10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2023

or

☐ 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 incorporation or organization)	(I.R.S. Employer Identification No.)

c/o Deutsche Bank Trust Company Americas Trust & Agency Services 1 Columbus Circle, 17th Floor Mail Stop: NYC01-1710 New York, New York	10019
(Address of principal executive offices)	(Zip Code)

(904) 271-2520

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Units of Beneficial Interest, no par value	MSB	New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

Large accelerated filer    ☐	Accelerated filer                       ☐
Non-accelerated filer      ☒	Smaller reporting company     ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of December 11, 2023, there were 13,120,010 Units of Beneficial Interest in Mesabi Trust outstanding.

TABLE OF CONTENTS

	Page
PART I – FINANCIAL INFORMATION	3
Item 1. Financial Statements. (Note 1)	3
Condensed Statements of Operations Three and Nine Months Ended October 31, 2023 and 2022	3
Condensed Balance Sheets October 31, 2023 and January 31, 2023	4
Condensed Statements of Cash Flows Nine Months Ended October 31, 2023 and 2022	5
Notes to Condensed Financial Statements	6
Item 2. Trustees’ Discussion and Analysis of Financial Condition and Results of Operations.	10
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	18
Item 4. Controls and Procedures.	19
PART II - OTHER INFORMATION	20
Item 1. Legal Proceedings	20
Item 1A. Risk Factors	20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3. Defaults upon Senior Securities	20
Item 4. Mine Safety Disclosures	20
Item 5. Other Information	20
Item 6. Exhibits.	21
SIGNATURES	22

Forward-Looking Statements

Certain information included in this Quarterly Report on Form 10-Q contains, or incorporates by reference, not only historical information, but also “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All such forward-looking statements, including those statements regarding estimation of iron ore pellet production, shipments, pricing, royalties and other matters, are based on information 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 (“Mesabi Trust” or the “Trust”). These statements may be identified by the use of forward-looking words, such as “may,” “will,” “could,” “project,” “predict,” “intend,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “should,” “assume,” “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. These risks and uncertainties include, but are not limited to, volatility of iron ore and steel prices, market supply and demand, competition, environmental hazards, health and safety conditions, regulation or government action, litigation, uncertainties about estimates of reserves, general adverse business and industry economic trends, uncertainties arising from war, terrorist events and other global events, higher or lower customer demand for steel and iron ore, decisions by mine operators regarding curtailments or idling production lines or entire plants, environmental compliance uncertainties, difficulties in obtaining and renewing necessary operating permits, higher imports of steel and iron ore substitutes, processing difficulties, consolidation and restructuring in the domestic steel market, market inputs tied to indexed price adjustment factors found in Cliffs’ Customer Contracts (as defined below) resulting in future adjustments to royalties payable to Mesabi Trust, and other factors. Further, substantial portions of royalties earned by Mesabi Trust are based on estimated prices that are subject to interim and final adjustments, which can be positive or negative, and are dependent in part on multiple price and inflation index factors under agreements to which Mesabi Trust is not a party and that are not known until after the end of a contract year. It is possible that future negative price adjustments could partially or even completely offset 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 (as defined below) in future quarters.

For a discussion of the factors, including without limitation, those that could materially and adversely affect Mesabi Trust’s actual results and performance, see “Risk Factors” set forth on pages 4 through 17 of Mesabi Trust’s Annual Report for the year ended January 31, 2023, as updated by Part II, Item 1A of the Report on Form 10-Q for the quarter ended April 30, 2023. These risks and uncertainties are not exclusive and further information concerning the Trust, including factors that potentially could materially affect our operating results, financial condition or the market price of the Units, may emerge from time to time. Mesabi Trust undertakes no obligation, other than that imposed by law, 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. We advise you, however, to consult any further disclosures we make on related subjects in our future Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K that we file with or furnish to the Securities and Exchange Commission.

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements. (Note 1)

Mesabi Trust

Condensed Statements of Operations

Three and Nine Months Ended October 31, 2023 and 2022

	Three Months Ended				Nine Months Ended
	October 31,				October 31,
	2023		2022		2023		2022
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
A. Condensed Statements of Operations
Revenues
Royalty income	$	4,664,092	$	—	$	16,106,008	$	9,794,440
Interest		231,974		84,681		528,152		119,678
Total revenues		4,896,066		84,681		16,634,160		9,914,118
Expenses		810,000		498,373		2,341,615		1,589,996
Net income (loss)	$	4,086,066	$	(413,692)	$	14,292,545	$	8,324,122
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING
Number of units outstanding		13,120,010		13,120,010		13,120,010		13,120,010
Net income (loss) per unit (Note 2)	$	0.3114	$	(0.0315)	$	1.0894	$	0.6345
Distributions declared per unit (Note 3)	$	0.3500	$	-	$	0.3500	$	1.8800

See Notes to Condensed Financial Statements.

3

Mesabi Trust

Condensed Balance Sheets

October 31, 2023 and January 31, 2023

	October 31, 2023		January 31, 2023
	(unaudited)
B. Condensed Balance Sheets
Assets
Cash and cash equivalents	$	22,912,715	$	13,966,500
Accrued income receivable		1,885,432		23,562
Contract asset		1,002,095		—
Prepaid expenses		212,757		127,233
Current assets		26,012,999		14,117,295
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
Total assets	$	26,013,002	$	14,117,298
Liabilities, Unallocated Reserve And Trust Corpus
Liabilities
Distribution payable	$	4,592,003	$	—
Accrued expenses		282,240		380,960
Contract liability		—		2,298,121
Total liabilities		4,874,243		2,679,081
Unallocated reserve		21,138,756		11,438,214
Trust corpus		3		3
Total liabilities, unallocated reserve and trust corpus	$	26,013,002	$	14,117,298

See Notes to Condensed Financial Statements.

