Vulcan Energy’s Lionheart Project Hits Three Milestones: Funding Closed, Deep Drill Reached, Shares Issued to Staff

German lithium-geothermal developer closes €2.2 billion financing for Lionheart Phase One, completes sixth exploration well to 3,000 meters, targets 24,000 tonnes lithium hydroxide by 2028.

Vulcan Energy Resources has pushed its sixth Lionhart exploration well, LSC-2, to a depth of 3,000 metres, with completion and flow testing scheduled for the current quarter. The drilling data point arrives just as the company formally closes the €2.2 billion financing package for Phase One of the Lionheart project, moving the German lithium-geothermal developer from fundraising mode into construction execution.

The funding structure breaks down into €1.185 billion in senior debt, €529 million in equity and €204 million in government grants. Construction of the central lithium extraction and geothermal plant began in late April, and the project is now targeting 24,000 tonnes per year of lithium hydroxide monohydrate from the second half of 2028 — enough to supply roughly 500,000 electric vehicles.

Shareholders gave management a strong vote of confidence at the annual meeting on 28 May, with 95.75% approving the remuneration report. Directors Francis Wedin and Josephine Bush were re-elected, while Roberto Gallardo, nominated by construction group HOCHTIEF, was formally confirmed to the board. HOCHTIEF took a 15.41% stake in Vulcan through a €130 million cornerstone equity investment and a separate €39 million injection into the Lionheart project company, earning the right to appoint a director. The company also tied executive compensation to specific project milestones, underlining the board’s push for delivery.

On 1 June, Vulcan issued 757,423 fully paid ordinary shares from the conversion of Performance Rights granted to employees and directors. The new stock, representing a dilution of roughly 0.16% of total shares, was cleared for immediate secondary-market trading via a cleansing notice under Australian corporations law. The company’s total voting rights now stand at about 478.7 million. Not all internal targets were met: 413,811 Performance Rights lapsed in March and another 79,297 in May, a governance hiccup that leaves some questions about interim execution.

On the production front, the company is installing a commercial electrolysis plant at the Industriepark Höchst in Frankfurt. Once operational, it will run on Vulcan’s proprietary VULSORB technology, extracting lithium from geothermal brine. The resource base of 29.1 million tonnes of lithium carbonate equivalent supports a 30-year mine life, with estimated C1 cash costs of €3,588 per tonne — placing Vulcan in the lowest cost quartile globally. Already, 72% of the planned annual output is covered by fixed-price or floor-price offtake agreements.

The lithium market is showing signs of life. Chinese lithium carbonate prices surged to a two-year high of roughly 200,500 yuan per tonne in mid-May before retreating to 177,000 yuan by month-end. Beyond electric vehicles, the energy storage boom — particularly for data-centre backup — is expected to drive 80% demand growth over the next five years.

Institutional investor VanEck Associates has taken note, lifting its Vulcan stake to 6.06% (28.96 million shares) through purchases completed by 18 May, up from 5.04% in January. Vulcan ended the first quarter with €364.3 million in liquidity, enough, the company says, to carry through to first commercial production in 2028.

The stock currently trades at €2.50, roughly 37% below its 52-week high of €3.98 but well above the March trough of €1.80. The relative strength index has dipped below 15, a technically oversold reading that often precedes a bounce. The catalyst to watch remains the LSC-2 flow test, expected before the end of the second quarter — it will either confirm or complicate the bullish narrative that the €2.2 billion financing has already set in motion.