News Centre

FOR: NORANDA INCOME FUND

Noranda Income Fund Reports 2005 Earnings of $32.8 million

Feb 6, 2006 - 09:00 ET

VALLEYFIELD, QUEBEC--(Marketwire - Feb. 6, 2006) -

Attention Business/Financial Editors:

The Noranda Income Fund (the "Fund") reported net earnings of $32.8 million for 2005,
compared with net earnings of $27.7 million for 2004. The $5.1 million increase was
due to higher zinc metal premiums and byproduct revenues and lower production costs,
offset by lower volumes of zinc metal production and sales and a stronger Canadian dollar.
Net earnings of $10.3 million were reported for the fourth quarter of
2005, compared to $4.7 million in the same quarter a year ago. The more than
doubling of earnings was due to higher zinc metal production and sales, lower
production costs, higher premiums and byproduct credits, offset by a stronger
exchange rate.

"The Fund has just recorded the best quarterly earnings for 2005," said
Mario Chapados, President and Chief Executive Officer of the Noranda Income
Fund's Manager. "Strong byproduct credits and premiums and lower costs largely
account for the favourable results. The outlook for 2006 is positive with
production forecast to be higher than last year, and premiums and byproduct
credits are expected to remain strong."

The outlook for 2006 and the estimate for production, premiums and
byproduct credits are subject to various risks and uncertainties. The
assumptions can be found in the "forward-looking statements" below.

Financial Results

This analysis of the financial position and results of operations of the
Fund should be read in conjunction with the unaudited interim consolidated
financial statements of the Fund for the three months and twelve months ended
December 31, 2005 and with the audited consolidated financial statements of
the Fund and the notes thereto for the period ended December 31, 2004.
This discussion is based on various assumptions (see "forward-looking
statements" below.) All dollar amounts are shown in Canadian dollars unless
otherwise specified.

The analysis has been prepared as of February 6, 2006. Additional
information relating to the Fund, including the Fund's annual information form
is available on SEDAR at www.sedar.com.

2005 Highlights

- Cash Generated(1) by the Fund was $55.8 million and distributions paid
out were $51 million.

- All the monthly distributions were paid at the 8.5 cent level.

- Realized premiums were higher - 6 cents US in 2005 vs. 5.1 cents US in
2004.

- Byproduct credits rose to $24.6 million from $21.8 million in 2004.

- Production costs fell by $1.7 million in 2005 compared to 2004.

RESULTS OF OPERATIONS

Consolidated Net Earnings (Twelve months 2005 compared to twelve months
2004)

Net revenues less raw material purchase costs ("Net Revenues") in 2005
were $259.8 million compared to $254.2 million in 2004. The $5.6 million
variance was due to higher revenues from byproducts and premiums partially
offset by a stronger Canadian dollar and lower volumes of zinc metal
production and sales.

Selling, general and administration ("SG&A") costs for 2005 were $18.5
million, compared to $20 million in 2004. SG&A costs were $1.5 million lower
than in 2004 due to a reduction in contractor costs during the year.
The foreign exchange loss for 2005 was $3.1 million, compared to a loss
of $2.7 million for 2004. The Fund maintains cash and cash equivalents,
accounts receivable and accounts payable in US dollars.

Amortization and reclamation was $29.4 million in 2005 compared to $28.6
million recorded in 2004. The increase was in part due to higher capital
investments during the year.

In 2005, net interest expense was $11.1 million compared to $10.4 million
in 2004 due to an increase in interest rates and the increase in debt
outstanding as a result of higher working capital levels.
Minority interest in earnings of subsidiaries in 2005 was $10.9 million
up from $9.2 million in 2004 due to the higher earnings of the Fund.

Consolidated Net Earnings (Fourth quarter 2005 compared to fourth quarter
2004)

Net Revenues for the fourth quarter of 2005 totalled $63.0 million,
compared to $57.7 million in the same period of 2004. The $5.3 million
increase was due to higher volumes of zinc metal production and sales and
higher premiums and byproduct credits, offset by a stronger dollar.
SG&A costs for the fourth quarter of 2005 were $4 million, compared to
$5.4 million in the same quarter a year ago due to lower contractor costs in
2005.

The foreign exchange loss in the fourth quarter of 2005 of $0.5 million
compared to a foreign exchange loss of $1.1 million for the same period in
2004.

