'Well positioned': Why the Vulcan share price is climbing today

Vulcan posted a largely positive activities report despite burning 9.81% of its cash in the September quarter.

| More on:
A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Vulcan yielded the best lithium hydroxide samples to date via its phase 1 definitive feasibility study
  • A new deputy CEO, Cris Moreno, was appointed
  • To help offset the energy crisis in Europe, Vulcan is producing green power from its Insheim geothermal renewable energy plant

The Vulcan Energy Resources Ltd (ASX: VUL) share price is up 0.69% amid the company posting its quarterly activities and cash flow reports for the September 2022 quarter this morning.

Shares of the ASX lithium stock are currently trading for $7.32 apiece. Earlier, they hit a high of $7.38 and a low of $7.18.

Let's go over the highlights of these reports from the lithium developer.

What did Vulcan Energy Report?

  • Net cash used in operating activities: €5.13 million ($7.97 million)
  • Net cash used in investing activities: €12.52 million ($19.45 million)
  • Cash and cash equivalents down 9.81% from the previous quarter to €158.20 million ($245.79 million)
  • Estimated quarters of funding available: 15

One of Vulcan's highlights for the September quarter was the beginning of on-site works at its sorption demo plant in Landau, Germany. This site will be important for training its staff in a pre-commercial setting.

Another achievement was producing "the highest grade lithium hydroxide samples that [Vulcan] has yielded to date". These were produced through its phase 1 definitive feasibility study that should be completed by the end of Q1 FY23.

Meanwhile, work also commenced at its Insheim and Landau-Süd licence areas to create an integrated lithium and geothermal energy project in the future.

What else happened in the September quarter?

A binding agreement was made with Enel Green Power for exploring geothermal lithium in Italy.

The company's first sustainability report was released covering the financial year of 2022. The report focused on climate-related financial disclosures (TCFD) and Vulcan's approach to sustainability practices.

Vulcan appointed a new deputy CEO, Cris Moreno, who has worked on lithium hydroxide and battery cathode plants in Europe.

What did management say?

Vulcan's managing director and CEO Francis Wedin said:

With winter approaching, and as Germany and Europe grapple with an energy crisis, Vulcan is making a positive impact by generating baseload, renewable power from our Insheim geothermal renewable energy plant. We are focused on delivering a significant contribution to renewable energy supply in Europe, by developing multiple large-scale renewable heat and power projects across the Upper Rhine Valley Brine Field.

As global supply chains continue to be challenging, Vulcan is leveraging our strong cash position to be strategic and proactive in procuring long lead items and key equipment. Our drilling company, Vercana, has secured long lead items required for the first drilling project and orders have been placed for all key equipment for the electrolysis demonstration plant, LiLy.

Vulcan Energy share price snapshot

The Vulcan Energy share price is down around 29% year to date. That's more than the S&P/ASX 200 Index (ASX: XJO), which has lost 8% over the same period.

The company's market capitalisation is around $1.04 billion.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Fortescue shares fall despite record-breaking first half performance

Not even a record-breaking performance was enough to please investors.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why this $2.3 billion ASX 200 mining stock just crashed 9%

Investors have been quick to hit the sell button today. But why?

Read more »

two young mining apprentices wearing their high visibility gear and hard hats stand together smiling.
Materials Shares

Are BHP shares dirt cheap?

A leading broker has given its verdict on this mining giant following its update.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Materials Shares

Big returns! Broker tips Liontown shares to double in value

This lithium miner could be heading higher from here according to one broker.

Read more »

Two young African mine workers wearing protective wear are discussing coal quality while on site at a coal mine.
Materials Shares

Why this expert thinks lithium could be a big deal for Rio Tinto shares

Let’s dig into what lithium could mean for Rio Tinto.

Read more »

Materials Shares

Novonix share price crashes 10% on shock news

Why are investors hitting the sell button on Tuesday? Let's find out what is happening.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Materials Shares

Why are Liontown shares roaring 14% higher today?

Investors are fighting to get hold of this lithium miner's shares. But why?

Read more »

Business people standing at a mine site smiling.
Materials Shares

South32 shares higher on solid half year update

The market has responded positively to the miner's update. Let's dig deeper into it.

Read more »