ANNUAL
REPORT
1 JULY TO
31 DECEMBER
2022
ABN 38 624 223 132
CONTENTS
VULCAN’S ANNUAL REPORTING SUITE
MESSAGE FROM THE CHAIR
MESSAGE FROM THE CEO
ABOUT VULCAN
VULCAN’S PURPOSE
BOARD OF DIRECTORS
VULCAN’S LEADERSHIP TEAM
OPERATING AND FINANCIAL REVIEW
RESERVES AND RESOURCES
SUSTAINABILITY
CORPORATE GOVERNANCE
DIRECTORS' REPORT
REMUNERATION REPORT
AUDITOR'S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR'S REPORT
ADDITIONAL ASX INFORMATION
APPENDIX
CORPORATE DIRECTORY
3
4
6
10
13
14
15
16
18
32
56
61
75
104
105
175
179
182
191
VULCAN’S ANNUAL
REPORTING SUITE
1 JULY 2022 TO 31 DECEMBER 2022
This Annual Report (Report) forms part of the Company’s
Global Reporting
Initiative
(GRI) Standards and the
Annual Reporting Suite for the period 1 July 2022 to
recommendations of the TCFD. Vulcan is a signatory to the
31 December 2022, which includes the Annual Report,
United Nations Global Compact (UNGC), and this Report
Sustainability Report, Group Management Report
outlines the Company’s ongoing commitment to ensuring
(Konzernlagebericht), Taskforce on Climate
related
progress towards the ten principles of the UNGC.
Financial Disclosure Report
(TCFD) and Corporate
Governance Statement. This Report covers Vulcan’s
All references to Vulcan Energy Resources, Vulcan, the
operations,
including
those under exploration and
Company, Vulcan Group, or the Group are in reference to
development and those operated through subsidiaries as
Vulcan Energy Resources Ltd (ABN 38 624 223 132) and its
well as our strategic approach to sustainability.
subsidiaries. All information and references in this Report
are related to the half financial year, 1 July 2022 to 31
Vulcan is dual listed on the Australian Securities Exchange
December 2022, unless otherwise stated. The Materiality
(ASX), and the regulated market of the Frankfurt Stock
Assessment has been achieved with the assistance of
Exchange (FSE), in the Prime Standard market segment.
global consultancy firm ERM. The TCFD component has
Consistent with the regulatory and reporting obligations
been completed with the assistance of consultancy firm,
of the FSE, Vulcan’s annual reporting suite also includes
Baringa. The sustainability data provided in this Report
the Group Management Report (Konzernlagebericht). The
has not been externally assured. For any questions about
Konzernlagebericht has been prepared in accordance with
Vulcan's sustainability approach, please contact info@v-
the Deutscher Rechnungslegungs Standard Nr. 20 (DRS 20).
er.eu or visit https://v-er.eu/.
This Report
incorporates our updated Sustainability
Report for 1 July 2022 to 31 December 2022, developed
with reference to
industry standards
including the
3
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 MESSAGE
FROM CHAIR
THE 6 MONTH PERIOD, 1 JULY TO 31
DECEMBER 2022, SAW YOUR COMPANY LED
BY DR FRANCIS WEDIN TRANSITION FROM A
DEVELOPMENT COMPANY TO AN INTEGRATED
PROJECT EXECUTION COMPANY. VULCAN
IS NOW FIRMLY IN THE PHASE TO LEAD THE
DECARBONISATION OF TWO TRADITIONALLY
CARBON INTENSIVE INDUSTRIES IN ENERGY
AND BATTERY RAW MATERIALS.
GAVIN REZOS
Chair
Vulcan aims to be the first in the world to deliver carbon
state governments in the Upper Rhine Valley voicing
neutral, domestically sourced energy and lithium from
their support for regional geothermal-lithium project
Europe for Europe.
development. At a community level, support continues to
grow for geothermal production.
The new era for geothermal
During 2022, throughout Europe, there has been an
increasing recognition and value placed on supporting
The EV evolution
Europe
the
is
fastest-growing electric
vehicle
geothermal energy production. In September 2022, the
manufacturing market in the world. Demand for lithium is
German Federal Ministry of Economic Affairs and Climate
expected to increase 57-fold by 2050, and the EU says it
Action announced a boost for green district heating, the
needs to produce at least 40% of its annual consumption
‘Federal Funding for Efficient Heating Networks’ (BEW).
to meet this demand. The Critical Raw Materials Act
Up to and including 2026, approximately €3 billion will
released in March 2023 aims to ensure Europe has
be available for renewable heat generation, including
access to the materials needed to meet its target of net
geothermal energy and other heat network infrastructure.
zero greenhouse gas emissions by 2050. Automakers like
This subsidy targets investment to increase the share
Stellantis, Volkswagen and Renault saw this need early
of renewable and climate-neutral heat sources to 25%
and have signed agreements with Vulcan that already see
by 2025 and 30% by 2030. Vulcan has a fully integrated
our first five years of production fully committed. These
drilling, development, and operations team in geothermal,
automakers are like others making the transition to an
including in house deep drill rigs, which makes us uniquely
all electric fleet, with Volkswagen announcing an €180
positioned to potentially benefit from such a funding
billion investment to meet its 2035 all electric production
program. At a state level, the government of Baden-
and be a fully carbon neutral organisation by 2050.
Württemberg launched a ‘Task Force’ aimed at halving the
planning and approval timeline for the commissioning of
new renewable energy projects. This Task Force follows
4
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Focus for 2023
Our core focus at the beginning of 2023 was to
successfully deliver our Definitive Feasibility Study
(DFS) for Phase One of Vulcan’s Zero Carbon Lithium™
Project. With its release, the Company has shifted
swiftly
into project execution mode, ready for
commercial production.
Looking ahead, the Company is determined to deliver
on the following:
f Demonstration plant: Demonstration
scale
production and commercial operation readiness
training for the Vulcan team.
f Funding: Secure funding from a targeted mix of
equity, debt and development grants.
f Permitting: In line with the 2023 project roadmap
and beyond.
f Drilling: Of the new production and re-injection
wells in the Phase One area.
f Execution: Build a project execution model and
put an organisation in place to successfully deliver
on the Phase One execution plan.
Our Board
During the second half of 2022 our Board leveraged its
In parallel, we will stay focused to deliver our
subsequent project phases, including the successful
leadership strength and experience across the lithium,
release of our Phase Two DFS later in 2023. Then for
geothermal, German chemical, renewable energy, battery
the longer term, our focus will be on innovation and
supply chain and investment banking sectors to support
growth while always maintaining sight of delivering on
Vulcan’s transition to project execution mode, while
our sustainability commitments.
ensuring focus is maintained on delivering long term
shareholder value.
Our focus during FY22
This half year saw the continued focus on strengthening
Vulcan’s corporate governance framework.
f Vulcan established a Projects Oversight Committee
consisting of three Directors highly experienced in
project management and execution together with
operational management who regularly review and
monitor the status of nominated projects and applying
appropriate corporate governance and risk management
frameworks.
f There was further
implementation of the Target
Operating Model 360 (TOM 360).
THANK YOU
On behalf of the board and
everyone at Vulcan, I thank you all
for your support, and I look forward
to Vulcan delivering valuable
returns for our shareholders in the
coming years and into the future.
f Deputy CEO Cris Moreno started with Vulcan. He will
be based in Europe and focus on advancing Vulcan’s
Zero Carbon Lithium™ Project towards commercial
Gavin Rezos
Chair
production.
5
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 MESSAGE
FROM THE CEO
DEAR SHAREHOLDERS,
WELCOME TO
OUR ANNUAL REPORT AND
UPDATE FOR THE PERIOD 1 JULY TO 31
DECEMBER 2022. I AM IMMENSELY PROUD
OF WHAT OUR TEAM, NOW MORE THAN 280
STRONG AND GROWING, HAVE ACHIEVED
DURING THE 6 MONTH PERIOD, MOST NOTABLY
IN PRODUCING ALL THE DATA REQUIRED
FOR THE FINALISATION OF OUR PHASE ONE
DEFINITIVE FEASIBILITY STUDY (DFS).
DR FRANCIS WEDIN
Managing Director and CEO
During the period, we passed 13,000 hours of pilot plant
have also agreed with a French toll manufacturing company
operation at our commercially operating geothermal wells
to make the sorbent for us, which they have already done
and plant, demonstrating that the widely used commercial
so for our commercial demonstration plant. In doing so:
process of lithium sorption works very well, as expected,
to extract the lithium from our brine. In November, we
f We have generated significant intellectual property
confirmed the highest grade, lowest impurity lithium
for lithium extraction technology in-house at Vulcan, in
hydroxide (LiOH) produced to date from our pilot plant.
contrast to some of our peers who outsource lithium
Since the heat used to drive this process is renewable
extraction technology to “technology providers”, and;
and embodied within the brine, as opposed to existing
commercial projects which use gas and large quantities
f We have on-shored one of the most important parts
of reagents, we are able to drive the lithium extraction
of our supply chain in Europe and reduced reliance on
and keep to the carbon neutral nature of our process. This
foreign supply chains, since most commercially available
means that, when our commercial plant is up and running,
lithium sorbents are either manufactured in China or
we will be actively decarbonising lithium supply for electric
Russia.
vehicles.
In December, Vulcan received approval from the state
During the period, we announced the development
authority in Rheinland-Pfalz, Germany, for the Operating
of VULSORB™, our own in-house sorbent for lithium
Plan for Vulcan’s lithium extraction Demonstration Plant
extraction. This is an alumina-based sorbent, belonging
(Demo Plant). The Demo Plant is on track to be completed
to the same family of lithium sorbents commercially used
mid-2023 and will train Vulcan’s team in a pre-commercial
globally in the lithium industry that we have also tested
setting prior to commercial start of production. This is
and proved works on our brine, but we have refined and
critical to ensure a smooth ramp up when commercial
improved its performance with our in-house expertise. We
operations begin. Encouragingly, we have seen multiple
6
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 permit approvals for our project during the period
Vulcan finished the 6-month reporting period in a strong
including the Operating Plan for the Demo Plant, as well
position with €134 million cash (A$209 million) on hand
as a number of preliminary EIA approvals for our planned
on 31 December 2022.
developments. These preliminary EIAs mean that, for
these parts of our project, no full EIA is required, due
to the extremely small footprint and environmentally
Reflections on the European Market
Lithium: Europe has zero local supply of the lithium
benign nature of our projects. This is a testament to the
hydroxide it needs for battery production. Predications
environmental credentials of our project, which is core to
from the EU are that Europe will see a 57-fold increase in
who we are.
lithium demand in the coming years. Currently nearly 80
per cent of lithium hydroxide comes from China. Lithium
In addition to our Phase One Zero Carbon Lithium™
is the lifeblood of the European auto industry’s present
Project advancements throughout the year, we welcomed
and future. As one of the largest industries in Europe, the
Cris Moreno who has joined Vulcan as Deputy CEO. Cris
situation is critical.
has a unique CV, having executed large LNG project
developments before turning his attention to lithium
Geothermal: The Upper Rhine Valley Brine Field (URVBF) is
hydroxide and battery cathode plants in Europe. His
one of the hottest geothermal resources in Europe, where
shared project discipline within both sectors and
Vulcan is already commercially producing renewable,
experience in delivering major projects in Europe like
baseload energy from its operations. Vulcan is one of the
our integrated, renewable energy and lithium hydroxide
largest geothermal developers in Germany and is ramping
project, is significant for Vulcan. In many ways, our project
up, aiming to supply a million households with renewable
is like a simpler version of an integrated oil and gas project,
energy by 2030. In September 2022, the Federal Ministry
minus the fossil fuels. Based in Europe, Cris will work with
of Economic Affairs and Climate Action announced a boost
the team across Germany and Australia, supporting the
for green district heating, the ‘Federal Funding for Efficient
transition to projection execution phase and delivery of
Heating Networks’ (BEW)1. In the period up to and including
our highly technical and globally unique project.
2026, approximately €3 billion will be made available for
1 Boost for green district heating: Federal funding for efficient heat networks (BEW) begins. https://www.bmwk.de/Redaktion/EN/Pressemitteil
ungen/2022/09/20220915-boost-for-green-district-heating-federal-funding-for-efficient-heat-networks-bew-begins.html 15/09/2022
7
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 renewable heat generation like geothermal energy. This
off-take guarantees for technology made in Europe. The
subsidy scheme will support the country’s long-term
NZIA covers geothermal projects, so we expect to benefit
energy transition, increasing the share of renewable
from this as well, within our integrated renewable energy
and climate-neutral heat sources to 25% by 2025 and
and lithium project development.
30% by 2030. The German Federal Government wants to
develop 100 new geothermal projects by 2030. Vulcan has
a fully integrated geothermal drilling, development, and
Focusing on the year ahead
Our DFS is the cornerstone framework for Vulcan’s
operations team in-house, including in-house rigs, which
progress towards financing and project execution. It
makes us uniquely positioned to benefit from this.
signifies our transition from a development company
towards an integrated project execution and production
During the second half of 2022, we saw tangible action
company. We believe Vulcan's Zero Carbon Lithium™
from Europe towards driving critical raw material
Project is crucial for Europe, and will help to alleviate
independence. This resulted, in March 2023, the European
the energy crisis, lessen the climate emergency through
Commission releasing two complementary Acts (the
decarbonisation of energy and lithium production, and
Critical Raw Materials Act and the Net-Zero Industry Act)
mitigate the lithium supply issues for the electrification
which will form part of the broader Green Deal Industrial
of the European auto industry.
Plan designed to enhance Europe's net-zero industry and
support the fast transition to climate neutrality by 2050.
2023 will be transformative for us. We have commenced
These Acts are likely to provide significant tailwinds for
the financing process for our commercial development,
Vulcan Energy's Zero Carbon Lithium™ Project.
led by BNP Paribas, and will start to order commercial long
lead items for the project to keep to our time schedule.
The Critical Raw Materials Act focuses on strengthening
We will be commissioning our commercial demonstration
EU capacities along all stages of the strategic raw
plants to train our team in a pre-commercial environment
materials value chain, including extraction, processing,
and will continue our permitting process in line with our
and recycling. The Act will provide a “One-Stop Shop” for
development timeline for 2023 and beyond. To increase
permitting, where each Member State must designate
the current brine flow we have from the existing wells
a single authority to process all permits for critical raw
in the core of our Phase One development area, we will
materials projects. Permitting will have fixed timeframes
commence drilling of new production/re-injection wells
that cannot be exceeded. There will also be further
with our in-house team. Whilst remaining disciplined on
acceleration for projects that are deemed “strategic”,
executing Phase One, we will make sure that we progress
and priority will be placed on sustainable projects.
the next phase of development, so our project pipeline
Better access to financing will also be made available.
continues to grow.
Since Vulcan is developing the largest lithium resource
in Europe, with sustainability and net zero carbon at our
As always, I would like to thank you and the entire Vulcan
core, we believe we are uniquely positioned to benefit
community for your continued support. We look forward
from this.
to keeping you up to date with our latest developments
throughout the year as we continue to methodically
Under the Net-Zero Industry Act a “One Stop Shop”
execute on our plan to deliver the world’s first integrated
for permitting will be enabled with set time limits for
renewable energy and Zero Carbon Lithium™ Project.
permitting applications from submission, as per the
CRMA. Projects identified as ‘Strategic Projects’ will gain
access to financial support to address financing gaps in
the form of guarantees to decrease borrowing costs and
Dr Francis Wedin
Managing Director and CEO
8
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 “
WE ARE RAPIDLY TRANSFORMING
TOWARDS BEING AN INTEGRATED
PROJECT EXECUTION AND
OPERATIONS COMPANY. WE HAVE
AN EXCITING YEAR AHEAD OF US.
9
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 ABOUT
VULCAN
FOUNDED IN 2018, VULCAN’S UNIQUE ZERO
CARBON LITHIUM™ PROJECT AIMS TO
DECARBONISE LITHIUM PRODUCTION BY
DEVELOPING THE WORLD’S FIRST NET ZERO
CARBON LITHIUM BUSINESS WITH THE CO-
PRODUCTION OF RENEWABLE GEOTHERMAL
ENERGY ON A MASS SCALE.
“
VULCAN IS PLAYING ITS PART IN
DISRUPTING AND DECARBONISING
TWO TRADITIONALLY CARBON
INTENSIVE INDUSTRIES, IN ENERGY
AND BATTERY RAW MATERIALS.
Vulcan’s combined geothermal energy and
lithium
As a motivated industry disruptor, Vulcan will leverage
resources represents the largest lithium Resource in
its expert multidisciplinary team,
leading technology,
Europe at 26.6 Mt LCE, with licence areas focused on the
and position in the European electric vehicle (EV) supply
Upper Rhine Valley of Germany and France. Strategically
chain in its aim to be the global leader in producing zero
placed in the heart of the European electric vehicle
fossil fuel, carbon neutral lithium while aiming to be nature
market to decarbonise the supply chain, Vulcan is rapidly
positive.
advancing the Zero Carbon Lithium™ Project aims to meet
timely market entry, with the ability to expand to meet the
Vulcan aims to be the largest, most preferred, strategic
unprecedented demand that is building in the European
producer and supplier of lithium chemicals and renewable
markets.
power and heating from Europe for Europe, to empower a
net zero carbon future.
Guided by our Values of Integrity, Leadership, Future-
focused and Sustainability, and united by a passion
for
innovation, Vulcan has a unique, world-leading
development, execution, and operations team in the fields
of lithium chemicals and geothermal renewable energy.
Vulcan is committed to partnering with organisations
that share its decarbonisation ambitions and has binding
lithium offtake agreements with some of the largest
cathode, battery, and automakers in the world.
10
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Defining 'Zero Carbon'
Vulcan defines ‘Zero Carbon’ as net zero carbon emissions
while South Pole certified Vulcan Energie Ressourcen
resulting from the activities undertaken to extract and process
GmbH, and its subsidiaries, Vulcan Energy Engineering
lithium from its combined lithium and geothermal brine
GmbH and Vulcan Energy Subsurface Solutions GmbH
resource located in the Upper Rhine Valley, Germany. Unlike
(originally called Gec-co and Geo-T, respectively). South
existing lithium operations, Vulcan aims to not burn fossil
Pole’s assessment did not include Vercana, Vulcan’s
fuels in the production and processing exercise. Instead,
electric drilling subsidiary, because it had been recently
it will use its own geothermal renewable heat source to
incorporated and was a shell company, or, the Natürlich
drive the process, whilst also selling its own geothermal
Insheim plant as the acquisition of Natürlich Insheim
heat and power to the grid, displacing fossil fuel generated
occurred post certification. These entities will be included
energy. The carbon emissions avoided as a result of the
in the next assessment round currently being undertaken
displaced fossil fuel generated energy allows Vulcan to
by Climate Active and will be reported on in Vulcan’s next
define the project as net zero, or ‘Zero Carbon’ per the
report. This assessment will include the development
project’s trademarked nomenclature, the ‘Zero Carbon
and construction activities associated with the build
LithiumTM Project’. Vulcan commissioned Minviro Ltd, an
of the Company’s Demo Plant following the successful
independent consultancy, to undertake an ISO aligned
completion of the DFS.
Life Cycle Assessment (LCA) of the integrated geothermal
energy, lithium production and processing impacts to
Following the Climate Active and South Pole reports,
prove and certify the validity of the carbon neutral nature
and in order to bring the minimal GHG emissions balance
of the Zero Carbon LithiumTM Project. Minviro’s first ISO
associated with the Australian and German operations to
aligned LCA was conducted in 2021, with the latest LCA
net zero, Vulcan purchased good quality carbon credits.
undertaken in 2023 (after the end of the reporting period).
Details of the Company’s carbon emissions associated
LCAs will be updated at regular intervals going forward.
with the Zero Carbon Lithium™ Project were disclosed to
the market in 2021 (Minviro LCA announcement 4 August
In addition, Vulcan engaged Climate Active and South
2021), GHG emissions associated with Vulcan’s operations
Pole to verify the GHG emissions of the whole Company,
and carbon credits purchases for 2021 were reported in
including
its Australian and German operations
the FY22 Sustainability Report available via the website
respectively. The most recent carbon neutral certification
(httsp://v-er.eu). The GHG emissions associated with
of the organisation’s emissions, which includes business
Vulcan’s operations for 2022 are currently being updated
travel, procurement of goods and services, waste usage
and the updated Minviro LCA data was announced as part
and electricity usage, was undertaken in 2021. Climate
of the DFS on 13 February 2023. Vulcan expects to maintain
Active completed the certification process for Australia,
its carbon neutral status for the period.
11
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 GROUP STRUCTURE
VULCAN IS A TEAM OF MORE THAN 280-STRONG AND GROWING, COMBINING MULTI-
DISCIPLINARY, INTERNATIONAL SCIENTIFIC, ENGINEERING, PROJECT EXECUTION AND
COMMERCIAL OPERATION EXPERTISE, PASSIONATELY DRIVEN BY THE DESIRE TO PROVIDE
SUSTAINABLE DECARBONISED LITHIUM AND RENEWABLE ENERGY SUPPLY FROM EUROPE
FOR EUROPE. THE COMPANY IS THE PARENT COMPANY OF VULCAN GROUP. THE FOLLOWING
CHART SHOWS THE STRUCTURE OF VULCAN GROUP.
VULCAN OPERATING STRUCTURE2
AUSTRALIA & GERMANY
Operating
entities
VERCANA
ELECTRIFIED DRILLING
DIVISION
NATÜRLICH
GEOTHERMAL
POWER PLANT
VULCAN ENGINEERING
VULCAN SUBSURFACE
GEOTHERMAL SURFACE
ENGINEERING
DEEP GEOTHERMAL
ENGINEERING
2 Company Operating Structure does not include all holding companies. For further information, please refer to Note 27 in the Financial
Statements
12
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 VULCAN’S PURPOSE
THE WORLD IS IN A RACE TO GET TO NET ZERO AND VULCAN IS PLAYING ITS PART IN
DISRUPTING AND SUPPORTING THE DECARBONISATION OF THE ELECTRIC MOBILITY SUPPLY
CHAIN, THROUGH THE COMPANY’S UNIQUE ZERO CARBON LITHIUM™ PROJECT INCLUDING
RENEWABLE ENERGY AND HEAT PRODUCTION.
PURPOSE
To empower a
net zero carbon
future
STRATEGY
To be global leaders
in the production of
carbon neutral
lithium while being
nature positive
MISSION
To decarbonise
the EV supply
chain
ZERO CARBON
RENEWABLE HEAT & ENERGY
ZERO CARBON
LITHIUM™
TEAM
A world-leading scientific &
commercial team in the
fields of lithium &
geothermal energy
INNOVATION
Adapting existing
technologies to efficiently
extract lithium from
geothermal brine
SUPPLY CHAIN
Strategically placed in the
heart of the European EV
market to decarbonise
the supply chain
13
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 BOARD OF DIRECTORS
VULCAN’S BOARD OF DIRECTORS HAVE DECADES OF LEADERSHIP EXPERIENCE AND EXPERTISE
IN THE FIELDS OF LITHIUM, GEOLOGY, CHEMICALS, RENEWABLE ENERGY, BATTERY SUPPLY
CHAIN, PROJECT EXECUTION AND INVESTMENT BANKING. THE EXPERTISE ON THIS BOARD WILL
SUPPORT THE INTENDED TRANSITION OF VULCAN FROM A DEVELOPMENT COMPANY TO A PROJECT
EXECUTION AND OPERATIONS COMPANY.
GAVIN REZOS
CHAIR
DR FRANCIS WEDIN
MANAGING DIRECTOR
AND CEO
JOSEPHINE
BUSH
INDEPENDENT
NON-EXECUTIVE DIRECTOR
RANYA
ALKADAMANI
INDEPENDENT
NON-EXECUTIVE DIRECTOR
ANNIE LIU
INDEPENDENT
NON-EXECUTIVE DIRECTOR
DR GÜNTER HILKEN
INDEPENDENT
NON-EXECUTIVE DIRECTOR
DR HEIDI GRÖN
INDEPENDENT
NON-EXECUTIVE DIRECTOR
MARK SKELTON
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Board advisors
DR HORST KREUTER
CO-FOUNDER AND BOARD ADVISOR
JULIA
POLISCANOVA
SPECIAL ADVISOR
14
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 LEADERSHIP TEAM
PROJECT DEVELOPMENT, EXECUTION AND OPERATIONS
DURING 2023 VULCAN AIMS TO TRANSITION TO A PROJECT EXECUTION AND OPERATIONS COMPANY.
BELOW IS THE LEADERSHIP TEAM ACROSS THESE AREAS, SUPPORTED BY MORE THAN 280 MULTI-
DISCIPLINARY PERSONNEL, ALL PASSIONATELY DRIVEN BY THE DESIRE TO PROVIDE SUSTAINABLE,
DECARBONISED LITHIUM AND RENEWABLE ENERGY SUPPLY FROM EUROPE FOR EUROPE.
THORSTEN
WEIMANN
CHIEF OPERATING
OFFICER
VINCENT
LEDOUX-
PEDAILLES
CHIEF COMMERCIAL
OFFICER
ANNABEL
ROEDHAMMER
HEAD OF INVESTOR
RELATIONS AND PR
DANIEL
TYDDE
COMPANY
SECRETARY
AND IN-HOUSE
LEGAL COUNSEL
(AUSTRALIA)
DR FRANCIS
WEDIN
MANAGING
DIRECTOR AND
CEO
DR STEPHEN
HARRISON
CHIEF TECHNICAL
OFFICER
CRIS
MORENO
DEPUTY CEO
CHRISTIAN
TRAGUT
VICE PRESIDENT
PRODUCTION
DR HORST
KREUTER
CEO - GERMANY
STORM
TAYLOR
HEAD OF ESG
ROBERT
IERACE
CHIEF FINANCIAL
OFFICER –
VULCAN ENERGY
RESOURCES LTD
DR MEINHARD
GRODDE
IN-HOUSE
LEGAL COUNSEL
(GERMANY)
MARKUS
RITZAUER
CHIEF FINANCIAL
OFFICER –
VULCAN ENERGIE
RESSOURCEN
GMBH
15
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 OPERATING AND
FINANCIAL REVIEW
16
vVULCAN ENERGY1 JULY – 31 DECEMBER 2022 HEALTH
AND SAFETY
VULCAN BELIEVES THAT NOTHING IS MORE IMPORTANT THAN THE SAFETY
AND WELLBEING OF ITS EMPLOYEES, CONTRACTORS, STAKEHOLDERS AND
COMMUNITIES.
The health and safety of Vulcan’s employees, contractors,
working towards ISO45001:2015, Occupational Health and
stakeholders and communities are of paramount importance.
Safety certification, to complement the already achieved ISO
This is encapsulated by the Vulcan Value of Leadership, and
14001 (environmental management) and 9001 certifications
the Company’s commitment to work to the highest standards
(quality management). During the period, Vulcan had zero lost
of safety, quality, and efficiency.
time incidents (LTIs) and zero fatalities. There were two minor
incidents reported, with no time away from work required.
Compliance with health and safety regulations is a minimum
standard set. The team have continued to advance health and
Looking ahead, the Company is targeting zero health and
safety procedures and culture during the period, including
safety incidents in 2023 and beyond. As Vulcan transforms
employment of a dedicated and full-time Health, Safety,
towards being a project execution and operations company,
Environment and Quality Manager and further development
specific, safety-focused key performance indicators (KPIs)
of process management systems, including implementation
have been introduced for the Leadership team including
of a full contractor training framework. The Company is
achieving zero LTIs across all operations annually.
17
vVULCAN ENERGY1 JULY – 31 DECEMBER 2022 RESERVES AND
RESOURCES
EXPLORATION AND
DEVELOPMENT
The Company has the largest lithium Resource, compliant
JORC RESOURCE STATEMENT
Vulcan’s URVBF hosts a JORC 2012-compliant global
resource estimation of 26.6 Mt
lithium carbonate
with the Australasian Code for Reporting of Exploration
equivalent (LCE) at an average grade of 175mg/l Li in the
Results, Mineral Resources and Ore Reserves (‘the JORC
Measured, Indicated, and Inferred categories as shown in
Code’), in Europe3. Vulcan continues to expand its licence
Table 1. Vulcan’s current Phase One Resource covers five
footprint in the Upper Rhine Valley Brine Field (URVBF) in
of its 15 licences, specifically Taro, Kerner, Landau South,
response to supporting Europe’s transition to critical raw
Insheim and Rift (North).
materials independence and consumer demand.
“
VULCAN HAS THE LARGEST
KNOWN LITHIUM RESOURCE
IN EUROPE
An overview of licence locations and details is provided in
Figure 1. In addition to the Phase One group of licences,
Vulcan also holds 10 additional licences in the URV, for a
total secured licence area of 1,583km². The Company has
also applied for an additional 155km² of licences in the
same region. Vulcan has acquired the geothermal brine
and lithium rights (licences) through direct application to
the respective mining authorities of the German states
of Rheinland-Pfalz, Baden-Württemberg, and Hessen. All
exploration licences were in accordance with the German
Federal Mining Act (Bundesberggesetz ‘BBergG’) for the
purpose of commercial exploration of mining-free mineral
resources: geothermal brine and lithium. Vulcan has also
acquired the geothermal production licence at Insheim
with 100% ownership.
3 Based on public, JORC compliant data. Refer Vulcan Zero Carbon Lithium™ Project Phase One DFS results and Resources-Reserves update
https://www.investi.com.au/api/announcements/vul/e617fca6-6d4.pdf 13/02/2023
18
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 FIGURE 1: OVERVIEW MAP OF VULCAN LICENSED AREAS IN THE UPPER RHINE VALLEY, SHOWING WELL AND SEISMIC
SURVEYS
Höchst Chemical Park:
Central Lithium Plant
planned location
Höchst Chemical Park:
Central Lithium Plant
planned location
Frankfurt
Frankfurt
R
R
h
i
v
i
n
e
e
r
R
R
h
i
v
i
n
e
e
r
Mannheim
Mannheim
Vulcan regional
office
Vulcan regional
office
Landau Süd - in production
Insheim - Vulcan’s commercial geothermal renewable
energy plant in production. Lithium extraction pilot plant
successfully operating for 18 months
Landau Süd - in production
Insheim - Vulcan’s commercial geothermal renewable
energy plant in production. Lithium extraction pilot plant
successfully operating for 18 months
Karlsruhe
Karlsruhe
Vulcan head office and laboratory
Vulcan head office and laboratory
20km
20km
GERMANY
GERMANY
Kaiserslautern
Kaiserslautern
ACC/Stellantis
Gigafactory
ACC/Stellantis
Development
Gigafactory
Development
FRANCE
FRANCE
Haguenau
Haguenau
Vulcan France
office
Vulcan France
office
Strasbourg
Strasbourg
N
N
Legend
Legend
Production licence
Production licence
Access to the licence through a
brine offtake
Access to the licence through a
brine offtake
Renewable heat offtake
agreement
Renewable heat offtake
agreement
Primary producing
Primary producing
reservoir (Buntsandstein)
reservoir (Buntsandstein)
Secondary target
(’Greenfields’ reservoir)
Secondary target
(’Greenfields’ reservoir)
Deep geothermal wells/plants
Deep geothermal wells/plants
Lithium and
Lithium and
geothermal licence
geothermal licence
Lithium and geothermal
licence application
Lithium and geothermal
licence application
19
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
VULCAN’S COMBINED UPPER RHINE VALLEY PROJECT LI- BRINE
MEASURED, INDICATED, AND INFERRED MINERAL RESOURCE
ESTIMATES.
TABLE 1: VULCAN’S COMBINED URVBF LI- BRINE MEASURED, INDICATED AND INFERRED MINERAL RESOURCE
ESTIMATES
Reservoir
Classification
GRV
km3
Avg. NTG
%
Avg. Phie
%
Avg. Li
mg/L
Elemental Li
t
Licence/
Area
Mannheim
Ludwig
Therese
Flaggenturm
Kerner
BST
BST
BST
BST
BST
BST
BST
BST
BST
BST
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Kerner Ost
*MUS, BST, ROT
Indicated
Taro
*MUS, BST, ROT
Indicated
Landau South
*MUS, BST, ROT
Measured
BST
Indicated
Insheim
*MUS, BST, ROT
Measured
Rift-North
*MUS, BST, ROT
Measured
*MUS, BST, ROT
Indicated
Ortenau
*MUS, BST, ROT
Indicated
BST
Total LCE
Inferred
Measured
Indicated
Inferred
4
32
7
22
2
22
7
37
5
13
4.3
14.5
7.4
1.2
9
10.1
11.9
57
105
90
65
90
65
90
65
90
65
90
65
73
73
73
90
73
73
73
73
73
10
9
10
9
10
9
10
9
10
9
8
8
8
11
8
8
8
8
8
153
153
153
153
153
153
181
181
181
181
181
181
181
181
181
181
181
181
181
181
178
172
LCE
kt
288
1,545
496
1,060
159
1,068
613
2,082
406
705
355
1,263
545
118
680
714
946
3,507
54,111
290,312
93,220
199,226
29,907
200,708
115,215
391,201
76,242
132,558
66,708
237,362
102,383
22,220
127,779
134,132
178,000
659,013
1,883,212
10,024
1,939
8,151
16,484
Note 1: Mineral Resources are not Ore Reserves and do not have demonstrated economic viability.
Note 2: The weights are reported in metric tonnes (1,000 kg or 2,204.6 lbs). Numbers may not add up due to rounding of the resource value
percentages.
