Offering for general working capital purposes.

Each Unit consists of one (1) share of the Company’s common stock, $0.001 par value per share (the “Common Stock”); and one common stock purchase warrant. Each warrant will entitle the warrant holder to purchase one (1) share of the Company’s Common Stock, at an exercise price (the “Warrant Exercise Price”) of $0.50 per share (the “Warrants,” and as exercised, collectively, the “Warrant Shares”). Such Warrants will expire five years from the date of issuance.

In connection with the Offering, we entered into a subscription agreement and a registration rights agreement (the “Registration Rights Agreement”) with each Investor.

Pursuant to the Registration Rights Agreement, we have agreed to file a Form S-3 registration statement with the SEC within 90 calendar days after the Company is permitted under the Securities Act and any SEC guidance to file such registration statement, and we will use our commercial best efforts to cause such registration statement to become effective as promptly as possible. The registration statement shall cover the resale of the shares issued to the Investors in the Offering, as well as any Warrant Shares (assuming that on the date of determination the Warrants are exercised in full).

We also have agreed to file and keep continuously effective such additional registration statements until all of the shares of Common Stock registered thereunder have been sold or may be sold without volume restrictions pursuant to Rule 144 of the Securities Act. The Investors will also be granted piggyback registration rights with respect to such shares.

Purchase of Additional Securities

On March 18, 2015, 13 note holders (“Note Holders”) of our secured convertible promissory notes (“Notes”) that were issued pursuant to a Secured Convertible Note Purchase Agreement entered into on September 18, 2013, elected to purchase shares of our common stock in consideration of cancellation of amounts owed by the Company to such Note Holders for their March 18, 2015 interest on such Notes (the “March Interest Payment”), at a rate of $0.25 per share. In the aggregate, $129,115 of the $142,415 of interest owed was cancelled in exchange for 516,460 shares of the Company’s common stock. Such Note Holders included Luxor, Martin Oring, one of our directors, and our Chief Executive Officer and President, and certain of Mr. Oring’s affiliates.

In connection with the issuance of such shares, we entered a registration rights agreement (the “March Registration Rights Agreement”), dated March 18, 2015, with the Note Holders.

Pursuant to the Registration Rights Agreement, we have agreed to file a Form S-3 registration statement with the SEC within 90 calendar days after the Company is permitted under the Securities Act and any SEC guidance to file such registration statement and we will use our commercial best efforts to cause such registration statement to become effective as promptly as possible. The registration statement shall cover the resale of the shares of common stock issued to Note Holders in exchange for the cancellation of the March Interest Payment.

We also have agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions pursuant to Rule 144 of the Securities Act. The Note Holders will also be granted piggyback registration rights with respect to such shares.

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Completion of Private Placement

On March 25, 2015, we completed a private placement (the “Offering”) of our securities to Luxor Capital Partners, LP (“Luxor”). Luxor and certain of its affiliates (the “Luxor Group”) are principal stockholders of the Company. The securities were issued in reliance on exemptions from registration pursuant to Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder.

In the Offering, we sold Four Million Two Hundred and Fifty Thousand (4,250,000) “Units” of the Company’s securities at a purchase price of $0.3529 per Unit, resulting in aggregate gross proceeds to us of $1,500,000. We intend to use the net proceeds from the Offering for general working capital purposes.

Each Unit consists of one (1) share of the Company’s common stock, $0.001 par value per share (the “Common Stock”); and one common stock purchase warrant. Each warrant will entitle the warrant holder to purchase one (1) share of the Company’s Common Stock, at an exercise price (the “Warrant Exercise Price”) of $0.50 per share (the “Warrants,” and as exercised, collectively, the “Warrant Shares”). Such Warrants will expire five years from the date of issuance.

In connection with the Offering, we entered into a common stock and warrant purchase agreement (the “Purchase Agreement”), and a registration rights agreement (the “Registration Rights Agreement”), each dated March 25, 2015, with Luxor.

The Purchase Agreement contains representations and warranties of the Company and Luxor that are customary for transactions of the type contemplated in connection with the Offering.

Pursuant to the Registration Rights Agreement, we have agreed to file a Form S-3 registration statement with the SEC within 90 calendar days after the Company is permitted under the Securities Act and any SEC guidance to file such registration statement and we will use our commercial best efforts to cause such registration statement to become effective as promptly as possible. The registration statement shall cover the resale of the shares of common stock issued to Luxor in the Offering, as well as any Warrant Shares (assuming that on the date of determination the Warrants are exercised in full). 

We also have agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions pursuant to Rule 144 of the Securities Act. Luxor will also be granted piggyback registration rights with respect to such shares.

In connection with the Offering, our board of directors agreed to waive certain provisions of our Rights Agreement, dated August 24, 2009, with respect to accounts managed by Luxor. In connection with the Rights Agreement, the Board of Directors previously declared a dividend of one common share purchase right for each outstanding share of our common stock. The rights become exercisable, under certain circumstances, in the event that a person or group of affiliated or associated persons has acquired beneficial ownership of 15% or more of the outstanding shares of our common stock (an “acquiring person”). Our Board of Directors has previously waived the 15% limitations currently in the Rights Agreement with respect to Luxor, to allow Luxor to become the beneficial owners of up to 22% of the shares of our common stock, without being deemed to be an “acquiring person” under the Rights Agreement. In connection with the Offering, we have agreed further waive the existing limitations to allow Luxor to become the beneficial owners of up to 26% of the shares of our common stock, without being deemed to be an “acquiring person” under the Rights Agreement. Following the Offering, Luxor is the beneficial owner of approximately 24.43% of our common stock (including giving effect to any warrants or other rights to purchase share of our common stock). The foregoing descriptions of the terms, conditions and restrictions of the Rights Plan, do not purport and are not intended to be complete and are qualified in their entirety by the complete text of the Rights Plan, which is filed as Exhibit 4.1 of the Company’s registration statement on Form 8-A filed on August 25, 2009, and as amended on Form 8-A12G/A on September 24, 2009. A summary of the Rights Plan is set forth in such registration statement.

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During the year ended December 31, 2014, we completed the following private placement offering:

2014 Unit Offering

On December 8, 2014, we closed on the sale of $599,500 of our securities (the “Second Closing”) of a private placement (the “Offering”) to certain investors. The securities were issued in reliance on exemptions from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended and Rule 506 of Regulation D thereunder. We previously sold $1,005,700 of our securities in a first closing to the Offering held on October 24, 2014. As of the Second Closing on December 8, 2014, we completed the Offering. We intend to use the net proceeds from the Offering for general working capital purposes.

In the Second Closing, we sold 2,997,500 “Units,” with each Unit consisting of: one share of the our common stock, $0.001 par value per share (each, a “Share”); and one half of a common stock purchase warrant, where each full warrant (each, a “Warrant”) will entitle the warrant holder to purchase one Share of our common stock at an exercise price of $0.30 per Share. Such Warrants will expire five years from the date of issuance. Such Units were sold to 11 investors for gross proceeds of $599,500. The price of each Unit was $0.20

In the First Closing, we sold 5,028,500 “Units,” with each Unit consisting of: one share of the Company’s common stock, $0.001 par value per share; and one half of a common stock purchase warrant, where each full warrant (each, a “Warrant”) will entitle the warrant holder to purchase one share of the Company’s common stock at an exercise price of $0.30 per share. Such Warrants will expire five years from the date of issuance. The price of each Unit (including the value used to determine the cancellation of debt) was $0.20.

Of the 5,028,500 Units, 4,395,000 were sold to 16 investors for gross proceeds of $879,000. In addition, 633,500 Units were issued to 13 Note Holders in consideration of cancellation of an aggregate of $126,700 in debt owing by the Company to such Note Holders for interest payments due on the Notes as of September 18, 2014. Such Note Holders include Luxor Capital Group, LP and certain of its associates and affiliates (collectively, “Luxor”), who received $91,000 worth of Units in the First Closing in consideration of cancellation of the September 18, 2014 interest payment owed to them on their Notes. Luxor and certain other funds managed by Luxor are principal stockholders of the Company and Michael Conboy, one of our directors, currently serves as Luxor’s Director of Research. Following the First Closing, Luxor is the beneficial owner of approximately 19.93% of our common stock (including giving effect to derivative securities or other rights to purchase or acquire shares of our common stock).

Altogether, out of the 16 total Note Holders, 13 Note Holders (including Luxor), participated in the First Closing. In addition to Luxor, affiliates of Martin Oring, one of our directors, and our Chief Executive Officer and President, purchased $100,000 of Units for cash and received an additional $8,225 worth of Units in consideration of the cancellation of the September 18, 2014 interest payment owed on Notes held by such affiliates. The three remaining Note Holders elected to receive their September 18, 2014 interest payment in cash, for an aggregate amount of $13,300.

In addition to the Offering, between September 10, 2014 and September 18, 2014, five Note Holders exercised their option as set forth in the September 18, 2013 Secured Convertible Note Purchase Agreement to purchase $69,000 of additional Notes. Mr. Oring and certain affiliates of Mr. Oring purchased $35,250 of such Notes.

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Working Capital Deficit

The following is a summary of our working capital deficit at September 30, 2015 and December 31, 2014:

	September 30, 2015			December 31, 2014			Percent Increase/(Decrease)
Current Assets	$	1,326,731		$	887,690			49.5	%
Current Liabilities		(5,614,044	)		(1,235,042	)		354.6	%
Working Capital Deficit	$	(4,287,313	)	$	(347,352	)		1134.3	%

The increase in our working capital deficit was primarily attributable to reclassification of $3,263,853 of convertible notes (net of discount) and the related derivative liability of $465,359 to current liabilities in the first quarter of 2015 as the convertible notes can be called within one year of the balance sheet date. Additionally, to address liquidity constraints, we have elected to defer payment on obligations due to related party service providers and debt holders resulting in an increase in current liabilities. Unrestricted cash was $1,230,358 as of September 30, 2015, as compared to $584,976 as of December 31, 2014.

Cash Flows

The following is a summary of our sources and uses of cash for the periods set forth below:

	Nine Months Ended September 30,
	2015			2014			Percent Increase/(Decrease)
Cash Flows Used in Operating Activities	$	(3,055,659	)	$	(2,420,486	)		26.2	%
Cash Flows Provided by Investing Activities		452,762			181,737			149.1	%
Cash Flows Provided by Financing Activities		3,248,279			524,000			519.9	%
Net Change in Cash During Period	$	645,382		$	(1,714,749	)		(137.6	)%

Net Cash Used in Operating Activities. Net cash used in operating activities increased to $3,055,659 during the nine month period ended September 30, 2015 from $2,420,486 during the nine month period ended September 30, 2014. The increase was due to reclassification of $227,345 to restricted cash which consisted of funds designated for debt collateral and to increased payments to our metallurgical consultants due to an expansion of our technical program.

Net Cash Provided by Investing Activities. Net cash provided by investing activities was $452,762 during the nine month period ended September 30, 2015, as compared to $181,737 during the nine month period ended September 30, 2014. The increase is due to additional proceeds received from asset sales and to less equipment purchased in 2015.

Net Cash Provided by Financing Activities. Net cash provided by financing activities was $3,248,279 during the nine month period ended September 30, 2015, as compared to $524,000 during the nine month period ended September 30, 2014. The increase was due to additional funds received from private placement offerings completed and to continued deferral of payments on certain long term debt in 2015.

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We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation. Our ability to achieve and maintain profitability and positive cash flow will be dependent upon, among other things:

· our ability to locate a profitable mineral property;

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

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

· our ability to generate revenues.

We may not generate sufficient revenues from our proposed business plan in the future to achieve profitable operations. As of September 30, 2015, we had an accumulated deficit of $80,282,950. As of September 30, 2015, we had a working capital deficit of $4,287,313, compared to a working capital deficit of $347,352 as of December 31, 2014. If we are not able to achieve profitable operations at some point in the future, we eventually will have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion plans. In addition, our losses may increase in the future as we expand our business plan. These losses, among other things, have had and will continue to have an adverse effect on our working capital, total assets and stockholders’ equity. If we are unable to achieve profitability, the market value of our common stock will decline and there would be a material adverse effect on our financial condition.

Our exploration and evaluation plan calls for significant expenses in connection with the Clarkdale Slag Project. For the next twelve months, our management anticipates that the minimum cash requirements for funding our proposed testing and feasibility programs and our continued operations will be approximately $7,300,000. As of October 31, 2015, we had operating cash reserves in the amount of approximately $1,012,000. Our current financial resources are not sufficient to allow us to meet the anticipated costs of our testing and feasibility programs and operating overhead during the next twelve months and we will require additional financing in order to fund these activities. As of September 30, 2015, our financial statements and this report do not include any adjustments relating to the recoverability of assets and the amount or classification of liabilities that might be necessary should we be unable to continue as a going concern.

A decision on allocating additional funds for the Clarkdale Slag Project will be forthcoming if and once the feasibility study is completed and analyzed. The Clarkdale Slag Project work program is expected to include the preparation of a bankable feasibility study, engineering and design of the full-scale production facility and planning for the construction of an Industrial Collector Road pursuant to an agreement with the Town of Clarkdale, Arizona. We estimate that our monthly expenses will increase substantially once the feasibility study is analyzed and we may require the necessary funding to fulfill this anticipated work program.

If the actual costs are significantly greater than anticipated, if we proceed with our exploration, testing and construction activities beyond what we currently have planned, or if we experience unforeseen delays during our activities in 2015, we will need to obtain additional financing. There are no assurances that we will be able to obtain additional financing in an amount sufficient to meet our needs or on terms that are acceptable to us.

 19

Obtaining additional financing is subject to a number of factors, including the market prices for base and precious metals. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. If adequate funds are not available or if they are not available on acceptable terms, our ability to fund our business plan could be significantly limited and we may be required to suspend our business operations. We cannot assure you that additional financing will be available on terms favorable to us, or at all. The failure to obtain such a financing would have a material, adverse effect on our business, results of operations and financial condition.

If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of current stockholders will be reduced and these securities may have rights and preferences superior to that of current stockholders. If we raise capital through debt financing, we may be forced to accept restrictions affecting our liquidity, including restrictions on our ability to incur additional indebtedness or pay dividends.

For these reasons, our financial statements filed herewith include a statement that these factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern will be dependent on our raising of additional capital and the success of our business plan.

Off-Balance Sheet Arrangements

None.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by us as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on our consolidated financial statements upon adoption.

In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. We are currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In November 2014, the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The ASU clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. The ASU is effective for fiscal years and interim periods beginning after December 15, 2015. We are currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

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In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We had unrestricted cash totaling $1,230,358 at September 30, 2015 and $584,976 at December 31, 2014. Our cash is held primarily in an interest bearing bank account, a savings account and non-interest bearing checking accounts and is not materially affected by fluctuations in interest rates. The unrestricted cash is held for working capital purposes. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of these cash holdings, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. Declines in interest rates, however, would reduce future interest income.

Item 4. Controls and Procedures

Controls and Procedures

As of September 30, 2015, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our “disclosure controls and procedures,” as such term is defined under Exchange Act Rules 13a-15(e) and 15d-15(e).

Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of September 30, 2015, such disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the quarter ended September 30, 2015 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and provides for potential losses on such litigation if the amount of the loss is determinable and the loss is probable.

We believe that there are no material litigation matters against us at the current time.

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, which to our knowledge have not materially changed. Those risks, which could materially affect our business, financial condition or future results, are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K for the quarter ended September 30, 2015 is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Item 5. Other Information

None.