Amortization and reclamation in the quarter were $7.4 million, an
increase of $0.8 million from the same period in 2004. This was partially due
to higher levels of capital investment during the quarter.
Minority interest in earnings of subsidiaries in the fourth quarter of
2005 was $3.4 million, up from $1.6 million in 2004 due to the higher earnings
of the Fund.

Fund Strategy and Key Performance Drivers

The Fund is an unincorporated open-end trust established under the laws
of Ontario. The Fund's units trade on the Toronto Stock Exchange ("TSX") under
the symbol "NIF.UN". The Fund was created to acquire Falconbridge's CEZinc
Processing Facility (the "Processing Facility") located in Salaberry-de-
Valleyfield, Quebec. The Fund distributes the cash generated by the Processing
Facility to its unitholders. A board of trustees, the majority of whom are
independent from Falconbridge, supervises the Fund.
The primary objective of the Fund is to provide stable monthly cash
distributions to its unitholders. The Manager aims to achieve the Fund's
objectives by maximizing production, increasing productivity, increasing
byproducts and recoveries and continuing to research and develop revenueenhancing
opportunities.

The principal factor affecting the Fund's performance is the processing
of zinc concentrates into zinc metal. This activity results in the Fund
earning a processing fee. In 2005, the processing fee accounted for 79% of the
Fund's Net Revenues.

The second factor affecting the performance of the Fund is the premiums
that are realized on the sale of zinc products to customers. In 2005, product
premiums accounted for 11% of the Fund's Net Revenues.

The sale of byproducts (copper, cadmium and sulphuric acid) and zinc
metal recovery gains generated 9% and 1%, respectively of the Fund's Net
Revenues in 2005.

The Canada/US exchange rate only impacts 21% of the Fund's Net Revenues
through premiums, byproduct revenues and zinc recovery gains.
Two other performance drivers that impact the Fund are managing costs and
a disciplined use of capital.



Fourth Quarter Year
2005 2004 2005 2004
---- ---- ---- ----
Zinc metal production (tonnes) 69,002 67,434 272,418 277,283
Zinc metal sales (tonnes) 67,912 65,690 271,830 273,893
Zinc metal premiums (US$/pound) 0.067 0.052 0.060 0.051
Byproduct revenues ($ millions) 8.1 5.9 24.6 21.8
Average US/Cdn. exchange rate 1.173 1.220 1.211 1.301

 


The following targets for production, sales and premiums are subject to
various risks and uncertainties. The assumptions for them can be found in the
"forward-looking statements" below.

PRODUCTION
----------

Zinc metal production in 2005 was 272,418 tonnes, 2% lower than the
277,283 tonnes produced in 2004. In 2005, some domestic mines closed and the
plant began to treat a different mix of concentrate, negatively impacting
third quarter production as a result of higher iron and lower zinc contained
in the concentrate. In order to mitigate this situation, a new jarosite tank
was constructed and production returned to a normalized level in the fourth
quarter. The production forecast for 2006 is 275,000 tonnes.

Fourth quarter production totalled 69,002 tonnes, 2% higher than in the
corresponding period of 2004 as production benefited from stable operations
during the quarter.

Zinc sales in 2005 were 271,830 tonnes, compared to 273,893 tonnes in
2004. For the fourth quarter of 2005, sales totalled 67,912 tonnes, 3% higher
than the 65,690 tonnes sold in the same period of 2004. Zinc metal inventory
is currently within the Processing Facility's target range. The sales forecast
for 2006 is 275,000 tonnes.

PREMIUMS AND BYPRODUCTS
-----------------------

For 2005, the Fund realized 6 cents US per pound, up from 5.1 cents US
per pound in 2004. The improvement was the result of higher contract premium
levels and an improved product mix. In the fall of 2005, two major Canadian
zinc producers went on strike, tightening the market and causing spot premiums
to rise.

For the fourth quarter of 2005, premiums rose to 6.7 cents US, compared
to 5.2 cents US in the same quarter of 2004 as a result of the improved
contract premiums, improved product mix and higher spot premiums. Spot
premiums increased in the fourth quarter as a consequence of the short-term
supply disruption caused by the strikes and overall tightness in the zinc
market. In 2006, the Fund's realized premiums are expected to be 6.9 cents US
per pound as a result of expected higher contract premium levels and an
improved product mix.