Note 3: Reservoir abbreviations: MUS – Muschelkalk Formation, BST – Buntsandstein Group; ROT – Rotliegend Group.
Note 4: To describe the resource in terms of industry standard, a conversion factor of 5.323 is used to convert elemental Li to Li2CO3, or lithium
carbonate equivalent (LCE).
Note 5: NTG and Phie averages have been weighted to the thickness of the reservoir. These averages are consolidations of multiple local zones
and therefore multiplied together will not equate to the global elemental lithium values presented. The elemental lithium values presented
are determined separately using detailed data for each zone and then summed together to show a total value for the purposes of this
summary table.
Note 6: GRV refers to Gross Rock Volume, also known as the aquifer volume. GRV values presented in this table are rounded to the first significant
figure for presentation purposes. The elemental lithium values presented are calculated using GRV values that have not been rounded.
Note 7: Mineral resources are considered to have reasonable prospects for eventual economic extraction under current and forecast lithium
market pricing used in the DFS with application of Vulcan’s DLS processing
Note 8: The values shown are an approximation and with globalised rounding of values in the presented summary table as per JORC guidelines,
cannot be multiplied through to achieve the Mineral Resource estimated volumes shown above.
20
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 f Total URVBF Resource: Inferred 16.5Mt LCE @ 172mg/l Li, Indicated 8.2 Mt LCE @ 178 mg/l Li, Measured 1.94 Mt LCE @
181 mg/l Li.
f Total Phase One Resource (Measured and Indicated): 4.6 Mt LCE @ 181 mg/l Li.
f Total Resource (all classifications): 26.6 Mt LCE @ 175 mg/l Li.
COMPETENT PERSON STATEMENT
The information in this Report that relates to Mineral
f It is not aware of any new information or data that
Resources and Ore Reserves, and any Exploration Results
materially affects the information included in the original
and Production Targets, of Vulcan's Zero Carbon Lithium™
market announcement, and that all material assumptions
Project is extracted from the ASX announcement made by
and technical parameters underpinning the estimates in
Vulcan on 13 February 2023 ("Vulcan Zero Carbon Lithium™
the original market announcement continue to apply and
Project Phase One DFS Results and Resources-Reserves
have not materially changed;
Update"), which is available to view on Vulcan's website
f The form and context in which the Competent Person’s
at https://v-er.eu/. Vulcan confirms that in respect of
findings are presented have not been materially modified
estimates of Mineral Resources and Ore Reserves, and any
from the original market announcement; and
Exploration Results and Production Targets, included in
f All material assumptions underpinning any production
this Report:
targets
(and any
forecast financial
information
derived from such production targets) included in this
announcement continue to apply and have not materially
changed.
21
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 GEOTHERMAL AND RENEWABLE ENERGY OPERATIONS
FIGURE 2: AERIAL PHOTOGRAPH OF VULCAN’S NATÜRLICH INSHEIM GEOTHERMAL PLANT
Geothermal, renewable energy is at the heart of the Zero
plant in the region at Landau-South for which Vulcan has
Carbon Lithium™ Project. During the period 1 July to 31
secured an offtake agreement for brine production with
December 2022, the geothermal powerplant Natürlich
Geox GmbH (the operating company). The plant and wells
Insheim operated by the Natürlich Insheim GmbH generated
have been in operation since 2007. Vulcan has entered into
a total amount of 17,000,000 kWh of renewable electrical
a 51:49 (in Vulcan’s favour) joint venture agreement with
energy, saving approximately 5,000 tonnes of CO2.
the owners of the Landau-South licence to develop a new
geothermal project in the same Landau-South licence area
To underline Vulcan Energy’s commitment to play a leading
as the current Landau plant, which will also supply Vulcan’s
role in the German heat transition, Natürlich Insheim is
Phase One operations with brine for lithium extraction.
currently being redesigned to be able to produce district
Vulcan has an agreement to develop new geothermal
heating in the future as well. This will allow the supply of
projects on the research and development exploration
CO2 free district heating to nearby municipalities.
licence in return for a production royalty. Vulcan plans to
develop the licence areas in a phased approach. Phase One
Natürlich Insheim (Figure 2), has the capacity to produce
will be developed first, followed by Phase Two which will be
up to 4.8 MW of renewable power. There are two operating
a further development in stepped out areas. Subsequent
wells located at this plant, one for production of the 165°C
phases are planned to follow to fully leverage the large
hot brine and one for reinjection of cooled brine. The wells
licence area that Vulcan has secured. The Project plans
were drilled between 2009 and 2010. The plant has been
for multiple central surface facilities for geothermal
in operation since 2012. There is a second geothermal
operations to be fed from multi-well pads.
22
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 FOCUS ON PHASE ONE EXECUTION
During the reporting period, the team moved into an
When it comes to expanding the Demo Plants to their
expanded laboratory. With its state-of-the-art equipment
commercial size, the sorption of lithium chloride at the
for wet and solid-state analyses, including full in-house
commercial plant represents a very manageable scale-
inductively coupled plasma optical emission spectrometry
up factor of only 1:50 in terms of column size, as each
(ICP-OES) and ion chromatography (IC) analytical capability,
lithium extraction plant (LEP) will be operating four
the new laboratory has enabled Vulcan to expand its core
trains of extraction units. Meanwhile, the commercial
competencies, centralise its proprietary lithium processes
Central Lithium Plant (CLP) electrolysis cells will have a
and deliver the required information for Vulcan’s Phase One
multiplication factor, not scale-up factor, as electrolysis
Definitive Feasibility Study.
cells are not scaled up further but multiplied. Initial
commissioning of the lithium extraction Demo Plant is
A key element of Vulcan’s strategy to de-risk its Zero
planned to commence in 2023. The commissioning of the
Carbon Lithium™ Project is the design and construction
Company’s CLP-Demo Plant is due in late Q2 2023.
of its demonstration plants. Vulcan’s demonstration plants
will consist of two parts: the lithium extraction plant (LEP)
In November 2022 Vulcan successfully developed its
(Figures 3 and 4) and the lithium hydroxide production
own in-house lithium extraction sorbent, VULSORB™.
plant (Central Lithium Plant-Demo Plant) and will replicate
Additionally, the team completed multi-cycle sorption
the full process from sorption-direct lithium extraction to
tests on Upper Rhine Valley geothermal brine using multiple
lithium hydroxide production including recycle streams.
commercially available and in-house aluminate-based
Importantly, technical and operations personnel will train
sorbents. Vulcan’s VULSORB™ sorbent has demonstrated
in the plant to develop a comprehensive understanding of
higher performance and lower water consumption for
the process and its operation prior to the construction of
lithium extraction in Vulcan’s pilot plant compared with
the first commercial plant.
commercially available sorbents tested by the Company.
FIGURES 3 AND 4: IN-HOUSE DESIGNED LITHIUM EXTRACTION DEMO PLANT, CURRENTLY UNDER CONSTRUCTION.
23
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 The team carried out test work on live brine from Vulcan’s
commercially operating geothermal renewable energy
plant, Natürlich Insheim. The manufacturing process for
VULSORB™ is environmentally friendly, with most of the
reagents recycled and with opportunities for Vulcan to use
its own produced lithium to manufacture future sorbent
once in production, thus further reducing Vulcan’s carbon
footprint and operating costs while fulfilling the European
Union’s circular economy goals.
VULSORB™ is a variation of the type of lithium extraction
sorbents originally developed 30 years ago and used
commercially worldwide for lithium extraction from brine
for the last 25 years. This Technology Readiness Level
(TRL) 9 approach for lithium extraction can be used in
most lithium-rich brines globally, provided salinity in the
brine is high enough and there is sufficient heat to drive
the process, with a brine pre-treatment step to increase
sorbent durability that can be adjusted depending on local
brine chemistry. Vulcan’s VULSORB™ enables the lithium
to be selectively extracted from the brine, providing a
development with consideration of existing land uses in
pure lithium chloride eluate which can then be electro-
consultation with local communities and landowners.
chemically converted to lithium hydroxide monohydrate
for use in lithium-ion batteries in the European cathode,
Vulcan is targeting start of operations by the end of
battery, and automaker industries.
2025 and ramping up after that. Vulcan recognises the
significant challenges ahead as a growing company. To this
This process is much faster and more efficient, with a
end, Vulcan is rapidly transforming into a project execution
lower carbon footprint, than the legacy industry method
and operations company. The Project will be delivered
of using large-scale evaporation and large quantities of
under a single integrated project group, providing a
chemical reagents to extract the lithium and process
consistent approach to delivery and overall accountability.
the product into lithium hydroxide. Sorbent extraction
During the first quarter of 2023, Phase One of the Project
happens in hours, rather than up to 18 months as is the
will move into a bridging engineering phase with Hatch Ltd.
case with legacy extraction routes.
Vulcan will continue to deliver according to the Company’s
Lithium extraction will be conducted in two stages,
contract strategy and delivery model and seek early
starting at geothermal facility-based LEPs and proceeding
engagement of key technology and equipment suppliers.
to a single facility near Frankfurt, being the CLP. Lithium
Throughout this execution phase, Vulcan will continue to
hydroxide monohydrate (LHM) product will be produced
increase its extensive stakeholder engagement activities
and marketed from the CLP. The Phase One area is well
already
implemented by Vulcan’s communications
located, close to existing road infrastructure and within
and ESG team, including regular monitoring, multiple
relatively flat valley terrain. The Phase One area is mixed
communication channels and local Info Centres run by
land use with rural, urban, agricultural, industrial, and
local people. Vulcan sees this as essential to ensure the
park land. Vulcan has been diligent in ongoing planning
community comes along with Vulcan on this journey.
24
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 FURTHER PHASES OF DEVELOPMENT
A core focus during the reporting period was on the
Germany, meaning Vulcan’s sustainable lithium production
delivery of the Phase One DFS. In parallel, Vulcan remained
process is applicable across the whole field. Vulcan
focused on the future and subsequent phases which will
created a French entity, Vulcan Energie France SAS (VEF),
include the delivery of the DFS for Phase Two later in 2023.
registered in Strasbourg with offices in Haguenau, where
Vulcan is growing an experienced French team. VEF
To that effect, 3D seismic survey works commenced on the
applied for its first lithium exploration licence in the region,
ground in one of Vulcan’s planned lithium and geothermal
'Les Cigognes'. The requested licence is 155km² in size and
energy development areas, in the Mannheim district of the
located east of the city of Haguenau. The Company will
Upper Rhine Valley Brine Field (URVBF). Vulcan signed a
look to access additional licence areas later in 2023. VEF
renewable heat offtake agreement with MVV Energie AG
is in discussions with local companies in Alsace to develop
(MVV), the utility for the city of Mannheim, in April 2022.
combined geothermal energy and lithium projects, and
These works follow earlier approval in 2022 of the main
support industrials and municipalities to decarbonise their
operating plans by the state directorate, after a thorough
heating supply. The Company is focused on increasing
review process, which involved the relevant municipalities,
engagement with local stakeholders to develop projects in
technical agencies, and associations. This seismic survey
full alignment with local communities, which is paramount
is the first step in the development of new power plants,
to the ongoing success of Vulcan’s activities.
through which, from 2025 onwards, the aim is to supply up
to 350,000 MWh of heat into the heating grid of Mannheim.
In November, Vulcan announced it was expanding its
activities to the French side of the URVBF, which accounts
for roughly one third of the Upper Rhine Graben, containing
both geothermal energy and lithium-rich brine. Vulcan had
previously collected a bulk (10,000 litres) brine sample
from the French side of the border and conducted test
work on it. Historical data and sampling coming from
existing geothermal operations in the region indicate brine
composition in Alsace is materially the same as the brine
composition across the border at Vulcan’s operations in
25
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 OFFTAKE AGREEMENTS
As of the date of this Report, Vulcan has entered into
f In January 2022, Vulcan Group entered into a lithium
binding lithium offtake agreements with five customers.
offtake agreement with LG Energy to sell to LG Energy
between 41,000 metric tonnes and 50,000 metric tonnes
f In October 2021, Vulcan Group entered into a lithium
of battery-grade lithium with an initial term of five years
offtake agreement with Umicore to sell between 28,000
and start of commercial delivery scheduled for 2026.
metric tonnes and 42,000 metric tonnes of battery-grade
LHM to Umicore over an initial five-year term with start
Together, the volumes of LHM to be delivered under these
of commercial delivery initially scheduled for 2025 (but
agreements correspond to the entire expected quantity
postponed to 2026).
of the first five years of production from Vulcan Group’s
Zero Carbon Lithium™ Project. Vulcan Group is also in
f In November 2021, Vulcan Group entered into lithium
discussions with other potential offtake partners that
offtake agreements with Renault and Stellantis, to sell
have demonstrated interest in securing LHM feed from
to Renault 29,000 to 49,000 metric tonnes of battery-
potential additional phases of Vulcan Group’s Zero Carbon
grade LHM over an initial six-year term and to Stellantis
Lithium™ Project. Overall, it is the Company’s goal to have
between 222,000 metric tonnes and 272,000 metric
most volumes of battery-grade LHM produced in Vulcan's
tonnes of battery-grade LHM over a ten-year term.
Zero Carbon Lithium™ Project committed under lithium
Commercial delivery is scheduled for 2027.
offtake agreements with reputable counterparties.
f In December 2021, Vulcan entered into a lithium offtake
The following table provides an overview of the binding
agreement with Volkswagen, to sell to Volkswagen
lithium offtake agreements entered into by Vulcan Group
between 34,000 to 42,000 metric tonnes of battery-
as of the date of this report.
grade LHM over an initial five-year term, with start of
commercial delivery scheduled for 2027.
TABLE 2: VULCAN GROUP BINDING LITHIUM OFFTAKE AGREEMENTS
Category
Start & duration
Volume over the duration of the
contract (t)
Partner
Umicore
Renault Group
Stellantis
Volkswagen Group
Tier one cathode maker
OEM
OEM
OEM
LG Energy Solutions
Tier one battery maker
28,000 to 42,000
29,000 to 49,000
222,000 to 272,000
34,000 to 42,000
41,000 to 50,000
2026
5 years
2027
6 years
2027
10 years
2027
5 years
2026
5 years
26
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 CORPORATE
VULCAN’S CORPORATE TEAM, SPANNING THE COMPANY’S AUSTRALIAN AND GERMAN
OFFICES, ARE FAST TRANSITIONING FROM A DEVELOPMENT COMPANY TO AN INTEGRATED
PROJECT EXECUTION AND PRODUCTION COMPANY.
TARGET OPERATING MODEL
(TOM 360)
In Q1 2022 Vulcan completed a Target Operating Model
SEGMENT INFORMATION
The consolidated entity is organised into three operating
segments based on geographical location: in Germany,
(TOM 360) review, with the objective of developing a fit for
Other European and Australia. These operating segments
purpose corporate structure for the next phase of project
are based on the internal reports that are reviewed and
development and expansion. One key recommendation of
used by the Board of Directors (who are identified as the
the TOM 360 was the centralisation of backbone functions
Chief Operating Decision Makers (CODM)) in assessing
to ensure better governance and higher efficiency, which
performance and
in determining the allocation of
was implemented on 1 July 2022. By the end of 2022, the
resources. There is no aggregation of operating segments.
vast majority of TOM 360 measures had been implemented.
One of the last key steps was the design of the project
The CODM reviews EBITDA (earnings before interest, tax,
execution structure in late 2022, which will be implemented
depreciation, and amortisation). The accounting policies
over the course of H1 2023.
adopted for internal reporting to the CODM are consistent
with those adopted in the financial statements.
The information reported to the CODM is on a monthly
basis.
TYPES OF PRODUCTS AND SERVICES
Germany – the supply of geothermal energy, exploration
relating to the Zero Carbon Lithium™ Project and
engineering services.
Other European (France and Italy) – exploration relating to
battery minerals and geothermal lithium.
Australia – ASX, corporate administration and DFS
engineering costs.
27
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 CORPORATE PARTNERS
Vulcan has strategically built relationships with companies who share the same sustainability, environmental and cultural
values and ambitions. Vulcan is committed to working with its partners as it aims to be the first integrated, renewable
heat and power, lithium extraction and lithium hydroxide refining project, to supply the battery electric vehicle industry
from Europe, for Europe.
GEOFIZYKA TOURUN S.A.
Geofizyka Toruń has been engaged by the Company to conduct 3D seismic surveys across Vulcan’s project areas,
where the Company does not already have existing 3D seismic data. Surveys will be interpreted and will further
refine Vulcan’s well design plan prior to production development drilling. In September 2022 Vulcan commenced
3D seismic surveys around its Insheim licence area where Vulcan has already been producing renewable energy
on a commercial scale, and from which it plans to expand brine flow for renewable energy and lithium production.
GLJ LTD
GLJ Ltd is the Company’s engineering consultant team responsible for the independent audit and sign-off of the
geological engineering and production study, part of Vulcan’s Phase One DFS, including Resources and Reserves.
GEF INGENIEUR AG
A local German business and independent experts in the field of heat supply for over 30 years, GEF Ingenieur
AG (GEF) develops and accompanies upstream decision-making processes and offers consulting services
to set up, develop and restructure a heat business. GEF is supporting the engineering of Vulcan’s brine and
hot water piping layout.
NOBIAN
In January 2022, Vulcan signed an MOU and term sheet with Nobian, a European leader in the production
of essential chemicals. Nobian, formerly part of Akzo-Nobel, is the fourth largest chlor-alkali producer in
Europe after Inovyn, Dow and Covestro, and has extensive electrolysis operational experience. Chlor-
alkali uses an electrolysis process that is very similar to the final stage of Vulcan’s flow sheet for lithium
hydroxide production. Vulcan and Nobian are assessing the feasibility of a joint project for the development,
construction, and operation of the Central Lithium Plant (CLP), including the electrochemical conversion
process of lithium chloride to battery quality lithium hydroxide.
HATCH LTD
Vulcan’s engineering consultant, Hatch Ltd (Hatch), was responsible for the lithium chemicals part of the DFS
including the engineering and execution planning for the lithium extraction plants (LEPs) and CLP, in collaboration
with Vulcan’s in-house lithium chemicals and chemical engineering teams. Post the release of the Phase One
DFS, Vulcan will enter into a two-month bridging phase towards ordering long lead commercial equipment.
MVV ENERGIE
Vulcan and MVV have signed a 20 year-long agreement, commencing in 2025, which includes the supply of a
minimum of 240,000MWh per year to a maximum of 350,000Mwh per year to households in Mannheim. MVV is
the largest municipal energy supplier in Germany, dedicated to making a lasting and sustainable contribution
to the local community through the provision of renewable energy and heat to the City of Mannheim.
28
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 SUSTAINABILITY PARTNERS
CIRCULOR
Vulcan is working with Circulor and its full traceability and dynamic CO2 measurement solution for
Vulcan’s carbon neutral lithium products across the European lithium-ion battery and electric vehicle
supply chain. Circulor’s system implementation enables reputational protection, proof of compliance
with regulations and dynamic carbon tracking.
MINVIRO LTD
Vulcan has worked with London-based consultancy Minviro Ltd (Minviro) since 2020. In August 2021,
Vulcan commissioned Minviro to update Vulcan's world-first, independent LCA. Vulcan’s original LCA
with Minviro represented the world’s first LCA on lithium hydroxide production. In February 2023, Minviro
updated the LCA with data from the DFS and will continue to update the LCA as required.
THE ERM INTERNATIONAL GROUP LTD
Vulcan is working with the largest global pure play sustainability consultancy, ERM International Group
Ltd, on a number of sustainability projects, including conducting a Materiality Assessment, assisting
with Equator Principles 4 alignment and EU Taxonomy assessment.
BARINGA
Vulcan is working with Baringa to align Vulcan’s Sustainability Report with TCFD reporting disclosures
to ensure compliance with the recommendations. Baringa has provided Vulcan with climate change
modelling services.
SUSTAINABLE BUSINESS CONSULTANTS
Vulcan has worked with Sustainable Business Consultants since 2021 to complete the annual Climate
Active certifications. Its expertise spans many strategic ESG projects, and the team have helped several
Australian companies to achieve Climate Active carbon neutral certification including supporting
credible carbon offset projects.
TAVISTOCK
Tavistock’s strategic communication services combine a deep understanding of sustainability issues
and cross-sector connections with practical knowledge of how to create change. The team assist Vulcan
with sustainability messaging and ESG disclosure optimisation.
29
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 FINANCE PARTNERS
BNP PARIBAS
BNP Paribas has been appointed as Financial Advisor for the Zero Carbon Lithium™ Project. Following
completion of the DFS, Vulcan will continue to work with BNP Paribas on the structuring and execution of
debt financing of Phase One of Vulcan’s Zero Carbon Lithium™ Project. The financing process for Phase
One has commenced, working with BNP Paribas as debt advisor.
COMMERCIAL PARTNERS
STRATEGIC SUPPORT WITH LONG-TERM LITHIUM SUPPLY CONTRACTS
As of 31 December 2022, Vulcan has concluded five long-term lithium supply agreements, also referred to as offtakes, with
five key players in the European lithium-ion battery supply chain. The contract terms are from five to ten years with some
having flexibility to extend, take or pay, with a mixture of pricing mechanisms to provide stability while maintaining some
exposure to upside in pricing5. The commercial partners are:
STELLANTIS, FRANCE
Binding lithium hydroxide offtake agreement, 10-year term.
A$76M (€50M) equity investment from Stellantis. This represents the world’s first upstream investment
in a listed lithium company by a top tier automaker. Stellantis is now Vulcan’s second largest shareholder
with ~8% shareholding.
RENAULT GROUP, FRANCE
Binding lithium hydroxide offtake agreement, initial 6-year term.
VOLKSWAGEN GROUP, GERMANY
Binding lithium hydroxide offtake agreement, initial 5-year term.
UMICORE, BELGIUM
Binding lithium hydroxide offtake agreement, initial 5-year term.
LG ENERGY SOLUTION, SOUTH KOREA
Binding lithium hydroxide offtake agreement, initial 5-year term.
5 More details on these offtake agreements can be found on page 26
30
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 INDUSTRY ASSOCIATIONS
Vulcan is proud to partner with, support and contribute
f Gesellschaft der Metallurgen und Bergleute (GDMB) -
to the work of
leading environmental societies and
Society of Metallurgists and Miners.
associations in the geothermal, renewable energy and
f Kompetenznetzwerk Lithium Ionen Batterien (KLiB) -
lithium industries including:
German Association of Lithium-Ion Batteries.
f Deutsche
Wissenschaftliche
Gesellschaft
f Landesnaturschutzverband Baden-Württemberg (LNV)
für
nachhaltige
Energieträger, Mobilität
und
- Nature Conservation Organisation of the State Baden-
Kohlenstoffkreisläufe (DGMK) - German Society for
Württemberg.
Sustainable Energy Carriers, Mobility and Carbon Cycles.
f Bundesverband Geothermie (BVG) - German Geothermal
Association.
To support local development and generate synergies,
f European Geothermal Energy Council (EGEC).
Vulcan is also an active member of the TechnologieRegion
f GeoEnergy Celle - Association of drilling and drilling
Karlsruhe GmbH (TRK). As Vulcan’s German head office is
service companies.
based in the Karlsruhe Technology Region, it is important
f Bundesverband der Geowissenschaftler
(BDG)
-
for the Company to connect with
local authorities,
Association of German Geoscientists.
chambers of commerce, scientific institutions, and other
f Bundesverband Erdgas, Erdöl und GeoEnergie (BVEG) -
companies in the region and to promote new technologies;
Germany's Association of Natural Gas, Oil and GeoEnergy.
the partnership with TRK is an effective platform for these
f Deutsche Gesellschaft für Geotechnik (DGGT) - German
activities. Importantly, Vulcan also wants to leverage the
Geotechnical Society.
network of TRK to accelerate the energy transition in the
f International Geothermal Association (IGA).
region.
f Bundesverband Erneuerbare Energien (BEE) - the
Renewable Energy Association of Germany.
Additionally, Vulcan
is also active
in another
local
f Plattform Erneuerbare Energien (PEE) - the state
development association, Metropolregion Rhein-Neckar,
subdivision of the BEE in Baden-Württemberg.
which aims to keep industrial excellence in the region
f Wirtschaftsrat der CDU -
the
largest business
around Mannheim.
association in Germany.
f Bundesverband Mittelständische Wirtschaft (BVMW)
- the
largest middle-sized business association in
Germany.
31
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 SUSTAINABILITY
REPORT
“
OUR BUSINESS EXISTS TO,
ESSENTIALLY, MAKE THE WORLD
A BETTER PLACE. WE AIM TO
BE THE FIRST IN THE WORLD
TO DELIVER CARBON NEUTRAL,
DOMESTICALLY SOURCED LITHIUM
FROM EUROPE TO EUROPE.
VULCAN ENERGY
32
v1 JULY – 31 DECEMBER 2022 SUSTAINABILITY
HIGHLIGHTS
Low ESG Risk Rating provided by
Sustainalytics (January 2023).
Ranked first amongst peers and in
the 2nd quartile Chemicals Industry,
i.e. the top 2%
Expansion of Vulcan's team to 184
full time employeess at 31 December
2022, up from 129 on 30 June 2022
Sustainability linked KPIs for
the Leadership team including
environmental, staff retention and
procurement
Sustainability Steering Committee
formed with 10 members
Completed first employee
compensation and benefits
assessment
United Nations Global Compact
member (since February 2022)
100% of European team have
completed all training modules on
occupational health, safety and
governance
Vulcan executed a binding term
sheet with Stellantis for the first
phase of a multiphase project
aimed at decarbonising the energy
mix of the Opel Rüsselsheim auto-
manufacturing site in the Upper
Rhine Valley, Germany
Partnership with Karlsruhe Zoo
Foundation (Jan 2023) supporting
local biodiversity projects, in line
with aim to be nature positive, and in
tandem with TNFD involvement.
9,5kt CO2 avoided from renewable
energy generated at Natürlich
Insheim since acquisition in
December 2021
Four Info Centres opened in Insheim,
Landau, Karlsruhe, Mannheim and
one mobile Info Centre for local
community engagement
Publication of third voluntary TCFD
report, which includes Vulcan's first
climate scenario modelling analysis
33
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 VULCAN'S APPROACH TO
SUSTAINABILITY
Sustainability is the cornerstone upon which Vulcan was
Vulcan's raison d’être is to be a leader in Sustainability and
founded. The Company's purpose is to empower a net zero
Environmental, Social and Governance (ESG) initiatives
carbon future and contribute to ensuring the livability of
and reporting, ensuring sustainability goals are not merely
the planet for generations to come.
aspirations but govern the way Vulcan operates in practice.
FIGURE 5: CORPORATE GOVERNANCE POLICIES
Vulcan is focused on developing a robust
sustainability
governance
framework
that integrates into its broader corporate
governance framework. This report and the
TCFD report set out our approach (available
via the website). The Company's approach is
supported by the development of corporate
governance policies available for review in
the Corporate Governance section of the
website https://v-er.eu. Vulcan will continue
to broaden the Company's suite of policies
during the course of 2023.
Anti-Bribery and Anti-Corruption policy
Community relations policy
Conflict minerals policy
Diversity policy
Environmental management policy
Sustainable supplier policy
34
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 SUSTAINABILITY AND ESG FRAMEWORK
In 2022, Vulcan developed and adopted a Sustainability
f Positive Disruption:
sustainable
innovation and
and ESG framework the purpose of which is to weave
excellence in execution.
sustainable decision making into the Company’s core
strategy.
The Company executes on its strategy to be a global
leader in the production of geothermal energy and heat
Vulcan’s Sustainability and ESG Framework helps Vulcan
and net zero lithium by utilising highly skilled experts,
implement its sustainability strategy. It guides sustainable
innovative technology, and by leveraging the Company’s
decision making - binding purpose, mission, strategy
strategic position within the European EV supply chain.
and values. The Framework is underpinned by the Vulcan
As the Company scales up, work will continue to further
Compass that aims to guide the Company on three key
embed and implement sustainability and ESG into the
themes:
organisation by further enhancing roles, responsibilities
and accountabilities, as well as targets setting and
f Quality of Life: improving the quality of life for people,
reporting on performance and progress against targets.
land and sea;
f Balance: maximising shareholder
returns without
compromising the needs of future generations; and
FIGURE 6: VULCAN COMPASS
E n v i ronmental
als
o
G
ality of Life
e quality of life
ple, land and se a
g th
vin
u
Q
o
e
p
r
o
f
o
r
p
m
I
F
o
c
u
s
A
r
e
a
s
M
a
with
xi
m
B
o
u
is
i
n
a
l
t c
o
g
a
of f
u
t
u
m
s
n
p
h
r
r
a
e
o
r
c
g
m
h
e
e
e
i
n
s
o
i
l
e
n
d
r
a
g
e
r
t
t
i
o
n
s
Empowering a
net zero carbon
future
r
e
t
u
r
n
s
h
e
n
e
e
d
s
e
c
n
a
Govern
S
o
c
i
a
l
Disru p t
n
Sustainable inn o v a t
i o
and excellence in e x e c u t i
n
o
Target s
35
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
SUSTAINABILITY AND ESG GOVERNANCE STRUCTURE
Sustainability and ESG-related roles and responsibilities have been clearly defined and delegated across the leadership
team to ensure accountability and clear reporting lines.
The diagram below gives an overview of Vulcan’s Sustainability and ESG related governance.
SUSTAINABILITY AND ESG GOVERNANCE STRUCTURE
Board - Overall reponsibility for the Company’s sustainability strategy
Audit, Risk and ESG Committee
Key responsibilities:
Projects Oversights Committee
Key responsibilities:
People and Performance Committee
Key responsibilities:
f Financial
accounting
statements,
policies and financial reporting and
practices
disclosure
(including
sustainability
related and climate
related reporting).
f Compliance.
f Internal control processes and control
framework
as
(including
it relates to sustainability and ESG
integration).
controls
f Internal and external audit.
f Management and disclosure of business,
ESG and economic risks.
f Risk
management
framework
(including climate related and broader
and
sustainability
related
management’s performance.
risks),
f Regular
reviews of
the status of
f Overall remuneration strategy.
nominated projects.
f Apply appropriate corporate governance
framework
risk management
(including climate related and broader
sustainability related risks).
and
appropriate
f Review and advise whether the projects
and
have
direction complimentary to maintaining
an appropriate awareness of
the
strategic objectives of the Company.
leadership
f Short term and long term incentive plans,
including ESG related KPIs.
f Performance management.
f Matters relating to recruitment, retention
and termination policies.
f Diversity strategy and gender pay equity
audits.
f Review
and
advise whether
the
processes utilised in the governance
and management of the projects align
with complimentary processes used at
the business and Company level e.g. risk
management.
All committee Chairs report to the Board
Projects Execution Committee
Key responsibilities include providing a consistent approach to:
Supply Chain Council
Key responsibilities include
f Delivery
(project execution, contract strategy, engineering
f Business critical supply chain priorities.
standards, strategic sourcing).
f Integrating schedules and visibility of critical paths.
f Interfaces being effectively managed.
f Risks and opportunities defined and managed (including
sustainability related and ESG risks and opportunities).
f Control processes to give strategic management and insights.
f Approval of procurement strategies.
f Awarding of contracts and delegations.
f Oversight of supply chain sustainability credentials.
All committee Chairs report to the relevant Board committee
Sustainability Steering Committee
Consists of ten committee members from all departments across the Company
Key responsibilities include:
f Establishes direction and operationalises implementation of the sustainability framework.
f Ambassadors of sustainability – ensures the culture of sustainability is integrated into the Company.
f Responsible for employee training and education.
Committee Chair reports to the Audit, Risk and ESG committee
36
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 MATERIALITY
Vulcan completed a materiality assessment
in mid
Vulcan identified 17 material topics (Figure 7), with climate
2022 with the assistance of ERM. This assessment will
change and energy, environmental impact, community
continue to be utilised until late 2025 (when the Company
engagement and governance scoring highest for both
expects to enter the production phase of the Project) at
importance to stakeholders and importance to Vulcan.
which time an updated assessment will be undertaken to
The material topics matrix and definitions are available in
ensure a continuous feedback program. The Materiality
the Appendix of this Report. This is aligned with the key
Assessment was informed by many reference points
ESG initiatives identified in the Sustainability and ESG
including a review of current global industry trends,
Framework and helps to prioritise focus in the near and
analysis of peers and sustainability leaders and, most
long term.
importantly, from key stakeholders.
FIGURE 7: VULCAN COMPASS LINKED TO MATERIAL TOPICS
y
Bio div e r s it
C i r c u lar
E c o n o my
Environmental
Impact
E n v i ronmental
Water
W
a
s
t
e
Climate
Change
T
ale
n
t
als
o
G
i
R
g
h
t
s
H
u
m
a
n
ality of Life
e quality of life
ple, land and se a
g th
vin
u
Q
o
e
p
r
o
f
o
r
p
m
I
H
e
a
l
t
h
S
o
c
i
a
l
D
i
v
e
r
sity
F
o
c
u
s
A
r
e
a
s
I
n
n
o
v
a
t
i
o
n
M
a
with
xi
m
B
o
u
is
i
n
t c
o
g
a
l
a
of f
u
t
u
m
s
n
p
h
r
r
a
e
o
r
c
e
g
m
e
i
h
e
n
s
o
i
l
e
n
d
r
a
g
e
r
t
t
C
h
a
i
n
V
a
l
u
e
r
e
t
u
r
n
s
h
e
n
e
e
d
s
i
o
n
s
Empowering a
net zero carbon
future
Disru p t
n
Sustainable inn o v a t
i o
and excellence in e x e c u t i
n
o
n
o
i
t
u
b
i
r
t
Dis
e
c
n
a
Govern
e
Governanc
Community
Engagement
Target s
Bu s i n e s s
E t h i c s
n s p are ncy
T r a
37
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
THE MATERIALITY ASSESSMENT IDENTIFIED THE FOLLOWING CURRENT
TRENDS, AND VULCAN UTILISES THESE WHEN CONSIDERING BUSINESS
STRATEGY AND FINANCIAL DECISIONS.
