Central Fund Enters Into a US$350 Million 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 CIBC World Markets Inc., as lead underwriter, and
Credit Suisse Securities (Canada) Inc. (the "Underwriters"), 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, 23,600,000 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 1,700,000 Class A Shares, exercisable in whole or in part, at any
point prior to 4:00 pm (EST) on May 11, 2010. The offering will be made under a
second 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.$14.85 per Class A Share is expected to result in
gross proceeds of approximately U.S.$350 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 May 18, 2010.

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 prospectus supplement 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 and prospectus supplement 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 useprospectus@us.cibc.com. You may obtain a copy
of the base shelf prospectus and prospectus supplement filed in Canada from
CIBC, fax 416-594-7242 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 Equities, symbol CEF and on the TSX,
symbols CEF.A (Cdn. $) and CEF.U (U.S. $).

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