Acquisition of Landau geothermal plant announced

Vulcan Energy Resources has signed an agreement to acquire Geox GmbH, including the geothermal plant and the licenses for energy production and lithium extraction in the Landau area. This acquisition will allow Vulcan to streamline operations and eliminate complexities from previous joint venture arrangements. By fully controlling the geothermal wells and lithium extraction, Vulcan aims to enhance efficiency and reduce risks during the commercial ramp-up of its Zero Carbon Lithium project. The deal includes a EUR 15m consideration, contingent on Vulcan securing financing for Phase One, and a EUR 3m loan to fund plant operations. Additionally, Vulcan secured a EUR 10m credit facility to ensure financial flexibility while awaiting long-term project funding. We rate Vulcan a BUY with a PT of EUR 10.50.

Charging up: Key Milestones and Strategic Moves in H1 2024

Vulcan Energy Resources has published its half-year report. The company achieved several key milestones in 2024, marking significant progress towards its Zero Carbon Lithium Project. It initiated the production of Lithium Chloride at its LEOP demo plant in Germany, achieving over 90% extraction efficiency, and began commissioning its CLEOP plant, set to produce battery-grade Lithium Hydroxide Monohydrate (LHM) by the end of the year. Financing remains a critical focus, with the company entering the final stage of securing the EUR 1.4bn required for Phase One, with potential backing from the European Investment Bank and strategic investors. Vulcan’s future success hinges on its financing, expected to conclude in Q4 2024 to further progress towards commercial lithium production. We confirm our BUY recommendation with a PT of EUR 10.50.