Life Cycle Assessment
In February, Minviro was appointed by Vulcan to conduct an updated cradle-to-gate life cycle assessment (LCA) on the production of lithium hydroxide monohydrate (LHM) from project and process data produced at a PFS level. Five different impact categories were evaluated: global warming potential, acidification potential, eutrophication potential, water use, and land use. Results of the updated LCA estimate negative 2.9t of CO2 emitted per tonne of LHM to be produced from Vulcan’s Zero Carbon Lithium™ Project, including Scope 1, 2 and 3 emissions.
Strengthened Cash Position: $120M Raised From ESG Investors
In February, the Company raised $120 million (before costs) through a strongly supported placement at $6.50 per share to a suite of ESG-focused institutions, including the BNP Paribas Energy Transition Fund. Goldman Sachs and Canaccord Genuity acted as Joint Lead Managers. Proceeds from the Placement will support the Company through to final investment decision at its Zero Carbon Lithium™ Project, with funds being applied to:
- Project development, feasibility study costs and permitting;
- Drill site acquisition and preparation; and
- Strategic opportunities to accelerate project development.
The cornerstone investment was provided by Hancock Prospecting Pty Ltd, one of the most successful private companies in Australian history and a leader in the resources industry, which is led by Executive Chair Mrs. Gina Rinehart.
DLE Pilot Plant & DFS
Vulcan has designed, built, commissioned, and is now operating a DLE Pilot Plant to demonstrate lithium extraction from live geothermal brine. The team is focused on demonstrating pre-treatment and DLE processes, as well as the durability of the process over hundreds of cycles, which will feed into its Definitive Feasibility Study (DFS).
Vulcan will use the data from the Pilot Plant to inform and finalise design of a larger, Demonstration Plant, which will also contribute information towards the DFS. Vulcan’s technology partners and internal experts have indicated that key process operations will scale up to commercial scale with minimal risk from the Demonstration scale.
In May, Vulcan announced that the Pilot Plant team had successfully achieved target specification for Direct Lithium Extraction (DLE) feed into its pilot plant. They also achieved target recovery of greater than 90% for lithium chloride from Upper Rhine Valley brine. The laboratory team also successfully demonstrated, via the first step of test work, post-treated DLE brine to be materially the same composition, within analytical error, as production brine, excluding extracted lithium and silica.
Next steps will include:
- Ramp up of DLE pilot plant to 24/7 operation.
- Production of lithium chloride solution to be converted to lithium hydroxide.
- Production of samples for potential customers/offtakers.
- Further work on post-treatment of brine.
Post June 2021 Quarter to date:
- Key consultants Hatch Ltd. and GLJ Ltd. have been engaged to assist Vulcan with its Definitive Feasibility Study (DFS).
- New exploration license granted in Upper Rhine Valley.
- Binding Lithium Offtake term sheet signed with LG Energy Solution to supply 10,000 metric tonnes per year of lithium hydroxide.
- Strategic partnership signed with Renault Group for Vulcan to supply Renault with between 6,000 and 17,000 metric tonnes per year of battery grade lithium chemicals.
Vulcan’s in-house technical team continues to methodically execute on and progressively de-risk its Zero Carbon Lithium™ Project development in a stepwise manner.
Positive Pre-Feasibility Study (PFS)
In January, Vulcan announced the successful completion of its PFS, which was conducted with world-leading experts in the fields of lithium extraction, chemistry, chemical engineering, geothermal plant engineering and geology. Hatch Ltd. led the lithium processing plant design, engineering and cost estimates. German geothermal experts gec-co and Geo-T (now in-house and part of Vulcan) led the engineering studies and cost estimates for the geothermal plant and the sub-surface well design and production study respectively.
GLJ Ltd. provided review and sign-off on the Maiden Probable JORC Ore Reserves. APEX Geoscience Ltd. conducted the resource modelling and estimation for the Upper Rhine Valley Project (URVP) Li-brine Indicated Resources used in the PFS as announced to market on November 12, 2020 (Taro Licence) and December 15, 2020 (Ortenau Licence). Laboratory test work was conducted with brine experts IBZ Salzchemie, alongside other providers. Optiro Ltd. carried out the financial modelling.
The PFS showed a positive post-tax NPV of €2.25B (full project, no phasing); phased option shows €700m NPV in Phase 1 and €1.4B NPV in Phase 2. Combined renewable energy-lithium project (no phasing) showed a pre-tax IRR of 26% and post-tax IRR of 21%. Lithium as a separate entity from energy shows pre-tax IRR of 31% and post-tax IRR of 26%.
Growth of best-in class team
General Commentary About Growing Into A World-Class, 70+ Strong Team
Vulcan continues to assemble a best-in-class team of professionals in the fields of geothermal renewable energy project development and lithium extraction across its two business sectors.
Acquisition Of World-Leading German Based Geothermal Consultancy Team
The Company signed a Binding agreement to acquire 100% of geothermal sub-surface engineering company GeoThermal Engineering GmbH (GeoT). GeoT has a highly credentialed, world-leading scientific team with over a century of combined expertise in sub-surface development of geothermal projects, encompassing everything from exploration to production drilling. GeoT is based in the Upper Rhine Valley, Germany, and is owned by Vulcan Executive Director Dr Horst Kreuter. GeoT has been working closely with the Vulcan team since the inception of Vulcan’s Zero Carbon Lithium™ Project. This acquisition was completed following the close of the 2021 Financial Year.
For further information on the acquisition of GeoT, please refer to ASX announcement dated 10 February 2021.
Acquisition Of Global Engineering & Consulting Gmbh
The Company has acquired 100% of geothermal surface consultancy company Global Engineering and Consulting GmbH (Gec-co). Gec-co has a world-leading engineering team with significant experience in surface development of geothermal projects world-wide.
For further information on the acquisition of Gec-Co, please refer to ASX announcement dated 27 April 2021.
The Company’s Directors are committed to conducting the Company’s business in an ethical manner and in accordance with the highest standards of corporate governance. The Company has adopted and substantially complies with the ASX Corporate Governance Principles and Recommendations (3rd Edition) (Recommendations) to the extent appropriate to the size and nature of the Company’s operations.
The Company has prepared a Corporate Governance Statement which sets out the corporate governance practices that were in operation throughout the financial year for the Company, identifies any Recommendations that have not been followed, and provides reasons for not following such Recommendations.
The Company’s Corporate Governance Statement and policies can be found on its website.