You’re a canny personal or institutional investor with
a nose for quality. And you’re sniffing around a troubled
marketplace for safe yet substantial growth opportunities.

Your research has helped you narrow your choices to two options.

On one hand, you may be tempted to purchase shares of a mature, investment-management company which, after years of determined effort, has climbed near the apex of the corporate heap.

It’s conservative and reliable, but its years of strongest growth have receded into the distant past, and perhaps its decision-makers, having achieved success, are
no longer as oriented to the development of growth strategies as they once were.

On the other hand, you’ve identified a second option, which truly captures the imagination.

You’ve been invited to place your trust in a proven group of well-seasoned investment minds who have recently teamed up to make the most of compelling opportunities which less-
experienced managers have tended to overlook, including small-cap equities.

Encap Corporation is such a team – an emerging investment management company that sees opportunities for growth in today’s unsettled climate and which offers you a rare change to hop aboard at ground level for an exhilarating, lucrative ride.

Encap’s goal: To manage no less than $1.5 billion in assets within a five-year period.

Encap announced the launch of a new, $25-million placement on August 1, 2002. We’ll spell out details of these products shortly.

But an introduction to Encap’s key principals is the first order of business. Once you’ve met these knowledgeable managers, you’ll understand why sophisticated investors should take advantage of Option 2.

Peter de Auer, Encap’s president and CEO, has been a close
observer of North American market cycles and trends for more than 40 years, spending his entire adult life at the heart of the industry.

The former director in charge of the Ontario Hydro Pension Fund, Mr. de Auer also served as chairman of the Canadian Council of Financial Analysts.

He has been a senior investment officer with OMERS and Guaranty Trust, and his list of directorships is long and
distinguished. Mr. de Auer has served as a director of Altamira Capital, Helix Investments and Star Data Systems, as well as the Pension Investment Association of Canada and the Association of Canadian Pension Management.

He is currently a director and chairman of the Compensation Committee of MDS Capital Corp., which at close to $1 billion, is the largest Canadian venture capital company specializing in investing only in health care.

Encap chairman, N. Gary Van Nest is a man with vision. With 35 years’ experience at senior level positions in the securities, merchant banking and investment
management industries, Mr. Van Nest adds an entrepreneurial advantage to the company.

These two senior strategists have made it a priority to
assemble a proven and experienced managerial team
to supervise Encap’s line of products from company offices in both Toronto and Calgary.

So, with the introductions complete, let’s proceed to a
discussion of Encap’s three primary products.

* 1. Income products comprising U.S. mortgage-backed securities and other largely government fixed income issues. These are high quality securities able to generate solid returns well beyond that provided by readily available GIC’s. Targeted annual return rate for investors: 7.5%.

* 2. A Canadian small cap investment offered to both pension funds (minimum account size is $10 million) and individual investors (minimum $100,000).

This is disciplined investing, calling for portfolios of 25 stocks, fully invested at all times, in financially strong companies, with above average revenue and earnings per share growth prospects and available at reasonable valuations. No single holding exceeds 7% of the total.

In the 16 months since inception, Encap’s results are up 46% and to the end of July, the increase this year has been 4.9%, both well ahead of the market as a whole.

* 3. The third product is a $100 million offering (available only to pension funds) of a pool of capital which will invest only in new treasury issues of public small cap companies wishing to raise additional equity capital.

An offering memorandum is available, for more details on this exiting offer, or for additional
general information, please send an inquiring e-mail to encap@shaw.ca.
Better still, why not telephone Encap President/CEO Peter de Auer in Toronto at (416) 413-3802 or contact Vice-President, Patrick Toth in Calgary at (403) 244-3038?
It’s a phone call that you owe it to yourself to make.