Vulcan Energy Resources Ltd. · ASX:VUL
Vulcan Energy Resources — Shareholder Meeting (May 2023)
57 slides from Vulcan Energy Resources's shareholder meeting presentation, May 29, 2023
Slide 1: Annual General Meeting
Ministers' For personal use only Annual General Meeting Managing Director Dr. Francis Wedin 29 May 2023 1
Slide 2: Disclaimer
DISCLAIMER 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, and is not intended to co
Slide 3: Disclaimer
DISCLAIMER Ore Reserves and Mineral Resources Reporting. It is a requirement of the ASX Listing Rules that the reporting of ore reserves and mineral resources in Australia comply with the Joint Ore Reserves Committee's Australasian Code for Reporting of Mineral Resources and Ore Reserves ("JORC Code
Slide 4: Introduction
For personal use only INTRODUCTION 4
Slide 5: Purpose and Mission
For personal use only Purpose Mission We will empower a Becoming Europe`s leading Zero zero-carbon future Carbon Lithium™ business & enabling energy security through geothermal energy 5
Slide 6: Our Targets
OUR TARGETS Vulcan’s unique Zero Carbon Lithium™ Project We are aiming to become the world’s first aims to produce both renewable geothermal For personal use only integrated lithium chemicals and renewable energy energy, and lithium hydroxide for Electric Vehicle producer with net zero greenhouse ga
Slide 7: Why Vulcan?
WHY VULCAN? ü World-leading product and brand – carbon neutral, battery-grade lithium chemicals from Zero Carbon Lithium™ Project ü Right place – located within the EU, fastest growing lithium For personal use only market in the world ü Long-life, sustainable asset, large growth potential – largest
Slide 8: What Are We Building?
WHAT ARE WE BUILDING? Phase 300GWh power LiCl concentrate for 24,000tpa one 250GWh heat 24,000tpa LHM equivalent LHM For personal use only 2. 3. 4. 5. Well Geothermal Plant Lithium Extraction Central Lithium sites Plant (LEP) Plant (CLP) Renewable heat and Lithium chloride Lithium hydroxide Hot Li-r
Slide 9: Our Achievements to Date
OUR ACHIEVEMENTS TO DATE Became a For personal use only commercial renewable energy producer Stellantis becomes first automaker to invest equity in a lithium Lithium company: $76m Successful in-house extraction test investment into Vulcan development of Vulcan Energy Resources Ltd. work VULSORB™ Fou
Slide 10: Why Do We Need Lithium in Europe?
WHY DO WE NEED LITHIUM IN EUROPE? For personal use only The market • EU targets new cars to be 100% electric by 20351 Vulcan has offtake agreements • 1,400GWh li-ion battery manufacturing estimated capacity by 20302 for EV with some of the largest battery, transition cathode and EV producers in • Pr
Slide 11: Why Do We Need Geothermal Renewable Energy in Europe?
