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Vulcan targeted by short-seller

Shares in Vulcan Energy Resources were paused and subsequently halted on Wednesday after the company responded to an online report by a short-seller.

Vulcan is alleged to have misled investors by issuing a positive pre-feasibility study with key assumptions provided by consulting companies owned by management, according to a report from US-based short-seller J Capital Research.

Backed in part by Australian investor Gina Rinehart’s Hancock Prospecting, Vulcan is aiming to produce the world’s first “zero-carbon lithium” from what it considers to be Europe’s largest lithium resource in the Upper Rhine Valley of Germany.

Prior to the opening of ASX trading on Wednesday Vulcan released a response largely calling into question the validity of the claims by J Capital, highlighting several statements on their website, including: “Be warned. We are activists, usually on the short side. We are biased.” “…we will profit if these stocks decline...”, and the report states that J Capital is "short" Vulcan. While also noting that J Capital also state that they do not hold an Australian Financial Services License.

The report was authored by Mr Tim Murray, co-founder of J-Capital. In its response, Vulcan also said that it is not apparent that Mr Murray has any technical qualifications in geothermal energy or lithium extraction and Mr Murray’s report makes a large number of inaccurate statements and assertions regarding Vulcan and its Zero Carbon Lithium Project, in particular its Pre-Feasibility Study published over nine months ago. “Given the warning on J Capital’s website, it is clear the report is merely an attempt to profit from “shorting” Vulcan.”

Vulcan reiterated that it has a team of approximately 80 personnel, with globally unique experience in geothermal energy project development and direct lithium extraction, and they continue to work and remain focused towards executing on the project, “We believe will be important in assisting with decarbonising the lithium-ion battery and electric vehicle supply chain in Europe, as well as to provide renewable energy for local communities at a time of energy crisis leading into COP26. We are highly motivated towards achieving our goals of decarbonising these industries, and will always happily dedicate time and effort to answer any questions about our Zero Carbon Lithium™ Project that come from stakeholders with a genuine interest in the Company and the Project.”

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