VUL 3.29% $7.65 vulcan energy resources limited

Financial review, page-120

  1. 429 Posts.
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    Success attracts attention - for better or worse
    As with so many of your posts, I agree - NassauPalmyra. Some here are trying to dress mutton up as lamb - and to justify negativity as an alternative viewpoint - while others find ways of cross-promoting other stocks in the course of a 'challenging' Vulcan's work. I understand how the focus on Vulcan's exceptional performance attracts attention of others who haven't bought in. It's human nature with something so exceptional, unfortunate as some aspects of it are.

    Warren Buffett again
    I also agree that some things take longer than some of us would like. Quoting Warren Buffett:
    "No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant.” So, the DFS apparently will take approx. another year. However given the state of the lithium market and the significance and location of our project I wouldn't be surprised if we get offtake agreements fairly soon.

    European lithium - strategic advantage including sovereign risk
    The demand from Europe for local lithium will be extraordinary. There are numerous reasons why European lithium buyers from the myriad of battery factories being built there will want a European supplier (and especially a German one I suggest). For example:
    • Sovereign risk - e.g. in Argentina. Unfortunately, Argentina has suffered many economic crises, reflecting in some unflattering comments about its currency etc. However the problem runs deeper. Here's an illustration of an unhelpful mindset. On 29 June 2020 in this article https://www.thebubble.com/is-argentina-going-to-nationalize-lithium the website Bubble posed the question: "Is Argentina Going to Nationalize Lithium?" Bubble describes itself as "Argentina’s guide to pop culture in English for foreigners and local English speakers alike....". I don't know if nationalisation is likely - I certainly hope not - but it does highlight that there is an additional element of risk having a project in some places.
    • Taxation on carbon - this is bad news for those shipping semi-bulk commodities like lithium from say South America when fuel is taken into account. Additionally, some buyers will be discouraged even without taxation penalties from sourcing from a project that requires a lot of fuel to get the lithium to a factory.
    • Shipping cost and travel times are obvious negative elements (especially for a semi-bulk product that has to be looked after around water);
    • Covid 19 issues devalue acreage in places like that, IMO, and time zone inconvenience is unwelcome. There are other issues too.
    • By far the world's biggest battery factory is to be built for Tesla at Brandenburg outside Berlin. Think about where some of their lithium is likely to come from. As Elon Musk said at Battery Day in the USA in September last year"...So I think this is also something that's maybe not fully appreciated ...of just how important it is to have a factory at least on the continent or reasonably close to where the end customer is so you can tighten that ...whole chain. Now we'll soon have 3 ...new factories incremental on – well we have one already – on 3 different continents. Shanghai...Berlin is making rapid progress ...... and Texas is making even faster progress .."

    Big picture

    This is a brilliant project. It won't be without challenges – nothing substantial and high value is – but problems will be addressed by capable and incentivised experts. With powerful EU backing, strong financial support, a very large resource in a stable, highly regarded country dripping with talent and technology and which is screaming out for reliably and ethically sourced European lithium, Vulcan's future looks terrific, whatever a few non-holders of the stock may write about on HC.
    Last edited by La Tache: 23/02/21
 
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