WHY DO WE NEED GEOTHERMAL RENEWABLE ENERGY IN EUROPE? The market For personal use only • EU to be climate neutral by 2050. Germany to be fully renewable by 20351 • EU wants to develop local sources of energy2 The crisis • Dual crises: Ukraine war and climate crisis • EU is now sourcing gas from Norw
Slide 12: Policy Tailwinds in Vulcan's Favour
POLICY TAILWINDS IN VULCAN’S FAVOUR The recently released Critical Raw Materials1 and Net Zero Industry Acts2 present a strong focus on fast-tracking the Critical permitting process Raw Materials and funding Act for technologies of relevance to the strategic autonomy of the EU economy For personal u
Slide 13: Zero Carbon Lithium Project
For personal use only ZERO CARBON LITHIUM™ PROJECT 14
Slide 14: Phase One Upstream-Downstream Integrated Production Structure
SPV2: downstream CLP PHASE ONE UPSTREAM-DOWNSTREAM Frankfurt 24Ktpa LHM INTEGRATED PRODUCTION STRUCTURE Phase One: For personal use only expanding upstream capacity, SPV1: upstream G-LEP, building downstream wells, resource. LiCl and energy production 2 Increasing the number of S PV l to LiC product
Slide 15: The Upstream Resource
Höchst Chemical Park: THE UPSTREAM RESOURCE Central Lithium Plant Frankfurt planned location Legend Production license Access to the license through ü Vulcan’s Upper Rhine Valley Brine Field (URVBF), a brine offtake Rhiner For personal use only consisting of 15 licenses for a total area of 1,583 Riv
Slide 16: Phase One Area
PHASE ONE AREA Höchst Chemical Park: Central Lithium Plant planned location Frankfurt Legend Production license Access to the license through a brine offtake Phase One Rhiner For personal use only Riv Downstream Lithium and e CLP geothermal license ü Phased growth approach, starting from core of fie
Slide 17: Increasing Upstream Brine Production
INCREASING UPSTREAM BRINE PRODUCTION Well-known area • >1,000 oil & gas and 24 deep geothermal wells already completed in the URVBF. For personal use only • In our Phase One project area, 4 deep geothermal wells have been in operation for more than 10 years. In-house expertise, team and assets • Vul
Slide 18: Long Life, Sustainable Upstream Production
LONG LIFE, SUSTAINABLE UPSTREAM PRODUCTION State-of-the art reservoir management principles from O&G industry For personal use only • Lithium dilution at the well sites modelled over 30 years and remains above cut-off, with only ~1.6% annual grade decrease. • Production levels could be increased by
Slide 19: Increasing Renewable Energy Production
INCREASING RENEWABLE ENERGY PRODUCTION Long established industry with strong growth potential For personal use only • Geothermal energy: 16GW of power & 107GW of heat capacity deployed worldwide¹ • There are currently 36 geothermal plants operating in Germany, 42 active projects (c. 84 wells), and t
Slide 20: Lithium Extraction: Proven, Sustainable Methods, In-House IP
LITHIUM EXTRACTION: PROVEN, SUSTAINABLE METHODS, IN-HOUSE IP Commercially proven methods, combined. Testwork phase complete ü Vulcan is using sorption to extract lithium; invented in the ‘70s and used commercially worldwide since 1996, including by top 5 producer Livent and multiple Chinese producer
Slide 21: Building New Lithium Extraction Plant (LEP)
BUILDING NEW LITHIUM EXTRACTION PLANT (LEP) Phase One commercial: sorption-type LEP For personal use only • To be constructed next to new Phase One geothermal plant • Total targeted capacity to be 24,000tpa LHM equivalent in LiCl form • From the LEP, LiCl concentrate solution will be trucked to the
Slide 22: Lithium Processing: Proven, Sustainable Methods, Strong Partners
LITHIUM PROCESSING: PROVEN, SUSTAINABLE METHODS, STRONG PARTNERS Proven chlor-alkali type process, sustainable inputs, no fossil fuels For personal use only • Vulcan to use the electrolysis process to convert lithium chloride into lithium hydroxide. Electrolysis produces very pure lithium hydroxide
Slide 23: Building New Central Lithium Plant (CLP)
