Lithium, geothermal energy upside, and exposure to the EU – once the world’s most EV-enthusiastic jurisdiction, until China overtook them in the right lane earlier this year.
Still, the EU is miles ahead of Australia when it comes to EV uptake, and the aforementioned combination of factors has log been the fundamental value premise driving interest in Vulcan Energy Resources (ASX:VUL).
For the uninitiated: Vulcan is building a lithium plant in Europe that uses geothermal energy and novel downstream technologies to ultimately boast a zero-carbon lithium battery materials project, at least on a Scope 1 basis.
To that end, the company has today reported it’s kicked off the final financing stage needed for its project, reporting strong interest from “Tier 1 banks,” among which is included the European Investment Bank and other major export banks.
Clearly, lithium prices entering a valley of despair hasn’t hurt morale at Vulcan (and nor has it shaken confidence in the stock among ASX traders.)
Sidebar: if you want proof lithium is currently going through a blue era, don’t even look at the charts for carbonate – just note Pilbara Minerals (ASX:PLS) is still the most shorted stock on the ASX, and has been for so long I’ve lost track of when that became the quo.
But don’t let the idle vapourings of a mind diseased coming from this ASX journalist colour your thinking – just look at the numbers, which paint a story of optimism.
In short: the market is liking what Vulcan is telling them.
Notably, the stock has smashed through the $5/sh barrier it’s been battling for around a year to reach $5.20/sh at 11.30AM AEST on Friday – an impressive feat for a company that’s been struggling to rise above $2/sh for most of this year.
The numbers are worth looking at for all those cursed with stock-watching – shares in VUL are up 82% YTD and up 21.3% YoY. The company keeps this up, they’ll be back in billion-dollar-valuation land before too long. At 11.30AM, VUL is boasting a cap of $893.05M.
While far from its 2021 highs at nearly $16/sh, the 2024 story for Vulcan is one of optimism on all ends.
Back in April, and not hurting matters at all, the company announced its commencement of Europe’s first local-supply lithium chemical production, after opening its lithium extraction plant in November 2023.
The company has since won approval from the relevant authorities in Germany to go ahead with its geothermal assets, the lifeline to “green status” for the project.
“This is an exciting period for the Company, and we look forward to entering the formal discussion stage of our Finance Process with such exceptional and well aligned financing partners,” Vulcan CEO Cris Moreno said on Friday.
VUL last traded at $5.19/sh.