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

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.

Figure 6: 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:

𝑄𝑄 = 𝐺𝐺𝐺𝐺𝐺𝐺 ∙ 𝜌𝜌_{𝑟𝑟} ∙ 𝐶𝐶_{𝑝𝑝𝑟𝑟} ∙ (1 − 𝜙𝜙 ∙ 𝑁𝑁𝑁𝑁𝐺𝐺) + 𝜌𝜌_{𝑓𝑓} ∙ 𝐶𝐶_{𝑝𝑝𝑓𝑓} ∙ 𝜙𝜙 ∙ 𝑁𝑁𝑁𝑁𝐺𝐺 ∙ 𝑁𝑁_{𝑟𝑟𝑟𝑟𝑟𝑟} − 𝑁𝑁_{𝑟𝑟𝑟𝑟𝑟𝑟}                                            (1)

Where Q is the heat in place, GRV is the geothermal reservoir Gross Rock Volume, ρ_r is the particle density for rock, ρ_f is the density of the fluid, C_pr is the specific heat capacity for rock, C_pf if the specific heat capacity of the fluid, ϕ is the effective porosity adjusted for NTG, the Net To Gross ratio, T_res is the average reservoir temperature, and T_rej is the rejection temperature. 

The rock and fluid input parameters have been defined according to the Bridging Study. Geologically for Mannheim, the geothermal resource bulk rock volume includes the middle and lower Buntsandstein host rock matrix, fault damage zones of the Permo-Triassic sediments (i.e. Muschelkalk, Buntsandstein, and Rotliegend where present), and fault damage zones in the upper 100 meters of the Variscan basement. The North-South striking fault planes that are associated with fault permeability are interpreted from 2D and 3D seismic data and the associated fault damage zones were modeled to uniformly include 200 meters on either side of each fault. Gross rock volumes for the host rock matrix and fault damage zones were extracted from 3D static models. The derivation of NTG and porosity inputs to the resource calculations was supported by a compilation of publicly available and proprietary porosity and permeability data for the Rotliegend, Buntsandstein, and Muschelkalk units (fault damage zones and host rock matrix). For the Buntsandstein matrix reservoir, NTG has been defined using a 5% total porosity cutoff. The rock properties (i.e. density and porosity) were determined from the petrophysical evaluation of well logs in the region of the zones of interest, supplemented with core and plug data where available. The rock specific heat capacities for each formation are from the GeORG report (GeORG, 2013 and Bär, 2012) and are corrected for reservoir temperature following Vosteen and Schellschmidt (2003) as described in Bär (2012). 

Average reservoir temperature estimation is described above. The rejection temperature is assumed to be 65 °C, which is in line with the planned reinjection temperature for the ORC facility design for Phase One. This is defined as the Base Temperature as outlined in the Geothermal Lexicon and can also be referred to as the rejection temperature for the report. This Base temperature is the lowest temperature that could be reached in the reservoir using the currently assumed design parameters for power and heat production. The Cut-off temperature is assumed to be 100 °C based on the minimum temperature for economic reservoir fluid temperature for commercial energy extraction for district heating. This parameter is based on the Phase One design for power and heat production.

Dynamic flow and analytical reservoir simulations assuming a project lifetime of 50 years, along with production data from currently producing wells (i.e. Insheim), have been used to estimate recovery factors. The recovery factor is defined to be the fraction of heat in-place that can be carried by fluid to the production wellhead. Recoverable thermal energy is calculated using the following equation:

 Ã°ÂÂ‘„𝑄_{𝑅ð‘Â} = 𝑄𝑄 ∙ 𝐺𝐺                           (2)

Where Q_R is the recoverable thermal energy and R is the recovery factor. 

The Geothermal Resource Estimation for the Mannheim license area is classified into Indicated and Inferred Geothermal Resources. As described above, the estimation methodology follows the formulas presented above. As described in previous reports, the fault damage zones are modelled with a 200-meter half-width. The GRV for the host rock matrix of the Middle and Lower Buntsandstein accounts for Early Tertiary erosion, particularly in the northwestern portion of the volume. The following parameters were used uniformly across all classifications and license areas in the Mannheim resource estimation:

• Rock density: 2,650 kg/m³
• Water density: 978 kg/m³
• Water specific heat capacity: 3,755–3,850 J/kg·K
• Initial reservoir temperature: 170°C
• Re-injection (or rejection) temperature: 65°C. 

The rock specific heat capacity was originally adapted from Bär (2012) and corrected for reservoir temperature according to Vosteen and Schellschmidt (2003). Fluid properties are assumed to closely resemble those at Insheim GTI2. Fluid density and specific heat capacity were corrected for in-situ reservoir conditions using an average reservoir temperature of 170°C. A Base temperature of 65°C was adopted, reflective of proven power plant technology and district heating design. This may vary in future if a different plan design is implemented but is a reasonable assumption for the report.

