VUL has Evolved into a Tesla Like Share Price Story

It’s been a big couple of weeks for one of our long term investments Vulcan Energy Resources (ASX:VUL).

After hitting a high of $14.20 and seeing huge trading volumes over the last week, the share price seems to be finding its feet between the $7 to $10 mark.

Vulcan Energy Resources
ASX:VUL, FWB:6KO

VUL aims to produce Zero Carbon LithiumR in Europe, and supply to EU electric vehicle battery makers.

Alster Research has just set a revised price target of $12.95 for VUL

Regular readers will remember VUL sailed through Alster's previous target of $2.55c.

Looking more closely at the new Alster research report, on page 8 you can find their “dilution path” projections, and we note that they have modelled a fully diluted share price of 27.56 Euros in 2024... thats $43.39 AUD per share.

Clearly we would all be very happy if this became reality in the next few years. Note that this calculation is based on a modelled dilution path over a few years, with all sorts of assumptions.

New market darling?

We said on the day of the PFS: VUL’s phenomenal run has seen it evolve into a Tesla-like share price story on the ASX - a market favourite that just keeps rising and rising on the back of the hottest global investing theme in decades:

The Electric Vehicle Boom.

We hold a long term position in VUL as we anticipate a further re-rate if an offtake agreement is announced, especially now that the recent share price rise has been digested by the market with a few $20M plus volume traded days.

We believe VUL will become the ASX “market darling” for the Electric Vehicle space.

Offtake agreement is key

An offtake agreement means a further de-risking of the project.

Compare VUL to Piedmont Lithium - Piedmont’s share price really took off AFTER they announced an offtake agreement - VUL hasn’t done this yet.

Environmental, Social and Governance (ESG) companies will win the next decade.

VUL’s unfair advantage are its ESG credentials.

VUL aims to supply Zero Carbon Lithium - the first of its kind.

We are seeing an unprecedented run on ethical, local and environmentally sustainable battery metals supply:

  • The EU has just mandated it.
  • Large fund managers are looking to deploy cash into it.
  • Global auto brands need it in their supply chain.
  • The community now all have investing apps and are voting for it with their investments

We believe ESG companies will outperform in the next decade which is why we are high conviction on VUL.

Where to next?

We are watching with interest to see if VUL can retest their recent highs.

Here are a couple of links that we found useful:

Bloomberg: Miner Gets Closer to Producing ‘Green’ Lithium for EV Batteries

Marcus Today interview with CEO Francis Wedin

VUL’s ESG credentials

Alster Research report with $12.95 price target

AFR article on VUL share price rise

Vulcan Energy Resoureces
ASX:VUL
Initial Investment
Feb 2020
Up as high as
7789%
Read the analysis
Elixir Energy
ASX:EXR
Initial Investment
Jul 2019
Up as high as
649%
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WhiteHawk
ASX:WHK
Initial Investment
May 2019
Up as high as
627%
Read the analysis

 

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