I am in the midst of a multi-month walkabout in the Antipodean summer, so have been mostly dark since late January, and thus following along with the market’s gyrations with a significant time lag. But some weather-enforced rest days were the catalyst for a $LIB.V update.
So how have Alex and team been doing since I first wrote about Liberty almost exactly two months ago? They look to be delivering to me, and I view the recent 50% haircut in the share price as just the market being the market. Narrative follows price, so I’m sure you’ve heard all sorts of theories why this is zero in no time.
In my first piece on Liberty, I laid out a list of catalysts I expected in the upcoming year or so. Lets see how they’re going.
Care of the two private placements, this is done. First commercial plant commissioning is on schedule for December 2026.
Done with purity confirmed.
Samples have been sent to prospective customers. This is the necessary step before signing offtakes.
This is done, and is a big effing deal. It is such an important announcement, I will cover the details more thoroughly below.
This gets a hollow green check: it is not done, but my sense the first one is really close. I’m betting we hear about it before the end of April.
Another item that is not done, but tantalizingly close. Liberty has called a Special Meeting for 31mar2026 to vote (remember to vote your shares!) on a proposed:
re-domiciliation of the Company to the State of Texas, USA, and the establishment of the Company’s corporate head office in Dallas, Texas
I understand the actual move should take no more than 2 weeks, so we can expect this also will happen before the end of April. This step will be followed by the planned move to the NASDAQ.
Loans/grants from DoE (1Q26 and 2H26).
Start of construction of first commercial facility (2H26).
More water partner agreements/JVs (CY26).
Moving stock listing to Nasdaq (2H26).
Commissioning of first commercial scale facility (1Q27).
Shipment of first product to offtake partners (1H27).
None of these are done, but I have no reason to adjust my expected timelines except for the first half of the first one: no DoE money has been awarded, but there is also no sign of rejection yet. I am still optimistic Liberty receives some significant grants/loans from DoE/Texas/North Dakota in the next 12 months.
Additionally, the 1Q27 commissioning is now a hard deadline based on the Select agreement (which see).
On 9feb2026 Liberty announced their first water agreement with Select Water Solutions. Key points (I’ve edited for clarity, and emphasis is mine):
Planned three-stage deployment of commercial lithium carbonate production facilities funded, designed, constructed, and operated by LibertyStream.
Liberty is funding it, so contrary to my expectations, the first agreement is not a joint venture, and thus 100% of the economics benefits, outside of the water tariff, will accrue to Liberty. This is a bullish surprise.
Stage 1 is scheduled to commissioning in December 2026 will be capable of producing up to 1,000 tonnes per annum of battery grade lithium carbonate.
The timeline is right on expectations, but the volume is half of the year-end 2026 2,000 tonnes I had predicted. I had expected the announcement of a 100 mbbl/d facility and the up-scaling of the existing pilot plant to 100 mbbl/d. This is not necessarily the end of the story for end-of-year capacity, but as it stands now, I need to downgrade my 2027 production numbers in my model.
As part of Stage 2, LibertyStream will commission a second Carbonate Facility on or before June 2027, designed to process up to 1,000 tonnes of battery grade lithium carbonate per annum.
The second stage doubles production, reaching my 2,000 ton milestone, 6 months later.
From SEDAR filing:
Beginning on July 1, 2027, on an annual basis, the Commissioning of at least two (2) additional Treatment Facilities each year.
The third stage will add another 2,000 tons of LCE, and double production again by 1jul2028. For those following along at home, that is a total of 4,000 tons run rate in less than 2 years and 3 months from now – close to $100M of annual revenue using current pricing.
In my original piece, I modeled exiting 2027 with a 500 mbbl/d run rate, and this first agreement’s minimum deliverable is around 300 mbbl/d; I think the 500 number is still within reach, because 300 is a minimum and more water agreements could be coming.
That “on an annual basis” is an interesting caveat, and implies a minimum of another 2,000 tons/year of additional capacity each year. At full build-out, this deal is yuge.
So long as Liberty meets these milestones, this agreement is exclusive and the prime Select real estate in the Midland Basin are locked up.
