Key points
- Vulcan shares are falling after it announced a potential expansion into Italy
- The lithium developer has identified a promising area which could provide sustainable lithium
- The Cesano Project covers an area of 11.5 km2 and is located 20km from Rome
The Vulcan Energy Resources Ltd (ASX: VUL) share price is starting the week in the red.
In early trade, the lithium developer's shares are down 4% to $9.01.
Why is the Vulcan share price falling?
The Vulcan share price is falling this morning after broad weakness in the lithium sector offset the release of a positive announcement relating to a potential expansion.
According to the release, the company has been granted a new research permit in Italy located 20 km north-northwest of Rome. The release notes that the permit has been given the name Cesano.
The Cesano permit extends over an area of 11.5 km2 and includes an area where a single geothermal well yielded two hot brine samples that contained high average lithium-in-brine historical (1976) grades of 350 and 380 mg/l Li.
Management believes the area could have potential for sustainable lithium battery chemicals development in line with its Zero Carbon Lithium business in Germany. This is based on the recorded high heat and lithium grades within the brine and encouraging flow rates.
Vulcan's in-house geological team in Germany will now collaborate with Italian geologists and local stakeholders to collate and assess historical data, verify the lithium content, and assess the brine for potential lithium project development.
If successful, management believes the Cesano Project could provide a source of strategic, sustainable lithium in Italy for Europe's battery and automotive market, and become a possible future additive to Vulcan's Zero Carbon Lithium business.
"Project Rollo"
Vulcan's Managing Director, Dr. Francis Wedin, notes that the Cesano Project is part of a wide project called Project Rollo.
He commented: "Vulcan is aiming to increase the future supply of our sustainable lithium production response to significant customer demand. By growing and diversifying our project development portfolio – an initiative we internally call "Project Rollo" – we ultimately aim to develop a global Zero Carbon Lithium business focused on Europe, and to become a significant producer of renewable energy and sustainable lithium for electric vehicles."
"Ultimately, we aim to leverage our extensive experience in lithium extraction from heated brines to have a materially decarbonising effect on global electric vehicle supply chains and in doing so build stakeholder value."
Dr Wedin appears optimistic that the Cesano Project could be a valuable addition to its portfolio in the future.
He concluded: "After an extensive geological review, we have identified an area in Italy with positive flow rate, historical lithium grade and reservoir temperature indications that could be conducive to Vulcan's unique method of using renewable heat to drive lithium processing, with net zero carbon footprint, for the European electric vehicle market. We will be working with local partners to ascertain the potential of the area in more detail, and ascertain next steps."
