from the ASX...Post March 2021 Quarter to Date of Reporting
The Company designed, built, commissioned, and is now operating a DLE Pilot Plant to demonstrate lithium extraction from geothermal brine. The team is focused on demonstrating pre-treatment and DLE processes, as well as the durability of the process over hundreds of cycles, which will feed into its Definitive Feasibility Study (DFS).
Former senior EY Global Renewables Partner Josephine Bush joined the Vulcan Board as a Non-Executive Director.
Planned spin-off and IPO of non-core, Scandinavian battery metals projects into a new dedicated vehicle, named “Kuniko Limited”.
Binding agreement signed to acquire 100% of geothermal surface consultancy company Global Engineering and Consulting GmbH.
March 2021 Quarter
Zero Carbon Lithium™ Project’s Pre-Feasibility Study (PFS) demonstrated strong potential to develop a cutting edge, combined renewable energy and lithium hydroxide project, in the centre of Europe, with net zero carbon footprint.
Positive post-tax NPV of €2.25B (full project, no phasing); phased option shows €700m NPV in Phase 1 and €1.4B NPV in Phase 2. Maiden Probable Ore Reserve of 1.12 Mt LCE at 181 mg/l Li across Ortenau and Taro licenses2. Projected to be one of the lowest OPEX lithium producers globally.
Successful completion of $120m placement strongly supported by ESG-focused institutions, with Goldman Sachs and Canaccord Genuity acting as lead managers: strong cash position, fully funded to FID.
Vulcan will be collaborating with DuPont Water Solutions, a leader inwater filtration and purification, to test and scale up Direct Lithium Extraction (DLE) solutions.
Binding agreement signed to acquire 100% of geothermal sub-surface engineering company GeoThermal Engineering GmbH.
Binding agreement signed to acquire 100% of Global Geothermal Holding UG, Vulcan’s minority partner holding the granted Taro license in the Upper Rhine Valley.
Vulcan Team Appointments including Chief Operating Officer in Germany, Mr. Thorsten Weimann, Ms. Julia Poliscanova as special advisor to the board, Ms. Annie Liu and Dr. Heidi Grön as Non-Executive Directors.
Vulcan was admitted to the ASX All Ordinaries Index in March 2021.
Planned spin-off and IPO of non-core, Scandinavian battery metals projects (non-lithium) into a new dedicated vehicle, named “Kuniko Limited”.
Enables Vulcan to be fully focused on development of its core Zero Carbon Lithium® combined renewable energy and lithium chemicals project in Germany.
Kuniko will be focused on the development of copper, nickel and cobalt projects in Scandinavia, with a strict mandate to maintain net zero carbon footprint throughout exploration, development and production.
Focus on areas with zero carbon, hydro-electric power, and of development of mineral processing flowsheets for production using zero fossil fuels.
Focus will be on Kuniko’s 262km2 Ni-Co-Cu license portfolio:
Vulcan shareholders to benefit from 1 for 4 priority offer to raise funds at 20c in Kuniko, in conjunction with a planned IPO, with priority rights to apply for additional shares above their entitlement. Vulcan to retain a circa 27% holding in Kuniko post-IPO given synergies in future sales and marketing of zero carbon battery metals and the focus of European markets and regulators on net zero carbon, ethical, reliable and sustainable battery metals sources of supply.
Proposed ASX Code: KNI
Vulcan has designed, built, commissioned and is now operating its Pilot Plant to demonstrate Direct Lithium Extraction (DLE) from Upper Rhine Valley geothermal brine.
Vulcan is using live geothermal brine from existing wells in its piloting programme for DLE and brine chemistry testwork.
Vulcan is working with major suppliers, including DuPont, to test DLE products similar to those already used commercially in the lithium industry, on Upper Rhine Valley geothermal brine.
Vulcan to use Circulor's full traceability and dynamic CO2 measurement solution for Zero Carbon Lithium™ across the European Lithium-ion battery and Electric Vehicle (EV) supply chain, in a world-first for the lithium sector.
