OceanaGold is proposing to acquire Romarco under s. 85.1

OceanaGold, which is a BC corporation headquartered in Australia, is proposing to acquire all the shares of Romarco (a B.C. corporation with a South Carolina gold property) under a B.C. plan of Arrangement in consideration for OceanaGold shares, so that s. 85.1 should apply (no nominal cash consideration). Although the exchange should qualify as a Code s. 368(a) reorganization, it is believed that Romarco may be a PFIC, and that OceanaGold is not, so that the PFIC rules may apply to the exchange.

There also is a s. 7(1.4) exchange of Romarco stock options for OceanaGold options.  Taking into account the OceanaGold shares covered by such options, the Romarco shareholders and optionholders collectively will receive a majority interest in OceanaGold.  However, the OceanaGold shares to be issued under the Plan of Arrangement represent only 98.6% of the shares currently outstanding.

Neal Armstrong.  Summary of OceanaGold and Romarco Circular under Mergers & Acquisitions – Mergers – Share-for-Share.