Noranda Income Fund Reports Second Quarter Net Earnings of $3.7 Million and an Improvement in Operating Cashflow

TORONTO, ONTARIO, Jul 31 (MARKET WIRE) --
The Noranda Income Fund (the "Fund") (TSX: NIF.UN) reported net earnings
of $3.7 million for the second quarter of 2008, compared to a loss of
$6.7 million in the same quarter a year ago. In 2007, the Fund recorded a
$14.6 million future income tax expense resulting from the enactment of
new tax legislation. Cash realized from operations was $26.5 million for
the second quarter of 2008, compared to $15.7 million in the same quarter
a year ago.

"The Fund's operating cashflow benefited from higher production, sales
and sulphuric acid revenues, the impact of prior month pricing and a
lower interest expense, partially offset by lower premiums and higher
production costs." said Mario Chapados, President and Chief Executive
Officer of the Noranda Income Fund's Manager. "Although production is
expected to be better in the second half because of a higher concentrate
grade, production for 2008 has been revised to 270,000 tonnes. Higher
sulphuric acid prices are expected to continue to positively impact
byproduct revenue."

Net earnings of $9.9 million were reported for the first six months
ending June 30, 2008 compared to $7.3 million in the first six months of
2007. Cash realized from operations was $33.6 million for the first half
of 2008, compared to $17.8 million in the same period a year ago.

The outlook for 2008 and the estimate for production, sales, premiums and
byproduct revenue are subject to various risks and uncertainties. The
assumptions can be found in the "forward-looking statements" below.

The second quarter Management Discussion and Analysis will be available
this afternoon on the Fund's website at
www.norandaincomefund.com/investor/financials.html.

Financial Results

This analysis provides a review of the performance of the Fund for the
three and six month periods ending June 30, 2008 and 2007. It should be
read in conjunction with the Fund's interim consolidated financial
statements and with the audited consolidated financial statements of the
Fund and the notes thereto for the period ended December 31, 2007. All
financial information has been prepared in accordance with Canadian
generally accepted accounting principles ("GAAP"). All amounts are
expressed in Canadian dollars, the Fund's functional and reporting
currency, except where indicated.

Q2 2008 Highlights

Second Quarter Year-to-date
2008 2007 2008 2007
---- ---- ---- ----
Zinc metal production (tonnes) 67,355 63,247 131,415 126,194
Zinc metal sales (tonnes) 73,847 59,897 136,004 119,926
Processing fee (cents/pound) 37.5 37.0 37.5 37.0
Zinc metal premiums (US$/pound) 0.060 0.126 0.064 0.110
Byproduct revenues ($ millions) 14.6 9.2 25.4 15.5
Average US/Cdn. exchange rate 1.01 1.10 1.01 1.14

- All of the monthly distributions were paid at the 8.5 cents per unit
level.

- Zinc metal production and zinc sales were 6% and 23%, respectively
higher than in the second quarter of 2007.

- Byproduct revenues were $14.6 million compared to $9.2 million in the
second quarter of 2007.

- Zinc recoveries in the second quarter of 2008 were 97.9% compared to
96.8% in the same quarter a year ago.

- The notional operating reserve increased by $4.8 million to $19.0
million

RESULTS OF OPERATIONS

Consolidated Net Earnings (Second quarter 2008 compared to second quarter
2007)

The Fund reported net earnings and comprehensive income of $3.7 million
for the second quarter of 2008, compared to a loss of $6.7 million in the
same quarter a year ago. Higher production, sales and sulphuric acid
revenues, the impact of prior month pricing, and a lower interest expense
were offset by lower premiums, higher production costs, financial
instrument losses, and higher amortization. In the second quarter of
2007, the Fund recorded a one-time $14.6 million future income tax
expense resulting from the substantive enactment of Bill C-52 (taxation
of income and royalty trusts).

Revenues less raw material purchase costs ("Net Revenues") in the second
quarter of 2008 were $75.8 million, compared to $58.0 million in the same
quarter of 2007. The $17.8 million increase was due to higher zinc metal
sales, sulphuric acid revenues, processing fee and recoveries partially
offset by lower premiums and a stronger Canadian dollar.

