Kelly Ventures and VUL Energy Enter into Definitive Merger Agreement for Qualifying Transaction and Announce C$10.0 Million Brokered Subscription Receipt Financing with C$8.6 Million in Strategic Lead Orders to Form an Argentina Focused Geothermal Energy Platform with Lithium Upside

VUL Energy targets a C$10M raise and RTO for a 60 MW geothermal project in Argentina.

What the company is saying

Kelly Ventures Ltd. and VUL Energy Ltd. have signed a definitive merger agreement for a reverse takeover, positioning VUL Energy as the resulting issuer. The announcement highlights a brokered private placement at C$1.40 per subscription receipt, aiming for up to C$10,000,000 in gross proceeds, with C$8.6 million already committed via SAFEs. The company frames its Catamarca geothermal project as a high-potential, long-life asset with a 60 MW capacity, a 40+ year lifespan, and an unrisked NPV10 (P50) of C$194.9 million, citing an independent Sproule ERCE evaluation. Management emphasizes the project's ability to supply baseload renewable energy to mining operators currently reliant on expensive diesel power, and references a non-binding LOI for a 35-year offtake of 40–60 MW. The narrative stresses the potential for strong cash flows, lithium extraction upside, and ESG alignment. Key executives named are Warren Levy (CEO), Hernan Montoya (CFO), and Fernando Figini (COO), with Paul Larkin joining as a director. The company also details the use of proceeds, including C$3,000,000 for early-stage project work, and outlines the steps and conditions required for escrow release and transaction completion.

What the data suggests

The transaction is at a definitive agreement stage, with the RTO and private placement subject to regulatory and shareholder approvals. Of the targeted C$10,000,000 raise, C$8.6 million is already subscribed and held in escrow, with up to C$3,000,000 available for immediate project activities. Subscription receipts are priced at C$1.40, each converting to a unit with a share and a warrant exercisable at C$1.82 for 36 months, subject to acceleration if the price exceeds C$2.73 for 10 days. The Catamarca project is supported by an independent unrisked NPV10 (P50) estimate of C$194.9 million, but no binding offtake or power purchase agreements are in place; the only commercial arrangement is a non-binding LOI for a 35-year supply of 40–60 MW. Projected annual generation is ~515,000 MWh, with targeted power prices of US$250–US$300 per MWh, implying revenue potential of US$129–US$155 million, but these are modelled figures, not contracted. Regional diesel power costs are US$350–US$400 per MWh, suggesting a competitive advantage if the project is built. Surface brine samples show lithium concentrations from 201 mg/L to 1,031 mg/L, indicating possible lithium extraction upside. The land package covers 25,000 hectares, expandable to 40,000 hectares. Management has a track record in Latin American energy projects, with CEO Warren Levy having raised over $1.8 billion previously. The project is at a pre-construction, pre-revenue stage, with significant execution and permitting steps remaining.

Analysis

The announcement is upbeat, highlighting a definitive merger agreement, a substantial capital raise (C$8.6M subscribed, up to C$10M targeted), and ambitious plans for a large-scale geothermal project. While the merger agreement and escrowed funds are realised facts, most of the economic upside—NPV, revenue, and offtake—is based on projections, non-binding LOIs, and targeted metrics rather than executed contracts or operational milestones. The project is capital intensive, with significant funds earmarked for early-stage activities (access road, camp, studies), but no immediate revenue or profitability is expected. The timeline for material benefits is long-term, as the power plant is not yet built and the offtake agreement is non-binding and subject to FID. The tone inflates the signal by presenting best-case economics and regional demand as if they are near certainties, despite the early stage and conditional nature of key agreements.

Risk flags

• ●The RTO and private placement are both conditional on regulatory and shareholder approvals, introducing material transaction risk; failure to satisfy escrow release conditions by the deadline would result in cancellation and return of funds to investors.
• ●The project's economics rely on modelled NPV and revenue projections, but there is no binding offtake or power purchase agreement; the only commercial arrangement is a non-binding LOI, which may not convert to a contract or may do so on less favourable terms.
• ●Execution risk is high due to the capital-intensive nature of geothermal development, the need for permitting, construction, and technical delivery in a remote region of Argentina, and the dependence on raising further capital beyond the current C$10 million.
• ●Market uptake depends on displacing diesel generation for nearby mines, but actual customer conversion and payment terms are unproven; the stated regional demand of 500 MW is an opportunity, not a secured market.
• ●Lithium extraction is presented as upside, but no resource estimate or extraction plan is in place; the lithium concentrations are from surface samples and do not guarantee commercial viability.

