Vulcan Energy Resources Limited (VUL) Earnings Call Transcript & Summary

Well, good morning, good afternoon and good evening, everyone. It's Cris Moreno here, Managing Director and CEO of Vulcan. Wonderful to be with everybody again, particularly today being able to announce some great news regarding our preliminary feasibility study for our Phase 2 project. I will give it a few seconds just to make sure any remaining attendees can jump in to the Zoom and then we'll quickly jump into the presentation. It will be followed by a Q&A session. So there is a Q&A function in Zoom. And yes, we'll obviously address as many questions as we can at the end. But no, I'm looking forward to bringing everything up to speed today in Germany, in sunny Karlsruhe in our head office here, a lot of busy bees, all of them working very, very hard on the Lionheart project, which we'll talk about as well. Okay. Well, we'll get started now. It's 1 minute after. Phase 2, our PFS, Project Ludwig, really wonderful outcome over the last few months as the team has been pulling together the work to demonstrate a few things that we really want to and hopefully been explaining to the market over the last few months. At the end of the day, Phase 1, our Lionheart project, it is what delivers a repeatable platform. We've put a lot of effort, time and shareholder money into developing Lionheart. We know it's in construction. We know it's been fully funded. But it becomes effectively the platform for all future phases. Why? Well, Lionheart has already demonstrated through its integrated nature by using a brine resource that is Geothermal, we can create a lot and can afford a lot of luxuries. That integration continues to drive a number of things. One of them is our cost position. We will always remain bottom quartile from a cost of production because we're utilizing this preheated brine in the Upper Rhine Graben here in Germany. So that becomes a wonderful starting point for any future phase that will remain low cost. We've also now spent, what, nearly EUR 100 million of Vulcan shareholder money developing our technology, our DLE technology, which is bankable by the fact that we raised the EUR 2.2 billion for Lionheart and have demonstrated that we can extract the lithium at efficient levels makes us extremely economic. That will be, again, used in any future phases. Within the delivery side, we've spent a number of years engineering Lionheart, whether that be through concept into preliminary feasibility study into definitive feasibility, but also now into construction where the detailed engineering to date has shown that we've designed a really strong integrated project. And we're still learning from this as well. And we're seeing that as well as we start to buy packages and start to move into construction. This will all be again part of a platform that we can use in any future phase. And finally, one thing that doesn't go away is our level of sustainability. Again, that's really borne through the fact that we've got this very small integrated supply chain. We're using efficient technologies. And of course, we have energy that's already embedded within the brine. So these are all the fundamentals that we don't lose as part of the project. Jeremy, can you just go on mute, please? So what does Project Ludwig look like? Well, effectively, we are delivering the growth strategy, which is effectively we're designing one and we're building many. The Tier 1 resource, which we've been obviously trying to make sure that we can grow in a staged manner, that remains the key to this. We have this naturally heated brine. It travels all the way up and down the Upper Rhine Valley, 300 kilometers, and we've got a huge license position in that. What we're doing now is that effectively, Lionheart is basically clearing the path. We're using this -- basically this replicable, I guess, supply chain, where in Lionheart, we're developing a 24-kilotonne lithium chemical project, and we have a huge element of renewable energy being delivered as well, power and in this case, heat. People should be aware, we took that FID last December. That project is in construction now. And now we've put almost all those years of effort into the delivery of that project. However, this is what is now the replicable part. We can take Lionheart and we can start to look at how we build other projects. And that's what we're doing here with Project Ludwig in Phase 2. In this case, we're actually going to look at a slightly different lithium chemical instead of lithium hydroxide monohydrate as we produce in Lionheart, we're actually going to produce lithium carbonate. I'll go into why we're doing that in a second. And again, we produce very similar amounts of heat. So again, very similar amounts of lithium or identical amounts of lithium and similar amounts of heat from both projects. We're also targeting a 30-year project life, again, similar to Project Lionheart. And in this case, we're also targeting the entire production from