Quarterly Activities Report for the Period ending 31 December 2023

30 January 2024 – During the Quarter, Vulcan Energy Resources Limited (Vulcan, ASX: VUL, FSE: VUL, the Company) has made significant progress towards execution of Phase One of Vulcan’s ZERO CARBON LITHIUM™ Project. The Company has also commenced Phase One debt and project-level equity financing.

Highlights from the Quarter:

-          Positive results from Vulcan’s Bridging Engineering Study for Phase One, demonstrating the low operating cost and robust nature of the ZERO CARBON LITHIUM™ Project, by keeping target NPV materially the same, demonstrating the robustness of the Project despite volatile market conditions. The study delivered a reduction in CAPEX and OPEX despite the inflationary environment, with the same target production capacity, while also increasing project definition to a “Class II” estimate.

-          Start of structured 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) during the Quarter, and indication of ECA support from Canada, Italy, and France during 2023.

-          Positive decision by the Landau City Council in Germany to execute an agreement to allow Vulcan to begin construction of its integrated Geothermal and Lithium Extraction Plant (G-LEP) on the intended land located in the Landau region.

-          Opening of Vulcan’s Lithium Extraction and Optimisation Plant (LEOP) in Landau, Germany, attended by key investors, offtakers and politicians, signifying Europe’s first plant for fully domestic lithium chemicals production, a step towards securing Europe’s lithium supply chain for Electric Vehicle (EV) manufacturers.

-          Completion of Environmental and Social Impact Assessment (ESIA) for Phase One, an important third-party validation of Vulcan’s sustainability credentials, supporting the Company’s efforts to raise sustainable or “green” debt finance.

Mr. Cris Moreno, Managing Director and CEO commented: “The last quarter of 2023 was pivotal for Vulcan, specifically achieving key milestones towards delivering Phase One of our ZERO CARBON LITHIUM™ Project.

“With the opening of Europe’s first Lithium Extraction Optimisation Plant (LEOP), we are seeing the start of tangible actions towards securing a domestic, sustainable supply chain for lithium in Europe.

“Our core focus now and in the upcoming months is on producing the first tonnes of lithium chloride to specification in Q1, and we aim to be ready for lithium hydroxide production from our lithium hydroxide optimisation plant (CLEOP) in Q2.

“The debt and project-level equity financing process for Phase One will also ramp up throughout Q1 of 2024, which is currently progressing well despite challenging market conditions. In the meantime, we are focused on preserving our strong cash position to reach our target milestone of financial close for Phase One.”

Health, safety, environment, and quality

-          During the Quarter, the Company conducted the 2023 Health, Safety, Environment and Quality (HSEQ) review and implemented a scorecard reporting process for its 2024 targets. As part of this process, leading and lagging indicators were developed with a strong focus on injury prevention.

-          Safety leadership rounds were introduced and HSEQ tours conducted by HSEQ professionals. Key Performance Indicators (KPIs) have been implemented to steer the Vulcan safety culture definition, focusing on company wide idea generation programs for improvement and training. Included is a 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.

-          There were no recordable lost time injuries during the Quarter.

Renewable energy and lithium chemicals production

Geothermal operations

-          Operations continued at Vulcan’s Natürlich Insheim geothermal renewable energy wells and plant (figure 1), with production of 5.680 MWh of gross baseload, renewable power, at an average selling price of €0.252/kWh, for approx. €1.4 million gross revenue generated.

-          During the Quarter, as part of the joint publicly and privately funded GEOSMART project to test the supply of renewable heat to local communities, the construction and commissioning of the components for district heating (heat exchangers, air-coolers, thermal energy storage, piping system, atomisation control) continued.

• Finalisation is planned in Q3 2024 to test different modes of operation for flow andrenewable heat supply.
• District heating using renewable energy is planned for the Insheim community in Q4 2025 in collaboration with its local energy supplier and grid operator.
• Vulcan is a consortia member of GEOSMART, which aims to optimise and demonstrate innovations to improve the flexibility and efficiency of geothermal heat and power systems.