The Fund makes a portion of its sales based on the average price from the
previous month (month prior pricing). In a market in which zinc prices
are rising, a portion of the Fund's revenues will lag behind the higher
zinc prices; while in a market in which zinc prices are falling, a
portion of the Fund's revenues will benefit from higher zinc prices from
the month prior. In the second quarter of 2008, month prior pricing had a
positive impact of approximately $1.7 million on the Fund's Net Revenues,
as the average monthly zinc price decreased from US$1.14 per pound in
March 2008 to US$0.86 per pound in June 2008. In the second quarter of
2007, month prior pricing had a negative impact of approximately $1.2
million on the Fund's Net Revenues, as the average monthly zinc price
increased from US $1.48 per pound in March 2007 to US $1.63 per pound in
June 2007.

Production Cost Breakdown
(in $ millions) Second Quarter
2008 2007
---- ----
Production costs 44.4 41.3
Change in inventory 6.6 (1.3)
---- ----
51.0 40.0

Production costs in the second quarter of 2008 were $51.0 million,
$11.0 million higher than the $40.0 million recorded in the second
quarter of 2007. Higher energy costs and production resulted in a $3.1
million increase. The remainder of the increase ($7.9 million) was a
result of inventory being reduced in the second quarter of 2008 versus
inventory being increased in the second quarter of 2007.

Selling, general and administration costs in the second quarter of 2008
were $4.8 million, compared to $5.0 million in the same quarter of 2007.

The foreign exchange gain for second quarter of 2008 was $1.7 million,
compared to a gain of $8.7 million in the second quarter of 2007. The
foreign exchange gain was a result of a strengthening Canadian dollar on
the Fund's net monetary liability. The foreign exchange gain was largely
offset by a decrease in the value of in-process and finished inventory.
The decrease in the value of inventory is realized in Net Revenues as the
metal is sold to customers (thereby increasing the Net Revenue recorded
by the Fund). The Fund maintains cash and cash equivalents, accounts
receivable and accounts payable and long-term debt in US dollars.

In the second quarter of 2008, the commodity financial instruments loss
was $3.6 million and the commodity hedging loss was $0.1 million. In the
second quarter of 2007, the commodity financial instruments gain was $2.8
million and the commodity hedging loss was $0.3 million. During the
period, the change in the market value of the Fund's derivative financial
instruments resulted in these gains and losses.

In the second quarter of 2008, amortization of property, plant and
equipment was $9.4 million compared to $7.7 million in the second quarter
of 2007. The increase was due to higher sales volumes in the second
quarter of 2008 versus the second quarter of 2007.

Reclamation for the three month period ending June 30, 2008 was $0.2
million compared to $0.3 million in the second quarter of 2007.

In second quarter of 2008, net interest expense was $3.5 million compared
to $5.6 million in the second quarter of 2007. The decrease in interest
expense was due to lower average amounts of long-term debt outstanding
during the quarter ended June 30, 2008 than the quarter ended June 30,
2007, as well as lower variable interest rates.

Minority interest in earnings of subsidiaries in the second quarter of
2008 was $1.2 million, down from $2.6 million in the second quarter of
2007 due to the Fund's lower earnings before income tax.

Consolidated Net Earnings (First half 2008 compared to first half 2007)

Net earnings and comprehensive income of $9.9 million were reported for
the first six months ending June 30, 2008 compared to $7.3 million in the
first six months of 2007. The $2.6 million increase was mainly due to
higher production, sales and byproduct revenues, the absence of income
tax expense in 2008 and a lower interest expense, partially offset by
lower premiums, higher production costs, higher amortization and
reclamation charges and financial instrument losses.

Revenues less raw material purchase costs in the first half of 2008 were
$144.2 million, compared to $127.5 million in the same quarter of 2007.
The $16.7 million increase was due to higher sales, byproduct revenues,
processing fee and recoveries partially offset by lower premiums and a
stronger Canadian dollar.

Production Cost Breakdown
(in $ millions) Year-to-date
2008 2007
---- ----
Production costs 89.4 83.3
Change in inventory 3.7 (6.3)
---- ----
93.1 77.0

Production costs in the first half of 2008 were $93.1 million, $16.1
million higher than the $77.0 million recorded in the first half of 2007.
Higher energy, labour costs and production resulted in a $6.1 million
increase. The remainder of the increase ($10 million) was a result of
inventory being reduced in the first six months of 2008 versus increased
in the first six months of 2007. Selling, general and administration
costs in the first half of 2008 were $9.7 million, compared to $9.9
million in the first half of 2007.

