ÐÇ¿Õ´«Ã½

ÐÇ¿Õ´«Ã½

P
Portman
Limited

         
26 April 2007
  ABN 22 007 871 892

Level 11
The Quadrant
1 William Street
Perth 6000
Western Australia
GPO Box W2017
Perth, 6001
Tel:
Fax:
 








61 8 9426 3333
61 8 9426 3344

(11 pages in total)

The Announcements Officer
Australian Stock Exchange (Sydney) Limited
Level 10
20 Bond Street
SYDNEY NSW 2001

Electronically Lodged

Dear Sir

QUARTERLY REPORT FOR THE PERIOD ENDED 31 MARCH 2007

Please find attached Portman’s Quarterly Report for the period ended 31 March 2007.

Yours faithfully

/s/ C.M. Rainsford

CM Rainsford
Company Secretary
PORTMAN LIMITED

1

PORTMAN LIMITED

A.B.N. 22 007 871 892

QUARTERLY REPORT FOR THE PERIOD ENDED
31 MARCH 2007

HIGHLIGHTS

Koolyanobbing Project

  Ore mined during the quarter was consistent with 8Mtpa production. Waste removal was satisfactory.

  Ore railed, however at 1.77Mt for the quarter was below the 95% performance target. Main issues were disruptions caused by heavy rain in January and various mechanical and scheduling difficulties. This area continues to be a top priority focus for management.

  Processing plant was operated at a rate consistent with railed in order to avoid excessive stocks. The CV1 upgrade is complete, and the plant is capable of 8Mtpa.

  Ore shipped during the quarter closely resembled railed tonnes, as expected.

  During this quarter, Portman’s mining contract for Koolyanobbing was awarded to the BGC group. BGC are scheduled to commence operations during Q3.

  The year end forecast for ore sales from Koolyanobbing has been revised to 7.65Mt due to the lost tonnage during Q1, as a result of railed related issues.

Cockatoo Island Project (100%)

  Ore mining was adversely affected by heavy rainfall, although ore shipped was on target due to healthy product stocks.

  Feasibility work on Stage 3 is ongoing. Subject to final review, the intention is to optimise Stage 2 in the meantime.

2

PORTMAN LIMITED

A.B.N. 22 007 871 892

     
1.0   PORTMAN OPERATIONS UPDATE FOR FIRST-QUARTER
Financials
 
 
   
 

    First quarter sales revenue was $128.4m on 1.9 tonnes versus $84.0m on 1.5m tonnes for the same period in 2006, reflecting higher volume and prices.

    Cost of goods sold and operating expenses were $89.0m in the first quarter, an increase of $27.9m from 2006.

    Sales margin increased $17.9m from the first quarter 2006 to $44.7m in 2007, also reflecting the higher volume and prices.

Inventory

At 31 March 2007 Portman had 0.9 million tonnes of finished product inventory, unchanged from 31 December 2006 and 0.4 million tonnes higher than 31 March 2006.

Capital Expenditure

The Company’s capital expenditure program for 2007 of $16.4 million supports process improvements and improved quality control which is being funded from current cash flow.

Liquidity

At 31 March 2007, Portman had $132.2 million of cash and cash equivalents and $13.0 million of held to maturity investments. At 31 March 31 2006, Portman had $57.2 million of cash and cash equivalents. The $88.0 million increase in liquid assets primarily reflected favourable earnings.

Outlook

The 2007 Australian average selling price of lump and fines ore is expected to increase approximately four percent compared with 2006. Per-tonne unit production costs are anticipated to be approximately eight percent higher in 2007.

Portman’s 2007 production volume is expected to be approximately 8.4 million tonnes, which includes 0.6 million tonnes from Cockatoo Island. Full year sales are estimated to be approximately 8.3 million tonnes of which 7.65 million tonnes relates to the Koolyanobbing operation.

