Announcement PDF Electro Optic Systems Holdings Limited A.C.N. 092 708 364 Suite 2, Level 12, 75 Elizabeth Street, Sydney NSW 2000 Tel +61 2 9233 3915 Fax +61 2 9232 3411 http://www.eos-aus.com EOS COMMENCES SSA NETWORK DEPLOYMENT Canberra, 2 December 2015 Australia’s role in managing the threat of satellites and space craft colliding with burgeoning space debris is about to grow substantially with the establishment of a major space tracking network. EOS Space Systems Pty Ltd (EOS Space), a wholly-owned subsidiary of ASX-listed Electro Optic Systems Holdings Ltd (ASX: EOS) has announced that construction has started on establishing a major space tracking network for the global provision of timely and accurate space situation awareness [SSA] data on a commercial basis to commercial and government customers globally. EOS has previously announced [5 August 2014] that it would expand its SSA capabilities and capacity, and subsequently [26 August 2014] that it had joined forces with Lockheed Martin Corporation to accelerate that expansion. EOS and Lockheed Martin are now actively collaborating in the production, deployment and operation of proprietary space tracking sensors with the objective of providing services to both government and commercial customers, based on timely and accurate space data from those sensors. This strategic collaboration is called OSSTM [Optical Space Services]. The Need Space debris is a serious and growing threat to operating spacecraft. Potential debris collisions with individual satellites are becoming increasingly likely and can cause economic loss of between $25 million and $500 million per event. An avalanche of collisions, where one collision quickly triggers another until many satellites are destroyed is increasingly likely. Such an event could destroy hundreds of satellites and impair the global economy for decades. However, collisions can be avoided if orbits of pieces of debris are accurately predicted well in advance of the time of potential collision with frequent updates so that operators of satellites can alter their own orbits sufficiently. While collision alerts are currently available to satellite operators, current alerts are typically neither accurate nor timely enough for cost-effective satellite manoeuvers. This is because the prime mission of most tracking systems is national defence, and provision of space data for general use is secondary. Current assets cannot readily respond to space emergencies by changing operational priorities or schedule. Page 1 of 4 Orbital data currently available at no cost for commercial use is usually of lower accuracy and is not frequently updated. This is of limited use for critical debris collision avoidance which requires very accurate and timely data. In summary, there is a significant need for reliable, timely and accurate space tracking data and services which can be cost-effectively delivered on commercial terms to space operators to complement and extend the capabilities currently available. EOS Sensors and Network Capacity EOS demonstrated laser tracking of space debris as far back as 1997, more than a decade before its nearest competitor. Since 1997 EOS has developed and refined an integrated suite of sensor technologies that can track space debris with the accuracy and sensitivity required for large-scale collision avoidance operations. EOS sensors are the first, and currently the only, non-US space sensor qualified to contribute data directly to the US SSN. The sensors are so cost-effective that for the first time it is feasible to commercially fund a sensor network to meet most commercial space data requirements. EOS space tracking sensors are not intended to be sold, but produced, installed and operated by EOS on behalf of OSSTM (effectively EOS and LMC) to deliver critical space data on a daily basis to government and commercial satellite operators. The current expansion of EOS’ space tracking network will allow up to 10,000 space objects to be tracked with the same accuracy as is currently available, or fewer objects with typically much higher accuracy. This capacity and accuracy are sufficient to meet many current and future commercial and defence requirements. This capability will be operational within 2016. Further expansion of the network is planned and will depend on the rate of execution of customer contracts for data delivery. Of critical importance to each space data customer is the dedication of sufficient assets to the timely delivery of accurate space data on a commercially committed basis. Accuracy, reliability, responsiveness and cost-effectiveness are all assured by the EOS sensor performance and their geographic distribution. Network Sites The EOS space network is privately owned and operated, but SSA operations are dualuse and preservation of the space environment requires both military and commercial satellites are protected. For reasons associated with managing the balance in a dual-use environment, EOS has agreed in principle to locate many of its global sensors within defence bases or facilities. A single site may host multiple sensors. In Australia EOS has recently executed an agreement with the Commonwealth of Australia relating to locating a cluster of EOS space tracking sensors on a Department of Defence property at Learmonth in Western Australia. Construction has commenced on this site. Sensors have been in production throughout 2015 in anticipation of final site selection, so the Learmonth site will be operational by November 2016. EOS will also substantially increase the capacity of its Mount Stromlo [ACT] operations in 2016 to support commercial customer data requirements. Page 2 of 4 Funding With the exception of mobilisation payments provided under the contract with Commonwealth of Australia for the facility at Learmonth, all tracking network costs are met by EOS and Lockheed Martin, including capital establishment costs and operating costs. No funding external to EOS and Lockheed Martin is required for current or future data collection infrastructure, allowing low-risk access to high quality data by all approved customers. There is no financial barrier to entry for customers as they will enter contracts for data services under an infrastructure model with OSSTM always owning and maintaining the infrastructure assets. Specific OSSTM financial arrangements cannot be disclosed, however EOS itself has already spent or committed more than US$65 million for this project. Further investment in infrastructure will be made as global demand grows. Future Developments Recently [October 2015] the US Government Accounting Office confirmed that US government investment in SSA infrastructure will exceed US$6 billion in the period up to 2020. By 2022, the US will have a vastly improved SSA capability, in terms of accuracy and capacity. OSSTM commercial plans do not compare or compete in any way with this nextgeneration US capability. The key OSSTM network attributes of accuracy, reliability and responsiveness to commercial needs is not likely to be provided by any military system to commercial operators. The key aspect of OSSTM network will be the dedication of significant assets as required to support collision avoidance decisions for each customer. The Chief Executive Officer of EOS, Dr Ben Greene, says that on completion in 2016 the OSSTM capability will meet the SSA requirements of a significant group of initial customers. In its initial configuration in 2016 the OSSTM space debris tracking capacity will represent a substantial fraction of capacity accessible to space industry globally. “The strategic partnership with Lockheed Martin has allowed a critical mass of sensors, data and services to be assembled, enabling OSSTM to deliver the suite of asset protection services requested by customers,” Dr Greene said. "This new tracking capacity will provide unique data which is exclusively available to EOS and Lockheed Martin, enabling each organisation to offer both data and services to meet global market needs. Based on current contracts and active negotiations, EOS expects to commence the delivery of data and services by late 2016," Dr Greene added. The Vice President and General Manager of Lockheed Martin Space Systems Military Space Line of Business, Mark Valerio, said: "The expansion of space debris tracking by EOS and Lockheed Martin is expected to make a significant contribution to the preservation of the space environment, by providing data which will enable cost-effective debris manoeuver for satellites. The accuracy of our network sensors, combined with an ability to re-schedule tracking operations according to commercial priorities, will provide a trusted source of critical space data to commercial and government operators.” Page 3 of 4 Information: Craig Smith CEO – EOS Space Systems Ph: +61 414 365 368 Ben Greene Group CEO, EOS Ph: +61 414 365 658 About Lockheed Martin Headquartered in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that – with the addition of Sikorsky – employs approximately 126,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. ABOUT ELECTRO OPTIC SYSTEMS (ASX: EOS; OTC: EOPSY) EOS is based in Canberra, Australia and employs 100 staff in two sectors: Space Systems and Defence Systems. The EOS Space Systems sector focuses on both commercial and defence requirements for space information. EOS specializes in obtaining space information based on the use of EOS-developed optical instruments and sensors to detect, track, classify and characterise objects in space. This information is required for both military and commercial space applications, and particularly for managing space assets to avoid collisions in space with space debris. Page 4 of 4