Surfacing Weekly Update #14

15 July 2004

CONTINUING ON SCHEDULE

As of July 15^th, we have surfaced over 335 of the 800 pass miles that we had projected to be surfaced in the 2004 production year, nearly 40% 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 and we now expect to have increased production from our surfacing equipment for the remainder of the year.

¨ As of July 15^th, over 120,000 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 are working very closely with the LG Everist Quarry and New Ulm Quartzite Quarry to provide adequate supplies of ballast throughout this busy season.