4

Mesabi Trust

Condensed Statements of Cash Flows

Nine Months Ended October 31, 2023 and 2022

	Nine Months Ended
	October 31,
	2023		2022
		(unaudited)		(unaudited)
C. Condensed Statements of Cash Flows
Operating activities
Royalties received	$	10,987,764	$	15,857,438
Interest received		484,310		85,363
Expenses paid		(2,525,859)		(1,540,146)
Net cash from operating activities		8,946,215		14,402,655
Financing activity
Distributions to unitholders		—		(47,625,638)
Net change in cash and cash equivalents		8,946,215		(33,222,983)
Cash and cash equivalents, beginning of period		13,966,500		47,727,522
Cash and cash equivalents, end of period	$	22,912,715	$	14,504,539
Reconciliation of net income to net cash from operating activities
Net income	$	14,292,545	$	8,324,122
(Increase) decrease in accrued income receivable		(1,861,870)		4,597,050
(Increase) decrease in contract asset		(1,002,095)		1,431,633
Increase in prepaid expense		(85,524)		(87,773)
(Decrease) increase in accrued expenses		(98,720)		137,623
Decrease in contract liability		(2,298,121)		—
Net cash from operating activities	$	8,946,215	$	14,402,655
Non cash financing activity
Distributions declared and payable	$	4,592,003	$	—

See Notes to Condensed Financial Statements.

5

Mesabi Trust

Notes to Condensed Financial Statements

October 31, 2023 (Unaudited)

Note 1.  The condensed financial statements and notes to the condensed financial statements included herein have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Trustees of Mesabi Trust (the “Trustees”), all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the results of operations for the three and nine months ended October 31, 2023 and 2022, (b) the financial position as of October 31, 2023 and (c) the cash flows for the nine months ended October 31, 2023 and 2022, have been made. For further information, refer to the financial statements and footnotes included in Mesabi Trust’s Annual Report on Form 10-K for the year ended January 31, 2023.

Note 2.  Net income per unit is based on 13,120,010 units outstanding during all periods presented.

The Trust accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers. All revenue is recognized as the performance obligations are satisfied. In accordance with the royalty agreement, the Trust recognizes revenue upon providing access to the lands and minerals only after the consideration that is entitled to be received is determinable. The Trust is entitled to payment upon production of all pellet grades to be sold for internal use by facilities owned by Cliffs, the parent company of Northshore, or its subsidiaries. For revenue recognition purposes, the Trust recognizes revenue for internal use pellets upon production of those pellets, which is when Cliffs deems these pellets to be shipped under the royalty agreement. Pellets that are not designated for internal use by Cliffs, or its subsidiaries, are recognized as revenue upon shipment from Silver Bay, Minnesota.

Disaggregation of Revenues

The following table represents a disaggregation of revenue for the three and nine months ended October 31, 2023 and October 31, 2022.

	Three Months Ended October 31,
	2023		2022
Base overriding royalties	$	2,214,651	$	—
Bonus royalties		2,252,620		—
Fee royalties		196,821		—
Total royalty income	$	4,664,092	$	—

	Nine Months Ended October 31,
	2023		2022
Base overriding royalties	$	8,550,118	$	3,829,720
Bonus royalties		7,050,557		5,722,317
Fee royalties		505,333		242,403
Total royalty income	$	16,106,008	$	9,794,440

Base overriding royalties

The performance obligation for the base overriding royalty consists of providing Northshore access to the Peters Lands, Cloquet Lands, and Mesabi Lands and the right to mine on these lands. The consideration to be received from this access relates to the volume of iron ore actually shipped to third parties, or deemed shipped upon production for internal use, by Northshore. Cliffs considers pellets designated for internal use by Cliffs to be “deemed shipped” upon production, entitling the Trust to payment under the provisions of the royalty agreement at this time. Mesabi Trust receives royalties at the greater of (i) the aggregate quantity of iron ore products shipped, or deemed shipped, that were mined from Mesabi Trust Lands, and (ii) a portion of the aggregate quantity of all iron ore products shipped, or deemed shipped, that were mined from any lands, such portion being 90% of the first four million tons shipped, or deemed shipped, during such year, 85% of the next two million tons shipped, or deemed shipped, during such year, and 25% of all tonnage shipped, or deemed shipped, during such year in excess of six million tons.

The royalty percentage paid to the Trust increases as the aggregate tonnage of iron ore products shipped, or deemed shipped, attributable to the Trust, in any calendar year increases. The Trust earns a 2.5% royalty on the first million tons shipped or

6

deemed shipped, 3.5% on the second million tons, 5.0% on the third million tons, 5.5% on the fourth million tons and 6.0% beyond four million tons. The base overriding royalties contain variable consideration, as the transaction price is based on a percentage that varies based on the total cumulative tons of iron ore shipped, or deemed shipped, for the calendar year. The Trust estimates the variable consideration it expects to be entitled to receive over the contractual period associated with the royalty agreement. Under the royalty agreement, measurement of the total cumulative volumes of iron ore shipped, or deemed shipped, and the applicable royalty percentages, is reset at the beginning of each calendar year. The Trust evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, the Trust includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For the base overriding royalties, the Trust estimates the base overriding royalty percentage using the expected value method, which calculates the estimate based on historical, current, and forecasted shipments. The Trust recognizes base overriding royalties on a quarterly basis based on the actual third party shipments and deemed shipments for internal use for the fiscal quarter at the estimated royalty percentage as described above and based on the estimated prices for iron ore products sold under Cliffs’ Customer Contracts.

On May 1, 2022, Cliffs idled Northshore. On July 22, 2022, Cliffs announced that it was extending the ongoing idle at Northshore through at least April of 2023. Based on the change in the anticipated timing of the idling of Northshore operations, the Trust’s estimate of the variable consideration relating to the base overriding royalties to be received was determined to be constrained during the second quarter ended July 31, 2022, and all variable consideration expected to be received through the end of the fiscal year ended January 31, 2023 was reversed in the second fiscal quarter ended July 31, 2022. On April 25, 2023, Cliff's announced a partial restart of some operations at Northshore and that Cliffs will continue to treat Northshore as a swing operation. The Trust has recommenced recording a contract asset for variable consideration in the current fiscal year for base overriding royalties, based on estimated cumulative tons shipped for the current fiscal year at estimated prices for iron ore products sold under Cliffs’ Customer Contracts that will be collected in subsequent quarters as the uncertainty associated with the variable consideration is resolved.

