Central Fund of Canada Limited Enters Into Underwriting Agreement

  Central Fund of Canada Limited ("Central Fund") (TSX: CEF.A)(TSX: CEF.U)(NYSE Amex: CEF) of Calgary, Alberta announced today that it has entered into an underwriting agreement with a syndicate of underwriters (the "Underwriters") led by CIBC, under which the Underwriters have agreed to buy and sell to the public, in Canada (except Quebec) and in the United States under the multijurisdictional disclosure system, 15,500,000 Class A Shares of Central Fund. The Underwriters have been granted the right to increase the size of the offering (the "Right") by up to an additional 1,475,000 Class A Shares, exercisable in whole or in part, at any point prior to 4:00 pm (EST) on November 10, 2009. The offering will be made under a prospectus supplement to Central Fund's U.S.$1,000,000,000 base shelf prospectus dated September 8, 2009.

The purchase price of U.S.$13.56 per Class A Share is expected to result in gross proceeds of approximately U.S.$210 million. Substantially all the net proceeds of the offering have been committed to purchase gold and silver bullion for settlement at closing, in keeping with the asset allocation policies established by the Board of Directors of Central Fund. Any additional capital raised by this offering is expected to assist in reducing the annual expense ratio in favour of the Shareholders of Central Fund.

Closing is expected to occur on or about November 17, 2009.

Central Fund has filed a base shelf prospectus and registration statement with the Canadian securities regulatory authorities (except Quebec) and the United States Securities and Exchange Commission ("SEC") for the offering to which this communication relates. Before you invest, you should read the base shelf prospectus and any other documents Central Fund has filed with the securities commissions in each of the provinces and territories of Canada, except Quebec, and the SEC for more complete information about Central Fund and this offering. You may obtain a copy of the base shelf prospectus filed in the United States from CIBC World Markets Corp., 425 Lexington Avenue, 5th Floor, New York, New York 10017, by fax at 212-667-6303 or by e-mail at [e-mail]. You may obtain a copy of the base shelf prospectus filed in Canada from CIBC, fax [phone] or request a copy by telephone at 416-594-7270.

Statements contained in this release that are not historical facts are forward-looking statements that involve risks and uncertainties. Central Fund's actual results could differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those risks detailed in Central Fund's filings with the Canadian securities regulatory authorities and the SEC.

Central Fund of Canada Limited (est. 1961) is an exchange-tradeable, refined gold and silver bullion holding company. Class A Shares are qualified for inclusion in many North American regulated accounts. Central Fund's bullion holdings are stored unencumbered in allocated and segregated safekeeping in Canada, in the treasury vaults of the Canadian Imperial Bank of Commerce. The gold and silver bullion are physically inspected by Ernst & Young LLP in the presence of Central Fund's Directors and Officers as well as bank officials. Class A Shares are quoted on the NYSE Amex LLC, symbol CEF and on the TSX, symbols CEF.A (Cdn. $) and CEF.U (U.S. $).

Contacts: Central Fund of Canada Limited J.C. Stefan Spicer President and CEO 905-648-7878 Email: [e-mail] Website: www.centralfund.com