Reservoir modelling was based on both 2D and newly acquired 3D seismic data. However, no in-field deep wells currently intersect the target reservoir formations, and thus well ties could not be performed. The nearest deep well that intersects the Buntsandstein is Brühl GT1.

Due to the absence of direct well control within the geothermal reservoir interval in the license itself, Geothermal Resource classifications are based on geologic interpretation. The nearby Brühl well has demonstrated productivity in the fault damage zones of the Middle and Lower Buntsandstein, supporting the classification of this interval as Indicated Geothermal Resources. Other geologic units interpreted to be present, but lacking direct evidence of productivity, are classified as Inferred Geothermal Resources. These include the Middle and Lower Buntsandstein host rock matrix and the fault damage zones associated with the Muschelkalk, Upper Buntsandstein, and the top 100 meters of the Variscan basement across the Mannheim license area. The average initial reservoir temperature across the entire license area and for both Geothermal Resource classes is 170 °C. 

Recovery factors for geothermal energy represent the recovery from both rock and fluids, unlike recovery of lithium which is only from the fluid. The recovery factors describe the fraction of the stored heat which can be economically extracted in terms of economically recoverable energy rather than energy in place. The recovery factor takes into consideration heat losses in the pipe, efficiency factors of the technology utilized to produce the energy, a project lifetime that is assumed to be 50 years for Geothermal Resource Estimation for the  report, and the base temperature or in this case, reinjection temperature of 65 °C. Typical recovery factors vary substantially dependent on the rock type, permeability, porosity, recovery process, fracture widths, and flow rates. Recovery factors can range from 3-25% and even higher, depending on the methodology and project type and location, as described in the Geothermal Lexicon.  

Recovery factors used in the Geothermal Resource Estimates for the Mannheim licence area was derived using a combination of site-specific data and validated modelling approaches. This has been applied for the Lionheart development, where dynamic simulation incorporating tracer tests were conducted based on the planned well configuration. This provided a robust model of the expected long-term thermal recovery under active production and has been adapted for Mannheim development in the report.

To complement these results, production data from the Insheim geothermal plant were analysed to benchmark fluid and thermal performance under similar geologic and operational conditions. In addition, analytical 1D convective and conductive heat transport models were applied to estimate recovery potential from both fault damage zones and the host rock matrix.

Based on the modelled results, the following geothermal recovery factors were assigned for the Mannheim licence area:

• Fault Damage Zones (across all stratigraphy): 6%
• Matrix Rock (Middle and Lower Buntsandstein only): 3%

The total geothermal recovery factor applied to each classified geothermal resource estimate depends on the volumetric ratio between the FDZ and matrix rock within each unit. This methodology results in differing overall recovery factors across license areas and geothermal resource classifications, which are applied to the estimated thermal energy in place to calculate recoverable thermal energy. These assumptions are considered conservative and reflect current best practice in geothermal resource evaluation.

The summary of Geothermal Resource Estimated Recoverable Thermal Energy is shown below for the Mannheim licence area

Table 3: Summary of Geothermal Resource Estimation for Vulcan Group Mannheim licence area

Note 1: Geothermal Resources are not Geothermal Reserves and do not have demonstrated economic viability. Note 2: The Recoverable Energy is reported in PetaJoules. 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: NTG and Phie averages have been weighted to the thickness of the reservoir. Note 5: GRV refers to gross rock volume, also known as the aquifer volume. Note 6: Geothermal Resources are considered to have reasonable prospects for eventual economic extraction with application of modifying factors.

Lithium Mineral Resource update - Mannheim

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. 

The report only provides an update of the Lithium Mineral Resource estimate for the Vulcan Group’s Mannheim licence area. This is done in accordance with the JORC code. Mineral Resources have been previously reported for the Mannheim licence area as referenced in the Prospectus CPR 12-2024. 

Vulcan Group has collected and analysed the brine chemistry through the progression of the Phase One project since 2019, which includes data from operating wells within the Phase One licence area and from off location wells within the URVBF. This geochemical data has been consistently acquired and verified to determine concentration of the lithium within the brine. Samples have been verified independently and are consistent with the averages used in the mineral resource estimates across the field. 