Bonus royalties

The performance obligation for the bonus royalties consists of providing Northshore access to the Peters Lands, Cloquet Lands, and Mesabi Lands and the right to mine on these lands and the consideration to be received from this access relates to the volume of iron ore shipped, or deemed shipped, by Northshore. The Trust recognizes bonus royalties on a quarterly basis based on the actual third party shipments and deemed shipments for internal use, for the fiscal quarter at the actual royalty percentage for those shipments and based on the anticipated prices for iron ore products sold under Cliffs’ Customer Contracts. The Trust is paid royalty bonuses when iron ore products shipped are sold at anticipated prices above a threshold price per ton. The royalty bonus is based on a percentage of the gross proceeds of product shipped. The royalty bonus percentage ranges from 1/2 of 1% of the gross proceeds (on all tonnage shipped for sale at prices between the threshold price and $2.00 above the threshold price) to 3% of the gross proceeds (on all tonnage shipped for sale at prices $10.00 or more above the threshold price). The threshold price is adjusted annually for inflation and is $66.00 per ton for calendar year 2023.

Fee royalties

The Fee royalties are determined based on the volume of crude ore mined on a quarterly basis. The Trust recognizes fee royalties on a quarterly basis based on the actual crude ore mined during the fiscal quarter. 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 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 the corporate trustee. The fee royalty on crude ore is based on an agreed price per ton, subject to certain indexing.

Accrued income receivable

The accrued income receivable is included in net income per unit. The Trust recorded $1,885,432 of accrued income receivable as reflected on the Condensed Balance Sheet as of October 31, 2023 (unaudited). As of January 31, 2023, the Trust recorded accrued income receivable of $23,562. 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 the Trust’s fiscal quarter, if any, and (ii) net positive adjustments (which may include the sum of positive and negative price adjustments) calculated using 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.

7

Contract asset and contract liability

The contract asset and contract liability are presented net in the accompanying condensed balance sheets as both the contract asset and contract liability are derived from one customer contract. A net contract asset in the amount of $1,002,095 is reflected on the Condensed Balance Sheet as of October 31, 2023 (unaudited). The net contract asset is made up of a contract asset in the amount of $1,525,140 and a contract liability in the amount of $523,045. As of January 31, 2023 the Trust recorded a net contract liability of $2,298,121. The net contract liability is made up of a contract asset in the amount of $0 and a contract liability in the amount of $2,298,121. The contract asset relates to variable consideration for base overriding royalties that occurs as a result of escalating royalty rates earned as thresholds for tons of ore shipped are reached. At each period end, the Trust updates its estimate of total tons expected to be shipped for the calendar year and applies the estimated annual royalty rate to actual tons shipped in the period. The estimate of total tons to be shipped for the calendar year is determined based on historical, current, and forecasted shipment data. The recorded contract asset represents the additional revenue earned based on the estimated annual royalty rate compared to the effective contracted rate for tons shipped during the period. The contract asset is not available for distribution to the Unitholders until the applicable royalties are actually received by the Trust. The Trust includes estimated future royalty rates on current contracted volumes within the contract asset. The contract liability represents an estimate of decreases in royalty revenue related to tons of iron ore that were shipped, or deemed 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, as well as payment for tons credited to the Trust at a minimum of 90% of total shipments when the actual tons shipped from Trust lands are less than 90% in the calendar quarter. The contract liability as of January 31, 2023 was offset against royalty payments owed to the Trust during the second fiscal quarter ended July 31, 2023.

Note 3.  The Trustees determine whether to declare a distribution each year in April, July, October and January. The Trust’s financial statements are prepared on an accrual basis and present the Trust’s results of operations based on each of the Trust’s fiscal quarters, which end one month after the close of each calendar quarter. Because (i) distributions, if any, are declared by the Trustees based on, among other considerations, the amount of royalties actually paid to the Trust through the end of each calendar quarter prior to April, July, October and January of each year, the Trustees’ evaluation of known and projected Trust expenses in the current and future quarters, the then-current level of Unallocated Reserve and general economic conditions, and (ii) the Trust’s Net Income is calculated as of the end of each fiscal quarter, the distributions declared by the Trust are not equivalent to the Trust’s Net Income during the periods reported in this quarterly report on Form 10-Q.

Note 4.  On October 13, 2023, the Trustees declared a distribution of $0.35 per Unit of Beneficial Interest payable on November 20, 2023 to Mesabi Trust Unitholders of record at the close of business on October 30, 2023. The declared distribution of $4,592,003 is recorded as a distribution payable on the Consolidated Balance Sheet for the quarter ended October 31, 2023 (unaudited) as compared to no distribution per Unit of Beneficial Interest for the quarter ended October 31, 2022.

On October 30, 2023, the Trustees received the quarterly royalty report of iron ore production and shipment during the calendar quarter ended September 30, 2023 from Cliffs.

Each quarter, as authorized by the Agreement of Trust dated July 18, 1961, as amended (the “Agreement of Trust”), the Trustees evaluate all relevant factors, including all costs, expenses, obligations, and present and future liabilities of the Trust (whether fixed 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 Cliffs 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 October 31, 2023 and January 31, 2023, the unallocated cash and cash equivalents portion of the Trust’s Unallocated Reserve was comprised of the following components. Cash equivalents consists of U.S. government securities with original maturities of 3 months or less.

	October 31, 2023		January 31, 2023
Cash and cash equivalents	$	22,912,715	$	13,966,500
Distribution payable		(4,592,003)		—
Unallocated cash and cash equivalents	$	18,320,712	$	13,966,500

8

A reconciliation of the Trust’s Unallocated Reserve and Trust Corpus for the three and nine months ended October 31, 2023 and 2022 is as follows:

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2023	$	11,438,214	$	3	$	11,438,217
Net income		14,292,545		—		14,292,545
Distributions declared - $0.3500 per unit		(4,592,003)		—		(4,592,003)
Balances as of October 31, 2023	$	21,138,756	$	3	$	21,138,759

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of July 31, 2023	$	21,644,693	$	3	$	21,644,696
Net income		4,086,066		—		4,086,066
Distributions declared - $0.3500 per unit		(4,592,003)		—		(4,592,003)
Balances as of October 31, 2023	$	21,138,756	$	3	$	21,138,759

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2022	$	30,794,749	$	3	$	30,794,752
Net income		8,324,122		—		8,324,122
Distributions declared - $1.8800 per unit		(24,665,620)		—		(24,665,620)
Balances as of October 31, 2022	$	14,453,251	$	3	$	14,453,254

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of July 31, 2022	$	14,866,943	$	3	$	14,866,946
Net loss		(413,692)		—		(413,692)
Distributions declared - $0.00 per unit		—		—		—
Balances as of October 31, 2022	$	14,453,251	$	3	$	14,453,254

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Item 2. Trustees’ Discussion and Analysis of Financial Condition and Results of Operations.