an indicated resource, which is a great outcome. And again, in Phase 1 Lionheart, we were accessing around 15% of our total volume in the Upper Rhine. And in this case, we're sort of targeting around 12%. So again, still a long way to go to deliver the entire portfolio, but this is putting us the design one, build many in action. So again, this is hopefully just giving you a bit of a feel for where we are. You'll see that Project Ludwig is around 50, 60 kilometers north of our Landau upstream project as well. So I guess what we're here today is to demonstrate that, I guess, the Vulcan strategic plan is now in action. We're here to deliver on our promises and on our potential. Lionheart is the blueprint. It's what our focus is. I can tell you, 99% of the company is delivering and working on Lionheart. Of course, we have a small group in the background also maturing the portfolio, but it pales into significance when we think about who and what and when we're delivering Lionheart. So what we wanted to demonstrate here again is that now that Lionheart is in construction, looking to come into production in 2028 and Ludwig sort of after that. We would never take a final investment decision in Project Ludwig until we were successfully starting up our Project Lionheart. So that becomes very much a key premise of the entire plan. So we're replicating the low-cost nature of Lionheart for future phases. That, again, is based on the geology. We've got this naturally preheated brine with high concentrations of lithium and low impurities. We will mature Phase 2 and future phases optimally to manage our capital and our people, which is important because there's a lot of lessons there and corporate knowledge that we want to transfer. We will continue to leverage things that we've built and designed and now have in-house like our technology, our engineering, our drilling rigs, which are all working on Phase 1. But again, the core focus remains Lionheart. Without Lionheart, we don't have that platform. So we need to successfully deliver Lionheart, which then gives us the value to actually grow and deliver on future potential. So the way we see it in Vulcan and I guess the way we've been explaining it to a number of our partners and shareholders is that, look, we're looking at a sustainable growth model, which I think is very normal within the resource world. What you see at the moment is that we've had a value for Phase 1 for Lionheart that's been announced at FID at EUR 1.15 billion as NPV8 under construction, fully funded. And now we're moving into our Phase 2 Project Ludwig, and we're delighted to show such strong economic results, which we'll go into in a second, at nearly EUR 1.7 billion as an NPV8. The important thing here is that what we're trying to do is we will bring a minority asset level investment. So the equity that we need for this will all come in at the asset level. So it's very nondilutive. And that basically allows us to continue to develop that project at the pace we need to get to a final investment decision towards the end of the decade. But what we believe this starts to demonstrate is the value of the broader portfolio, how we do take our resource and how we're going to convert that into production and of course, how that's then valuing our Vulcan Limited company. So overall, we're delighted that we can start to show this staged value and that growth as we go through this staircase. I think hopefully, most at least of the Vulcan investors are aware is that, again, the building blocks that are there to deliver, not just Lionheart, but obviously any future phase, they're in place. Those building blocks are key to delivery of Ludwig, but the reality is that's what's delivering Project Lionheart. That's where the blueprint is, and we're capitalizing on that because we've already put a significant amount of investment, whether that's into our technology, into our rigs or our people. And I think that's the key for derisking all our future phases. So if we break this down one by one, within the Vulcan group of companies, we have our technology company, what we call VULTEC. It's where we host our proprietary high-performing DLE technology. A lot of people are very interested in this technology at the moment. Obviously, it becomes a core part of our own delivery, but we also have a lot of external focus where a lot of other companies or developers are keen to get access to our VULTEC or our VULSORB technology. Now this is fully derisked. The fact that we've spent nearly EUR 100 million on that technology, the fact it's been proven bankable and it's actually what we're accessing now within a European supply chain, and it's what is going to be fully applicable to Phase 2. It's a tick, a huge part of where we need to deliver a future phase. Probably something that doesn't get enough attention is within Vulcan, we have the Vercana Group. It's our in-house drilling company. We've got 2 of the largest and most powerful onshore electric rigs within Vulcan