Battery Metals - Lithium
|Our Entry Price $||Current Price $||Current Return||Highest Price $||Highest Return|
|$ 0.180||$ 7.450||4039%||$ 14.200||7789%|
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 LithiumTM 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.