In a whimsical, 100+ page report, meant to literally drum up interest in investing in an entirely new frontier, Bank of America tries to address the untapped "space" opportunity from the perspective investors. The Primer "sets out the challenges and opportunities posed by Space" and, predictably, concludes that lots of money is to be made, just call now to book your piece of timeshared monorail equity as "we are entering an exciting era in Space where we expect more advances in the next few decades than throughout human history." More:

The original 20th century Space Race was all about the Cold War superpowers, and military/defense interests (US DoD) will remain a key driving force of the new Space Race. However, we see a raft of new drivers including private company innovation (SpaceX reusable launch), commercial activity (3/4 of the Space industry), the involvement of new countries (80+ countries with satellites in orbit), and falling launch costs (Rocket Lab - US$5mn). Stakeholder support remains strong (7/10 Americans rate NASA favorably) as does the regulatory backdrop (SPACE Act 2015, Trump administration).

While BofA is not the first, and certainly won't be the last, to urge investors to literally send their money into cold vacuum of space where stratospheric (P/E) opportunities await, and far from the boring, gravitational confines of earth, what is notable about the report, are its attempts to quantify instead of just qualifying the opportunity.

According to BofA, the numbers are as follows: $339bn space market today growing to $2.7 trillion by 2045E, with BofA making the following clarification: "It has traditionally been difficult for companies to make money from Space, with high capex requirements and frequent delays. However, for those wishing to take a truly long-term time horizon we see it as one of the final frontiers of investing. The market is expected to grow from US$339bn in 2016 to US$2.7tn by 2045E. Over US$16bn has been invested in Space start-ups since 2000, with 2016 seeing a record US$2.8bn."

To be sure, BofA has a point, and lists multiple (re)entry points for those with varying degrees of risk preference: defense, launch, satellites.

Beyond the involvement of 16 of the world's richest billionaires, we see several "terra firma" opportunities including: defense & contractors, satellites (77% of market), launchers (US$5bn+ market) and insurance (US$30bn in exposure). National space agencies (NASA, ESA, etc) and military programs (US Air Force) together with incumbent Aerospace & Defense companies/JVs (United Launch Alliance, Arianespace) will continue to dominate, in our view (50+ years of technological expertise). Private companies and commercial space players will ride their coat-tails but play a growing role (SpaceX, Blue Origin, etc). We also explore a number of unproven "moonshot" projects (e.g. space tourism, intercity rocket travel, asteroid mining & deep space/interstellar exploration).

And this is where the report begins to drift away into countless whimsical tangents, where the authors eagerly seeks to find, demonstrate and convince readers of value, nowhere more so than in the following slide which summarizes the "Space Age 2.0" opportunity in a nutshell, and which puts the estimate on the Mars/Jupiter asteroid belt at $700 quintillion ($700,000,000,000,000,000,000), as previously estimated by NASA.

So what could 700 quadrillions (a 7 with 20 zeros after it) dollars buy you these days? Here is BofA's explanation:

"The first trillionaire there will ever be is the person who exploits the natural resources on asteroids. There's this vast universe of limitless energy and limitless resources. - Neil deGrasse Tyson, Astrophysicist

Robotic mining capabilities are critical to NASA's plans for long-duration space missions to asteroids, the Moon and Mars. NASA is developing robotic prospecting and mining capabilities for space exploration via a number of programs: including the Regolith Advanced Surface Systems Operations Robot (RASSOR), the Regolith and Environment Science and Oxygen and Lunar Volatile Extraction (RESOLVE), and the Moon Mars Analog Mission Activities (MMAMA). The Lunabotics Mining Competition is a university competition sponsored by NASA, Caterpillar, SpaceX, Newmont Mining Corporation and Honeybee Robotics. Competitors are tasked with designing and building an excavator that can mine and deposit a minimum of 10kg of simulated moon dust in 10 minutes. The adoption of automation in terrestrial mining has been slow due to technical issues. However, several large mining companies e.g. Rio Tinto, BHP Billiton are using autonomous or semi-autonomous equipment and remote virtual control room technologies that allow miners to operate equipment from thousands of miles away which, in principle, would also apply in space (source: NASA).

Furthermore it isn't just companies that are getting involved in outer space mining. According to consultancy Navitas, Middle East states are developing space programs and investing in nascent private space commodity initiatives. This is aimed at giving them a foothold in building extra-terrestrial reserves of water - a substance likely to fuel travel within space - and other resources that could be used for in-space manufacturing. The UAE and Saudi Arabia have space programs, with the Saudis signing a pact with Russia in 2015 for cooperation on space exploration. Abu Dhabi is an investor in Richard Branson's space tourism venture, Virgin Galactic. In addition to money, the Middle East also has geography on its side with its proximity to the Equator. Navitas expects companies to launch satellites searching for rare gases and metals in asteroids within five years, with actual mining happening within eight years (source: Bloomberg).



