Searchlight Minerals Corp. (OTCPK:SRCH) announced that it has entered into a term sheet with respect to a binding commitment for a private placement of secured convertible notes for gross proceeds of $5,000,000 on August 19, 2013. The notes will be due five years from the date of issuance.

The note holders will have a put option on the second anniversary of the issuance date and every six months thereafter, at par plus accrued and unpaid interest. The notes will bear interest at a rate of 7% per annum which will be paid in cash semi-annually. The notes are convertible into common stock of the company at $0.40 per share.

The transaction will include participation from existing investor Luxor Capital Partners, L.P., a fund managed by Luxor Capital Group, LP., which will subscribe to notes for proceeds of $2,600,000. Luxor Capital Partners, L.P. will act as the lead investor. The company will have until September 2, 2013 to seek additional potential accredited investors who will be provided the opportunity to subscribe notes for an additional $2,400,000.

The company is in the process of securing additional commitments from accredited investors. The investors shall have the right to purchase pro rata up to $750,000 of additional separate notes, of which Luxor Capital Partners shall be able to purchase up to $390,000 of the separate notes, on or before the first anniversary of the issuance date. The additional notes shall bear identical terms as the notes being issued in this transaction.

The company shall reimburse the investors only for all reasonable out of pockets fees and expenses incurred in relation to the transactions contemplated by this term sheet.