Figure 1 Vulcan’s Natürlich Insheim geothermal renewable energy wells and plant

Lithium Extraction and Optimisation Plant (LEOP)

-          Brine was successfully introduced into the plant in November to enable the lithium extraction process to begin.

-          On 23 November Vulcan officially opened its LEOP in Landau Germany (figure 2-6), in a ceremony attended by local community, shareholders, politicians, strategic partners and industry.

For Europe, the opening of LEOP is significant because:

• It is Europe's first plant for fully domestic lithium chemicals production, a step towards securing Europe's lithium supply chain for Electric Vehicle (EV) manufacturers.
• It will produce lithium from the largest lithium resource in Europe, the Upper Rhine Valley Brine Field.
• Representing a €40 million investment to date by Vulcan, LEOP allows for optimisation and operational training in a pre-commercial setting, and product qualification facility, to enable commercial operational readiness.

-          To extract lithium from brine, Vulcan is using Adsorption-type Direct Lithium Extraction (“A-DLE”), which is a highly efficient, highly sustainable commercially proven process, and accounts for 10% of global lithium production today (figure 7).

-          Vulcan is using its proprietary sorbent VULSORB® as part of the lithium extraction process. During the piloting phases, VULSORB® demonstrated higher performance and lower water consumption for lithium extraction compared with commercially available sorbents tested by the Company.

-          Once the lithium chloride is produced, it will travel to Vulcan’s downstream Central Lithium Electrolysis Optimisation Plant (CLEOP) in the Industrial Park, Frankfurt-Hoechst where the lithium chloride will be converted into battery grade lithium hydroxide.

Figure 2 LEOP Opening on 23 November 2023 in Landau, Germany

-          Interest in the existing Vulcan pilot plants, in their third year of operation, remained high, with visits from the US Consul General, Norman Thatcher Scharpf, the Automotive Engineering Network (AEN), the University of Karlsruhe (KIT), the Chamber of Commerce, potential strategic investors, and related industry as well as several regional interest groups.

Figure 3 Inside the purification process room at Vulcan LEOP

Figure 4 Head of the Rhineland-Palatinate Mining Authority Andreas Tschauder (left), Founder and Executive Chair, Dr. Francis Wedin (middle) and CDO Thorsten Weimann (right) at Vulcan's LEOP opening.

Figures 5 and 6 Tours held at the LEOP opening: politicians, industry, and investment partners.

Figure 7 Current commercial use of DLE technology and projected increase in use

Update on Central Lithium Electrolysis Optimisation Plant (CLEOP)

-          During the Quarter, Vulcan completed ground works of its CLEOP at the Industrial Park, Frankfurt- Hoechst.

-          Pre-commissioning of the main equipment has begun, continuing the Company’s progress in delivering the first tonnes of carbon neutral lithium on project schedule.

-          The CLEOP will focus on optimising operating conditions and training the production team, whilst the commercial Phase One Central Lithium Plant (CLP) is being constructed in the same Industrial Park.

-          Within the CLEOP, the lithium chloride produced in Vulcan’s LEOP will be converted into battery grade lithium hydroxide, which will be tested by Vulcan’s lithium offtake partners Stellantis, Volkswagen, Renault, Umicore and LG Energy Solution.

Figure 8 Electrolyser Equipment - Flushing (side view)

Figure 9 Electrolyser Equipment – Catholyte, Flushing Anolyte

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About Vulcan

Founded in 2018, Vulcan’s unique Zero Carbon Lithium™ Project aims to decarbonise lithium production, through developing the world’s first net carbon neutral lithium business, with the co-production of renewable geothermal energy on a mass scale. By adapting existing technologies to efficiently extract lithium from geothermal brine, Vulcan aims to deliver a local source of sustainable lithium for Europe, built around a net zero carbon strategy with exclusion of fossil fuels. Already an operational renewable energy producer, Vulcan will also provide renewable electricity and heat to local communities. Vulcan’s combined geothermal energy and lithium resource is the largest in Europe[i], with license areas focused on the Upper Rhine Valley, Germany. 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 markets. Guided by our Values of Climate Champion, Determined and Inspiring, and united by a passion for the 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 offtake agreements with some of the largest cathode, battery, and automakers in the world. As a motivated disruptor, Vulcan aims to leverage its multidisciplinary expert team, leading geothermal technology and position in the European EV supply chain to be a global leader in producing zero fossil fuel, net carbon neutral lithium while being nature positive. Vulcan aims to be the largest, most preferred, strategic supplier of lithium chemicals and renewable power and heating from Europe, for Europe; to empower a net zero carbon future.

