Surfacing Weekly Update #19

19 August 2004

SURFACING CONTINUES ON SCHEDULE

As of August 19th, we have surfaced over 480 of the 800 pass miles that we had projected to be surfaced in the 2004 production year, over 60% 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 of crews, but these problems have been corrected. We now expect to have increased production from our surfacing equipment for the remainder of the year.

¨ We have added a contract surfacing crew from Progress Rail last week and they will continue to surface on the Kansas City sub in Iowa for the next four weeks. This crew will then travel to the DM&E to assist with the RRIF surfacing for the remainder of the year.

¨ As of August 19, 2004, over 155,000 tons of ballast has been distributed on both properties. This is over 65% of the 230,000 tons of ballast that we now require to complete this year’s projects.

¨ 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.