Vulcan Energy Resources Ltd. · ASX:VUL
Vulcan Energy Resources — H1 FY2022 Earnings Presentation
55 slides from Vulcan Energy Resources's earnings presentation, Mar 10, 2022
Slide 1: Half Year Results FY22
1 For personal use only Vulcan Energy Resources Zero Carbon LithiumTM Project Half Year Results FY22 Dr Francis Wedin, Managing Director
Slide 2: Disclaimer
2 Disclaimer For personal use only No investment or financial product advice This Presentation, and the information provided in it, does not constitute, and is not intended to constitute, financial product or investment advice, or a recommendation to acquire Vulcan Shares, nor does it constitute, an
Slide 3: HY22 Highlights
3 HY22 Highlights For personal use only Geothermal plant Electric drill rigs Granted license area acquisition acquired increased to over 1,000km2* First battery quality Five binding lithium Site for Central lithium hydroxide offtake agreements Lithium Plant secured monohydrate sample Zero Carbon Lit
Slide 4: HY22 Financial Highlights
4 HY22 Financial Highlights For personal use only Strengthening of the balance sheet Net assets increased from €81M at June 2021 to €206M at December 2021 through the following: AUD$200 million Acquisition of 2 capital raise electric drill rigs Zero Carbon LithiumTM Project Acquisition of Insheim Co
Slide 5: Circular economy Zero Carbon Lithium
5 Circular economy Lithium For personal use only Battery Offtakers manufacturing Grid storage Rewilding Electric vehicle transition initiatives Renewable Better air power 2nd Life quality Human Improved Recyclable biodiversity capital Renewable lithium energy Local Sustainable Lithium stakeholders c
Slide 6: Right place, right time
6 For personal use only Zero Carbon LithiumTM Project Right place, right time for fully integrated renewable energy and sustainable lithium chemicals business in Europe
Slide 7: How to support 30million EVs by 2030 in Europe?
7 How to support 30million EVs by 2030 in Europe? For personal use only 1,000GWh Lithium-ion EU: fastest growing Zero local supply Battery capacity by 20301 Lithium market in the world2 of lithium hydroxide 0.8 0.7 0.6 EU: 0% MILLIONS LCE 0.5 0.4 0.3 0.2 0.1 Zero Carbon LithiumTM Project 0.0 2020 20
Slide 8: Auto battery and cathode-makers committing to carbon neutrality
8 Auto battery and cathode-makers committing to carbon neutrality For personal use only ‘Reducing carbon footprint is not just reducing vehicle emissions while they are being operated, but also […] Current Lithium production has a significant from the company's resource extraction and production pro
Slide 9: Germany and Europe prioritising rapid growth of renewable energy
9 Germany and Europe prioritising the rapid growth of renewable energy sources For personal use only German Federal coalition Supply chain Geothermal roadmap3 Coalition agreement1 includes: • New EU Battery Regulation • Installation of 70 gigawatts of • Order to secure the goal of climate neutrality
Slide 10: Delivering the Zero Carbon Lithium Project
Zero Carbon LithiumTM Project 10 For personal use only Delivering the Zero Carbon Lithium™ Project
Slide 11: We scoured the globe to find the right conditions
11 We scoured the globe to find the right conditions for our Zero Carbon Lithium™ development For personal use only We had the lithium and geothermal expertise to Lithium concentration know that a Zero Carbon Lithium™ Project was In brine (mg/L Lithium) possible using modern extraction methods, 181
Slide 12: Largest lithium resource at the centre of the fastest growing market
12 Largest lithium resource at the centre of the fastest growing market in the world Largest lithium resource in Europe: 15.85Mt LCE1 Planned European battery manufacturing projects in GWh For personal use only capacity – 11/2021 Höchst Chemical Park: Central Lithium Plant Frankfurt planned location
Slide 13: Vulcan's renewable energy and lithium chemicals project
13 Vulcan’s renewable energy and lithium chemicals project Central Lithium Plant OUR PROJECT For personal use only Electric mobility Lithium hydroxide distributed to the EU market 6 LITHIUM BUSINESS Renewable Lithium chloride electricity and/or transported to the heat sold to the grid 2 5 central li
Slide 14: Commercially available technologies combined and adapted to be fossil-free
14 Commercially available technologies combined and adapted to be fossil-free For personal use only Our process incorporates technologies with commercial analogues across the world. What is unique about us is the proposed combination of these different steps, and our strict exclusion of fossil fuels
Slide 15: Global DLE assets and projects
