Note 4. 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. Accordingly, 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 payments received quarterly and the level of Trust expenses that the Trustees anticipate occurring in subsequent quarters. Pursuant to the Agreement of Trust, the Trust makes cash distributions to Unitholders based on the royalty payments it receives from Northshore when received, rather than as royalty income is recorded in accordance with the Trust’s revenue recognition policy. Refer to Note 3 for further information.

As of July 31, 2013 and January 31, 2013, the unallocated cash and U.S. Government securities portion of the Trust’s Unallocated Reserve was comprised of the following components:

	July 31, 2013
	(unaudited)		January 31, 2013
Cash and U.S. Government securities	$	6,757,004	$	7,371,331
Distribution payable	6,035,205		6,428,805

Unallocated cash and U.S. Government securities	$	721,799	$	942,526

A reconciliation of the Trust’s Unallocated Reserve from January 31, 2013 to July 31, 2013 is as follows:

Unallocated Reserve, January 31, 2013	$	1,182,222

Net income, six months ended July 31, 2013	9,827,169
Distributions declared	(7,084,806		)

Unallocated Reserve, July 31, 2013	$	3,924,585