The AWN Holdings Ltd (ASX: AWN) share price is having a spectacular day today.

AWN shares shot up 36.27% this morning to $1.39 a share. This gain comes after AWN was trading at just $1.02 on Monday, then opened at $1.23 a share this morning and rocketed up from there.

This morning’s high saw AWN Holdings up more than 85% year to date, and up more than 1,600% over the past 7 or so months. However, the AWN share price has since slipped back to $1.30, up 27.45% at the time of writing.

So what’s going on here?

What is this company?

AWN, also known commercially as ‘Arowana’, is a funds management business. It was founded in 2007 and has grown from a single office in Sydney to a truly global presence. Today, the company has offices in London, Singapore, Manila and Tel Aviv.

AWN can be best described as a ‘venture capitalist’ company, rather than a traditional fund manager. AWN “directly invests and operates” in individual businesses at the ground level as “true partners”. Some of AWN’s current businesses include VivoPower, EdventureCo and Alicorn.

Why are AWN shares going to the moon today?

Today’s dramatic move in the AWN share price appears to be the result of a single market release the company made this morning before market open.

In this release, AWN told investors that its subsidiary VivoPower has “signed a definitive agreement” with the GB Auto Group (a private company). VivoPower is a solar energy company that was founded by AWN in 2014.

Vivopower’s new agreement will “expand GB Auto’s position as Australia’s exclusive distributor of the Tembo electric Toyota Land Cruiser, electric Toyota Hilux, and Tembo electric vehicle conversion kits”.  Apparently, the “collaboration will focus primarily on the next‐generation 72-kilowatt-hour battery kit for Toyota’s Landcruiser and Hilux models, as well as the application of other Tembo products in the mining industry”.

AWN tells us that “[the agreement] is believed to be the most valuable deal for electric vehicles in the Australasian region to date and will initiate close technical collaboration over a seven‐year term”. The company estimates that the orders stemming from this deal will be worth “an estimated US$250 million in revenues over the four-year period”. The first of the deliveries are scheduled for “mid-2021”.

Perhaps the magic topic of ‘electric vehicles has something to do with today’s moves. Electric vehicles and batteries are hot property at the moment, with many famous companies in the space (such as Tesla Inc (NASDAQ: TSLA) soaring in value recently. Regardless of the reasons, investors have evidently shown up a big green light of endorsement, judging by the AWN share price rise today.

More reading

• Why Beach, Fortescue, Iluka, & Temple & Webster shares are dropping lower
• Why the Reliance (ASX:RWC) share price is storming 7% higher today
• IMF upgrades economic outlook but points to ‘exceptional uncertainty’
• This ASX company will double its earnings this year: fundie
• The Genesis Energy (ASX:GNE) share price is up today. Here’s why

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on track to record a sizeable decline. The benchmark index is currently down 0.8% to 6,771.6 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping lower:

Beach Energy Ltd (ASX: BPT)

The Beach share price is down 4% to $1.78 following the release of its second quarter update. The energy producer reported production of 6.2 MMboe for the quarter, which was down 8% from the prior quarter and 3% from the prior corresponding period. This, together with a decline in oil prices over the last 12 months, led to Beach reporting a 25.5% decline in sales revenue to $344 million.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price is down 6% to $23.78. Investors have been selling the mining giant’s shares after the price of iron ore pulled back. According to CommSec, the iron ore price fell by 2.3% or US$3.85 to US$164.65 a tonne after Chinese steel mill profitability weakened.

Iluka Resources Limited (ASX: ILU)

The Iluka share price has fallen 5% to $6.69. This morning the mineral sands producer released a production update which revealed zircon, rutile and synthetic rutile (Z/R/SR) production of 585,000 tonnes in 2020. This was down from 702,000 tonnes in 2019. The company also revealed that it will suspend Synthetic Rutile Kiln 2 production for three to six months from February in order to reduce stocks of synthetic rutile. A contractual dispute has left the company with elevated stock levels.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has sunk 11% lower to $12.00 despite there being no news out of the online furniture and homewares retailer. This decline could be due to profit taking ahead of its half year update next week. Prior to today, the Temple & Webster share price was up 340% since this time last year.

More reading

• ASX 200 down 0.7%: BHP & Fortescue tumble, Reliance rockets, CSL downgraded
• 5 things to watch on the ASX 200 on Wednesday
• ASX property stocks are likely to beat property investments in 2021
• ASX 200 rises 0.4%
• Why the Fortescue (ASX:FMG) share price is storming higher today

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Reliance Worldwide Corporation Ltd (ASX: RWC) share price is surging more than 7% higher after the company announced its trading update for the first half of FY21.

