Vulcan Energy Advances Key Lithium Project with Strong Initial Results

Vulcan Energy AU0000066086

Vulcan Energy Resources has reported significant progress at its Lionheart lithium extraction project in Germany's Upper Rhine Valley. Recent operational and corporate developments indicate the company is moving decisively from planning to construction, backed by secured financing.

The foundational funding for the first phase of the Lionheart project was finalized in December 2025, according to company statements. This financial package includes a €250 million loan from the European Investment Bank. With this capital in place, Vulcan Energy considers the initial construction phase fully financed as of December.

The company is targeting an annual production capacity of 24,000 tonnes of lithium hydroxide monohydrate. The integrated project is also designed to generate approximately 275 GWh of renewable electricity and 560 GWh of thermal energy per year. Commercial lithium production is scheduled to commence in 2028.

Initial Well Exceeds Production Expectations

A key operational milestone was announced on January 21. The LSC-1b directional well, drilled in the Upper Rhine Valley Brine Field, demonstrated a production potential of 105 to 125 liters of geothermal brine per second during testing.

This result surpassed the development plan's earlier assumptions of 84 to 94 liters per second. The higher flow rates provide positive validation for the geological models and the technical concept of extracting lithium from geothermal brines.

Drilling Completed Successfully

The company reported that the well was completed safely, ahead of schedule, and without any reportable incidents. Critical technical parameters, including reservoir properties, lithium concentration, temperature, and pressure, met or exceeded anticipated ranges.

Furthermore, the test equipment was operated at full capacity for the first time. This successful test resolved a prior issue that had prevented a complete performance confirmation during the final stages of the drilling process.

Executive Compensation Revised for Construction Phase

In a separate announcement also dated January 21, Vulcan Energy disclosed approved changes to its executive remuneration policy. These changes, effective retroactively from January 1, are linked to the commencement of the "Phase One Lionheart" construction phase in December.

Key Adjustments to Remuneration

• The fixed salary for CEO Cris Moreno is set at 804,000 Australian dollars plus superannuation contributions.
• The fixed salary for CFO Felicity Gooding is set at 670,000 Australian dollars plus superannuation contributions.
• The short-term bonus opportunity for both executives has been increased from 25% to 50% of their fixed salary.
• The long-term incentive structure remains unchanged, though its absolute value rises in line with the increased base salary.

The company's supervisory board cited the transition from the development to the implementation phase, alongside the increased complexity of international operations, as the rationale for the adjustments.

Shareholder Approval and Capital Strengthening

An extraordinary general meeting was held on January 12. The sole resolution put to a vote was passed via a postal ballot.

This followed the completion of a rights issue for private investors in late December. The capital raising initiative was undertaken to strengthen Vulcan Energy's equity base ahead of the ramp-up in construction activity.

Project Milestones in Perspective

The positive test results from the LSC-1b well, the realigned management incentives, and the secured financing collectively represent several foundational elements for the first project phase. The critical path forward now depends on the company's ability to maintain the planned technical and scheduling framework for subsequent drilling and plant construction over the coming years, with the goal of achieving first production in 2028.

@ boerse-global.de | AU0000066086 VULCAN