10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2010
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                        to                       

Commission file number: 1-4488

MESABI TRUST

(Exact name of registrant as specified in its charter)

New York	13-6022277
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
c/o Deutsche Bank Trust Company Americas
Trust & Securities Services — GDS
60 Wall Street
27th Floor
New York, New York	10005
(Address of principal executive offices)	(Zip Code)

(615) 835-2749

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Units of Beneficial Interest in Mesabi Trust	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  No x  Yes o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  No x  Yes o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).  Yes o  No o*

*The registrant has not yet been phased into the interactive data requirements.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company.)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  No x  Yes o

As of July 31, 2009, the aggregate market value of the Units of Beneficial Interest in the registrant held by non-affiliates of the registrant was $142,269,930* based on the closing sale price as reported on the New York Stock Exchange.

*Includes approximately $108,700 representing the market value, as of July 31, 2009, of 10,000 Units of Beneficial Interest the beneficial ownership of which is disclaimed by affiliates (see Item 12 herein).

DOCUMENTS INCORPORATED BY REFERENCE

Document	Parts Into Which Incorporated
Annual Report of the Trustees for the Fiscal Year Ended January 31, 2010 (Annual Report)	Parts I, II, and IV

PART I

ITEM 1.BUSINESS.

(a)General Development of Business.

The information under the headings “Trustees’ Discussion and Analysis of Financial Condition and Results of Operations,” “The Trust Estate,” “Leasehold Royalties,” and “Land Trust and Fee Royalties” beginning on pages 11, 20, 25 and 28, respectively, of the Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 2010 (the “Annual Report”) is incorporated herein by reference.

(b)Financial Information About Segments.

Substantially all of the revenue, operating profits and assets of Mesabi Trust (“Mesabi Trust” or the “Trust”) relate to one business segment—iron ore mining.  The information under the heading “Selected Financial Data” set forth on page 10 of the Annual Report is incorporated herein by reference.

(c)Narrative Description of Business.

The information under the headings “Trustees’ Discussion and Analysis of Financial Condition and Results of Operations,” “The Trust Estate,” and “Leasehold Royalties” beginning on pages 11, 20 and 25, respectively, of the Annual Report is incorporated herein by reference.

(d)Financial Information About Geographical Areas.

All of the Trust’s revenues and assets are derived from the Trust Estate.  The information under the heading “Selected Financial Data” set forth on page 10 of the Annual Report is incorporated herein by reference.

(e)Availability of Reports on Registrant’s Website.

The information on the cover page of the Annual Report, set forth on page 1 thereof, is incorporated herein by reference.

ITEM 1A.RISK FACTORS.

The information under the heading “Risk Factors” set forth on pages 3 through 8 of the Annual Report is incorporated herein by reference.

ITEM 1B.UNRESOLVED STAFF COMMENTS.

None.

ITEM 2.PROPERTIES.

The information under the heading “The Trust Estate” beginning on page 20 of the Annual Report is incorporated herein by reference.

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ITEM 3.LEGAL PROCEEDINGS.

None.

ITEM 4.RESERVED.

PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED UNITHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

The information under the headings “Unallocated Reserve” and “Certificates of Beneficial Interest” set forth on pages 29 and 30, respectively, of the Annual Report is incorporated herein by reference.

ITEM 6.SELECTED FINANCIAL DATA.

The information under the heading “Selected Financial Data” set forth on page 10 of the Annual Report is incorporated herein by reference.

ITEM 7.TRUSTEES’ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The information under the headings “Trustees’ Discussion and Analysis of Financial Condition and Results of Operations,” “Leasehold Royalties,” “Trust Expenses,” and “Unallocated Reserve” beginning on pages 11, 25, 28 and 29, respectively, of the Annual Report is incorporated herein by reference.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements, including the independent auditors’ reports thereon, filed as a part of this report, are presented on pages F-3 through F-16 and are incorporated herein by reference.

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A.CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.  The Trust maintains a system of disclosure controls and procedures designed to ensure that information required to be disclosed by Mesabi Trust in the reports that it furnishes or files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and regulations of the Securities and Exchange Commission.  Due to the pass-through nature of the Trust, the Trust’s disclosure controls and

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procedures include controls and procedures designed to ensure that information required to be disclosed by Mesabi Trust is accumulated and communicated by Cliffs Natural Resources Inc. (“Cliffs”) and its wholly-owned subsidiary, Northshore Mining Company (“Northshore”).  In order to help ensure the accuracy and completeness of the information required to be disclosed in the Trust’s periodic and annual reports, the Trust employs certified public accountants, geological consultants, and attorneys.  These outside professionals advise the Trust in its review and compilation of the information in this Form 10-K and the other periodic reports filed by the Trust with the SEC.

As part of their evaluation of Mesabi Trust’s disclosure controls and procedures, the Trustees rely on quarterly shipment and royalty calculations provided by Northshore and Cliffs.  Because Northshore has declined to provide a written certification attesting to whether Northshore has established disclosure controls and procedures and internal controls sufficient to enable it to verify that the information furnished to the Trustees is accurate and complete, the Trustees also rely on (a) an annual certification from Northshore and Northshore’s parent, Cliffs Natural Resources Inc., certifying as to the accuracy of the royalty calculations, and (b) the related due diligence review performed by the Trust’s accountants.  In addition, Mesabi Trust’s consultants review the schedule of leasehold royalties payable and shipping and sales reports provided by Northshore against production and shipment reports prepared by Eveleth Fee Office, Inc., an independent consultant to Mesabi Trust (“Eveleth Fee Office”). Eveleth Fee Office gathers production and shipping information from Northshore and prepares monthly production and shipment reports for the Trustees. Furthermore, as part of its engagement by Mesabi Trust, Eveleth Fee Office also attends Northshore’s calibration and testing of its crude ore scales and boat loader scales which are conducted on a periodic basis.

As of the end of the period covered by this report, the Trustees carried out an evaluation of Mesabi Trust’s disclosure controls and procedures.  The Trustees have concluded that such disclosure controls and procedures are effective.

Trustees’ Report on Internal Control over Financial Reporting.  The Trustees’ Report on Internal Control over Financial Reporting is set forth on page F-2 of the Annual Report.  The attestation reports of the Trust’s current and former independent registered public accounting firms on their assessment of the Trust’s internal control over financial reporting are set forth on pages F-3 and F-4 of the Annual Report.

Changes in Internal Control over Financial Reporting.  To the knowledge of the Trustees, there has been no change in the Trust’s internal control over financial reporting that occurred during the Trust’s last fiscal quarter that has materially affected, or is likely to materially affect, the Trust’s internal control over financial reporting.  The Trustees note for purposes of clarification that they have no authority over, and make no statement concerning, the internal controls of Northshore.

ITEM 9B.OTHER INFORMATION.

At the special meeting of the Trust’s Unitholders held on December 17, 2009 (the “Special Meeting”), the Unitholders appointed Robert C. Berglund to serve as successor Trustee of the Trust, replacing David J. Hoffman. Of the 11,294,759 Units voting in person or by proxy at the Special Meeting, on this proposal, 11,096,581 Units (or 84.58% of the Units outstanding) voted for Mr. Berglund, with 198,178 Units (or 1.51%) withholding votes.  Because the appointment of Mr. Berglund was determined to be a routine matter, and therefore subject to discretionary voting under NYSE Rule 452, there were no broker non-votes with respect to this proposal.

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PART III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The Agreement of Trust dated July 18, 1961 (the “Agreement of Trust”) provides for a Corporate Trustee and four Individual Trustees (collectively, the “Trustees”).  The Trust does not have, nor does the Agreement of Trust provide for officers, a board of directors or an audit committee.  Generally, the Trustees continue in office until their resignation or removal.  Any Trustee may be removed at any time, with or without cause, by the holders of two-thirds in interest of the Certificates of Beneficial Interest in the Trust (the “Trust Certificates”) then outstanding.  In the case of an Individual Trustee, a successor is appointed if the Individual Trustee dies, becomes incapable of acting or is adjudged bankrupt or insolvent.  In the case of the Corporate Trustee, a successor is appointed if a receiver of the Corporate Trustee or of its property is appointed, or if any public officer takes charge or control of the Corporate Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation.  Successor Trustees can only be appointed by the holders of a majority in interest of the Trust Certificates then outstanding.  Because such appointments are not made on a regular or periodic basis, the Trust does not have a standing nominating committee or a policy in place for the recommendation and nomination of successor Trustees.

The Trust’s activities are limited to collecting income, paying expenses and liabilities, distributing net income to the holders of Trust Certificates (the “Unitholders”) after the payment of, or provision for, such expenses and liabilities, and protecting and conserving the assets held.  Although the Trust is not required to designate an audit committee because of an exemption from Rule 10A-3 of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, the Trustees believe that they collectively perform the functions of an audit committee.  The Trustees have not designated an “audit committee financial expert.”  The Trustees have adopted a Code of Ethics that applies to the Trustees.  A copy of the Code of Ethics is incorporated by reference in Exhibit 14 of this Form 10-K.

To carry out the Trustees’ duties under the Agreement of Trust, the Trustees meet on a quarterly basis to discuss information and circumstances relevant to the Trust.  The Trustees also conduct telephone conferences from time to time between the quarterly meetings to address developments that require more timely attention.  The Trust held four regular Trustee meetings and nine special meetings via teleconference in fiscal 2010.  All of the Trustees who were then appointed were present at all of the meetings held in fiscal 2010.

In the third quarter of each year, the Trustees’ meeting is typically conducted in connection with the Trustees’ annual inspection trip in which they personally visit and tour Northshore’s mining operations and plant facilities located near Babbitt and in Silver Bay, Minnesota, respectively.  During the inspection trip, the Trustees meet with and interview Northshore personnel with respect to Northshore’s current operations, changes in operations, mining plans, capital equipment and facilities.

Because Mesabi Trustees are appointed until they resign or are removed, at the time of nomination the Trustees believe that it is necessary for each Trustee to possess many qualities and skills. The present Trustees of Mesabi Trust principal occupations and directorships held with other public corporations during the past five years, or longer as material, their ages and the year first elected as a Trustee, are set forth below.

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Robert C. Berglund

Age: 63

Year Appointed as Individual Trustee: 2009

Retired Mining Engineer, Cliffs Natural Resources, Inc.

Mr. Berglund has extensive experience in the mining industry.  He retired from his position as Vice President and General Manager of Northshore Mining Company in 2003 after spending thirty-five years in mining production and operations management with Cliffs. Mr. Berglund joined Cliffs after graduating from Penn State University in 1968 with a B.S. in Mining Engineering. From 1976 until 2003, Mr. Berglund worked onsite at various mines owned and operated by Cliffs across North America.

James A. Ehrenberg

Age: 67

Year Appointed as Individual Trustee: 2006

Retired Vice President, U.S. Bank, N.A.

Mr. Ehrenberg has extensive experience serving as corporate trustee.  Before retiring from his position as Senior Vice President of U.S. Bank, N.A. Mr. Ehrenberg spent nearly forty years in the Corporate Trust department of U.S. Bank, N.A. and its predecessor, First Trust Company of Saint Paul. From 1983 until April 2005, Mr. Ehrenberg was directly responsible for providing corporate trustee services to the Mesabi Land Trust of which Mesabi Trust is the sole trust certificate holder.

Richard G. Lareau

Age: 81

Year Appointed as Individual Trustee: 1990

Senior Partner, Oppenheimer Wolff & Donnelly LLP

Mr. Lareau is a senior partner in the law firm of Oppenheimer Wolff & Donnelly LLP with which firm he has been associated since 1956.  Through his legal work, Mr. Lareau has represented numerous clients on a wide range of issues including, corporate, trust and real estate law.  Over the course of his legal career, Mr. Lareau has also served as a director on the boards of numerous publicly-traded companies.  During his service as a director on the boards of publicly-traded corporations, Mr. Lareau also served as a member, and frequently as chair, of board committees, including: audit, compensation, governance, nominating, and executive.

Norman F. Sprague III, M.D.

Age: 63

Year Appointed as Individual Trustee: 1981

Orthopedic Surgeon

Dr. Sprague, appointed as a Mesabi Trustee in 1981, is the longest serving member of the Mesabi Trustees.  Dr. Sprague received a B.S. in Geology from the University of California, Santa Barbara and a M.D. from UCLA.  Dr. Sprague also has investment experience as a general partner in two private investment partnerships.  Dr. Sprague’s nearly thirty years experience as a Trustee makes him an important part of the institutional memory of the Mesabi Trust.

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The Trust believes that each of the Individual Trustees has a diversified background and extensive financial, business and industry specific expertise that make him an important resource in the oversight of the Trust’s affairs.  There are no family relationships among any of the Individual Trustees.

David J. Hoffman, who served as a Mesabi Trustee from 1977 until his successor was appointed at the Special Meeting of Trust Certificate Holders on December 17, 2009, retired from the Trust effective upon the appointment of Mr. Berglund.

ITEM 11.EXECUTIVE COMPENSATION.

Compensation Discussion and Analysis

The Trust does not have a board of directors, executive officers or any employees.  The compensation paid to the Trustees is governed by the Amendment to the Agreement of Trust dated October 25, 1982, as amended (the “Amendment”).  The Trust does not use any compensation consultants.

The Amendment does not provide for any stock awards, option awards, non-equity incentive plan compensation, change in pension value, nonqualified deferred compensation earnings or any other compensation.  The Trust does not have severance agreements nor does it provide post-retirement benefits to the Trustees.  Accordingly, all such tables have been omitted from this Annual Report on Form 10-K.

Pursuant to the Amendment, each Individual Trustee receives at least $20,000 in annual compensation for services as Trustee.  Each year, annual Trustee compensation is adjusted up or down (but not below $20,000) in accordance with changes from the November 1981 level of 295.5 (the “1981 Escalation Level”) in the All Commodities Producer Price Index (with 1967 = 100 as a base).  The All Commodities Producer Price Index is published by the U.S. Department of Labor, Bureau of Labor Statistics.  The adjustment is made at the end of each fiscal year and is calculated on the basis of the proportion between (a) the level of such index for the November preceding the end of such fiscal year, and (b) the 1981 Escalation Level.  Any action to modify or otherwise vary the compensation of the Individual Trustees as provided by the Amendment must be approved by the affirmative vote of 66 2/3% of the outstanding units of beneficial interest.  Messrs. Ehrenberg, Lareau and Sprague, the Individual Trustees who served for the entire fiscal year, each received $35,999 in fiscal 2010.  Messrs. Berglund and Hoffman, the Individual Trustees who served for less than the entire fiscal year, received $17,499 and $27,496, respectively.

Under the Amendment, the Corporate Trustee receives annual compensation in an amount equal to the greater of (i) $20,000, or such other amount determined in accordance with the adjustments described in the preceding paragraph, or (ii) one quarter of one percent (1/4 of 1%) of the trust moneys, exclusive of proceeds of sale of any part of the Trust Estate (as such terms are defined in the Agreement of Trust), received by the Trustees and distributed to Unitholders.

Additionally, each year the Corporate Trustee receives $62,500 to cover clerical and administrative services to Mesabi Trust, other than services customarily performed by a registrar or transfer agent for which the Corporate Trustee is paid additional service fees.  The Corporate Trustee earned $88,089 in cash compensation for the fiscal year ended January 31, 2010. The Corporate Trustee also received $9,974 for its services as registrar and transfer agent for the year ended January 31, 2010.  The Corporate Trustee earned $98,063 in total compensation for the fiscal year ended January 31, 2010.

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Under the Amendment, the Individual Trustees may, in extraordinary circumstances, pay additional compensation to the Corporate Trustee.  The decision to pay such compensation must be unanimously approved by the Individual Trustees.  The Corporate Trustee did not receive any compensation for extraordinary services with respect to the year ended January 31, 2010.

Trustees’ Compensation Report

The Trustees have not designated a compensation committee and are not required to do so by applicable law or regulation.  The Trustees, as a group, have reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) and based on such review and discussion have recommended that the CD&A be included in this Annual Report on Form 10-K.

MESABI TRUST

Deutsche Bank Trust Company Americas

Robert C. Berglund

James A. Ehrenberg

Richard G. Lareau

Norman F. Sprague III

Trustee Compensation

Summary Compensation Table

The table below summarizes the total compensation earned by each of the Individual Trustees and the Corporate Trustee in the fiscal year ended January 31, 2010.

Name	Trustee Fees Earned ($)			Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Deferred Compensation Earnings($)	All Other Compensation ($)			Total ($)
Deutsche Bank Trust Company Americas, Corporate Trustee	$	88,089		N/A	N/A	N/A	N/A	$	9,974	(1)	$	98,063
Robert C. Berglund	$	17,499	(2)	N/A	N/A	N/A	N/A	N/A			$	17,499
James A. Ehrenberg	$	35,999		N/A	N/A	N/A	N/A	N/A			$	35,999
David J. Hoffman	$	27,496	(2)	N/A	N/A	N/A	N/A	N/A			$	27,496
Richard G. Lareau	$	35,999		N/A	N/A	N/A	N/A	N/A			$	35,999
Norman F. Sprague III	$	35,999		N/A	N/A	N/A	N/A	N/A			$	35,999

(1) Represents fees and disbursements paid to Deutsche Bank Trust Company Americas for its services as registrar and transfer agent of the Units.

(2) Pursuant to the Agreement of Trust, each Individual Trustee is paid compensation on a quarterly basis for service during each fiscal year.  To the extent that an Individual Trustee serves during any quarter in a fiscal year, he receives compensation for service during the quarters of the fiscal year that such Individual Trustee was in office.

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ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND TRUSTEES.

The following table sets forth information concerning each person known to Mesabi Trust to own beneficially more than 5% of the Trust’s Units outstanding as of April 2, 2010.  Such information has been obtained from Mesabi Trust’s records and a review of statements of beneficial ownership filed with Mesabi Trust pursuant to Rule 13d-102 under the Securities Exchange Act of 1934, as amended, through April 2, 2010.

