Canoe Provides Update on Reverse Takeover with OpenPort and Listing on the Canadian Securities Exchange
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Canoe Provides Update on Reverse Takeover with OpenPort and
Listing on the Canadian Securities Exchange
OAKVILLE, ONTARIO ( October 1, 2018) - Canoe Mining Ventures Corp. (TSX VENTURE:
CLV) (“Canoe”) and OpenPort Limited (“ OpenPort”) are pleased to provide an update on the
proposed transaction pursuant to which Canoe will acquire all of the issued and outstanding shares
in the capital of OpenPort pursuant to a reverse takeover transaction (the “ RTO”). Canoe and
OpenPort entered into of a letter of in tent (the “LOI”) regarding the RTO that was announced in
a press release dated March 20, 2018.
Prior to closing of the RTO, Canoe also intends to delist its common shares from the TSX Venture
Exchange (the “TSXV”) and apply to list its common shares on the Canadian Securities Exchange
(the “CSE”).
The RTO will be an arms -length transaction. It is expected to be completed by way of a share
exchange or other form of business combination , as determined by the legal and tax advisors to
each of Canoe and OpenPort, acting reasonably. This will result in OpenPort becoming a wholly-
owned subsidiary of Canoe or otherwise combining its corporate existence with that of a Canoe
entity (the “Resulting Issuer”). Upon completion of the RTO, the Resulting Issuer will c arry on
the business currently carried on by OpenPort (as described in greater detail below). It is currently
anticipated that the Resulting Issuer will become listed on the CSE.
The LOI contemplates that Canoe and OpenPort will promptly negotiate and enter into a definitive
agreement (the “ Definitive Agreement ”), together with such other documents that may be
required to affect such filings and applications as are required in order to more fully delineate,
formalize and execute the terms of the RTO as ou tlined in the LOI. The LOI contemplates that if
the Definitive Agreement is not executed by all parties due to certain failures (including: (i)
OpenPort not delivering to Canoe consolidated audited financial statements for the last two fiscal
years and reviewed engagement financial statements for its most recent quarter; (ii) OpenPort not
obtaining the approval of the shareholders of OpenPort; (iii) OpenPort not delivering 100% of the
issued and outstanding securities in its capital to Canoe; or (iv) either party failing to receive the
approval of the parties’ respective boards of directors) then OpenPort shall pay to Canoe a break
fee of $1,000,000 USD.
The LOI also contemplates that Canoe will conduct a consolidation of its common shares, warrants
and stock options on a 1.8(old):1(new) basis. Canoe will then issue 86,200,000 common shares on
a post-consolidation basis to the shareholders of OpenPort and certain finders in respect of the
deal. The current Canoe shareholders will retain approximately 31% of the Resulting Issuer prior
to the Financing (as described below).
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In addition to regulatory escrow restrictions imposed on the RTO, individual shareholders of
Canoe representing greater than 30% of the issued outstanding shares have agreed to enter into a
lock up agreement supporting the RTO and voluntary escrow arrangement.
Canoe and OpenPort a re currently in the process of negotiating the Definitive Agreement and
preparing the documentation required in connection with listing on the CSE, including a Listi ng
Statement that will contain prospectus -level disclosure. Canoe will also apply for delisting from
the TSXV, and will provide further details as to the delisting date and its new listing on the CSE ,
as they become available.
The LOI was unanimously approved by the board of directors of OpenPort and Canoe. The
completion of the RTO is subject to a number of conditions, including but not limited to, receiving
approval of the shareholders of OpenPort and Canoe and receiving all r elevant exchange
approvals. The RTO cannot be completed until the required shareholder, regulatory and other
approvals are obtained. The TSXV delisting and CSE listing are subject to Canoe receiving
shareholder approval as well as approval from the TSXV and the CSE. There can be no assurance
that the RTO will be completed as proposed or at all, or that Canoe’s common shares will be
delisted from the TSXV and become listed on the CSE.
Information about OpenPort
OpenPort is a private company incorporated under the laws of Hong Kong. OpenPort seeks to
improve supply chains and logistics with its proprietary blockchain-enabled technology, bringing
transparency to shipment deliveries in emerging markets and around the world. In an effort to
address the ineffi ciencies of paper -based systems of record -keeping, OpenPort seeks to provide
shipment visibility from pickup to delivery, for maximum security and traceability.