at a EUR 60 million investment to the company. More importantly, we have 100 drillers within the company, which is rare these days within the European landscape. And they're the ones that are actually working on our V10 and V20 rigs to date that will be drilling our Lionheart wells and are drilling our Lionheart wells. So again, there's a lot of knowledge there from the drilling company and our subsurface team who will transfer that from our Lionheart project into Ludwig, which is just down the road in the exact same reservoir. So we continue to see these efficiencies and these learnings that will be driven from Phase 1 into Phase 2. Last but not least, and maybe not obvious to everyone, but within the German subsidiary here, where I am today, we have 400-odd people here that are working on the execution of Lionheart. But of course, there's so much knowledge and corporate knowledge and project knowledge here being built up through the engineering, our construction teams, our project management teams. And so again, we won't have to redesign future phases. We won't start from scratch. There's a lot of engineering value there, tens of millions that we can transfer into a future phase. So again, that's something we will do at the right time to make sure that we've then got those lessons available and of course, the people available. And it's something as simple as like even -- we're creating a lot of understanding of how working with our external partners like the mining authority. So we've created a playbook as such on how to permit our Lionheart project, which is absolutely applicable to Phase 2. It's in the same state, the same mining authority. So we get the benefit of that repeat paste -- copy paste type approach. So again, very low-risk development by the fact that we've done this once before. And this is how we see Lionheart and now this is how we see Ludwig, a very, very similar development where we're basically accessing and targeting a lot of these fault structures, which hosts a lot of this geothermal brine. And we will do that by a very similar approach. We've got 5 well sites with 28 wells. If you remember correctly, in Lionheart, we also have 28 wells in total. The reservoir is very, very similar, a little bit deeper, and we will access that and collect that hot brine by a collection of pipelines. This then brings you to a central lithium facility. And in this case, and you'll see in the next slide is where we will have an integrated upstream and downstream facility at one. So we're hosting 1 lithium plant that will both extract lithium and convert that into the battery-grade material. That's a little bit different to what we have in Lionheart. Lionheart, we actually have the downstream plant in our Industriepark Höchst in Frankfurt for lots of good reasons and lots of good reasons why we can host an integrated plant now here in the Ludwigshafen site. So hopefully, some people have seen this block diagram for Lionheart. It's identical for the upstream. So the wells are targeting the Bunter Sandstone resource, very similar. The type of well design, very similar. The well sites, very similar, pipelines, very similar. And even when you get into the lithium extraction plant, very similar and identical. The difference here for what we're proposing for Ludwig is really the integration of both the extraction and the conversion plants. And that affords us a few things. A, we can be a lot more efficient in our capital, which has clearly been a massive driver for this project. And you'll see the benefits of that capital efficiency in a second. But having 1 integrated site for lithium, which is actually more the norm, as you will see in other parts of the world, particularly in Argentina and the U.S., is that we can be more efficient with capital, but we can also be more efficient with our own energy. The fact is in the upstream is where we produce the geothermal energy. And we can use that geothermal energy to drive large parts of our lithium process. So again, we're quite insulated against all these other energy prices that are global. We don't need that because we drive the entire process with our own geothermal energy, which is quite unique that you can protect your own cost position because of the natural geology. So the only difference in this flow sheet that you would have seen from Lionheart is that instead of using electrolysis to effectively create a lithium hydroxide product, we're using the standard carbonation route, which again is very, very common in the lithium industry. All the other units are exactly the same. So again, we have a lot of knowledge from Lionheart on how to design Project Ludwig to do the same flow sheet. And we're already using the same technology suppliers in both projects. So again, it gives us a huge comfort that we can use the same suppliers to learn and basically then design a plant that we'll be very, very familiar with. And in this case, as mentioned, lithium carbonate will be produced battery grade, and