Name and Address of Beneficial Owner(s)	Amount of Beneficial Ownership of Units		Percent of Class
Donald W. Hodges, First Dallas Holdings, Inc., a Texas corporation, First Dallas Securities, Inc., a Texas corporation, Hodges Capital Management, Inc., a Texas corporation, Hodges Fund, a Massachusetts business trust, and Hodges Small Cap Fund, a Massachusetts business trust, 2905 Maple Ave, Dallas, Texas 75201	725,150	(1)	5.5	%

(1)According to a Schedule 13G dated February 13, 2009, First Dallas Holdings, Inc., which is a holding company and parent company of First Dallas Securities, Inc., Hodges Capital Management, Inc., Hodges Fund, and Hodges Small Cap Fund, has shared voting power with respect to 386,000 Units and shared dispositive power with respect to 725,150 Units.  Dallas Holdings, Inc., First Dallas Securities, Inc., Hodges Capital Management, Inc., Hodges Fund, and Hodges Small Cap Fund are all identified as part of a group.  First Dallas Securities, Inc., a broker dealer and investment adviser, has shared dispositive power with respect to 119,119 Units.  Hodges Capital Management, Inc., an investment adviser, has shared voting power with respect to 375,000 Units and shared dispositive power with respect to 595,031 Units.  Hodges Fund, an investment company, has shared voting power with respect to 375,000 Units and shared dispositive power with respect to 595,031 Units.  Hodges Fund, an investment company, has shared voting power with respect to 375,000 Units and shared dispositive power with respect to 375,000 Units.  Donald W. Hodges is a reporting person with respect to First Dallas Holdings, Inc.

The table below sets forth information as to the Units of Beneficial Interest in Mesabi Trust beneficially owned as of April 2, 2010 by the Trustees individually and as a group.  Except as otherwise indicated and subject to applicable community property laws, each Trustee has sole voting and investment powers with respect to the securities listed.  There were no Certificates of Beneficial Interest of Mesabi Trust owned or pledged by the Trustees as of January 31, 2010.

Name	Amount of Beneficial Ownership of Units		Percent of Class
Deutsche Bank Trust Company Americas	0		0
Robert C. Berglund	2,000		**
James A. Ehrenberg	3,000		**
Richard G. Lareau	24,000	(1)	**
Norman F. Sprague III	12,700		**
All trustees as a group	41,700		**

** Less than 1%

(1)Includes 10,000 Units owned by Mr. Lareau’s wife, over which Mr. Lareau does not have any investment or voting power and as to which Mr. Lareau disclaims any beneficial ownership.

The Trust does not have any compensation plans under which securities of the Trust are authorized for issuance.

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ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Mr. Richard G. Lareau, who became a Trustee on March 7, 1990, is a senior partner in the law firm of Oppenheimer Wolff & Donnelly LLP, of Minneapolis, Minnesota.  That firm has been retained by Mesabi Trust since 1961 to act with respect to matters of Minnesota law, and was retained in 1991 by the Trustees other than Mr. Lareau to act as general legal counsel.  Mesabi Trust paid Oppenheimer Wolff & Donnelly LLP (“Oppenheimer”) fees totaling $224,796 for legal services provided to the Trust during the fiscal year ended January 31, 2010 compared with fees totaling $219,329 for legal services provided to the Trust during fiscal year ended January 31, 2009.  Please see the disclosure under the heading “Trust Expenses” beginning on page 28 of the Annual Report for additional information regarding the fees paid to Oppenheimer for the Trust’s legal expenses.

Related Person Transaction Policy

During the fiscal year ended January 31, 2010, the Trustees met on a quarterly basis and reviewed and approved or ratified certain transactions that occurred during the prior fiscal quarter.  In connection with their review of the Trust’s transactions, the Trustees consider whether there have been any related person transactions.  In determining whether to approve a related person transaction, the Trustees consider the following factors, in addition to any other factors they deem necessary or appropriate:

·whether the transaction is expressly permitted by the Trust indenture;

·whether the terms are fair to the Trust;

·whether the transaction is material to the Trust;

·the role of the related person in arranging the related person transaction;

·the structure of the related person transaction; and

·the interests of all related persons in the related person transaction.

The Trust maintains a written related person transaction approval policy, which sets forth the Trust’s policies and procedures for the review, approval or ratification of any transaction required to be reported in Mesabi Trust’s filings with the Securities and Exchange Commission.  The policy applies to any financial transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships in which Mesabi Trust is a participant and in which a related person has a direct or indirect interest.

Certain types of transactions, which would otherwise require review, are pre-approved by the Trustees in accordance with the policy. These types of transactions include, for example, (i) transactions, which when aggregated with the amount of all other transactions between the related person and the Trust, involve less than $120,000 in a fiscal year; (ii) transactions where the interest of the related person arises only by way of a directorship or minority stake in another organization that is a party to the transaction; (iii) transactions with a related person involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services; and (iv) a transaction that is specifically contemplated by provisions of the Trust’s indenture.

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Based on their review of the Trust’s transactions during the fiscal year ended January 31, 2010, the Trustees concluded that there were no related person transactions required to be disclosed in this Annual Report on Form 10-K.

Pass-Through Royalty Trust Exemptions

Because of its legal structure and character as a pass-through royalty trust, the Trust is exempt from Rule 10A-3 of the Securities Exchange Act and the Corporate Governance Standards set forth in Section 303A of the New York Stock Exchange’s Listed Company Manual.

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES.

On October 17, 2008, the Trust announced that Gordon, Hughes & Banks, LLP (“GH&B”), had resigned as the Trust’s independent registered public accounting firm as a result of GH&B entering into an agreement with Eide Bailly, LLP (“Eide Bailly”), pursuant to which Eide Bailly acquired the operations of GH&B.  Mesabi Trust engaged Wipfli LLP (“Wipfli”), on October 17, 2008, as its principal independent registered public accountant to audit Mesabi Trust’s financial statements.

(a)        Audit Fees.

The aggregate fees paid for professional services rendered by GH&B for the audit of the Trust’s annual financial statements, the Trustees’ assessment of internal control over financial reporting for fiscal 2008 and review of the financial statements included in the Trust’s quarterly reports on Form 10-Q for fiscal 2009 were $41,866.

The aggregate fees paid during fiscal 2010 for professional services rendered by Wipfli for the audit of the Trust’s annual financial statements, the audit of the Trustees’ assessment of internal control over financial reporting and review of the financial statements included in the Trust’s quarterly reports on Form 10-Q were $52,660, which amount excludes fees incurred by the Trust for professional services rendered by Wipfli after January 31, 2010 and not yet billed to the Trust.

The aggregate fees paid during fiscal 2009 for professional services rendered by Wipfli for the audit of the Trust’s annual financial statements, the audit of the Trustees’ assessment of internal control over financial reporting and review of the financial statements included in the Trust’s quarterly reports on Form 10-Q were $4,877, which amount excludes fees incurred by the Trust for professional services rendered by Wipfli after January 31, 2009 and not yet billed to the Trust.

(b)       Audit-Related Fees.

No fees were paid to Wipfli or GH&B for assurance and related services that were not reasonably related to the performance of the audit or review of the Trust’s financial statements for fiscal 2010 or fiscal 2009.

(c)        Tax Fees.

No fees were paid to Wipfli or GH&B for tax compliance, tax advice and tax planning for Mesabi Trust for fiscal 2010 or fiscal 2009.

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(d)        All Other Fees.

No other fees were paid to Wipfli or GH&B for services provided to Mesabi Trust, other than those described in item (a), for fiscal 2010 or fiscal 2009.

Before the independent auditor is engaged to perform audit and review services for the Trust, the Trustees approve the engagements.

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PART IV

ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) 1.Financial Statements:

The following Financial Statements are incorporated in this Report by reference from the following pages of the Annual Report:

Reports of Independent Registered Public Accounting Firms	Page F-3 and F-4
Balance Sheets as of January 31, 2010 and 2009	Page F-5
Statements of Income for the years ended January 31, 2010, 2009, and 2008	Page F-6
Statements of Unallocated Reserve and Trust Corpus for the years ended January 31, 2010, 2009, and 2008	Page F-7
Statements of Cash Flows for the years ended January 31, 2010, 2009, and 2008	Page F-8
Notes to Financial Statements	Pages F-9 - F-16

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(a) 3.Exhibits:

Item No.	Item	Filing Method
3	Agreement of Trust dated as of July 18, 1961	Incorporated by reference from Exhibit 3 to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1987.
3(a)	Amendment to the Agreement of Trust dated as of October 25, 1982	Incorporated by reference from Exhibit 3(a) to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1988.
4	Instruments defining the rights of Trust Certificate Holders	Incorporated by reference from Exhibit 4 to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1987.
10(a)	Peters Lease	Incorporated by reference from Exhibits 10(a) - 10(d) to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1987.
10(b)	Amendment of Assignment of Peters Lease	Incorporated by reference from Exhibits 10(a) - 10(d) to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1987.
10(c)	Cloquet Lease	Incorporated by reference from Exhibits 10(a) - 10(d) to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1987.
10(d)	Assignment of Cloquet Lease	Incorporated by reference from Exhibits 10(a) - 10(d) to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1987.
10(e)	Modification of Lease and Consent to Assignment dated as of October 22, 1982	Incorporated by reference from Exhibit 10(e) to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 1988.

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Item No.	Item	Filing Method
10(f)	Amendment of Assignment, Assumption and Further Assignment of Peters Lease	Incorporated by reference from Exhibit A to Mesabi Trust’s Report on Form 8-K dated August 17, 1989.
10(g)	Amendment of Assignment, Assumption and Further Assignments of Cloquet Lease	Incorporated by reference from Exhibit B to Mesabi Trust’s Report on Form 8-K dated August 17, 1989.
10(h)	Summary Description of Trustees’ Compensation	Filed herewith.
13	Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 2010	Filed herewith.
14	Trustees Code of Ethics	Incorporated by reference from Exhibit 13 to Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 2004.
31	Certification of Corporate Trustee of Mesabi Trust pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32	Certification of Corporate Trustee of Mesabi Trust pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  April 15, 2010

MESABI TRUST
By:	DEUTSCHE BANK TRUST COMPANY AMERICAS
	Corporate Trustee
	Principal Administrative Officer and duly authorized signatory:*
By:	Deutsche Bank National Trust Company
	By:	/s/ Kenneth R. Ring
	Kenneth R. Ring
	Vice President

* There are no principal executive officers or principal financial officers of the registrant.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Robert C. Berglund	April 15, 2010
Robert C. Berglund
Individual Trustee
/s/ James A. Ehrenberg	April 15, 2010
James A. Ehrenberg
Individual Trustee
/s/ Richard G. Lareau	April 15, 2010
Richard G. Lareau
Individual Trustee
/s/ Kenneth R. Ring	April 15, 2010
Kenneth R. Ring
Vice President
Deutsche Bank Trust Company Americas
/s/ Norman F. Sprague III	April 15, 2010
Norman F. Sprague III
Individual Trustee

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EX-10.(H)

Exhibit 10(h)

SUMMARY DESCRIPTION OF TRUSTEES’ COMPENSATION

The compensation paid to each Individual Trustee and the Corporate Trustee is set forth in the Amendment to the Agreement of Trust dated as of October 25, 1982 (the “Amendment”).  The Amendment is filed as Exhibit 3(a) to the Form 10-K.

Pursuant to the Amendment, each Individual Trustee receives at least $20,000 in annual compensation for services as Trustee.  Each year, annual Trustee compensation is adjusted up or down (but not below $20,000) in accordance with changes from the November 1981 level of 295.5 (the “1981 Escalation Level”) in the All Commodities Producer Price Index (with 1967 = 100 as a base).  The All Commodities Producer Price Index is published by the U.S. Department of Labor.  The adjustment is made at the end of each fiscal year and is calculated on the basis of the proportion between (a) the level of such index for the November preceding the end of such fiscal year, and (b) the 1981 Escalation Level.  Each of the Individual Trustees that served the Trust for the entire fiscal year received $35,999 in cash compensation for services to the Trust during the fiscal year ended January 31, 2010.  The Individual Trustees who did not serve for an entire fiscal year received a pro-rated portion of the $35,999.

Also pursuant to the Amendment, Deutsche Bank Trust Company Americas, as the Corporate Trustee, receives annual compensation in an amount equal to the greater of (i) $20,000, or such other amount determined in accordance with the adjustments described in the preceding paragraph, or (ii) one quarter of one percent (1/4 of 1%) of the Trust Moneys, exclusive of proceeds of sale of any part of the Trust Estate (as such terms are defined in the Agreement of Trust), received by the Trustees and distributed to Trust Unitholders.

Additionally, each year the Corporate Trustee receives $62,500 (or more, if unanimously approved by the Individual Trustees) to cover clerical and administrative services to Mesabi Trust other than services customarily performed by a registrar or transfer agent.  In fiscal 2010, the Trust paid the Corporate Trustee $62,500 to cover clerical and administrative services to Mesabi Trust and $9,974 for services as registrar and transfer agent.  The Corporate Trustee earned $98,063 in total compensation for the fiscal year ended January 31, 2010.

EX-13

Exhibit 13

ANNUAL REPORT
OF THE TRUSTEES OF
MESABI TRUST
For The Year Ended January 31, 2010

ADDRESS

Mesabi Trust

c/o Deutsche Bank Trust Company Americas

Trust & Securities Services — GDS

60 Wall Street, 27th Floor

New York, NY 10005

(615) 835-2749 (telephone)

www.mesabi-trust.com

REGISTRAR AND TRANSFER AGENT

Deutsche Bank Trust Company Americas

LEGAL COUNSEL

Oppenheimer Wolff & Donnelly LLP, General Counsel

REGISTRANT INFORMATION

Mesabi Trust maintains a website that provides access to its annual, quarterly, and other reports it files with the Securities and Exchange Commission.  Such reports can be accessed at www.mesabi-trust.com.  Mesabi Trust will provide, upon the written request of any Unitholder addressed to the Trustees at the above address and without charge to such Unitholder, (i) a paper copy of Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 2010 as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, and (ii) the Trustees Code of Ethics.

Special Note Regarding Forward-Looking Statements

Certain statements contained in this document are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  All such forward-looking statements, including those statements estimating calendar year 2010 production or shipments, are based on input from the lessee/operator (and its parent corporation) of the mine located on the lands owned and held in trust for the benefit of the holders of units of beneficial interest of Mesabi Trust.  These statements may be identified by the use of forward-looking words, such as “may,” “will,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast” and other similar words.  Such forward-looking statements are inherently subject to known and unknown risks and uncertainties.  Actual results and future developments could differ materially from the results or developments expressed in or implied by these forward-looking statements.  Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to, volatility of iron ore and steel prices, market supply and demand, regulation or government action, litigation and uncertainties about estimates of reserves, and those described under the caption “Risk Factors” in this annual report.  Mesabi Trust undertakes no obligation to make any revisions to the forward-looking statements contained in this filing or to update them to reflect circumstances occurring after the date of this filing.

OVERVIEW

Mesabi Trust (“Mesabi Trust” or the “Trust”), formed pursuant to an Agreement of Trust dated July 18, 1961 (the “Agreement of Trust”), is a trust organized under the laws of the State of New York.  Mesabi Trust holds all of the interests formerly owned by Mesabi Iron Company, including all right, title and interest in the Amendment of Assignment, Assumption and Further Assignment of Peters Lease (the “Amended Assignment of Peters Lease”), the Amendment of Assignment, Assumption and Further Assignment of Cloquet Lease (the “Amended Assignment of Cloquet Lease” and together with the Amended Assignment of Peters Lease, the “Amended Assignment Agreements”), the beneficial interest in the Mesabi Land Trust (as such term is defined below) and all other assets and property identified in the Agreement of Trust. The Amended Assignment of Peters Lease relates to an Indenture made as of April 30, 1915 among East Mesaba Iron Company (“East Mesaba”), Dunka River Iron Company (“Dunka River”) and Claude W. Peters (the “Peters Lease”) and the Amended Assignment of Cloquet Lease relates to an Indenture made May 1, 1916 between Cloquet Lumber Company and Claude W. Peters (the “Cloquet Lease”).

The Agreement of Trust specifically prohibits the Trustees from entering into or engaging in any business.  This prohibition seemingly applies even to business activities the Trustees may deem necessary or proper for the preservation and protection of the Trust Estate.  Accordingly, the Trustees’ activities in connection with the administration of Trust assets are limited to collecting income, paying expenses and liabilities, distributing net income to the holders of Certificates of Beneficial Interest in Mesabi Trust (“Unitholders”) after the payment of, or provision for, such expenses and liabilities, and protecting and conserving the assets held.  Because the Units of the Trust are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 and are listed on the New York Stock Exchange, the Trustees are also responsible for ensuring that the Trust maintains compliance with all applicable laws, rules and regulations.  Deutsche Bank Trust Company Americas, the Corporate Trustee, performs certain administrative functions for the Trust.

The Trustees do not intend to expand their responsibilities beyond those permitted or required by the Agreement of Trust, the Amendment to the Agreement of Trust dated October 25, 1982 (the “Amendment”), and those required under applicable law.  The Trust has no employees, but it engages independent consultants to assist the Trustees in, among other things, monitoring the amount and sales prices of iron ore products shipped from Silver Bay, Minnesota, based on information supplied to the Trustees by Northshore Mining Company (“Northshore”), the lessee/operator of the Mesabi Trust lands, and its parent company Cliffs Natural Resources Inc (“Cliffs”).  References to Northshore in this annual report, unless the context requires otherwise, are applicable to Cliffs as well.

The information regarding amounts and sales prices of shipped iron ore products is used to compute the royalties payable to the Trust by Northshore.  The Trustees request material information, from time to time, for use in the Trust’s periodic reports and as part of their evaluation of the Trust’s disclosure controls and procedures.  The Trustees rely on Northshore to provide accurate and timely information for use in the Trust’s current, periodic and annual reports filed with the Securities and Exchange Commission.

Pursuant to a ruling from the Internal Revenue Service, which ruling was based on the terms of the Agreement of Trust including the prohibition against entering into any business, the Trust is not taxable as a corporation for Federal income tax purposes.  Instead, the Unitholders are considered “owners” of the Trust and the Trust’s income is taxable directly to the Unitholders.  In accordance with the Agreement of Trust, the Trust will terminate twenty-one years after the death of the survivor of twenty-five persons named in an exhibit to the Agreement of Trust, the youngest of whom is believed to be forty-nine years old.

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RISK FACTORS

The results of operations and financial condition of the Trust are subject to various risks. Some of these risks are described below, and you should take such risks into account in evaluating the Trust or any investment decision involving the Trust.  This section does not describe all risks that may be applicable to the Trust and it is intended only as a summary of certain material risk factors.  More detailed information concerning the risk factors described below is contained in other sections of this Annual Report.

The Trustees have no control over the operations and activities of Cliffs or Northshore.