By-product revenues in 2005 rose to $24.6 million from $21.8 million in
2004. The higher revenue was due to higher sulphuric acid and copper prices.
In the fourth quarter of 2005, byproduct revenues totalled $8.1 million,
compared to $5.9 million in the same quarter a year ago. Record copper prices
and strong sulphuric acid prices explain the increase.

EXCHANGE RATE
-------------

Each $C0.01 change in the average Canadian/US exchange rate impacts the
Fund's annual net earnings and cash flow by approximately $0.5 million. The
average Canadian/US exchange rate appreciated to $1.211 in 2005 from $1.301 in
2004.

COSTS
-----

Year-to-date 2005 production costs were $153.9 million compared to $155.6
million in 2004. During the fourth quarter of 2005, production costs were
$34.5 million compared to $35.7 million in the fourth quarter of 2004. The
reductions for both the year and the quarter were mostly due to improved
energy efficiency and contractor management.

Distribution Policy, Distributable Cash(2 3) and Operating Reserve
The Fund makes monthly distributions to its unitholders based on the
monthly Distributable Cash declarations. The Fund's goal is to provide stable
monthly distributions to its unitholders.

In 2005, Cash Generated (Distributable Cash before changes in operating
reserves) was $55.8 million and distributable cash to unitholders was $51
million: $38.3 million paid to Priority Unitholders and $12.7 million paid to
Ordinary Unitholders.

In order to meet the Fund's goal to provide a stable monthly distribution
the Fund utilizes a notional operating reserve. The operating reserve provides
the Fund with some flexibility in complying with the Fund's trust indentures
and debt covenants. In a period during which Cash Generated is greater than
the distribution declared, the operating reserve will increase. In a period
during which Cash Generated is less than the distribution declared, the
operating reserve will decrease. During 2005, the operating reserve increased
by $4.8 million to $8.9 million.

The schedule below sets out the history of the Fund's cash distributions
for the past six months:



-------------------------------------------------------------------------
RECORD DATE PAYMENT DATE DISTRIBUTION PER UNIT
-------------------------------------------------------------------------
January 31, 2006 February 27, 2006 8.5 cents
December 31, 2005 January 25, 2006 8.5 cents
November 30, 2005 December 28, 2005 8.5 cents
October 31, 2005 November 25, 2005 8.5 cents
September 30, 2005 October 25, 2005 8.5 cents
August 31, 2005 September 26, 2005 8.5 cents
-------------------------------------------------------------------------

 


Cash Flows, Liquidity and Capital Resources

Cash realized from operations, before changes in non-cash working capital
for the fourth quarter of 2005 was $21.8 million compared to $12.6 million in
the fourth quarter of 2004 as a result of the higher earnings achieved in
2005. During the quarter, non-cash working capital increased by $12.0 million,
mostly due to the increase in inventory and accounts receivable related to
higher zinc metal prices. This increase was partially offset by a
corresponding increase to the accounts payable and accrued liabilities related
to the supply of concentrate. During the quarter the zinc price rose from 64
cents US per pound at the end of September to 87 cents US per pound at the end
of December.

Capital expenditures in the fourth quarter were $5.9 million compared to
$1.9 million in the fourth quarter of 2004 as much of the current year's
spending occurred in the second half of the year, including the construction
of a new jarosite tank. Year-to-date 2005 capital expenditures were $15.8
million compared to $12.5 million in 2004. In 2006, capital expenditures are
expected to be $18 million in part due to the deferral of $1 million of
capital spending from 2005 to 2006.

The Fund's target for capital spending is subject to various risks and
the assumptions can be found below in the "forward-looking statements" below.
Distributions paid to unitholders in the fourth quarter were $12.8
million, unchanged from the same period in 2004.

Fluctuations in working capital balances as a result of operations are
generally funded by or used to repay the Operating Facility. During the
quarter, $0.4 million of debt was issued related to the increase in the Fund's
working capital as a result of the increase in the price of zinc.
At December 31, 2005, the Fund's cash and cash equivalents totalled $0.2
million and total debt was $180.4 million.

RISKS AND UNCERTAINTIES

Update on the Federal Government's White Paper on Income Trusts
In our third quarter press release, we noted that on September 8, 2005
the Department of Finance (Canada) had released the White Paper to review tax
and other issues related to income trusts. On November 23, 2005 the Federal
Government announced that it would revise the Dividend Tax Credit system to
create a more level playing field between Trusts and Corporations. This
announcement removed much of the recent uncertainty in the Trust sector that
had been created after the release of the White Paper in September.