Circulor’s customers include major European automotive manufacturers such as Volvo Cars, Daimler, Polestar and Jaguar Land Rover, which indicates OEMs’ growing need to demonstrate responsible sourcing of raw materials like lithium and to track and manage the embedded CO2 emission in their upstream supply chain for EVs, as they strive towards their net zero targets.
Circulor offers a software solution that enables customers to track raw materials through supply chains to demonstrate responsible sourcing and sustainability.
This system implementation enables reputational protection, proof of compliance with regulations and dynamic carbon tracking.
Circulor’s CO2 solution provides a dynamic month-to-month visibility of CO2 intensity across the supply chain and its participants.
Battery raw materials transparency, traceability and sustainability were directly targeted in the latest European Commission Battery Regulation proposed in December 2020.
Vulcan will be implementing Ciculor’s solution to its future lithium supply contracts with European OEMs to help them meet their sustainability objectives for material traceability and CO2 transparency.
Circulor’s solution will first be used during Vulcan’s project development including at a pilot and demonstration plant level, when the first samples are dispatched to customers.
Circulor and Vulcan will work together to prepare Vulcan and its supply chain for full traceability of Vulcan’sZero Carbon Lithium™ product at the production start in 2024.
Vulcan has collected a bulk (10,000 litre) brine sample from a recently drilled geothermal well in the Upper Rhine Valley within 6km of Vulcan’s Ortenau Resource and license area.
The bulk brine sample returned a high grade of 214 mg/L Li (n=1 analysis) and will be used in Direct Lithium Extraction (DLE) piloting test work.
Vulcan now has brine data stretching back to 1980 showing remarkably consistent Li values in Upper Rhine Valley brine.
Within Ortenau, Vulcan currently has an Inferred and Indicated JORC Resource Estimation of 12.86 Mt contained Lithium Carbonate Equivalent (LCE) at a grade of 181 mg/L Li, and Vulcan’s total Upper Rhine Valley Project has Inferred and Indicated Resources of 15.85 Mt contained LCE at a grade of 181 mg/L Li of which 23% is in the Indicated category, the largest lithium resource in Europe.
The brine analysis also showed exceptionally low impurities (inc. Si, Mn, Fe) relative to other high-lithium geothermal brines worldwide, important for DLE performance.
New data will be incorporated into Vulcan’s resource estimation update work later in the year, as part of Definitive Feasibility Study (DPS) work for the Vulcan Zero Carbon Lithium® project.
Vulcan will be collaborating with DuPont Water Solutions, a leader in water filtration and purification, to test and scale up Direct Lithium Extraction (DLE) solutions for Vulcan’s world-first Zero Carbon Lithium® extraction process.
DuPont will leverage its portfolio of proprietary Direct Lithium Extraction (DLE) products to assist Vulcan with input and test-work during Vulcan’s Zero Carbon Lithium® project Definitive Feasibility Study (DFS). As part of the project, DuPont will be developing and testing an integrated Direct Lithium Extraction Process for Vulcan’s brine. DuPont’s multi-technology portfolio of lithium selective sorbent, nanofiltration, reverse osmosis, ion exchange resins, ultrafiltration, and close circuit reverse osmosis will be leveraged for the study.
Agreement is in line with Vulcan’s strategy to test and pursue commercially mature DLE products from major suppliers for its project to minimize technical risks and accelerate development of the project.
Unlike current extraction processes, the Zero Carbon Lithium® project will demonstrate the world’s first completely carbon neutral lithium extraction process with virtually zero environmental disruption.
DuPont Water Solutions (DWS) is a leader in sustainable water purification and separation technologies, including ultrafiltration, reverse osmosis (RO) membranes and ion exchange resins.
Binding agreement signed to acquire 100% of Global Geothermal Holding UG (GGH),subject to shareholder approval.
