Industrial Minerals provides corporate update

    TORONTO, Dec. 20 /CNW/ - 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
    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.
    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
    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
    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.

For further information:

For further information: David Wodar, President, Industrial Minerals
Inc.,, 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

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