The Vulcan Energy Resources Limited (ASX: VUL) share price surged another 19.6% today after making an an announcement.
Vulcan says that it is trying to become the world’s first ‘zero carbon lithium’ producer for electric vehicle batteries.
What happened today?
It was reported in the Australian Financial Review that the company was gearing up for a 3-day roadshow. The AFR said the company will use this time to explain to funds how it plans to succeed with its goals by building a lithium extraction and processing plant in western Germany. The proposed project could lead to lower lithium production costs than any other operation globally. Phase one of the project could start in 2024.
The AFR speculated that a capital raising could be coming up. The newspaper also said that the company is in the process of talking to potential European partners about lithium offtake agreements.
Vulcan responds
ASX businesses usually respond to media pieces, particularly when it can be market moving.
Vulcan said that it is not conducting a capital raising at this point in time. It said that it was conducting a non-deal roadshow with potential investors.
Summary thoughts
The Vulcan share price has been rocketing in recent times, it is up 219% over the last month. Achieving the lowest lithium costs would be good news if the company can achieve it. I don’t know enough about the company, or the lithium sector in general, to say whether the Vulcan share price is a buy today during this hot interest.
It can be a bit dangerous going after ASX shares when they’re just going higher and higher. It has taken three years for the share prices of Orocobre Limited (ASX: ORE), Galaxy Resources Limited (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS) to get back to where they were when investors loved lithium miners. Only time will tell, seemingly years, whether Vulcan shares are still undervalued or whether it’s just momentum pushing the stock higher.
Instead of Vulcan, I suggest getting a free Rask account and accessing our full stock reports. Click this link to join for free and access our analyst reports.