For the Mannheim licence area, the lithium concentration has been determined using data from a Brühl GT1 well sample which was taken during a production test in 2013. The Brühl well is owned and operated by a third party and Vulcan Group does not have access for further sampling. Aliquots of the 2013 sample were provided to Vulcan and were archived, and analysed in 2019, as part of a wider sampling and analysis program at that time. Results were recognized as being influenced by dilution, consistent with the use of freshwater during production testing and with loss of drilling fluids. Vulcan conducted an assessment and interpretation of the results based on reservoir temperature estimates using geothermometers developed for geothermal brines. These calculations resulted in an estimate of original lithium content (i.e. before dilution) of 155 mg/L with an error range of +/-3 mg/L, which was identified as a potentially conservative correction. The calculated lithium value of 153 mg/L was used as the lithium grade in the previous Mineral Resource Estimation for Mannheim. The Vulcan Group has provided clarifying documentation for the sample analysis results that confirms and supports the update of the estimated lithium content to 155 mg/L. The CP has reviewed these interpretations and considers the resource grade to be conservative to realistic at 155 mg/L. 

The updated Lithium Mineral Resource estimate for the Mannheim licence is underpinned by a new 3D seismic survey that was acquired in early 2023 and which covers much of the Mannheim licence area. The seismic data has since been processed and interpreted together with the existing 3D Weinheim seismic survey and tied via legacy 2D lines with regional offset wells. 

The resultant new subsurface model confirms previous findings about the general structural setup and the general prospectivity of the area but now has a higher certainty than the previous model that was based on sparse 2D seismic data only. As a further consequence of the improved seismic data quality and coverage, additional fault zones were interpreted, and reservoir units were mapped out in more detail and split-out in more sub-units. This resulted in a slight increase in the overall estimated Mineral Resource Estimation for the Mannheim licence area. The increased certainty in fault orientations, extent, and configuration resulted in an upgraded classification from Inferred to Indicated Mineral Resources for the fault damage zone associated with the Buntsandstein.

As there is no well data available within the Mannheim license itself, as the references wells are located in other licenses in the URVBF, and no dedicated Field Development Plan exists for Mannheim, no Measured Mineral Resources or Ore Reserves are currently attributed to Mannheim. Estimated Mineral resources are summarised below.

Table 4: 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, on 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.  

The previously reported Mineral Resource Estimation for Mannheim was made up of Indicated Resources of 288 kt LCE and Inferred Resources of 1545 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. 

Competent Person’s statement

The information in this document that relates to Geothermal Resources is based on and fairly represents, information that was reviewed, overseen, and compiled by Mike Livingstone, P.Geo., who is a full-time employee of GLJ Ltd. and deemed to be a ‘Competent Person’. Mr. Livingstone is a member as a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of Alberta (APEGA), a 'Recognised Professional Organisation' included in a list that is posted on the ASX website from time to time. Mr. Livingstone has sufficient experience which is relevant to the style and type of geothermal play under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the Second Edition (2010) of the ‘Australian Code for Reporting Exploration Results, Geothermal Resources and Geothermal Reserves’. Mr. Livingstone has consented in writing to the inclusion in the document of the matters relating to Geothermal Resources based on his information in the form and context in which it appears. 

The information in this document that relates to Lithium Mineral Resources is based on and fairly represents, information that was reviewed, overseen, and compiled by Mike Livingstone, P.Geo., who is a full-time employee of GLJ Ltd. and deemed to be a ‘Competent Person’. Mr. Livingstone is a member as a Professional Geoscientist of the Association of Professional Engineers and Geoscientists of Alberta (APEGA), a 'Recognised Professional Organisation' included in a list that is posted on the ASX website from time to time. Mr. Livingstone has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the JORC Code for the reporting of Lithium Mineral Resources. Mr. Livingstone consents to the disclosure of the technical information as it relates to the Lithium Mineral Resources information in this document in the form and context in which it appears.

The information in this announcement that relates to estimates of Mineral Resources (other than the update to the Mannheim region of the URVBF as contained in this announcement) and Ore Reserves is extracted from the following ASX announcement: "Zero Carbon Lithium^TM Project Phase One Bridging Engineering Study" released on 16 November 2023, which is available to view on Vulcan's website at https://v-er.eu. Vulcan confirms, that: 

a) in respect of any estimates of Mineral Resources (other than the update to the Mannheim region of the URVBF as contained in this announcement) and Ore Reserves included in this announcement: 

1. it is not aware of any new information or data that materially affects the information included in the original market announcement, and that all material assumptions and technical parameters underpinning the estimates in the original market announcement continue to apply and have not materially changed; and
2. the form and context in which the Competent Persons' findings are presented in this announcement have not been materially modified from the original market announcement; and 

all material assumptions underpinning the production targets (and the forecast financial information derived from such production targets) included in this announcement continue to apply and have not materially changed.