This discussion should be read in conjunction with the condensed financial statements and notes presented in this Quarterly Report on Form 10-Q and the financial statements and notes in the last filed Annual Report on Form 10-K for the year ended January 31, 2023 for a full understanding of Mesabi Trust’s financial position and results of operations for the three and nine months ended October 31, 2023.

All references in this discussion and in this Quarterly Report on Form 10-Q to iron ore products “shipped” shall include iron ore products that Cleveland-Cliffs Inc. (“Cliffs”) actually ships from Silver Bay, Minnesota and/or iron ore products Cliffs deems shipped upon production. Similarly, all references in this discussion and in this Quarterly Report on Form 10-Q to “shipments” shall include Cliffs’ actual shipments of iron ore products and/Cliffs’ production of iron ore products it deems shipped. The Trust is entitled to payment upon production of all pellet grades to be sold for internal use by facilities owned by Cliffs or its subsidiaries. For revenue recognition purposes, the Trust recognizes revenue for internal use pellets upon production of those pellets, which is when Cliffs deems these pellets to be shipped under the royalty agreement. Pellets that are not designated for internal use by Cliffs, or its subsidiaries, are recognized as revenue upon shipment from Silver Bay, Minnesota.

Background

Mesabi Trust, formed pursuant to 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 (“MIC”), 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 a trust organized under the laws of the State of Minnesota to administer the Mesabi Fee Lands (as defined below) as the trust corpus in compliance with the laws of the State of Minnesota on July 18, 1961 (the “Mesabi Land Trust”) 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 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 by 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. Mesabi Trust has no employees, but it engages independent consultants to assist the Trustees in, among other things, monitoring the volume and sales prices of iron ore products shipped, based on information supplied to the Trustees by Northshore Mining Company (“Northshore”), the lessee/operator of the lands leased under the Peters Lease and Cloquet Lease (the “Peters Lease Lands” and “Cloquet Lease Lands,” respectively) and the 20% fee interest of certain lands that are particularly described in, and subject to a mining lease under, the Peters Lease (the “Mesabi Fee Lands,” and together with the Peters Lease Lands and Cloquet Lease Lands, the “Mesabi Trust Lands”), and its parent company, Cliffs. References to Northshore in this quarterly report, unless the context requires otherwise, are applicable to Cliffs as well.

Leasehold royalty income constitutes the principal source of the Trust’s revenue. The income of the Trust is highly dependent upon the activities and operations of Northshore. Royalty rates and the resulting royalty payments received by the Trust are determined in accordance with the terms of the Trust’s leases and assignments of leases.

Three types of royalties, as well as royalty bonuses, comprise the Trust’s leasehold royalty income:

● Base overriding royalties. Base overriding royalties have historically constituted the majority of the 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 the 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 or deemed shipped. The percentage ranges from 2-1/2% of the gross proceeds for the first one million tons of iron ore products shipped annually to 6% of the gross proceeds for all iron ore products in excess of four million tons shipped annually. Base overriding royalties are subject to interim and final price adjustments under some of the contracts among Northshore, Cliffs and certain of their customers (the “Cliffs’ Customer Contracts”) and, as described elsewhere in this report, such adjustments may be positive or negative.

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● Royalty bonuses. The Trust earns royalty bonuses when iron ore products shipped 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. 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 is $66.00 per ton for calendar year 2023 and was $62.03 per ton for calendar year 2022. 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 Cliffs’ Customer Contracts and, as described elsewhere in this report, such adjustments may be positive or negative.

● 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 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 the 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. 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 or deflation. The minimum advance royalty is $1,100,498 for calendar year 2023 and was $1,034,237 for calendar year 2022. 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 Mesabi Trust Lands 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, 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 that were mined from any lands, such portion being 90% of the first four million tons shipped 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. 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 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 ton volume thresholds.

During the course of its typical fiscal year, some portion of royalties expected to be paid to Mesabi Trust is based in part on estimated prices for certain iron ore products sold under some of the Cliffs’ Customer Contracts. Some of the Cliffs’ Customer Contracts use estimated prices which are subject to interim and final pricing adjustments, which can be positive or negative, and 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’ Customer Contracts, these adjustments can result in significant variations in royalties payable to 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 the Trust. In either case, these price adjustments will impact future royalties payable to the Trust and, in turn, will impact cash reserves that may become available for distribution to Unitholders.

According to Cliffs’ SEC filings, historically, certain of Cliffs’ third party customer supply agreements specify provisional price calculations, where the pricing mechanisms generally are based on market pricing, with the final revenue rate based on certain market inputs at a specified period in time in the future, per the terms of the supply agreements. Market inputs are tied to indexed price adjustment factors that are integral to the iron ore supply contracts and vary based on the agreement. The pricing adjustments generally operate in the same manner, with each factor typically comprising a portion of the price adjustment, although the weighting of each factor varies based upon the specific terms of each agreement. The price adjustment factors have been evaluated to determine

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if they qualify as embedded derivatives. The price adjustment factors share the same economic characteristics and risks as the host sales contract and are integral to the host sales contract as inflation adjustments; accordingly, they have not been separately valued as derivative instruments.

A portion of royalties expected to be paid to the Trust each year is also based on “spot“ sales of iron ore products sold by Northshore and Cliffs, where pricing is basically set at a fixed rate.

