ALS Limited Offers a High-Margin Way to Play Gold Without Miner Cost Inflation

A diversified testing and analytics business is capturing rising exploration budgets at high incremental margins, with fund managers seeing an early-stage earnings upgrade cycle.

4 Aug 2026 · 3 min read

ALS Limited, a global testing and analytics company that has diversified away from cyclical metallurgical testing into life sciences and environmental testing, benefited from a wave of junior mining capital raisings and rising gold and copper exploration budgets, with fund managers describing it as a high-margin, second derivative play on gold prices that avoids the cost inflation miners themselves face.

A diversified, well-managed testing business

Pendal Group rated the stock a buy, saying while it wouldn't put ALS management as captain of a grand final team, the acquisitions and changes made, particularly in the minerals services business under new management over the last three or four years, have been very positive, with the fund strongly predisposed to the existing management team's experience and continuity. Blackwattle Investment Partners, also a buy, said what stands out when looking at high-quality businesses, even cyclical ones like ALS, is the diversification of the business and how management has deployed capital over the past 10 to 15 years, improving cyclicality by expanding into life sciences, environmental testing and pharma testing, shifting away from just metallurgical testing.

Some of the things that stand out for us when looking at high-quality businesses, even cyclical ones like ALS, are the diversification of the business and how management has deployed capital over the last 10 to 15 years. They've improved the cyclicality by expanding into life sciences, environmental testing, pharma testing, and the like, shifting away from just metallurgical testing.

— Blackwattle Investment Partners, Article, October 2025

A high-margin second derivative gold play

Antares Capital said it added ALS shares as strength in the gold price and other related minerals such as copper saw a raft of capital raisings by junior miners seeking exploration funding, much of which will flow to ALS as the major laboratory for measurement of mining assays. Airlie Funds Management said it owns ALS as a second derivative play on the gold price, with half of earnings coming from commodities testing, most of it driven by gold and copper exploration, with testing volumes dropping through at a really high incremental margin, the opposite of gold miners, who face a lot of cost-based inflation and are pretty imperfect vehicles to play a positive view on gold.

It's a second derivative play on the gold price. Half of their earnings come from commodities testing. Most of that's driven by gold and copper exploration. Those testing volumes drop through at a really high incremental margin. It's sort of the opposite for gold miners, who face a lot of cost-based inflation.

— Airlie Funds Management, Webinar, January 2026

Conservative guidance the market looked through

Pendal Group said the stock rose 8.3 percent after delivering a result slightly ahead of expectations but guidance slightly behind, with conservative commodities assumptions baked in by management, seeming sensible given the uncertain macro environment, though the market looked through the conservatism and moved ahead of expectations anyway.

Early in an earnings upgrade cycle

Ten Cap said it increased its position on strong momentum across the geochemistry business, where rising sample volumes and firmer pricing are driving improving earnings, seeing the stock as still at an early stage of its earnings upgrade cycle. Blackwattle Investment Partners said ALS contributed significantly to fund performance for the year, benefiting indirectly from stronger commodity prices, particularly gold, as major mining companies boosted exploration budgets, driving sample testing and analytics volumes, with its market position enabling it to both raise prices and achieve operating leverage in its commodities division.

We increased ALQ on strong momentum across its geochemistry business, where rising sample volumes and firmer pricing are driving improving earnings. We see the stock as still at an early stage of its earnings upgrade cycle.

— Ten Cap, Monthly Report, June 2026

What fund managers say they are watching next is continued strength in gold and copper exploration budgets driving sample testing volumes, whether conservative commodities assumptions in guidance again prove overly cautious, delivery on the earnings upgrade cycle Ten Cap sees as still early, and continued operating leverage and pricing power in the Commodities division.