Canoe Mining Ventures Corp. said March 20 that it signed a letter of intent to acquire the issued share capital of Hong Kong-based blockchain logistics solutions company OpenPort Ltd. through a reverse takeover and to subsequently exit mining.
In January, the companies entered into a services agreement to build a Mining Operations Logistics Solution to service the traditional mining industry via a blockchain protocol.
The letter of intent, which contemplates the negotiation and signing of a definitive agreement, includes provisions for Canoe to undertake a 1-for-1.8 share consolidation and the issuance of 86.2 million shares to OpenPort shareholders.
Following the merger, OpenPort shareholders will hold approximately 31% of the merged entity. In addition, its board will be reconstituted with Canoe directors Eugene Lee and Scott Kelly, together with OpenPort CEO and director Max Ward, COO and director Morten Damgaard Andersen and director Hans Hickler.
Meanwhile, OpenPort expects to conduct a placement of US$10 million in convertible debentures to fund the share acquisitions, the merged company's program to commercialize its technology and for general corporate purposes.
Canoe will also negotiate the sale of its Ontario mining assets, including the Kerrs gold project, for cash, shares and the assumption of debts that it owes to Wahgoshig First Nation, expected to take place upon the completion of the reverse takeover.