Annual
Report
23
ABN 38 624 223 132
VULCAN’S ANNUAL REPORTING SUITE
1 JANUARY 2023 TO 31 DECEMBER 2023
This Annual Report (Report) forms part of the Company’s Annual Reporting Suite for the period 1 January 2023 to 31
December 2023. The Annual Reporting Suite includes the Annual Report, Sustainability Report, Group Management
Report (Konzernlagebericht), Taskforce on Climate related Financial Disclosure Report (TCFD) and Corporate Governance
Statement. This Annual Report covers Vulcan’s operations, including those under exploration and development and those
operated through subsidiaries as well as our strategic approach to sustainability. Vulcan is dual listed on the Australian
Securities Exchange (ASX), and the regulated market of the Frankfurt Stock Exchange (FSE), in the Prime Standard market
segment. Consistent with the regulatory and reporting obligations of the FSE, Vulcan’s Annual Reporting Suite also includes
the Group Management Report (Konzernlagebericht). The Konzernlagebericht has been prepared in accordance with the
Deutscher Rechnungslegungs Standard Nr. 20 (DRS 20). The Reporting Suite incorporates our updated Sustainability Report
for 1 January 2023 to 31 December 2023, developed with reference to industry standards including the Global Reporting
Initiative (GRI) Standards and the United Nations Sustainable Development Goals (UNSDGs). Vulcan is a signatory to the
United Nations Global Compact (UNGC), and the Sustainability Report outlines the Company’s ongoing commitment to
ensuring progress towards the ten principles of the UNGC. All references to Vulcan Energy Resources, Vulcan, the Company,
Vulcan Group, or the Group are in reference to Vulcan Energy Resources Ltd (ABN 38 624 223 132) and its subsidiaries. All
information and references in this Report are related to the full financial year, 1 January 2023 to 31 December 2023, unless
otherwise stated. The Materiality Assessment and TCFD Report has been achieved with the assistance of global consultancy
firm ERM. The sustainability data provided in this Report has not been externally assured. For any questions about Vulcan's
sustainability approach, please contact info@v-er.eu or visit https://v-er.eu/.
Currency References
Currency is expressed in Euros (€) unless otherwise stated. (An average AUD/EUR exchange rate of 0.6144 has been used in
the Remuneration report for the financial year ended 31 December 2023).
Forward Looking Statement
This Report contains certain forward-looking statements. Often, but not always, forward-looking statements may be
identified by the use of forward-looking words such as "may", "will", "expect", "intend", "plan", "estimate", "target", "propose",
"anticipate", "continue", "outlook" and "guidance", or other similar words. By their nature, forward-looking statements
inherently involve known and unknown risks, uncertainties and other factors that may cause actual results, performance
and achievements to be materially greater or less than estimated, including those generally associated with the lithium
industry and/or resources exploration companies. Any such forward-looking statements, opinions and estimates in this
Report (including any statements about market and industry trends) are based on assumptions and contingencies, all
of which are subject to change without notice, and may ultimately prove to be materially incorrect. Forward-looking
statements are provided as a general guide only and should not be relied upon as, and are not, an indication or guarantee
of future performance. Neither Vulcan nor any of its directors, officers, agents, consultants, employees or advisors give
any representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the
information, opinions, forward looking statements and conclusions contained in this Report.
Approval
This Report has been approved for release by the Board of Directors.
CONTENTS
About Vulcan
Chair’s Message
CEO’s Message
Defining ‘Zero Carbon Lithium'
FY2023 Key Milestones Addressed
Delivering Europe’s first integrated lithium
and renewable energy company
Operations Overview
Corporate Overview
Sustainability Overview
Corporate Governance
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Financial Statements
Independent Auditor’s Report
ASX Additional Information
Corporate Directory
Appendix
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6
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68
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163
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ABOUT VULCAN:
EMPOWERING A CARBON
NEUTRAL FUTURE
WE ARE ONE VULCAN
FOUNDED IN 2018, VULCAN’S PURPOSE IS
TO EMPOWER A CARBON NEUTRAL FUTURE,
THROUGH THE EFFICIENT CO-PRODUCTION
Strategically placed in the heart of the European electric
vehicle market to decarbonise the supply chain, Vulcan is
rapidly advancing the ZERO CARBON LITHIUM™ Project to
target timely market entry, with the ability to expand to meet
the unprecedented demand that is building in the European
OF LITHIUM, HEAT AND RENEWABLE ENERGY
markets. Guided by our Values of Climate Champion,
FROM GEOTHERMAL BRINE. VULCAN IS
Determined and Inspiring, and united by a passion for the
FOCUSED ON DELIVERING THE WORLD’S
FIRST INTEGRATED ZERO CARBON LITHIUMTM
AND RENEWABLE ENERGY PROJECT.
environment and leveraging scientific solutions, Vulcan has a
unique, world-leading scientific and commercial 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
By adapting existing technologies to efficiently extract
offtake agreements with some of the largest cathode, battery,
lithium from geothermal brine, Vulcan aims to deliver
and automakers in the world. As a motivated disruptor,
a local source of sustainable lithium for Europe, built
Vulcan aims to leverage its multidisciplinary expert team,
around a carbon neutral strategy with exclusion of fossil
leading geothermal technology and position in the European
fuels. Already an operational renewable energy producer,
EV supply chain to be a global leader in producing carbon
Vulcan will also provide renewable electricity and heat
neutral lithium. Vulcan aims to be the largest, most preferred,
to
local communities. Vulcan’s combined geothermal
strategic supplier of lithium chemicals and renewable power
energy and lithium resource is the largest in Europe1, with
and heating from Europe, for Europe; to empower a carbon
licence areas focused on the Upper Rhine Valley, Germany.
neutral future.
Purpose
We will empower a carbon neutral future
Mission
Becoming Europe`s leading ZERO CARBON LITHIUM™
business & enabling energy security through
geothermal energy
1 According to public, JORC-compliant data. See Upgrade of Zero Carbon Lithium™ Project Resources, 29 September 2023
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VULCAN ENERGY ANNUAL REPORT | 2023 ZERO CARBON LITHIUMTM
Technology
Empowering
a carbon
neutral future
G
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VULCAN
DELIVERING
EUROPE’S
GREEN ENERGY
AND MOBILITY
TRANSITION
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CHAIR’S MESSAGE
Dear Vulcan Shareholders,
DURING THE YEAR, YOUR RENEWABLE ENERGY AND
ZERO CARBON LITHIUM™ COMPANY, LED BY CEO CRIS
MORENO AND OUR EXCEPTIONAL LEADERSHIP TEAM,
SUCCESSFULLY TRANSITIONED TO BEING EXECUTION
READY TO BUILD THE NEXT PHASE OF GROWTH.
WE STAND AT AN EXCITING JUNCTURE, WITH YOUR
COMPANY POISED AND READY TO EXECUTE PHASE ONE
OF OUR ZERO CARBON LITHIUM™ PROJECT, PENDING
COMPLETION OF FINANCING DURING 2024, AND IN DOING
SO TO DECARBONISE TWO TRADITIONALLY CARBON-
INTENSIVE
INDUSTRIES: ENERGY AND BATTERY
RAW MATERIALS. OUR COMPANY AND PROJECT HAS
INHERENT COMMERCIAL AND TECHNICAL ADVANTAGES
WHICH MAKES US WELL PLACED FOR THE YEARS TO
COME.
As my first message as Executive Chair, I would like to take
this opportunity to thank Gavin Rezos for his invaluable
contributions as Chair since 2019, and the entire Vulcan
Board for their continued guidance. Your Board, leveraging
its expertise and experience spanning the lithium, chemicals,
renewable energy, battery supply chain, and finance sectors,
has steered Vulcan’s transition throughout 2023 to being
execution ready.
Meeting Europe’s renewable
heating challenge
The heat sector accounts for over half of Germany’s energy
demand, and renewable energy accounts for only 15% of heat
production, a share that has been static for years2. Power
is relatively straightforward to decarbonise, whereas heat
is the “elephant in the room” of decarbonisation. In 2023,
geothermal renewable energy gained increased momentum.
The EU Parliament recently called for a European strategy on
geothermal energy, leading to the adoption of a resolution
to accelerate the deployment and investment in geothermal
energy, approved by an overwhelming majority of 531 in
favour, and only two against3.
The market potential for geothermal heating in Germany is
approximately 25% of total heat demand, according to the
Fraunhofer Institute4. This means unprecedented amounts
of geothermal production needs to be built. German
chancellor Olaf Scholz has supported this with a target for
geothermal energy capacity to be increased tenfold by 20305.
As a business, we are committed to the stable, firmed supply
Your Company is already helping to meet this challenge.
of renewable energy, through two avenues:
• Our current baseload geothermal renewable energy
production already underpins the grid; and
• Our planned lithium production for batteries can provide
“firming” for other, intermittent forms of renewable
energy, as well as enabling the decarbonisation of
transport.
We are already a commercial geothermal renewable energy
producer, and through our operating subsidiary have over a
decade of successful operation. We have a highly experienced
project development and execution team, including our
in-house well delivery and drilling group, Vercana. Through
the hard work of our executive leadership team led by Cris,
we are now ready to build a much larger geothermal energy
project, surrounding the existing operation, as part of Phase
Phase One of our project will significantly increase our
One. After this, we aim to “print and repeat” further phases
geothermal energy production, which is a reliable and
of production across Central Europe, towards our target
renewable source of heat and power, and produce lithium on
to supply more than one million people with geothermal
a commercial scale from the same deep brine reservoir.
renewable heat by 20306.
2 https://shorturl.at/bkU08
3 https://www.euractiv.com/section/energy/news/eu-parliament-calls-for-european-strategy-on-geothermal-energy/
4 https://shorturl.at/bkU08
5 https://www.n-tv.de/politik/Bundesregierung-will-den-Erdwaerme-Turbo-zuenden-article24348800.html
6 Based on average per capita heat consumption in Germany of 6,200 kWh (https://www.destatis.de/).and the estimated capacity for heat
production from Vulcan’s long term development areas, in a pure heat (no power) scenario.
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VULCAN ENERGY ANNUAL REPORT | 2023 Lithium: rising to meet the challenge,
through strategic advantages
With our integrated approach, through more geothermal
energy production comes the opportunity for more lithium
production.
Our industry is still a small one in terms of volume, growing at
a very fast compound annual growth rate, as Electric Vehicles
(EVs) move from a previously niche market, steadily towards
the complete replacement of Internal Combustion Engines
(ICEs). We have seen, and are likely to continue to see, short
term supply-demand imbalances as this small market grows
very quickly, which can cause dramatic rises and falls in
lithium pricing. We saw this in 2021 with a tenfold rise in lithium
prices, and we saw it in 2023, with prices down around 85%
YOY7, which created challenging conditions for the industry
as a whole. We expect to continue to see this continued
volatility for the rest of the decade. This short-term instability
is not helpful for the lithium industry or the end-users of our
products, and for this reason, Vulcan had previously taken
the step in 2021-2022 to lock in offtake agreements with
Stellantis, Renault, LG, Umicore and Volkswagen, some of
which involve fixed pricing and/or floor-ceiling mechanisms.
This gives us stability and some degree of insulation from an
oscillating lithium market in the years to come and supports
our project financing. It is good for us, our customers, and
ultimately for EV customers.
Another point to note is that Vulcan is targeting one of the
Our URVBF strategy is to leverage our strengths to grow our
production in a modular, stepwise manner. The co-product of
all of this is more renewable heating for local communities,
a win-win.
Technology
Over the last three years, the team have successfully piloted
and proven our lithium production and conversion from our
existing geothermal operations. The Vulcan team has used
commercial aluminate-based adsorbent technology, used in
the industry for over 25 years, which it has adapted, optimised,
and greatly improved. This has resulted in the creation
of a technology arm within Vulcan, and the development
of VULSORB®, our
industry-leading
lithium extraction
technology. This has implications beyond our own projects
and production in Europe. Vulcan can assist other companies
and countries in improving their lithium production globally,
both from a cost and sustainability perspective, by deploying
our technology worldwide and start to realise shareholder
value from our technological assets. This will be an increasing
focus for Vulcan beyond the team’s immediate Phase One
financing efforts.
Looking ahead
Over the next 12 months, your Company will be focused on:
• Completing the financing of Phase One of the ZERO
CARBON LITHIUM™ Project and moving into execution
and construction.
lowest costs of production in the industry. This cost advantage
• Progressing the pipeline of future phases of renewable
is because we leverage waste heat naturally contained in
energy and lithium production throughout the Upper
our lithium brine source to drive our lithium production, and
Rhine Valley (URV).
because we are net producers, not consumers, of renewable
energy.
Stability on lithium pricing, combined with a very low cost of
production, gives Vulcan a strong basis for the future.
• Progressing the global deployment strategy of our lithium
production technology.
On behalf of the Board and our OneVulcan team, I would like
to thank you all for your support on this exciting journey, and
During 2023, the leadership team has taken the Phase One
I look forward to Vulcan continuing to deliver shareholder
project to successful completion of a high-quality Bridging
value, whilst growing a world-leading, sustainability driven
Engineering Study. At 24,000 tonnes per annum of lithium
business.
hydroxide production capacity, Phase One alone will produce
enough lithium for our automotive and battery customers in
Europe to supply around half a million electric vehicles per
annum. This will make a significant contribution to Europe’s
critical raw materials independence for the energy transition.
All this, whilst producing one of the most sustainable, and
low cost, lithium products in the world. This is just Phase
One: Vulcan’s project areas in the Upper Rhine Valley Brine
Field (URVBF) contain the largest lithium resource in Europe8.
Dr Francis Wedin
Executive Chair
7 https://www.ft.com/content/0fb27a1a-d149-4d66-87cf-a1e3feecb5e5
8 According to public, JORC-compliant data.
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VULCAN ENERGY ANNUAL REPORT | 2023 CEO’S MESSAGE
Dear Vulcan Shareholders,
I am excited to share Vulcan’s 2023 Annual Report with you, my
first as Managing Director and CEO of the Vulcan Group. The
past year has seen remarkable progress towards executing
our plan to deliver the ZERO CARBON LITHIUM™ Project. I’d
also like to take this opportunity to thank Dr Francis Wedin
OneVulcan Team
and the Board for their guidance throughout this year and
The year saw a significant shift for our team as we
the Vulcan team for their support as I transitioned to the role
transitioned from a development company to an integrated
of their CEO. I can honestly state that I am very proud to be
project development, execution, and operations company.
leading your Company.
Reflections on 2023
Safety
Safety is at the core of all that we do. 2023 did not deliver
satisfying safety results. Ingraining a safety culture that
ensures safety is top of mind for all our people is our core
priority for 2024. We believe all incidents and injuries
Our team grew to 371 exceptional individuals, each bringing
unique experience from various relevant sectors, including
the oil and gas, geothermal, and lithium chemical industries.
Our “Level One” executive team was finalised with highly
experienced talent, including bringing in a Vice President for
Project Execution, Supply Chain and Subsurface, who, with
the whole leadership team, will guide our project and people
through its execution phase.
are preventable. Therefore, we will focus on identifying,
At Vulcan, we pride ourselves on diversity. We are an
managing, and eliminating risks where possible and growing
international business spanning 29 nations, sharing a
a culture of making every day a zero-incident day. Under
passion and dedication to bring our Phase One ZERO
the guidance of the Vulcan Board, our leadership team has
CARBON LITHIUM™ Project to life. During the year, we
adopted a comprehensive approach, combining top-down
took a companywide initiative to reassess our values and
and bottom-up strategies. We will focus on measuring leading
move forward with those that resonate with us most. I was
indicators to identify and prevent potential issues while also
thrilled with the alignment across the business and why, as
leveraging lagging indicators to learn and guide our efforts in
a OneVulcan team, we collectively embraced the values of
fostering a resilient safety-first culture tailored to our Phase
‘Climate Champion,’ ‘Determined,’ and ‘Inspiring’ in our daily
One project execution and beyond.
lives.
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VULCAN ENERGY ANNUAL REPORT | 2023 Local Community
Throughout the year, our regional, political and development
teams were actively involved across the regions of our
Phase One operations and future phases. The team
During the year, we further advanced our high-performance
lithium extraction technology, VULSORB®. Vulcan aims to
magnify its decarbonising impact on the global lithium supply
chain beyond Vulcan’s immediate projects in the URV.
engaged extensively with the local community, industry, and
Project results
politicians, providing information on our integrated project,
the benefits of renewable local heating and the ‘green’ jobs
we aim to bring to the local community. I am incredibly
In mid-November, we released the results of our Bridging
Engineering Study for Phase One with five key outcomes:
proud of the hard work of our external engagement teams.
1. We reduced the overall CAPEX.
The results became evident later in the year with the
positive decision by the Landau City Council to execute
2. We retained the low operating cost.
an agreement to allow Vulcan to begin construction of our
3. We simplified our planned operations for Phase One.
integrated commercial Geothermal renewable energy and
Lithium Extraction Plant (G-LEP). Construction is on track
to start at the end of 2024.
Project readiness
In September last year, we broke ground at our Central
Lithium Electrolysis Optimisation Plant (CLEOP) in the Höchst
Industrial Park which is also the location of our Commercial
Central Lithium Plant (CLP). CLEOP will be assembled on-site
in the first quarter of 2024, with commissioning to commence
thereafter, allowing for the first tonnes of carbon-neutral
lithium hydroxide to be produced. In November 2023, we
opened our Lithium Extraction Optimisation Plant (LEOP) in
Landau, Germany, in a ceremony attended by local community,
shareholders, politicians, strategic partners and industry.
Representing a €40m investment to date by Vulcan, LEOP is
a training facility to ensure operational readiness. The start
of operations at LEOP will signify the first lithium chemicals
to be produced in Europe with an entirely locally sourced
value chain.
4. We improved our financial case.
5. We are now EXECUTION READY.
Financing
Towards the end of 2023, Vulcan started its debt and
project level equity financing, supported by BNP Paribas. It
followed positive market sounding throughout the year from
commercial banks, development banks, and government-
backed export credit agencies. This included a A$200
million (~€120 million) non-binding Letter of Support from
Export Finance Australia (EFA), and an indication of strong
ECA support from Canada, Italy, and France during 2023. In
February 2024, we also announced a proposed financing
from the European Investment Bank (EIB) of up to €500m
(~A$825m). This progression in EIB’s financial appraisal is a
positive step forward in the financing process of our Phase
One project.
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VULCAN ENERGY ANNUAL REPORT | 2023 Our immediate focus is on producing the first lithium
chemicals to specification from our optimisation plants,
once commissioning of our CLEOP is complete. Our key
EPC and EPCM contracts have all progressed well and are
ready for award upon full financing and final permits being
received with the aim to start construction in the second
half of the year.
Vulcan’s project provides a unique, tangible benefit that
literally “flows” into local communities, including renewable
heating for district heating networks and employment.
Throughout 2024, we will continue to work closely with the
local communities, and we aim to operate, engaging with
them to provide further information on our ZERO CARBON
LITHIUM™ Project. This means we will continue our active
community stakeholder engagement and immerse ourselves
within the communities.
2024 Phase One ZERO CARBON
LITHIUM™ Project objectives
• A safety-first culture with clear KPIs and targets to drive
our performance.
• Producing the first tonnes of Lithium Hydroxide
Monohydrate ( LHM) to specification at CLEOP.
• Completion of Phase One debt and project level equity
financing.
• Commencing construction of our integrated Geothermal
and Lithium Extraction Plant (G-LEP).
• Commence drilling at our first well sites.
I would like to thank you and the entire Vulcan community
for your continued support. We look forward to keeping you
updated with our latest developments throughout the year as
we continue to methodically execute our plan to deliver the
world’s first integrated renewable energy and ZERO CARBON
LITHIUM™ Project.
Cris Moreno
Managing Director and CEO
EXECUTION READY
AS WE LOOK TOWARDS 2024,
THE YEAR WILL BE PIVOTAL
AS WE FOCUS ON EXECUTING
ON OUR PHASE ONE PROJECT
PLAN, SUBJECT TO SUCCESSFUL
COMPLETION OF FINANCING.
IT’S A HEADS-DOWN STRATEGY
FOCUSED ON DELIVERING OUR
ZERO CARBON LITHIUM™ PROJECT
THAT WILL SEE US POSITIONED AS
ONE OF THE MOST COMPETITIVE
AND SUSTAINABLE LITHIUM
PRODUCERS GLOBALLY.
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VULCAN ENERGY ANNUAL REPORT | 2023 OneVulcan Values
CLIMATE CHAMPION
We will pioneer a better
and carbon neutral future for all
DETERMINED
We are hungry for success and
determined to shape tomorrow
INSPIRING
United in passion for a better world,
we rise and inspire each other
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DEFINING
ZERO CARBON
LITHIUM
VULCAN USES ‘ZERO CARBON’ IN
ITS TRADEMARK TO REFER TO THE
CLIMATE CHANGE IMPACT OF THE
LITHIUM HYDROXIDE MONOHYDRATE
(LHM) PRODUCT EXTRACTION
AND PROCESSING. VULCAN IS
CURRENTLY EXPECTING ZERO
BURNING OF FOSSIL FUELS IN ITS
PROCESS TO PRODUCE LHM ONCE
FULLY OPERATIONAL.
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Since 2020, Vulcan has commissioned Minviro to undertake
a series of International Organisation for Standardisation
(ISO) compliant Life Cycle Assessments (LCAs). These are
cradle-to-gate studies which include the extraction of
the raw lithium product, the geothermal plant, the brine
handling, the purification, electrolysis and crystallisation,
and the transport of the product from well sites through
to the final processing plant. The LCA does not include
emissions associated with construction of the ZERO
CARBON LITHIUM™ production plant, or the Vulcan Group’s
corporate office emissions.
The latest update of the LCA, undertaken in 2024, found that
Vulcan’s integrated renewable energy and ZERO CARBON
LITHIUM™ Project has an overall net climate change impact
contribution of –2.0 kg CO2 eq. per kg LiOH.H2O. This
included the estimated emissions from lithium production
and transport including import of energy from the grid, and
estimated emissions avoided due to export of geothermal
electricity and heat into the grid and district heating
respectively. For full information on the LCA calculation,
please see the 2023 Sustainability Report.
The Company is committed to continuing to update the LCA
and any associated messaging as the project moves into
execution and construction.
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2023 KEY
MILESTONES
ADDRESSED
Positive City Council vote for Geothermal and Lithium Extraction Plant.
The Landau City Council approved the execution of an agreement to allow Vulcan to begin construction
of its integrated Geothermal renewable energy and Lithium Extraction Plant (G-LEP).
Debt and project level equity finance program commenced.
In December 2023, Vulcan commenced its debt and project level equity financing program, led by BNP
Paribas. Financing close is anticipated in the second half of 2024.
Environmental and Social Impact Assessment (ESIA) completed for Phase One.
ERM completed the ESIA for Phase One of Vulcan’s ZERO CARBON LITHIUM™ Project in December
2023. The ESIA is a prerequisite to raising sustainable or “green” debt finance and is an important third-
party validation of the project’s sustainability credentials.
Positive ZERO CARBON LITHIUM™ Project Bridging Engineering Study results released.
The ZERO CARBON LITHIUMTM Project Phase One Bridging Engineering Study, has delivered reduced
risk, reduced CAPEX, lowest cost, and robust financials. Signifying the project is execution ready.
Key land secured for Phase One.
Land packages were acquired for key Phase One production sites towards the commencement of
Phase One project execution and to increase Vulcan’s current brine production.
Opening of Lithium Extraction Optimisation Plant.
Vulcan commenced commissioning of its Lithium Extraction Optimisation Plant (LEOP) for extraction,
purification, and concentration of lithium chloride from brine. The plant officially opened on
23 November 2023, and brine was successfully introduced into the plant.
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VULCAN ENERGY ANNUAL REPORT | 2023 New license secured in strategic Phase two location.
Vulcan has been granted a new geothermal and lithium brine exploration licence, designated
“Luftbrücke”, covering a region of Frankfurt am Main, an area with potential industrial customers like
the Höchst Industrial Park and Frankfurt Airport, proximal to Vulcan’s Central Lithium Plant (CLP).
Leadership for the future.
Cris Moreno was appointed as Managing Director and CEO, as Dr Francis Wedin transitioned to
Executive Chair to ensure the right skills are in place to lead the delivery of Vulcan’s Phase One of the
ZERO CARBON LITHIUM™ Project into the future.
DFS and Bridging Study released for Phase One of ZERO CARBON LITHIUM™ Project.
Studies confirmed the positive economics for Phase One and became the basis on which Vulcan
transitioned to a project execution company.
Successful placement.
EUR 67m (A$109m) institutional placement successfully completed, supported by existing major
shareholders.
ECA backing for Vulcan’s Phase One Project.
Positive market sounding in 2023 from commercial banks, development banks, and government-
backed export credit agencies. This included a A$200 million (~€120 million) non-binding Letter of
Support from Export Finance Australia (EFA), and indication of strong ECA support from Canada, Italy,
and France during 2023.
Agreement with strategic partner to work towards decarbonising operations.
Vulcan and Stellantis entered into two phased project agreements, aimed at developing, building, and
operating geothermal renewable energy assets to help decarbonise Stellantis’ energy supply, for their
auto manufacturing operations in Rüsselsheim am Main in Germany and Mulhouse in France. This is
the fourth agreement signed with Stellantis since 2021.
Further details on all FY23 milestones can be found https://v-er.eu/announcements/2023
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VULCAN ENERGY ANNUAL REPORT | 2023 EXECUTION
READY
Low Risk
Upstream:
One core production area
that is already producing
brine, with increased lithium
reserves.
Reduction of two
upstream lithium plants to
one central plant, with a
simplified design enabling
easier operation and
maintenance.
• Resource of 27.7 Mt LCE @ 175 mg/l, the largest
lithium Resource in Europe and scope for further
pipeline of further phased development.9
• 0.57Mt LCE @ 181 mg/l Li Reserves, 4.16MT LCE @
181mg/l Li Resource in the core "Löwenherz” area,
centred around current production wells in core of
the Upper Rhine Valley Brine Field.9
Phase One
Well Sites
275 GWh power p.a.
Up to 560 GWh heat p.a.
LiCl concentrate for
24,000tpa LHM equivalent
Geothermal Plant
Lithium Extraction Plant (LEP)
Renewable heat and
brine transferred to
the LEP
Hot Li-rich brine
Pipeline
Cold Li-poor brine
Geothermal & Lithium Extraction Plant – G-LEP
Landau
Renewable heat & power
Geothermal
and lithium
brine field
resource
Reservoir
Wells are drilled into the deep, hot, lithium-rich
brine resource, which is pumped to the surface.
Re-injection of brine.
A closed loop, circular system.
9 The Resource and Reserve information should be read in conjunction with the competent person statement in the Appendix.
16
VULCAN ENERGY ANNUAL REPORT | 2023 Most advanced Adsorption-Type Direct Lithium
Extraction Project in Europe
Low risk
and low cost
operations
1,771km2
Licence Area
for Vulcan’s
Phase One
and beyond
€3.9Bn
NPV (A$6.5Bn)
pre-tax and €2.6Bn
($4.3Bn) post-tax
€705m
Target annual
revenues
Delivering
Low Cost
Low OPEX
€4,022/t LHM
one of the lowest on the industry
cost curve, while maintaining
green credentials.
• Offtake agreements with Tier One customers, supports stability
during payback period, and protection from
lithium price
fluctuations.
• Low environmental and social impact project due to small land
requirements and being situated in industrial and agricultural areas.
Refer to the 2023 Sustainability Report.
24,000tpa
LHM (capacity)
Central Lithium Plant (CLP)
Electric Mobility
Lithium
Chloride
(LiCl)
transported
to CLP
Lithium
hydroxide
(LHM)
distributed to
the EU market
Frankfurt
17
VULCAN ENERGY ANNUAL REPORT | 2023 OPERATIONS
OVERVIEW
3
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|
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18
HEALTH, SAFETY, ENVIRONMENT,
AND QUALITY (HSEQ)
NOTHING IS MORE IMPORTANT THAN THE
SAFETY AND WELLBEING OF VULCAN’S
EMPLOYEES, CONTRACTORS, STAKEHOLDERS
AND COMMUNITIES.
Vulcan had four lost time incidents (LTIs) and zero fatalities
in 2023. As stated in the CEO’s message, safety performance
during the reporting period did not deliver satisfactory
results; 2024’s core priority is on the consistent shift in
improving safety performance moving forward.
In 2023, Vulcan's German subsidiary, Energie Ressourcen
GmbH, received the ISO 45001:2015, Occupational Health
and Safety certification. This complements the already
achieved ISO 14001 (environmental management) and ISO
9001 certifications (quality management).
Throughout the year, Vulcan focused on core initiatives to
drive Vulcan’s safety culture:
• Score card reporting for 2024 key performance indicators
(KPIs), leading and lagging indicators.
“SAFETY COMES FIRST AND THERE
WILL BE NO COMPROMISE TO
THIS. OUR COMMITMENT IS TO A
ZERO-HARM CULTURE. TOGETHER
WITH THE LEADERSHIP TEAM, WE
ARE EMBEDDING A CONTINUOUS
IMPROVEMENT SAFETY CULTURE
AS PART OF OUR DAY-TO-DAY LIVES
AT VULCAN.
CRIS MORENO
MD & CEO
•
International Association of Oil and Gas producers (IOGP)
Life-saving rules implemented companywide.
• More than 10,000 online training sessions conducted,
of which more than 400 were completed by external
contractors.