As also described elsewhere in this 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 and sold at prices above the Adjusted Threshold Price. Although 94.5% of all the iron ore products shipped during calendar 2022 was sold at prices higher than the Adjusted Threshold Price, the Trustees are unable to project whether Cliffs will continue to be able to sell iron ore products at prices above the applicable Adjusted Threshold Price, entitling the Trust to any future bonus royalty payments.

As previously disclosed, on May 1, 2022, Cliffs idled Northshore. On July 22, 2022, Cliffs announced that it extended the idling of Northshore to at least April 2023. On April 25, 2023, Cliffs announced that “higher levels of steel production have led to the partial restart of some operations at … [its] iron ore mining and pelletizing swing facility at Northshore earlier this month.” In addition, Cliffs announced that it “…will continue to treat that facility as our swing operation. And at this time, we still do not expect to operate Northshore in full any time this year.” The Trustees of Mesabi Trust have not been provided with any additional information regarding the anticipated volume of production, stockpiling or shipping of iron ore products at the Northshore operations in Babbitt and Silver Bay, Minnesota.

In order to calculate the royalties owed by Northshore to Mesabi Trust, the 1989 royalty agreement requires that Northshore make sales of iron ore products to third parties on an arm’s-length basis without regard to any other business relationship between Northshore and the third-party buyer of the iron ore products. In order to calculate royalties on less than arm’s-length sales (including sales from Northshore to Cliffs’ corporate affiliates), the royalty agreement requires reference to the highest contract price obtained by Northshore in the preceding four calendar quarters in a sale to a buyer not affiliated with Northshore and made on an arms’-length basis without regard to any other business relationship. Since Cliffs’ acquisition of ArcelorMittal USA in late-2020, and accelerating after Cliffs’ Toledo HBI plant came online in mid-2021, Northshore has increased the proportion of iron ore mined from the Mesabi Trust Lands that it sells to Cliffs’ corporate affiliates and decreased the proportion of such iron ore that it sells to third parties in arms’-length transactions. Cliffs’ public statements beginning in third quarter of 2021 have indicated that Cliffs will be limiting the tonnage of iron ore pellets that it sells to third parties from all of its mines, and particularly Northshore, which Cliffs idled from May 2022 to April 2023, announced a partial restart in April 2023, and said it will continue to run as a swing operation. For the twelve month period ended September 30, 2023, Cliffs has reported to the Trust two low volume shipments of iron ore pellets (produced with iron ore principally mined from Mesabi Trust Lands) to a single third party customer, which shipments together are much less than one typical boatload of iron ore normally shipped from Silver Bay in arms’-length third-party sale transactions. Cliffs’ quarterly royalty report used the highest price from those two transactions to set the price for royalty purposes for subsequent shipments of iron ore pellets intended for Cliffs’ affiliates’ internal consumption beginning in July 2023, subject to any newly reported arms-length third-party customer sale transaction thereafter.

Deutsche Bank Trust Company Americas, the Corporate Trustee of Mesabi Trust, performs certain administrative functions for Mesabi Trust. The Trust maintains a website at www.mesabi-trust.com. The Trust makes available (free of charge) its annual, quarterly and current reports (and any amendments thereto) filed with the SEC through its website as soon as reasonably practicable after electronically filing or furnishing such material with or to the SEC.

Results of Operations

Comparison of Iron Ore Pellet Production and Shipments for the Three and Nine Months Ended October 31, 2023 and October 31, 2022

As shown in the table below, during the three months ended October 31, 2023, production and shipments of iron ore pellets at Northshore from Mesabi Trust Lands both totaled 918,482 tons. By comparison, pellet production and shipments for the comparable period in 2022 were both zero tons. The increase in production and shipments is attributable the operations of Northshore’s facilities during the three months ended October 31, 2023 as compared to the three months ended October 31, 2022, when Northshore’s facilities were idled. For the three months ended October 31, 2023, approximately 85.6% of shipments originated from Trust lands.

	Pellets Produced from	Pellets Shipped from
	Trust Lands	Trust Lands
Three Months Ended	(Tons)	(Tons)
October 31, 2023	918,482	918,482
October 31, 2022	—	—

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As shown in the table below, during the nine months ended October 31, 2023, production and shipments of iron ore pellets at Northshore from Mesabi Trust Lands both totaled 2,123,063 tons. By comparison, pellet production and shipments for the comparable period in 2022 were both 906,952 tons. The increase in production and shipments is attributable to the restart of Northshore’s facilities during April 2023 as compared to the idling that occurred during part of the prior period. For the nine months ended October 31, 2023, approximately 86.8% of shipments originated from Trust lands.

	Pellets Produced from	Pellets Shipped from
	Trust Lands	Trust Lands
Nine Months Ended	(Tons)	(Tons)
October 31, 2023	2,123,063	2,123,063
October 31, 2022	906,952	906,952

Comparison of Royalty Income for the Three and Nine Months Ended October 31, 2023 and October 31, 2022

As reflected in the table below, the Trust’s total royalty income for the three months ended October 31, 2023 increased by $4,664,092 to $4,664,092 as compared to the three months ended October 31, 2022. The increase in total royalty income is attributable to the operations of Northshore’s facilities during the three months ended October 31, 2023 as compared to the three months ended October 31, 2022, when Northshore’s facilities were idled.

The table below shows that the base overriding royalties increased $2,214,651 and the bonus royalties increased by $2,252,620 for the three months ended October 31, 2023, as compared to the three months ended October 31, 2022. Fee royalties increased by $196,821 over the same period. The increase in the base overriding royalties, bonus royalties and fee royalties is attributable to the operations of Northshore’s facilities during the three months ended October 31, 2023 as compared to the three months ended October 31, 2022, when Northshore’s facilities were idled.

The table below summarizes the components of Mesabi Trust’s total royalty income for the three months ended October 31, 2023 and October 31, 2022, respectively:

	Three Months Ended October 31,
	2023		2022
Base overriding royalties	$	2,214,651	$	—
Bonus royalties		2,252,620		—
Fee royalties		196,821		—
Total royalty income	$	4,664,092	$	—

As reflected in the table below, the Trust’s total royalty income for the nine months ended October 31, 2023 increased by $6,311,568 to $16,106,008 as compared to the nine months ended October 31, 2022.