Asteroid Mining: US$700 "quintillion" in Mars/Jupiter asteroid belt: The mineral wealth of the asteroid belt would amount to US$100bn for each person on Earth

Asteroids are leftover material from the early formation of the solar system or debris from the destruction of a planet. There are tens of thousands of asteroids circling the Sun. In our solar system most are grouped inside the asteroid belt, between the orbits of Mars and Jupiter where there over 1mn asteroids, with about 200 that are over 60 miles (100km) in diameter. Most asteroids fit into three basic categories (source NASA):

C-Type (carbonaceous) - more than 75% of known asteroids fit into this category. The composition of C-type asteroids is similar to that of the Sun without the hydrogen, helium and other volatiles.

(carbonaceous) - more than 75% of known asteroids fit into this category. The composition of C-type asteroids is similar to that of the Sun without the hydrogen, helium and other volatiles. S-Type (silicate) - about 17% of asteroids are this type. These contain deposits of nickel, iron and magnesium.

(silicate) - about 17% of asteroids are this type. These contain deposits of nickel, iron and magnesium. M-Type (metal-rich) - a small number of asteroids are this type, and they contain nickel and iron.

"3554 Amun" asteroid is thought to contain US$6tn worth of cobalt and another US$8tn in iron and nickel - Professor John S. Lewis, "Mining the Sky" (1996)

There are estimates that the minerals of the asteroid belt between Mars and Jupiter could be worth US$700 quintillion - which is US$100bn for each of the 7 billion people on Earth at spot prices.

John S. Lewis, author of "Mining the Sky", argues that an asteroid with a diameter of 1km would have a mass of about 2 billion tons. There are perhaps one million asteroids of this size in the solar system. One of these asteroids, according to Lewis, would contain 30 million tons of nickel, 1.5 million tons of metal cobalt and 7,500 tons of platinum with the platinum alone having a value of more than US$150bn (source: Lewis 1996, Biggs 2013, NASA).

NASA is looking to explore the "16 Psyche" asteroid worth US$10,000 quadrillion or US$10 quintillion

However, asteroid mining is costly. NASA estimates it would cost US$1bn today to bring back 2oz of an asteroid - the weight of a tennis ball. On the other hand, a study at the Keck Institute for Space Studies (KISS) at Caltech estimates that one full cycle Asteroid Capture and Return mission, moving an asteroid weighing about 1.1 million pounds (500,000kg) to a high lunar orbit by 2025, would cost approximately US$2.6bn. An MIT study (Schuler, 2011) found that opening a mine and separation plant can cost up to US$1bn.

Exhibit 66: Potential value of the asteroid belt

Planetary Resources

Planetary Resources is an American company with a stated goal to "expand Earth's natural resource base" by developing and deploying the technologies for asteroid mining. It is backed by Peter Diamandis, James Cameron, Larry Page, Eric Schmidt, Richard Branson and Tencent among other investors. The company is developing Asteroid Exploration program for launch readiness by end of 2020 and targeting multiple C-type asteroids for exploration by multiple spacecraft. According to President Chris Lewicki, the first mission should take place in 2020.

Luxembourg, home of the company's European headquarters, invested US$28mn in Planetary Resources in 2016 to conduct key research and development and international business activities in support of commercial asteroid prospecting. It is now hiring asteroid miners across Europe (source: Planetary Resources).

Deep Space Industries

Deep Space Industries (DSI) is another American privately held company with global operations in the space technology and resources sectors. The company is developing spacecraft technologies that are needed for asteroid mining, and is selling satellites that use these technologies. DSI is expecting to make in-space materials, extracted from asteroids, commercially available in the early 2020s, include space-based refuelling, power, asteroid processing, and manufacturing.

According to the Artemis project paper, there are roughly 1,100,000 metric tonnes of lunar helium-3. To put this number into perspective, just 25 tonnes of the material could be enough to power the entire US for one year while a further 75 tonnes would power the remainder of the world for the same time.



Exhibit 67: How asteroid mining would work

* * *

Excited yet? Not really? Then here are some more cool, spacey charts to get you thinking big picture thoughts.

Deep space exploration mapped out since Sputnik



The past, present and future space exploration of other worlds

Profiles of various space launch vehicles

Who spends what on space exploration

A history of US space program funding:

The biggest NASA contrators

The Space startup ecosystem

Number of launches into orbit

The size of the space market now...

... and in 2045.

Finally, here are the most active space tech investors now.