Vulcan Energy’s Lionheart Faces Cash Burn Test as Q1 Report Looms

The supply chain for Vulcan Energy Resources’ Lionheart project is now effectively complete, but the company’s attention has shifted from procurement to execution — and the meter is running on its capital reserves.

Final Supplier Deals Locked In

Siemens has been contracted to deliver automation and building technology worth €40 million for the geothermal and lithium facilities in the Upper Rhine Valley. Hot on the heels of that agreement, French manufacturer Mersen will supply an Eco&FLEX® unit destined for the Frankfurt site. That piece of equipment converts lithium chloride into lithium hydroxide — the critical ingredient for electric vehicle batteries — while also recovering chlorine and energy from the process.

Mersen’s technology relies on isostatic high-purity graphite combined with a proprietary carbon impregnation technique to produce ultra-pure hydrochloric acid, an essential input. The contract value runs into the double-digit millions, though Vulcan has not disclosed the exact figure.

With these two deals, the supplier network for Lionheart is now virtually complete. Offtake agreements are already in place with Umicore, LG Energy Solution, Stellantis and Glencore. Stellantis alone has secured 128,000 tonnes of lithium hydroxide monohydrate over ten years, while LG Energy Solution is contracted for 31,000 tonnes across six years and Umicore for 23,000 tonnes over the same period. Glencore’s deal covers 36,000 to 44,000 tonnes over eight years.

Construction Accelerates, Cash Burn Follows

Activity on the ground is picking up visibly. Drilling is running in parallel at the Schleidberg and Trappelberg sites, with the main drilling phase scheduled for the second half of 2026. The commercial production target remains 2028, following a two-and-a-half-year construction timeline.

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That timeline comes with a price tag. In the previous quarter, operating expenses stood at €7.2 million. With drilling now underway at two locations simultaneously, the cash outflow is expected to climb sharply in the first-quarter report due on April 29.

The company’s financial foundation looks solid on paper. A banking syndicate has lined up nearly €1.2 billion in senior debt, supplemented by €204 million in government grants. The state of Rhineland-Palatinate has also waived lithium extraction royalties through the end of 2030. Around 72 percent of production volume in the first decade is backed by fixed or minimum pricing, providing a buffer against market volatility.

Internal Signals Raise Questions

A less visible development has caught the attention of close watchers. Chief executive Cris Moreno and chief financial officer Felicity Gooding forfeited more than 400,000 performance rights at the end of March — a sign that internal milestones were missed. The forfeiture suggests the company’s own benchmarks for progress are not being met, even as construction accelerates.

The annual general meeting on May 28 will give shareholders a chance to press management on whether the cost framework for Lionheart remains intact. For now, the first-quarter numbers will provide the clearest picture yet of how quickly the build phase is consuming capital — and whether the project’s financial discipline matches its engineering ambition.