Item 6. Exhibits

 EXHIBIT TABLE

The following is a complete list of exhibits filed as part of the Quarterly Report on Form 10-Q, some of which are incorporated herein by reference from the reports, registration statements and other filings of the issuer with the Securities and Exchange Commission, as referenced below:

Reference Number	Item
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
95.1	Mine Safety Disclosures

101	101.INS	XBRL Instance
	101.SCH	XBRL Taxonomy Extension Schema
	101.CAL	XBRL Taxonomy Extension Calculation
	101.LAB	XBRL Taxonomy Extension Labels
	101.PRE	XBRL Taxonomy Extension Presentation
	101.DEF	XBRL Taxonomy Extension Definition

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SEARCHLIGHT MINERALS CORP.
	a Nevada corporation
Date: November 23, 2015	By:	/s/ Martin B. Oring
		Martin B. Oring
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: November 23, 2015	By:	/s/ Melvin L. Williams
		Melvin L. Williams
		Chief Financial Officer
		(Principal Accounting Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Martin B. Oring, hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q of Searchlight Minerals Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	SEARCHLIGHT MINERALS CORP.
Date:  November 23, 2015			By:	/s/ Martin B. Oring
		Martin B. Oring
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Melvin L. Williams, hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q of Searchlight Minerals Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	SEARCHLIGHT MINERALS CORP.
Date:  November 23, 2015			By:	/s/ MELVIN L. WILLIAMS
		Melvin L. Williams
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Searchlight Minerals Corp. (the “Company”) for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Martin B. Oring, as Chief Executive Officer of the Company, and Melvin L. Williams, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	SEARCHLIGHT MINERALS CORP.
Date: November 23, 2015			By:	/s/ Martin B. Oring
		Martin B. Oring
		Chief Executive Officer
Date:  November 23, 2015			By:	/s/ MELVIN L. WILLIAMS
		Melvin L. Williams
		Chief Financial Officer

EX-95.1

EXHIBIT 95.1

MINE SAFETY DISCLOSURE

Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K require certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate coal or other mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). The following disclosures are provided pursuant to the Act and Item 104 of Regulation S-K; provided, however, that such disclosure is not intended as an admission by us that we are subject to the provisions of the Mine Act and, provided, further, that we reserve the right to challenge the applicability of the Mine Act and the jurisdiction of the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”) with respect to our activities. The following disclosures are reported for the quarter ended September 30, 2015 for us and our subsidiaries.

Project

Section 104 S&S Citations (#) (1)

Section 104(b) Orders (#) (2)

Section 104(d) Citations and Orders (#) (3)

Section 110(b)(2) Violations (#) (4)

Section 107(a) Orders (#) (5)

Total Dollar  Value of MSHA Assessments Proposed ($)

Total Number of Mining Related Fatalities (#)

Received Notice of Pattern of Violations Under Section 104(e) (yes/no) (6)

Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no)

Legal Actions Pending as of Last Day of Period (#) (7)

Legal Actions Initiated During Period (#) (7)

Legal Actions Resolved During Period (#) (7)

Clarkdale Slag Project

0

0

0

0

0

0

0

No

No

0

0

0

(1) Mine Act section 104(a) citations are for alleged violations of mandatory health or safety standards, rules, orders or regulations.

(2) Mine Act section 104(b) orders are for alleged failures to totally abate a citation within the period of time specified in the citation.

(3) Mine Act section 104(d) citations and orders are for alleged violations of mandatory health or safety standards where such violation is caused by an unwarrantable failure on the part of the operator to comply with such standards.

(4) Mine Act section 110(b)(2) violations are for “flagrant” violations of mandatory health or safety standards, i.e. a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory safety or health standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.

(5) Mine Act section 107(a) orders are for alleged conditions or practices which could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated and result in orders of immediate withdrawal from the area of the mine affected by the condition.

(6) Mine Act section 104(e) violations and notices are for when an operator is alleged to have a pattern or potential to have a pattern of violations of mandatory health or safety standards.

(7) Legal actions before the Federal Mine Safety and Health Review Commission involving a coal or other mine owned and operated by us or our subsidiaries.

XML

RESTRICTED CASH (Additional Information) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash and Cash Equivalents	$ 227,345	$ 0

XML

DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Additional Information) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) $ / shares
Derivative Instruments, Gain (Loss) [Line Items]
Debt Instrument, Convertible, Conversion Price	$ 0.39
Percentage Of Principal Balance Payable Upon Change Of Control	120.00%
Private Placement [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Proceeds from Issuance of Long-term Debt, Total | $	$ 4,069,000

XML

DERIVATIVE WARRANT LIABILITY (Schedule of Fair Value of Warrants) (Details)		1 Months Ended		9 Months Ended
	Nov. 11, 2014	Oct. 25, 2013	Nov. 01, 2012	Sep. 30, 2015
Derivative [Line Items]
Expected life (years)				2 years
Warrant [Member]
Derivative [Line Items]
Risk-free interest rate	0.14%	0.11%	0.19%
Expected volatility	142.72%	114.79%	94.94%
Expected life (years)	1 year	1 year	1 year

XML

DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Schedule of Other significant estimates) (Details)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Derivative Instruments, Gain (Loss) [Line Items]
Expected life (years)	2 years
Maximum [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Expected volatility	105.61%	107.84%
Risk-free interest rate	1.13%	1.73%
Expected life (years)		3 years
Minimum [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Expected volatility	101.46%	96.46%
Risk-free interest rate	0.92%	1.25%
Expected life (years)		2 years 6 months

XML

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Accounts Payable And Accrued Liabilities [Line Items]
Trade accounts payable	$ 583,058	$ 728,021
Accrued compensation and related taxes	347,247	88,293
Accrued interest	46,128	81,637
Accounts payable and accrued liabilities	$ 976,433	$ 897,951

XML

VRIC PAYABLE - RELATED PARTY (Tables)

9 Months Ended

Sep. 30, 2015

Other Liabilities Disclosure [Abstract]

Schedule of Future Principal Payments on VRIC Payable

The following table represents future minimum payments on the VRIC payable for each of the twelve month periods ending September 30:

2016	$	630,000
2017		131,195
Thereafter		-
Total minimum payments		761,195
Less: amount representing interest		(63,051)
Present value of minimum payments		698,144
VRIC payable, current portion		569,288
VRIC payable, net of current portion	$	128,856

XML

RELATED PARTY TRANSACTIONS (Company and CMOW) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Cupit Milligan Ogden Williams Certified Public Accountants [Member]
Related Party Transaction [Line Items]
Fee and expenses incurred to related party	$ 41,606	$ 33,331	$ 137,211	$ 105,133
Chief Financial Officer [Member]
Related Party Transaction [Line Items]
Fee and expenses incurred to related party	$ 12,066	$ 12,999	$ 39,791	$ 41,002

XML

VRIC PAYABLE - RELATED PARTY (Additional Information) (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 15, 2007	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 18, 2014
Recorded Unconditional Purchase Obligation [Line Items]
Additional Paid in Capital						$ 255,000
Clarkdale Slag Project [Member]
Recorded Unconditional Purchase Obligation [Line Items]
Capitalized Interest Costs, Including Allowance for Funds Used During Construction, Total		$ 10,342	$ 16,753	$ 35,710	$ 54,566
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member]
Recorded Unconditional Purchase Obligation [Line Items]
Monthly payments	$ 30,000			$ 30,000
Effective interest rate used for present value of monthly payment		8.00%		8.00%
Purchase of assets, Present value of monthly payment commitment		$ 2,501,187		$ 2,501,187
Purchase of assets, imputed interest on the monthly payment commitment		$ 1,128,813		$ 1,128,813
Expected term used for present value of monthly payment				10 years

XML

RELATED PARTY TRANSACTIONS (Additional Information) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 18, 2015	Dec. 31, 2014	Dec. 18, 2014
Related Party Transaction [Line Items]
Operating Leases, Rent Expense, Sublease Rentals	$ 5,068	$ 7,305	$ 15,070	$ 24,219
Additional Paid in Capital							$ 255,000
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 0.50
Financial Consulting Services [Member]
Related Party Transaction [Line Items]
Class Of Warrant Or Right Grants In Period	2,063,143
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.50		$ 0.50
Warrants and Rights Outstanding	$ 70,112		$ 70,112
Warrants Expiration Period	5 years
Nanominerals Corporation [Member]
Related Party Transaction [Line Items]
Fee and expenses incurred to related party			15,000
Additional Paid in Capital		50,000		50,000
Due to Related Parties, Current	$ 193,725		$ 193,725			$ 13,365
Nanominerals Corporation [Member] | Clarkdale Slag Project [Member]
Related Party Transaction [Line Items]
Royalty payment percentage			2.50%
Cupit Milligan Ogden Williams Certified Public Accountants [Member]
Related Party Transaction [Line Items]
Fee and expenses incurred to related party	41,606	$ 33,331	$ 137,211	$ 105,133
Outstanding balance due to related party	$ 145,386		$ 145,386			$ 8,174

XML

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

20. SUBSEQUENT EVENT

Warrant extension - On November 12, 2015, the Company approved an amendment to the expiration dates of certain outstanding warrants to purchase up to an aggregate of 16,189,414 shares of the Company’s common stock. Prior to the amendment, these warrants were set to expire on November 12, 2015. After the amendment, these warrants are set to expire on November 30, 2016. The terms and conditions of these warrants remain the same in all other respects. These warrants were originally issued in connection with the Company’s February 23, 2007, March 22, 2007, December 26, 2007, February 7, 2008 and November 12, 2009 private placements. The Company calculated the fair value of the warrants using the Binomial Lattice model with the following assumptions, outputs and results:

Risk-free interest rate	0.47%
Expected volatility	88.50%
Expected life	1 year
Fair value	$ -

XML

DERIVATIVE WARRANT LIABILITY (Assumptions Used to Estimates Fair Value of Derivative Liabilities) (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Derivative [Line Items]
Dividend yield	0.00%	0.00%
Minimum [Member]
Derivative [Line Items]
Expected volatility	30.46%	29.38%
Risk-free interest rate	0.00%	0.02%
Expected life (years)	1 month 6 days	1 month 6 days
Maximum [Member]
Derivative [Line Items]
Expected volatility	65.70%	153.76%
Risk-free interest rate	0.14%	0.26%
Expected life (years)	7 months 6 days	1 year

XML

CLARKDALE SLAG PROJECT (Additional Information) (Details) - USD ($)	1 Months Ended	9 Months Ended
	Feb. 15, 2007	Sep. 30, 2015	Dec. 31, 2014	Jul. 25, 2011	Dec. 31, 2010	May. 20, 2005
Noncash or Part Noncash Acquisitions [Line Items]
Accumulated Capitalized Interest Costs		$ 1,098,488	$ 1,062,778
Purchase of assets, purchase price		130,292,777
Land Smelter Site And Slag Pile [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Allocation of acquisition cost		5,916,150
Land [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Allocation of acquisition cost		3,300,000
Building and Building Improvements [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Allocation of acquisition cost		309,750
Nanominerals Corporation [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Advance royalty payment amount				$ 15,000	$ 660,000
Clarkdale Slag Project [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Purchase of assets, ownership interest acquired	100.00%
Allocation of acquisition cost	$ 120,766,877
Purchase of assets, purchase price		$ 130,292,777
Clarkdale Slag Project [Member] | Land Smelter Site And Slag Pile [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Allocation of acquisition cost	5,916,150
Clarkdale Slag Project [Member] | Land [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Allocation of acquisition cost	3,300,000
Clarkdale Slag Project [Member] | Building and Building Improvements [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Allocation of acquisition cost	$ 309,750
Clarkdale Slag Project [Member] | Nanominerals Corporation [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Joint venture ownership interest	50.00%					50.00%
Additional contingent payment					$ 1,320,000
Royalty payment percentage		2.50%
Clarkdale Slag Project [Member] | Nanominerals Corporation [Member] | Scenario, Previously Reported [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Joint venture ownership interest	50.00%	50.00%
Royalty payment percentage		5.00%
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Common stock issued	16,825,000
Shares Issued, Price Per Share	$ 3.975
Monthly payments, current portion	$ 30,000	$ 30,000
Monthly payment Period	90 days
Additional contingent payment	$ 6,400,000
Advance royalty payment amount	$ 500,000
Royalty payment percentage	2.50%
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Minimum [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Advance royalty payment amount	$ 500,000
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Royalty Payments [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Monthly payments, current portion	30,000
Additional contingent payment	500,000
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Cash Flow [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Additional contingent payment	3,500,000
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | On Execution Of Letter Agreement [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Monthly payments, current portion	200,000
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | On Closing Date [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Monthly payments, current portion	$ 9,900,000
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Scenario, Previously Reported [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Joint venture ownership interest	50.00%
Royalty payment percentage	5.00%
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Nanominerals Corporation [Member]
Noncash or Part Noncash Acquisitions [Line Items]
Royalty payment percentage	2.50%	2.50%

XML

SUBSEQUENT EVENT (fair value of the warrants) (Details) - USD ($)		9 Months Ended
	Nov. 12, 2015	Sep. 30, 2015
Subsequent Event [Line Items]
Fair Value Assumptions, Expected Term		2 years
Subsequent Event [Member]
Subsequent Event [Line Items]
Fair Value Assumptions, Risk Free Interest Rate	0.47%
Fair Value Assumptions, Expected Volatility Rate	88.50%
Fair Value Assumptions, Expected Term	1 year
Fair Value Adjustment of Warrants	$ 0

XML

SUBSEQUENT EVENT (Tables)

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Fair value of the Warrants

The Company calculated the fair value of the warrants using the Binomial Lattice model with the following assumptions, outputs and results:

Risk-free interest rate	0.47%
Expected volatility	88.50%
Expected life	1 year
Fair value	$ -

XML

CONVERTIBLE NOTES (Schedule of Carrying value of the Convertible debt) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Sep. 10, 2014
Debt Conversion [Line Items]
Convertible notes at face value	$ 4,069,000	$ 4,000,000
Issuance of additional notes	0	69,000	$ 69,000
Unamortized discount	(805,147)	(981,620)
Convertible notes, net of discount	$ 3,263,853	$ 3,087,380

XML

GAIN ON SETTLEMENT (Additional Information) (Details) - USD ($)	6 Months Ended	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2014
General And Administrative Expense Disclosure [Line Items]
Other General and Administrative Expense	$ 378,136	$ (378,136)	$ 0