OpenPort uses its enterprise resource planning integrated technology to provide shippers with
proof of delivery from any road transporter, rewarding participants in micro-incentives for sharing
shipment information. This is intended to enable users to determine exactly what was delivered,
when, and by whom with a digital audit trail.
This technology has been deployed since OpenPort’s inception in 2015 through established offices
in Hong Kong, China, Indonesia, Philippines, India, Pakistan, and the United States. OpenPort
software can be purchased directly, sold through transportation agreements w ith local providers,
and integrated with third party partners.
In January 2018, OpenPort entered into a services agreement with Canoe to build a Mining
Operations Logistics Solution (“ MOLS”) to service the traditional mining industry using a
blockchain pr otocol. MOLS is intended to be a vertically integrated technology to be used in
tracking and delivery of core samples and other raw or finished resources. Canoe and OpenPort
also entered into a commercial agreement providing for the equal sharing of revenues derived from
MOLS.
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In June 2018, OpenPort announced that it had entered into a commercial agreement with Canoe
and Heavyweight Group Special Projects Ltd. , to sell OpenPort’s technology, including MOLS,
in Africa.
As of August 2018, OpenPort has begun using its unique and proprietary suite of technology to
accelerate liquidity in the supply chain for both freight and goods payments through partnerships
with financial providers. Through this service OpenPaid helps tr ansporters, small and medium
enterprises and multinationals address cash flow challenges with convenient access to affordable
financing on their shipments. Using OpenPort’s Transport Management System and electronic
Proof of Delivery , with an audit trail p owered by micro -incentives and verified by blockchain,
OpenPort seeks to secure affordable supply chain finance for its clients on their invoices in a period
of days rather than the market standard of weeks or months.
OpenPort hopes that OpenPaid, which u tilizes the technology built and deployed by it, over the
preceding three years, will enable OpenPort to recognize revenue multiples higher than previously
recorded from the same client base, while expanding OpenPort’s market presence to an increasing
number of small and medium sized enterprises. In the Philippines, the first market for the OpenPaid
service, a sales pipeline representing over $1.5 million per month in net revenue has been filled in
the first month.
OpenPort Financial Information
In 2017, O penPort reported gross revenues of $3,243,999, compared to $241,976 during the
previous year. This increase was related primarily to the deployment of OpenPort’s Transport
gateway product into the domestic supply chains of several large , fast-moving consumer goods
companies in India, Pakistan and China. Under the Transport gateway model, OpenPort embeds
its proprietary system into outsourced trucking services for first, middle and/or last mile deliveries.
The launch of the Transport gatew ay product also enabled OpenPort to expand its network of
domestic third-party transport companies using its proprietary system.
During 2017, OpenPort reported gross profits of $293,610 (2016: $142,933). OpenPort’s
unaudited financial statements as of De cember 31 st, 2017 show total assets of $2,734,849 , with
$1,632,662 in liabilities and $1,102,186 in equity.
Supply Chain Finance Powered by Blockchain and Pipeline
Since early 2018, OpenPort’s core focus has been to provide supply chain participants with an
easy to use and fully operational digital blockchain platform and network for accelerated cash
flows. OpenPort is currently putting significant emphasis on enhancing and deploying its platform
in support of supply chain financing deals and is moving bey ond freight invoices financing into
financing of goods value invoices, helping an increasing number of companies, mainly SMEs,
collect cash faster to better grow their business. The initial revenue pipeline for the Supply Chain
Finance system (“SCF system”) initiative is promising and exceeds $170,000,000 per month of
goods value transferred , representing a potential monthly fee pool (for OpenPort) of more than
$1,700,000 per month.
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SCF System – Initial Revenue Pipeline as of August 2018
Pipeline – Aug
2018
Unit: US$
Financing
Providers
Status Monthly
Invoice
Goods/freight
value
OpenPort
Monthly Fee
pool
SEA
(Philippines) Acudeen
Sales team deployed,
first invoices already
factored
150,000,000 1,500,000
India TradeSpace Finalizing agreement
with TradeSpace 10,000,000 100,000
China - HK Liqease Pilot with Liqease in
China 10,000,000 100,000
Total 170,000,000 1,700,000
In addition, management expects the SCF system revenue pipeline to grow significantly in the
coming months in all of OpenPort’s markets as more partnerships with financial providers are
secured and sales efforts are fully redirected towards SCF system sales.
