we should aall email d.stevens, page-6

gents ... winding up this co will NOT be happening soon ... no matter how logical or much we whinge. If you have been following my correspondencece with company you will notice that they just IGNORE the questions and reply with platitudes .... latest response from them below with my question below their answer:

I am NOT impressed & looking for HC posters help re next move??? Please advise what EVERYONE THINKS.

Do we combine shares and push for an EGM? Food for thought there????


IF YOU HOLD HOW .... I say again HOW would you knock back a 50% return???? .... That is NOT 50% over say 5 ... or even 10 years that is now; through a simple decision to SELL up the assets and return OUR cash .... lets remember fact, in 6 years they have a -12cent capital return .... (too late for compounding) ... lets call that -2.5 % /ANNUM ... give me the 50% any time.

The pearls of wisdom from our leader below:

(for the observant:
-spells my name incorrectly
-who cares if 'current period to be unrepresentative of the longer term. '
-who cares if they are "unashamed supporters" of small caps ... what happened to old fashioned idea of making $$$$$$$$$$
-who cares about closed end versus open ended stuff???}

RETURN OUR CASH!!!!!!

G (as in Graeme) J


Hello Graham,



Thank you for your note.



I think the first point in my letter to you covers the discount to premium history of CTN and its relativity to other LICs well.



Certainly the current period to which you refer to is different to the long run position for both markets and CTN. The discount for both have been elevated due to the GFC, and more specifically for CTN the SPP has held the stock price back( which happens with all companies raising capital).



I consider the current period to be unrepresentative of the longer term.



Whilst micro cap companies show outstanding relative growth to large companies they deserve the markets support. We are unashamed supporters to this important growth engine for the Australian economy that provides major employment opportunities product and service strength and high profitability dividends and growth to its shareholders. Currently due to the same issues impacting our share price as is impacting on the valuation of share in the micro cap sector. Thereby making them very attractive acquisitions and that is why we have determined to undertake a raising as we can acquire micro securities on larger discounts thereby benefiting our shareholders more than a buy back. I have pointed out that should CTN trade at a larger discount than the micro cap securities then we would implement the buyback provisions as we did last year.



I believe that in an relatively illiquid sector the closed end fund approach is much better for shareholders despite heightened discounts during events of significant stress. The holders of frozen and collapsed trusts would certainly agree.



I hope this further outlines our drivers.



Regards David Stevens











From: graeme joyce [mailto:[email protected]]
Sent: Monday, 15 February 2010 9:42 AM
To: David Stevens
Subject: Re: Contango Microcap Ltd Share price



Hi David

As you may recall I sent you an email in January and following your response of 15/1/10followed up requesting your position regarding the prospect of selling up the assets of the company and returning the proceeds to s/hs. I have not had a response to this query as yet.

I am sure you are aware that since initially raising this issue the unfortunate deterioration in the s/p (which I presume is greater in percentage terms than the deterioration of the NTA) means that an even greater return is available in the event of winding up the company. This must now be approaching 50% based on your latest NTA and I consider requires immediate attention.

I have not received your response as yet however I now consider that a strategy should be initiated immediately to announce that you WILL wind up the company if the discount to NTA is not closed.

In fact I consider that is the company was to announce such a strategy it would have an immediate impact on the share price as it would represent a prospective attractive gain to s/h. (I can assure you I would be loading up on the shares if you are to treat this proposal positively.)

I have shared my thoughts with several other shareholders and they appear to support this action.

For your info I have drafted an announcement that could be made to the market asap.

Dear Shareholders

First to those of you that have followed the company over the several years since listing I thank you for your loyal support. It is on behalf of you that I have recently put a recommendation to your Board that:

If the share price of CTN does not trade above 95 % of the previous months announced NTA (after tax) for a period of more than 5 consecutive days at any time in the future the necessary actions will be put in place to ensure that that the assets are in an orderly and logical manner as determined sold and the proceeds returned to shareholders in the form of a capital return (or in some other manner if subsequent investigations reveal a more advantageous outcome to shareholders.)

I have concluded that this action is necessary to ensure that you, our loyal shareholders interests are maximised.



Yours etc.



Could you please advise:

Your response on this issue.
The steps necessary to proceed with the winding up of the company. In particular:
Would it need shareholder approval? and,
What process is required by shareholders to instigate this action?


Ps. I have sent this email to your personal email address and posted it on contact us section of the ctn website.

Regards Graeme