Quarterly Activities Report for the period ending 30 September 2023
EQS-News: Vulcan Energy Resources Limited
/ Key word(s): Quarterly / Interim Statement
Quarterly Activities Report for the Period ending 30 September 2023
During the Quarter, Vulcan Energy Resources Limited (Vulcan, ASX: VUL, FSE: VUL, the Company) has made significant progress toward execution of Phase One of Vulcan’s Zero Carbon Lithium™ Project, and on completion of the project milestones necessary for the commencement of financing of Phase One. Projectlevel debt and equity financing for Phase One is on track to commence in November.
Mr. Cris Moreno, MD-CEO commented: “During the Quarter, the Vulcan team have worked tirelessly on all fronts to complete the remaining activities of the Bridging Phase. This has included advancements on land acquisition and permitting, as well as substantial progress on commissioning Europe’s first Lithium Extraction Optimisation Plant, which will produce the first tonnes of carbon neutral lithium. In the upcoming Quarter, we will introduce brine into the plant for the lithium extraction process to begin, as well as completing construction of our Central Lithium Electrolysis Optimisation Plant ready for lithium hydroxide production early in the new year. We will also complete our Bridging Phase Study and have progressed key EPC and EPCM contract negotiations, all of which will be a major step forward in the upcoming weeks and position us strategically to start our project-level Phase One financing, in November.”
Highlights
Phase One: Zero Carbon Lithium™ and Renewable Energy Project Figure 1 Phase One Zero Carbon Lithium™ Project Overview
Geothermal operations:
Lithium Extraction and Optimisation Plant (LEOP)
Figure 2 Commercialisation of DLE technology now and into the future.
Central Lithium Electrolysis Optimisation Plant (CLEOP)
Resource: Upgrade of Zero Cabon Lithium™ Project Mineral Resources
Updated Phase One Field Development Plan
Phase One Bridging Study Close to Completion
Figure 3 Simplification and de-risking of Phase One project structure
Commercial
Future development and project pipeline Vulcan granted new licence for expansion into Frankfurt.
Luftbrücke. Vulcan has invested in a joint research well in the region together with the City of Frankfurt, the Hessian Ministry of Economics, the LandesEnergieAgentur Hessen GmbH (LEA), the state geological survey, the BäderBetriebe Frankfurt GmbH, Mainova AG, the Leibniz Institute of Applied Geophysics (LIAG) and GLU Freiberg GmbH to test the lithium concentrations. The well has been drilled, and brine sampling and analysis work is under way. Brine sampling results are expected Q4, 2023.
Additional ASX Disclosure Information ASX Listing Rule 5.3.1: Exploration and Evaluation expenditure during the Quarter was €3.8 million. Expenditure related to 3D seismic data acquisition and interpretation costs as well as preparation for upcoming drilling. Interpretation costs include capitalised costs from Vulcan Energy Subsurface (VES) and Vulcan Energie Ressourcen GmbH staff costs where time was allocated to Vulcan licence areas. ASX Listing Rule 5.3.2: Development expenditure during the Quarter was €23.3 million. Expenditure related to construction of the Lithium Extraction Optimisation Plant (€5.0 million) and Central Lithium Electrolysis Optimisation Plant (€1.5 million), refurbishment costs for Vulcan’s two electric drill rigs (€6.4 million), bridging study work undertaken by Hatch for Phase One (€3.5 million), and land acquired relating to well site locations for Phase One (€2.0 million). Rig V20 is now fully refurbished and drill ready. ASX Listing Rule 5.3.3: During the Quarter, the geothermal and lithium brine exploration licence “Luftbrücke” was granted; no licences were relinquished. ASX Listing Rule 5.3.5: Payments to related parties of the Company and their associates during the Quarter per Section 6.1 of the Appendix 5B total €230,000. This is comprised of an allocation of the Managing Director remuneration of €17,000, Executive Chairman remuneration of €90,000 and Non-Executive Director fees of €123,000. Payments to related parties of the Company and their associates during the Quarter per Section 6.2 of the Appendix 5B total €67,000. This amount is an allocation of the Managing Director’s remuneration for work done on exploration activities associated with the Vulcan Zero Carbon Lithium™ Project. Please see the Remuneration Report in the 2022 Annual Report for further details on Directors’ Remuneration.
