3 reasons to buy this ASX 300 lithium share today

A leading investment analyst forecasts a big turnround for this well-funded ASX 300 lithium share.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • Vulcan Energy shares increased by 7% on Wednesday amid a global rally in lithium stocks.
  • The ASX 300 lithium miner recently announced a €2.2 billion funding package for its Lionheart project, potentially positioning it for strong future performance.
  • EnviroInvest’s Elio D’Amato has a bullish outlook on the stock.

S&P/ASX 300 Index (ASX: XKO) lithium share Vulcan Energy Resources Ltd (ASX: VUL) enjoyed a strong run on Wednesday.

Amid a broader rally among global lithium miners, Vulcan Energy shares closed up 7.05% yesterday, trading for $3.95 apiece. The ASX 300, meanwhile, ended the day down 0.12%.

Longer term, Vulcan Energy shares remain down 18% since this time last year, underperforming the 3.67% 12-month gains posted by the benchmark index.

Looking to the year ahead, however, EnviroInvest's Elio D'Amato believes Vulcan Energy will be much more rewarding for its shareholders (courtesy of The Bull).

Here's why.

A white EV car and an electric vehicle pump with green highlighted swirls representing ASX lithium shares

Image source: Getty Images

ASX 300 lithium share well-funded

"Vulcan recently secured a €2.2 billion ($A3.929 billion) financing package to fully fund phase one of its Lionheart project," said D'Amato, who has a buy recommendation on the ASX 300 lithium share.

Lionheart, he explained, is "Europe's first fully integrated, zero carbon lithium and renewable energy project". Which is the second reason you may want to add Vulcan Energy shares to your buy list.

According to D'Amato:

Funding enables immediate construction. The package includes €1.185 billion in senior debt, €204 million in German government grants, €150 million from KfW, plus strategic equity from HOCHTIEF, Siemens and Demeter.

As for the third reason Vulcan Energy shares could outperform in the months ahead, D'Amato said, "Phase one targets 24,000 tonnes of lithium hydroxide per year. With funding risk removed and execution underway, VUL's strategic positioning is materially stronger."

A word from Vulcan Energy's CEO

Vulcan Energy shares crashed 33.1% on 4 December, the day the ASX 300 lithium share emerged from the trading halt following its funding announcement.

However, investors weren't selling the company because of the new funding secured via European government grants and senior debt.

Rather, Vulcan Energy separately announced that it had raised around $710 million via an institutional placement. Investors were favouring their sell buttons on the day, as the new shares were issued for $4 apiece, 34.7% below the last closing price.

But Vulcan Energy CEO Cris Moreno was unapologetic about the discounted capital raise.

"The placement will enable Vulcan to transition from development phase into execution phase with project execution of Project Lionheart due to commence in the coming days," he said.

Moreno added that the ASX 300 lithium share is producing "a lighthouse project for Europe".

According to Moreno:

Lionheart is set to redefine lithium production, delivering Europe's first fully domestic and sustainable lithium value chain. It will also provide a clean and reliable source of renewable energy for local communities and industries in Germany's Upper Rhine Valley.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Siemens Energy Ag. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Engineer at an underground mine and talking to a miner.
Resources Shares

This ASX gold stock just smashed records, so why is it down?

All systems go for this miner, but are investors taking a breather?

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Guess which ASX rare earths stock just leapt 68% on big acquisition news

Investors are piling into the ASX rare earths miner today after it emerged from a lengthy trading halt.

Read more »

gold, gold miner, gold discovery, gold nugget, gold price,
Resources Shares

Greatland Resources posts record March quarter cash build and gold-copper resource growth

Greatland Resources announced record March quarter cash build, robust production results, and major resource upgrades at Telfer and O’Callaghans.

Read more »

A woman holds a chilli in front of her mouth as an upside down smile.
Resources Shares

Red-hot PLS shares: Smart buy or risky move?

Up 299%, but do brokers see more upside ahead?

Read more »

A mining worker clenches his fists celebrating success at sunset in the mine.
Resources Shares

Capricorn Metals reports Mt Gibson gold results

Capricorn Metals has announced exceptional underground gold drilling results, extending high-grade mineralisation at the Mt Gibson Gold Project.

Read more »

Two young African mine workers wearing protective wear are discussing coal quality while on site at a coal mine.
Resources Shares

Whitehaven Coal shares: Q3 FY26 shows steady sales, improved pricing

Whitehaven Coal delivered steady coal sales, improved pricing, and lower net debt in Q3 FY26, maintaining its full-year guidance and…

Read more »

A construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer.
Resources Shares

Deep Yellow provies March quarter update

Deep Yellow progressed its Tumas uranium project and held $171.6m in cash at 31 March 2026.

Read more »

Businesswoman holds hand out to shake.
Resources Shares

Is this ASX lithium stock a takeover target? Sure looks like it

This company's shares could rocket if the rumours are true.

Read more »