The foreign exchange loss for first half of 2008 was $2.3 million,
compared to a gain of $9.3 million in the first six months of 2007. The
foreign exchange loss was a result of a weakening Canadian dollar on the
Fund's net monetary liability. The foreign exchange loss was largely
offset by an increase in the value of in-process and finished inventory.
The increase in the value of inventory is realized in Net Revenues as the
metal is sold to customers (thereby increasing the Net Revenue recorded
by the Fund).

In the first six months of 2008, the commodity financial instruments loss
was $1.0 million and the commodity hedging gain was $0.2 million. In the
same period of 2007, the commodity financial instruments gain was $2.5
million and the commodity hedging loss was $0.2 million. During the
period, the change in the market value of the Fund's derivative financial
instruments resulted in these gains and losses.

In the first six months of 2008, amortization of property, plant and
equipment was $17.3 million compared to $14.5 million in the same period
of 2007. The increase was due to higher sales volumes in the current year.

Reclamation for the six months ending June 30, 2008 was $0.5 million
compared to a recovery of $3.5 million in the same period of 2007. The
recovery in 2007 was due to a reduction in the expected future
reclamation spending, which resulted in a reduction in the present value
of future site restoration and reclamation liabilities.

In the first six months of 2008, net interest expense was $7.3 million
compared to $11.9 million in the first six months of 2007. The decrease
in interest expense was due to lower average amounts of long-term debt
outstanding, as well as lower variable interest rates.

Minority interest in earnings of subsidiaries in the first half of 2008
was $3.3 million, down from $7.3 million in the first half of 2007 due to
the Fund's lower earnings before income tax.

KEY PERFORMANCE DRIVERS

The following table provides a summary of the key performance drivers for
2008 and 2007:

-------------------------------------------------------------------------
Second Quarter Year-to-date
2008 2007 2008 2007
-------------------------------------------------------------------------

Zinc metal production (tonnes) 67,355 63,247 131,415 126,194
Zinc metal sales (tonnes) 73,847 59,897 136,004 119,926
Zinc concentrate processed (tonnes) 130,656 127,463 255,424 255,659
Zinc recovery (%) 97.9 96.8 97.9 96.9
Processing fee (cents/pound) 37.5 37.0 37.5 37.0
Zinc metal premiums (US$/pound) 0.060 0.126 0.064 0.110
Byproduct revenues ($ millions) 14.6 9.2 25.4 15.5
Copper in copper cake production (tonnes) 791 770 1,548 1,454
Copper in copper cake sales (tonnes) 807 851 1,674 1,470
Sulphuric acid production (tonnes) 108,421 105,918 211,750 210,181
Sulphuric acid sales (tonnes) 127,139 105,108 219,214 210,422
Average LME zinc price (US$/pound) 0.96 1.66 1.03 1.62
Average LME copper price (US$/pound) 3.83 3.47 3.68 3.08
Sulphuric acid netback (US$/tonnes) 61.38 15.28 51.66 17.50
Average US/Cdn. exchange rate 1.01 1.10 1.01 1.14
-------------------------------------------------------------------------

PRODUCTION

In the second quarter of 2008, zinc metal production was
67,355 tonnes, compared to 63,247 tonnes in the same quarter of 2007.
Production improved by approximately 6% as a result of higher feed grade
in the concentrate, lower zinc dust consumption and improved recoveries.

Production in the first half of 2008 was 131,415 tonnes compared to
126,194 tonnes. The 2008 production target has been revised to 270,000
tonnes. Processing zinc concentrate with higher grade (starting in the
third quarter) is expected to result in higher production volumes in the
last half of the year.

The target for production is subject to various risks and uncertainties.
The assumptions for them can be found in the "Forward-looking
Information" below.

SALES

As the Fund expected, zinc metal demand improved in the second quarter.
The weak US dollar has improved the price competitiveness of US sheet
steel products compared to imports and has provided export opportunities
that did not exist previously. In addition, rising raw materials costs
have pressured steel mills to increase prices, which have stimulated
steel consumers to restock. The strength of the recovery is uncertain due
to the continued slow consumer demand from the transportation and
construction sectors.