Looking ahead, Vulcan’s focus and education are on safety
prevention as the growth of the Company’s operations and
staff on sites continues. As Vulcan transforms towards
being a project execution and operations company,
specific, safety-focused KPIs have been introduced for the
• Safety leadership rounds were introduced and HSEQ
leadership team.
tours conducted by HSEQ professionals.
• Care Moments communication program and a site-wide
“Last-Minute Risk Analysis” process for all operational
onsite attendees to complete before the start of any
activity on location.
19
VULCAN ENERGY ANNUAL REPORT | 2023 EXECUTION READY
ZERO CARBON LITHIUMTM PROJECT
More than
10,000
hours of successful in-
house A-DLE piloting
Phase One
Robust financials
€3.9Bn
NPV (A$6.5Bn)
pre-tax and €2.6Bn
($4.3Bn) post-tax
Phase One
€4,022/t
LHM
Lowest OPEX compared
to industry peers’ cost
for operations
27.7m
tonnes
Largest lithium
resource in Europe
• Proprietary A-DLE technology: VULSORB® is a specially tailored lithium production
technology for lithium-ion adsorption.
• LEOP: First LiCl production expected imminently.
• CLEOP: Commissioning and first LHM production H2 2024.
•
1,771km2 of licences across the Upper Rhine Valley Brine Field (URVBF) for lithium brine
extraction and Geothermal with reserve.
• €705m target annual revenues, 4.2y payback, despite drop in lithium prices.
• Strong support in initial market sounding.
• Ten years of production already sold to industry-leading, iconic, and reputable
brands, of which Stellantis is Vulcan’s second largest shareholder.
• Streamlined operations plan for Phase One core production area.
• Peerless sustainability credentials: net -2.0t CO2 per tonne of LHM produced.
•
In-house operations: Engineering, project management, scientists and well delivery.
• Vulcan’s URVBF lithium Resource has increased to 27.7 million tonnes of contained
Lithium Carbonate Equivalent (Mt LCE) @ 175 mg/L, from 26.6Mt LCE @ 174 mg/L.
• Over the reporting period, Vulcan’s licence footprint in the URVBF increased from
15 to 16 and the total area increased from 1,583km2 to 1,771 km2 respectively.
20
VULCAN ENERGY ANNUAL REPORT | 2023 Höchst Industrial Park
Central Lithium Plant
planned location
R
h
i
n
e
R
i
v
e
r
Frankfurt
GERMANY
Upper Rhine Valley
Brine Field
Stellantis
Rüsselsheim Plant
Landau Süd
Existing plant
Kaiserslautern
ACC/Stellantis Gigafactory Development
Insheim
Vulcan’s geothermal wells
and plant, in production
Mannheim
Heat offtake
agreement
Karlsruhe
Vulcan head
office and
Vulcan
Labs
Licence
Areas for
Vulcan’s
Phase One
and beyond
FRANCE
Haguenau
Vulcan France office
Strasbourg
Stellantis
Mulhouse
Plant
LEGEND
Production licence
Access to the licence
through a brine offtake
Lithium and
geothermal licence
Lithium and geothermal
licence application
Renewable heat
offtake agreement
Deep geothermal
wells/plants
Höchst Industrial Park
Kaiserslautern ACC/Stellantis
Gigafactory Development
FIGURE 1 OVERVIEW MAP OF VULCAN'S LICENCE AREAS IN THE UPPER RHINE VALLEY
RESOURCES AND RESERVES
EXPLORATION AND DEVELOPMENT
The Company has the largest lithium Resource in Europe,
Li of Measured and Indicated Resource, of which 4.16 Mt LCE
compliant with the Australasian Code for Reporting of
@ 181mg/l Li is in the Phase One area, and 2.11 Mt LCE is now
Exploration Results, Mineral Resources and Ore Reserves10.
in the Measured category.
During the year, Vulcan’s URVBF lithium Resource has
Over the reporting period, Vulcan’s licence footprint in the
increased to 27.7 million tonnes of contained Lithium
URVBF increased from 15 to 16 and the total area increased
Carbonate Equivalent (Mt LCE) @ 175 mg/L, from 26.6Mt LCE
from 1,583km2 to 1,771 km2 respectively.
@ 174 mg/L, to reflect a larger resource in the Phase One area.
Vulcan’s URVBF area now comprises 11.2 Mt LCE @ 179 mg/L
Refer to Appendix for the JORC Resource Statement.
10 According to public, JORC-compliant data. Refer Vulcan ZERO CARBON LITHIUM™ Project Phase One DFS results and Resources
21
VULCAN ENERGY ANNUAL REPORT | 2023
WELL DELIVERY
VULCAN’S VERCANA IS A HIGHLY
EXPERIENCED WELL CONSTRUCTION AND
OPERATIONS TEAM FROM THE OIL AND GAS
AND GEOTHERMAL INDUSTRIES.
Vercana deploys experience in onshore operations and
inputs are ready for the well delivery program forecast to
high pressure, high temperature (HPHT) drilling as well
start in 2024.
as German regulations. Vulcan’s V20 electric drill rig was
refurbished during 2023 and is now ready for mobilisation
and commissioning. Vercana received the final approval
from the mining authority for the V20 rig and its additional
equipment to start operations.
The V10 refurbishment is planned to be completed in 2024.
The Vercana team continues to apply lessons from the V20
drill refurbishment to aid the V10 rig refurbishment.
The “Phase One ZERO CARBON LITHIUM™ Project Well
Delivery Group” was created, and the well delivery plan
was finalised in line with the Phase One well delivery
requirements for the project. Several tendering processes
with required service supplier candidates for the delivery
of materials and services were started in 2023 to ensure all
Vulcan’s inhouse drill team were leased out during 2023 and
will continue to be until Phase One well delivery operations
commence.
VULCAN’S PHASE ONE ZERO
CARBON LITHIUM™ PROJECT
WILL HAVE SEVEN WELL SITES
IN TOTAL, WITH TWO WELL SITES
ALREADY EXISTING.
22
VULCAN ENERGY ANNUAL REPORT | 2023 PHASE ONE WILL HAVE
SEVEN WELL SITES.
Landau
GEO + LEP
Landau
LiCI to CLP
CLP
Höchst
Production/
re-injection
well site
Insheim
Production/
re-injection
well site
Production/
re-injection
well site
Production/
re-injection
well site
Production/
re-injection
well site
Geothermal and lithium
brine field resource
FIGURE 2 VULCAN'S PHASE ONE ZERO CARBON LITHIUMTM PROJECT WILL HAVE SEVEN
PRODUCTION WELL SITES
23
FIGURE 3 IN-HOUSE DESIGNED LITHIUM EXTRACTION OPTIMISATION PLANT
OPTIMISATION PLANTS FOR
COMMERCIAL READINESS
A key element of Vulcan’s strategy to de-risk its ZERO
CARBON LITHIUM™ Project is the design and construction
of its optimisation plants. Vulcan’s optimisation plants
consist of two parts, the Lithium Extraction Optimisation
Plant (LEOP) (figure 3) and the Central Lithium Electrolysis
Optimisation Plant (CLEOP). Both will replicate the full
process from Adsorption-Type Direct Lithium Extraction
(A-DLE) to lithium hydroxide production including recycle
On 23 November 2023, Vulcan officially opened its LEOP
in Landau, Germany, in a ceremony attended by local
community, shareholders, politicians, strategic partners
and industry (figure 4). The start of operations at LEOP will
signify the first lithium chemicals which will be produced
in Europe with an entirely locally sourced value chain. The
renewable heat in the lithium brine resource will also enable
Vulcan to produce with a carbon neutral footprint and co-
production of renewable energy, a world-first in the lithium
industry. The Company has successfully tested and piloted
lithium production in the URVBF for close to three years,
streams. LEOP and CLEOP will serve as a training facility
including at its pilot plants in Insheim.
for its production team, ensuring operational readiness for
commercial production in the second half of 2026. Vulcan’s
CLEOP will also serve as a product testing facility for its
offtake partners.
Demonstration to commercial operation represents a
manageable scale-up factor of 1:50 in terms of column
size, as the Lithium Extraction Plant (LEP) will be operating
twelve trains of extraction units. Meanwhile, the commercial
Central Lithium Plant (CLP) electrolysis cells will have a
multiplication factor, not scale-up factor, as electrolysis
cells are not scaled up further but multiplied.
In September 2023, Vulcan together with numerous
politicians and industry representatives, including Infraserv
GmbH & Co. Höchst KG CEO Dr Joachim Kreysing, officially
“broke the ground’’ at the Company’s CLEOP at Frankfurt
Höchst’s Industrial Park, one of the largest chemical parks
in Europe (figure 5). Vulcan’s CLEOP will focus on optimising
operating conditions in preparation for its commercial
Phase One CLP, which will be constructed in the same
Industrial Park. CLEOP will convert the lithium chloride
from Vulcan’s LEOP into lithium hydroxide monohydrate
(LHM), to be used in battery production once operations are
commercial. Site works progressed well during the Period,
with commissioning expected to start in the first half year
of 2024.
24
VULCAN ENERGY ANNUAL REPORT | 2023 FIGURE 4 LEOP OPENING ON 23 NOVEMBER 2023 IN LANDAU, GERMANY
LITHIUM PRODUCTION WILL BE
CONDUCTED IN TWO STAGES, STARTING
AT THE INTEGRATED GEOTHERMAL AND
LITHIUM EXTRACTION PLANT (G-LEP)
AND PROCEEDING TO A SINGLE FACILITY
NEAR FRANKFURT, THE CENTRAL LITHIUM
PLANT WHERE THE LHM PRODUCT WILL BE
PRODUCED.
The Phase One area is well located, close to existing road
infrastructure and within relatively flat valley terrain.
The Phase One area is mixed land use with rural, urban,
agricultural, industrial, and park land. Vulcan has been
diligent in ongoing planning development with consideration
of existing land uses in consultation with local communities
and landowners.
FIGURE 5 HÖCHST INDUSTRIAL PARK
25
VULCAN ENERGY ANNUAL REPORT | 2023 During the Period, Vulcan released the positive results of its Bridging Engineering
Study, which has a significant positive impact on Phase One execution.
THE PHASE ONE BRIDGING ENGINEERING STUDY ENABLED HIGHER PROJECT DEFINITION:
• Reduced uncertainty provides Class Two cost estimate, ready to award key contracts.
• Key land parcels acquired for initial execution phase. Preparatory works conducted on first site.
• EPC/EPCM tender process very advanced, contractor expected to be named in first half year of 2024.
• Key permits are on track, have been received or have been submitted.
LOW RISK: THE COMPANY TO FOCUS ON ONE CORE PRODUCTION AREA, THEREFORE REDUCING RISK:
•
Improved Field Development Plan (FDP) from two production areas down to one core production area that is already
commercially producing brine.
• Reduction of two upstream lithium plants to one central plant (figure 7).
• Simplified modular upstream design enabling easier operation and maintenance.
REDUCED CAPEX:
• ~€100m reduction down to est. €1,399m, combining assets, whilst moving to higher project definition.
LOWEST COST:
• Further decline in OPEX to est. €4,022/t LHM, one of the lowest on the industry cost curve, while maintaining green
credentials.
ROBUST FINANCIALS:
• Maintained est. NPV at €3.9Bn (A$6.5Bn) pre-tax and €2.6Bn (A$4.3Bn) post-tax, and €705m target annual revenues. 4.2y
payback, despite drop in lithium prices.
EXECUTION READY:
• Class Two cost estimate, ready to award key EPC/EPCM contracts.
• More than 10,000 hours of successful in-house A-DLE piloting completed.
• €50m optimisation plants starting up in 2024.
• Debt and project level equity financing with strong support has been commenced.
26
VULCAN ENERGY ANNUAL REPORT | 2023 PHASE ONE DFS PUBLICATION
€ 1,496 CAPEX
PHASE ONE BRIDGING ENGINEERING STUDY
PUBLICATION € 1,399 CAPEX
Central Lithium Plant Phase 1: 24ktLHM
Central Lithium Plant Phase 1: 24ktLHM
LEP Löwenherz - 16kt
LEP Taro - 8Kt
LEP Löwenherz - 24kt
Geothermal Insheim
OPERATING
Geothermal Plant
DEVELOPMENT
Geothermal Plant
Taro
DEVELOPMENT
Geothermal Insheim
OPERATING
Geothermal Plant
DEVELOPMENT
23 New Wells + 4 Existing Wells
7 New Well Pads + 2 Existing
21.4km of ICPP
24 New Wells + 4 Existing Wells
5 New Well Pads + 2 Existing
16.4km of ICPP
CENTRAL LITHIUM
PLANT (CLP)
Lithium
Extraction Plant
(LEP)
Geothermal
Plant
Well Sites
Reservoir
PROVEN RESERVE
PROBABLE RESERVE
PROVEN RESERVE for first 15 years, probable reserve 15-30 yrs
FIGURE 6 IMPROVEMENT ON THE PHASE ONE PROJECT STRUCTURE
FIGURE 7 SITE DESIGN FOR VULCAN’S CENTRAL LITHIUM PLANT LOCATED IN FRANKFURT HÖCHST INDUSTRIAL PARK.
CLOSE TO 100,000 SQM SECURED, ENOUGH FOR SIGNIFICANT EXPANSION
27
VULCAN ENERGY ANNUAL REPORT | 2023 CLEOP SITE
LHM PRODUCTION
IN 2024
CLP SITE
SECURED
FIGURE 8 HÖCHST INDUSTRIAL PARK, CLEOP AND CLP SITES
28
VULCAN ENERGY ANNUAL REPORT | 2023 FUTURE PHASE DEVELOPMENT
“VULCAN OFFERS A TRUSTED
LONG-TERM SOLUTION FOR
EUROPE’S GREEN MOBILITY AND
In addition, Vulcan has been granted a new licence for
expansion into Frankfurt, designated Luftbrücke, covering a
region of Frankfurt am Main, an area with potential industrial
customers like the Höchst Industrial Park and Frankfurt
Airport. Given Frankfurt’s high heat demand, there is a
significant commercial and decarbonisation opportunity for
Vulcan via geothermal renewable energy development. In
this licence, an initial exploration via an airborne gravimetric
and magnetic survey by the federal state of Hessen is
ENERGY TRANSITION.
planned for 2024.
KERSTIN MÜLLER
VP SUBSURFACE
With the URVBF located on either side of the Rhine River,
Vulcan is also planning to further expand its activities to
the French side of the URVBF, which accounts for roughly
one third of the Upper Rhine Valley, containing both
Vulcan plans to develop its licence areas (figure 1) in a phased
geothermal energy and lithium-rich brine. Historical data
approach. After Phase One, further phases are planned to
and sampling coming from existing geothermal operations
fully leverage the large licence area that Vulcan has secured.
in the region indicate brine composition in Alsace, France,
The Project plans for multiple upstream surface facilities for
is materially the same as the brine composition across the
geothermal and lithium extraction operations to be fed from
border at Vulcan’s operations in Germany, meaning Vulcan’s
multi-well pads. Vulcan has also secured space for additional
sustainable lithium production process is applicable across
capacity expansion at its planned CLP, where it has secured
the whole field. With Vulcan’s French entity, Vulcan Energie
a site at the Höchst Industrial Park near Frankfurt.
France SAS (VEF), registered in Strasbourg with an office in
To that effect, 3D seismic survey works were carried
Haguenau, Vulcan is growing an experienced French team.
out on the ground in one of Vulcan’s planned lithium and
During the Period, the Company has applied for a geothermal
geothermal energy development areas in the Mannheim
licence, designated “Kachelhoffa”, and a lithium exploration
district of the URVBF. These works follow earlier approval in
licence, designated “Kachelhoffa minéral”, in the region, with
2022 of the main operating plans by the state directorate,
492,04km2 size in total and located in the region of Mulhouse.
after a thorough review process, which involved the relevant
Vulcan will look to access additional licence areas in 2024.
municipalities, technical agencies, and associations.
VEF is in discussions with local companies in Alsace to
In April 2022, Vulcan signed a renewable heat offtake
develop combined geothermal energy and lithium projects,
agreement with MVV Energie AG (MVV), the utility provider
and support industrials and municipalities to decarbonise
for the city of Mannheim. This seismic survey is the first
their heating supply. The Company is focused on increasing
step to develop new heat and power plants, which aim to
engagement with local stakeholders to develop projects in
supply up to 350,000 MWh/year of heat into the heating
full alignment with local communities, which is paramount
grid of Mannheim.
to the ongoing success of Vulcan’s activities.
Vulcan’s corporate team, spanning the Company’s Australian
and German offices, are committed to accelerating and
expanding Vulcan’s integrated renewable energy and lithium
development strategy.
29
VULCAN ENERGY ANNUAL REPORT | 2023 GEOTHERMAL ENERGY
VULCAN RENEWABLE ENERGY
DURING 2023, THE GEOTHERMAL POWER
were drilled between 2008 and 2010. The plant has been in
PLANT NATÜRLICH INSHEIM GENERATED
APPROXIMATELY 16,000,000 KWH OF
RENEWABLE ELECTRICAL ENERGY, AVOIDING
AN ESTIMATED 6,500 TONNES OF CO2
EQUIVALENT EMISSIONS ON THE GRID.
THESE AVOIDED EMISSIONS ARE NOT
INCLUDED IN VULCAN’S CURRENT CARBON
NEUTRAL CERTIFICATES.
operation since 2012. There is a second geothermal plant
in the region of Landau-Süd with which Vulcan has an
offtake agreement for brine production with Geox GmbH
(the operating company). Vulcan has entered a 51:49 (in
Vulcan’s favour) Joint Venture agreement with the owners
of the Landau-Süd licence to develop a new geothermal
well site in the same Landau-Süd licence as the current
Landau plant, which will also supply Vulcan’s Phase One
operations with brine for lithium extraction.
Vulcan has an agreement to develop new geothermal
projects on the Rift-Nord exploration licence in return for a
A workover of the production well pump at Vulcan’s current
production royalty. Vulcan plans to develop the licence areas
production and re-injection well site was safely carried
in a phased approach. Subsequent Phases are planned to
out during the first half of 2023. To underline Vulcan’s
follow, to fully leverage the large licence area that Vulcan
commitment to play a leading role in the German heat
has secured. The ZERO CARBON LITHIUM™ Project plans for
transition, Natürlich Insheim is currently being redesigned
multiple central surface facilities for geothermal operations
to be able to produce district heating in the future as well.
to be fed from multi-well pads.
This will allow the supply of carbon neutral district heating
to nearby municipalities.
Key political figures visited the Insheim plant during the
Period, including U.S. Consul General Norman Thatcher
Natürlich Insheim (figure 9), has the capacity to produce
Scharpf, Malu Dreyer, Prime Minister of Rheinland-Pfalz and
up to 4.8 MW of renewable power. There are two operating
Parliamentary State Secretary Michael Theurer, signifying
wells located at this plant, one for production of the 165°C
the profile of Vulcan and importance of the project to local,
hot brine and one for reinjection of cooled brine. The wells
state, federal, and international stakeholders.
30
VULCAN ENERGY ANNUAL REPORT | 2023 FIGURE 9 AERIAL SHOT OF VULCAN’S GEOTHERMAL POWER PLANT IN INSHEIM, GERMANY
“GEOTHERMAL RENEWABLE ENERGY
IS AT THE HEART OF THE ZERO
CARBON LITHIUM™ PROJECT.
MARKUS CECHOVSKY
DIRECTOR GEOTHERMAL PRODUCTION
During the Period, Vulcan and Stellantis entered two phased
project agreements, aimed at developing, building, and
including the electrified variants. This facility in the German
state of Hessen is also the traditional home of the Opel brand
and the German headquarters of Stellantis. The planned
renewable heating project is at the northernmost extent of
Vulcan’s focus area in the URV.
Vulcan and Stellantis’ agreement in Mulhouse represents
the first joint project in France for the potential use of
geothermal renewable energy to decarbonise and localise the
energy supply for Stellantis’ European operations. Stellantis
is a major industrial player in the automotive sector in the
Grand Est of France. Vulcan remains focused on execution
of its Phase One commercial lithium and renewable energy
project, in the centre of the URVBF, however this project
operating geothermal renewable energy assets to help
with Stellantis is a complementary opportunity to expand
decarbonise Stellantis’ energy supply in Rüsselsheim am
future development pipeline into the French region of the
Main and Mulhouse, by providing renewable heat. Stellantis
URV, supported by industrial partners like Stellantis.
aims to be an auto industry champion in climate change
mitigation, becoming carbon net zero by 2038, with a 50%
reduction by 203011. This requires Stellantis, as a leading
mobility tech company, to decarbonise and localise its
energy supply across its manufacturing facilities. In the
northern area of the Upper Rhine Valley in Rüsselsheim am
Main, Stellantis maintains a large manufacturing facility
in which the DS 4 and Opel Astra models are produced,
11 https://www.stellantis.com/en/responsibility/carbon-net-zero-strategy?adobe_mc_ref=
31
VULCAN ENERGY ANNUAL REPORT | 2023 TECHNOLOGY
OVER THE PAST THREE YEARS, VULCAN
renewable energy. This means Europe can produce its own
HAS CONDUCTED MORE THAN 10,000 HOURS
OF SUCCESSFUL IN-HOUSE PILOT PLANT
PERFORMANCE TESTING, SHOWING HIGH
LITHIUM RECOVERIES AND THOUSANDS
OF CYCLES OF ADSORBENT LIFE WITH NO
DEGRADATION.
With Pilot Plant One (PP1) operational since 2021 and larger
Pilot Plant OneA (P1A) in operation since 2022, Vulcan has
deployed several activities to de-risk A-DLE on the URV
brine. These activities include three years of successful in-
house testwork from 2021-2023, as well as several thousand
non-stop cycles both at brine pressure and atmospheric
pressure.
locally sourced lithium for EVs and do so with a world-leading
carbon neutral footprint.
VULSORB® is a variation of the type of lithium extraction
adsorbents originally developed thirty years ago and used
commercially worldwide for lithium extraction from brine
for the last 25 years. This Technology Readiness Level (TRL)
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 adsorbent durability,
which can be adjusted depending on local brine chemistry.
Vulcan’s VULSORB® enables the lithium to be selectively
extracted from the brine, providing a pure lithium chloride
eluate which can then be electro-chemically converted to
LHM for use in lithium-ion batteries in the European cathode,
battery, and automotive industries.
Vulcan uses its proprietary in-house lithium production
technology, VULSORB®, which has shown a high-
This process is much faster and more efficient, with a lower
carbon footprint, than the legacy industry method of using
performance relative to
“off the shelf” products. The
large-scale evaporation and large quantities of chemical
manufacturing process for VULSORB® is environmentally
reagents to extract the lithium and process the product into
friendly, with most of the reagents recycled. The Company
lithium hydroxide. A-DLE happens in hours, rather than up
has also deployed its technology at its LEOP.
to 18 months as is the case with legacy extraction methods.
Vulcan has successfully piloted the sustainable lithium
Vulcan is poised to improve the lithium supply chain with the
production process and shown that A-DLE can be
global deployment of its high performing lithium extraction
successfully applied in the URV, and powered by geothermal
technology, VULSORB®.
32
VULCAN ENERGY ANNUAL REPORT | 2023 “WITH THE DEVELOPMENT OF OUR
PROPRIETARY IN-HOUSE LITHIUM
EXTRACTION TECHNOLOGY
As a cutting-edge technological asset, VULSORB® has
the potential to propel Vulcan's decarbonisation efforts
beyond its current use in the URVBF, setting the standard
for present and future A-DLE projects. With this strategic
approach, Vulcan is at the forefront of providing sustainable
solutions that resonate far beyond its immediate operational
VULSORB®, VULCAN HAS CREATED
footprint.
A TECHNOLOGY ARM AND ASSET
TO BE USED BEYOND OUR OWN
PROJECTS AND PRODUCTION
IN EUROPE.
DR ANGELA DIGENNARO
DIRECTOR RESEARCH AND
DEVELOPMENT
During the reporting period, the Vulcan team moved into an
expanded laboratory. With its state-of-the- art equipment
for wet and solid-state analyses, including full in-house
inductively coupled plasma optical emission spectrometry
(ICP-OES) and Ion chromatography (IC) analytical capability,
this Innovation hub has enabled Vulcan to expand its
core competencies and centralise its proprietary lithium
processes and deliver the required information for Vulcan’s
Phase One Bridging Engineering Study.
33
VULCAN ENERGY ANNUAL REPORT | 2023 CORPORATE OVERVIEW
FUNDING
SEGMENT INFORMATION
During the reporting year, the Company successfully raised
The consolidated entity is organised into three operating
€67m (A$109m) gross proceeds through a single tranche
segments based on geographical location: in Germany,
placement to institutional investors. Net proceeds from the
other European countries, and Australia. These operating
placement, together with existing cash, were applied to the
segments are based on the internal reports that are reviewed
development of the Phase One project, corporate costs and
and used by the Key Management Personnel (who are
general working capital.
A$200 MILLION LETTER OF SUPPORT
RECEIVED FROM EXPORT FINANCE
AUSTRALIA
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
During October, Vulcan announced that it received a
information reported to the CODM is on a monthly basis.
conditional, non-binding Letter of Support from Export
Finance Australia (EFA) for up to A$200 million (~€120
million) for the upcoming financing of Phase One of its
ZERO CARBON LITHIUM™ Project. This letter of support
further complements the in-principle support provided by
Government-backed Export Credit Agencies (ECAs) from
France, Italy, and Canada including an indication that Vulcan
would be designated as a strategic project of national
TYPES OF PRODUCTS AND SERVICES
• Germany: the supply of geothermal energy, exploration
and development relating to the ZERO CARBON LITHIUM™
Project; engineering services and drilling personnel
outsourcing, and technology development.
importance in France.
• France and Italy: exploration relating to geothermal
energy and lithium.
• Australia: Administration and Definitive Feasibility Study
costs.
34
VULCAN ENERGY ANNUAL REPORT | 2023 INDUSTRY ASSOCIATIONS
Vulcan is proud to partner with, support and contribute to the
• Gesellschaft der Metallurgen und Bergleute (GDMB) -
work of leading environmental societies and associations in
Society of Metallurgists and Miners.
the geothermal, renewable energy and lithium industries
including:
• Landesnaturschutzverband
Baden-Württemberg
(LNV) - Nature Conservation Organisation of the State
Baden-Württemberg.
• Kompetenznetzwerk Lithium-Ionen-Batterien (KLiB) -
German Association of Lithium-Ion Batteries.
• Deutsche
Wissenschaftliche
Gesellschaft
für
nachhaltige
Energieträger, Mobilität
und
Kohlenstoffkreisläufe (DGMK) - German Society for
• AHK – German-Australian Chamber of Industry and
Sustainable Energy Carriers, Mobility and Carbon Cycles.
Commerce.
• European Association of Geoscientists and Engineers
• AGA – Australian Geothermal Association.
(EAGE).
• AFBA – Australia France Business Association.
• Bundesverband der Energie- und Wasserwirtschaft e.V.
• GABC – German Australian Business Council.
(BDEW).
• Bundesverband Geothermie (BVG) – German Geothermal
Association.
• European Geothermal Energy Council (EGEC).
• GeoEnergy Celle – Association of drilling and drilling
service companies.
• Bundesverband der Geowissenschaftler (BDG) –
Association of German Geoscientists.
• Deutsche Geologische Gesellschaft - Geologische
Vereinigung (DGGV).
• American Association of Petroleum Geologists (AAPG).
• Verband der industriellen Energie- & Kraftwirtschaft
(VIK).
• Deutsche Mineralogische Gesellschaft (DMG).
• Bundesverband Erdgas, Erdöl und GeoEnergie (BVEG) –
To support local development and generate synergies,
Germany’s Association of Natural Gas, Oil and GeoEnergy.
Vulcan is also an active member of the Technologie Region
• Deutsche Gesellschaft für Geotechnik (DGGT) – German
Geotechnical Society.
•
International Geothermal Association (IGA).
• Bundesverband Erneuerbare Energien (BEE) – the
Renewable Energy Association of Germany.
• Plattform Erneuerbare Energien (PEE) – the state
subdivision of the BEE in Baden-Württemberg.
Karlsruhe GmbH (TRK). As Vulcan’s German head office is
based in the Karlsruhe Technology Region, it is important for
the Company to connect with local authorities, chambers
of commerce, scientific institutions, and other companies
in the region and to promote new technologies. The
partnership with TRK is an effective platform for these
activities. Importantly, Vulcan also wants to leverage the
network of TRK to accelerate the energy transition in the
region. Vulcan is also active in another local development
association, Metropolregion Rhein-Neckar, which aims to
• Wirtschaftsrat der CDU – the largest business
keep industrial excellence in the region around Mannheim.
association in Germany.
• Bundesverband Mittelständische Wirtschaft (BVMW) –
the largest middle-sized business association in Germany.
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SUSTAINABILITY
OVERVIEW
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“SUSTAINABILITY IS THE CORNERSTONE
UPON WHICH VULCAN WAS FOUNDED AND
WE ARE COMMITTED TO BEING A LEADER IN
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
INITIATIVES AND REPORTING.
STORM TAYLOR
ESG LEAD
SUSTAINABILITY HIGHLIGHTS
Employed 187 new Full Time
Equivalent (FTE) employees,
reaching a total of 371 Vulcan
Climate Champions.
In the top 2% for ESG rating in peer
group, according to Sustainalytics.