OpenPort - Estimated Revenues for the 2018 and 2019 Calendar Years
The projected revenues presented below include revenues from all of OpenPort’s segments and
geographies. These projections are estimates that management of OpenPort believes to be
achievable and are based on factors and assumptions relating to past performance, market demand
and customers’ feedback, among other things. However, there is no guarantee that OpenPort will
achieve such results.
Projected Revenues and gross profit as of August 2018
Projections – Aug 2018
Unit: US$
2017a 2018e 2019e
Revenue 3,416,687 6,650,000 19,950,000
Gross Profit 293,610 1,050,000 2,340,000
2017 revenue and gross profit include revenues from discontinued operations in Indonesia and
Brunei.
The 2018 projected revenue growth set out in this press release is dependent on a number of factors,
including the beginning of operation of OpenPort ’s new joint venture in the Philippines. Initial
invoices for this joint venture are expected to be issued at the end of September or first week of
October 2018.
The 2019 projected revenue growth set out in this press release is dependent on a number of factors
and assumptions, including plans for OpenPort to set up new entities in Indonesia and the Middle
East. While discussions are ongoing, no definitive agreement s with local partn ers in those
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jurisdictions have been finalized yet and there is no assurance that any such agreements will be
entered into or, if they are, that they will be on terms that would support the projected revenue set
out in this press release.
Information about Canoe
Canoe is an exploration and development company governed by the laws of Canada. It is currently
a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and
Ontario, with its common shares listed on the TSX V under the trading symbol “CLV”. Canoe’s
primary asset is a 100% interest in the Kerr Township property and a 50% interest in the Mining
Operations Logistics Solution currently being built in partnership with OpenPort to service the
traditional mining industry using a blockchain protocol.
Additional information about Canoe can be found at www.sedar.com.
The Resulting Issuer
The board of directors of the Resulting Issuer is expected to be comprised of five (5) members,
including Eugene Lee, Scott Kelly, Max Ward, Morten Damgaard Andersen, and Hans Hickler.
Below is a brief biographic summary for each of the proposed directors of the Resulting Issuer.
Eugene Lee is a mining finance and metals marketing professional with experience in capit al
markets, financial reporting, corporate governance and base metals marketing. He is currently the
Director, Marketing for Hudbay Minerals Inc. and oversees the marketing and sales strategy of
Hudbay’s metal production. Eugene also serves as chair of the International Zinc Association’s
(“IZA”) Technical and Market Development Committee and is a member of the IZA’s Executive
and Advisory Committee s. Furthermore, he serves on the board s of Giyani Metals Corp. and
Nevada Zinc Corp. Prior roles include Chief Financial Officer of Commonwealth Silver and Gold
Mining Inc. and of Premier Royalty Inc. Eugene is a Chartered Professional Accountant with the
Institute of Chartered Professional Accountants of Ontario and commenced his career with
PricewaterhouseCoopers (“PwC”) in the audit and assurance group before transferring to PwC’s
consulting practice, focusing on corporate bankruptcies and restructurings. Eugene is a graduate
of Trinity College at the University of Toronto and holds a Bachel or of Commerce in Economics
and Finance.
