(Asx: VUL) | Vulcan Energy Resources

Oct 1, 2021

Sentiment: Sideways

Type of Trade: Speculative

Industry: EV - Electric Vehicles - Lithium

Sector: Materials

Vulcan Energy Resources Ltd is focused on lithium supply solutions to European electric vehicles manufacturers. Principally, it is engaged in exploring and developing copper-zinc projects and other mineral opportunities. The company’s projects located in the Trodelag region in Norway, namely the Lokken Project, Tverrfjellet Project, Grimsdal Project, Killingdal Project, and Storwartz Project.

Additionally, the company acquired the Vulcan Lithium Project in Germany which consists of the production of battery-grade lithium hydroxide from geothermal brines. Its operating segment includes Energy metals exploration in Germany; Copper and zinc minerals exploration in Norway and Administration.

Vulcan Energy is aiming to decarbonise the transition to electric mobility, through its world-first Zero Carbon Lithium™ business for electric vehicle batteries, and its renewable energy business.

Backed by a team of world-renowned experts in chemistry, engineering and geology, the company aims to produce the world’s first, premium, battery-quality lithium chemicals with zero carbon footprint, by harnessing renewable geothermal energy to drive lithium production, without using evaporation ponds, mining or fossil fuels.

✅ Europe currently produce no lithium;

✅ 80% of Lithium comes from China;

✅ Non mining and zero carbon emission lithium production .

✅ Vulcan Project contains the largest lithium resources in Europe.

✅ Vulcan is set to build multiple plans across the region.

✅ Strategically located in Europe the second fast growing market in the World.

✅ Supported By EU funding, regulation & initiatives.

🚩 Set to start production and commercialisation in 2024. This red flag comes as the lead time is quite longer compared to Argosy Minerals that has already been producing and Core Lithium which is set to start producing in 2022.

Comparison to other process

Through wells into the deep sub-surface, hot, lithium-rich brine from our project area is pumped to the surface.

  1. Vulcan use renewable heat derived from our geothermal brine to drive the lithium extraction process, with no fossil fuel consumption.
  2. Vulcan will produce a surplus of renewable energy, decarbonising the grid.
  3. Vulcan will produce a unique, premium, battery-quality hydroxide product for EVs, zero carbon footprint.
  4. The spent brine then gets re-injected in a closed-loop cycle.

Company has signed offtake agreements with LG Energy Solutions and Renault Group.

✅ Huge opportunity for further agreements once the first samples of battery quality lithium hydroxide is produced.

✅ Huge cost advantage compared to other producers such as Orocobre, Yahua, Piedmont, and others.

✅ Vulcan to offset CO2 Penalties for Automakers, which could be soon be affected by EU legislation to lead to heavy penalties if carmakers are not sourcing greener raw materials. In this case, another technology that comes in place is Lake Resources Kachi Project.

✅ Project Finance to offer huge upside compared to energy business with Dual Revenues.

Comparison to other Australian Producers

Technical Analysis

SP has risen a fantastic 999% in the last 52 weeks, providing investors an incredible high capital growth. The stock is continuing forming higher highs and lower highs, confirming its uptrend. In the last 12 months we saw 5 SP pullbacks:

  • 62% in February
  • 22% in June
  • 13% in July
  • 22.33% in August
  • 22% in September.

An average of 28%, meaning that any pull back larger than 28% could be a relatively good entry opportunity or to accumulate.

🚩 SP is now trading under SMA after a bearish intersection level 1

🚩 Red Candles on the Heiken Ashi, shows that stock is still into correction mode.

✅ Buying a growth bullish stock under SMA means buying at relatively cheap or fair price.

✅ Volume is decreasing on the downside, which could eventually reach the bounce back candle.

✅ Strong trend to the upside, remember, trend is the friend of the trade.

Overall, the stock is currently out of the FOMO area and offer a reasonable good entry opportunity for long term investor.

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