BUILDING NEW CENTRAL LITHIUM PLANT (CLP) Commercial CLP • CLP planned to be located in Frankfurt (Höchst Industrial Park). Close to 100,000sqm secured. For personal use only • Targeted 24,000tpa LHM capacity with space for further modular expansion. • Conversion of LiCl to battery grade LHM using el
Slide 24: Experienced Team Ready to Deliver
EXPERIENCED TEAM READY TO DELIVER Founder of Zero Carbon Deputy CEO 20+ years’ major energy and MD-CEO Lithium™ Project. Extensive Cris chemicals project execution Dr. Francis lithium and climate tech Moreno experience Wedin industry executive experience For personal use only CORE FUNCTIONS SUPPORT
Slide 25: Target Project Timeline – Commercial Phase One
TARGET PROJECT TIMELINE – COMMERCIAL PHASE ONE 2023 2024 2025 2026 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 DFS Publication Bridging Phase For personal use only Start of procurement phase Detailed Engineering Start of EPC contract awards Strategic equity funding process Debt funding process O
Slide 26: Environment, Social, Governance
For personal use only ENVIRONMENT, SOCIAL, GOVERNANCE 27
Slide 27: Aiming for Lowest CO2 Footprint in the Lithium Industry
AIMING FOR LOWEST CO2 FOOTPRINT IN THE LITHIUM INDUSTRY • Vulcan is developing the first and only net zero carbon lithium project in the world1 • Globally significant decarbonisation opportunity through Vulcan’s Zero Carbon Lithium™ Project For personal use only Zero Carbon Lithium™ Emissions from G
Slide 28: Aiming for Lowest Water and Land Footprint in Lithium Industry
AIMING FOR LOWEST WATER AND LAND FOOTPRINT IN LITHIUM INDUSTRY Engineered to have industry-leading environmental performance: our core mission For personal use only Hard rock mining ~60% of world lithium production Per tonne of LHM produced1, 2 Evaporation ponds ~40% of world lithium production ca.
Slide 29: Other Leading ESG Credentials
OTHER LEADING ESG CREDENTIALS For personal use only Low ESG Risk Rating from 9,5kT CO2 avoided from ESG linked KPIs including Sustainalytics (01/2023) renewable energy generated individual and shared targets First amongst peers and in at NatürLich Insheim in 2022. the 2nd quartile Chemicals Industry
Slide 30: Permitting Progress on Track
PERMITTING PROGRESS ON TRACK Exploration license 1 Licenses Production license 2 Pre-EIA 3 For personal use only Main operation plan (one well site, all wells) Mining authority Production/Re-injection wells Special operating plan: Well pad Special operating plan: Drilling Secure land 4 Permitting pr
Slide 31: Societal Acceptance
SOCIETAL ACCEPTANCE • The Project is developed in cooperation with local communities, as Vulcan directly engages with them to For personal use only understand and meet their needs. • Vulcan is doing a substantial amount of work to consult as well as inform the public: • 4 Info-Centres have been set
Slide 32: Economics and Financing
For personal use only ECONOMICS AND FINANCING 33
Slide 33: Phase One Project Value Flows
PHASE ONE PROJECT VALUE FLOWS VUL Lithium hydroxide Lithium h ydro xide For personal use only SPV1 SPV2 2. 3. 4. 5. Well Geothermal Plant Lithium Extraction Central Lithium sites Plant (LEP) Plant (CLP) Renewable heat and Hot Li-rich brine transferred to the brine sorption plant Lithium chloride Col
Slide 34: Capex Breakdown
CAPEX BREAKDOWN1 VUL Phase 1 estimated CAPEX: €1,496M €1,174M €322M For personal use only SPV1 SPV2 2. 3. 4. 5. Well Geothermal Plant Lithium Extraction Central Lithium sites Plant (LEP) Plant (CLP) €657M €517M €322M 1. Resource • CAPEX includes renewable energy generation, lithium extraction and li
Slide 35: Global Cost Curve LHM – Projected 2025
GLOBAL COST CURVE LHM – PROJECTED 2025 Vulcan’s Zero Carbon Lithium™ Project has the potential to be one of the lowest cost integrated LHM projects in the world. For personal use only Lithium hydroxide delivered costs - 2025 ($/tonne, ddp Rotterdam) Vulcan Energy $4,5771 €4,359 1 Projected cost curv
Slide 36: Strategic Supply Partner Contracts