1
NET POSITIVE
Vulcan is recruiting many team members from the
Increasingly, stakeholders expect companies
local community, building local energy infrastructure
to be more accountable for their impacts on
and commerce, and aiming to provide important
biodiversity and society, with a focus on a ‘net
renewable geothermal heating to the city of
positive’ impact that goes beyond just harm
Mannheim from 2025. The communications team has
minimisation.
also been very active during the period, educating
and consulting local communities.
In December 2022, the United Nations Biodiversity
Conference
(COP15) adopted
the Kunming-
3
Montreal Global Biodiversity Framework (GBF)
DECARBONISATION
which aims to address biodiversity loss, restore
Decarbonisation continues to be a pivotal focus
ecosystems, and protect indigenous rights. The
point amongst energy and resource sectors.
plan includes a pledge to protect 30% of the
Both from a regulatory point of view and investor
world’s land and seas for nature by 2030.
perspective, greater emphasis is being placed on
reducing a company’s carbon footprint.
Vulcan is a forum member of the Taskforce for
Nature-Related Financial Disclosures (TNFD) and
Vulcan was founded on the need to decarbonise
will report under that framework in the future.
the EV lithium battery industry. Legacy methods of
Vulcan is working with the Karlsruhe Species
lithium extraction and refining are environmentally
Conservation Foundation, amongst other experts,
damaging and/or high in fossil fuel usage. This issue,
to support both
local biodiversity programs
alongside the fact that Europe does not currently
and start planning for nature positive, rewilding
produce any of its own battery grade
lithium
initiatives within all operational sites.
hydroxide6 and is entirely reliant on imports, means
2
that innovative solutions are necessary to assist
with climate change mitigation. Vulcan has been
operating its lithium extraction pilot plant since April
SOCIAL LICENCE TO OPERATE
2021 and is in the process of constructing its lithium
Addressing and reducing the risk of negative
extraction demo plant, which Vulcan is aiming to
impacts on local communities and society is a
use to train its operations team in a pre-commercial
key focus for investors. Sustainable, long-term
setting prior to start of commercial production.
success is dependent on companies like Vulcan
building positive long-term relationships with all
of its stakeholders, supporting local communities,
and maintaining a positive citizenship status.
6 Mining Journal https://www.mining-journal.com/project-finance/news/1367501/zero-hour-for-lithium-in-europe
38
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
4
5
GEOPOLITICS AND POLICY
SHIFTING REGULATORY ENVIRONMENT
The Russian
invasion of Ukraine and trade
Sustainability-focused
regulation
is
being
tensions between China, the United States
introduced globally, with the European Union
and Australia continues to create a turbulent
(EU)
introducing mandatory reporting under
geopolitical environment and markets visibly
the EU Corporate Sustainability Reporting
more volatile. Instability of energy supply and
Directive (CSRD) and third-party sustainability
increasing shifts towards protectionist actions
data assurance requirements
for all
listed
have pushed energy pricing in Europe to all-time
entities from 2023. In December, the Australian
highs while the US Inflation Reduction Act (IRA) is
Government
commenced
consultations on
threatening geopolitical trade alliances.
whether
to
introduce mandated
climate
Vulcan has worked to alleviate Europe’s ensuing
the International Sustainability Standards Board
reporting requirements that would align with
energy crisis,
including signing a binding
(ISSB).
term sheet with Stellantis to assist with the
decarbonisation of the energy mix of their
Vulcan has been a first mover adopter in many
Rüsselsheim manufacturing site in the Upper
instances. Vulcan believes that sustainability is at
Rhine Valley in January 2023 and a binding
the heart of what drives success. The Company:
heat offtake agreement with MVV for the city of
Mannheim in April 2022. Importantly, Vulcan is
f Has voluntarily reported to the Taskforce for
a current, commercial producer of renewable
Climate-related Disclosures (TCFD) since 2021.
energy, from its operational plant at Insheim.
Additionally, Germany’s €2.98 billion scheme
f Voluntarily sought certification as a carbon neutral
to promote green district heating based on
company under the Climate Active and South Pole
renewable energy alongside other policies to
certifications.
support renewable projects also act as enablers
for Vulcan.
f Is a signatory to the United Nations Global Compact
(UNGC) and a forum member of the Taskforce for
Favourable European policy, such as
the
Nature-related Disclosures (TNFD).
Critical Raw Materials Act (2023) which seeks to
significantly increase and diversify the European
f Is working towards comprehensively reporting to
Union’s critical raw materials supply, strengthen
the Global Reporting Initiatives (GRI) framework.
circularity and support research and innovation
and the Carbon Border Adjustment Mechanism
Cognisant that Vulcan is dual listed on the ASX
(CBAM), shows the EU’s support for sustainably
and FSE, the team continues to work with experts
sourced local materials that are key in assisting
in sustainability practices to continue being at the
decarbonisation efforts. Vulcan is strategically
forefront of sustainability reporting.
placed within Europe to benefit and, given the
demand for lithium is expected to rise significantly
in the coming years, has signed multiple offtake
agreements aimed to ensure financial stability
for the Company for a number of years once in
commercial production.
39
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 ESG ROADMAP
1 JULY - 31 DECEMBER 2022
In ensuring Vulcan remains committed to the
implementing an online occupational health &
Company's sustainable purpose, Vulcan have
safety, and onboarding training program due to
devised and adopted an ESG specific Roadmap
the necessity of this training for a fast growing
with key environmental, social and governance
team. Now fully implemented, Vulcan is focusing
deliverables. The
infographic
illustrates key
on expanding the training platform to include
deliverables for 2022 and which of those were
some ESG training modules, focused on raising
achieved during the reporting period. Vulcan are
awareness of sustainability matters impacting the
proud of the fact that the team achieved all but two
business. (2) the carbon reduction target: Vulcan
of the 2022 deliverables and recorded many more
has instructed a third party to assess Company GHG
ESG related achievements.
emissions for the 2022 calendar year and is focused
The two targets where initiatives are in progress:
monitor and successfully implement reduction
(1) the full ESG training program: Vulcan prioritised
strategies. Vulcan will report on these targets in
on ensuring robust systems are in place to capture,
the next reporting period.
Climate Active Aust
Organisation
TOM 360
implementation
Sustainability
Report 2022
Minviro
KMP ESG KPI
Vulcan group ESG
training program
Q1
Q2
Q3
Q4
Vulcan Group
Purpose, Mission,
Strategy & Values
Process Management
System for ISO
Standards
UN Compact membership
Carbon neutrality
certification
Materiality Assessment
ESG and Climate
risk assessment
Carbon
reduction
target
Completed
In Progress
40
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 ACHIEVEMENTS
1 JULY - 31 DECEMBER 2022
f Peer benchmarking completed under both the Materiality Assessment and Sustainalytics ESG
Risk Rating (determined as having a low risk exposure, first amongst peers, and in the 2nd
percentile for the Chemicals Industry).
f Third TCFD report now also including climate scenario modelling against Net Zero Emissions
(NZE) and State Policies Scenario (STEPS).
species
f Completed
preliminary
five
environmental impact assessments
conservation
and
assessments to 31 December 2022
on planned development areas,
which are focused only on farmland
or industrial land.
f Partnering with
the Karlsruhe
f Renewable energy producer since
January 2022 with the acquisition
of Natürlich Insheim and produced
31,500,00kWh of renewable energy,
saving ~9,500 tonnes of CO2.
f Signed offtake agreement with MVV
for district heat supply to the City of
Mannheim.
Species Conservation Foundation.
f Gender balanced board, a standout for the second year running within ASX300 mining companies7.
f Completed first Company wide compensation and benefits assessment and set further employee wellbeing initiatives.
f In 2022 ‘One Vulcan, One Team’ introduced a significant initiative with an increasing focus on culture within ESG.
f Fully integrated internal training and development program completed with implementation of SAM platform.
f Enhanced occupational health and safety management.
f United Nations Global Compact (UNGC) member.
f Centralised administrative functions after TOM 360 analysis.
f Completed 19 community roadshow events during the year to educate and inform local communities.
f Opened Info Centres in Insheim, Landau, Mannheim and Karlsruhe for local community engagement.
f Expanded the Zero Carbon Lithium™ project exploration license area with a licence application in France.
f Sustainability embedded in projects execution management.
f Formed the Vulcan Sustainability Steering Committee.
f Strengthened risk management processes.
7 Source https://www.miningnews.net/leadership/news/1449188/mnns-2023-gender-diversity-scorecard
41
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 ESG PERFORMANCE
UPDATE
Environmental impact assessment
Corporate
sustainable
responsibility goes beyond
Decarbonisation
Vulcan acquired an operational geothermal renewable
emissions mitigation and reduction. It is only one part
energy power plant in December 2021 and renamed
of the climate change solution. Biodiversity and nature
it Natürlich
Insheim. Natürlich
Insheim supplies
positive impacts are fundamental, not only to our efforts
approximately 6,500 households with power and, during
to decrease emissions but also to our social welfare.
the full year of 2022, generated 31,500 MWh and saved
As part of Vulcan’s permitting process, preliminary
approximately 9,500 tonnes of CO2. Vulcan also increased
the number of employees to 12 full-time people. Natürlich
environmental
impact assessments
(EIA) and
initial
Insheim is a key first step for Vulcan as the Company
species conservation assessments have been completed
transitions
into a project execution and operations
over potential drilling sites within Vulcan’s licensed areas.
company and scales up support for Europe achieving
The information gathered within these reports is being
energy security and independence from fossil fuel reliance.
used to inform our biodiversity strategy and nature positive
impact targets.
Climate change and energy
The value of Future-focused encompasses both awareness
The first EIAs have confirmed that no Natura 2000 sites,
of the potential future risks from climate change
including bird protection areas and flora-fauna habitats,
to infrastructure and the supply chain, and also the
are or will be affected. We have specifically avoided
opportunity to assist the German power grid to transition
environmentally sensitive areas, and are focused on using
away from fossil fuel and Russian reliance and European
farmland or industrial land. As part of the EIA studies by the
lithium extraction to
innovate to more sustainable
project development team, a catalogue of criteria was used
methods.
to identify the most suitable locations for Vulcan activities,
taking into account Natura 2000 sites, nature reserves,
biotopes, infrastructure, geothermal potential, residential
Environmental Management
Driven by the Value of Sustainability, Vulcan has a dual aim
areas and necessary site size. Däs Institut für Näturkunde
of tackling climate change and decarbonisation through
in Südwestdeutschländ in coordination with the Lower
the production of lithium and geothermal heat and energy
Nature Protection Authority assessed potential drill sites
while working to be nature positive. Vulcan is a positive
and noted that no clearing of trees would be required and
disruptor with a management approach designed to have
that environmental impacts would be minimal.
minimal impacts on communities and the environment.
42
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 RESOURCE MANAGEMENT
Resource management
is a crucial step
towards
understanding and minimising potential negative impacts.
Water
Vulcan is working to manage and reduce the amount of water
Vulcan will continue to develop and assess energy
consumed through effective recycling and replenishment
consumption, water usage and waste analysis as the
of withdrawn water. To protect this valuable resource, the
Zero Carbon Lithium™ Project advances. Year-on-year
Company will re-use water when feasible, test and treat
comparisons are just one way Vulcan remains accountable
water returned to the environment, and continue to advance
and transparent.
understanding of potential risks – including the potential for
increased water scarcity due to climate-related changes in
Energy consumption and the burning of fossil fuels
precipitation in Western Europe.
to generate electricity is deemed one of the biggest
contributors to GHG emissions. Vulcan is a renewable
Minviro has updated the Life Cycle Analysis (LCA) for water
geothermal energy producer and is committed to reducing
consumption for production of the lithium hydroxide product,
reliance on grid electricity and heating where possible
utilising the updated DFS data that was published on 13
across the organisation. Some energy management
February 2023. The assessment is a cradle-to-gate study,
initiatives already in place at Vulcan include the purchasing
including the extraction of geothermal brine, the processing
of renewable energy certificates, energy efficiency
of the lithium product into lithium hydroxide monohydrate
measures such as automatic lighting, and allowing staff
(LHM), transportation of the lithium chloride concentrates
flexible work from home options.
from the geothermal plants to the CLP, and treatment of
TABLE 3: PROPOSED WATER USAGE PER TONNE OF LHM (SOURCE: MINVIRO 2023 LCA)
Location
Taro LEP
Net freshwater input
Lionheart
Net freshwater input
CLP
Net freshwater input
Net high purity water input
Total Water Consumption
Water in Hydrochloride
Water in Lithium Hydroxide Monohydrate
Water in Products
Water Consumption Net of Products
Tonnes Water/LHM
0.58
1.16
0.08
1.89
3.71
1.92
0.43
2.35
1.36
43
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 wastewater effluent and solid waste by third parties. The
Waste
Vulcan is committed to the effective management of waste
LCA estimates that only 1.36 tonnes of water per tonne of
including overall operational waste efficiency and recycling
LHM produced (Table 3), net of products, will be consumed
from lithium processing. As the team move towards execution
due to recycling streams engineered into the process, which
and operation, waste management and recycling processes
comparatively is an extremely small water footprint.8
are being finalised. Below is the Company’s organisational
waste data for 2021 and 2022.
TABLE 4: 2022 ELECTRICITY, WATER AND WASTE CONSUMPTION
2021
2022
Electricity consumption
Grid electricity
Renewable electricity
Heating
Fuel
Water
Consumption
Treatment
Groundwater
Waste
General
Wastewater
Hazardous waste
Waste recycled (paper, plastic and glass)
44,574.54 kWh
0
117,872 kWh
928 ltr
227.7 m3
9842.4 kg
0
11,500 kg
360 kg
24 kg
7,677 kg
419,000 kWh
66,198 kWh9
7,000 kWh
5073 ltr
828 m3
n/a10
0
5,981 kg
n/a10
n/a10
6,201 kg
8 Based on internal Vulcan figures and calculated together with the Hatch study as part of the DFS, then incorporated into the Minviro LCA Study
2023.
9 GreenPower being utilised at three Vulcan sites and excludes electricity self-generated at Natürlich Insheim.
10 It was not possible to separately quantify water treatment, wastewater and hazardous waste for 2022. Systems are being implemented to
report this accurately.
44
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 LIFECYCLE ASSESSMENT
Vulcan commissioned Minviro Ltd, an
independent
Carbon Lithium™ Project. Minviro’s first ISO-aligned LCA was
consultancy, to undertake an
ISO-aligned Life Cycle
conducted in 2021, with the latest LCA undertaken in 2023
Assessment (LCA) of the integrated geothermal energy,
(after the end of the reporting period). LCAs will be updated at
lithium production and processing impacts to prove and
regular intervals going forward.
certify the validity of the carbon neutral nature of the Zero
i
.
0
2
H
H
O
L
g
k
r
e
p
.
q
e
2
O
C
g
k
0
-2
-4
-6
-8
-10
FIGURE 8: CLIMATE CHANGE BY STAGE
-1.4
-6.7
-1.7
2.4
0.1
2.6
1.4
Geothermal
Energy
Production
(Taro)
Geothermal
Energy
Production
(Lionheart)
Lithium
Extraction
(Taro)
Lithium
Extraction
(Lionheart)
Chemical
Processing
Transport
Total
45
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
EMISSIONS
VULCAN'S AUSTRALIAN ORGANISATION, COMPRISED OF A TEAM BASED IN PERTH, WESTERN
AUSTRALIA HAS MAINTAINED CLIMATE ACTIVE CARBON NEUTRAL CERTIFICATION FOR 2020
AND 2021.
To complement the Australian carbon neutral certification
year. This is the first step of the annual carbon neutral
for 2021, Vulcan engaged South Pole to certify the Vulcan
certification process. As the certification process is
German organisation, Vulcan Energie Ressourcen GmbH
usually only completed by May of each year, the GHG
and its subsidiaries VEE and VES for 2021. As part of the
emissions data has yet to be independently verified.
certification process, 2,228 tCO2e credible carbon offsets
were purchased to bring the Group to a carbon neutral
Final numbers will be
included
in Vulcan's next
position11. These comprised of 598 tCO2e supporting
REDD+ Rimba Raya Biodiversity Project in Indonesia and
1,630 tCO2e Sipansihaporas hydro power plant, North
Sumatra.
Sustainability Report. Good quality carbon offsets will be
acquired as per prior years once numbers are finalised.
For further
information on the process of carbon
neutral certification for 2021, please refer to the FY22
Sustainable Business Consultants
(SBC), who Vulcan
Sustainability Report, available via the website https://v-
currently utilise to assist with carbon neutral certification
er.eu.
applications,
is currently completing a combined
assessment (for Australia and Germany) of the greenhouse
gas (GHG) emissions inventory for the 2022 calendar
11 The extra 55 tCO2e purchased was due to a last minute South Pole Scope 3 emissions recalculation that resulted in a slight decrease in the
total after the offsets had been purchased
46
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 TCFD SUMMARY
VULCAN HAS PRODUCED, FOR THE FIRST TIME, A STANDALONE TASKFORCE FOR CLIMATE
RELATED FINANCIAL DISCLOSURES (TCFD) REPORT AS PART OF THIS REPORTING SUITE. WHAT
FOLLOWS BELOW IS A SUMMARY OF THE PROGRESS MADE IN THE PERIOD UNDER REVIEW. THE
FULL REPORT IS ACCESSIBLE VIA THE WEBSITE (HTTPS://V-ER.EU).
Governance
Disclose the organisation’s governance around climate related risks and opportunities
Recommended disclosures and
disclosure level
a) Describe the Board’s oversight of climate
related risks and opportunities
b) Describe management’s role in assessing
and managing climate related risks and
opportunities
Summary of progress in 2022
Standalone TCFD Report page reference
Page 4 - 5
Page 6 -7
f Vulcan has a robust governance
framework as set out in the TCFD
report. It was enhanced with the
formation of a Projects Oversight
Committee, one key responsibility
is the oversight of the
of which
projects,
of
risk management
including climate related risks and
opportunities.
f A Projects Execution Committee
and a Supply Chain Council were
created in 2022 comprising members
of management. The remit of the
Committee and Council
include
oversight of climate related risks and
responsibilities as it relates to project
execution and the Company’s supply
chain.
formed
f A Sustainability Steering Committee
the
to
was
Vulcan’s
implementation
Sustainability
This
Committee comprises personnel from
across the organisation.
facilitate
of
framework.
47
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Strategy
Disclose the actual and potential impacts of climate related risks and opportunities on the organisation’s businesses,
strategy and financial planning where such information is material.
Recommended disclosures and
disclosure level
a) Describe the climate related risks
and opportunities the organisation has
identified over the short, medium and long-
term
the
b) Describe
impact of climate
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning
resilience of
the
the
c) Describe
organisation’s
into
strategy,
consideration different climate related
scenarios, including a 2°C or lower scenario
taking
Summary of progress in 2022
Standalone TCFD Report page reference
f A Sustainability and ESG framework
was adopted to ensure sustainability is
woven into Vulcan’s core strategy.
Page 8 - 9
Page 15 - 18
f The Company updated its risk matrix In
Sept 2022 to include additional Climate
related risks. No material risks were
identified.
f Climate related opportunity is inherent
in the Company’s overall strategy.
f The Board and senior management
deliberated on the potential impacts
of climate related risks during the
enterprise risk management workshops
conducted in Sept 2022. The outcome
of this is captured in more detail in the
TCFD report but no material risks were
identified.
f Climate related opportunity is inherent
in the Company’s strategy and purpose.
f To stress
test
the organisation’s
strategy, the first climate scenario
modelling was completed with the
support of Baringa using the
IEA’s
Stated Policies Scenario (STEPS) and
Net Zero Emissions by 2050 Scenario
(NZE). No material exposures were
identified following this analysis.
Page 12 - 18
Page 10 - 11
48
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Risk management
Disclose how the organisation identifies, assesses, and manages climate related risks.
Recommended disclosures and
disclosure level
a) Describe the organisation’s processes
for
identifying and assessing climate
related risks
b) Describe the organisation’s processes
for managing climate related risks
c) Describe how processes for identifying,
assessing, and managing climate related
risks are integrated into the organisation’s
overall risk management
Summary of progress in 2022
Standalone TCFD Report page reference
f The Company adopted
the 2004
COSO Enterprise Risk Management –
Integrated Framework as the principal
mechanism to
identify, assess and
measure enterprise wide risks.
f 18 climate related risks identified over
the short, medium and long term. No
Material risks were identified.
f PwC were instructed to undertake a
360 Target Operating Model review
resulting in recommendations on the
enhancement of the legal corporate
structure and governance framework.
f Through
and
Executive
Board
workshops using the COSO Enterprise
Integrated
Risk Management
Framework, Vulcan
its
understanding of the climate related
physical and transition risks.
–
advanced
Page 12 - 18
Page 4 -7
Page 8 - 9
Page 12 - 18
f The development of new Committees
within the governance framework.
f Allocation of roles and responsibilities
for specific risks, and reporting lines on
the management of risk.
f Enhanced
developed
risk matrix
following the Executive and Board risk
management workshops.
Page 4 – 7
Page 19
f Executive incentivation linked to ESG-
related KPIs
introduced to embed
business
into
sustainability
strategy and drive accountability and
performance.
the
the establishment of
f Enhanced governance was introduced
through
the
Projects Oversight Committee, Projects
Execution Committee, Sustainability
Steering Committee and Supply Chain
Council.
49
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Targets and metrics
Disclose the metrics and targets used to assess and manage relevant climate related risks and opportunities where such
information is material.
Recommended disclosures and
disclosure level
Summary of progress in 2022
Standalone TCFD Report page reference
a) Disclose the metrics used by the
organisation to assess climate related risks
and opportunities in line with its strategy
and risk management process
f Vulcan reports its GHG emissions and
Page 19 - 21
use of carbon offsets.
f Opportunity management is inherent in
Vulcan’s overall business strategy and
purpose.
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 GHG emissions, and
the related risks
f The GHG emission data is being updated
and verified for 2022 and will be reported
in the next issued report.
Page 19 - 21
c) Describe the targets used by the
organisation to manage climate related
risks and opportunities and performance
against targets
f Executive incentivation linked to ESG-
related KPIs
introduced to embed
sustainability into the business strategy.
f Key highlights are included in the TCFD
report and the annual report.
Page 19 - 21
The full report is available on Vulcan's
website https://v-er.eu.
50
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 OUR PEOPLE
THE VULCAN VALUE OF INTEGRITY PROVIDES THE FOUNDATION FOR HOW THE TEAM
INTERACT WITH EACH OTHER AND HOW THE COMPANY TREATS EMPLOYEES. VULCAN
FOCUSES ON HAVING A POSITIVE SOCIAL IMPACT ON THE COMMUNITIES WITHIN WHICH IT
OPERATES AND ON HELPING IMPROVE THE QUALITY OF LIFE FOR PEOPLE, LAND, AND SEA.
VULCAN VALUES
As part of the process to define Vulcan’s purpose, vision
Considerations in defining the values were that their
and strategy, the Vulcan Values were finalised in March
meaning was the same across languages and that they
2022 (Figure 9) after collaborative workshops with the
succinctly encapsulated the type of company Vulcan
Leadership team. Four key values were identified including
aspires to be. Work continues to bring these to life within
Integrity, Leadership, Future-focused and Sustainability.
the Company and make them a visible part of the culture.
FIGURE 9: VULCAN VALUES
VULCAN
VALUES
INTEGRITY
LEADERSHIP
FUTURE-FOCUSED
SUSTAINABILITY
We act respectfully and
We work to the highest
We disrupt and innovate
Economic progress
transparently to earn
levels of safety, quality
to build a better future.
through sustainable
trust.
and efficiency.
growth and
environmentalism.
51
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 ONE VULCAN, ONE TEAM
Vulcan has been ambitiously growing the team over the
mindset is fundamental to driving the Company’s success,
past few years to be able to deliver on the Zero Carbon
and the team have focused on building the Vulcan Way to
Lithium™ Project with a strong recruitment strategy
ensure every employee takes ownership and understands
as well as through the acquisition of Vulcan Energy
their individual importance within the Company. Some of
Engineering, Vulcan Energy Subsurface solutions, and
the things implemented to build a collaborative culture
Natürlich Insheim. A strong culture with a collaborative
include:
'One Vulcan, One Team' to bring people together from the different sectors of the business and
convene around the Company purpose of empowering a net zero carbon future.
As part of the Target Operating Model (TOM 360), all administrative functions have been centralised
and streamlined, with clarity around roles and responsibilities.
There has also been significant work in the Human Resources department to standardise
compensation and benefits frameworks and enhance employee wellbeing and recruitment.
The Employee Wellbeing Project Manager has initiated a workstream to continue embedding and
exemplifying the Vulcan Values across the Company.
52
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 TALENT ATTRACTION AND RETENTION
Vulcan is in a rapid scale-up and recruitment phase
aiming to ensure employment of the best people to help
deliver on the Zero Carbon Lithium™ Project. Through
Via a uniform compensation structure...
the Company’s comprehensive recruitment process, a
range of positions were filled during the period. Once
someone becomes part of Team Vulcan, the Company
focuses on providing opportunities for the employee
… we are committed to equitable payment
to flourish within the Company and to be a team player
who can exemplify the Vulcan Values. The Human
Resources team has finalised a complete review of
compensation and role descriptions and presented
the results to the Board. This process included a
review of over 150 job descriptions, preparation of
salary bands and peer benchmarking. Areas that were
identified were a benefits package to be included in
salary considerations, personal development and
training opportunities, and employee wellbeing
incentives. Vulcan’s compensation structure is based
on the following considerations:
… we are transparent
… we are fair
… we promote personal development
The Vulcan team continues to grow steadily and totalled
While working to meet diversity targets, it is encouraging
184 full-time employees (FTE) at 31 December 2022, up
to see 50% female representation on the Board, and that
from 129 FTE at 30 June 2022. At the time of this report,
female representation increased 2% over the 6-month
this had increased to >280 FTE strong and still growing.
period across the entire company.
The Board has set measurable gender diversity objectives
of 40% female representation on the Board, in senior
executive positions, and across the entire workforce.
TABLE 5: EMPLOYEE NUMBERS, AGE AND DIVERSITY
Employees
Total
employees
Total
full-time
% female
Vulcan
193
184
34%
Employees by age
Intern/ work
students
<30
40
30-50
>50
113
40
33
53
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 EMPLOYEE TRAINING
Although there are no employees covered under collective
Utilising an online training platform alongside workshops,
bargaining agreements (CBA) (a written contract between
the Vulcan European team have completed a number
an employer and a union representing the employees that
of training programs including HSEQ onboarding, with
negotiates the terms and conditions of employment),
the average number of hours of training completed per
the HR department has referenced CBA terms when
employee since implementation being six hours. Training
finalising employment contracts and are in the process of
is based on a mixture of Company-wide modules, followed
standardising contracts across the Vulcan Group, in line
by job or site-specific modules, and refresher courses
with the compensation review.
are automatically applied depending on necessity. An IT
awareness webinar was completed in October and skills
Vulcan is proud to report that the Company pays on average
upgrade training including finance, communications and
1.67 times higher than the basic salary in Germany, which
Office 365 proficiency were also offered to the relevant
is currently €12 per hour. The Company has also hired 22
team members. As of December, 100% of the German team
executives from the local community and the ratio of CEO
have completed and passed all onboarding and occupational
compensation to the median Vulcan salary is 3.40. The
health and safety courses. With the training framework now
Company’s current turnover rate (where the employee left
in place, the Process Management team is looking to expand
voluntarily) is approximately 13.5% at the end of the period.
course offerings to include ESG specific training.
DIVERSITY, EQUITY, AND INCLUSION
BOARD
SENIOR
EXECUTIVE
ENTIRE
WORKFORCE
50% Male / 50% Female
73% Male / 27% Female
68% Male / 32% Female
54
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 COMMUNITY ENGAGEMENT
Vulcan continues to engage and collaborate with
local
Vulcan continuously evaluates communication measures
communities. The Company recognises that one of the most
to ensure messaging is current, focused, effective, and
important stakeholder groups for the success of the Zero
efficient. Central measures include:
Carbon Lithium™ Project are the local decision-makers, and
that the wellbeing of the communities in which Vulcan works is
f Daily press and social media monitoring.
of paramount importance for mutually beneficial outcomes for
stakeholders and the Company. The Vulcan communications
f A Regional Readiness Index.
team and strategy have grown commensurate to the increased
engagement requirements as the Company advances through
f Regular communication team meetings and alignment
permitting and construction to commercial operation.
workshops.
Therefore, activities are developed and adjusted continuously
to always be meaningful, focused, and timely. These efforts
f Monthly evaluation of citizens' enquiries via phone, email
are centred around a toolbox that has been set up for each
and dialogue.
region in the Upper Rhine Valley and contains the following
communication tools:
f Ad hoc evaluation of conversations and events with
politicians, administrative decision-makers, journalists,
f Local website and regional social media to continuously
and other multipliers.
inform local community groups about Project progression
and to ensure the highest levels of transparency (e.g.
Collaboration with local community is crucial for Vulcan to
https://natuerlich-kurpfalz.eu/) .
ensure acceptance for the Zero Carbon Lithium™ Project.
The team is aware of the activities of citizens’ initiatives
f Strong activity with media including interviews, site visits,
in some regions and takes their concerns seriously,
information events and news articles.
ensuring Vulcan provides numerous opportunities for
dialogue and collaborative solutions. Vulcan’s continuous
f A citizen telephone hotline so the team can provide local
communication feedback process aims to proactively
citizens with another channel of direct communication.
inform local political decision-makers, public bodies, and
f Vulcan’s Info Centres located in Karlsruhe, Landau, and
examples of these include the start of a 3D seismic survey,
Mannheim are a visible and tangible option for residents
the start of drilling, and the construction of facilities.
to learn more about the Zero Carbon Lithium™ Project
This is supplemented by face-to-face dialogue, resident
alongside a Mobile Info Centre truck that is used for
communication, and community events such as those
opinion leaders about all important milestones. Some
roadshows.
in Herxheim and Haßloch in 2022. A model participation
process is currently being established in the Palatinate
f Vulcan is active across multiple online platforms for local
region which will be rolled out to other regions. Vulcan has
community groups to engage with the Company including
demonstrated significant progress in public acceptance,
via websites, social media, and enquiry emails.
with the City of Landau voting to support geothermal
f An emergency communication plan has been implemented
of nine councils in the region voting in favour of Vulcan’s
to proactively react in the event of an incident. Vulcan has
seismic survey during the period.
development in Vulcan’s Phase One area, and eight out
an internal procedure for the settlement of claims and a
publicly available whistleblower process.
55
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 CORPORATE
GOVERNANCE
56
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 OVERVIEW OF
GOVERNANCE
As a sustainability-centric company, Vulcan continues
policies which aim to create value, whilst ensuring it remains
to be committed to the highest standards of corporate
accountable, by implementing appropriate controls that are
governance and regulatory compliance. Underpinned by
commensurate with the risks involved.
Vulcan’s Value of Integrity, each team member endeavours
to be respectful, authentic and trustworthy both to each
The Board believes that the Company’s policies and
other and to external groups.
practices comply with the recommendations of the ASX
Vulcan is also committed to ensuring its business activities
4th Edition and as Vulcan grows, the Company will regularly
are conducted fairly, honestly and with
integrity
in
review its corporate governance policies, practices and
compliance with all applicable laws. To achieve this, Vulcan’s
controls so this compliance is not only maintained but
Board of Directors has adopted a number of charters and
enhanced.
Corporate Governance Principles and Recommendations –
57
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 PRACTICE AND
COMPLIANCE
VULCAN IS COMMITTED TO THE HIGHEST STANDARDS OF CORPORATE GOVERNANCE PRACTICE
AND REGULATORY COMPLIANCE. THIS IS REFLECTED IN THE VULCAN VALUES OF LEADERSHIP
AND INTEGRITY AND IS EXEMPLIFIED IN THE COMPANY’S FIRST PUBLIC LOW ESG RISK RATING
FROM SUSTAINALYTICS (JANUARY 2023).
PROJECT EXECUTION
The second half of 2022 saw the continued focus on
strengthening Vulcan’s corporate governance framework.
The matrix organisation provides a consistent approach to:
f Delivery defined by project execution, contract strategy,
Vulcan is transitioning from a development company to an
engineering standards and strategic sourcing.
integrated project execution and operations company.
The appointment of Deputy CEO, Cris Moreno, will be
instrumental in defining the project execution strategy and
f Interfaces being effectively managed and clear lines of
f Integrating schedules and visibility of critical paths.
building out the team to achieve this, with projects to be
accountability.
delivered under a single integrated project group which will
focus on advancing Vulcan’s Zero Carbon Lithium™ Project
f Risks and opportunities being defined and managed.
towards commercial production.
f Control processes to give strategic management and
insights.
In addition, strong project governance is applied via a Project
Oversights Committee and Project Directorate that oversee
the project delivery teams.
The Projects Oversight Committee, comprising of three
Directors highly experienced in project management and
execution together with operational management are
responsible for regularly reviewing the status of nominated
projects and applying appropriate corporate governance and
risk management frameworks.