Corporate Directory

Executive Chair

Dr. Francis Wedin

Managing Director and CEO

Cris Moreno

Deputy Chair

Gavin Rezos

Non-Executive Director

Ranya Alkadamani

Non-Executive Director

Annie Liu

Non-Executive Director

Dr. Heidi Grön

Non-Executive Director

Josephine Bush

Non-Executive Director

Dr. Günter Hilken

Non-Executive Director

Mark Skelton – retiring as of 1 February 2024

Chief Representative GER

Dr. Horst Kreuter

Company Secretary

Daniel Tydde

For and on behalf of the Board

Daniel Tydde | Company Secretary

Media and Investor Relations contact

International:

Annabel Roedhammer, Vice President Communications and Investor Relations | [email protected] | +49 (0) 1511 410 1585

Please contact Vulcan’s Legal Counsel Germany, Dr Meinhard Grodde, for matters relating to the Frankfurt Stock Exchange listing on [email protected].

Reporting calendar

Link to English original news:

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Disclaimer

Some of the statements appearing in this announcement may be in the nature of forward-looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to the industries in which Vulcan operates and proposes to operate as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets, among other things. Actual events or results may differ materially from the events or results expressed or implied in any forward- looking statement. No forward-looking statement is a guarantee or representation as to future performance or any other future matters, which will be influenced by a number of factors and subject to various uncertainties and contingencies, many of which will be outside Vulcan’s control.

Vulcan does not undertake any obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions or conclusions contained in this announcement. To the maximum extent permitted by law, none of Vulcan, its Directors, employees, advisors or agents, nor any other person, accepts any liability for any loss arising from the use of the information contained in this announcement. You are cautioned not to place undue reliance on any forward-looking statement. The forward-looking statements in this announcement reflect views held only as at the date of this announcement.

This announcement is not an offer, invitation or recommendation to subscribe for, or purchase securities by Vulcan. Nor does this announcement constitute investment or financial product advice (nor tax, accounting or legal advice) and is not intended to be used for the basis of making an investment decision. Investors should obtain their own advice before making any investment decision.

Vulcan has carried out a definitive feasibility study (“DFS”) and bridging engineering study (“Bridging Study”) for Phase One of its Zero Carbon Lithium™ Project (“Project”), the results of which were announced to the ASX in the announcements "Zero Carbon Lithium Project Phase 1 DFS Results" dated 13 February 2023 (“DFS Announcement”) and “Positive Zero Carbon Lithium™ Project Bridging Study Results” on 16 November 2023 (“Bridging Study Announcement”). This announcement may include certain information relating to the DFS and the Bridging Study. The DFS and Bridging Study are based on the material assumptions and parameters outlined in their respective announcements. While Vulcan considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Bridging Study or DFS will be achieved. This presentation may also include certain information relating to Phase 2 of its Project, Vulcan has not yet carried out a definitive feasibility study for Phase Two of its Project.

Competent Person Statement

The information in this announcement that relates to estimates of Mineral Resources and Ore Reserves is extracted from the Bridging Study Announcement which is available to view on Vulcan's website at www.v-er.eu. Vulcan confirms, that in respect of the estimates of Mineral Resources and Ore Reserves included in this announcement:

a)       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;

b)       the form and context in which the Competent Persons' findings are presented in this announcement have not been materially modified from the original market announcement; and

c)       all material assumptions underpinning the production targets (and the forecast financial information derived from such production targets) included in this announcement continue to apply and have not materially changed.

[i] According to public, JORC-compliant data. See Upgrade of Zero Carbon Lithium™ Project Resources, 29 September 2023