Note 4. On April 27, 2017, the Trustees received the quarterly royalty report of iron ore product shipments from Silver Bay, Minnesota during the quarter ended March 31, 2017 from Cliffs Natural Resources Inc. (“Cliffs”), the parent company of Northshore Mining Company (“Northshore”). On April 14, 2017, the Trustees declared a distribution of fifty five cents ($0.55) per Unit of Beneficial Interest payable on May 20, 2017 to Mesabi Trust Unitholders of record at the close of business on April 30, 2017.

Each quarter, as authorized by the Agreement of Trust, the Trustees evaluate all relevant factors including all costs, expenses, obligations, and present and future liabilities of the Trust (whether known or contingent) in determining the prudent level of unallocated reserve in light of the unpredictable nature of the iron ore industry and current economic conditions.

Pursuant to the Agreement of Trust, the Trustees make decisions about 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, 2017 and January 31, 2017, the unallocated cash and U.S. Government securities portion of the Trust’s Unallocated Reserve was comprised of the following components:


	April 30, 2017 (unaudited)		January 31, 2017
Cash and U.S. Government securities	$	12,382,899	$	14,151,226
Distribution payable		(7,216,006)		(1,836,801)

Unallocated cash and U.S. Government securities	$	5,166,893	$	12,314,425

A reconciliation of the Trust’s Unallocated Reserve from January 31, 2017 to April 30, 2017 is as follows:


Unallocated Reserve, January 31, 2017	$	10,205,470

Net income		3,361,707
Distributions declared		(7,216,006)

Unallocated Reserve, April 30, 2017	$	6,351,171