Scott Kelly is an entrepreneur, principal investor and board chair with a successful track record as
a business founder, director, consultant and capital markets executive. Scott is a trusted advisor to
chief exec utive officers and management teams and has more than 20 years of experience
maximizing awareness for public companies in a variety of industries. Scott served as a director
of Newstrike Brands (HIP.V), formerly Newstrike Resources, from 2013 to 2018, incl uding as
Chief Executive Officer from September 2015 to May 2017 and as Executive Chairman until April
2018, when he oversaw a series of financings totaling over $150 million and led the company
through a successful reverse takeover transaction. Scott is also currently a director of Westbridge
Energy Corp. and Inter -Rock Minerals Inc. In 1995, Scott founded Biocom, a boutique
communications agency that specialized in serving leading companies in the global pharmaceutical
industry including Roche, Sanofi, Amgen, Biogen Idec and Phillips Medical. Biocom was acquired
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by The Equicom Group Inc., Canada’s largest and most successful investor relations firm, in
February 2003. Scott was a Partner, director and Senior Vice President of The Equicom Group. In
2007, The Equicom Group was acquired by the TSX Group (Now TMX), and as a TMG Group
company, Scott was Senior Vice President and built on the company’s earlier success by helping
private companies through the initial public off ering process and working in partnersh ip with
public companies to deliver best practices in investor relations and shareholder communications.
Scott has been a director and investor in private and public companies over his career, and has sat
on and chaired board, audit committees and compensation and governance committees. Scott holds
a BA from Queens University and a certification from the Venture Capital Executive Program at
University of California, Berkeley, Haas School of Business. He is currently the President of a
private strategic ad visory consulting firm focused on emerging companies in North American,
European and international markets.
Max Ward is currently the Chief Executive Officer and a director of OpenPort. Before this, he was
Vice-President of Business Development APAC at Agility Logistics and Head of Consumer Retail
Asia at DHL. Max has over 10 years of executive business development experience with leading
logistics service providers in Asia, solving board -level supply chain problems for multinational
companies focused on the retail and consumer goods industries. Max is originally from the United
States, and also has extensive global experience , including five years working in the technology
services and transport industry in Europe and North America, including with two Sil icon Valley
start-ups. He holds an MBA from the Thunderbird School of Global Management in Arizona.
Morten Damgaard Anderson is currently a director of OpenPort. Before this, he was the Chief
Executive Officer of Agility Logistics South East Asia, and prior to assuming that role, served as
Senior Vice-President of Sales and Marketing and Vice -President of Strategic Accounts. Morten
brings a wealth of experience managing large -scale complex organizations in emerging Asian
markets, most recently managing se ven countries with a turnover in excess of USD$350 million
and 3,500 employees. Morten has further executive experience as the Senior Director for North
Asia at Damco, and as a director and General Manager for Maersk Logistics, with executive
education from the Columbia University Business School.
Hans Hickler is currently a director of OpenPort. He is also currently the Chief Executive Officer
of Asia Pacific and member of the management board of Agility Logistics Solutions Ltd., and was
previously the Chief Executive Officer of Asia Pacific Region at Agility Holdings Inc. Hans has
also served as Chief Execu tive Officer of Global Consumer Solutions for DHL Express (USA)
Inc., prior to which he was Executive Vice-President of its Consumer Experience Initiative. Hans
joined DHL Express (USA) Inc. in May 2005 and served as a member of the DHL US Management
board.
Hans has more than 25 years of experience in the transportation industry at the Neptune Orient
Lines Limited Group and its subsidiaries, APL and APL Logistics, through various roles including
Chief Executive Officer, Chief Information Officer, Senior Vice-President of Information Strategy
and Managing Director of US Southern Region. Hans also served as the Head of Loss -Making
Express Division of Deutsche Post AG until May 2008. He is currently the Chairman of DHL
Global Commercial Board at DHL Express (USA) Inc., as well as a director of Lumni Inc., director
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and Member of Advisory Board of Mela Artisans, Inc., and Member of Advisory Board at
MyMela.com, Inc. He was previously a director of ASTAR Air Cargo and Changan Minsheng
ALPP Logistics Co., Ltd. (fo rmerly Cma Logistics Co. Ltd.). Hans was named SAMA Program
and Executive of the Year , 2009, by the Strategic Account Management Association. He is a
member of the Young President Organization and holds a BA in Comparative Literature from
Brown University.
Financing
As part of the RTO, OpenPort anticipates that it will complete a private placement of subscription
receipts for aggregate gross proceeds of approximately Cdn$3,000,000 (the “ Financing”). Net
proceeds of the Financing are expected to be used t o fund the share acquisitions of OpenPort, to
fund the Resulting Issuer’s program to commercialize its technology following completion of the
RTO and for general corporate purposes, if the RTO closes. It is anticipated that after the closing
of the RTO, the convertible debentures will automatically convert into common shares of Canoe
on a post-consolidated basis based upon a discount to the volume-weighted average trading price.