    2.0

3

PORTMAN IRON ORE

             
2.1   Koolyanobbing Project    
 
    2.1.1.     Production
 
           
 
          Production and shipments for the quarter were as follows:
                         
    Actual   Actual   Actual
    Mar Qtr 2007   YTD 2007   Mar Qtr 2006
-            
Koolyanobbing Iron Ore Project            
Waste: (bcm)            
Koolyanobbing   401,496   401,496   474,038
Mt Jackson   189,120   189,120   259,786
Windarling   2,885,046   2,885,046   1,582,463
Total Waste   3,475,662   3,475,662   2,316,287
 
                       
Ore Mined: (wmt)
                       
 
                       
Koolyanobbing
    635,065       635,065       283,272  
 
                       
Mt Jackson
    541,450       541,450       584,287  
 
                       
Windarling
    979,880       979,880       693,441  
 
                       
Total Ore Mined
    2,156,395       2,156,395       1,561,000  
 
                       
 
                       
 
                       
Ore Processed: (wmt)
                       
 
                       
Lump
    853,542       853,542       584,974  
 
                       
Fines
    941,430       941,430       576,408  
 
                       
Total Ore Processed
    1,794,972       1,794,972       1,161,382  
 
                       
 
                       
 
                       
Ore Railed: (wmt)
                       
 
                       
Lump
    833,099       833,099       752,020  
 
                       
Fines
    933,512       933,512       572,578  
 
                       
Total Ore Railed
    1,766,611       1,766,611       1,324,598  
 
                       
 
                       
 
                       
Ore Shipped: (wmt)
                       
 
                       
Lump
    871,209       871,209       750,480  
 
                       
Fines
    914,954       914,954       560,473  
 
                       
Total Ore Shipped
    1,786,163       1,786,163       1,310,953  
 
                       
                 
2.1.2.   Project Development        

    Mining rates at Mt Jackson and Windarling were above budget.

    Plant throughput has improved steadily throughout the quarter, CV1 upgrade and consolidated commissioning are now complete. The plant is capable of an 8Mtpa processing rate.

    Rail operations have been disappointing during the quarter with a reliability factor of 86% achieved, as opposed to budget of 95%. Due to ongoing rail maintenance throughout the year, this area is expected to be the major challenge for the balance of the year.

    Shiploading operations at the Port ran without loss during the quarter. Improvement work at the Port in relation to dust suppression is expected to be ongoing.

      2.2.

4

Cockatoo Island Joint Venture (100%)

  2.2.1.   Production

Production and shipments for the quarter were as follows:

                         
    Actual   Actual   Actual
    Mar Qtr 2007   YTD 2007   Mar Qtr 2006
Cockatoo Island                        
Iron Ore Project
                       
 
                       
 
                       
Waste (bcm)
        61,296  
 
                       
 
                       
Ore Mined (wmt)
    191,943       191,943       244,156  
 
                       
 
                       
Ore Produced (wmt)
    294,585       294,585       278,566  
 
                       
 
                       
Ore Shipped (wmt)
    274,976       274,976       305,200  
 
                       

    Mine development was below target due to continued pit flooding as a result of severe rainfall.

    Shipping performance was less affected due to healthy ROM stocks. 4 ships were loaded during February/March.

             
2.3   Exploration    
 
    2.3.1.     Summary

Drilling during the quarter comprised a mix of resource definition drilling (Koolyanobbing C and D) and prospect testing (Koolyanobbing K North, B-north, G and Mt Finnerty FIN7).

At Cockatoo Island a definitive feasibility study assessing the technical and economic viability of developing a Stage 3 resource continues.

During the quarter Portman signed a letter agreement with Cape Lambert Iron Ore Limited and International Goldfields Limited which will enable Portman to explore for, and develop iron ore resources on 5 tenements located in the Evanston region, near Portman’s Mt Jackson and Windarling operations. Cape Lambert holds the iron ore rights to the tenements. Portman can earn 100% of the iron ore rights by spending $1million on exploration within 3 years of the commencement date with a minimum of $300,000 to be spent in the first 12 months. Cape Lambert will receive a royalty of 1.5% of average per tonne value for iron ore products removed from the tenements.

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2.3.2. Koolyanobbing Project Area

A summary of drilling activity for the quarter is as follows:

                         
Project   Drill Type   # of Holes   Metres
Mt Finnerty FIN7 Prospect
  Reverse Circulation
    7       465  
 
                       
Koolyanobbing B Deposit North
  Reverse Circulation
    2       210  
 
                       
Koolyanobbing C Prospect
  Reverse Circulation
    8       1,090  
 
                       
Koolyanobbing G Prospect
  Reverse Circulation
    5       246  
 
                       
Koolyanobbing K Deposit North
  Reverse Circulation
    7       360  
 
                       
Koolyanobbing D Prospect
  Reverse Circulation
    9       1,176  
 
                       
 
  Totals             3,547  
 
                       

    J5 Prospect — Final results from the 2006 resource drilling programme were received during the quarter. Intercepts below were not included in the recently announced resource.