“
VULCAN IS COMMITTED TO
ENSURING ALL OF ITS BUSINESS
ACTIVITIES ARE CONDUCTED
FAIRLY, HONESTLY AND WITH
INTEGRITY IN COMPLIANCE WITH
ALL APPLICABLE LAWS.
58
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 FIGURE 10: PROJECT EXECUTION GOVERNANCE FRAMEWORK
PHASE ONE ORGANISATION & GOVERNANCE
PROJECTS OVERSIGHT COMMITTEE
EXECUTIVE PROJECT STEERCO
PROJECT DIRECTOR(ATE)
DELIVERY TEAMS
Wells
Wells
P/L’s
Geothermal
LEP
Wells
Wells
CLP
Wells
P/L’s
Geothermal
LEP
Wells
Sites
Projects
UPSTREAM
DOWNSTREAM
One Nominated Project Sponsor will chair the Executive
all Capital Projects until handover to production. The Head
Project SteerCo which will govern, support, and steer the
of ESG will sit within the Executive Project SteerCo and
Project Directorate. The Project Sponsor will report Capital
assist with reporting on sustainability aspects of project
Project updates to the Vulcan Board and Projects Oversight
execution to the Board. The proposed strategy will deliver
Committee, while a dedicated Project Director will lead the
operational integrity, will maximise site synergies and will
Project Directorate and be the single point accountable for
help deliver on cost competitiveness.
59
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 WHISTLEBLOWER REPORTING
Vulcan encourages a culture of ‘speaking up’ to raise
f Using the Company’s independent and confidential
concerns about possible unlawful, unethical, or socially
reporting channel, externally managed by speeki.
irresponsible behaviour or other improprieties of or within
the Company, without fear of retaliation or otherwise being
f Encouraging employees to raise
issues with their
disadvantaged as evidenced in our Whistleblower policy.
manager or a member of the HR team.
The Company provides a range of mechanisms to report
During 2022, no Whistleblower Hotline disclosures were
suspected breaches of the Code of Conduct. These
reported and there were no matters of concern managed
include:
by the WPIO.
f Training and education on Vulcan’s Whistleblower Policy
(publicly available on our website).
f Speaking with Vulcan’s Whistleblower Protection and
Investigation Officer (WPIO).
60
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 DIRECTORS'
REPORT
“
OUR TEAM, COMBINING MULTI-
DISCIPLINARY, INTERNATIONAL,
SCIENTIFIC, ENGINEERING
AND COMMERCIAL EXPERTISE,
ARE SUPPORTED BY A BOARD
WITH DECADES OF INDUSTRY
EXPERTISE AND LEADERSHIP.
61
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 The Directors of Vulcan Energy
Resources Limited ('Vulcan' or
'the Company') present their
report, together with the financial
statements on the consolidated
entity consisting of Vulcan
Energy Resources Limited and its
controlled entities (the 'Group') for
the six months ended 31 December
2022.
DIRECTORS
The names of the Company’s directors in office during
the financial period and their date of appointment are as
follows.
Mr Gavin Rezos: appointed 4 September 2019.
INTEREST IN SHARES AND
OTHER SECURITIES IN THE
COMPANY
The following table sets out each current Director’s
relevant interest in shares and performance rights of the
Company as at the date of this report.
Director
Ordinary Shares
Performance
Rights
Mr Gavin Rezos
7,598,727
1,000,000
Dr Francis Wedin
16,458,561
142,000
Ms Ranya Alkadamani
276,000
Ms Annie Liu
Dr Heidi Grön
Ms Josephine Bush
Dr Günter Hilken
Mr Mark Skelton
77,379
6,099
13,698
-
900
-
8,597
8,597
8,597
14,237
14,237
Total
24,431,364
1,196,265
Dr Francis Wedin: appointed 4 September 2019.
PRINCIPAL ACTIVITIES
Ms Ranya Alkadamani: appointed 29 April 2020.
The principal activities of the Company during the period
were geothermal energy and lithium exploration in Europe.
Ms Annie Liu: appointed 18 March 2021.
Dr Heidi Grön: appointed 25 March 2021.
Ms Josephine Bush: appointed 16 April 2021.
Dr Günter Hilken: appointed 23 March 2022.
Mr Mark Skelton: appointed 19 April 2022.
62
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 INFORMATION ON DIRECTORS
THE NAMES AND PARTICULARS OF THE COMPANY’S DIRECTORS IN OFFICE DURING THE
FINANCIAL PERIOD AND AT THE DATE OF THIS REPORT ARE AS FOLLOWS. DIRECTORS HELD
OFFICE FOR THIS ENTIRE PERIOD UNLESS OTHERWISE STATED.
MR GAVIN REZOS
NON-EXECUTIVE CHAIRMAN
B.Juris, LLB, BA, Law, Economics, International Politics
Mr Rezos has many years of Australian and international corporate, project finance and investment banking
experience and is both a former Head of Legal and Compliance across multiple countries for the HSBC Group
and an investment banking Director of HSBC Group with regional roles during his career based in London,
Sydney and Dubai. Mr Rezos has held chairman, board and CEO positions of companies in the materials,
technology and resources sector in Australia, the United Kingdom, the United States and Singapore and was
formerly a non-executive director of Iluka Resources and of Rowing Australia, the peak Olympics sports body
for rowing in Australia. He is a principal of Viaticus Capital.
DR FRANCIS WEDIN
MANAGING DIRECTOR
PhD & BSc (Hons) Geology & Mineral Exploration, MBA in renewable energy
Dr Wedin is a battery raw materials industry executive, with a diverse career spanning four continents and
multiple commodities. Dr Wedin co-founded Vulcan Group’s Zero Carbon Lithium™ Project in Germany. Dr
Wedin was previously Executive Director of successful ASX-listed Exore Resources Ltd (ASX:ERX). During this
time, he discovered and defined two new JORC lithium resources, on two continents, in under a year. This
included Lynas Find, which was bought by Pilbara Minerals to become part of its large Pilgangoora Lithium
Project, now in production (ASX:PLS). Dr Wedin has a PhD and BSc (Hons) in geology and mineral exploration,
and an MBA in renewable energy. He is a Fellow of the Geological Society, London, and a member of the
Australasian Institute of Mining and Metallurgy.
MS RANYA ALKADAMANI
INDEPENDENT NON-EXECUTIVE DIRECTOR
BA Media, Communication, Media Studies, MA International Relations & Affairs, MA International Communications
Ms Alkadamani holds a Master of International Relations and International Communications and a Bachelor of
Media from Macquarie University. Ms Alkadamani is currently Founder and CEO of Impact Group International, a
strategic communications consultancy focused on advice to impact investors, philanthropists and innovative
social impact programs. Ms Alkadamani works extensively in the impact investment space in Australia and
internationally and has a strong network of clients and investors in the clean energy and renewables sector.
She is also a Non-Executive Director of Australian Associated Press, Australia’s only independent newswire,
Director of the Impact Investment Summit, Asia Pacific and an advisory board member at Murdoch University.
Ms Alkadamani was formerly Strategic Communications and External Affairs Director of Andrew Forrest’s
Minderoo Foundation and now Tatterang, Press Secretary to former Australian Prime Minister, Kevin Rudd
during his time as Australian Foreign Minister and a spokesperson for the Australian Department of Foreign
Affairs and Trade.
63
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 MS ANNIE LIU
INDEPENDENT NON-EXECUTIVE DIRECTOR
BEng Industrial Engineering & Operations Research
Ms Liu was the Executive Director at Ford (Model E) from 2022 to 2023. In this role, Liu applied her knowledge
of global technology sourcing, especially tied to batteries and raw materials, as the business ramps to produce
2 million EVs globally by late 2026. Prior to her role at Ford, Liu was Head of Supply Chain, Battery and Energy
at Tesla, from 2017 to 2020. At Tesla, Ms Liu oversaw multi-billion-dollar partnerships with battery cell and raw
material suppliers to help meet the company’s growth plan. Ms Liu led a global team of supply chain managers
and engineers to support the battery and energy business.
Ms Liu joined Tesla after a 15-year career with Microsoft, holding various positions with Xbox, new product
introductions and strategic sourcing for various products within the organisation. Ms Liu started her career
with Sun Microsystems as a manufacturing engineer. She holds a Bachelor of Science in Engineering from the
University of California, Berkeley.
DR HEIDI GRÖN
INDEPENDENT NON-EXECUTIVE DIRECTOR
PhD Chemical Process Engineering, Dip. Chemical Engineering
Dr Grön is a chemical engineer with more than 20 years' experience in the chemicals industry. Since 2007,
Dr Grön has been a senior executive with Evonik, a specialty chemicals company. At Evonik, Dr Grön is
currently responsible for Production, Technology and for Global product safety including impact assessment
and development of solutions for the EU Chemicals Strategy for Sustainability as well as the management of
Evonik's major investment volumes and production network.
MS JOSEPHINE BUSH
INDEPENDENT NON-EXECUTIVE DIRECTOR
CTA, MA (Hons) Law, CFA ESG investing, Sustainable Finance Certification
Ms Bush is a qualified solicitor and chartered tax advisor, as well as earning the CFA ESG investing qualification
and a sustainable finance certification. She has an MA in Law from Cambridge University. Ms Bush was a senior
partner at EY for 14 years specialising in the renewable energy sector. She built and led the UK and Ireland
Renewables Tax Practice, led on market leading transactions such as structuring for the initial public offerings
of several environmental yieldcos, and developed latterly the EY global renewables business plan. She was a
member of the Ernst & Young Power and Utilities Board and UK&I Governance Board.
64
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 “
OUR BOARD IS COLLECTIVELY PASSIONATE
ABOUT BUILDING A SUSTAINABLE FUTURE AND
BRING LEADERSHIP AND EXPERIENCE ACROSS
THE LITHIUM, GEOTHERMAL, GERMAN CHEMICAL,
RENEWABLE ENERGY AND BATTERY SUPPLY
CHAIN INDUSTRIES.
DR GÜNTER HILKEN
NON-EXECUTIVE DIRECTOR
PhD in Organic Chemistry, Master’s Degree in Chemistry
Dr Hilken has over 35 years’ experience in and a deep understanding of the German chemicals, renewables
and infrastructure investment sectors and, through leading industry advocacy associations, the German
Government at the state and federal level. Dr Hilken’s experience and connections will help Vulcan ensure that
geothermal energy becomes a foundation of Germany’s supply of sustainable and secure renewable energy
as Germany diversifies away from local carbon-based energy sources and Russian energy. Dr Hilken is also a
Senior Advisor to Macquarie Asset Management, a Director of Currenta, a member of the Executive Board of
the German Federation of Industrial Energy Consumers (VIK) as well as a Member of the Supervisory Board of
Currenta. He was previously CEO of Currenta for nine years, held senior executive roles with Bayer in Germany,
the US, Canada and Asia and was a Director of RWE Power AG.
MR MARK SKELTON
NON-EXECUTIVE DIRECTOR
Chartered Engineer (Institution Mechanical Engineers, UK) , BSc (Hons), Mechanical Engineering
Mr Skelton has more than 35 years' experience including a 29-year tenure at BP and then at Fortescue Metals
Group in multiple Project Director and senior management roles. A senior leader and advisor with a proven
record in delivering major projects, business transformation and developing organisational capability within
the mining, energy and oil and gas industries, Mr Skelton has extensive project experience in Australia and
internationally. Mr Skelton holds a Bachelor of Science (Honours), Mechanical Engineering from the University
of Greenwich and is a Chartered Engineer registered by the Institute of Mechanical Engineers (UK). Currently
a director of a private consulting company, Mr Skelton has been involved in delivering and providing strategic
advice on Definitive Feasibility Study (DFS) and development stages of large-scale projects, including mineral
resources, renewable energy and LHM plants in Western Australia. With a focus on excellence in project
development and delivery, Mr Skelton has assisted with the execution of projects from feasibility phase to full
sanction, including assisting with the award of major contracts.
65
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 BOARD SKILLS MATRIX
Vulcan’s management of risk begins with our independently
or, in its absence, the Board, to ensure the appropriate mix
appointed Board who have been carefully selected to
of skills and expertise is present to facilitate successful
ensure relevant and diverse expertise.
strategic direction and to manage and leverage new and
The composition of the Board is to be reviewed regularly
against the Company’s Board skills matrix, which is
The following table sets out the composition of skills and
prepared and maintained by the nominations committee,
experience of Vulcan’s Board of Directors.
emerging business and governance issues.
Experience
Knowledge and skills
Corporate leadership
Successful experience in CEO and/or other senior corporate
leadership roles.
Strategic expertise
Experience setting and reviewing strategy and/or business
development.
International experience
Senior experience in multiple international locations.
Marketing & communications
Media, stakeholder communication, investor relations, public
relations.
Resources or technology industry experience
Relevant industry (resources, energy, power ,mining, exploration,
processing) experience.
Risk and compliance
Risk management and mitigation experience.
Other Board level experience
Membership of other listed entities
(last 3 years).
Capital markets
Capital raising, mergers and acquisitions.
Capital projects
Major resources capital project development and management.
Environmental
Proven experience with climate change policy, sustainability,
carbon reduction.
Social
Positive human resource management.
Governance
Relevant exposure to controlling and operating organisational
procedures and processes.
66
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 SPECIAL ADVISORS TO THE BOARD
MS JULIA POLISCANOVA
Julia is a senior director with the EU’s Transport and Environment. She is instrumental in shaping policies
around EU vehicle CO2 standards and sustainable batteries. Julia previously worked for the Mayor of London
as a senior EU policy officer. Julia is also on the steering committee for the Battery CO2 Passport program of
the Global Battery Alliance.
DR HORST KREUTER
Dr Horst Kreuter is a highly experienced businessman and engineering geologist, with an extensive and
distinguished record of project development and consulting in the geothermal sector.
COMPANY SECRETARY
MR DANIEL TYDDE
Daniel is an experienced corporate lawyer with over 15 years’ experience across a wide range of corporate,
commercial and finance areas including corporate regulatory compliance; corporate governance; equity and
debt capital raisings; asset and share sales and purchases; initial public offerings; corporate restructuring and
re-organisations; and litigation. Most recently, Daniel held a senior position at Steinepreis Paganin and, prior
to that, worked at Clayton Utz and Phillips Fox (now DLA Piper). Daniel holds a Bachelor of Laws and a Bachelor
of Commerce from the University of Notre Dame Australia.
67
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 DIRECTORS’ MEETINGS
The number of Directors’ meetings held during the six months and the number of meetings attended by each Director
during the time the Director held office are:
Full Board
Audit, Risk and ESG
People and Performance
Committee
Projects Oversight
Committee
Attended
Eligible
to
attend
Held
Attended
Held
Attended
Eligible
to
attend
Held
Attended
Eligible
to
attend
Held
Eligible
to
attend
Gavin Rezos
(Chair)
Dr Francis
Wedin (Managing
Director)
Ranya Alkadamani
Annie Liu
Dr Heidi Grön
Josephine Bush
Dr Günter Hilken
Mark Skelton
3
3
3
3
2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
0
0
3
3
0
0
3
3
0
0
3
3
0
0
3
3
3
3
3
3
3
3
2
2
2
2
0
0
0
0
2
2
2
2
0
0
0
0
2
2
2
2
2
2
2
2
0
2
0
0
2
0
2
2
0
2
0
0
2
0
2
2
2
2
2
2
2
2
2
2
In addition to the scheduled Board meetings, Directors regularly communicate by telephone, email or other electronic
means, and where necessary, circular resolutions are executed to effect decisions. For details of the function of the
Board, refer to the Corporate Governance Statement.
68
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 CORPORATE FINANCIAL PERFORMANCE
The financial results of the Group for the six months ended 31 December 2022 and the financial year ended 30 June 2022 are:
31 December 2022
30 June 2022
Cash and cash equivalents (€’000)
Net Assets (€’000)
Revenue from continuing operations (€’000)
Net loss after tax (€’000)
Loss per share (Euro per share)
134,107
233,161
3,622
13,450
(0.09)
175,416
247,323
3,799
18,851
(0.15)
DIVIDENDS
No dividend is recommended in respect of the current financial period.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Highest grade lowest impurity LiOH
produced to date
Vulcan produced
the first battery quality
lithium
Environmental approvals
Vulcan received a positive result for its second preliminary
EIA application (UVP-V) in its Taro licence, in the 'Taro
hydroxide monohydrate (LHM) from piloting operations.
Golf' project area, to drill wells for geothermal energy
The plant sample exceeded traditional battery grade at
and lithium. This is the second positive environmental
57.1% LiOH, easily exceeding the best-on-the-market
approval the Company has received, following the EIA for
battery grade specification of 56.5% LiOH required from
geothermal-lithium drilling in Taro in July 2022, in the
offtake customers. Impurities were well below market
'Taro North' district. At the time of writing, Vulcan had also
specification minimums. The lithium chloride extracted
received a third preliminary EIA approval, in its Insheim
by the sorbent in the pilot plant was recovered with water
licence, the other part of the Phase 1 development area.
and sent off site, where it was purified and concentrated
by third-party providers to prepare the lithium chloride
for electrolysis to produce lithium hydroxide solution. The
solution was then crystalised to produce battery grade
3D seismic surveys commenced and
completed
The Company has received strong support to carry out
lithium hydroxide monohydrate (LHM).
a 3D seismic survey from eight local councils in the
German state of Rhineland-Palatinate. Vulcan mobilised
3D seismic survey teams around its Insheim licence area
from which it is currently producing renewable energy
on a commercial scale, towards an expanded geothermal
and lithium project development. This survey, along with
a survey in the Mannheim licence that represents a future
phase of development, has been successfully completed.
69
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Development of VULSORB™
Vulcan successfully developed, tested, and demonstrated
its own in-house lithium extraction sorbent, VULSORB™,
Appointment of Cris Moreno as Deputy
Chief Executive Officer
Mr Moreno is an energy and chemicals industry executive
for sustainable lithium extraction from the Upper Rhine
with over 20 years’ experience in successfully delivering
Valley Brine Field and Vulcan’s Zero Carbon Lithium™
major capital projects, including in the lithium chemicals,
Project. This is part of Vulcan’s onshoring of its supply
cathode and LNG sectors. In the LNG sector, Mr Moreno
chain to the European market. The technology also
was successful in leadership roles at Santos, Woodside and
represents potentially significant future value for Vulcan,
Shell, including working on the Browse, Gorgon and Prelude
as it can potentially be used in other project areas.
LNG projects, with experience mainly in the execution
Lithium extraction pilot and
demonstration plants
Having tested its process in its pilot plants for two years, to
phase and financially responsible for budgets well over USD
1 billion, leading teams of up to 1,000 personnel. Just prior
to joining Vulcan, Mr Moreno was working in the lithium
chemicals and battery cathode sector in Europe, as Senior
provide engineering information for the DFS, a key element
Director Programs for Northvolt – Cathode Active Material
of Vulcan’s strategy to train its operational team in a pre-
(CAM) Business Unit, and Vice President - Engineering
commercial environment is the design, construction and
and Development for Aurora Lithium, Northvolt’s lithium
operation of demonstration plants. Vulcan’s demonstration
hydroxide refinery joint venture with Galp in Europe.
plant consists of two parts: the Sorption-Demo Plant and
the lithium hydroxide production plant (CLP-Demo Plant)
and will replicate the full process from sorption-DLS to
lithium hydroxide production including recycle streams.
Importantly, technical and operations personnel will train
in the plant to develop a comprehensive understanding of
the process and its operation prior to the construction of
the first commercial plant.
MATTERS SUBSEQUENT TO
THE REPORTING PERIOD
VULCAN ZERO CARBON LITHIUM™
PROJECT PHASE ONE DFS RESULTS
During the period, Vulcan received approval from the state
On 13 February 2023, Vulcan announced the results of
authority in Rhineland-Pfalz, Germany, for the Operating
its DFS for Phase One of Vulcan’s Zero Carbon Lithium™
Plan for Vulcan’s lithium extraction Demo Plant.
Project10. More than 13,000 hrs of data have been gathered
Commencement of French strategic
expansion
In November 2022, Vulcan Group started initiatives to
and analysed from Vulcan’s
lithium extraction pilot
plant (PP1) operation, using brine from our commercial
geothermal wells in the core of our Phase One area
since April 2021. We have also been able to incorporate
expand its exploration licence areas into the Alsace Region
VULSORB™, Vulcan’s newly developed high-performing
of France, a natural extension of the Upper Rhine Valley
in-house sorbent, into our DFS, as well as data from our
geothermal-lithium brine field. For this purpose, Vulcan
newer, higher pressure lithium extraction pilot plant (P1A).
Group founded the French entity, Vulcan Energie France
The combined study has shown compelling financial
SAS (VEF). In late 2022, VEF applied for its first lithium
results and world-leading environmental metrics.
exploration licence in the region, 'Les Cigognes'. A decision
on the application is expected in 20239.
9 https://www.investi.com.au/api/announcements/vul/6420a193-fb5.pdf https://www.investi.com.au/api/announcements/vul/6420a193-fb5.
pdf 02/11/2022
10 Vulcan Zero Carbon Lithium™ Project Phase One DFS results and Resources-Reserves update https://www.investi.com.au/api/
announcements/vul/e617fca6-6d4.pdf 13/02/2023
70
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Compelling financials
f 24ktpa
lithium hydroxide monohydrate
(LHM) p.a.
production from EU, for EU.
World-leading
metrics.
f Net zero project Scope 1, 2 and 3 Greenhouse Gas
target environmental
Emissions per tonne LHM carbon footprint: a world-first
f >300GWh/a renewable power, >250GWh/a renewable
in the lithium industry.
heat production p.a.
f >250% increase in NPV8
tax, €2.6Bn post-tax.
compared to PFS: €3.9Bn pre-
production process.
f Zero Scope 1 fossil fuels consumption in the lithium
f Increased 34% IRR pre-tax, 26% IRR post-tax.
from Phase One.
f Vulcan aims to be a net producer of renewable energy
f >€700Mpa revenues. EBITDA margin of 84%.
f Low water consumption due to recycling: only 1.36 tonnes
of water consumption per tonne of LHM, net of products:
f €1,496M CAPEX. This increase from the PDF is broadly
the lowest compared to current global production.
similar to larger projects and reflects our increase in
project size and inflation.
Vulcan is targeting start of production by the end-2025
and ramp up after that. The Project will be delivered under
f A very low OPEX of €4,359/t LHM.
a single integrated projects group, providing a consistent
approach to delivery and overall accountability. Phase One
f 3.5-year payback (integrated Project). Target start of
of the Project is now moving into bridging engineering
production end-2025.
with Hatch Ltd. Vulcan will continue to deliver according
A larger, sustainable project with a long-
term pipeline.
f Vulcan has forecasted a 60% increase in Phase One
to its contract strategy and delivery model and seek early
engagement of key technology and equipment suppliers.
For full details on Vulcan's Phase One DFS please refer to
production target to 24ktpa LHM per annum. Our
https://v-er.eu/.
increase in CAPEX mostly relates to developing a larger
project and global inflation.
f The Upper Rhine Valley Brine Field (URVBF) lithium
Resource increases to 26.6Mt LCE, the largest lithium
Resource in the EU.
f There has been an increase in overall Phase One Proven
and Probable Reserves to 0.54Mt LCE, centred around
current production wells in the core of the URVBF field.
f Vulcan’s Phase Two DFS is to follow, targeting an
additional further modular 24ktpa production, as per the
2021 PFS study, updated for new engineering data from
the Phase One DFS.
71
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 GREEN ESG RISK RATING REPORT
VULCAN AND STELLANTIS ENTER
PHASED PROJECT AGREEMENT
Sustainalytics, a Morningstar Company that is a leading
independent ESG and corporate governance research,
On 17 January 2023, Vulcan and Stellantis announced they have
ratings, and analytics firm, delivered Vulcan’s first publicly
entered into a phased project agreement, aimed at developing,
available ESG Risk report in January 2023. It gave Vulcan an
building, and operating geothermal renewable energy assets to
overall low ESG Risk Score of 16.8, which puts Vulcan in the
help decarbonise the Company’s energy supply in Rüsselsheim,
top second percentile of all chemicals companies, and first
by providing renewable heat. Stellantis aims to be the auto
among peers of equal market capital size, as assessed by
industry champion in climate change mitigation, becoming
Sustainalytics.
carbon net zero by 2038, with a 50% reduction by 2030. This
requires Stellantis to decarbonise and localise its energy supply
Key indicators that supported Vulcan’s low ESG risk rating were:
across its manufacturing facilities. In the northern area of the
f The quality and integrity of the Board and management
Upper Rhine Valley in Rüsselsheim am Main, Stellantis maintains
teams due to relevant industry experience and strong
a large manufacturing facility in which the DS4 and Opel Astra
governance policies in place.
models are produced, including the electrified variants. This
f Strong stakeholder governance with board responsibility
home of the Opel brand and the German headquarters of
defined and clear, publicly accessible whistleblower
Stellantis. The planned Project will be at the northernmost
facility in the German state of Hesse is also the traditional
programmes.
extent of Vulcan’s focus area in the Upper Rhine Valley. The first
phase of the Project will include a Pre-Feasibility Study for the
f Having executive compensation explicitly linked to the
construction of geothermal assets for Stellantis’ Rüsselsheim
attainment of ESG targets.
facility, carried out by Vulcan and based on existing data. The
Noting that Vulcan is currently a geothermal energy provider
drilling and more advanced studies and development. Stellantis
and will scale up to commercial lithium production, material
will aim to source funding for 50% of the project development
ESG topics that will continue to be most notable to the
after the first phase.
following phase, if the first phase is successful, will focus on
Company are:
f Human capital and the recruitment and retention of
highly skilled employees.
f Emissions, effluents, and waste due to the commercial
production of energy, heat, and lithium.
f Business ethics as mandatory reporting and regulation
increase.
The strong ESG governance that is currently in place
demonstrates Vulcan’s industry leading ESG management
and performance and sets the Company up to continue
delivering strong ESG credentials as it moves into being a
project execution and operations company.
72
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 COMEBACK
PERSONALDIENSTLEISTUNGEN GMBH
On 4 January, 2023 , Vulcan acquired a drilling labour hire
company, Comeback Personaldienstleistungen GmbH
INDEMNIFICATION AND
INSURANCE OF OFFICERS
AND AUDITORS
("Comeback"), adding a further ca. 60 personnel to Vulcan’s in-
The Company has indemnified the Directors and
house development drilling team.
Executives of the Company for costs incurred, in their
Vulcan is targeting operational readiness for Phase One
held personally liable, except where there is a lack of good
development drilling by mid-year, with rig refurbishment
faith.
capacity as a Director or Executive, for which they may be
progressing well.
LIKELY DEVELOPMENTS AND
EXPECTED RESULTS
During the six months, the Company paid a premium
in respect of a contract to insure the Directors and
Executives of the Company against a liability to the extent
permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability
and the amount of the premium. The Company has not,
during or since the end of the financial period, indemnified
Over the next 12 months, the Group plans to complete
or agreed to indemnify the auditor of the Company or any
construction and start operation of its Lithium Extraction
related entity against a liability incurred by the auditor.
Demo Plant and CLP Demo Plant, commence development
drilling operations to expand existing brine production,
During the six months, the Company has not paid a
carry out fundraising efforts to fund the capital expenditure
premium in respect of a contract to insure the auditor of
for Phase One of the Project, and to commence ordering
the Company or any related entity.
long lead items for commercial plant and equipment.
DIVERSITY
During the financial period, the Company had four female
Directors and four male Directors. At 31 December 2022
the female representation on the Board was 50%, senior
executives 25% and across the entire workforce was 34%.
73
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 ENVIRONMENTAL
REGULATIONS
The Directors have considered compliance with the
National Greenhouse and Energy Reporting Act 2007
OFFICERS OF THE
COMPANY WHO ARE
FORMER PARTNERS OF RSM
AUSTRALIA PARTNERS
which requires entities to report annual greenhouse gas
There are no officers of the Company who are former
emissions and energy use. The Australian operations of the
partners of RSM Australia Partners.
Company have been certified as carbon neutral under the
Australian Climate Active initiative since 2020, the German
operations, including VEE and VES have been certified
carbon neutral under the South Pole label for 2021.
PROCEEDINGS ON BEHALF
OF THE COMPANY
No person has applied to the Court under section 237 of
the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings
to which the Company is a party, for the purposes of taking
responsibility on behalf of the Company for all or part of
these proceedings.
74
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 REMUNERATION
REPORT
75
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 This Remuneration report for the six-month period 1 July to 31 December 2022
outlines the remuneration arrangements of the Group in accordance with the
requirements of the Corporations Act 2001 (the Act) and its regulations. This
information has been prepared in accordance with section 300A and audited as
required by section 308(3C) of the Act.
The Remuneration Report is presented under the following sections:
1.
Introduction
2. Remuneration Summary
3. Remuneration governance
4. Executive remuneration arrangements
5. Executive KMP remuneration outcomes
6. Looking forward to FY23
7. Executive KMP Contracts
8. Non-Executive Director remuneration arrangements
9. Additional disclosures relating to rights and shares
10. Other transactions and balances with key management personnel and their related parties
76
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 1.
INTRODUCTION
The Remuneration Report details the remuneration arrangements for Key Management Personnel (KMP) who are
defined as those persons having authority and responsibility for planning, directing, and controlling the major
activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the
Company.
Each KMP was appointed for the entire period 1 July to 31 December 2022, unless otherwise stated. For the
purposes of this report, the term “Executive” includes the Managing Director and other Executive KMP of the
Group.
(i) Non-Executive directors (NEDs)
Mr Gavin Rezos
Non-Executive Chair
Ms Ranya Alkadamani
Non-Executive Director
Dr Heidi Grön
Ms Annie Liu
Non-Executive Director
Non-Executive Director
Ms Josephine Bush
Non-Executive Director
Dr Günter Hilken
Mr Mark Skelton
Non-Executive Director
Non-Executive Director
(ii) Executive (Executive KMP)
Dr Francis Wedin
Dr Horst Kreuter
Mr Robert Ierace
Mr Vincent Ledoux
Pedailles
Managing Director
Executive Director (Germany) – (ceased 31 October 2022)
Executive
Executive
Mr Cris Moreno
Deputy Chief Executive Officer – (appointed 1 November 2022)
With the appointment of Mr Cris Moreno as Deputy Chief Executive Officer (Deputy CEO) overseeing the daily
operations of Vulcan’s Zero Carbon Lithium™ Project in Germany, effective 1 November 2022, Dr Horst Kreuter’s
role is not considered to represent key management personnel from this date. There were no other changes to
the KMP after the reporting date and before the date the financial report was authorised for issue.
77
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 2. REMUNERATION SUMMARY
As outlined in the Remuneration Report for the year ending 30 June 2022, an independent review of the executive
remuneration framework was completed by external advisors, BDO, in the prior financial year. The People and
Performance Committee (PPC), in conjunction with the Board, adopted these recommendations, which were
detailed extensively in the 2022 Annual Report. The independent external review comprised a comprehensive
assessment of Fixed Remuneration and the current STI and LTI Framework which included market benchmarking.
The Board considered all aspects of remuneration to ensure alignment with the business requirements, relevant
market practice and key stakeholder expectations including the ability to attract and retain global talent within a
tight market. Following the review undertaken in the prior year, the following table provides the key remuneration
highlights for the six-month period from 1 July 2022 to 31 December 2022:
FIXED
REMUNERATION
Alignment of
Following an executive remuneration review whereby
executive KMP to
executive KMP were found to be remunerated considerably
comparator group
below the relevant comparator group, and considering
individual performance, role complexity and internal parity,
the following increases to executive KMP were adopted by
the Board, effective 1 July 2022:
f MD’s Total Fixed Remuneration (TFR) increased by 25%
from A$512,600 (€337,752) to A$638,000 (€422,067),
inclusive of superannuation.
f Other executive KMP received an average annual TFR
increase of 19%.
ANNUAL DEFERRED
Annual Deferred
Annual discretionary cash awards have been replaced
INCENTIVE (ADI)
Incentive (ADI)
with an annual award of Performance Rights (Rights) to
award introduced for
executive KMP.
executive KMP
Performance measures which have been aligned to
evolving business imperatives and are assessed at the
end of June 2023, plus an additional year of service to
enhance executive retention and encourage greater
equity ownership aligned with shareholder interests and
performance assurance.
No ADI outcomes between 1 July 2022 and 31 December
2022.
Please refer to sections 4 and 5 for further detail.
78
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 REMUNERATION SUMMARY (CONT’D)
LONG TERM
Performance Rights
LTI vesting has been extended from 1-2 years to 4 years in
INCENTIVE (LTI)
Issued to executive
line with evolving business operations.
KMP
LTI performance measures include business, sustainability
and shareholder return measures.
No LTI vesting occurred between 1 July 2022 and 31
December 2022.
Please refer to sections 4 and 5 for further detail.
NED REMUNERATION
Total aggregate
Shareholders approved, with 98.94% in favour, an increase
remuneration
in the total aggregate amount of fees payable to NEDs
pool increased to
from $650,000 (€430,006) to $950,000 (€628,470) to allow
$950,000 (€628,470)
for the potential appointment of additional directors and
to be able to match future director fees with the size of
operations and business complexity of the Company under
current growth plans. The current fees for Non-Executive
Directors (excluding the Chairman) include service based
performance rights to the value of $35,000 (€23,154) per
annum. Service based rights are granted to preserve cash
while the Company is in the development stage.