In the opening minutes of trade, the Reliance share price shot up to an intraday high of $4.59. However, its shares have since retreated to $4.40, up 7.2% at the time of writing.

How did Reliance perform?

The Reliance share price is firmly in positive territory after the plumbing parts company reported strong growth across all regions of the business.

For the period ending December 31, Reliance delivered total net sales of $642 million. This represented a 13% lift on the same time last year, and a 17% increase on a constant currency basis.

Looking at the segment performance, repair and remodel markets experienced robust demand through retail and hardware channels in the United States. This reflected a 16% jump on the prior corresponding period (PCP).

Across Asia Pacific, sales rose 10%, underpinned by new Australian housing construction and remodel sectors. Inter‐company sales inched 13% higher on the back of continued demand from the Americas region.

As a collective, Europe, Middle East, and Africa saw their sales advance 9% following the relaxation of the United Kingdom’s government COVID-19 restrictions.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is forecast to be in the range of $164 million and $167 million. The anticipated result will come in above 30% above the EBITDA achieved on PCP.

Reliance noted that cost reduction measures implemented over the first-half have resulted in improved margins. It highlighted that on a run-rate basis, it expects $25 million in annual savings for FY21.

In addition, net debt also decreased by $76 million with the company focused on paying back its existing loans. In-turn, Reliance’s leverage ratio fell to 0.88 times from the recorded 1.57 times at the end of December 2020.

The group advised that it will release its half-year financial results on February 22, 2021.

Management commentary

Reliance group CEO Heath Sharp welcomed the positive result, saying:

The first half of the 2021 financial year has undoubtedly been a strong period for RWC and we are pleased with how the group has performed in demanding circumstances.

Given the continuing uncertainties in all our markets because of COVID‐19 we would caution against extrapolating the first half sales performance for the full year. We note that copper cost increases will negatively impact earnings in the second half and currency translation impacts may also adversely impact reported earnings.

A year in review for the Reliance share price

The Reliance share price took a steep dive in the March COVID-19-related crash last year, falling to as low as $1.63. Since then, its shares have been in recovery, moving upwards to close in on its 52-week high of $4.86 last January.

In comparison to this time last year, the Reliance share price has recovered last year’s losses and is up 0.3%.

More reading

• ASX 200 down 0.7%: BHP & Fortescue tumble, Reliance rockets, CSL downgraded
• Why Booktopia, Nitro, Reliance, & Vulcan shares are charging higher
• Top brokers name 3 ASX shares to sell today

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The International Monetary Fund (IMF) released its latest world economic outlook update yesterday, forecasting stronger global economic growth than previously expected.

Based in Washington DC, the IMF is a financial institution that consists of 190 countries. Essentially, the IMF endeavours to oversee and steer global monetary policy while also addressing social problems like climate change and poverty.

As part of this work, the IMF releases its world economic outlook update twice a year. The report offers a detailed analysis of the global economy.

So what can we learn from the IMF’s latest report?

Things are looking up

The Australian Financial Review (AFR) points out that the revised January 2021 world economic forecast is up by 0.3 percentage points from the previous outlook.

The revised outlook stems from certain economies navigating through the coronavirus pandemic better than projected. The IMF stated that the increased outlook for 2021 reflected “additional policy support in a few large economies and expectations of a vaccine-powered strengthening of activity later in the year, which outweigh the drag on near-term momentum due to rising infections.”

According to the outlook, third quarter GDP was stronger than expected in a number of countries including Australia, India, Japan, Korea, New Zealand, Turkey and the United States.

The Australian notes today that IMF predicts the Australian economy will grow by 3.5% this year. This is 0.5% higher than October 2020’s forecast.

Uncertain world economic growth

The IMF advises that its latest economic projections come “amid exceptional uncertainty”, largely due to the coronavirus. 

Regarding the IMF’s world economic analysis, the report says that the key underlying uncertainties in the data models are COVID infection numbers and the efficacy of vaccine rollouts.

The outlook strongly advises that vaccines, therapies and containment efforts will have to progress smoothly to meet current growth targets.

However, as reported by the AFR, there’s always the chance that the coronavirus battle could move on more quickly and efficiently than expected, which might result in a global growth that’s stronger than forecasted.

Foolish takeaway

The IMF’s economic outlook is just one available resource to help form your own opinions about the state of the global economy.

Uncertainty and volatility are just as common in big-picture IMF forecasts as they are in the everyday trading markets. For now, it looks like economies around the world are showing signs of improvement. 

Let’s hope that this is a developing trend and we continue to see more of it.