Except within the framework of the Amended Assignment Agreements, neither the Trust nor the Trustees have any control over the operations and activities of Cliffs or its wholly-owned subsidiary, Northshore.  Accordingly, the income of the Trust is highly dependent upon the activities and operations of Northshore, and the terms and conditions of the Amended Assignment Agreements.  Northshore together with Cliffs, without any influence from the Trust, control: (i) historical operating data, including iron ore production volumes, marketing of iron ore products, operating and capital expenditures as they relate to Northshore, environmental and other liabilities and the effects of regulatory changes; (ii) plans for Northshore’s future production, operations and capital expenditures; (iii) geological data relating to iron ore reserve estimates; (iv) shipments of iron ore products to customers of Cliffs; and (v) the provisions and pricing under the Cliffs Pellet Agreements.  Any substantial alteration of Cliffs’ business or the operations, production and shipments by Northshore could adversely affect the income of the Trust.

Price adjustment provisions in the North American supply agreements with Cliffs’ customers can cause significant positive and negative fluctuations in the royalties paid to the Trust.

In Cliffs’ Form 10-K filed February 18, 2010, Cliffs has reported that five customers together accounted for more than 80 percent of its North American iron ore sales revenues.  According to the Form 10-K filed by Cliffs, sales volume under these agreements is largely dependent on customer requirements, and in some cases, Cliffs is the sole supplier of iron ore pellets to its customers.  Contractual disputes with any of Cliffs’ significant customers could result in lower sales volume or lower sales prices, which could adversely affect the royalties received by the Trust.

Cliffs has also reported that its North American term supply agreements contain a number of price adjustment provisions, including adjustments based on general industrial inflation rates, the price of steel and the international price of iron ore pellets, among other factors, that allow Cliffs to adjust the prices under those agreements generally on an interim and annual basis.  Factors that could result in price adjustment include measures of general industrial inflation, steel prices and international pellet prices.  These market prices are dependent upon supply and demand relationships and a variety of other factors over which the Trust has no control.  Cliffs’ price adjustment provisions are weighted and some are subject to annual collars, which limit Cliffs’ ability to raise prices to match international levels and fully capitalize on strong demand for iron ore.  These price adjustments can be positive or negative, and can result in significant variations in royalties received by Mesabi Trust from quarter to quarter and year to year.  These variations could adversely affect the royalties received by the Trust and, in turn, the resulting cash available for distribution to Unitholders.

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Royalties received by the Trust, and distributions paid to Unitholders, in any particular quarter are not necessarily indicative of royalties or distributions that will be paid in any subsequent quarter or for a full year.

Royalties received by the Trust can fluctuate significantly from quarter to quarter and year to year based upon market prices for iron ore products, the level of orders for iron ore products from Cliffs’ customers, the consumption of inventory by Cliffs’ customers, and production decisions made by Northshore.  Moreover, because the royalties paid to the Trust in any particular quarter include payments made with respect to pellets shipped and sold at estimated prices that are subject to future interim and final multi-year adjustments in accordance with Cliff’s Customer Agreements, the recent downward trends in demand and market prices for iron and steel products could result in negative adjustments to royalties in future quarters, some of which may be significant.  These negative price adjustments could have a material adverse effect on the Trust’s royalty income, which in turn could result in lower quarterly distributions, and possibly reduce or even eliminate funds available for distribution in any quarter and in some quarters may completely offset royalties otherwise payable to the Trust.  Because of this, cash available for distribution to Unitholders in future quarters could be reduced, potentially materially, and in some cases, such reduction could result in no cash being available for distribution to Unitholders.  As a result, the royalties received by the Trust, and the distributions paid to Unitholders, in any particular quarter are not necessarily indicative of royalties that will be received, or distributions that will be paid, in any subsequent quarter or for a full year.  Based on the foregoing and the current uncertainty in the economic environment, the Trust cannot ensure that there will be adequate cash available to make a distribution to Unitholders in any particular quarter.

The Trust does not control the portion of Northshore’s shipments that will come from ore mined from Mesabi Trust lands.

The Trustees do not exert any influence over mining operational decisions and Northshore alone determines whether to mine from lands owned by the Trust or state-owned lands, based on its current production estimates and engineering plan.  Northshore’s mining operations (the Peter Mitchell Mine) include mineral-producing land owned by the Trust and the State of Minnesota.  Ore mined from state-owned lands by Northshore is processed, along with ore mined from Trust-owned lands, in Northshore-owned crushing, concentrating and pelletizing facilities and is separately accounted for on a periodic basis.  Northshore also has the ability to process and ship iron ore products from lands other than Mesabi Trust lands.  In certain circumstances, the Trust may be entitled to royalties on those other shipments, but not in all cases.  In general, the Trust will receive higher royalties (assuming all other factors are equal) if a higher percentage of shipments are from Mesabi Trust lands.  The percentages of shipments from Mesabi Trust lands were 93.6%, 90.2%, 88.2%, 90.9% and 90.1% in calendar years 2009, 2008, 2007, 2006 and 2005, respectively.  If Northshore decides to materially reduce the percentage of ore mined, or pellets shipped, from Mesabi Trust lands, the income of the Trust could be adversely affected.

The global economic climate and the recent disruption in the financial and credit markets have created uncertainty and a prolonged downturn in global economic conditions could adversely affect the royalties received by the Trust.

The volatile global economic climate and the recent global financial and credit crisis could have a material adverse effect on the royalties received by the Trust.  Financial markets in the United States and elsewhere have been experiencing extreme disruption, including, among other things, extreme volatility in security prices, diminished liquidity and credit availability, ratings downgrades of certain investments and declining values of others. The global economy is struggling to exit a recession.  In 2009 Cliffs announced

4

production curtailments, workforce reductions and an extended idling of production at Northshore.  Deterioration or worsening of economic conditions, prolonged global, national or regional economic instability or other events could produce major changes in demand patterns and may have a material adverse effect on sales prices of iron ore products shipped by Northshore which would adversely affect the royalties received by the Trust.  Moreover, such conditions could impact the international benchmark pellet price, hot band steel prices and various Producer Price Indexes all of which affect the royalties payable to the Trust.  The Trustees are not able to predict the impact the volatile global economic climate and the recent global financial and credit crisis will have on future royalties payable to the Trust.

The world price of iron ore and steel are strongly influenced by international demand and global market conditions which are uncertain.  Domestic demand for iron ore and steel products, which is influenced by international markets, is also uncertain.  In recent years, many major iron ore suppliers increased their capacity to meet the increased demand for iron ore and steel products, particularly from China.  Despite some signs that the global economic environment is improving, there is a high degree of uncertainty concerning the overall demand for steel and iron ore products. Reduced demand for iron ore will likely result in decreased sales of products to Cliffs’ customers and decreasing prices, all of which would adversely affect royalties received by the Trust in 2010.  Since the Trust is not party to any specific customer contracts that Cliffs has with its customers and because these macroeconomic forces are difficult to forecast, the Trustees are not able to predict the extent to which reduced demand and lower prices for iron ore products will adversely affect royalties payable to the Trust.

The royalties payable to the Trust could be adversely affected by the failure of the Trust’s independent experts to competently perform.

As permitted by the terms of the Agreement of Trust and the Amendment, the Trustees are entitled to, and in fact do rely, upon certain experts to assist the Trustees in carrying out and fulfilling their obligations as Trustees.  Independent consultants perform services, render advice and produce reports with respect to monthly production and shipments, which include figures on crude ore production, iron ore pellet production, iron ore pellet shipments, and discussions concerning the condition and accuracy of the scales used to weigh iron ore pellets produced at Northshore’s facilities.  The Trustees have also retained an accounting firm to provide non-audit services, including preparing financial statements, reviewing financial data related to shipping and sales reports provided by Northshore and reviewing the schedule of leasehold and fee royalties payable to the Trust.  The Trustees believe that the independent experts are qualified to perform the services and functions assigned to them.   Nevertheless, any negligence or the failure of any such independent expert to competently perform could adversely affect the royalties received by the Trust.

The Trust relies on Cliffs’ estimates of recoverable reserves and if those estimates are inaccurate the total potential future royalty stream to the Trust and distributions payable to each Unitholder may be adversely affected.

The Trustees do not participate in preparing the ore reserve estimate reported by Cliffs.  According to Cliffs’ Form 10-K, Cliffs regularly evaluates its iron ore reserves based on revenues and costs and updates them as required in accordance with Securities Act Industry Guide 7, promulgated by the U.S. Securities and Exchange Commission.  In 2010, the Trustees engaged an independent firm of geological experts to evaluate the process Cliffs uses to estimate the mineral reserves at the Peter Mitchell Mine.  Still, there are numerous uncertainties inherent in estimating quantities of reserves of mineral producing lands and such estimates necessarily depend upon a number of variable factors and assumptions, such as production capacity, effects of regulations by governmental agencies, future prices for iron ore, future industry conditions and operating costs,

5

severance and excise taxes, development costs and costs of extraction and reclamation costs, all of which may in fact vary considerably from actual results.  For these reasons, estimates of the economically recoverable quantities of mineralized deposits attributable to the lands owned by Mesabi Trust and the classifications of such reserves based on the risk of recovery prepared by different engineers or by the same engineers at different times may vary substantially as the criteria change.  Cliffs’ estimate of the ore reserves could be negatively affected by future industry conditions, geological conditions and ongoing mine planning at the Peter Mitchell Mine.  Actual reserves and therefore actual royalties will likely vary from estimates, and if such variances are negative and material, the expected royalties of the Trust could be adversely affected and the value of the Trust’s Units could decline.

The operations at Northshore are largely dependent on a single-source energy supplier.

The operations at Northshore are largely dependent on Silver Bay Power Company, a 115 megawatt power plant, for its electrical supply.  Silver Bay Power Company, which is wholly owned by Northshore, has an interconnection agreement with Minnesota Power, Inc. for backup power, and sells 40 megawatts of excess power capacity to Xcel Energy under a contract that extends to 2011.  A significant interruption in service from Silver Bay Power Company due to vandalism, terrorism, weather conditions, natural disasters, or any other cause could cause a decrease in production capacity or require a temporary shutdown of Northshore’s operations.  In addition, one natural gas pipeline serves all of Cliffs’ Minnesota mines, and a pipeline failure could idle or substantially impair the operations at Northshore.  Any substantial interruption of, or material reduction in, Northshore’s operations could adversely affect the royalties received by the Trust.

The mining operations of Northshore are subject to extensive governmental regulation and Northshore is subject to risks related to its compliance with federal and state environmental regulations.

Northshore, as the owner/operator of the Peter Mitchell Mine, is subject to various federal, state and local laws and regulations on matters such as employee health and safety, air quality, water pollution, plant and wildlife protection, reclamation and restoration of mining properties, the discharge of materials into the environment, and the effects that mining has on groundwater quality and availability.  Northshore is required to maintain permits and approvals issued by federal and state regulatory agencies and its mining operations are subject to inspection and regulation by the Mine Safety and Health Administration of the United States Department of Labor (“MSHA”) under the provisions of the Mine Safety and Health Act of 1977.  The Occupational Safety and Health Administration (“OSHA”) also has jurisdiction over safety and health standards not covered by MSHA and the Minnesota Pollution Control Agency (“MPCA”) regulates various aspects of Northshore’s operations.  Northshore is involved in litigation with the MPCA over certain air quality permitting matters but because the Trust has no control over Northshore’s operations, the potential impact of these proceedings cannot be determined.  Moreover, Northshore is solely responsible for its compliance with any laws, regulations or permits applicable to Northshore’s operations and therefore the Trust cannot determine whether Northshore has been or will continue to be in compliance with such laws and regulations.  If Northshore fails to comply with these laws, regulations or permits, it could be subject to fines or other sanctions, any of which could have an adverse effect on its operations and its ability to ship iron ore products from Silver Bay, Minnesota, which could, in turn, have an adverse effect on the royalties paid to the Trust.

Equipment failures and other unexpected events at Northshore may lead to production curtailments or shutdowns.

Interruptions in production capabilities at the mine operated by Northshore may have an adverse impact on the royalties payable to the Trust.  In addition to planned production shutdowns and curtailments, equipment

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failures, the Northshore facilities are also subject to the risk of loss due to unanticipated events such as fires, explosions or extreme weather conditions. The manufacturing processes that take place in Northshore’s mining operations, as well as in its crushing, concentrating and pelletizing facilities, depend on critical pieces of equipment, such as drilling and blasting equipment, crushers, grinding mills, pebble mills, thickeners, separators, filters, mixers, furnaces, kilns and rolling equipment, as well as electrical equipment, such as transformers. It is possible that this equipment may, on occasion, be out of service because of unanticipated failures or unforeseeable acts of vandalism or terrorism.  In addition, because the Northshore mine and processing facilities have been in operation for several decades, some of the equipment is aged.  Because the Trustees have no control over the operations or maintenance of the equipment at Northshore, a shutdown or reduction in capacity may come with little or no advance warning.  The remediation of any interruption in production capability at Northshore could require Cliffs to make large capital expenditures which may take place over an extended period of time.  A shutdown or reduction in operations at Northshore could adversely affect the royalties paid to the Trust.

If steelmakers use methods other than blast furnace production to produce steel, shut down or reduce production using blast furnaces, the demand for iron ore pellets may decrease.

Demand for iron ore pellets is determined by the operating rates for the blast furnaces of steel companies. However, not all finished steel is produced by blast furnaces; finished steel also may be produced by other methods that do not require iron ore pellets. For example, steel “mini-mills,” which are steel recyclers, generally produce steel by using scrap steel, not iron ore pellets, in their electric furnaces.  North American steel producers also can produce steel using imported iron ore or semi-finished steel products, which eliminates the need for domestic iron ore. Environmental restrictions on the use of blast furnaces also may reduce the use of their blast furnaces in steel production.  Because the maintenance of blast furnaces can require substantial capital expenditures, manufacturers may choose not to maintain their blast furnaces, and some of them may not have the resources necessary to adequately maintain their blast furnaces. If steel manufacturers significantly alter the methods they use to produce steel or otherwise substantially reduce their use of iron ore pellets, demand for iron ore pellets will decrease, which could adversely affect the royalties paid to the Trust.

Risk factors affecting Cliffs’ North American Iron Ore Business and Operations at Northshore could have a material adverse effect on the royalties of the Trust.

Because substantially all of the Trust’s revenue is derived from iron ore products shipped by Northshore from Silver Bay, Northshore’s iron ore pellet processing and shipping activities directly impact the Trust’s revenues in each quarter and each year.  A number of factors affect Cliffs’ operations, including Northshore’s production and shipment volume.  These factors which are described in Cliffs’ Form 10-K filed February 18, 2010 include, among others, the global economic climate and financial market conditions, economic conditions in the iron ore industry, extensive governmental regulation relating to environmental matters and the costs and risks related thereto, availability of substitute materials, pricing by domestic and international competitors, long-term customer contracts or arrangements by Northshore or its competitors, price adjustment provisions in Cliffs’ North American term supply agreements (which take into account various price indexes), availability of ore boats, production at Northshore’s mining operations, natural disasters, shipping conditions in the Great Lakes and production at Northshore’s pelletizing/processing facility.  Specifically, if any portion of Northshore’s pelletizing lines becomes idle for any reason, production, shipments and, consequently, the royalties paid to the Trust could be adversely affected.

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The Trustees are not subject to annual election and, as a result, the ability of the holders of Certificates of Beneficial Interest to influence the policies of the Trust may be limited.

Directors of a corporation are generally subject to election at each annual meeting of stockholders or, in the case of staggered boards, at regular intervals. Under the Agreement of Trust, however, the Trust is not required to hold annual meetings of holders of Certificates of Beneficial Interest to elect Trustees and Trustees generally hold office until their death, resignation or disqualification. As a result, the ability of holders of Certificates of Beneficial Interest to effect changes in the Board of Trustees, and the policies of the Trust, is significantly more limited than that of the stockholders of a corporation.

OVERVIEW OF TRUST’S ROYALTY STRUCTURE

Leasehold royalty income constitutes the principal source of the Trust’s revenue.  Royalty rates are determined in accordance with the terms of Mesabi Trust’s leases and assignments of leases.  Three types of royalties, as well as royalty bonuses, comprise the Trust’s royalty income:

·Base overriding royalties.  Base overriding royalties have historically constituted the majority of Mesabi Trust’s royalty income.  Base overriding royalties are determined by both the volume and selling price of iron ore products shipped.  Northshore is obligated to pay Mesabi Trust base overriding royalties in varying amounts, based on the volume of iron ore products shipped.  Base overriding royalties are calculated as a percentage of the gross proceeds of iron ore products produced at Mesabi Trust lands (and to a limited extent other lands) and shipped from Silver Bay, Minnesota.  The percentage ranges from 2-1/2% of the gross proceeds for the first one million tons of iron ore products so shipped annually to 6% of the gross proceeds for all iron ore products in excess of 4 million tons so shipped annually.  Base overriding royalties are subject to interim and final price adjustments under the Cliffs Pellet Agreements and, as described elsewhere in this report, such adjustments may be positive or negative.

·Royalty bonuses.  The Trust earns royalty bonuses when iron ore products shipped from Silver Bay are sold at prices above a threshold price per ton.  The royalty bonus is based on a percentage of the gross proceeds of product shipped from Silver Bay and sold at prices above a threshold price.  The threshold price is adjusted (but not below $30.00 per ton) on an annual basis for inflation and deflation (the “Adjusted Threshold Price”).  The Adjusted Threshold Price was $47.43 per ton for calendar year 2008, $48.48 per ton for calendar year 2009 and will be $48.81 per ton for calendar year 2010.  The royalty bonus percentage ranges from 1/2 of 1% of the gross proceeds (on all tonnage shipped for sale at prices between the Adjusted Threshold Price and $2.00 above the Adjusted Threshold Price) to 3% of the gross proceeds (on all tonnage shipped for sale at prices $10.00 or more above the Adjusted Threshold Price).  Royalty bonuses are subject to price adjustments under the Cliffs Pellet Agreements (described elsewhere in this Annual Report); such adjustments may be positive or negative.  See the section entitled “Comparison of Financial Results for Fiscal Years ended January 31, 2010 and January 31, 2009” on page 12 of this Annual Report for more information.