The table below shows that the base overriding royalties increased $4,720,398 and the bonus royalties increased by $1,328,240 for the nine months ended October 31, 2023, as compared to the nine months ended October 31, 2022. Fee royalties increased by $262,930 over the same period. The increase in the base overriding royalties, bonus royalties and fee royalties is attributable to a higher volume of shipments during the current nine months ended October 31, 2023, as compared to the prior comparable period due to Northshore being idled for a longer period during the nine months ended October 31, 2022 as compared to the nine months ended October 31, 2023.

The table below summarizes the components of Mesabi Trust’s total royalty income for the nine months ended October 31, 2023 and October 31, 2022, respectively:

	Nine Months Ended October 31,
	2023		2022
Base overriding royalties	$	8,550,118	$	3,829,720
Bonus royalties		7,050,557		5,722,317
Fee royalties		505,333		242,403
Total royalty income	$	16,106,008	$	9,794,440

Comparison of Net Income, Expenses and Distributions for the Three and Nine Months Ended October 31, 2023 and October 31, 2022

Net income for the three months ended October 31, 2023 was $4,086,066, an increase of $4,499,758 as compared to the three months ended October 31, 2022. The increase in net income for the three months ended October 31, 2023 is attributable to the operations of Northshore’s facilities during the three months ended October 31, 2023 as compared to the three months ended October 31, 2022, when Northshore’s facilities were idled. The Trust’s expenses for the three months ended October 31, 2023 were $810,000, an increase of $311,627 compared to the expenses for the three months ended October 31, 2022. The increase in expenses was

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primarily attributable to an increase in legal fees and expenses incurred for the three months ended October 31, 2023 (primarily related to the pending arbitration), as compared to the prior comparable period. The table below summarizes the Trust’s income and expenses for the three months ended October 31, 2023 and October 31, 2022, respectively.

	Three Months Ended October 31,
	2023		2022
Total royalty income	$	4,664,092	$	—
Interest income		231,974		84,681
Total revenues		4,896,066		84,681
Expenses		810,000		498,373
Net income (loss)	$	4,086,066	$	(413,692)

Net income for the nine months ended October 31, 2023 was $14,292,545, an increase of $5,968,423 as compared to the nine months ended October 31, 2022. The increase in net income for the nine months ended October 31, 2023 was due to a higher volume of shipments during the current nine months ended October 31, 2023, as compared to the prior comparable period. The Trust’s expenses for the nine months ended October 31, 2023 were $2,341,615, an increase of $751,619 compared to the expenses for the nine months ended October 31, 2022. The increase in expenses was primarily attributable to an increase in legal fees and expenses (primarily related to the pending arbitration) incurred for the nine months ended October 31, 2023, as compared to the prior comparable period. The table below summarizes the Trust’s income and expenses for the nine months ended October 31, 2023 and October 31, 2022, respectively.

	Nine Months Ended October 31,
	2023		2022
Total royalty income	$	16,106,008	$	9,794,440
Interest income		528,152		119,678
Total revenues		16,634,160		9,914,118
Expenses		2,341,615		1,589,996
Net income	$	14,292,545	$	8,324,122

As presented on the “Trust’s Condensed Statements of Operations” on page 3 of this quarterly report, the Trust’s net income per unit increased $0.3429 per unit to $0.3114 per unit for the fiscal quarter ended October 31, 2023 as compared to the fiscal quarter ended October 31, 2022. On October 13, 2023, the Trust declared a distribution of $0.35 per unit payable on November 20, 2023 to Unitholders of record on October 30, 2023. Comparatively, the Trust declared no distribution during the quarter ended October 31, 2022. During the nine months ended October 31, 2023 and October 31, 2022 the Trust declared distributions $0.35 and $1.88 per unit, respectively.

On a quarterly basis, the Trustees review a variety of financial and economic data and information impacting the Trust, and upon the Trustees’ determination, distributions may be declared approximately ten weeks after the Trustees receive a quarterly royalty report from Northshore and Cliffs and the Trust receives the actual royalty payment with respect to royalty income that is payable for iron ore shipments through the end of each prior calendar quarter. Royalty payments may include pricing adjustments with respect to shipments made during prior periods. The Trust accounts for and reports accrued income receivable based on shipments during the last month of each of the Trust’s fiscal quarters (April, July, October and January) and price adjustments under Cliffs’ Customer Contracts (which can be positive or negative and can result in significant variations in royalties received by Mesabi Trust and cash available for distribution to Unitholders) as reported to the Trust by Northshore. The Trust accounts for these amounts by using estimated prices and reports such amounts even though accrued income receivable is not available for distribution to Unitholders until it is received by the Trust. Accordingly, distributions declared by the Trust are not equivalent to the Trust’s net income during the periods reported in this quarterly report on Form 10-Q.

Comparison of Unallocated Reserve as of October 31, 2023, October 31, 2022 and January 31, 2023

As set forth in the table below, Unallocated Reserve increased from $14,453,251 as of October 31, 2022 to $21,138,756 as of October 31, 2023. The increase in Unallocated Reserve as of October 31, 2023, as compared to October 31, 2022, is primarily the result of an increase in the unallocated cash and cash equivalents, accrued income receivable and contract asset. The increase in the unallocated cash and cash equivalents is attributable to an increase in royalties received in the third quarter of 2023, offset by the declared distribution of $4,592,003, as compared to the third quarter of 2022. The increase in the accrued income receivable portion of the Unallocated Reserve is attributable to an increase in shipments and related pricing for the month ended October 31, 2023 as compared to the prior comparable period. The increase in the contract asset portion of the Unallocated Reserve is attributable to estimates in the variable consideration as of October 31, 2023, as compared to October 31, 2022, which is driven by the amount of shipments to date through the current quarter end, see “Note 2” for further discussion of contract asset.