OUTLOOK

The Fund's primary goal is to continue to provide stable monthly
distributions.



The 2006 targets for the key drivers of the Fund are:
Zinc metal production: 275,000 tonnes
Zinc metal sales: 275,000 tonnes
Processing fee: 36.5 cents per pound
Zinc metal premiums: 6.9 cents US/pound
Capital expenditures: $18 million

 


The Manager's ability to provide for stable monthly distributions and
meet the targets identified above is subject to the various risks and the
assumptions that can be found in the "forward-looking statements" below.
This news release contains forward-looking statements concerning the
Noranda Income Fund's ("Fund") objectives and 2006 general business outlook,
zinc metal production and sales targets, estimated processing fee, zinc
premium target and capital expenditures forecast. Forward-looking statements
can be identified by the use of words, such as "are expected", "is forecast",
approximately or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved. Forward-looking statements involve known and
unknown risks, uncertainties and other factors, which may cause the actual
results, or performance to be materially different from any future results or
performance expressed or implied by the forward-looking statements.

Examples of such risks, uncertainties and other factors include, but are
not limited to the following: (1) the Fund's ability to operate at normal
production levels; (2) the dependence upon the continuing supply of zinc
concentrates (terms of the Supply and Processing Agreement); (3) the demand
for zinc metal, sulphuric acid, and copper cake; (4) changes to the supply and
demand for specific zinc metal products and the impact on the Fund's realized
premiums; (5) the ability of the Fund to continue to service customers in the
same geographic region; (6) the sensitivity of the Fund's net revenues to
reductions in realized zinc metal prices including premiums, copper prices,
sulphuric acid prices; the strengthening of the Canadian dollar vis-à-vis the
US dollar; and increasing transportation and distribution costs (7) the
sensitivity of the Fund's production costs to increases in electricity rates,
other energy costs, labour costs and operating supplies used in its
operations; (8) changes in capital expenditure requirements; (9) the
negotiation of collective agreement with its unionized employees; (10) general
business and economic conditions; (11) transportation disruptions; (12) the
legislation governing air emissions, discharges into water, waste, hazardous
materials and workers' health and safety as well as the impact of future
legislation and regulations on expenses, capital expenditures, taxation and
restrictions on the operation of the Processing Facility; (13) potential
negative financial impact from regulatory investigations, claims, lawsuits and
other proceedings; (14) loan default and (15) reliance on Falconbridge for the
operation and maintenance of the Processing Facility. Actual results and
developments are likely to differ, and may differ materially, from those
expressed or implied in the forward-looking statements contained herein.
These forward-looking statements represent our views as of the date of
this Report. The Fund anticipates that subsequent events and developments may
cause the Fund's views to change. The Fund does not undertake to update any
forward-looking statements, either written or oral, that may be made from time
to time by or on behalf of the Fund subsequent to the date of this release.
Noranda Income Fund is an income trust whose units trade on the Toronto
Stock Exchange under the symbol "NIF.UN". The Noranda Income Fund was created
to acquire Falconbridge's CEZ processing facility and ancillary assets (the
"CEZ processing facility") located in Salaberry-de-Valleyfield, Quebec. The
CEZ processing facility is the second-largest zinc processing facility in
North America and the largest zinc processing facility in eastern North
America, where the majority of its customers are located. It produces refined
zinc metal and various byproducts from zinc concentrates purchased from mining
operations. The Processing Facility is operated and managed by Canadian

Electrolytic Zinc Limited.
--------------------------

(1) Cash Generated is not a measure defined by generally accepted
accounting principles. Cash Generated as calculated by the Fund may
not be comparable to similar measures presented by other issuers. See
Distribution Policy, Distributable Cash and Operating Reserve.

(2) Distributable Cash is not a measure defined by generally accepted
accounting principles and is dependant upon the definitions as
contained in the trust indentures establishing the Fund.
Distributable Cash as calculated by the Fund may not be comparable to
similar measures presented by other issuers.

(3) Distributable Cash is based on 100 percent of the net earnings
adjusted to account for non-cash transactions such as amortization
and reclamation and reduced by additions to property, plant and
equipment, site restoration expenditures, reasonable reserves and
repayment of long-term debt. Cash Generated is defined as
Distributable Cash before changes in operating reserves.



