Vulcan Energy Resources Ltd (ASX: VUL) shares are catching the eye on Thursday.
In morning trade, the ASX 200 lithium stock is up 8% to $3.84.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.8% at the time of writing.
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Why is this ASX 200 lithium stock jumping?
Investors have been buying the lithium developer's shares this morning following the release of a major update on its Lionheart operation in Germany.
According to the release, the ASX 200 lithium stock has achieved financial close as part of the EUR2.2 billion (A$3.9 billion) Lionheart Project equity and debt financing arrangements.
It notes that this financing package is designed to fund the construction of Lionheart through a combination of arrangements at the project, subsidiary, and company level.
What is Lionheart?
The Lionheart Project is located in the Upper Rhine Valley Brine Field between Germany and France.
It is Vulcan's first phase of production and described by management as "a lighthouse project for Europe's energy and critical raw material resilience."
The development of Lionheart involves the construction of an integrated lithium and renewable energy project targeting production capacity of 24,000 tonnes of lithium hydroxide monohydrate (LHM). This is enough for around 500,000 electric vehicle batteries per year.
In addition, it is expected to deliver a co-product of 275 GWh of renewable power and 560 GWh of heat per annum for local consumers. This is over an estimated 30-year project life.
In December, the ASX 200 lithium stock secured its financing package, made a concurrent positive final investment decision (FID), settled its underwritten institutional placement and entitlement offer and commenced Lionheart construction.
Now with financial close, the balance of the financing package can be accessed subject to ongoing conditions for drawdown. This is customary for such financing arrangements.
The company expects these remaining conditions to be satisfied in line with disbursements and drawdown schedules sequenced to Lionheart's budgeted construction schedule and capital expenditure profile.
The ASX 200 lithium stock's executive director and group chief financial officer, Felicity Gooding, believes this is a significant milestone for the company.
Commenting on the news, Gooding said:
Reaching Financial Close is a significant milestone and reflects the continued support from our financing partners, including European and German government agencies, commercial banks, and strategic industrial partners. We continue to enact our strategic plan to deliver Lionheart on time, on budget and to nameplate capacity.
