Industrial Minerals Inc. announces engagement of agent for up to US $5.0 million

All securities issued in connection with the private placement will besubject to resale restrictions under securities laws. The Company has agreedto use its best commercial efforts (i) in the United States, to complete, fileand have become effective a registration statement that allows for the resalein the United States of certain of the securities issued pursuant to theoffering, and (ii) in Canada, to prepare and file a preliminary long formprospectus and a (final) long form prospectus in order for the Company tobecome a reporting issuer or the equivalent in each Canadian province otherthan Quebec and qualifying the distribution of certain of the securitiesissued pursuant to the offering, in each case within 120 days of the closingof the offering. If these obligations have not been satisfied within 120 daysof the closing of the offering, then the Company will issue to each purchaserof Special Warrants additional Special Warrants equal to 1% of the SpecialWarrants purchased by such purchaser for each month (or part thereof) duringwhich such obligations have not been satisfied. Notwithstanding any failure bythe Company to satisfy these obligations within 120 days of the closing of theoffering, the Company shall continue to use its best commercial efforts tosatisfy such obligations as soon as possible thereafter.

The funds from the private placement will be used for the building of theplanned pilot plant, preparation of an application for a Canadian stockexchange listing, and for general corporate purposes (which may includefurther exploration and development of the Company's Bissett Creek Project).

"We are extremely pleased that with the results from the preliminaryassessment (NI 43-101), the Agent has taken special interest in our BissettCreek graphite project," said David Wodar, President & CEO of IndustrialMinerals Inc. "This funding will provide the necessary working capital for thebuilding of our pilot plant, the expansion of our resources through moreexploration on known areas of the remaining 90% of the property, and allow usto work toward a listing on a recognized Canadian stock exchange."

    The Special Warrants, the common shares and warrants issuable upon    exercise of the Special Warrants, and the common shares issuable upon    exercise of the warrants have not been registered under the United States    Securities Act of 1933, as amended (the "Securities Act"), or the    securities laws of any other jurisdiction, and may not be offered or sold    in the United States or to, or for the account or benefit of, a U.S.    person without registration under, or an applicable exemption from, the    registration requirements of the Securities Act, and will be subject to    resale restrictions in Canada.    No stock exchange, securities commission or other regulatory authority    has approved or disapproved the information contained herein.

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Industrial Minerals Inc. through its wholly owned subsidiary IndustrialMinerals Canada Inc., headquartered in Oakville, Ontario, Canada, owns 100% ofthe undivided interest in the Bissett Creek Graphite patented mineral lease,containing a resource of 327,700 tonnes indicated plus 397,900 tonnes inferredof flake graphite based on approximately 10% of the patented mineral leasesthat have been drilled to date. The property is comprised of 28 claimscovering an area of approximately 1,315 hectares (3,250 acres). It has beenthe subject of substantial earlier exploration drilling, trenching andmetallurgical test work by KHD Canada, Kilborn Engineering, Pincock Alan andHolt and Cominco Engineering Services. The property is located in MariaTownship in the Province of Ontario, Canada. The Company believes the propertyis one of the largest and purest natural flake graphite deposits in the world.Its goal is to become the leading producer of large flake crystalline graphitein North America and a prominent market participant internationally.

Safe Harbor Statement

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All statements contained herein, as well as oral statements that may bemade by the Company or by officers, directors or employees of the Companyacting on the Company's behalf that are not statements of historical fact,constitute "forward-looking statements" and are made pursuant to theSafe-Harbor provisions of the Private Securities Litigation Reform Act of1995. In addition, estimates of mineral reserves and resources may constituteforward looking statements to the extent they involve estimates of themineralization that will be encountered if the property is developed. Suchforward-looking statements involve known and unknown risks, uncertainties andother factors that could cause the actual results of the company to bematerially different from the historical results or from any future resultsexpressed or implied by such forward-looking statements. Such risks anduncertainties are outlined in the Company's Annual Report on Form 10-KSB for2006 as filed with the Securities and Exchange Commission. There can be noassurance that future developments affecting the Company will be thoseanticipated by management or set forth in this news release. The Company isnot obligated, and assumes no obligation, to revise or update anyforward-looking statements in order to reflect events or circumstances thatmay arise after the date of this news release.

Information Concerning Mineralization and Resources

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All mineral resources have been estimated in accordance with thedefinition standards on mineral resources and mineral reserves of the CanadianInstitute of Mining, Metallurgy and Petroleum referred to in NationalInstrument 43-101, commonly referred to as NI 43-101. U.S. reportingrequirements for disclosure of mineral properties are governed by the UnitedStates Securities and Exchange Commission (SEC) Industry Guide 7. Canadian andGuide 7 standards are substantially different. This press release uses theterms "indicated" and "inferred" resources. We advise investors that whilethose terms are recognized and required by Canadian regulations, the SEC doesnot recognize them. Inferred mineral resources are considered too speculativegeologically to have economic considerations applied to them that enable themto be categorized as mineral reserves.

For further information

David Wodar, President, Industrial MineralsInc., , Tel: (905) 829-0220, Fax: (905)829-5220, Toll free: 1-888-829-0220
Or: Martti Kangas, The Equicom Group,, Tel: (416) 815-0700 x 243