Company diversifies to become first rare earth mining company listed on SGX

The Deal Breakdown

The acquisition of MCRE comes with a price tag of RM242.4 million, which values the entire MCRE at RM606 million (~S$184 million).

Here’s how it’s structured:

• Shares Issuance: RM219 million will be paid through the issuance of 147,982,380 new SAM shares at S$0.4471 each, representing about 23.2% of the company’s enlarged share capital.
  
  
• Deferred Cash Payments: RM23.4 million will be paid over four years, funded internally.
  
  

This is an interested party transaction as several vendors of MCRE are directors of SAM.

Dato Gainneos Jacob Goldie, Independent Non Executive Chairman of SAM.This acquisition gives SAM a stake in MCRE's Gerik Mine in Hulu Perak, Malaysia—a 2,161-hectare site with an estimated rare earth reserve of 84.9 million metric tonnes.

Why Rare Earths?

Rare earth elements are critical components used in everything from smartphones and electric vehicles to renewable energy systems and defense equipment.

The global rare earth market is booming, projected to grow from USD 3.74 billion in 2024 to USD 8.14 billion by 2032 at a compound annual growth rate (CAGR) of 10.2%.

Malaysia itself has vast potential in this sector.

Its non-radioactive rare earth reserves are valued at RM747.2 billion and are expected to contribute RM9.5 billion to the country’s GDP by as early as 2025.

For SAM, this move aligns with its strategy to diversify revenue streams beyond its traditional iron ore and gold mining operations.

The company sees rare earths as a way to tap into high-tech industries while contributing to Malaysia’s economic growth.

MCRE: A Sustainable Mining Pioneer

MCRE is a trailblazer in sustainable practices. The Gerik Mine employs an environmentally friendly in-situ leaching technique to get non-radioactive ion adsorption clay rare earth minerals out of the ground.

Unlike traditional mining methods that involve extensive land clearing, in-situ leaching minimizes environmental impact by preserving natural landscapes and reducing carbon emissions.

Lim Wei Hung, COO and Executive Director of SAM.Chinalco Guangxi Nonferrous Rare-earth Developments Co., Ltd., one of China’s leading rare earth companies, provides both technical expertise and credibility to MCRE, which exports the raw materials to China.

(China processes approximately 85-90% of the world’s rare earth elements, giving it control over the refining stage critical for high-value applications).

MCRE has already demonstrated its operational capability and financial strength:

• Commercial operations began in 2022.
  
  
• The first export of rare earth carbonate occurred in February 2023.
  
  
• As of January 2025, MCRE reported cash reserves of RM53.3 million. 
  
  

  MCRE RESOURCES
  Period	FY23	FY24	1HFY25
  Net profit (RM’m)	32.5	36.6	52.9

  It reported profits after tax of RM32.5 million, RM36.6 million, and RM52.9 million for financial year ending July 2023, July 2024, and 1HFY2025, respectively.

What Does This Mean for SAM?

The acquisition is expected to significantly enhance SAM’s financial performance. On a proforma basis, for FY24:

• Earnings Per Share (EPS): Increased from a loss of RM0.91 cent to a profit of RM1.60 cent.
  
  
• Net Tangible Assets (NTA): Rose from RM0.69 to RM0.88.
  
  

The PowerPoint deck is here.