then we will have an offtake to our partners as well. One thing I'm delighted to update our investors with as well. Again, Phase 2, we're targeting the same Bunter Sandstone reservoir unit. Again, it's the same field development because it's effectively the same reservoir. So again, we're targeting a blueprint approach here. What we feel very comfortable with, again, is that with our production forecast that runs for the 30 years, we're recovering around 517 kilotonnes of lithium carbonate equivalent, but we're using that or recovering that with our indicated mineral resource. So we're not using the inferred even though we have the inferred here. And I guess the update, again, that's been signed off by our competent person is you can see from 2023 to 2026, there's been a huge increase in the indicated resource from 655 to 1,251, nearly 90% increase in indicated resource, again, giving us comfort and confidence to be able to have that production profile. But the inferred has also increased as well, around 5%. So in total, we've seen the indicated and the inferred resource lithium within the Therese and the Ludwig licenses grow around 25%. So that's been a real positive as part of the overall PFS as well and again, signed off by our competent person. The other thing that we wanted to indicate is we are now starting to really get comfort in the way we present on our geothermal resource. We've done this recently in Mannheim as well. This is across the river. And what you see here is also a maiden geothermal resource for both the Ludwig and Therese licenses. And in petajoules, again, we had announced this in '23. So the numbers you can see on the right-hand side there, nearly 500 petajoules of resource -- geothermal resource now being signed off and within this area. So again, we're delighted. We are an energy and lithium project. So it's good that we can start to indicate both lithium and energy. This is a lovely render of what the plant is looking like. Again, it's really -- it's engineered. And what I mean by engineered is that we're taking a lot of Phase 1 Lionheart. We're using similar engineering partners, which we'll talk about in the PFS. And what this does is that by having a single integrated site, particularly on the lithium side, we've been able to engineer capital efficiencies into the project. And that's a huge outcome for us because what we do know is that we'll always remain bottom quartile for cost of production. But what we had in control is how can we reduce the capital and start to be really competitive on the capital side as well, which is what we've done. So the conversion of the lithium carbonate, again, it's a very well-known industry process. And again, we get to use our own integrated heat, which is probably a unique feature to Vulcan by using our geothermal resource. And we've also been able to create a lot of synergies with the local heat consumers. So we don't have to convert a lot of our heat into power, which is what we've done in Lionheart. So here, we can be very more capital efficient where we now have to build major power plants, we can actually use the heat and internally most of it, but also take that to our local heat consumers as well. So a wonderful outcome from the PFS. So what does this all translate into in terms of Project Ludwig and how we look at it in the numbers. Again, very, very attractive in terms of NPV and IRR, both post-tax numbers of EUR 1.7 billion and 20% IRR. That is unlevered in this case. You see very similar revenue numbers actually from both Lionheart and from our friends here in Ludwig. And we've got an average price there of the lithium around EUR 20,500, again, similar to Lionheart. The key numbers that stick out for me, and you'll see a comparison in the next slide, which we think is really important to give you that comparative element, is the CapEx. So I'll go on to that in a second at EUR 1.26 billion. Very similar cost of production at 4.1 thousand tonne. Again, that embeds us right at the bottom of the cost curve, which I'll show you in a second and a very similar EBITDA margin. So let's move on to a bit of a comparison between Ludwig and Lionheart, which we think is a wonderful outcome on how we're demonstrating how we're keeping the best of Lionheart and where we can improve on Lionheart. So on the left-hand column here, you see the Project Ludwig numbers. Now on the right-hand side, you can see arrows, which basically tell you whether we see an equivalence between the 2 projects, Lionheart and Ludwig or where we genuinely believe we've seen improvement between Lionheart and Ludwig. So on capacity, it's exactly the same. We're producing in terms of LCE, lithium carbonate equivalents. Both plants are producing around 21.1 kilotonnes per annum. Again, we've done that by design. We don't want -- we want to replicate the engineering, so we don't spend more and more money building different plants. And again, this is a very normal size globally. It's a very standard size of lithium