EXTENSION AGREEMENT

                                                                   Exhibit 10.38

LV1 392943v1 03/31/06
                                     TRIDENT
                                   GROWTH FUND

March 23, 2006

Roger Abel
President and Chief Executive Officer
Touchstone Resources USA, Inc.
1600 Smith, Suite 5100
Houston, Texas 77002

Dear Mr. Abel:

      Trident Growth Fund L.P. ("Trident") hereby agrees to extend the due date
of Touchstone Resources USA, Inc.'s ("Touchstone") $2,100,000 Convertible
Promissory Note from March 23, 2006 to a date no later than May 7, 2006 (the
"Note Extension"). In addition, Trident agrees to waive the Cash Interest
Coverage, The Cash Flow Coverage and the Current Ratio to a date no later than
May 7, 2006 (the "Requirement Waivers"). In consideration for the above Note
Extension and Requirement Waivers, Touchstone will issue to Trident a Common
Stock Purchase Warrant to purchase 50,000 shares of Touchstone's commo