"Ore" is mineral that you can extract, process to produce valuable material, transport to market, and sell to make a profit. If you can extract it but the mining and processing costs are too great to make a profit, then it is not ore. If on the other hand, a purchaser is willing to take whatever you produce, at whatever it costs plus some profit, then it is ore. (Such was the case for uranium until about 1960). "Rich" deposits which cannot be mined because of technical, political, economic, or environmental factors are NOT ORE. If you can truthfully say that material IS ore, and if you have legal title to mine it, or clear de-facto control over it, then it can be counted as an asset on the books of your company!

The terrestrial approach adopted by international mining companies generally follows the sequence given below:

1. Strategic "Desktop" studies, to decide what to look for, and where:

   Initially, a mining corporation will commission literature surveys, market forecasts, and desktop country comparisons, to decide the commodities (metals, minerals and fuels) it feels comfortable with, competent in, and expects to be profitable, the geologically prospective regions, and the political entities offering reasonable law-and-order and security of tenure.

   (e.g., copper in the Andes, gold in the Nevada Carlin Trend, nickel in the Western Australian greenstone belt, coal in Indonesia, oil in the Permian Basin, uranium in Uzbekistan etc....)

   The market, cost and risk questions are critical: What is the present and future likely demand and price? Are there market-insensitive competitors? What is present and planned world production? What is the cost curve likely to look like in the time scale under consideration? What is the mechanism and security of title? Is there a risk of expropriation of equity or sequestration of any prospective earnings? What is the local taxation regime? -labour and energy costs? -social burdens expected to be carried by the operator?

   In the space resources scenario, I propose generally volatiles and nickel-iron in the Near-Earth Asteroids to be the target materials of interest.

   TO BE MORE SPECIFIC, I BELIEVE THE FIRST VALUABLE PRODUCT FROM NEAs WILL BE WATER, FOR SPACELINER DE-ORBIT PROPELLANT, SUPPLIED IN LEO.

   I identify the low-eccentricity and low-inclination Apollos and Atens as the regions of interest, for reason of the low delta-v's required for outbound and return trajectories..

   Having decided what to look for, and where, then we perform:-

2. More detailed open and proprietary data reviews:

   Government mining department reports, university theses, historical information from past operations, commercial aeromagnetic or other remote data, Landsat photography, etc., are reviewed This enables more restricted target areas within the regions to be identified and prioritized.

   In the case of Near-Earth Asteroid resources, we review present astronomical asteroid databases to extract the initial 'shortlist' of bodies that are prospective from the viewpoint of orbital accessibility and spectra.

3. Having identified sufficiently prospective areas, in the terrestrial case one then applies for exploration leases from the State, or otherwise obtains legal access to the prospective 'ground'; detailed aerial and then surface reconnaissance is planned.

   In the space mining scenario, we are in a legal "terra nullius" - a land owned by no-one. This implies some threats and opportunities (see my thesis for a long discussion).

4. Progressively more specific (and more costly) screening:

   In the terrestrial case, field work then commences, involving (e.g.) stream sediment sampling or soil sampling, outcrop sampling, soil gas sampling, detailed aeromagnetic, gravity, conductivity, or seismic surveys (note the increasing costs).

5. For specific locations which show mineralization, a trenching and surface bulk sampling exercise or shallow percussion drilling program is then undertaken. If the potential deposit is "blind" but there is a strong geophysical signature, a core drilling program to probe mineralization at depth, or a wildcat well (in the case of exploration for oil or gas) may be approved, to give data on the extent of the apparent deposit or mineralization.

   In the space scenario at an equivalent stage, a precursor or prospector mission may be decided upon.

6. Areas which remain prospective are now clearly defined as promising areas of mineralization, but are still not necessarily an orebody. In the terrestrial metal-mining case, most such prospects still fail to produce a mine, either because there was insufficient contained metal to make a viable operation, or the grade was too low, or too discontinuous, or because of recovery problems in the mining or in the metallurgical processing, or because of political or infrastructure problems.

   If the drilling shows adequate volume at adequate grade, then an orebody may be announced by the Directors.

7. Project conceptual planning and prefeasibility studies:

   At this stage, the design team will begin to consider possible mining and processing methods. The concepts will be subjected to initial review.

   In the terrestrial case, there is generally need for further drilling to delineate orebody shape and reserves. Bulk samples may be required to provide feed for metallurgical testwork.

   Conceptual project design work - the PreFeasibility Study - commences. This Study must consider the RESOURCE size, percent RECOVERY, and desired production RATE, to come up with a

   • Mining Plan, and a
   • Metallurgical Process Flowsheet, which
   • minimizes Capital Expenditure,
   • minimizes Payback Time, and
   • maximizes the Expected Net Present Value.