Ranked #11 out of 578 Chemicals
industry peers.12
Became a Voluntary Carbon Markets
Initiative (VCMI) Forum member to
assist with Carbon Claims Integrity
Framework.
Officially opened Lithium Extraction
Optimisation Plant (LEOP) to train
operators in a pre-commercial setting
on sustainable lithium extraction for
Electric Vehicles.
Implemented ESG
pre-qualification survey
for suppliers.
Avoided ca. 6.5kT CO2eq.
through Natürlich Insheim
renewable power plant.13
Completed an Equator Principles
(EP4) and International Finance
Corporation (IFC) standards-
aligned Environmental Social
Impact Assessment (ESIA) which
found that Vulcan’s integrated
renewable energy and ZERO
CARBON LITHIUMTM Project:
- Will not have any negative
impacts classed as greater than
“minor” post mitigation
- Will have several positive
impacts, including renewable
heating provision for local
communities17.
Calculated that the absolute
avoided climate impact over
10 years from 2026 to 2023 is
estimated to be more than
4.1 million tonnes CO2 eq. from
Phase One of the integrated
renewable energy and ZERO
CARBON LITHIUMTM Project.14
Reinforced LCA metrics with
Phase One Project Bridging
Engineering Study data,
finding that Vulcan is on
track to have the lowest C02
footprint in the industry.15
Reduced footprint and
impacts of Phase One of the
Project, whilst maintaining
same production capacity.15
56:44 gender
balance on
Vulcan’s Board.16
Growth of
OneVulcan
Team Culture.
FIGURE 10 VULCAN’S SUSTAINABILITY HIGHLIGHTS
12 Sustainalytics website (https://www.sustainalytics.com/esg-rating/vulcan-energy-resources-ltd/2006029601)
13 Based on official feed-in numbers from grid operator and calculated with the latest local electricity mix emission factor
14 Minviro Preliminary Results: Vulcan Energy Resources GHG Avoidance 20/03/24. Calculated using the EU Innovation Fund methodology
15 16/11/23 Vulcan Bridging Study Results https://v-er.eu
16 As as 31 December 2023. Currently 50:50 balance of gender representation on the Board
17 Vulcan ASX Annoucement 8 December 2023
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TCFD
In March 2023, Vulcan released its first standalone Taskforce for Climate-
related Financial Disclosures (TCFD) as part of the Annual Reporting suite.
The full report is available via the Vulcan website https://v-er.eu/. Below is a
summary of the report.
TASKFORCE FOR
CLIMATE REL ATED
FINANCIAL DISCLOSURES
1 JULY TO
31 DECEMBER
TASKFORCE FOR
CLIMATE RELATED
FINANCIAL DISCLOSURES
1 JULY TO
31 DECEMBER
2022
2022
TASKFORCE FOR
CLIMATE RELATED
FINANCIAL DISCLOSURES
1 JULY TO
31 DECEMBER
2022
( TC F D )
(TCFD)
(TCFD)
Disclosure group
Recommended disclosure
Reference
A B N 3 8 6 2 4 2 2 3 1 3 2
ABN 38 624 223 132
ABN 38 624 223 132
Governance
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
a) Describe the climate related risks
and opportunities the organisation
has identified over the short, medium
and long term
ESG risk management, pg.53
ESG risk management, pg.53
31 Dec 22 TCFD report
Strategy
b) Describe the impact of climate
related risks and opportunities on the
organisation’s businesses, strategy,
and financial planning
c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate
related scenarios, including a 2°C or
lower scenario
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
a) Disclose the metrics used by the
organisation to assess climate related
risks and opportunities in line with
its strategy and risk management
process
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 GHG emissions,
and the related risks
c) Describe the targets used by the
organisation to manage climate
related risks and opportunities and
performance against targets
Risk management
Targets and metrics
Vulcan’s approach to sustainability, pg.18
Vulcan’s sustainability framework, pg.18
Vulcan Values, pg.21
Minimising environmental impacts, pg.28
Climate and energy , pg.31
Water, pg.37
31 Dec 22 TCFD report
ESG risk management, pg.53
ESG risk management, pg.53
ESG risk management, pg.53
Current emissions, pg.34
Current emissions, pg.34
2023 Remuneration Report
TABLE 1 TCFD SUMMARY TABLE
Note: Page references relate to the 2023 Sustainability Report
38
VULCAN ENERGY ANNUAL REPORT | 2023 Empowering
a Carbon
Neutral Future
Empowering
a Carbon
Neutral Future
Empowering
a Carbon
Neutral Future
The full Sustainability Report is available on
Vulcan's website https://v-er.eu.
ABN 38 624 223 132
ABN 38 624 223 132
ABN 38 624 223 132
Sustainability
Sustainability
Report
Report
23
23
23
Sustainability
Report
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39
OUR
APPROACH TO
SUSTAINABILITY
AT VULCAN, SUSTAINABILITY IS EMBEDDED
process optimisation. To ensure that the Company’s
INTO BOTH THE COMPANY PURPOSE
OF EMPOWERING A CARBON NEUTRAL
FUTURE, AND PERFORMANCE, BY ACTIVELY
DECARBONISING THE ENERGY AND LITHIUM
INDUSTRIES IN A WAY WHICH MINIMISES
ENVIRONMENTAL AND SOCIAL IMPACTS.
Vulcan has a unique opportunity to construct a renewable
energy and lithium supply chain in Europe, for Europe, with
sustainability built in from the outset. The team believes
this gives Vulcan a unique competitive edge compared to
other established peers and industries who are looking to
retrofit their businesses.
Delivering on Vulcan’s sustainable purpose and performance
requires continuous focus and determination, and the team
has taken numerous important steps to this end over the past
year. In terms of understanding Company impacts, Vulcan
completed an Equator Principles (EP4) and International
Finance Corporation (IFC) Performance Standards-aligned
sustainability approach remains up to date for the growing
organisation, the team redefined the Vulcan Values and
began implementing “OneVulcan”, Vulcan’s policy to ensure
that there is a cohesive sustainability culture across the
entire business.
VULCAN’S SUSTAINABILITY
AND ESG FRAMEWORK
Vulcan’s Sustainability and ESG Framework, defined in 2022,
has evolved and grown alongside the Company.
The Company's purpose is to empower a carbon neutral
future. Leveraging the team, innovative technology, and
strategic position within the European supply chain,
Vulcan will execute its strategy to be global leaders in
the production of renewable energy and lithium, while
minimising environmental and social impacts. Through
this strategy, the team will deliver on Vulcan’s mission
of becoming Europe’s leading ZERO CARBON LITHIUM™
Environmental and Social Impact Assessment (ESIA) and
business and enabling energy security through geothermal
updated the LCA18 for LHM production to reflect continuous
renewable energy.
18 Minviro LCA Report Final dated 22 March 2024
40
VULCAN ENERGY ANNUAL REPORT | 2023 PURPOSE
We will empower a
carbon neutral future.
MISSION
Becoming Europe's leading ZERO CARBON
LITHIUM™ business & enabling energy
security through geothermal energy.
ZERO
CARBON
LITHIUM™
RENEWABLE
ENERGY
TECHNOLOGY
TEAM
INNOVATION
SUPPLY CHAIN
A world-leading scientific
& commercial team
in the fields of lithium
& geothermal energy.
Adapting existing
technologies to efficiently
produce lithium from
geothermal brine.
Strategically placed in the
heart of the European EV
market to decarbonise the
supply chain.
VULCAN VALUES
CLIMATE CHAMPION
DETERMINED
INSPIRING
FIGURE 11 VULCAN’S SUSTAINABILITY AND ESG FRAMEWORK
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41
Woven through Vulcan’s Sustainability
• Quality of Life: improving the quality of life for people, land and sea
and ESG Framework (figure 11) and
informing every level of the Company’s
business model, the Vulcan Compass
(figure 12) guides sustainable decision
making – binding purpose, mission,
strategy, and values together via three
key themes.
• Balance: maximising shareholder returns without compromising the
needs of future generations
• Innovation: sustainable innovation and excellence in execution
These themes are supported by ESG initiatives that deliver Vulcan’s
Sustainability and ESG Framework and objectives.
E n v i ronmental
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
with
a
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
e
g
m
e
i
h
e
n
s
o
i
l
e
n
d
r
a
g
e
r
t
t
i
o
n
s
Empowering a
carbon neutral
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
Innova t i o n
n
Sustainable inn o v a t
i o
and excellence in e x e c u t i
n
o
Target s
FIGURE 12 VULCAN
COMPASS TO GUIDE
SUSTAINABLE
DECISION MAKING
als
o
G
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VULCAN VALUES
This year the team refreshed the Vulcan Values (figure 13)
The team settled on Climate Champion, to reflect Vulcan’s
with the objective of ensuring that they reflect what is
purpose to empower a carbon neutral future, through
unique and special about the Company as it continues to
actively decarbonising the energy and lithium industries;
grow and evolve. To ensure that Vulcan could capture the
Determined, which speaks to the team’s unwavering drive
thoughts and insights of as many of the team as possible,
and “grit” to solve problems; and Inspiring, which is the
three feedback channels were launched: a workshop with
impact the team hopes to have within and outside of Vulcan.
the leadership team, a Company-wide workshop with the
Looking forward to 2024, the Company will continue to
broader team during the annual summer get-together, and
embed the Vulcan Values across the Company and highlight
an online Vulcan Values booth.
how they are exemplified in employees and operations.
CLIMATE CHAMPION
We will pioneer a better
and carbon neutral future for all
DETERMINED
We are hungry for success and
determined to shape tomorrow
INSPIRING
United in passion for a better world,
we rise and inspire each other
FIGURE 13 ONEVULCAN VALUES
43
STAKEHOLDER ENGAGEMENT
Vulcan seeks to ensure that the integrated renewable
energy and ZERO CARBON LITHIUM™ business is a force
for positive change that is also creating shareholder value.
recognises that there are also concerns about how Europe
can produce sufficient lithium locally to satisfy its EV battery
demand, without aggravating other environmental issues,
This extends beyond Vulcan’s objective of decarbonising
such as biodiversity loss, and water scarcity. Vulcan views
the energy industry and lithium supply chain, to include
these debates as valid and sees stakeholder engagement
creating value for its wider stakeholders, both through
as a crucial means of explaining how the Company will
geothermal energy and lithium products, as well as how
minimise the environmental impacts of the lithium supply
Vulcan operates. Stakeholder engagement is crucial for this,
chain, by producing the most sustainable lithium products
as it enables the team to better understand how to maximise
on the market whilst delivering affordable baseload energy
positive impacts, through pursuing mutual interests, while
to local communities.
minimising any potentially negative impacts of operations.
Vulcan’s stakeholder engagement approach is tailored to
As a company which is building part of the solution to
the Company’s diverse stakeholder groups, and engagement
Europe’s decarbonisation targets, as well as the continent’s
methods include roadshows, permanent local information
energy sovereignty and local critical minerals supply needs,
centres, virtual workshops, face-to-face meetings, and
Vulcan has spent considerable time and resources ensuring
surveys. In 2023, a particular highlight of the team’s
a highly skilled communications team and strategy is in
engagement were two “open door” days for members of
place. This team consists of regional managers, political and
the local community and local authorities (which drew in
stakeholder engagement and investor relations specialists
approximately 100 attendees19) to visit Insheim and ask
who already actively engage with policy debates on how
Vulcan’s experts questions about the geothermal energy
best governments and industry can reach decarbonisation
production process. The team is keen to carry out similar
objectives. At a local, national, and regional level, Vulcan
open days to shed light on Vulcan’s other business activities,
such as visits to drilling sites, in 2024.
19 https://v-er.eu/de/blog/buerger-informieren-sich-bei-anwohnerfest-im-geothermiekraftwerk-insheim-ueber-projekte-vulcans/
44
VULCAN ENERGY ANNUAL REPORT | 2023 Stakeholder group
How we
engaged
Related material topics
Sustainable
Development Goals
Employees
Annual employee satisfaction
survey
Annual “SommerFest” event
Quarterly team town halls
Whistleblower mechanism
Health and safety mobile app
Health and safety training
Climate change and energy
Environment impact
Community engagement
Diversity, equity and inclusion
Health, safety and wellbeing
Business ethics
Governance
Transparency
Community
Local communities in the
regions in which Vulcan
operates
"Open door” days of our
facilities
Info trucks
Info centres
Information events
Phone / email
Sponsorships
Biodiversity
Climate change and energy
Envrionmental impact
Community engagement
Health, safety, and wellbeing
Business ethics
Governance
Transparency
Customers
Lithium offtakers
Heat offtakers
Geothermal energy
offtakers
Direct engagement
Climate change and energy
Email
Site visits
Market briefings
Circular economy
Environmental impact
Suppliers
Ranges of businesses,
including both local and
multinational businesses
Website
Emails
Climate change and energy
Circular economy
Direct engagement
Envrionmental impact
Human rights
Government and regulators
Meetings
Biodiversity
Local, regional and national
governments including
Australia, Germany, Italy and
the European Union
Briefings
Presentations
Events
Climate change and energy
Environmental impact
Community engagement
Working groups
Diversity, equity and inclusion
Forums
Letters
Emails
Health, safety and wellbeing
Business ethics
Digitisation and cyber security
Formal submissions
Website
Governance
Transparency
Participation in industry
Associations and advocacy
Further information is available in the 2023 Sustainability Report
TABLE 2 OVERVIEW OF VULCAN’S STAKEHOLDER ENGAGEMENT
45
VULCAN ENERGY ANNUAL REPORT | 2023 MINIMISING ENVIRONMENTAL
IMPACT
WHILE VULCAN’S MISSION, WHICH IS TO
Vulcan’s position is that decarbonisation should not come
at any material cost to the environment, and that renewable
energy and critical materials providers should be taking all
viable steps to understand and minimise their impacts. The
team is motivated by a desire to be proud of not just what we
ACTIVELY DECARBONISE THE ENERGY AND
do, but also how we do it.
LITHIUM SUPPLY CHAIN, IS EVIDENTLY
ALIGNED WITH ENVIRONMENTAL
For this reason, Vulcan is building sustainability into the
renewable energy and lithium value chain from the outset.
OBJECTIVES, THE TEAM RECOGNISES
In practice, this means understanding the Company’s
THAT THIS IN ITSELF DOES NOT
NECESSARILY MEAN THAT VULCAN IS
AN ENVIRONMENTALLY SUSTAINABLE
COMPANY. THE DEBATE ABOUT WHETHER
current and forecasted impacts and using this knowledge
to interrogate whether parts of the processes or inputs to
produce renewable energy and lithium can be modified to
reduce environmental impact. A good example of this in
2023 was the team’s decision to push for grid connection at
THE RAPID DRIVE FOR DECARBONISATION
the well sites from the outset as opposed to relying on diesel.
WILL, UNINTENTIONALLY, AGGRAVATE
OTHER ENVIRONMENTAL ISSUES, SUCH AS
BIODIVERSITY LOSS, AND WATER SCARCITY,
IS VALID AND IS ONE VULCAN ACTIVELY
Having forecast the different scenarios, the team calculated
that even without renewable Power Purchase Agreements
(PPAs), Vulcan will have dramatically reduced potential
emissions. By ensuring access to PPAs, as is currently the
plan, Vulcan hopes to cut scope 1 and 2 emissions to as
ENGAGES IN. VULCAN'S POSITION IS THAT
close to zero as possible, with remaining potential for scope
DECARBONISATION SHOULD NOT COME AT
ANY MATERIAL COST TO THE ENVIRONMENT.
1 emissions only relating to the diesel backup generator to
ensure power supply in the unlikely case of grid issues.
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MINVIRO LIFE CYCLE
ASSESSMENT 2023
Vulcan regularly updates its ISO-aligned LCAs, so that
energy and ZERO CARBON LITHIUMTM Project, using the EU
they are in line with advances in project optimisation and
Innovation Fund methodology. The absolute avoided impact
sustainability.
The current climate change impact assessed is net -2.0 kg
CO2 eq. per kg LiOH.H2O1, which significantly means that
Vulcan’s integrated renewable energy and ZERO CARBON
LITHIUMTM Project has an overall net negative carbon
emissions contribution using this LCA methodology. The
largest positive contributor to climate change impact is the
geothermal plant, due to the emissions avoided through
renewable energy production. Hence, geothermal brine
extraction and energy production’s impact stands at -8.9 kg
CO2 eq. per kg LiOH.H2O. Lithium extraction, on the other
hand contributes 5.2 kg CO2 eq. per kg LiOH.H2O, an amount
minimised by the use of geothermal waste heat to drive the
process. Finally, the climate change impact contribution of
the CLP is 1.7 kg CO2 eq. per kg LiOH.H2O, and the impact of
transporting intermediate products between the sites is 0.1
kg CO2eq. per kg LiOH.H2O (figure 14). For this reason, when
compared with alternative lithium producers, the team
believes that Vulcan’s lithium production method has the
lowest carbon footprint, giving Vulcan a key competitive
differentiator.
As part of the LCA update, a 10-year GHG avoidance profile
was forecasted for Phase One of the integrated renewable
over 10 years from 2026 to 2035 is estimated to be more than
4.1 million tonnes CO2 eq, using this particular methodology.
The graph below represents the current outcomes of the ISO
methodology (figure 15).
CLIMATE CHANGE
-8.9
-2.0
.
O
2
H
H
O
L
r
e
p
i
.
q
e
2
O
C
g
k
1.7
0.1
5.2
0
-2
-4
-6
-8
-10
Geothermal
Energy
Production
Lithium
Extraction
Chemical
Processing
Transport
Total
FIGURE 14 CLIMATE CHANGE IMPACT BY PROCESS
STAGE FOR 1 KG CO2 EQ. LIOH.H2O 20
4,107,185
3,661,795
3,206,277
2,745,916
.
q
e
2
O
C
s
e
n
n
o
t
n
o
i
l
l
i
m
e
v
i
t
a
u
m
u
C
l
4
3
2
1
0
2,287,966
1,831,098
1,374,108
916,996
463,739
89,535
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Years
FIGURE 15 CUMULATIVE ABSOLUTE AVOIDED GHG EMISSIONS OVER 10 YEARS FROM PHASE 1, USING THE EU INNOVATION FUND
METHODOLOGY, ESTIMATED BY MINVIRO LTD 21
20 Minviro LCA Report Final dated 22 March 2024
21 Minviro GHG Avoidance dated 22 March 2024
47
VULCAN ENERGY ANNUAL REPORT | 2023
ENVIRONMENTAL
PERFORMANCE22
15t
CO2
5t
CO2
0 t
CO2
ZERO CARBON LITHIUMTM
ca. 450t
water
3,124m2
land
0.3t
water
6m2
land
0t
CO2
ca. 150t
water
0.3t
water
464m2
land
6m2
land
PER TONNE OF LHM PRODUCED
Hard rock mining
~ 60% of world
lithium production
Evaporation ponds
~ 40% of world
lithium production
EMPLOYEES
Vulcan is made up of a team of almost 400 Climate
As part of this ambition, Vulcan is growing rapidly, having
Champions, who are constantly working
towards
added 187 new employees in 2023, to reach a total of 371 full
empowering a carbon neutral future.
time equivalent employees (FTEs) by the end of the year.
Attracting and retaining a diverse and passionate workforce
This expansion was primarily related to the acquisition of a
is essential for delivering on the Company’s ambition to
drilling contract labour company to grow Vulcan’s inhouse
be a leader in sustainable geothermal energy and lithium
drilling subsidiary, Vercana23.
production.
VULCAN
(with Vercana)
VULCAN
(without Vercana)
BOARD
LEADERSHIP
72% Male | 28% Female
64% Male | 36% Female
56% Male | 44% Female
86% Male | 14% Female
STATISTICS CALCULATED USING VULCAN'S HEADCOUNT AT THE END OF THE REPORTING YEAR (DECEMBER 2023)
29 NATIONS
22 Based on Minviro LCA 2024, and peer comparisons in the Minviro LCA 2020. Compared to current methods of lithium extraction: hard rock
and brine evaporation ponds as per Minviro LCA 2020.
23 Refer to 2023 Sustainability Report for further breakdown
48
VULCAN ENERGY ANNUAL REPORT | 2023 ONEVULCAN
Vulcan’s geographical spread, diverse operating units, and
rapid scaling up are potential challenges for maintaining a
cohesive company culture. To address these challenges, in
2023, the team launched the ongoing OneVulcan initiative
which seeks to strengthen unity and collaboration across the
Company under a common culture, in which each employee
takes ownership and understands their individual importance
to delivering on Vulcan’s mission. To this end, last year the
leadership team implemented several structural changes
to centralise administrative functions and standardise
compensation and benefits frameworks, to bring all Vulcan
employees under one umbrella. The refresh of the Vulcan
Values, which drew on employee feedback at all levels of the
company, was another key part of the OneVulcan initiative, by
seeking to ensure that the values are relevant to the evolving
company. Finally, in order to bring employees together for
team building, Vulcan continued events such as quarterly
town halls and the annual “Sommerfest” party and "Winterfest".
3
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COMMUNITY ENGAGEMENT
The
integrated renewable energy and ZERO CARBON
LITHIUMTM Project is designed to work in harmony with
local communities, providing interdependent opportunities
and positive impacts, aligned with the United Nations
Sustainable Development Goals
(UNSDGs). The ESIA
identified positive impacts for local communities including
job creation and renewable heating, which Vulcan is aiming
to provide from 2025.
Community engagement helps
the Company better
understand how to maximise positive impacts, through
pursuing mutual interests, while minimising any potentially
negative impacts of operations for local communities. As
Vulcan continues to transition to an integrated project
development, execution, and operations company, the main
focus of the team’s community engagement is resolving
queries from the public about how operations will work, and
their impacts on communities and the local environments.
Vulcan’s approach has been to reassure the public through
providing
information about compliance with German
regulations and best practices as well as the ESIA’s
findings that any impacts were determined to be minor or
insignificant after mitigation measures during all phases of
Vulcan’s project. The Company has also signed an insurance
policy for local communities in the case of an impact from
the Project, to give them reassurance that Vulcan is a
company who is responsible and accountable.
Transparency is key to how Vulcan conducts community
engagement, and in May 2023, the team was proud to host
two “open door” days for members of the local community
and local authorities to visit Insheim and ask Vulcan’s experts
questions about the geothermal energy and heat production
process. The event was a success, drawing in approximately
100 attendees, and the team is planning to carry out similar
open days to shed light on Vulcan’s other business activities,
such as visits to drilling sites, in 2024.
Engagement initiative
Description
Vulcan info truck
visited the Landau city marketplace, residents’ festival in Insheim and the Bad
The truck regularly tours around the Project’s areas of influence, and in 2023
Dürkheim sausage market.
Vulcan info centres in Landau and
The info centres are open on most weekdays and any person or group is
Karlsruhe
welcome to stop in and visit, coordinate a meeting or call and ask questions.
Insheim “Open Doors”
plant to the public for a tour of the facility and explanations of the geothermal
Over two days in May 2023, the team opened up the Natürlich Insheim power
energy and heat production process from Vulcan’s experts.
Laying of the foundation stone in
Schleidberg
In October 2023, Vulcan held an event with approximately 30 members of the
local community to lay a foundation stone in Schleidberg, one of the Company’s
well locations to celebrate the beginning of pre-execution preparatory works.
LEOP launch event
(LEOP), an event attended by approximately 50 members of the public and local
In November 2023, Vulcan opened the Lithium Extraction Optimisation Plant
authorities.
Sponsorship of local sports clubs
Over 2023, Vulcan provided support for several local handball and football clubs
including TSG Haßloch and HSG Landau Land, Südpfalztiger, TV Offenbach.
Grievance
mechanisms
Vulcan did not receive any formal grievances from members of the local
community in 2023.
TABLE 3 OVERVIEW OF VULCAN’S KEY COMMUNITY ENGAGEMENT INITIATIVES IN 2023
50
VULCAN ENERGY ANNUAL REPORT | 2023 3
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51
CORPORATE
GOVERNANCE
As a sustainability-centric company, Vulcan continues to be
The Company has prepared a Corporate Governance
committed to the highest standards of corporate governance
Statement which sets out the corporate governance
and regulatory compliance. Each team member endeavours
practices that were in operation throughout the financial
to be respectful, authentic, and trustworthy both to each
year for the Company, identifies any Recommendations
other and to external groups. Vulcan is also committed to
that have not been followed, and provides reasons for
ensuring its business activities are conducted fairly, honestly
not following such Recommendations. The Company’s
and with integrity in compliance with all applicable laws.
Corporate Governance Statement and policies can be found
To achieve this, Vulcan’s Board of Directors has adopted
on its website: https://v-er.eu/information-for-investors/.
several charters and policies which aim to create value,
whilst ensuring it remains accountable, by implementing
appropriate controls that are commensurate with the risks
involved. The Board believes that the Company’s policies
and practices comply with the recommendations of the
ASX Corporate Governance Principles and Recommendations
– Fourth Edition and as Vulcan continues to grow, the
Company will regularly review its corporate governance
policies, practices and controls, so compliance is not only
maintained but enhanced.
PROJECT EXECUTION
During the reporting period, Vulcan continued to focus on
strengthening its corporate governance framework, whilst
it transitioned into an integrated project development,
execution and operations company.
The matrix organisation provides a consistent approach to:
• Delivery defined by project execution, contract strategy,
engineering standards and strategic sourcing.
PRACTICE AND COMPLIANCE
•
Integrating schedules and visibility of critical paths.
VULCAN IS COMMITTED TO
THE HIGHEST STANDARDS OF
CORPORATE GOVERNANCE
PRACTICE AND REGULATORY
COMPLIANCE.
•
Interfaces being effectively managed and clear lines of
accountability.
• Risks and opportunities being defined and managed.
• Control processes to give strategic management and
insights.
52
VULCAN ENERGY ANNUAL REPORT | 2023 PHASE ONE ORGANISATION & GOVERNANCE
VULCAN BOARD / PROJECT OVERSIGHT COMMITTEE
EXECUTIVE PROJECT STEERCO
PROJECT DIRECTORATE
DELIVERY TEAMS
Wells
Wells
Wells
Wells
Wells
Wells
ICPP
Geothermal
LEP
CLP
Upstream
Downstream
Sites
Projects
FIGURE 16 PHASE ONE ORGANISATION AND GOVERNANCE
In addition, strong project governance is applied via a
Project Oversight Committee and Project Directorate that
oversee the project delivery teams (figure 16).
WHISTLEBLOWER REPORTING
Vulcan encourages a culture of
‘speaking up’ to raise
concerns about possible unlawful, unethical, socially
The Project Oversight Committee, comprising Directors
irresponsible behaviour or other improprieties of or within
that are highly experienced in project management and
the Company, without fear of retaliation or otherwise being
execution together with operational management, are
disadvantaged as evidenced in our Whistleblower Policy.
responsible for regularly reviewing the status of nominated
The Company provides a range of mechanisms to report
projects and applying appropriate corporate governance
suspected breaches of the Code of Conduct. These include:
and risk management frameworks.
• Training and education on Vulcan’s Whistleblower Policy
One Nominated Project Sponsor chairs the Executive
(publicly available on the website).
Project SteerCo which governs, supports, and steers the
Project Directorate. The Project Sponsor reports Capital
Project updates to the Project Oversight Committee which
reports into the Board meetings, whilst a dedicated Project
Director leads the Project Directorate and is the single point
• Speaking with Vulcan’s Whistleblower Protection and
Investigation Officer (WPIO).
• Using the Company’s
independent and confidential
reporting channel, externally managed by whistleblower
of accountability for all Capital Projects until handover to
production. The Executive Project SteerCo meets many
software.
times a month, with the Project Sponsor reporting to the
• Encouraging employees to raise
issues with their
Project Oversight Committee at every scheduled meeting.
manager or a member of the P&C team. During 2023, no
Vulcan has found that this framework allows timely
Whistleblower Hotline disclosures were reported and
communication and agility in problem solving and risk
there were no matters of concern managed by the WPIO.
mitigation.
53
VULCAN ENERGY ANNUAL REPORT | 2023 DIRECTORS’
REPORT
THE DIRECTORS OF VULCAN ENERGY
RESOURCES LIMITED (‘VULCAN’ OR ‘THE
COMPANY’) PRESENT THEIR REPORT,
INTEREST IN SHARES AND OTHER
COMPANY SECURITIES
The following table sets out each Director’s relevant interest
TOGETHER WITH THE FINANCIAL STATEMENTS
in shares and performance rights of the Company as at the
OF THE CONSOLIDATED ENTITY CONSISTING OF
date of this report based on publicly available information.
VULCAN ENERGY RESOURCES LIMITED AND ITS
CONTROLLED ENTITIES FOR THE YEAR ENDED
31 DECEMBER 2023.
DIRECTORS
Director
Mr Cris Moreno
Mr Gavin Rezos
Dr Francis Wedin
Ordinary
Shares
Performance
Rights
-
8,635,500
16,458,561
The names of the Company’s directors in office during the
Ms Ranya Alkadamani
276,000
financial year and their date of appointment are as follows.
• Dr Francis Wedin: appointed 4 September 2019.
• Mr Cris Moreno: appointed 1 July 2023.
• Mr Gavin Rezos: appointed 4 September 2019.
• Ms Ranya Alkadamani: appointed 29 April 2020.
• Ms Annie Liu: appointed 18 March 2021.
• Dr Heidi Grön: appointed 25 March 2021.
• Ms Josephine Bush: appointed 16 April 2021.
