Vulcan Energy Resources Ltd. · ASX:VUL
Vulcan Energy Resources — Investor Presentation (April 2023)
58 slides from Vulcan Energy Resources's investor presentation, Apr 28, 2023
Slide 1: Corporate Presentation Q2 2023
For personal use only Corporate Presentation Q2 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: Why Vulcan?
WHY VULCAN? World-leading product and brand – carbon neutral, battery-grade For personal use only lithium chemicals from Zero Carbon Lithium™ Project Right place – located within the EU, fastest growing lithium market in the world Long-life, sustainable asset, large growth potential – largest
Slide 5: I. Introduction
For personal use only I. INTRODUCTION 5
Slide 6: Who are we?
I. INTRODUCTION 1. WHO ARE WE? For personal use only Vulcan is aiming to become the world’s first integrated lithium chemicals and renewable energy producer with net zero greenhouse gas emissions. Company created in 2018 Offices in Perth, Australia, Karlsruhe and Augsburg, Germany Dual listed on ASX
Slide 7: Our targets
I. INTRODUCTION 2. OUR TARGETS For personal use only Vulcan’s unique Zero Carbon Lithium™ Project We are aiming to become the world’s first aims to produce both renewable geothermal integrated lithium chemicals and renewable energy energy, and lithium hydroxide for Electric Vehicle producer with net
Slide 8: Our achievements to date
I. INTRODUCTION 3. OUR ACHIEVEMENTS TO DATE For personal use only Became a 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
Slide 9: Why do we need lithium in Europe?
I. INTRODUCTION 4. 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 E
Slide 10: Why do we need carbon neutral lithium supply?
I. INTRODUCTION 5. WHY DO WE NEED CARBON NEUTRAL LITHIUM SUPPLY? For personal use only ‘Reducing carbon footprint is not just reducing vehicle emissions while they are being operated, but also from the company's resource extraction and production processes through to the end of the vehicle's life cy
Slide 11: Why do we need geothermal renewable energy in Europe?
I. INTRODUCTION 6. WHY DO WE NEED GEOTHERMAL RENEWABLE ENERGY IN EUROPE? For personal use only The market • 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 sou
Slide 12: Policy tailwinds in Vulcan's favour
I. INTRODUCTION 7. 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 eco
Slide 13: What do we want to build?
I. INTRODUCTION 8. WHAT DO WE WANT TO BUILD? For personal use only Phase 300GWh power LiCl concentrate for 24,000tpa one 250GWh heat 24,000tpa LHM equivalent LHM 2. 3. 4. 5. Well Geothermal Plant Lithium Extraction Central Lithium sites Plant (LEP) Plant (CLP) Renewable heat and Lithium chloride Lit
Slide 14: II. Zero Carbon Lithium Project
For personal use only II. ZERO CARBON LITHIUM™ PROJECT 14
Slide 15: Phase One upstream-downstream integrated production structure
II. THE PROJECT SPV2: downstream CLP PHASE ONE UPSTREAM-DOWNSTREAM Frankfurt 24Ktpa LHM INTEGRATED PRODUCTION STRUCTURE For personal use only Phase One: expanding upstream capacity, SPV1: upstream G-LEP, building downstream wells, resource. LiCl and energy production Increasing the number of product
Slide 16: The upstream: resource
II. THE PROJECT 1. THE UPSTREAM Höchst Chemical Park: Central Lithium Plant planned location Frankfurt Legend RESOURCE Production license For personal use only Access to the license through Vulcan’s Upper Rhine Valley Brine Field (URVBF), a brine offtake consisting of 15 licenses for a total area
Slide 17: Phase One area
II. THE PROJECT 1. PHASE ONE AREA Höchst Chemical Park: Central Lithium Plant planned location Frankfurt Legend Production license For personal use only Access to the license through a brine offtake Phase One Downstream Lithium and CLP geothermal license Phased growth approach, starting from core
Slide 18: Increasing upstream brine production
II. THE PROJECT 2. INCREASING UPSTREAM BRINE PRODUCTION For personal use only Well-known area • >1,000 oil & gas and 24 deep geothermal wells already completed in the URVBF. • In our Phase One project area, 4 deep geothermal wells have been in operation for more than 10 years. In-house expertise, te
Slide 19: Long life, sustainable upstream production
II. THE PROJECT 2. LONG LIFE, SUSTAINABLE UPSTREAM PRODUCTION For personal use only State-of-the art reservoir management principles from O&G industry • Lithium dilution at the well sites modelled over 30 years and remains above cut-off, with only ~1.6% annual grade decrease. • Production levels cou
Slide 20: Increasing renewable energy production
