EXHIBIT 10.16  




CONSULTING SERVICES
AGREEMENT  



        This
Consulting  Services  Agreement is made as of the 3rd day of April, 2007 between O2 LTD.,
an Ontario  corporation (the  "Consultant")  and INDUSTRIAL  MINERALS,  INC. a Delaware
 corporation (the "Company"). 





        Whereas,
the Consultant provides integrated marketing, business development and communication
services, consisting of: (1) marketing strategy services, (2) strategic business planning
and research services, (3) creative and multimedia design services, (4) engineering and
technical development/evaluation services, and (5) public financing and investor relations
services to start-up companies and companies which are re-positioning themselves in their
market place; 



        And
whereas, the Company requires the provision of services from the Consultant; 



        Therefore,
the Consultant and the Company agree as follows: 



1.
      Services. 



        The
Consultant shall during reasonable business hours and within the next six (6) months
provide the Company with the following services: (a) strategic assessments of the IMI
flake graphite business and business development opportunities, including acquisitions and
mergers; (b) recruitment of new management personnel for IMI; (c) marketing contacts; and
(d) identification of sources of capital and investment in the Company as well as the
facilitation of any such potential relationships. 



2.
      Conduct of Services. 



        Consultant
represents and warrants to the Company that Consultant shall provide the services required
by this Agreement in a cooperative fashion and efficiently in accordance with appropriate
standards of quality acceptable to the Company acting reasonably. 



3.
      Remuneration. 



        In
consideration of the services to be provided by the Consultant as set out in this
Agreement, the Company shall forthwith issue and deliver 15,000,000 registered shares,
without restriction of any kind, in the capital stock of the Company to O2 or the order of
O2. 



4.
      Consultant’s
Undertakings. 



        The
Consultant shall be solely responsible for any and all payments, remittances or deductions
required to be made respecting unemployment insurance, workmen’s compensation, income
tax, pension plans and any other such similar pay list deductions or payments, and the
Company shall not charge or make any such payments, remittances or deductions from the
remuneration to be paid to the Consultant. 



        Consultant
undertakes that any and all records, documents and other information that Consultant
obtains from the Company shall be held confidential by Consultant and that Consultant
shall not disclose the same to any third party (except to the extent that any of the
foregoing is in the public domain or such disclosure is required by law) nor use the same
for any purpose other than to provide the Company with the consulting services required by
this Agreement. Consultant shall upon termination of this Agreement return any and all of
the foregoing documents, records and information which it has obtained to the Company. 











5.
      Independent
Contractors. 



        The
Company and Consultant are independent contractors. Both parties acknowledge and agree
that Consultant’s engagement pursuant to this Agreement is not exclusive and that
either party may provide to, or retain from, others similar such services provided that it
does so in a manner that does not otherwise breach this Agreement. The Consultant is not
engaged as a coventurer, partner, agent or employee of the Company and no act by the
Consultant shall in any way obligate or be binding upon the Company except to the extent
that such act has been expressly authorized by the Company. 



6.
      Limitation. 



        Notwithstanding
any provisions at law or under this Ageement to the contrary, the Company and Consultant
hereby forever mutually waive, release and discharge the other party from any and all
claims, losses or damages howsoever arising relating to the performance or breach of their
respective obligations under this Agreement that either: (a) constitute indirect or
consequential damages; (b) constitute a breach of implied or statutory warranties or
conditions, including those pertaining to merchantable quality or fitness for purpose; or
(c) are in excess of the total remuneration payable under this Agreement as set out in
Section 3 hereof. 



7.
      Applicable Laws. 



        This
Agreement and the rights and obligations of the parties shall be governed by the laws in
force in the Province of Ontario, and the parties hereby attorn to the jurisdiction of the
courts of the Province of Ontario. 



        IN
WITNESS WHEREOF the parties hereto have duly signed this Consulting Services
Agreement. 












		
	Industrial Minerals, Inc.: 







/s/ Dick van Wyck 

Mr. Dick van Wyck, President 
	O2 LTD.:







/s/Paul Ogilvie

Mr. Paul Ogilvie, President 







301345.1