Shareholders of Continental Gold, a Bermuda company with Canadian residence, will transfer their shares under a Bermuda Scheme to a new Ontario holding company

The common shareholders of Continental Gold, which is a TSX-listed Bermuda corporation with central management and control in Canada, will transfer all their shares to Continental Holdco (a newly incorporated Ontario corporation) under a Bermuda Scheme of Arrangement for the same number of Continental Holdco common shares. Taxable resident shareholders can elect under s. 85 to achieve rollover treatment. The s. 85.1 rollover is not available as Continental Gold is not a taxable Canadian corporation.

The transaction is less innocuous in the U.S. Although it fits under the description of a "B" (share-for-share) reorg or a Code s. 351 contribution, U.S. shareholders who acquired their shares before 2014 (when Continental Gold ceased to be a PFIC) generally will not be eligible for tax-free exchange treatment unless they made a timely election to hold their Continental Gold shares on a mark-to-market basis or made a "purging election" to recognize gain (and pay U.S. tax) on a deemed sale of their shares at the end of 2013.

Neal Armstrong and Abe Leitner. Summary of Continental Gold Circular under Other – Continuances/Migrations – New Canadian Holdco.