Vulcan’s Zero Carbon Lithium™ Project
Defining ‘zero carbon’ Given Vulcan’s trademarked logo includes the wording ‘Zero Carbon Lithium’ it is important the Company clarifies the usage of the term. Vulcan defines ‘Zero Carbon’ as “net zero carbon equivalent emissions”, the legal definition of which states that net zero emissions refers to achieving a balance between the amount of greenhouse gas equivalent emissions produced and the amount removed or reduced[3] . This is specifically related to the activities undertaken to extract and process the final lithium hydroxide monohydrate product from its combined lithium and geothermal energy brine resource located in the Upper Rhine Valley. Unlike existing lithium operations, Vulcan aims to not burn fossil fuels in the lithium production and processing exercise. Instead, it will use its renewable energy source to drive the lithium production process, whilst also selling its own geothermal heat and power to the grid, displacing fossil fuel generated energy. The greenhouse gas (GHG) emissions avoided as a result of the displaced fossil fuel-generated energy allows Vulcan to define the project as net zero, or “Zero Carbon” per the Project’s trademarked nomenclature, the ‘Zero Carbon Lithium™ Project’. Vulcan commissioned Minviro Ltd, an independent consultancy, to undertake an ISO-aligned Life Cycle Assessment (LCA) of the integrated geothermal renewable energy, lithium production and processing impacts to prove the validity of the carbon neutral nature of the Zero Carbon Lithium™ Project. Minviro’s LCA assessments are a cradle-to-gate study and include the extraction of the raw lithium product, the geothermal plant, the brine handling, the purification, electrolysis and crystallisation and the transport of the product from well sites through to the final processing plant. Minviro’s first ISO aligned LCA was conducted in 2021, one of the first such studies conducted on the lithium hydroxide supply chain globally, with the latest LCA update undertaken in 2023[4]. In addition, Vulcan engages Climate Active to verify the GHG emissions of Vulcan's Australian organisation annually, which began in calendar year 2020. The latest carbon neutral certification covers the corporate team’s day-today emissions from 2022 across Scopes 1, 2 and 3, as defined by the GHG Protocol. Because Climate Active is an Australian based carbon neutral certification in partnership with the Australian Government and does not cover other jurisdictions, Vulcan certifies its German subsidiaries against European carbon neutral certifications. For baseline calendar year 2021, Vulcan certified against South Pole’s carbon neutral organisation label. For 2022, Vulcan used Climate Impact Partner’s carbon neutral label, which covered business as usual emissions, in line with the Australian Climate Active certification, for Vulcan Energie Ressourcen GmbH, its engineering subsidiaries Vulcan Energy Engineering GmbH, Vulcan Energy Subsurface Solutions GmbH, the geothermal renewable energy operator Natürlich Insheim, and Vercana, Vulcan’s electric geothermal drilling subsidiary. Emissions associated with scale up and construction of the Zero Carbon Lithium™ Project are not included in the carbon neutral certifications because they are not part of the day-to-day operations. Instead, these emissions will be disclosed to the market on an annual basis and will be included in future LCA calculations. As part of the carbon neutral certifications, and to bring the minimal GHG emissions balance associated with the Australian and German operations to net zero, Vulcan purchased good quality carbon credits through reputable suppliers, covered under the VERRA Verified Carbon Standard. Mitigation measures as part of the carbon neutral certificates include implementing energy efficiency measures within the offices and purchasing renewable energy certificates (RECs) to increase the mix of renewable energy in the electricity grid. Details of the Company’s estimated future carbon emissions associated with the life cycle of the planned Zero Carbon Lithium™ Project were disclosed to the market in 2021 (Minviro LCA announcement 4 August 2021)[5] , a breakdown of the GHG emissions categories associated with Vulcan’s operations and how they were calculated as well as information about the carbon credits purchased for 2021 were reported in the FY22 Sustainability Report available via the website (https://v-er. eu/). The GHG emissions associated with Vulcan’s operations for 2022 will be reported in full in the 2023 Sustainability Report. Updated Minviro LCA data was announced as part of Vulcan’s Phase One Definitive Feasibility Study (DFS) on 13 February 2023 and will continue to be reviewed at key Project milestones such as completion of the Bridging Study, and the start of commercial production. Vulcan expects to maintain its carbon neutral status for this period.
About Vulcan Founded in 2018, Vulcan’s unique Zero Carbon Lithium™ Project aims to decarbonise lithium production, through developing the world’s first net carbon neutral lithium business, with the co-production of renewable geothermal energy on a mass scale. By adapting existing technologies to efficiently extract lithium from geothermal brine, Vulcan aims to deliver a local source of sustainable lithium for Europe, built around a net zero carbon strategy with exclusion of fossil fuels. Already an operational renewable energy producer, Vulcan will also provide renewable electricity and heat to local communities. Vulcan’s combined geothermal energy and lithium resource is the largest in Europe[6], with license areas focused on the Upper Rhine Valley, Germany. Strategically placed in the heart of the European electric vehicle market to decarbonise the supply chain, Vulcan is rapidly advancing the Zero Carbon Lithium™ Project to target timely market entry, with the ability to expand to meet the unprecedented demand that is building in the European markets. Guided by our Values of Climate Champion, Determined and Inspiring, and united by a passion for the environment and leveraging scientific solutions, Vulcan has a unique, world-leading scientific and commercial team in the fields of lithium chemicals and geothermal renewable energy. Vulcan is committed to partnering with organisations that share its decarbonisation ambitions and has binding lithium offtake agreements with some of the largest cathode, battery, and automakers in the world. As a motivated disruptor, Vulcan aims to leverage its multidisciplinary expert team, leading geothermal technology and position in the European EV supply chain to be a global leader in producing zero fossil fuel, net carbon neutral lithium while being nature positive. Vulcan aims to be the largest, most preferred, strategic supplier of lithium chemicals and renewable power and heating from Europe, for Europe; to empower a net zero carbon future.