Select’s water recycling and pre‑treatment capabilities will play a critical role in LibertyStream’s lithium extraction process. By removing a major pre‑treatment step required for direct lithium extraction, Select’s systems reduce both capital and operating costs across LibertyStream’s Carbonate Facilities.
“Pre-treatment” is the removal of dissolved solids in the water, and is a necessary step before extracting lithium. As Select already does this at scale all across the Permian, they can do it cheaper than Liberty. This is a great synergy, but it gets better. Management has guided total opex to be essentially unchanged. This is where we need to read between the lines. What I think they’re saying is that the savings due to Select’s pre-treatment will cover the cost of the water tariff paid to Select. In a way, you can view it as Liberty essentially getting the water for free. Select’s view is probably that the tariff covers the cost of their pre-treatment, so they both win. Combine that insight with the 100% Liberty ownership, and this deal is a best case scenario outcome. This is an excellent, excellent deal for Liberty. Well done Alex/Team.
From BBG news story:
Bloomberg, in speaking with well known lithium analyst, Whirly Bard, has learned that what was not said is also important: “Select has an existing project with DLE aspirant Mariana Minerals, but for this 3+ stage commercial project, Select choose Liberty as a partner”, Mr. Bard said.“Liberty has proven their technology” he noted, while taking pains to emphasize that was in the field, with the low lithium concentrations found in the Permian. Mariana has not. “And Liberty”, Whirly continued, “didn’t feel the need to sprinkle ‘AI’ references into their press release. You decide what that means.”
OK, I’m taking the piss with that quote. I am not well known.
Fine, be like that, I didn’t talk to Bloomberg either.
But the rest is true.
The Select installation will use updated Liberty extraction technology. Details have not been released, but I think we can make some guesses.
Capital requirements of extraction facilities is relatively modest (remember total capex includes refining which is more than half), so I believe Liberty will initially be focusing R&D efforts on reducing operating costs, firstly reagent use, as that is their biggest variable cost. Rolling out updated extraction tech hints at opex improvements coming already.Battery Grade
On 12mar2026 Liberty issued a news release announcing the start of construction of a small scale facility at a Select location that will start production in just a month or two. A noteworthy excerpt (emphasis mine):
The systems are being integrated with Select’s existing produced water pretreatment and recycling infrastructure and are expected to begin producing technical-grade and battery-grade lithium carbonate in early Q2 2026.
This initial deployment is intended to support continued bulk sample production and customer qualification …
Liberty’s first couple customers are expected to be industrial users (think ceramics, welding, cement, …). Industrial users have lower purity requirements and faster qualification times, so were the obvious choice for first customers, but I think the above quote is telling us battery customers are coming. Liberty is some time away from producing enough lithium to interest a large battery manufacturer like Tesla, but Packet Digital, however … (wink, wink: NR).
Based on news releases, it appears that Select was not the midstream partner for Liberty’s pilot project. The obvious question is “why not?” The identity of the partner has never been publicly released, and I am not going to speculate here, but it is odd they were not the first water agreement partner. I am told that there are no technical/relationship issues, or competitive pressures, causing problems, it is just a matter of which midstreamer was prepared to move fast. It is probably worth noting that it is believed the aforementioned but unnamed midstreamer still holds 1.2M shares of $LIB.V.
Lithium carbonate is +24% to ~US$23,000/ton in the past two months, well above my model estimate.
Since I published my valuation model in January:
Liberty is ticking off the items on my catalyst list right on schedule.
My production forecast still looks approximately correct.
Spot price of lithium is above my estimate.
The first midstreamer agreement is 100% Liberty owned, an upside surprise.
There are hints that opex may come down faster than I modeled.
Dilution is currently running 11% higher than I had modeled.
A bit of give and take, but mostly take. I see no reason to update my model at this point, and believe it is still fit for purpose.
On balance, I think the developments of the past two months have been very bullish, the recent beat down in the share price notwithstanding.
In my first piece I warned we were “due for a nasty pullback”, well we’ve now had the nasty pullback.
Lithium price is up, risk is down, company-making deal is signed, and the stock is down. I’ve been buying.
I am a low IQ bird who did too much acid in my misspent youth – you’d be a fool to take anything written here as advice or a recommendation.
I am long bigly, participated in the last raise, and bought on market last week.
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