·Fee royalties.  Fee royalties have historically constituted a smaller component of the Trust’s total royalty income.  Fee royalties are payable to the Mesabi Land Trust, a Minnesota land trust, which holds a 20% interest as fee owner in the Amended Assignment of Peters Lease.  Mesabi Trust holds the entire beneficial interest in the Mesabi Land Trust for which U.S. Bank N.A. acts as the corporate trustee.  Mesabi Trust receives the net income of the Mesabi Land Trust, which is

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generated from royalties on the amount of crude ore mined after the payment of expenses to U.S. Bank N.A. for its services as corporate trustee.  Crude ore is the source of iron oxides used to make iron ore pellets and other products.  The fee royalty on crude ore is based on an agreed price per ton, subject to certain indexing.

·Minimum advance royalties.  Northshore’s obligation to pay base overriding royalties and royalty bonuses with respect to the sale of iron ore products generally accrues upon the shipment of those products from Silver Bay.  However, regardless of whether any shipment has occurred, Northshore is obligated to pay to Mesabi Trust a minimum advance royalty.  Each year, the amount of the minimum advance royalty is adjusted (but not below $500,000 per annum) for inflation and deflation.  The minimum advance royalty was $790,721 for calendar year 2008, $808,177 for calendar year 2009 and is $813,729 for calendar year 2010.  Until overriding royalties (and royalty bonuses, if any) for a particular year equal or exceed the minimum advance royalty for the year, Northshore must make quarterly payments of up to 25% of the minimum advance royalty for the year.  Because minimum advance royalties are essentially prepayments of base overriding royalties and royalty bonuses earned each year, any minimum advance royalties paid in a fiscal quarter are recouped by credits against base overriding royalties and royalty bonuses earned in later fiscal quarters during the year.

The current royalty rate schedule became effective on August 17, 1989 pursuant to the Amended Assignment Agreements, which the Trust entered into with Cyprus Northshore Mining Corporation (“Cyprus NMC”).  Pursuant to the Amended Assignment Agreements, overriding royalties are determined by both the volume and selling price of iron ore products shipped.  In 1994, Cyprus NMC was sold by its parent corporation to Cliffs and renamed Northshore Mining Company.  Cliffs now operates Northshore as a wholly owned subsidiary.

Under the relevant agreements, Northshore has the right to mine and ship iron ore products from lands other than Mesabi Trust lands.  Northshore alone determines whether to conduct mining operations on Trust and/or such other lands based on its current mining and engineering plan.  The Trustees do not exert any influence over mining operational decisions.  To encourage the use of iron ore products from Mesabi Trust lands, Mesabi Trust receives royalties on stated percentages of iron ore shipped from Silver Bay, whether or not the iron ore products are from Mesabi Trust lands.  Mesabi Trust receives royalties at the greater of (i) the aggregate quantity of iron ore products shipped that were mined from Mesabi Trust lands, and (ii) a portion of the aggregate quantity of all iron ore products shipped from Silver Bay that were mined from any lands, such portion being 90% of the first four million tons shipped from Silver Bay during such year, 85% of the next two million tons shipped during such year, and 25% of all tonnage shipped during such year in excess of six million tons.

Royalty income constitutes the principal source of the Trust’s revenue, which comprised 99.9%, 99.9% and 99.7% of the total revenue of the Trust in fiscal years ended 2010, 2009 and 2008, respectively.  A more complete discussion of royalty rates and the manner in which they are determined is set forth under the headings “Leasehold Royalties” and “Land Trust and Fee Royalties,” beginning on pages 25 and 28, respectively, of this Annual Report.

During the course of its fiscal year some portion of royalties expected to be paid to Mesabi Trust is based in part on estimated prices for iron ore products sold under term contracts between Northshore, Cliffs and certain of their customers (the “Cliffs Pellet Agreements”).  The Cliffs Pellet Agreements use estimated prices which are subject to interim and final pricing adjustments, which can be positive or negative, and which

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adjustments are dependent in part on multiple price and inflation index factors that are not known until after the end of a contract year. Even though Mesabi Trust is not a party to the Cliffs Pellet Agreements, these adjustments can result in significant variations in royalties received by Mesabi Trust (and in turn the resulting amount available for distribution to Unitholders by the Trust) from quarter to quarter and on a comparative historical basis, and these variations, which can be positive or negative, cannot be predicted by Mesabi Trust.  In either case, these price adjustments will impact future royalties received by the Trust that become available for distribution to Unitholders.

As described elsewhere in this Annual Report, the royalty percentage paid to the Trust increases as the aggregate tonnage of iron ore products shipped, attributable to the Trust, in any calendar year increases past each of the first four one-million ton volume thresholds.  Assuming a consistent sales price per ton throughout a calendar year, shipments of iron ore product attributable to the Trust later in the year generate a higher royalty to the Trust, as total shipments for the year exceed increasing levels of royalty percentages and pass each of the first four one-million ton volume thresholds.

As also described elsewhere in this Annual Report, the Trust receives a bonus royalty equal to a percentage of the gross proceeds of iron ore products (mined from Mesabi Trust lands) shipped from Silver Bay and sold at prices above the Adjusted Threshold Price.  Although Cliffs was able to sell all of the iron ore products at prices higher than the Adjusted Threshold Price during calendar 2009, the Trustees are unable to project whether Northshore will continue to be able to sell pellets at prices above the applicable Adjusted Threshold Price, entitling the Trust to any future bonus royalty payments.

SELECTED FINANCIAL DATA

	2010		2009		2008		2007		2006
Years ended on January 31
Royalty and interest income	$	13,241,669	$	35,469,105	$	18,866,511	$	17,902,988	$	21,579,833
Trust expenses	818,007		799,320		634,151		756,322		844,956
Net income(1)	$	12,423,662	$	34,669,785	$	18,232,360	$	17,146,666	$	20,734,877
Net income per Unit(2)	$	0.95	$	2.64	$	1.39	$	1.31	$	1.58
Distributions declared Per unit(2)(3)	$	1.15	$	2.48	$	1.35	$	1.60	$	1.53
Years ended on January 31
Total Assets	$	11,199,575	$	5,346,932	$	8,488,509	$	5,414,552	$	11,328,959

(1)The Trust, as a grantor trust, is exempt from federal and state income taxes.

(2)Based on 13,120,010 Units of Beneficial Interest outstanding during all years.

(3)During the Trust’s fiscal year ended January 31, 2010, the Trustees distributed $0.71 per Unit (including $0.11 per Unit declared in fiscal 2009 but distributed in fiscal 2010 (February 2009)) and in fiscal 2010 declared a distribution of $0.55 per Unit payable in February 2010, the next fiscal year.  During the Trust’s fiscal year ended January 31, 2009, the Trustees distributed $2.885 per Unit (including $0.515 per Unit declared in fiscal 2008 but distributed in fiscal 2009 (February 2008)) and in fiscal 2009 declared a distribution of $0.11 per Unit payable in February 2009, the next fiscal year.  During the Trust’s fiscal year ended January 31, 2008, the Trustees distributed $1.15 per Unit (including $0.315 per Unit declared in fiscal 2007 but distributed in fiscal 2008 (February 2007)) and in fiscal 2008 declared a distribution of $0.515 per Unit payable in February 2008, the next fiscal year.  During the Trust’s fiscal year ended January 31, 2007, the Trustees distributed $1.755 per Unit (including $0.47 per Unit declared in fiscal 2006 but distributed in fiscal 2007 (February 2006)) and in fiscal 2007 declared a distribution of $0.315 per Unit payable in February 2007, the next fiscal year.  During the Trust’s fiscal year ended January 31, 2006, the Trustees distributed $1.355 per Unit (including $0.295 per Unit declared in fiscal 2005 but distributed in fiscal 2006 (February 2005)) and in fiscal 2006 declared a distribution of $0.47 per Unit payable in February 2006, the next fiscal year.

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TRUSTEES’ DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Comparison of Iron Ore Pellet Production and Shipments for the Fiscal Years Ended January 31, 2010, January 31, 2009 and January 31, 2008

During fiscal 2010, production attributed to Trust lands totaled approximately 3.14 million tons, a decrease of 34.2% and 33.4% as compared to production for fiscal years 2009 and 2008, respectively.  Shipments to Northshore’s customers attributed to the Trust totaled approximately 3.24 million tons during fiscal 2010.  This represents a decrease of 37% and 23.7%, respectively, as compared to shipments for fiscal years 2009 and 2008.  The table below, which is based on information provided to the Trust by Northshore, shows the total production and total shipments of iron ore pellets from Mesabi Trust lands during the prior three fiscal years.

Fiscal Year Ended	Pellets Produced from Trust Lands (Tons)	Pellets Shipped from Trust Lands (Tons)
January 31, 2010	3,141,395	3,241,237
January 31, 2009	4,774,939	5,146,687
January 31, 2008	4,719,005	4,248,785

Production of iron ore pellets was slightly lower for the fourth quarter of fiscal 2010 as compared to the fourth quarter of fiscal 2009, decreasing 2.8%.  However, shipments of iron ore pellets by Northshore during the fourth quarter of fiscal 2010 increased 2,504%.  The significant increase in shipments in the fourth quarter of fiscal 2010 is due to the return of more robust customer demand in the fourth quarter of fiscal 2010, as compared to the fourth quarter of fiscal 2009, combined with a dramatic decline in shipments in the fourth fiscal quarter of 2009.  Notwithstanding the significant increase in shipments in the fourth quarter, as shown in the table below, shipments attributable to the Trust decreased 37% during fiscal 2010, as compared to fiscal 2009.

Three Months Ended	Pellets Produced fromTrust Lands(Tons)	Pellets Shipped fromTrust Lands(Tons)
January 31, 2010	1,059,310	1,417,425
January 31, 2009	1,089,757	54,429

The table below shows the change in the percentages of production and shipments from lands owned or leased by Mesabi Trust versus the percentages of production and shipments from lands owned by the State of Minnesota for the most recent three fiscal years.

Fiscal Year Ended	Percentage of Pellets Produced From Trust Lands		Percentage of Pellets Produced From State Lands		Percentage of Pellets Shipped From Trust Lands		Percentage of Pellets Shipped From State Lands
January 31, 2010	95.9	%	4.1	%	93.0	%	7.0	%
January 31, 2009	87.8	%	12.2	%	90.2	%	9.8	%
January 31, 2008	91.7	%	8.3	%	88.2	%	11.8	%

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As is the case with the volume of shipments from Silver Bay, Minnesota, the Trustees cannot predict what percentage of production or shipments will be attributable to Mesabi Trust lands in fiscal 2011.  However, pursuant to the Amendment, Mesabi Trust will be credited with at least 90% of the first four million tons of iron ore pellets shipped from Silver Bay, Minnesota in each calendar year, at least 85% of the next two million tons of pellets shipped from Silver Bay, Minnesota in each calendar year, and at least 25% of all tons of pellets shipped from Silver Bay, Minnesota in each calendar year in excess of six million tons.

Comparison of Financial Results for Fiscal Years ended January 31, 2010 and January 31, 2009

Royalty Income

As shown in the table below, in fiscal 2010 there was a 64.9% decrease in base royalties and a 60% decrease in bonus royalties, each as compared to fiscal 2009.  Accordingly, the Trust’s total royalty income decreased 62.7% in fiscal 2010 as compared to fiscal 2009.  The significant decrease in royalties received by the Trust is primarily the result of lower average selling price for each ton of iron ore shipped from Silver Bay, Minnesota in fiscal 2010, as compared to fiscal 2009, and a decrease in shipments in fiscal 2010 as compared to fiscal 2009.

	Fiscal Years Ended on January 31,				% increase
	2010		2009		(decrease)
Base overriding royalties	$	7,522,767	$	21,442,218	(64.9	)%
Bonus royalties	5,401,563		13,454,580		(60.0	)%
Minimum advance royalty paid (recouped)	—		—
Fee royalties	305,407		525,851		(41.9	)%
Total royalty income	$	13,229,737	$	35,422,649	(62.7	)%

The royalty amounts set forth in the table above include pricing adjustments made to royalty payments previously received by the Trust based on shipments from Silver Bay, Minnesota during prior calendar years.  Depending on the year, the volume of shipments, and the interim and final price paid to the Trust for shipments from Silver Bay, Minnesota, the price adjustments provisions of the Cliffs Pellet Agreements may increase or decrease, in some cases materially, the distributions payable to Unitholders.  Because the Trust is not a party to the Cliffs Pellet Agreements, the Trustees are unable to determine the extent of any pricing adjustments that may occur under the Cliffs Pellet Agreements or whether the adjustments will increase or decrease royalties received by the Trust. With the current volatility in demand and prices for iron ore and steel products, the price adjustment provisions in the Cliffs Pellet Agreements may have a significant impact on future royalties received by the Trust and the adjustments, depending on whether they are positive or negative, may increase or decrease the distributions payable to Unitholders.

Gross Income, Expenses, Net Income and Distributions

As set forth in the table below, net income for fiscal 2010 decreased 64.2% as compared to fiscal 2009 primarily due to a decrease in gross income related to the decrease in shipments and selling price of iron ore pellets.  Total expenses for fiscal 2010 increased 2.3% as compared to fiscal 2009 due to a slight increase in legal and accounting fees and other fees related to the administration of the Trust.  A more detailed summary of the Trust’s expenses, including legal and accounting expenses, is set forth under the heading “Trust Expenses” on page 28 of this Annual Report.

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	Fiscal Years Ended on January 31,				% increase
	2010		2009		(decrease)
Gross Income	$	13,241,669	$	35,469,105	(62.8	)%
Expenses	818,007		799,320		2.3	%
Net Income	$	12,423,662	$	34,669,785	(64.2	)%

As discussed in the paragraph above, the Trust’s total royalty income and net income for fiscal 2010 decreased 62.8% and 64.2% respectively, due to decreased shipping activity during fiscal 2010 and the lower prices paid to the Trust for shipments, both as compared to fiscal year 2009.  The decrease in the Trust’s net income, combined with an increase in the Trust’s cash reserve for unexpected losses, resulted in a 75.4% decrease in total distributions paid to Unitholders in fiscal 2010, as compared to fiscal year 2009.

	Fiscal Years Ended on January 31,				% increase
	2010		2009		(decrease)
Total Cash Distributions	$	9,315,207	$	37,851,229	(75.4	)%
Distributions Paid per Unit	$	0.71	$	2.885	(75.4	)%

Unallocated Reserve

As set forth below, the Unallocated Reserve, decreased $2,664,349 or 70.3% to $1,127,832, as of January 31, 2010, as compared to $3,792,181 as of January 31, 2009.  As of January 31, 2010, the Unallocated Reserve consisted of $3,023,894 in unallocated cash and U.S. Government securities, $873,938 of accrued income receivable, primarily representing royalties not yet received by the Trust but anticipated to be received in fiscal 2011, less deferred royalty revenue of ($2,770,000).  Comparatively, as of January 31, 2009, the Unallocated Reserve consisted of $1,070,203 in unallocated cash and U.S. Government securities and, $2,721,978 of accrued income receivable.

	Fiscal Years Ended on January 31,					% increase
	2010			2009		(decrease)
Accrued Income Receivable	$	873,938		$	2,721,978	(67.9	)%
Deferred Royalty Revenue	(2,770,000		)	—		100	%
Cash Reserve	3,023,894			1,070,203		182.6	%
Unallocated Reserve	$	1,127,832		$	3,792,181	(70.3	)%

The 70.3% decrease in the Unallocated Reserve is primarily attributable to the Trust’s deferred royalty revenue.  In April 2009, the Trust received a payment from Northshore but did not recognize the entire payment as revenue in accordance with the Trust’s revenue recognition policy.  Because of declines in the estimated pricing of iron ore pellets subsequent to January 31, 2009, the royalty payment received by the Trust in April 2009 included funds received by the Trust but for which the Trust has not recognized as revenue in accordance with the Trust’s revenue recognition policy which is described in Note 2 to the Trust’s consolidated financial statements included in this Annual Report.  Depending on future adjustments to iron ore pellet pricing, if any, the deferred royalty revenue could cause a cumulative negative price adjustment related to shipments of pellets during prior periods, which could partially or even completely offset future royalty income to be received by the Trust.

The decrease in the Unallocated Reserve as of January 31, 2010, is also attributable to a $1,848,040, or 67.9%, decrease in the accrued income receivable portion of the Unallocated Reserve which decreased to $873,938 as of January 31, 2010 from $2,721,978 as of January 31, 2009.  The decrease in accrued income receivable is the result of fewer positive pricing adjustments for the fiscal year ended January 31, 2010, as

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compared to the fiscal year ended January 31, 2009.  In accordance with the Cliffs Pellet Agreements, there were positive and negative price adjustments that are determined and finalized by Cliffs each calendar year with respect to shipments by the Trust in earlier calendar years.  However, these negative pricing adjustments were partially offset due to higher shipments by the Trust during January 2010 and an accrual for positive price adjustments with respect to tonnage shipped by Northshore as of December 31, 2009, that is estimated using current pricing information provided by Northshore.

The Trust’s cash reserve for unexpected losses increased 182.6% to $3,023,894 as of January 31, 2010 from $1,070,203 as of January 31, 2009.  The increase in the Trust’s cash reserve is due to the Trustees’ decision to add to the Trust’s cash reserve because of the Trust’s deferred royalty revenue for fiscal 2010, the use of estimates regarding pricing that is potentially subject to negative adjustment in future periods, and as a result of the continuing uncertainty in the economic environment that affects the royalties paid to the Trust by Northshore under Cliffs Pellet Agreements.  It is possible that future negative price adjustments could offset, or even eliminate, royalties or royalty income that would otherwise be payable to the Trust in any particular quarter, or at year end, thereby potentially reducing cash available for distribution to the Trust’s Unitholders in future quarters.  See discussion under the heading “Risk Factors” beginning on page 3 of this Annual Report.

The Trustees have determined that the unallocated cash and U.S. Government securities portion of the Unallocated Reserve should be maintained at a prudent level, usually within the range of $500,000 to $1,000,000, to meet present or future liabilities of the Trust.  As a result of the deferred royalty revenue recorded by the Trust as a liability, the Trustees have determined that it is prudent to increase the unallocated cash and U.S. Government securities portion of the Unallocated Reserve above the range of $500,000 to $1,000,000.  See the discussion under the heading “Unallocated Reserve” on page 29 of this Annual Report for more information on the Trust’s policy for maintaining a cash reserve for unexpected losses.  The Trustees will continue to monitor the economic circumstances of the Trust to strike a responsible balance between distributions to Unitholders and the need to maintain reserves at a prudent level, given the unpredictable nature of the iron ore industry, the Trust’s dependence on the actions of the lessee/operator, and the fact that the Trust essentially has no other liquid assets.

