Vulcan Energy Resources (FWB:6KO, ASX:VUL) was our top pick of the year for 2020.

Vulcan has developed the world’s first and only zero-carbon lithium process and plans to produce battery-grade lithium hydroxide from geothermal brines pumped from wells with a renewable geothermal energy by-product.

VUL also has Europe’s largest lithium JORC Resource (13.95Mt contained LCT) at its Zero Carbon Lithium^TM Project in Germany — the world’s fastest growing lithium market.

The large resource size is significant and provides Vulcan with the opportunity to become a major supplier of lithium chemicals into European Union markets.

Vulcan aims to use its project to produce the lowest CO2-eq. footprint lithium hydroxide for electric vehicles in the world.

Recent Activities by the Company

• Raised $120M led by Goldman Sachs. Australia’s richest person and famous mining magnate Gina Rinehart has corner stoned VUL’s capital raise investing almost $50M. VUL is now fully funded for the medium term.
• Appointment of former Tesla director Jochen Rudat to Business Development team.
• Taro license grant and increased global Mineral Resource Estimate.
• Appointment of lithium industry expert Vincent Pedailles to Business Development team.
• Appointment of lithium chemistry expert Dr. Katharina Gerber to the Executive team.
• Excellent recoveries of over 90% from lithium extraction test work on Upper Rhine Valley brine.
• Securing EU backing support package, and EU-backed investment agreement into the Vulcan Zero Carbon Lithium® project.
• $4.8m institutional and ESG investor equity placement.
• Agreement to acquire 3D seismic package to accelerate project development.
• Commencement of lithium test work for Pre-Feasibility Study.
• Completion of positive Scoping Study.
• Released updated Indicated and Inferred lithium-brine (Li-brine) Resource Estimations for its Taro License in the Vulcan Zero Carbon LithiumTM Project.
• The Taro resource has grown by 60% since VUL released its maiden resource in August.
• This higher confidence resource area is now being integrated into VUL's PFS.
• Release of PFS which details its potential for highly profitable and environmentally friendly Zero Carbon Lithium® production, plus the co-production of revenue-generating renewable geothermal energy.

Highlights of the PFS include:

• Project value of €2.25 billion (post-tax, NPV), which equates to A$3.54 billion.
• Lowest operating expenses (OPEX) of any lithium hydroxide (LHM) project globally at €2,640/t LHM.
• Combined renewable energy-lithium project pre-tax IRR of 26% and post-tax IRR of 21%. (Lithium as a separate entity from energy shows pre-tax IRR of 31% and post-tax IRR of 26%.)
• Dual operation producing: 74 MW of renewable energy generation and approximately 40ktpa LHM production.
• Starting capital cost of €226m for geothermal wells and plant, and €474m for Direct Lithium Extraction (DLE) plants and Central Lithium Plant (CLP).

The company has also confirmed a Maiden Probable Ore Reserve of 1.12 Mt Lithium Carbonate Equiv. (LCE) at 181 mg/l lithium.

Why we have invested...

• Europe’s largest JORC lithium resource
  • JORC Mineral Resources contain a total combined Indicated & Inferred estimate of 13.95Mt LCE (13.2Mt LCE Inferred at Ortenau license) – large enough to be Europe’s primary source of battery-quality lithium hydroxide.
• Strategically beneficial location
  • Location in the heart of Europe’s auto & EV battery industry in Germany – the fastest growing lithium market in the world and has the EU’s backing.
• Diversified revenue streams
  • Dual lithium hydroxide & renewables project. Primary revenue from selling battery-quality LiOH-H2O chemicals into the European market. Secondary revenue derived from renewable geothermal power generation.
• Uniquely lithium-rich
  • DLE test work confirms excellent lithium recoveries. One of only a handful of high-grade lithium-rich geothermal brines worldwide. Can operate profitably at a lower grades than lithium salar brines.
• World’s most rapidly advancing lithium project
  • Co-generation of geothermal energy from dual-property wells will power lithium extraction & fully offset processing energy requirements. Excess power generated after lithium extraction will be fed back into the power grid.
• Strong team & board
  • Expert multi-disciplinary team local to project area in Germany. Decades of experience in developing & permitting geothermal brine projects. International project finance, lithium market & DLE processing expertise.

Research Reports

September 29th 2020 -Alster Research: "Path to lithium plant further broadened and bolstered"

June 1st 2020 - WiseOwl Research: "World's First Zero Carbon Lithium Project"

March 4th 2020 - Alster Research: "Initiation of Coverage"