Note 4. During recent periods, the Trustees had determined that Mesabi Trust’s unallocated reserve should usually be within the range of $500,000 to $1,000,000. In April 2015, the Trustees determined that the unallocated reserve may no longer necessarily be within such range. Rather, each quarter, as authorized by the Agreement of Trust, the Trustees will reevaluate all relevant factors including all costs, expenses, obligations, and present and future liabilities of the Trust (whether known or contingent) in determining a prudent level of unallocated reserve in light of the unpredictable nature of the iron ore industry and current economic conditions. 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 April 30, 2015 and January 31, 2015, the unallocated cash and U.S. Government securities portion of the Trust’s Unallocated Reserve was comprised of the following components:

	April 30, 2015 (unaudited)		January 31, 2015
Cash and U.S. Government securities	$	1,569,442	$	9,484,275
Distribution payable	—		(8,396,806		)

Unallocated cash and U.S. Government securities	$	1,569,442	$	1,087,469

A reconciliation of the Trust’s Unallocated Reserve from January 31, 2015 to April 30, 2015 is as follows:

Unallocated Reserve, January 31, 2015	$	1,611,124

Net income	940,266
Distributions declared	—

Unallocated Reserve, April 30, 2015	$	2,551,390