Vulcan Energy Resources Ltd. has signed a Term Sheet agreement with Nobian GmbH (Nobian) for the formation of a 50/50 joint venture over, and equity financing of, Vulcan's Central Lithium Plant (CLP), which forms part of Vulcan's Zero Carbon LithiumTM Project (Transaction). The strategic partnership is subject to the parties entering into definitive agreements, which are targeted to be completed within 10 weeks from the date of the term sheet. The planned CLP is contained within a Joint Venture Special Purpose Vehicle known as SPV2, and the Transaction is envisaged to be based on the terms set out below.

Background and rationale for strategic partnership · As part of its project financing, Vulcan has split Phase One of its integrated 24,000tpy Lithium Hydroxide Monohydrate (LHM) and renewable energy project into two separate Special Purpose Vehicles (SPVs): o SPV1 includes the plant and infrastructure associated with the production of renewable energy and lithium chloride (LiCl) and includes land, wells, pipelines, geothermal and lithium extraction plants. SPV1's output includes renewable energy and LiCl, the latter which is sold to SPV2. o SPV2 includes the CLP which converts LiCl into LHM, with a by-product of HCl.

LHM will be sold to the Vulcan parent company which will then distribute it to Vulcan's offtakers. Nobian has a strong pedigree in chlor-alkali operations and a heritage stretching back over 100 years. It's first chlor-alkali electrolysis plant in Bitterfeld was started up in 1894.

Nobian is a European leader in the production of salt, essential chemicals and energy solutions for industry and has a deep and long-standing expertise in crystallization, electrolysis, and the production of chlor-alkali products. Through the proposed strategic partnership both parties seek to leverage both Nobian's deep and long-standing experience in industrial crystallization and electrolysis and operating chlor-alkali plants, as well Vulcan's Zero Carbon LithiumTM Project, which uses chlor-alkali type electrolysis cells to produce lithium hydroxide. Nobian has existing production sites in the Netherlands, Denmark and Germany, including at the same site as Vulcan's planned CLP, at the Hoechst Chemical Park, providing additional synergies.

The Term Sheet builds on and reflects 15 months of collaboration between Nobian and Vulcan. Proposed contributions, valuation and key terms · The Term Sheet provides that, subject to execution of Definitive Agreements for the Transaction and the satisfaction of other conditions (set out below), Nobian shall contribute EUR 161 million (approximately AUD 265 million) in cash as equity to fund CAPEX for the CLP, to acquire 50% of the SPV2 Joint Venture, on the basis of an agreed pre-money valuation of EUR 322 million for the CLP SPV2. As per Vulcan's Definitive Feasibility Study (DFS) published in February 2023 1, SPV2's CAPEX requirement is estimated at EUR 322 million.

It is expected that Nobian's equity contribution, alongside expected project debt finance to be obtained by the Company, which BNP Paribas, Vulcan's financial advisor, is assisting Vulcan on arranging, will fully cover the funding requirement for the CLP. The Company is targeting a debt-to-equity ratio of 65:35 for the overall funding of Phase One. Based on the DFS, SPV1's Net Present Value (NPV) represents 77% of Phase One total NPV whilst SPV2's NPV represents 23%.

Financing for remainder of Zero Carbon LithiumTM Project · Vulcan is leveraging its existing cash position to continue to advance its project through bridging engineering and ordering of commercial long lead items, whilst financing for full project CAPEX is ongoing. Vulcan is in discussions with strategic counterparties for equity funding of SPV1, in which it intends to deploy a similar strategy as SPV2 of bringing in project-level equity investment. The process of obtaining debt financing is already under way lead by BNPP, with positive feedback already received from numerous commercial banks, and Letters of Intent secured from Export Credit Agencies from the French, Italian and Canadian governments3, in line with similar approaches taken by successful project developers in the past.

Vulcan is targeting close of all debt and equity financing workstreams by First Quarter 2024.