Vulcan Energy Resources, formerly Koppar Resources, is an Australia-based energy metals exploration company. The company is engaged in developing a combined geothermal and lithium extraction project in the Upper Rhine Valley of Germany. The company’s zero-carbon lithium extraction process uses renewable geothermal energy to power the lithium extraction process and create a renewable energy by-product.
Koppar Resources listed on the Australian Stock Exchange (ASX) on 30 May 2018 raising A$4.5M in its IPO. The managers were Xcel Capital Pty Ltd. Additional share offerings raised A$325m; A$4.8m (30-Jun-2020), A$120m (11-Feb-2021) and A$200m (22-Sep-2021).
On 21 November 2019, Koppar Resources Ltd changed its name to Vulcan Energy Resources Ltd.
On 26 October 2021, J Capital Research issued a report "Vulcan: God of Empty Promises". J Capital believed that Vulcan had pumped its stock and misled investors with a preliminary feasibility study promoting the company's future project, in Germany. The report allegations included:
- the study was based on highly optimistic assumptions on work done by small consultancies that were owned by management and acquired by Vulcan.
- the costs were higher than the company claimed, output would be lower and the quality of the lithium resource was low.
- output would be lower, the environmental impact would be brutal enough that public outcry would block permits. This had happened before in the area.
- the company's management team had been failing at similar projects for nearly two decades.
- Vulcan’s management team had low-balled the costs, thus making the project look profitable, and overstated the quality of the resource shown in the project’s pre-feasibility study.
- The study was rife with contradictions, presenting contradictory information such as operating costs and discount rates to the German government.
- The company claimed it would have a recovery rate of 90% for the lithium. Other projects were estimating a 70% recovery rate.
On 27 October 2021, Vulcan issued a response which dismissed the report as biased and accused J Capital of seeking to profit from a declining stock price.
On 28 October 2021, the company issued a more detailed response to J Capital's report. It said that the wrong and misleading statements in the report were too numerous to mention. Vulcan’s responded to key claims in the report.
On the same day, J Capital issued a response "Nothing New Here". It noted that Vulcan had failed to show that the original report contained wrong and misleading statements. J Capital also listed what it believed investors needed to ask:
- Did Vulcan have a reasonable path to a profitable project? Would it really build and commission its plant? J Capital thought not.
- Aren’t the assumptions about Vulcan’s project—flow rate, lithium recovery rate, and discount rate—highly optimistic and without support? The companies and directors who provided the optimistic assumptions were compensated after doing so.
- Vulcan agreed that community opposition may shut down operations. Why had Vulcan not fully informed investors?
AFR: Is Vulcan Energy’s lithium utopia too good to be true ?, 15 Feb 2021
J Capital: Vulcan Resources - God of Empty Promises, 26 Oct 2021
Vulcan: Response to J Capital report, 28 Oct 2021
J Capital: Nothing New Here, 28 Oct 2021
AFR: Vulcan’s global PR factory pits lithium hopes against short seller J Capital, 8 Nov 2021
Vulcan Energy Resources: Annual Report – YE Jun. 2021
Vulcan Energy Resources: Annual Report – YE Jun. 2020
Koppar Resources: Annual Report – YE Jun. 2019
ASX: Vulcan Filings