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	October 31,				% increase
	2023		2022		(decrease)
Accrued Income Receivable	$	1,885,432	$	34,460	5371.4%
Contract Asset		1,002,095		—	100.0%
Unallocated Cash and Cash Equivalents		18,320,712		14,504,539	26.3%
Prepaid Expenses and (Accrued Expenses), net		(69,483)		(85,748)	(19.0)%
Unallocated Reserve	$	21,138,756	$	14,453,251	46.3%

It is possible that future negative price adjustments could offset, or even eliminate, future 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 the discussion under the heading “Risk Factors” beginning on page 4 of the Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (filed April 24, 2023), as updated by Part II, Item 1A of this Quarterly Report on Form 10-Q.

The Trust’s Unallocated Reserve as of October 31, 2023 increased by $9,700,542 to $21,138,756, as compared to the fiscal year ended January 31, 2023. The increase in the Unallocated Reserve as of October 31, 2023, as compared to January 31, 2023, is primarily the result of an increase in unallocated cash and cash equivalents, accrued income receivable, and contract asset as well as a decrease in the contract liability. The increase in the unallocated cash and cash equivalents portion of the Unallocated Reserve is attributable to the excess in royalties received during the current fiscal year over distributions declared. The increase in the accrued income receivable portion of the Unallocated Reserve is attributable to an increase in shipments for the final month of the quarter ended October 31, 2023, as compared to the final month of the quarter ended January 31, 2023 when Northshore facilities were idled. The increase in the contract asset portion of the Unallocated Reserve is attributable to estimates in the variable consideration as of October 31, 2023, as compared to January 31, 2023, which is driven by the amount of shipments to date through the current calendar year. The contract liability portion of the unallocated reserve at January 31, 2023 has been reduced by royalty payments received through October 31, 2023.

					% increase
	October 31, 2023		January 31, 2023		(decrease)
Accrued Income Receivable	$	1,885,432	$	23,562	7902.0%
Contract Asset		1,002,095		—	100.0%
Unallocated Cash and Cash Equivalents		18,320,712		13,966,500	31.2%
Prepaid Expenses and (Accrued Expenses), net		(69,483)		(253,727)	(72.6)%
Contract Liability		—		(2,298,121)	(100.0)%
Unallocated Reserve	$	21,138,756	$	11,438,214	84.8%

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 fixed or contingent) in determining a prudent level of unallocated reserve in light of the unpredictable nature of the iron ore industry, current and projected future mining operations and current economic conditions. 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 anticipated 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. Shipping activity is greatly reduced during the winter months. As previously disclosed, on April 25, 2023, Cliffs announced that “higher levels of steel production have led to the partial restart of some operations at … [its] iron ore mining and pelletizing swing facility at Northshore earlier this month.” Cliffs also announced that it “…will continue to treat that facility as our swing operation. And at this time, we still do not expect to operate Northshore in full any time this year.” The Trustees have not been provided with any additional information regarding the anticipated volume of production, stockpiling or shipping of iron ore products at the Northshore operations in Babbitt and Silver Bay, Minnesota. Economic conditions, particularly those affecting the iron ore and steel industry arising from the COVID-19 pandemic, may adversely affect the amount and timing of such future shipments and sales. The Trustees will continue to monitor the economic and other circumstances of the Trust to strike a responsible balance between distributions to Unitholders and the need to maintain adequate reserves at a prudent level, given the unpredictable nature of the iron ore and steel industry, the Trust’s dependence on the actions of the lessee/operator, and the fact that the Trust essentially has no other liquid assets.

Recent Developments

Receipt of Quarterly Royalty Report and Royalty Payment from Cliffs

On October 30, 2023, Mesabi Trust received the quarterly royalty report of iron ore production and shipments out of Silver Bay, Minnesota during the quarter ended September 30, 2023 (the “Quarterly Royalty Report”) from Cliffs, the parent company of Northshore.

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As reported to Mesabi Trust by Cliffs in the Quarterly Royalty Report, based on production and shipments of iron ore products by Northshore during the three months ended September 30, 2023, Mesabi Trust was credited with a base royalty of $2,892,169.  Also for the three months ended September 30, 2023, Mesabi Trust was credited with a bonus royalty in the amount of $2,560,609.  After applying $8,840 for positive adjustments related to changes in estimates from prior quarters, on October 30, 2023, Cliffs paid Mesabi Trust a royalty of $5,461,618. In addition, a royalty payment of $204,636 was paid to the Mesabi Land Trust.  Accordingly, the total royalty payments from Cliffs received on October 30, 2023 by Mesabi Trust for the three months ended September 30, 2023 were $5,666,254.

The royalties paid to Mesabi Trust are based on the volume of iron ore pellets produced for internal use or shipped for third party sales during the quarter and the year to date, the pricing of iron ore product sales, and the percentage of iron ore pellet shipments from Mesabi Trust lands rather than from non-Mesabi Trust lands.  In the third calendar quarter of 2023, Cliffs credited Mesabi Trust with 1,019,311 tons shipped or produced during the quarter, as compared to zero tons shipped or produced during the third calendar quarter of 2022, when Northshore operations were idled.

Since Cliffs’ acquisition of ArcelorMittal USA in late-2020, and accelerating after Cliffs’ Toledo HBI plant came online in mid-2021, Northshore has increased the proportion of iron ore mined from the Mesabi Trust Lands that it sells to Cliffs’ corporate affiliates and decreased the proportion of such iron ore that it sells to third parties in arms’-length transactions.  Cliffs’ public statements beginning in third quarter of 2021 have indicated that Cliffs will be limiting the tonnage of iron ore pellets that it sells to third parties from all of its mines, and particularly Northshore, which Cliffs idled from May 2022 to April 2023, announced a partial restart in April 2023, and said it will continue to run as a swing operation.  For the twelve month period ended September 30, 2023, Cliffs has reported to the Trust two low volume shipments of iron ore pellets (produced with iron ore principally mined from Mesabi Trust Lands) to a single third party customer, which shipments together are much less than one typical boatload of iron ore normally shipped from Silver Bay in arms’-length third-party sale transactions.  Cliffs’ quarterly royalty report used the highest price from those two transactions to set the price for royalty purposes for subsequent shipments intended for Cliffs’ affiliates’ internal consumption beginning in July 2023, subject to any newly reported arms-length third-party customer sale transaction thereafter.  The Trust is continuing to evaluate whether such transactions meet the requirements of the royalty agreement.

