EQS-News: Future phase pipeline: Mannheim resources growth - 76% increase in lithium brine resource estimate

 

Future phase pipeline: Mannheim resources growth

 

76% increase in lithium brine resource estimate 

Maiden geothermal energy resource estimate

Scoping study in progress for future phase of production

Vulcan Energy (Vulcan, ASX: VUL, FSE: VUL, the Company^[1]) is pleased to announce that following a 3D seismic survey, it has successfully completed an updated lithium brine Resource estimation, together with a maiden geothermal energy Resource estimation, for the Mannheim licence area of Germany’s Upper Rhine Valley Brine Field (URVBF). 

 

Key highlights

• The lithium brine Resource estimation update for the Mannheim sector estimates the total lithium brine Resource (Indicated and Inferred) has increased from 1,833kt LCE @ 153 mg/Li to 3,225kt LCE @ 155 mg/Li, which is an increase of 1,392kt LCE[2] 
• A large-scale in place maiden geothermal Resource of 2,848 PJ (Indicated) and 10,539 PJ (Inferred) has also been estimated for the Mannheim sector of which 171 PJ (Indicated) and 377 PJ (Inferred) are considered recoverable. The Company intends to continue to complete geothermal energy Resource estimations under the Australian Geothermal Reporting Code for all its development areas within the URVBF, to better assist with investors’ understanding of the scale of the URVBF geothermal potential 
• Mannheim is one of a number of areas the Company is progressing within the URVBF to potentially develop as a future phase of integrated lithium and renewable energy production in addition to the Company’s Phase One Lionheart development
• Vulcan is progressing a Scoping Study for the Mannheim licence which is located 40km to the northeast of Phase One. The study will look to add further production in addition to the Phase One integrated lithium and geothermal renewable energy development including expansion of the downstream lithium hydroxide monohydrate (LHM) facility in Industrie-Park Höchst
• It is envisaged Vulcan will deliver baseload geothermal heat from the Mannheim region geothermal resource to the district heating network of MVV Energie AG (MVV), one of Germany’s leading energy companies, while simultaneously extracting sustainable lithium for EV battery production.  Negotiations with MVV to revise the current heat offtake agreement are ongoing to take into account an updated development
• Harnessing natural heat to produce lithium from sub-surface brines and to power conversion to battery-quality material, the Company is building a local, low-cost source of sustainable lithium for European electric vehicle batteries. Phase One of the Project has recently been identified as a Strategic Project under the European Commission’s Critical Raw Materials Act (CRMA), reflecting the Project’s alignment with the objectives of the CRMA: to secure a sustainable supply chain for critical raw materials, including lithium, across Europe. 

 

Vulcan Energy Managing Director and CEO, Cris Moreno, commented: “The completion of the lithium brine Resource update, together with our first geothermal energy Resource estimate, is yet another step forward in advancing our pipeline of integrated lithium and renewable energy project development in the Upper Rhine Valley Brine Field beyond our Phase One development.

“This further validates our strategy to replicate the current phase into future phases by utilising the URVBF bordering Germany and France. The URVBF is the largest lithium Resource in Europe, as well as one of the highest quality brine geothermal resources, and therefore a significant asset for Europe’s energy and critical raw materials security.”  

Figure 1: Overview of the Vulcan Group Upper Rhine Valley Brine Field

  

Background

This lithium brine Resource estimation update, and maiden geothermal energy Resource estimation, both for the Mannheim region of Germany’s URVBF, is based on a Competent Person’s Report prepared by GLJ Ltd as Competent Person (CP) for the Company (Report). 

 

Lithium Mineral Resource Estimation update – Mannheim, Germany 

The Mineral Resource Estimation for the Indicated Resource classification is 820 kt LCE and for the Inferred Resource classification is 2,405 kt LCE for the Mannheim licence per Table 1. In accordance with the JORC code the checklist of assessment and reporting criteria as applicable for the Report is contained in the JORC Table in Annexure 2. The Lithium Mineral Resource Estimations are in line with and build on previous work, with increased confidence in the Mannheim area where Vulcan Group has performed additional exploration activities, gathered and analysed further data, and advanced the lithium extraction technology project at Phase One that is the basis for the Mannheim future development. 