XML

STOCK-BASED COMPENSATION (Additional Information) (Details) - USD ($)		1 Months Ended					3 Months Ended				9 Months Ended
	Jan. 13, 2014	Aug. 28, 2015	Jun. 30, 2015	Mar. 23, 2015	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Mar. 31, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares available for issuance for stock option awards							5,425,576				5,425,576
Expenses related to vesting and granting of stock-based compensation awards							$ 177,725		$ 11,300		$ 228,732	$ 62,947
Stock option granted, weighted average exercise price											$ 0.49
Stock option outstanding							23,909,854				23,909,854		17,387,745
Unrecognized compensation cost related to unvested stock-based compensation awards							$ 262,468				$ 262,468
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value							$ 27,708		$ 27,708		$ 27,708	$ 102,439
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Ending Balance							4,104,000				4,104,000		350,000
Weighted Average Period For Recognized Costs											2 months 23 days
Weighted Average Period For Recognized Expenses											3 months
Non Employee Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted, shares		3,804,000		659,890
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee											18,000
Value of common stock per quarter directors can choice to receive											$ 9,000
Stock option granted, weighted average exercise price		$ 0.50		$ 0.83
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost				$ 31,544
Consultant Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted, shares	200,000
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost	$ 5,011
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Ending Balance							250,000				250,000
Warrant [Member] | Consultant Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted, shares		2,591,714
Stock option granted, weighted average exercise price		$ 0.50
Stock Option Plan 2007 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares available for issuance for stock option awards							1,047,953				1,047,953
Stock option plan, maximum options to purchase shares of common stock that may be granted							4,000,000				4,000,000
Stock option granted, shares											2,952,047
Stock option granted, weighted average exercise price											$ 0.61
Stock option outstanding							2,763,618				2,763,618
Stock Option Plan 2007 [Member] | Minimum [Member] | Nonqualified Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option plan, exercise price as a percentage of fair market value											85.00%
Stock Option Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares available for issuance for stock option awards							3,812,500				3,812,500
Stock option plan, maximum options to purchase shares of common stock that may be granted							7,250,000				7,250,000
Stock option granted, shares											3,437,500
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee											500,000
Stock option granted, weighted average exercise price											$ 0.68
Stock option outstanding							3,397,500				3,397,500
Stock Option Plan 2009 [Member] | Non-Management Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted, shares			54,000		54,000			54,000		54,000		54,000
Stock option, expiration date			Jun. 30, 2020					Mar. 31, 2020		Mar. 31, 2019		Jun. 30, 2019
Stock option granted, weighted average exercise price			$ 0.25		$ 0.22	$ 0.24		$ 0.33		$ 0.26
Stock Option Plan 2009 [Member] | Directors Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares available for issuance for stock option awards							565,123				565,123
Stock option plan, maximum options to purchase shares of common stock that may be granted							2,750,000				2,750,000
Stock option granted, shares											2,184,877
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee											250,000
Stock option granted, weighted average exercise price											$ 0.70
Stock option outstanding							2,138,022				2,138,022
Stock Option Plan 2009 [Member] | Directors Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option plan, exercise price as a percentage of fair market value											100.00%
Stock Option Plan 2009 [Member] | For grantees who own more than 10% of the Company's common stock on the grant date [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option plan, exercise price as a percentage of fair market value											110.00%
Out of Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option granted, weighted average exercise price											$ 0.48
Stock option outstanding							15,610,714				15,610,714

XML

DERIVATIVE WARRANT LIABILITY (Additional Information) (Details)		1 Months Ended	9 Months Ended
	Nov. 12, 2009 $ / shares shares	Nov. 30, 2009	Sep. 30, 2015 $ / shares shares	Sep. 18, 2015 $ / shares	Jul. 30, 2015 $ / shares	May. 21, 2015 $ / shares	Dec. 31, 2014	Jun. 07, 2012 $ / shares shares
Derivative [Line Items]
Exercise price of warrant				$ 0.50
Private Placement [Member]
Derivative [Line Items]
Exercise price of warrant	$ 1.85				$ 0.50	$ 0.50
Warrants expiration date	Nov. 12, 2012	Nov. 01, 2012
Warrants issued | shares			993,332
Warrant [Member]
Derivative [Line Items]
Warrants expiration date			Nov. 12, 2015
Derivative Liability, Number of Instruments Held			9,147,029				8,153,697
Warrant [Member] | Maximum [Member]
Derivative [Line Items]
Exercise price of warrant			$ 1.85
Warrant [Member] | Minimum [Member]
Derivative [Line Items]
Exercise price of warrant			$ 1.27
Luxor Capital Partners LP [Member] | Private Placement [Member]
Derivative [Line Items]
Total number of warrants that anti dilution rights were waived on | shares								4,252,883
Exercise price of warrant								$ 1.29
Stock Issuance Costs [Member] | Private Placement [Member]
Derivative [Line Items]
Shares of common stock that can be purchased by the warrants | shares	6,341,263
Scenario Cumulative Adjustment [Member] | Private Placement [Member]
Derivative [Line Items]
Shares of common stock that can be purchased by the warrants | shares			2,805,766

XML

CLARKDALE SLAG PROJECT

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

CLARKDALE SLAG PROJECT

4. CLARKDALE SLAG PROJECT

On February 15, 2007, the Company completed a merger with Transylvania International, Inc. (“TI”) which provided the Company with 100% ownership of the Clarkdale Slag Project in Clarkdale, Arizona, through its wholly owned subsidiary CML. This acquisition superseded the joint venture option agreement to acquire a 50% ownership interest as a joint venture partner pursuant to Nanominerals Corp. (“NMC”) interest in a joint venture agreement (“JV Agreement”) dated May 20, 2005 between NMC and VRIC. One of the Company’s former directors was an affiliate of VRIC. The former director joined the Company’s board subsequent to the acquisition.

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

The Company believes 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 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 Emerging Issues Task Force (“EITF”) 98-03 (which has been superseded by ASC 805-10-25-1) 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 ASC 805-10-55-4, and the Company recorded the acquisition as a purchase of assets.

The $130.3 million purchase price was comprised of a combination of the cash paid, the deferred tax liability assumed in connection with the acquisition, and the fair value of our common shares issued, based on the closing market price of our common stock, using the average of the high and low prices of our common stock on the closing date of the acquisition. The Clarkdale Slag Project is without known reserves and the project is exploratory in nature in accordance with Industry Guides promulgated by the Commission, Guide 7 paragraph (a)(4)(i). As required by ASC 930-805-30, Mining – Business Combinations – Initial Recognition, and ASC 740-10-25-49-55, Income Taxes – Overall – Recognition – Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, the Company then allocated the purchase price among the assets as follows (and also further described in this Note 4 to the financial statements): $5,916,150 of the purchase price was allocated to the slag pile site, $3,300,000 to the remaining land acquired, and $309,750 to income property and improvements. The remaining $120,766,877 of the purchase price was allocated to the Clarkdale Slag Project, which has been capitalized as a tangible asset in accordance with ASC 805-20-55-37, Use Rights. Upon commencement of commercial production, the asset will be amortized using the unit-of-production method over the life of 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:

a) The Company paid $200,000 in cash to VRIC on the execution of a letter agreement;

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

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

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

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

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

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

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

g) The Company has agreed to pay VRIC an additional amount of $3,500,000 from the net cash flow of the Clarkdale Slag Project. The Company has accounted for this as a contingent payment and upon meeting the contingency requirements, the purchase price of the Clarkdale Slag Project will be adjusted to reflect the additional consideration.

Under the original JV Agreement, the Company agreed to pay NMC a 5% royalty on NSR payable from the Company’s 50% joint venture interest in the production from the Clarkdale Slag Project. Upon the assignment to the Company of VRIC’s 50% interest in the Joint Venture Agreement in connection with the reorganization with TI, the Company continues to have an obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project. On July 25, 2011, the Company agreed to pay NMC an advance royalty payment of $15,000 per month effective January 1, 2011. The advance royalty payment is more fully discussed in Note 16.

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

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

The following table reflects the components of the Clarkdale Slag Project:

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

The Company agreed to continue to pay VRIC $30,000 per month until the earlier of the Project Funding Date or the tenth anniversary of the date of the execution of the letter agreement. As of September 30, 2015 and December 31, 2014, the cumulative interest cost capitalized and included in the Slag Project was $1,098,488 and $1,062,778 respectively.

The following table sets forth the change in the Slag Project for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,		December 31,
	2015		2014
Slag Pile, beginning balance	$	121,829,655	$	121,759,811
Capitalized interest costs		35,710		69,844
Slag Pile, ending balance	$	121,865,365	$	121,829,655

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STOCK-BASED COMPENSATION (Assumptions Used to Estimate Fair Value of Stock-Based Compensation Awards) (Details)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.24%	0.39%
Expected volatility	91.23%	98.65%
Expected life (years)	3 months 18 days	2 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.75%	1.73%
Expected volatility	110.32%	105.87%
Expected life (years)	4 years 9 months	4 years 3 months

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CLARKDALE SLAG PROJECT (Purchase Consideration for Clarkdale Slag Project) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Purchase price:
Total	$ 130,292,777
Clarkdale Slag Project [Member]
Purchase price:
Cash payments	10,100,000
Joint venture option acquired in 2005 for cash	690,000
Warrants issued for joint venture option	1,918,481
Common stock issued	66,879,375
Acquisition costs	127,000
Total purchase price	82,216,043
Net deferred income tax liability assumed - Clarkdale Slag Project	48,076,734
Total	130,292,777
Clarkdale Slag Project [Member] | Current Liabilities [Member]
Purchase price:
Monthly payments, current portion	167,827
Clarkdale Slag Project [Member] | Noncurrent Liabilities [Member]
Purchase price:
Monthly payments, net of current portion	$ 2,333,360

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2015

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract]

Schedule of Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at September 30, 2015 and December 31, 2014 consisted of the following:

	September 30, 2015		December 31, 2014
Trade accounts payable	$	583,058	$	728,021
Accrued compensation and related taxes		347,247		88,293
Accrued interest		46,128		81,637
	$	976,433	$	897,951

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CLARKDALE SLAG PROJECT (Tables)

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Schedule of Clarkdale Slag Project

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

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

The following table reflects the components of the Clarkdale Slag Project:

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

The Company agreed to continue to pay VRIC $30,000 per month until the earlier of the Project Funding Date or the tenth anniversary of the date of the execution of the letter agreement. As of September 30, 2015 and December 31, 2014, the cumulative interest cost capitalized and included in the Slag Project was $1,098,488 and $1,062,778 respectively.

The following table sets forth the change in the Slag Project for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,		December 31,
	2015		2014
Slag Pile, beginning balance	$	121,829,655	$	121,759,811
Capitalized interest costs		35,710		69,844
Slag Pile, ending balance	$	121,865,365	$	121,829,655

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DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Schedule of fair value of the derivative liability) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Derivative Liability And Convertible Debt [Line Items]
Beginning balance	$ 1,218,619
Ending balance	0	$ 1,218,619
Convertible Notes Payable [Member]
Derivative Liability And Convertible Debt [Line Items]
Beginning balance	1,218,619	755,709
Issuance of convertible debt	0	9,519
Change in fair value	(753,260)	453,391
Ending balance	$ 465,359	$ 1,218,619

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CLARKDALE SLAG PROJECT (Components of Clarkdale Slag Project) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Purchase price:
Total	$ 130,292,777
Land - smelter site and slag pile [Member]
Purchase price:
Allocation of acquisition cost	5,916,150
Land [Member]
Purchase price:
Allocation of acquisition cost	3,300,000
Building and Building Improvements [Member]
Purchase price:
Allocation of acquisition cost	309,750
Clarkdale Slag Project [Member]
Purchase price:
Allocation of acquisition cost	$ 120,766,877

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DERIVATIVE WARRANT LIABILITY (Tables)

9 Months Ended

Sep. 30, 2015

Derivative [Line Items]

Schedule Of Fair Value Assumptions Warrants

With respect to the extensions, the Company did not recognize any additional expense as the fair values of the warrants were calculated at zero using the Binomial Lattice model with the following assumptions:

	November 11,	October 25,	November 1,
	2014	2013	2012
Risk-free interest rate	0.14%	0.11%	0.19%
Expected volatility	142.72%	114.79%	94.94%
Expected life (years)	1.0	1.0	1.0

Schedule of Assumptions used to Establish Valuation of Warrants

The Company estimates the fair value of the derivative liabilities by using the Binomial Lattice pricing-model, with the following assumptions used for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,	December 31,
	2015	2014
Dividend yield	-	-
Expected volatility	30.46% - 65.70%	29.38% - 153.76%
Risk-free interest rate	0.00% - 0.14%	0.02% - 0.26%
Expected life (years)	0.10 - 0.60	0.10 – 1.0

Warrant [Member]

Derivative [Line Items]

Schedule of Changes in Fair Value of Derivative Liabilities

The following table sets forth the changes in the fair value of derivative liability for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,		December 31,
	2015		2014
Beginning balance	$	-	$	(81,574)
Adjustment to warrants		-		-
Change in fair value		-		81,574
Ending balance	$	-	$	-

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CONVERTIBLE NOTES (Tables)

9 Months Ended

Sep. 30, 2015

Convertible Debt [Abstract]

Convertible Debt

The carrying value of the convertible debt, net of discount was comprised of the following:

	September 30,		December 31,
	2015		2014
Convertible notes at face value	$	4,069,000	$	4,000,000
Issuance of additional notes		-		69,000
Unamortized discount		(805,147)		(981,620)
Convertible notes, net of discount	$	3,263,853	$	3,087,380

Schedule Of Notes Payable

The effective interest rate on the Notes is 15.4% which included the following for the nine month periods ended:

	September 30,		September 30,
	2015		2014
Interest rate at 7%	$	213,612	$	209,798
Amortization of debt discount		176,473		163,244
Amortization of deferred financing fees		18,327		16,953
Total interest expense on convertible notes	$	408,412	$	389,995

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2015

PROPERTY AND EQUIPMENT [Abstract]

PROPERTY AND EQUIPMENT

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	September 30, 2015						December 31, 2014
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Depreciation		Value		Cost		Depreciation		Value
Furniture and fixtures	$	38,255	$	(37,868)	$	387	$	38,255	$	(37,476)	$	779
Lab equipment		249,061		(249,061)		-		249,061		(247,356)		1,705
Computers and equipment		71,407		(59,926)		11,481		68,558		(54,025)		14,533
Vehicles		47,675		(45,983)		1,692		47,675		(45,458)		2,217
Slag conveyance equipment		300,916		(300,916)		-		300,916		(300,916)		-
Demo module building		6,630,063		(4,361,115)		2,268,948		6,630,063		(3,863,860)		2,766,203
Grinding circuit		913,679		(19,167)		894,512		913,679		(11,667)		902,012
Extraction circuit		938,352		(415,750)		522,602		938,352		(274,997)		663,355
Leaching and filtration		1,300,618		(1,235,587)		65,031		1,300,618		(1,040,494)		260,124
Fero-silicate storage		4,326		(2,055)		2,271		4,326		(1,731)		2,595
Electrowinning building		1,492,853		(709,105)		783,748		1,492,853		(597,141)		895,712
Site improvements		1,677,844		(684,647)		993,197		1,675,906		(591,259)		1,084,647
Site equipment		360,454		(352,114)		8,340		360,454		(338,588)		21,866
Construction in progress		1,102,014		-		1,102,014		1,102,014		-		1,102,014
	$	15,127,517	$	(8,473,294)	$	6,654,223	$	15,122,730	$	(7,404,968)	$	7,717,762

Depreciation expense was $352,988 and $378,181 for the three months ended September 30, 2015 and 2014, respectively and $1,068,325 and $1,136,174 for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, construction in progress included the gold, copper, and zinc extraction circuits and electrowinning equipment at the Clarkdale Slag Project.

The Company rents corporate office space on month-to-month terms from a related party as further discussed in Note 19. Total rent expense was $5,068 and $7,305 for the three months ended September 30, 2015 and 2014 respectively and $15,070 and $24,219 for the nine months ended September 30, 2015 and 2014, respectively.

On March 9, 2015, the Company completed the sale of three parcels of land for net proceeds of $457,548 with half of the net proceeds designated for operating purposes and the remaining half designated for debt and is recorded as restricted cash on the consolidated balance sheet.

