Vulcan Energy (ASX:VUL) has announced a $164m institutional placement and a $20m share purchase plan (SPP) to fund key aspects of its Lionheart Project in Germany's Upper Rhine Valley Brine Field.
The company aims to become the world's first carbon-neutral, integrated lithium and renewable energy producer.
The placement will raise $121m from institutional investors and $43m from strategic investors, with the SPP offering existing shareholders an opportunity to participate at the same offer price. The placement price of $5.85 per share represents an 11.9% discount to Vulcan’s last traded price of $6.64.
The SPP will close on 20 January 2025, and shares under the SPP will be issued on 28 January 2025.
About Vulcan and Lionheart
Vulcan Energy is building a fully integrated lithium and renewable energy production system in Germany's Upper Rhine Valley. The Lionheart Project aims to extract lithium from sub-surface brines while co-producing renewable geothermal energy. The company’s in-house VULSORB technology enables direct lithium extraction with low environmental impact, reducing carbon emissions compared to conventional mining methods.
Offtake agreements with Stellantis, Renault, Volkswagen, Umicore, and LG already cover most of the project's first 10 years of production.
Use of funds
Funds raised will be directed towards key execution tasks for the Lionheart Project, including the commencement of Field Development Plan activities, such as rig mobilisation, well drilling, and procurement for FDP execution. Capital will also be allocated to engineering, procurement, and construction contracts for the development of the Organic Rankine Cycle geothermal plant, a lithium extraction plant, and a central lithium plant.
Additionally, proceeds will be used for critical execution-related expenditures, such as the acquisition of land, establishment of sites, and key supply agreements. Operating expenditure is also included in the funding allocation, with proceeds supporting operational activity and placement costs.
Broader financing
The equity raise is part of a broader financing strategy for Phase One of the Lionheart Project. The total funding requirement for Phase One is estimated at €2.2bn ($3.61bn), covering capital expenditure, financing costs, owner’s costs, debt service reserve accounts, ramp-up costs, and contingencies.
Vulcan is targeting €1.5bn to €1.6bn in debt financing, including loans from the European Investment Bank, Export Finance Australia, Export Development Canada, and commercial lenders. It has already received conditional approval for €120m in debt funding from Export Finance Australia.
On the equity side, Vulcan is targeting to raise €625m to €725m through strategic partnerships, public equity raises, and government funding. Recent grants from the German government and the European Recovery and Resilience Facility have already contributed €100m to the project.