Corporate Directory Executive Chair Dr. Francis Wedin Managing Director and CEO Cris Moreno Deputy Chair Gavin Rezos Non-Executive Director Ranya Alkadamani Non-Executive Director Annie Liu Non-Executive Director Dr. Heidi Grön Non-Executive Director Josephine Bush Non-Executive Director Dr. Günter Hilken Non-Executive Director Mark Skelton Executive Director, Germany Dr. Horst Kreuter Company Secretary Daniel Tydde
For and on behalf of the Board Daniel Tydde | Company Secretary
Media and Investor Relations contact
Australia: Annabel Roedhammer, Director Communications and Investor Relations | aroedhammer@v-er.eu | +49 (0) 1511 410 1585 Please contact Vulcan’s Legal Counsel Germany, Dr Meinhard Grodde, for matters relating to the Frankfurt Stock Exchange listing on mgrodde@v-er.eu.
Reporting calendar
Disclaimer Some of the statements appearing in this announcement may be in the nature of forward-looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to the industries in which Vulcan operates and proposes to operate as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets, among other things. Actual events or results may differ materially from the events or results expressed or implied in any forwardlooking statement. No forward-looking statement is a guarantee or representation as to future performance or any other future matters, which will be influenced by a number of factors and subject to various uncertainties and contingencies, many of which will be outside Vulcan’s control.
Vulcan does not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions or conclusions contained in this announcement. To the maximum extent permitted by law, none of Vulcan, its Directors, employees, advisors or agents, nor any other person, accepts any liability for any loss arising from the use of the information contained in this announcement. You are cautioned not to place undue reliance on any forward-looking statement. The forward-looking statements in this announcement reflect views held only as at the date of this announcement. This announcement is not an offer, invitation or recommendation to subscribe for, or purchase securities by Vulcan. Nor does this announcement constitute investment or financial product advice (nor tax, accounting or legal advice) and is not intended to be used for the basis of making an investment decision. Investors should obtain their own advice before making any investment decision.
Vulcan has carried out a definitive feasibility study for Phase One of its Zero Carbon Lithium™ Project ('Project'), the results of which were announced to the ASX in the announcement "Zero Carbon Lithium Project Phase 1 DFS Results" dated 13 February 2023 ('DFS'), ('DFS Announcement'). This announcement may include certain information relating to the DFS. The DFS is based on the material assumptions outlined in the DFS Announcement (see "Competent Person Statement" below). While Vulcan considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct of that the range of outcomes indicated by the DFS will be achieved. Vulcan also released an announcement entitled “Upgrade of Zero Carbon LithiumTM Project Resources” on 29 September 2023 (“Bridging Study Update”) which uses the results of the DFS as a basis to update its Mineral Resources, estimated in accordance with the 2012 Edition of the Australian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). This announcement may also include certain information relating to Phase 2 of its Project, Vulcan has not yet carried out a definitive feasibility study for Phase Two of its Project.
Competent Person Statement: The information in this announcement that relates to Mineral Resources and Ore Reserves, and any Exploration Results and Production Targets, of Vulcan's Zero Carbon LithiumTM Project is extracted from the DFS Announcement and the Bridging Study Update, both of which are available to view on Vulcan's website at www.v-er.eu. Vulcan confirms that in respect of estimates of Mineral Resources and Ore Reserves, and any Exploration Results and Production Targets, included in this announcement:
[1] See the Company’s announcement “$200 million Letter of Support received from Export Finance Aust.” (sic) as released on 26 October 2023. [2] According to public, JORC-compliant data. See Upgrade of Zero Carbon Lithium™ Project Resources, 29 September 2023 [3] Definition taken from The Institute for Government UK website. [4] Please refer to page 45 of Vulcan’s 31 Dec Annual Report available via the Company website https://v-er.eu [5] https://v-er.eu/wp-content/uploads/2022/10/LCA.pdf [6] According to public, JORC-compliant data. See Upgrade of Zero Carbon Lithium™ Project Resources, 29 September 2023
27.10.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG. |
Language: | English |
Company: | Vulcan Energy Resources Limited |
Level 2,267 St. Georges Terrace | |
6000 Perth | |
Australia | |
E-mail: | dtydde@v-er.eu |
Internet: | www.v-er.eu |
ISIN: | AU0000066086 |
WKN: | A2PV3A |
Listed: | Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange |
EQS News ID: | 1759591 |
End of News | EQS News Service |
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1759591 27.10.2023 CET/CEST