Vulcan Energy Resources : Growth and Diversification of Portfolio with Italian Permit

Growth and diversification of Zero Carbon Lithium™ development portfolio

New permit in Italy prospective for sustainable lithium development

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ASX Release 24 January 2022

ASX:VUL

FRA:6KO

Fast Facts

Issued Capital: 131,607,598

Market Cap (@$9.42): $1.24b

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useVulcan Energy Resources Limited (Vulcan; ASX: VUL, the Company) is aiming to become the world's first integrated lithium and renewable energy producer with a net zero carbon footprint. Vulcan's unique Zero Carbon Lithium™ Project aims to produce both renewable geothermal energy and lithium hydroxide for electric vehicles, from the same deep brine source in the Upper Rhine Valley, Germany.

personal	• Vulcan subsidiary Vulcan Energy Italy Pty Ltd has been granted a new Research Permit in Italy,
	named "Cesano" located 20 km NNW of Rome.
	become a possible future additive to Vulcan's Zero Carbon Lithium™ business.
	•	The Cesano Permit extends over an area of 11.5 km2 and includes an area where a single

geothermal well yielded two "hot brine" samples that contained high average lithium-in-brine historical (1976) grades of 350 and 380 mg/l Li.

• Vulcan considers the area to have potential for sustainable lithium battery chemicals development in line with its Zero Carbon Lithium™ business, given the recorded high heat and lithium grades within the brine, and encouraging flow rates.

• Vulcan's in-house geological team in Germany will be collaborating with Italian geologists and local stakeholders to collate and assess historical data, verify the lithium content and assess the brine for potential lithium project development. If successful, the Cesano Project could provide a source of strategic, sustainable lithium in Italy for Europe's battery and automotive market, and

Vulcan's Managing Director Dr. Francis Wedin commented: "Vulcan is aiming to increase the future supply of our sustainable lithium product in response to significant customer demand. By growing and diversifying our project development portfolio - an initiative we internally call "Project Rollo" - we ultimately aim to

Fordevelop a global Zero Carbon Lithium™ business focused on Europe, and to become a significant producer

of renewable energy and sustainable lithium for electric vehicles. Ultimately, we aim to leverage our extensive experience in lithium extraction from heated brines to have a materially decarbonising effect on global electric vehicle supply chains and in doing so build stakeholder value.

"After an extensive geological review, we have identified an area in Italy with positive flow rate, historical lithium grade and reservoir temperature indications that could be conducive to Vulcan's unique method of using renewable heat to drive lithium processing, with net zero carbon footprint, for the European electric vehicle market. We will be working with local partners to ascertain the potential of the area in more detail, and ascertain next steps."

Contact

Level 11, Brookfield Place	Vulcan Energie Ressourcen GmbH
125 St Georges Terrace	Baischstr. 8
Perth WA 6000 Australia	76133 Karlsruhe
08 6189 8767

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Figure 1: Location of A) Vulcan's Zero Carbon Lithium Project in the Upper Rhine Valley, Germany, in relation to B) the newly granted Research Permit in Italy.

The Cesano Research Permit is located within the Cesano geothermal field, which was discovered in For1974, and is approximately 20km NNW of the Capital City of Rome. During 1975, a "hot brine" was discovered in a single geothermal well (Cesano 1) at a depth of approximately 1,390 m below surface by ENEL. Two hot brine samples yielded historical lithium contents of 350 and 380 mg/L Li in filtered and unfiltered brine (Calamai et al, 1976). The historical results represent one of the highest global lithium

grades recorded in a confined aquifer geothermal brine setting.

The Cesano geothermal field occurs within the Monti Sabatini volcanic region. Several deep wells (1,400- 3,000m) were historically drilled in the geothermal field and the deep brine has yet to be tested, or publicly documented, for their lithium content. The Baccano caldera was formed over a carbonate structural high with Quaternary volcanic cover, on the inside of a large graben that developed from the Upper Miocene, and is characterised by a strong thermal anomaly (Funiciello et al, 1979). The Cesano 1 well was drilled at the southern border of the Baccano caldera, in correlation with a gravity high anomaly and a thermo-metamorphic halo in the Lower Jurassic carbonate rocks of the Umbria-Marche sedimentary basin (Petracchini et al., 2015).

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onlyThe Cesano 1 well was reportedly tested at more than "250 tons/hr flow rate and about 50 tons/hr flashing steam, at a delivery pressure of 12-16kg/cm2g". At the date of brine sampling, the recorded "temperature at the base of the well, in conditions far from thermal equilibrium, was 210 °C, but the base temperature in the aquifer was thought to likely exceed 300 °C" (Calamai et al, 1976).

The geothermal reservoir of Cesano field occurs within fractured pelagic and shallow water carbonate rocks in the lower portions of the Late Triassic to Paleogene Umbria-Marche sequence. The Cesano geothermal fluid is made of brine with salinities that are up to 350,000 mg/L and rich in sodium and potassium chloride (Petracchini and Scrocca, 2015).

usepersonalFigure 2: Average brine composition from Cesano 001 well (Calamai et al, 1976)

Based on the historical geochemical values from Calamai et al. (1976), a study by Pauwels et al (1989) concluded that the Cesano geothermal field "presents very favourable characteristics for lithium production". A subsequent study (Pauwels et al, 1990) used the historical geochemical data to assimilate aluminate adsorption tests on reconstituted Cesano brine and concluded that "the results are very encouraging for Li recovery from these fluids without any prior treatment. Very high Li recovery rates are obtained in (a) few minutes…". A Competent Person and Vulcan has not verified the experimental work and are not taking the information as current metallurgical results.

For

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onlyuse

personalFigure 3: Map of the Cesano Permit exploration license, Italy, showing the location of the historically drilled wells, "Cesano 001, 002, 006, 007, 008", within the license permit area.

The Vulcan team has noted some potential future challenges with development of lithium extraction at Cesano, including structural complexity and presence of high quantities of dissolved H2S. The structural complexity could be better understood with a 3D survey and the mitigation of H2S within a closed loop system is understood and a standard practice at other brine and geothermal plants worldwide.

While there has recently been a moratorium on geothermal renewable energy exploration (but not lithium exploration) in the Cesano region, a recent study by Cinti et al (2018), concluded that "the exploitation of Forthe identified geothermal resources in the …Sabatini volcanic district (are) very suitable for both generation of electric power and direct uses that, due to the presence of many potential users (municipalities, industrial sites, agricultural, and touristic infrastructures), can play a significant role in the reduction of CO2 emissions." Initially, as a next step, Vulcan plans on conducting surface studies including CO2 soil gas analysis, to detect open/permeable fluid conduits, as well as a surface analogue study to

define lithological heterogeneity.

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onlyAbout Vulcan

Vulcan is aiming to become the world's first lithium producer with net zero greenhouse gas emissions. Its ZERO CARBON LITHIUM™ Project intends to produce a battery-quality lithium hydroxide chemical product from its combined geothermal energy and lithium resource, which is Europe's largest lithium resource, in Germany. Vulcan's unique, ZERO CARBON LITHIUM™ Project aims to produce both renewable geothermal energy, and lithium hydroxide, from the same deep brine source. In doing so, Vulcan intends to address lithium's EU market requirements by reducing the high carbon and water footprint of production, and total reliance on imports. Vulcan aims to supply the lithium-ion battery and

useelectric vehicle market in Europe, which is the fastest growing in the world. The Vulcan Zero Carbon Lithium™ Project has a resource which could satisfy Europe's needs for the electric vehicle transition, from a source with net zero greenhouse gas emissions, for many years to come.

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