II. THE PROJECT 3. INCREASING RENEWABLE ENERGY PRODUCTION For personal use only Long established industry with strong growth potential • Geothermal energy: 16GW of power & 107GW of heat capacity deployed worldwide¹ • There are currently 36 geothermal plants operating in Germany, 42 active projects (
Slide 21: Lithium extraction: proven, sustainable methods, in-house IP
II. THE PROJECT 4. LITHIUM EXTRACTION: PROVEN, SUSTAINABLE METHODS, IN-HOUSE IP Commercially proven methods, combined. Testwork phase complete For personal use only Vulcan is using sorption to extract lithium; invented in the ‘70s and used commercially worldwide since 1996, including by top 5 prod
Slide 22: Building new Lithium Extraction Plant (LEP)
II. THE PROJECT 4. BUILDING NEW LITHIUM EXTRACTION PLANT (LEP) For personal use only Phase One commercial: sorption-type LEP • 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
Slide 23: Lithium processing: proven methods, strong partners
II. THE PROCESS 5. LITHIUM PROCESSING: PROVEN, SUSTAINABLE METHODS, STRONG PARTNERS For personal use only Proven chlor-alkali type process, sustainable inputs, no fossil fuels • Vulcan to use the electrolysis process to convert lithium chloride into lithium hydroxide. Electrolysis produces very pure
Slide 24: Building new Central Lithium Plant (CLP)
II. THE PROJECT 5. BUILDING NEW CENTRAL LITHIUM PLANT (CLP) Commercial CLP For personal use only • CLP planned to be located in Frankfurt (Höchst Industrial Park). Close to 100,000sqm secured. • Targeted 24,000tpa LHM capacity with space for further modular expansion. • Conversion of LiCl to battery
Slide 25: Experienced team ready to deliver
II. THE PROJECT 6. EXPERIENCED TEAM READY TO DELIVER Founder of Zero Carbon For personal use only 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 CORE
Slide 26: Target project timeline – Phase One
II. THE PROJECT 7. TARGET PROJECT TIMELINE – PHASE ONE 2023 2024 2025 2026 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 For personal use only DFS Publication Bridging Phase Start of procurement phase Detailed Engineering Start of EPC contract awards Strategic equity funding process Debt funding p
Slide 27: III. Environment, Social, Governance
For personal use only III. ENVIRONMENT, SOCIAL, GOVERNANCE 27
Slide 28: Aiming for lowest CO2 footprint in the lithium industry
III. ESG 1. AIMING FOR LOWEST CO2 FOOTPRINT IN THE LITHIUM INDUSTRY • Vulcan is developing the first and only net zero carbon, zero fossil fuels lithium project in the world1 • Globally significant decarbonisation opportunity through Vulcan’s Zero Carbon Lithium™ Project For personal use only Zero C
Slide 29: Aiming for lowest water and land footprint
III. ESG 2. 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 pro
Slide 30: Other leading ESG credentials
III. ESG 3. 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 Chemic
Slide 31: Permitting progress on track
III. ESG 4. PERMITTING PROGRESS ON TRACK Exploration license 1 Licenses For personal use only Production license 2 Pre-EIA 3 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 P
Slide 32: Societal acceptance
III. ESG 5. SOCIETAL ACCEPTANCE For personal use only 1 The Project is developed in cooperation with local communities, as Vulcan directly engages with them to understand and meet their needs. Vulcan is doing a substantial amount of work to consult as well as educate the public through: 4 2 Info-C
Slide 33: IV. Economics and Financing
For personal use only IV. ECONOMICS AND FINANCING 33
Slide 34: Phase One project value flows
IV. ECONOMICS & FINANCING 1. PHASE ONE PROJECT VALUE FLOWS VUL Lithium hydroxide 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 chl
Slide 35: Capex breakdown
IV. ECONOMICS & FINANCING 2. CAPEX BREAKDOWN1 VUL Phase 1 estimated CAPEX: €1,496M For personal use only €1,174M €322M 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 generati
Slide 36: Global cost curve LHM – projected 2025
IV. ECONOMICS & FINANCING 3. 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
Slide 37: Strategic supply partner contracts
IV. ECONOMICS & FINANCING 4. STRATEGIC SUPPLY PARTNER CONTRACTS For personal use only • 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 40,000 from a basket of fixed, floor-ceiling and fully
Slide 38: Target revenues – 20Y average
IV. ECONOMICS & FINANCING 5. TARGET REVENUES – 20Y AVERAGE1 For personal use only SPV1 SPV2 SPV1 SPV2 Geothermal LEP CLP Phase 1 Heat 3% HCl HCl 2% 1% NaOCl 0% NaOCl 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. *
Slide 39: Target project economics
IV. ECONOMICS & FINANCING 6. 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% 2
