Industrial Minerals Files Amended NI 43-101 Technical Report and Clarifies Historical Technical Disclosure

OTTAWA, ONTARIO -- (Marketwire) -- 02/22/11 -- As a result of a review by the British Columbia Securities Commission (the 'BCSC'), Industrial Minerals, Inc. ('IDSM' or the 'Company') (OTCBB: IDSM) has filed, and its 42% owned subsidiary Northern Graphite Corporation ('Northern') will file shortly, an amended and restated technical report with respect to the Bissett Creek graphite project located in Northern Ontario (the 'Bissett Creek Project') prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101'). Reference is also made to the press release issued by the Company on October 1, 2010 clarifying its historical disclosure with respect to the Bissett Creek Project.

In 2007, the Company retained Geostat Systems International Inc. (now SGS Canada Inc.) ('SGS'), a qualified independent consultant, to prepare a technical report, including a preliminary economic assessment, on the Bissett Creek Project in accordance with NI 43-101 (the '2007 Technical Report'). Due to financial difficulties experienced by the Company at the time, the 2007 Technical Report was not finalized and filed with applicable Canadian securities regulatory authorities, although the Company had issued certain press releases that summarized or referred to information from the report, including with respect to a mineral resource estimate and a preliminary assessment on the Bissett Creek Project.

As part of an initial public offering proposed by Northern, SGS subsequently prepared an updated technical report on the Bissett Creek Project dated July 16, 2010 (the '2010 Technical Report'), including 2010 price and cost estimates, which was filed on SEDAR by Northern and the Company in September 2010. Following a review of the 2010 Technical Report by the BCSC, the report has been amended and restated as of February 2, 2011 and has been refiled and is available for review under the SEDAR profiles of the Company and Northern at www.sedar.com.

There are no material differences between the recommendations and conclusions contained in the 2007 Technical Report and those in the original 2010 Technical Report or the amended and restated 2010 Technical Report. As a result of comments by the BCSC, the Company added additional disclosure relating to historical drilling results, assay procedures and the conversion of double LOI assay results to LECO assay equivalents for about 20 per cent of the drill database, independent verification of the graphite prices used, and corrected areas of identified technical non-compliance with NI 43-101. Investors and shareholders should rely only on the amended and restated 2010 Technical Report and are cautioned that they should not place undue reliance on the 2007 Technical Report or the original 2010 Technical Report.

On September 15, 2008, the BCSC designated the Company as a reporting issuer in British Columbia under BC Instrument 51-509 Issuers Quoted in the U.S. Over-the-Counter Markets, by virtue of the fact that the Company had a director resident in British Columbia. As a result of the technical disclosure issues and the fact that the Company had not filed the 2007 Technical Report within 45 days of issuing a press release announcing a mineral resource estimate and a preliminary assessment on the Bissett Creek Project, the BCSC issued a cease trade order ('CTO') against the Company on August 18, 2009. The CTO was not dealt with due to the Company's financial and management issues at the time. However, the Company is now seeking revocation of the CTO as part of the process for Northern's initial public offering. As the cease trade order has been in effect for longer than 90 days, the Company is considered a dormant issuer in British Columbia. The Company first made application to the BCSC to revoke the cease trade order on October 19, 2010 and this process remains ongoing.

The 2010 Technical Report was prepared by Gilbert Rousseau, P.Eng. and Claude Duplessis, P.Eng. of SGS, who are the Qualified Persons responsible for the technical information contained in this press release. A summary of the 2010 Technical Report, compared to the 2007 Technical Report is as follows:

--  SGS estimated that using a 1.5% graphitic carbon cut-off and 10% mining
    dilution, the Bissett Creek graphite deposit contains 14,641,000 tonnes
    of indicated resources grading 2.24% graphitic carbon and 18,027,000
    tonnes of inferred resources grading 2.21% graphitic carbon. The deposit
    remains open along strike to the north and south and down dip to the
    east. Drill holes north of the current resources, which were not used in
    the estimate, intersected the same style and tenor mineralization. There
    is no change in mineral resources between the 2007 Technical Report and
    the 2010 Technical Report.