Additional information in connection with the RTO will be provided in subsequent press releases.
On behalf of the board of directors of Canoe Mining Ventures Corp.
Duane Parnham,
President and CEO
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of
the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
Reader Advisory
Except for statements of historical fact, this press release contains certain “forward -looking
information” within the meaning of applicable securities law. Forwar d-looking information is
frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”,
“anticipate”, “estimate” and other similar words, or statements that certain events or conditions
“may” or “will” occur. In particular, forward-looking information in this press release includes,
but is not limited to, statements with respect to timing and completion of the RTO, satisfaction
of the conditions precedent to the completion of the RTO , the anticipated business of the
Resulting Is suer following the completion of the RTO , and projected future revenue for
OpenPort.
Although we believe that the expectations reflected in the forward -looking information are
reasonable, there can be no assurance that such expectations will prove to be correct. We cannot
guarantee future results, performance or achievements. Consequently, there is no
representation that the actual results achieved will be the same, in whole or in part, as those set
out in the forward-looking information.
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Forward-looking information is based on the opinions and estimates of management at the date
the statements are made, and are subject to a variety of risks and uncertainties and other factors
that could cause actual events or results to differ materially from those anticipa ted in the
forward-looking information. Some of the risks and other factors could cause results to differ
materially from those expressed in the forward -looking statements which include, but are not
limited to: general economic conditions in Canada, the Un ited States and globally; industry
conditions; unanticipated operating events; competition for and/or inability to retain services
and inputs; the availability of capital on acceptable terms; the need to obtain required approvals
from regulatory authorities; stock market volatility; volatility in market prices for commodities;
changes in tax laws and incentive programs; and the other factors described in our public filings
for Canoe available at www.sedar.com.
Some of the factors that could cause actual results to differ materially from the revenue
projections for OpenPort set out in this press release include, without limitation: the sufficiency
of OpenPort’s capital resources; OpenPort’s operating results and cash flo ws; OpenPort’s
ability to adjust spending quickly enough to offset any unexpected revenue shortfall or increases
in expenses; the impact of foreign currency exchange rate s and interest rate fluctuations on
OpenPort’s results; OpenPort’s ability to attract personnel; OpenPort’s ability to innovate and
adapt to technological change and global trends; OpenPort’s ability to develop and maintain
brand awareness and reputation; OpenPor t’s ability to anticipate the future market demands
and future needs of its customers; delays or cancellations in spending by OpenPort’s customers;
any problems with implementing upgrades to OpenPort’s services or products , including new
services and product features; any significant product accuracy or quality problems or delays;
business interruption or failure of OpenPort’s information technology and communication
systems; OpenPort’s reliance on third -party hardware, software and platform providers;
potential litigation involving OpenPort; OpenPort’s ability to adequately protect its intellectual
property rights; any failure to properly use and protect personal customer or employee
information and data; a security breach could result in third -party access to confidential
customer, employee and business information; privacy and cyber security concerns relating to
OpenPort’s services and products; any failure to process transactions effectively or to
adequately protect against potential fraudulent activities; any loss of confidence in using
OpenPort’s services or products as a result of publicity regarding such fraudulent activity;
OpenPort’s service performance and security, including the resources and costs required to
prevent, detect and remediate potential security breaches; expenses associated with new data
centers and third -party infrastructure providers; OpenPort’s dependency on the development
and maintenance of the infrastructure of the Internet; domestic and foreign government
regulations, including those related to the provision of services on the Internet, those related to
accessing the Internet, and those addressing data privacy and import and export controls ; the
contraction or lack of growth of markets in which OpenPort competes and in which OpenPort’s
services and products are sold; OpenPort’s ability to execute its international expansion
strategy, including acquisitions and investments ; OpenPort’s ability to successfully integrate
acquired businesses and technologies; OpenPort’s ability to develop, manage and maintain
critical third-party business relationships; risks asso ciated with international operations; risks
and uncertainties associated with the effect of general and global economic and market
conditions; increases in or changes to government regulation of OpenPort’s businesses; and
the impact of climate change.