Abstract: A method of constructing an exterior insulated wall is provided. The method includes: erecting a wall structure of vertical studs and sheathing mounted to the studs; applying a moisture barrier layer and an adhesive layer; mounting a rear surface of a mineral wool insulation board to the adhesive layer, the rear surface having vertically extending drainage grooves, a front surface of the insulation board having a reinforcing mesh adhered thereto; securing the mineral wool insulation board to the studs with corrosion resistant screws and washers; and applying a weather resistant coating on the reinforcing mesh and washers. The mineral wool insulation board includes mechanically entangled non-woven hydrophobic fibers spaced apart by air voids to define a compressible fibrous mass. The washers and screws exert pressure on a compressed zone of the compressible fibrous mass which reduces moisture permeability, increases volume percentage of fibers, and lowers volume percentage of air voids.