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DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Tables) - Convertible Notes Payable [Member]

9 Months Ended

Sep. 30, 2015

Derivative Instruments, Gain (Loss) [Line Items]

Schedule Of Fair Value Assumptions

Assumptions used for the nine months ended September 30, 2015 and 2014 included redemption and conversion estimates/behaviors, estimates regarding future anti-dilutive financing agreements and the following other significant estimates:

	September 30,	September 30,
	2015	2014
Expected volatility	101.46 - 105.61%	96.46 – 107.84%
Risk-free interest rate	0.92 - 1.13%	1.25 – 1.73%
Expected life (years)	2.0	2.5 - 3.0

Schedule Of Derivative Liabilities At Fair Value

The following table sets forth the changes in the fair value of the derivative liability for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,		December 31,
	2015		2014
Beginning balance	$	1,218,619	$	755,709
Issuance of convertible debt		-		9,519
Change in fair value		(753,260)		453,391
Ending balance	$	465,359	$	1,218,619

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PROPERTY AND EQUIPMENT (Additional Information) (Details) - USD ($)		3 Months Ended		9 Months Ended
	Mar. 09, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Property, Plant and Equipment [Line Items]
Depreciation expense		$ 352,988	$ 378,181	$ 1,068,325	$ 1,136,174
Operating Leases, Rent Expense		$ 5,068	$ 7,305	15,070	24,219
Proceeds from Sale of Property, Plant, and Equipment	$ 457,548			$ 457,548	$ 245,943

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CONVERTIBLE NOTES (Schedule of Components and amounts of effective interest rate) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Debt Conversion [Line Items]
Amortization of deferred financing fees	$ 194,801	$ 180,197
Notes Payable, Other Payables [Member]
Debt Conversion [Line Items]
Interest rate at 7%	213,612	209,798
Amortization of debt discount	176,473	163,244
Amortization of deferred financing fees	18,327	16,953
Total interest expense on convertible notes	$ 408,412	$ 389,995

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RELATED PARTY TRANSACTIONS (Company and NMC) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Related Party Transactions [Member]
Related Party Transaction [Line Items]
Mineral and exploration expense - related party	$ 60,000	$ 75,983	$ 180,360	$ 231,543
Nanominerals Corporation [Member]
Related Party Transaction [Line Items]
Advance royalty payments	45,000	45,000	135,000	135,000
Nanominerals Corporation [Member] | Reimbursements [Member]
Related Party Transaction [Line Items]
Fee and expenses incurred to related party	0	983	360	6,143
Nanominerals Corporation [Member] | Consulting Fees [Member]
Related Party Transaction [Line Items]
Fee and expenses incurred to related party	$ 15,000	$ 30,000	$ 45,000	$ 90,400

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets
Cash	$ 1,230,358	$ 584,976
Prepaid expenses	96,373	75,214
Assets held for sale	0	227,500
Total current assets	1,326,731	887,690
Property and equipment, net	6,654,223	7,717,762
Assets held for sale, non-current portion	0	227,500
Restricted cash	227,345	0
Deferred financing fees	79,073	97,401
Reclamation bond and deposits, net	14,566	14,566
Total non-current assets	136,452,964	137,499,276
Total assets	137,779,695	138,386,966
Current liabilities
Accounts payable and accrued liabilities	976,433	897,951
Accounts payable - related party	339,111	21,539
VRIC payable, current portion - related party	569,288	315,552
Convertible debt, net of discount	3,263,853	0
Derivative liability - convertible debt	465,359	0
Total current liabilities	5,614,044	1,235,042
Long-term liabilities
VRIC payable, net of current portion - related party	128,856	382,592
Convertible notes, net of discount	0	3,087,380
Derivative liability - convertible debt	0	1,218,619
Deferred tax liability	48,224,926	27,547,468
Total long-term liabilities	48,353,782	32,236,059
Total liabilities	$ 53,967,826	$ 33,471,101
Commitments and contingencies - Note 16
Stockholders' equity
Common stock, $0.001 par value; 400,000,000 shares authorized, 154,306,537 and 144,153,748 shares, respectively, issued and outstanding	$ 154,306	$ 144,153
Additional paid-in capital	163,940,513	160,177,521
Accumulated deficit	(80,282,950)	(55,405,809)
Total stockholders' equity	83,811,869	104,915,865
Total liabilities and stockholders' equity	137,779,695	138,386,966
Slag Project [Member]
Current assets
Mineral properties	121,865,365	121,829,655
Smelter Site and Slag Pile [Member]
Current assets
Land	5,916,150	5,916,150
Remaining Amount [Member]
Current assets
Land	$ 1,696,242	$ 1,696,242

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CLARKDALE SLAG PROJECT (Changes in the Slag Project) (Details) - Slag Project [Member] - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Noncash or Part Noncash Acquisitions [Line Items]
Slag Pile, beginning balance	$ 121,829,655	$ 121,759,811
Capitalized interest costs	35,710	69,844
Slag Pile, ending balance	$ 121,865,365	$ 121,829,655

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DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES

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

Description of business - Searchlight Minerals Corp. (the “Company”) has been in the exploration stage 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 United Kingdom (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 the Company 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.” (“Phage”).

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 and its Board of Directors approved a change in its name from Phage to "Searchlight Minerals Corp.” effective June 23, 2005.

Going concern - The accompanying consolidated financial statements were prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raise substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business it must raise additional equity or debt capital and continue cost cutting measures. There can be no assurance that the Company will be able to achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management.

If the Company continues to incur operating losses and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations and 2) the Company’s inability to fully implement its current business plan. There can be no assurance that the Company will successfully improve its liquidity position. The accompanying consolidated financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty.

As of September 30, 2015, the Company had cumulative net losses of $80,282,950 from operations and had not commenced its commercial mining and mineral processing operations; rather it is still in the exploration stage. For the nine month period ended September 30, 2015, the Company incurred a net loss of 24,877,141, had negative cash flows from operating activities of $3,055,659 and will incur additional future losses due to planned continued exploration expenses. In addition, the Company had a working capital deficit totaling $4,287,313 at September 30, 2015.

To address liquidity constraints, the Company will seek additional sources of capital through the issuance of equity or debt financing. Additionally, the Company has reduced expenses and elected to defer payment of certain obligations. Cash conservation measures include, but are not limited to, the deferred payment where available of outsourced consulting fees, current and future board fees, officer salaries, monthly professional fees, and the Verde River Iron Company, LLC (“VRIC”) monthly payable. These activities have reduced the required cash outlay of the Company’s business significantly. The Company is focused on continuing to reduce costs and obtaining additional funding. There is no assurance that such funding will be available on terms acceptable to the Company, or at all. If the Company raises additional funds by selling additional shares of capital stock, securities convertible into shares of capital stock or the issuance of convertible debt, the ownership interest of the Company’s existing common stock holders will be diluted.

Basis of presentation - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company’s fiscal year-end is December 31.

These condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. All such adjustments are, in the opinion of management, of a normal recurring nature with the exception of recording a full valuation allowance on certain deferred tax assets as discussed in Note 15. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on April 13, 2015.

Principles of consolidation - The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Clarkdale Minerals, LLC (“CML”) and Clarkdale Metals Corp. (“CMC”). Significant intercompany accounts and transactions have been eliminated.

Use of estimates - The preparation of financial statements in conformity with U.S. GAAP 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. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include the valuation of stock-based compensation and derivative liabilities, impairment analysis of long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates.

Capitalized interest cost - The Company capitalizes interest cost related to acquisition, development and construction of property and equipment which is designed as integral parts of the manufacturing process. The capitalized interest is recorded as part of the asset it relates to and will be amortized over the asset’s useful life once production commences.

Mineral properties - Costs of acquiring mineral properties are capitalized upon acquisition. Exploration costs and costs to maintain mineral properties are expensed as incurred while the project is in the exploration stage. Once mineral reserves are established, development costs and costs to maintain mineral properties are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the proven and probable reserves.

Mineral exploration and development costs - Exploration expenditures incurred prior to entering the development stage are expensed and included in mineral exploration and evaluation expense.

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 15 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 operating expenses.

Impairment of long-lived assets - The Company reviews and evaluates its long-lived assets for impairment at each balance sheet date due to its planned exploration stage losses and documents such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property.

The tests for long-lived assets in the exploration, development or production stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.

The Company's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value.

Deferred financing fees – Deferred financing fees represent fees paid in connection with obtaining debt financing. These fees are amortized using the effective interest method over the term of the financing.

Convertible notes – derivative liabilities – The Company evaluates the embedded features of convertible notes to determine if they are required to be bifurcated and recorded as a derivative liability. If more than one feature is required to be bifurcated, the features are accounted for as a single compound derivative. The fair value of the compound derivative is recorded as a derivative liability and a debt discount. The carrying value of the convertible notes is recorded on the date of issuance at its original value less the fair value of the compound derivative.

The derivative liability is measured at fair value on a recurring basis with changes reported in other income (expense). Fair value is determined using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The debt discount is amortized to non-cash interest expense using the effective interest method over the life of the notes. If a conversion of the underlying note occurs, a proportionate share of the unamortized amount is immediately expensed.

Reclamation and remediation costs - For its exploration stage properties, the Company accrues the estimated costs associated with environmental remediation obligations in the period in which the liability is incurred or becomes determinable. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense. The costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule.

Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early stage nature of the exploration project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations in the period an estimate is revised.

The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to reclamation accruals. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known.

Fair value of financial instruments - The Company’s financial instruments consist principally of derivative liabilities and the VRIC payable. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels defined as follows:

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company’s financial instruments consist of the VRIC payable (described in Note 9), derivative liabilities and convertible notes (described in Note 7). The VRIC payable and the convertible notes are classified within Level 2 of the fair value hierarchy. The fair value of the VRIC payable approximates carrying value as the imputed interest rate is considered to approximate a market interest rate. The fair value of the convertible notes approximates carrying value as the interest rate is considered to approximate a market interest rate.

The Company calculates the fair value of its derivative liabilities using various models which are all Level 3 inputs. The fair value of the derivative warrant liability (described in Note 6) is calculated using the Binomial Lattice model, and the fair value of the derivative liability - convertible notes (described in Note 8) is calculated using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The change in fair value of the derivative liabilities is classified in other income (expense) in the consolidated statement of operations. The Company generally does not use derivative financial instruments to hedge exposures to cash flow, market or foreign currency risks.

There have been no changes in the valuation techniques used for the derivative liabilities. The Company does not have any non-financial assets or liabilities that it measures at fair value. During the nine months ended September 30, 2015 and 2014, there were no transfers of assets or liabilities between levels.

Per share amounts - Basic earnings (loss) per share is computed by dividing net income (loss) 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. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as when the exercise price of the instrument exceeds the fair market value of the Company’s common stock and when a net loss is reported. The dilutive effect of convertible debt securities is reflected in the diluted earnings (loss) per share calculation using the if-converted method. Conversion of the debt securities is not assumed for purposes of calculating diluted earnings (loss) per share if the effect is anti-dilutive. 73,162,932 and 37,054,430 stock options, warrants and common shares issuable upon the conversion of notes were outstanding as of September 30, 2015 and 2014, respectively, but were not considered in the computation of diluted earnings per share as their inclusion would be anti-dilutive.

Stock-based compensation - Stock-based compensation awards are recognized in the consolidated financial statements based on the grant date fair value of the award which is estimated using the Binomial Lattice option pricing model. The Company believes that 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 the actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock.

The fair value of performance-based stock option grants is determined on their grant date through the use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements.

The Company accounts for stock options issued to non-employees based on the estimated fair value of the awards using the Binomial Lattice option pricing model. The measurement of stock-based compensation to non-employees is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in the Company’s consolidated statements of operations during the period the related services are rendered.

Income taxes - For interim reporting periods, the Company uses the annualized effective tax rate (“AETR”) method to calculate its income tax provision. Under this method, the AETR is applied to the interim year-to-date pre-tax losses to determine the income tax benefit or expense for the year-to-date period. The income tax benefit or expense for a quarter represents the difference between the year-to-date income tax benefit or expense for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the Company’s annual operating results and AETR.

The Company follows the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

For acquired properties that do not constitute a business, a deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with Accounting Standards Codification (“ASC”) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, 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.

Recent accounting standards - From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In November 2014, the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The ASU clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. The ASU is effective for fiscal years and interim periods beginning after December 15, 2015. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

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STOCKHOLDERS' EQUITY (Additional Information) (Details) - USD ($)		1 Months Ended			9 Months Ended
	Sep. 09, 2014	Sep. 18, 2015	Jul. 30, 2015	May. 21, 2015	Sep. 30, 2015	Sep. 30, 2014	Mar. 18, 2015	Dec. 31, 2014	Nov. 12, 2009
Stockholders Equity Note [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.50
Proceeds from Issuance of Private Placement				$ 995,050
Payments of Stock Issuance Costs					$ 22,172	$ 0
Interest Payable					$ 46,128			$ 81,637
Debt Conversion, Converted Instrument, Shares Issued		327,900
Debt Conversion, Original Debt, Amount		$ 114,765
Class Of Warrant Or Right Expiration Period		5 years
Gains (Losses) on Extinguishment of Debt		$ 10,666
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	5 years
Convertible Notes Payable [Member]
Stockholders Equity Note [Line Items]
Interest Payable							$ 129,115
Debt Conversion, Converted Instrument, Shares Issued					10,433,333
Common Stock [Member]
Stockholders Equity Note [Line Items]
Shares Issued, Price Per Share							$ 0.25
Shares, Issued							516,460
Private Placement [Member]
Stockholders Equity Note [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 0.50	$ 0.50					$ 1.85
Proceeds from Issuance of Private Placement			$ 775,400
Common Stock Units Issued During Period			2,215,429	2,843,000
Common Stock Unit Price Per Share			$ 0.35	$ 0.35
Payments of Stock Issuance Costs			$ 9,468	$ 12,704

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Assumptions Used to Estimate Fair Value of Stock Based Compensation Awards

For both service-based and performance-based stock option grants, the Company estimates the fair value of stock-based compensation awards by using the Binomial Lattice option pricing model with the following assumptions used for the nine month periods ended:

	September 30,	September 30,
	2015	2014
Risk-free interest rate	0.24% - 1.75%	0.39% - 1.73%
Dividend yield	-	-
Expected volatility	91.23% - 110.32%	98.65% - 105.87%
Expected life (years)	0.30 - 4.75	2.00 - 4.25

Summary of Stock-based Compensation Activity

The following table summarizes the Company’s stock-based compensation activity for the nine month period ended September 30, 2015:

							Weighted
			Weighted				Average
			Average				Remaining
			Grant		Weighted		Contractual		Aggregate
	Number of		Date Fair		Average		Life		Intrinsic
	Shares		Value		Exercise Price		(Years)		Value
Outstanding, December 31, 2014		17,387,745	$	0.24	$	0.55		4.53
Options/warrants granted		6,557,714		0.07		0.49		5.09
Options/warrants expired		(35,605)		0.31		0.84		-
Options/warrants exercised		-		-		-		-
Outstanding, September 30, 2015		23,909,854	$	0.20	$	0.53		4.12	$	-
Exercisable, September 30, 2015		19,805,854	$	0.21	$	0.53		3.93	$	-

Schedule of Changes to Stock Based Compensation Awards Subject to Vesting

The following table summarizes the changes of the Company’s stock-based compensation awards subject to vesting for the nine month period ended September 30, 2015:

			Weighted
	Number of		Average
	Shares Subject		Grant Date
	to Vesting		Fair Value
Unvested, December 31, 2014		350,000	$	0.93
Options/warrants granted		3,804,000		0.09
Options/warrants vested		(50,000)		0.55
Unvested, September 30, 2015		4,104,000	$	0.16

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STOCKHOLDER RIGHTS AGREEMENT (Additional Information) (Details)	Sep. 30, 2015
Stockholder Rights Agreement [Line Items]
Minimum Percentage Of Ownership Acquired Or To Be Acquired Upon Which Purchase Rights Become Exercisable	15.00%
Luxor Capital Partners LP [Member]
Stockholder Rights Agreement [Line Items]
Percentage Of Ownership Interests	15.00%
Luxor Capital Partners LP [Member] | Maximum [Member]
Stockholder Rights Agreement [Line Items]
Percentage Of Ownership Interests	26.00%

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CONCENTRATION OF CREDIT RISK

9 Months Ended

Sep. 30, 2015

CONCENTRATION OF CREDIT RISK [Abstract]

CONCENTRATION OF CREDIT RISK

17. CONCENTRATION OF CREDIT RISK

The Company maintains its cash accounts in financial institutions. Cash accounts at these financial institutions are insured by the Federal Deposit Insurance Corporation (the “FDIC”) for up to $250,000 per institution. The Company has never experienced a material loss or lack of access to its cash accounts; however, no assurance can be provided that access to the Company’s cash accounts will not be impacted by adverse conditions in the financial markets. At September 30, 2015, the Company had $921,654 of deposits in excess of FDIC insured limits.