79
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
3. REMUNERATION GOVERNANCE
Remuneration decision making
The following diagram represents the Group’s remuneration decision making framework:
BUSINESS
OBJECTIVE
To be global leaders in the production
of carbon neutral, lithium chemicals
and renewable energy whilst being
nature positive
Remuneration strategy linked to business objective
Market competitive
Alignment to performance
Sustainability
Culture
Competitive remuneration
compared to companies
of a similar size and
complexity.
At-risk remuneration
components, including
both short and longer
term elements, subject to
performance in alignment
with business objectives.
Remuneration promotes
executive retention.
Rewards performance in a
balanced and sustainable
manner.
Aligns remuneration to
performance outcomes
which promote a positive
culture that champions
Vulcan’s values.
Vulcan’s Values
Sustainability, Leadership, Integrity and Future-focused
The People and Performance Committee (PPC) comprises three NEDs, of which two are independent, and meets
regularly through the year. The Managing Director attends certain Committee meetings by invitation, where
management input is required. The Managing Director is not involved in the final decision related to their own
remuneration arrangements. Further information on the Committee’s role, responsibilities and membership can
be found on the Company’s website at https://v-er.eu/.
Use of independent remuneration consultants
To ensure the Committee is fully informed when making remuneration decisions, it seeks external remuneration
advice where required. Independent remuneration consultants are engaged by, and report directly to, the
Committee. In selecting remuneration consultants, the Committee considers potential conflicts of interest and
requires independence from the Company’s KMP and other executives as part of their terms of engagement.
During the six-month period to 31 December 2022, the Committee did not engage a remuneration consultant.
During the prior financial year, the Company engaged BDO Remuneration and Reward Pty Ltd to review its
remuneration policies in respect to external market practice and provide recommendations on target executive
remuneration structures. Please refer to the 2022 Annual Report for further details.
Remuneration report approval at 2022 AGM
The Remuneration Report for the year ending 30 June 2022 received positive shareholder support at the 2022
AGM with a vote of 98.98% in favour.
80
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 4. EXECUTIVE REMUNERATION ARRANGEMENTS
4A: Remuneration principles and strategy
Vulcan’s executive remuneration strategy is designed to attract, retain and motivate the best people to create a
positive culture that delivers the Company’s business strategy and contributes to sustainable long-term returns.
The following diagram illustrates how the Company’s remuneration strategy aligns with the strategic direction
and links remuneration outcomes to performance.
Remuneration
Component
Vehicle
Purpose
Link to performance
Fixed
Base salary
and statutory
Remuneration
superannuation
or equivalent
Performance
Rights (ADI)
Performance
Rights (LTI)
ADI
LTI
Attract and retain executives with
Appropriately
compensate
the capability and experience to
Executives
for
driving
deliver Vulcan’s strategy, based
a
positive
culture
and
upon the competitive
landscape
delivering on the business
among relevant peers.
strategy.
Reward for performance against
KPIs aligned to annual business
objectives,
including ESG-linked
objectives.
Strategic annual objectives
are embedded
in each
Executive’s
personalised
scorecard of performance
measures.
Align
long-term
performance
Vesting
subject
to
focus to drive shareholder returns.
achievement
of
defined
Encourage sustainable, long- term
business and sustainability
value creation
through equity
milestones and TSR over a
ownership.
four-year period.
4B: Approach to setting remuneration and details of incentive plans
The executive remuneration framework consists of fixed remuneration and short and long- term incentives. The
following diagrams set out the executive remuneration structure.
Fixed Remuneration
ADI
LTI
Base Salary, Superannuation
and Other benefits.
Unvested Rights subjects to forfeitures
Annual award of
Performance Rights under
the ADI plan which vest
subject to achievement of
annual objectives plus an
additional year of service.
Performance Rights which
vest 100% after four years
subject to the achievement
of performance hurdles.
Year 1
Year 2
Year 4
81
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
EXECUTIVE REMUNERATION ARRANGEMENTS (CONT’D)
Each component of the remuneration structure is further outlined below.
Overall remuneration level and mix
How is overall
The overall remuneration mix reflects an appropriate balance of fixed and variable
remuneration and
remuneration given the Company’s size and business operations.
mix determined?
The chart below summarises the Managing Director’s and other Executive KMP’s
remuneration mix based on maximum ADI and LTI award opportunity.
MD
42%
11%
48%
Other Executive
KMP (Ave)
58%
9%
34%
FR
ADI
LTI
Fixed remuneration and other benefits
How are fixed
Fixed remuneration and other benefits are reviewed annually from benchmarked
remuneration and
remuneration data. Fixed remuneration changes for executives are subject to approval
other benefits
from the Board after considering recommendations from the Committee.
reviewed and
approved?
82
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
EXECUTIVE REMUNERATION ARRANGEMENTS (CONT’D)
Annual Deferred Incentive (ADI)
What is the ADI
The Company operates an Annual Deferred Incentive (ADI) program which is an award
plan?
of Performance Rights which vest annually on achievement of defined performance
measures, plus an additional year of service to enhance executive retention.
Opportunity
Managing Director: 25%of fixed remuneration.
What are the
performance
criteria and how
do they align
with business
performance?
Other Executive KMP: 15-25%of fixed remuneration.
Executive KMP are measured against the following performance criteria:
1. Overarching company business plan and project milestones (30%): KPIs cascaded
from the business plan aligned to strategic imperatives.
2. Individual Objectives (30%): KPIs are individualised and linked to respective areas
of responsibility to ensure accountability.
3. Shared Objectives toward operational reputation (40%): Drive sustainable business
practices including social objectives, staff retention and satisfaction targets, zero
carbon certification and a top tier ESG rating from a third-party provider.
For further details, refer to Note 32.
How is ADI vesting
On an annual basis, after consideration of actual performance against KPIs, the Board
determined?
in line with their responsibilities, determine the portion of Rights (if any) to vest for
each executive, seeking recommendations from the Committee and/or Managing
Director as appropriate.
Executive KMP must complete a year of service in addition to the performance period,
for Rights to vest.
For further details, refer to Note 32.
What happens if an
Where a participant ceases employment prior to their award vesting due to resignation
executive leaves?
or termination for cause, awards will be forfeited subject to Board discretion. Where a
participant ceases employment due to a qualifying reason (death, total and permanent
disability, retirement or redundancy), then vesting will be determined based on the
amount of performance period remaining and subject to Board discretion.
Are executives
Executives are not eligible to receive dividends on unvested Rights.
eligible for
dividends?
83
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
EXECUTIVE REMUNERATION ARRANGEMENTS (CONT’D)
Long Term Incentive (LTI)
What is the LTI
Under the LTI plan, an annual grant of Rights is made to executives to align remuneration
plan?
with creation of shareholder value over the long-term.
Opportunity
Managing Director: 110%
Other Executive KMP: 70-90%
How is
LTI Vesting is subject to the following performance criteria measured over the four-
performance
year vesting period:
measured?
1. Business returns (55%):
• Based on successful ramp up to nameplate capacity for Phase One energy and
lithium chemicals production, and achievement of corresponding revenue.
• Achievement of obtaining a positive definitive feasibility study for Phase Two
energy and lithium chemicals production, and achievement of corresponding
revenue.
• Achievement of obtaining project financing for completion of Phase Two capital
expenditure.
2. Sustainability returns (15%): based on the Company achieving net zero carbon
certification across all operations through each year in the four-year period and
remaining in the lowest quartile for absolute GHG emissions (Scope 1, 2, 3).
3. Total Shareholder returns (TSR) (30%):
a. Absolute TSR (10%):
aTSR CAGR
Less than 7.5%
Between 7.5% and 10%
Between 10% and 12.5%
Greater than 12.5%
b. Relative TSR (20%)
rTSR Performance
Less than 50th percentile
Between 50th percentile and 75th percentile
Greater than 75th percentile
For further details, refer to Note 32.
% to Vest
0%
50%
75%
100%
% to Vest
0%
50%
100%
84
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
EXECUTIVE REMUNERATION ARRANGEMENTS (CONT’D)
Long Term Incentive (LTI) (cont’d)
Which companies
For LTI grants made for the period commencing 1 July 2022 the customised peer group
do Vulcan measure
comprises the following companies:
their TSR against?
Syrah Resource, Chalice Mining, Lynas Rare Earth, 29 Metals, Novonix, AVZ Limited,
Liontown, Sayona, Lake Resources, Core Lithium, Plibara Minerals, Ioneer, Piedmont
Lithium, Galan Lithium, Leo Lithium.
When is
The performance measures are tested at the end of the four-year performance period
performance
to determine the number of Rights that vest. There is no opportunity for re-testing.
measured?
Rights will lapse if the performance measures are not met at the end of the performance
period.
What happens if an
Where a participant ceases employment prior to their award vesting due to resignation
executive leaves?
or termination for cause, awards will be forfeited subject to Board discretion. Where a
participant ceases employment due to a qualifying reason (death, total and permanent
disability, retirement or redundancy), then vesting will be determined based on the
amount of performance period remaining and subject to Board discretion.
What happens if
In these circumstances, vesting is determined at the discretion of the Board.
there is a change of
control?
Are executives
Executives are not eligible to receive dividends on unvested Rights.
eligible for
dividends?
85
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
5. EXECUTIVE KMP REMUNERATION OUTCOMES
Company performance
A summary of Company performance as measured by its earnings per share and share price for the five periods
/ years since incorporation to 31 December 2022, including disclosure required by the Corporations Act 2001, is
outlined in the table below.
Measure
Revenue from continuing operations (€’000)
Net Loss After Tax (NPAT) (€’000)
Loss per share (Euro cents)
Closing Vulcan security price ($)
6 months
ended 31
Dec 2022
3,622
13,450
9.52
6.33
30 June
2022
30 June
2021
30 June
2020
30 June
2019
3,799
18,851
15.12
5.42
-
6,726
7.71
7.70
-
2,156
4.47
0.57
-
525
1.66
0.18
ADI Outcomes
There were no ADI outcomes over the period 1 July 2022 to 31 December 2022. The ADI outcomes will be
determined for the period ending 30 June 2023.
LTI Vesting
There was no LTI vesting over the period 1 July 2022 to 31 December 2022.
86
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 EXECUTIVE KMP REMUNERATION OUTCOMES (CONT’D)
Statutory Executive KMP remuneration
The following table sets out total remuneration for Executive KMP for the six-month period 1 July 2022 to 31
December 2022 (Dec22) and for the 12-month period 1 July 2021 to 30 June 2022 (Jun22), calculated in accordance
with statutory accounting requirements and presented in Euro (€).
Short-term benefits (€)
Post-
employment
Benefits (€)
Period
Cash
Salary
Bonus1
Non-
monetary2
Superannuation
Share-
based
payments
(€) 3
Total (€)
% Performance
related
Executive KMP
Dr Francis Wedin
Dec22
190,980
-
Jun22
259,323
115,438
-
-
20,053
57,224
268,258
25,932
-
400,693
21%
29%
50%
78%
16%
18%
51%
16%
-
-
-
125,276
249,108
710,488
916,225
9,241
18,515
115,763
14,372
25,361
193,034
-
-
171,183
377,605
4,631
8,942
57,676
-
-
-
(74,386)
60,614
(123)%
Dr Horst Kreuter4
Dec22
121,000
-
2,832
Jun22
187,500
9,741
8,496
Mr Robert Ierace
Dec22
88,007
-
Jun22
143,721
9,580
Mr Vincent Ledoux
Pedailles
Dec22
135,000
-
Jun22
183,640
22,782
Mr Cristobal
Moreno
Dec22
44,103
Jun22
-
Totals
Dec22
579,090
-
-
-
-
-
-
-
-
-
2,832
33,925
135,571
751,418
Jun22
774,184
157,541
8,496
40,304
907,032
1,887,557
1 The FY22 STI was paid in cash in August 2022, after the end of the performance period.
2 Dr Kreuter is provided a company car.
3 Share-based payments are calculated in accordance with Australian Accounting Standards and are the amortised fair value of
equity-related awards that have been granted to Executives. Refer to Note 32 for further details.
4 Dr Kreuter ceased to be an Executive on 31 October 2022.
87
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
EXECUTIVE KMP REMUNERATION OUTCOMES (CONT’D)
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk – ADI/STI1
At risk - LTI
31-Dec-22
30-Jun-22
31-Dec-22
30-Jun-22
31-Dec-22
30-Jun-22
EXECUTIVE KMP
Dr Francis Wedin
Dr Horst Kreuter
Mr Robert Ierace
79%
50%
84%
Mr Vincent Ledoux Pedailles
223%
Mr Cristobal Moreno
84%
71%
21%
82%
49%
-
7%
2%
6%
11%
5%
29%
1%
5%
6%
-
15%
48%
10%
-134%
11%
-
78%
13%
45%
-
1 ADI refers to ADI rights issued during the period ending 31 December 2022. STI refers to cash bonus issued in the year ending 30 June 2022.
88
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
6. LOOKING FORWARD TO FY23 (1 JANUARY TO 31 DECEMBER 2023)
The PPC in conjunction with the Board is confident that the changes made to the executive remuneration
framework which have been detailed in this Report and effected from 1 July 2022 are aligned to Vulcan’s
remuneration philosophy and strategy and continue to seek a balance between rewarding and retaining our
Executives and recognising the interests of shareholders.
To align performance and measurement periods with the Company’s transition to a December financial year end,
the following changes to incentives are planned for FY23 (1 January 2023 to 31 December 2023):
f Vesting of the FY23 ADI award (to be granted in July 2023) will be tested following an 18-month performance
period to 31 December 2024, to align with the Company’s transition to a December financial year end, with no
additional ADI award to be made in FY24.
f Vesting of the FY23 LTI award (to be granted in July 2023) will be tested following a 3 year and 6-month period up
to 31 December 2027, as part of the Company’s transition to a December financial year end.
7. EXECUTIVE KMP CONTRACTS
Remuneration arrangements for Executive KMP are formalised in employment agreements. The following outlines
the details of contracts with KMP:
Managing Director – Dr Francis Wedin
The Managing Director is employed under an ongoing contract which can be terminated with notice by either side.
Under the terms of the present contract:
f The Managing Director receives a base salary of $638,000 (€422,067) per annum inclusive of superannuation.
f With effect from 1 July 2022 base salary increased from $512,600 (€339,109) to $638,000 (€422,067) per annum
inclusive of superannuation.
f The Managing Director is eligible to participate in Vulcan’s ADI and LTI structure on terms determined by the
Board, subject to receiving any required or appropriate shareholder approval.
f The Managing Director has notice periods of one month for termination with cause and three months for
termination without cause or resignation.
89
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 EXECUTIVE KMP CONTRACTS (CONT’D)
Other Executive KMP
All Other Executive KMP are employed under ongoing contracts.
Deputy Chief Executive Officer - Cris Moreno
Under the terms of the present contract:
f The Deputy Chief Executive Officer receives a base salary of $442,000 (€292,404) per annum inclusive of
superannuation.
f The Deputy Chief Executive Officer is eligible to participate in Vulcan’s ADI and LTI structure on terms determined
by the Board.
f The Deputy Chief Executive Officer has notice periods of one month for termination with cause and three months
for termination without cause or resignation.
Executive Director Germany – Dr Horst Kreuter (to 31 October 2022)
Under the terms of the present contract:
f The Executive Director Germany receives a base salary of €363,000 per annum.
f With effect from 1 July 2022 base salary increased from €250,000 to €363,000 per annum.
f The Executive Director Germany is eligible to participate in Vulcan’s ADI and LTI structure on terms determined
by the Board.
f The Executive Director Germany has notice periods of one month for termination with cause and three months
for termination without cause or resignation.
f Dr Kreuter is provided with a company car.
Chief Financial Officer – Robert Ierace
Under the terms of the present contract:
f The Chief Financial Officer receives a base salary of $294,000 (€194,496) per annum inclusive of superannuation.
f With effect from 1 July 2022 base salary increased from $262,900 (€173,920) to $294,000 (€194,496) per annum
inclusive of superannuation.
f The Chief Financial Officer is eligible to participate in Vulcan’s ADI and LTI structure on terms determined by the
Board.
f The Chief Financial Officer has notice periods of one month for termination with cause and one month for
termination without cause or resignation.
Chief Commercial Officer – Vincent Ledoux Pedailles
Under the terms of the present contract:
f The Chief Commercial Officer receives a base salary of €270,000 per annum.
f The Chief Commercial Officer is eligible to participate in Vulcan’s ADI and LTI structure on terms determined by
the Board.
f The Chief Commercial Officer has notice periods of one month for termination with cause and six months for
termination without cause or resignation.
90
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
8. NON-EXECUTIVE DIRECTOR
REMUNERATION ARRANGEMENTS
Policy
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract
and retain directors of the highest calibre, at an acceptable cost to shareholders.
The fee structure is reviewed annually against fees paid to NEDs of comparable ASX listed companies with a
similar market capitalisation to Vulcan, as well as similar sized industry comparators. The Board commissioned
an independent review by BDO on NED Remuneration and considers advice from other independent external
consultants when undertaking the annual review process.
The Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time
to time by a general meeting. The latest determination was at the annual general meeting (AGM) held in November
2022 when shareholders approved an aggregate fee pool of $950,000 (€628,470) per year.
Structure
The remuneration for NEDs consists of directors’ fees, committee fees plus Rights. The payment of additional
fees for serving on a committee recognises the additional time commitment required by NEDs to fulfil this role.
The table below summarises the current NED cash fee policy:
Board fees
Chairman
Directors
Committee fees
Committee Chair
Committee Members
NEDs do not receive retirement benefits.
$162,000 (€107,171)
$60,000 (€39,693)
$10,000 (€6,615)
$5,000 (€3,308)
91
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 NON-EXECUTIVE DIRECTOR
REMUNERATION ARRANGEMENTS (CONT’D)
The remuneration of NEDs for the six-month period from 1 July 2022 up to 31 December 2022 and for the
twelve-month period from 1 July 2021 up to 30 June 2022 is detailed below in Euro (€).
Short-term
benefits (€)
Post-employment
benefits (€)
Period
Director Fees
Superannuation
Share Based
Payments (€)
Total (€)
96,651
491,262
32,264
139,074
9,315
39,226
9,315
39,226
9,315
39,226
3,720
-
3,720
-
-
2,200
4,098
-
-
-
-
-
-
-
-
2,200
804
153,545
602,031
55,418
184,154
32,469
81,623
30,815
81,086
32,469
84,386
25,220
11,028
26,874
8,850
4,400
164,300
4,902
748,014
356,810
1,053,157
Non-Executive Directors
Mr Gavin Rezos
Dec-22
Jun-22
Ms Ranya Alkadamani
Dec-22
Dr Heidi Grön
Ms Annie Liu
Jun-22
Dec-22
Jun-22
Dec-22
Jun-22
Ms Josephine Bush
Dec-22
Jun-22
Dr Günter Hilken
Dec-22
Mr Mark Skelton
Totals
Jun-22
Dec-22
Jun-22
Dec-22
Jun-22
56,894
110,769
20,954
40,982
23,154
42,397
21,500
41,860
23,154
45,159
21,500
11,028
20,954
8,046
188,110
300,241
92
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
NON-EXECUTIVE DIRECTOR
REMUNERATION ARRANGEMENTS (CONT’D)
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk – NED/STI1
At risk - LTI
31-Dec-22
30-Jun-22
31-Dec-22
30-Jun-22
31-Dec-22
30-Jun-22
Non Executive
Directors
Mr Gavin Rezos
Ms Ranya Alkadamani
Dr Heidi Grön
Ms Annie Liu
Ms Josephine Bush
Dr Günter Hilken
Mr Mark Skelton
37%
42%
71%
70%
71%
85%
86%
18%
24%
52%
52%
54%
100%
100%
-
-
-
-
-
8%
8%
-
-
26%
26%
25%
-
-
63%
58%
29%
30%
29%
7%
6%
82%
76%
22%
22%
21%
-
-
1 NED refers to NED rights issued in the period ending 31 Dec 2022. STI refers to performance rights issued in the year ending 30 June 2022.
93
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
9. ADDITIONAL DISCLOSURES RELATING
TO RIGHTS AND SHARES
Performance Rights awarded, vested and lapsed during the period
The table below discloses the number of performance rights granted to Executive KMP as remuneration during
the six-month period ended 31 December 2022 as well as the number of performance rights that vested or lapsed
during the period.
Performance rights do not carry any voting or dividend rights and can be exercised once the vesting conditions
have been met until their expiry date.
Executive KMP
Executive KMP
Balance at
start of period
1-Jul-22
Granted as
remuneration
Performance
rights
exercised
Performance
rights lapsed
Balance1 at end
of period
31-Dec-22
Number of
performance
rights vested
Dr Francis Wedin
-
142,000
Dr Horst Kreuter2
4,500,000
Mr Robert Ierace
310,909
37,000
39,000
-
-
-
-
-
-
142,000
-
4,537,000
3,000,000
349,909
310,909
Mr Vincent Ledoux
Pedailles
580,909
41,000
(170,000)
(250,000)
201,909
160,909
Mr Cristobal Moreno
-
64,500
-
-
64,500
-
5,391,818
323,500
(170,000)
(250,000)
5,295,318
3,471,818
1 Includes Performance Rights held directly, indirectly and beneficially by Executive KMP.
2 Performance rights were granted early in the Project when the share price was considerably lower. Vulcan was one of the fastest
growing ASX stocks in the 2021 financial year. Rights were approved by shareholders at 2020 AGM.
There are no expired performance rights.
94
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 ADDITIONAL DISCLOSURES RELATING
TO RIGHTS AND SHARES (CONT’D)
The table below discloses the number of performance rights granted to Non-Executive Directors as remuneration
during the six-month period ended 31 December 2022 as well as the number of performance rights that vested or
lapsed during the period.
Performance rights do not carry any voting or dividend rights and can be exercised once the vesting conditions
have been met until their expiry date.
Non-Executive Directors
Balance at
start of period
1-Jul-22
Granted as
remuneration
Performance
rights
exercised
Performance
Rights lapsed
Balance at end
of period
31-Dec-22
Number of
performance
rights vested
Non-Executive Directors
Mr Gavin Rezos1
1,000,000
Ms Ranya Alkadamani2
100,000
Dr Heidi Grön2
Ms Annie Liu2
Ms Josephine2 Bush
Dr Günter Hilken2
Mr Mark Skelton2
12,896
12,896
12,896
-
-
-
-
-
-
-
14,237
14,237
-
(100,000)
(4,299)
(4,299)
(4,299)
-
-
1,138,688
28,474
(112,897)
-
-
-
-
-
-
-
-
1,000,000
-
8,597
8,597
8,597
14,237
14,237
1,054,265
-
-
-
-
-
-
-
-
1 Performance rights were granted early in the Project when the share price was considerably lower. The Performance Rights milestone
was announcement of a commercially viable DFS for the Project by September 2023. Subsequent to the end of the reporting period
these rights vested as the Company announced a commercially viable DFS.
2 These are service based performance rights which vest annually from the date of issue or shareholder approval received at a general
meeting. Ms Alkadamani’s rights were granted early in the Project when the share price was considerably lower. Vulcan was one of the
fastest growing ASX stocks in the 2021 financial year. Ms Alkadamani’s rights were approved by shareholders at November 2020 AGM.
There were no expired performance rights.
95
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
ADDITIONAL DISCLOSURES RELATING
TO RIGHTS AND SHARES (CONT’D)
The terms and conditions of each grant of performance rights affecting remuneration of directors and other key
management personnel in this financial period or future reporting years are as follows:
Number of
performance
rights granted
Grant date
Vesting date
Expiry date
Fair value per
performance
right at grant
date (€)
Exercise
price
Non-Executive Directors
Dr Günter Hilken
Tranche AC
4,746
29/11/2022
29/11/2023
31/12/2023
Tranche AC
4,746
29/11/2022
29/11/2024
31/12/2024
Tranche AC
4,746
29/11/2022
29/11/2025
31/12/2025
Mr Mark Skelton
Tranche AC
4,746
29/11/2022
29/11/2023
31/12/2023
Tranche AC
4,746
29/11/2022
29/11/2024
31/12/2024
Tranche AC
4,746
29/11/2022
29/11/2025
31/12/2025
Executive KMP
Dr Francis Wedin
Tranche AA
26,000
29/11/2022
30/06/2024
30/06/2026
Tranche AB
81,200
29/11/2022
30/06/2026
30/06/2027
Tranche AB
11,600
29/11/2022
30/06/2026
30/06/2027
Tranche AB
23,200
29/11/2022
30/06/2026
30/06/2027
Dr Horst Kreuter
Tranche AA
8,000
19/09/2022
30/06/2024
30/06/2026
Tranche AB
20,300
19/09/2022
30/06/2026
30/06/2027
Tranche AB
2,900
19/09/2022
30/06/2026
30/06/2027
Tranche AB
5,800
19/09/2022
30/06/2026
30/06/2027
Mr Robert Ierace
Tranche AA
9,000
19/09/2022
30/06/2024
30/06/2026
Tranche AB
21,000
19/09/2022
30/06/2026
30/06/2027
Tranche AB
3,000
19/09/2022
30/06/2026
30/06/2027
Tranche AB
6,000
19/09/2022
30/06/2026
30/06/2027
Mr Vincent Ledoux Pedailles
Tranche AA
9,000
19/09/2022
30/06/2024
30/06/2026
Tranche AB
22,400
19/09/2022
30/06/2026
30/06/2027
Tranche AB
3,200
19/09/2022
30/06/2026
30/06/2027
Tranche AB
6,400
19/09/2022
30/06/2026
30/06/2027
Mr Cristobal Moreno
Tranche AA
11,000
13/12/2022
30/06/2024
30/06/2026
Tranche AB
37,450
13/12/2022
30/06/2026
30/06/2027
Tranche AB
5,350
13/12/2022
30/06/2026
30/06/2027
Tranche AB
10,700
13/12/2022
30/06/2026
30/06/2027
96
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
nil
4.76
4.76
4.76
4.76
4.76
4.76
4.52
4.52
3.46
3.69
5.24
5.24
4.18
4.57
5.24
5.24
4.18
4.57
5.24
5.24
4.18
4.57
4.30
4.30
3.24
3.50
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
ADDITIONAL DISCLOSURES RELATING
TO RIGHTS AND SHARES (CONT’D)
Performance rights granted carry no dividend or voting rights.
All performance rights were granted over unissued fully paid ordinary shares in the company. The number of
performance rights granted was determined having regard to the satisfaction of performance measures and
weightings as described in note 32. Performance rights vest based on the provision of service over the vesting
period or satisfaction of performance measures, whereby the executive and non executive becomes beneficially
entitled to the performance rights on vesting date. There has not been any alteration to the terms or conditions
of the grant since the grant date. There are no amounts paid or payable by the recipient in relation to the granting
of such performance rights other than on their potential exercise.
Values of performance rights over ordinary shares granted, exercised and lapsed for directors and other key
management personnel as part of compensation during the period ended 31 December 2022 are set out below:
Value of performance
rights granted during
the period (€)
Value of performance
rights exercised
during the period (€)
Value of performance
rights lapsed during
the period (€)
Remuneration
consisting of
performance rights
for the period (%)
-
(157,448)
(22,183)
(22,183)
(22,183)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(101,217)
148,848
-
-
63%
58%
29%
30%
29%
15%
14%
21%
50%
16%
-123%
16%
Non Executive Directors
Mr Gavin Rezos
Ms Ranya Alkadamani
Dr Heidi Grön
Ms Annie Liu
Ms Josephine Bush
Dr Günter Hilken
Mr Mark Skelton
Executive KMP
Dr Francis Wedin
Dr Horst Kreuter
Mr Robert Ierace
Mr Vincent Ledoux Pedailles
Mr Cristobal Moreno
-
-
-
-
-
67,746
67,746
610,288
186,920
197,160
207,160
263,119
97
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
ADDITIONAL DISCLOSURES RELATING
TO RIGHTS AND SHARES (CONT’D)
Vendor Deferred Consideration Performance Shares
The table below details the number of vendor performance shares held by KMP and the movement during the
six-month period ended 31 December 2022. These were issued in 2021 as deferred consideration for the sale of
Global Geothermal Holding UG.
Balance at
start of period
1-Jul-22
Performance
Shares
Granted
Performance
Shares
exercised
Performance
Shares lapsed
Balance at
end of period
31-Dec-22
Number of
Performance
Shares vested
Executive
Dr Horst Kreuter
Totals
45,587
45,587
-
-
-
-
-
-
45,587
45,587
-
-
There are no expired performance shares.
98
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
ADDITIONAL DISCLOSURES RELATING
TO RIGHTS AND SHARES (CONT’D)
Shareholdings
The table below details the number of shares held in Vulcan and the movement during the six-month period ended
31 December 2022.
Class of shares
Balance at start
of period
1-Jul-22
Exercise of
Performance
Rights
Net change
Other
Balance at end of
period
31-Dec-22
Non-Executive Directors
Mr Gavin Rezos
Ms Ranya Alkadamani
Dr Heidi Grön
Ms Annie Liu
Ms Josephine Bush
Dr Günter Hilken
Mr Mark Skelton
Executive KMP
Dr Francis Wedin
Dr Horst Kreuter
Mr Robert Ierace
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Mr Vincent Ledoux Pedailles
Ordinary
MrCristobal Moreno
Ordinary
7,598,727
-
176,000
100,000
4,299
4,299
4,299
-
-
-
-
-
1,800
73,080
9,399
-
900
16,458,561
171,758
-
-
-
170,000
(170,000)
-
-
-
-
-
-
-
-
-
-
-
-
7,598,727
276,000
6,099
77,379
13,698
-
900
16,458,561
171,758
-
-
-
Totals
24,490,225
282,897
(170,000)
24,603,122
99
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
10. OTHER TRANSACTIONS AND BALANCES WITH KEY
MANAGEMENT PERSONNEL AND THEIR RELATED
PARTIES
During the six month period ending 31 December 2022 payments for consultancy fees of €28,089 (30 June 2022:
€33,968) were made to JRB Consulting Ltd, a related party of Ms Josephine Bush, in respect of expert advice on
ESG reporting. There were no amounts outstanding as at 31 December 2022 to JRB Consulting Ltd (30 June 2022:
€8,709) . There was €4,954 outstanding as at 31 December 2022 (30 June 2022: €nil) to Sustineri Strategy Ltd, a
related party to Ms Josephine Bush in relation to ESG consulting provided.
On the 8th of September 2022 Vulcan entered into a contract with Dr Horst Kreuter to rent a flat at the rate of
€1,810 per month and €418 operating costs monthly. The contract is a short-term lease. No amount was paid from
inception of the contract and until 31 October 2022. The amount of €2,715 was outstanding as at 31 October 2022
and nil was outstanding as at 31 December 2022.
During the previous financial year, the Company issued 5,698 shares and 45,587 performance shares to Dr Horst
Kreuter for the security consideration for the acquisition of Global Geothermal Holding UG (GGH, a company
incorporated under the laws of Germany) on 6 July 2021, following shareholder approval at an EGM held in
June 2021. Dr Kreuter was a shareholder of Global Geothermal Holding UG, which held geothermal and lithium
exploration licenses applied for by GGH prior to Dr Kreuter joining Vulcan, that were sold to Vulcan as part of the
transaction.
The Company also completed the acquisition of GeoThermal Engineering GmbH (GeoT), a geothermal engineering
consultancy business, on 2 July 2021 for €1. Dr Kreuter is the sole shareholder of GeoT. Dr Kreuter will also receive
50% of any payments received from certain debtors to GeoT, if these payments are made to GeoT within 18 months
of completion of the acquisition. GeoT owes a debt of approximately €140,000 (plus a nominal amount of interest)
to Dr Kreuter, 50% of which will be paid within three months of completion of the acquisition, with the remaining
50% to be paid by no later than 31 December 2021.
During the previous financial year payments for consultancy fees of €52,834 were made to Alto Group Inc., a
related party of Ms Annie Liu. There was no outstanding balance as at 30 June 2022.
100
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 OTHER TRANSACTIONS AND BALANCES WITH KEY
MANAGEMENT PERSONNEL AND THEIR RELATED
PARTIES
LOANS TO/FROM KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
There were no transactions with key management personnel and their related parties during the period ended 31
December 2022 (30 June 2022 nil).
TERMS AND CONDITIONS
All transactions were made on normal commercial terms and conditions and at market rates.
End of Remuneration Report
This concludes the remuneration report, which has been audited.
101
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
SHARES UNDER PERFORMANCE RIGHTS AND
PERFORMANCE SHARES
At the date of this report there were the following unissued ordinary shares for which performance rights and
performance shares are outstanding:
Performance rights
Class G
Class H
Class I
Class J
Class M
Class N
Class S
Class T
Class U
Class V
Class W
Class Y
Class Z
Class AA
Class AB
Class AC
Performance shares
Class D
Number
250,000
472,727
910,909
2,500,000
1,500,000
1,500,000
25,791
260,000
250,000
110,000
100,000
60,000
50,000
90,700
274,200
28,474
Number
91,174
Expiry Date
Exercise Price
1/12/2023
1/12/2023
1/12/2023
16/9/2023
1/12/2023
1/12/2023
30/6/2025
1/12/2024
1/12/2024
1/12/2024
1/12/2024
1/12/2024
1/12/2024
30/6/2026
30/6/2027
29/11/2026
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Expiry Date
24/6/2024
Exercise Price
Nil
Performance rights and performance shares holders do not have any rights to participate in any issues of shares or other
interests of the company or any other entity.
