A critical production test at Vulcan Energy’s first new Lionheart well in the Upper Rhine Valley has delivered results significantly ahead of the company’s base development plan. The success provides substantial confidence in the timeline for Phase One of the fully-funded lithium extraction project.
Well Performance Surpasses Expectations
Data from the LSC-1b Sidetrack well indicates a potential brine production capacity of 105 to 125 liters per second. This output notably exceeds the 84 to 94 liters per second that formed the foundational assumption in the existing field development plan (FDP). The performance represents an improvement of approximately 25% to 33% over initial projections.
These results serve a dual purpose: they confirm the anticipated subsurface geological and thermal conditions, while simultaneously bolstering the engineering framework for Phase One of the Lionheart initiative. The test successfully addresses a prior technical completion issue reported in November 2025, which had temporarily prevented a full demonstration of production potential despite positive initial lithium concentration data.
Key Test Highlights:
* Achieved Flow Rate: 105–125 liters per second
* Original FDP Assumption: 84–94 liters per second
* Performance vs. Plan: 25–33% above target
* Outcome: Subsurface model and reservoir data validated, supporting Phase One execution.
Fully Funded 2.2 Billion Euro Project Advances
The Lionheart project’s financing, secured in December 2025, totals 2.2 billion euros. It aims for an annual production capacity of 24,000 tonnes of lithium hydroxide monohydrate (LHM), a volume sufficient for roughly 500,000 electric vehicle batteries per year. Commercial production is slated to commence in 2028.
Beyond lithium, the operation is designed to generate substantial renewable energy by-products over its planned 30-year lifespan: 275 GWh of power and 560 GWh of heat annually for local offtakers.
Consortium Backing and Government Support
A broad consortium of financial institutions is backing the venture. The European Investment Bank is contributing 250 million euros. They are joined by commercial lenders including ABN AMRO, BNP Paribas, ING, KommunalKredit Austria, Natixis, OCBC, and Unicredit. Export credit agencies from France, Canada, Australia, Denmark, and Italy are also providing support. Furthermore, the German federal government has granted subsidies totaling 204 million euros.
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Management Compensation Realigned for Construction Phase
With the project transition from development to construction, Vulcan Energy adjusted its executive remuneration structure effective January 1, 2026. The company cited the finalized overall financing package and the start of construction in December 2025 as key triggers for the board compensation review.
Share Price Volatility Persists Amid Operational Progress
Despite the positive operational update, the company’s shares have exhibited continued volatility. The current price is approximately 4.46 AUD, marking a decline of nearly 30% over the past 90 days. On a year-to-date basis, however, the stock shows a modest overall gain of about 2.5%.
Financial Metrics Snapshot:
* Price-to-Book Ratio: 3.8x
* Direct Peer Average: 6.9x
* Australian Metals & Mining Sector Average: 2.8x
* Net Loss FY 2024: 42.4 million euros
* Net Loss H1 2025: 30.7 million euros
These figures underscore that Vulcan remains in a pre-revenue investment phase, incurring losses as it advances projects toward commercial production.
Strategic European Supplier in the Making
Vulcan’s “Zero-Carbon Lithium” strategy—extracting lithium from geothermal brine while co-generating renewable energy—positions it as a potential key supplier under the European Union’s Critical Raw Materials Act. Phase One of Lionheart is projected to meet roughly 12% of Europe’s anticipated lithium hydroxide demand by 2030.
Construction work at the German sites in Landau and Frankfurt-Höchst is expected to take approximately two and a half years. The company’s proprietary VULSORB® technology has already produced battery-grade lithium in optimization plants since April 2024. The corporate focus is now decisively shifting from proving technical feasibility to executing large-scale industrial deployment.
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