 

Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Inferred Mineral Resources have a lower level of confidence associated with their estimation than Indicated Mineral Resources, but it is reasonably expected that with further exploration most of the Inferred Mineral Resources could be upgraded to Indicated Mineral Resources. Indicated Mineral Resources are sufficiently well defined to allow application of modifying factors to support mineral extraction planning and economic evaluations of the deposit. 

 

It is the opinion of the CP that the methods utilised to estimate the lithium Mineral Resources followed accepted industry practices and utilised a thorough approach and are deemed to have reasonable prospects for economic extraction with application of modifying factors.  

Table 1: Summary of Lithium Mineral Resource Estimation for Vulcan Group Mannheim licence area

Note 1: Mineral Resources are not Ore Reserves and do not have demonstrated economic viability. Note 2: The weights are reported in metric tonnes (1,000 kg or 2,204.6 lbs). Numbers may not add up due to rounding of the resource value percentages. Note 3: Reservoir abbreviations: MUS – Muschelkalk Formation, BST – Buntsandstein Group; BM - Variscan Basement. Note 4: To describe the resource in terms of industry standard, a conversion factor of 5.323 is used to convert elemental Li to Li₂CO₃, or LCE. Note 5: NTG and Phie averages have been weighted to the thickness of the reservoir. Note 6: GRV refers to gross rock volume, also known as the aquifer volume. Note 7: Mineral Resources are considered to have reasonable prospects for eventual economic extraction under current and forecast lithium market pricing with application of Vulcan Group’s A-DLE processing. Note 8: The values shown are an approximation and with globalised rounding of values in the presented summary table as per JORC guidelines, cannot be multiplied through to achieve the Mineral Resource Estimated volumes shown above.  Note 9: The Company’s combined URVBF Mineral Resource Estimate is contained on page 141 of its 2024 Annual Report. See also the Competent Person Statement at the end of this announcement.  

The previously reported Mineral Resource Estimation for Mannheim was made up of Indicated Resources of 288 kt LCE and Inferred Resources of 1,545 kt LCE based on average lithium concentration of 153 mg/L. The upgrading of volumes is associated with a slight revision to the lithium concentration to be consistent with available data, and increased Gross Rock Volume and adjustment to NTG for Inferred based on newly acquired and processed 3D seismic and updated geological modelling. There has been no change to the remainder of the Company’s Mineral Resource, which is contained on page 142 of Vulcan’s 2024 Annual Report.^[3]

 

Geothermal Resource Estimation – Mannheim, Germany

The report provides an initial reporting of Geothermal Resources for Vulcan Group’s Mannheim licence area, which are within the Vulcan Group licences in the URVBF. The Geothermal Resource Estimation is being publicly disclosed in accordance with the Geothermal Reporting Code and the Assessment and Reporting criteria are listed in the Geothermal Code Table in Annexure 1. The Geothermal Resources Estimation presented in the report was completed in accordance with the Geothermal Reporting Code. In the opinion of the Competent Person (CP), the Mannheim licence area has a reasonable prospect for eventual economic extraction based on aquifer geometry, delineation of fault zones using newly acquired and re-interpreted seismic data, brine volume, porosity, and heat flow. 

Geothermal Resources are not Geothermal Reserves and may not be economically recoverable with existing technology and prevailing market conditions. Geothermal Resources are not an inventory of all heated areas drilled or sampled, regardless of Base or Cut-Off Temperature, likely dimensions, location or extent. It is a realistic inventory of those geothermal plays which, under assumed and justifiable technical and economic conditions, might, in whole or in part, be developed. 

Table 2: Summary of Geothermal Resource Estimation for the Mannheim licence area

 

Overview

Vulcan Energy is a producer of geothermal renewable heat and power in the Upper Rhine Valley of Germany and holds geothermal and lithium licences in an area referred to as the Upper Rhine Valley Brine Field (“URVBF”) or in some cases referred to as the Upper Rhine Graben Brine Field (“URGBF”). The URVBF is a geothermally hot and deep subsurface brine field which is enriched in lithium. It is strategically located in the heart of the European electric vehicle (“EV”) market, providing close access to the EV supply chain, and the infrastructure supporting the automobile industry. The Vulcan Group is progressing an integrated commercial scale lithium co-production with renewable geothermal heat and power as part of their phased development of the URVBF starting with the Project Phase One Lionheart ("Lionheart" or "Phase One"). This Project proposes to provide geothermal renewable electricity and heat to local communities, as well as the production of battery-quality lithium in the form of lithium hydroxide monohydrate (“LHM”). 