STRATEGIC SUPPLY PARTNER CONTRACTS • High quality of European-focused offtake partners. • Average EUR 30,283/t price used by Vulcan over 20 year period, Lithium hydroxide price forecasts1 - €/t For personal use only 40,000 from a basket of fixed, floor-ceiling and fully floating price mechanisms in
Slide 37: Target Revenues – 20Y Average
TARGET REVENUES – 20Y AVERAGE1 For personal use only SPV1 SPV2 SPV1 SPV2 Geothermal LEP CLP Phase 1 Heat 3% HCl HCl 2% 1% NaOCl NaOCl 0% Power 0% Heat 13% 3% Power 10% LHM 86% LiCl LHM 84% 98% €537M/a €616M/a €704M/a* 1 Vulcan Energy’s Phase One DFS, 13 February 2023. * Consolidated revenue. 38
Slide 38: Target Project Economics
TARGET PROJECT ECONOMICS¹ For personal use only SPV1 SPV2 SPV1 SPV2 Geothermal LEP CLP Phase 1 Revenues €M/a 537 616 704 Net Op. Cash Flow €M/a 339 104 437 NPV pre-tax m€ 3,022 895 3,917 NPV post-tax m€ 1,998 572 2,584 IRR before Tax 34.1% 35.5% 34.4% IRR after Tax 26% 26.1% 26.1% Payback in years 3
Slide 39: Phase One Proposed Financing Strategy and Progress Update
PHASE ONE PROPOSED FINANCING STRATEGY AND PROGRESS UPDATE • Debt market sounding exercise completed with positive feedback from banks and ECAs. For personal use only • Government backed ECAs SPV1 SPV2 from France, Italy and Canada have indicated 2. 3. 4. 5. strong support, including Central Lithium
Slide 40: Conclusion
For personal use only CONCLUSION 41
Slide 41: Key Takeaways
KEY TAKEAWAYS • The first integrated renewable energy, lithium extraction and lithium hydroxide refining project development, seeking to supply the battery electric vehicle industry from Europe, for For personal use only Europe. • World-leading sustainability credentials: engineered specifically to
Slide 42: Share Price and Capital Structure
SHARE PRICE AND CAPITAL STRUCTURE ASX : VUL Shares on Issue 164,835,301 Performance Shares 91,174 For personal use only Performance Rights 8,382,801 Market Capitalisation at $3.84 ~$631m (undiluted as at 26 May 2023 ) Cash Position (as at 26 May 2023) ~€164m (~$269m) Top 20 Shareholders ~62% Managem
Slide 43: Thank you – Questions?
Thank you For personal use only Questions? Contact our media and investor relations team info@v-er.eu @VulcanEnergyRes | www.v-er.eu | info@v-er.eu ASX:VUL FSE:VUL 44
Slide 44: Appendices
For personal use only APPENDICES 45
Slide 45: Appendix 1: Board of Directors
APPENDIX 1: BOARD OF DIRECTORS Dr. Francis Wedin Managing Director & CEO Gavin Rezos Ranya Alkadamani Chair Non-Executive Director For personal use only Founder of Vulcan Zero Carbon Lithium™ Project. Lithium Executive Chair/CEO positions of three companies that grew from Founder of Impact Group Int
Slide 46: Appendix 2: Energy Balance
APPENDIX 2: ENERGY BALANCE: NET POSITIVE PRODUCER OF RENEWABLE ENERGY¹ Geothermal Lithium Geothermal LEP CLP Phase One For personal use only MW 40 30 20 10 - Lionheart LEP SPV1 Power Taro ORC Taro ORC Taro Pumps & Piping Lionheart ORC* SPV2 Power Heat production SPV1 Taro LEP Lionheart Pumps & Pipin
Slide 47: Appendix 3: DLE/DLS Projects and Assets - References
APPENDIX 3: DLE/DLS PROJECTS AND ASSETS - REFERENCES Livent https://s22.q4cdn.com/453302215/files/doc_presentations/2022/2022.11-Livent-Investor-Presentation.pdf https://www.linkedin.com/pulse/from-catamarca-qinghai-commercial-scale-direct-lithium-alex-grant/ Lanke Lithium http://www.asianmetal.com/
Slide 48: Appendix 5: Key Risks Technology / Execution / Resource
APPENDIX 5: KEY RISKS TECHNOLOGY / EXECUTION / RESOURCE Risk Description Mitigation Currently in discussions with a local toll manufacturer to manufacture VULSORB™, who is already supplying Vulcan for its Technology: VULSORB™ industrial manufacturing capability still to be demonstrated. Optimisation
Slide 49: Appendix 6: Key Risks General
APPENDIX 6: KEY RISKS GENERAL Risk Description Mitigation Vulcan closely monitors developments in the battery industry, and preferred battery chemistries. Vulcan notes that, whilst EU Markets: General demand for lithium hydroxide may decrease as a result of new market or technological customers are
Slide 50: Appendix 6: Key Risks General Cont.
