CANADA ENTERS THE NEW SPACE ECONOMY

Have the Liberals reached the precipice?

I don't normally put my faith in one political party or another, I tend to judge them by the level and regularity of missed opportunities or failed deliveries. This is probably quite common as well as the unrealistic thought that a quick change in political leadership will immediately change my fortune or standard of living. Over the years I am however perplexed by the speed of government decisions on what I consider important while socially correct posturing or affirmative action decisions are made at record breaking speed. Perhaps leaders should focus on the right decision for all Canadians rather that a pressured decision that supports a certain group or idea. With so much attention around the globe focused on space exploration and new tech revolving around delivery to lower earth orbit, its amazing how long it took for the Canadian government to get on board.

The federal government has recently supported several companies that are geared towards Canada's future in the new Space economy but has yet to identify or realize the full extent of the current absence of our own Spaceport. Supporting the new Space Port in Canso, Nova Scotia seems to be the cornerstone to the success of our space economy dreams and without it we are in line with so many companies and countries asking for ride share. I would also like to mention that many ride share requests come from third world countries that don't have the capital or experience in this field which makes Canada's lack of motivation perplexing. So many things that were once science fiction are now being played out in front of our own eyes not only by NASA but by several other entrepreneurs around the globe. 

Although most investors see this as a new start up company the grass roots of this venture started quite some time ago and the hurdles of studies and approvals were originally quite daunting. I picked up on the story as the company was thinking of going public, which only made good business sense since this would need a great deal of capital to prepare the necessary infrastructure to carry out rocket launches in a safe and economical manner. From the very start the phone started to ring at the new office of Maritime Launch as end users were hoping to align themselves with the timelines laid out in the business plan. We have all seen SpaceX launching rockets with payloads for a fee for a while now but what you don't see is the thousands of companies trying to get their satellite to space but can't hitch a ride or even get into the queue. yes I said thousands, at last count I found there were 65000 unfilled requests. That number will continue to grow while SpaceX tries to meet shareholder promises on Starlink.

SpaceX wants to create a global broadband network called Starlink. essentially a low earth orbit (LEO) satellite to provide high speed internet around the globe. One SpaceX Falcon rocket can carry up to 60 satellites and they want to put over 40000 in orbit quickly. So if you want to launch you have to get in line and wait. This could be a game changer if your technology is new and groundbreaking yet obsolete by the time you get to launch? Global demand is growing and with demand comes new players trying to get in on this lucrative market. Sounds easy right? well not so much. You need to find a site, get approvals for land use, meet with government and community leaders, coordinate with everyone one from emergency services, military, transportation etc,  just to find out who may potentially derail your plans down the road. 

After following the Maritime Launch story for a few years, it seems like yesterday, the company secured the land, jumped through years of hoops and studies and got the greenlight to build. I forgot to mention the company realized they may benefit from applying to the SIF or Strategic Innovation Fund. They provide funding for various opportunities in Canada and once you confirm your eligibility you submit an application and wait for a call to make your pitch as to why you should get support. It is not an easy or fast process, the government wants to get it right. But now that federal funding may be close this opens the door and provides streamlined access to other credit type instruments that limit dilution which is always on the minds of investors. Most Spaceports seem to be 100% government funded which seems quite obvious when you take into account the government will likely be one of the largest customers to use the facilities. 

Maritime Launch is part of Space Canada https://space-canada.ca/ and has made some strategic alliances with top industry leaders as well as new innovative companies entering the space economy as a support provider.  They plan on providing a launch alternative to those seeking a faster route than SpaceX and if you look around the world there are not many options. In a recent interview the CEO of MLS Stephen Matier commented on the margins and the fact that just one launch from the site per year would cover all costs for operations. Now imagine the profits from 12 or even 24 launches a year. Of course the true costs and fees are quite secretive in nature due to the competition that may try to enter this sector in the future. It's interesting to note that anyone trying to play catch up with MLS has a 6 to 7 year wait just to get to where MLS is today if everything goes smoothly.  When asked about the rocket they will use as a primary vehicle he was candid about their original plans for the Cyclone 4 rocket that comes with a legacy of success in the Ukraine and can carry 5 tons at a time to space. He also mentioned that Canso would likely become an operational spaceport that can service multiple rockets and multiple users. There are several rocket options but rather than stick with 2 or 3 rockets in their fleet as the go to revenue stream,  they can allow fee for launch services for other companies like Reaction Dynamics or even Lockheed Martin. 

The story becomes more real every day for those waiting on services and those in the communities around Canso that have not seen any new investments in decades. Land and home prices are going up and new hotels and restaurants are already making a move in an area with very limited lodging.  Spaceport Canso brings hope, jobs and much needed tax dollars as well. Tim Houston the Premier of Nova Scotia has been a strong supporter and recently announced an amazing investment of $100 million CDN for the spaceport. 

As we approach a new year I am hopeful Maritime Launch will deliver to it's investors and partners and help Canada catch up in this fast paced sector.

Full disclosure the writer is invested long term in Maritime Launch SVS, trading symbol MAXQ. Stock Quote