   The Feasibility Study will consider the various mining and process options, identify the one or two best mining and processing choices, and estimate capital and operating costs (+/- 50%) for the chosen production rate, based on industry rules of thumb. Many projects fail at this stage because the costs do not come in low enough.

   My thesis completed a couple of years ago showed how to carry out a generic scoping and prefeasibility study for hypothetical asteroid mining projects for water recovery and delivery to a near-future market in low earth orbit including how to calculate net present value for these ventures.

   An asteroid mining project must be able to deliver a positive NPV or it will not fly!!

8. If the project survives this review, and the Board supports it, the Final Feasibility Study is commenced, with an aim of giving +/- 20% in CAPEX and operating costs The FFS is generally intended to be a "bankable document" i.e., something you present to the bankers in support of your application for a loan. Industry average figures are replaced with project-specific costs. There will be substantial metallurgical testwork, and perhaps even some trial mining, especially if the plan is for underground mining

   Generally the FFS is performed in parallel with an obligatory Environmental Impact Statement. Sometimes the EIS uncovers a previously unconsidered constraint, which may demand a major change in plans, or may even scuttle the project, depending on the cost implications. (The EIS process is important, because an overlooked constraint which causes catastrophic failure can end up costing the proponent millions or even billions in compensation and rehabilitation.)

   Some projects still fail at this level, although most will have developed significant momentum, and many projects make it over this hurdle that should in fact fail.

9. Proponent seeks licence to develop mine and operate from the regulators. In a 'good' legislative regime, this should be almost automatic, although not necessarily without special licence conditions, provided obligations as an Exploration Lease Holder have been fulfilled, and provided the EIS has 'passed muster'.

10. Project go-ahead by Board of Directors

    Engineering, Procurement, and Construction, followed by commissioning. Hopefully the owner finally get a mining project more-or-less like what he asked for, running at about nameplate capacity, on time and on budget!

    In terrestrial resource developments, only about one in one thousand of the prospects identified at stage 4 actually gets to be a mine.

    In the extraterrestrial case, there are indications that a much larger proportion of the targets found in initial surveys will be able to survive later screening to prove up ultimately as orebodies which are able to support commercial water-producing operations. This is because as many as 50% of NEAs may be water-bearing, and about 10% are more accessible than the Moon. Note also that the target asteroid types are of high grade in water, and schemes for its extraction and return appear to be easy to develop.

The best comparisons for asteroid mining are probably NOT with large low cost open pit gold mines or extensive underground base metal operations, or other highly complex, high capital cost low profit margin operations, BUT with small, remote highly profitable operations supplying very high value material into a seller's market. Examples are early low volume gold and diamond mines, and small successful present-day precious-gem mines.

Small throughput high value versus large throughput low value -- Shaving the last few cents per pound off the cost is of major importance in large terrestrial mines, but is certainly not important in these 'high-value' cases, compared with ensuring robustness of operation.

The examples which come to mind are the "forty-niners" in California, or gold-panners on the Klondike, or the mining syndicates formed during the Australian gold rushes at Ballarat and at Kalgoorlie, or the present-day opal miners in Coober Pedy, Australia's Mad Max country, or the 'garimpairos' carrying out outlaw gold mining in Brazil.

These places were all initially very remote and dangerous; basic necessities of life were missing and had to be supplied from great distances; the legal regime was initially non-existent or very poorly defined, and poorly policed.

Another commodity that comes to mind is Radium, during the 1920's. This was worth, at the beginning of the decade, $200,000 per gram - an amazing value! It was originally only available from the Bohemian silver mines as a very tiny byproduct. Then discoveries were made at Port Radium, on Great Slave Lake in the Canadian Northwest Territories, at Radium Ridge in the rugged North Flinders Ranges in the South Australian desert, and at Shinkolobwe in the Belgian Congo. All very inhospitable, remote, and literally life-threatening locations. These mines began as small operations, hand-digging and hand-sorting ore to be transported by dogsled, camel-train, or river dugout to the nearest railhead or port. Small companies were floated on local stockmarkets, to develop these mines and to build little refineries. Shinkolobwe became the greatest radium mine in the world, the foundation for Union Miniere, and a huge contributor to the Belgian Treasury.

It is generally assumed that prospector missions are essential, prior to the launch of a commercial miner. This is not necessarily so, even on Earth:

Case 1: A "wildcat" oil exploration is carried out with equipment sized to enable future production, should oil or gas be found. Why? - because the incremental cost (including effect of time saved in the event of a discovery) is small enough to justify the extra up-front expenditure.

Case 2: An exploration shaft or decline is developed to gain access into a deep body of known but ill-defined mineralization to confirm mining design and costs for a Final Feasibility Study. Such a shaft is always sized so as to accommodate initial mine production rates, so as to save capital cost and NPV-effect of time delay, if the deposit should 'prove up'.