SHARES ISSUED ON THE EXERCISE OF PERFORMANCE RIGHTS
AND PERFORMANCE SHARES
Ordinary shares of Vulcan Energy Resources Ltd were issued during the six months ended 31 December 2022 and up to the
date of this report on the exercise of 282,897 performance rights.
102
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the six months ended 31 December 2022 as required under section 307C of
the Corporations Act 2001 has been received and included within these financial statements.
AUDITOR
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the period by the auditor are
outlined in Note 36 to the financial statements.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied
that the provision of non-audit services by the auditors, as set out below, did not compromise the auditor independent
requirements of the Corporations Act 2001 for the following reasons:
f All non-audit services have been reviewed by the Board of Directors to ensure they do not impact the impartiality and
objectivity of the auditor; and
f None of the services undermine the general principles relating to the auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants.
This report is signed in accordance with a resolution of Board of Directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
Gavin Rezos
Chairman
27 March 2023
103
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Vulcan Energy Resources Limited for the period 1 July
2022 to 31 December 2022, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 27 March 2023
AIK KONG TING
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
104
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
FINANCIAL
STATEMENTS
105
VULCAN ENERGY1 JULY – 31 DECEMBER 2022 Consolidated Statement Of Comprehensive Income
For the Period Ended 31 December 2022
Revenue from continuing operations
Other income
Finance income
Gain on deconsolidation
Loss from equity accounted investments
Other own work capitalised
Raw materials and purchased services
Finance cost
Administrative expenses
Compliance and regulatory expenses
Consulting and legal fees
Depreciation and amortisation expenses
Employee benefit expenses
Investor relations expenses
Impairment expenses
Loss on disposal of financial assets
Occupancy costs
Share-based payments expense
Other expenses
Foreign currency (loss)/gain
Loss before income tax expense
Income tax benefit/(expense)
Loss after income tax for the period
Other comprehensive income
Note
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
4
5
6
25
5
6
7
7
7
7
32
8
3,622
213
615
-
(249)
3,489
(3,119)
(177)
(2,127)
(304)
(1,362)
(2,299)
(8,097)
(231)
-
-
(1,265)
(711)
(1,446)
(105)
(13,553)
103
(13,450)
3,799
317
350
1,975
(495)
3,696
(2,512)
(155)
(3,790)
(729)
(4,099)
(2,629)
(7,793)
(615)
(36)
(745)
(498)
(3,637)
(1,175)
285
(18,486)
(365)
(18,851)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
(1,648)
6,990
Total comprehensive loss for the period (net of tax)
(15,098)
(11,861)
Total comprehensive loss for the period attributable to the
owners of Vulcan Energy Resources Limited
(15,098)
(11,861)
Loss per share for the year attributable to the members
Vulcan Energy Resources Limited:
Basic loss per share
Diluted loss per share
€
€
9
9
(0.09)
(0.09)
(0.15)
(0.15)
The Consolidated Statement of Comprehensive Income should be
read in conjunction with the notes to the financial statements.
Page | 3
106
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Consolidated Statement of Financial Position
As at 31 December 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Total current assets
Non-current assets
Investments accounted for using equity method
Exploration and evaluation expenditure
Property, plant and equipment
Right-of-use
Intangible assets
Deferred tax assets
Total non-current assets
Total Assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Income tax liabilities
Deferred income
Provisions
Total Current liabilities
Non-current liabilities
Lease liabilities
Provisions
Deferred income
Deferred tax liabilities
Total non-current liabilities
Total Liabilities
Net Assets
Equity
Share capital
Reserves
Accumulated losses
Total Equity
Vulcan Energy Resources Limited – Annual Report 1 July 2022 - 31 December 2022
Note
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
10
11
12
13
25
14
15
16
17
18
19
16
8(d)
20
21
16
21
20
22
23
24
37
134,107
6,316
42
155
140,620
974
30,135
70,280
3,377
3,068
1,681
109,515
175,416
4,030
79
138
179,663
1,214
20,440
51,490
2,990
3,633
1,710
81,477
250,135
261,140
9,418
646
91
132
752
11,039
2,670
110
1,453
1,702
5,935
16,974
8,354
439
332
-
608
9,733
2,566
55
-
1,463
4,084
13,817
233,161
247,323
259,158
15,875
(41,872)
233,161
258,933
16,812
(28,422)
247,323
The Consolidated Statement of Financial Position should be
read in conjunction with the notes to the financial statements.
Page | 4
107
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Consolidated Statement of Changes in Equity
For the Period Ended 31 December 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Consolidated
Issued
Capital
Reserves
Foreign
Currency
Reserve
Accumulated
Losses
Total
€'000
€'000
€'000
€'000
€'000
At 1 July 2022
258,933
8,995
7,817
(28,422)
247,323
Loss for the period
Other comprehensive loss
Total comprehensive loss for the
period after tax
Transactions with owners in their
capacity as owners:
Issue of share capital
Share issue costs
Share-based payments
-
-
-
225
-
-
-
-
-
-
-
711
-
(1,648)
(13,450)
-
(13,450)
(1,648)
(1,648)
(13,450)
(15,098)
-
-
-
-
-
-
225
-
711
Balance at 31 December 2022
259,158
9,706
6,169
(41,872)
233,161
Consolidated
Issued
Capital
Reserves
Foreign
Currency
Reserve
Accumulated
Losses
Total
€'000
€'000
€'000
€'000
€'000
At 1 July 2021
85,272
4,995
827
(9,571)
81,523
Loss for the period
Other comprehensive income
Total comprehensive loss for the
period after tax
Transactions with owners in their
capacity as owners:
Issue of share capital
Share issue costs
Share-based payments
Balance at 30 June 2022
-
-
-
-
-
-
-
6,990
6,990
(18,851)
-
(18,851)
6,990
(18,851)
(11,861)
178,040
(4,379)
-
258,933
-
-
4,000
8,995
-
-
-
-
-
-
178,040
(4,379)
4,000
7,817
(28,422)
247,323
The Consolidated Statement of Changes in Equity should be read
in conjunction with the notes to the financial statements.
Page | 5
108
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Consolidated Statement of Cash Flows
For the Period Ended 31 December 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other income
Interest paid
Net cash used in operating activities
10
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Payment for plant and equipment
Payment to acquire subsidiary
Cash acquired upon acquisition of subsidiary
Payments to acquire financial assets
Proceeds from disposal of financial assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Lease repayments
Repayment of loan to Associate
Net cash used in/from financing activities
3,496
(12,941)
468
1,798
(239)
(7,418)
(10,429)
(20,094)
-
-
(1,245)
-
(31,768)
-
-
(462)
-
(462)
Net increase/(decrease) in cash and cash equivalents
(39,648)
Cash and cash equivalents at beginning of the
period/year
Effect of exchange rate fluctuations
Cash and cash equivalents at end of the period/year
175,416
(1,661)
134,107
The Consolidated Statement of Cash Flows should be
read in conjunction with the notes to the financial statements.
Page | 6
109
3,799
(15,400)
228
317
(291)
(11,347)
(9,384)
(22,793)
(32,685)
1,230
(30,008)
29,282
(64,358)
176,208
(4,378)
(185)
409
172,054
96,349
72,494
6,573
175,416
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
The principal accounting policies adopted in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
(a)
Reporting Entity
Vulcan Energy Resources Limited (referred to as “Vulcan” or the “Company”) is a company domiciled in Australia
The address of the Company’s registered office and principal place of business is Level 11, Brookfield Place, 125
St Georges Terrace, Perth WA 6000. The consolidated financial statements of the Company as at and for the
period ended 31 December 2022 comprise the Company and its subsidiaries (together referred to as the
“consolidated entity” or the “Group”). The principal activity of the Group is geothermal energy and lithium
exploration and production.
(b) Basis of Preparation
Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (“AASB”) and the Corporations Act 2001. The consolidated financial statements comply with
International Financial Reporting Standards (“IFRS”) adopted by the International Accounting Standards Board
(“IASB”). Vulcan Energy Resources Limited is a for-profit entity for the purpose of preparing the financial
statements.
The annual report was authorised for issue by the Board of Directors on 27 March 2023.
Comparatives
The consolidated entity’s current accounting period is the 6-months ended 31 December 2022, and the
comparative is 12-month period due to the consolidated entity changing its accounting year end to a 31 December
balance date.
Functional and presentation currency
Items included in the financial statements of each of the consolidated entities are measured using the currency
of the primary economic environment in which the entity operates (“functional currency”). The consolidated
financial statements are presented in Euro, which is Vulcan Energy Resources Limited’s presentation currency.
Basis of measurement
The consolidated financial statements have been prepared on a going concern basis in accordance with the
historical cost convention, unless otherwise stated.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in Note 38.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance
with that Corporations Instrument to the nearest thousand Euro, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Page | 7
110
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to
be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets
are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
New standards and interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations relevant to the Group that have recently been issued or
amended but are not yet mandatory, have not been adopted by the Group for the annual reporting period ended
31 December 2022. The Group has not yet assessed the impact of these new or amended Accounting Standards
and Interpretations but does not expect it to have a significant impact on the Group’s results.
Significant Judgements and Estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in Note 2.
(c) Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Vulcan Energy
Resources Limited (‘Company’ or ‘parent entity’) as at 31 December 2022 and the results of all subsidiaries for the
6 month period then ended.
Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has the power
to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of
the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the consolidated entity controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They
are de-consolidated from the date that control ceases.
Intercompany transactions, balances, and unrealised gains on transactions between consolidated entity
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
Page | 8
111
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Subsidiaries (cont.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
The acquisition method of accounting is used to account for business combinations by the consolidated entity.
A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling interest
acquired is recognised directly in equity attributable to the parent.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of comprehensive income, statement of changes in equity and statement of financial position
respectively.
Where the consolidated entity loses control over the subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative transaction differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss on profit or loss.
(d) Foreign Currency Transactions
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at period end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
(e) Entity Functional Currency Different From Group Presentational Currency
The assets and liabilities of entities with functional currency different from group presentational currency are
translated into Euro using the exchange rates at the reporting date. The revenues and expenses of entities with
functional currency different from group presentational currency are translated into Euro using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign currency reserve in
equity.
NOTE 2
CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various
factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions in these financial statements that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial period are
disclosed below.
Exploration and evaluation expenditure
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence
commercial production in the future, from which time the costs will be amortised in proportion to the depletion
of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes
determining expenditures directly related to these activities and allocating overheads between those that are
expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through
successful development or sale of the relevant mining interest. Factors that could impact the future commercial
production at the mine include the level of reserves and resources, future technology changes, which could
impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised
costs are determined not to be recoverable in the future, they will be written off in the period in which this
determination is made.
Page | 9
112
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 2
CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Share-based payments
The Group measures the cost of equity settled transactions with Directors, employees and consultants, where
applicable, by reference to the fair value of equity instruments at the date at which they are granted. The fair
value is determined using an appropriate valuation model taking into account the terms and conditions upon
which the instruments were granted. The accounting estimates and assumptions relating to equity-settled
shared-based payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss and equity.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges
for its plant and equipment. The useful lives could change significantly as a result of technical innovations or
some other event. The depreciation and amortisation charge will increase where the useful lives are less than
previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate
impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in note 1. The recoverable amounts of cash-generating units have
been determined based on value-in-use calculations. These calculations require the use of assumptions,
including estimated discount rates based on the current cost of capital and growth rates of the estimated future
cash flows. Refer to note 17 for further information.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the
particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset
is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a
number of key estimates and assumptions.
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement
is required in determining the provision for income tax. There are many transactions and calculations undertaken
during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated
entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current
understanding of the tax law. Where the final tax outcome of these matters is different from the carrying
amounts, such differences will impact the current and deferred tax provisions in the period in which such
determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers
it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability.
Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease
or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when
ascertaining the periods to be included in the lease term. In determining the lease term, all facts and
circumstances that create an economical incentive to exercise an extension option, or not to exercise a
termination option, are considered at the lease commencement date. Factors considered may include the
importance of the asset to the consolidated entity's operations; comparison of terms and conditions to prevailing
market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs
and disruption to replace the asset. The consolidated entity reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant
change in circumstances.
Page | 10
113
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 2
CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is
estimated to discount future lease payments to measure the present value of the lease liability at the lease
commencement date. Such a rate is based on what the consolidated entity estimates it would have to pay a third
party to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar
terms, security and economic environment.
NOTE 3
SEGMENT INFORMATION
Accounting Policy
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board. Management has
determined that based on the report reviewed by the Board and used to make strategic decisions, that the
consolidated entity has three reportable segments.
Identification of reportable operating segments
The consolidated entity is organised into three operating segments based on geographical location: Germany,
Other European (comprised of France, Norway and Italy) and Australia. These operating segments are based on
the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief
Operating Decision Makers (CODM)) in assessing performance and in determining the allocation of resources.
There is no aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
Types of products and services
Germany – the supply of geothermal energy, exploration relating to the Zero Carbon Lithium™ Project and
engineering services
Other European (France and Italy) – exploration relating to battery minerals and geothermal lithium.
Australia – administration and Definitive Feasibility Study (“DFS”) ongoing costs.
Intersegment transactions
Intersegment transactions were made at market rates. Engineering services have been provided within the
German segment. All intersegment receivables and payables, including the profit margin, are eliminated on
consolidation.
Major customers
During the period ended 31 December 2022, approximately €3.2m (30 June 2022: €3.0m) of the consolidated
entity’s external revenue was derived from sales to Pfalzwerke.
Page | 11
114
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 3
SEGMENT INFORMATION (CONT.)
For the 6 months ended 31 December 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Segment performance
Germany
Other European
Administration
Australia
Total
31/12/2022
Revenue
Sales to external customers
Intersegment sales - Other own work
capitalised
Other income
Finance income
Loss from equity accounted investment
Total segment revenue
EBITDA
Depreciation and amortisation
Finance expense
Finance income
Loss before income tax expense
Income tax expense
Loss after income tax expense
Material items include:
Employee benefit expense
Share based payments expense
€'000
€'000
€'000
€'000
3,622
3,489
213
155
-
7,479
(6,941)
(2,285)
(62)
155
(9,133)
103
(9,030)
(7,334)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
460
(249)
211
(4,751)
(14)
(115)
460
(4,420)
-
(4,420)
(763)
(711)
3,622
3,489
213
615
(249)
7,690
-
(11,692)
(2,299)
(177)
615
(13,553)
103
(13,450)
(8,097)
(711)
Page | 12
115
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 3
SEGMENT INFORMATION (CONT.)
For the 6 months ended 31 December 2022 (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Assets
Segment assets
Intersegment eliminations
Total assets
Total assets include:
Investments accounted for using equity
method
Exploration and evaluation expenditure
additions
Capital additions
Liabilities
Segment liabilities
Intersegment eliminations
Total Liabilities
Germany
Other
European
Administration
Australia
Total
164,779
-
-
-
4,463
20,304
21,881
-
-
195
-
-
-
32
-
103
-
-
425,784
590,758
-
-
(340,623)
250,135
974
5,675
-
974
10,170
20,304
176,578
-
-
198,562
(181,588)
16,974
Page | 13
116
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 3 SEGMENT INFORMATION (CONT.)
For the year ended 30 June 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Segment performance
Germany
Other European
Australia
Total
30/06/2022
€'000
€'000
€'000
€'000
Revenue
Sales to external customers
Intersegment sales – Other own work
capitalised
Other income
Finance income
Gain on deconsolidation
Loss from equity accounted
investment
Total segment revenue
EBITDA
Depreciation and amortisation
Finance expense
Finance income
Loss before income tax expense
Income tax expense
Loss after income tax expense
Material items include:
Employee benefit expense
Share based payments expense
3,799
3,696
317
199
-
-
8,011
(7,192)
(2,629)
(33)
199
(9,655)
(365)
(10,020)
(6,784)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
151
1,975
(495)
1,631
(8,860)
-
(122)
151
(8,831)
-
(8,831)
(1,009)
(3,637)
3,799
3,696
317
350
1,975
(495)
9,642
(16,052)
(2,629)
(155)
350
(18,486)
(365)
(18,851)
(7,793)
(3,637)
Germany
Other
European
Administration
Australia
Total
Assets
Segment assets
Intersegment eliminations
Total assets
Total assets include:
Investments accounted for using equity method
Exploration and evaluation expenditure additions
Capital additions
115,874
-
-
-
3,656
24,149
160
-
-
-
33
-
263,218
-
-
1,214
7,735
-
379,252
(118,112)
261,140
1,214
11,424
24,149
Page | 14
117
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 3 SEGMENT INFORMATION (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Liabilities
Segment liabilities
Intersegment eliminations
Total Liabilities
NOTE 4 REVENUE
Revenue from contract
with customers
Sale of goods
Rendering of services
Revenue from continuing
operations
Germany
Other European
Administration
Australia
Total
16,796
-
-
160
-
-
3,527
-
-
20,483
(6,666)
13,817
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
3,128
494
3,622
3,622
2,977
822
3,799
3,799
Electricity sales
Engineering Services
Total
6-months
12-months
6-months
12-months
6-months
12-months
31 Dec 2022 30 June 2022
€'000
€'000
31 Dec 2022
€'000
30 June 2022
€'000
31 Dec 2022
€'000
30 June 2022
€'000
Timing of revenue recognition
Goods transferred
at a point in time
Services
transferred over
time
3,128
2,977
-
-
3,128
2,977
-
-
3,128
2,977
494
494
822
822
494
822
3,622
3,799
All revenues are derived from Germany.
Page | 15
118
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 4 REVENUE (CONT.)
Accounting Policy
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected
to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the
contract; determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligation on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered ; and recognises revenue when
or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods
and services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent
events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The
measurement of variable consideration is subject to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint continues until the uncertainty associated with the
variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle
are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods,
which is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on either
a fixed price or an hourly rate.
NOTE 5 OTHER INCOME
Government grants
Other income
Reversal of provision for expected credit losses
Other own work capitalised
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
151
37
25
213
6-months
31 Dec 2022
€'000
3,489
3,489
317
-
-
317
12-months
30 June 2022
€'000
3,696
3,696
Page | 16
119
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 5 OTHER INCOME (CONT.)
Accounting Policy
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Other own work capitalised
Vulcan Energy Engineering GmbH and Vulcan Energy Subsurface Solutions GmbH provide services to Vulcan
Energie Ressourcen GmbH, a wholly owned subsidiary of Vulcan Energy Resources Limited which have been
capitalised to exploration and evaluation expenditure and property, plant and equipment. These services are
disclosed in the statement of profit or loss and other comprehensive income as other own work capitalised. The
expenses incurred by Vulcan Energy Engineering GmbH and Vulcan Energy Subsurface Solutions GmbH to provide
these services are disclosed in the statement of profit or loss and other comprehensive income as employee
benefit expenses. Other own work capitalised also includes the capitalisation of Vercana GmbH staff costs
relating to the refurbishment of electric drill rigs. Other own work capitalised does not relate to any external
revenue or any profit margin charge to intercompany transactions.
NOTE 6 FINANCE INCOME/(COST)
Finance Income
Interest income
Accounting Policy
Interest
Interest revenue is recognised as interest accrues.
Finance cost
Interest expense- cash at bank and deposits
Interest expense- lease liabilities
Accounting Policy
6-months
31 Dec 2022
€'000
615
615
12-months
30 June 2022
€'000
350
350
6-months
31 Dec 2022
€'000
(115)
(62)
(177)
12-months
30 June 2022
€'000
(122)
(33 )
(155)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
Page | 17
120
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 7 EXPENSES
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
(a) Administrative expenses
Accounting, audit and company secretarial fees
Travel expenses
General expenses
(b) Consultancy and legal expenses
Corporate advisory fees
Consulting fees
Legal fees
(c) Employee benefit expense
Wages and salaries
Other benefits
(d) Depreciation and amortisation expenses
Software
Property, plant and Equipment
Land and Buildings
Right of use assets
Intangible assets
89
362
1,676
2,127
88
816
458
1,362
6,514
1,583
8,097
21
1,284
44
385
565
2,299
311
372
3,107
3,790
286
1,573
2,240
4,099
6,640
1,153
7,793
10
1,897
43
200
479
2,629
Page | 18
121
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 8 INCOME TAX
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
(a) The components of tax expense/(benefit)
comprise:
Current tax
Deferred tax
Income tax expense reported in the of profit or loss
and other comprehensive income
(b) The prima facie tax on loss from ordinary
activities before income tax is reconciled to the
income tax as follows:
Loss before income tax expense
Prima facie tax benefit on loss before income tax at
30% (30 June 2022: 30%)
Tax effect of amounts that are not
deductible/taxable in calculating taxable income
Non-deductible expense
Tax losses and temporary differences not brought to
account
Foreign corporate rate differential
Income tax (benefit)/expense
(c) Deferred tax assets/(liabilities) not brought to
accounts are:
Accruals
Prepayments
Other
Tax losses
Total deferred tax balances not brought to account
(369)
266
(103)
(13,553)
(4,066)
323
2,394
1,246
(103)
104
74
1,837
5,122
7,137
462
(97)
365
(18,486)
(5,546)
682
3,688
1,541
365
136
(107)
2,308
2,461
4,798
(d) As at 31 December 2022, the consolidated entity has income tax payable of €91,000 (30 June
2022:€332,000).
Except for the deferred tax assets (note 18) and deferred tax liabilities (note 22) recognised in the subsidiary,
Natürlich Insheim GmbH, potential deferred tax assets attributable to tax losses and other temporary differences
have not been brought to account at 31 December 2022 because the directors do not believe it is appropriate to
regard realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained
if:
the consolidated entity derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the expenditure to be realised; and
no changes in tax legislation adversely affect the consolidated entity in realising the benefit from the
deductions for the expenditure.
-
-
Page | 19
122
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 8 INCOME TAX (CONTINUED)
Accounting Policy
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current Tax
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred Tax
Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit
or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the
reporting period. Their measurement also reflects the manner in which management expects to recover or settle
the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement
of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets
or liabilities are expected to be recovered or settled.
Page | 20
123
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 9 LOSS PER SHARE
Net loss for the period/year in €'000
Weighted average number of ordinary shares for basic and
diluted loss per share.
Basic and diluted loss per share €
Accounting Policy
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
6-months
31 Dec 2022
(13,450)
12-months
30 June 2022
(18,851)
143,332,764
124,671,203
(0.09)
(0.15)
Basic Loss Per Share
Basic loss per share is determined by dividing net profit or loss after income tax attributable to members of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued
during the year.
Diluted Loss Per Share
Diluted loss per share adjusts the figures used in the determination of basic earnings per share to take into
account the after-income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
NOTE 10 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
6-months
31 Dec 2022
€'000
12,515
121,592
134,107
12-months
30 June 2022
€'000
150,378
25,038
175,416
Reconciliation of net loss after tax to net cash flows from operations.
Loss for the financial period/year
Share based payment expense
Impairment expenses
Depreciation and amortisation expenses
Share issued in exchange for services
Gain on deconsolidation
Loss from equity accounted investments
Foreign exchange differences
Changes in assets
Trade and other receivables
Trade and other payables
Movement in provisions
Net cash used in operating activities
Page | 21
124
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
(13,450)
711
-
2,299
225
-
249
394
(1,041)
3,339
(144)
(7,418)
(18,851)
3,637
36
2,629
478
(1,975)
495
105
(697)
2,249
547
(11,347)
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 10 CASH AND CASH EQUIVALENTS (CONT.)
Accounting Policy
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Cash and cash equivalents
Cash at bank earns interest at floating rates based on daily deposit rates. Short-term deposits are made in varying
periods between one day and three months, depending on the immediate cash requirements of the Group and
earn interest at the respective short-term deposit rates.
NOTE 11 TRADE AND OTHER RECEIVABLES
Trade receivables
Allowance for expected credit losses
Prepayments
Other receivables
Other - bank guarantees
31 Dec 2022
€'000
30 June 2022
€'000
1,296
(34)
1,033
2,776
1,245
6,316
655
(43)
331
2,967
120
4,030
Expected credit loss rate
31 Dec 2022
30 June 2022
Carrying amount
Allowance for ECL
31 Dec 2022
30 June 2022 31 Dec 2022
30 June 2022
Consolidated
%
%
€’000
€’000
€’000
€’000
not overdue
overdue
0%
50%
0%
50%
1,228
68
1,296
569
86
655
-
34
34
-
43
43
Allowance for expected credit loss
Trade receivables are non-interesting bearing and are generally on terms of 30 days. A provision for €35,000 (30
June 2022: €43,000) has been recorded to cover expected credit loss.
Page | 22
125
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
Accounting Policy
Trade and other receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the
ordinary course of business. Trade and other receivables are initially recognised at fair value and subsequently
measured at amortised cost using effective interest method less any allowance for expected credit loss.
Receivables expected to be collected within 12 months of the end of the reporting period are classified as current
assets.
Goods and Services Tax (‘GST’)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset of the assets or part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included as a current asset or liability in the Consolidated
statement of financial position.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST on
investing and financial activities, which are disclosed as operating cash flows.
Value Added Tax (“VAT”)
Revenues expenses and assets are recognised net of VAT, except where the amount of VAT incurred is not
recoverable from the German tax authority. In these circumstances the VAT is recognised as part of the cost of
acquisition or parts of the expense. Receivables and payables are stated inclusive of the amount of VAT
receivable or payable. The net amount of VAT recoverable from, or payable to, the taxation authority is included
as a current asset or liability in the Consolidated statement of financial position. Cash flows are presented in the
statement of cash flows on a gross basis, except for the VAT on investing and financial activities, which are
disclosed as operating cash flows.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part
of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification is
determined based on both the business model within which such assets are held and the contractual cash flow
characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no
reasonable expectation of recovering part or all of a financial asset its carrying value is written off.
Page | 23
126
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 11 TRADE AND OTHER RECEIVABLES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i)
held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making
a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements
are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such
upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the consolidated entity’s assessment at the end of each reporting period as to
whether the financial instrument’s credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss recognised
is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of
the instrument discounted at the original effective interest rate.
NOTE 12 CONTRACT ASSETS
Contract assets
Reconciliation
31 Dec 2022
€'000
30 June 2022
€'000
42
42
79
79
Reconciliation of the written down values at the beginning and end of the current and previous financial
period/year are set out below
31 Dec 2022
€'000
30 June 2022
€'000
79
(37)
42
-
79
79
Opening balance
transfer (to)/from inventory
Closing balance
Accounting policy
Contract assets
Contract assets are recognised when the consolidated entity has transferred goods and services to the customer
but where the consolidated entity is yet to establish an unconditional right to consideration. Contract assets are
treated as financial assets for impairment purposes.
Page | 24
127
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 13 INVENTORIES
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Spare parts
Accounting policy
31 Dec 2022
€'000
30 June 2022
€'000
155
155
138
138
Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a
“first in first out’’ basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and
other taxes, an appropriate proportion of variable d fixed overhead expenditure based on normal operating
capacity, and, where applicable transfers from cash flow hedging reserves in equity. Costs of purchased
inventory re determined after deducting rebates and discounts received or receivable.
NOTE 14 EXPLORATION AND EVALUATION EXPENDITURE
31 Dec 2022
€'000
30 June 2022
€'000
Carrying amount of exploration and evaluation
expenditure
At the beginning of the period/year
Exploration expenditure incurred
Performance shares issued upon acquisition of GGH
Deconsolidation of Kuniko Ltd
Foreign exchange (Loss)/Gain
At the end of the period/year
Accounting Policy
30,135
20,440
10,400
-
-
(705)
30,135
20,440
8,722
11,273
363
(335)
417
20,440
Exploration and evaluation expenditure
Acquisition, exploration, and evaluation costs associated with mining tenements are accumulated in respect of
each identifiable area of interest. These costs are only carried forward to the extent that the rights of tenure to
that area of interest are current and that the costs are expected to be recouped through the successful
commercial development or sale of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves.
Costs in relation to an abandoned area are written off in full against profit in the period in which the decision to
abandon the area is made.
Each area of interest is also reviewed annually, and acquisition costs written off to the extent that they will not
be recoverable in the future.
Page | 25
128
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 15 PROPERTY, PLANT AND EQUIPMENT
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Software
Plant & Equipment
Land & Buildings
Assets under Construction
31 Dec 2022
€'000
30 June 2022
€'000
383
27,411
1,536
40,950
70,280
267
26,859
1,580
22,784
51,490
Movement in carrying amounts of property, plant and equipment for the financial period ended 31 December
2022
Software
€'000
Plant and
equipment
€'000
Asset under
construction
€'000
Land and
Building
€'000
Total
€'000
Cost
At 1 July 2022
Additions
Disposals
At 31 December
2022
Accumulated Depreciation
At 1 July 2022
Depreciation for
the period
Depreciation
eliminated on
disposal
Carrying amount
At 1 July 2022
At 31 December
2022
280
137
-
417
(13)
(21)
-
(34)
267
383
28,817
2,001
(195)
30,623
(1,958)
(1,284)
30
(3,212)
22,784
18,166
-
40,950
-
-
-
-
26,859
22,784
27,411
40,950
1,623
-
-
1,623
(43)
(44)
-
(87)
1,580
1,536
53,504
20,304
(195)
73,613
(2,014)
(1,349)
30
(3,333)
51,490
70,280
Page | 26
129
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 15 PROPERTY, PLANT AND EQUIPMENT (CONT.)
Movement in carrying amounts of property, plant and equipment for year ended 30 June 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Software
€'000
Plant and
equipment
€'000
Asset under
construction
€'000
Land and
Building
€'000
Total
€'000
Cost
At 1 July 2021
Acquired in
business
combinations
Additions
At 30 June 2022
Accumulated Depreciation
At 1 July 2021
Depreciation for
the year
Carrying amount
At 1 July 2021
At 30 June 2022
Accounting Policy
112
34
134
280
(3)
(10)
(13)
109
267
417
26,508
470
191
1,892
22,123
-
1,623
-
999
28,356
24,149
28,817
22,784
1,623
53,504
(61)
(1,897)
-
(1,958)
356
26,859
-
-
-
-
470
22,784
-
(43)
-
(43)
-
1,580
(64)
(1,950)
-
(2,014)
935
51,490
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items
Once assets are available for use, depreciation is calculated using the straight-line method to allocate asset
costs over their estimated useful lives, as follows:
Software
Plant & Equipment
Buildings
3 -5 years
2-20 years
20 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. An
asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Page | 27
130
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 16 LEASE LIABILITIES & RIGHT OF USE
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Buildings
Vehicles
€'000
€'000
Hardware
and
Software
€'000
Technical
Equipment
Land
Total
€'000
€'000
€'000
21
-
21
(10)
(5)
-
(15)
11
6
-
14
14
-
(3)
-
(3)
-
11
-
23
23
-
(5)
-
(5)
-
18
3,190
780
3,970
(200)
(385)
(8)
(593)
2,990
3,377
Right-of-use
asset
Cost
At 1 July 2022
Additions
At 31 December
2022
2,908
492
3,400
Accumulated Depreciation
At 1 July 2022
(107)
Depreciation for
the period
Foreign
Exchange
Gain/(Loss)
(307)
(8)
261
251
512
(83)
(65)
-
(422)
(148)
Carrying amount
At 1 July 2022
2,801
At 31 December
2022
2,978
178
364
Page | 28
131
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 16 LEASE LIABILITIES & RIGHT OF USE (CONT.)
Right-of-use asset
Buildings
Vehicles
€'000
€'000
Hardware and
Software
€'000
Total
€'000
Cost
At 1 July 2021
Additions
Leases relinquished
At 30 June 2022
Accumulated Depreciation
At 1 July 2021
Depreciation for the
year
Eliminated upon
relinquishment
Carrying amount
At 1 July 2021
At 30 June 2022
334
2,908
(334)
2,908
10
(107)
(10)
(107)
324
2,801
38
261
(38)
261
4
(83)
(4)
(83)
34
178
-
21
-
21
-
(10)
-
(10)
-
11
372
3,190
(372)
3,190
14
(200)
(14)
(200)
358
2,990
Lease Liabilities Buildings
Vehicles
€'000
€'000
Hardware
and
Software
€'000
Technical
Equipment
Land
Total
€'000
€'000
€'000
At 1 July 2022
2,804
New lease
liabilities
entered during
the period
Add: Interest
Less: Payment
Foreign
Exchange
Gain/(Loss)
492
56
(329)
(3)
190
248
6
(181)
-
Closing Balance
3,020
263
Represented by:
Current lease
liabilities
Non-current
lease liabilities
Page | 29
506
2,512
3,018
115
150
265
11
-
-
(5)
-
6
6
-
6
132
-
13
-
(4)
-
9
8
1
9
-
3,005
23
-
(5)
-
18
11
7
18
776
62
(524)
(3)
3,316
646
2,670
3,316
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 16 LEASE LIABILITIES & RIGHT OF USE (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Lease liabilities
Buildings
Vehicles
Hardware and
Software
€'000
€'000
€'000
Total
€'000
At 1 July 2021
New lease liabilities entered
during the period
Leases relinquished
Add: Interest
Less: Payment
Closing Balance
Represented by:
Current lease liabilities
Non-current lease liabilities
Accounting Policy
325
2,908
(325)
27
(131)
2,804
326
2,478
2,804
28
262
(28)
6
(78)
190
104
86
190
-
21
-
-
(10)
11
9
2
11
353
3,191
(353)
33
(219)
3,005
439
2,566
3,005
Right-of-use assets:
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs incurred,
and, except where included in the cost of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-
of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
Page | 30
133
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 16 LEASE LIABILITIES & RIGHT OF USE (CONT.)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the consolidated entity’s incremental borrowing
rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments
that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price
of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated
termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the
period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
The Group leases office space, a laboratory, vehicles and land through its German subsidiary Vulcan Energie
Ressourcen GmbH as well as the subsidiaries of the German operating Company.
