Revett Minerals is taking advantage of a business reversal to continue to Delaware

Revett is CBCA corporation holding, through US subsidiaries, a U.S. mine at which production has been temporarily suspended as well as a US deposit in development.  It is proposing to continue out of Canada and be "domesticated" as a Delaware corporation.  Although this will result in a deemed disposition of all its property (s. 128.1(4)(b)) and an exit tax calculated at 5% of NAV minus PUC (s. 219.1), management does not anticipate any material Canadian income tax under these rules provided that the share price is below $2.25 per share – which generally has been the case since the U.S. mining operations were suspended.

As discussed in a previous post on another transaction, the continuance of Gastar Exploration (with a U.S. natural gas business) from Alberta to Delaware was regarded from a U.S. tax perspective as entailing a transfer by Gastar of all its assets to the new Delaware corporation (Gastar Delaware), followed by a distribution by Gastar of Gastar Delaware to its shareholders.  This distribution step was problematic as Gastar Delaware was a United States real property holding company for FIRPTA purposes.

Notwithstanding that US mines are FIRPTA assets, Revett management does not anticipate that the domesticated Revett will be a USRPHC.  The disclosure does not describe the analysis in support of this view.

Neal Armstrong and Abe Leitner.  Summary of Revett Minerals Proxy Circular under Public Transactions - Other – Continuances.