In November 2023, Vulcan Group completed a Bridging Engineering Study (“Bridging Study” or “BES”) on the Phase One commercial development. Pursuant to the Bridging Study, Phase One includes the construction of a geothermal plant and a lithium extraction plant ("LEP"), and a central lithium plant ("CLP") with a production target capacity of approximately 24,000 metric tonnes per annum ("tpa") of lithium monohydrate (“LHM”), along with over 275 gigawatt hours ("GWh") per annum ("GWh/a") of renewable power production capacity and over 560 GWh/a of renewable heat production capacity. Vulcan Group intends to develop

further phases across its licence areas, as the Company plans to grow production in a staged, modular fashion, however the development of any further expansion beyond Phase One remains subject to the availability of funding, and the exact timing is still to be defined.

Vulcan Group has built a large team that includes scientists, geoscientists, engineers and commercial specialists in the fields of lithium chemicals, subsurface characterisation, field development and geothermal renewable energy. Vulcan Group has binding lithium offtake agreements with some of the largest cathode, battery, and automakers in the world. As a company whose business model for the Project combines a carbon neutral extraction process with renewable energy generation, Vulcan Group has Environment, Social and Governance (“ESG”) considerations deeply embedded in its corporate strategy. 

Vulcan Group has previously reported Lithium Mineral Resources and Ore Reserves in accordance with Joint Ore Reserves Committee Code (“JORC”) of the Australasian Institute of Mining and Metallurgy (2012) for licences in the URVBF. The last Competent Person Report was published December 17, 2024, on the ASX as part of the Prospectus for Regulated Market of FSE (Prime Standard), referred to as the “Prospectus CPR 12-2024” in this announcement. The content in the report is based on much of the content of the last CPR, and where information is the same, the report will reference to the Prospectus CPR 12-2024 in lieu of repeating the information.

The report provides the reporting of Geothermal Resource estimation for the  Mannheim licence area, in accordance with the Australian Code for Reporting of Exploration Results, Geothermal Resources and Geothermal Reserves, (“Geothermal Reporting Code” or “GRC”), Second Edition (2010), developed by the Joint Committee of the Australian Geothermal Energy Group (“AGEG”) and the Australian Geothermal Energy Association (“AGEA”) as well as the supporting Geothermal Lexicon for Resources and Reserves Definition and Reporting (“Geothermal Lexicon”), Edition 2, compiled by Lawless, J. for The Geothermal Code Committee. Additionally, due to newly acquired data in the Mannheim licence area, there is an update provided on Lithium Mineral Resource estimation for the Mannheim licence in this announcement.

Geothermal Resource Estimation is reported for the Mannheim licence, which is part of a future phase of development, described as Mannheim Sector or Mannheim licence area in the report.  

Phase One of the Project plans for a central surface facility for geothermal energy and lithium extraction, where the integrated facilities are referred to as the geothermal and lithium extraction plant (“GLEP”), which will be fed from a number of multi-well pads. Lithium extraction and processing will be conducted in two stages, starting at the GLEP and proceeding to a CLP processing facility at Hoechst, near Frankfurt. The battery grade product LHM will be produced and sold from the CLP.

The Mannheim licence area, as reported in this study, has been granted an exploration licence. In the Prospectus CPR 12-2024 there is further detail on the other licences that the Vulcan Group holds within the URVBF.  Figure 2 shows the location of the Lionheart and Mannheim licence areas. There are currently no operating geothermal facilities in the Mannheim licence area. The Vulcan Group plans a similar development to the Phase One Project which has been described in the Prospectus CPR 12-2024, for lithium coproduction with geothermal power and heat at Mannheim in the future as part of a different Phase. 