Slide 40: Phase One proposed financing strategy and progress update
IV. ECONOMICS & FINANCING 7. PHASE ONE PROPOSED FINANCING STRATEGY AND PROGRESS UPDATE VUL: current entity value • Debt market sounding exercise completed with For personal use only €382M3 positive feedback from banks and ECAs. • Government backed ECAs SPV1 SPV2 from France, Italy and Canada have in
Slide 41: V. Conclusion
For personal use only V. CONCLUSION 41
Slide 42: Short term objectives: an exciting year ahead
V. CONCLUSION 1. SHORT TERM OBJECTIVES: AN EXCITING YEAR AHEAD Operational readiness 01 For personal use only Optimisation plants to commence for operational readiness in 2025 Permits 01 Relevant permits in line with development timeline 01 Increase brine production Start drilling of new production/
Slide 43: Key takeaways
V. CONCLUSION 2. KEY TAKEAWAYS • The first integrated renewable energy, lithium extraction and For personal use only lithium hydroxide refining project development, seeking to supply the battery electric vehicle industry from Europe, for Europe. • World-leading sustainability credentials: engineered
Slide 44: Share price and capital structure
V. CONCLUSION 3. SHARE PRICE AND CAPITAL STRUCTURE ASX : VUL For personal use only Shares on Issue 143,435,301 Performance Shares 91,174 Performance Rights 8,382,801 Market Capitalisation at $5.73 ~$822m (undiluted as at 26 April 2023 ) Cash Position (as at 31 Mar 2023) €112M Top 20 Shareholders ~61
Slide 45: Appendices
For personal use only APPENDICES 45
Slide 46: Appendix 1: Board of Directors
APPENDIX 1: BOARD OF DIRECTORS Dr. Francis Wedin For personal use only Managing Director & CEO Gavin Rezos Ranya Alkadamani Chair Non-Executive Director Founder of Vulcan Zero Carbon Lithium™ Project. Lithium Executive Chair/CEO positions of three companies that grew from Founder of Impact Group Int
Slide 47: Appendix 2: Energy balance
APPENDIX 2: ENERGY BALANCE: NET POSITIVE PRODUCER OF RENEWABLE ENERGY¹ Geothermal Lithium For personal use only Geothermal LEP CLP Phase One MW 40 30 20 10 - Taro Pumps & Piping Lionheart LEP Taro ORC Lionheart ORC* Taro ORC Lionheart Pumps & Piping Taro LEP SPV1 Power Heat production SPV1 SPV2 Powe
Slide 48: 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 For personal use only https://www.linkedin.com/pulse/from-catamarca-qinghai-commercial-scale-direct-lithium-alex-grant/ Lanke Lithium http
Slide 49: Appendix 5: Key risks technology / execution / resource
APPENDIX 5: KEY RISKS TECHNOLOGY / EXECUTION / RESOURCE Risk Description Mitigation For personal use only 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 demo
Slide 50: 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 For personal use only Markets: General demand for lithium hydroxide may decrease as a result of new market or techno
Slide 51: Appendix 6: Key risks general cont.
APPENDIX 6: KEY RISKS GENERAL CONT. Risk Description Mitigation For personal use only 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 un
Slide 52: 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. For personal use only Planned well placement and brine flow rates optimised for sustainable lithium production over
Slide 53: 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 For personal use only Note 2: The weights are reported in metr
Slide 54: 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 For personal use only (saP) Exploration License (geo
Slide 55: Appendix 10: Integrated project delivery model
APPENDIX 10: INTEGRATED PROJECT DELIVERY MODEL Strategy moving towards project execution and delivery model For personal use only Phase One 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 56: Appendix 11: Financial definitions
APPENDIX 11: FINANCIAL DEFINITIONS • CAPEX = Capital Expenditure in tangible and intangible assets For personal use only • EBIT = Earnings before interest and taxes • EBITDA = Earnings before interest, taxes, depreciation and amortisation • IRR = Internal Rate of Return • Net Income (EAT) = Earnings
Slide 57: Appendix 12: The Zero Carbon Lithium Project: a circular process
APPENDIX 12: THE ZERO CARBON LITHIUM�PROJECT: A CIRCULAR PROCESS Lithium hydroxide Phase One For personal use only distributed Downstream CLP: “SPV2” to EU customers CLP in Central Frankfurt- Electric 6 Lithium Hoechst Mobility Plant converting LiCl to LHM Renewable electricity Lithium chloride and/
Slide 58: 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: For personal use only "Vulcan Zero Carbon Lithium™ Project Phase One DFS results and Resources-Reserves Upd
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