plant. Energy, again, both are very similar in terms of thermal energy. But if you're looking or energy coming from the wells, but in this case, we've got more thermal energy because we're not actually building a power plant. The CapEx is a standout feature of this table. And again, it was a huge focus of the Vulcan team is that we wanted to demonstrate that we could develop a future phase of project and reduce that capital cost to be even more competitive. So we've seen around a 15% improvement in capital intensity, which is a great outcome. And that's predominantly because we've been able to integrate those lithium plants. So for example, we're not building 2 tank farms. We're not building 2 control rooms. We're not building 2 maintenance workshops. We're not building 2 pipe racks can all be efficiently built with 1. And that's the big saving here, which you'll see in a second. What we're able to do as well, though, by having that similar production level, but being able to reduce that CapEx and then having the same sort of operational costs, that basically translates into much better economics, particularly on a rate of return IRR pre and post tax, you can see there it's about a 7% difference between Lionheart and Ludwig, 20.2% to 13.7% and also on an NPV basis. So again, Lionheart was a very, very attractive project. But by the fact that we can focus on capital efficiency, we're able to improve the economics for Ludwig. So we're delighted with that outcome. And again, we've been -- what we believe is quite a conservative with our assumptions at this point, and I'll show you about that conservatism in a second. So in terms of CapEx, people should remember for Lionheart, we had about a EUR 1.47 billion project at FID. And that actually had a 10.5% contingency level at that time, fit for purpose for an FID project. For Ludwig, we've now been able to reduce that capital by 15%, and it's predominantly the synergies that I've told you. On the upstream, it's very similar. So the well costs, the well sites, the pipelines, they don't change a lot. Where you get the synergies is predominantly on the lithium side. So we've got a much smaller heat plant than Lionheart because we can use a lot of that heat internally. And then it's those efficiencies between the 2 lithium plants being co-located and integrated. So -- but what we've also done is we've maintained a 15%. So it's 5% more contingency at this level at the PFS. And we've done that with design. We think that's well benchmarked. But we're also using a lot of the very detailed cost estimates that have come from Lionheart. In many cases, like a Class I or Class II level. We don't take credit for that. We still maintain a high contingency because we feel that's the right thing to do at this stage. So overall, again, we feel like we're doing a great job in being able to focus on capital efficiency. We're taking the best from Lionheart, but while also keeping in mind that we maintain contingency at this point so we can manage risk as we get towards definitive feasibility and FID in the coming years. And again, this is where we've ended up on the cost curve. So we're working with some of the major forecast agencies. In this case, this data is independent. It comes from BMI, Benchmark Mineral Intelligence. And again, when you map Project Lionheart and then you map Project Ludwig in all the projects globally, we sit clearly within the bottom 10% of global production. Again, why does that happen? Well, that's because of the natural resource. The fact that in the Upper Rhine Graben within this geothermal brine, it is naturally preheated. And energy is one of the largest costs to any form of lithium production globally. For Vulcan, it's the other way around. We actually -- we revenue that. We monetize that and valorize that because we have an excess amount of energy for what we need. The fact that there's low impurity remains the fact that we don't need any chemical pretreatment. Again, one of the biggest costs for other companies is the reagent costs. Again, low impurities means that we don't have to do chemical pretreatment. And again, because we've got such an efficient extraction technology in DLE absorption and using our proprietary technology, the combination of those 3 elements really embed us in that bottom quartile and in this case, clearly in the bottom 10%. So again, we're really -- we're delighted that we can demonstrate that. And again, that's really one of the key things that continue to drive value for Vulcan. I wanted to talk a bit, and I think we've been really clear and want to be very keen to demonstrate that what does the hard work within the lithium business is the extraction. And in our case, Vulcan has got our own extraction technology. It's our VULSORB technology. And effectively, when we extract the lithium, we create an intermediate product, which is lithium chloride. It's actually the lithium chloride that is actually the precursor to all these lithium chemicals, whether it's lithium