NORANDA INCOME FUND
CONSOLIDATED BALANCE SHEETS
(unaudited)
($ thousands)

Dec. 31 Dec. 31
2005 2004
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents 175 11,000
Accounts receivable
Other 72,022 51,138
Falconbridge 13,120 9,083
Inventories 60,519 43,944
Prepaids and other assets 3,133 3,523
---------- ----------
148,969 118,688

Deferred financing fees 1,263 1,532

Property, plant and equipment 334,641 347,673
---------- ----------
484,873 467,893
---------- ----------

LIABILITIES AND EQUITY

Current liabilities:
Accounts payable and accrued liabilities
Other 16,155 16,862
Falconbridge 51,942 33,345
Distributions payable 4,250 4,250
---------- ----------
72,347 54,457

Future site restoration and reclamation 15,924 14,979

Long-term debt 180,400 175,000

Unitholders' Interest:
Interests of Ordinary Unitholders 54,050 55,864

Unitholders' capital accounts 191,293 191,293
Retained earnings (Deficit) (29,141) (23,700)
---------- ----------
162,152 167,593
---------- ----------
484,873 467,893
---------- ----------


NORANDA INCOME FUND
CONSOLIDATED STATEMENTS OF EARNINGS
AND RETAINED EARNINGS (DEFICIT)
(unaudited)
($ thousands)

Three months Twelve months
ended December 31 ended December 31
----------------- -----------------
2005 2004 2005 2004
------- ------- ------- -------
Revenues
Sales 152,517 106,204 525,250 438,855
Transportation and distribution costs (3,923) (3,502) (14,457) (14,001)
------- ------- ------- -------
Net revenues 148,594 102,702 510,793 424,854
------- ------- ------- -------

Raw material purchase costs 85,615 45,024 251,023 170,606
------- ------- ------- -------
Net revenues less raw material
purchase costs 62,979 57,678 259,770 254,248
------- ------- ------- -------

Other expenses
Production 34,451 35,738 153,929 155,587
Selling, general and administration 4,017 5,387 18,504 19,968
Foreign exchange loss (gain) 462 1,137 3,085 2,730
Amortization and reclamation 7,443 6,619 29,397 28,608
------- ------- ------- -------
46,373 48,881 204,915 206,893
------- ------- ------- -------
Earnings before interest expense and
minority interest 16,606 8,797 54,855 47,355
------- ------- ------- -------
Interest expense, net 2,828 2,549 11,110 10,360
------- ------- ------- -------
Earnings before minority interest 13,778 6,248 43,745 36,995
------- ------- ------- -------
Minority interest in earnings for
Ordinary Unitholders 3,444 1,562 10,936 9,249
------- ------- ------- -------
Net earnings 10,334 4,686 32,809 27,746
------- ------- ------- -------
Deficit, beginning of period (29,912)(18,823) (23,700) (13,196)
Distributions to Priority Unitholders (9,563) (9,563) (38,250) (38,250)
------- ------- ------- -------
Deficit, end of period (29,141)(23,700) (29,141) (23,700)
------- ------- ------- -------
Net earnings per Priority Unit
(basic and diluted) $ 0.28 $ 0.12 $ 0.87 $ 0.74



NORANDA INCOME FUND
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
($ thousands)

Three months Twelve months
ended December 31 ended December 31
----------------- -----------------
2005 2004 2005 2004
------- ------- ------- -------
Cash realized from (used for)
operations:
Net earnings for the period 10,334 4,686 32,809 27,746
Items not affecting cash:
Amortization and reclamation 7,443 6,619 29,397 28,608
Minority Interest in earnings for
Ordinary Unitholders 3,444 1,562 10,936 9,249
Mark-to-market (gain)/loss on
derivative financial instruments 404 (324) 773 (773)
Amortization of deferred financing
fees 64 51 269 230
Loss from sale of assets 193 - 542 52
Site restoration expenditures (102) (3) (102) (309)
------- ------- ------- -------
21,780 12,591 74,624 64,803
------- ------- ------- -------
Net change in non cash working
capital items (12,045) 3,150 (24,032) (1,278)
------- ------- ------- -------
9,735 15,741 50,592 63,525
------- ------- ------- -------
Cash realized from (used for)
investment activities:
Purchases of property, plant and
equipment (5,940) (1,918) (15,826)(12,541)
Proceeds on sale of property,
plant and equipment 8 - 9 11
------- ------- ------- -------
(5,932) (1,918) (15,817)(12,530)
------- ------- ------- -------
Cash realized from (used for)
financing activities:
Distributions
- Priority Unitholders (9,562) (9,562) (38,250)(38,250)
- Ordinary Unitholders (3,187) (3,187) (12,750)(12,750)
Long-term debt issued from the
Revolving Facility 74,000 5,000 223,300 41,538
Long-term debt repaid to the
Revolving Facility (73,600) - (217,900)(40,538)
Change in bank indebtedness - - - (39)
------- ------- ------- -------
(12,349) (7,749) (45,600)(50,039)
------- ------- ------- -------
Change in cash and cash equivalents
during the period (8,546) 6,074 (10,825) 956