Ms Annie Liu
Dr Heidi Grön
Ms Josephine Bush
Dr Günter Hilken
81,678
10,398
40,367
-
Total
25,502,504
235,703
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year were
57,614
-
125,724
25,234
4,298
4,298
4,298
14,237
• Dr Günter Hilken: appointed 23 March 2022.
geothermal energy and lithium development in Europe.
• Mr Mark Skelton: appointed 19 April 2022
(retired 1 February 2024).
54
VULCAN ENERGY ANNUAL REPORT | 2023 INFORMATION ON DIRECTORS
THE NAMES AND PARTICULARS OF THE COMPANY’S DIRECTORS IN OFFICE DURING THE
FINANCIAL YEAR AND AT THE DATE OF THIS REPORT ARE AS FOLLOWS. DIRECTORS HELD
OFFICE FOR THIS ENTIRE PERIOD UNLESS OTHERWISE STATED.
Dr Francis Wedin
Executive Chair
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.
Mr Cris Moreno (From 1 July 2023)
Managing Director and Chief Executive Officer
BASc (Hons) BChE (Hons)
Mr Moreno has over 20 years’ global experience in successfully delivering major, unique, and challenging
projects, including in the lithium chemicals, cathode, and LNG sectors. In the LNG sector, he held
leadership roles with Santos, Woodside, and Shell, including working on the Browse, Gorgon, and Prelude
LNG projects. Prior to joining Vulcan, Mr Moreno worked in the lithium chemicals and battery cathode
sector in Europe, as Senior Director Programs for Northvolt–Cathode Active Material (CAM) Business Unit,
and as Vice President – Engineering and Development for Aurora Lithium, Northvolt’s lithium hydroxide
refinery in Europe.
Mr Gavin Rezos
Non-Executive Deputy Chair
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.
55
VULCAN ENERGY ANNUAL REPORT | 2023 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. Ms Alkadamani 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
Tattarang, 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.
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, Ms Liu applied her
knowledge of global technology sourcing, especially tied to batteries and raw materials. Prior to her
role at Ford, Ms 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. Ms Liu is also currently a
Non-Executive Director of Alpha HP.
Dr Heidi Grön
Independent Non-Executive Director
PhD Chemical Process Engineering, Dip. Chemical Engineering
Dr Grön is a chemical engineer with almost 25 years’ experience in the chemicals industry. Since
2007, Dr Grön has been a senior executive with Evonik, a specialty chemicals company. Dr Grön’s key
achievements include successful implementation of large CAPEX projects, significant improvements
in OPEX, successful M&A and JV negotiations, and strategic re-positioning of a large global business.
At Evonik, Dr Grön is currently responsible for Production, Technology, Asset Digitalisation, and for Global
Product Stewardship.
56
VULCAN ENERGY ANNUAL REPORT | 2023 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 holidng 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 sustainable and renewable energy
sector. She was a member of the Ernst & Young Power and Utilities Board and UK&I Governance Board.
Josephine is also a NED on the Next Energy Solar Fund PLC and Foresight Sustainable Forestry Company
PLC, both listed on the London Stock Exchange. In addition, she is a strategic advisor to select businesses
on their sustainability strategy.
Dr Günter Hilken
Non-Executive Director
PhD in Organic Chemistry, master’s degree in chemistry
Dr Hilken has over 35 years’ experience 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 geothermal
energy become 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 and a member of the Board of the German Federation
of Industrial Energy Consumers (VIK). He was previously CEO of Currenta for nine years, a Member of the
Supervisory Board of Currenta, held senior executive roles with Bayer in Germany, the US, Canada, and
Asia and was a Director of RWE Power AG.
Mark Skelton (retired effective 1 February 2024)
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. As 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.
57
VULCAN ENERGY ANNUAL REPORT | 2023 BOARD SKILLS MATRIX
Vulcan’s management of risk begins with our Board who
appropriate mix of skills and expertise is present to facilitate
have been carefully selected to ensure relevant and diverse
successful strategic direction and to manage and leverage
expertise.
The composition of the Board is reviewed regularly against
the Company’s Board skills matrix, which is prepared and
maintained by the Nominations Committee, to ensure the
new and emerging business and governance issues. The
following table sets out the composition of skills and
experience of Vulcan’s Board of Directors.
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 in the last three 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.
58
ADDITIONAL EXPERTISE
Ms Julia Poliscanova
Board Adviser
MSc, Energy, BA Politics and French (Hons)
Ms Poliscanova is a senior director with the EU’s Transport and Environment. Ms Poliscanova is
instrumental in shaping policies around EU vehicle CO2 standards, sustainable batteries and responsibly
source critical minerals. She has previously worked for the Mayor of London as a senior EU policy officer.
Ms Poliscanova is also on the steering committee for the Battery CO2 Passport program of the Global
Battery Alliance.
Dr Horst Kreuter – Chief Representative Germany
Board Adviser
PhD in Geology
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. Dr Kreuter
is Co-Founder of the ZERO CARBON LITHIUM™ Project, alongside Dr Francis Wedin. Prior to Vulcan,
Dr Kreuter spent over 15 years as leader of GeoThermal Engineering GmbH, a consulting firm based in
Karlsruhe, with work extending both domestically and internationally. Notably, Dr Kreuter was actively
involved in countries such as Tanzania, Turkey, Italy, and Indonesia. In these regions, he initiated and
guided numerous geothermal projects, showcasing his expertise and dedication to advancing the field
of geothermal energy.
COMPANY SECRETARY
Mr Daniel Tydde (Appointed 14 June 2021)
Company Secretary & In-House Counsel
Bachelor of Laws, Bachelor of Commerce
Mr Tydde is an experienced corporate lawyer with approximately 20 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. Prior to joining Vulcan, he held
a senior position at Steinepreis Paganin and, prior to that, worked at Clayton Utz and Phillips Fox (now
DLA Piper). Mr Tydde holds a Bachelor of Laws and a Bachelor of Commerce from the University of Notre
Dame Australia.
59
VULCAN ENERGY ANNUAL REPORT | 2023 DIRECTORS’ MEETINGS
Full Board
Audit, Risk and ESG
Committee
People and
Performance
Committee
Project Oversight
Committee
Nomination
Committee
Attended Eligible
Held Attended Eligible
Held Attended Eligible
Held Attended Eligible
Held Attended Eligible
Held
to
attend
4
9
9
9
9
9
9
9
9
4
9
9
9
8
9
9
8
9
9
9
9
9
9
9
9
9
9
to
attend
0
0
7
0
0
7
7
0
0
4
7
7
0
0
7
7
1
1
7
7
7
7
7
7
7
7
7
to
attend
to
attend
to
attend
1
4
4
4
4
0
0
0
0
0
0
4
4
4
0
0
0
0
4
4
4
4
4
4
4
4
4
3
7
5
0
0
7
4
7
7
0
0
0
0
0
7
0
7
7
7
7
7
7
7
7
7
7
7
1
3
3
3
3
3
3
3
2
0
0
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
Cris Moreno24
Dr Francis Wedin
Gavin Rezos
Ranya Alkadamani
Annie Liu
Dr Heidi Grön
Josephine Bush
Dr Günter Hilken
Mark Skelton25
The number of meetings held during the year and the number of meetings attended by each
Director is contained in the table above.26
The committee members during the year were as follows:
•
•
•
•
Audit Risk and ESG Committee: Josephine Bush (Chair), Gavin Rezos and Dr Heidi Grön
People and Performance Committee: Ranya Alkadamani (Chair), Gavin Rezos, Annie Liu
Projects Oversight Committee: Mark Skelton (Chair), Dr Günter Hilken, Dr Heidi Grön
Nomination Committee: Ranya Alkadamani (Chair), Gavin Rezos, Josephine Bush
as well as one member from Project Oversight Commitee depending on availability.
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 further details of the function of the Board, refer to the
Corporate Governance Statement.
24 Appointed as CEO/Managing Director on 1 July 2023. The information for Mr Moreno in the above table only relates to the relevant
meetings whilst he was a director.
25 Retired effective 1 February 2024.
26 All directors are entitled to attend all committee meetings.
60
VULCAN ENERGY ANNUAL REPORT | 2023 OPERATING AND FINANCIAL REVIEW
The financial results of the Group for the financial year ended
31 December 2023 are as follows:
BALANCE SHEET
Vulcan’s financial position remains robust with a cash position
CASH OUTFLOWS
The cash outflows are consistent with Vulcan’s strategy to
advance the ZERO CARBON LITHIUM™ Project at pace and
scale. Notable cash outlays during the year related to:
of €78.7 million on hand as at 31 December 2023. During the
• Bridging Engineering Study.
year, the Company successfully raised capital through an
underwritten institutional placement of €67.3 million.
REVENUE
Revenue from continuing operations was €6.8 million (2022
€3.6 million) comprised of €4.0 million geothermal power
revenue from Natürlich Insheim as well as €2.6 million drilling
personnel outsourcing revenue from Comeback Personal-
dienstleistung GmbH, which Vulcan took control of effective
• Construction of the Lithium Extraction Optimisation Plant.
• Construction of
the Central Lithium Electrolysis
Optimisation Plant.
• Refurbishment of two electric drill rigs in preparation for
upcoming drilling.
• Engineering works for Phase One plants.
1 February 2023.
• Well site preparation costs for upcoming Schleidberg well.
31 December 2023
31 December 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)
78,728
268,281
6,783
26,963
(0.17)
134,107
233,161
3,622
13,450
(0.09)
DIVIDENDS
No dividend is recommended in respect of the current
financial year.
61
VULCAN ENERGY ANNUAL REPORT | 2023
MATERIAL BUSINESS RISKS
LITHIUM MARKET
INTERRUPTIONS TO ITS SUPPLY CHAIN OR LONG
DELIVERY TIMES
Technical and project execution-related supplies can
impact Vulcan's phase one project's timely completion and
operational start. The Company continues to analyse the
risks associated explicitly with delays with critical supplies
and any associated increased costs. This planning, led
by the VP of Supply Chain appointed during the reporting
period, includes regular budget, and forecast allocation
updates with the leadership team and the board. Assigning
specific enterprise risk management to team members
and extending the internal financial accounting capabilities
are also measures to mitigate risk occurrence. Vulcan has
implemented the recommendations alongside the Target
Operating Model 360.
CONSERVATIVE CREDIT MARKETS
A delay in finalising Vulcan’s debt financing program could
affect the start of Vulcan’s Phase One project. Over the
last year, Vulcan commenced its debt and project level
equity financing program. In November, Vulcan received an
Lithium prices are subject to unpredictable fluctuations,
driven partly by changes in the balance of global supply and
demand. Due to new market or technology developments
and other factors, fluctuations in market demand and
commodity prices for lithium may adversely impact Vulcan’s
financial results and futurecash flows. Vulcan has limited
its exposure to lithium price fluctuations by flooring the
lithium prices for parts of its future sales volume in the
offtake contracts with OEMs. The nature of our product
being carbon neutral lithium and differentiator in the market
remains attractive to OEM’s.
SOCIETAL ACCEPTANCE
There is a risk that mining, and resource projects are
considered ‘taboo’ in Europe and may not be permitted.
Vulcan’s Phase One project has received favourable support
across its Phase One region, as demonstrated in December
by the positive Landay City Council vote for its Phase One
G—LEP plant. Vulcan will continue to work closely with local
communities to provide updates and information to ensure
they understand the project's benefits within their region.
A$200 million (~€120 million) non-binding Letter of Support
LITHIUM RECLASSIFICATION
from Export Finance Australia (EFA) and an indication of
Although the reclassification movement has slowed, ongoing
strong ECA support from Canada, Italy, and France during
discussions continue by the European Chemicals Agency
2023. The integrated nature of the business model with
(ECHA) to re-classify lithium as a Category 1A chemical on
geothermal energy, as well as lithium production, coupled
a similar level as cobalt. The reclassification could increase
with the financial case finalised in November of 2023, has
regulatory requirements around controlling, processing,
defined Vulcan Energy’s ZERO CARBON LITHIUM™ Project
packaging, and storage of lithium. With European OEMs and
with robust financials and, therefore, less foreseeable risk
lithium battery supply chain companies and institutions,
for financiers.
RESOURCE AND RESERVE ESTIMATES
Lithium resources and reserves
indicated must be
considered as estimates only until such reserves are
extracted and processed. Vulcan’s resources are based on
strong temporal (many brine samples taken over time), but
limited spatial data points due to the deep nature of the
reservoir. Grades of lithium in brine produced may vary
negatively from the amount anticipated. At the end of 2023,
Vulcan announced an increase to Europe's largest lithium
Resource. Vulcan’s URVBF lithium Resource has increased
to 27.7 million tonnes of contained Lithium Carbonate
Equivalent (Mt LCE) @ 175 mg/L, from 26.6Mt LCE @ 174
mg/L, to reflect a larger resource in the Phase One area.
Although data can only indicate an estimate, indications are
for a large, long-term resource.
Vulcan has raised its concerns with the European Union
and member states. The Company believes that rejecting
the proposal is an opportunity for the EU to demonstrate
its commitment to building a local, European lithium supply
chain consistent withrecent targets and actions.
CLIMATE
Climate related risks continue to be considered as the
Company advances the ZERO CARBON LITHIUM™ Project.
These risks can take the form of physical impacts, such as
acute weather events (flooding, drought) and chronic weather
events (an increase in precipitation or mean temperature),
as well as transitional risks, as governments and countries
adapt to new conditions due to climate change. Further
information can be found in the website's TCFD and EU
Taxonomy Report, including the Company's climate scenario
modelling, considering two climate scenarios, Net Zero
Emissions (NZE) and Stated Policies Scenario (STEPS). The
low-risk exposure of Phase One of Vulcan's ZERO CARBON
LITHIUM™ Project to climate change was confirmed in the
ESIA report in November 2023.
62
VULCAN ENERGY ANNUAL REPORT | 2023 PERSONNEL
CYBER SECURITY
The ability to execute Vulcan’s ZERO CARBON LITHIUM™
Data integrity, availability and reliability within the Company’s
Phase One Project is in part dependent on its ability to
information technology systems may be subject to
retain and attract key personnel. During the reporting
intentional or unintentional disruption. Given the increasing
period, Vulcan appointed key executive positions from
level of sophistication and scope for potential cyberattacks,
related industries to further the organisation's knowledge
these attacks may lead to significant breaches of security
and credibility in delivering on its Phase One Zero Carbon
that could jeopardise Vulcan's sensitive information and
lithium project. Vulcan will make every reasonable effort to
financial transactions or shut down systems for some time.
retain key personnel, but there can be no guarantee that it
Vulcan’s information technology team have implemented
will be able to maintain its executive team. There is also a
several risk mitigation processes in an attempt to protect
risk that the Group may need to pay a higher-than-expected
the Company and its stakeholders from the possibility of a
cost to acquire or retain the necessary talent in the current
cyber security breach.
or future market conditions.
PERMITTING PROCESS
The ZERO CARBON LITHIUM™ Project may be affected
by delays in receiving the necessary approvals from all
relevant authorities and parties. Multiple permits will be
needed to enter commercial operations for geothermal
production on a larger scale and lithium production. A
significant cornerstone for Phase One of the project was
the approval of the City Council of Landau in December
2023 to enter contract negotiations with Vulcan for the sale
of the industrial land plot of D12, which will host Vulcan’s
commercial-scale geothermal and lithium extraction plant.
Furthermore, Vulcan has received approval from the mining
authority for the primary and special operating plans at
its first new well site in Schleidberg, where preparations
of the well site started in H2 2023. Vulcan has a team of
experts in geothermal development who have developed
numerous projects in the past and will continue to keep
stakeholders updated on the timetable. Vulcan has received
encouragement from state and federal governments that
renewable energy project permitting times will be reduced
as a priority. Furthermore, government policies are moving
to support the domestic production of strategic raw
materials, which is in Vulcan’s favour. So far, Vulcan has
received multiple preliminary EIA approvals in line with its
development plans.
63
VULCAN ENERGY ANNUAL REPORT | 2023 SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
PHASE ONE EXECUTION OF VULCAN’S
ZERO CARBON LITHIUM™ PROJECT
COMPLETION OF DFS AND BRIDGING ENGINEERING STUDY
FOR PHASE ONE
Vulcan published the results of its Definitive Feasibility
Study (DFS) for Phase One in February 2023, followed by the
positive results of the Bridging Engineering Study launched
by Vulcan together with Hatch. This includes significant
value improvements, including a reduction in CAPEX, and
MAIN OPERATING PLAN APPROVAL
The State Mining Directorate approved the first Main
Operating Plan for Vulcan’s newly planned wells in its Insheim
licence, where Vulcan is already operating commercial
geothermal wells and plant. Vulcan plans to increase brine
production by adding several production and injection wells.
Pipelines will flow the lithium-rich brine, as well as water
heated by the brine, to the planned facilities in the Landau
Industrial Park.
OPEX, while increasing and streamlining project definition.
BUILDING PERMIT RECEIVED FOR CLEOP
APPROVAL TO BEGIN CONSTRUCTION OF G-LEP
Vulcan announced the positive decision by the Landau City
Council to execute an agreement to allow the Company to
begin construction of its integrated Geothermal renewable
energy and Lithium Extraction Plant (G-LEP) on the intended
land located in the Landau region. Completion of acquisition
of this land is set to occur subsequently, following satisfaction
Building permit received for CLEOP at the Frankfurt Höchst
Industrial Park and Vulcan officially "broke the ground" on
site in October 2023.
FUTURE PHASES AND
PROJECT PIPELINE
of already agreed conditions and execution of the formal
NEW LICENCE GRANTED
purchase agreement. The prospective
land acquisition
During the Period, Vulcan was granted a new geothermal and
is a major step in completion of the Phase One plant land
lithium brine exploration licence, designated “Luftbrücke”,
packages and will add to the site already secured at Industrial
covering a region of Frankfurt am Main, an area with potential
industrial customers like the Höchst Industrial Park and
Frankfurt Airport, all heavy energy consumers requiring
large quantities of renewable energy and heating solutions.
Park Frankfurt Höchst for the Central Lithium Plant (CLP).
LEOP OPENING
During the Period, Vulcan officially opened its LEOP in
Landau, Germany. LEOP is Europe’s first plant for fully
domestic lithium chemicals production, to secure Europe’s
lithium supply chain for EV manufacturers. It is a €40m
investment by Vulcan and serves as an optimisation,
operational training, and product qualification facility,
enabling commercial operational readiness for 2026.
64
VULCAN ENERGY ANNUAL REPORT | 2023 DECARBONISATION OF STELLANTIS OPERATIONS
At the start of 2023, Vulcan signed a Binding Term Sheet with
Stellantis for the first phase of a multiphase project aimed at
decarbonising the energy mix of the Rüsselsheim am Main
manufacturing site in the URV, Germany, by developing new
OTHERS
SUCCESSFUL COMPLETION OF €67M (A$109M)
PLACEMENT
€67m
(A$109m)
institutional placement successfully
completed, supported by existing major shareholders.
geothermal projects. In addition, the companies signed
LEADERSHIP OF THE FUTURE
their fourth agreement later in 2023, with the aim to a joint
To ensure successful delivery of Vulcan’s ZERO CARBON
project to develop geothermal renewable energy to supply
LITHIUM™ Project, Cris Moreno has been appointed to
Stellantis’ Mulhouse Plant in France.
3D SEISMIC
In the Mannheim region, Vulcan completed a 3D Seismic
survey, with results expected in Q1, 2024. Vulcan signed a
renewable heat offtake agreement with MVV Energie AG, the
Managing Director and CEO, Dr Francis Wedin moved to
the role of Executive Chair and Gavin Rezos will continue to
serve on the Board as Non-Executive Deputy Chair.
utility for the city of Mannheim in April 2022.
DIVERSITY
Vulcan endeavours to continuously
improve diversity
statistics across the business and is proud to have surpassed
the gender diversity target of 40% female representation at
the Board level. At the time of writing, the Vulcan Board has
a female representation of 50%. Looking forward, Vulcan
has identified that the leadership team, with currently 21%
female, is a key target area for improvement in coming years.
LIKELY DEVELOPMENTS AND
EXPECTED RESULTS
Over the next 12 months, Vulcan targets production of
LiCl to specification in the first half of 2024. Construction
and commissioning will be completed at CLEOP, where
production will commence in the second half of the year.
Throughout the year, Vulcan also aims to complete its debt
and project level equity financing program. The close of its
financing will signal the trigger for awarding EPC and EPCM
contracts. Towards the end of the year, Vulcan aims to
commence construction of its G-LEP.
INCREASE IN RESOURCES
The Company released a Mineral Resources update, showing
that Vulcan’s URVBF lithium Resource has increased to 27.7
million tonnes of contained Lithium Carbonate Equivalent
(Mt LCE) @ 175 mg/L, from 26.6Mt LCE @ 174 mg/L, to reflect
a larger resource in the Phase One area. This signifies an
increase in confidence, reduction of risk in the upstream
of Phase One, and supports Vulcan’s Bridging Engineering
Study and financing.
ESG AND COMMUNITY STAKEHOLDER
ENGAGEMENT
ESIA COMPLETED
In December 2023, Vulcan together with ERM completed
its Environmental and Social Impact Assessment (ESIA)
for Phase One of its ZERO CARBON LITHIUM™ Project.
ESIA is in line with lenders’ requirements to ensure a level
of environmental performance prior to the furnishing of
debt finance and is, together with ESMP, integrated into
the project level debt and equity financing process. Within
ESIA it is noted that there are multiple positive impacts of
the Project, including renewable heating provision for local
communities, and carbon neutral lithium production to
decarbonise the lithium supply chain, in a world leading first
for the industry.
65
VULCAN ENERGY ANNUAL REPORT | 2023 MATTERS SUBSEQUENT TO THE REPORTING YEAR
FINANCING UPDATE
The Company continues its debt and project level equity
APPOINTMENT OF VULCAN GROUP
CHIEF FINANCIAL OFFICER
financing process, supported by BNP Paribas, following
Appointment of Ms Felicity Gooding to the role of Group
positive market sounding in 2023 from commercial banks,
Chief Financial Officer
(CFO) for the Vulcan Group.
development banks, and government-backed export credit
Ms Gooding is a Senior Finance executive and leader with
agencies. Vulcan aims to complete its finance program in
over 20 years’ experience in strategic and financial analysis,
the third quarter of 2024.
After preliminary due diligence, Vulcan’s Phase One ZERO
CARBON LITHIUM™ Project appears potentially suitable for
EIB financing and the Project has advanced to the “Under
Appraisal” stage. EIB’s proposed financing could amount
to up to €500m (~A$825m), pending completion of due
diligence, credit approval and legal agreement, and subject
to EIB’s governing bodies approval. This funding is expected
to serve as a cornerstone to complement ongoing debt
funding discussions with leading export credit agencies and
international banks.
In April 2023, Nobian and Vulcan signed a Term Sheet to
review potential areas of cooperation. The agreement
followed a longer cooperation to assess the feasibility
of producing lithium hydroxide from lithium chloride in
Germany. The initial finance structure saw the financing of
its upstream and downstream lithium projects separately,
and the Term Sheet contemplated Nobian participating
at
the downstream
lithium hydroxide project
level
only. Following feedback from its financiers and other
stakeholders, Vulcan has decided to fund its upstream and
debt funding (including acting as joint project leader in
obtaining expansion finance for Fortescue Limited totalling
US$3.5b), corporate finance, mergers and acquisitions,
management and financial accounting and governance
within Australia, Singapore, London and Washington
DC. Ms Gooding’s extensive experience with large-scale
financing will assist the Company during the financing of
the multiple phases of Vulcan’s ZERO CARBON LITHIUM™
Project, of which Phase One financing is already under way,
and is an opportune appointment at the current stage of the
Company’s development.
RETIREMENT OF MR MARK SKELTON
Mr Mark Skelton retired from the Board as non-executive
director of the Company effective 1 February 2024. Mr
Skelton joined the Board of Vulcan in April 2022 whilst the
Company was evolving from a development company into a
project execution company. During his time on the Board,
Mr Skelton contributed to building a strong executive
leadership team across Vulcan, and specifically, the build-
out of the project execution team, which has already made
significant strides with completion of the construction of
downstream developments in an integrated lithium and
the LEOP.
renewable energy project (integrated project) in order to
gain more operational synergies. Due to the changed project
structure by Vulcan, Nobian has decided not to participate
further in the equity financing process for the Integrated
Project. Whilst Nobian recognises Vulcan’s decision to raise
equity at the Integrated Project level; at the same time,
it also impacts Nobian’s potential role in the project as a
strategic partner. Nobian and Vulcan will continue to explore
other forms of commercial collaboration.
66
VULCAN ENERGY ANNUAL REPORT | 2023 ENVIRONMENTAL REGULATIONS
The Directors have considered compliance with the
under Climate Impact Partners for 2022. During the Period,
National Greenhouse and Energy Reporting Act 2007
Vulcan together with ERM completed its Environmental and
which requires entities to report annual greenhouse gas
Social Impact Assessment (ESIA) for Phase One of its ZERO
emissions and energy use if over certain facility or corporate
CARBON LITHIUM™ Project, noting multiple positive impacts
group thresholds. The Vulcan Group does not meet these
of the Project, including renewable heating provision for
thresholds for 2023 but does voluntarily report annual
local communities, and carbon neutral lithium production to
greenhouse gas emissions. The Australian operations of
decarbonise the lithium supply chain, in a world leading first
the Company have been certified as carbon neutral under
for the industry. ESIA is in line with lenders’ requirements
the Australian Climate Active initiative since 2020, the
to ensure a level of environmental performance prior to
German operations, including VEE and VES have been
the furnishing of debt finance and is, together with ESMP,
certified carbon neutral since 2021. The German operations
integrated into the project level debt and equity financing
were certified under South Pole for 2021 and certified
process.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of
to which the Company is a party, for the purposes of taking
the Corporations Act 2001 for leave to bring proceedings on
responsibility on behalf of the Company for all or part of
behalf of the Company, or to intervene in any proceedings
these proceedings.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
The Company has indemnified the Directors and Executives
prohibits disclosure of the nature of the liability and the
of the Company for costs incurred, in their capacity as a
amount of the premium. The Company has not, during or
director or Executive, for which they may be held personally
since the end of the financial year, indemnified or agreed to
liable, except where there is a lack of good faith.
indemnify the auditor of the Company or any related entity
During the financial year, the Company paid a premium in
against a liability incurred by the auditor.
respect of a contract to insure the Directors and Executives
During the financial year, the Company has not paid a
of the Company against a liability to the extent permitted
premium in respect of a contract to insure the auditor of the
by the Corporations Act 2001. The contract of insurance
Company or any related entity.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM
There are no officers of the Company who are former
partners of RSM Australia Partners.
67
VULCAN ENERGY ANNUAL REPORT | 2023 REMUNERATION
REPORT
The Remuneration Report (Report) outlines the remuneration arrangements for the Vulcan Energy Resources
Limited (Vulcan, or the Company) Key Management Personnel (KMP) for the year ended 31 December 2023 (FY23) 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.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
3
2
0
2
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T
R
O
P
E
R
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A
U
N
N
A
Y
G
R
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N
E
N
A
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U
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68
Introduction
Remuneration Summary
Remuneration governance
Executive KMP remuneration arrangements
Executive KMP remuneration outcomes
Looking forward to FY24
Executive KMP Contracts
Non-Executive Director remuneration arrangements
Additional disclosures relating to rights and shares
Loans to key management personnel and their related parties
Other transactions and balances with key management personnel and their related parties
VULCAN ENERGY ANNUAL REPORT | 2023
1. INTRODUCTION
This Remuneration Report details the remuneration
Each KMP was appointed for the entire year 1 January to 31
arrangements for KMP who are defined as those persons
December 2023, unless otherwise stated. For the purposes
having authority and responsibility for planning, directing
of this Report, the term “Executive” includes the Managing
and controlling the major activities of the Company, directly
Director and other Executive KMP of the Group.
or indirectly, including any director (whether executive or
otherwise) of the Company.
(i) NON-EXECUTIVE DIRECTORS (NEDs)
Mr Gavin Rezos27
Non-Executive Deputy Chair
Ms Ranya Alkadamani
Non-Executive Director
Dr Heidi Grön
Non-Executive Director
Ms Annie Liu
Non-Executive Director
Ms Josephine Bush
Non-Executive Director
Dr Günter Hilken
Non-Executive Director
Mr Mark Skelton28
Non-Executive Director
(ii) EXECUTIVE (EXECUTIVE KMP)
Dr Francis Wedin 29
Executive Chair
Mr Robert Ierace 30
Chief Financial Officer
Mr Vincent Ledoux Pedailles 31 Chief Commercial Officer
Mr Cris Moreno 32
Managing Director & Chief Executive Officer
27 Mr Rezos moved from Non-Executive Chair to Non-Executive Deputy Chair on 1 July 2023.
28 Mr Mark Skelton retired from the position of NED on 1 February 2024.
29 Dr Francis Wedin transitioned from Managing Director (MD) to Executive Chair following the
appointment of the Deputy Chief Executive Officer (Deputy CEO) to CEO and MD on 1 July 2023.
30 Mr Robert Ierace will step down from the role of Chief Financial Officer (CFO) on 31 March 2024. Ms
Felicity Gooding was appointed as Group CFO on 15 January 2024 and her remuneration details will be
disclosed in the FY24 annual report.
31 Based on an internal restructure of executive roles, Mr Ledoux-Pedailles ceased to be a KMP from 1
July 2023
32 Mr Cris Moreno transitioned from Deputy CEO to MD and CEO on 1 July 2023.
There were no other changes to the KMP after the reporting date and before the date the
financial report was authorised for issue.