GGH is Vulcan’s joint venture partner holding the granted Taro license in the Upper Rhine Valley. The Taro license has a JORC Resource Estimation of 2.27 Mt contained Lithium Carbonate Equivalent (LCE) at a grade of 181 mg/l Li (Indicated and Inferred) out of the total 15.85 Mt LCE at 181 mg/l Li across the Vulcan Project1.
Vulcan hasearned a 51% interest in the Taro license and has a right to earn up to 80% with GGH holding the balance.
GGH also holds other exploration license applications in the Upper Rhine Valley region which are subject to the Vulcan joint venture.
This acquisition consolidates Vulcan’s major strategic holding in the Upper Rhine Valley, as part of the plan to rapidly advance the Zero Carbon Lithium® project towards production.
Agreement involves entirely share-based payments, 90% of which are based on project development milestones.
Binding agreement signed to acquire 100% of geothermal sub-surface consultancy company GeoThermal Engineering GmbH (GeoT).
GeoT has a highly credentialed, world-leading scientific team with over a century of combined expertise insub-surface development of geothermal projects, from exploration to production drilling.
Acquisition is part of Vulcan’s plans to accelerate its Zero Carbon Lithium® project in Germany, by rapidly growing its development team.
GeoT is based in the Upper Rhine Valley, Germany, and is owned by Vulcan Executive Director Dr. Horst Kreuter.
Vulcan has received firm commitments to raise A$120million (before costs) through a strongly supported placement at A$6.50per share to a suite of ESG-focused institutions. Goldman Sachs and Canaccord Genuity acted as Joint Lead Managers.
Proceeds from the Placement will support Vulcan through to final investment decision at its Zero Carbon Lithium® Project, with funds being applied to:
Upon settlement of the Placement, Vulcan will have a cash balance (before costsof the Placement) of ~A$125 million.
Post December 2020 Quarter to Date of Reporting
Subsequent to the Quarter, Zero Carbon Lithium® Project’s first Pre- Feasibility Study (PPS) demonstrated strong potential to develop a cutting edge, combined renewable energy and lithium hydroxide project, in the centre of Europe, with net zero carbon footprint.
Positive post-tax NPV of €2.25B (full project, no phasing); phased option shows €700m NPV in Phase 1 and €1.4B NPV in Phase 2. Maiden Probable Ore Reserve of 1.12 Mt LCE at 181 mg/l Li across Ortenau and Taro licenses. Projected to be one of the lowest OPEX lithium producers globally.
December 2020 Quarter
Vulcan announced an updated and reclassified Taro Indicated JORC Resource Estimation of 0.83 Mt contained Lithium Carbonate Equivalent (LCE) at a grade of 181 mg/l Li. The updated Taro Inferred JORC Resource Estimation was revised upward to 1.44 Mt contained LCE at a grade of 181 mg/l Li.
The Company also announced an updated and reclassified Ortenau Indicated JORC Resource Estimation of 2.06 Mt contained LCE at a grade of 181 mg/l Li. This represented a 131% increase in the total Upper Rhine Valley Project (URVP) JORC Indicated Resource Estimate, with 23% of Vulcan’s total URVP lithium-brine (Li-brine) Resource now in the Indicated category. Vulcan’s total combined URVP resource is now estimated at 15.85 Mt LCE at a grade of 181 mg/l Li (Indicated & Inferred Resources), the largest JORC lithium resource in Europe, and with further growth potential. The Ortenau project was subsequently integrated into the PPS at the Vulcan Zero Carbon Lithium® Project.
German Parliament and Federal Council (Bundesrat) enacted positive legislative amendments related to geothermal electricity feed in tariffs to further encourage geothermal energy production.
Proposed new Regulation from the European Commission underpins the Company’s Zero Carbon Lithium® strategy through new EU mandatory requirements on carbon footprint rules and responsibly sourced materials within lithium-ion batteries production and consumption in the EU. From 1 January 2026, lithium-ion batteries will have to bear a carbon intensity performance class label and from 1 July 2027, must comply with maximum carbon footprint thresholds.