Comparison of Financial Results for Fiscal Years ended January 31, 2009 and January 31, 2008

Royalty Income

The increase in the volume of shipments and the higher average selling price for each ton of iron ore both contributed to the 101.8% increase in base royalties and the 74.3% increase in bonus royalties for fiscal 2009, both as compared to fiscal 2008.  Accordingly, total royalty income increased 88.3% in fiscal 2009 as compared to fiscal 2008.  The significant increase in royalties received by the Trust is primarily the result of higher average selling price for each ton of iron ore shipped from Silver Bay, Minnesota in fiscal 2009, as compared to fiscal 2008, and an increase in shipments in fiscal 2009 as compared to fiscal 2008.

	Fiscal Years Ended on January 31,				% increase
	2009		2008		(decrease)
Base overriding royalties	$	21,442,218	$	10,624,935	101.8	%
Bonus royalties	13,454,580		7,717,513		74.3	%
Minimum advance royalty paid (recouped)	—		—
Fee royalties	525,851		474,094		10.9	%
Total royalty income	$	35,422,649	$	18,816,542	88.3	%

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Gross Income, Expenses, Net Income and Cash Distributions

Net income for fiscal 2009 increased 90.2% as compared to fiscal 2008 primarily due to an increase in gross income related to the increase in shipments and selling price of iron ore pellets.  In addition, total expenses for fiscal 2009 increased as compared to fiscal 2008 as a result of increases in legal and accounting fees and other fees related to the administration of the Trust.  A summary of the Trust’s expenses is set forth under the heading “Trust Expenses” on page 28 of this Annual Report.

	Fiscal Years Ended on January 31,				% increase
	2009		2008		(decrease)
Gross Income	$	35,469,105	$	18,866,511	88.0	%
Expenses	799,320		634,151		26.1	%
Net Income	$	34,669,785	$	18,232,360	90.2	%

The Trust’s gross income and net income for fiscal 2009 increased 88.0% and 90.2% respectively, resulting in an increase in total distributions paid to Unitholders in fiscal 2009 of 150.9% as compared to fiscal 2008.  The significant increase in total cash distributions and distributions per unit in fiscal 2009, as compared to fiscal 2008, is primarily due to increased shipping activity in the fourth calendar quarter of 2008 and increased shipping activity at significantly higher prices with respect to shipments during fiscal 2009.

	Fiscal Years Ended on January 31,				% increase
	2009		2008		(decrease)
Total Cash Distributions	$	37,851,229	$	15,088,012	150.9	%
Distributions Paid per Unit	$	2.885	$	1.150	150.9	%

Unallocated Reserve

The Unallocated Reserve, which is comprised of accrued income receivable and cash reserve for unexpected losses, increased $2,132,160 or 128.4% to $3,792,181, as of January 31, 2009, as compared to $1,660,021 as of January 31, 2008.  The increase in the Unallocated Reserve as of January 31, 2009, is primarily due to a $1,762,053, or 183.6%, increase in the accrued income receivable portion of the Unallocated Reserve which increased to $2,721,978 as of January 31, 2009 from $959,925 as of January 31, 2008.  The significant increase in accrued income receivable is due to positive pricing adjustments that were determined and finalized under the Cliffs Pellet Agreements with respect to shipments by the Trust in calendar 2007 and calendar 2008.

	Fiscal Years Ended on January 31,				% increase
	2009		2008		(decrease)
Accrued Income Receivable	$	2,721,978	$	959,925	183.6	%
Cash Reserve	$	1,070,203	$	700,096	52.9	%
Unallocated Reserve	$	3,792,181	$	1,660,021	128.4	%

Liquidity and Capital Resources

The Trust’s activities are limited to the collection of royalty income, payment of expenses and liabilities, distribution of net income to the Trust’s Unitholders and protection and conservation of Trust assets.  Distributions of net income to Unitholders are based on the amount of total royalty income after providing for the payment of expenses and, to the extent deemed prudent by the Trustees, reserving funds in the Unallocated

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Reserve to provide for potential fixed or contingent future liabilities.  See the discussion of the Trustees’ management of liquidity set forth under the heading “Unallocated Reserve” beginning on page 29 of this Annual Report.

The Trust’s primary short-term liquidity needs are to fund the distributions to Unitholders following the Trust’s receipt of the royalty payments from Northshore each calendar quarter.  After the Trust receives the royalty payments, the Trust’s current assets are invested in U.S. government securities, either through direct purchases of U.S. government securities or through investments in a money market fund that invests its assets in U.S. Treasury securities and securities guaranteed by the U.S. government its agencies or instrumentalities, or the FDIC.  Due to the short-term duration and investment grade nature of these investments, the Trustees believe that the Trust’s current assets are adequate to meet the Trust’s currently foreseeable liquidity needs.  As of January 31, 2010, the Trust held $8,444,697 in cash and cash equivalents of which $24,788 was invested in a money market fund that exclusively invests in obligations of the U.S. Treasury.  In February 2010, the Trust distributed $7,216,005 to Unitholders of record on January 30, 2010.

Off-Balance Sheet Arrangements

The Trust has no off-balance sheet arrangements.

Contractual Obligations

The Trust has no payment obligations under any long-term borrowings, capital lease, operating lease, or purchase agreement.

Critical Accounting Estimates

This “Trustees’ Discussion and Analysis of Financial Condition and Results of Operations” is based upon the Trust’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires the Trustees to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  These estimates form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  The Trustees base their estimates and judgments on historical experience and on various other assumptions that the Trustees believe are reasonable under the circumstances.  However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.  Critical accounting policies are those that have meaningful impact on the reporting of the Trust’s financial condition and results of operations, and that require significant judgment and estimates.  For a complete description of the Trust’s significant accounting policies, please see Note 2 to the financial statements on pages F-9 through F-13.

Revenue Recognition

Royalty income under the amended lease agreements with Northshore is recognized as it is earned. Under such agreements, royalties are earned upon shipment from Silver Bay, Minnesota, regardless of whether the actual sales proceeds for any shipment are received by Northshore.  The amount of base overriding royalties and royalty bonuses payable to the Trust are determined based on the volume of iron ore tonnage shipped from Silver Bay, Minnesota during each calendar quarter and the proceeds to Cliffs resulting from shipments by Cliffs to its customers in accordance with the iron ore pellet sales agreements between Cliffs and its customers.

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The Trust’s royalty income includes accrued income receivable.  Accrued income receivable represents royalty income earned but not yet received by the Trust.  Accrued income receivable is calculated using estimated prices and includes (i) shipments during the last month of Mesabi Trust’s fiscal year, if any, and (ii) positive price adjustments under the pricing adjustment mechanisms in the iron ore pellet sales agreements between Cliffs and its customers that determine the final sales price of the shipments from Silver Bay, Minnesota.

Deferred royalty revenue represents an estimate of potential decreases in the Trust’s royalty revenue due to negative price adjustments anticipated to be applied to tons of iron ore that were shipped by Northshore, but for which Northshore has indicated that final pricing is not yet known.  The royalty revenue received by the Trust for certain tons of iron ore shipped by Northshore is subject to adjustment in accordance with the Trust’s revenue recognition policy each quarter as updated pricing information is received from Northshore.  Accordingly, it is possible that changes in iron ore pellet pricing provided to the Trust by Northshore may have a significant impact on the Trust’s deferred royalty revenue.

Adjustments to royalty income may result from changes in final reconciliations of tonnage shipped by Northshore with the final amounts received from Cliffs’ customers.  Adjustments may also result from revisions to estimated prices previously used to record revenue for tonnage shipped.  Pricing decreases may give rise to negative price adjustments which may be applied against future royalty income recognized by the Trust and changes in iron ore pellet prices may have a significant impact on the revenue recognized by the Trust

During the fourth quarter of fiscal 2009, positive price adjustments were recorded by Mesabi Trust as accrued income receivable due to price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from Northshore with respect to shipments during calendar 2007 and calendar 2008.  During the fourth quarter of fiscal 2010, negative price adjustments were recorded by Mesabi Trust as deferred royalty revenue due to price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from Northshore with respect to certain shipments during calendar 2008 and calendar 2009.  As of January 31, 2010, the Trust recognized revenue as accrued income receivable related to approximately 1,400,000 tons of iron ore that were shipped by Northshore as of December 31, 2009, but for which Cliffs has indicated that final pricing is not yet known.  Pricing related to these tons is expected to be finalized in the first quarter of 2011.

Recent Developments

2010 Estimates.  Neither Cliffs nor Northshore has provided the Trust with an estimate for total calendar year 2010 shipments of iron ore pellets or concentrate.  During calendar years 2009, 2008, 2007 and 2006, the percentage of shipments of iron ore products from Mesabi Trust lands was approximately 93.0%, 90.2%, 88.2% and 90.9%, respectively, of total shipments.  Northshore has not advised the Trustees as to the percentage of iron ore products from Mesabi Trust lands it anticipates shipping in calendar year 2010.  See the description of the uncertainty of market conditions in the iron ore and steel industry under the heading “Risk Factors” above.

Iron Ore Pricing and Contract Adjustments.  During the course of its fiscal year some portion of the royalties paid to Mesabi Trust are based on estimated prices for iron ore products sold under term contracts between Cliffs and its subsidiaries and certain of their customers (the “Cliffs Pellet Agreements”).  Mesabi Trust is not a party to any of the Cliffs Pellet Agreements.  These prices are subject to interim and final pricing adjustments, which can be positive or negative, and which adjustments are dependent in part on a variety of price and inflation index factors, including but not limited to the international benchmark pellet price, hot band steel prices and various Producer Price Indexes.  Although Northshore makes interim adjustments to the royalty

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payments on a quarterly basis, these price adjustments cannot be finalized until after the end of a contract year. This may result in significant and frequent variations in royalties received by Mesabi Trust (and in turn the resulting amount of funds available for distribution to Unitholders by the Trust) from quarter to quarter and on a comparative historical basis, and these variations, which can be positive or negative, cannot be predicted by Mesabi Trust.  See the description of pricing adjustments in Cliffs’ contracts under the heading “Risk Factors” above.

ArcelorMittal Arbitration with Cliffs.  In its Form 10-K filed February 18, 2010 (“Cliffs’ Form 10-K”), Cliffs provided an update to the matters previously reported regarding Cliffs’ arbitration with ArcelorMittal.  As previously reported, Northshore, along with The Cleveland-Cliffs Iron Company, Cliffs Mining Company and Cliffs Sales Company, filed two arbitration demands against ArcelorMittal USA Inc., ISG Cleveland Inc., ISG Indiana Harbor Inc. and Mittal Steel USA Weirton Inc. (collectively, “ArcelorMittal”).  Cliffs reported that each arbitration demand was filed on September 11, 2009 and related to that certain Umbrella Agreement between Mittal Steel USA and Cleveland-Cliffs Inc, The Cleveland-Cliffs Iron Company, Cliffs Mining Company, Northshore Mining Company, and Cliffs Sales Company, dated as of March 1, 2007 and effective as of April 12, 2006 (the “Umbrella Agreement”).  According to Cliffs, the first arbitration, to which ArcelorMittal filed an answer on October 1, 2009, stemmed from attempts by ArcelorMittal to revise the nomination of ArcelorMittal’s pellet requirements and a corresponding shipping schedule for 2009.  Cliffs reported that the Umbrella Agreement allows ArcelorMittal to nominate tonnage under the Umbrella Agreement for export out of the U.S. to any facility owned by ArcelorMittal.  Cliffs reported that the nomination and shipping schedule were finalized in November 2008, and that ArcelorMittal provided several revised nominations and shipping schedules in 2009.  Cliffs reported that in response to the revised nominations, Cliffs filed the arbitration demand to enforce the nomination and shipping schedule finalized in November 2008 for the year 2009.  Cliffs further reported that a similar arbitration demand filed by Cliffs in 2008 and related to attempted revisions to ArcelorMittal’s 2008 nomination was successful.

According to Cliffs, the second arbitration demand, to which ArcelorMittal filed an answer and counterclaim on October 1, 2009, related to ArcelorMittal’s attempt to reverse an election to defer certain tonnage for 2009.  As Cliffs reports, the Umbrella Agreement permits ArcelorMittal to make a one-time election to defer tons from one calendar year into the next, which then prevents ArcelorMittal from taking anything less than its minimum tonnage for the following calendar year.  ArcelorMittal made an election to defer tonnage from 2009 to 2010.  Subsequently, ArcelorMittal purported to revoke its election to defer, which would have the effect of increasing the tonnage to be received in 2009 and allowing ArcelorMittal to defer tonnage from 2010 into 2011.  Cliffs reported that it filed the arbitration demand to enforce the nomination and the 2009 deferral contained in the nomination.  In its Form 10-K, Cliffs’ reported that the two arbitrations had been consolidated and that an arbitration panel had been selected while noting further that the arbitration was in an early phase.

The Trustees are unable to predict what impact, if any, the arbitration proceedings between Cliffs and ArcelorMittal will have on shipments from Northshore or future royalties payable to the Trust.

Northshore Air Permit Matters.  In Cliffs’ Form 10-K, Cliffs provided an update to the matters previously reported regarding air permit amendments submitted to the Minnesota Pollution Control Agency (“MPCA”).  As previously reported, Northshore submitted an administrative permit amendment application on December 16, 2006 to the MPCA with respect to its Title V operating permit requesting the deletion of a 30 year old “control city” monitoring requirement.  The MPCA denied Northshore’s application on February 23, 2007 and Cliffs appealed the denial to the Minnesota Court of Appeals.

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Cliffs reported that on August 28, 2008 it filed a major permit amendment to remove the control city requirement from its permit. Cliffs also reported that on November 25, 2008, in response to the proposed amendment, MPCA issued an order declaring that Northshore’s request to remove the control city standard from its permit constitutes a “project” for which an Environmental Assessment Worksheet, or EAW, must be completed.  According to Cliffs’ Form 10-K, MPCA also stated that it was ceasing all other work on the permit, including its own efforts to create a replacement standard, until the environmental review process was complete.  Northshore filed an action to challenge the MPCA’s requirement for an EAW in Minnesota State District Court.

In Cliff’s Form 10-K, Cliffs reported that on January 13, 2010, the Minnesota District Court ruled that Northshore was entitled to judgment in its favor as a matter of law. Cliffs reported further that the District Court specifically ruled that its request to remove the control city standard was not a project under Minnesota law and that MPCA’s determination that Northshore’s application required an EAW was arbitrary and capricious, unsupported by substantial evidence and an error of law.  On March 12, 2010, the MPCA appealed the District Court’s decision to the Minnesota Court of Appeals, however, no further information is available about the status of the appeal as of the date of this Annual Report on Form 10-K.

The Trustees are unable to predict what impact the proceedings discussed above will have on Northshore’s compliance with its Title V operating permit or on future royalties payable to the Trust.

Securities Regulation.  The Trust is a publicly-traded trust with its units of beneficial interest listed on the New York Stock Exchange (“NYSE”) and is therefore subject to extensive regulation under, among others, the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the rules and regulations of the NYSE.  Issuers failing to comply with such authorities risk serious consequences, including criminal as well as civil and administrative penalties.  In most instances, these laws, rules and regulations do not specifically address their applicability to publicly-traded trusts such as Mesabi Trust.  In particular, Sarbanes-Oxley mandated the adoption by the Securities and Exchange Commission (the “SEC”) and NYSE of certain rules and regulations that are impossible for the Trust to literally satisfy because of its nature as a pass-through trust.  Pursuant to NYSE rules the Trust is exempt from many of the corporate governance requirements that apply to other publicly traded corporations.  The Trust does not have, nor does the Agreement of Trust, as amended, provide for, a board of directors, an audit committee, a corporate governance committee, a compensation committee or executive officers.  The Trustees intend to closely monitor the SEC’s and NYSE’s rulemaking activity and will comply with their rules and regulations to the extent applicable.

Other Information.  Mesabi Trust has no employees, but it engages independent consultants to assist the Trustees in monitoring, among other things, the amount and sales prices of iron ore products shipped by Northshore from Silver Bay, Minnesota.  As noted above, the information regarding amounts and sales prices of shipped iron ore products is used to compute the royalties payable to Mesabi Trust by Northshore.  Deutsche Bank Trust Company Americas, the Corporate Trustee, also performs certain administrative functions for Mesabi Trust.

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TO THE HOLDERS OF
CERTIFICATES OF BENEFICIAL INTEREST IN
MESABI TRUST

THE TRUST ESTATE

The principal assets of Mesabi Trust consist of two different interests in certain properties in the Mesabi Iron Range: (i) Mesabi Trust’s interest as assignor in the Amended Assignment of Peters Lease and the Amended Assignment of Cloquet Lease, which together cover properties aggregating approximately 9,750 largely contiguous acres in St. Louis County, Minnesota (the “Peters Lease Lands” and the “Cloquet Lease Lands,” respectively), and (ii) Mesabi Trust’s ownership of the entire beneficial interest in the Mesabi Land Trust, which has a 20% interest as fee owner in the Peters Lease Lands and a 100% fee ownership in certain non-mineral-bearing lands adjacent to the Peters and Cloquet Lease Lands (the “Mesabi Lease Lands,” together with the Peters Lease Lands and the Cloquet Lease Lands, the “Trust Estate”).  The map below shows the approximate location of the Trust Estate.

oThe boxed area indicates the approximate location of Mesabi Trust’s Trust Estate (not drawn to scale), as defined above under “The Trust Estate,” which is a small part of the region known as the Mesabi Iron Range. The Mesabi Trust does not own any property interests other than in the Trust Estate.

Under the Amended Assignment Agreements, Northshore produces iron ore from the Trust Estate for the manufacture of iron ore products to be sold to various customers of Cliffs.  Mesabi Trust receives royalties

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on the crude ore extracted from such Lands and the pellets produced from such crude ore, and in each case the royalties are based upon the volume of iron ore products shipped and the prices charged to Cliffs’ customers.

The largest component of the Trust Estate is the Peters Lease Lands.  The Peters Lease provides that each leasehold estate will continue until the reserves of iron ore, taconite and other minerals or materials on the land subject to the Peters Lease are exhausted.  The Mesabi Lease terminates when the Peters Lease terminates.  The Cloquet Lease, executed in 1916, terminates in the year 2040.  If Northshore decides to terminate or surrender one or more of these leases, it must first give Mesabi Trust at least six months’ notice of its intention to do so and, at Mesabi Trust’s request, reassign all of such leases to Mesabi Trust.  If any such reassignment occurs, Northshore must transfer the lease interests to Mesabi Trust free and clear of liens, except public highways.  In return, Mesabi Trust must assume Northshore’s future obligations as lessee under the reassigned leases.

