Vulcan ASX Boosts Confidence in Lithium Resource Ahead of PFS

  Email Published On: 12-11-2020 10:00 a.m.

2 minute read

Our Top Pick of 2020, Vulcan Energy Resources Ltd (ASX: VUL) has just announced an increase in its Lithium Brine resource.

VUL is the biggest holding in our portfolio.

Before today, VUL already had the largest lithium resource in Europe.

Now, VUL’s Upper Rhine Valley lithium brine resource is estimated to collectively contain 16.19 Mt Lithium Carbonate Equivalent (LCE) at a grade of 181 mg/l Lithium.

Today’s announcement tells us that its Taro resource has grown by 60% since VUL released the maiden resource in August and has upgraded a significant portion of the Taro resource to the “Indicated” category.

What does this mean?

As far as resource project development is concerned, the “Indicated” resource category shows a much higher degree of confidence in the resource estimate, while “Inferred” is a lower confidence measurement and is much more speculative.

The large resource size is significant as it provides Vulcan with the opportunity to become a major supplier of lithium chemicals into European Union battery markets.

Vulcan aims to use its project to produce the lowest CO2-equivalent footprint lithium hydroxide for electric vehicles in the world, from its unique Zero Carbon LithiumTM Project in the Upper Rhine Valley.

Why does today’s news matter?

Increased confidence in a large portion of the Taro Lithium Brine resource to a JORC Indicated category is required for the Pre-Feasibility Study (PFS).

With an increased confidence in the amount of lithium in the ground, it will make the project much more feasible and bankable when it comes to moving forward to production.

This means the PFS will be more attractive economically, demonstrating better investment returns.

How did VUL do this?

  1. In March this year, VUL purchased a high quality seismic dataset on Taro earlier in the year - which has clearly now paid dividends.
  2. In August, VUL acquired the Taro exploration license to add to its total Lithium Brine position in the Upper Rhine Valley, Germany.
  3. VUL have used the dataset to increase the “confidence” in a large portion of the Taro resource, to JORC Indicated category that can be used in the PFS.
  4. Also worth noting is the Inferred part of the Taro resource has also grown with the new interpretation from the data.

The PFS should be the next major catalyst, and this could well see the stock trading at Alster Research’s recent price target of $2.45.

Vulcan Energy Resources