The Zero Carbon Lithium® Project’s1 first Pre-Feasibility Study (PPS) demonstrates strong potential to develop a cutting edge, combined renewable energy and lithium hydroxide project, in the centre of Europe, with net zero carbon footprint.
Positive post-tax NPV of €2.25B (full project, no phasing); phased option shows €700m NPV in Phase 1 and €1.4B NPV in Phase 2.
Combined renewable energy-lithium project (no phasing) pre-tax IRR of 26% and post-tax IRR of 21%. Lithium as separate entity from energy shows pre-tax IRR of 31% and post-tax IRR of 26%.
Reasonable starting capital cost of €226m for geothermal wells and plant, and €474m for Direct Lithium Extraction (DLE) plants and Central Lithium Plant (CLP) (Phase 1, Taro). Phase 2 total CAPEX €1.14B, full project (no phasing) CAPEX €1.74B.
Sensitivity analysis shows robust project economics. Geothermal energy part of project supported by favourable feed-in tariff and recent German parliament support for geothermal.
Maiden Probable Ore Reserve of 1.12 Mt LCE at 181 mg/l Li across Ortenau and Taro licenses.
Main focuses of 2021 to be Definitive Feasibility Study (DPS) work, permitting, lithium extraction test-work scale up and advancing current discussions with European lithium offtakers.
From 1 January 2026, lithium-ion batteries will have to bear a carbon intensity performance class label and from 1 July 2027, must comply with maximum carbon footprint thresholds. The EU will ban batteries not meeting the new regulation.
Vulcan Managing Director, Dr. Francis Wedin, commented: “We welcome these announcements fiom the European Commission, which are a major endorsement of Vulcan’s Zero Carbon Lithium® strategy. Decarbonisation, responsibly sourced lithium and renewable energy are the foundation of Vulcan. Our early adoption of this strategy gained EU support and puts us at the forefront of the lithium sector where companies will have to adapt to the rapidly evolving global aims of decarbonisation in the production process and responsibly sourced materials. With our PPS due shortly we go into 2021 knowing that our project, process and product, to produce battery quality lithium hydroxide for electric vehicles in Europe for the European market with net zero carbon footprint, will be strongly supported by EU regulations.
Vulcan ensured it is fully funded for its PPS by completion of an agreement for a direct investment by EU-backed EIT InnoEnergy, at a premium to 30-day VWAP. This followed the previous oversubscribed $4.8m institutional and ESG investor equity placement, also completed at a premium to 30-day VWAP.
Vulcan is now well-funded with cash of $5.1m at 30 September.
London-based Natural Resources Global Capital Partners Limited (“NRG”) was appointed to provide strategic and financial advice in connection with the Zero Carbon LithiumTM Project. NRG will assist Vulcan with financial advice related to potential future transactions surrounding funding for its Definitive Feasibility Study (“DFS”) and first commercial lithium hydroxide production plant.
Direct Lithium Extraction (DLE) testwork was successfully concluded, using commercially available adsorbents, which achieved initial recovery rates in excess of 90%. Optimisation work is underway to achieve enhanced recovery rates.
Taro license was granted and Vulcan’s overall Upper Rhine Valley (URVP) mineral resource estimate was updated. This is now estimated to collectively contain 15.37 million tonnes (Mt) Lithium Carbonate Equivalent (LCE) at a grade of 181 mg/l Li (Indicated & Inferred; 95% of which is in the Inferred Resource category), the largest JORC lithium resource in Europe.
Vulcan’s team was bolstered by the following Senior Executive appointments:
Ex-Tesla Director for Central Europe. Launched Models S, 3, X and Roadster in the region. Ten years’ experience at Tesla, ex-direct report to Elon Musk. Ex-Automobili Pininfarina Chief Sales Officer; launched Electric Hyper-car. Experience in the auto industry with BMW, Kia and Porsche. Will assist Business Development team at Vulcan with exploring Zero Carbon Lithium offtake and strategic partnerships in the electric vehicle and battery sector in Europe.