Sales of 73,847 tonnes in the second quarter of 2008 compared to 59,897
tonnes in the second quarter of 2007, and inventories decreased by over
6,000 tonnes from March 31, 2008 to the end of June 2008.

Sales in the first half of 2008 was 136,004 tonnes compared to 119,926
tonnes in the same period of 2007. The Fund's target sales volume for
2008 remains unchanged at 275,000 tonnes.

The target for sales is subject to various risks and uncertainties. The
assumptions for them can be found in the "Forward-looking Information"
below.

PROCESSING FEE

In 2008, the processing fee was increased to 37.5 cents per pound,
compared to 37.0 cents per pound in 2007. The processing fee is adjusted
annually by (i) upward by 1% and (ii) upward or downward by 10% of the
year-over-year percentage change in the average cost of electricity per
megawatt hour for the Processing Facility.

PREMIUMS

For the second quarter of 2008, premiums averaged 6.0 cents US per pound,
compared to 12.6 cents US per pound in the second quarter of 2007. The
decrease in realized premiums reflects a decrease in 2008 contract
premiums from the high levels achieved in 2007.

The forecast for the premiums in 2008 is 6.5 cents US per pound.

The Fund's target for premiums is subject to various risks and
uncertainties. The assumptions can be found in the "Forward-looking
Information" below.

BYPRODUCTS

In the second quarter of 2008, the Fund generated $14.6 million in
revenue for the sale of its byproduct copper cake and sulphuric acid
compared to $9.2 million in the second quarter of 2007. The $5.4 million
increase was largely due to a significantly higher netback from sulphuric
acid, partially offset by a stronger Canadian dollar. In the second
quarter of 2008, the Fund realized US$61.38 per tonne compared to
US$15.28 per tonne in the second quarter of 2007.

About 85% of the Fund's 400,000 tonnes of sulphuric acid is sold on 1 to
3 year contracts. The balance is sold on a transaction-by-transaction
basis throughout the year. The Fund's sulphuric acid netback is based on
a realized selling price less transportation cost and a commission for
the reseller.

The market conditions for sulphuric acid have improved over the last
number of months and the Fund's netbacks have risen sharply. The
improvement in 2008 is the result of higher purchase order prices and the
impact from contract business being rolled over at higher prices. The
Fund expects that its' realized sulphuric acid netbacks will remain
stable for the balance of the year. Roughly 40% of the Fund's contracts
will be renegotiated later this year for sales starting on January 1,
2009. There is a potential for higher sulphuric acid netbacks in 2009 if
the Fund continues to capture this pricing in the upcoming contract
negotiations.

The Fund's target for sulphuric acid netbacks is subject to various risks
and uncertainties. The assumptions can be found in the "Forward-looking
Information" below.

EXCHANGE RATE

A stronger Canadian dollar has a negative impact on the Fund's financial
results. In the second quarter of 2008, a one-cent Canadian appreciation
in the average Canadian/US exchange rate would have negatively impacted
the Fund's cash available for distribution by approximately $0.225
million ($0.9 million on an annual basis). The average Canadian/US
exchange rate appreciated from US$1.10 in the second quarter of 2007 to
US$1.01 in the second quarter of 2008.

COSTS

Production costs include labour, energy, supplies and other costs
directly associated with the production process. Production costs in the
second quarter of 2008 were higher at $51.0 million, compared to $40.0
million in the second quarter of 2007. See pages 3 and 4 for more details.

CAPITAL EXPENDITURES

Capital expenditures in the second quarter of 2008 were $6.9 million,
compared to $6.2 million in the second quarter of 2007.

Capital spending is forecast to be $30 million in 2008, unchanged from
last quarter. It is expected that $24 million will be spent on sustaining
capital, of this amount, $21 million is for regular maintenance capital,
and $3 million will be spent to remove the magnesium and selenium from a
new feed source for zinc concentrate called Perseverance. About $6
million is expected to be spent on revenue-generating projects.

The Fund's target for capital spending is subject to various risks and
uncertainties. The assumptions can be found in the "Forward-looking
Information" below.