    J4 Prospect — Drilling results were received for the drilling programme completed during 2006 over the eastern one third of the prospect. These have not yet been incorporated into a resource estimate.

    K Deposit North – Drilling during the quarter was targeted on outcropping mineralisation at the northern end of K Pit. Only 3 holes were completed to planned depth because of drilling problems in unconsolidated fill.

    C Prospect — Drilling was designed to test for continuity between structurally complex mineralised zones and thereby improve the geological resource model. It is planned to incorporate this drilling into a revised resource estimate during the second quarter of 2007.

    D Prospect — Drilling was designed to test for a northern extension to this deposit. Significant mineralisation was intersected in one hole below the existing pit but no northern extension was recognised visually. Assays are awaited.

    B Deposit North — Drilling was designed to test a conceptual target north of the current pit. No significant mineralisation was intersected.

    G Prospect — Drilling was designed to test the extent of mineralisation under shallow cover intersected by earlier drilling. No significant mineralisation was intersected.

    Mt Finnerty FIN7 — Drilling was designed to test depth extensions of surface enriched iron formation within the Mt Finnerty JV area 60 kilometres east of Koolyanobbing. Only weak iron enrichment was intersected and no further work is planned on this prospect.

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Highlights of analytical results received during the reporting period include the following significant intercepts:

                                                                                 
 
          Fe%
  SiO2%
  A12O3 %   P %   S %            
 
                                                                               
J5 Prospect
                                       
 
                                                                               
J5RC111
  18   metres at
  58.35   2.78   1.48   0.198   0.085   from
  34   Metres
 
                                                                               
J5RC116
  14   metres at
  58.53   5.74   2.29   0.151   0.037   from
  33   Metres
 
                                                                               
J4 Prospect
                                       
 
                                                                               
J4RC027
  10   metres at
  58.16   3.94   2.15   0.172   0.013   from
  40   Metres
 
                                                                               
J4RC028
  15   metres at
  58.29   3.29   1.15   0.182   0.015   from
  78   Metres
 
                                                                               
J4RC031
  27   metres at
  59.35   3.19   0.73   0.097   0.024   from
  38   Metres
 
                                                                               
 
  22   metres at
  58.17   2.5   1.12   0.234   0.009   from
  73   Metres
 
                                                                               
J4RC032
  18   metres at
  58.54   3.14   1.78   0.174   0.023   from
  58   Metres
 
                                                                               
 
  30   metres at
  58.85   2.47   0.85   0.093   0.016   from
  84   Metres
 
                                                                               
J4RC033
  22   metres at
  59.86   2.69   1.29   0.096   0.041   from
  55   Metres
 
                                                                               
 
  18   metres at
  59.18   1.53   1.2   0.395   0.018   from
  96   Metres
 
                                                                               
J4RC034
  63   metres at
  59.55   2.27   0.79   0.075   0.033   from
  13   Metres
 
                                                                               
J4RC035
  34   metres at
  58.98   3.01   0.84   0.117   0.041   from
  15   Metres
 
                                                                               
J4RC036
  23   metres at
  58.64   3.61   1.12   0.134   0.025   from
  1   Metres
 
                                                                               
J4RC039
  31   metres at
  58.67   2.7   1.39   0.152   0.019   from
  59   Metres
 
                                                                               
J4RC041
  16   metres at
  58.8   2.82   1.89   0.08   0.034   from
  21   Metres
 
                                                                               
J4RC043
  22   metres at
  58.23   2.9   1.56   0.312   0.025   from
  22   Metres
 
                                                                               
J4RC044
  13   metres at
  58.71   2.79   1.32   0.192   0.033   from
  39   Metres
 
                                                                               
J4RC045
  35   metres at
  59.22   1.7   1.13   0.119   0.017   from
  94   Metres
 
                                                                               
J4RC046
  32   metres at
  58.62   1.97   1.21   0.117   0.02   from
  68   Metres
 
                                                                               
C Prospect
                                       
 
                                                                               
KCRC158
  11   metres at
  62.51   2.07   0.21   0.002   0.048   from
  117   Metres
 
                                                                               
KCRC159
  15   metres at
  63.78   1.26   0.09   0.006   0.061   from
  99   Metres
 