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RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2015

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

The following table provides details of transactions between the Company and NMC for the three and nine months ended:

	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		September 30,
	2015		2014		2015		2014
Reimbursement of expenses	$	-	$	983	$	360	$	6,143
Consulting services provided		15,000		30,000		45,000		90,400
Advance royalty payments		45,000		45,000		135,000		135,000
Mineral and exploration expense – related party	$	60,000	$	75,983	$	180,360	$	231,543

Cupit Milligan Ogden Williams Certified Public Accountants [Member]

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

The following table provides details of transactions between the Company and CMOW and the direct benefit to Mr. Williams for the three and nine month periods ended:

	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		September 30,
	2015		2014		2015		2014
Accounting support services	$	41,606	$	33,331	$	137,211	$	105,133
Direct benefit to CFO	$	12,066	$	12,999	$	39,791	$	41,002

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

19. RELATED PARTY TRANSACTIONS

NMC - The Company utilizes the services of NMC to provide technical assistance and financing related activities. In addition, NMC provides the Company with use of its laboratory, instrumentation, milling equipment and research facilities. One of the Company’s executive officers, Mr. Ager, is affiliated with NMC. The Company and NMC agreed to an advance royalty of $15,000 per month and to reimburse NMC for actual expenses incurred and consulting services provided.

The Company has an existing obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project. The royalty agreement and advance royalty payments are more fully discussed in Note 16.

The following table provides details of transactions between the Company and NMC for the three and nine months ended:

	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		September 30,
	2015		2014		2015		2014
Reimbursement of expenses	$	-	$	983	$	360	$	6,143
Consulting services provided		15,000		30,000		45,000		90,400
Advance royalty payments		45,000		45,000		135,000		135,000
Mineral and exploration expense – related party	$	60,000	$	75,983	$	180,360	$	231,543

The Company had outstanding balances due to NMC of $193,725 and $13,365 at September 30, 2015 and December 31, 2014, respectively. Additionally, during the nine month period ended September 30, 2014, NMC paid $50,000 of the Company’s expenses. Such amount was recorded as a contribution of capital.

Cupit, Milligan, Ogden & Williams, CPAs - The Company utilizes CMOW to provide accounting support services. CMOW is an affiliate of the Company’s CFO, Mr. Williams. Fees for services provided by CMOW do not include any charges for Mr. Williams’ time. Mr. Williams is compensated for his time under his employment agreement.

The following table provides details of transactions between the Company and CMOW and the direct benefit to Mr. Williams for the three and nine month periods ended:

	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
	September 30,		September 30,		September 30,		September 30,
	2015		2014		2015		2014
Accounting support services	$	41,606	$	33,331	$	137,211	$	105,133
Direct benefit to CFO	$	12,066	$	12,999	$	39,791	$	41,002

The Company had an outstanding balance due to CMOW of $145,386 and $8,174 as of September 30, 2015 and December 31, 2014, respectively.

Financial Consulting Services - Beginning in October of 2014, the Company utilized five individuals to provide financial consulting services. During the third quarter of 2015 the Company entered into consulting agreements with three of these individuals, all of the consultants provided similar services. One of these individuals is the son of the Company's CEO, in consideration for his services, the Company issued to him 2,063,143 warrants to purchase common stock at an exercise price of $0.50 per share, which the Company has valued at an aggregate of $70,112. The warrants are fully vested and expire five years from the date of grant.

Ireland Inc. – The Company leases corporate office space on month-to-month terms from Ireland Inc. (“Ireland”). NMC is a shareholder in both the Company and Ireland. Additionally, one of the Company’s directors is the CFO, Treasurer and a director of Ireland and the Company’s CEO provides consulting services to Ireland.

 

Total rent expense incurred to Ireland was $5,068 and $7,305 for the three month periods ended September 30, 2015 and 2014, respectively, and $15,070 and $24,219 for the nine month periods ended September 30, 2015 and 2014, respectively. No amounts were due to Ireland as of September 30, 2015 or December 31, 2014.

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INCOME TAXES (Additional Information) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Operating Loss Carryforwards [Line Items]
Effective Income Tax Rate Reconciliation, Percent, Total	1305.00%	(38.00%)	492.00%	(38.00%)
Income Tax Expense (Benefit)	$ 21,795,143	$ (7,440,766)	$ 20,677,458	$ (8,747,063)
Deferred Tax Assets, Valuation Allowance	$ 20,756,645		$ 20,756,645
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			35.00%

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RESTRICTED CASH

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

RESTRICTED CASH

2. RESTRICTED CASH

At September 30, 2015, restricted cash amounted to $227,345 and consisted of funds designated for debt collateral.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	154,306,537	144,153,748
Common stock, shares outstanding	154,306,537	144,153,748

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STOCKHOLDER RIGHTS AGREEMENT

9 Months Ended

Sep. 30, 2015

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDER RIGHTS AGREEMENT

12. STOCKHOLDER RIGHTS AGREEMENT

The Company adopted a Stockholder Rights Agreement (the “Rights Agreement”) in August 2009 to protect stockholders from attempts to acquire control of the Company in a manner in which the Company’s Board of Directors determines is not in the best interest of the Company or its stockholders.  Under the agreement, each currently outstanding share of the Company’s common stock includes, and each newly issued share will include, a common share purchase right.  The rights are attached to and trade with the shares of common stock and generally are not exercisable.  The rights will become exercisable if a person or group acquires, or announces an intention to acquire, 15% or more of the Company’s outstanding common stock. The Rights Agreement was not adopted in response to any specific effort to acquire control of the Company.  The issuance of rights had no dilutive effect, did not affect the Company’s reported earnings per share and was not taxable to the Company or its stockholders. 

The Company has agreed to waive the 15% limitation currently in the Rights Agreements with respect to Luxor, and to allow Luxor to become the beneficial owners of up to 26% of the Company’s common stock, without being deemed to be an “acquiring person” under the Rights Agreement.

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 20, 2015
Document Information [Line Items]
Entity Registrant Name	Searchlight Minerals Corp.
Entity Central Index Key	0001084226
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	SRCH
Entity Common Stock, Shares Outstanding		154,306,537
Amendment Flag	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2015

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PROPERTY RENTAL AGREEMENTS AND LEASES

9 Months Ended

Sep. 30, 2015

PROPERTY RENTAL AGREEMENTS AND LEASES [Abstract]

PROPERTY RENTAL AGREEMENTS AND LEASES

13. PROPERTY RENTAL AGREEMENTS AND LEASES

The Company, through its subsidiary CML, has the following rental agreement as lessor:

Clarkdale Arizona Central Railroad – rental – CML rents land to Clarkdale Arizona Central Railroad on month-to-month terms at $1,700 per month.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue	$ 0	$ 0	$ 0	$ 0
Operating expenses
Administrative - Clarkdale site	26,682	34,080	91,244	83,912
Loss (gain) on asset dispositions	0	18,095,234	(2,548)	18,140,349
Depreciation	352,988	378,181	1,068,325	1,136,174
Total operating expenses	1,751,111	19,525,152	4,545,628	22,866,435
Loss from operations	(1,751,111)	(19,525,152)	(4,545,628)	(22,866,435)
Other income (expense)
Rental revenue	5,100	6,105	15,300	21,775
Other expense	(10,591)	(18,659)	(10,591)	(18,659)
Change in fair value of derivative liabilities	224,943	125,635	753,260	329,430
Interest expense	(139,820)	(131,735)	(413,475)	(391,430)
Interest and dividend income	791	0	1,451	516
Total other income (expense)	80,423	(18,654)	345,945	(58,368)
Loss before income taxes	(1,670,688)	(19,543,806)	(4,199,683)	(22,924,803)
Income tax (expense) benefit	(21,795,143)	7,440,766	(20,677,458)	8,747,063
Discontinued operations
Net loss	(23,465,831)	(12,103,040)	(24,877,141)	(14,177,740)
Comprehensive loss	$ (23,465,831)	$ (12,103,040)	$ (24,877,141)	$ (14,177,740)
Loss per common share - basic and diluted
Net loss	$ (0.15)	$ (0.09)	$ (0.17)	$ (0.10)
Weighted average common shares outstanding -
Basic	153,298,984	135,768,318	149,390,171	135,768,318
Diluted	153,298,984	135,768,318	149,390,171	135,768,318
All Other [Member]
Operating expenses
Mineral exploration and evaluation expenses	$ 674,637	$ 396,409	$ 1,770,453	$ 1,482,176
General and administrative	590,130	504,629	1,285,513	1,662,929
Related Party Transactions [Member]
Operating expenses
Mineral exploration and evaluation expenses	60,000	75,983	180,360	231,543
General and administrative	$ 46,674	$ 40,636	$ 152,281	$ 129,352

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CONVERTIBLE NOTES

9 Months Ended

Sep. 30, 2015

Convertible Debt [Abstract]

CONVERTIBLE NOTES

7. CONVERTIBLE NOTES

On September 18, 2013, the Company completed a private placement of secured convertible notes (the “Notes”) to certain investors resulting in gross proceeds of $4,000,000. At issuance, the Notes were convertible into shares of common stock at $0.40 per share, subject to certain adjustments. The term of the Notes is five years, but as of September 30, 2015, the Notes can be called within one year. The Notes bear interest at 7% which is payable semi-annually. The Notes have customary provisions relating to events of default including an increase in the interest rate to 9%. The Notes are secured by a first priority lien on all of the assets of the Company including its subsidiaries. At September 30, 2015, the first priority lien included $227,345 of restricted cash specifically dedicated to debt collateral.

The Company has agreed not to incur any additional secured indebtedness or any other indebtedness with a maturity prior to that of the Notes without the written consent of the holders of the majority-in-interest of the Notes. In the event of a change of control of the Company, the Notes will become due and payable at 120% of the principal balance. The holders of the Notes had the right to purchase, pro rata, up to $600,000 of additional separate notes by the first anniversary of the issuance date on the same general terms and conditions as the original Notes. On September 10, 2014, $69,000 of additional notes were issued.

At September 30, 2015, the Notes were convertible into 10,433,333 shares of common stock at $0.39 per share, as adjusted for anti-dilutive provisions and the if-converted value equaled the principal amount of the Notes. Certain embedded features in the Notes were required to be bifurcated and accounted for as a single compound derivative and reported at fair value as further discussed in Note 8.

At issuance, the fair value of the compound derivative was $1,261,285 and was recorded as both a derivative liability and a debt discount. The debt discount is being amortized to interest expense over the term of the Notes and the derivative liability is carried at fair value until conversion or maturity. The carrying value of the convertible debt, net of discount was comprised of the following:

	September 30,		December 31,
	2015		2014
Convertible notes at face value	$	4,069,000	$	4,000,000
Issuance of additional notes		-		69,000
Unamortized discount		(805,147)		(981,620)
Convertible notes, net of discount	$	3,263,853	$	3,087,380

The Company incurred $126,446 of financing fees related to the Notes. Such amounts were capitalized and are being amortized to interest expense over the term of the Notes. The effective interest rate on the Notes is 15.4% which included the following for the nine month periods ended:

	September 30,		September 30,
	2015		2014
Interest rate at 7%	$	213,612	$	209,798
Amortization of debt discount		176,473		163,244
Amortization of deferred financing fees		18,327		16,953
Total interest expense on convertible notes	$	408,412	$	389,995

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DERIVATIVE WARRANT LIABILITY

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE WARRANT LIABILITY

6. DERIVATIVE WARRANT LIABILITY

Related to a private placement completed on November 12, 2009, the Company issued 6,341,263 warrants to purchase shares of common stock. The warrants had an initial expiration date of November 12, 2012 and an initial exercise price of $1.85 per share. The warrants have anti-dilution provisions, including provisions for the adjustment to the exercise price and to the number of warrants granted if the Company issues common stock or common stock equivalents at a price less than the exercise price.

The Company determined that the warrants were not afforded equity classification because the warrants are not considered to be indexed to the Company’s own stock due to the anti-dilution provisions. In addition, the Company determined that the anti-dilution provisions shield the warrant holders from the dilutive effects of subsequent security issuances and therefore the economic characteristics and risks of the warrants are not clearly and closely related to the Company’s common stock. Accordingly, the warrants are treated as a derivative liability and are carried at fair value.

On November 1, 2012, October 25, 2013 and November 11, 2014, the Company’s Board of Directors unilaterally determined, without any negotiations with the warrant holders to amend these private placement warrants. The expiration date of the warrants was extended for one year at each extension. The current expiration date is November 12, 2015. In all other respects, the terms and conditions of the warrants remained the same.

With respect to the extensions, the Company did not recognize any additional expense as the fair values of the warrants were calculated at zero using the Binomial Lattice model with the following assumptions:

	November 11,	October 25,	November 1,
	2014	2013	2012
Risk-free interest rate	0.14%	0.11%	0.19%
Expected volatility	142.72%	114.79%	94.94%
Expected life (years)	1.0	1.0	1.0

As of September 30, 2015, the cumulative adjustment to the warrants was as follows: (i) the exercise price was adjusted from $1.85 per share to $1.27 per share, and (ii) the number of warrants was increased by 2,805,766 warrants. In connection with the financing completed with Luxor Capital Partners, L.P. and its affiliates (“Luxor”) on June 7, 2012, Luxor waived its right to the anti-dilution adjustments on 4,252,883 warrants it holds from the 2009 private placement. Future anti-dilution adjustments were not waived. The adjusted exercise price of those warrants is $1.29 per share. During the nine month period ended September 30, 2015, the warrants increased by 993,332 as a result of dilutive issuances.

The total warrants accounted for as a derivative liability were 9,147,029 and 8,153,697 as of September 30, 2015 and December 31, 2014, respectively.

The following table sets forth the changes in the fair value of derivative liability for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,		December 31,
	2015		2014
Beginning balance	$	-	$	(81,574)
Adjustment to warrants		-		-
Change in fair value		-		81,574
Ending balance	$	-	$	-

The Company estimates the fair value of the derivative liabilities by using the Binomial Lattice pricing-model, with the following assumptions used for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,	December 31,
	2015	2014
Dividend yield	-	-
Expected volatility	30.46% - 65.70%	29.38% - 153.76%
Risk-free interest rate	0.00% - 0.14%	0.02% - 0.26%
Expected life (years)	0.10 - 0.60	0.10 – 1.0

The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. Significant increases or decreases in inputs would result in a significantly lower or higher fair value measurement.

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CONCENTRATION OF ACTIVITY

9 Months Ended

Sep. 30, 2015

Concentration Of Activity [Abstract]

CONCENTRATION OF ACTIVITY

18. CONCENTRATION OF ACTIVITY

The Company currently utilizes a mining and environmental firm to perform significant portions of its mineral property and metallurgical exploration work programs. A change in the lead mining and environmental firm could cause a delay in the progress of the Company’s exploration programs and would cause the Company to incur significant transition expense and may affect operating results adversely.

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GAIN ON SETTLEMENT

9 Months Ended

Sep. 30, 2015

General And Administrative Expense Disclosure [Abstract]

General And Administrative Expense Disclosure [Text Block]

14. GAIN ON SETTLEMENT

During the second quarter of 2015, the Company settled certain amounts due to a vendor for a gain of $378,136.