15 Global DLE assets and projects Energy Lake Lanke Zangge Jintai Eramet/ Standard Vulcan Berkshire Compass Company Livent Rio Tinto CTR Source Resources/ E3 Metals Lithium Lithium Lithium Tsingshan Lithium Energy Hathaway Minerals Minerals Lilac For personal use only Hombre Centenario- Zero Carbon
Slide 16: Lithium division update
16 Lithium division update For personal use only Laboratory work Pilot plant operations Demonstration (Demo) plant Images of lithium hydroxide monohydrate from Zero Carbon Lithium™ project Rendering of Vulcan’s Demo Plant, major skids ordered and currently under construction. • Lab and pilot studies
Slide 17: Proposed combined greenfield and brownfield projects
17 Our proposed, combined greenfield and brownfield projects to add more capacity For personal use only GREENFIELD PROJECT DEVELOPMENT BROWNFIELD PROJECT DEVELOPMENT ADDITIONAL LICENCES Target metrics from Pre-Feasibility Study, subject to modifications in the DFS: Target metrics to be informed in t
Slide 18: Proposed dual purpose renewable energy and battery chemicals project
18 Proposed dual purpose renewable energy and battery chemicals project BROWNFIELD PROJECT DEVELOPMENT For personal use only Target metrics to be informed in the DFS PHASE B1 - €XBn CAPEX 5km Currently assessing the feasibility of integrating lithium extraction Brine Brine offtake Geothermal Plant I
Slide 19: Dual revenues: energy and lithium
19 Dual revenues: energy and lithium LITHIUM BUSINESS For personal use only ENERGY BUSINESS LITHIUM BUSINESS Decarbonising Coal phase-out Bans for fossil Lithium hydroxide prices the grid in Germany heating systems $/t 70,0 00 Industries March 2022: $66,500/t Grid Cities 65,000 60,000 55,000 Renewab
Slide 20: Securing long term lithium supply contracts
20 Securing long term lithium supply contracts Cathodes For personal use only § Binding lithium hydroxide offtake agreement § Initial 5-year term, starting in 2025, which can be extended by further 5 years § Minimum of 28,000t and a maximum of 42,000t of battery grade lithium hydroxide Lithium-ion b
Slide 21: Vulcan will supply leading actors across the lithium-ion battery supply chain
21 Vulcan will supply leading actors across the lithium-ion battery supply chain For personal use only Battery metals Cathodes Lithium-ion batteries Electric vehicles Zero Carbon LithiumTM Project
Slide 22: Potential for very low OPEX operation
22 Potential for very low OPEX operation Select South American brine and Australian/Chinese mineral conversion vs Vulcan’s process For personal use only LiOH VIA HARD-ROCK PROCESSING US$11,702/t LiOH US$9,240¹ US$2,462² Feedstock €9,830/t LiOH Mineral Cost Conversion Cost Vulcan’s “feedstock” is exp
Slide 23: Robust target project financials and production metrics from PFS
23 Robust target project financials and production metrics from PFS For personal use only ENERGY BUSINESS LITHIUM BUSINESS 74MW Power* 40,000tpy LiOH * Renewable heat sales to also be examined in DFS €0.7Bn NPV Pre-tax €0.5Bn NPV Post-tax €2.8Bn NPV Pre-tax €1.9Bn NPV Post-tax LITHIUM BUSINESS 16% I
Slide 24: Improvement in lithium pricing environment since PFS
24 Improvement in lithium pricing environment since PFS March 2022 Fastmarkets For personal use only January 2021 – PFS Lithium project economics Contract price $66,500 LITHIUM BUSINESS +346% 40,000tpy LiOH 2022 Banks long €2.8Bn NPV Pre-tax €1.9Bn NPV Post-tax 2021 term price assumptions* PFS long
Slide 25: Working hard to de-risk the project further
25 Working hard to de-risk the project further and address all identified risks Risk Mitigation For personal use only Drill rigs that can reach the deep geothermal reservoirs are Vulcan has agreed to acquire two electric drill rigs, re-purposed from the oil and gas industry, which can reach the targ
Slide 26: Environment, Social, Governance
Zero Carbon LithiumTM Project 26 For personal use only Environment, Social, Governance
Slide 27: Materially improving the global battery chemicals supply chain
27 Materially improving the global battery Lithium Chem icals Spodumene chemicals supply chain For personal use only Process development and R&D ENVIRONMENT development of world’s first lithium Strict Zero and renewable energy co- Carbon focus production process in Pre- Feasibility Study: Zero Carbo
Slide 28: Leading environmental credentials
28 Leading environmental credentials For personal use only Per tonne of lithium hydroxide produced CARBON EMISSIONS WATER CONSUMPTION LAND USE WASTE GENERATION REAGENTS CONSUMPTION (Scope 1,2,3) Tonnes CO2 m3 m2 Tonnes Tonnes Zero Carbon LithiumTM Project Hard rock mining Evaporation ponds 60% of wo
Slide 29: Four pillars of community engagement
29 Four pillars of community engagement For personal use only Public affairs Media engagement Community outreach Partnerships/ cooperation • Discuss and exchange • Raise awareness • Community roadshows, • Conduct research ideas regularly with through in-depth school presentations, projects with poli
