Site menu

Search by ticker code:
Generic filters

Menu

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Vulcan Energy (ASX:VUL) share price on pause after short seller report

The Vulcan Energy Resources Ltd (ASX: VUL) share price remains in a trading halt after the business became the target of a short-seller. 

The Vulcan Energy Resources Ltd (ASX: VUL) share price remains in a trading halt after the company became the target of a short-seller.

J Capital published a short report on Wednesday accusing the business of misleading investors over its zero-carbon lithium project in Germany.

J-Capital savages management estimates

The 24-page report described Vulcan as the “God of Empty Promises”.

J Capital accuses Vulcan of misleading investors by:

  • Low-balling cost estimates
  • Overstating the quality of the resource including flow rate and recovery rate
  • Using low discount rates to make the project look profitable
  • Using small consultancies owned by management and later acquired by Vulcan
  • Declining to reveal information about the direct lithium extraction (DLE) technology critical to the project
  • Overstating the positive environmental impacts of the project

Notably, J Capital believes the project may actually never get off the ground due to politicians and activists opposed to geothermal power plants.

“Many experts agree with us that this project is a non-starter”.

Moreover, Vulcan management is accused of using a Pre-Feasibility Study (PFS) to drive share price momentum.

Source: J Capital Vulcan short report
Source: J Capital Vulcan short report

Co-founder and managing director Horst Kreuter previously attempted and subsequently failed at two geothermal projects in 2003 and 2016.

Similarly, Francis Wedin, co-founder and managing director, has never been able to develop a lithium project to production.

Finally, Thorstein Weimann, the newly appointed COO, ran a loss-making geothermal-power consulting company for the past decade.

Source: J Capital Vulcan short report
Source: J Capital Vulcan short report

Vulcan shareholders in Limbo

In response to the report, Vulcan issued a statement yesterday discrediting J Capital and the author of the report, Tim Murray.

“…Mr. Tim Murray, co-founder of J-Capital, who according to his own bio has lived in China for 19 years and has a degree in “Chinese Political Economy”. Based on his online profile, it is not apparent that Mr. Murray has any technical qualifications in geothermal energy or lithium extraction”.

Vulcan noted the report makes a large number of inaccurate statements or assertions. However, the company failed to address any of them directly.

Subsequently, the company was forced into a trading halt just 26 minutes later.

Shareholders now remain in limbo, as they wait for a detailed response from management.

My take

Vulcan tried to play the man rather than the ball. Unfortunately, it failed.

J Capital report is detailed and raises several concerns over Vulcan’s credibility.

As a result, management will likely have to release more detailed estimates of the feasibility study.

With a $1.86 billion market capitalisation and effectively no revenue, it could get ugly for the Vulcan Energy share price.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Lachlan does not have a financial or commercial interest in any of the companies or funds mentioned.
Skip to content