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(Kitco News) - Good financial incentives and prospective ground are some of the reasons that Rodney Hooper, Partner at RK Equity, said that Canada is enjoying a lithium boom.
On June 21, 2023, Hooper spoke to Kitco at the 15th Lithium Supply and Battery Raw Materials 2023 in Henderson, Nevada.
"Historically, Canada hasn't seen a lot of lithium exploration, but it's obviously highly prospective," said Hooper. "It's even attracted a lot of Australians. You have the flow-through financing, which effectively almost doubles the value of what you get for your shares as long as you put it in the ground."
Hooper said it's unlike any other area in the world that offers that kind of incentive. As the sector in Canada has grown, Hooper sees M&A increasing.
"We are going to see more M&A in the space," said Hooper. "I think it's now an absolute given now we've seen the OEM start to get involved. As far as Canada is concerned, I think it is a prime candidate for consolidation."
Researching the space, Hooper noted that spodumene concentrations in the entire sector are falling. He noted that Greenbushes lithium mine is producing grades at 6% but the rest of the sector is drifting down to the 3% to 5% range.
"We've seen a deflation of what's produced," noted Hooper. "Guys have definitely dropped grades."
Coverage of 15th Lithium Supply and Battery Raw Materials 2023 sponsored by Lindian Resources (ASX:LIN).
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