Slide 30: The right team for the job
Zero Carbon LithiumTM Project 30 For personal use only for the job The right team
Slide 31: Board of Directors
31 Board of Directors For personal use only Dr. Francis Wedin Gavin Rezos Dr. Heidi Grön Josephine Bush Managing Director & Chair Founder-CEO Non-Executive Director Non-Executive Director Executive Chair/CEO positions of three companies Founder of Vulcan Zero Carbon Lithium™ Project. Dr. Grön is a c
Slide 32: Leadership team
32 Leadership team Dr. Francis Wedin For personal use only Managing Director & Founder-CEO Renewable Energy Business Dr. Horst Kreuter Markus Ruff Tobias Executive Director Thorsten Weimann CEO Global Hochschild Germany Chief Operating Officer Engineering & CEO GeoThermal Consulting Company Engineer
Slide 33: Vulcan Group: integrated, in-house capability to execute on our strategy
33 Vulcan Group: integrated, in-house capability to execute on our strategy Renewable energy Lithium Sustainability Finance Customers Vulcan’s expertise and assets For personal use only Gec-co Above-surface geothermal engineering Fully equipped Carbon neutrality in-house lab with team Strong cash po
Slide 34: Target project timeline
34 Target project timeline For personal use only 2022 2023 2024 2025 + Further exploration, 3D seismic surveys & acquisition, geological analysis Drilling and construction Phase 1 Phase 1 Phase 2 Phase 2 Phase + Phase+ Pre-Feasibility and Definitive Feasibility Studies (PFS & DFS) Production Phase 1
Slide 35: Share price and capital structure
35 Share price and capital structure ASX : VUL For personal use only Shares on Issue 131,607,598 Performance Shares* 91,174 Performance Rights 8,656,324 Market Capitalisation at A$8.230 (undiluted) ~A$1.07B (as of 8 March 2022) Cash Position €135M (as of 31 December 2021) Top 20 Shareholders ~53% Ma
Slide 36: Conclusion
36 Conclusion For personal use only Goal to become world’s first Europe’s largest Location centre Supported By EU integrated Zero Carbon lithium Resource1 of fastest growing funding, regulation Lithium™ and renewable market2 & initiatives energy company Zero Carbon LithiumTM Project Low cost & resil
Slide 37: Appendices
Zero Carbon LithiumTM Project 37 For personal use only Appendices
Slide 38: Appendix 1: Vulcan's integrated renewable energy and lithium project description
Regulations & 38 Appendix 1: Vulcan’s integrated renewable energy and lithium project description Initiatives Germany European Union For personal use only Bans for Sector backed by ESG and EU funds Coal phase-out EU New Battery regulation fossil heating looking to finance the green transition in Ger
Slide 39: Appendix 2: Largest JORC lithium resource in Europe
39 Appendix 2: Largest JORC lithium resource in Europe For personal use only Germany Probable Reserve 0.7 Ortenau License Indicated Resource 2.06 Inferred Resource 10.8 Valley Total 12.86 hine Probable Reserve 0.42 License Indicated Resource Taro 0.83 Upper R Inferred Resource 1.44 Total 2.27 France
Slide 40: Appendix 3: Europe-focused and DLE lithium projects peer comparison
40 Appendix 3: Europe-focused and DLE lithium projects peer comparison references For personal use only Company1 Code Project Stage Resource Category Resources M tonnes Resource Grade (Li2O) Contained Mt LCE Information Source Tonnes Corporate Presentation July 2021 - Company European Metals ASX: EM
Slide 41: Appendix 4: Vulcan supported by EU-backed group
41 Appendix 4: Vulcan supported by EU-backed group For personal use only EIT InnoEnergy will marshal its ecosystem and significant EU- wide resources to launch the Zero Carbon Lithium Project forward: • Securing project funding, including the use of applicable EU, national or regional grant schemes,
Slide 42: Appendix 5: EU lithium-ion battery capacity
42 Appendix 5: EU lithium-ion battery capacity For personal use only Zero Carbon LithiumTM Project >1,000GWh LITHIUM-ION BATTERY CAPACITY PLANNED BY 2030 Source: CIC energiGune 09/2021
Slide 43: Appendix 6: Lithium market dynamics favour sustainable lithium production
43 Appendix 6: Lithium market dynamics favour sustainable lithium production For personal use only Technology & Costs Sustainability Market Balance Prices ‘We expect DLE technology to dominate the future “Geothermal lithium extraction has a much lower “Incorporating the stronger demand outlook “Lith
Slide 44: Appendix 7: The new EU Battery Regulation and initiatives
Other EU measures 44 Appendix 7: The new EU Battery Regulation and initiatives supporting lithium: For personal use only New measures announced in December 2020 including: 1. Responsible sourcing : New mandatory procedures to ensure sustainable and ethical sourcing of raw materials such as lithium.