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2015

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

10. STOCKHOLDERS’ EQUITY

During the nine month period ended September 30, 2015, the Company’s stockholders’ equity activity consisted of the following:

a) On September 18, 2015, the Company issued 327,900 units to certain convertible note holders for settlement of $114,765 interest due to them. Each unit consists of one share of the Company’s common stock at $0.35 per share and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock. The Company recognized a loss on the settlement of $10,666.

b) On July 30, 2015, the Company completed a private placement offering for gross proceeds of $775,400. A total of 2,215,429 units were issued at a price of $0.35. Each unit consists of one share of the Company’s common stock and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock. Financing fees related to this placement were $9,468.

c) On May 21, 2015, the Company completed a private placement offering for gross proceeds of $995,050. A total of 2,843,000 units were issued at a price of $0.35. Each unit consists of one share of the Company’s common stock and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock. Financing fees related to this placement were $12,704.

d) On March 25, 2015, the Company completed a private placement offering for gross proceeds of $1,500,000 with Luxor. A total of 4,250,000 units will be issued at a price of $0.3529. Each unit consists of one share of the Company’s common stock and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock.

e) On March 18, 2015, the Company issued 516,460 shares of common stock at a price of $0.25 per share to certain convertible note holders as consideration for cancellation of an aggregate of $129,115 for interest payments due on the convertible notes as of March 18, 2015. The remaining note holders received interest payments in cash.

During the nine month period ended September 30, 2014, the Company’s stockholders’ equity activity consisted of the following:

a) On September 9, 2014, the Company approved the issuance of a private placement of the Company’s securities at a purchase price of $0.20 per Unit. Each Unit consists of one share of the Company’s common stock and one half of a common stock purchase warrant exercisable at $0.30 per share and expiring five years from the date of issuance.

As of September 30, 2014, the Company had received subscriptions for the purchase of these Units. $575,000 of proceeds were received by September 30, 2014 and were recorded as common stock subscribed. Additionally, 633,000 Units were subscribed to by convertible note holders in consideration of $126,700 of interest payments due on September 18, 2014. The first closing of the private placement was completed on October 24, 2014.

The following summarizes the exercise price per share and expiration date of our outstanding warrants issued to investors and vendors to purchase common stock at September 30, 2015:

Shares Underlying
Outstanding Warrants	Exercise Price		Expiration Date
3,410,526	$	1.27	November 2015
5,736,501		1.29	November 2015
7,042,387		1.85	November 2015
1,000,000		0.375	June 2016
3,000,000		0.375	June 2017
316,752		0.30	September 2019
2,197,496		0.30	October 2019
1,000,000		0.30	November 2019
1,498,750		0.30	December 2019
3,981,000		0.50	December 2019
4,250,000		0.50	March 2020
2,843,000		0.50	May 2020
2,215,429		0.50	July 2020
327,900		0.50	September 2020
38,819,741

Subsequent to quarter end, all of the warrants scheduled to expire in November 2015 were extended to November 30, 2016 as further explained in Note 20.

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STOCKHOLDERS' EQUITY (Schedule Of Outstanding Warrants Issued To Investors To Purchase Common Stock) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 18, 2015
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	38,819,741
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.50
Class Of Warrant Or Right One [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	3,410,526
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.27
Class of Warrant or Right, Expiration Date of Warrants or Rights	November 2015
Class Of Warrant Or Right Two [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	5,736,501
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.29
Class of Warrant or Right, Expiration Date of Warrants or Rights	November 2015
Class Of Warrant Or Right Three [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	7,042,387
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.85
Class of Warrant or Right, Expiration Date of Warrants or Rights	November 2015
Class Of Warrant Or Right Four [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	1,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.375
Class of Warrant or Right, Expiration Date of Warrants or Rights	June 2016
Class Of Warrant Or Right Five [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	3,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.375
Class of Warrant or Right, Expiration Date of Warrants or Rights	June 2017
Class Of Warrant Or Right Six [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	316,752
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.30
Class of Warrant or Right, Expiration Date of Warrants or Rights	September 2019
Class Of Warrant Or Right Seven [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	2,197,496
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.30
Class of Warrant or Right, Expiration Date of Warrants or Rights	October 2019
Class Of Warrant Or Right Eight [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	1,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.30
Class of Warrant or Right, Expiration Date of Warrants or Rights	November 2019
Class Of Warrant Or Right Nine [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	1,498,750
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.30
Class of Warrant or Right, Expiration Date of Warrants or Rights	December 2019
Class Of Warrant Or Right Ten [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	3,981,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.50
Class of Warrant or Right, Expiration Date of Warrants or Rights	December 2019
Class Of Warrant Or Right Eleven [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	4,250,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.50
Class of Warrant or Right, Expiration Date of Warrants or Rights	March 2020
Class Of Warrant Or Right Twelve [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	2,843,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.50
Class of Warrant or Right, Expiration Date of Warrants or Rights	May 2020
Class Of Warrant Or Right Thirteen [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	2,215,429
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.50
Class of Warrant or Right, Expiration Date of Warrants or Rights	July 2020
Class Of Warrant Or Right Fourteen [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	327,900
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.50
Class of Warrant or Right, Expiration Date of Warrants or Rights	September 2020

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DERIVATIVE LIABILITY - CONVERTIBLE NOTES

9 Months Ended

Sep. 30, 2015

Derivative Liability And Convertible Debt [Abstract]

DERIVATIVE LIABILITY - CONVERTIBLE NOTES

8. DERIVATIVE LIABILITY – CONVERTIBLE NOTES

As further discussed in Note 7, the Company has issued $4,069,000 of convertible notes. The Notes are convertible at any time into shares of common stock at $0.39 per share.

The Notes have several embedded conversion and redemption features. The Company determined that two of the features were required to be bifurcated and accounted for under derivative accounting as follows:

1. The embedded conversion feature includes a provision for the adjustment to the conversion price if the Company issues common stock or common stock equivalents at a price less than the exercise price. Derivative accounting was required for this feature due to this anti-dilution provision.

2. One embedded redemption feature requires the Company to pay 120% of the principal balance due upon a change of control. Derivative accounting was required for this feature as the debt involves a substantial discount, the option is only contingently exercisable and its exercise is not indexed to either an interest rate or credit risk.

These two embedded features have been accounted for together as a single compound derivative. The Company estimated the fair value of the compound derivative using a model with estimated probabilities and inputs calculated by the Binomial Lattice model and present values. The assumptions included in the calculations are highly subjective and subject to interpretation. Assumptions used for the nine months ended September 30, 2015 and 2014 included redemption and conversion estimates/behaviors, estimates regarding future anti-dilutive financing agreements and the following other significant estimates:

	September 30,	September 30,
	2015	2014
Expected volatility	101.46 - 105.61%	96.46 – 107.84%
Risk-free interest rate	0.92 - 1.13%	1.25 – 1.73%
Expected life (years)	2.0	2.5 - 3.0

The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. Significant increases or decreases in inputs would result in a significantly lower or higher fair value measurement.

The following table sets forth the changes in the fair value of the derivative liability for the nine month period ended September 30, 2015 and the year ended December 31, 2014:

	September 30,		December 31,
	2015		2014
Beginning balance	$	1,218,619	$	755,709
Issuance of convertible debt		-		9,519
Change in fair value		(753,260)		453,391
Ending balance	$	465,359	$	1,218,619

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VRIC PAYABLE - RELATED PARTY

9 Months Ended

Sep. 30, 2015

Other Liabilities Disclosure [Abstract]

VRIC PAYABLE - RELATED PARTY

9. VRIC PAYABLE - RELATED PARTY

Pursuant to the Clarkdale acquisition agreement, the Company agreed to pay VRIC $30,000 per month until the Project Funding Date. Mr. Harry Crockett was an affiliate of VRIC and served on the Company’s Board of Directors subsequent to the acquisition until he passed away in 2010.

The Company has recorded a liability for this commitment using imputed interest based on its best estimate of its incremental borrowing rate. The effective interest rate used was 8.00%, resulting in an initial present value of $2,501,187 and a debt discount of $1,128,813. The discount is being amortized over the expected term of the debt using the effective interest method. The expected term used was 10 years which represents the maximum term the VRIC liability is payable if the Company does not obtain project funding.

Interest costs related to this obligation were $10,342 and $16,753 for the three months periods ended September 30, 2015 and 2014, respectively and $35,710 and $54,566 for the nine months periods ended September 30, 2015 and 2014, respectively. Interest costs incurred have been capitalized and included in the Slag Project. To address liquidity constraints, the Company has deferred payment of the VRIC payable effective May 1, 2014. On December 18, 2014, VRIC relinquished $255,000 of payments due to them. The relinquishment was recorded as a contribution of capital.

The following table represents future minimum payments on the VRIC payable for each of the twelve month periods ending September 30:

2016	$	630,000
2017		131,195
Thereafter		-
Total minimum payments		761,195
Less: amount representing interest		(63,051)
Present value of minimum payments		698,144
VRIC payable, current portion		569,288
VRIC payable, net of current portion	$	128,856

The acquisition agreement also contains payment terms which are based on the Project Funding Date as defined in the agreement. The terms and conditions of these payments are discussed in more detail in Notes 4 and 16.

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

11. STOCK-BASED COMPENSATION

Stock-based compensation includes grants of stock options and purchase warrants to eligible directors, employees and consultants as determined by the board of directors.

Stock option plans - The Company has adopted several stock option plans, all of which have been approved by the Company’s stockholders that authorize the granting of stock option awards subject to certain conditions. At September 30, 2015, the Company had 5,425,576 of its common shares available for issuance for stock option awards under the Company’s stock option plans.

At September 30, 2015, the Company had the following stock option plans available:

⋅ 2009 Incentive Plan – The terms of the 2009 Incentive Plan, as amended, allow for up to 7,250,000 options to be issued to eligible participants. Under the plan, the exercise price is generally equal to the fair market value of the Company’s common stock on the grant date and the maximum term of the options is generally ten years. No participants shall receive more than 500,000 options under this plan in any one calendar year. For grantees who own more than 10% of the Company’s common stock on the grant date, the exercise price may not be less than 110% of the fair market value on the grant date and the term is limited to five years. The plan was approved by the Company’s stockholders on December 15, 2009 and the amendment was approved by the Company’s stockholders on May 8, 2012. As of September 30, 2015, the Company had granted 3,437,500 options under the 2009 Incentive Plan with a weighted average exercise price of $0.68 per share and had 3,812,500 options remaining available for issuance. As of September 30, 2015, 3,397,500 of the options granted were outstanding.

⋅ 2009 Directors Plan - The terms of the 2009 Directors Plan, as amended, allow for up to 2,750,000 options to be issued to eligible participants. Under the plan, the exercise price may not be less than 100% of the fair market value of the Company’s common stock on the grant date and the term may not exceed ten years. No participants shall receive more than 250,000 options under this plan in any one calendar year. The plan was approved by the Company’s stockholders on December 15, 2009 and the amendment was approved by the Company’s stockholders on May 8, 2012. As of September 30, 2015, the Company had granted 2,184,877 options under the 2009 Directors Plan with a weighted average exercise price of $0.70 per share and had 565,123 options remaining available for issuance. As of September 30, 2015, 2,138,022 of the options granted were outstanding.

⋅ 2007 Plan - Under the terms of the 2007 Plan, options to purchase up to 4,000,000 shares of common stock may be granted to eligible participants. Under the plan, the option price for incentive stock options is the fair market value of the stock on the grant date and the option price for non-qualified stock options shall be no less than 85% of the fair market value of the stock on the grant date. The maximum term of the options under the plan is ten years from the grant date. The 2007 Plan was approved by the Company’s stockholders on June 15, 2007. As of September 30, 2015, the Company had granted 2,952,047 options under the 2007 Plan with a weighted average exercise price of $0.61 per share and had 1,047,953 options remaining available for issuance. As of September 30, 2015, 2,763,618 of the options granted were outstanding.

As of September 30, 2015, the Company had granted 15,610,714 options and warrants outside of the aforementioned stock option plans with a weighted average exercise price of $0.48 per share. As of September 30, 2015, all of the options and warrants granted were outstanding.

Non-Employee Directors Equity Compensation Policy – Non-employee directors have a choice between receiving $9,000 value of common stock per quarter, where the number of shares is determined by the closing price of the Company’s stock on the last trading day of each quarter, or a number of options, limited to 18,000, to purchase twice the number of shares of common stock that the director would otherwise receive if the director elected to receive shares, with an exercise price based on the closing price of the Company’s common stock on the last trading day of each quarter.

Stock warrants – Upon approval of the Board of Directors, the Company may grant stock warrants to consultants for services performed.

Valuation of awards – At September 30, 2015, the Company had options outstanding that vest on two different types of vesting schedules, service-based and performance-based. For both service-based and performance-based stock option grants, the Company estimates the fair value of stock-based compensation awards by using the Binomial Lattice option pricing model with the following assumptions used for the nine month periods ended:

	September 30,	September 30,
	2015	2014
Risk-free interest rate	0.24% - 1.75%	0.39% - 1.73%
Dividend yield	-	-
Expected volatility	91.23% - 110.32%	98.65% - 105.87%
Expected life (years)	0.30 - 4.75	2.00 - 4.25

The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options.

The expected life of awards represents the weighted-average period the stock options or warrants are expected to remain outstanding and is a derived output of the Binomial Lattice model. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model.

Stock-based compensation activity – During the nine months ended September 30, 2015, the Company granted stock-based awards as follows:

a) On September 30, 2015, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.22 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on September 30, 2020. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

b) On August 28, 2015, the Company granted stock options for the purchase of 3,804,000 shares of common stock. The per share exercise price shall be equal to the greater of $0.50 or the closing price of the Company’s common stock on December 18, 2015. The options were granted to certain officers, directors, employees and consultants, will be fully vested on December 19, 2015 and expire on December 19, 2020.

c) On August 28, 2015, the Company granted warrants for the purchase of 2,591,714 shares of common stock at an exercise price of $0.50 per share. The warrants were granted to three of the Company’s consultants for services provided, are fully vested and expire on August 28, 2020.

d) On June 30, 2015, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.25 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on June 30, 2020. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

e) On March 31, 2015, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.33 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on March 31, 2020. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

f) On March 23, 2015, the Company’s Board of Directors unilaterally determined to amend 659,890 stock options by extending their expiration dates. The options were granted at various dates between October 6, 2008 and December 31, 2010 and have a weighted average exercise price of $0.83 per share. The expiration dates of all of the options were extended by twelve months. In all other respects, the terms and conditions of the extended options remain the same. The modification resulted in additional expense of $31,544.

During the nine month period ended September 30, 2014, the Company granted stock-based awards as follows:

a) On September 30, 2014, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.22 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on September 30, 2019. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

b) On June 30, 2014, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.24 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on June 30, 2019. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

c) On March 31, 2014, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.26 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on March 31, 2019. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date.

d) On January 13, 2014, the Company extended the expiration date of 200,000 warrants issued to a consultant. The expiration date was extended from January 13, 2014 to January 13, 2016. All other terms were unchanged. The modification resulted in additional expense of $5,011.

Expenses related to the vesting, modifying and granting of stock-based compensation awards were $177,725 and $11,300 for the three months ended September 30, 2015 and 2014, respectively and $228,732 and $62,947 for the nine month period ended September 30, 2015 and 2014, respectively. Such expenses have been included in general and administrative and mineral exploration and evaluation expense.

