The Australian exploration company Vulcan Energy Resources Ltd. has turned its attention to the exploitation of lithium resources in the Upper Rhine Valley, which are also generous by global standards. The concept: to combine the use of thermal water as an energy source (hydrogeothermal energy) with the extraction of the lithium contained in the lithium-rich geothermal brine without polluting the environment with emissions, waste material or toxic substances.

With a CO2 footprint of "zero", the project is predestined to mark the beginning of the decarbonization of the battery industry.

The Upper Rhine Valley will be accelerated by the cooperation with a German geothermal power plant operator. Pursuant to a Memorandum of Understanding concluded in November 2019, Vulcan Energy Resources will base the pilot plant for lithium production at a geothermal power plant already in operation (stage 1). This will shorten the process involved in both exploration for geothermal energy use and the construction of the geothermal power plant.

In parallel with stage 1, the "Greenfield Project" in Ortenau will be developed as the second stage (stage 2) A resource estimate of a total of approx. 13.9 million t lithium carbonate equivalent / LCE has been indicated for the Upper Rhine Valley Project. This puts Vulcan Energy Resources at the very top of the rankings for the peer group of exploration projects in Europe - all of which are based on hard rock deposits.

Securing the raw material supply for Europe's battery industry is a challenge that puts a European lithium producer in a strong position. In actual fact, we assumethat lithium hydroxide produced free of CO2_ emissions in an core industrial region of Europe will benefit from a relevant premium on the reference price calculated for Asia. The European battery industry, which is currently in the process of expanding, will have strong incentives to use the raw material extracted by Vulcan Energy Resources.

Following the start-up phase (2022 to 2023), which is characterised by capex, amortisation will be achieved within four years. Raising the capital remains a key aspect.

We have set a price target of EUR 1.45 (equivalent to AUD 2.45) for shares in Vulcan Energy Resources. The investment recommendation for the initial assessment is "buy".

The complete study is available at the following link (Please note the notes and disclaimer at the end of the document): 

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