Slide 45: Appendix 8: Geothermal brine composition comparison
45 Appendix 8: Geothermal brine composition comparison Mg/kg Mg/kg For personal use only The Salton Sea in California 1 2 The Upper Rhine Valley in Germany Zero Carbon LithiumTM Project Note: Refer to ASX announcement of 10 March 2021 “High grade lithium, low impurity results from Vulcan’s 2021 Uppe
Slide 46: Appendix 9: Vulcan secured site for planned commercial lithium hydroxide plant
46 Appendix 9: Vulcan secured site for its planned commercial lithium hydroxide plant For personal use only • Vulcan signed an agreement with chemical park management company Infraserv, to secure a site for its planned Central Lithium Plant (CLP) at the Höchst Chemical Park, located just outside of
Slide 47: Appendix 10: DLE Projects and Assets - References
47 Appendix 10: DLE Projects and Assets - References For personal use only Livent https://s22.q4cdn.com/453302215/files/doc_presentations/2021/11/Livent-Investor-Presentation_for-website.pdf https://www.linkedin.com/pulse/from-catamarca-qinghai-commercial-scale-direct-lithium-alex-grant/ Lanke Lithi
Slide 48: Appendix 11: Target project economics from PFS - CAPEX
48 Appendix 11: Target project economics from PFS - CAPEX ENERGY BUSINESS LITHIUM BUSINESS For personal use only 1 Geothermal Plant 2 Sorption Plant 3 CLP FULL PROJECT 2 geothermal plants: 2 Sorption plants: 1 Central Lithium Plant €473M PHASE 1 • GB1 – 8MW • SB1 – 8kt LiOH • CLP1 - 15kt LiOH 2024 S
Slide 49: Appendix 12: Target project economics - possible structures
49 Appendix 12: Target project economics - possible structures Numbers are based on the PFS published in 2021 and are subject to change Phase 1 developed first, separated in two different Phase 2 developed second, separated in two For personal use only Full project developed at the same time but sep
Slide 50: Appendix 14: The fossil fuel era in Europe is coming to an end
50 Appendix 14: The fossil fuel era in Europe is coming to an end For personal use only 2020 2030 2040 2050 Europe is aiming for carbon neutrality, but the EU’s energy transition is far from being complete: 30.7% RE in Power Renewable Energy (RE) 19.5% RE in Heat 7.6% RE in Transport • Combustion en
Slide 51: Appendix 15: Project development timeline: example for one project area
51 Appendix 15: Project development timeline: example for one project area ~4 years For personal use only Exploration Approvals Subsurface Development Construction Production Development Independent and transparent review, monitoring & reporting Project data generation 2D & 3D seismic Modelling dril
Slide 52: Appendix 16: Brine flow rates
52 Appendix 16: Brine flow rates For personal use only Until we drill our first wells, risks around flow rate will remain. However, Vulcan believes it has an appropriate level of confidence around its flow rates assumptions, based on the experience of its team, and state-of-the-art scientific tools,
Slide 53: Appendix 17: Vulcan & Circulor lithium traceability
53 Appendix 17: Vulcan & Circulor to establish world-first full lithium traceability & transparency across the EU supply chain For personal use only Circulor offers a software solution that enables customers to track raw materials and CO2 emissions through supply chains to demonstrate responsible so
Slide 54: Appendix 18: R&D projects
54 Appendix 18: R&D projects For personal use only Effeo Increasing efficiency of geothermal CROWDTHERMAL power plants Empowering the European public to directly participate in the via Project Management Jülich development of geothermal projects with the help of alternative financing schemes (crowdf
Slide 55: Thank you
55 Thank you For personal use only Media and Investor Relations Germany Beate Holzwarth Chief Communication Officer bholzwarth@v-er.eu Australia Jessica Bukowski PR & IR Manager jbukowski@v-er.eu Zero Carbon LithiumTM Project @VulcanEnergyRes | www.v-er.eu | info@v-er.eu ASX:VUL FSE:VUL 55
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