On Monday, Vulcan Energy Resources Ltd [ASX:VUL] put itself into a trading halt.
A request made prior to the release of their long-awaited preliminary feasibility study (PFS), a document which was analysing the viability of their ‘Zero Carbon Lithium’ project.
Well, today that PFS has been released. And with the Vulcan Energy share price soaring 34% higher at time of writing, you know it was a good result.
Let’s dig into the details.
Double-dipping the renewable and lithium booms
Based out of the Upper Rhine Valley in Germany, Vulcan’s proposed mine/energy facility is the epitome of cutting edge.
Not only has the PFS shown that they can extract and produce lithium cheaper than current competitors, but they can also do so without any harmful impacts to the environment.
In other words, it’s a massive win-win for Vulcan. As Managing Director, Dr Francis Wedin, explains:
‘The PFS has demonstrated robust economics for both the lithium and energy parts of the project, both independently and combined.
‘This means that there doesn’t need to be a compromise on the ethical and environmental sourcing of battery raw materials, for Europe’s current rapid transition to electric vehicles and renewable energy storage. We’ve shown the potential for zero carbon production of lithium hydroxide, with co-production of renewable geothermal energy, to be highly profitable as well as environmentally friendly.
‘2021 should be a transformative year for Vulcan, as we commence our DFS, scale up our lithium extraction piloting and advance discussions with European offtakers for our Zero Carbon Lithium product.’
Clearly, this is a major breakthrough. One that could completely upend the lithium market as we know it. At least in Europe, for the time being.
Because if this mine goes ahead, and lives up to these expectations, it will be a game changer.
For that reason, investors have plenty of reasons to be pleased. Because the staggering gains this stock has made recently may be just a taste of what is to come.
What’s next for Vulcan?
Before I get too ahead of myself though, you do need to be aware that there is a lot of work ahead for Vulcan.
This PFS is just the start of much longer journey. One that, as Dr Wedin notes, will require a definitive feasibility study (DFS) before any commitments. Something that they will be looking to wrap up as soon as possible, I imagine.
So, it could be a while before Vulcan technically becomes a producer.
Nevertheless, they’ve got an exciting opportunity on their hands. One that could net early investors a whole of gains.
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For Money Morning