Vulcan Energy Resources Ltd (ASX: VUL) is a lithium stock on ASX aiming to be the world’s first Zero Carbon Lithium company in the electric vehicle industry. The company produces lithium for EV batteries and renewable energy businesses. The company was founded in 2018.
Renowned chemical engineers and geologists back the company with zero-carbon energy footprints. The company sees Europe as the fastest growing market for the EV industry and aims to solve its lithium needs in the upcoming years. The company has tremendous resources in the Upper Rhine Valley of Germany to serve the purpose.
The company is currently targeting Europe, the fastest-growing lithium chemical market. Europe has zero local supply at the moment. Vulcan Energy will not only solve Europe’s lithium problems but also help them grasp a good market share in the future’s biggest electric vehicle market.
VUL: Key Financials
VUL stock has lost more than 25% in the previous 5 trading days. In the intraday trading session today, the company lost around 14%. The VUL stock is currently trading at a 52-weeks low. VUL stock is trading at $5.52 with a market cap of approximately 730.63 Million AUD.
- Vulcan Energy Resources Limited’s revenue in the first half of 2021 was $1.52 million.
- Its net loss was approximately $6.28 million, with a year-on-year increase of 72% in the loss.
- The operating expense was $9.44 million, increasing by 192% y-o-y.
- Its EBITDA in the 1H22 was – ($7.2 million), increasing by 136% y-o-y.
- The company’s loss per share in the first half of 2022 was 6.52 cents. Last year in the same period, its loss per share was 5.07 cents.
- As of 1H22, the company has cash and cash equivalents of approximately $134.5 million.
Why is VUL Stock losing value?
Previously one of the renowned financial institutions, Goldman Sachs updated its price targets for lithium in 2022. As a result, most lithium stocks listed on ASX and other financial markets across the globe crashed and lost a significant percentage in their valuation.
Goldman Sachs said they had set a target of $60,000 per tonne in 2022, but the current statistics suggest otherwise. They currently expect the trading price of lithium to be around $54,000 in 2022; in 2023, its price will drastically reduce to only $16,000.
VUL, a lithium stock listed on ASX, got a severe blow from the new price targets for lithium. As a result, they lost 25% in the valuation in the last 5 days and 13% in the intraday trading session today.
VUL: Key Targets
- Vulcan energy expects to verify that all organisations are carbon neutral across Vulcan Group annually.
- They anticipate ensuring 100% renewable energy is used to power demonstration and commercial plants.
- The company wants to partner with local biodiversity projects to further enhance local climate efforts through nature positive approach.
- They expect to extend geothermal capacity with different plants.
- VUL wants to implement the ‘Girls in Science’ scholarship program
- Report to TNFD as an industry-first adopter alongside TCFD: nature-focused reporting to be incorporated alongside climate reporting.
- The company expects to get certification to ISO 14001:2015 & 9001
- The company aims for 20ktCO2 annual avoidance through renewable electricity production from existing operations.
- Vulcan Energy targets 3.6MtCO2 to be avoided for LiOH material allocated to current off-takers.
- They anticipate a renewable heat offtake agreement signed with MVV to supply 25,000 – 35,000 households from 2025.
Conclusion
VUL is a significant lithium stock on the ASX and was one of the prominent lithium stocks due to its valuation. The company was founded recently in 2018, but its team of highly qualified industry experts and its zero-carbon lithium company caught the attention of investors. The company is sitting on the massive resources in the Upper Rhine Valley of Germany, which aims to dominate the lithium market scene in Europe. But the current price targets for lithium resulted in the lithium company shedding a significant amount of value.
