Which program to capture some high value


Throughout recent history, mankind has mined natural resources from the ground. Your boss, Peter Diamandis, wants people to stop looking down for minerals, and start looking up. He points out that even within our own solar system there is a single asteroid, 241 Germania, that has $95.8 trillion of mineral wealth inside it (at today’s prices). This is a figure nearly as large as the annual GDP of the entire world. That particular asteroid is a little too big and a little too far away, but there are lots of smaller accessible asteroids with loads of platinum. He proposes building a private space program to capture some high value asteroids and bring them back to earth to mine the platinum.

Building a spaceship is not something you do on a shoestring budget, so the question is whether bringing one of these things back to earth is a positive NPV project. A related question is whether bringing an asteroid back to earth might have some unintended consequence. As it turns out, asteroids have landed on earth before, just ask the dinosaurs. Ignoring the haters that claim this concept may not be a good idea, he is considering starting an asteroid mining company named “Planetary Resources” to harvest these minerals and has asked you to help him analyze the project.

The timeline for the proposed business is as follows: In Year 0 (i.e., this year), Dr. Diamandis would begin acquiring the necessary labor and assets to set up operations. In Years 1 and 2, they will continue building the spaceship and in years 3 through 7 the business would be in full operation, collecting asteroids full of platinum and bringing them back to earth. He plans to sell the spaceships to NASA at the end of Year 7. In Year 8 nothing will happen except he will collect all the outstanding working capital. He will then move on to some other revolutionary idea, perhaps building a colony on Mars with Elon Musk.

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Finance Basics: Which program to capture some high value
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