 

Listing Rule 5.8 Requirements - Mineral Resources

 

Listing Rule 5.8.1 Item	Location in announcement
• geology and geological interpretation	Pages 66, 71, 77, 78.
• sampling and sub-sampling techniques;	Pages 63, 64, 65 & 66.
• drilling techniques;	Page 62, 63, 67, 72 & 75.
• the criteria used for classification, including drill and data spacing and distribution. This includes separately identifying the drill spacing used to classify each category of + mineral resources (inferred, indicated and measured) where estimates for more than one category of +mineral resource are reported;	Pages 64, 65, 66, 67, 78, 79, 83 & 84.
• sample analysis method;	Pages 62, 63, 64, 65, 66 & 68.
• estimation methodology;	Pages 9, 78 – 86.
• cut-off grade(s), including the basis for the selected cut-off grade(s); and	Pages 65, 66, 74, 75, 79 - 81.
• mining and metallurgical methods and parameters, and other material modifying factors considered to date	Pages 81 - 83.

 

Figure 2: Geothermal and Lithium Licences for Mannheim and Lionheart cluster

 

Geology and exploration 

The Upper Rhine Graben (“URG”) regional geology and lithium system are fully described in the previous report Prospectus CPR 12-2024. In this study, the content provides updates as applicable, and content related to geothermal characterization for the Mannheim licence area. Since the publication of the previous report Prospectus CPR 12-2024, interpretations from the reprocessed and merged Weinheim 3D and Mannheim 3D seismic data have been integrated into the geologic model, providing updated mapping of geologic formations and faults over the Mannheim licence area. In the sections below, the Mannheim geologic model, URG geothermal system, and predicted reservoir temperatures for the Mannheim licence are described. 

Figure 3: Mannheim licence 2D and 3D seismic coverage

The targeted reservoir at Mannheim is composed of Middle and Lower Buntsandstein along with fault damage zones (“FDZ”) that cut through the upper 100 m of crystalline basement, Rotliegend (where present), Buntsandstein, and Muschelkalk. The Rotliegend is interpreted to not be present in the Mannheim area based on seismic interpretation. Lithology and sedimentology of the Buntsandstein and the Muschelkalk is essentially the same as in Lionheart, except that the Muschelkalk in the Mannheim licence area is interpreted to have been closer to surface during Early Tertiary and therefore potentially prone to karstification.  The Muschelkalk is also interpreted to only be present in the western and southern parts of the Mannheim license, due to Early Tertiary erosion.

Petrophysical data from various sources, including public datasets and proprietary datasets purchased by Vulcan, were integrated as part of the Bridging Study to assess regional reservoir quality. Porosity and permeability estimates were derived from offset wells, including Brühl GT1, Offenbach GT1, Kraichgau 1002, Soultz EPS-1, Landau, Römerberg, and Appenhofen-1. The data includes well log data, core plug data (inhouse and published), reports on hydraulic tests, and published ranges and mean values. 

Data availability varies between the different stratigraphic units with the largest data set being available for the Buntsandstein formation, which represents the primary target reservoir. Due to differences observed between outcrop and subsurface rock properties, subsurface datasets were prioritized for reservoir quality assessment. Core measurements from seven wells in the URG basin (Appenhofen-1, five Römerberg oil wells, and one Landau well) were used to evaluate porosity and permeability within the Buntsandstein. 

Figure 4: Well data availability for the Buntsandstein interval on a regional scale showing the Lionheart and Mannheim licence areas.

Effective porosity, defined as the interconnected pore space that contributes to significant fluid flow, was established based on permeability thresholds. Using results from producing and previously producing geothermal and hydrocarbon wells in the URG (Appenhofen-1, Landau 207 and 211, Römerberg oil field wells), effective porosity was defined as porosity associated with a permeability greater than 0.02 mD. This threshold aligns with the Canadian Oil and Gas Evaluation Handbook (COGEH, 2005) and the theoretical framework provided by Nelson (1994). The table below presents a porosity–permeability crossplot for Buntsandstein core data, highlighting a positive correlation and supporting an effective porosity cutoff of approximately 5%.

Figure 5: (Left to right) Overall porosity-permeability relationship of the compiled core data (Landau oil field (1 well), Römerberg (5 wells), and Appenhofen-1); and histograms of the core porosity and permeability data from Appenhofen-1 and the Römerberg wells.

For the Mannheim licence, structural and geocellular models have been created from well and seismic data, following the methodology as previously described in the Prospectus CPR 12-2024.

