Vulcan Energy Shares: $200 Million Placement Announced (ASX:VUL)

Vulcan Energy Resources Ltd [ASX:VUL] shares are motionless today, on the back of a company-driven trading halt.

The halt is in place after the lithium producer announced a capital raising effort.

Vulcan’s shares have shown a general uptrend in the last 12 months, as you can see in the chart below:

ASX VUL - Vulcan Energy Share Price ChartSource:

In recent times, Vulcan has enjoyed a stellar run.

Several events have influenced upswings in the share price, such as a , and a with the world’s largest producer of lithium-ion batteries, LG Energy Solutions, among other key milestones.

Today, we’ll look at the company’s capital raise announcement in more detail and reveal our outlook for Vulcan shares in the months ahead…

What were the highlights of today’s announcement?

Vulcan announced it has launched a placement to accelerate its exploration initiatives.

The key mission is to expand its dual-renewable energy and lithium development strategy.

This is an underwritten institutional placement designed to raise $200 million.

There will also be a non-underwritten share purchase plan available for eligible existing Vulcan shareholders.

The aim for the latter is to raise a further $20 million.

Along with existing cash, proceeds will go to the following initiatives:

  • Targeted acquisition and refurbishment of exploration equipment
  • Targeted acquisition and upgrade of existing brownfield energy and brine infrastructure
  • Expansion of project development; and
  • General working capital and costs of the offer

Vulcan’s ongoing investment into its rapid growth bodes well for its flagship Zero Carbon Lithium project.

The company is aiming to become the world’s first lithium producer with net-zero greenhouse gas emissions.

Last month, results of its Life Cycle Assessment (LCA) indicated that Vulcan has all the resources needed to achieve its mission.

However, before construction begins, several prerequisite boxes still need to be ticked.

These include securing offtake agreements, the completion of a definitive feasibility study, and further explorations.

What’s next for Vulcan shares?

The company’s trading halt will continue until Thursday, 16 September, or until an announcement is made advising of the capital raising’s outcome.

The stock is currently up 474% year-to-date, and it will be interesting to see how the market reacts to the capital raise (and how shares perform as a result).

But does this mean Vulcan should be a part of your portfolio?

It’s obvious that lithium is a red-hot space right now, and energy investors will likely have their eye on this stock.

But Vulcan is just one of many opportunities, and there’s no knowing whether other lithium stocks will rise to the occasion.

Our experts at Money Morning have discovered three ASX lithium stocks that could potentially thrive in 2021.

It’s worth considering these before you make your next trade.

We’ve shared our findings in a report, which you can download for free today.

Click here to get your free copy now.


Kiryll Prakapenka,

For Money Morning

PS: How to Find Promising Energy Stocks — Discover why the energy market is ripe for massive disruption and how to identify innovative energy stocks. Click here to learn more.

Kiryll Prakapenka is a research analyst focusing on investigating the biggest trends in investments. Kiryll brings sound analytical skills to his work, courtesy of his Philosophy degree from the University of Melbourne. A student of legendary investors and their strategies, Kiryll likes to synthesise macroeconomic narratives with a keen understanding of the fundamentals behind companies..

Money Morning Australia