The Peters Lease Lands and the Cloquet Lease Lands are located at the northeastern end of the Mesabi Iron Range and contain mineral deposits consisting of a sedimentary bed of banded magnetite in siliceous gangue, a form of low-grade iron ore known as taconite, approximately three tons of which must be beneficiated to produce one ton of high-grade pellets.  The Mesabi Lease Lands contain substantially no commercial ore deposits and have been used principally in connection with mining the taconite from other parts of the Trust Estate, such as the provision of an area for location of service roads, supporting plants and equipment and dump sites for overburden.

Because the Trust is not involved with the mining operations at Northshore, the Trust relies on the ore reserve estimate reported in Cliffs’ Form 10-K each year.  In Cliff’s most recent Form 10-K, as filed with the Securities and Exchange Commission, which was for the year ended December 31, 2009, the following information was provided by Cliffs regarding the estimated ore reserves at Northshore.

		Tons in Millions (1)
	Current	Mineral Reserves (2)				Method of
Iron Ore	Annual	Current Year			Previous	Reserve
Mineralization	Capacity	Proven	Probable	Total	Year	Estimation
Biwabik Iron Formation (Magnetite)	5.7	304	16	320	308	Geologic - Block Model

(1)Tons are long tons of pellets of 2,240 pounds.

(2)Estimated standard equivalent pellets, including both proven and probable reserves based on life-of-mine operating schedules.

In 2010, the Trustees engaged an independent geological consulting firm, Scott Wilson Roscoe Postle Associates, Inc. (“Scott Wilson RPA”), to confirm that the process used by Cliffs to estimate the ore reserve in the mine at Northshore is reasonable.  In its report to the Trustees, Scott Wilson RPA summarized its review and evaluation of Cliffs’ ore reserve estimation process.  Scott Wilson RPA reported to the Trustees that the reserve estimation process used by Cliffs is reasonable and complies with the reporting standards set forth in Securities Act Industry Guide 7.  Based on the report of Scott Wilson RPA, the Trustees estimate that at least 90% of the ore reserve in the mine at Northshore, as reported by Cliffs, is attributable to the Trust Estate.

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HISTORY OF THE TRUST’S ACQUISITION OF THE TRUST ESTATE

Prior to the creation of the Mesabi Trust and the Mesabi Land Trust on July 18, 1961, Mesabi Iron Company (“MIC”), the Trust’s predecessor in interest, owned the interests in the Peters, Cloquet and Mesabi Lease Lands.  MIC obtained its interests as follows:

Peters Lease Lands. MIC owned a 20% interest in the fee ownership in the Peters Lease Lands.  Originally, the Peters Lease Lands were owned by East Mesaba and Dunka River which were wholly owned subsidiaries of Dunka-Mesaba Security Company (“Dunka-Mesaba”).  In August 1951, East Mesaba and Dunka River conveyed the Peters Lease Lands to their parent company, Dunka-Mesaba, which in turn conveyed to each of its stockholders an undivided interest in the Peters Lease Lands in proportion to each stockholder’s ownership in the parent company.  Accordingly, MIC, which had been the owner of 20% of the outstanding capital stock of Dunka-Mesaba, acquired a 20% undivided interest in the Peters Lease Lands and the right to receive a 20% fee royalty under the Peters Lease.

By an instrument dated October 1, 1917, as of April 30, 1915, East Mesaba and Dunka River leased their properties to Claude W. Peters.  (This instrument, as modified by instruments dated February 3, 1921, July 17, 1939 and July 31, 1951, is known as the “Peters Lease.”)  Claude W. Peters acquired the Peters Lease on behalf of MIC and an assignment of the Peters Lease from Claude W. Peters to MIC was recorded in 1919.  In 1939, MIC assigned the Peters Lease to Reserve Mining Company (“Reserve”) in consideration for which Reserve agreed to pay MIC a percentage of its net profits.  Later, these payments were changed to royalty payments.

Cloquet Lease Lands.  MIC held a leasehold interest in the Cloquet Lease Lands pursuant to the Indenture of Lease dated May 1, 1916.  In 1939, MIC assigned its interest in the Cloquet Lease as lessee to Reserve.

Mesabi Lease Lands.  MIC held a fee interest in the Mesabi Lease Lands, subject to earlier grants of mineral rights to other parties.  In 1939, MIC leased its interest in the Mesabi Lease Lands to Reserve.  One 40-acre parcel of the Mesabi Lease Lands was forfeited in the 1980s to the State of Minnesota and subsequently sold to the United States government, excluding the mineral rights granted to other parties.  Further, another 40-acre parcel of the Mesabi Lease Lands, for which the Trust owns only surface rights, is currently being explored for non-ferrous deposits by the holder of the mineral rights to the parcel.  The Trustees do not believe that either parcel was ever involved in, or otherwise material to, Northshore’s mining operations.

Acquisition of Interests from MIC.  MIC had not engaged in actual mining operations since 1939, with all of its ownership of land in fee having been leased out and its leaseholds in land assigned to Reserve in exchange for royalty payments.  Because MIC’s activities in connection with the administration of its assets were limited to the collection of income, the payment of expenses and liabilities, the distribution of the net income and the protection and conservation of the assets held, in July 1961 its board of directors proposed, and its stockholders subsequently approved, to adopt a plan of complete liquidation as a result of which MIC’s assets were transferred to and administered by two trust entities.

To comply with the law of the State of Minnesota, which requires that a trust holding real property located in that state must be administered under Minnesota law, the Mesabi Land Trust was created under Minnesota law on July 18, 1961 pursuant to an Agreement of Trust of even date.  MIC transferred to the Mesabi Land Trust its 20% interest as fee owner in the Peters Lease and the Peters Lease Lands and its interest as 100%

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fee owner in the Mesabi Lease Lands and as lessor of the Mesabi Lease (subject to the reservation of mineral rights described above).

Also pursuant to an Agreement of Trust, the Mesabi Trust was created under New York law on July 18, 1961.  MIC transferred to the Mesabi Trust instruments assigning the Amended Assignment of Peters Lease and the Amended Assignment of Cloquet Lease (covering its interest as assignor of the entire leasehold interest in the Peters Lease Lands and the Cloquet Lease Lands), together with cash, marketable securities and other assets.  The Mesabi Trust also received all of the beneficial interest in the Mesabi Land Trust.

Reserve, the original lessee, operated the mine until it closed on July 31, 1986.  Cyprus Minerals Company (“Cyprus”) purchased substantially all of Reserve’s assets on August 17, 1989 and resumed operations as Cyprus NMC.  On September 30, 1994, Cliffs purchased all of Cyprus NMC’s capital stock from Cyprus.  Cliffs renamed the operation Northshore Mining Corporation.

Since the creation of the Mesabi Land Trust and the Mesabi Trust, although the mining operators have changed and the Peters Lease, the Cloquet Lease and the Mesabi Lease have been further amended and assigned, the Trust Estate has not changed beyond the forfeiture of one parcel of the Mesabi Lease Lands described above.

The diagram below illustrates the relationships of the various parties that own the lands and have interests in the lands the Trust has interests in:

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DESCRIPTION OF THE MINERAL PROPERTIES AND NORTHSHORE’S MINING OPERATIONS

Mine and Rock Formation.  The Mesabi Trust properties, including the ore mine, are located in northeastern Minnesota, approximately two miles south of Babbitt, Minnesota.  The ore mine on the Mesabi Trust properties is called the Peter Mitchell mine, an open pit mine consisting of a 10-mile long segment of a host rock called the Biwabik Iron Formation, which is a very hard cherty rock containing magnetite as the ore mineral.  The Biwabik Iron Formation extends west and southwest for over 100 miles and constitutes the Mesabi Iron Range.  Recoverable iron grades range from 21% in the west end of the mine open pit to 26% in the central portion and east end, with 22.5% as the cut off grade.  The ore body dips south under the hanging wall called the Virginia Formation.  To date, the Mesabi Trust properties have been explored for their iron ore potential.  To the knowledge of the Mesabi Trustees, no other minerals have been explored on the Mesabi Trust properties.

Mining Properties.  As disclosed elsewhere in this Annual Report, Northshore, a wholly owned subsidiary of Cliffs, currently conducts the mining operation upon the Mesabi Trust properties.  The main entrance to the Northshore mine is accessed by means of a gravel road and is located off County Road 70.  Northshore’s processing facilities are located in Silver Bay, Minnesota, near Lake Superior, on U.S. Highway 61.  Each year, the Trustees visit the Northshore mine in Babbitt, Minnesota and the processing plant in Silver Bay, Minnesota.  During such visits, the Trustees inspect the condition of the mining properties as well as mining equipment and facilities.  Based on information provided to the Trustees’ during the most recent inspection trip in October 2009, the mining properties and facilities at Northshore were in good operating condition.

Northshore’s Operations.  Because the Mesabi Trust is not involved in Northshore’s mining operations, the Trustees do not have detailed firsthand information relating to such operations or the equipment and facilities used by Northshore.  Therefore, the Trustees rely on information provided by Northshore personnel, disclosed by Cliffs in its periodic reports filed with the SEC or provided in other reports published by independent organizations, such as Skillings Mining Review, in providing the information relating to Northshore’s mining operations, its equipment and facilities.

·Mining and Railroad: Drilling at the Northshore mine is conducted with two P&H 120, one P&H 320XPC and one Gardner Denver 120 rotary units with 16-inch diameter holes on 28- to 30-foot spacing.  The drilling is followed with blasts using heavy ANFO (which stands for ammonium nitrate and fuel oil) and emulsion which break an average of 700,000 to 1,200,000 tons of crude taconite.  After blasts, taconite is then removed by a loading fleet consisting of three P&H 2800XPC shovels with 37 cubic-yard buckets, one P&H 2800 shovel with a 28 cubic-yard bucket, one LeTourneau L1850 loader with a 28 cubic yard bucket and a Cat 994D loader with a 19 cubic-yard bucket.  A haulage fleet of three 250-ton Terex Model 4400AC and four 200-ton Komatsu 730E production trucks carry crude taconite to the primary and secondary crushers located about two miles away.  At the crushers, taconite is emptied from the end-dump trucks into a 60 inch primary gyratory unit and four 30-inch by 70-inch secondary crushers for reduction to a nominal 4 inch size.  Coarse ore is then fed into 90-ton capacity ore cars for transportation to Silver Bay via a 47 mile long, single track railroad owned by Northshore.  Each train is pulled by three or four diesel electric locomotives.

·Concentrating and Pelletizing Process.  Upon arrival at the pelletizing facility in Silver Bay, the coarse taconite ore first passes through a fine crushing stage where it is reduced in size to approximately 0-3/4” and then the non-magnetic material is rejected through a dry cobber magnetic separation stage.  The non-magnetic material is rail hauled seven miles to the Mile Post 7 disposal site. The magnetic

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material is then fed into one of the fourteen active grinding lines.  Each line includes one 10-1/2-foot by 18-foot rod mill and two 10-foot by 16-foot (14-foot in west plant) ball mills.  The final grinding of the crude taconite is reduced to 90% minus 325 mesh.

During the concentrating process, ore concentrate is separated by a two-stage magnetic separation, which removes low grade tailings from the ore concentrate.  The tailings are pumped uphill to the Mile Post 7 disposal site.  The concentrate is then fed into hydro-separators followed by a final flotation upgrading accomplished with two 500 cubic foot flotation cells per grinding line.  Next, the concentrate proceeds to a central filtering facility of nine 9-foot diameter vacuum filters, during which process the moisture content in the concentrate is reduced and the final concentrate is ready for pelletizing.  The pelletizing process first feeds the ore concentrate, to which bentonite and starch has been added as a binder, into a balling drum 14 feet long and 7 feet in diameter.  The revolving action of the drum causes the concentrate to build up into green balls.  Next, the green balls with a target size of plus 0-1/4” and minus 0-1/2” in diameter are conveyed to one of four moving grates and enter into an accompanying high temperature furnace where they are heated to over 2400° F. and are hardened into the final pellet product.  From the four furnaces the pellets are conveyed to a dockside storage area with a 5-million ton storage capacity.  Northshore’s sheltered harbor at Silver Bay can handle lake-going vessels with capacities up to 55,000 tons.

·Capital Expenditures.  During calendar year 2009, Northshore continued to modernize and improve the operations at the Peter Mitchell Mine in Babbitt and Northshore’s pelletizing facility in Silver Bay, Minnesota.  Toward that end, Cliffs implemented the following capital expenditures:

·Completed commissioning the third of four P&H 2800-XPC shovels.  The final shovel is scheduled for delivery in late calendar 2010.

·Continued a program to improve the railroad locomotive fleet for the ore haul between the Peter Mitchell Mine and Northshore’s pelletizing facility.

·Continued investments in projects for safety (primarily mill liner handler and mine cable handler) and environment (primarily dust control) to protect employees and improve air and water quality.

LEASEHOLD ROYALTIES

Northshore is obligated to pay to Mesabi Trust base overriding royalties and royalty bonuses on all pellets (and other iron ore products) produced from the Peters Lease Lands and the Cloquet Lease Lands (“Mesabi Ore”) and shipped from Silver Bay in each calendar year.  The royalties are based on prices per unit of product, volumes of product shipped and where on the escalating scale of royalties—2-1/2% on the first million tons to 6% on shipments above four million long tons per calendar year—each shipment falls.

Base overriding royalties.  Base overriding royalties are calculated on the basis of an escalating scale of percentages of gross sales proceeds of iron ore shipped.  The applicable percentage is determined by reference to the tonnage of pellets previously shipped in the then current calendar year, as follows:

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Tons of iron ore products shipped in calendar year	Applicable royalty (expressed as a percentage of gross sales proceeds within each tranche)
one million or less	2-1/2%
more than one but not more than two million	3-1/2%
more than two but not more than three million	5%
more than three but not more than four million	5-1/2%
more than four million	6%

Royalty bonuses.  Royalty bonuses are payable on all iron ore products produced from Mesabi Ore shipped from Silver Bay during a calendar quarter and sold at prices above the Adjusted Threshold Price.  The Adjusted Threshold Price was $47.43 for calendar year 2008, $48.48 for calendar year 2009 and will be $48.81 for calendar year 2010.  The Adjusted Threshold Price is subject to adjustment (but not below $30 per ton) for inflation and deflation and is determined each year on the basis of the change in the Gross Domestic Product Implicit Price Deflator, a broad based index of inflation and deflation published quarterly by the U.S. Department of Commerce.

The amount of royalty bonuses payable for any calendar quarter is calculated on the basis of an escalating scale of percentages of the gross sales proceeds to Northshore of pellets produced from Mesabi Ore that are sold at prices above the Adjusted Threshold Price.  The applicable percentage is determined by reference to the amount by which the sales prices for a particular quantity of pellets exceeds the Adjusted Threshold Price, as follows:

Amount by which sales price per ton exceeds Adjusted Threshold Price	Applicable Percentage
$2 or less	1/2 of 1%
more than $2 but not more than $4	1%
more than $4 but not more than $6	1-1/2%
more than $6 but not more than $8	2%
more than $8 but not more than $10	2-1/2%
more than $10	3%

Leasehold royalty example.   To illustrate the calculation of base overriding royalties and royalty bonuses, assume that no shipments of iron ore products were made during the first calendar quarter of 2010, and further assume that pellets were shipped from Silver Bay in the second and third calendar quarters of 2010 in the following tonnage quantities and rendering the following gross proceeds:

	Tonnage	Sales Price per Ton		Gross Proceeds
2nd Quarter:	500,000	$	42.00	$	21,000,000
3rd Quarter:	500,000	$	44.00	$	22,000,000
	1,000,000	$	46.00	$	46,000,000
	1,000,000	$	48.00	$	48,000,000
	1,000,000	$	50.00	$	50,000,000
	1,500,000	$	52.00	$	78,000,000

In this example, the base overriding royalties payable in respect of the second and third calendar quarters of 2010 would be as follows:

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2nd Quarter:	$21,000,000 x 2-1/2%	=	$	525,000
3rd Quarter:	$22,000,000 x 2-1/2%	=	$	550,000
	$46,000,000 x 3-1/2%	=	$	1,610,000
	$48,000,000 x 5%	=	$	2,400,000
	$50,000,000 x 5-1/2%	=	$	2,750,000
	$78,000,000 x 6%	=	$	4,680,000

Based on the same example, the base overriding royalty percentage applicable for all iron ore products shipped in the fourth calendar quarter of 2010 would be 6%, because more than four million tons were shipped during the first three quarters.

Further, the royalty bonuses payable in respect of the second and third calendar quarters of 2010 would be as follows (with reference to the Adjusted Threshold Price (“ATP”) of $48.81:

2nd Quarter:	$42.00/ton falls below ATP: no bonus payable	=	None
3rd Quarter:	$44.00/ton falls below ATP: no bonus payable	=	None
	$46.00/ton falls below ATP: no bonus payable	=	None
	$48.00/ton falls below ATP: no bonus payable	=	None
	$50,000,000 x 1/2 of 1%	=	$	250,000
	$78,000,000 x 1%	=	$	780,000

The above figures are provided only to illustrate the method for calculating base overriding royalties and royalty bonuses and do not indicate the amount of base overriding royalties or royalty bonuses the Trustees expect Mesabi Trust to earn in calendar 2010 or any other calendar or fiscal year.  Accordingly, the foregoing example illustrating the calculation of base overriding royalties and royalty bonuses should not be considered a prediction of the amount of base overriding royalties or royalty bonuses Mesabi Trust will receive.

Bonuses on other ore.  Northshore also must pay base overriding royalties and royalty bonuses on pellets produced from lands other than Mesabi Lease Lands (“Other Ore”) to the extent necessary to assure payment of base overriding royalties and royalty bonuses on at least 90% of the first four million tons of pellets shipped from Silver Bay in each calendar year, at least 85% of the next two million tons of pellets shipped therefrom in each calendar year, and at least 25% of all tonnage of pellets shipped therefrom in each calendar year in excess of six million tons.  Base overriding royalties and royalty bonuses payable on Other Ore can be recouped by Northshore out of base overriding royalties and royalty bonuses paid on Mesabi Ore.  The amount of Other Ore royalties and Other Ore royalty bonuses which can be recouped on any payment date cannot, however, exceed 20% of the amount of Mesabi Ore royalties and royalty bonuses which are otherwise payable on that payment date.