NOTE 17 INTANGIBLE ASSETS
Goodwill
Less: Impairment
Customer contracts – at cost
Less: Accumulated amortisation
Order backlog – at cost
Less: Accumulated amortisation
Operating permit - at cost
Less: Accumulated amortisation
Total Intangible Assets
31 Dec 2022
€'000
30 June 2022
€'000
1,076
(36)
1,040
1,526
(904)
622
46
(46)
-
1,500
(94)
1,406
3,068
1,076
(36)
1,040
1,526
(386)
1,140
46
(46)
-
1,500
(47)
1,453
3,633
Page | 31
134
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 17 INTANGIBLE ASSETS (CONT.)
Reconciliation of the written down values at the beginning and the end of the current and previous financial year
are set out below:
Customer
Contracts
Order
backlog
Operating
Permit
Goodwill
TOTAL
€'000
€'000
€'000
€'000
€'000
Balance at 1 July 2021
Acquired through business combinations
Less: amortisation
Less: Impairment
Balance at 30 June 2022
Less: amortisation
Balance at 31 December 2022
Impairment testing
-
1,526
(386)
-
1,140
(518)
622
-
46
(46)
-
-
-
-
-
-
-
1,500
1,076
(47)
-
1,453
(47)
1,406
-
(36)
1,040
-
4,148
(479)
(36)
3,633
(565)
1,040
3,068
Goodwill impairment test is conducted annually. The last goodwill impairment testing was performed on 30 June
2022. There are no indicators of impairment as at 31 December 2022.
Goodwill has been allocated to the following cash-generating units:
Global Engineering & Consulting-Company GmbH (Gec-co) - renamed to Vulcan Energy
Engineering GmbH
€'000
1,040
1,040
The consolidated entity impaired the goodwill related to Insheim and GeoT as at 30 June 2022 amounted to
€36,000.
The recoverable amount of the consolidated entity’s goodwill has been determined by a value-in-use calculation
using a discounted cash flow model, based on a 5 year projection period approved by management, together with
terminal value.
The following key assumptions were used in the discounted cash flow model:
-
-
13.2% pre-tax discount rate
18% average per annum projected EBITDA
The discount rate of 13.2% pre-tax reflects management’s estimate of the time value of money and Gec-co’s
weighted average cost of capital.
Page | 32
135
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 17 INTANGIBLE ASSETS (CONT.)
Sensitivity
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
As disclosed in note 2, the directors have made judgements and estimates in respect of impairment testing of
goodwill. Should these judgements and estimates not occur the resulting goodwill carrying amount may
decrease. The sensitivities are as follows:
-
Pre-tax discount rate would be required to increase to 28.2% for goodwill to be impaired, with all other
assumptions remaining constant.
- EBITDA would be required to decrease to 9% for goodwill to be impaired, with all other assumptions
remaining constant.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount of
the engineering is based would not cause the cash-generating unit’s carrying amount to exceed its recoverable
amount.
If there are any negative changes in the key assumptions on which the recoverable amount of goodwill is based,
this would result in further impairment charge for the engineering division’s goodwill.
Accounting Policy
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate
impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in note 1. The recoverable amounts of cash-generating units have
been determined based on value-in-use calculations. These calculations require the use of assumptions,
including estimated discount rates based on the current cost of capital and growth rates of the estimated future
cash flows.
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their
fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment.
Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains
or losses recognised in profit and loss arising from the derecognition of intangible assets are measured as the
difference between the net disposal proceeds and the carrying amount of the intangible asset. The method and
useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption
or useful life are accounted for prospectively by changing the amortisation method or period.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life
intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the
particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset
is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a
number of key estimates and assumptions.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a cash-generating unit.
Page | 33
136
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 18 DEFERRED TAX ASSETS
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
31 Dec 2022
€'000
30 June 2022
€'000
Deferred tax asset comprises temporary differences
attributable to:
Other
Property, plant and equipment
Deferred tax asset
Movements:
Opening balance
Additions through business combinations
Charged to income statement
Closing balance
NOTE 19 TRADE AND OTHER PAYABLES
47
1,634
1,681
1,710
-
(29)
1,681
18
1,692
1,710
-
1,768
(58)
1,710
Trade payables (i)
Accrued expenses
Other payables
VAT Payable
31 Dec 2022
€'000
30 June 2022
€'000
6,479
1,190
1,466
283
9,418
6,183
802
866
503
8,354
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms.
Due to the short-term nature of these payables, their carrying value is assumed to be the same as their fair value.
Accounting Policy
Trade and other payables
Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the
end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
Page | 34
137
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 20 DEFERRED INCOME
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Current
Government grants
Non-current
Government grants
Accounting Policy
31 Dec 2022
€'000
30 June 2022
€'000
132
132
1,453
1,453
-
-
-
-
Government grants
Government grants are not recognised until there is a reasonable assurance that the Group will comply with the
conditions attached to them and that the grants will be received.
The assistance from the European Union aims to support the Group in testing, development and optimisations in
production of geothermal energy. Unfulfilled conditions relate to the spend requirements as part of the grant
acquittal processes which will be validated by the European Union at the next reporting period, 31 December 2023
for the income showing as current deferred income, and in November 2024 for the remaining balance.
NOTE 21 PROVISIONS
Current:
Annual leave provision
Non-Current:
Other provisions
31 Dec 2022
€'000
30 June 2022
€'000
752
752
110
110
608
608
55
55
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have
completed the required period of service and also those where employees are entitled to pro-rata payments in
certain circumstances. The entire amount is presented as current, since the consolidated entity does not have
an unconditional right to defer settlement. However, based on past experience, the consolidated entity does not
expect all employees to take the full amount of accrued leave or require payment within the next 12 months.
Accounting Policy
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result
of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation at the reporting date, taking into account the risks
and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of
time is recognised as a finance cost.
Page | 35
138
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 21 PROVISIONS (CONT.)
Employee benefits
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Defined contribution superannuation expenses
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when
the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are measured at the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity
and currency that match, as closely as possible, the estimated future cash outflows.
NOTE 22 DEFERRED TAX LIABILITIES
31 Dec 2022
€'000
30 June 2022
€'000
Deferred tax liability comprises temporary
differences attributable to:
Other
Property, plant and equipment
Deferred tax liabilities
Movements:
Opening balance
Additions through business combinations
Charged to income statement
Closing balance
6
1,696
1,702
1,463
-
239
1,702
2
1,461
1,463
-
1,618
(155)
1,463
Page | 36
139
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 23 CONTRIBUTED EQUITY
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
31 Dec 22
30 Jun 22
No’000
€’000
No.’000
€’000
Fully paid ordinary shares
143,435
259,158
143,094
258,933
Ordinary shares
Ordinary shares entitle the holder to participate in the dividends and the proceeds on winding up in proportion to
the number of and amounts paid on the shares held.
At shareholders meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
Share buy-back
There is no current on-market share buy-back.
Date
Number
Issue
Price
€
€'000
At 1 July 2022
Exercise of Class S performance rights
Exercise of Class H performance rights
Exercise of Class I performance rights
Shares issued for services rendered
7/07/2022
7/07/2022
7/07/2022
9/07/2022
Exercise of Class R performance rights
20/12/2022
At 31 December 2022
12,897
80,909
89,091
58,355
100,000
143,435,301
143,094,049
258,933
-
-
-
3.86
-
-
Issue
Price
€
-
-
-
225
-
259,158
€'000
85,272
1,637
57
253
123,680
1,975
-
553
-
-
225
49,660
(4,379)
258,933
Date
Number
At 1 July 2021
Shares issued as consideration for
acquisition of Gec-co.
Shares issued as consideration for
acquisition of GGH
Shares issued for services rendered
Placement
Share Purchase Plan
Exercise of warrants
Placement
Exercise of performance shares
Exercise of performance rights
Shares issued for services rendered
Shares issued to Stellantis
Less capital raising costs
At 30 June 2022
Page | 37
108,422,717
6/07/2021
325,000
5.04
11,396
5.04
7.84
8.35
8.65
-
8.47
-
-
6.00
4.34
32,251
14,814,815
228,434
521,304
65,317
4,400,000
2,786,364
37,492
11,448,959
143,094,049
6/07/2021
19/08/2021
22/09/2021
18/10/2021
1/12/2021
17/12/2021
17/12/2021
17/12/2021
8/02/2022
27/06/2022
140
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 23 CONTRIBUTED EQUITY (CONT.)
Accounting Policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly
attributable to the issue of new shares or options for the acquisition of a business are not included in the cost
of the acquisition as part of the purchase consideration.
If the entity reacquires its own equity instruments, for example, as a result of a share buy-back, those
instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised
in the profit or loss and the consideration paid including any directly attributable incremental costs (net of
income taxes) is recognised directly in equity.
NOTE 24 RESERVES
31 Dec 2022
€'000
30 June 2022
€'000
Share-based payment reserve
Foreign currency translation reserve
Total
9,706
6,169
15,875
8,995
7,817
16,812
Movement reconciliation
On issue at 1 July 2022
Issue of performance rights during the year
Exercise of Performance Rights during the year
Recognition of share - based payment expense for
performance rights issued to Directors, staff &
consultants (Note 32)
Performance rights cancelled
Performance rights lapsed
On issue at 31 December 2022
Number of
Warrants
Number of
Performance
Shares
Number of
Performance
Rights
€'000
-
-
-
-
-
-
-
91,174
8,656,324
8,995
-
-
-
-
-
393,374
(282,897)
-
(24,000)
(360,000)
-
-
711
-
-
91,174
8,382,801
9,706
Page | 38
141
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 24 RESERVES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Movement reconciliation
On issue at 1 July 2021
Issue of performance rights during the year
Recognition of share - based payment expense
for performance rights issued to Directors,
staff & consultants (Note 32)
Performance shares issued upon purchase of
GGH
Recognition of share - based payment expense
for performance rights issued to Vendors on
Acquisition (Note 32)
Issue of unlisted options during the year
Exercise of unlisted options during the year
Exercise of Performance rights during the year
Issue of warrants during the year
Warrants exercised during the year
Recognition of shared based payment expense
for warrants
Exercise of Performance Shares during the
year
Number of
Warrants
Number of
Performance
Shares
Number of
Performance
Rights
€’000
512,447
4,400,000
11,238,688
4,995
204,000
-
-
-
91,174
-
-
-
-
-
-
-
-
-
-
-
(2,786,364)
8,857
(521,304)
-
-
-
-
-
(4,400,000)
-
-
-
-
-
-
-
-
-
3,289
363
218
-
-
-
-
-
130
-
On issue at 30 June 2022
-
91,174
8,656,324
8,995
Page | 39
142
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 24 RESERVES (CONT.)
The share-based payment reserve is used to record the value of share-based payments provided to outside
parties, and share-based remuneration provided to employees and directors.
Foreign Currency Translation Reserve
31 Dec 2022
€'000
30 June 2022
€'000
Balance at the beginning of the period/year
Movement during the period/year
Balance at the end of the period/year
7,817
(1,648)
6,169
827
6,990
7,817
The foreign currency translation reserve is used to recognise exchange differences arising from the translation
of the financial statements of foreign operations to Euro.
NOTE 25 INVESTMENT IN ASSOCIATE
The Company’s interest in Kuniko Limited is recognised as an investment in associate accounted for using the
equity method. Subsequent to the deconsolidation, the Company’s share of Kuniko Limited’s loss for the period
was offset against the investment resulting in the amount recognised as investment in associate as follows:
31 Dec 2022
€'000
30 June 2022
€'000
Opening carrying value
Share of loss - associate
Share of other comprehensive income/(loss) -
associate
Investment in associate
1,214
(249)
9
974
1,709
(474)
(21)
1,214
Page | 40
143
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 25 INVESTMENT IN ASSOCIATE (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Interests in associates are accounted for using the equity method of accounting. Information relating to
associates that are material to the consolidated entity are set out below:
Name
Kuniko Ltd
Principal place of business /
Country of incorporation
Ownership interest
31 December
2022
%
30 June
2022
%
Australia
21.15%
21.15%
Kuniko Ltd
31 Dec 2022
€'000
30 June 2022
€'000
Summarised statement of financial position
Current assets
Non-current
assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets/(liabilities)
4,921
3,016
7,937
(241)
-
(241)
7,696
6,985
2,665
9,650
(678)
-
(678)
8,972
Summarised statement of profit or loss and other comprehensive income
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
Revenue
Expenses
Loss before income tax
Income tax
expense
Loss after income tax
Other comprehensive loss
Total comprehensive loss
-
(1,177)
(1,177)
-
(1,177)
42
(1,135)
-
(1,391)
(1,391)
-
(1,391)
(115)
(1,506)
Page | 41
144
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 25 INVESTMENT IN ASSOCIATE (CONT.)
Accounting policy
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method, the
share of the profits or losses of the associate is recognised in profit or loss and the share of the movements
in equity is recognised in other comprehensive income. Investments in associates are carried in the
statement of financial position at cost plus post-acquisition changes in the consolidated entity's share of net
assets of the associate. Goodwill relating to the associate is included in the carrying amount of the investment
and is neither amortised nor individually tested for impairment. Dividends received or receivable from
associates reduce the carrying amount of the investment.
When the consolidated entity’s share of losses in an associate equals or exceeds its interest in the associate,
including any unsecured long-term receivables, the consolidated entity does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence over
the associate and recognises any retained investment at its fair value. Any difference between the associate’s
carrying amount, fair value of the retained investment and proceeds from disposal is recognised in profit or
loss.
Page | 42
145
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 26 ACQUISITION OF SUBSIDIARY
No acquisitions occurred in the period ending 31 December 2022.
In the prior year, the following acquisitions occurred:
Global Geothermal Holding UG
On 2 July 2021 Vulcan Energie Ressourcen GmbH, a subsidiary of Vulcan Energy Resources Limited, acquired
100% of the shares in Global Geothermal Holding UG (‘GGH’) with an effective date on 2 July 2021 (closing-date).
Dr Horst Kreuter, CEO of Vulcan Energie Ressourcen GmbH, and a related party of Vulcan Energy Resources
Limited, and Mr Thorsten Weimann, Chief Operating Officer and a related party of Vulcan Energy Resources
Limited were the sole shareholders of GGH.
With a share price at closing date of €5.04 (AUD7.90), the agreed purchase price for 11,396 ordinary shares
amounted to €57,411.
Additionally, 91,174 performance shares with a fair value €363,307 have been recognised as deferred
consideration, based on management’s assessment of the probability of achieving the performance milestones.
The performance shares were issued in equal number to Dr Horst Kreuter and Mr Thorsten Weimann. Milestones
as follows:
The Performance Shares will convert into Shares upon achievement of any of the following in relation to any of
the licenses held by GGH:
(a)
(b)
(c)
(d)
(e)
the Company (or any of its subsidiaries) obtaining a positive approval for geothermal brine
production from the relevant governmental authority following a provisional environmental
impact assessment;
the Company (or any of its subsidiaries) obtaining approval for the construction and operation
of a main operating plant under Germany’s Federal Mining Act (BBergG);
the Company (or any of its subsidiaries) obtaining the first approval for a special operating
plan in accordance with BBergG;
the Company (or any of its subsidiaries) the first approval or pre-approval from the relevant
governmental authority for the construction of a geothermal plant; or
the Company (or any of its subsidiaries) obtaining the first approval or pre-approval from the
relevant governmental authority for the construction of a direct lithium extraction (lithium
conveying) plant.
Page | 43
146
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 26 ACQUISITION OF SUBSIDIARY (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Purchase Consideration:
Shares issued
Performance shares issued (refer to note 14)
Net consideration
Net Assets Acquired:
Fair value of net liabilities acquired
Exploration and evaluation expenditure
Net assets acquired
€
57,411
363,307
420,718
€
(1,193)
421,911
420,718
Management has determined that the acquisitions do not meet the definition of a business within AASB 3
Business Combinations. The transactions have been accounted for as an asset acquisition.
Since GGH is an entity which holds exploration licences including Taro where the majority of the indicated
resources is generated from, the acquisition of GGH is considered an asset acquisition rather than a business
combination.
Accounting Policy
Asset Acquisition not constituting a Business
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a
carrying amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise
in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax
under AASB 112 applies. No goodwill will arise on the acquisition and transaction costs of the acquisition will be
included in the capitalised cost of the asset.
Page | 44
147
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 27 INTERESTS IN SUBSIDIARIES
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
The consolidated financial statements incorporate assets, liabilities and results of the following wholly owned
subsidiaries in accordance with the accounting policy described in note 1
Entity
Location
Vulcan Energie
Ressourcen GmbH
Karlsruhe
Vulcan Energy Europe Pty
Limited
Perth
Primary
activity
Operating
entity
Operating
entity
Date of
foundation or
acquisition
Ownership
Interest 31
December
2022 (%)
Ownership
Interest 30
June 2022
(%)
September
26, 2019
October 11,
2019
100
100
Global Geothermal Holding
UG*
Vulcan Energy Subsurface
Solutions GmbH
Vulcan Energy Engineering
GmbH
Karlsruhe
Group holding
July 2, 2021
100
Karlsruhe
Augsburg
Operating
entity
Operating
entity
July 2, 2021
100
July 2, 2021
100
Vulcan Geothermal GmbH
Karlsruhe
Group holding
July 09, 2021
100
VER GEO LIO GmbH
Karlsruhe
Group holding
July 12, 2021
100
Vercana GmbH
Karlsruhe
Natürlich Insheim GmbH
Vulcan Energy Italy Pty
Limited
Karlsruhe
(previously:
Ludwigshafen)
Perth
Vulcan Energie France SAS
France
Operating
entity
Operating
entity
Operating
entity
Operating
entity
December
09, 2021
December 31,
2021
100
100
July 5, 2021
100
June 22,
2022
100
100
100
100
100
100
100
100
100
100
100
100
*Global Geothermal Holding UG merged with Vulcan Energie Ressourcen GmbH. Subsequently the entity was
deregistered on 28 February 2023.
Page | 45
148
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 28 BUSINESS COMBINATIONS
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
No business combinations occurred in the period ending 31 December 2022. In the prior year, the following
business combinations occurred:
Natürlich Insheim GmbH (previously: Pfalzwerke Geofuture GmbH)
VER GEO LIO GmbH, an indirect subsidiary of Vulcan Energy Resources Limited, acquired 100% shares in Natürlich
Insheim GmbH (‘Natürlich Insheim’), in accordance with the Share Purchase Agreement, with an effective date on
31 December 2021 (closing-date).
The preliminary purchase price for the acquisition of Natürlich Insheim amounted to €32,684,814 and was paid in
cash. The preliminary purchase price has been adjusted by €1,410,417 based on the purchase price adjustments
stated in the Share Purchase Agreement. Therefore, the adjusted purchase price amounts to €31,274,397 and is
now final.
The acquired business contributed revenues of €2,976,987 and a loss after tax of €105,243 to the consolidated
entity for the period 1 January 2022 to 30 June 2022. If the acquisition occurred on 1 July 2021 the full year
contributions would have been revenues of €5,953,974, a loss after tax of €210,486 and EBITDA of €1,352,836.
Natürlich Insheim owns and operates a geothermal power plant in Insheim, Germany.
The values identified in relation to the acquisition of Insheim are final as at 30 June 2022.
Details of the acquisition are as follows:
Cash
Trade and other receivables
Inventory
Property, plant & equipment
Deferred tax asset
Trade and other payables
Other provisions
Fair value of net assets acquired
Goodwill
Operating permit
Intangibles acquired on acquisition
Deferred tax liabilities arising on acquisition
Acquisition-date fair value of total consideration
Representing:
Cash paid
Loan repayment to Pfalzwerke Geofuture GmbH
Profit transfer adjustment
Total consideration
Page | 46
149
€’000
922
754
138
28,313
1,747
(894)
(50)
30,930
35
1,500
1,535
(1,191)
31,274
€’000
32,685
(1,300)
(111)
31,274
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 28 BUSINESS COMBINATIONS (CONT.)
Gec-co Global Engineering & Consulting-Company GmbH
Vulcan Energie Ressourcen GmbH, a subsidiary of Vulcan Energy Resources Limited, acquired 100% of
geothermal surface consultancy company, Global Engineering and Consulting - Company GmbH (‘Gec-co’), in
accordance with the Share Purchase Agreement, with an effective date on 2 July 2021 (closing-date). Mr Thorsten
Weimann, Chief Operating Officer of Vulcan Energy Resources Limited is the sole shareholder of Gec-co.
325,000 fully paid ordinary shares of Vulcan Energy Resources Limited were issued, totalling to €1,627,720 based
on a share price at closing date of €5.01 (AUD7.93).
This is an engineering business and operates in the renewables sector. The goodwill of €1.040m represents the
expected synergies from merging this business with the other entities and reducing external consultancy costs.
The acquired business contributed revenues (including other own works capitalised) of €2,979,154 for sale of
services and loss after tax of €900,073 to the consolidated entity for the period from 2 July 2021 to 30 June 2022.
As the acquisition occurred on 2 July 2022, the full year contribution is the same as above.
Additionally, a cash payment of €862,750 linked to project development milestones of the Vulcan Zero Carbon
Lithium™ Project has been recognised as deferred consideration, based on management’s assessment of the
probability of achieving the milestones. Milestones as follows:
(a) The first building permit for the construction of an ORC (geothermal) plant is granted.
(b) The first building permit or approval pursuant to the German Federal Immission Control Act (BlmSchG) for the
construction of a DLE (lithium extraction) plant is granted.
The values identified in relation to the acquisition of Gec-co are final as at 30 June 2022.
Details of the acquisition are as follows:
€‘000
€‘000
246
557
192
122
(372)
(348)
397
1,393
46
1,040
2,479
(386)
2,490
1,628
862
2,490
Cash
Trade and other receivables
Contract assets
Other assets
Trade and other payables
Loans and borrowings
Fair value of net assets acquired
Customer relationships
Order backlog
Goodwill
Intangibles acquired on acquisition
Deferred tax liabilities arising on acquisition
Acquisition-date fair value of total consideration
Representing:
Shares issued
Deferred consideration
Total consideration
Page | 47
150
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 28 BUSINESS COMBINATIONS (CONT.)
GeoThermal Engineering GmbH
Vulcan Energie Ressourcen GmbH, a subsidiary of Vulcan Energy Resources Limited, acquired 100% of the shares
in GeoThermal Engineering GmbH (‘GeoT’) in accordance with the Share Purchase Agreement, with effective date
on 2 July 2021 (closing-date). Dr Horst Kreuter, CEO of Vulcan Energie Ressourcen GmbH, and a related party of
Vulcan Energy Resources Limited, was the sole shareholder of GeoT.
The acquisition costs for 100% of the shares in GeoT were payable in cash. The agreed purchase price was €1.
GeoT is an independent planning and consulting company for the development of deep geothermal projects
worldwide. In cooperation with partners and investors, GeoT develops national and international projects in
regions that offer favourable conditions for a sustainable heat and/or power production from geothermal energy.
Furthermore, GeoT designs optimally adapted exploration programs for each project by individual composing of
the different exploration methods.
The acquired business contributed revenues (including other own work capitalised) of €1,469,495 for sale of
services and loss after tax of €263,250 to the consolidated entity for the period from 2 July 2021 to 30 June 2022.
As the acquisition occurred on 2 July 2022, the full year contribution is the same as above.
The values identified in relation to the acquisition of GeoT are final as at 30 June 2022.
€
€
62,150
151,854
134,223
(156,342)
(285,330)
(93,445)
133,316
1,298
134,614
(41,168)
1
1
1
Details of the acquisition are as follows:
Cash
Trade and other receivables
Other assets
Trade and other payables
Loans and borrowings
Fair value of net liabilities acquired
Customer relationships
Goodwill
Intangiles acquired on acquisition
Deferred tax liabilities arising on acquisition
Acquisition-date fair value of total consideration
Representing:
Cash paid or payable to vendor
Total consideration
Page | 48
151
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 28 BUSINESS COMBINATIONS (CONT.)
Accounting policy
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued, or liabilities incurred by the acquirer to former owners of the acquiree and the amount of
any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the
acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets.
All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms, economic
conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in
existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held
equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and
the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value.
Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is
recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any
pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-
existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to
the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-
date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-
controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity
interest in the acquiree.
Page | 49
152
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 29 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and
interest rate risk), credit risk, liquidity risk and price risk. The Group’s overall risk management programme
focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the
financial performance of the Group. The Group uses different methods to measure and manage different types
of risks to which it is exposed.
These include monitoring levels of exposure to interest rate and foreign exchange risk and assessments of
market forecasts for interest rate and foreign exchange prices. Ageing analysis and monitoring of specific credit
allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future
cash flow forecasts.
Risk management is carried out by Management and overseen by the Board of Directors with assistance from
suitably qualified external advisors.
The main risks arising for the Group are foreign exchange risk, interest rate risk, credit risk and liquidity risk. The
Board reviews and agrees policies for managing each of these risks and they are summarised below.
The carrying values of the Group’s financial instruments are as follows:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Lease liabilities
(a) Market risk
(i.)
Foreign exchange risk
31 Dec 2022
€'000
30 June 2022
€'000
134,107
6,316
140,423
9,418
3,316
12,734
175,416
4,030
179,446
8,354
3,005
11,359
The Group’s exposure to foreign currency risk at the end of the reporting period, was as follows:
Trade payables
Cash and cash equivalent
31 Dec 22
€’000
(1,312)
35,358
34,046
30 Jun 22
€’000
(1,430)
87,421
85,991
Page | 50
153
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 29 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
The aggregate net foreign exchange gains/(losses) recognised in the P&L were:
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Net foreign exchange gains/(losses) recognised in the P&L:
Sensitivity
31 December
2022
€’000
30 June 2022
€’000
(105)
285
As shown in the table above, the group is primarily exposed to changes in EUR/AUD exchange rates. The
sensitivity of profit or loss to changes in the exchange rates is:
EUR/AUD exchange rate - increase 5% *
EUR/AUD exchange rate – decrease 5%*
EUR/USD exchange rate – increase 5% *
EUR/USD exchange rate – decrease 5% *
*Holding all other variables constant
(ii.)
Interest rate risk
Impact on post-tax profit
6 months
31 December 2022
€’000
(1,773)
1,773
(64)
64
12 months
30 June
2022
€’000
(4,390)
4,390
(53)
53
The Group is exposed to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a
result of changes in the market interest rates on interest bearing financial instruments. The Group’s exposure to
this risk relates primarily to the Group’s cash and any cash on deposit. The Group does not use derivatives to
mitigate these exposures. The Group manages its exposure to interest rate risk by holding certain amounts of
cash in fixed and floating interest rate facilities. At the reporting date, the interest rate profile of the Group’s
interest-bearing financial instruments was:
31 December 2022
30 June 2022
Weighted
average
interest rate
Balance
€’000
Weighted
average
interest rate
Cash and cash equivalents
1.53%
101,687
0.25%
Balance
€’000
103,558
Sensitivity
Within the analysis, consideration is given to potential renewals of existing positions and the mix of fixed and
variable interest rates. The following sensitivity analysis is based on the interest rate risk exposures in
existence at the reporting date. The 1% increase and 1% decrease in rates is based on reasonably expected
possible changes over a financial year.
At 31 December 2022, if interest rates had moved, as illustrated in the table below, with all other variables held
constant, losses and equity would have been affected as follows:
Page | 51
154
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 29 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Profit
higher/(lower)
31 December
2022
€
1,016,867
(1,016,867)
Profit
higher/(lower)
30 June 2022
€
1,035,576
(1,035,576)
+ 1.0% (100 basis points)
- 1.0% (100 basis points)
(b)
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and
other receivables and other financial assets. The Group’s exposure to credit risk arises from potential default of
the counterparty, with maximum exposure equal to the carrying amount of the financial assets.
The Group’s policy is to trade only with recognised, creditworthy third parties. It is the Group’s policy that all
customers who wish to trade on credit terms will be subject to credit verification procedures.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant. There are no significant concentrations of credit risk within the Group except for
cash and cash equivalents.
(c)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to its reputation.
The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by
continuously monitoring forecast and actual cash flows. The Group does not have any external borrowings.
The following are the contractual maturities of financial liabilities:
31 Dec 22
Trade and other payables
Lease Liabilities
30 Jun 22
Trade and other payables
Lease Liabilities
1 year or less
1-5 years
€’000
€’000
> 5 years
€’000
Total
€’000
9,418
646
8,354
439
-
1,801
-
838
-
869
-
1,728
9,418
3,316
8,354
3,005
Page | 52
155
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 29 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(d)
Price risk
The Group is exposed to the commodity price risk, as its energy sales are predominantly subject to prevailing
market prices. The contract with Pfalzwerke guarantees a minimum price of €0.25 per kWh. During the six
months ending 31 December 2022 Vulcan sold 10,409 MWh at an average price of €0.32 per kWh.
At 50% of the upward movement in the price for Mwh, the Group’s loss would decrease by €2.0m. At 100% upward
price movement the loss would decrease by €3.7m.
(e)
Capital risk management
The Group’s objectives when managing capital are to:
• Safeguard their ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and
• Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the number of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Given the stage of the Company’s development there are no formal targets set for return on capital. The Company
is not subject to externally imposed capital requirements. The net equity of the Company is equivalent to capital.
Net capital is obtained through capital raisings on the Australian Securities Exchange (“ASX”).
NOTE 30 CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Lease liabilities
€'000
Total
€'000
Balance at 1 July 2021
Net cash used in financing activities
Additions to leases
Other changes
Balance at 1 July 2022
Net cash used in financing activities
Additions to leases
Other changes
Balance at 31 December 2022
353
(185)
3,190
(353)
3,005
(462)
776
(3)
3,316
353
(185)
3,190
(353)
3,005
(462)
776
(3)
3,316
NOTE 31 NON-CASH INVESTING AND FINANCING ACTIVITIES
Additions to the right of use assets
Performance shares issued for consideration of
acquisition
Shares issued for consideration of acquisition
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
776
-
-
776
3,190
363
1,685
5,238
Page | 53
156
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
6-months
31 Dec 2022
€'000
12-months
30 June 2022
€'000
Recognised share-based payment transactions
Performance rights issued to Directors, staff and consultants (i)
Performance rights issued to Directors & staff in prior periods (ii)
Performance shares issued to Vendors of Acquisition
Performance shares issues as consideration for acquisition of
subsidiary GGH
Shares issued for consideration of services (Note 23)
Warrants
Represented by
Shared-based payment expense
Investor relations expense
Capitalised exploration assets
153
558
-
-
225
-
936
711
225
-
936
520
2,769
218
363
478
130
4,478
3,637
478
363
4,478
(i) Details of new performance rights issued during the period:
Under the Company’s Incentive Award plan, the Company issued the following incentives:
-
-
an annual deferred incentive (ADI), designed to reward creation of of exceptional short-term
shareholder value as evidenced by the performance hurdles. Issued in three Tranches as Class AA
a long-term incentive (LTI), deigned to reward creation of exceptional long-term shareholder value as
evidenced by performance hurdles. Issued in seven tranches as Class AB
The incentives were issued on the following dates:
on the 19th of September 52,000 ADIs and 102,000 LTIs were issued to the Executives.
on the 13th of December 12,700 ADIs and 56,200 LTIs were issued to the Executives.
-
-
- On the 29th of November 26,000 ADI’s and 116,000 LTI’s were issued to the Managing Director.
Page | 54
157
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Details of the ADIs for Executives:
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Item
Executive Rights - ADI
Grant date
19/09/2022
13/12/2022
19/09/2022
13/12/2022
19/09/2022
13/12/2022
Tranche 1
Tranche 2
Tranche 3
Fair value of each right
(EUR)
Commencement of
performance period
Performance
measurement date
Vesting date
Expiry date
Volatility
Risk-fee rate
Dividend yield
Number of Rigts
Price at grant (EUR)
Valuation per Tranche
(EUR)
Share based payment
expense (EUR)
5.24
4.30
5.24
4.30
5.24
4.30
1/07/2022
1/11/2022 &
14/11/2022
1/07/2022
1/11/2022 &
14/11/2022
1/07/2022
1/11/2022 &
14/11/2022
30/06/2022
30/06/2022
30/06/2022
30/06/2022
30/06/2022
30/06/2022
30/06/2024
30/06/2024
30/06/2024
30/06/2024
30/06/2024
30/06/2024
30/06/2026
30/06/2026
30/06/2026
30/06/2026
30/06/2026
30/06/2026
n/a
n/a
nil
15,600
5.24
n/a
n/a
nil
3,810
4.30
n/a
n/a
nil
15,600
5.24
n/a
n/a
nil
3,810
4.30
n/a
n/a
nil
20,800
5.24
n/a
n/a
nil
5,080
4.30
81,744
16,383
81,744
16,383
108,992
21,844
10,116
808
10,116
808
18,882
1,509
Item
Tranche 1
Tranche 2
Tranche 3
Managing Director's Rights - ADI
Grant date
Fair value of each right (EUR)
Commencement of
performance period
Performance measurement
date
Vesting date
Expiry date
Volatility
Risk-fee rate
Dividend yield
Number of Rigts
Price at grant (EUR)
Valuation per Tranche (EUR)
Share based payment
expense (EUR)
Page | 55
29/11/2022
4.52
1/07/2022
30/06/2023
30/06/2024
30/06/2026
n/a
n/a
nil
7,800
4.52
35,228
4,527
158
29/11/2022
4.52
1/07/2022
30/06/2023
30/06/2024
30/06/2026
n/a
n/a
nil
7,800
4.52
35,228
4,527
29/11/2022
4.52
1/07/2022
30/06/2023
30/06/2024
30/06/2026
n/a
n/a
nil
10,400
4.52
46,971
8,451
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Details of ADI performance rights vesting conditions:
Tranche 1:
The Tranche 1 will vest subject to the obtaining sufficient funding in order to allow for completion of the first plant
that will be able to produce lithium on a commercial scale and/or the first new commercial geothermal heating
plant, in accordance with Vulcan’s business plan (First Plant) by 30 June 2023.