More reading

• This ASX company will double its earnings this year: fundie
• The Genesis Energy (ASX:GNE) share price is up today. Here’s why
• ASX 200 down 0.7%: BHP & Fortescue tumble, Reliance rockets, CSL downgraded
• 3 ASX dividend shares to buy in February 2021
• Why Booktopia, Nitro, Reliance, & Vulcan shares are charging higher

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ASX shares involved in the housing sector are set to boom this year, according to a fund manager — but one company looks especially attractive.

Near-zero interest rates and the dumping of responsible lending laws have put a rocket under Australian real estate.

UBS has predicted a 10% increase in prices this year. The RBA calculated a low cash rate could inflate the market by 30% over the next 3 years.

Tribeca Investment Partners portfolio manager Jun Bei Liu told a GSFM briefing last week that the housing industry has recovered very sharply from the COVID-19 recession.

“Building approvals have been positive. Who would’ve thought it would turn positive so quickly?” she said.

“We have finance approvals, credit growth has started picking up, we have housing prices starting to improve, listing volumes have started picking up and we have a very strong consumer market at this point.”

4 ASX shares set to cash in on housing boom

But investors still need to be discriminating among the ASX shares playing in that field.

“I like to keep with quality and I like to stay with companies that have proven [they can] generate long-term value,” Liu said.

“CSR Limited (ASX: CSR) is one that’s directly linked to housing approvals.”

There are also retailers that will cash in from a housing boom, with Australians buying goods to fill up new spaces.

“JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) are examples of housing retailers [and] how much they will benefit,” said Liu.

“Analysts are absolutely underestimating the operating leverage these businesses will have. I think the [positive] operating environment for the housing retailers will go on for quite some time.”

But there is one specific company that Liu’s team is really licking their lips about.

“We are big believers in Domain Holdings Australia Ltd (ASX: DHG),” Liu said.

“This business will double its earnings in the next 12 months. It’s actually one of the highest growth businesses within the Australian market.”

The Domain share price is currently trading 3.31% higher at $4.66 on Wednesday (at the time of writing). It was going for $3.80 exactly 12 months ago, just before the coronavirus market crash.

More reading

• 3 high-yielding ASX 200 dividend shares
• Why Frontier Digital Ventures, JB Hi-Fi, Regis, & Tyro are dropping lower
• 2021 has its worries… even for an optimist
• Is the JB Hi-Fi (ASX:JBH) share price overvalued now?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Genesis Energy Ltd (ASX: GNE) share price is up 3.74% to $3.61 in late morning trade, bucking the wider market slide that’s seen the All Ordinaries Index (ASX: XAO) fall 0.78%.

This follows the release of the Kiwi energy company’s second quarter performance report.

Quarterly performance powers up

In its retail sector, Genesis reported its LPG business for Q2 was the strongest summer period ever for the company. The company attributed the growth to an increase in residential customers in the main centres, alongside strong growth from its new depot in Whangarei.

While cost to serve (CTS) trended lower, the company noted some delayed costs will impact CTS in the second half of the 2021 financial year by around $1. It also reported an increase in customer churn, due to a 10% increase in national home moving switches in its New Zealand market.

On the sustainability front, Genesis confirmed its commitment to a science-based target in line with limiting global warming to 1.5 degrees Celsius. The company has pledged to reduce emissions by 1.2 million tonnes or more by 2025.

Commenting on the company’s sustainability commitments, Genesis Energy’s CEO Marc England said:

Genesis has committed to the most aggressive emissions reduction target by a New Zealand energy company. We chose the 1.5-degree target knowing it will be difficult but achievable with the right planning and pathway.

The company’s Waipipi development is forecast to be fully operational by March. Generation already started back in November, producing 30 Gwh of renewable energy in Q2. Noting that La Nina may reduce South Island inflows in the third quarter, Genesis said it may be asked to provide additional thermal back-up energy to the market.

Genesis Energy has a 46% interest in the Kupe Joint Venture, which owns the Kupe Oil and Gas Field offshore of Taranaki, New Zealand. It reported the Kupe strategic review is on track with conclusions expected by mid-2021.

Genesis Energy share price and company snapshot

Genesis Energy sells electricity, reticulated natural gas and LPG through its retail brands of Genesis Energy and Energy Online to customers in New Zealand. With some 500,000 customers, the company is New Zealand’s largest energy retailer. Genesis is listed on both the New Zealand and Australian exchanges. Shares first listed on the ASX in April 2014.

With today’s intraday gains, the Genesis Energy share price is up 17.2% over the past 12 months. Shares are up 4.6% so far in 2021.