Operating Cash Flows

Cash realized from operations, before net change in non-cash working
capital items in the second quarter of 2008 was $23.9 million compared to
$14.8 million in the second quarter of 2007. During the second quarter of
2008, non-cash working capital decreased by $2.6 million due to the
decrease in inventory partially offset by an increase in accounts
receivable and a decrease in the accounts payable and accrued liabilities.

Cash realized from operations, before net change in non-cash working
capital items in the first half of 2008 was $35.7 million compared to
$40.1 million in the same period of 2007. During the first six months of
2008, non-cash working capital increased by $2.1 million due to an
increase in accounts receivable and a decrease in accounts payable and
accrued liabilities partially offset by a reduction in inventory.
Standardized Distributable Cash

Standardized distributable cash is defined as the GAAP measure of cash
from operating activities after adjusting for capital expenditures,
restrictions on distributions arising from compliance with financial
covenants restrictive at the time of reporting, and minority interests.

Standardized distributable cash should not be seen as a measurement of
liquidity or be used as a substitute for other measures, in accordance
with GAAP. Management believes that, in addition to net earnings,
standardized distributable cash is a useful supplemental measure for
evaluating the Fund's performance as the standardized distributable cash
net of the fluctuations in non-cash working capital items provides
investors with an indication of cash available for distributions and
working capital needs. Investors are cautioned, however, that
standardized distributable cash should not be construed as an alternative
to the statement of cash flows as a measure of liquidity and cash flows.
The method of calculating standardized distributable cash for the
purposes of this press release may differ from that used by other issuers
and, accordingly, standardized distributable cash in this press release
may not be comparable to standardized distributable cash used by others.

A reconciliation of cash realized from operations to standardized
distributable cash for the periods ending June 30, 2008 and 2007 is
provided below:

($ thousands) Second Quarter Year-to-date
2008 2007 2008 2007
--------------------------------------------
Cash realized from
operations 26,514 15,676 33,614 17,752
Less: portion attributable to
minority interest (6,629) (3,919) (8,404) (4,438)
--------------------------------------------------------------------------
Cash realized from operations
attributable to Priority
Unitholders 19,885 11,757 25,210 13,314

Capital adjustments:
Purchase of property, plant
and equipment (6,869) (6,178) (10,026) (12,016)
Proceeds from government
assistance 478 1,745 478 1,745
Proceeds on sale of
property, plant and
equipment 97 60 172 60
Accretion on long-term debt (64) (63) (128) (126)
--------------------------------------------------------------------------
(6,358) (4,436) (9,504) (10,337)

Plus: portion of capital
adjustments attributable to
minority interest 1,589 1,109 2,376 2,584
--------------------------------------------------------------------------
Capital adjustments
attributable to Priority
Unitholders (4,769) (3,327) (7,128) (7,753)

--------------------------------------------------------------------------
Standardized distributable
cash 15,116 8,430 18,082 5,561
--------------------------------------------------------------------------

Other adjustments including
discretionary items:
Increase/(decrease) in
non-cash working capital (2,644) (853) 2,091 22,317
Decrease/(increase) in
operating reserve (4,762) 2,362 (702) (4,233)
Less/(plus) portion of other
adjustments attributable to
minority interest 1,852 (377) (347) (4,521)

--------------------------------------------------------------------------
Distributions declared to
Priority Unitholders 9,562 9,562 19,124 19,124
--------------------------------------------------------------------------

Weighted average number of
Priority Units outstanding
(basic and diluted) 37,497,975 37,497,975 37,497,975 37,497,975
Standardized distributable
cash per Priority Unit $0.40 $0.22 $0.48 $0.15

Distributions declared per
Priority Unit $0.255 $0.255 $0.51 $0.51

In the above reconciliation, in order to comply with the guidance of
the CICA publication on standardized distributable cash, the item
"Increase in non-cash working capital" is excluded from the calculation
of standardized distributable cash, and is included in the reconciliation
of distributions declared to Priority Unitholders from the standardized
distributable cash.

In the second quarter of 2008, standardized distributable cash was $15.1
million and distributions declared to Priority Unitholders were $9.6
million.

