Ties Weekly Update #10

17 June, 2004

CONTINUING EXCELLENT PRODUCTION

As of the 17^th of June, we have installed over 100,000 of the 182,000 ties scheduled to be installed by November 24^th 2004. All crews, both contractor and company, are doing an excellent job and are ahead of schedule.

¨ As of the 17^th of June, 160,000 ties have been delivered. Because of the shortage of gondolas we now expect the delivery of ties to be completed by the end of July. Over 15,000 ties are currently under load and in transit toward our property.

¨ Wes Risseeuw’s DM&E east tie gang has completed tie installation between Lake Preston and De Smet. After ballasting and surfacing, this section of track will be raised to 30 MPH. We expect this to be complete by the end of June. This crew will now make the first pass tie installation from Volga to Lake Preston and then will help with siding construction projects.

¨ The LA Colo tie gang has started at MP 180 and will continue toward Garvin with an expected completion date of June 25^th. They are west of Sanborn working toward Garvin.

¨ Foreman Steve Koser’s crew has completed installing ties in the Calmar area and has moved westward on the Mason City sub to install 6,000 joint ties in that area. He expects to be completed with this project by mid July and return to Calmar to install switches and start the curve patch program.

¨ Jim Nemec’s west tie gang continues to improve on their production numbers and will be installing ties just south of Rapid City for the next several weeks. Average weekly production for this crew is nearly 1000 per week.

¨ Because of the additional siding work that is now planned for the 2004 season, we have added 24,000 ties to the scheduled number of ties to be installed during the production season. The “new” scheduled number of ties to be installed in the 2004 season is 206,000 and will be used on future web site updates.