Advance royalties.  Northshore is obligated to pay Mesabi Trust advance royalties in equal quarterly installments.  The advance royalty was $790,721 for calendar year 2008, $808,177 for calendar year 2009 and is $813,729 for calendar year 2010.  The amount of advance royalties payable is subject to adjustment (but not below $500,000 per annum) for inflation and deflation and is determined each year in the same manner as the Adjusted Threshold Price.  All payments of advance royalties are credited against payments of base overriding royalties and royalty bonuses payable on Mesabi Ore until fully recouped by Northshore.  The amount of advance royalties payable in respect of each calendar quarter constitutes the minimum overriding royalty amount payable by Northshore in respect of that calendar quarter.

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Other leasehold royalty information.  Base overriding royalties and royalty bonuses are payable quarterly and accrue upon shipment, whether or not the actual sales proceeds for any shipment are received by Northshore.  The amount of base overriding royalties and royalty bonuses payable with respect to the first three quarters in any calendar year are determined on the basis of tonnage shipped during each such calendar quarter and the actual sales proceeds of such shipments, with an adjustment made to the royalties payable with respect to the last quarter in any calendar year to account for adjustments.

LAND TRUST AND FEE ROYALTIES

Mesabi Land Trust holds a 20% interest as fee owner in the Peters Lease Lands and a 100% interest as fee owner in the Mesabi Lease Lands as lessor of the Mesabi Lease.  Mesabi Trust holds the entire beneficial interest in Mesabi Land Trust and is entitled to receive the net income of Mesabi Land Trust after payment of expenses.  Northshore is not obligated to pay royalties or rental to Mesabi Land Trust as fee owner of the non-mineral bearing Mesabi Lease Lands, a consideration having been paid in that respect at the inception of the Mesabi Lease.

Northshore is required to pay a base royalty to the fee owners in an amount which, at its option, is either (a) 11-2/3¢ per gross ton of crude ore it mines from the Peters Lease Lands, or (b) $0.0056 for each 1% of metallic iron ore natural contained in each gross ton of pellets it produces from the Peters Lease Lands and ships.  The base fee royalty rate is adjusted up or down each quarter (but not below the base royalty specified above) by adding or subtracting an amount to be determined by reference to changes in Lower Lake Mesabi Range pellet prices and the All Commodities Producer Price Index.  The adjustment factor is computed by multiplying the base fee royalty rate specified above by a percentage that is the sum of (a) one-half of the percentage change, if any, by which the then prevailing price per iron unit of Mesabi Range taconite pellets delivered by rail or vessel at Lower Lake Erie ports exceeds 80.5¢ (the price per iron unit in effect in January 1982), plus (b) one-half of the percentage change, if any, by which the All Commodities Producer Price Index exceeds 295.8 (the level of the Index for December 1981).  Fee royalties aggregating $305,407 with respect to crude ore mined by Northshore were earned by Mesabi Land Trust during the fiscal year ended January 31, 2010.

TRUST EXPENSES

Total Trust Expenses

Total Trust expenses for the fiscal year ended January 31, 2010 were $818,007, representing an increase of 2.3% from the $799,320 of total Trust expenses in fiscal 2009.  For the fiscal year ended January 31, 2009, total Trust expenses increased 26.0% to $799,320, as compared to $634,151 for the fiscal year ended January 31, 2008.

Trust Legal Expenses

Mesabi Trust paid Oppenheimer Wolff & Donnelly LLP (“Oppenheimer”) $224,796 for legal services provided to the Trust during the fiscal year ended January 31, 2010.  Comparatively, Mesabi Trust paid Oppenheimer $219,389 and $160,780 for legal services provided to the Trust during fiscal years ended January 31, 2009 and January 31, 2008, respectively.

In each of the last three fiscal years, Oppenheimer represented the Trust and assisted the Trustees in the preparation and filing of the Trust’s current, periodic and annual reports with the SEC and related securities law

28

compliance.  Oppenheimer also advised the Trust on various other legal matters related to inquiries from third parties in the ordinary course of the Trust’s administration.  The total amount of Oppenheimer’s legal fees for services rendered during fiscal 2010 increased approximately $5,400, or 2.5%, as compared to fiscal 2009.  The increase in legal fees in fiscal 2010, as compared to fiscal 2009, resulted primarily from Oppenheimer providing the Trust with services related to the preparation of the proxy statement and the proxy solicitation to appoint Robert C. Berglund as an individual trustee of the Trust, legal review of real estate matters and cost of living increases in the billing rates of Oppenheimer attorneys who provide services to the Trust.

The total amount of Oppenheimer’s legal fees for services rendered during fiscal 2009 increased approximately $58,000, or 36%, as compared to fiscal 2008.  The increase in legal fees in fiscal 2009, as compared to fiscal 2008, resulted primarily from Oppenheimer providing the Trust with services related to the Trust’s change of its independent certified public accounting firm, responding to comments received from the SEC staff under the disclosure review program, additional third party inquiries made to the Trust, and cost of living increases in the billing rates of Oppenheimer attorneys who provide services to the Trust.

Total Trust expenses by category for fiscal 2010, 2009 and 2008 are set forth in the table below.

	Fiscal Year ended on January 31,
	2010		2009		2008
Compensation of Trustees	$	178,581	$	228,053	$	181,700
Corporate Trustee’s Administrative Fees	62,500		62,500		62,500
Professional fees and expenses
Legal	224,796		219,389		160,780
Accounting	125,009		109,268		60,324
Mining consultant and field representatives	22,908		22,617		52,242
Insurance	66,492		52,518		37,195
Annual stock exchange fee	38,000		38,000		38,000
Transfer agent’s and registrar’s fees	9,974		10,273		12,694
Other Trust Expenses	89,747		56,702		28,716
	$	818,007	$	799,320	$	634,151

UNALLOCATED RESERVE

The Trustees have determined that a portion of the Unallocated Reserve, usually within the range of $500,000 to $1,000,000 or such other amount as the Trustees may deem prudent, should be maintained as a cash reserve for unexpected losses. The actual amount of the Unallocated Reserve will fluctuate from time to time and may increase or decrease from its current level. Future distributions will be highly dependent upon royalty income as it is received, changes in estimated pricing, potential for future price adjustments and the level of Trust expenses.  Although the actual amount of the Unallocated Reserve will fluctuate from time to time and may increase or decrease from its current level, it is currently intended that future distributions will be highly dependent upon royalty income as it is received and the level of Trust expenses.  The amount of future royalty income available for distribution will be subject to the volume of iron ore product shipments and the dollar level of sales by Northshore.

29

As a result of the $2,770,000 deferred royalty revenue recorded by the Trust, the unpredictable nature of the current economic conditions, and the potential for future negative price adjustments under the long-term customer contracts between Northshore, Cliffs and certain customers, the Trustees have determined that it is prudent to increase the cash and U.S. Government securities portion of the Unallocated Reserve above the range of $500,000 to $1,000,000.  The amount of future royalty income available for distribution will be subject to the volume of iron ore product shipments and the dollar level of sales by Northshore.  Shipping activity is greatly reduced during the winter months and economic conditions, particularly those affecting the steel industry, may adversely affect the amount and timing of such future shipments and sales.  It is possible that future negative price adjustments could offset, or even eliminate, royalties or royalty income that would otherwise be payable to the Trust in any particular quarter, or at year end, thereby potentially reducing cash available for distribution to the Trust’s Unitholders in future quarters.  See discussion under the heading “Risk Factors” beginning on page 3 of this Annual Report.

The Trustees will continue to monitor the economic circumstances of the Trust to strike a responsible balance between distributions to Unitholders and the need to maintain reserves at a prudent level, given the unpredictable nature of the iron ore industry, the Trust’s dependence on the actions of the Cliffs and Northshore, and the fact that the Trust essentially has no other liquid assets.

CERTIFICATES OF BENEFICIAL INTEREST

The Mesabi Trust’s Certificates of Beneficial Interest are traded on the New York Stock Exchange.  Distributions paid to Unitholders during the fiscal year ended January 31, 2010 totaled $9,315,207 as compared to $37,851,229 during fiscal year ended January 31, 2009, and $15,088,011 during the fiscal year ended January 31, 2008.  Unitholders received distributions of $0.71 per Unit for the fiscal year ended January 31, 2010, compared with distributions of $2.885 and $1.150 per Unit for the fiscal years ended January 31, 2009 and 2008, respectively.

During the past two fiscal years, the market ranges of the certificates for each quarterly period and the distributions declared for such quarterly periods were as follows:

Fiscal Quarter Ended	High		Low		Distribution Declared		Distribution Per Unit
April 30, 2009	$	9.75	$	5.30	$	4,985,604	$	0.38
July 31, 2009	$	13.09	$	9.50	0		0.00
October 31, 2009	$	11.22	$	8.60	2,886,402		0.22
January 31, 2010	$	15.60	$	9.65	7,216,005		0.55
					$	15,088,012	$	1.15

Fiscal Quarter Ended	High		Low		Distribution Declared		Distribution Per Unit
April 30, 2008	$	28.20	$	21.36	$	1,574,401	$	0.12
July 31, 2008	$	30.80	$	24.31	13,120,010		1.00
October 31, 2008	$	27.65	$	11.34	16,400,013		1.25
January 31, 2009	$	12.96	$	6.98	1,443,201		0.11
					$	32,537,625	$	2.48

As of the close of business on April 6, 2010, the beneficial interest in Mesabi Trust was represented by 13,120,010 Units registered in the names of approximately 1,250 individuals holding of record approximately 864,749 Units, and in the names of approximately 115 brokers, nominees, or fiduciaries holding of record approximately 12,255,261 Units.

30

THE TRUSTEES

The name and address of each Trustee and the principal occupation of each individual Trustee are as follows:

Name and Address of Trustee	Principal Occupation
Deutsche Bank Trust Company Americas Corporate Trustee 60 Wall Street 27th Floor New York, New York 10005	New York banking corporation
Robert C. Berglund PO Box 351 Corona, New Mexico 88318	Retired Mining Engineer
James A. Ehrenberg Individual Trustee 295 Kopp Drive West St. Paul, Minnesota 55118	Until April 2005, Senior Vice President, Corporate Trust Services, U.S. Bank, N.A.
Richard G. Lareau Individual Trustee Oppenheimer Wolff & Donnelly LLP Plaza VII, Suite 3300 45 South Seventh Street Minneapolis, Minnesota 55402	Senior Partner in the law firm of Oppenheimer Wolff & Donnelly LLP
Norman F. Sprague III Individual Trustee 11726 San Vicente Blvd. Suite 625 Los Angeles, California 90049	Private investor; orthopedic surgeon
New York, New York April 15, 2010	Respectfully submitted, DEUTSCHE BANK TRUST COMPANY AMERICAS ROBERT C. BERGLUND JAMES A. EHRENBERG RICHARD G. LAREAU NORMAN F. SPRAGUE III

31

INDEX TO FINANCIAL STATEMENTS

Trustees’ Report on Internal Control over Financial Reporting	Page F-2
Reports of Independent Registered Public Accounting Firms	Pages F-3 and F-4
Balance Sheets as of January 31, 2010 and 2009	Page F-5
Statements of Income for the years ended January 31, 2010, 2009, and 2008	Page F-6
Statements of Unallocated Reserve and Trust Corpus for the years ended January 31, 2010, 2009, and 2008	Page F-7
Statements of Cash Flows for the years ended January 31, 2010, 2009, and 2008	Page F-8
Notes to Financial Statements	Pages F-9 – F-16

F-1

TRUSTEES’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Mesabi Trustees are responsible for establishing and maintaining adequate internal control over financial reporting for Mesabi Trust.  The Trust’s internal control system was designed to provide reasonable assurance to the Trustees regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Mesabi Trustees assessed the effectiveness of the Trust’s internal control over financial reporting as of January 31, 2010.  In making this assessment, they used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework.  Based on their assessment, the Trustees believe that, as of January 31, 2010, the Trust’s internal control over financial reporting is effective, based on those criteria.

Wipfli LLP, the Trust’s independent registered public accounting firm, has issued an audit report on its assessment of the Trust’s internal control over financial reporting.  This report appears immediately below.

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees

Mesabi Trust

New York, New York

We have audited the accompanying balance sheets of Mesabi Trust (the “Trust”) as of January 31, 2010 and 2009, and the related statements of income, unallocated reserve and trust corpus, and cash flows for the years then ended.  We also have audited Mesabi Trust’s internal control over financial reporting as of January 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Mesabi Trust’s trustees are responsible for these financial statements, for maintaining effective internal control over financial reporting, and for their assessment of the effectiveness of the Trust’s internal control over financial reporting, included in the accompanying Trustees’ Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on these financial statements and an opinion on the Trust’s internal control over financial reporting based on our audits.  The financial statements of Mesabi Trust as of January 31, 2008 were audited by other auditors whose report dated April 8, 2008 expressed an unqualified opinion on those statements.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Trustees, and evaluating the overall financial statement presentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audits provide a reasonable basis for our opinions.

An organization’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  An organization’s internal control over financial reporting includes those policies and procedures that 1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the organization; 2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the organization are being made only in accordance with authorizations of the Trustees; and 3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the organization’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mesabi Trust as of January 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, Mesabi Trust maintained, in all material respects, effective internal control over financial reporting as of January 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

/s/ WIPFLI LLP

St. Paul, Minnesota

April 15, 2010

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees

MESABI TRUST

New York, New York

We have audited the accompanying statements of income, unallocated reserve and trust corpus, and cash flows of MESABI TRUST (the “Trust”) for the year ended January 31, 2008.  We also have audited MESABI TRUST’S internal control over financial reporting as of January 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  The Trustees are responsible for these financial statements, for maintaining effective internal control over financial reporting, and for their assessment of the effectiveness of the Trust’s internal control over financial reporting, included in the accompanying Trustees’ Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on these financial statements and an opinion on the Trust’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Trustees, and evaluating the overall financial statement presentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances.  We believe that our audits provide a reasonable basis for our opinion.

An organization’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  An organization’s internal control over financial reporting includes those policies and procedures that 1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the organization; 2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the organization are being made only in accordance with authorizations of the Trustees; and 3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the organization’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the financial statements referred to above present fairly, in all material respects, the results of operations of MESABI TRUST and cash flows for the year ended January 31, 2008 in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, MESABI TRUST maintained, in all material respects, effective internal control over financial reporting as of January 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

/s/ Gordon, Hughes & Banks, LLP

Greenwood Village, Colorado

April 8, 2008

F-4

MESABI TRUST

BALANCE SHEETS

YEARS ENDED JANUARY 31, 2010 AND 2009

	2010		2009
ASSETS
CASH AND CASH EQUIVALENTS	$	8,444,697	$	2,254,107
U.S. GOVERNMENT SECURITIES, at amortized cost (which approximates market)	1,850,515		340,421
ACCRUED INCOME RECEIVABLE	873,938		2,721,978
PREPAID EXPENSE	30,422		30,423
	11,199,572		5,346,929
FIXED PROPERTY, including intangibles, at nominal values
Assignments of leased property
Amended assignment of Peters Lease	1		1
Assignment of Cloquet Leases	1		1
Certificate of beneficial interest for 13,120,010 units of Land Trust	1		1
	3		3
	$	11,199,575	$	5,346,932
LIABILITIES, UNALLOCATED RESERVE AND TRUST CORPUS
DISTRIBUTION PAYABLE	$	7,216,005	$	1,443,201
ACCRUED EXPENSES	85,735		111,547
DEFERRED ROYALTY REVENUE	2,770,000		—
	10,071,740		1,554,748
UNALLOCATED RESERVE	1,127,832		3,792,181
TRUST CORPUS	3		3
	$	11,199,575	$	5,346,932

See Notes to Financial Statements

F-5

MESABI TRUST

STATEMENTS OF INCOME

YEARS ENDED JANUARY 31, 2010, 2009, AND 2008

	2010		2009		2008
REVENUES
Royalties under amended lease agreements	$	12,924,330	$	34,896,798	$	18,342,448
Royalties under Peters Lease fee	305,407		525,851		474,094
Interest	11,932		46,456		49,969
Total revenues	13,241,669		35,469,105		18,866,511
EXPENSES
Compensation of Trustees	178,581		228,053		181,700
Corporate Trustee’s administrative fees	62,500		62,500		62,500
Professional fees and expenses:
Legal	224,796		219,389		160,780
Accounting	125,009		109,268		60,324
Mining consultant and field representatives	22,908		22,617		52,242
Insurance	66,492		52,518		37,195
Annual stock exchange fee	38,000		38,000		38,000
Transfer agent’s and registrar’s fees	9,974		10,273		12,694
Other Trust expenses	89,747		56,702		28,716
Total expenses	818,007		799,320		634,151
NET INCOME	$	12,423,662	$	34,669,785	$	18,232,360
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING	13,120,010		13,120,010		13,120,010
NET INCOME PER UNIT	$	0.947	$	2.643	$	1.390

See Notes to Financial Statements

F-6

MESABI TRUST

STATEMENTS OF UNALLOCATED RESERVE AND TRUST CORPUS

YEARS ENDED JANUARY 31, 2010, 2009, AND 2008

	Unallocated Reserve
	Number of				Trust
	Units	Amount			Corpus
BALANCE, JANUARY 31, 2007	13,120,010	1,139,674			3
Net income	—	18,232,360			—
Distribution paid May 20, 2007, $.045 per unit	—	(590,400		)	—
Distribution paid August 20, 2007, $.310 per unit	—	(4,067,203		)	—
Distribution paid November 20, 2007, $.480 per unit	—	(6,297,605		)	—
Distribution declared January 11, 2008, paid February 20, 2008, $.515 per unit	—	(6,756,805		)	—
BALANCE, JANUARY 31, 2008	13,120,010	1,660,021			3
Net income	—	34,669,785			—
Distribution paid May 20, 2008, $.12 per unit	—	(1,574,401		)	—
Distribution paid August 20, 2008, $1.00 per unit	—	(13,120,010		)	—
Distribution paid November 20, 2008, $1.25 per unit	—	(16,400,013		)	—
Distribution declared January 16, 2009, paid February 20, 2009, $.11 per unit	—	(1,443,201		)	—
BALANCE, JANUARY 31, 2009	13,120,010	$	3,792,181		$	3
Net income	—	12,423,662			—
Distribution paid May 20, 2009, $.38 per unit	—	(4,985,604		)	—
Distribution paid November 20, 2009, $.22 per unit	—	(2,886,402		)	—
Distribution declared January 15, 2010, paid February 20, 2010, $.55 per unit	—	(7,216,005		)	—
BALANCE, JANUARY 31, 2010	13,120,010	$	1,127,832		$	3

