Vulcan Energy Receives Validation from Key Well Test

Vulcan Energy AU0000066086

A critical production test at Vulcan Energy Resources' flagship lithium project in Germany's Upper Rhine Valley has delivered results that align with the company's development plans. The data from the first Lionheart well supports the technical assumptions for the initial phase of the operation, though the market's response to the news has been measured.

The company announced that its LSC-1b directional well achieved a sustained flow rate ranging between 105 and 125 liters per second during testing, with equipment operating at its maximum capacity. Management interprets this as a direct confirmation that the resource's productivity matches the projections outlined in the Field Development Plan.

This outcome resolves a significant technical uncertainty. While Vulcan had reported positive drilling and geological data in November 2025, it had been unable at that time to demonstrate production capability due to a well-completion issue. The successful test now provides evidence of the well's commercial viability.

Key Operational Details

• Flow Rate: Confirmed at 105–125 l/s, meeting project targets.
• Resource Quality: Lithium concentration, temperature, and rock integrity met or exceeded expectations.
• Safety Record: The drilling operation was completed ahead of schedule with no reportable incidents.
• Project Status: The LSC-1 well is the fifth of Phase One, with four other sources already in production.
• Future Capacity: A second drilling rig is scheduled for commissioning in the second half of 2026.

Executive Compensation Revised

Concurrent with the operational update, Vulcan disclosed adjustments to its senior executive remuneration packages, effective from January 1, 2026. The board cited the project's transition from the development stage into the execution phase following the final investment decision and commencement of construction in December 2025.

• The fixed annual salary for CEO Cris Moreno has been set at 804,000 AUD.
• CFO Felicity Gooding will receive a fixed annual salary of 670,000 AUD.

According to the supervisory board, the increases reflect the heightened operational complexity and expanded international governance obligations associated with the project's current phase.

Muted Market Reaction

On the Australian Securities Exchange (ASX), Vulcan's shares showed limited movement despite the positive technical report. The stock closed the latest session at 4.52 AUD, marking a slight decline of 1.09%. On the day the test results were initially released, the share price had previously advanced by 3.49%, partially anticipating the recent recovery.

The current share price remains approximately 40% below its 52-week high of 7.52 AUD. However, since the start of the year, the stock has posted a gain of roughly 10%, outperforming the broader S&P/ASX 200 index.

Financial and Analyst Snapshot

• Market Capitalization: Approximately 2.16 billion AUD
• 52-Week Trading Range: 3.36 – 7.52 AUD
• Average Analyst Price Target: 4.58 AUD (Range: 3.38 – 6.30 AUD)
• Recent Rating: Berenberg reaffirmed a "Buy" recommendation with a 5.90 AUD target price (as of January 13, 2026).

Phase One Construction Underway

Following the positive final investment decision in December 2025, the Lionheart project is now in the construction phase. The integrated lithium and renewable energy facility is designed for an annual production capacity of 24,000 tonnes of lithium hydroxide monohydrate. This output is sufficient to supply material for an estimated 500,000 electric vehicle batteries per year.

Beyond lithium, the project is planned to generate 275 GWh of renewable electricity and 560 GWh of thermal energy annually for the regional market. The projected operational life of the asset is around 30 years, with the commencement of commercial lithium production targeted for 2028.

Balancing Progress with Execution Risk

Vulcan Energy's stock is currently navigating a consolidation phase, where tangible project milestones are weighed against the execution risks and the extended timeline before first production. The successful well test mitigates key geological and subsurface uncertainties. Meanwhile, the market continues to factor in the over two-year journey to the planned production start, alongside prevailing conditions in the global lithium market.

@ boerse-global.de | AU0000066086 VULCAN