Surfacing Weekly Update #15

22 July 2004

CONTINUING ON SCHEDULE

As of July 22nd, we have surfaced over 370 of the 800 pass miles that we had projected to be surfaced in the 2004 production year, over 45% of the total miles scheduled. As of now, it appears we will meet that schedule.

¨ There have been some minor breakdowns on the production tampers recently which have reduced some of the pass miles we had expected to be getting from a couple crews, but these problems have been corrected. We now expect to have increased production from our surfacing equipment for the remainder of the year.

¨ As of July 22^nd, over 125,000 tons of ballast has been delivered. This is over 50% of the 230,000 tons of ballast that we now require to complete this year’s projects. From a historical perspective, the DM&E, in a normal year, would use a total of about 60,000 tons annually and the IC&E would use about 40,000 tons. This year’s requirements are over two times the normal usage.

¨ We continue to work very closely with the LG Everist Quarry and New Ulm Quartzite Quarry to provide adequate supplies of ballast throughout this busy season.