SRH AlsterResearch AG: Update Vulcan Energy - “Indispensable player on path to commercialize Lithium in Europe

September 2020 The Pre-Feasibility Study (PFS) of the Zero Carbon Lithium Project® has been completed. For Vulcan, this brings about a leading and unique position in the race to commercialize Lithium in Europe. Moreover, Vulcan steps up to an indispensable role on the path to commercial Lithium extraction in the Upper Rhine Valley. The project – it rather is a portfolio of projects – combines operations of extraction, of upgrading Lithium to a high purity hydroxide (LiOH) as well as the production of energy (renewable electricity). Due to the PFS, it reaches unparalleled dimension with an envisaged annual LiOH-production target of 39.4 thousand t (34.7 thousand t LCE p.a.). In Vulcan's project areas, a staged development will implement a process technology proven effective for more than 20 years in industrial lithium carbonate production, which is known as Direct Lithium Extraction (DLE). Estimated resources of Vulcan’s Upper Rhine Valley Project have reached a total of approx. 15.85 million t LCE in JORC-compliant terms (Inferred and Indicated Mineral Resource, probable Mineral Reserve: 1.12 million t LCE). This is an outstanding magnitude. A portion of 3.62 million t LCE has been classified as Indicated status. The PFS sets the stage for further refinement of geological and engineering data as well as of the financial road map. Subsequent testwork will lead to the Definitive Feasibility Study (DFS), with completion scheduled for late 2021. On the basis of the DFS, Vulcan will be able to scale-up the lithium adsorption process so that commercial operation could start by mid-2024. With a CO2 footprint of "zero", the project is intending to mark the beginning of the decarbonization of the battery industry. Vulcan has achieved to take an indispensable role on the path to commercial Lithium extraction in the Upper Rhine Valley – and this conclusion is valid apart from its project’s pure dimension (financial projections, significance of resource). With a concept as well as economic data on PFS-level on hand, Vulcan has evolved to be the benchmark and thus preferred partner for stakeholders to promote Lithium production in Germany (car / battery industry, electricity utilities). We have set a price target of EUR 8.20 (equivalent: AUD 12.95) for shares in Vulcan Energy Resources. The investment recommendation is "Buy" (unchanged). Investment recommendation: Buy (previous: Buy) Price target: AUD 12.95 / EUR 8.20 (previous: AUD 2.55 / EUR 1.55) Stock exchange: Australian Stock Exchange Reuters: VUL.AX Bloomberg: VUL:AU Dual listing Stock exchange: Frankfurt Stock Exchange Reuters: 6KO.DE Bloomberg: 6KO:GR ISIN/WKN: AU0000066086/A2PV3A Market capitalisation:AUD 866.11 million EUR 538.58 million Number of shares, undiluted: 87,57 million Shareholder structure: Top 20 shareholders ~50% Management (undiluted) ~18% Closing price ASX (19 January): AUD 9.890 High/low ASX 52 weeks: AUD 14.200 / AUD 0.150 Opening price Frankfurt (19 January): EUR 6.15 High/low Frankfurt 52 weeks: EUR 6.300 / EUR 0.076 Issuer website: www.v-er.com Analyst: Oliver Drebing [e-mail] [phone] www.alsterresearch.com 19 January 2021 Vulcan Energy Resources Limited – Equity Research