SECOND VOTE NO on ALL RESOLUTIONS

THIS MATERIAL IS PRESENTED BY REPRESENTATIVES OF CTN SHAREHOLDERS
WHO ARE STRONGLY OPPOSED TO THE DIRECTORS' ACTIONS OVER THE
LAST SEVEN MONTHS, AND ALSO OF THE ACTIONS OF BOTH CGA AND NAOS


SHAREHOLDERS OF CONTANGO MICROCAP LIMITED – UPCOMING AGM

Tuesday 28^th November 2017 – In Sydney – Voting Closes Sunday 26^th November 2017 at 10.00am

VOTE “NO” TO ALL RESOLUTIONS

WHY VOTE “NO”?

• The Board is allowing CGA to sell your asset (the right to manage your portfolio) for $12.5m - you get NOTHING for this sale! – CTN OWN the rights to manage the portfolio - NOT CGA, whose performance has been disastrous
• In our view, the current Board has not operated YOUR Company in your best interests
  • It terminated OC Funds management – a much better manager – already costing $2m in lost performance so far, and a $1m fee settlement
  • By maintaining CGA as investment manager over the last 6 months, it has lost another $25m of underperformance
  • By appointing Naos. and letting them change the portfolio during the month of October, another $5m has been foregone
  • All up approximately $0.25 of NTA value has gone down the toilet on this Board’s watch
• The new Investment Management Agreement (IMA) sets a completely new focus for the Company and is totally unsatisfactory
  • Small companies NOT microcaps
  • Concentrated – 15-20 stocks instead of a diverse portfolio – high risk
  • NAOS currently manage 2 other LIC’s amounting to a combined value of only 60% of CTN’s portfolio value - this is a big step up, and provides further concentration risk
  • No resource exposure – one third of microcaps are miners
  • High fees – management fees should be around 0.8%pa for this size portfolio
• Atrocious termination provisions – an absolute 10-year lock-in, with high termination fees thereafter
• The current Board is aligned to the success of investment managers – not CTN shareholders – forget the token shareholdings that the Evans’ have in CTN – they are insignificant compared to their Naos Asset Management positions

IF A “NO” VOTE WINS – WHAT THEN?

• The remaining director (Trevor Carroll) should appoint David Stevens, Ian Ferres, and Glenn Fowles as interim Board members
• NAOS will manage the portfolio under the OLD IMA while the new Board embarks on a proper, due-diligence based investment manager search
• This process may involve multiple managers, and could include OC, NAOS (on much better terms for CTN than they are proposing), and Geoff Wilson amongst others
• CTN will STAY a microcap Company
• All of CTN’s managers will be independent of the Board
• A proper buy-back arrangement will be implemented to allow shareholders to exit at NTA
• The old dividend policy will remain in place
• A new name more fitting for the Company will be proposed

GO ON-LINE TO VOTE or APPOINT DAVID STEVENS AS YOUR PROXY BEFORE 26^th NOVEMEBR

If you receive your communications by email, follow the instructions in the Notice of Meeting sent to you on 30^th October 2017, voting “NO” to all resolutions.

OR

Send your proxy form to the Company Registry nominating David Stevens of 26 Alexandra Street, South Yarra, 3141 as your proxy.

If you have already voted you can change your vote by re-voting online or obtaining a replacement proxy form from Computershare (noting new date and “Replacement”)

FOR MORE INFORMATION

David Stevens E: [email protected] P: +61 (0)411 110 955
Ian Ferres E: [email protected] P: +61 (0)413 117 770
Glenn Fowles E: [email protected] P: +61 (0)425 703 805

Go to www.hotcopper.com.au and enter CTN into the ASX code to read the shareholder posts -- also CGA and NCC