Vulcan Energy Resources (ASX:VUL) is ready to tackle phase one debt and equity financing after receiving a $200 million (€120 million) non-binding letter of support from Export Finance Australia.
Vulcan, which has a $378.75 million market capitalisation, says funds will be put towards the phase one financing of its Zero Carbon Lithium Project in Germany once a bridging study is completed.
The phase one financing process is timed to coincide with public funding applications in Germany.
Vulcan notes the letter of support from the Australian government’s export credit agency could be converted into a binding agreement once customary conditions and financing terms are met, including but not limited to a confirmed level of Australian content.
The Australian content includes legal, technical, market, and environmental due diligence reports and acceptable lender and other contracts.
The company states it has already secured ‘substantial’ in-principle government-backed Export Credit Agency (ECA) support — subject to customary conditions — from Bpifrance Assurance Export, the French ECA, the Italian ECA, and the Canadian ECA, Export Development Canada (EDC).
Vulcan Energy Resources Managing Director and Chief Executive Officer (CEO) Cris Moreno says the support represents a ‘signal of confidence’ ahead of its planned equity financing.
“Noting the deepening relationship between Australia and the EU as part of the international push to develop and secure global supply chains for clean energy critical minerals, it is encouraging that we have secured substantial in-principle financing support from government-backed export credit agencies (ECAs) both in Europe and in Australia.
EFA’s letter of support is encouraging and follows our successful market sounding conducted in the last few months, which has seen strong commercial and development bank support, as well as substantial in-principle ECA support for phase one.
“This signal of confidence is timely and strengthens our position as we enter our project-level debt and equity financing for phase one of the Zero Carbon Lithium Project in November”
This signal of confidence is timely and strengthens our position as we enter our project-level debt and equity financing for phase one of the Zero Carbon Lithium Project in November.
This is a tangible and powerful symbol of the sort of Australia-EU links sought as part of the Minerals Security Partnership, which includes Australia, Germany, France, the European Commission and the USA.”
Vulcan Energy is focused on decarbonising the production footprint of lithium-ion batteries by producing a world-first lithium hydroxide monohydrate chemical product with a carbon-neutral footprint from its geothermal lithium brine project in Germany.
The company had $147.696 million cash and cash equivalents at hand as of 30 June 2023, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Vulcan Energy Resources