“Taro” Exploration License granted within the Vulcan Zero Carbon Lithium Project, in the Upper Rhine Valley Project area of southwest Germany (URVP). Announcing upgrade from Taro as an Exploration Target to a JORC Inferred Li—Brine Resource Estimation of 1.42 Mt contained Lithium Carbonate Equivalent (LCE) at a grade of 181 mg/l Li. Further work under way toward advancing the confidence category of the Taro resource to a higher resource classification. Vulcan has a binding agreement to earn 80% rights in Taro, by spending €1 million on project development. Vulcan’s URVP Li—brine resource is now estimated to collectively contain 15.37 Mt LCE at a grade of 181 mg/l Li (Indicated and Inferred; 95% of which is in the Inferred Resource category), the largest JORC lithium resource in Europe. Vulcan aims to use its project to produce the lowest CO2—eq. footprint lithium hydroxide for electric vehicles in the world, from its unique Zero Carbon Lithium Project in the Upper Rhine Valley. Large resource size is significant in that it gives Vulcan the potential to become a major supplier of lithium chemicals into the EU market.
Lithium concentrate has been successfully produced from Upper Rhine Valley geothermal brine during a series of successful bench-scale Direct Lithium Extraction (DLE) tests commissioned by Vulcan. Two different, pre-selected DLE adsorbents were tested and in both cases the lithium recovery rate exceeded 90% on first pass. The tested DLE adsorbents are of a type already used commercially on lithium brines worldwide, which reduces development risk, in line with Vulcan’s strategy of utilising established technologies. The demonstrated DLE process will result in much reduced water usage and environmental footprint compared to traditional, evaporative methods used by producers in South America. Use of renewable power and heat from geothermal brine would make Vulcan the lowest CO2-eq. footprint supplier of lithium hydroxide for electric vehicles in the world. Results will inform Vulcan’s Pre-Feasibility Study (PPS) towards achieving the world’s first Zero Carbon LithiumTM Project. Additional test work, including optimisation of controlling parameters such as pressure and brine chemistry, is ongoing.
Vulcan continued its momentum by commencing a Pre—Peasibility Study (PPS) on its globally unique Zero Carbon LithiumTM Project. Lithium extraction testwork was commenced as part of the PPS, with initial results to be reported imminently.; Agreement to acquire an existing package of seismic data was signed, to accelerate project development and save costs.; The Company is targeting completion of its PPS by end 2020, on schedule, with minimal COVID—19 related disruption. Vulcan’s team was bolstered by the following key Board and Senior Executive appointments: Lithium chemistry expert Dr. Katharina Gerber.; Strategic communications and ESG investment expert Ranya Alkadamani.; Engineering experts Dr. Thomas Aicher and Stefan Trummer. Vulcan ensured it is fully funded for its PPS by completion of: Oversubscribed $4.8m institutional and ESG investor equity placement, and; Agreement for a direct investment by EU—backed EIT InnoEnergy, both at a premium to 30—day VWAP.; Vulcan is now well-funded with cash of $6.4m at 30 June. EU—backing: Vulcan expects its Zero Carbon Lithium Project to be a key part of the EU’s plans for battery supply chain independence, as well as efforts to be climate neutral by 2050.; Vulcan presented to European Commission Vice President Maros Sefcovic and the European Investment Bank.; Vulcan subsequently announced an agreement with EU-backed EIT InnoEnergy to assist with project development.
Investment agreement signed with EU—backed EIT InnoEnergy for staged cash investments into Vulcan, with initial tranche valued at A$O.51/share, equivalent to the 15—day VWAP and at an 8.5% premium to 30—day VWAP, subject to shareholder approval; Direct investment by EIT InnoEnergy marks a vote of confidence in the Vulcan Zero Carbon Lithium Project by a prominent EU—backed body mandated to lead the European Battery Alliance; This follows Vulcan recently announcing a separate agreement with EIT InnoEnergy to assist with securing future large—scale project development funding, including from public sources, and to assist with fast—tracking project approvals; Investment to be used by Vulcan towards its Pre—Feasibility Study programme.
