SecProbe.io

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July 15, 2005

Mr Jim B. Rosenberg
Senior Assistant Chief Accountant
United States Securities and Exchange Commission
Washington, D.C. 20549

RE:  PROGEN INDUSTRIES LIMITED
     FORM 20-F FOR FISCAL YEAR ENDED JUNE 30, 2004
     FILE NO. 000-29228

Dear Mr. Rosenberg:

     We refer to your letter dated June 9, 2005 in relation to the above matter.

     We hereby respond to each of your comments as follows.

Form 20-F for Fiscal Year Ended June 30, 2004
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Item .5. Operating and Financial Review and Prospects
-----------------------------------------------------
Overview, page 44
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     1.   Please expand your disclosure by referring to the Division of
          Corporation Finance "Current Issues and Rulemaking Projects Quarterly
          Update" under section VIII - Industry Specific Issues - Accounting and
          Disclosure by Companies Engaged in Research and Development
          Activities. You can find it at the following website address:
          http://www.sec.gov/divisions/corpfin/cfcrq032001.htm#secviii.
          ------------------------------------------------------------

          Please disclose the following information for each of your major
          research and development projects:

               a.   The current status of the project;
               b.   The costs incurred during each period presented and to date
                    on the project;
               c.   The nature, timing and estimated costs of the efforts
                    necessary to complete the project;
               d.   The anticipated completion dates;
               e.   The risks and uncertainties associated with completing
                    development on schedule, and the consequences to operations,
                    financial position and liquidity if the project is not
                    completed timely; and finally
               f.   The period in which material net cash inflows from
                    significant projects are expected to commence.

          Regarding b., if you do not maintain any research and development
          costs by project,

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          disclose that fact and explain why management does not maintain and
          evaluate research and development costs by project. Provide other
          quantitative and qualitative disclosure that indicates the amount of
          the company's resources being used on the project.

          Regarding c. and d., disclose the amount and range of estimated costs
          and timing to complete the phase in process and each future phase. To
          the extent that information if not estimable, disclose those facts and
          circumstances indicating the uncertainties that preclude you from
          making a reasonable estimate.

          Company response:
          -----------------

          We have updated our disclosure accordingly under Item 5.A. Operating
          Results. Research and Development Expenses.

Critical Accounting Policies
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Revenue Recognition and Research and Development Expenses, page 45
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     2.   We note from your disclosure that you have identified revenue
          recognition and research and development expenses as critical
          accounting estimates. The disclosures included in MD&A should provide
          greater insight into the quality and variability of information
          regarding financial condition and operating performance. As such, we
          believe your discussion of revenue recognition and development
          expenses in MD&A should also include the following information:

               a.   Specifically address why your accounting estimates and/or
                    assumptions bear the risk of change.
               b.   How you arrive at the estimates and/or assumptions.
               c.   How much the estimates and/or assumptions have changed in
                    the past.
               d.   Whether the estimates and/or assumptions are reasonably
                    likely to change in the future.
               e.   Provide a quantitative analysis of the sensitivity of your
                    estimates and/or assumptions to change, based on outcomes
                    that are reasonably likely to occur and would have a
                    material effect.

          Please refer to FRR 72 "Interpretation: Commission Guidance Regarding
          Managements' Discussion and Analysis of Financial Condition and
          Results of Operations" for additional guidance.

          Company response:
          -----------------

          We have reviewed the extent to which the reported amounts of revenue
          and research and development expense required us to make estimates and
          judgments. The application of our accounting policies in relation to
          revenue recognition and research and development expense did not
          involve significant estimates and judgments.

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          Accordingly, we have updated our disclosure under Critical Accounting
          Policies by removing reference to revenue recognition and research and
          development expense as critical accounting policies.

Financial Statements
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Notes to Financial Statements
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Statements of Operations, page F-3
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1. Summary of Significant Accounting Policies
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Patents, page F-9
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     3.   We note from your disclosure that costs incurred for filing, defending
          and protecting patents (i.e. legal costs) are included in research and
          development expense in the statement of operations. Please refer to
          SFAS 2 paragraph 10(i) which states that typically legal work in
          connection with patent applications or litigation are excluded from
          research and development expenses. As such, please revise your
          financial statements to reclassify these costs from research and
          development expenses or explain to us why your classification is
          appropriate.

          Company response:
          -----------------

          We have amended the "Research and development expenditure" and
          "Patents" Significant Accounting Policies on page F-9 of the Financial
          Statements.

          We have updated the following disclosures as a result of this change
          to our Significant Accounting Policies:
               -    Form 20-F: Item 3.A. Selected Financial Data.
               -    Form 20-F: Item 5. Operating and Financial Review and
                    Prospects. Research and Development Expenses.
               -    Financial Statements. Statements of Operations.

13. Stock Option Plans
----------------------

     4.   We note from your disclosure that you reported your stock option
          information in A$. Please revise your disclosure to reflect amounts in
          your reporting currency USD. Please refer to Rule 3-20 of Regulation
          S-X.

          Company response:
          -----------------

          We have updated the following disclosures accordingly:
               -    Form 20-F. Item 6.E. Share Ownership. Option Plans.
               -    Form 20-F. Item 7.A. Major Shareholders.
               -    Financial Statements. Note 6. Investments accounted for
                    using equity method.
               -    Financial Statements. Note 13. Stock Option Plans.

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The Company hereby acknowledges that:
     -    it is responsible for the adequacy and accuracy of the disclosure in
          this filing;
     -    United States Securities and Exchange Commission (SEC) staff comments
          or changes to disclosure in response to staff comments do not
          foreclose the SEC from taking any action with respect to the filing;
          and
     -    the Company will not assert SEC staff comments as a defense in any
          proceedings initiated by the SEC or any person under the federal
          securities law of the United States.

You may contact the undersigned if you have any questions regarding the above
responses to your comments at +61 7 3273 9110.

Sincerely,

Linton W. P. Burns
Chief Financial Officer and Company Secretary

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