69
VULCAN ENERGY ANNUAL REPORT | 2023 2. REMUNERATION SUMMARY
Executive KMP are rewarded through fixed remuneration, an Annual Deferred Incentive (ADI) and a Long-Term Incentive
(LTI). NEDs receive a fixed fee for their service over the year. The following table provides the key remuneration highlights
for FY23.
Fixed
Remuneration (FR)
The following increases to executive KMP remuneration were adopted
by the Board considering growing role responsibilities and complexity,
performance, internal parity and external market conditions. The
increases were effective from 1 July 2023:
• Dr Francis Wedin’s FR was adjusted from $638,000 (€422,067) to
$666,000 (€409,121), a 4.4% increase.
• Mr Cris Moreno’s FR was adjusted from $442,000 (€292,404) per
annum to $666,000 (€409,121), a 50.7% increase. The increase
reflects the transition from Deputy CEO to MD- CEO.
• Mr Robert Ierace’s FR increased from $294,000 (€194,496) to $304,140
(€186,864), a 3.4% increase.
Annual Deferred
41% ADI award
Based on the assessed outcomes for the period 1 July 2022 to 30
Incentive (ADI)
delivered for the
June 2023 the Board awarded 41% of ADI payments in the form of
period to 30 June
performance rights, which will vest subject to continued employment
2023
to 30 June 2024.
Please refer to sections 4 and 5 for further detail.
Long Term
Incentive (LTI)
No LTI rights vested
No LTI vesting occurred between 1 January 2023 and 31 December
2023.
Please refer to sections 4 and 5 for further detail.
NED remuneration
NED and committee
Following an independent review by BDO Remuneration and Reward
fees increased to
Pty Ltd (BDO), the NED and committee fees were adjusted to align with
market and business
external market conditions and the size of the Company’s operations
appropriate levels
and business complexity under current growth plans. The NED fee pool
remains unchanged. The increases were effective 1 April 2023:
• Chair fee was adjusted from $162,000
(€107,171) to $204,000
(€125,338), representing a 25.9% increase.
• Deputy Chair fee was the same as the Chair fee from 1 July 2023 to 31
December 2023, to reflect a period of transition. The Deputy Chair fee
is $152,000 (€93,389) from 1 January 2024.
• NED fees were adjusted from $60,000 (€39,693) to $81,000 (€49,766),
representing a 35.0% increase.
• Committee chair fees were adjusted from $10,000 (€6,615) to $15,000
(€9,216), representing a 50.0% increase.
• Committee member fees were adjusted from $5,000 (€3,308) to
$10,000 (€6,144), representing a 100% increase.
70
VULCAN ENERGY ANNUAL REPORT | 2023 3. REMUNERATION GOVERNANCE
REMUNERATION DECISION MAKING
The following diagram represents the Company’s remuneration decision making framework:
Reviews and approves Executive remuneration and incentives. Sets aggregate NED fees,
subject to shareholder approval.
BOARD
PEOPLE AND PERFORMANCE COMMITTEE (PPC, THE COMMITTEE)
Develops remuneration strategy, framework and policy and provides Executive &
NED remuneration recommendations to the Board.
MANAGING DIRECTOR
REMUNERATION CONSULTANTS
AUDIT, RISK AND ESG COMMITTEE
Executive remuneration input
and implementation.
External, independent
remuneration advice and
information as required.
Input to financial, risk and ESG
measures and outcomes as
required.
The People and Performance Committee (PPC) comprises three NEDs, of which two are independent, and meets regularly
throughout the year. The Executive Chair and MD - CEO attend certain PPC meetings by invitation, where management
input is required. The Executive Chair and MD - CEO is not involved in the final decision related to their own remuneration
arrangements. Further information on the PPC’s role, responsibilities and membership can be found on the Company’s
website at www.v-er.eu.
USE OF INDEPENDENT REMUNERATION
CONSULTANTS
REMUNERATION REPORT APPROVAL AT
2022 AGM
To ensure the PPC
is fully
informed when making
The Remuneration Report for the period ended 31 December
remuneration decisions, it seeks external remuneration
2022 received positive shareholder support at the 2022 AGM
advice where
required.
Independent
remuneration
with a vote of 98.92% in favour.
consultants are engaged by, and report directly to, the PPC.
In selecting remuneration consultants, the PPC 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 financial year ended 30 June 2021, the PPC
commissioned BDO for an independent review of NED
Remuneration.
71
VULCAN ENERGY ANNUAL REPORT | 2023 4. EXECUTIVE KMP REMUNERATION ARRANGEMENTS
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.
VULCAN MISSION
To become Europe’s leading ZERO CARBON LITHIUMTM business and
enable energy security through geothermal energy.
REMUNERATION STRATEGY LINKED TO BUSINESS OBJECTIVES
MARKET COMPETITIVE
Competitive
remuneration compared
to companies of a similar
size and complexity.
ALIGNMENT TO
PERFORMANCE
At-risk remuneration
including both short and
longer term elements,
subject to performance
in alignment with
business objectives.
SUSTAINABILITY
CULTURE
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
CLIMATE CHAMPION
DETERMINED
INSPIRING
72
VULCAN ENERGY ANNUAL REPORT | 2023 APPROACH TO SETTING REMUNERATION AND DETAILS OF INCENTIVE PLANS
The executive remuneration framework consists of fixed remuneration, short and long- term incentives with different
reward focus.
Remuneration
Vehicle
Purpose
Link to performance
Component
Fixed
Base salary
Attract and retain executives with
Regularly reviewed to ensure the
Remuneration
plus statutory
the capability and experience to
remuneration
levels appropriately
(FR)
superannuation or
deliver Vulcan’s strategy, based
compensate Executives for their
equivalent
upon the competitive landscape
capability
in driving a positive
among relevant peers.
culture and delivering on
the
business strategy.
Annual Deferred
Performance
Reward for performance against
Strategic annual objectives are
Incentive (ADI)
Rights (Rights)
KPIs aligned to annual business
embedded in each executive’s
objectives, including Environmental
personal scorecard of performance
Social Governance (ESG) -linked
measures.
objectives.
Long Term
Performance
Align long-term performance
Vesting is subject to the
Incentive (LTI)
Rights (Rights)
focus to drive shareholder returns.
achievement of defined business
Encourage sustainable, long- term
and sustainability milestones and
value creation through equity
Total Shareholder Return (TSR) over
ownership.
a four-year period.
The following diagrams set out the executive remuneration structure.
Fixed Remuneration
ADI
LTI
Unvested Rights subjects to forfeitures
Base Salary, Superannuation
Annual award of Performance
and Other benefits.
Rights under the ADI plan
which vest subject to
achievement of annual
objectives plus an additional
year of service.
Performance Rights which
vest after four years subject
to the achievement of
performance hurdles.
Year 1
Year 2
Year 4
Each component of the remuneration structure is further outlined on the following pages.
73
VULCAN ENERGY ANNUAL REPORT | 2023
Remuneration mix
How is overall
The overall remuneration mix reflects an appropriate balance of fixed and variable remuneration
remuneration and mix
considering the Company’s size and business operations.
determined?
The chart below summarises the Managing Director’s and other Executive KMP’s remuneration
mix based on maximum ADI and LTI award opportunity.
ADI and LTI opportunity, for MD-CEO, for the 2024 Financial year will be based on 25% and 110%
of Fixed Remuneration respectively.
MD-CEO
Other
Executive
KMP
57%
8%
35%
50%
11%
39%
FR
ADI
LTI
Fixed remuneration (FR)
How is fixed
Fixed remuneration is reviewed annually from benchmarked remuneration data. Fixed
remuneration reviewed
remuneration changes for Executives are subject to approval from the Board after considering
and approved?
recommendations from the Committee.
Annual Deferred Incentive (ADI)
What is the ADI plan?
The Company operates an Annual Deferred Incentive (ADI) program which is an award of Rights
which vest annually on achievement of defined performance measures, plus an additional year
of service to enhance executive retention.
What is the
opportunity?
MD-CEO: 13%of fixed remuneration
Other Executive KMP: 16-28%of fixed remuneration
What are the
Executive KMP are measured against the following performance criteria:
performance criteria
and how do they
align with business
performance?
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, carbon
neutral certification and a top tier ESG rating from a third-party provider.
How is vesting
determined?
On an annual basis, after consideration of actual performance against KPIs, the Board, in line
with their responsibilities, determines 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.
What happens if an
Where a participant ceases employment prior to their award vesting due to resignation or
Executive leaves?
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?
Long Term Incentive (LTI)
What is the LTI plan?
Under the LTI plan, an annual grant of Rights is made to Executives to align remuneration with
creation of shareholder value over the long-term.
74
VULCAN ENERGY ANNUAL REPORT | 2023 What is the
opportunity?
MD-CEO: 60% of fixed remuneration
Other Executive KMP: 54-117% of fixed remuneration
How is performance
LTI vesting is subject to the following performance criteria measured over a four-year
measured?
performance period:
1) Business returns (55%) based on the satisfaction of the following strategic milestones:
• Successful ramp up to nameplate capacity for Phase One energy and lithium chemicals
production, and achievement of corresponding revenue.
• Achievement of a positive definitive feasibility study for Phase Two energy and lithium
chemicals production, and achievement of corresponding revenue.
• Achievement of project financing for completion of Phase Two capital expenditure.
2) Sustainability returns (15%): based on the Company achieving carbon neutral certification
across all operations 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 (aTSR) (10%):
aTSR CAGR
Less than 7.5%
Between 7.5% and 10%
Between 10% and 12.5%
Greater than 12.5%
b. Relative TSR (rTSR) (20%):
rTSR Performance
Less than 50th percentile
Between 50th percentile and 75th percentile
Greater than75th percentile
% to Vest
0%
50%
75%
100%
% to Vest
0%
50%
100%
For rTSR, which
companies do
The Company assesses TSR against a custom peer group with constituents being determined
by the Board and reviewed on a regular basis to ensure appropriateness for the purpose of
Vulcan measure their
assessment.
performance against?
For LTI grants made for the period commencing 1 July 2022 the customised peer group
comprises the following companies:
Syrah Resources Limited, Chalice Mining Limited, Lynas Rare Earth Limited, 29 Metals Limited,
Novonix Limited, AVZ Minerals Limited, Liontown Resources Limited, Sayona Mining Limited,
Lake Resources Limited, Core Lithium Limited, Plibara Minerals Limited, Ioneer Limited,
Piedmont Lithium Limited, Galan Lithium Limited, Leo Lithium Limited.
When is performance
The performance measures are tested at the end of the four-year performance period to
measured?
determine the number of Rights that vest. There is no opportunity for re-testing. 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 or
Executive leaves?
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?
75
VULCAN ENERGY ANNUAL REPORT | 2023
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 to 31
December 2023, including disclosure required by the Corporations Act 2001, is outlined in the table below.
Measure
31 Dec 2023
6 months ended
31 Dec 2022
30 June 2022
30 June 2021
30 June 2020
Revenue (€’000)
6,783
3,622
3,799
-
-
26,963
13,450
18,851
6,726
2,156
16.92
2.85
9.52
6.33
15.12
5.42
7.71
7.70
4.47
0.57
Net Loss After Tax
(NPAT) (€’000)
Loss per share
(Euro cents)
Closing Vulcan
security price ($)
ADI OUTCOMES
Based on the assessed outcomes for the period 1 July 2022 to 30 June 2023, the Board awarded 41% of ADI payments in
the form of performance rights which will vest subject to continued employment to 30 June 2024. The following provides a
summary of ADI performance.
VULCAN ENERGY FY23 SCORECARD
Companywide project and people, environment, and social measures
The table overleaf illustrates the project and people, environment and social measures which apply
consistently to the Executive Chair, MD-CEO, CFO and Chief Commercial Officer during FY23. The outcome
was 28.4% out of a maximum 70% with the remaining 30% allocated to individual KPI’s.
76
VULCAN ENERGY ANNUAL REPORT | 2023 Measure
Weighting Assessed
Outcome Summary
Operations - 30%
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.
People, environment, and social areas – 40%
People
80% retention rate for agreed critical roles
at all levels of the organisation for FY 23
onwards.
Outcome
30%
0%
During FY23 the group raised €67,350k
through a capital raise. However, debt
finance for the project has not been achieved
resulting in 0% achievement.
6%
90%
A pro rata vesting determination of 90% was
awarded.
Increased employee satisfaction rate based
on previous annual internal employee
satisfaction survey.
6%
50%
Satisfaction survey was performed in FY23.
The results of the survey were not available
until the post assessment date. A pro rata
vesting determination of 50% was awarded.
Environment
Obtain an ESG rating from a recognised
third party ESG provider that is above 50%;
6%
100%
6%
50%
6%
100%
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.
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
During FY23 Vulcan Energy was assessed by
Sustainalytics as being very low risk, and in
the top 2% of ESG performers in a peer group,
resulting in 100% achievement.
Vulcan complied with the requirements of
the Climate Active Carbon Neutral Standard
for FY22. Climate Active did not release their
certification until September 2023. A pro rata
vesting determination of 50% was awarded,
as the certification was awarded after the
assessment date.
TCFD report released in March 2023. TNFD
guidelines were not released and therefore
TNFD could not be prepared, resulting in
100% award granted
All exploration/production licenses to be in
good standing as at 30 June 2023;
Release an announcement on the ASX that it
has commenced drilling in the Upper Rhine
Valley.
5%
5%
100%
0%
All licences in good standing as at 30 June
2023.
Drilling not commenced during the
performance period as this will take place after
project financing for Phase One is completed.
77
VULCAN ENERGY ANNUAL REPORT | 2023 Individual KPIs
The table below illustrates the individual KPIs for the Executive Chair, MD-CEO, CFO and CCO. The individual KPIs make up
30% weighting of each KMP’s total ADI.
KPI
Executive Chair, MD-CEO
Weighting
Assessed
Outcome
Commentary
Secure Funding for completion of First Plant
6%
0% During FY23 the group raised €67m through a capital
which is at least 30% from ESG investor or
green debt funding.
raise. However, debt finance for the project has not
been achieved resulting in 0% achievement.
Vulcan commenced debt and project level equity
financing for Phase One production at the end of 2023
and aims to complete the process in the second half
of 2024.
Obtain Financial grants to the value of €50
6%
0% Not achieved. Vulcan is actively applying for financial
million.
Completion of a positive DFS by 30 June 2023
confirming the project is commercially viable,
to include net export of renewable energy,
lowest quartile operating cost, and net zero
carbon footprint, with zero fossil fuel usage.
grants and is expecting to receive feedback during
FY24.
6%
100% Commercially viable DFS released February 2023,
including net export renewable energy, lowest quartile
operating costs and net zero carbon footprint third
party from Life Cycle Assessment.
Complete construction, commissioning and
6%
0% Construction not completed in line with forecasts.
successful operation of Demonstration Plant
in line with forecasts provided to the CEO at
the beginning of the review period.
Vulcan officially opened its Lithium Extraction and
Optimisation Plant (LEOP) in November 2023 and
its Central Lithium Electrolysis Plant (CLEOP) is
approaching completion.
Increase the number of institutional
6%
50% Additional institutional shareholders from May 2023
shareholders who utilise a screening process
that considers Environmental, Social and
Governance performance alongside traditional
financial performance (ESG Investor) by 50%
from those on the shareholder register as at
30 June 2022.
Total for Executive Chair, MD-CEO
30%
9%
capital raising utilising ESG and financial performance.
Partial recognition as less than 50% increase.
78
VULCAN ENERGY ANNUAL REPORT | 2023 KPI
CFO
Weighting
Assessed
Outcome
Commentary
Secure Funding for completion of First Plant
6%
0% During FY23 the group raised €67m through a capital
which is at least 30% from ESG investor or
green debt funding.
raise. However, debt finance for the project has not
been achieved resulting in 0% achievement.
Vulcan commenced debt and project level equity
financing for Phase One production at the end of 2023
and aims to complete the process in the second half
of 2024.
Corporate costs targets achieved without
6%
100% Corporate costs in line with targets without affecting
affecting necessary support to operations.
operations.
Implement Target Operating Model in
6%
100% Integration of support functions into Vulcan Energie
accordance with timetable.
Ressourcen GmbH.
Maintain minimum 6 months group cash
6%
100% Six-month group cash position maintained due to May
position while ensuring funds available to
support project development.
2023 capital raise.
Report to Task Force on Climate Related
6%
100% TCFD report released in March 2023. TNFD guidelines
Financial Disclosures (TCFD) and, when
guidelines are published, Task Force on
Nature Related Financial Disclosures
(including financial data and modelling for
climate and ESG risks and mitigation);
Total for CFO
CCO
30%
24%
were not released and therefore TNFD could not be
prepared, resulting in 100% award granted.
Secure Funding for completion of First Plant
7.50%
0% During FY23 the group raised €67m through a capital
which is at least 30% from ESG investor or
green debt funding.
raise. However, debt finance for the project has not
been achieved resulting in 0% achievement.
Vulcan commenced debt and project level equity
financing for Phase One production at the end of 2023
and aims to complete the process in the second half
of 2024.
Obtain at least one new licence in France
7.50%
50% French licence applications were lodged during the
which allow geothermal-lithium exploration
and development.
period but not granted by the end of the performance
period. A partial award of 50% has been applied.
Obtain supply of 5m3 of sorbent sufficient for
7.50%
100% Supply sourced for Demonstration Plant (now defined
the Demonstration Plant operation well in time
as Lithium Extraction and Optimisation Plant – LEOP).
for Demo Plant start-up.
Completion of a positive DFS by 30 June 2023
7.50%
100% Commercially viable DFS released February 2023,
confirming the project is commercially viable,
to include net export of renewable energy,
lowest quartile operating cost, and net zero
carbon footprint, with zero fossil fuel usage.
Total for CCO
30%
18.75%
including net export renewable energy.
79
VULCAN ENERGY ANNUAL REPORT | 2023 FY23 ADI SHARE OUTCOMES
The following table outlines the proportion of maximum ADI that was earned and forfeited in relation to the 2023 financial
year. The maximum bonus values are established at the start of the financial year and amounts payable are determined
by the People and Performance Committee at the end of the financial year. Achieved ADI’s will vest subject to continued
employment to 30 June 2024.
Executive
Dr Francis Wedin
Mr Cris Moreno
Mr Robert Ierace
Mr Vincent Ledoux Pedailles
LTI VESTING
Achieved ADI (%)
Forfeited ADI (%)
37.4%
37.4%
52.4%
47.2%
62.6%
62.6%
47.6%
52.8%
During FY23, Class J performance rights vested following the release of a positive Definitive Feasibility Study in relation to
its Zero Carbon Lithium Project confirming it is commercially viable. 1,000,000 of these rights were held by Deputy Chair
Gavin Rezos.
LTI’s that were granted in FY22 to Executive KMP’s will be tested at the end of the performance period which is 30 June 2026.
At present the non-market based vesting conditions relating to Business Returns, (nameplate production and revenue for
Phase One, Definitive Feasibility Study for Phase Two, Project financing for Phase Two) and sustainability returns (relating
to emissions) all appear probable to vest during the performance period. Market based conditions relating to Shareholder
returns will only be assessed at end of the performance period.
80
VULCAN ENERGY ANNUAL REPORT | 2023 STATUTORY EXECUTIVE KMP REMUNERATION
The following table sets out total remuneration for Executive KMP for the year ending 31 December 2023 (Dec23) and for
the 6-month period from 1 July 2022 to 31 December 2022 (Dec22), calculated in accordance with statutory accounting
requirements and presented in Euro (€).
Short-term
benefits (€)
Post-
employment
benefits (€)
Year/Period
Cash Salary
Non-
monetary
Superannuation
Share-
based
payments
(€)
Total (€)
Performance
related %
Executive KMP
Dr Francis
Wedin
Dec-23
361,690
Dec-22
190,980
Mr Cristobal
Moreno
Dec-23
307,200
Dec-22
44,103
Mr Robert
Ierace
Dec-23
165,908
Dec-22
88,007
Mr Vincent Ledoux
Pedailles33
Dec-23
135,000
Dec-22
135,000
Dec-23
-
Dec-22
121,000
2,832
Dr Horst
Kreuter34
Totals
-
-
-
-
-
-
-
-
-
38,899
88,710
489,299
20,053
57,224
268,257
33,178
43,980
384,358
4,631
8,942
57,676
17,841
(186)
183,563
9,241
18,515
115,763
18%
21%
11%
16%
0%
16%
-
-
-
-
(17,923)
117,077
(15%)
(74,386)
60,614
(123%)
-
-
-
125,276
249,108
50%
Dec-23
969,798
-
89,918
114,581
1,174,298
Dec-22
579,090
2,832
33,925
135,571
751,418
10%
18%
33 Mr Vincent Ledoux Pedailles ceased to be an Executive KMP on 30 June 2023.
34 Dr Horst Kreuter ceased to be an Executive KMP on 31 October 2022.
81
VULCAN ENERGY ANNUAL REPORT | 2023
6. LOOKING FORWARD TO FY24
To align performance measures with the business objectives
If SOP occurs more than 6 months after the Controlled
the Board approved 1,570,750 performance rights to Vulcan
Schedule P50, whilst no multiplier will be applied, Mr Moreno
executives including 96,750 ADI and 282,000 LTI to the
will still be eligible for vesting of his performance rights,
MD - CEO. The performance period relating to these rights
subject to the satisfaction of the relevant milestones. The
commenced on 1 July 2023.
To further incentivise the MD-CEO, to provide value to
shareholders, Mr Moreno has the following multipliers on
Controlled Schedule P50 will be determined at Financial
Investment Decision of the Phase One Vulcan ZERO CARBON
LITHIUMTM Project.
his ADI and LTI performance securities in relation to the
The PPC in conjunction with the Board is confident that the
start date for successful commercial lithium hydroxide
changes made to the executive remuneration framework
production (SOP):
•
1.5 x should SOP occur according to the Controlled
Schedule P50; and
which have been detailed in this report and effected from 1
July 2023 are aligned to Vulcan’s remuneration philosophy
and strategy and continue to seek a balance between
rewarding and retaining our Executives and recognising the
•
1.25 x should SOP occur within six months of the
interests of shareholders.
Controlled Schedule P50.
These rights are subject to shareholders’ approval at the AGM.
7. EXECUTIVE KMP CONTRACTS
Remuneration arrangements for Executive KMP are formalised in employment agreements. All Executive KMP are employed
under an ongoing contract. Key terms of the agreements are as follows:
Executive KMP
Position
Fixed
Termination
Termination
Termination
remuneration
notice
notice
benefits (in
(inclusive of
period by the
period by the
lieu of notice)
superannuation)
Company
Executive
Dr Francis Wedin 35
Executive Chair
$666,000 (€409,121)
1 or 6 months
6 months
1 or 6 months
Mr Cris Moreno 36
Chief Executive
Officer and Managing
Director
$666,000 (€409,121)
1 or 6 months
6 months
1 or 6 months
Mr Robert Ierace 37
Chief Financial Officer
$304,140 (€186,864)
1 month
1 month
1 month
Mr Vincent Ledoux-
Pedailles38
Chief Commercial
€270,000
3 months
3 months
3 months
Officer
35 Dr Francis Wedin’s fixed remuneration (for both Executive and Chair duties) increased from $638,000 (€422,067) to $666,000 (€409,121)
per annum inclusive of superannuation effective from 1 July 2023.
36 Mr Cris Moreno’s fixed remuneration was adjusted from $442,000 (€292,404) per annum to $666,000 (€409,121) to reflect his new role,
effective from 1 July 2023.
37 Mr Robert Ierace’s fixed remuneration increased from $294,000 (€194,496) to $304,140 (€186,864) effect from 1 July 2023.
38 Mr Vincent Ledoux-Pedailles ceased to be a KMP on 30 June 2023.
All Executive KMP are eligible to participate in Vulcan’s ADI and LTI structure on terms as determined by the Board, subject
to receiving any required or appropriate shareholder approval.
82
VULCAN ENERGY ANNUAL REPORT | 2023 8. NON-EXECUTIVE DIRECTOR REMUNERATION ARRANGEMENTS
POLICY
STRUCTURE
The Board seeks to set aggregate remuneration at a level that
The fee for NEDs consists of directors’ fees and committee
provides the Company with the ability to attract and retain
fees. The payment of additional fees for serving on a
directors of the highest calibre, at an acceptable cost to
committee recognises the additional time commitment
shareholders.
required by NEDs to fulfil this role.
The fee structure is reviewed annually against fees paid
The Board fees paid to Chair/Deputy Chair Gavin Rezos
to NEDs of comparable ASX
listed companies with a
included a consulting fee.
similar market capitalisation to Vulcan, as well as similar
sized industry comparators. The Board commissioned an
independent review by BDO in FY21 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.
During the year to 31 December 2023, the NED and committee
fees were increased to align with the size of operations and
business complexity of the Company under current growth
plans. The increases were effective 1 April 2023. The table
below summarises the current NED fee policy.
Board fees
Chair/Deputy Chair
Directors
Committee fees
Committee Chair
Committee Members
From 1 January 2023 to 31 March 2023 the fees were as follows:
Board fees
Chair
Directors
Committee fees
Committee Chair
Committee Members
Australian based NEDs can elect to have superannuation included as part of their fees.
For FY23, no NED has been granted equity awards linked to company performance.
$204,000 (€125,338)
$81,000 (€49,766)
$15,000 (€9,216)
$10,000 (€6,144)
$162,000 (€99,533)
$60,000 (€36,864)
$10,000 (€6,144)
$5,000 (€3,072)
83
VULCAN ENERGY ANNUAL REPORT | 2023 NED STATUTORY REMUNERATION DISCLOSURES
The remuneration of NEDs for the year from 1 January 2023 up to 31 December 2023 (Dec23) and for the six-month period
from 1 July 2022 up to 31 December 2022 is detailed below in Euro (€).
Short-term
benefits (€)
Post-
employment
benefits (€)
Year/Period
Fees Superannuation
Share based
payments (€)
Total (€)
Share based
payment %
Non - Executive Directors
Mr Gavin
Rezos
Ms Ranya
Alkadamani
Dr Heidi
Grön
Ms Annie
Liu
Ms Josephine
Bush
Dr Günter
Hilken
Mr Mark
Skelton
Totals
Dec-23
Dec-22
Dec-23
Dec-22
Dec-23
Dec-22
Dec-23
Dec-22
Dec-23
Dec-22
Dec-23
Dec-22
Dec-23
Dec-22
Dec-23
Dec-22
129,639
56,894
-
-
82,239
211,878
96,651
153,545
49,643
5,345
21,867
76,855
20,954
2,200
32,264
55,418
62,82339
23,154
51,917
21,500
54,989
23,154
57,44739
21,500
-
-
-
-
-
-
-
-
11,799
74,622
9,315
32,469
11,799
63,716
9,315
30,815
11,799
66,788
9,315
32,469
37,518
94,965
3,720
25,220
58,24540
5,345
18,050
81,640
20,954
2,200
3,720
26,874
464,703
10,690
195,071
670,464
188,110
4,400
164,300
356,810
39%
63%
28%
58%
16%
29%
19%
30%
18%
29%
40%
15%
22%
14%
29%
46%
39 Fee included reimbursement of an additional $9,000 for participating in an additional three meetings for their roles as members of
Projects Oversight Committee.
40 Fee included reimbursement of an additional $14,000 for participating in an additional three meetings for his roles as Chair of Projects
Oversight Committee.
84
VULCAN ENERGY ANNUAL REPORT | 2023
9. ADDITIONAL DISCLOSURES RELATING TO RIGHTS AND SHARES
RIGHTS AWARDED, VESTED AND CANCELLED/LAPSED DURING THE YEAR
The table below discloses the number of Rights that vested, were exercised or cancelled during the year. There are no Rights
granted to Executive KMP as remuneration for the year ended 31 December 2023.
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
Performance
rights
exercised
during
the year
Balance at
start of year
1-Jan-23
Performance
rights
cancelled
Other
movement41
Balance at
end of year
31-Dec-23
Performance
rights vested
during the
year
Numbers of
performance
rights
vested and
exercisable at
31-Dec-23
Dr Francis Wedin
142,000
Mr Cristobal Moreno
64,500
-
-
(16,276)
(6,886)
Mr Robert Ierace
349,909
(310,909)
(4,284)
-
-
-
125,724
57,614
34,716
Mr Vincent Ledoux
Pedailles
201,909
(160,909)
(4,757)
(36,243)
-
758,318
(471,818)
(32,203)
(36,243)
218,054
-
-
-
-
-
-
-
-
-
-
41 Mr Vincent Ledoux Pedailles ceased to be a KMP on 30 June 2023. Other movement represent his holding at the date he ceased to be a KMP.
There are no expired performance rights.
The table below discloses the number of Rights granted to Non-Executive Directors as remuneration during the year ended
31 December 2023 as well as the number of Rights that vested or were exercised during the year.
Rights do not carry any voting or dividend rights and can be exercised once the vesting conditions have been met until their
expiry date.