APPENDIX 6: KEY RISKS GENERAL CONT. Risk Description Mitigation Technical: Battery raw materials and geothermal energy exploration and development are high-risk Vulcan uses modern geothermal industry best practice by incorporating 3D seismic data and analysis and has a world undertakings and there i
Slide 51: Appendix 7: Phase One Production Study and Reserves
APPENDIX 7: PHASE ONE PRODUCTION STUDY AND RESERVES § Detailed reservoir engineering and production simulation study conducted to achieve maximum “sweep” of lithium across the field. § Planned well placement and brine flow rates optimised for sustainable lithium production over a long project life.
Slide 52: Appendix 8: Upper Rhine Valley Brine Field: Mineral Resource
APPENDIX 8: UPPER RHINE VALLEY BRINE FIELD: MINERAL RESOURCE Note 1: Mineral Resources are not Ore Reserves and do not have demonstrated economic viability. Licence Reservoir Classification GRV km3 Avg. NTG Avg. Avg. Li Elemental Li LCE3 Note 2: The weights are reported in metric tonnes (1,000 kg or
Slide 53: Appendix 9: Permitting Process
APPENDIX 9:PERMITTING PROCESS EXTERNAL ASSESSMENTS MAIN PERMITS specific species Ground survey BBergG (Federal Mining Act), BauGB (Building Act), GEG (Building Energy Act), BImSchG (Fed. Immission Ctrl. Act) protection assessment GEOTHERMAL ENERGY (saP) Exploration License (geothermal and lithium) (
Slide 54: Appendix 10: Integrated Project Delivery Model
APPENDIX 10: INTEGRATED PROJECT DELIVERY MODEL Strategy moving towards project execution and delivery model Phase One For personal use only Phase One Phase One Organisation & Governance Delivery Wells Model ICPP ORC LEP CLP Site GLEP Executive Project SteerCo Integrated Owner Vulcan Schedule EPCM Co
Slide 55: Appendix 11: Financial Definitions
APPENDIX 11: FINANCIAL DEFINITIONS • CAPEX = Capital Expenditure in tangible and intangible assets • EBIT = Earnings before interest and taxes For personal use only • EBITDA = Earnings before interest, taxes, depreciation and amortisation • IRR = Internal Rate of Return • Net Income (EAT) = Earnings
Slide 56: Appendix 12: The Zero Carbon Lithium Project: A Circular Process
APPENDIX 12: THE ZERO CARBON LITHIUM™ PROJECT: A CIRCULAR PROCESS Lithium hydroxide Phase One distributed Downstream CLP: “SPV2” to EU CLP in For personal use only customers Central Frankfurt- Electric 6 Lithium Hoechst Mobility Plant converting LiCl to LHM Renewable electricity Lithium chloride and
Slide 57: Appendix 13: Competent Person Statement
APPENDIX 13: COMPETENT PERSON STATEMENT The information in this presentation that relates to estimates of Mineral Resources and Ore Reserves is extracted from the following ASX announcement: § "Vulcan Zero Carbon Lithium™ Project Phase One DFS results and Resources-Reserves Update", released on 13 F
Vulcan Energy Resources — Shareholder Meeting (May 2023) on 6ix