Bottom line

This announcement marks a major step for VUL Energy, securing a definitive RTO agreement and launching a C$10 million capital raise, with C$8.6 million already committed. The Catamarca geothermal project is presented as a high-upside, long-life asset, but all revenue and NPV figures are projections contingent on future construction, permitting, and customer agreements. The only commercial arrangement is a non-binding LOI, and there is no binding power purchase agreement or final investment decision. Execution risk is significant, given the project's scale, capital intensity, and early stage. Investors should treat the headline economics as aspirational, not guaranteed, and focus on the company's ability to close the RTO, secure binding contracts, and advance toward construction. The most important takeaway is that this is a high-potential, high-risk early-stage energy play, with real progress on financing but a long road to commercial operations.

Announcement summary

(TSXV:KKL.P) Kelly Ventures Ltd., VUL Energy Ltd., and 1001799338 Ontario Ltd. (Subco), a wholly-owned Ontario subsidiary of Kelly Ventures, have entered into a definitive merger agreement dated November 2, 2026, under which VUL Energy will complete a reverse takeover of Kelly Ventures via a three-cornered amalgamation. VUL Energy is conducting a best efforts, brokered private placement of subscription receipts at C$1.40 per Subscription Receipt for aggregate gross proceeds of up to C$10,000,000. Approximately C$8.6 million has already been subscribed for and deposited into escrow via SAFEs, which will convert into Subscription Receipts on the same terms. Research Capital Corporation is acting as sole agent and bookrunner for the Offering, and has an option to offer up to 15% additional Subscription Receipts, exercisable up to 48 hours before closing. Net proceeds will be used for property acquisition, geotechnical evaluations, exploration drilling, working capital, and general corporate purposes. Each Subscription Receipt converts into one unit of VUL Energy, consisting of one common share and one common share purchase warrant, with each warrant exercisable at C$1.82 per share for 36 months after escrow release, subject to acceleration if the share price exceeds C$2.73 for 10 consecutive trading days. Upon closing of the RTO, the underlying shares and warrants will be exchanged one-for-one for shares and warrants of the resulting issuer, which will be named VUL Energy Ltd. and is expected to trade under the ticker 'VEN'. The Catamarca geothermal project, VUL Energy's flagship asset, has an independent unrisked NPV10 (P50, best estimate) of C$194.9 million according to Sproule ERCE. The project involves a 60 MW geothermal power plant with a 40+ year lifespan and a 25,000-hectare land package, expandable to 40,000 hectares. VUL Energy has entered into a non-binding LOI with a neighboring lithium mining company for a long-term offtake of 40 MW to 60 MW over a 35-year term, subject to a final investment decision. Targeted power price is US$250 to US$300 per MWh, with annual generation of ~515,000 MWh, implying annual revenue potential of ~US$129 million at US$250/MWh and ~US$155 million at US$300/MWh. Typical geothermal opex is ~US$20 to US$40 per MWh. Surface brine samples show lithium concentrations from 201 mg/L to 1,031 mg/L. The project is located near the Lastarria volcano in Catamarca, Argentina, with proximity to rail infrastructure and export routes via Chile. Mines in the region currently rely on diesel power at US$350 to US$400 per MWh. VUL Energy's management team includes Warren Levy (CEO), Hernan Montoya (CFO), and Fernando Figini (COO), with Paul Larkin as a director. Founders Silvio Duport and Diego Zuckerberg are expected to be control persons of the resulting issuer. Up to C$3,000,000 of escrowed funds may be released early for project advancement, including access road, work camp, geotechnical studies, and working capital. The RTO and Offering are subject to shareholder and regulatory approvals, including TSXV conditional approval for listing.

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