Atlas Mining Company Starts Second Phase of Drilling at Dragon Mine.

SILVER CITY, Utah -- Atlas Mining Company (OTCBB: ALMI) reported on the progress of drilling taking place at the Dragon Mine in Juab County, Utah, as they entered into the second phase. According to Company officials, the initial phase of drilling took place in the underground decline, which helped delineate the halloysite clay bed and verify halloysite material continuously along the strike of the exposed bed in the decline. According to William Jacobson, President and CEO, "The underground drilling gave us the roadmap we needed to continue our development work. We can continue the underground development with a sense of confidence that there is mineable material waiting for us."

Atlas consulting geologist, John May stated that the material recovered from the drill cores was tested and has some significant halloysite. Two holes intersected some really nice high quality material and extended the clay horizon below the decline. The second phase of the drill program has just started drilling from the surface to further delineate this bed, and has again found good material to a depth of 100 feet.

Drilling in the underground decline was completed by Kettle Drilling, however Atlas Mining Company recently purchased a used Longyear 38 skid mounted drill to complete the second phase which includes both a surface and underground drilling of approximately 5,000 feet. The acquisition will reduce drilling costs, and leave the Company with an additional piece of equipment for exploration on other properties.

About Atlas Mining Company: Atlas Mining Company is a diversified natural resource company with focus on the development of the Dragon Mine in Juab County, Utah, the only known commercial source of halloysite clay outside of New Zealand. The unique purity and quality of the Dragon mine halloysite is unmatched anywhere in the world and has spawned considerable research in the nanotechnology fields and has created exciting new applications for this product. Atlas also holds mining and timber interests in Northern Idaho, and operates an underground mining contracting business. Atlas stock trades on the OTC Bulletin Board under the symbol "ALMI". More information about Atlas Mining Company can be found at www.atlasmining.com

Safe Harbor Statement: Except for the historical statements made herein, the statements made in this release are forward-looking statements. Risk factors that could cause actual results to differ materially from those projected in forward-looking statements include, but are not limited to, general business conditions, managing growth, and political and other business risks. All forward-looking statements are expressly qualified in their entirety by this Safe Harbor Statement and the risks and other factors detailed in the Company's reports filed with the Securities and Exchange Commission. Atlas Mining Company undertakes no duty to update these forward-looking statements.