Highest grade lithium produced to date

The chemical engineering team of Vulcan Energy Resources (ASX:VUL) has just produced the highest grade, lowest impurity lithium hydroxide to date from its pilot plant.

VUL’s lithium hydroxide pilot plant is located at the commercially operational geothermal renewable energy plant at its Zero Carbon Lithium™ Project in Germany.

In our view, these are solid results — this latest material produced graded 57.1% LiOH, easily exceeding the best-on-the-market battery grade specification of 56.5% LiOH required from offtake customers.

We also note that impurities were well below market specification minimums.

It is the embodied renewable heat within VUL’s brine that allows for it to use the commercially proven sorption method of lithium extraction which produces a very high purity lithium chloride (LiCl) product. This, in turn, enables the use of lithium electrolysis to directly produce very high grade, low impurity lithium hydroxide (LiOH).

The pilot plant has now been successfully operating since April 2021, and it has now produced sufficient data to complete Phase 1 of the Definitive Feasibility Study (DFS), which VUL expects in the first quarter of 2023.

Having been early investors in VUL, holding for over three years now, we are keenly awaiting release of the DFS — it is the key objective that we want to see the company achieve as it will provide further clarity on the project’s economics and development feasibility.

Canaccord Genuity released a note after the announcement. The broker has a speculative buy recommendation and $19 price target on VUL (as compared to the current $6.67 share price). It made note of the product’s low levels of impurities, which it says highlights one of the strengths of using a geothermal DLE process in the production of lithium.

Of course analyst predictions cannot be relied upon alone, they are based on a number of assumptions that may not happen. Always seek professional financial advice and make your own investment decisions.