The following table summarizes the Company’s stock-based compensation activity for the nine month period ended September 30, 2015:

							Weighted
			Weighted				Average
			Average				Remaining
			Grant		Weighted		Contractual		Aggregate
	Number of		Date Fair		Average		Life		Intrinsic
	Shares		Value		Exercise Price		(Years)		Value
Outstanding, December 31, 2014		17,387,745	$	0.24	$	0.55		4.53
Options/warrants granted		6,557,714		0.07		0.49		5.09
Options/warrants expired		(35,605)		0.31		0.84		-
Options/warrants exercised		-		-		-		-
Outstanding, September 30, 2015		23,909,854	$	0.20	$	0.53		4.12	$	-
Exercisable, September 30, 2015		19,805,854	$	0.21	$	0.53		3.93	$	-

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the quarter ended September 30, 2015 in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable.

Unvested awards - The following table summarizes the changes of the Company’s stock-based compensation awards subject to vesting for the nine month period ended September 30, 2015:

			Weighted
	Number of		Average
	Shares Subject		Grant Date
	to Vesting		Fair Value
Unvested, December 31, 2014		350,000	$	0.93
Options/warrants granted		3,804,000		0.09
Options/warrants vested		(50,000)		0.55
Unvested, September 30, 2015		4,104,000	$	0.16

For the three month periods ended September 30, 2015 and 2014, the total grant fair value of shares vested was $27,708 and $27,708, respectively. For the nine month periods ended September 30, 2015 and 2014 the total grant date fair value of shares vested was $27,708 and $102,439, respectively. As of September 30, 2015, there was $262,468 of total unrecognized compensation cost related to unvested stock-based compensation awards. The weighted average period over which the related expense will be recognized was 0.23 years as of September 30, 2015. Included in the total of unvested stock options at September 30, 2015, was 250,000 performance-based stock options. At September 30, 2015, management determined that achievement of the performance targets was probable. The weighted average period over which the related expense will be recognized was 0.25 years as of September 30, 2015.

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STOCK-BASED COMPENSATION (Changes of Stock-Based Compensation Awards Subject to Vesting) (Details)	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Number of Shares Subject to Vesting
Unvested	350,000
Options/warrants granted	3,804,000
Options/warrants vested	(50,000)
Unvested	4,104,000
Weighted Average Grant Date Fair Value
Unvested | $ / shares	$ 0.93
Options/warrants granted | $ / shares	0.09
Options/warrants vested | $ / shares	0.55
Unvested | $ / shares	$ 0.16

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PROPERTY RENTAL AGREEMENTS AND LEASES (Additional Information) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Operating Leased Assets [Line Items]
Operating Leases, Income Statement, Minimum Lease Revenue	$ 1,700

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STOCK-BASED COMPENSATION (Stock-Based Compensation Activity) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Number of Shares
Outstanding	17,387,745
Options/warrants granted	6,557,714
Options/warrants expired	(35,605)
Options/warrants exercised	0
Outstanding	23,909,854	17,387,745
Exercisable	19,805,854
Weighted Average Grant Date Fair Value
Outstanding	$ 0.24
Options/warrants granted	0.07
Options/warrants expired	0.31
Options/warrants exercised	0
Outstanding	0.20	$ 0.24
Exercisable	0.21
Weighted Average Exercise Price
Outstanding	0.55
Options/warrants granted	0.49
Options/warrants expired	0.84
Options/warrants exercised	0
Outstanding	0.53	$ 0.55
Exercisable	$ 0.53
Weighted Average Remaining Contractual Life (Years)
Outstanding	4 years 1 month 13 days	4 years 6 months 11 days
Options/warrants granted	5 years 1 month 2 days
Exercisable	3 years 11 months 5 days
Aggregate Intrinsic Value
Outstanding	$ 0
Exercisable	$ 0

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2015

STOCKHOLDERS' EQUITY [Abstract]

Schedule Of Outstanding Warrants Issued To Investors To Purchase Common Stock

The following summarizes the exercise price per share and expiration date of our outstanding warrants issued to investors and vendors to purchase common stock at September 30, 2015:

Shares Underlying
Outstanding Warrants	Exercise Price		Expiration Date
3,410,526	$	1.27	November 2015
5,736,501		1.29	November 2015
7,042,387		1.85	November 2015
1,000,000		0.375	June 2016
3,000,000		0.375	June 2017
316,752		0.30	September 2019
2,197,496		0.30	October 2019
1,000,000		0.30	November 2019
1,498,750		0.30	December 2019
3,981,000		0.50	December 2019
4,250,000		0.50	March 2020
2,843,000		0.50	May 2020
2,215,429		0.50	July 2020
327,900		0.50	September 2020
38,819,741

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CONVERTIBLE NOTES (Additional Information) (Details) - USD ($)	1 Months Ended		9 Months Ended
	Sep. 18, 2015	Sep. 18, 2013	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Sep. 10, 2014	Dec. 31, 2013
Debt Conversion [Line Items]
Proceeds from Convertible Debt			$ 0	$ 69,000
Percentage Of Principal Balance Payable Upon Change Of Control			120.00%
Debt Instrument, Convertible, Conversion Price			$ 0.39
Debt Conversion, Converted Instrument, Shares Issued	327,900
Deferred Finance Costs, Noncurrent, Net			$ 79,073		$ 97,401
Notes Payable Additional Issuance			0		69,000	$ 69,000
Derivative Liability			0		0		$ (81,574)
Restricted Cash and Cash Equivalents			$ 227,345		$ 0
Convertible Notes Payable [Member]
Debt Conversion [Line Items]
Proceeds from Convertible Debt		$ 4,000,000
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate		7.00%
Debt Instrument, Debt Default, Percentage Of Interest		9.00%
Percentage Of Principal Balance Payable Upon Change Of Control		120.00%
Additional Secured Indebtedness Amount		$ 600,000
Debt Instrument, Convertible, Conversion Price		$ 0.40	$ 0.39
Debt Conversion, Converted Instrument, Shares Issued			10,433,333
Debt Instrument, Interest Rate, Basis for Effective Rate			15.4
Deferred Finance Costs, Noncurrent, Net		$ 126,446
Derivative Liability		$ 1,261,285

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

16. COMMITMENTS AND CONTINGENCIES

Severance agreements – The Company has severance agreements with two executive officers that provide for various payments if the officer’s employment agreement is terminated by the Company, other than for cause. At September 30, 2015, the total potential liability for severance agreements was $112,500.

Clarkdale Slag Project royalty agreement - NMC - Under the original JV Agreement, the Company agreed to pay NMC a 5% royalty on NSR payable from the Company’s 50% joint venture interest in the production from the Clarkdale Slag Project. Upon the assignment to the Company of VRIC’s 50% interest in the Joint Venture Agreement in connection with the reorganization with Transylvania International, Inc., the Company continues to have an obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project.

Purchase consideration Clarkdale Slag Project - In consideration of the acquisition of the Clarkdale Slag Project from VRIC, the Company has agreed to certain additional contingent payments. The acquisition agreement contains payment terms which are based on the Project Funding Date as defined in the agreement:

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

b) 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 NSR 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: (i) the end of the first calendar year in which the Project Royalty equals or exceeds $500,000 or (ii) 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; and,

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

The Advance Royalty shall continue for a period of ten years from the Agreement Date or until such time that the Project Royalty shall exceed $500,000 in any calendar year, at which time the Advance Royalty requirement shall cease.

On July 25, 2011, the Company and NMC entered into an amendment (the “Third Amendment”) to the assignment agreement between the parties dated June 1, 2005. Pursuant to the Third Amendment, the Company agreed to pay advance royalties (the “Advance Royalties”) to NMC of $15,000 per month (the “Minimum Royalty Amount”) effective as of January 1, 2011. The Third Amendment also provides that the Minimum Royalty Amount will continue to be paid to NMC in every month where the amount of royalties otherwise payable would be less than the Minimum Royalty Amount, and such Advance Royalties will be treated as a prepayment of future royalty payments. In addition, fifty percent of the aggregate consulting fees paid to NMC from 2005 through December 31, 2010 were deemed to be prepayments of any future royalty payments. As of December 31, 2010, aggregate consulting fees previously incurred amounted to $1,320,000, representing credit for advance royalty payments of $660,000.

Total advance royalty fees were $45,000 and $45,000 for the three month periods ended September 30, 2015 and 2014, respectively and $135,000 and $135,000 for the nine month periods ended September 30, 2015 and 2014, respectively. Advanced royalty fees have been included in mineral exploration and evaluation expenses – related party on the statements of operations.

Development agreement - In January 2009, the Company submitted a development agreement to the Town of Clarkdale for development of an Industrial Collector Road (the “Road”). The purpose of the Road is to provide the Company the capability to transport supplies, equipment and products to and from the Clarkdale Slag Project site efficiently and to meet stipulations of the Conditional Use Permit for the full production facility at the Clarkdale Slag Project.

The timing of the development of the Road is to be within two years of the effective date of the agreement. The effective date shall be the later of (i) 30 days from the approving resolution of the agreement by the Council, (ii) the date on which the Town of Clarkdale obtains a connection dedication from separate property owners who have land that will be utilized in construction of the Road, or (iii) the date on which the Town of Clarkdale receives the proper effluent permit. The contingencies outlined in (ii) and (iii) above are beyond control of the Company.

The Company estimates the initial cost of construction of the Road to be approximately $3,500,000 and the cost of additional enhancements to be approximately $1,200,000 which will be required to be funded by the Company. Based on the uncertainty of the contingencies, this cost is not included in the Company’s current operating plans. Funding for construction of the Road will require obtaining project financing or other significant financing. As of the date of this filing, these contingencies had not changed.

Registration Rights Agreement - In connection with the June 7, 2012 private placement, the Company entered into a Registration Rights Agreement (“RRA”) with the purchasers. Pursuant to the RRA, the Company agreed to certain demand registration rights. These rights include the requirement that the Company file certain registration statements within a specified time period and to have these registration statements declared effective within a specified time period. The Company also agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions. If the Company is not able to comply with these registration requirements, the Company will be required to pay cash penalties equal to 1.0% of the aggregate purchase price paid by the investors for each 30 day period in which a registration default, as defined by the RRA, exists. The maximum penalty is equal to 3.0% of the purchase price which amounts to $121,500. As of the date of this filing, the Company does not believe the penalty to be probable and accordingly, no liability has been accrued.

Registration Rights Agreement - In connection with the September 18, 2013 convertible notes issuance, the Company entered into a RRA with the investors. Pursuant to the RRA, the Company agreed to file a registration statement covering the resale of the shares of common stock issuable upon conversion of the notes and the additional notes allowed for under the agreement. Pursuant to the RRA, the Company agreed to certain demand registration rights. These rights include the requirement that the Company file certain registration statements within a specified time period and to have these registration statements declared effective within a specified time period. The Company also agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions. The Purchasers will also be granted piggyback registration rights with respect to such shares. If the Company is not able to comply with these registration requirements, the Company will be required to pay cash penalties equal to 1.0% of the purchase price. The maximum penalty is equal to 3.0% of the purchase price which amounts to $120,000 for the convertible notes and $18,000 for the additional notes. As of the date of this filing, the Company does not believe the penalty to be probable and accordingly, no liability has been accrued.

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DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Description of business

Description of business - Searchlight Minerals Corp. (the “Company”) has been in the exploration stage 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

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 United Kingdom (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 the Company 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.” (“Phage”).

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 and its Board of Directors approved a change in its name from Phage to "Searchlight Minerals Corp.” effective June 23, 2005.

Going concern

Going concern - The accompanying consolidated financial statements were prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raise substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business it must raise additional equity or debt capital and continue cost cutting measures. There can be no assurance that the Company will be able to achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management.

If the Company continues to incur operating losses and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations and 2) the Company’s inability to fully implement its current business plan. There can be no assurance that the Company will successfully improve its liquidity position. The accompanying consolidated financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty.

As of September 30, 2015, the Company had cumulative net losses of $80,282,950 from operations and had not commenced its commercial mining and mineral processing operations; rather it is still in the exploration stage. For the nine month period ended September 30, 2015, the Company incurred a net loss of 24,877,141, had negative cash flows from operating activities of $3,055,659 and will incur additional future losses due to planned continued exploration expenses. In addition, the Company had a working capital deficit totaling $4,287,313 at September 30, 2015.

To address liquidity constraints, the Company will seek additional sources of capital through the issuance of equity or debt financing. Additionally, the Company has reduced expenses and elected to defer payment of certain obligations. Cash conservation measures include, but are not limited to, the deferred payment where available of outsourced consulting fees, current and future board fees, officer salaries, monthly professional fees, and the Verde River Iron Company, LLC (“VRIC”) monthly payable. These activities have reduced the required cash outlay of the Company’s business significantly. The Company is focused on continuing to reduce costs and obtaining additional funding. There is no assurance that such funding will be available on terms acceptable to the Company, or at all. If the Company raises additional funds by selling additional shares of capital stock, securities convertible into shares of capital stock or the issuance of convertible debt, the ownership interest of the Company’s existing common stock holders will be diluted.

Basis of presentation

Basis of presentation - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company’s fiscal year-end is December 31.

These condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. All such adjustments are, in the opinion of management, of a normal recurring nature with the exception of recording a full valuation allowance on certain deferred tax assets as discussed in Note 15. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on April 13, 2015.

Principles of consolidation

Principles of consolidation - The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Clarkdale Minerals, LLC (“CML”) and Clarkdale Metals Corp. (“CMC”). Significant intercompany accounts and transactions have been eliminated.

Use of estimates

Use of estimates - The preparation of financial statements in conformity with U.S. GAAP 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. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include the valuation of stock-based compensation and derivative liabilities, impairment analysis of long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates.

Capitalized interest cost

Capitalized interest cost - The Company capitalizes interest cost related to acquisition, development and construction of property and equipment which is designed as integral parts of the manufacturing process. The capitalized interest is recorded as part of the asset it relates to and will be amortized over the asset’s useful life once production commences.

Mineral properties

Mineral properties - Costs of acquiring mineral properties are capitalized upon acquisition. Exploration costs and costs to maintain mineral properties are expensed as incurred while the project is in the exploration stage. Once mineral reserves are established, development costs and costs to maintain mineral properties are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the proven and probable reserves.

Mineral exploration and development costs

Mineral exploration and development costs - Exploration expenditures incurred prior to entering the development stage are expensed and included in mineral exploration and evaluation expense.

Property and equipment

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 15 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 operating expenses.

Impairment of long-lived assets

Impairment of long-lived assets - The Company reviews and evaluates its long-lived assets for impairment at each balance sheet date due to its planned exploration stage losses and documents such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property.

The tests for long-lived assets in the exploration, development or production stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.

The Company's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value.

Deferred financing fees

Deferred financing fees – Deferred financing fees represent fees paid in connection with obtaining debt financing. These fees are amortized using the effective interest method over the term of the financing.

Convertible notes - derivative liabilities

Convertible notes – derivative liabilities – The Company evaluates the embedded features of convertible notes to determine if they are required to be bifurcated and recorded as a derivative liability. If more than one feature is required to be bifurcated, the features are accounted for as a single compound derivative. The fair value of the compound derivative is recorded as a derivative liability and a debt discount. The carrying value of the convertible notes is recorded on the date of issuance at its original value less the fair value of the compound derivative.

The derivative liability is measured at fair value on a recurring basis with changes reported in other income (expense). Fair value is determined using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The debt discount is amortized to non-cash interest expense using the effective interest method over the life of the notes. If a conversion of the underlying note occurs, a proportionate share of the unamortized amount is immediately expensed.

Reclamation and remediation costs

Reclamation and remediation costs - For its exploration stage properties, the Company accrues the estimated costs associated with environmental remediation obligations in the period in which the liability is incurred or becomes determinable. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense. The costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule.

Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early stage nature of the exploration project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations in the period an estimate is revised.

The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to reclamation accruals. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known.