hydroxide, which is what we're developing and building for Phase 1, whether it's lithium carbonate, which is what we're wishing for and planning to build for Phase 2 or even it's lithium chloride itself in a much purer form like anhydrous, which will be the chemical choice for solid-state batteries moving forward, which we know is coming. It's coming fast. So again, Vulcan has spent its time, its effort and its shareholders to build out our DLE technology because that gives us that product flexibility, and we can capture market share and market value at any point. So that gives us the flexibility to be a true lithium company, lithium hydroxide for Phase 1, lithium carbonate for Phase 2, and we'll see what else we produce in the future. But this is why we're moving towards lithium carbonate. We're getting a lot of inbounds from a lot of offtake partners that are also quite keen to look at lithium carbonate, but we also see huge inbounds in hydroxide to be very honest. So -- and really -- and we'll come on to the market section in a second, you will see and we will continue to see huge demand for lithium locally as the electrification is happening faster than any other place here in Europe. And that's what answers the market question. We're looking here and being on the ground here in Europe, we can see this. It's huge demand, the growth, and it's been extremely accelerated by what's happening in the Middle East at the moment. But even globally, if you look at passenger fleet, I mean, that is a huge hockey stick coming from 2010 to '25 now. You're growing at 27% and probably even more this year. That's pre and now you'll have post conflict, electrification of passenger fleet globally. That doesn't even consider the battery storage, what's happening with AI, the data centers, which is taking off even further. And so on the right-hand side, you're seeing just the European market, where you've got year-on-year growth of 60-odd percent. So even just taking Germany as an example, you're talking about 40% of the country with some form of electric vehicle or some form of a hybrid. So 2 out of 5, and that's this year. So you imagine what the 2026 numbers will look like at the end. So the demand is clearly there. Where the concern is in Europe is actually the bottom graph. Unfortunately, this becomes -- this is where Vulcan becomes a solution, to be honest. You've got demand coming from Europe in the dark blue bars. In 2028, it's 400,000 tonnes of LCE, nearly 0 supply or 0 supply today and Vulcan becomes the first supplier of lithium come 2028. There will always be a huge gap here. Vulcan in itself cannot provide a gap this big. I mean the 20% of global demand currently comes from Europe, 20%, and you've got less than 1% supply. So we've become a big part of the solution and particularly as you start to look at resilience and security of supply chains, Vulcan is the heart of that within Europe at the moment from a lithium perspective. So that becomes a huge enabler, and it really poises Vulcan to be the #1 supplier of lithium in this continent. So we're delighted to have that title and that responsibility, to be honest. And that's why we've got partners and industrial partners, large industrial partners, but even the German government as a major shareholder from the Vulcan subsidiary. So that's very much to deliver not just Lionheart, but also to grow the broader portfolio. Next steps, Ludwig. We've now completed the PFS. We're hugely delighted with the work and a lot of kudos and work to the team who have done a really great job to get to this point. We are going to start a strategic equity process. This is something we've been thinking about for a long time. This will look at bringing in equity at the asset level. This is the way to do it. This is the way I've been brought up. This is the way the company should do. We're looking at farm-in opportunities with good partners to come in and support Vulcan at the asset level. We will do some other activities. Again, we need to appraise the field. So we've got a lot of technical work to happen in the next 2 to 3 years. This is not the next 6 months, just to be very, very clear. This is more like a 4-, 5-year horizon. But of course, we've done this once before. So we know how long it takes to mature a natural resource like this. We will look to start drilling off the back of the 3D seismic. So we're doing 3D seismic in Q3 next year in this Project Ludwig area. And then off the back of those results, we will then target and optimize a first appraisal well. The knowledge of that appraisal then feeds a DFS as such. And then once we've completed the DFS, we can then start to crystallize that into what a final value for the project would look like. In parallel, we'll always look at commercial agreements. We'll continue to do the work on offtake agreements, both on lithium and heat. We've got some very good discussions happening already for both of those. So we'll continue those -- and again, once we've got all the