Canadian Space Summit November 21 - 23, 2008

Montreal, Quebec, Canada

CREATING A ROBUST CANADIAN SPACE RESEARCH, EXPLORATION & DEVELOPMENT INDUSTRY - THE CANADIAN MINERAL INDUSTRY FLOW-THROUGH SHARE ANALOG

John Chapman, Nadeem Ghafoor, Christian Sallaberger, Frank Teti

Financing of space research, exploration and development in the past has been mainly by governments. To create a vibrant and sustainable space program, the private sector needs to be aggressively involved, building upon the foundation established mainly by the USA and Soviet Union governments. There is an analog that could point the way to rapidly opening space to private enterprise – that is the Canadian flow-through tax incentive for mineral exploration. The flow-through tax credit program in Canada has facilitated the raising of billions of dollars annually by mineral exploration companies, mainly from wealthy individuals, and this has kept Canada in the forefront of world mineral exploration and mine development. In addition, Canada has, through this tax incentive, developed a large base of experts in science, technology, legal, accounting, finance, etc. for mineral exploration and mine development world wide. Statistics from the 2005 Canadian intergovernmental working group on the mineral industry reported:

1. Canada continues to be the foremost destination for exploration capital globally. In 2004, some 20% of the mineral exploration programs planned by the world’s mining companies were expected to be conducted in Canada. As for Canadian companies, they were expected to undertake 43% of all the exploration programs in the world in 2004, a share that is by far the largest of the global mineral exploration market.

2. In 2003, C$12.7 billion in equity financing was raised for mineral exploration and development projects around the world. More than 45% of the new funds were raised by companies listed on Canadian stock exchanges.

These are amazing statistics as Canada represents only 7% of the land area on Earth and only 0.5% of the world’s population. It is important to understand the details of the tax-driven incentive that encourages the exploration and development of Canadian natural resources. The government allows Canadian natural resource companies to issue common shares that entitle the holder to certain tax benefits. These shares are called flow-through shares. Canadian natural resource companies have certain expenses, known as Canadian Exploration Expenses (CEE), which can be deducted 100% for tax purposes by the purchasers of flow-through shares. The company’s tax deductions are “flowed through” to the investor. In addition to benefiting a taxpayer in the current taxation year, these tax deductions can be carried back three years and carried forward seven years. There is also a 15% tax credit available to Canadian investors for "grass roots" mining exploration expenses incurred in Canada. This applies only to exploration for metals and minerals and not for extraction of oil and gas. For investors in every province and territory of Canada, the tax credit is at least 15% as long as the "grass roots" mining exploration occurs somewhere in Canada. In addition, some (but not all) of the provinces and territories have added their own tax credit, ranging from 5% in Ontario to 20% in British Columbia. The provincial tax credit only applies if the investor is resident in the province and the exploration occurs in the same province. In addition to benefiting a taxpayer in the current taxation year, these tax credits can be carried back three years and carried forward 10 years. Just imagine the impact of countries such as Canada and the USA adopting a similar tax-driven incentive for space research, exploration and development – tens of billions of private dollars could be raised annually for space enterprises.

AUTHORS

John A. Chapman, B.Sc., P.Eng., FCIM, Principal J.A. Chapman Mining Services, is a Professional Mining Engineer (British Columbia). He has worked for 42 years in the mining industry in mineral exploration, mine development, operations, and engineering and as an executive. He has been involved in the financing of many high risk mineral exploration and mine development ventures.

Nadeem Ghafoor, Ph.D., Manager of Planetary Exploration at MDA, Canada’s largest space company. His background is in both planetary science and spacecraft engineering. Christian Sallaberger, Ph.D.,Vice President & Director of Space Exploration at MDA. Previously held positions at the European Space Agency and the Canadian Space Agency, where he initiated Canada's Space Exploration program. Frank Teti, P.Eng., MBA, Manager of Autonomous Robotics at MDA. His background includes the development of manned and unmanned systems for space and terrestrial applications.

CREATING A ROBUST CANADIAN SPACE RESEARCH, EXPLORATION & DEVELOPMENT INDUSTRY

THE CANADIAN MINERAL INDUSTRY FLOW‐THROUGH SHARE ANALOG

CANADIAN SPACE SUMMIT NOVEMBER 21 ‐ 23, 2008

MONTREAL, QUEBEC, CANADA 

John Chapman, Principal, J.A. Chapman Mining ServicesFrank Teti, Manager of Autonomous Robotics, MDA

Nadeem Ghafoor, Manager of Planetary Exploration, MDAChristian Sallaberger, VP and Director Space Exploration, MDA

What are Flow‐Through Shares?

