Vulcan Energy Advances German Lithium Project with Strong Test Results

Vulcan Energy AU0000066086

Vulcan Energy Resources has reported significant operational progress at its Lionheart lithium project in Germany's Upper Rhine Valley. The company's transition from development to execution is now supported by a successful production test and fully secured financing, raising questions about how the technical performance aligns with initial projections.

The operational update follows a major financial milestone achieved in December 2025. Vulcan Energy finalized a comprehensive €2.2 billion funding package, which fully finances Phase One of the Lionheart initiative. This package includes a €250 million contribution from the European Investment Bank.

Key targets for Phase One of the Lionheart project include:
* Planned annual output: 24,000 tonnes of lithium hydroxide monohydrate
* Internal estimate: sufficient material for approximately 500,000 electric vehicle batteries per year
* Co-products: 275 GWh of renewable electrical energy and 560 GWh of thermal energy annually for regional offtakers
* Target start for commercial lithium production: 2028

To accelerate the field development program, a second drilling rig is scheduled for deployment in the second half of 2026.

Production Test Exceeds Modeled Expectations

On January 21, Vulcan released results from a production test conducted at the LSC-1b sidetrack well, part of the Lionheart project.

Critical data from the test revealed:
* Measured potential flow rate: 105–125 litres per second
* Originally modeled in the development plan: 84–94 litres per second
* Location: LSC-1b sidetrack, Upper Rhine Valley, Germany

The tested flow capacity clearly surpassed the earlier assumptions used in the field development planning models. This test was conducted after resolving a completion issue that had initially delayed a performance review following the first drilling results in November 2025.

Subsurface Data Meets or Beats Forecasts

Beyond flow rates, the company announced that several key subsurface parameters either met or exceeded expectations. These parameters encompass lithium concentration, temperature, reservoir properties, and matrix permeability.

The LSC-1b well represents the first new drilling for the commercial Phase One Lionheart project since construction commenced in December 2025. It is the fifth well site in the Phase One development zone, where four existing wells are already in production.

Drilling operations were completed by Vercana, Vulcan's fully integrated drilling subsidiary. The company reported the work was completed safely, ahead of schedule, with no lost time and no reportable workplace, safety, or environmental incidents.

Executive Compensation Revised for Operational Phase

Also on January 21, Vulcan disclosed board-approved changes to executive remuneration, effective January 1, 2026. The adjustments were attributed to the company's shift from project development to operational execution, following the securing of full financing and the start of construction.

According to the EQS announcement, the following fixed salaries were established:
* Chief Executive Officer: 804,000 AUD plus superannuation contributions
* Chief Financial Officer: 670,000 AUD plus superannuation contributions

Furthermore, the short-term incentive opportunity for both positions was increased from 25% to 50% of the fixed salary.

Market Response Shows Volatility

The combination of operational news and compensation adjustments provided initial support for the share price. MarketScreener data indicated the stock gained approximately 5% on January 21.

Subsequent trading, however, showed fluctuations. Data from Fintel indicated the share price stood at 4.46 AUD on January 23. This reflects near-term market volatility even as the project advances with secured financing and test results that have outperformed the plan.

@ boerse-global.de | AU0000066086 VULCAN