pieces to the puzzle, we will look to see how we would fund this, both from an asset level equity, pursuing further public funding, which we're doing now. And of course, we'll look at hopefully a debt process to lever and give us more value. And again, we'll only look at a final investment decision after successful start-up of the Lionheart project. That's a requirement from the Vulcan Board, from myself and from our shareholders. Again, our focus is Lionheart. The proof will be in that pudding. That is what we put a lot of attention to. And the value of that start-up will be translated to a future project like Ludwig. So again, making it super, super clear that that's where our focus is today, Lionheart. But of course, we will mature this as we can in the background driving value for the greater portfolio. So what does it mean as a summary? I think we've presented this a few times as part of our corporate deck as well. We're very, very clear on our strategic pillars. We're trying to maintain very good visibility of those pillars through our 5-year plan. You see in our 5-year plan, number one, deliver Lionheart on time, on budget and get that to nameplate capacity. No other more important goal than that at the moment. Of course, developing our resource is a key part of the value of the company. So we will develop future phases in time to make sure that we can transfer the value of Lionheart to the next project. We'll continue to look at how we establish our VULTEC business, both within Germany, within Europe, but globally. I think there's been some indications of that already with some partnerships. Vercana becomes an important part, continues to deliver Lionheart and future projects. And we don't want to lose sight of being the best in our class, particularly around ESG and being a great partner and making sure that we support and maintain and deliver all regulatory requirements. So that is something that we've done well to date, and we won't lose sight of that. And that then translates into what the corporate team, what the executive team are focused on this year. We're on track with Lionheart. I can tell you, we're on budget, we're on time. We'll communicate more of that in the next few quarters as well. But that's why I'm here in Germany, we're really working closely at the moment on the Lionheart project, and we see great, great success to date in the delivery of that. We've delivered our feasibility study. We've shown capital efficiency has improved through that process. It wasn't easy. We had to engineer that. But again, we've been able to achieve that. You can see that we're still working to secure strategic asset level funding for Phase 2. That's going to kick off now. Again, we've had a lot of inbounds to date. We'll communicate more about that in the coming months. And we've had a stellar, and I mean, stellar performance HSE-wise to date within the Vulcan Group, particularly in the Lionheart project, particularly when we're starting to see a lot of man hours really increase across all of our sites. The leadership required to maintain that performance takes a lot of all of us. But today, we've had an incredible performance, no lost time injuries. Hopefully, that continues for the remainder of the year. That's the update that I wanted to bring you up to date with. I will now open up to some Q&A.

So let me just open up and see what questions we have, and I'll try and go through as many of these as possible. Okay. Okay, from Tim. Can you talk to the shift in chemistry and how it changes your consumables? What is the outlook for those consumables within Germany? Excellent question, Tim. So yes, by going to our carbonation route, you're replacing electricity, which was what was required for electrolysis to effectively a form of carbonate. And there's different carbonates that can be used, the sodium and calcium. So we are replacing that, Tim. We're going from electricity, which obviously does have a cost to carbonate. We're fortunate within the European landscape, particularly in the German landscape as well, particularly in an area we're working in, which is a number of large industrial chemical sites that, that carbonate is available and very local as well. So that is probably the biggest change. The rest of the upstream is unchanged. The DLE is unchanged, the purification concentration unchanged. And then the final crystallization unchanged. It's just that carbonation step. And again, that's what you see sort of like more broadly like in South America, where you've got Rio Tinto or Eramet or a lot of the other projects, brine projects or even what's happening within the U.S. now. So very common routes, but that is the main chemical change between electrical molecules to carbon molecules. Anonymous attendee, can you refresh us on your strategy on resin procurement? Where will it come from? And have costs shifted at all from the last study? Great question. The good thing here is that because we're actually producing the same amount of brine