• The Canadian Income Tax Act allows mineral exploration (high‐risk) to be funded by wealthy individuals and corporations by way of flow‐through shares that “flow” Canadian mineral exploration expenses to the investor from the exploring company  

• The investor gets the tax write offs against any income type and the company gives them up –the company, like most early stage ventures, probably has no source of income to write these expenses off against

Proposal• Canadian government can support space exploration in 

Canada without need for new funding or budget request• Apply flow through tax credits to space exploration• Create whole new set of world‐class industries and 

capabilities in Canada– High tech jobs– Spinoffs– Tax sources– Education

• Canada is a world‐leader in mining • Canada can be a world leader in space exploration

High Risk / High Reward Ventures

• Mineral Exploration is probably the riskiest business on the planet

• At very long odds, from time to time, immense wealth is created by a mineral deposit discovery

• The Canadian government for many years has recognized that having a tax incentive for mineral exploration creates great wealth for the country

• Success is related to the: project, team and financing

Spin‐Off Benefits

• The Canadian flow‐through policy has created a World‐Class base, in Canada, of:– Mineral finance institutions and stock exchanges– A very large base of internationally respected mineral specialists in the fields of:

• Geosciences• Mining • Exploration and Development Financial Analyses• Accounting• Legal• Manufacturing and Supplies

Importance to Canada (2004 data)

• Canada has 7% of land area on Earth and 0.5% of population

• 20% of World mineral exploration conducted in Canada

• Canadian companies conduct 43% of the World’s mineral exploration

• 45% of the World’s $12.7 billion raised for exploration is via companies listed on Canadian stock exchanges

Aerial PhotographyRadiometricsMultispectralHyperspectralSynthetic Aperture RadarMagneticElectromagneticGravity

REMOTE SENSING

KAOLINITE (ASTER)

IRON OXIDE (ASTER)

AIRBORNE MAGNETICS(helicopter)

VISIBLE COLOUR ANOMOLY

SURFACE EXPLORATION

Claim StakingProspectingSampling

SURFACE EXPLORATIONGeophysicsGeochemistrySurveyingTrenchingDrilling

Example of grid drilling to define a mineral deposit

Space Exploration

Degree of Realism

• Any planetary body (Moon, asteroids)• Already there are existing businesses involved (Shackleton, Lunar Transporation Systems, Jamestown Group, etc)

• MDA is involved  – Prime contractor for Odyssey Moon to deliver 5 commercial landed mission to moon

– Prime contractor to another commercial customer for  planetary mining mission concept development

• Most large space primes are involved and/or reviewing these opportunities

Planetary Resources

• Use on the Moon– Oxygen from Silicon Oxide 

• for use by humans and for fuel

– Water (bring up Hydrogen)

– Methane (fuel source)

– Silicon to build solar power arrays

• Return to Earth– He3 (use in nuclear fusion, extremely rare on Earth)

– Iron, copper

– Precious metals (platinum)

Infrastructure Deployment& Assembly Robotics

Infrastructure Deployment& Assembly Robotics

Human Surface MobilityRobotic Human Field Assistance

Human Surface MobilityRobotic Human Field Assistance

Human-Robotic Infrastructure Assembly & Maintenance

Human-Robotic Infrastructure Assembly & Maintenance

Surface Exploitation & 

ISRU

Orbital & Surface 

Infrastructure

Human Sortie & Sustained Presence

Surface Sampling & Processing

In‐situSurface 

Exploration

In‐situ Science & Prospecting

Orbital Science & Prospecting

Orbit & Transport 

infrastructure

Sample Acquisition &Transfer Systems

Sample Acquisition &Transfer Systems

Robotic 

Surface Mobility

Robotic 

Surface Mobility Sample Processing & ISRU Robotics

Sample Processing & ISRU Robotics

Surface & Subsurface Science

Instruments

Surface & Subsurface Science

Instruments

Shuttle & ISS 

Robotics

Shuttle & ISS 

Robotics

Robotic RemoteSensing

Robotic RemoteSensing

Rendezvous & Docking Robotics

Rendezvous & Docking Robotics

Autonomous Landing & Hazard

Avoidance

Autonomous Landing & Hazard

Avoidance

Robotic Site Characterisation

Robotic Site Characterisation

System Overview

• Lunar & Planetary SAR

– World leading terrestrial SAR heritage:  RADARSAT‐1 & ‐2, Next‐generation SAR constellation

– Planetary surface & subsurface mapping

– Regolith & bedrock topography for landing site selection & resource / ISRU

• Spiral‐scanning Lidar Altimetry Instrument (SALLI)

– Efficient generation of lunar surface topography from polar orbiting spacecraft

– High‐resolution mapping & reconnaissance for sortie and outpost site selection

Prospecting – Remote Sensing

Image: CSA

Image: NASA

Precision Landing

Prospecting & Advance Scouting

• Remote / advance prospecting, mappingand resource assessment– Autonomous field geologist– Surface & subsurface

• Pre‐EVA tele‐op / autonomous scout – Site survey (laser + camera)– Operations planning– Hazard assessment– Time, risk conservation

Mobility ‐ Locomotion

• Need to ensure local soil and environmental challenges can be met– Soil/wheel interaction