Management and the board of trustees periodically review cash
distributions, taking into consideration current and prospective
performance. Some of the factors considered in decisions related to
distributions include cash amounts required to service debt obligations,
capital expenditures, taxes, working capital requirements, current
business conditions and other items considered to be prudent. The Fund's
policy is to make distributions to unitholders equal to cash flows from
operations, before variations in working capital and such reserves for
operating and capital expenditures as may be considered appropriate by
the trustees. The Fund determines the cash available for distribution on
a monthly basis for the unitholders of record of the Fund on the last
business day of each calendar month and these distributions are to be
paid on or about 25 days thereafter.

The amount of monthly distribution to unitholders is a function of Fund's
debt management strategy and productive capacity maintenance program. The
Fund's calculation, as compared to the CICA's standardized distributable
cash, excludes changes in non-cash working capital as the changes within
the working capital components are often temporary by nature and, if
needed, can be financed with the Fund's Revolving Facility.

Notional Operating Reserve and Capital and Site Restoration Reserve

In order to meet the Fund's goal to provide a stable, monthly
distribution, a notional operating reserve is utilized. In a period in
which standardized distributable cash, net of the changes in non-cash
working capital attributable to Priority Unitholders, is greater than the
distributions declared to the Priority Unitholders, the notional
operating reserve will increase. In a period during which standardized
distributable cash, net of the changes in non-cash working capital
attributable to Priority Unitholders, is less than the distributions
declared to the Priority Unitholders, the notional operating reserve will
decrease. The notional operating reserve provides flexibility so that the
Fund can maintain a stable, monthly distribution while adhering to the
Fund's trust indentures and debt covenants. During the second quarter of
2008, the notional operating reserve increased by $4.8 million to $19.0
million.

While the operating reserve is greater than the Fund's target three-month
payout level, the Fund's financial flexibility has been reduced. The
strengthening in the Canadian dollar and the reduced zinc premiums
expected in 2008 may negatively impact the Fund's ability to generate
cash in 2008. The Fund plans to increase capital expenditures in 2008.
For these reasons, the Fund considers it prudent at this time not to
increase its monthly distributions, nor to issue a special distribution.

The Fund also utilizes a notional capital and site restoration reserve.
In a period in which unexpected or unusually high capital expenditures
are required, the Fund has the ability to reduce the notional capital and
site restoration reserve, while adhering to the Fund's trust indentures
and debt covenants. As of June 30, 2008, the notional capital and site
restoration reserve was $5.0 million.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2008, the Fund's total debt was $244.6 million, up from
$240.3 million at the end of December 2007. The Fund's cash and cash
equivalents at June 30, 2008 totalled $6.7 million, up from $3.7 million
at December 31, 2007.

The Fund has a Revolving Facility in place that is used for general
corporate purposes, including financing working capital. In April 2008,
the Revolving Facility was extended to May 3, 2010. The amount available
to be drawn on the Revolving Facility varies on a quarterly basis and
will be based on percentages of the Fund's eligible inventory and
accounts receivable from the previous quarter. The maximum available to
be drawn at any time is $200 million and the minimum available to be
drawn is $55 million. The Fund has the ability to draw down the Revolving
Facility in both Canadian and US dollars. The amount available to be
drawn based on the Fund's June 30, 2008 balance sheet is $129 million.

Fluctuations in working capital balances as a result of operations are
generally funded by, or used to repay, the Revolving Facility. During the
second quarter of 2008, $100.6 million of debt was drawn and $102 million
was repaid related to the fluctuations in working capital.

The Fund has $153.5 million of senior secured notes (the "Notes")
outstanding. When issued, the Notes had a term of seven years and will
mature on December 20, 2010. The Notes offering was made by way of a
private placement and the proceeds were used to repay a term facility
that had been outstanding since the inception of the Fund.

OUTLOOK

----------------------------------------------------------------------------

The 2008 targets for the key drivers of the Fund
are:
Zinc metal production: 270,000 tonnes
Zinc metal sales: 275,000 tonnes
Processing fee: 37.5 cents per pound
Zinc metal premium: 6.5 cents US per
poundCapital expenditures: $30
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 can be found in the "Forward-looking Information" below.