                                                                               
KCRC160
  25   metres at
  59.96   5.24   0.41   0.011   0.083   from
  78   Metres
 
                                                                               
KCRC160
  16   metres at
  63.31   1   0.21   0.008   0.059   from
  115   Metres
 
                                                                               
KCRC162
  18   metres at
  58.24   7.91   0.16   0.005   0.057   from
  83   Metres
 
                                                                               
KCRC162
  11   metres at
  63.57   1.36   0.59   0.004   0.045   from
  103   Metres
 
                                                                               
KCRC163
  19   metres at
  61.22   3.28   0.2   0.009   0.087   from
  121   Metres
 
                                                                               
K Prospect
                                                                               
 
                                                                               
KPRC126
  17   metres at
  58.49   13.15   0.29   0.082   0.02   from
  10   Metres
 
                                                                               
KPRC127
  26   metres at
  59.56   12.06   0.09   0.117   0.004   from
  33   Metres
 
                                                                               

2.3.3. Cockatoo Island Joint Venture

The September quarterly reported a new JORC-compliant in-situ Indicated and Inferred resource estimate for a Stage 3 eastern extension of the Seawall Hematite orebody of 6.6M tonnes down to a depth of -50RL at Cockatoo Island. A definitive feasibility study was initiated assessing the technical and economic viability of developing this Stage 3 resource. A geotechnical drilling program was initiated during the reporting period. The information from this program will be utilized to design and cost various seawall containment structures and pit alignments. The Stage 3 feasibility study is scheduled for completion in the 2nd quarter 2007.

7

2.3.4. Exploration Expenditure

                         
    (000’s)
    Mar Qtr 2007   YTD 2007   Mar Qtr 2006
Koolyanobbing                        
Project $
    818,505       818,505       755,291  
 
                       
Cockatoo Island (100%) $
    33,112       33,112       4,442  
 
                       

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr R G Graber, who is a Member of the American Institute of Professional Geologists (AIPG), a ‘Recognised Overseas Professional Organisation’ included in a list promulgated by the ASX from time to time. Mr Graber is an employee of Cliffs Reduced Iron Management Company, a subsidiary of ÐÇ¿Õ´«Ã½ Inc, and is seconded to the company. Mr Graber has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Graber consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

8

3.0   FOREIGN EXCHANGE HEDGING
 

Total residual foreign exchange cover for the Portman Group at 31 March 2007 was US$278.0M.

 

                                 
YEAR   2007   2008   2009   TOTAL
Face Value US$M
    156.50       83.50       38.00       278.0  
 
                               
Weighted Avg “Worst” Case Hedge Rate
    0.7762       0.7594       0.7738       0.7567  
 
                               

Portman Group’s current Foreign Exchange Policy, for all hedging, provides for:  

    Up to 12 months maturity:  Uncommitted Hedging: Minimum 50% Maximum 90% of forecast USD sales Committed Hedging: Maximum 90% of forecast USD sales  

    12 to 24 months maturity: Uncommitted Hedging: Minimum 25% Maximum 75% of forecast USD sales Committed Hedging: Maximum 30% of forecast USD sales

    24 to 36 months maturity:  Uncommitted Hedging: Minimum 15% Maximum 50% of forecast USD sales Committed Hedging: Maximum 15% of forecast USD sales

9

PORTMAN LIMITED
A.B.N. 22 007 871 892

 

 

Corporate Information

 

     
Directors    
Joseph Carrabba
Richard Mehan
David Gunning
Donald Gallagher
William Calfee
Laurie Brlas
Michael Perrott
Malcolm Macpherson
  Chairman
Managing Director/CEO
Director
Director
Director
Director
Independent Director
Independent Director

Company Secretary

Chris Hunt
Caroline Rainsford  

Registered Office

Level 11, The Quadrant
1 William Street
Perth  6000
WESTERN AUSTRALIA  

Telephone:        (08) 9426 3333
Facsimile:          (08) 9426 3344  

Internet site:      www.portman.com.au  

At 31 March 2007 there were 175,690,073 Ordinary shares on issue.  

Substantial Shareholders as at 31 March 2007

ÐÇ¿Õ´«Ã½ Australia Pty Ltd
AMP Limited

Reporting Calendar  

Anticipated release dates for information in 2007 and other important anticipated dates
are as follows:

Annual General Meeting 31 May 2007

10