NED
Balance at start
of year
1-Jan-23
Granted as
remuneration
Performance
rights exercised
Balance at end
of year42
31-Dec-23
Performance
rights vested
during the year
Mr Gavin Rezos 43
1,000,000
-
(1,000,000)
-
1,000,000
Ms Ranya Alkadamani
-
25,234
-
25,234
Dr Heidi Grön
Ms Annie Liu
Ms Josephine Bush
Dr Günter Hilken
Mr Mark Skelton
8,597
8,597
8,597
14,237
14,237
-
-
-
-
-
(4,299)
(4,299)
(4,299)
-
-
4,298
4,298
4,298
14,237
14,237
-
4,299
4,299
4,299
4,746
4,746
1,054,265
25,234
(1,012,897)
66,602
1,022,387
Numbers of
performance
rights vested
and exercisable
at 31-Dec-23
-
-
-
-
-
4,746
4,746
9,492
42 Includes Performance Rights held directly, indirectly and beneficially by NED.
43 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. These rights vested and were exercised during the year.
There are no expired performance rights.
85
VULCAN ENERGY ANNUAL REPORT | 2023 The terms of and conditions of each grant of performance rights affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Number of
performance
rights granted
Grant date
Vesting date
Fair value per
performance
right at grant
date (€)
Total value of
performance
rights at grant
date (€)
Value of
performance
rights
exercised
during the year
(€)
NED
Mr Gavin Rezos
Class J
1,000,000
10/09/2020
08/02/2023
Ms Ranya
Alkadamani 44
Class AD
8,411
28/05/2023
28/05/2024
Class AD
8,411
28/05/2023
28/05/2025
Class AD
8,412
28/05/2023
28/05/2026
Dr Heidi Grön
Class S
4,298
24/06/2021
24/06/2024
Class S
4,299
24/06/2021
24/06/2023
Ms Annie Liu
Class S
4,298
24/06/2021
24/06/2024
Class S
Class S
Class S
4,299
24/06/2021
24/06/2023
4,298
24/06/2021
24/06/2024
4,299
24/06/2021
24/06/2023
Class AC
4,746
29/11/2022
29/11/2023
Ms Josephine
Bush
Dr Günter
Hilken
Class AC
4,746
29/11/2022
29/11/2024
Class AC
4,746
29/11/2022
29/11/2025
Mr Mark Skelton Class AC
4,746
29/11/2022
29/11/2023
Class AC
4,746
29/11/2022
29/11/2024
Class AC
4,746
29/11/2022
29/11/2025
0.55
2.60
2.60
2.60
4.95
4.95
4.95
4.95
4.95
4.95
4.76
4.76
4.76
4.76
4.76
4.76
547,439
(547,439)
21,906
21,906
21,908
21,280
-
-
-
-
21,280
(21,280)
21,280
-
21,280
(21,280)
21,280
-
21,280
(21,280)
22,591
22,591
22,591
22,591
22,591
22,591
-
-
-
-
-
-
44 Refer to Note 36 to the financial statements for further details of performance rights granted during the current year.
86
VULCAN ENERGY ANNUAL REPORT | 2023 Number of
performance
rights granted
Grant date
Vesting date
Fair value per
performance
right at grant
date (€)
Total value of
performance
rights at grant
date (€)
Value of
performance
rights
exercised
during the year
(€)
Executive KMP
Dr Francis
Wedin
Class AA
26,000
29/11/2022
30/06/2024
Class AB
81,200
29/11/2022
30/06/2027
Class AB
11,600
29/11/2022
30/06/2027
Class AB
23,200
29/11/2022
30/06/2027
Mr Cristobal
Moreno
Class AA
11,000
13/12/2022
30/06/2024
Class AB
37,450
13/12/2022
30/06/2027
Class AB
5,350
13/12/2022
30/06/2027
Class AB
10,700
13/12/2022
30/06/2027
Mr Robert
Ierace
Class I
250,000
14/05/2020
17/12/2021
Class H
250,000
14/05/2020
15/01/2021
Class AA
9,000
19/09/2022
30/06/2024
Class AB
21,000
19/09/2022
30/06/2027
Class AB
3,000
19/09/2022
30/06/2027
Class AB
6,000
19/09/2022
30/06/2027
4.52
4.52
3.46
3.69
4.30
4.30
3.24
3.50
0.13
0.13
5.24
5.24
4.18
4.57
117,427
367,024
40,136
85,608
47,300
161,035
17,334
37,450
-
-
-
-
-
-
-
-
32,500
(32,500)
32,500
(7,918)
47,160
110,040
12,540
27,420
-
-
-
-
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
section 5. 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 as part of compensation and value of performance right exercised
during the year for Directors and other KMP are set out above.
87
VULCAN ENERGY ANNUAL REPORT | 2023 SHAREHOLDINGS
The table below details the number of shares held in Vulcan and the movement during the year ended 31 December 2023.
Class of shares
Balance at start
of year
1-Jan-23
Exercise of
Performance
Rights
On market
purchase/
(sale)
Other
movement45
Balance at end
of year
31-Dec-23
Non-Executive Directors
Mr Gavin Rezos46
Ordinary
7,598,727
1,000,000
36,773
Ms Ranya Alkadamani46
Ordinary
276,000
Dr Heidi Grön
Ordinary
Ms Annie Liu46
Ordinary
Ms Josephine Bush
Ordinary
Dr Günter Hilken
Ordinary
Mr Mark Skelton46
Ordinary
Executive KMP
6,099
77,379
13,698
-
900
Dr Francis Wedin46
Ordinary
16,458,561
Mr Cristobal Moreno Ordinary
Mr Robert Ierace
Ordinary
Mr Vincent Ledoux
Pedailles45
Ordinary
-
-
-
-
4,299
4,299
4,299
-
-
-
-
-
-
-
8,170
-
1,100
-
-
310,909
(185,455)
-
-
-
-
-
-
-
-
-
-
8,635,500
276,000
10,398
81,678
26,167
-
2,000
16,458,561
-
125,454
160,909
(80,000)
(80,909)
-
Totals
24,431,364
1,484,715
(219,412)
(80,909)
25,615,758
45 Mr Vincent Ledoux Pedailles ceased to be a KMP on 30 June 2023. Other movement represent his holding at the date he ceased to be a KMP.
46 Includes shares held directly, indirectly and beneficially by KMP.
88
VULCAN ENERGY ANNUAL REPORT | 2023
10. LOANS TO KEY MANAGEMENT PERSONNEL AND THEIR
RELATED PARTIES
There were no loans to KMP and their related parties during the financial year.
11. OTHER TRANSACTIONS AND BALANCES WITH KEY
MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
During the year ending 31 December 2023 payments for consultancy fees of €12,056 (31 December 2022: €28,089) 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 2023 to JRB Consulting Ltd (31 December 2022: €8,709), however there was a
prepayment for Ms Bush’s director fee to the value of €3,605.
During the previous year Vulcan entered into a contract with Dr Horst Kreuter to rent a flat for company personnel at the
rate of €1,810 per month and €418 operating costs monthly. The contract was a short term lease. No amount was paid from
inception of the contract and until 31 December 2022. The amount of €2,715 was outstanding as at 31 October 2022 and nil
was outstanding as at 31 December 2022. Dr. Horst Kreuter ceased to be a key management personnel on 31 October 2022.
There was an outstanding balance payable to Gavin Rezos of €11,666 as at 31 December 2023 (31 December 2022: nil) in
relation to his directors’ fees.
Other than the above, there were no other transactions with related parties during the year ended 31 December 2023.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
END OF REMUNERATION REPORT
This concludes the Renumeration Report, which has been audited.
89
VULCAN ENERGY ANNUAL REPORT | 2023 PERFORMANCE RIGHTS
At the date of this Report there were the following performance rights on issue:
Performance rights
Class AA
Class AB
Class AC
Class AD
Class AE
Class AE
Class S
Class T
Class U
Class V
Class Y
Class Z
Class IP
Number
37,232
274,200
18,982
25,234
41,357
41,357
12,894
260,000
250,000
110,000
60,000
50,000
248,953
Expiry Date
Exercise Price
30/06/2026
30/06/2027
15/12/2024
28/05/2027
31/12/2024
31/12/2025
30/06/2025
1/12/2024
1/12/2024
1/12/2024
1/12/2024
1/12/2024
1/07/2025
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Performance rights and performance shares holders do not have any right 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 year ended 31 December 2023 and up to the date of
this report on the exercise of 7,146,533 performance rights and 91,174 performance shares.
3
2
0
2
|
T
R
O
P
E
R
L
A
U
N
N
A
Y
G
R
E
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E
N
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V
90
VULCAN ENERGY ANNUAL REPORT | 2023
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 31 December 2023 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 40 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:
•
•
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
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 the Board of Directors, pursuant to section 298(2) (a) of the
Corporations Act 2001.
Dr Francis Wedin
Executive Chair
27 March 2024
91
VULCAN ENERGY ANNUAL REPORT | 2023 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 year ended 31
December 2023, 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 2024
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
FINANCIAL
STATEMENTS
93
VULCAN ENERGY ANNUAL REPORT | 2023 Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 31 December 2023
Revenue from continuing operations
Other income
Gain on discontinuation of use of the equity method of
accounting for investments
Loss from equity accounted investments
Other own work capitalised
Raw materials and purchased services
Employee benefit expenses
Depreciation and amortisation expenses
Impairment expenses
Share-based payments expense
Other expenses
Net foreign exchange gain/(loss)
Finance income
Interest expense
Loss before income tax expense
Income tax benefit
Loss after income tax for the year/period
Note
12-months
31 Dec 2023
€'000
6-months
31 Dec 2022
€'000
4
5
29
29
5
6
18
36
33
7
7
8
6,783
1,191
3,874
(456)
18,877
(2,593)
(30,170)
(5,869)
(1,144)
(1,688)
(21,294)
299
3,558
(172)
(28,804)
1,841
(26,963)
3,622
213
-
(249)
3,489
(3,119)
(8,097)
(2,299)
-
(711)
(6,735)
(105)
615
(177)
(13,553)
103
(13,450)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
(2,444)
(1,648)
Items that will not be reclassified subsequently to profit or loss
Revaluation of investments at fair value through other
comprehensive income
(1,870)
-
Total comprehensive loss for the year/period (net of tax)
(31,277)
(15,098)
Total comprehensive loss for the period attributable to the
owners of Vulcan Energy Resources Limited
(31,277)
(15,098)
Loss per share for the year attributable to the members Vulcan
Energy Resources Limited:
Basic loss per share (Euro)
Diluted loss per share (Euro)
€
€
9
9
(0.17)
(0.17)
(0.09)
(0.09)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be
read in conjunction with the notes to the financial statements.
94
VULCAN ENERGY ANNUAL REPORT | 2023
Consolidated Statement of Financial Position
Vulcan Energy Resources Limited – Annual Report 1 January 2023 - 31 December 2023
As at 31 December 2023
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
Financial assets at fair value through other comprehensive
income
Exploration and evaluation expenditure
Other assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Total non-current assets
Note
31 Dec 2023
€'000
31 Dec 2022
€'000
10
11
12
13
29
30
15
14
16
17
18
19
78,728
6,899
117
327
86,071
124
2,550
48,475
11,775
138,605
4,416
1,655
3,212
210,812
134,107
5,546
42
155
139,850
974
-
30,135
770
70,280
3,377
3,068
1,681
110,285
Total Assets
296,883
250,135
Liabilities
Current liabilities
Trade and other payables
Derivative financial instrument
Employee benefits
Lease liabilities
Provisions
Income tax liabilities
Deferred income
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
20
21
22
17
24
8(d)
23
17
24
23
25
27
28
41
17,194
133
1,509
1,086
750
113
-
20,785
3,325
264
2,818
1,410
7,817
9,418
-
752
646
-
91
132
11,039
2,670
110
1,453
1,702
5,935
28,602
16,974
268,281
233,161
323,739
13,377
(68,835)
268,281
259,158
15,875
(41,872)
233,161
The Consolidated Statement of Financial Position should be
read in conjunction with the notes to the financial statements.
95
VULCAN ENERGY ANNUAL REPORT | 2023
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l
VULCAN ENERGY ANNUAL REPORT | 2023
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2023
Vulcan Energy Resources Limited – Annual Report 1 January 2023 – 31 December 2023
12-months
31 Dec 2023
€'000
6-months
31 Dec 2022
€'000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other income
Interest paid
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Payments for Property, plant and equipment
Payment to acquire subsidiary
Cash acquired upon acquisition of subsidiary
Receipts from sale/(Payments to acquire) financial assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Repayment of loan acquired in business combinations
Lease repayments
Net cash from/(used in) financing activities
10
32
32
8,315
(37,711)
3,359
2,424
(172)
(546)
(24,331)
(19,003)
(73,629)
(150)
35
287
(92,460)
67,350
(2,770)
(81)
(1,744)
62,755
3,496
(12,941)
468
1,798
(239)
-
(7,418)
(10,429)
(20,094)
-
-
(1,245)
(31,768)
-
-
-
(462)
(462)
Net decrease in cash and cash equivalents
(54,036)
(39,648)
Cash and cash equivalents at beginning of the year/period
Effect of exchange rate fluctuations
Cash and cash equivalents at end of the year/period
134,107
(1,343)
78,728
175,416
(1,661)
134,107
The Consolidated Statement of Cash Flows should be
read in conjunction with the notes to the financial statements.
97
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 1 SUMMARY OF MATERIAL ACCOUNTING POLICIES
Vulcan Energy Resources Limited – Annual Report 1 January 2023 – 31 December 2023
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 2, 267 St Georges Terrace,
Perth WA 6000. The consolidated financial statements of the Company as at and for the year ended 31 December
2023 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 2024.
Comparatives
The consolidated entity’s current accounting period is the 12-months ended 31 December 2023, and the
comparative is 6-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.
Historical cost convention
The consolidated financial statements have been prepared under historical cost convention, except for, where
applicable, the revaluation of financial assets at fair value through other comprehensive income, certain classes
of property, plant and equipment and derivative financial instruments.
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 42.
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.
98
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 1 SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Going concern
The consolidated financial statements have been prepared on the going concern basis, which contemplates
continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal
course of business.
As disclosed in the consolidated financial statements, the Group incurred a loss after tax of €26.963m and had
net cash outflows from operating and investing activities of €24.331m and €92.460m respectively for the year
ended 31 December 2023. As at that date, the Group had a net current assets surplus of €65.286m and cash and
cash equivalents of €78.728m.
The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a going
concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report after
consideration of the following factors:
• The Group’s ability to issue additional shares under the Corporations Act 2001 to raise further working
capital. The Group has demonstrated its ability to raise capital from strategic and institutional investors,
including over €320m raised through equity raisings in the past.
• Subsequent to the end of the year, the Group was advised by the European Investment Bank (EIB) that its
Phase One Zero Carbon Lithium™ Project appears potentially suitable for EIB financing and the Project
has advanced to the "Under Appraisal" stage.
• EIB's proposed financing could amount up to €500m (~A$825m), pending completion of due diligence,
credit approval and legal agreement, and subject to EIB's governing bodies approval.
• The group has already started its debt and project level equity financing process, supported by BNP
Paribas, following positive market sounding in 2023 from commercial banks, development banks, and
government-backed export credit agencies. This included a A$200 million (~€120 million) non-binding
Letter of Support from Export Finance Australia (EFA), and indication of strong ECA support from
Canada, Italy, and France during 2023.
99
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 1 SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONT.)
Current and non-current classification
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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 year ended 31
December 2023. 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 2023 and the results of all subsidiaries for the
year 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.
100
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 1 SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONT.)
Subsidiaries (cont.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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.
101
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 2 CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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.
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.
102
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 2 CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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 and Italy) and Australia. These operating segments are based on the
internal reports that are reviewed and used by the Executive Key Management Personnels (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 and development related to the Zero Carbon Lithium™
Project and engineering services.
Other European (France and Italy) – exploration and development relating to battery materials and geothermal
lithium.
Australia – administration and Definitive Feasibility Study (“DFS”) cost.
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 financial year ended 31 December 2023, approximately €4m (six months ended 31 Dec 2022: €3.2m) of
the consolidated entity’s external revenue was derived from sales to Pfalzwerke.
103
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 3 SEGMENT INFORMATION (CONT.)
For the year ended 31 December 2023
Vulcan Energy Resources Limited – Annual Report 1 January 2023 – 31 December 2023
Segment performance
Germany
Other European
Australia
Total
1 Jan 2023 to 31 Dec 2023
€'000
€'000
€'000
€'000
Revenue
Sales to external customers
Intersegment sales - Other own
work capitalised
Total sales revenue
Other income
Total segment revenue
EBITDA
Depreciation and amortisation
Finance expense
Interest income
Loss before income tax expense
Income tax benefit
Loss after income tax expense
Material items include:
Employee benefit expense
Impairment
Loss from equity accounted
investments
Gain on discontinuing of use of
equity method for accounting for
investments
6,783
18,486
25,269
1,191
26,460
(20,377)
(5,814)
(164)
1,181
(25,174)
1,841
(23,333)
(28,069)
(1,144)
-
-
-
-
-
-
-
(130)
(2)
-
-
(132)
-
(132)
-
391
391
-
391
(5,814)
(53)
(8)
2,377
(3,498)
-
(3,498)
6,783
18,877
25,660
1,191
26,851
(26,321)
(5,869)
(172)
3,558
(28,804)
1,841
(26,963)
(95)
(2,006)
(30,170)
-
-
-
-
(456)
(1,144)
(456)
3,874
3,874
104
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 3 SEGMENT INFORMATION (CONT.)
As at 31 December 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Germany
Other
European
Australia
Total
€'000
€'000
€'000
€'000
Assets
Segment assets
Intersegment eliminations
Total assets
Total assets include:
223,333
433
305,364
Investments accounted for using equity method
Exploration and evaluation expenditure
additions
Additions to property, plant and equipment
-
16,591
71,657
-
98
-
124
2,087
-
Liabilities
Segment liabilities
Intersegment eliminations
Total Liabilities
33,776
466
1,183
529,130
(232,247)
296,883
124
18,776
71,657
35,425
(6,823)
28,602
105
VULCAN ENERGY ANNUAL REPORT | 2023
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 January 2023 – 31 December 2023
Segment performance
Germany
Other European
Australia
Total
31/12/2022
Revenue
Sales to external customers
Intersegment sales – Other own work
capitalised
Total sales revenue
Other income
Total segment revenue
EBITDA
Depreciation and amortisation
Finance expense
Finance income
Loss before income tax expense
Income tax benefit
Loss after income tax expense
Material items include:
Employee benefit expense
Share based payments expense
Loss from equity accounted investment
€'000
€'000
€'000
€'000
3,622
3,489
7,111
213
7,324
(6,941)
(2,285)
(62)
155
(9,133)
103
(9,030)
(7,334)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,751)
(14)
(115)
460
3,622
3,489
7,111
213
7,324
(11,692)
(2,299)
(177)
615
(4,420)
(13,553)
-
103
(4,420)
(13,450)
(763)
(711)
(249)
(8,097)
(711)
(249)
106
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 3 SEGMENT INFORMATION (CONT.)
As at 31 December 2022
Germany
Other
European
Australia
Total
€'000
€'000
€'000
€'000
164,779
195
425,784
590,758
Assets
Segment assets
Intersegment eliminations
Total assets
Total assets include:
Investments accounted for using equity method
Exploration and evaluation expenditure additions
Additions to property, plant and equipment
-
4,463
20,304
-
32
-
974
5,675
-
Liabilities
Segment liabilities
Intersegment eliminations
Total Liabilities
21,881
103
176,578
(340,623)
250,135
974
10,170
20,304
198,562
(181,588)
16,974
107
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 4 REVENUE
Revenue from contract with customers
Sale of goods
Rendering of services
Drilling Personnel outsourcing
Revenue from continuing operations
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
12-months
31-Dec-23
€'000
6-months
31-Dec-22
€'000
4,036
134
2,613
6,783
6,783
3,128
494
-
3,622
3,622
Electricity sales
Engineering Services
Drilling Services
Total
12-mths
6-mths
12-mths
6-mths
12-mths
6-mths
12-mths
6-mths
31-Dec-23 31-Dec-22
31-Dec-23 31-Dec-22
31-Dec-23 31-Dec-22
31-Dec-23
31-Dec-22
€'000
€'000
€'000
€'000
€'000
€'000
€'000
€'000
Timing of revenue recognition
Goods
transferred
at a point in
time
Services
transferred
over time
4,036
3,128
-
-
-
-
4,036
3,128
-
-
134
494
2,613
4,036
3,128
134
494
2,613
-
-
2,747
494
6,783
3,622
All revenues are derived in Germany.
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.
108
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 4 REVENUE (CONT.)
Accounting Policy(cont)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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
Accounting Policy
12-months
31-Dec-23
€'000
532
659
-
1,191
12-months
31-Dec-23
€'000
18,877
18,877
6-months
31-Dec-22
€'000
151
37
25
213
6-months
31-Dec-22
€'000
3,489
3,489
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, Vulcan Energie Ressourcen GmbH staff costs capitalised to various
projects and partial capitalisation of Managing Director employed by Vulcan Energy Resources Limited.
Other own work capitalised does not relate to any external revenue or any profit margin charge to intercompany
transactions.
109
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 6 DEPRECIATION AND AMORTISATION EXPENSE
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Depreciation of Right-of-use assets
Depreciation of Property, Plant and Equipment
Amortisation of intangible assets
NOTE 7 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
12-months
31-Dec-23
€'000
6-months
31-Dec-22
€'000
1,826
3,387
656
5,869
385
1,349
565
2,299
12-months
31 Dec 2023
€'000
3,558
3,558
6-months
31 Dec 2022
€'000
615
615
12-months
31 Dec 2023
€'000
-
(172)
(172)
6-months
31 Dec 2022
€'000
(115)
(62)
(177)
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.
110
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 8 INCOME TAX
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
12-months
31-Dec-23
€'000
6-months
31-Dec-22
€'000
(a) The components of tax benefit comprise:
Current tax
Deferred tax
Income tax benefit 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
effect
amounts
Prima facie tax benefit on loss before income tax
at 30% (31 December 2022: 30%)
Tax
of
deductible/taxable in calculating taxable income
Non-deductible expense
Tax losses and temporary differences not
brought to account
Foreign corporate rate differential
that
are
not
Income tax benefit
(c) Deferred tax assets/(liabilities) not brought to
accounts are:
Accruals
Prepayments
Other
Tax losses
Total deferred tax balances not brought to
account
106
(1,947)
(1,841)
(28,804)
(8,641)
615
3,468
2,717
(1,841)
173
86
1,010
4,838
6,107
(369)
266
(103)
(13,553)
(4,066)
323
2,394
1,246
(103)
104
74
1,837
5,122
7,137
(d) As at 31 December 2023, the consolidated entity has income tax payable of €113,000 (31 Dec 2022: €91,000).
Except for the deferred tax assets (note 19) and deferred tax liabilities (note 25) 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 2023 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.
111
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 8 INCOME TAX (CONT.)
Accounting Policy
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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.
112
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 9 LOSS PER SHARE
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Net loss for the year/period in €'000
Weighted average number of ordinary shares for basic
and diluted loss per share.
12-months
31 Dec 2023
(26,963)
6-months
31 Dec 2022
(13,450)
159,325,357
143,332,764
Basic and diluted loss per share €
(0.17)
(0.09)
Accounting Policy
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
31-Dec-23
€'000
23,915
54,813
78,728
31-Dec-22
€'000
12,515
121,592
134,107
113
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 10 CASH AND CASH EQUIVALENTS (CONT.)
Reconciliation of net loss after tax to net cash flows from operations
12-months
31 Dec 2023
€'000
6-months
31 Dec 2022
€'000
Loss for the financial year/period
Share based payment expense
Impairment expenses
Depreciation and amortisation expense
Shares issued in exchange for services
Gain on discontinuation of use of the equity method of
accounting for investments
Loss from equity accounted investments
Foreign exchange differences
Changes in assets/liabilities
Increase in trade and other receivables
(Decrease)/Increase in trade and other payables
Increase/(Decrease) in provisions
Increase in deferred tax assets
Decrease in deferred tax liabilities
Net cash used in operating activities
Accounting Policy
(26,963)
1,688
1,144
5,869
-
(3,874)
456
-
(787)
(1,702)
1,661
(1,531)
(292)
(24,331)
(13,450)
711
-
2,299
225
-
249
394
(1,041)
3,339
(144)
-
-
(7,418)
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
31-Dec-23
€'000
31-Dec-22
€'000
608
-
712
2,061
958
2,560
6,899
1,296
(34)
273
2,766
1,245
-
5,546
Trade receivables
Allowance for expected credit losses
Prepayments
Other receivables
Other - bank guarantees
VAT receivable
114
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 11 TRADE AND OTHER RECEIVABLES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Expected credit loss rate
Carrying amount
31 Dec 2023
31 Dec 2022
31 Dec 2023
31 Dec 2022
Allowance for ECL
31 Dec 2023 31 Dec 2022
Consolidated
%
%
€’000
€’000
€’000
€’000
not overdue
overdue
0%
50%
0%
50%
608
-
608
1,228
68
1,296
-
-
-
-
34
34
Allowance for expected credit loss
Trade receivables are non-interest bearing and are generally on terms of 30 days. No provision has been recognised
for the year (31 Dec 2022: €34,000) to cover expected credit loss .
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.
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.
115
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 11 TRADE AND OTHER RECEIVABLES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Impairment of financial assets (cont.)
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
31 Dec 2023
€'000
31 Dec 2022
€'000
117
117
42
42
Reconciliation of the written down values at the beginning and end of the current and previous financial
year/period are set out below:
Opening balance
transfer from/(to) inventory
Closing balance
Accounting policy
31 Dec 2023
€'000
31 Dec 2022
€'000
42
75
117
79
(37)
42
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.
NOTE 13 INVENTORIES
Spare parts
Accounting policy
31 Dec 2023
€'000
327
327
31 Dec 2022
€'000
155
155
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 and fixed overhead expenditure based on normal operating capacity,
and, where applicable transfers from cash flow hedging reserves in equity. Costs of purchased inventory is
determined after deducting rebates and discounts received or receivable.
116
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 14 OTHER ASSETS
The group has recognised the following other assets relating to prepayments on capital items.
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Prepayments relating to capital items
NOTE 15 EXPLORATION AND EVALUATION EXPENDITURE
Carrying amount of exploration and evaluation
expenditure
At the beginning of the year/period
Exploration expenditure incurred
Foreign exchange Loss
At the end of the year/period
Accounting Policy
31 Dec 2023
€'000
11,775
11,775
31 Dec 2022
€'000
770
770
31-Dec-23
€'000
31-Dec-22
€'000
48,475
30,135
18,776
(436)
48,475
30,135
20,440
10,400
(705)
30,135
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.
NOTE 16 PROPERTY, PLANT AND EQUIPMENT
Software
Plant & Equipment
Land & Buildings
Assets under Construction
31-Dec-23
€'000
31-Dec-22
€'000
655
26,188
4,659
107,103
138,605
383
27,411
1,536
40,950
70,280
117
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 16 PROPERTY, PLANT AND EQUIPMENT(CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Movement in carrying amounts of property, plant and equipment for the financial year ended 31 December 2023
Software
€'000
Plant and
equipment
€'000
Asset under
construction
€'000
Land and Building
Total
€'000
€'000
Cost
At 1 January 2023
Additions
Disposals
Acquired in Business
Combinations
At 31 December 2023
Accumulated Depreciation
At 1 January 2023
Depreciation for the year
Depreciation eliminated
on disposal
Acquired in Business
Combinations
At 31 December 2023
Carrying amount
At 1 January 2023
At 31 December 2023
417
328
-
36
781
(34)
(56)
-
(36)
(126)
383
655
30,623
1,955
(10)
39
40,950
66,163
(10)
-
1,623
3,211
-
-
73,613
71,657
(20)
75
32,607
107,103
4,834
145,325
(3,212)
(3,201)
10
(16)
(6,419)
27,411
26,188
-
-
-
-
-
(87)
(88)
-
-
(3,333)
(3,345)
10
(52)
(175)
(6,720)
40,950
107,103
1,536
4,659
70,280
138,605
118
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 16 PROPERTY, PLANT AND EQUIPMENT (CONT.)
Movement in carrying amounts of property, plant and equipment for period ended 31 December 2022
Software
Plant and
equipment
Asset under
construction
€'000
€'000
€'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
At 31 December
2022
Carrying amount
At 1 July 2022
At 31 December
2022
Accounting Policy
280
137
-
417
(13)
(21)
-
(34)
267
383
28,817
2,001
(195)
22,784
18,166
-
30,623
40,950
(1,958)
(1,284)
30
(3,212)
-
-
-
-
1,623
-
-
1,623
(43)
(44)
53,504
20,304
(195)
73,613
(2,014)
(1,349)
-
30
(87)
(3,333)
26,859
22,784
27,411
40,950
1,580
1,536
51,490
70,280
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.
119
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 17 LEASE LIABILITIES & RIGHT-OF-USE ASSETS
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Right-of-use asset Buildings
Vehicles
Hardware and
Software
Technical
Equipment
Land
Total
€'000
€'000
€'000
€'000
€'000
€'000
Cost
At 1 January 2023
Additions
3,400
2,210
Acquired in Business
Combinations
Disposals
-
(71)
At 31 December 2023
5,539
512
498
33
(89)
954
Accumulated
Depreciation
At 1 January 2023
(422)
(148)
Depreciation for the
period
(1,444)
(442)
Eliminated on
cancellation
FX loss
Carrying amount
42
(20)
89
-
(1,844)
(501)
At 1 January 2023
2,978
At 31 December 2023
3,695
364
453
21
24
-
(30)
15
(15)
(30)
30
-
(15)
6
-
14
27
-
-
41
(3)
(36)
-
-
(39)
11
2
23
283
-
-
3,970
3,042
33
(190)
306
6,855
(5)
(593)
(35)
(1,987)
-
-
161
(20)
(40)
(2,439)
18
3,377
266
4,416
120
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 17 LEASE LIABILITIES & RIGHT-OF-USE ASSETS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Right-of-use asset Buildings
Vehicles
Hardware and
Software
Technical
Equipment
€'000
€'000
€'000
€'000
Land
€'000
Total
€'000
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)
(422)
Carrying amount
At 1 July 2022
2,801
At 31 December
2022
2,978
261
251
512
(83)
(65)
-
(148)
178
364
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
121
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 17 LEASE LIABILITIES & RIGHT-OF-USE ASSETS (CONT.)
