LibertyStream Acquires Commercial Lithium Carbonate Refining Unit for Texas; Announces $3.53 Million Promissory Note Financing with Leading Institutional Investment Firm and Insiders
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CALGARY, Alberta–(BUSINESS WIRE)–LibertyStream Infrastructure Partners Inc. (TSXV: LIB | OTCQB: VLTLF | FSE: I2D) (“LibertyStream” or the “Company”) is pleased to announce the Company has finalized the purchase of a commercial lithium carbonate refining unit (the “Refining Unit”) capable of producing up to 10 tonnes per annum (tpa) of industrial grade and battery grade lithium carbonate. In addition, LibertyStream announces an offering of 12% promissory notes (the “Notes”) for aggregate gross proceeds of $3,530,000 (the “Offering”).
Alex Wylie, President & CEO of LibertyStream, commented:
The purchase of the Refining Unit is a critical next step to commercial production,
“Customers have told us loud and clear that they need bulk samples of lithium carbonate from the field in order to negotiate future offtake agreements. The Refining Unit is expected to provide our future customers with the lithium carbonate from the field they require.”
Lithium Carbonate Refining Unit
In September 2024, LibertyStream deployed its first direct lithium extraction (“DLE”) field unit in the Permian Basin, subsequently scaling up to its Generation 5 unit by February 2025. This rapid scaling resulted in North America’s largest operational DLE system, capable of processing over 10,000 barrels per day of produced water.
LibertyStream has focused the past six months conducting intensive operations in Texas, during which the company completed over 1,300 DLE runs. The Company has leveraged the knowledge gained over the six-month period to continuously improve its system including adding a pre-treatment step to knock out iron and organics prior to the DLE process. The 1,300 DLE runs and system improvements have led to consistency of results in the Texas operations. The performance to date has provided management the confidence to accelerate to the next crucial stage in the business strategy by acquiring the Refining Unit.
The Refining Unit will be capable of producing up to 10 tpa of lithium carbonate tailored to the technical specifications of future customers for either industrial grade or battery grade lithium carbonate. In order to have the ability to sign offtake agreements, future customers need bulk sample from the field in Texas. Management anticipates that the Refining Unit will consistently provide its customers with the confidence to rely on the grade and quality of lithium carbonate for future offtake agreements.
Promissory Note Financing
LibertyStream’s Offering of the $3,530,000 aggregate principal amount of Notes is expected to be fully subscribed. The principal balance of each Note will be payable on the date that is one year from the date of issuance of the Notes (the “Maturity Date”), provided that the Company shall have the right to redeem and repay the Notes at any time prior the Maturity Date, in whole or in part, without notice, bonus or penalty. The Notes will bear simple interest at a rate of 12% per annum, with interest payable on the Maturity Date. The Company intends to use the proceeds from the Notes to complete the purchase of the Refining Unit ($2,400,000) and for general working capital purposes ($1,130,000) or for such other purposes as the Company may determine to be appropriate in its sole discretion.
Pathfinder Asset Management Ltd. (“Pathfinder”) has agreed to purchase $3,400,000 aggregate principal amount of Notes under the Offering, which Notes will be senior and secured against all of the Company’s present and after-acquired property. The remaining $130,000 aggregate principal amount of the Notes will be purchased by Alex Wylie, the Company’s President and Chief Executive Officer. The Notes purchased by Mr. Wylie will be unsecured.
In connection with the Offering, the Company will issue an aggregate of 2,893,617 common shares in the capital of the Company (the “Bonus Shares”) to the lenders. The Bonus Shares will represent a value equal to 20% of the principal amount of the Notes, calculated based on the Market Price (as defined by the TSX Venture Exchange (“TSXV”)) of $0.235 per Bonus Share. The Bonus Shares will be subject to a four month hold period commencing from the date of issuance thereof, in accordance with applicable Canadian securities laws and the policies of the Exchange.
Closing of the Offering is subject to customary closing conditions, including receipt of all necessary corporate and regulatory approvals, including TSXV conditional approval.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities of the Company in the United States. The Notes and Bonus Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or except where an exemption from such registration is available.
Alex Wylie, the Company’s President and Chief Executive Officer, will acquire $130,000 aggregate principal amount of Notes and 110,638 Bonus Shares. Accordingly, the Offering constitutes a “related party transaction” as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on the exemptions for the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(b) of MI 61-101, as the Notes are not listed, and will not be listed, on a specified market and the fair market value of the Notes and Bonus Shares being issued to the related party does not exceed $2,500,000, as determined in accordance with MI 61-101. The Company has not filed a material change report with respect to the participation of the insiders at least 21 days prior to the closing as the related party participation had not been determined at such time.
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LibertyStream Acquires Commercial Lithium Carbonate Refining Unit for Texas; Announces $3.53 Million Promissory Note Financing with Leading Institutional Investment Firm and Insiders, source