More reading

• ASX 200 drops 1.1%
• Here’s how ASX renewable energy shares have performed in 2020

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At lunch on Wednesday the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. The benchmark index is currently down 0.7% to 6,775.2 points.

Here’s what is happening on the market today:

Iron ore miners tumble

BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) shares are tumbling lower on Wednesday and are acting as a major drag on the ASX 200. The Fortescue share price is the worst performer in the group with a decline of over 6%. Investors have been selling their shares after the iron ore price pulled back. According to CommSec, the iron ore price fell by US$3.85 or 2.3% to US$164.65 a tonne after Chinese steel mill profitability weakened.

Reliance update impresses

The Reliance Worldwide Corporation Ltd (ASX: RWC) share price is surging higher today following the release of its half year update. According to the release, the plumbing parts company achieved net sales of $642 million for the six months ending 31 December. This was up 13% on the prior corresponding period. Things were even better for its earnings, with EBITDA expected to be in the range of $164 million to $167 million. This will be up at least 30% versus the same period last year.

CSL downgraded

The CSL Limited (ASX: CSL) share price is dropping lower today after being downgraded by analysts at Ord Minnett. The broker has downgraded the biotech giant’s shares to a hold rating and cut the price target on them to $293.70. It has concerns that rising COVID cases in the United States is hindering the plasma collections recovery.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Reliance share price following its strong half year update. It is up 7% at lunch. Going the other way, the worst performer has been the Fortescue share price with a decline of just over 6% following the pull back in the iron ore price.

More reading

• Why Booktopia, Nitro, Reliance, & Vulcan shares are charging higher
• These ASX dividend shares will help you overcome low interest rates
• 5 things to watch on the ASX 200 on Wednesday
• ASX property stocks are likely to beat property investments in 2021
• Experts want Big Tech to stop the spread of COVID-19 misinformation

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Reliance Worldwide Limited. The Motley Fool Australia has recommended Reliance Worldwide Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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There are some ASX dividend shares that could be worth considering in February 2021.

Businesses that pay out some of their profit to investors each year may be able to generate a higher yield for income-seekers.

Here are three ASX dividend shares with yields of at least 3%:

Charter Hall Long WALE REIT (ASX: CLW)

This is a real estate investment trust (REIT) that is run by Charter Hall Group (ASX: CHC). It aims to invest in high quality real estate assets that are predominately leased to corporate and government tenants on long term leases.

The ASX dividend share has 459 properties with a total value of $4.23 billion. Around 53% of the leases are triple net leases, which means tenants are responsible for things like rates, insurance, repairs and maintenance and land tax.

The REIT has an occupancy rate of 97.3% and a weighted average lease expiry (WALE) of 14.2 years.

It has major tenants that make up a lot of the rental income – Telstra Corporation Ltd (ASX: TLS) is responsible for 19%, government entities make up 16%, BP makes up 14% of the rental income and Woolworths Group Ltd (ASX: WOW) makes up 13%.

In terms of sector diversification, industrial properties make up 26%, long WALE retail is 29%, office is 24%, telco exchanges is 15% and agri-logistics is 6%.

Analysts at Macquarie Group Ltd (ASX: MQG) likes the guidance of at least 29.1 cents per share, with the REIT’s good yield, cashflow and certainty provided by strong tenant agreements.

Charter Hall Long WALE REIT has an expected yield of at least 6.3% using a payout ratio of 100%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is the ASX dividend share with the longest dividend growth record. The old investment conglomerate has grown its dividend every year since 2000.

The Soul Patts share price has fallen 8% over the past month, which has had the effect of pushing up the trailing dividend yield, which is now 3.1%.

It has a diversified portfolio which displays different defensive characteristics and continue to pay dividends despite the difficult operating conditions because of COVID-19. Some of the biggest dividend payers for Soul Patts from its portfolio are: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Bki Investment Co Ltd (ASX: BKI) and Milton Corporation Limited (ASX: MLT).

Soul Patts funds its own dividend from the investment income it receives. It also makes its own profit from private operating businesses like swimming schools, resources and agriculture.

If the ASX dividend share increases its annual dividend by 2 cents per share in FY21, at the current Soul Patts share price it has a forward grossed-up dividend yield of 3.2%.

APA Group (ASX: APA)

APA owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.

After Soul Patts, APA is one of the next ASX dividend shares that has the longest consecutive growth streaks, it has been going up for around a decade and a half.

The energy infrastructure giant funds its dividend from growing operating cashflow, which is increasing as more of APA’s projects are finished. APA recently announced a pipeline in WA which could unlock further requests from miners for a connection for cheap and reliable energy.

At the current APA share price it offers a distribution yield of 5.3%.