and therefore, we're using the same number of DLE columns. And therefore, it's the same amount of VULSORB, the resin, the sorbent. We have a local supply chain here in Germany, literally across the road. I mean, literally, I mean, across the river from where we're developing Project Ludwig. So that won't change. In fact, the relationship we have with our toller is that they are aware of the future phase development. So we've selected them with the ability to increase VULSORB production as we grow with future phases. So costs don't change, producer won't change and the reality is nothing will change from Phase 1 to Phase 2. So that's another part of the repeatable element for future phases. [ Pelen ], good to have you, my friend. How many of the 28 wells have been planned to be completed by the time Lionheart is in production in 2028? How many wells are fully completed by now, [ max step 3 ] so far. Any progress with VULTEC technology in Bolivia and anywhere in the world? Right. So the 28 wells, almost none will be drilled prior to Lionheart going into production. The only 1 well that we may do is that exploration well in 2028, [ Pelen ]. So that's because we will get public funding for that or we will apply for public funding, and that will be part of the appraisal to basically understand that the brine is identical and that will feed the definitive feasibility study. So we won't move into any development drilling for Ludwig until we've had a successful start-up of Project Lionheart. So at best, you're drilling development wells for Ludwig sometime back end of 2029. So there will be no rush for that. And that will also mean that we can take our V10 and our V20 rigs from Lionheart and then take them over to Ludwig. So that's the first part. So none are in production. In terms of depth, they're a little bit deeper. The Bunter Sandstone goes slightly deeper within the Ludwig area. It's quite immaterial, but yes, it's slightly deeper than the current wells that we're seeing here in Lionheart. Progress with VULTEC technology in Bolivia, it's going really well, to be honest. We're working closely with EAU Lithium. They're actually in Germany in the next few weeks. It's a great partnership to have. We've been able to basically test their brines, demonstrate that VULTEC through VULSORB can extract the same level of lithium in terms of efficiency as what we've seen in the Upper Rhine. And having a long-term partnership to deploy our VULTEC in Bolivia, we believe, is a part of our strategy. So -- and to be honest, we're not limiting to Bolivia, we are in discussions with other partners globally, [ Pelen ]. So that will be the source of hopefully some announcements to come. But we've already announced the EAU part I think that's quite public now. And yes, hopefully, we continue to grow that part of the company as well. So Cris, Phase 1 project timeline still on track. When can we expect the next big announcement? It's 100% on track. I can tell you that. As per our last quarterly, we're doing really well, Tim. I really say that with a genuine on-the-ground feeling. We're delivering as per plan. We're drilling the wells on time at the moment. The pipelines are going in, probably a little bit ahead of schedule. Both the 2 lithium plants are on track as well. We've got key milestones for this year. We've already kicked off 3 milestones that were key milestones for 2026. We've got 1 milestone remaining for the end of the year. They were basically key points to tell us we will be on track to start production in the second half of 2028. And for us, absolutely on track. In terms of big announcements, well, we feel like Lionheart being on progress is something that we need to continue driving to the investor community. We feel that that's going to be the case as we move forward. Obviously, the PFS today continues to be a wonderful part of how we're delivering on our promises and delivering on our potential, to be honest. I think moving forward, there's going to probably be a few more announcements as we go through both Lionheart and Ludwig. So something to keep an eye out towards the end of this year. We're starting the strategic equity process very, very soon. So again, lots of things to watch out for there as well. Well, that is all the Q&A on the screen. Again, I really thank everybody for their time. Always also thank you for your support. Vulcan is doing an incredibly great job at the moment. I have to thank so many people within the company. Everyone is working extremely hard. I wish I could thank every single person every single day, but they're here to deliver on Lionheart. It's great to have something else to basically demonstrate that the value of Lionheart can be translated. And hopefully, it's something that gets picked up by investors as well. So -- but until then, we'll continue to do our job. We'll continue to deliver until then, stay safe and looking forward to updating the broader group next time we see you. Thanks a lot, everyone, and take care.