TORONTO, Dec. 20 /PRNewswire-FirstCall/ - Industrial Minerals Inc. -OTCBB: IDSM - (or 'the Company') today announced it has deferred its previously announced private placement, intended to raise up to US $5.0 million, due to current volatile capital market conditions. The Company will re-evaluate the market in early 2008 when management believes the market more accurately reflects the company's valuation.

The funds from the private placement are intended to be used for the building of the planned pilot plant, preparation of an application for a Canadian stock exchange listing, and for general corporate purposes (which may include further exploration and development of the Company's Bissett Creek Graphite Project). The deferral of the financing may not adversely affect the schedule for the plant, as the engineering portion of the project remains ongoing.

The Company also continues to move forward actively with its market development efforts. Its short-term focus will be on completion of preliminary letters of intent (LOI) with strategic customers in the traditional graphite market segments. These LOI's will provide the Company with a strong base on which to build its broader market strategies in emerging high-value, high-growth segments.

Of particular interest to Industrial Minerals is the battery sector, particularly those used in the rapidly expanding hybrid electric vehicle (HEV) marketplace. Recent comprehensive market studies have projected dramatic increases in HEV adoption over the next five to seven years. Industrial Minerals is positioning itself to capitalize on these growth opportunities by developing its high quality, large flake Bissett Creek graphite project.

    No stock exchange, securities commission or other regulatory authority
    has approved or disapproved the information contained herein.

    About Industrial Minerals Inc.
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Industrial Minerals Inc., through its wholly owned subsidiary Industrial Minerals Canada Inc., headquartered in Oakville, Ontario, Canada, owns 100% of the undivided interest in the Bissett Creek Graphite patented mineral lease, containing a resource of 327,700 tonnes indicated plus 397,900 tonnes inferred of flake graphite based on approximately 10% of the patented mineral leases that have been drilled to date. The property is comprised of 28 claims covering an area of approximately 1,315 hectares (3,250 acres). It has been the subject of substantial earlier exploration drilling, trenching and metallurgical test work by KHD Canada, Kilborn Engineering, Pincock Alan and Holt and Cominco Engineering Services. The property is located in Maria Township in the Province of Ontario, Canada. The Company believes the property is 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 graphite in 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 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. In addition, estimates of mineral reserves and resources may constitute forward looking statements to the extent they involve estimates of the mineralization that will be encountered if the property is developed. 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-KSB for 2006 as filed with the Securities and Exchange Commission. There can be no assurance that future developments affecting the Company will be those anticipated by management or set forth in this news release. The Company is not obligated, and assumes no obligation, to revise or update any forward-looking statements in order to reflect events or circumstances that may 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 the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in National Instrument 43-101, commonly referred to as NI 43-101. U.S. reporting requirements for disclosure of mineral properties are governed by the United States Securities and Exchange Commission (SEC) Industry Guide 7. Canadian and Guide 7 standards are substantially different. This press release uses the terms 'indicated' and 'inferred' resources. We advise investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that enable them to be categorized as mineral reserves.

SOURCE Industrial Minerals Inc.