Tranche 2:
The Tranche 2 will vest subject to the achievement of various individual and business KPIs. The STI targets
reflect a balance of individual and organisational goals impacting overall STI. Individual goals in the assessment
of the STI include items such as sustainability, cost performance, funding, approval of drilling permits, drilling
activity, compliance and governance, growth and safety. Individual executive goals are all clearly defined and
specifically measurable.
Tranche 3
The tranche 3 will vest subject to the achievement of the shared objectives as follows:
People:
a) >80% retention rate for agreed critical roles at all levels of the organisation for FY 23 onwards; and
b) increased employee satisfaction rate based on previous annual internal employee satisfaction survey.
Environment:
a) obtain an ESG rating from a recognised third party ESG provider that is above 50%;
b) obtain a carbon neutral emission certification from a recognised third-party issuer where the Group’s carbon
emissions footprint is measured and offset by supporting credible carbon offset projects and verified across all
business units by 30 June 2023; and
c) reporting of climate related impacts, risks and opportunities management by the Group according to the
Taskforce for Climate-Related Financial Disclosures (TCFD) guidelines and/or report according to the Taskforce
for Nature-Related Financial Disclosures (TNFD).
Social:
a) all exploration/production licenses to be in good standing as at 30 June 2023; and
b) release an announcement on the ASX that it has commenced drilling in the Upper Rhine Valley.
The above ADI performance rights are subject to continuous service until the vesting date.
Page | 56
159
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Details of the LTIs for Executives:
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Item
Grant date
Fair
value of
each
right
(EUR)
Expiry date Volatility
Risk-fee
rate
Number
of Rights
Price at
grant
(EUR)
Valuation
per
Tranche
(EUR)
Share
based
payment
expense
(EUR)
30,600
5.24
160,344
Tranche
1
Tranche
2
Tranche
3
19/09/2022
5.24
30/06/2027
13/12/2022
4.30
30/06/2027
19/09/2022
5.24
30/06/2027
13/12/2022
4.30
30/06/2027
19/09/2022
5.24
30/06/2027
13/12/2022
4.30
30/06/2027
Executive
Rights
Tranche
4
19/09/2022
5.24
30/06/2027
13/12/2022
4.30
30/06/2027
19/09/2022
5.24
30/06/2027
13/12/2022
4.30
30/06/2027
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
16,860
15,300
8,430
10,200
5,620
7,650
4,215
7,650
4,215
19/09/2022
4.18
30/06/2027
75%
3.405%
10,200
13/12/2022
3.24
30/06/2027
75%
3.115%
5,620
19/09/2022
4.57
30/06/2027
75%
3.405%
20,400
13/12/2022
3.50
30/06/2027
75%
3.115%
11,240
Tranche
5
ATSR
Rights
RTSR
Rights
72,498
80,172
36,249
9,921
1,659
4,961
829
53,448
3,307
24,166
553
40,086
2,480
18,125
415
40,086
2,480
18,125
415
42,636
5,267
18,209
837
93,228
11,518
39,340
1,673
4.30
5.24
4.30
5.24
4.30
5.24
4.30
5.24
4.30
5.24
4.30
5.24
4.30
Item
Grant date
Fair
value of
each
right
(EUR)
Expiry date Volatility
Risk-fee
rate
Number
of Rights
Price at
grant
(EUR)
Valuation
per
Tranche
(EUR)
Share
based
payment
expense
(EUR)
Tranche 1
29/11/2022
4.52
30/06/2027
29/11/2022
4.52
30/06/2027
29/11/2022
4.52
30/06/2027
29/11/2022
4.52
30/06/2027
29/11/2022
4.52
30/06/2027
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
34,800
4.52
157,296
10,100
17,400
4.52
11,600
4.52
8,700
4.52
8,700
4.52
78,648
5,050
52,432
3,367
39,324
2,525
39,324
2,525
29/11/2022
3.46
30/06/2027
75%
3.235%
11,600
4.52
40,136
5,164
29/11/2022
3.69
30/06/2027
75%
3.235%
23,200
4.52
85,608
10,988
MD
Rights
Tranche
2
Tranche
3
Tranche
4
Tranche
5
ATSR
Rights
RTSR
Rights
Page | 57
160
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Details of LTI performance rights vesting conditions:
Tranche 1:
The Tranche 1 Rights will vest subject to the achievement of the successful ramp up to nameplate capacity for
Phase 1 energy and lithium chemicals production, and achievement of corresponding revenue.
Tranche 2:
The Tranche 2 Rights will vest subject to the achievement of obtaining a positive definitive feasibility study for
Phase 2 energy and lithium chemicals production, and achievement of corresponding revenue.
Tranche 3:
The Tranche 3 Rights will vest subject to the achievement of obtaining project financing for completion of Phase
2 capital expenditure.
Tranche 4:
The Tranche 4 Rights will vest subject to the achievement of carbon neutral emission certification across all
operations through each year in the four-year period commencing 30 June 2022.
Tranche 5:
The Tranche 5 Rights will vest subject to the achievement of lowest quartile absolute greenhouse gas (GHG)
emissions.
ATSR Rights:
The number of RTSR Rights that vest is based on the TSR of Vulcan over the performance period, relative to the
returns of the Peer Group. The RTSR Rights will vest according to the following schedule:
Company's TSR performance
Percentage of ATSR Rights eligible to vest
Company's TSR < 7.5%
7.5% < Company's TSR <10%
10% < Company's TSR < 12.5%
Company's TSR > 12.5%
RTSR Rights:
Nil
50% to 75% on a pro-rata basis
75% to 100% on a pro-rata basis
100%
The number of RTSR Rights that vest is based on the TSR of Vulcan over the performance period, relative to the
returns of the Peer Group. The RTSR Rights will vest according to the following schedule.
Company's TSR performance relative to the Peer
Group
50th percentile
Between 50th percentile and 75th percentile
75th percentile
Page | 58
Percentage of RTSR Rights eligible to vest
50%
Pro-rata
100%
161
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
On the 29th of November the Company issued Performance rights to Non-Executive Directors (NED Service
Rights). Dr Günter Hilken and Mark Skelton each received 14,237 performance rights valued at EUR 67,746. Issued
in three tranches as class AC
Performance rights vest as follows:
- 1/3 vesting 12 months from the date of 2022 AGM;
- 1/3 vesting 24 months from the date of 2022 AGM; and
- 1/3 vesting 36 months from the date of 2022 AGM.
Type
Grant date
Number of Rights
Vesting date
Total value of
Rights (EUR)
Share based
payment expense
(EUR)
Tranche 1
Tranche 2
Tranche 3
29/11/2022
29/11/2022
29/11/2022
9,491
9,491
9,491
29/11/2023
29/11/2024
29/11/2025
45,164
45,164
45,164
4,060
2,027
1,352
Page | 59
162
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
(ii) Details of performance rights issued in prior years:
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Fair
value of
each
right
(EUR)
Expected
volatility
Grant date
Price at
grant
date
(EUR)
Expiry date
Vesting
hurdle (5-
day
VWAP)
Interest
rate
Number
of Rights
Total
value of
Rights
(EUR)
Share
based
payment
expense
(EUR)
0.55
70%
10/09/2020
0.55
16/09/2023
1.84
0.26%
2,500,000
1,368,598
241,631
0.55 &
4.67 &
7.54
1.47
4.95
4.82 &
7.54
N/A
15/09/2020
&
29/06/2021
&
16/12/2021
0.55 &
4.67 &
7.54
1/12/2023
N/A
N/A
250,000
& 60,000
& 58,000
855,020
(441,746)
N/A
25/11/2020
1.47
27/11/2022
N/A
N/A
100,000
147,060
32,264
N/A
24/06/2021
4.95
30/06/2025
N/A
N/A
38,688
191,561
27,944
N/A
29/06/2021
&
16/12/2021
4.82 &
7.54
1/12/2024
N/A
N/A
250,000
& 18,000
1,341,080
147,585
4.82
N/A
29/06/2021
4.82
1/12/2024
N/A
N/A
250,000
1,205,360
175,530
4.82 &
7.54
4.82
7.54
7.54
N/A
29/06/2021
&
16/12/2021
4.82 &
7.54
1/12/2024
N/A
N/A
100,000 &
18,000
617,864
69,513
N/A
29/06/2021
4.82
1/12/2024
N/A
N/A
100,000
482,144
52,488
N/A
16/12/2021
7.54
1/12/2024
N/A
N/A
60,000
452,400
204,326
N/A
16/12/2021
7.54
1/12/2024
N/A
N/A
50,000
377,000
48,417
Type
Class
J
Class
P
Class
R
Class
S
Class
T
Class
U
Class
V
Class
W
Class
Y
Class
Z
Details of Performance Rights vesting conditions:
Class J
- the Company announcing, within 36 months from the date of issue, a positive (JORC-Compliant) Definitive
Feasibility Study in relation to the Project confirming it is commercially viable; and
- the VWAP for Shares as traded on ASX over 20 consecutive trading days is equal to or greater than 225% of the
VWAP for Shares for the last 5 trading days up to but not including the date of the Meeting (the Reference Price).
Page | 60
163
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Class P
- the Company announcing before 31 December 2022 a positive Definitive Feasibility Study in relation to the
Project confirming it is commercially viable. Performance rights lapsed as the vesting condition had not been
satisfied within the intended timeframe.
Class R
- Vesting on issue and converting to shares on a one for one basis on the date that is 24 months from the date of
issue.
Class S
- one third vesting 12 months from the date of the 24 June 2021 General Meeting (EGM), one third vesting 24
months from EGM, one third vesting 36 months from EGM.
Class T
- the Company being issued a building permit for the first geothermal power plant or, in the case of a pure heating
project with no electricity production, the transfer station, on or before the Expiry Date of 1st December 2024.
Class U
– the Company being issued a building permit for the first Direct Lithium Extraction system, on or before the
Expiry Date of 1st December 2024.
Class V
- the Company being granted a permit according to BImSchG for the first lithium refinery, on or before the Expiry
Date of 1st December 2024.
Class W
- the Company announcing commissioning of the first commercial lithium extraction plant, on or before the
Expiry Date of 1st December 2024.
Class Y:
The Company announcing successful listing of Vulcan Energy on the regulated market of the Frankfurt Stock
Exchange on or before the expiry date of 1 December 2024.
Class Z:
Performance Rights will vest upon the Company obtaining project finance for the first commercial plant, on or
before the Expiry Date of 1 December 2024.
Page | 61
164
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Set out below are summaries of performance rights granted and exercised:
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
As at 1
July 2022
250,000
553,636
1,000,000
2,500,000
1,500,000
1,500,000
368,000
100,000
38,688
268,000
250,000
118,000
100,000
60,000
50,000
Granted
Exercised Cancelled
Lapsed
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(80,909)
(89,091)
-
-
-
-
(100,000)
(12,897)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,000)
-
-
(8,000)
-
(8,000)
-
-
-
-
-
-
As at 31
December
2022
Exercisable
performance
rights
-
-
-
-
-
-
250,000
472,727
910,909
2,500,000
1,500,000
1,500,000
250,000
472,727
910,909
-
1,500,000
1,500,000
(360,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
25,791
260,000
250,000
110,000
100,000
60,000
50,000
90,700
274,200
28,474
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
90,700
274,200
28,474
Class G
Class H
Class I
Class J
Class M
Class N
Class P
Class R
Class S
Class T
Class U
Class V
Class W
Class Y
Class Z
Class AA
(ADI)
Class AB
(LTI)
Class AC
(NED)
8,656,324
393,374
(282,897)
(24,000)
(360,000)
8,382,801
4,633,636
Page | 62
165
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
No performance rights expired during the period. Vested conditions of performance rights exercisable at 31
December 2022:
Class G
- Will vest upon the holder completing six months continuous employment with the Company, with an expiry date
of 1 December 2023.;
Class H
- the Company announcing, on or before 18 May 2022, a positive Pre-Feasibility Study in relation to the Company’s
Zero Carbon Lithium™ Project confirming it is commercially viable.
Class I:
-Will vest upon the Company announcing that it has secured either an off-take agreement representing a
minimum of 30% of production volume over a three-year term, or a downstream lithium chemicals joint venture
partner with a minimum EUR 6,000,000 investment in relation to the Vulcan Lithium Project within three years of
issue of the Performance Rights, with an expiry date of 1 December 2023.
Class M:
- the Company announcing, on or before 21 May 2021, a positive Pre-Feasibility Study in relation to the Company’s
Zero Carbon Lithium™ Project confirming it is commercially viable.
Class N:
-the Company announcing, on or before 21 May 2022, that it has secured either an off-take agreement
representing a minimum of 30% of production volume over a three-year term, or a downstream lithium chemicals
joint venture partner with a minimum of EUR 6,000,000 investment in relation to the Project.
Page | 63
166
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Set out below are summaries of performance rights granted and exercised.
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
As at 1 July
2021
Granted
Exercised
Cancelled,
Lapsed or
Expired
As at 30
June 2022
Exercisable
performance
rights
Class F
Class G
Class H
Class I
Class J
Class L
Class M
Class N
Class P
Class Q
Class R
Class S
Class T
Class U
Class V
Class W
Class Y
Class Z
1,250,000
250,000
990,000
1,000,000
2,500,000
1,000,000
1,500,000
1,500,000
310,000
100,000
100,000
38,688
250,000
250,000
100,000
100,000
-
-
-
-
-
-
-
-
-
-
58,000
(1,250,000)
-
(436,364)
-
-
(1,000,000)
-
-
-
-
-
(100,000)
-
-
18,000
-
18,000
-
60,000
50,000
-
-
-
-
-
-
-
11,238,688
204,000
(2,786,364)
Set out below are summaries of performance shares granted and exercised.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
553,636
1,000,000
2,500,000
-
1,500,000
1,500,000
368,000
-
100,000
38,688
268,000
250,000
118,000
100,000
60,000
50,000
250,000
553,636
1,000,000
-
-
-
-
-
-
-
12,897
-
-
-
-
-
-
8,656,324
1,816,533
As at 1 July
2022
Issued
Exercised
Class D
91,174
91,174
-
-
-
-
Cancelled,
Lapsed or
Expired
As at 31
December
2022
Exercisable
performance
shares
-
-
91,174
91,174
-
-
As at 1 July
2021
Issued
Exercised
Cancelled,
Lapsed or
Expired
As at 30
June 2022
Exercisable
performance
shares
Class C
Class D
4,400,000
-
(4,400,000)
-
91,174
-
4,400,000
91,174
(4,400,000)
-
-
-
-
91,174
91,174
-
-
-
Page | 64
167
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 32 SHARE-BASED PAYMENTS (CONT.)
Accounting Policy
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to Key Management
Personnel and employees.
Equity-settled transactions are awards of shares, or options over shares, which are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using an appropriate valuation model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the consolidated entity receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
an appropriate valuation model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
a. During the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired portion of the vesting period.
b. From the end of the vesting period until settlement of the award, the liability is the full fair value of the
liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the
cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
Page | 65
168
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 33 RELATED PARTY DISCLOSURE
Parent entity
Vulcan Energy Resources Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 27.
Associates
Interests in associates are set out in note 25.
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below.
6 months
31-Dec-22
€
770,032
38,325
299,871
1,108,228
12 months
30-Jun-22
€
1,240,462
45,206
1,655,046
2,940,714
Short-term benefits
Post-employment benefits
Share-based payments
(a)
Transactions with associates
Loans to or from associates
There were no loans to or from associates at 31 December 2022 (30 June 2022: nil).
(b)
Transactions with related parties
During the six month period ending 31 December 2022 payments for consultancy fees of €28,089 (30 June 2022:
€33,968) were made to JRB Consulting Ltd, a related party of Ms Josephine Bush, in respect of expert advice on
ESG reporting. There were no amounts outstanding as at 31 December 2022 to JRB Consulting Ltd (30 June 2022:
€8,709) . There was €4,954 outstanding as at 31 December 2022 (30 June 2022: €nil) to Sustineri Strategy Ltd, a
related party to Ms Josephine Bush in relation to ESG consulting provided.
On the 8th of September 2022 Vulcan entered into a contract with Dr Horst Kreuter to rent a flat at the rate of
€1,810 per month and €418 operating costs monthly. The contract is a short-term lease. No amount was paid from
inception of the contract and until 31 October 2022. The amount of €2,715 was outstanding as at 31 October 2022
and nil was outstanding as at 31 December 2022.
During the previous financial year, the Company issued 5,698 shares and 45,587 performance shares to Dr Horst
Kreuter for the security consideration for the acquisition of Global Geothermal Holding UG (GGH, a company
incorporated under the laws of Germany) on 6 July 2021, following shareholder approval at an EGM held in June
2021. Dr Kreuter was a shareholder of Global Geothermal Holding UG, which held geothermal and lithium
exploration licenses applied for by GGH prior to Dr. Kreuter joining Vulcan, that were sold to Vulcan as part of the
transaction.
The Company also completed the acquisition of GeoThermal Engineering GmbH (GeoT), a geothermal engineering
consultancy business, on 2 July 2021 for €1. Dr Kreuter is the sole shareholder of GeoT. Dr. Kreuter will also
receive 50% of any payments received from certain debtors to GeoT, if these payments are made to GeoT within
Page | 66
169
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Notes to the Consolidated Financial Statements
NOTE 33 RELATED PARTY DISCLOSURE (CONT.)
(c)
Transactions with related parties (cont.)
18 months of completion of the acquisition. GeoT owes a debt of approximately €140,000 (plus a nominal amount
of interest) to Dr. Kreuter, 50% of which will be paid within three months of completion of the acquisition, with
the remaining 50% to be paid by no later than 31 December 2021.
During the previous financial year payments for consultancy fees of €52,834 were made to Alto Group Inc., a
related party of Ms Annie Liu. There was no outstanding balance as at 30 June 2022.
Loans to/from related parties
There were no loans to or from related parties at the 31 December 2022 (30 June 2022: nil).
Other than the above, there were no other transactions with related parties during the period ended 31 December
2022.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
NOTE 34 COMMITMENTS
Below are the commitments in relation to its exploration and evaluation assets:
Within one year
One to five years
31 Dec 2022
€'000
30 June 2022
€'000
5,482
4,708
10,190
3,422
6,293
9,715
Below are the commitments in relation to capital expenditure:
Within one year
One to five years
NOTE 35 CONTINGENCIES
31 Dec 2022
€'000
30 June 2022
€'000
30,383
1,917
32,300
18,362
3,600
21,962
The Group has given bank guarantees as at 31 December 2022 of €1,245,000 (30 June 2022: €120,000)
The Group has no contingent assets and liabilities as at 31 December 2022 (30 June 2022 : nil).
Page | 67
170
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 36 AUDITOR’S REMUNERATION
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
31 Dec 2022
€’000
30 June 2022
€’000
Amounts received or due and receivable by RSM
Australia Partners for:
Audit or review of the annual financial report
Amounts received or due and receivable by RSM
GmbH for:
Audit or review of the annual financial report
Other services - RSM Australia Pty Ltd for:
– Comfort letter in relation to listing prospectus
NOTE 37 ACCUMULATED LOSSES
73
95
-
168
109
88
79
276
6 months
31 Dec 22
€'000
(28,422)
(13,450)
(41,872)
12 months
30 Jun 22
€'000
(9,571)
(18,851)
(28,422)
31 Dec 22
€'000
30 Jun 22
€'000
64,912
169,934
234,846
1,618
68
1,686
259,158
12,984
(38,981)
233,161
(7,682)
(7,682)
117,542
133,308
250,850
3,527
-
3,527
258,933
19,689
(31,299)
247,323
(21,479)
(21,479)
Balance at beginning of the period/year
Loss after income tax for the period/year
Balance at end of the period/year
NOTE 38 PARENT ENTITY
Statement of Financial Position
ASSETS
Current Assets
Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Non-Current Liabilities
Total Liabilities
EQUITY
Issued Capital
Reserves
Accumulated losses
Total Equity
Statement of Profit or Loss and other
comprehensive income
Loss for the period/year
Total Comprehensive Loss
Page | 68
171
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 38 PARENT ENTITY (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
Contingent liabilities
Other than disclosed at Note 35, the parent entity has no other contingent assets or contingent liabilities as at
30 June 2022 and 31 December 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 31
December 2022.
Exploration commitments
The parent entity has no exploration commitments as at 30 June 2022 and 31 December 2022.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in
the financial statements, except for the following:
(i.)
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
NOTE 39 DIVIDENDS
No dividend has been declared or paid during the period ended 31 December 2022 (30 June 2022: nil), and the
Directors do not recommend the payment of a dividend in respect of the period ended 31 December 2022
Accounting Policy
Dividends
Dividends are recognised when declared during the financial period and no longer at the discretion of the
Company.
Page | 69
172
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Notes to the Consolidated Financial Statements
NOTE 40 EVENTS AFTER THE REPORTING DATE
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
• On January 4, 2023, Vulcan signed a share purchase agreement to acquire Comeback
Personaldienstleistungen GmbH, a company which provides skilled workforce in the drilling industry. The
transaction was closed on 31 January 2023. Total consideration for the acquisition was €278,000
comprised of a €150,000 cash component as well as a qualified purchase price component of
€128,000. The identifiable net assets and intangibles of the business totalled €296,000. The final
purchase price allocation will be determined over the twelve-month period from completion.
• Sustainalytics, a Morningstar Company that is a leading independent ESG and corporate governance
research, ratings and analytics firm, delivered Vulcan’s first publicly available ESG Risk report in January,
giving Vulcan an overall low ESG Risk Score of 16.8.
• Vulcan recently signed a Binding Term Sheet with Stellantis for the first phase of a multiphase project
aimed at decarbonising the energy mix of the Rüsselsheim auto manufacturing site in the Upper Rhine
Valley, Germany, through the development of new geothermal projects.
• On 13 February 2023, the Company announced the Zero Carbon Lithium™ Project’s Phase One definitive
feasibility study results. Key highlights were:
• Targeting 24Ktpa Lithium Hydroxide Monohydrate (LHM) p.a. production from EU, for EU.
• Targeting >300GWh/a renewable power, >250GWh/a renewable heat production p.a.
•
•
• Targeted >€700Mpa estimated revenues. Targeted EBITDA margin of 84%.
• €1,496M estimated CAPEX, increase broadly in line with larger project and inflation. Low
>250% increase in estimated NPV: €3.9Bn pre-tax, €2.6Bn post-tax.
34% estimated IRR pre-tax, 26% IRR post-tax.
estimated OPEX of €4,359/t LHM.
• Targeted 3.5-year payback (Integrated Project). Target start of production end-2025. Net zero
per tonne estimated LHM carbon footprint.
• Zero Scope 1 fossil fuels. Net water consumption very low. Increase in Resources and Reserves
relative to Integrated Phase One PFS
Apart from the above, no other matter or circumstance has arisen since 31 December 2022 that has significantly
affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the
consolidated entity's state of affairs in future financial years.
Page | 70
173
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Directors’ Declaration
In the Directors’ opinion:
Vulcan Energy Resources Limited – Annual Report 1 July 2022 – 31 December 2022
a) The financial statements and accompanying notes are in accordance with the Corporations Act 2001,
including:
i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2022 and of its
performance for the six months ended on that date.
b) The financial statements and notes comply with International Financial Reporting Standards.
c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors made pursuant to section
295(5)(a) of the Corporations Act 2001 and is signed for and on behalf of the Directors by:
Gavin Rezos
Chairman
27 March 2023
Page | 71
174
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
VULCAN ENERGY RESOURCES LIMITED
Opinion
We have audited the financial report of Vulcan Energy Resources Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 31 December 2022, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the period 1 July 2022 to 31 December 2022, and notes to the financial
statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
Giving a true and fair view of the Group's financial position as at 31 December 2022 and of its financial
performance for the period 1 July 2022 to 31 December 2022; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
175
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Exploration and Evaluation Expenditure
Refer to Note 14 in the financial statements
The Group has capitalised exploration and evaluation
expenditure with a carrying value of €30,135,000 as at
31 December 2022.
We considered this to be a key audit matter due to the
in
significant management
assessing the carrying value of the asset including:
judgments
involved
• Determination of whether the exploration and
evaluation expenditure can be associated with
finding specific mineral resources and the basis
on which that expenditure is allocated to an area
of interest;
• Assessing whether exploration activities have
reached a stage at which the existence of
economically
reserves may be
determined; and
recoverable
• Assessing whether any indicators of impairment
are present and if so, judgement applied to
determine and quantify any impairment loss.
Our audit procedures included:
• Assessing the Group’s accounting policy for
Accounting
Australian
with
compliance
Standards;
• Obtaining a schedule of the areas of interest held
by the Group and testing on a sample basis that
the right to tenure of each relevant area of interest
remained current at reporting date;
• Testing a sample of additions to supporting
documentation and ensuring
the amounts
capitalised for the period 1 July 2022 to 31
December 2022 are in compliance with the
Group’s accounting policy and relate to the area
of interest;
• Enquiring with management and reading budgets
and other documentation as evidence that active
and significant operations in, or relation to, the
area of interest will be continued in the future;
• Assessing
and
evaluating management’s
determination that exploration activities have not
yet progressed to the stage where the existence
or otherwise of economically recoverable reserves
may be determined;
• Assessing
and
evaluating management’s
assessment of whether indicators of impairment
existed; and
• Assessing the appropriateness of disclosures in
the financial statements.
176
Key Audit Matter
How our audit addressed this matter
During the period, the Group issued performance
Our audit procedures included:
Share-based payments
Refer to Note 32 in the financial statements
rights and shares to key management personnel,
employees, consultants and vendors.
Management has accounted for these instruments in
accordance with AASB 2 Share-Based Payment.
We have considered this to be a key audit matter
because:
• The complexity of the accounting associated with
recording these instruments and management
estimation
in determining
the
fair value of
instruments granted;
• Management judgement is required to determine
the probability of vesting conditions of these
instruments and the inputs used in the valuation
model to value these instruments; and
• The recognition of the share-based payment
expense is complex due to the variety of vesting
conditions attached to these instruments.
Other Information
• Assessing the Group’s accounting policy for
compliance with Australian Accounting Standards;
• Obtaining an understanding of the terms and
conditions of these instruments granted;
• Assessing the completeness of the instruments
granted/expired/lapsed at reporting date;
• Assessing the appropriateness of management’s
valuation methodology used to determine the fair
value of these instruments granted;
• Testing the key inputs used in the valuation model
for each instrument granted;
• Critically assessing management’s determination
of the vesting probability of each instrument;
• Recalculating
the amount of share-based
payment expense recognised for the period 1 July
2022 to 31 December 2022 and reserve balance
for accuracy and in accordance with the vesting
conditions; and
• Assessing the appropriateness of disclosures in
the financial statements.
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the period 1 July 2022 to 31 December 2022 but does not include the financial
report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
The Group has capitalised exploration and evaluation
Our audit procedures included:
Exploration and Evaluation Expenditure
Refer to Note 14 in the financial statements
expenditure with a carrying value of €30,135,000 as at
31 December 2022.
We considered this to be a key audit matter due to the
significant management
judgments
involved
in
assessing the carrying value of the asset including:
• Assessing the Group’s accounting policy for
with
Australian
Accounting
compliance
Standards;
• Obtaining a schedule of the areas of interest held
by the Group and testing on a sample basis that
the right to tenure of each relevant area of interest
• Determination of whether the exploration and
remained current at reporting date;
evaluation expenditure can be associated with
finding specific mineral resources and the basis
on which that expenditure is allocated to an area
of interest;
• Assessing whether exploration activities have
reached a stage at which the existence of
economically
recoverable
reserves may be
determined; and
• Assessing whether any indicators of impairment
are present and if so, judgement applied to
• Testing a sample of additions to supporting
documentation and ensuring
the amounts
capitalised for the period 1 July 2022 to 31
December 2022 are in compliance with the
Group’s accounting policy and relate to the area
of interest;
• Enquiring with management and reading budgets
and other documentation as evidence that active
and significant operations in, or relation to, the
area of interest will be continued in the future;
determine and quantify any impairment loss.
• Assessing
and
evaluating management’s
determination that exploration activities have not
yet progressed to the stage where the existence
or otherwise of economically recoverable reserves
may be determined;
• Assessing
and
evaluating management’s
assessment of whether indicators of impairment
existed; and
• Assessing the appropriateness of disclosures in
the financial statements.
Key Audit Matter
How our audit addressed this matter
Share-based payments
Refer to Note 32 in the financial statements
During the period, the Group issued performance
rights and shares to key management personnel,
employees, consultants and vendors.
Management has accounted for these instruments in
accordance with AASB 2 Share-Based Payment.
We have considered this to be a key audit matter
because:
• The complexity of the accounting associated with
recording these instruments and management
estimation
fair value of
instruments granted;
in determining
the
• Management judgement is required to determine
the probability of vesting conditions of these
instruments and the inputs used in the valuation
model to value these instruments; and
• The recognition of the share-based payment
expense is complex due to the variety of vesting
conditions attached to these instruments.
Other Information
Our audit procedures included:
• Assessing the Group’s accounting policy for
compliance with Australian Accounting Standards;
• Obtaining an understanding of the terms and
conditions of these instruments granted;
• Assessing the completeness of the instruments
granted/expired/lapsed at reporting date;
• Assessing the appropriateness of management’s
valuation methodology used to determine the fair
value of these instruments granted;
• Testing the key inputs used in the valuation model
for each instrument granted;
• Critically assessing management’s determination
of the vesting probability of each instrument;
• Recalculating
the amount of share-based
payment expense recognised for the period 1 July
2022 to 31 December 2022 and reserve balance
for accuracy and in accordance with the vesting
conditions; and
• Assessing the appropriateness of disclosures in
the financial statements.
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the period 1 July 2022 to 31 December 2022 but does not include the financial
report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
177
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the period 1 July 2022 to 31
December 2022.
In our opinion, the Remuneration Report of Vulcan Energy Resources Limited, for the period 1 July 2022 to 31
December 2022, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 27 March 2023
AIK KONG TING
Partner
178
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This
We have audited the Remuneration Report included in the directors’ report for the period 1 July 2022 to 31
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
December 2022.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 27 March 2023
AIK KONG TING
Partner
ASX ADDITIONAL
INFORMATION
Additional information required by the Australian Securities Exchange and not shown elsewhere in this Annual Report is
as follows. The information is current as of 13 March 2023.
1.
Fully paid ordinary shares
f There is a total of 143,435,301 fully paid ordinary shares on issue which are listed on the ASX.
f The number of holders of fully paid ordinary shares is 31,891.
f Holders of fully paid ordinary shares are entitled to participate in dividends and the proceeds on winding up of
the Company.
f There are no preference shares on issue.
In our opinion, the Remuneration Report of Vulcan Energy Resources Limited, for the period 1 July 2022 to 31
December 2022, complies with section 300A of the Corporations Act 2001.
2.
Distribution of fully paid ordinary shareholders is as follows:
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
Total
Number of holders
Number of shares
% of Issued Capital
24,049
6,113
956
710
63
31,891
7,770,772
14,001,733
7,093,250
18,166,351
96,403,195
143,435,301
5.42
9.76
4.95
12.67
67.21
100.00
3.
Holders of non-marketable parcels
Holders of non-marketable parcels are deemed to be those whose shareholding is valued at less than $500.
There are 4,871 shareholders who hold less than a marketable parcel of shares, amount to 0.19% of issued
capital based on a price per Share of $6.00.
4.
Substantial shareholders of ordinary fully paid shares
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Mr Francis Edward Barnabas Wedin and related parties
PSA Automobiles S.A
Vivien Enterprises Pte Ltd
Mrs Georgina Hope Rinehart and Hancock Prospecting Pty Ltd (HPPL) and
subsidiaries of HPPL
Holding Balance % of Issued Capital
16,458,561
11,448,959
7,598,727
7,424,534
11.47
7.98
5.29
5.18
179
VULCAN ENERGY1 JULY – 31 DECEMBER 2022
5.
6.
Share buy-backs
There is currently no on-market buyback program for any of Vulcan Energy Resources’ listed securities.
Voting rights of Shareholders
All fully paid ordinary shareholders are entitled to vote at any meeting of the members of the Company and their
voting rights are on:
f Show of hands – one vote per shareholders; and
f Poll – one vote per fully paid ordinary share.
7.
Major Shareholders
Twenty largest shareholders
Rank Shareholders
Number Held
Percentage (%)
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
23,253,674
16.21%
1
2
3
4
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
PSA AUTOMOBILES SA
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR FRANCIS EDWARD BARNABAS WEDIN1
MR FRANCIS EDWARD BARNABAS WEDIN1
MR JOHN LANGLEY HANCOCK
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
MR FRANCIS EDWARD BARNABAS WEDIN1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MONSLIT PTY LTD
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