Clearwater Capital Supports Review by Noranda Income Fund's Independent Committee of the Fund's Priority Unit Distribution Rate

TORONTO, Nov. 14, 2011 /CNW/ - Clearwater Capital Management Inc. ("Clearwater"), a significant holder of priority units of Noranda Income Fund (the "Fund") and a holder of the 6.875% senior secured notes due 2016 (the "Notes") of the Noranda Operating Trust (the "Trust"), on behalf of its managed accounts, welcomes the Fund's announcement on Friday, November 11, 2011 concerning the formation of an independent committee of the Trust's board to determine the availability of funds for distribution to unitholders.

Mr. Roland Keiper, President of Clearwater, commented, "Clearwater fully supports use of an independent committee, receiving independent advice, to make determinations concerning unitholder distributions.  That process, which is responsive to concerns Clearwater has expressed, should on a go-forward basis help address the conflicts of interest arising from the multiple roles and interests of Xstrata Canada. We expect that the process disclosed by the Fund will be managed in a rigorous and transparent manner."

Mr. Keiper further stated, "The Fund has experienced an increase in EBITDA in 2011 over 2010 and has also experienced an increase in each quarter in 2011. As a result of these developments, and having recently completed long term financings, the Fund is in a stable financial position, and its commitment to reduce the outstanding amount of senior secured notes at a rate of $15 million per year or a total of $90 million by December 2016 will further improve the Fund's financial position.

We expect that the review will confirm the long term viability of the Fund's processing facility given its attractive location close to large, long standing customers, ready rail access to domestic zinc concentrate supply and water access to off-shore zinc concentrate supply, low cost electricity supply, a supportive Provincial government, and a stable labour force. As such we believe a bona fide independent effort to locate zinc concentrate supply will be successful in coming years as new mines are developed and existing mines expanded that may provide zinc concentrate as a primary product or by-product, and that there is no need whatsoever to build additional notional reserves in the circumstances.

We are therefore confident the independent committee will support an increase in the distribution to priority unitholders and distribute excess cash, as generated, up to an amount equal to the base monthly distribution rate of $0.08333 per unit."

SOURCE Clearwater Capital Management Inc.

For further information:

Clearwater Capital Management Inc.
Contact 416 642 5700.

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Clearwater Capital Management Inc.

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