Cash and cash equivalents, beginning
of period 8,721 4,926 11,000 10,044
------- ------- ------- -------
Cash and cash equivalents, end of
period 175 11,000 175 11,000
------- ------- ------- -------
Cash 175 2,500 175 2,500
Cash equivalents - 8,500 - 8,500



NORANDA INCOME FUND
ADDITIONAL INFORMATION
December 31, 2005
(UNAUDITED)

($ thousands except as otherwise indicated)

1. Distributable Cash

Distributable Cash is not a measure defined by generally accepted
accounting principles and is dependant upon the definition as contained
in the trust indentures establishing the Fund. Distributable Cash under
the Fund's indenture is based on 100% of the net earnings adjusted to
account for non-cash transactions such as depreciation, amortization and
reclamation and reduced by additions to capital assets, site restoration
expenditures, reasonable reserves and repayment of long-term debt.
Fluctuations in working capital balances as a result of operations are
generally funded by or used to repay the Revolving Facility.

Cash Generated is defined as Distributable Cash before changes in
operating reserves. Distributable Cash as calculated by the Fund may not
be comparable to similar measures presented by other issuers. The
Distributable Cash for the period is as follows:

Three Three Twelve Twelve
months months months months
ending ending ending ending
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
-------------------------------------------------------------------------------
Net earnings $10,334 $4,686 $32,809 $27,746
Add:
Amortization, and reclamation 7,443 6,619 29,397 28,608
Minority interest 3,444 1,562 10,936 9,249
Loss from sale of assets 193 - 542 52
Proceeds on sale of assets 8 - 9 11
Decrease in capital and site
restoration reserve - - - -
Less:
Additions to property, plant
and equipment, net of
proceeds from sale of assets (5,940) (1,918) (15,826) (12,541)
Site restoration expenditures (102) (3) (102) (309)
Increase in capital and site
restoration reserve 570 (66) (1,972) (1,583)
----------------------------------------------

Cash Generated during the
period 15,950 10,880 55,793 51,233
----------------------------------------------
(Increase) decrease in
operating reserve (3,200) 1,870 (4,793) (233)
----------------------------------------------
Distributable Cash for the
period $12,750 $12,750 $51,000 $51,000
----------------------------------------------

Priority units issued 37,500,000 37,500,000 37,500,000 37,500,000
Ordinary units issued 12,500,000 12,500,000 12,500,000 12,500,000
Distributable Cash
attributable to Priority
Units $0.2550 $0.2550 $1.02 $1.02
Distributable Cash
attributable to Ordinary
Units $0.2550 $0.2550 $1.02 $1.02
-------------------------------------------------------------------------------

 


In order to meet the Fund's goal to provide a stable monthly distribution
the Fund utilizes an operating reserve. In a period during which Cash
Generated is greater than the distribution declared, the operating
reserve will increase. In a period during which Cash Generated is less
than the distribution declared, the operating reserve will decrease. As
of December 31, 2005, the operating reserve was $8,884 (December 31, 2004
- $4,091).

The Fund also utilizes a capital and site restoration reserve. As of
December 31, 2005, the capital and site restoration reserve was $5,087
(December 31, 2004 - $3,115).

SEDAR: 00017578EF



FOR FURTHER INFORMATION PLEASE CONTACT:

Financial information: Noranda Income Fund
Michael Boone
Vice President & Chief Financial Officer of
Canadian Electrolytic Zinc Limited
(416) 982-7188
michael.boone@falconbridge.com


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