Lease Liabilities
Buildings
Vehicles
At 1 January 2023
3,020
263
€'000
€'000
New lease liabilities
entered during the
period
Acquired in business
combinations
Add: Interest
Less: Payment
Foreign exchange
loss
At 31 December 2023
Represented by:
Current lease
liabilities
Non-current lease
liabilities
2,156
376
-
147
(1,480)
(29)
3,814
792
3,022
3,814
33
19
(363)
-
328
236
92
328
Hardware
and
Software
€'000
6
(6)
-
-
-
-
-
-
-
-
Technical
Equipment
Land
Total
€'000
€'000
€'000
9
18
3,316
27
283
2,836
-
-
-
5
33
171
(35)
(38)
(1,916)
-
1
1
-
1
-
268
(29)
4,411
57
1,086
211
268
3,325
4,411
122
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 17 LEASE LIABILITIES & RIGHT-OF-USE ASSETS (CONT.)
Lease Liabilities
Buildings
Vehicles
Hardware and
Software
Technical
Equipment
€'000
€'000
€'000
€'000
At 1 July 2022
2,804
New lease liabilities
entered during the
period
Add: Interest
Less: Payment
Foreign Exchange
Gain/(Loss)
At 31 December
2022
Represented by:
Current lease
liabilities
Non-current lease
liabilities
Accounting Policy
492
56
(329)
(3)
3,020
506
2,512
3,018
190
248
6
(181)
-
263
115
150
265
11
-
-
(5)
-
6
6
-
6
-
13
-
(4)
-
9
8
1
9
Land
€'000
Total
€'000
-
3,005
23
-
(5)
-
18
11
7
18
776
62
(524)
(3)
3,316
646
2,670
3,316
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.
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.
123
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 17 LEASE LIABILITIES & RIGHT-OF-USE ASSETS (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Lease liabilities (cont.)
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 18 INTANGIBLE ASSETS
Goodwill
Less: Impairment
Customer contracts – at cost
Acquired in Business Combinations
Less: Impairment
Less: Accumulated amortisation
Order backlog – at cost
Less: Accumulated amortisation
Operating permit - at cost
Less: Accumulated amortisation
Total Intangible Assets
31-Dec-23
€'000
31-Dec-22
€'000
1,076
(1,076)
-
1,526
387
(104)
(1,466)
343
46
(46)
-
1,500
(188)
1,312
1,655
1,076
(36)
1,040
1,526
-
-
(904)
622
46
(46)
-
1,500
(94)
1,406
3,068
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
1,140
(518)
622
387
(562)
(104)
343
-
-
-
-
-
-
-
1,453
(47)
1,406
-
(94)
-
1,312
1,040
3,633
-
(565)
1,040
3,068
-
-
387
(656)
(1,040)
(1,144)
-
1,655
Balance at 1 July 2022
Less: amortisation
Balance at 31 December 2022
Acquired through business combinations
Less: amortisation
Less: impairment
Balance at 31 December 2023
124
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 18 INTANGIBLE ASSETS (CONT.)
Goodwill impairment test is conducted annually.
During the year ended 31 December 2023, the consolidated entity impaired the goodwill related to Vulcan Energy
Engineering GmbH in the amount of €1,040,000 and Customer contracts in the amount of €104,000.
The goodwill has been impaired due to the subsidiary focusing solely on the work associated with the Project and
not providing services to external customers and therefore the recoverable amount of the goodwill was assessed
as nil.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired and is
carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and
are not subsequently reversed.
Customer contracts, operating permits, and order backlog
Customer contracts, operating permits and order backlog are deferred and amortised on a straight-line basis
over the period of their expected benefit, being their finite life of 3-5 years.
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.
125
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 19 DEFERRED TAX ASSETS
Deferred tax asset comprises of differences attributable to:
31-Dec-23
€'000
31-Dec-22
€'000
Other
Property, plant and equipment
Tax losses
Deferred tax asset
Movements:
Opening balance
Charged to statement of profit or loss
Closing balance
Refer to note 8 for accounting policy.
NOTE 20 TRADE AND OTHER PAYABLES
Trade payables (i)
Accrued expenses
Other payables
VAT Payable
2,145
241
826
3,212
1,681
1,531
3,212
47
1,634
-
1,681
1,710
(29)
1,681
31-Dec-23
€'000
31-Dec-22
€'000
9,514
5,868
1,812
-
17,194
6,479
1,190
1,466
283
9,418
(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.
126
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 21 DERIVATIVE FINANCIAL INSTRUMENT
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
The group has the following derivative financial instruments in the following line items in the statement of financial
position:
Current liabilities
31 Dec 2023
€'000
133
133
31 Dec 2022
€'000
-
-
Forward foreign currency contract held for trading
Accounting Policy
(i)
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognised immediately in profit or loss and are included
in other gains/(losses).
(ii)
Classification of derivatives
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where
derivatives do not meet the hedge accounting criteria, they are classified as ‘held for trading’ for accounting
purposes and are accounted for at fair value through profit or loss. They are presented as current assets or
liabilities to the extent they are expected to be settled within 12 months after the end of the reporting period.
(iii)
Fair value measurement
For information about the methods and assumptions used in determining the fair value of derivatives see note 26.
NOTE 22 EMPLOYEE BENEFITS
Leave obligations
(i)
Leave obligations
31 Dec 2023
€'000
1,509
1,509
31 Dec 2022
€'000
752
752
The leave obligations cover the group’s liabilities for long service leave and annual leave which are classified as
either other long-term benefits or short-term benefits The current portion of this liability includes all of the accrued
annual leave, the unconditional entitlements to long service leave where employees have completed the required
period of service and also for those employees who are entitled to pro rata payments in certain circumstances. The
entire amount of the provision of €1,509,000 (31 December 2022: €752,000) is presented as current, since the
group does not have an unconditional right to defer settlement for any of these obligations. However, based on
past experience, the group does not expect all employees to take the full amount of accrued leave or require
payment within the next 12 months.
127
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 22 EMPLOYEE BENEFITS (CONT.)
Current leave obligations expected to be settled after 12
months
(ii)
Reclassification of employee benefit obligations
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
31-Dec-23
€'000
31-Dec-22
€'000
755
376
The group previously presented its liabilities for employee benefit obligations as provisions in the statement of
financial position. However, management considers it to be more relevant if all employee benefit obligations are
presented in one separate line item in the statement of financial position. €752,000 has been reclassified from
current provisions to current employee obligations in prior year comparatives as at 31 December 2022.
Accounting Policy
Employee benefits
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 23 DEFERRED INCOME
Current
Government grants
Non-current
Government grants
Accounting Policy
31 Dec 2023
€'000
31 Dec 2022
€'000
-
-
2,818
2,818
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 after the next reporting period, 31 December
2024. Therefore, all deferred income is presented as non-current.
128
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
NOTE 24 PROVISIONS
Current:
Other provision (i)
Non-Current:
Other provisions
31 Dec 2023
€'000
31 Dec 2022
€'000
750
750
264
264
-
-
110
110
(i)
Information about individual provisions and significant estimates
The amount of €750,000 has been included in the current other provision for the closure of Augsburg office.
In December 2023, the decision was made to centralise engineering operations in Karlsruhe to ensure closer
collaboration between the engineering teams and proximity to future construction locations. All Augsburg located
employees have been offered new contracts in Karlsruhe, this provision represents potential termination benefits
to those employees who do not accept new contracts.
(ii)
Movement in provisions
Restructuring
obligations
Waste disposal
Decontamination
provision
€'000
€'000
€'000
TOTAL
€'000
-
80
30
110
750
750
120
200
34
64
904
1,014
Cost
Carrying amount at the
start of the year
Charged to profit or loss
- additional provisions
recognised
Carrying amount at end of
year
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.
129
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
31-Dec-23
€'000
31-Dec-22
€'000
253
1,157
1,410
1,702
115
(407)
1,410
6
1,696
1,702
1,463
-
239
1,702
Notes to the Consolidated Financial Statements
NOTE 25 DEFERRED TAX LIABILITIES
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 statement of profit or loss
Closing balance
Refer to note 8 for accounting policy.
NOTE 26 FAIR VALUE MEASUREMENTS
(i)
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are recognised and measured at fair value in the financial statements. To provide an indication
about the reliability of the inputs used in determining fair value, the group has classified its financial instruments
into the three levels prescribed under the accounting standards. An explanation of each level follows underneath
the table.
Level 1
Financial assets
Financial assets at fair value through other
comprehensive income
Australian listed equity securities
Level 2
Financial liabilities
31 Dec 2023
€'000
31 Dec 2022
€'000
2,550
Forward foreign currency contracts held for sale
133
-
-
There were no transfers between levels 1 and 2 for recurring fair value measurements during the year. The group’s
policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the reporting period.
130
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 26 FAIR VALUE MEASUREMENTS (CONT)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives and
equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price
used for financial assets held by the group is the current bid price. The quoted market price incorporates the
market's assumptions with respect to changes in economic climate such as rising interest rates and inflation, as
well as changes due to ESG risk. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (e.g. over-the counter
derivatives) is determined using valuation techniques that maximise the use of observable market data and rely as
little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3. This is the case for unlisted equity securities and for instruments where ESG risk gives rise to a significant
unobservable adjustment.
(ii)
Valuation techniques used to determine fair values
Specific valuation techniques used to value financial instruments include:
•
•
the use of quoted market prices or dealer quotes for similar instruments
for foreign currency forwards – the present value of future cash flows based on the forward exchange
rates at the reporting date
Accounting Policy
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date; and assumes that the transaction
will take place either: in the principal market; or in the absence of a principal market, in the most advantageous
market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting
date and transfers between levels are determined based on a reassessment of the lowest level of input that is
significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is
either not available or when the valuation is deemed to be significant. External valuers are selected based on
market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one
period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with external sources of data.
131
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 27 CONTRIBUTED EQUITY
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
31 Dec 23
31 Dec 22
No.’000
€’000
No.’000
€’000
Fully paid ordinary shares
172,073
323,739
143,435
259,158
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
143,435,301
21,400,000
3.15
259,158
67,350
At 1 January 2023
Placement
Exercise of Class J performance rights
Exercise of Class M performance rights
Exercise of Class J performance rights
Exercise of Class G performance rights
Exercise of Class H performance rights
Exercise of Class I performance rights
Exercise of Class M performance rights
Exercise of Class N Performance rights
Exercise of Class S performance rights
Exercise of Class D performance shares
Less capital raising costs
At 31 December 2023
12/05/2023
6/06/2023
6/06/2023
30/08/2023
23/11/2023
23/11/2023
23/11/2023
23/11/2023
23/11/2023
23/11/2023
23/11/2023
1,500,000
1,000,000
1,000,000
250,000
472,727
910,909
500,000
1,500,000
12,896
91,175
-
172,073,008
-
-
-
-
-
-
-
-
-
-
-
-
Issue
Price
€
-
-
-
3.86
-
-
-
-
-
-
-
-
-
-
-
-
(2,769)
323,739
€'000
258,933
-
-
-
225
-
259,158
Date
Number
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
143,094,049
12,897
80,909
89,091
58,355
100,000
143,435,301
132
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 27 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 28 RESERVES
Share-based payment reserve
Revaluation reserve
Foreign currency translation reserve
Total
Share-based Payment Reserve
31 Dec 2023
€'000
31 Dec 2022
€'000
11,522
(1,870)
3,725
13,377
9,706
-
6,169
15,875
Number of
Warrants
Number of
Performance
Shares
Number of
Performance
Rights
€'000
Movement reconciliation
On issue at 1 January 2023
Issue of performance rights during the year
Exercise of Performance Rights during the year
Exercise of Performance Shares during the year
Recognition of share - based payment expense
for performance rights issued to Directors, staff
& consultants (Note 36)
Performance rights issued as part of the
acquisition
Performance rights cancelled
On issue at 31 December 2023
-
-
-
-
-
-
-
-
91,174
8,382,801
9,706
-
-
(91,174)
385,754
(7,146,533)
-
-
-
-
-
-
-
-
-
1,688
82,714
(153,468)
1,551,268
128
-
11,522
133
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 28 RESERVES (CONT.)
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Number of
Warrants
Number of
Performance
Shares
Number of
Performance
Rights
€'000
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 36)
Performance rights cancelled
Performance rights lapsed
On issue at 31 December 2022
-
-
-
-
-
-
-
91,174
8,656,324
8,995
-
-
-
-
-
393,374
(282,897)
-
(24,000)
(360,000)
-
-
711
-
-
91,174
8,382,801
9,706
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
Balance at the beginning of the period/year
Movement during the year/period
Balance at the end of the year/period
31 Dec 2023
€'000
31 Dec 2022
€'000
6,169
(2,444)
3,725
7,817
(1,648)
6,169
The foreign currency translation reserve is used to recognise exchange differences arising from the translation
of the financial statements of foreign operations to Euro.
Revaluation Reserve
Balance at the beginning of the period/year
Movement during the year/period
Balance at the end of the year/period
31 Dec 2023
€'000
31 Dec 2022
€'000
-
(1,870)
(1,870)
-
-
-
The revaluation reserve is used to recognise the revaluation of investments at fair value through other
comprehensive income.
134
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 29 INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
The Company’s interest in Kuniko Limited is recognised as an investment in associate accounted for using the
equity method. On 17th of July 2023 the Group discontinued the use of the equity method, shareholding reducing to
19% due to capital raises.
The shares held in Kuniko have been accounted for using fair value through other comprehensive income.
a)
Gain on discontinuation of use of the equity method of accounting for investments:
Opening carrying value
Share of loss - associate
Fair value of Kuniko shares at the date of discontinuation of use of the equity method
(note 30)
Gain on discontinuation of use of the equity method of accounting for investments
b)
Interest in associates
31 Dec 2023
€'000
974
(456)
4,392
3,874
Set out below are the associates and joint ventures of the group as at 31 December 2023 which, in the opinion of
the directors, are material to the group. The entities listed below have share capital consisting solely of ordinary
shares, which are held directly by the group. The country of incorporation or registration is also their principal place
of business, and the proportion of ownership interest is the same as the proportion of voting rights held.
Name of Associate
31 Dec 2023
%
31 Dec 2022
%
31 Dec 2023
€'000
31 Dec 2022
€'000
% of ownership
Carrying amount
Kuniko Limited (i)
Immaterial associates (ii)
-
50.1
21.15
-
-
124
974
-
(i)
Kuniko ceased to be an associate on 17 July 2023.
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:
Kuniko Ltd
31-Dec-23
€'000
31-Dec-22
€'000
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
-
-
-
-
-
-
-
4,921
3,016
7,937
(241)
-
(241)
7,696
135
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 29 INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD (CONT.)
31-Dec-23
€'000
Summarised statement of profit or loss and other comprehensive income
12-months
Revenue
Expenses
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive loss
Total comprehensive loss
-
-
-
-
-
-
-
6-months
31-Dec-22
€'000
-
(1,177)
(1,177)
-
(1,177)
42
(1,135)
(ii)
Individually immaterial associates
In addition to the interests in associates disclosed above, the group also has interests in a number of individually
immaterial associates that are accounted for using the equity method.
31 Dec 2023
€'000
31 Dec 2022
€'000
Aggregate carrying amount of individually immaterial
associates
Aggregate amounts of the group's share of:
Profit from continuing operations
Post-tax profit or loss from discontinued operations
Othe comprehensive income
Total comprehensive income
Accounting policy
124
-
-
-
-
-
-
-
-
-
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.
136
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 30 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Australian listed shares
Movement reconciliation
Carrying amount at the start of the year
Discontinuation of the use of equity method of
accounting for investments (note 29)
Charged to other comprehensive income
- change in fair value
Foreign exchange gain
Carrying amount at end of year
Accounting policy
31 Dec 2023
€'000
31 Dec 2022
€'000
2,550
2,550
-
-
Australian listed shares
€'000
Total
€'000
-
4,392
(1,870)
28
2,550
-
4,392
(1,870)
28
2,550
Classification
The group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value (either through OCI or through profit or loss), and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss
or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group
has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value
through other comprehensive income (FVOCI).
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade date, being the date on which the
group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash
flows from the financial assets have expired or have been transferred and the group has transferred substantially
all the risks and rewards of ownership.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets
with embedded derivatives are considered in their entirety when determining whether their cash flows are solely
payment of principal and interest.
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.
137
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
NOTE 30 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (CON’T)
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.
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.
138
VULCAN ENERGY ANNUAL REPORT | 2023
100
100
100
100
100
100
100
100
100
Notes to the Consolidated Financial Statements
NOTE 31 INTERESTS IN SUBSIDIARIES
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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.
Date of
foundation or
acquisition
Ownership
Interest 31
December
2023 (%)
Ownership
Interest 31
December
2022 (%)
Entity
Location
Vulcan Energie
Ressourcen GmbH
Karlsruhe
Vulcan Energy Europe Pty
Limited
Perth
Global Geothermal Holding
UG *
Vulcan Energy Subsurface
Solutions GmbH
Vulcan Energy Engineering
GmbH
Karlsruhe
Karlsruhe
Augsburg
Primary
activity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
September
26, 2019
October 11,
2019
October
11,2019
100
100
-
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
Comeback
Peronaldienstleistungen
GmbH
Vulcan Projektgesellschaft
3 GmbH
Vulcan Projektgesellschaft
2 GmbH
Karlsruhe
(previously:
Ludwigshafen)
Perth
Karlsruhe
Karlsruhe
Karlsruhe
Natürlich Südpfalz
Geschaftsführungs GmbH
Landau i.d
Pfalz
Natürlich Südpfalz GmbH &
Co. KG
Landau i.d.
Pfalz
Vulcan Lily Lithium GF -
GmbH
Vulcan Lily Lithium
(Hochst) GmbH & Co. KG
Karlsruhe
Karlsruhe
Vulcan Energie France SAS
France
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Operating
entity
Vulcan Energy SA Pty
Limited
Perth
Group holding
December
09, 2021
December 31,
2021
100
100
July 5, 2021
100
100
February 1,
2023
100
July 4, 2023
100
July 3, 2023
100
February 15,
2023
March 10,
2023
100
100
May 3, 2023
100
May 4, 2023
100
June 22,
2022
September
23, 2023
100
100
-
-
-
-
-
-
-
100
-
*Global Geothermal Holding UG was merged with Vulcan Energie Ressourcen GmbH. The entity was deregistered on 28 February
2023.
139
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 32 BUSINESS COMBINATIONS
No business combinations occurred in the period ending 31 December 2022.
Comeback Personaldienstleistungen GmbH
Vulcan Energie Ressourcen GmbH, a subsidiary of Vulcan Energy Resources Limited, acquired 100% of drilling
labour hire company, Comeback Personaldienstleistungen GmbH, in accordance with the Share Purchase
Agreement, with an effective date on 1 February 2023 (closing-date).
The acquired business contributed revenues of €2,549,284 for sale of services and loss after tax of €103,057 to the
consolidated entity for the period from 1 February 2023 to 31 December 2023. If the acquisition occurred on 1
January 2023 the revenue and the loss would have been €2,700,968 and €150,167 respectively.
Additionally, the issue of two tranches of performance rights at EUR100,000 each has been recognised as deferred
consideration, based on management’s assessment of the probability of achieving the milestones. Milestones are
as follows:
•
•
The successful complete staffing of the drilling rigs for the year 2023 on or before December 31,
2023. The rights will expire on December 31, 2024.
The successful complete staffing of the drilling rigs for the year 2024 on or before December 31,
2024. The rights will expire on December 31, 2025.
The values identified in relation to acquisition of Comeback are final as at 31 December 2023.
Details of the acquisition are as follows:
Cash
Trade and other receivables
Property, plant & equipment
Right-of-use assets
Loans and borrowings
Trade and other payables
Lease Liabilities
Fair value of net assets acquired
Intangible assets acquired
Deferred tax liabilities arising on acquisition
Acquisition-date fair value of total consideration
Representing:
Cash paid
Performance rights issued as consideration (note 36)
Total consideration
140
€’000
35
458
23
33
(81)
(429)
(33)
6
387
(115)
278
€’000
150
128
278
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 32 BUSINESS COMBINATIONS (CONT.)
Accounting policy
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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.
NOTE 33 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
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.
141
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 33 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
The carrying values of the Group’s financial instruments are as follows:
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Financial Liabilities
Trade and other payables
Derivative financial instrument
Lease liabilities
(a) Market risk
(i.)
Foreign exchange risk
31-Dec-23
€'000
31-Dec-22
€'000
78,728
6,899
11,775
97,402
17,194
133
4,411
21,738
134,107
5,546
770
140,423
9,418
-
3,316
12,734
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign
currency risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
In order to protect against exchange rate movements, the consolidated entity has entered into forward foreign
exchange contracts.
The maturity, settlement amounts and the average contractual exchange rates of the consolidated entity's
outstanding forward foreign exchange contracts at the reporting date were as follows:
Sell Australian dollars
Average exchange rates
31-Dec-23
31-Dec-22
€'000
€'000
31-Dec-23
€'000
31-Dec-22
€'000
Buy Euros
Maturity:
0 - 3 months
10,000
-
0.610
-
142
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 33 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(a) Market risk (cont)
(i.) Foreign exchange risk (cont)
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial
liabilities at the reporting date were as follows:
Consolidated
US dollars
Canadian dollar
Australian dollar
Assets
Liabilities
31-Dec-23
€'000
31-Dec-22
€'000
31-Dec-23
31-Dec-22
€'000
€'00
-
-
44,007
44,007
-
-
35,358
35,358
3,237
9,465
-
12,702
304
-
1,008
1,312
The aggregate net foreign exchange gains/(losses) recognised in the P&L were:
Net foreign exchange gains/(losses) recognised in the statement of profit or loss:
31 Dec 2023
€’000
299
31 Dec 2022
€’000
(105)
Sensitivity
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% *
EUR/CAD exchange rate – increase 5% *
EUR/CAD exchange rate – decrease 5% *
*Holding all other variables constant
Impact on post-tax profit
12 months
31-Dec-23
€’000
6 months
31-Dec-22
€’000
(2,096)
2,096
(162)
162
(473)
473
(1,773)
1,773
(64)
64
-
-
143
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 33 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(ii) Interest rate risk
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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 2023
31 December 2022
Weighted average
interest rate
Balance
€’000
Weighted average
interest rate
Balance
€’000
101,687
Cash and cash equivalents
3.93%
63,359
1.53%
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 2023, 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:
Profit higher/(lower)
Profit higher/(lower)
31 December 2023
€
31 December 2022
€
633,590
(633,590)
1,016,867
(1,016,867)
+ 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.
144
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 33 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT.)
(c)
Liquidity risk
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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 23
Trade and other payables
Derivative liabilities
Lease Liabilities
31 Dec 22
Trade and other payables
Lease Liabilities
(d)
Price risk
1 year or less
1-5 years
€’000
€’000
> 5 years
€’000
Total
€’000
17,194
133
1,086
9,418
646
-
-
2,596
-
1,801
-
-
729
-
869
17,194
133
4,411
9,418
3,316
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 year
months ending 31 December 2023 Vulcan sold 16,279 MWh at an average price of €0.26 per kWh.
At 50% of the upward movement in the price for Mwh, the Group’s loss would decrease by €2.1m. At 100% upward
price movement the loss would decrease by €4.2m.
(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”).
145
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 34 CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Balance at 1 July 2022
Net cash used in financing activities
Additions to leases
Other changes
Balance at 31 December 2022
Net cash used in financing activities
Acquired in business combinations
Additions to leases
Other changes
Balance at 31 December 2023
Lease liabilities
€'000
Loan
€'000
Total
€'000
3,005
(462)
776
(3)
3,316
(1,744)
33
2,835
(29)
4,411
-
-
-
-
-
(81)
81
-
-
-
3,005
(462)
776
(3)
3,316
(1,825)
114
2,835
(29)
4,411
NOTE 35 NON-CASH INVESTING AND FINANCING ACTIVITIES
Additions to the right of use assets
Performance shares issued for consideration of
acquisition
12-months
31 Dec 2023
€'000
6-months
31 Dec 2022
€'000
3,042
128
3,170
776
-
776
146
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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 rights issued as consideration for acquisition of
subsidiary Comeback (note 32)
Shares issued for consideration of services
Represented by
Shared-based payment expense
Acquisition of subsidiary (note 32)
Investor relations expense
12-months
31 Dec 2023
€'000
6-months
31 Dec 2022
€'000
315
1,373
128
-
1,816
1,688
128
-
1,816
153
558
-
225
936
711
-
225
936
(i) Details of new issues during the year:
On 28 February 2023, the company granted 244,853 performance rights to the staff to align their interests to that
of the Company's shareholders and assist as an effective means of retention. On 10 September 2023 further
115,667 were granted to staff.
The rights were granted with the following vesting conditions:
•
•
Successful execution of drilling operations in line with development plans
Remaining an employee on the earlier of the date of 12 months from satisfaction of the Vesting
Condition or 31 December 2024.
The value of performance rights was determined, as follows:
Type
Fair value of
each rights
(EUR)
Number of Rights
Grant Date
Expiry date
Total value of
Rights (EUR)
Share based
payment
expense (EUR)
Employee Incentive
Plan
Employee Incentive
Plan
4.07
244,853 28/02/2023
1/07/2025
995,709
263,052
1.82
115,667
10/09/2023
1/07/2025
210,753
30,472
147
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
On the 28th of May 2023, following AGM approval, the Company granted service-based performance rights to Non-
Executive Director (NED Service Rights). Ranya Alkadamani received 25,234 service-based performance rights
valued at EUR 65,720. Issued in three tranches as class AC. The rights expire a year after vesting.
Performance rights vest as follows:
•
•
•
1/3 vesting 12 months from the date of 28 May 2023.
1/3 vesting 24 months from the date of 28 May 2023.
1/3 vesting 36 months from the date of 28 May 2023.
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Tranche 1
Tranche 2
Tranche 3
2.60
2.60
2.60
28/05/2023
28/05/2023
8,411
8,411
28/05/2024
28/05/2025
28/05/2023
8,412
28/05/2026
21,906
21,906
21,908
11,919
5,967
3,981
(ii) Details of performance rights issued during the previous periods:
Under the Company’s Incentive Award plan, the Company issued the following incentives:
•
•
an annual deferred incentive (ADI), designed to reward creation 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 2022; 52,000 ADIs and 102,000 LTIs were issued to the Executives.
on the 13th of December 2022; 12,700 ADIs and 56,200 LTIs were issued to the Executives.
On the 29th of November 2022; 26,000 ADI’s and 116,000 LTI’s were issued to the Managing Director.
148
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
Details of the ADIs for Executives:
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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 Rights
Price at grant (EUR)
Valuation per Tranche
(EUR)
Share based payment
expense (EUR)
Item
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 Rights
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
30/06/2023
30/06/2023
30/06/2023
30/06/2023
30/06/2023
30/06/2023
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
(9,395)
(751)
16,953
3,198
22,311
8,994
Managing Director's Rights – ADI1
Tranche 1
Tranche 2
Tranche 3
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
(4,205)
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
3,350
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
15,991
1 – MD’s Rights relate to rights granted to Dr Francis Wedin, before the change of his role to the Executive Chair.
149
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 36 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.
Performance assessment has been completed during the year.
The above ADI performance rights are subject to continuous service until the vesting date.
150
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
Details of the LTIs for Executives:
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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
10,262
Tranche
1
Tranche
2
Tranche
3
Executive
Rights
Tranche
4
Tranche
5
ATSR
Rights
RTSR
Rights
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
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
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
72,498
9,493
80,172
36,249
53,448
24,166
40,086
18,125
40,086
18,125
42,636
18,209
93,228
39,340
5,131
4,747
3,421
3,164
2,566
2,373
2,566
2,373
5,448
4,794
11,914
9,587
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
18,709
17,400
4.52
11,600
4.52
8,700
4.52
8,700
4.52
78,648
9,354
52,432
6,236
39,324
4,677
39,324
4,677
29/11/2022
3.46
30/06/2027
75%
3.235%
11,600
4.52
40,136
9,566
29/11/2022
3.69
30/06/2027
75%
3.235%
23,200
4.52
85,608
20,355
MD
Rights1
Tranche
2
Tranche
3
Tranche
4
Tranche
5
ATSR
Rights
RTSR
Rights
1 – MD’s Rights relate to rights granted to Dr Francis Wedin, before the change of his role to the Executive Chair.
151
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 36 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
Percentage of RTSR Rights eligible to vest
50%
Pro-rata
100%
152
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
On the 29th of November 2022 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 29 November 2022.
1/3 vesting 24 months from the date of 29 November 2022.
1/3 vesting 36 months from the date of 29 November2022.