--  The preliminary economic assessment contemplates a conventional open pit
    mining operation and flotation concentrator processing 2,500 tonnes of
    graphite bearing rock per day to produce an average of 18,500 tonnes of
    large flake, high purity ( 92%C) graphite concentrate per year.
    Recoveries are expected to average 94% and the waste to potentially
    economic mineralized rock ratio averages .66 to 1 over the 45 year
    project life. These parameters are the same in both the 2007 Technical
    Report and the 2010 Technical Report.

--  In the 2010 Technical Report capital costs are estimated at $62.9
    million assuming contract mining. Based on an average selling price of
    CDN $1,700 per tonne and using a 10% discount rate, the project has a
    pre-tax net present value ('NPV') of $77.6 million and an internal rate
    of return of 24%. In the 2007 Technical Report capital costs were
    estimated at $56.6 million, the pre-tax NPV $88.1 million and the IRR
    28%. Mineral resources are not mineral reserves and do not have
    demonstrated economic viability. There are no mineral reserves on the
    Bissett Creek Property.

--  The project is very sensitive to changes in prices. With a 25% increase
    in prices the project has a pre-tax NPV of $154.6 million and an IRR of
    37%. At 25% lower prices the project has a pre-tax NPV of less than $1M
    but still has a 10% IRR.

--  75% of resources expected to be processed during the first 19 years of
    operation are in the indicated category and Bissett Creek would have a
    project life of approximately 17 years based on indicated resources
    alone.

--  The preliminary economic assessment includes inferred mineral resources
    which are considered too speculative geologically to have economic
    considerations applied to them that would enable them to be categorized
    as mineral reserves. Furthermore, there is no certainty that the results
    projected in the preliminary economic assessment will be realized and
    actual results may vary substantially.

--  A feasibility study on the Bissett Creek deposit was completed by
    Kilborn Engineering Ltd., KHD, Bacon Donaldson and Associates Ltd. and
    Cominco Engineering Services during the 1980s including metallurgical
    test work, pilot plant testing and bulk sampling. Historical information
    is presented for informational purposes only. It was not completed in
    accordance with NI 43-101 and in accordance with NI 43-101, it should
    not be relied upon.

--  While past work predated NI 43-101, it is the opinion of SGS that it has
    significant value, and in conjunction with the results of the
    preliminary economic assessment, enabled SGS to recommend that the
    Company proceed with a prefeasibility study. As part of the
    prefeasibility study, past metallurgical testing should be validated, an
    optimized flowsheet developed and infill drilling carried out to verify
    the block model and increase the quality of the resource.

--  There is no guarantee that additional drilling will upgrade inferred
    mineral resources to a higher category and there is no guarantee that
    the results of the prefeasibility study will be positive or will support
    a decision to initiate construction.

--  The 2007 Technical Report recommended a $2.5 million work program
    including $1.5 million for an on-site pilot plant and $500,000 for a
    feasibility study. The 2010 Technical Report recommends a $1.25 million
    work program including $250,000 for a prefeasibility study, $500,000 for
    permitting and $100,000 for bench scale pilot plant testing. The Company
    and SGS decided not to construct an on-site pilot plant due to the
    extensive metallurgical work done on the Bissett Creek project in the
    past.

The proposed development plan at Bissett Creek relies on standard mining and processing technologies. Because there are no major or unusual technical or engineering challenges the Company intends to make a production decision based on the results of the prefeasibility study. If the results of the prefeasibility study are positive, the Company will begin detailed engineering and design work, order long lead time equipment and begin site preparation work, all subject to the availability of financing. However, as part of the detailed engineering and design process the Company plans to produce an engineered cost estimate, similar in accuracy to a full feasibility study, which will enable the Company to confirm capital costs to a greater degree of precision before proceeding with full construction.

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 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 2009 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.

Contacts:

Industrial Minerals, Inc.

Gregory Bowes

CEO

613-241-9959