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I have a series of large scale (almost 1:1), aerial jpeg images taken from a UAV DJI-FC350 drone camera. They have no spatial reference, but the images have their own GPS tags giving a single lat, lon and altitude for each.

I am trying to see if it is possible to use ArcMap to load them as raster datasets and mosaic them together to create a single image with the proper spatial locality.

I have read in some places that this might not be possible and you must use a photo stitching program to get a single image.

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No, it is not possible to do this task in any GIS software. What you need is a software that uses the Structure-from-Motion algorithm. These are specialized photogrammetric software packages and the most popular are Pix4D and Agisoft Photoscan.

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