FORWARD-LOOKING INFORMATION

The Fund provides Forward-looking Information for the current year on
zinc metal production, zinc metal sales, processing fee, zinc metal
premiums, byproduct revenues and capital expenditures. The Fund provides
this Information to shareholders and analysts because they are the key
drivers of the business. Readers are cautioned that this information may
not be appropriate for other reasons.

The Fund updates its Forward-looking Information in each of our quarterly
MD&A's.

This press release contains Forward-looking Information concerning the
Fund's objectives and 2008 general business outlook, zinc metal
production and sales targets, estimated processing fee, zinc premium
target, estimated recovery rates, expected byproduct revenues and capital
expenditures forecast. Forward-looking Information 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 Information involves 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
Information.

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 impact of month prior pricing; (6)
the ability of the Fund to continue to service customers in the same
geographic region; (7) 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-a-vis the US dollar; and increasing transportation and distribution
costs; (8) 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, the sensitivity of the Fund's interest
expense to increases in interest rates; (9) changes in recoveries and
capital expenditure requirements; (10) the negotiation of collective
agreements with its unionized employees; (11) general business and
economic conditions; (12) transportation disruptions; (13) 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;
(14) potential negative financial impact from regulatory investigations,
claims, lawsuits and other proceedings; (15) loan default and refinancing
risk; and (16) reliance on Xstrata Canada for the operation and
maintenance of the Processing Facility.

This Forward-looking Information represents our views as of the date of
this press release. The Fund anticipates that subsequent events and
developments may cause its views to change.

Noranda Income Fund is an income trust whose units trade on the Toronto
Stock Exchange under the symbol "NIF.UN". The Noranda Income Fund owns
the CEZinc processing facility and ancillary assets (the "CEZinc
processing facility") located in Salaberry-de-Valleyfield, Quebec. The
CEZinc 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 by-products from zinc
concentrates purchased from mining operations. The Processing Facility is
operated and managed by Canadian Electrolytic Zinc Limited.

NORANDA INCOME FUND

INTERIM CONSOLIDATED BALANCE SHEETS

(unaudited)

($ thousands)

June 30 Dec. 31
2008 2007
--------- ---------
ASSETS

Current assets:
Cash and cash equivalents 6,661 3,702
Accounts receivable
Trade 87,605 64,210
Xstrata Canada 25,242 22,617
Commodity financial instruments - 964
Firm commitments 8,718 719
Inventories 96,150 129,066
Prepaids and other assets 3,051 2,195
--------- ---------
227,427 223,473

Property, plant and equipment 307,845 314,489
--------- ---------
535,272 537,962
--------- ---------

LIABILITIES AND EQUITY

Current liabilities:
Accounts payable and accrued liabilities
Trade 17,751 18,547
Xstrata Canada 42,711 44,801
Commodity financial instruments 8,577 735
Distributions payable 4,250 4,250
--------- ---------
73,289 68,333

Future tax liability 13,147 13,147
Future site restoration and reclamation 12,389 12,130
Long-term debt 244,616 240,269
Interests of Ordinary Unitholders 51,249 54,312

Unitholders' Interest:
Unitholders' equity 191,273 191,273
Deficit (50,691) (41,502)
--------- ---------
140,582 149,771
--------- ---------
535,272 537,962
--------- ---------

NORANDA INCOME FUND
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS AND DEFICIT
AND COMPREHENSIVE INCOME

(unaudited)

($ thousands)

Three months Six Months
Ended June 30 Ended June 30
--------------------- -----------------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenues
Sales 195,598 270,497 362,663 543,033
Transportation and
distribution costs (6,038) (3,920) (10,359) (7,181)
-------- -------- -------- --------
189,560 266,577 352,304 535,852
-------- -------- -------- --------

Raw material purchase
costs 113,799 208,606 208,141 408,370
-------- -------- -------- --------

Revenues less raw
material purchase costs 75,761 57,971 144,163 127,482
-------- -------- -------- --------

Other expenses

Production 50,972 39,951 93,053 76,965
Selling, general and
administration 4,805 5,003 9,660 9,940
Foreign exchange loss
(gain) (1,743) (8,667) 2,327 (9,272)
Commodity hedging loss
(gain) 89 263 (201) 153
Commodity financial
instruments loss
(gain) 3,619 (2,822) 1,007 (2,474)
Amortization of
property, plant and
equipment 9,360 7,744 17,272 14,519
Reclamation 237 271 480 (3,530)
-------- -------- -------- --------
67,339 41,743 123,598 86,301
-------- -------- -------- --------