 

Mannheim geology

Top Buntsandstein is mapped to be between 3.2 km and 4.2 km depth, which is significantly deeper than in the Lionheart project area reflecting the Mannheim licence’s location within the “Heidelberger Loch” or “Heidelberger Basin”, where the thickest Pliocene and Quaternary sedimentary fill within the entire URG is observed. The Eastern Rhine Graben bounding fault intersects the licence area in a roughly N-S direction and is itself not considered a target but instead marks the Eastern boundary of the static geological model area. The Buntsandstein thickness map shows the effect of Early Tertiary erosion in the northwest edge of the licence.

Figure6: Structure map of top Buntsandstein from the Mannheim (MAN) static model shows the area is structurally divided in two areas, separated by a prominent fault.

Figure 7: Buntsandstein reservoir thickness map for the Mannheim (MAN) licence showing a thinning towards the  northwest due to Early Tertiary erosion.

The geothermal well Brühl GT1 is currently the main and nearest reference well available for the evaluation of the Mannheim licence. The well has been drilled into a fault zone within the Buntsandstein. The production and injection tests showed that the heavily fractured fault zone encountered in the Middle Buntsandstein is highly permeable. During a production test, a total of 1,000 m³ of thermal fluid was produced by a natural artesian outflow at a flow rate of approximately 50-70 l/s. No production pump was required, and the pressure drop at reservoir depth was approximately 2.5-2.8 bar. This roughly corresponds with a productivity index of 15-25 l/s*bar. With a standard Line Shaft Pump (LSP) as used in Vulcan's current projects, a production in excess of 100l/s would be expected from the Brühl well. The evaluation of the injection test resulted in an injectivity index of 5-10 l/s*bar. The well Brühl GT1 flow tests were at very high rates, and this well showed no induced seismicity during the test.

The new 3D seismic and updated interpretation, combined with results from nearby wells, indicates the presence of Muschelkalk, Buntsandstein, and basement units within the Mannheim licence. The data also suggests that reservoir quality is similar to that observed in the Lionheart area and is modelled from the seismic data to extend northward into Mannheim. The interpretation of the reservoir and the corresponding volumetric estimate will be further refined when the first wells are drilled within the license area.

 

URG geothermal system

The URG represents a non-magmatic, fault-controlled geothermal system situated in an extensional tectonic setting (Moeck, 2014). As a Cenozoic continental rift with significant lithospheric thinning, up to 25% compared to surrounding regions (Brun et al. 1992), the URG experiences elevated heat flow and geothermal gradients relative to much of Central Europe. This unique geodynamic environment forms the basis for a convection-dominated geothermal play.

Geothermal and lithium-enriched fluids in the URG are primarily driven by deep-seated convection through active fault zones, where frequent natural seismicity helps maintain fracture permeability. The primary heat source is a combination of elevated radiogenic heat production in the mica-rich granitic Variscan basement and enhanced heat flow due to crustal thinning. Temperature anomalies across the basin are further influenced by the low thermal conductivity of overlying clay-rich Keuper and Tertiary sediments, which act as thermal blankets and regional top seals. These formations not only cap convection cells but also mark the transition from conductive to convective heat flow regimes, as observed in temperature-depth profiles of regional geothermal wells. According to Freymark et al. (2017) the median geothermal gradient in the central to northern part of the URG is 48 K/km modelled at 3,000 m depth and 41 K/km at 5,000 m depth.

Figure 8: Temperature versus depth plot for wells across the Upper Rhine Graben show that the convection cells are capped by a regional shale (Keuper or lower Tertiary), which acts as a top seal (modified after Ledesert & Hebert, 2020). The change of slope in geothermal gradient indicates change from conductive to convective heat flow regime.

The Buntsandstein formation functions as a key geothermal reservoir due to its high fracture permeability and matrix porosity, capable of storing and conducting hot lithium-rich fluids. Confinement of these fluids is achieved by the overlying regional seals, while meteoric recharge supports fluid budgets and drives fluidrock interactions. The regional variation in predicted reservoir temperature at the top of the Buntsandstein formation is shown. 

