Through a series of small but decisive steps taken over the past 18 months, Deveron UAS Corp., a drone data services company that focuses on the agriculture sector, is slowly taking flight.

The latest development in that steady build came Monday when Deveron announced that it had been given the green light by the Minister of Transport to operate across Canada.

Prior to this, Deveron, which started life in 2012 as Deveron Resources and whose major shareholder is Greencastle Resources, had received government approval to operate in three additional provinces, Alberta, Manitoba and Saskatchewan, alongside its home base of Ontario.

“With national compliance, we have the ability to fly anywhere under one area of interest. It makes things easier for us as we scale (up) and talk to nationally-based agricultural providers,” said David MacMillan, chief executive. Accordingly, because the firm’s clients have a national perspective, the new licence allows Deveron to adopt a national approach to its business.

“We are excited about (the business) because the data we generate produces intelligence that can help farmers increase yields and reduce costs,” benefits he argues the farmers can achieve through variable rate application, a technique that allows resources (including additional seed or fertilizer) to be applied to areas with the greatest need.

But getting to Monday’s news hasn’t been easy — even if Deveron has followed a clear path. One reason is that the company is operating in a new and highly regulated industry that provides data and other services using unmanned aerial systems (UAS).

Participants in the industry are operating under Ottawa’s mantra of Responsibility and Safety. “You have to operate aircraft in Canada safely. We look at drones in the same way,” added MacMillan.

Indeed one sidebar to Monday’s announcement was that the hardware used by the company — the eBee drone platforms produced by Switzerland’s senseFly — also received federal approval. (senseFly is part of the publicly listed Parrot Group.).

The clear path started when there was an awareness of the opportunity presented by drones. So Greencastle, after realizing that the mining business offered fewer opportunities than before, studied the UAS market and also what was involved from a regulatory point of view. MacMillan, who trained as an economist was given that task. Through that work he became an entrepreneur.

In late November 2015, Deveron, which had about $680,000 in total assets, announced the acquisition of Eagle Scout Imaging, a private company “that acquires high resolution aerial imaging data of crop acreage,” processes the data and then “develops prescriptions to improve crop yield.” Eagle Scout operated in Ontario. In March 2016, Deveron was granted its Special Flight Operations Certificate, that allowed it to operate annually — and not on a per flight basis. A few months later, it raised additional capital (through a non-brokered private placement), changed its name and moved its share listing to the Canadian Securities Exchange.

Since then it has expanded to the U.S. (where its drones were most recently surveying the almond crop in California); monetized its legacy assets, which when completed will mean almost $1 million in additional cash.

Last month those cash balances were boosted when, for the first time, it raised $1.3 million via a brokered private placement. It is now cashed up and looking to grow both here and in the U.S.

Aside from Deveron UAS, Drone Delivery Canada and Global UAV Technologies are the other drone-related public companies in Canada. Drone Delivery has a market cap of about $50 million, about five times as large as the other two.

Financial Post
bcritchley@postmedia.com