Earnings before
interest, minority
interest and income
tax 8,422 16,228 20,565 41,181
-------- -------- -------- --------

Interest expense, net 3,521 5,637 7,318 11,926
-------- -------- -------- --------

Earnings before
minority interest and
income tax 4,901 10,591 13,247 29,255
-------- -------- -------- --------

Minority interest in
earnings for Ordinary
Unitholders 1,225 2,648 3,312 7,314
-------- -------- -------- --------

Earning before income
tax 3,676 7,943 9,935 21,941
-------- -------- -------- --------

Income tax expense - 14,636 - 14,636
-------- -------- -------- --------

Net earnings (loss)
and comprehensive
income 3,676 (6,693) 9,935 7,305
-------- -------- -------- --------

Deficit beginning of
period (44,805) (26,188) (41,502) (30,624)
-------- -------- -------- --------

Distributions to
Priority Unitholders (9,562) (9,562) (19,124) (19,124)
-------- -------- -------- --------

Deficit end of period (50,691) (42,443) (50,691) (42,443)
-------- -------- -------- --------

Net earnings per

Priority Unit (basic
and diluted) $ 0.10 $ (0.18) $ 0.26 $ 0.19

Weighted average
Priority Units
outstanding 37,497,975 37,497,975 37,497,975 37,497,975

NORANDA INCOME FUND

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

($ thousands)

Three months Six Months
Ended June 30 Ended June 30
------------------ -----------------
2008 2007 2008 2007
------- ------- ------- -------

Cash realized from (used for)
operations:
Net earnings for the period 3,676 (6,693) 9,935 7,305
Items not affecting cash:
Amortization of property, plant
and equipment 9,360 7,744 17,272 14,519
Accretion of reclamation expense 237 271 480 (3,530)
Minority interest in earnings for
Ordinary Unitholders 1,225 2,648 3,312 7,314
Mark-to-market loss (gain) on
commodity financial instruments 3,708 (2,559) 806 (2,321)
Change in fair value of embedded
derivatives 5,414 (1,545) 3,453 1,627
Future income tax expense - 14,636 - 14,636
Accretion on long-term debt 64 63 128 126
Loss from sale of property, plant
and equipment 253 299 540 447
Site restoration expenditures (67) (41) (221) (54)
------- ------- ------- -------
23,870 14,823 35,705 40,069
------- ------- ------- -------
Net change in non-cash working
capital items 2,644 853 (2,091) (22,317)
------- ------- ------- -------
26,514 15,676 33,614 17,752
------- ------- ------- -------

Cash realized from (used for)
investment activities:
Purchases of property, plant and
equipment (6,869) (6,178) (10,026) (12,016)
Proceeds from Hydro-Quebec -
incentive 478 1,745 478 1,745
Proceeds on sales of property,
plant and equipment 97 60 172 60
------- ------- ------- -------
(6,294) (4,373) (9,376) (10,211)
------- ------- ------- -------

Cash realized from (used for)
financing activities:

Distributions - Priority
Unitholders (9,562) (9,562) (19,124) (19,124)
- Ordinary
Unitholders (3,187) (3,187) (6,375) (6,375)
Long-term debt issued under the
Revolving Facility 100,628 141,900 196,220 303,100
Long-term-debt repaid under the
Revolving Facility (102,000) (141,700) (192,000) (298,100)
------- ------- ------- -------
(14,121) (12,549) (21,279) (20,499)
------- ------- ------- -------

Net change in cash and cash
equivalents during the period 6,099 (1,246) 2,959 (12,958)

Cash and cash equivalents,
beginning of period 562 2,000 3,702 13,712
------- ------- ------- -------

Cash and cash equivalents, end
of period 6,661 754 6,661 754
------- ------- ------- -------

Contacts:
Financial information: Canadian Electrolytic Zinc Limited,
Noranda Income Fund's Manager
Michael Boone, Vice President & Chief Financial Officer
(416) 775-1561
Email: mboone@xstrata.ca

Copyright 2008, Market Wire, All rights reserved.

-0-