Highlights

• Southern Alliance Mining hosted UM and UKM research teams at its MCRE rare earth operations in Gerik, strengthening Malaysia's academic-industry collaboration in ion-adsorption clay extraction and responsible rare earth development.
• SAM reported FY2025 revenue of RM199.5M (up 20% YoY) with robust liquidity (RM113.8M cash vs. RM14M debt) despite RM27.4M net loss driven by non-cash impairments, while strategically acquiring 40% of MCRE Resources for RM242.4M.
• Trading at SGD 0.42 with 82% insider ownership, SAM positions itself at the geopolitical intersection of U.S.-China rare earth competition as Malaysia builds a transparent, non-Chinese supply chain for critical magnet metals.

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Southern Alliance Mining (opens in a new tab) (SAM) (QNS.SI) welcomed research teams from Universiti Malaya (UM) and Universiti Kebangsaan Malaysia (UKM) for an on-site visit to its MCRE rare earth operations in Gerik (opens in a new tab)—turning an MOU into visible, practical collaboration.

The visit showcased Malaysia’s growing academic engagement with ion-adsorption clay (IAC) extraction, environmental stewardship practices, and the technical pathways required to build a competitive, responsible rare earth value chain.

By opening its operations to researchers and policymakers, SAM is strengthening the bridge between industry and academia, helping Malaysia advance its rare earth research capability while reinforcing national goals for transparent, sustainable resource development.

Rare Earth Exchanges™ examines SAM, a rising force whose position, assets, and timing could make it a central player in the rapidly expanding ex-China rare earth landscape.

Wei Hung Lim, COO and Students at SAM

SAM on the Move

SAM’s latest annual report (opens in a new tab) (Nov 2025) frames FY2025 as a turning-point year—one defined by underground mining execution, bold diversification moves, and the company’s formal entry into Malaysia’s rare earth future.

1. Vision & Mission: A Modern Miner for the Energy Transition

SAM’s vision emphasizes continuous operational improvement and responsible mining, explicitly balancing profitability with community welfare and environmental protection. Its mission commits to creating value through industry best practices and responsible extraction of scarce resources.

Takeaway: SAM is positioning itself as a next-generation miner—commercially driven but ESG-aware—as it moves beyond iron ore into gold and rare earth elements (REEs).

2. Strategy: Three Pillars Driving the Next Chapter

A. Underground Mining Comes of Age

FY2025 marked the first full year of underground operations at Chaah Mine. New tunnel infrastructure and selective extraction methods enhanced efficiency, unlocked deeper ore bodies, and extended mine life.

B. Diversification Into Gold and Rare Earths

The report is explicit: REEs and gold are now strategic pillars. REE projects position SAM for global energy-transition demand, integrating the company directly into the magnet-metal narrative.

C. Rapid Expansion of International Sales

Exports surged from RM11.3M to RM69.2M—a six-fold increase—as SAM broadened its overseas customer base.

Takeaway: SAM is evolving from a regional iron ore player into a multi-commodity, globally linked mining group.

3. Financial Performance: Revenue Growth, Heavy Impairments, Strong Liquidity

• Revenue: RM199.5M (~USD42.0M), up 20% YoY, driven primarily by the new bauxite division.
• Net Loss: RM27.4M (USD5.8M), largely due to RM26.1M (USD5.5M) in non-cash impairments tied to weaker iron ore prices and JV revaluations.
• Underlying Loss (ex-impairments): RM5.4M (~USD1.1M), demonstrating far healthier operations than headline figures imply.
• Balance Sheet Strength: RM113.8M (~USD24.0M) in cash vs. RM14M debt—strong liquidity and financial resilience.
• Major Transaction: SAM acquired a 40% stake in MCRE Resources for RM242.4M (~USD51.0M), cementing its rare earth ambitions.

Takeaway: Revenue momentum and liquidity remain robust, giving SAM the financial capacity to pursue its diversification into gold and rare earths despite iron ore headwinds.

4. Risks: Commodity Cycles, Climate, Safety, and Impairments

• Iron Ore Price Volatility: Soft demand from China pressured valuations and triggered impairments.
• Climate & ESG Exposure: Extreme weather and biodiversity risks remain structural concerns. Malaysia takes land stewardship very seriously.
• Underground Mining Complexity: Higher safety and technical risks mitigated through new monitoring systems and training.
• Asset Impairments: Market-related impairments may recur in cyclical downturns.

Takeaway: Diversification into REE and gold materially reduces long-term reliance on iron ore cycles.

5. Why SAM Matters in the Rare Earth Ecosystem

SAM’s REE strategy aligns tightly with Malaysia’s national push to build a transparent, value-added, non-China-dependent rare earth supply chain. Advantages include:

• Commercially viable ion-adsorption clay deposits
• A government prioritizing downstream REE processing
• Surging global demand for non-Chinese magnet metals
• SAM’s strategic 40% MCRE acquisition

Takeaway: SAM is positioning itself as a future regional REE producer (with global implications), anchoring the upstream of Malaysia’s emerging rare earth industry.

6. Largest Shareholders (as of 13 Oct 2025)

• Total shares: 636,741,380
• 98.94% held by top 9 shareholders (≥1M shares)
• Dominated by insiders: CEO Kok Sam Pek (60–66%), Teck Tee Teh (13–14%), Tek Mook Lee (8.4%), with the general public holding the remainder.

Undervalued?

SAM continues to trade like a sleeper in the rare earth universe, even as its strategic importance grows. At SGD 0.42, the company’s SGD 261M market cap contrasts with unusually strong liquidity (SGD 115M cash vs. SGD 14M debt, current ratio 3.94). Profit margins remain negative, but the growth story stands out: 199M in sales and 75% YoY quarterly revenue growth—a rare feat in Southeast Asian mining.

Crucially, 82% insider ownership signals strong foundational alignment as SAM pivots into rare earths. With Malaysia sitting at the geopolitical intersection of U.S.–China competition, SAM’s assets, timing, and geography give it strategic weight that cannot be ignored.  China already understands Malaysia’s rare earth potential; Washington is just beginning to take it seriously. SAM, armed with the MCRE stake, academic partnerships, and IAC exposure, is exactly the kind of upstream asset both sides quietly covet.

The numbers show a company in transition; the geopolitics show why that transition matters. SAM is on the move.

An Important Company and Place

SAM is increasingly important because it sits at the center of a geopolitical and industrial convergence that neither Washington nor Beijing can afford to ignore. Malaysia is one of the few countries with commercially meaningful ion-adsorption clay deposits and the political stability to build a transparent rare earth supply chain outside China’s shadow. China’s influence is already entrenched. The United States—scrambling to secure non-Chinese magnet-metal feedstock—must now take Malaysia, and companies like SAM, very seriously.

SAM’s move into rare earths through its MCRE stake, combined with Malaysia’s entrepreneurial momentum and policy push toward responsible development, puts the company in a pivotal position: a domestic miner capable of supplying future non-Chinese heavy and light rare earths, shaping academic partnerships, and anchoring Malaysia’s rise as Southeast Asia’s credible alternative in a bifurcating supply chain.

© 2025 Rare Earth Exchanges™ – Accelerating Transparency, Accuracy, and Insight Across the Rare Earth & Critical Minerals Supply Chain.