 

Figure 9: Temperature map of the URG along the Top Buntsandstein (south of dashed line) based on the GeORG model, north of dashed line along Top Rotliegend based on GeotIS model. Diamonds show locations of available key wells.

 

Mannheim geothermal temperatures

The Permo-Triassic strata and Variscan basement are the focus of the geothermal resource model for the Mannheim licence.  The only in-field temperature measurement is from the well Sandhofen 1 on the western edge of the licence area. However, this well TD is 1292 m within the Miocene, which is shallower than the target reservoirs. The nearest offset well encountering Buntsandstein is Brühl GT1, approximately 10 km south of Mannheim licence area, which shows temperatures between 150-160 °C in the Buntsandstein section at 3.0-3.3 km depth. A regional model is available from the geological survey (GeORG model) that is based on kriging of all available well data across the URG. The GeORG model suggests temperatures in the order of 170 °C for the Top Buntsandstein at 3.7 km depth in the Mannheim area but does not specifically model the impact of heat convection along faults. 

Figure 10: Left: Plotted temperature profiles (lines) and BHT data (points) from surrounding offset wells for Mannheim licence area (temperature data from GeotIS). Right: Locations of wells with temperature profiles relative to the Mannheim licence area

Figure 11: Temperature prognosis at top Buntsandstein in the Mannheim licence by the GeORG model.

Geothermal Resources Estimation 

An updated Geothermal Resources Estimation is provided for the Mannheim sector only. While Vulcan Group holds additional licences in the URVBF, geothermal resource estimates for those areas will be provided in future reports. This represents the first formal reporting of Geothermal Resource Estimation for the Vulcan Group within the licence area, since lithium Mineral Resource Estimation has been the primary focus to date, in line with JORC and ASX requirements. Going forward, Vulcan will seek to update both Geothermal and Lithium Resource Estimations across the URVBF.

It is important to note that Geothermal Resources are not Geothermal Reserves, and their economic recoverability under current technology and market conditions is not assured. Geothermal Resources are not a catalogue of all heated areas drilled or sampled, regardless of temperature cut-offs, dimensions, or extent. Rather, they represent a realistic and technically justified inventory of geothermal plays that may be partially or fully developed under assumed technical and economic conditions. Geothermal Resources are classified in accordance with the Geothermal Reporting Code into three confidence levels: Inferred, Indicated, and Measured.

Inferred Geothermal Resources are based on geological, geochemical, and geophysical evidence, with assumptions made about the extent and capacity to deliver geothermal energy. These resources have a lower level of confidence than Indicated Resources, but it is reasonably expected that further exploration could upgrade many Inferred Resources to Indicated status.

Indicated Geothermal Resources are supported by sufficient direct measurements, such as temperature and formation thickness, that allow for the estimation of Recoverable Thermal Energy with a reasonable level of confidence. The data are adequate to apply modifying factors for preliminary project planning and economic evaluation.

Measured Geothermal Resources are defined by high-confidence direct measurements and testing of drilled rock and/or fluids, where well deliverability has been demonstrated. The spatial distribution of data confirms continuity in temperature and fluid chemistry. The quality, amount, and distribution of information are sufficient to estimate Recoverable Thermal Energy within close limits, such that any variation would be unlikely to significantly affect economic viability. The geology and heat source are well understood, enabling the application of technical and economic parameters for project evaluation. There are no Measured Geothermal Resources reported for Mannheim at this time.

 

Geothermal Resources Estimation methodology

The methodology used to estimate the geothermal resources follows guidelines as outlined in the Geothermal Lexicon. The reported values of in-place and recoverable thermal energy are derived from deterministic calculations using mean values for key input parameters (e.g. porosity, rock and fluid densities, specific heat capacities, and reservoir temperature). These inputs represent the best available interpretations from geoscientific data and modelling, but no stochastic or probabilistic uncertainty analysis (e.g. Monte Carlo simulation) was conducted. As such, the reported values should not be interpreted as P50 estimates but rather as indicative central estimates based on current knowledge.

The geothermal resource assessment utilises a comprehensive data set that includes 3D seismic, 2D seismic, geological well data (including temperature measurements, core samples, outcrop data, depositional environment interpretations), and production data from currently producing wells in the Lionheart license area, outside the license area in Mannheim. The volumetric heat in-place is estimated using the following equation: