I took a look at this one early in the year and took a pass. The economics looked solid enough at the lithium price deck they were assuming, but that price was roughly double the market price. At the market price, the margins were not enough to get excited about and I think this is still true today so then it becomes a bet on the lithium price which I'm not too keen on. This is the problem with all these China-restricted metals. As long is the tap is flowing from China, no one can compete with them on cost.
That said, you've made a good case for why this technology could have strategic value. I'd like the stock more if they were pursuing a capital-light or build-to-sell model. The technology makes much more sense being owned by the midstream partner with a lower cost of capital. Definitely one to keep an eye on. Wish I had been paying closer attention to it.
Part of the thesis is that the lithium refined in America will have a premium and likely a growing premium as the political tailwinds we outlined play out.
The midstream water infrastructure angle here is underappreciated. Energy Transfer and other major pipeline operators handle massive volumes of produced water in the Permian, and the fact that LibertyStream's tech gets plumbed directly into existing disposal networks means these midstreamers could essentially monetize a waste stream. With the article noting shallow disposal zones getting over-pressurized and New Mexico banning certain disposal methods, midstreamers with cross-border infrastructure and the ability to integrate lithium extraction are going to have a strucural advantage going forward.
The comparison with LAC is intresting because they secured that DOE backing with a much larger market cap, which really shows the potential upside here if Liberty can land similar support. That 5% government stake in LAC also signals just how serious Washington is about securing domestic lithium supply chains. The political tailwinds you outline for Liberty seem even more compelling now with the export control situation heating up. If Liberty can execute on the refining unit commissioning this quarter, the risk reward at current levels looks asymmetric.
We used USD with all the numbers in this one, so the market caps were up to date based on today's numbers before open. I don't make buy or sell recommendations. Like I said, "I’m neutral on the stock price in the short term, but I would not be surprised by a significant dip. If it gets back under 40 cents, I’ll likely add again. Now that I understand the thesis better, my adding zone is higher, and I remain bullish mid- and long-term."
Yes, the stock has run up a lot recently, which always carries a risk of a retracement. So everyone has to take that into account, but ultimately focus on the fundamental thesis and the valuation.
I took a look at this one early in the year and took a pass. The economics looked solid enough at the lithium price deck they were assuming, but that price was roughly double the market price. At the market price, the margins were not enough to get excited about and I think this is still true today so then it becomes a bet on the lithium price which I'm not too keen on. This is the problem with all these China-restricted metals. As long is the tap is flowing from China, no one can compete with them on cost.
That said, you've made a good case for why this technology could have strategic value. I'd like the stock more if they were pursuing a capital-light or build-to-sell model. The technology makes much more sense being owned by the midstream partner with a lower cost of capital. Definitely one to keep an eye on. Wish I had been paying closer attention to it.
Part of the thesis is that the lithium refined in America will have a premium and likely a growing premium as the political tailwinds we outlined play out.
The midstream water infrastructure angle here is underappreciated. Energy Transfer and other major pipeline operators handle massive volumes of produced water in the Permian, and the fact that LibertyStream's tech gets plumbed directly into existing disposal networks means these midstreamers could essentially monetize a waste stream. With the article noting shallow disposal zones getting over-pressurized and New Mexico banning certain disposal methods, midstreamers with cross-border infrastructure and the ability to integrate lithium extraction are going to have a strucural advantage going forward.
The comparison with LAC is intresting because they secured that DOE backing with a much larger market cap, which really shows the potential upside here if Liberty can land similar support. That 5% government stake in LAC also signals just how serious Washington is about securing domestic lithium supply chains. The political tailwinds you outline for Liberty seem even more compelling now with the export control situation heating up. If Liberty can execute on the refining unit commissioning this quarter, the risk reward at current levels looks asymmetric.
the stock is 68 cents cad today and market cap of 128.20M, it seems to have already run up a fair distance. Is it still a buy?
We used USD with all the numbers in this one, so the market caps were up to date based on today's numbers before open. I don't make buy or sell recommendations. Like I said, "I’m neutral on the stock price in the short term, but I would not be surprised by a significant dip. If it gets back under 40 cents, I’ll likely add again. Now that I understand the thesis better, my adding zone is higher, and I remain bullish mid- and long-term."
Yes, the stock has run up a lot recently, which always carries a risk of a retracement. So everyone has to take that into account, but ultimately focus on the fundamental thesis and the valuation.