See Notes to Financial Statements

F-7

MESABI TRUST

STATEMENTS OF CASH FLOWS

YEARS ENDED JANUARY 31, 2010, 2009, AND 2008

	2010			2009			2008
OPERATING ACTIVITIES
Royalties received	$	17,841,808		$	33,658,880		$	18,265,935
Interest received	17,901			48,173			50,415
Expenses paid	(843,818		)	(765,190		)	(710,529		)
NET CASH FROM OPERATING ACTIVITIES	17,015,891			32,941,863			17,605,821
INVESTING ACTIVITIES
Maturities of U.S. Government securities	329,000			586,953			9,464,477
Purchases of U.S. Government securities	(1,839,094		)	(383,181		)	(9,280,787		)
NET CASH FROM (USED FOR) INVESTING ACTIVITIES	(1,510,094		)	203,772			183,690
FINANCING ACTIVITY
Distributions to unitholders	(9,315,207		)	(37,851,229		)	(15,088,011		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	6,190,590			(4,705,594		)	2,701,500
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	2,254,107			6,959,701			4,258,201
CASH AND CASH EQUIVALENTS, END OF YEAR	$	8,444,697		$	2,254,107		$	6,959,701
RECONCILIATION OF NET INCOME TO NET CASH FROM OPERATING ACTIVITIES
Net income	$	12,423,662		$	34,669,785		$	18,232,360
Decrease (increase) in accrued income receivable	1,848,040			(1,762,053		)	(550,161		)
Decrease (increase) in prepaid expense	1			(5,736		)	(5,986		)
Increase (decrease) in accrued expenses	(25,812		)	39,867			(70,392		)
Increase in deferred royalty revenue	2,770,000			—			—
NET CASH FROM OPERATING ACTIVITIES	$	17,015,891		$	32,941,863		$	17,605,821
NON CASH FINANCING ACTIVITY
Distributions declared	$	7,216,005		$	1,443,201		$	6,756,805

See Notes to Financial Statements

F-8

MESABI TRUST

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2010, 2009 AND 2008

NOTE 1 -               NATURE OF BUSINESS AND ORGANIZATION

Nature of Business

Mesabi Trust was created in 1961 upon the liquidation of Mesabi Iron Company. The sole purpose of the Trust, as set forth in the Agreement of Trust dated as of July 18, 1961, is to conserve and protect the Trust Estate and to collect and distribute the income and proceeds there from to the Trust’s certificate holders after the payment of, or provision for, expenses and liabilities. The Agreement of Trust prohibits the Trust from engaging in any business.  In accordance with the Agreement of Trust, the Trust will terminate twenty-one years after the death of the survivor of twenty-five persons named in an exhibit to the Agreement of Trust, the youngest of whom is believed to be forty-eight years old.

The lessee/operator of Mesabi Trust’s mineral interests is Northshore Mining Corporation (NMC), a subsidiary of Cliffs Natural Resources Inc (Cliffs). Cliffs is among the world’s largest producers of iron ore products. Prior to September 30, 1994, the lessee/operator had been a subsidiary of Cyprus Amax Minerals Company and was named Cyprus Northshore Mining Corporation (Cyprus NMC).

Organization

The beneficial interest in Mesabi Trust is represented by 13,120,010 transferable units distributed on July 27, 1961 to shareholders of Mesabi Iron Company.

The Trust’s status as a grantor trust was confirmed by letter ruling addressed to Mesabi Iron Company from the Internal Revenue Service in 1961. As a grantor trust, Mesabi is exempt from Federal income taxes and its income is taxable directly to the Unitholders.

NOTE 2 -               SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Trust considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  As of January 31, 2010 and 2009, the Trust held $24,788 and $390,661, respectively, in a money market fund that invests primarily in obligations of the U.S. Treasury, which it considers to be cash and cash equivalents.

Investments

The Trust invests solely in U.S. Government securities. Management determines the appropriate classifications of the securities at the time they are acquired and evaluates the appropriateness of such classifications as of each balance sheet date.

The U.S. Government securities are classified as held-to-maturity securities as the Trust has the positive intent and ability to hold to maturity and are therefore stated at amortized cost.

F-9

MESABI TRUST

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2010, 2009 AND 2008

Revenue Recognition

Royalty income under the amended lease agreements with NMC is recognized as it is earned. Under such agreements, royalties are earned upon shipment from Silver Bay, Minnesota (NMC’s location), regardless of whether the actual sales proceeds for any shipment are received by NMC.  The amount of base overriding royalties and royalty bonuses payable are determined on the volume of tonnage shipped from Silver Bay, Minnesota during each calendar quarter and the actual proceeds to Cliffs resulting from such shipments.

Royalty income includes accrued income receivable.  Accrued income receivable represents royalty income earned but not yet received by the Trust under the royalty agreements described elsewhere in these notes.   Accrued income receivable is calculated based on (i) shipments during the last month of Mesabi Trust’s fiscal year, if any, and (ii) positive price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from Silver Bay, Minnesota.

Adjustments to royalty income may result from changes in final reconciliations of tonnage shipped by NMC with the final amounts received from NMC customers.  Adjustments may also result from revisions to estimated prices previously used to record revenue for tonnage shipped.  Pricing decreases may give rise to negative price adjustments which may be applied against future royalty income recognized by the Trust.

During the fourth quarter of fiscal 2009, positive price adjustments were recorded by Mesabi Trust as accrued income receivable due to price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from NMC with respect to shipments during calendar 2007 and calendar 2008.  During the fourth quarter of fiscal 2010, negative price adjustments were recorded by Mesabi Trust as deferred royalty revenue due to price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from NMC with respect to certain shipments during calendar 2008 and calendar 2009.  As of January 31, 2010, the Trust recognized revenue as accrued income receivable related to approximately 1,400,000 tons of iron ore that were shipped by NMC as of December 31, 2009, but for which Cliffs has indicated that final pricing is not yet known.  Pricing related to these tons is expected to be finalized in the first quarter of 2011.

Royalty income under the Peters Lease fee agreement also is recognized quarterly as it is earned. Under such agreement, however, royalties are earned at the option of NMC either upon mining of crude ore from Peters Lease lands or upon shipment from Silver Bay of iron ore product produced from Peters Lease lands.

Fixed Property, Including Intangibles

The Trust’s fixed property, including intangibles, is recorded at nominal values and includes the following:

1.The entire beneficial interest as assignor in the Amended Peters Lease Assignment and the Amended Cloquet Lease Assignment covering taconite properties in Minnesota which are leased to NMC.

F-10

MESABI TRUST

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2010, 2009 AND 2008

2.The entire beneficial interest in Mesabi Land Trust which owns a 20% fee interest in the lands     subject to the Peters Lease and the entire fee interest in other properties in Minnesota.

Deferred Royalty Revenue

Deferred royalty revenue represents an estimate of decreases in pellet revenue related to tons of iron ore that were shipped by Northshore, but for which Northshore has indicated that final pricing is not yet known and is adjusted in accordance with the Trust’s revenue recognition policy each quarter as updated pricing information is received.

Reclassifications

Certain reclassifications have been made to facilitate comparability with current presentation. Such reclassifications have no effect on the statement of income.

Net Income Per Unit

Net income per unit is computed by dividing net income available to Unitholders by the weighted average number of units outstanding.

Concentration of Credit Risk

Financial instruments which potentially subject the Trust to concentrations of credit risk consist primarily of cash that is maintained at an FDIC insured financial institution. At times during the year the Trust’s cash balance may exceed insured limits.

As further described in Note 1, NMC is the lessee/operator of the Mesabi Trust land.  All royalty income earned by the Trust is received from NMC, and accordingly, the entire accrued income receivable is also due from NMC.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the Trustees to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  Specifically, the accrued income receivable, deferred royalty revenue and related royalty revenue is a significant estimate which is subject to change in the near term, and changes to this estimate could have a material effect on the Trust’s financial statements.

Fair Value Measures

Valuation Hierarchy

ASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.

F-11

MESABI TRUST

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2010, 2009 AND 2008

·Level 1 — Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

·Level 2 — Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·Level 3 — Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety.

The carrying amounts of financial instruments including investments, accrued income receivable, distributions payable, accrued expenses and deferred royalty revenue approximated fair value as of January 31, 2010 and 2009, because of the relative short maturity of these instruments.

Recent Accounting Pronouncements

Effective July 1, 2009, the Trust adopted the FASB Accounting Standards Codification™ (“Codification”). The Codification is the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. The content of the Codification carries the same level of authority, thereby modifying the previous GAAP hierarchy to include only two levels of GAAP: authoritative and nonauthoritative. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Adoption of the Codification did not result in a change in current accounting practice.

In April 2009, the FASB updated ASC 820 to provide additional guidance for estimating fair value when the volume and level of activity for an asset or liability have significantly decreased, including guidance on identifying circumstances that indicate a transaction is not orderly. The updated guidance emphasizes that the objective of a fair value measurement remains the same even if there has been a significant decrease in the volume and level of activity for the asset or liability and amends certain reporting requirements for interim and annual periods related to disclosure of major security types and the inputs and valuation techniques used in determining fair value. The amendment is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The adoption of this amendment did not have a material impact the Trust’s financial statements.

In August 2009, the FASB issued ASU No. 2009-05 which amends ASC 820-10-35 to provide further guidance concerning the measurement of a liability at fair value when there is a lack of observable market information, particularly in relation to a liability whose transfer is contractually restricted. The amendment provides additional guidance on the use of an appropriate valuation technique that reflects the quoted price of an identical or similar liability when traded as an asset and clarifies the circumstances under which adjustments to such price may be required in estimating the fair value of the liability. The guidance provided in this update is effective for the first reporting period beginning after issuance, with early application permitted. The amendment was adopted for the annual reporting period ended January 31, 2010 and did not have a material

F-12

MESABI TRUST

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2010, 2009 AND 2008

impact on the Trust’s financial statements.

In January 2010, the FASB issued ASU 2010-06, which amends the guidance on fair value to add new requirements for disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value.  The new guidance is effective for the first reporting period beginning after December 15, 2009, except for the requirement to provide the Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Trust will adopt this amendment upon its effective date and will report the required disclosures beginning with the interim period ended April 30, 2010.

NOTE 3 -               U. S. GOVERNMENT SECURITIES

U.S. government securities at January 31, 2010 and 2009 are classified as held-to-maturity and mature as follows:

	2009				2008
	Carrying				Carrying
	Value		Fair Value		Value		Fair Value
Due within one year	$	—	$	—	$	340,421	$	335,254
Due after one year through three years	1,850,515		1,855,546		—		—
	$	1,850,515	$	1,855,546	$	340,421	$	335,254

NOTE 4 -               ROYALTY AGREEMENT

The current royalty rate schedule became effective on August 17, 1989, which was established pursuant to certain agreements (the “Amended Assignment Agreements”) the Trust entered into with Cyprus Northshore Mining Corporation (“Cyprus NMC”).  Pursuant to the Amended Assignment Agreements, overriding royalties are determined by both the volume and selling price of iron ore products shipped.

Pursuant to the Amended Assignment Agreements, NMC is obligated to pay Mesabi Trust base overriding royalties, in varying amounts constituting a percentage of the gross proceeds of shipments, from Silver Bay, Minnesota, of iron ore product produced from Mesabi Trust lands or, to a limited extent, other lands.  NMC is obligated to make payments of overriding royalties on product shipments within 30 days following the calendar quarter in which such shipments occur.  NMC resumed mining operations and shipping product from Silver Bay in the second calendar quarter of 1990, and the first payment of overriding royalties was made in July 1990.

F-13

MESABI TRUST

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2010, 2009 AND 2008

Royalty bonuses are payable on all iron ore products produced from Mesabi Ore shipped from Silver Bay during a calendar quarter and sold at prices above the Adjusted Threshold Price.  The Adjusted Threshold Price was $47.43 (per ton) for calendar year 2008, $48.48 (per ton) for calendar year 2009 and will be $48.81 (per ton) for calendar year 2010.  The Adjusted Threshold Price is subject to adjustment (but not below $30 per ton) for inflation and deflation and is determined each year on the basis of the change in the Gross Domestic Product Implicit Price Deflator, a broad based index of inflation and deflation published quarterly by the U.S. Department of Commerce.

NMC also is obligated to pay to Mesabi Trust a minimum advance royalty of $500,000 per annum, subject to adjustment for inflation and deflation (but not below $500,000), which is credited against base overriding royalties and royalty bonuses. NMC is obligated to make quarterly payments of the minimum advance royalty in January, April, July and October of each year. For the calendar year ending December 31, 2010, the minimum advance royalty is $813,729. The minimum annual advance royalty was $808,177 and $790,721, for the calendar years ended December 31, 2009 and 2008, respectively.

NOTE 5 -              UNALLOCATED RESERVE AND DISTRIBUTIONS

The Trustees have determined that the unallocated cash and U.S. Government securities portion of the Unallocated Reserve should be maintained at a prudent level, usually within the range of $500,000 to $1,000,000, to meet present or future liabilities of the Trust.  The actual amount of the unallocated cash and U.S. Government securities portion of the Unallocated Reserve will fluctuate from time to time, and it may increase or decrease from its current level.

The Trustees determine the level of distributions on a quarterly basis after receiving notification from NMC as to the amount of royalty income that will be received and after determination of any known or anticipated expenses, liabilities and obligations of the Trust.  As a result of fluctuations in the accrued income receivable portion of the Unallocated Reserve, future distributions may vary depending upon the adjustments to royalty income, which are determined by NMC, and the level of Trust expenses that the Trustees anticipate occurring in subsequent quarters.

During the fiscal years ended January 31, 2010, 2009, and 2008, the Trustees distributed cash payments totaling $9,315,207 ($.71 per Unit), $37,851,229 ($2.89 per Unit), and $15,088,011 ($1.15 per Unit), respectively. In addition, in January 2010 the Trustees declared a distribution of $.55 per Unit of beneficial interest, which was paid in February 2010.

F-14

MESABI TRUST

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2010, 2009 AND 2008

NOTE 6 -               SUMMARY OF QUARTERLY EARNINGS (UNAUDITED)

The quarterly results of operations for the two years ended January 31, 2010 and 2009 are presented below:

	2010
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Revenue	$	1,024,881	$	422,936	$	5,042,739	$	6,751,113
Expenses	223,835		201,925		141,870		250,377
Net income	$	801,046	$	221,011	$	4,900,869	$	6,500,736
Net income per unit	$	0.061	$	0.017	$	0.374	$	0.495

	2009
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Revenue	$	3,861,807	$	16,771,803	$	11,796,116	$	3,039,379
Expenses	222,154		201,486		138,805		236,875
Net income	$	3,639,653	$	16,570,317	$	11,657,311	$	2,802,504
Net income per unit	$	0.277	$	1.263	$	0.889	$	0.214

F-15

NOTE 7 — SUBSEQUENT EVENT

In April 2010, the Trust received customary quarterly payment notification from NMC, which indicated that the Trust was credited a royalty payment of approximately $1.77 million.  The Trust will receive only the minimum advance royalty payment of approximately $203,000 on April 30, 2010 because NMC applied negative pricing adjustments of approximately $2.8 million against the $1.77 million royalty payment credited to the Trust for shipments during the three months ended March 31, 2010.  This resulted in a carry forward negative pricing adjustment of approximately $1.1 million.  The Trust anticipates that NMC will offset the $1.1 million carry forward negative price adjustment against royalties that will be payable to the Trust in future periods.

F-16

EX-31

Exhibit 31

CERTIFICATION

I, Kenneth R. Ring, certify that:

1.I have reviewed this annual report on Form 10-K of Mesabi Trust, for which Deutsche Bank Trust Company Americas acts as Corporate Trustee;

2.Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, distributable income and changes in trust corpus of the registrant as of, and for, the period presented in this annual report.

4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), or for causing such controls and procedures and internal control over financial reporting to be established and maintained, for the registrant and have:

a)designed such disclosure controls and procedures, or caused such controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this annual report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the

case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors:

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves persons who have a significant role in the registrant’s internal control over financial reporting.

In giving the foregoing certifications in paragraphs 4 and 5, I have relied to the extent I consider reasonable on information provided to me by Eveleth Fee Office, Inc., Northshore Mining Company and Cliffs Natural Resources, Inc.

Date: April 15, 2010	By:	/s/ Kenneth R. Ring
		Kenneth R. Ring*
		Vice President
		Deutsche Bank National Trust Company For Deutsche Bank Trust Company Americas

* There are no principal executive officers or principal financial officers of the registrant.

EX-32

Exhibit 32

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, the Corporate Trustee of Mesabi Trust, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge, the Annual Report of Mesabi Trust on Form 10-K for the fiscal year ended January 31, 2010 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of operations of Mesabi Trust.

/s/ Kenneth R. Ring	April 15, 2010
Kenneth R. Ring*
Vice President
Deutsche Bank National Trust Company For Deutsche Bank Trust Company Americas

* There are no principal executive officers or principal financial officers of the registrant.

A signed original of this written statement required by Section 906 has been provided to Mesabi Trust and will be retained by Mesabi Trust and furnished to the Securities and Exchange Commission or its staff upon request.

COVER

Plaza VII, Suite 3300

45 South Seventh Street

Minneapolis, MN  55402-1609

www.Oppenheimer.com

Direct:	(612) 607-7309
Main:	(612) 607-7000
Fax:	(612) 607-7100
E-Mail:	TMarek@Oppenheimer.com

April 15, 2010

VIA EDGAR

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549

Re:          Mesabi Trust - File No. 1-4488

Dear Ladies and Gentlemen:

On behalf of Mesabi Trust (the “Trust”), we are hereby furnishing for filing via EDGAR the Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 2010.

Pursuant to General Instruction D.3. of Form 10-K, the Trust represents that the financial statements included in the Form 10-K do not reflect a change from the preceding fiscal year in any accounting principles or practices or in the method of applying such principles or practices.

Any questions or comments regarding this filing may be directed to the undersigned at (612) 607-7309.

Very truly yours,

/s/ Thomas R. Marek

Thomas R. Marek