Vulcan Energy Counts Down to Lionheart Financing and AGM Amid Drilling Gains

Vulcan Energy advances Lionheart geothermal-lithium project with drilling milestones and €2.2B financing expected to close in Q2, despite €76M quarterly cash burn and governance scrutiny at May 28 AGM.

The Lionheart project in Germany’s Upper Rhine Graben is delivering measurable physical milestones, yet Vulcan Energy’s share price still tracks a different variable: the formal signature on a €2.2 billion financing package. With the annual general meeting scheduled for May 28 in Perth, the company is balancing operational momentum against governance issues and a cash burn that consumed €76 million in the first quarter alone.

Drilling progress at Lionheart continues to build the technical case. The sixth geothermal well has reached its final depth of 3,000 metres, and two more wells are planned for 2026. The fifth production well, LSC-1, delivered flow rates between 105 and 125 litres per second. Above ground, construction is advancing in Landau on a combined geothermal and lithium extraction plant, while preparations for a fourth production site are under way. Siemens has been appointed preferred supplier for automation and digitalisation technology through to 2035, with awarded work already valued at roughly €40 million.

Financing remains the central catalyst. A consortium of 13 institutions — including export credit agencies, the European Investment Bank, BNP Paribas, ING and UniCredit — put together the €2.2 billion package late last year. Vulcan expects to close the deal in the current second quarter, which would unlock around €1.2 billion in senior loans and approximately €204 million in government grants. The company burned through €76 million in the three months to March, spending on land acquisitions, contractor payments and the ORC power plant. Cash reserves dropped from €523 million to €364 million, with an additional €63 million tied up in security deposits. Quarterly overheads have climbed to €7.2 million and are still rising.

Commercial coverage helps underpin the project. Some 72% of planned output is contracted under fixed or minimum-price agreements. Long-term offtake includes 128,000 tonnes of lithium hydroxide over ten years with Stellantis, 31,000 tonnes over six years with LG Energy Solution, and up to 44,000 tonnes over eight years with Glencore. Battery-grade lithium prices in Europe stood at $20,500 per tonne for carbonate and $19,800 for hydroxide at the end of April, both up $500 week-on-week and showing stability. Commercial production at Lionheart is targeted for 2028.

The AGM on May 28 brings governance scrutiny to the fore. Two batches of performance rights have lapsed after conditions were not met: 79,297 rights expired on May 1, following 413,811 that lapsed in March. For shareholders, that reduces potential dilution from equity instruments, but operationally it signals that internal targets have been missed. On the agenda is the election of Roberto Gallardo to the board, representing major shareholder Hochtief, as well as discussion of performance-based executive compensation. CEO Cris Moreno is expected to provide an update on Lionheart’s construction timeline and financing schedule.

Political support offers a tailwind: the state of Rhineland-Palatinate has exempted lithium extraction from production levies for five years, and the EU has designated Lionheart a strategic project. But goodwill cannot substitute for a signed financing agreement. Canaccord Genuity maintains a buy rating on the stock, with a consensus price target of €4.45 implying substantial upside. In actual trading, the shares are at €2.34, down 10.42% year to date. The stock sits above its 50-day moving average of €2.17 but below the 200-day line of €2.60 — a technical picture that mirrors the broader narrative: short-term improvement, but the long-term trend has yet to turn.