Why the Vulcan Energy (ASX: VUL) share price charges 6% higher
the Vulcan Energy Resources Ltd The share price (ASX: VUL) performed very well on Thursday.
In afternoon trading, shares of the Europe-based lithium developer rose 6% to $ 8.35.
Incredibly, this means that the Vulcan Energy share price is now up over 200% since the start of the year.
Why is the Vulcan Energy share price higher today?
A number of lithium producers are climbing higher today, although there is no real news from the industry to speak of.
The tastes of Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE), and Pilbara Minerals Ltd (ASX: PLS) are all recording solid gains.
So the current gain in Vulcan Energy’s share price may have more to do with it than releasing its quarterly update this afternoon.
What does Vulcan Energy bring in?
Since the company is still a long way from producing lithium in Zero Carbon Lithium Project in Germany, his quarterly report was more of a reminder of what he achieved during the quarter. And he certainly accomplished a lot!
During the quarter, the company undertook the pre-feasibility study (PFS) for the Zero Carbon Lithium project.
This PFS has shown great potential to develop a cutting-edge project, combined renewable energy and lithium hydroxide, in central Europe, with a net zero carbon footprint.
The study also estimates that the entire project has a positive net present value (NPV) after tax of 2.25 billion euros.
It also has options to stagger its developments, with the first phase estimated at a NPV of 700 million euros and phase two at a NPV of 1.4 billion euros.
The company also successfully completed a $ 120 million placement, with strong backing from institutions focused on ESG. Interestingly, the basic investment was provided by Hancock Prospecting. It is one of the most successful private companies in Australian history, led by Executive Chairman Gina Rinehart.
These funds will be used for project development, feasibility study costs and permits, drilling site acquisition and preparation, and strategic opportunities to accelerate project development. Regarding the latter, Vulcan has indicated that it is evaluating options to acquire the existing infrastructure in Germany in order to accelerate development.
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Motley Fool Contributor James mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia does not have a position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article only contains general investment advice (under AFSL 400691). Authorized by Bruce Jackson.