Fair value of financial instruments

Fair value of financial instruments - The Company’s financial instruments consist principally of derivative liabilities and the VRIC payable. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels defined as follows:

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company’s financial instruments consist of the VRIC payable (described in Note 9), derivative liabilities and convertible notes (described in Note 7). The VRIC payable and the convertible notes are classified within Level 2 of the fair value hierarchy. The fair value of the VRIC payable approximates carrying value as the imputed interest rate is considered to approximate a market interest rate. The fair value of the convertible notes approximates carrying value as the interest rate is considered to approximate a market interest rate.

The Company calculates the fair value of its derivative liabilities using various models which are all Level 3 inputs. The fair value of the derivative warrant liability (described in Note 6) is calculated using the Binomial Lattice model, and the fair value of the derivative liability - convertible notes (described in Note 8) is calculated using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The change in fair value of the derivative liabilities is classified in other income (expense) in the consolidated statement of operations. The Company generally does not use derivative financial instruments to hedge exposures to cash flow, market or foreign currency risks.

There have been no changes in the valuation techniques used for the derivative liabilities. The Company does not have any non-financial assets or liabilities that it measures at fair value. During the nine months ended September 30, 2015 and 2014, there were no transfers of assets or liabilities between levels.

Per share amounts

Per share amounts - Basic earnings (loss) per share is computed by dividing net income (loss) 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. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as when the exercise price of the instrument exceeds the fair market value of the Company’s common stock and when a net loss is reported. The dilutive effect of convertible debt securities is reflected in the diluted earnings (loss) per share calculation using the if-converted method. Conversion of the debt securities is not assumed for purposes of calculating diluted earnings (loss) per share if the effect is anti-dilutive. 73,162,932 and 37,054,430 stock options, warrants and common shares issuable upon the conversion of notes were outstanding as of September 30, 2015 and 2014, respectively, but were not considered in the computation of diluted earnings per share as their inclusion would be anti-dilutive.

Stock-based compensation

Stock-based compensation - Stock-based compensation awards are recognized in the consolidated financial statements based on the grant date fair value of the award which is estimated using the Binomial Lattice option pricing model. The Company believes that 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 the actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock.

The fair value of performance-based stock option grants is determined on their grant date through the use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements.

The Company accounts for stock options issued to non-employees based on the estimated fair value of the awards using the Binomial Lattice option pricing model. The measurement of stock-based compensation to non-employees is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in the Company’s consolidated statements of operations during the period the related services are rendered.

Income taxes

Income taxes - For interim reporting periods, the Company uses the annualized effective tax rate (“AETR”) method to calculate its income tax provision. Under this method, the AETR is applied to the interim year-to-date pre-tax losses to determine the income tax benefit or expense for the year-to-date period. The income tax benefit or expense for a quarter represents the difference between the year-to-date income tax benefit or expense for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the Company’s annual operating results and AETR.

The Company follows the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.

For acquired properties that do not constitute a business, a deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with Accounting Standards Codification (“ASC”) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, 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.

Recent accounting standards

Recent accounting standards - From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In November 2014, the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The ASU clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. The ASU is effective for fiscal years and interim periods beginning after December 15, 2015. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows.

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DERIVATIVE WARRANT LIABILITY (Changes in Fair Value of Derivative Liabilities) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Derivative [Line Items]
Beginning balance	$ 0	$ (81,574)
Adjustment to warrants	0	0
Change in fair value	0	81,574
Ending balance	$ 0	$ 0

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Cost	$ 15,127,517	$ 15,122,730
Accumulated Depreciation	(8,473,294)	(7,404,968)
Net Book Value	6,654,223	7,717,762
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Cost	38,255	38,255
Accumulated Depreciation	(37,868)	(37,476)
Net Book Value	387	779
Lab Equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	249,061	249,061
Accumulated Depreciation	(249,061)	(247,356)
Net Book Value	0	1,705
Computers and Equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	71,407	68,558
Accumulated Depreciation	(59,926)	(54,025)
Net Book Value	11,481	14,533
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Cost	47,675	47,675
Accumulated Depreciation	(45,983)	(45,458)
Net Book Value	1,692	2,217
Slag conveyance equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	300,916	300,916
Accumulated Depreciation	(300,916)	(300,916)
Net Book Value	0	0
Demo Module Building [Member]
Property, Plant and Equipment [Line Items]
Cost	6,630,063	6,630,063
Accumulated Depreciation	(4,361,115)	(3,863,860)
Net Book Value	2,268,948	2,766,203
Grinding Circuit [Member]
Property, Plant and Equipment [Line Items]
Cost	913,679	913,679
Accumulated Depreciation	(19,167)	(11,667)
Net Book Value	894,512	902,012
Extraction Circuit [Member]
Property, Plant and Equipment [Line Items]
Cost	938,352	938,352
Accumulated Depreciation	(415,750)	(274,997)
Net Book Value	522,602	663,355
Leaching And Filtration [Member]
Property, Plant and Equipment [Line Items]
Cost	1,300,618	1,300,618
Accumulated Depreciation	(1,235,587)	(1,040,494)
Net Book Value	65,031	260,124
Fero-silicate storage [Member]
Property, Plant and Equipment [Line Items]
Cost	4,326	4,326
Accumulated Depreciation	(2,055)	(1,731)
Net Book Value	2,271	2,595
Electrowinning Building [Member]
Property, Plant and Equipment [Line Items]
Cost	1,492,853	1,492,853
Accumulated Depreciation	(709,105)	(597,141)
Net Book Value	783,748	895,712
Site improvements [Member]
Property, Plant and Equipment [Line Items]
Cost	1,677,844	1,675,906
Accumulated Depreciation	(684,647)	(591,259)
Net Book Value	993,197	1,084,647
Site equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	360,454	360,454
Accumulated Depreciation	(352,114)	(338,588)
Net Book Value	8,340	21,866
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Cost	1,102,014	1,102,014
Accumulated Depreciation	0	0
Net Book Value	$ 1,102,014	$ 1,102,014

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (24,877,141)	$ (14,177,740)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,068,325	1,136,174
Stock based compensation	228,732	62,947
Stock based expenses	41,588	0
(Gain) loss on asset dispositions and impairment	(2,548)	18,140,349
Amortization of prepaid expense	235,024	263,493
Amortization of debt financing fees and debt discount	194,801	180,197
Deferred income taxes	20,677,458	(8,747,063)
Change in fair value of derivative liabilities	(753,260)	(329,430)
Loss on interest settled in shares	10,666	19,005
Accounts payable settlement	(378,136)	0
Changes in operating assets and liabilities:
Restricted cash	(227,345)	0
Prepaid expenses	(256,183)	(204,576)
Reclamation bond and deposits	0	(325)
Accounts payable and accrued liabilities	982,360	1,236,483
Net cash used in operating activities	(3,055,659)	(2,420,486)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from property and equipment dispositions, net	457,548	245,943
Purchase of property and equipment	(4,786)	(64,206)
Net cash provided by investing activities	452,762	181,737
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuance	3,270,451	575,000
Stock issuance costs	(22,172)	0
Proceeds from convertible notes	0	69,000
Payments on VRIC payable - related party	0	(120,000)
Net cash provided by financing activities	3,248,279	524,000
NET CHANGE IN CASH	645,382	(1,714,749)
CASH AT BEGINNING OF PERIOD	584,976	2,065,824
CASH AT END OF PERIOD	1,230,358	351,075
SUPPLEMENTAL INFORMATION
Interest paid, net of capitalized amounts	46,011	154,735
Income taxes paid	0	0
Non-cash investing and financing activities:
Common stock subscribed in satisfaction of accrued interest	0	126,700
Accrued Liabilities [Member]
Non-cash investing and financing activities:
Common stock subscribed in satisfaction of accrued interest	243,880	0
Accounts Payable [Member]
Non-cash investing and financing activities:
Accounts payable satisifed by contribution of capital	$ 0	$ 50,000

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

9 Months Ended

Sep. 30, 2015

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract]

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at September 30, 2015 and December 31, 2014 consisted of the following:

	September 30, 2015		December 31, 2014
Trade accounts payable	$	583,058	$	728,021
Accrued compensation and related taxes		347,247		88,293
Accrued interest		46,128		81,637
	$	976,433	$	897,951

Accounts payable – related party are discussed in Note 19.

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VRIC PAYABLE - RELATED PARTY (Future Principal Payments on VRIC Payable) (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
2016	$ 630,000
2017	131,195
Thereafter	0
Total minimum payments	761,195
Less: amount representing interest	(63,051)
Present value of minimum payments	698,144
VRIC payable, current portion	569,288	$ 315,552
VRIC payable, net of current portion	$ 128,856	$ 382,592

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COMMITMENTS AND CONTINGENCIES (Additional Information) (Details) - USD ($)		1 Months Ended		3 Months Ended		9 Months Ended
	Jun. 07, 2012	Sep. 18, 2013	Feb. 15, 2007	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Jul. 25, 2011	Dec. 31, 2010	May. 20, 2005
Commitments and Contingencies Disclosure [Line Items]
Cash penalties as a percentage of purchase price paid by investors	1.00%	1.00%
Potential Liability for Severance Agreements				$ 112,500		$ 112,500
Long-term Construction Loan				3,500,000		3,500,000
Long-term Construction Loan, Current				1,200,000		1,200,000
Payments for Royalties				$ 45,000	$ 45,000	$ 135,000	$ 135,000
Additional Notes Payables [Member]
Commitments and Contingencies Disclosure [Line Items]
Payment, Period		$ 18,000
Maximum [Member]
Commitments and Contingencies Disclosure [Line Items]
Cash penalties as a percentage of purchase price paid by investors	3.00%	3.00%
Payment, Period	$ 121,500
Maximum [Member] | Convertible Notes Payable [Member]
Commitments and Contingencies Disclosure [Line Items]
Payment, Period		$ 120,000
Nanominerals Corporation [Member]
Commitments and Contingencies Disclosure [Line Items]
Advance royalty payment amount								$ 15,000	$ 660,000
Clarkdale Slag Project [Member] | Nanominerals Corporation [Member]
Commitments and Contingencies Disclosure [Line Items]
Additional contingent payment									$ 1,320,000
Royalty payment percentage						2.50%
Joint venture ownership interest			50.00%							50.00%
Clarkdale Slag Project [Member] | Nanominerals Corporation [Member] | Scenario, Previously Reported [Member]
Commitments and Contingencies Disclosure [Line Items]
Royalty payment percentage						5.00%
Joint venture ownership interest			50.00%	50.00%		50.00%
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member]
Commitments and Contingencies Disclosure [Line Items]
Additional contingent payment			$ 6,400,000
Advance royalty payment amount			500,000
The Minimum project royalty payments that should be made for the advance royalty not to remains payable			$ 500,000
Royalty payment percentage			2.50%
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Scenario, Previously Reported [Member]
Commitments and Contingencies Disclosure [Line Items]
Royalty payment percentage			5.00%
Joint venture ownership interest			50.00%
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Minimum [Member]
Commitments and Contingencies Disclosure [Line Items]
Advance royalty payment amount			$ 500,000
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Royalty Payments [Member]
Commitments and Contingencies Disclosure [Line Items]
Additional contingent payment			500,000
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Cash Flow [Member]
Commitments and Contingencies Disclosure [Line Items]
Additional contingent payment			$ 3,500,000
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Nanominerals Corporation [Member]
Commitments and Contingencies Disclosure [Line Items]
Royalty payment percentage			2.50%			2.50%

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2015

PROPERTY AND EQUIPMENT [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

	September 30, 2015						December 31, 2014
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Depreciation		Value		Cost		Depreciation		Value
Furniture and fixtures	$	38,255	$	(37,868)	$	387	$	38,255	$	(37,476)	$	779
Lab equipment		249,061		(249,061)		-		249,061		(247,356)		1,705
Computers and equipment		71,407		(59,926)		11,481		68,558		(54,025)		14,533
Vehicles		47,675		(45,983)		1,692		47,675		(45,458)		2,217
Slag conveyance equipment		300,916		(300,916)		-		300,916		(300,916)		-
Demo module building		6,630,063		(4,361,115)		2,268,948		6,630,063		(3,863,860)		2,766,203
Grinding circuit		913,679		(19,167)		894,512		913,679		(11,667)		902,012
Extraction circuit		938,352		(415,750)		522,602		938,352		(274,997)		663,355
Leaching and filtration		1,300,618		(1,235,587)		65,031		1,300,618		(1,040,494)		260,124
Fero-silicate storage		4,326		(2,055)		2,271		4,326		(1,731)		2,595
Electrowinning building		1,492,853		(709,105)		783,748		1,492,853		(597,141)		895,712
Site improvements		1,677,844		(684,647)		993,197		1,675,906		(591,259)		1,084,647
Site equipment		360,454		(352,114)		8,340		360,454		(338,588)		21,866
Construction in progress		1,102,014		-		1,102,014		1,102,014		-		1,102,014
	$	15,127,517	$	(8,473,294)	$	6,654,223	$	15,122,730	$	(7,404,968)	$	7,717,762

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SUBSEQUENT EVENTS (Additional Information) (Details)	Nov. 12, 2015 shares
Subsequent Event [Member]
Subsequent Event [Line Items]
Shares of common stock that can be purchased by the warrants	16,189,414

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DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (Additional Information) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Organization And Summary Of Significant Accounting Policies [Line Items]
Retained Earnings (Accumulated Deficit)	$ (80,282,950)		$ (80,282,950)		$ (55,405,809)
Net loss	(23,465,831)	$ (12,103,040)	(24,877,141)	$ (14,177,740)
Cash flows from operating activities			(3,055,659)	$ (2,420,486)
Working Capital Deficit	$ 4,287,313		$ 4,287,313
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			73,162,932	37,054,430
Minimum [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives			3 years
Maximum [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Property and equipment, estimated useful lives			15 years

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INCOME TAXES

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

15. INCOME TAXES

The income tax expense of $21,795,143 for the three months ended September 30, 2015 reflects an effective tax rate of 1305%, which is higher than the effective tax rate of (38)% for the three months ended September 30, 2014.  The income tax expense of $20,677,458 for the nine months ended September 30, 2015 reflects an effective tax rate of 492%, which is higher than the effective tax rate of (38)% for the nine months ended September 30, 2014. The increases in rates for each period are attributed to a change in judgment regarding the need for a full valuation allowance on all of the beginning-of-year and current year deferred tax assets arising from federal and state net operating loss carryforwards, property, plant and equipment and stock based compensation. The change in judgment with respect to the application of the valuation allowance resulted from delays in receiving third party validation of the Company’s production process and as such, the Company’s timeline to production remains uncertain. The valuation allowance recorded on the beginning-of-year deferred tax assets was $20,756,645.

The effective tax rates of 1305% and 492% for the three and nine months ended September 30, 2015, respectively, differed from the U.S. statutory rate of 35%, primarily due to federal and state valuation allowances on all of the Company’s deferred tax assets as discussed above.

The overall effective income tax rate for the year could be different from the effective tax rate for the three and nine months ended September 30, 2015. A summary of our deferred tax assets and liabilities as well as the Company’s federal and state net operating loss carryforwards are included in Note 14 “Income Taxes” in our Annual Report on Form 10-K for the year ended December 31, 2014.

The Company and its subsidiaries file income tax returns in the United States. These tax returns are subject to examination by taxation authorities provided the years remain open under the relevant statutes of limitations, which may result in the payment of income taxes and/or decreases in its net operating losses available for carryforward. The Company has losses from inception to date, and thus all years remain open for examination. While the Company believes that its tax filings do not include uncertain tax positions, the results of potential examinations or the effect of changes in tax law cannot be ascertained at this time. The Company does not have any tax returns currently under examination by the Internal Revenue Service.