– Materials

– Dust mitigation

– Power

Mobility ‐ Autonomous Navigation

• Increased rover autonomy – Terrain assessment & global path planning– Obstacle avoidance & local path planning– Visual Motion Estimation & localization

(slip mitigation)

• “Visual odometry” field demonstrations

Credit: MDA

Credit: MDACredit: MDA

• MDA has successfully developed a software and controls solution for an underground autonomous vehicle to improve safety and productivity

Autonomous Vehicles

Credit: MDA

Advanced Vision ‐ Camera Based• Vision‐based scene modeling

– Rapid in‐situ photo‐real scene modeling

• Handheld & vehicle‐mounted options• Technologies being applied in mining, 

forensic & security industries– Autonomous site characterization & 

prospecting– Survey & contextual imaging (tele‐op 

geology)– 3D sample acquisition monitoring (e.g. 

drilling) – Cost mapping for autonomous navigation– Data‐storage & bandwidth efficiency

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Triangular Mesh(no texture)

Triangular Mesh(texture added)

Credit: Optech

Credit: CSA

Credit: UNB / Optech

Advanced Vision ‐ Laser based

• Lidar‐based scene modeling– Ultra‐high accuracy

– Range independent

– Lighting and contrast independent

• Applications – Lunar shadowed region scene modelling

– Lunar shadowed region rover navigation

– Geological sample classification

• Optech lidar recently utilized at Haughton Crater with NASA Ames Human‐Robot Site Survey Project

Credit: Optech Credit: Optech / NASA

• MDA‐CSA Exploration Arm:

– Rover / lander mountable

– Low power, low mass, high tip load

– DOF:  4 ‐ 7 

– Length: 1 ‐ 4m

– Range of end effectors (scoop shown)

– Regolith simulant tested

Sample Handling & Acquisition

• Lunar & Planetary Exploration coring & drilling systems

• Collaborations– hard‐rock mining partners– ice‐drilling partners

• Proof of principle breadboarding– Low mass, power, down force, rpm & comminution– Rock‐bit interface characterisation– Cuttings transport & core capture

• Drill architecture & control scheme trades

• Future exploration– Autonomous lander & rover deployed systems– Astronaut deployed systems

Sub‐Surface Acquisition

• Sample handling design activities for CSA, ESA & NASA missions (most recently MSR)

• Sample processing, sample transfer and sample containment concept development

• Crusher breadboarding:– Sample reduction investigation

– Low mass, low power

• Delivery to instruments, sample storage, inter‐vehicle transfer, sample return transfer

Image: NASA

Processing and Transfer

ISRU  Robotics

• Prime contractor for US (DARPA) Phase A lunar resource utilisation study– Lunar surface prospector

– Mobile regolith processor & orbital delivery

• Sample processing systems– Sample reduction

Return Minerals to Orbit

• 25 yrs of robotic deployment & assembly of large‐scale human space infrastructure on Shuttle & ISS

– Heavy cargo transport & deployment

– Vehicle docking & berthing

Credit: NASA

Infrastructure Deployment& Assembly Robotics

Infrastructure Deployment& Assembly Robotics

Human Surface MobilityRobotic Human Field Assistance

Human Surface MobilityRobotic Human Field Assistance

Human-Robotic Infrastructure Assembly & Maintenance

Human-Robotic Infrastructure Assembly & Maintenance

Surface Exploitation & 

ISRU

Orbital & Surface 

Infrastructure

Human Sortie & Sustained Presence

Surface Sampling & Processing

In‐situSurface 

Exploration

In‐situ Science & Prospecting

Orbital Science & Prospecting

Orbit & Transport 

infrastructure

Sample Acquisition &Transfer Systems

Sample Acquisition &Transfer Systems

Robotic 

Surface Mobility

Robotic 

Surface Mobility Sample Processing & ISRU Robotics

Sample Processing & ISRU Robotics

Surface & Subsurface Science

Instruments

Surface & Subsurface Science

Instruments

Shuttle & ISS 

Robotics

Shuttle & ISS 

Robotics

Robotic RemoteSensing

Robotic RemoteSensing

Rendezvous & Docking Robotics

Rendezvous & Docking Robotics

Autonomous Landing & Hazard

Avoidance

Autonomous Landing & Hazard

Avoidance

Robotic Site Characterisation

Robotic Site Characterisation

Conclusion

• Robotics systems have supported sustainable human space exploration infrastructure for 30 yrs

• Scouts, field‐scientists and prospectors for planetary have been provided by robotic systems

• Many key technologies exist now that will form the basis of the early human‐robotic activities on the lunar surface

RECOMMENDATION

• Canada has a large and successful mineral exploration science, technology and financial base already established, that could be used as a solid foundation for human lunar and planetary mineral exploration and development

• The Canadian federal government should now extend the mineral flow‐through financing tax incentive to space research, exploration and development

• This tax policy would position Canada as a leader in space research, exploration and development, with all its spin‐off benefits, similar to those accrued from the present Canadian mineral industry tax policy