Vulcan Energy Secures Major Funding Milestone for Lithium Project

Vulcan Energy AU0000066086

The transition from developer to producer has moved a significant step closer for Vulcan Energy Resources Ltd. Following a successful shareholder vote, the company has now fully secured the financing package for the initial phase of its flagship "Lionheart" lithium project in Germany's Upper Rhine Valley.

At an extraordinary general meeting held on January 12, Vulcan's shareholders voted decisively to ratify shares issued during a recent institutional placement. The resolution passed with 83.43% of votes in favor, against 16.57% opposed. This formal approval finalizes a capital raise structured in December 2025 as a cornerstone of the overall funding strategy, which injected approximately €545 million in equity.

A second proposal concerning conditional placement shares was withdrawn prior to the vote, allowing the company to focus on the completed placement.

A Comprehensive €2.2 Billion Financing Package

A total funding structure of €2.2 billion is now in place for Lionheart's first phase. The package is a blend of debt, equity, and public support:

• Senior Debt: €1.185 billion from a consortium of 13 financial institutions, including the European Investment Bank (EIB).
• Government Grants: €204 million in funding from German federal and state authorities.
• Strategic Equity: A €150 million investment from the KfW Raw Materials Fund for a 14% stake in Vulcan Energie Ressourcen GmbH.
• Anchor Investment: €169 million from construction giant HOCHTIEF, which is also the project's building partner.
• Additional Strategic Investment: €133 million from other strategic investors, including Siemens Financial Services and Demeter.

This capital is intended to fully finance the construction of an integrated lithium extraction and processing facility. The target annual production capacity is 24,000 tonnes of lithium hydroxide monohydrate (LHM)—theoretically enough battery-grade material for approximately 500,000 electric vehicles.

Market Analysts Highlight Upside Potential

The confirmation of financing has prompted updated research coverage from analysts. On January 14, Bell Potter reaffirmed its "Speculative Buy" rating with a price target of A$6.10.

Canaccord Genuity has set an even higher target of A$10.00. With Vulcan's shares currently trading around A$4.42, these targets imply a potential upside ranging from approximately 38% to over 125%, based purely on the analysts' assumptions.

HOCHTIEF's Dual Role as Investor and Builder

HOCHTIEF's involvement extends beyond providing capital. Through its subsidiaries Sedgman and HOCHTIEF Infrastructure, the ACS Group will act as the EPCM (Engineering, Procurement and Construction Management) partner.

Furthermore, HOCHTIEF will serve as the preferred supplier for construction works on two key plants:
* The lithium extraction plant, with an estimated investment volume of €397 million.
* The central lithium plant, valued at approximately €337 million.

This dual role as both investor and construction partner underscores strong industrial backing for the project's technical execution.

Project Timeline and Strategic Importance

The commercial construction phase is scheduled to last approximately 30 months, with the commencement of lithium production targeted for 2028. Lionheart holds the status of an EU Strategic Project under the Critical Raw Materials Act, positioning it as a key initiative to reduce Europe's reliance on imported battery raw materials.

Vulcan will employ its proprietary VULSORB® adsorption technology for direct lithium extraction (DLE). This technology was validated at pilot scale in 2025 and is now slated for scaling to commercial capacity.

The company has already supplied battery-grade LHM samples to offtake partners, including Stellantis, Renault, and LG Energy Solution, which have been successfully qualified. The coming years will be defined by plant construction and the drive to achieve planned production targets.