More reading

• 2 ASX 200 shares to buy for dividends
• 3 top ASX blue chip shares to buy
• 2 ASX 200 growth shares to buy
• 3 ASX dividend shares rated as strong buys by brokers
• Got money to invest for dividends? Here are 3 ASX shares

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Macquarie Group Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) has returned from the public holiday in a disappointing fashion. At the time of writing, the benchmark index is down 0.7% to 6,777.9 points.

Four ASX shares that have not let that hold them back are listed below. Here’s why they are charging higher:

Booktopia Group Ltd (ASX: BKG)

The Booktopia share price has jumped over 11% to $2.95 following the release of its half year update. The online book retailer revealed that it had both a record month in December and a record half. Booktopia shipped a record 728,000 units during the final month of the year, bringing its total shipments to 4.2 million units for the half. This was a 40% increase on the same period last year. This led to a 52% increase in unaudited half year revenue to $113 million and a 506% increase in adjusted EBITDA to $8 million.

Nitro Software Ltd (ASX: NTO)

The Nitro share price has stormed 5.5% higher to $3.23. Investors have been buying the document productivity software company’s shares following the release of a strong fourth quarter update. At the end of the quarter, Nitro’s annualised recurring revenue (ARR) stood at US$27.7 million. This was up 64% on the prior corresponding period and ahead of its previously upgraded guidance of US$26 million to US$27 million.

Reliance Worldwide Corporation Ltd (ASX: RWC)

The Reliance share price has surged 8% higher to $4.43. The catalyst for this was the release of a half year update by the plumbing parts company. According to the release, Reliance has achieved net sales of $642 million for the six months, which is up 13% on the prior corresponding period. EBITDA is expected to be in the range of $164 million to $167 million, up at least 30% versus the same period last year.

Vulcan Energy Resources Ltd (ASX: VUL)

The Vulcan share price has jumped 13% to $8.22. Investors have been buying the clean lithium developer’s shares after it refuted media speculation that it was planning to raise capital. Vulcan advised that it is undertaking a non-deal roadshow and has no immediate plans to launch a capital raising.

More reading

• Why the Vulcan (ASX:VUL) share price is storming 12% higher today
• Why the Booktopia (ASX:BKG) share price is rocketing 15% to a record high
• Here’s why the Nitro Software (ASX:NTO) share price is surging 7% higher today
• 5 lithium shares that are fast-charging up in 2021
• 3 exciting small cap ASX shares to watch very closely

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Reliance Worldwide Limited. The Motley Fool Australia has recommended Nitro Software Limited and Reliance Worldwide Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price is back on form again and is storming higher on Wednesday.

At one stage today the clean lithium developer’s shares were up as much as 12.5% to $8.19.

The Vulcan share price has since given back some of these gains but remains up 8.5% to $7.90 at the time of writing.

Why is the Vulcan share price storming higher?

Investors have been buying Vulcan shares today after it responded to media speculation that it could be about to undertake a capital raising.

According to the release, Vulcan is not conducting a capital raise at this point in time. Instead, it advised that it is undertaking a non-deal roadshow with potential investors.

The AFR had suggested that this roadshow could be a pre-requisite before launching a capital raising to fund future work at its lithium project in Europe.

Chief among these will be the starting capital cost of 226 million euros for geothermal energy plants and 474 million euros for direct lithium extraction and processing plants. After which, its phase two total capital expenditure is forecast to be 1.14 billion euros.

This means its full project costs with no phasing could come to a sizeable 1.74 billion euros by the time it is operational in 2024. But investors certainly believe this investment will be worth it based on its pre-feasibility study (PFS).  

According to its announcement, the Zero Carbon Lithium Project’s first PFS demonstrates strong potential to develop a cutting edge, combined renewable energy and lithium hydroxide project, in the centre of Europe, with net zero carbon footprint.

The study also reveals that the project has an after tax net asset value of 2.25 billion euros. This equates to approximately A$3.5 billion.

What’s next for Vulcan?

The company’s main focus in 2021 will be the Definitive Feasibility Study (DFS) work at the project.

It is also working on permitting, the scale up of lithium extraction test-work, and advancing its current discussions with European lithium offtakers.

The Vulcan share price is now up 185% since the start of 2021.

More reading

• 5 lithium shares that are fast-charging up in 2021
• Here’s why the AVZ Minerals (ASX:AVZ) share price is surging higher today
• Why Cleanaway, Crown, Pro Medicus, & Vulcan shares are tumbling lower
• Why Vulcan (ASX:VUL) and these ASX shares are smashing the market in 2021
• We have lift-off: Vulcan Energy (ASX:VUL) share price hits new heights

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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