A project cannot run unless it can be reasonably expected to pay for itself.

• What are your market assumptions?
• What is your desired production rate?
• What, therefore, is your expected revenue?
• What is the expected operating cost?
• What is your target Capital Cost?
• What, finally, is the project's calculated Net Present Value?

The capital cost of any envisaged asteroid mining project MUST be capable of being paid back out of profits in a period of (say) 5 years at most.

Anyone who seeks to advance any specific space mining idea or hypothesis MUST put his or her idea through the above "reality check"

"Minimize CAPEX":

• unmanned
• single launch
• simplest possible systems

  (note that launch cost can be taken as $1000/kg otherwise there will be no market!)

"Minimize Payback Time":

• minimum duration mission cycle

"Maximize NPV":

• lowest delta-v for return
• highest-yield target
• simplest possible extraction system

Imminent "Order-of-Magnitude" reduction in launch cost to LEO, to approx $500 / kg to $1000 / kg. This will come about with the success of any one of the prospective new start-up cheap launch providers.

At $500/kg, a major expansion of space based activities, especially Space Tourism and Satellite Solar Power Stations is predicted.

These will call forth a market for materials in LEO, specifically:

• water, for propellant, shielding, and life-support;
• metals and concrete for construction.

The launch cost for a remote asteroid water-miner will ALSO be down at about $1000/kg, because if it isn't, there wont be any market for its product!

Assume 300,000 tourists per year (from market surveys by Patrick Collins et al., and the basis of planning for ' Kankoh Maru'), at a ticket price of $20,000 = $6 Billion.

This scenario assumes 6000 flights per year (50 pax per flight). Each flight will require 20 tonnes of deorbit fuel, liquid hydrogen and liquid oxygen, which either has to be lifted into orbit, or can potentially be supplied in orbit, from asteroidal-origin water, thus increasing dramatically the available payload into orbit.

The value of 20 tonnes of water in orbit, at $200/kg, is $4,000,000.

The value of (6000 × $4,000,000) is $24 Billion.

This is the "airfreight capacity" that could be freed up and made available for sale, by supplying propellant in-orbit, rather than requiring it to be lifted into orbit.

So delivery of water from Near-Earth Asteroids to Low Earth Orbit for production of spaceliner deorbit propellant, in a rapidly expanding LEO economy, could generate a very large cash flow.

A major concern is "How to obtain strategic growth?" - this growth should preferably be in an expanding, not a mature, market.

There is a need to seek to identify and develop high growth, high profit, products.

There is a need to create a "sustainable competitive advantage". This generally derives from (i) proprietary knowledge; and / or (ii) a superlative orebody of long life and low cost relative to its competition.

A VIRTUOUS CIRCLE can thus be developed:

• PROPRIETARY KNOWLEDGE
• FIRST IN MARKET
• (AND SUPERLATIVE OREBODIES)
• REDUCED RISK AND COST (C.F. ANY LATER COMPETITOR)
• OVERWHELMING ONGOING TECHNICAL AND ECONOMIC ADVANTAGE
• (SUSTAINABLE COMPETITIVE ADVANTAGE)

Thus the CONCEPT becomes:

A 10-tonne teleoperated or autonomous miner, capable of processing 50,000 tonnes of regolith in 6 months, and extracting 5,000 tonnes of water, to be collected in a 2-tonne fabric storage bag and radiator, of which 1,000 tonnes is returned to Low Earth Orbit, using solar thermal rocket propulsion and Lunar-flyby capture.

CAPEX for missions using 'new-technology" $1000/kg class launch vehicles can be as low as (say) $15 million, on the basis of $5 M for the launch and $10 M for the miner.

Return from a payload of 1000 tonnes delivered into LEO is $1000 M.

1. Likely to be a market for MASS-IN-ORBIT, as soon as launch costs come down

2. Rate of discovery of NEAs now quite high

3. Some NEAs good targets for RESOURCES RECOVERY

4. Need more MINERALOGY / COMPOSITION DATA

5. Mission plans can be classified by trajectory and target

6. MINING and PROCESSING METHODS for volatiles recovery are:
   REGOLITH RECLAIM, or DRILL & FLUIDIZE IN-SITU

7. SOLAR THERMAL POWER and PROPULSION preferred

8. PROJECT ECONOMICS (CAPEX, PAYBACK TIME, and NET PRESENT VALUE) is crucial, and driven by:
   • DELTA-V for RETURN
   • MISSION DURATION and MASS RETURNED
   • SPECIFIC MASS THROUGHPUT OF MINER
   • VALUE PER KILOGRAM DELIVERED INTO LEO
   • COST-OF-CAPITAL INTEREST RATE