SOURCE: Industrial Minerals Inc.

December 07, 2006 08:30 ET

Industrial Minerals, Inc. Enters Final Stage of Process Optimization

TORONTO -- (MARKET WIRE) -- December 7, 2006 -- Industrial Minerals, Inc. (OTCBB: IDSM) (the "Company") announced today it has contracted Dr. W. Tai Yen, Professor Emeritus at Queen's University Department of Mining in Kingston, Ontario, Canada, to initiate the final step of the analysis to optimize liberation of Bissett Creek's jumbo graphite flake.

Mr. David Michaud, the metallurgical consultant who is coordinating Dr. Yen's work on behalf of the Company commented as follows:

"This test will confirm the true particle size distribution of the final product and is expected to significantly improve the economics of the project by reducing degradation of the jumbo flake."

The ore sample will be provided by Industrial Minerals, Inc. The upgrading process and assaying work will be tested and developed at Queen's University.

Preparations for further coarse flake extraction process optimization are underway. The Company is awaiting proposals from geological and mining consulting firms to produce a complete and detailed resource model with the intent to award a contract in early 2007. Thanks to its pre-production trials, the Company has acquired graphite samples it is now capable of using to aggressively continue meetings with serious potential end-users to negotiate potential off-take agreements. Knight Piesold is continuing to keep the mine closure plan in compliance.

About Industrial Minerals, Inc.

Industrial Minerals Inc. through its wholly owned subsidiary Industrial Minerals Canada Inc., headquartered in Toronto, Ontario, Canada, owns 100% of the undivided interest in the Bissett Creek Graphite patented mineral lease, containing a resource of 640,000 tonnes of flake graphite on approximately 10% of the patented mineral lease that has been drilled to date. The property is comprised of 28 patented claims covering an area of approximately 504 hectares (1,245 acres). It has been the subject of substantial earlier exploration drilling, trenching and metallurgical test work by KHD Canada, Kilborn Engineering, Pincock Allan and Holt and Cominco Engineering Services. The property is located in Maria Township in the Province of Ontario, Canada. The property is one of the largest and purest natural flake graphite deposits in the world. The Company plans to become the leading producer of large flake crystalline graphite in North America and a prominent market participant internationally.

Safe Harbor Statement

All statements contained herein, as well as oral statements that may be made by the Company or by officers, directors or employees of the Company acting on the Company's behalf that are not statements of historical fact, constitute "forward-looking statements" and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties are outlined in the Company's Annual Report on Form 10-K for 2005 as filed with the Securities and Exchange Commission. The Company is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

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