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
39,238
9,796
6,537
Details of performance rights issued in previous years:
Fair
value of
each
right
(EUR)
0.55
4.95
4.82 &
7.54
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)
70%
10/09/2020
0.55
16/09/2023
1.84
0.26%
2,500,000
1,368,598
205,597
N/A
24/06/2021
4.95
30/06/2025
N/A
N/A
38,688
191,561
35,397
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
364,904
4.82
N/A
29/06/2021
4.82
1/12/2024
N/A
N/A
250,000
1,205,360
332,199
4.82 &
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
159,581
4.82
7.54
7.54
N/A
29/06/2021
4.82
1/12/2024
N/A
N/A
100,000
482,144
(137,545)
N/A
16/12/2021
7.54
1/12/2024
N/A
N/A
60,000
452,400
46,410
N/A
16/12/2021
7.54
1/12/2024
N/A
N/A
50,000
377,000
102,770
Type
Class
J
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 10
September 2020.
Vesting conditions have been met during the year.
153
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
Class S
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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.
The first and second vesting conditions have been met.
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.
The vesting condition has been met during the year.
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.
154
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
Set out below are summaries of performance rights movement during the year:
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
As at 1 January
2023
Granted
Exercised
Cancelled
As at 31
December 2023
Exercisable
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
Class IP
Class AE
Class AD
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
360,520
82,714
25,234
(250,000)
(472,727)
(910,909)
(2,500,000)
(1,500,000)
(1,500,000)
(12,897)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(100,000)
-
-
(53,468)
-
-
-
-
-
-
-
-
-
-
-
12,894
260,000
250,000
110,000
-
60,000
50,000
37,232
274,200
28,474
360,520
82,714
25,234
-
-
-
-
-
-
-
-
-
-
-
60,000
-
-
-
9,491
-
41,357
-
8,382,801
468,468
(7,146,533)
(153,468)
1,551,268
110,848
No performance rights expired during the year.
155
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
Set out below are summaries of performance rights granted and exercised.
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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
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
Granted
Exercised Cancelled
Lapsed
As at 31
December
2022
Exercisable
performance
rights
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(80,909)
(89,091)
-
-
-
-
(100,000)
(12,897)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,000)
-
-
(8,000)
-
(8,000)
-
-
-
-
-
-
-
-
-
-
-
-
(360,000)
-
-
-
-
-
-
-
-
-
-
-
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
250,000
472,727
910,909
-
1,500,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
Class AA (ADI)
Class AB (LTI)
Class AC
(NED)
-
-
-
90,700
274,200
28,474
8,656,324
393,374
(282,897)
(24,000)
(360,000)
8,382,801
4,633,636
Set out below are summaries of performance shares granted and exercised.
As at 1 Jan
2023
Issued
Exercised
Cancelled,
Lapsed or
Expired
As at 31
December
2023
Exercisable
performance
shares
Class D
91,174
91,174
-
-
(91,174)
(91,174)
As at 1 July
2022
Issued
Exercised
Cancelled,
Lapsed or
Expired
Class D
91,174
91,174
-
-
-
-
-
-
-
-
-
-
-
-
As at 31
December
2022
Exercisable
performance
shares
91,174
91,174
-
-
156
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 36 SHARE-BASED PAYMENTS (CONT.)
Accounting Policy
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
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.
157
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 37 RELATED PARTY DISCLOSURE
Parent entity
Vulcan Energy Resources Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 31.
Associates
Interests in associates are set out in note 29.
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below.
Short-term benefits
Post-employment benefits
Share-based payments
12 months
31-Dec-23
€
1,434,501
100,608
309,652
1,844,761
6 months
31-Dec-22
€
770,032
38,325
299,871
1,108,228
(a)
Transactions with associates
Loans to or from associates
There were no loans to or from associates at 31 December 2023 (31 December 2022: nil).
(b)
Transactions with related parties
During the year ending 31 December 2023 payments for consultancy fees of €12,056 (31 December 2022: €28,089)
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 2023 to JRB Consulting Ltd (31 December 2022:
€8,709), however there was a prepayment for Ms Bush’s director fee to the value of €3,605.
During the previous year 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 was a short term lease. No amount was paid from inception
of the contract and until 31 December 2022. The amount of €2,715 was outstanding as at 31 October 2022 and nil
was outstanding as at 31 December 2022. Dr. Horst Kreuter ceased to be a key management personnel on 31
October 2022.
There was an outstanding balance payable to Gavin Rezos of €11,666 (31 December 2022: nil) in relation to his
directors’ fees.
Loans to/from related parties
There were no loans to or from related parties at the 31 December 2023 (31 December 2022: nil).
Other than the above, there were no other transactions with related parties during the year ended 31 December
2023.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
158
VULCAN ENERGY ANNUAL REPORT | 2023
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Notes to the Consolidated Financial Statements
NOTE 38 COMMITMENTS
Below are the commitments in relation to its exploration and evaluation assets:
Within one year
One to five years
Below are the commitments in relation to capital expenditure:
Within one year
One to five years
NOTE 39 CONTINGENCIES
31-Dec-23
€'000
31-Dec-22
€'000
1,888
-
1,888
5,482
4,708
10,190
31-Dec-23
€'000
31-Dec-22
€'000
22,472
-
22,472
30,383
1,917
32,300
The Group has given bank guarantees as at 31 December 2023 of €958,000 (31 December 2022: €1,245,000)
The Group has no contingent assets and liabilities as at 31 December 2023 (30 December 2022 : nil).
NOTE 40 AUDITOR’S REMUNERATION
31 Dec 2023
€’000
31 Dec 2022
€’000
Amounts received or due and receivable by RSM
Australia Partners for:
Audit or review of the annual financial report
Comfort letter in relation to listing prospectus
Amounts received or due and receivable by RSM GmbH
for:
Review of the financial report
Comfort letter in relation to listing prospectus
Amounts received or due and receivable by RSM Ebner
Stolz
Audit of the annual financial report
102
111
46
46
135
440
73
-
95
-
-
168
159
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 41 ACCUMULATED LOSSES
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
Balance at beginning of the period/year
Loss after income tax for the period/year
Balance at end of the period/year
NOTE 42 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 year/period
Total Comprehensive Loss
12 months
31 Dec 23
€'000
(41,872)
(26,963)
(68,835)
6 months
31 Dec 22
€'000
(28,422)
(13,450)
(41,872)
31-Dec-23
€'000
31-Dec-22
€'000
49,411
219,929
269,340
1,059
-
1,059
323,739
6,049
(61,507)
268,281
(22,526)
(22,526)
64,912
169,934
234,846
1,618
68
1,686
259,158
12,984
(38,981)
233,161
(7,682)
(7,682)
Contingent liabilities
Other than disclosed at Note 39, the parent entity has no other contingent assets or contingent liabilities as at 31
December 2023 and 31 December 2022.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 31 December 2023 and 31
December 2022.
Exploration commitments
The parent entity has no exploration commitments as at 31 December 2023 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.
160
VULCAN ENERGY ANNUAL REPORT | 2023
Notes to the Consolidated Financial Statements
NOTE 43 DIVIDENDS
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
No dividend has been declared or paid during the year ended 31 December 2023 (31 December 2022: nil), and the
Directors do not recommend the payment of a dividend in respect of the year ended 31 December 2023.
Accounting Policy
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
NOTE 44 EVENTS AFTER THE REPORTING DATE
On 15 January 2024 announced the appointment of Felicity Gooding to the role of Group Chief Financial Officer for
the Vulcan Group. Ms Gooding is a Senior Finance executive and leader with over 20 years’ experience in strategic
and financial analysis, debt funding (including acting as joint project leader in obtaining expansion finance for
Fortescue Limited totalling US$3.5b), corporate finance, mergers and acquisitions, management and financial
accounting and governance within Australia, Singapore, London and Washington DC.
Mr. Mark Skelton retired from the Board as a non-executive director of the Company effective 1 February 2024. Mr.
Skelton joined the Board of Vulcan in April 2022 whilst the Company was evolving from a development company
into a project execution company. During his time on the Board, Mr. Skelton contributed to building a strong
executive leadership team across Vulcan, and specifically, the build-out of the project execution team, which has
already made significant strides with completion of the construction of the Lithium Extraction and Optimisation
Plant.
The Company continues its debt and project level equity financing process, supported by BNP Paribas, following
positive market sounding in 2023 from commercial banks, development banks, and government-backed export
credit agencies. Vulcan aims to complete its finance program in the third quarter of 2024.
After preliminary due diligence, Vulcan’s Phase One ZERO CARBON LITHIUM™ Project appears potentially suitable
for an EIB financing and the Project has advanced to the “Under Appraisal” stage. EIB’s proposed financing could
amount to up to €500m (~A$825m), pending completion of due diligence, credit approval and legal agreement, and
subject to EIB’s governing bodies approval. It is expected to serve as a cornerstone to complement ongoing debt
funding discussions with leading export credit agencies and international banks.
In April 2023, Nobian and Vulcan signed a Term Sheet to review potential areas of cooperation. The agreement
followed a longer cooperation to assess the feasibility of producing lithium hydroxide from lithium chloride in
Germany. The initial finance structure saw the financing of its upstream and downstream lithium projects
separately, and the Term Sheet contemplated Nobian participating at the downstream lithium hydroxide project
level only. Following feedback from its financiers and other stakeholders, Vulcan has decided to fund its upstream
and downstream developments in an integrated lithium and renewable energy project (integrated project) in order
to gain more operational synergies. Due to the changed project structure by Vulcan, Nobian has decided not to
participate further in the equity financing process for the Integrated Project. Nobian recognises Vulcan’s decision
to raise equity at the Integrated Project level; at the same time, it also impacts Nobian’s potential role in the project
as a strategic partner. Nobian and Vulcan will continue to explore other forms of commercial collaboration.
Apart from the above, no other matter or circumstance has arisen since 31 December 2023 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.
161
VULCAN ENERGY ANNUAL REPORT | 2023
Directors’ Declaration
In the Directors’ opinion:
Vulcan Energy Resources Limited – Annual Report 1 January2023 – 31 December 2023
(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 2023 and of its
performance for the year ended on that date.
(b)
(c)
The financial statements and notes comply with International Financial Reporting Standards.
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:
Dr Francis Wedin
Executive Chair
27 March 2024
162
VULCAN ENERGY ANNUAL REPORT | 2023
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 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes
in equity and the consolidated statement of cash flows for the year then ended, 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 2023 and of its financial
performance for the year then ended; 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.
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 15 in the financial statements
The Group has capitalised exploration and evaluation
expenditure with a carrying value of €48,475,000 as at
31 December 2023.
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 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.
Key Audit Matter
How our audit addressed this matter
Property, plant and equipment
Refer to Note 16 in the financial statements
The Group has property, plant and equipment with a
carrying value of €138,605,000 as at 31 December
2023.
We considered this to be a key audit matter due to
significant amounts of costs capitalised and
management judgments involved in assessing the
carrying value of the assets including:
• Determination of the nature of costs incurred meet
the specific recognition criteria in AASB 116
Property, Plant and Equipment for capitalisation;
• Determination of asset under construction be
capable of operating in the manner intended by
management; and
• Assessing whether any indicators of impairment
are present and if so, judgement applied to
determine and quantify any impairment loss.
Share-based payment
Refer to Note 36 in the financial statements
During the year, the Group issued performance rights
to key management personnel and employees.
Management have 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.
Our audit procedures included:
• Assessing the Group’s accounting policy for
compliance with Australian Accounting Standards;
• Obtaining the schedule of property, plant and
equipment and on sample basis, testing the
to supporting documentation and
additions
ensuring the amounts were capital in nature;
• Critically assessing management’s determination
of when asset is available for use and challenge
management assumptions used;
• Critically assessing management’s determination
of useful life of assets and challenge management
assumptions used;
• Assessing
and
evaluating management’s
assessment of whether indicators of impairment
existed; and
• Assessing the appropriateness of disclosures in
the financial statements.
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;
• Recalculating
• Critically assessing management’s determination
of the vesting probability of each instrument;
the value of
to be
the share-based
payment expense
in
consolidated statement of profit or loss and other
comprehensive income; and
recognised
• Assessing the appropriateness of disclosures in
the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 31 December 2023 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.
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 year ended 31 December 2023.
In our opinion, the Remuneration Report of Vulcan Energy Resources Limited, for the year ended 31 December
2023, 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 2024
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 21 March 2024.
FULLY PAID ORDINARY SHARES
• There is a total of 172,073,008 fully paid ordinary shares on issue which are listed on the ASX.
• The number of holders of fully paid ordinary shares is 29,993.
• Holders of fully paid ordinary shares are entitled to participate in dividends and the proceeds on winding up of the
Company.
• There are no preference shares on issue.
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 and over
Total
Number of holders
Number of shares
% of Issued Capital
21,319
6,376
1,197
1,015
86
29,993
7,080,456
15,171,959
8,982,840
26,535,901
114,301,852
172,073,008
4.11%
8.82%
5.22%
15.42%
66.43%
100.00%
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 9,088 shareholders who hold less than a marketable parcel of shares, which amounts to 0.49% of issued capital
based on a price per Share of $2.80.
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
Holding Balance
% of Issued Capital
16,458,561
11,448,959
8,635,000
9.56
6.65
5.02
168
VULCAN ENERGY ANNUAL REPORT | 2023 SHARE BUY-BACKS
VOTING RIGHTS OF SHAREHOLDERS
There is currently no on-market buyback program for any of
All fully paid ordinary shareholders are entitled to vote at any
Vulcan Energy Resources’ listed securities.
meeting of the members of the Company and their voting
rights are on:
• Show of hands – one vote per shareholders; and
• Poll – one vote per fully paid ordinary share.
MAJOR SHAREHOLDERS
TWENTY LARGEST SHAREHOLDERS
Rank
Shareholders
Number Held
Percentage (%)
1
2
3
4
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PSA AUTOMOBILES SA
MR FRANCIS EDWARD BARNABAS WEDIN57
MR FRANCIS EDWARD BARNABAS WEDIN57
MR JOHN LANGLEY HANCOCK
CITICORP NOMINEES PTY LIMITED
MR FRANCIS EDWARD BARNABAS WEDIN57
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
DR HORST DIETER KREUTER
CGI3 PTY LIMITED
MONSLIT PTY LTD 58
DR HORST KREUTER
BNP PARIBAS NOMS PTY LTD
LHO LA PTY LTD
VIVIEN ENTERPRISES PTE LTD
BNP PARIBAS NOMINEES PTY LTD
SNOWBALL 3 PTY LTD 58
MAGNI ASSOCIATES PTY LTD57
RHODIUM CAPITAL PTY LIMITED
20
MR HOANG HUY NGUYEN
33,306,875
12,751,705
11,448,959
6,096,667
6,096,667
4,718,000
3,847,893
3,452,727
2,851,196
2,217,345
1,839,612
1,600,000
1,426,751
1,197,874
1,018,559
1,000,000
960,887
937,000
812,500
750,000
660,000
19.36%
7.41%
6.65%
3.54%
3.54%
2.74%
2.24%
2.01%
1.66%
1.29%
1.07%
0.93%
0.83%
0.70%
0.59%
0.58%
0.56%
0.54%
0.47%
0.44%
0.38%
Totals
98,991,217
57.53%
57 Mr. Francis Edward Barnabas Wedin and his related parties hold a total of 16,458,561 shares (9.56%).
58 Part of the Torresan Group which holds a total of 2,537,000 shares (1.47%).
OPTIONS
FRANKING CREDITS
There are no listed or unlisted options on issue as at 21
The Company has no franking credits.
March 2024.
TAX STATUS
BUSINESS OBJECTIVES
Vulcan Energy Resources Limited has used its cash and cash
The Company is treated as a public company for taxation
equivalents held at the time of listing in a way consistent
purposes.
with its stated business objectives.
169
VULCAN ENERGY ANNUAL REPORT | 2023 TENEMENT SCHEDULE
Vulcan's Licences as at 31 December 2023
Name
State
Resources
applied for
Area
(km2)
Expiry
Ownership as at 31
December 2023
Change in
ownership
Type
Ried
Hessen
Luftbrücke
Hessen
Geothermal,
brine & lithium
Geothermal,
brine & lithium
289.92
7.2025
100 % VER GmbH
N/A
exploration
207.25
9.2026
100 % VER GmbH
N/A
exploration
Rift-Nord
(or Rift)
RLP
Geothermal &
lithium
61.83
6.2027
50% interest in
licence, with 100%
ownership of first
new production
project developed
N/A
exploration
20.43
12.2024
100 % VER GmbH
N/A
exploration
1.99
7.2024
100 % VER GmbH
N/A
exploration
374.1
12.2025
100 % VER GmbH
N/A
exploration
144.49
6.2024
100 % VER Pty Ltd
N/A
exploration
8.2025
100% GGH (part of
VER Group)
32.68
Lithium
9.2024
100 % VER GmbH
96.34
12.2024
100 % VER GmbH
N/A
N/A
N/A
exploration
exploration
exploration
81.12
12.2024
100 % VER GmbH
N/A
exploration
108.03
7.2024
100 % VER GmbH
N/A
exploration
72.26
12.2024
100 % VER GmbH
N/A
exploration
Geothermal,
brine & lithium
Geothermal,
brine & lithium
Geothermal,
brine & lithium
Geothermal,
brine & lithium
Geothermal
Geothermal &
lithium
Geothermal &
lithium
Geothermal,
brine & lithium
Geothermal &
lithium
Geothermal &
lithium
Waldnerturm
BW
Lampertheim II
Hessen
Ortenau II
Mannheim
Taro
Lisbeth
Ludwig
Therese
BW
BW
RLP
RLP
RLP
RLP
Lampertheim
Hessen
Kerner
Löwenherz
Flaggenturm
Fuchsmantel
RLP
RLP
RLP
RLP
75.43
12.2024
100 % VER GmbH
Geothermal
12.2024
100 % VER GmbH
166.75
Lithium
7.2025
100 % VER GmbH
Landau-Süd
RLP
Geothermal
5.2034
19.41
Ilka
RLP
Lithium
11.2025
Insheim
RLP
Geothermal
LiThermEx
RLP
Lithium
19
11.2037
3.2025
JV and brine
offtake agreement
Geox
JV and brine
offtake agreement
Geox
100% Natürlich
Insheim GmbH
100% Natürlich
Insheim GmbH
170
N/A
N/A
N/A
exploration
exploration
exploration
N/A
production
N/A
exploration
N/A
production
N/A
exploration
VULCAN ENERGY ANNUAL REPORT | 2023 MINERAL RESOURCE
Vulcan’s combined Upper Rhine Valley Project Lithium Brine Measured, Indicated and Inferred Mineral Resource Estimates
as at 31 December 2023.
Licence/Area
Reservoir
Classification
GRV km3
Avg. NTG
%
Avg.
Phie
%
Avg. Li
mg/L
Elemental
Li
t
LCE
kt
69
70
71
68
69
90
65
90
65
73
73
73
73
90
65
90
65
90
65
*MUS, BST,
ROT, BM
*MUS, BST,
ROT, BM
*MUS, BST,
ROT, BM
*MUS, BST,
ROT; BM
*MUS, BST,
ROT; BM
BST
BST
BST
BST
*MUS, BST,
ROT
*MUS, BST,
ROT
*MUS, BST,
ROT
BST
BST
BST
BST
BST
BST
BST
Insheim
Rift-Nord
Landau- Süd
Flaggenturm
Kerner
Kerner Ost
Taro
Ortenau
Mannheim
Ludwig
Therese
Total LCE
Measured
Measured
Indicated
Measured
Indicated
Indicated
Inferred
Indicated
Inferred
Indicated
13
9.5
29
12
2.7
7
37
5
13
4.3
Indicated
14.5
Indicated
57
Inferred
105
4
32
7
22
2
22
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Measured
Indicated
Inferred
9
9
9
9
9
10
9
10
9
8
8
8
8
10
9
10
9
10
9
181
181
181
181
181
181
181
181
181
181
181
181
181
153
153
153
153
153
153
151,823
808
110,181
586
355,443
1892
134,677
717
29,620
115,215
158
613
391,201
2,082
76,242
132,558
66,708
406
705
355
237,362
1,263
659,013
3,507
1,883,212
10,024
54,111
288
290,312
1,545
93,220
496
199,226
1,060
29,907
159
200,708
1,068
181 mg/L
178 mg/L
172 mg/L
2,112 kt
9,137 kt
16,484 kt
171
VULCAN ENERGY ANNUAL REPORT | 2023 Note 1: Mineral Resources are not Ore Reserves and do not
Note 6: GRV refers to gross rock volume, also known as the
have demonstrated economic viability. Refer to Competent
aquifer volume.
Person Statement in Appendix for further information.
Note 7: Mineral Resources are considered to have reasonable
Note 2: The weights are reported in metric tonnes (1,000 kg
prospects for eventual economic extraction under current
or 2,204.6 lbs). Numbers may not add up due to rounding of
and forecast lithium market pricing with application of
the resource value percentages.
Vulcan’s A-DLE processing.
Note 3: Reservoir abbreviations: MUS – Muschelkalk
Note 8: The values shown are an approximation and with
Formation, BST – Buntsandstein Group; ROT Rotliegend
globalised rounding of values in the presented summary
Group; BM - Variscan Basement.
table as per JORC guidelines, cannot be multiplied through
Note 4: To describe the resource in terms of industry
standard, a conversion factor of 5.323 is used to convert
to achieve the Mineral Resource estimated volumes shown
above
elemental Li to Li2CO3, or Lithium Carbonate Equivalent
Note 9: For further information, please refer to the Bridging
(LCE).
Engineering Study announcement released on 16 November
Note 5: NTG and Phie averages have been weighted to the
thickness of the reservoir.
2023 (BES Announcement).
ORE RESERVES
The following table sets out the additions to Vulcan’s Ore Reserves as at 31 December 2023, due to the updated Bridging
Engineering Study conducted in November 2023, with increased data availability. The Ore Reserves otherwise remain
unchanged.
INSHEIM, LANDAU SOUTH, AND RIFT NORTH
Reserves Classification
Lithium grade
Economic Reserves Quantity at
Wellhead Reference Point
Proved
Probable
mg/l Li
181
181
kt LCE
318
252
Note: see Competent Person Statement in the Appendix and the BES Announcement for further information.
172
VULCAN ENERGY ANNUAL REPORT | 2023 CORPORATE DIRECTORY
Board of Directors
DR FRANCIS WEDIN
Executive Chair
(from 1 July 2023)
MR CRIS MORENO
Managing Director & CEO
(from 1 July 2023)
MR GAVIN REZOS
Non-Executive Chair
(from 1 July 2023)
Board Advisers
MS JULIA POLISCANOVA
Board Advisor
DR HEIDI GRÖN
Non-Executive Director
MS RANYA ALKADAMANI
Non-Executive Director
MS JOSEPHINE BUSH
Non-Executive Director
MS ANNIE LIU
Non-Executive Director
DR GÜNTER HILKEN
Non-Executive Director
MR MARK SKELTON
Non-Executive Director
(retired 1 February 2024)
DR HORST KREUTER
Chief Representative GER
Company Secretary
Solicitors
MR DANIEL TYDDE
Registered Office
Level 2, 267 St Georges Terrace
Perth WA 6000
Australia
Telephone: 08 6331 6156
Website: https://v-er.eu
Stock Exchange Listing
Listed on the Australian Securities Exchange
(ASX Code: VUL)
Listed on Prime Standard of Frankfurt Stock Exchange
(FSE Code: VUL)
Auditors
RSM AUSTRALIA PARTNERS
Level 32, 2 the Esplanade
Perth WA 6000
ASHURST
Brookfield Place Tower II
Level 10 and 11 St Georges Terrace
Perth WA 6000
Bankers
WESTPAC BANKING CORPORATION
Level 4, Brookfield Place, Tower Two
123 St Georges Terrace
Perth WA 6000
Share Registry
AUTOMIC SHARE REGISTRY
Level 2, 267 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
173
VULCAN ENERGY ANNUAL REPORT | 2023 APPENDIX
174
VULCAN ENERGY ANNUAL REPORT | 2023 JORC RESOURCE STATEMENT
Vulcan’s URVBF hosts a JORC 2012-compliant global
and Hessen. All exploration licences were in accordance with
resource estimation of 27.7 Mt lithium carbonate equivalent
the German Federal Mining Act (Bundesberggesetz ‘BBergG’)
(LCE) at an average grade of 175mg/l Li in the Measured,
for the purpose of commercial exploration of mining-free
Indicated, and Inferred categories as shown in Table 4.
mineral resources: geothermal brine and lithium. Vulcan has
Vulcan’s current Phase One Resource covers three licences
also acquired the geothermal production licence at Insheim
in total, with Insheim as one of the Company’s 16 licences in
with 100% ownership.
the URVBF, and two licences for which Vulcan has secured
commercial agreements, designated Landau-Süd and
Rift (Nord). An overview of licence locations and details is
provided in figure 1.
Mineral Resources and Ore Reserves are estimated by
suitably qualified Vulcan personnel, and reviewed, verified
and signed off by external personnel in accordance with
the requirements of the JORC code, industry standard
In addition to Vulcan’s Phase One licence, Vulcan also holds
techniques and internal guidelines for the estimation and
15 additional licences in the URV, for a total secured licence
reporting of Ore Reserves and Mineral Resources. All Mineral
area of 1,771km², including the recently acquired licence
Resources estimates and supporting documentation
“Luftbrücke” in the Frankfurt region. Vulcan has acquired
are reviewed and signed off by an external, independent
the geothermal brine and lithium rights (licences) through
Competent Person. All Ore Reserve estimates and
direct application to the respective mining authorities of
supporting documentation are reviewed and signed off by
the German states of Rheinland-Pfalz, Baden-Württemberg,
an external, independent Competent Person.
175
VULCAN ENERGY ANNUAL REPORT | 2023 COMPETENT PERSON STATEMENT
LICENCE AREA AND DESCRIPTION
The information in this Report that relates to Mineral
The Project area is in the Upper Rhine Valley Brine Field
Resources and Ore Reserves, and any Exploration
(URVBF), a sub-surface geothermal-lithium brine reservoir
Results and Production Targets is extracted from the
on the border between Germany and France. The area is
ASX announcement made by Vulcan on 16 November 2023
located centrally in Europe and is highly developed with
(“Positive ZERO CARBON LITHIUM™ Project Bridging
many rural and urban centres which are interconnected via
Engineering Study Results”)16, which is available to view
roadways, freeways, and railways. This proximity to urban and
on Vulcan’s website at https://v-er.eu/. Vulcan confirms
rural centres presents a significant opportunity to provide
that in respect of estimates of Mineral Resources and Ore
sustainable renewable energy and heat. The Rhine River
Reserves, and any Exploration Results and Production
dominates the region as a major shipping route, and access
Targets, included in this Report:
to both sides of the river is possible, with many bridges.
There are well developed industrial areas for automotive
manufacturing, chemical
industry, and related service
sectors, including the Opel manufacturing plants owned by
Stellantis, one of Vulcan’s lithium offtakers and investors.
·
It is not aware of any new information or data that
materially affects the information included in the original
market announcement, and that all material assumptions
and technical parameters underpinning the estimates in
the original market announcement continue to apply and
have not materially changed.
· The form and context in which the Competent Person’s
findings are presented have not been materially modified
from the original market announcement; and
· All material assumptions underpinning any production
targets (and any forecast financial information derived from
such production targets) included in this announcement
continue to apply and have not materially changed.
16 https://www.investi.com.au/api/announcements/vul/22623520-1b3.pdf
176
VULCAN ENERGY ANNUAL REPORT | 2023 FIGURE 17 OVERVIEW MAP OF VULCAN'S LICENCE AREAS IN THE UPPER RHINE VALLEY,
SHOWING WELL AND SEISMIC SURVEYS
Höchst Industrial Park
Central Lithium Plant
planned location
R
h
i
n
e
R
i
v
e
r
Frankfurt
GERMANY
Upper Rhine Valley
Brine Field
Stellantis
Rüsselsheim Plant
Landau Süd
Existing plant
Kaiserslautern
ACC/Stellantis Gigafactory Development
Insheim
Vulcan’s geothermal wells
and plant, in production
Mannheim
Heat offtake
agreement
Karlsruhe
Vulcan head
office and
Vulcan
Labs
FRANCE
Haguenau
Vulcan France office
Strasbourg
Stellantis
Mulhouse
Plant
LEGEND
Production licence
Access to the licence
through a brine offtake
Lithium and
geothermal licence
Lithium and geothermal
licence application
Renewable heat
offtake agreement
Deep geothermal
wells/plants
Höchst Industrial Park
Kaiserslautern ACC/Stellantis
Gigafactory Development
The upstream area for Phase One of the ZERO CARBON
holds a 100% interest in the operating Insheim licence,
LITHIUM™ Project comprises the Löwenherz district,
including the operational geothermal wells and plant. It has
consisting of three licence areas. Lithium chloride (LiCl)
a brine offtake agreement in place to access brine from
production from wells in this area will be transported to the
the geothermal wells and plant in the Landau-Süd permit,
CLP, at Vulcan’s downstream lithium chemicals production
as well as a Joint Venture Agreement to develop another
site at the Höchst Industrial Park near Frankfurt am Main
project area in Landau-Süd. It also has an agreement to
(figures 5, 7 & 8), to which Vulcan has secured exclusive
develop the Rift Nord licence neighbouring Insheim, subject
access. Within the upstream Phase One district, Vulcan
to production compensation.
177
VULCAN ENERGY ANNUAL REPORT | 2023
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