27/10/2021 - 11:26

Vulcan forced to answer shortseller

27/10/2021 - 11:26

Bookmark

Save articles for future reference.

A Perth lithium play backed by Gina Rinehart is seeking to fend off claims from a short selling fund that says its namesake zero carbon lithium project in Germany is a “non-starter.”

Vulcan forced to answer shortseller
The project is located in Germany's Upper Rhine Valley. Photo: Herry Dona

A Perth lithium play backed by Gina Rinehart is seeking to fend off claims from a short selling fund that says its namesake zero carbon lithium project in Germany is a “non-starter.”

The junior was asked by the ASX to respond to a report published by US- based J Capital Research, which holds “making short work of over-valued companies” as its mantra.  

The report by J Capital co-founder Tim Murray claims that costs for Vulcan’s planned zero-carbon lithium project in Germany are higher than the company claims and that its environmental impact are “brutal enough” to negatively impact permits.

“They have based highly optimistic assumptions for the project on work done by small consultancies that were owned by management and acquired by Vulcan,” the report read.

In its initial response, Vulcan has said the report is an attempt to profit from shorting Vulcan and that the report’s author had no evident technical qualifications in geothermal energy or lithium.

Vulcan is working to produce what it says could be a world-first zero carbon lithium hydroxide product from its in-development geothermal lithium brine project in the Upper Rhine Valley.

The company has raised $320 million from investors this year with backers including Gina Rinehart's private agricultural and mining business Hancock Prospecting.

“Mr. Murray’s report makes a large number of inaccurate statements and assertions regarding Vulcan and its zero carbon lithium project, in particular its pre-feasibility study published over nine months ago,” the statement from Vulcan read.

Cost estimates from September put the project's full CAPEX at €1.1 billion ($A1.5 billion).

Vulcan has since entered a trading halt while it prepares a full response to the report, which is expected on or before Friday October 29.

Vulcan listed on the ASX as Koppar Resources in 2018, before changing its name to Vulcan Energy Resources when it acquired the Vulcan Lithium Project in Germany in 2019.

The company is based in Perth and has a team of 80 staff.

Its shares are up 81.92 per cent in the last six months and last traded at $14.99.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options