Financing and economic consideration 

For the Phase One Lionheart development as a template for future phase development, Vulcan has already received 879m EUR in conditional debt commitments from commercial and development banks, and a Board-approved 500m EUR financing envelope from the EIB. Vulcan has also received approval for 100m EUR in grant funding for the geothermal part of the project and is expecting an indication of approval on further public funding shortly. Vulcan is aiming to finalise its full financing package for Phase One Lionheart, and commence construction, in H2 2025. For the Mannheim development, the project is at a much earlier stage. Vulcan is aiming to fund the project in the next development stage through a combination of heating and geothermal related government grants, as well as project level investment from strategic and infrastructure type investors. Discussions are currently ongoing.

For the Mannheim sector, in April 2022, Vulcan Energie Ressourcen GmbH entered into a heat supply agreement with MVV Grüne Wärme GmbH. The agreement covers an expected heat quantity of 240 GWh/a over a period of 20 years, starting at the end of 2026. If no termination is given with a one-year notice period, the contract will automatically extend for an additional five years. This arrangement enables the exclusive supply of heat to the MVV. The contract is currently being negotiated to reflect a changed market and updated project timeline since this contract was originally signed.

Vulcan is carrying out a high level, internal Scoping Study to develop a similar project to Phase One. It has selected four drill site options, each of which could contain multiple production and re-injection wells. Three sites were considered to host two doublets (four wells), and one site was considered to have the potential of one doublet (two wells). For these well sites and corresponding pipelines, 20 to 40% public grant funding is expected to be available, through the BEW (heating networks) grant scheme operated by the German Federal Government. It should also be noted that the new German Coalition government has committed to further upsizing the funds being made available to this scheme. OPEX costs are expected to be broadly in line with Vulcan’s Phase One project. A Lithium Extraction Plant (LEP) could be built to produce lithium chloride concentrate from the wells, in a similar manner to Phase One, and could be transported to Vulcan’s CLP, which has been sized to allow for two more trains of production to be built beyond Phase One. Key considerations for the next phase of development include the sizing of the brine and therefore heat production, since production beyond the capacity of local customers’ ability to take the heat in lowest demand periods in Summer would necessitate the building of an ORC plant to generate power, but would also enable more lithium production. This will be progressed, subject to a positive outcome from the Scoping Study, in a Pre-Feasibility Study as part of a next phase of development, alongside updated heat demand profiles from MVV.

As this is an internally completed Scoping Study, it will not be subject to external Competent Person (CP) review, however, such a review is planned as part of the upcoming Pre-Feasibility Study.

Summary of risks and uncertainties

Herein is a summary of key risks and uncertainties that relate to the estimation of Geothermal Resources and Mineral Resources for Mannheim.

Geological

• Reservoir connectivity may be influenced by currently unidentified features, such as baffles and barriers, high permeability zones and the impact and geometries of fault/fracture zones which can impact brine flow rate estimates. This is mitigated by flexibility in the field development plan.
• Whilst data from wells in the vicinity is available, no deep wells are available so far in the Mannheim license itself. There is a risk that the geologic interpretation for the Mannheim area might be different when data from new wells is gathered. This will be mitigated by allowing for flexibility in the yet to be drafted field development plan.

Technical/ operational

• Drilling issues with downhole collision as multiple wells and side-tracks are drilled from the same pad. This is mitigated with measurement while drilling and specialised tools and control systems to manage the drilling.
• Scaling and corrosion are risks that can affect the operating equipment including wells, piping, and vessels. There is historical knowledge from the operating facilities and mitigation is planned utilizing inhibitor chemicals and maintenance operating plans that manage the risk.
• Transport activities could lead to accidents, which is mitigated with proper training and staffing for driver selection and having an emergency response plan prepared.

Geothermal

• Producing temperature may suffer from depletion within the reservoir and be lower than the minimum operating temperatures for the ORC plant or for district heating.
• Since the district heating network operates with feed-in temperatures of 100 to 120°C, temperature depletion is seen as a very-low risk.

Economic

• Failure of product to meet on-spec lithium requirements can lead to loss in revenues. This is mitigated with communication with offtake holders to manage delivery schedules, and to identify buyers for off-spec product, as well as achieving qualification through Vulcan’s existing qualification plants that are operational.
• Change in market conditions that impacts the price negatively or impacts market demand is considered with a low likelihood and mitigated by Vulcan’s existing lithium offtake contracts and relationships.
• Change in facility and infrastructure equipment supply that can impact costs and schedule.

Environmental

• There is potential risk associated with induced seismicity caused by injection of brine, which is mitigated with injection control, monitoring systems and passive seismic monitoring.
• Risk of hazardous gas or fluid release to air or surface. This is being mitigated with Hazard and Operability (“HAZOP”) and Layers of Protection Analysis (“LOPA”) studies and engineering design considerations, plus maintaining emergency response plans, having spill containment, and ensuring safe operating procedures are in place.<