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Consensus community valuation
$5.25
Average Intrinsic Value
18.5%
Overvalued by
Active Member Straws
#Bull Case
Added a week ago

Battery stocks are rallying at the moment and look to be the flavour of 2021.  Lithium is a big part of the story and it looks like there is already a little more support coming into prices.

At the same time, the auto industry is starting to push emissions reductions down into the supply chain.

Ergo, companies that can support that will have the long tailwinds of both sustainability and electrification of the car industry.

VUL has a lot of excitement for its narritive.  Pulling lithium from a geothermal brine and using the heat to generate electricity.  It is potentially the biggest lithium source in Europe and most importantly it would be carbon emissions negative.  Smack bang in the middle of Europe (Germany), its location is great too.

The PFS is due shortly which is why the pump is on right now.  Im not sure if it will surprise either positively or negatively.

There are two stages to the project.  Stage one is much smaller and would aim to use an existing geothermal plant.  stage two would involve new wells and geothermal plants.

On the positive side, stage one is low risk and alone (subject to the PFS) estimates are for net profits from the operation in the region of $35M pa.  Current MC is $355 and you can see that its probably still reasonably valued.

Stage two with an extra 10 wells could add an extra ~$500M net profit per annum. That gives plenty of upside to come (though financing of capex will be a big question too).

The big risk with those are NIMBY with some concern about earthquakes being caused by geothermal activity in the area.

At the same time, the German government is pushing geothermal energy to help its emissions reduction drive.

Hoepfully the PFS will answer a lot of questions and concerns!

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#ASX Announcement 15/1/21
Added 2 days ago

Positive Pre-Feasibility Study 15/1/21

Shares looking to rise 34+% at open

https://vul.live.irmau.com/site/PDF/232dbb56-08a7-4f19-aac4-70fd4d11ec97/PFSPresentation

 

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