The volume of iron ore pellets (and other iron ore products) produced or shipped by Northshore varies from quarter to quarter and year to year based on a number of factors, including, among others, Cliffs’ decisions to idle Northshore operations (which occurred from May 2022 through March 2023), the requested delivery schedules of customers (including affiliates), general economic conditions in the iron ore industry, production schedules and weather conditions on the Great Lakes.  These multiple factors can result in significant variations in royalties received by Mesabi Trust (and in turn, the resulting funds available for distribution to Unitholders by Mesabi Trust) from quarter to quarter and from year to year.  These variations, which can be positive or negative, cannot be predicted by the Trustees of Mesabi Trust.  Based on the above factors, and as indicated by Mesabi Trust’s historical distribution payments, the royalties received by Mesabi Trust, and the distributions paid to Unitholders, if any, in any particular quarter are not necessarily indicative of royalties that will be received, or distributions that will be paid, if any, in any subsequent quarter or full year.

Cliffs’ quarterly royalty reports normally present production and shipment volumes, as well as royalty calculations, that are based on documented transactions that are reviewed by the Trustees and are based on estimated iron ore prices that are subject to change.  It is possible that future negative price adjustments could offset, or even eliminate, royalties or royalty income that would otherwise be payable to Mesabi Trust in any particular quarter, or at year end, thereby potentially reducing cash available for distribution to Mesabi Trust’s Unitholders in future quarters.

The Trustees of Mesabi Trust have received no specific updates concerning Cliffs’ plans for the remainder of the current year with respect to Northshore iron ore operations.  Most recently, Cliffs’ announcements made in April 2023 included that Northshore would be partially restarted and run at less than full capacity for the remainder of this year, and that Cliffs would continue to treat Northshore as a swing operation.

Trust’s Announcement of Thirty-Five Cents Distribution

On October 13, 2023, Mesabi Trust issued a press release announcing that the Trustees of Mesabi Trust declared a distribution of thirty-five cents ($0.35) per Unit of Beneficial Interest payable on November 20, 2023 to Mesabi Trust Unitholders of record at the close of business on October 30, 2023. This compares to no distribution declared during the quarter ended October 31, 2022.

The Trustees’ October 13, 2023 announcement of a thirty-five cents ($0.35) per Unit distribution, as compared to no distribution announced by the Trust at the same time last year, is primarily attributable to the restart of Northshore operations in April 2023, and to an increase in the total royalties received by the Trust in July 2023, as compared to the total royalties received by the Trust in July 2022. In particular, the Trust’s receipt of total royalty payments of $5,321,510 on July 30, 2023 from Cliffs, the parent company of Northshore, was higher than the total royalty payments of $2,314,994 received by the Trust from Cliffs in July 2022. This

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increase in the total royalties received by the Trust in July 2023, as compared to the total royalties received in July 2022, was primarily attributable to the restart of Northshore operations.

The distribution announced October 13, 2023 also reflects that, until July 30, 2023, the Trust had received no royalties in the Trust’s three previous fiscal quarters, as well as the current continuing uncertainties related to previous announcements by Cliffs about its plans to operate Northshore at less than full capacity for the remainder of this year, and an intention to continue to treat Northshore as a swing operation. Accordingly, the Trustees’ decision also reflects their determination to maintain an appropriate level of reserves in order to make adequate provision to meet current and future expenses and current and future liabilities (whether fixed or contingent) that may arise in the future.

Forward-Looking Statements

This report contains certain forward-looking statements based on Cliffs’ publicly announced plans with respect to Northshore in the future, which statements are intended to be made under the safe harbor protections of the Private Securities Litigation Reform Act of 1995, as amended. Cliffs’ implementation of, or changes to, these plans are beyond Mesabi Trust’s control. As such, such statements are subject to risks and uncertainties, which could cause actual results to differ materially. Additional information concerning these and other risks and uncertainties is contained in Mesabi Trust’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (filed April 24, 2023) and the Trust’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2023 (filed June 13, 2023). Mesabi Trust undertakes no obligation to publicly update or revise any of the forward-looking statements made herein to reflect events or circumstances after the date hereof.

Important Factors Affecting Mesabi Trust

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 deem necessary or proper for the preservation and protection of the Trust’s assets. 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 Mesabi Trust’s Unitholders after the payment of, or provision for, such expenses and liabilities, monitoring royalties and protecting and conserving the held assets.

Neither Mesabi Trust nor the Trustees have any control over the operations and activities of Northshore, except within the framework of the Amended Assignment of Peters Lease. Cliffs alone controls (i) historical operating data, including iron ore production volumes, decisions to reduce or idle the Northshore plant and mining operations, 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 operating and capital expenditures; (iii) geological data relating to ore reserves; (iv) projected production of iron ore products; (v) contracts between Cliffs and Northshore with their customers; and (vi) the decision to mine off Mesabi Trust and/or state lands, based on Cliffs’ current mining and engineering plan. The Trustees do not exert any influence over mining operational decisions at Northshore, nor do the Trustees provide any input regarding the ore reserve estimated at Northshore as reported by Cliffs. While the Trustees request relevant information from Cliffs and Northshore in accordance with the royalty agreement for use in periodic reports as part of their evaluation of Mesabi Trust’s disclosure controls and procedures, the Trustees do not control this information and they rely on the information in Cliffs’ periodic and current filings with the SEC to provide accurate and timely information in Mesabi Trust’s reports filed with the SEC.

In accordance with the Agreement of Trust and the Amendment, the Trustees are entitled to, and in fact do, rely upon certain experts in good faith, including (i) the independent consultants with respect to monthly production and shipment reports, which include figures on crude ore production and iron ore pellet shipments, and discussions concerning the condition and accuracy of the scales and plans regarding the development of Mesabi Trust’s mining property; and (ii) the accounting firm they have contracted with for non-audit services, including reviews of financial data related to shipping and sales reports provided by Northshore and a review of the schedule of leasehold royalties payable to Mesabi Trust.

For a discussion of additional factors, including but not limited to those that could adversely affect Mesabi Trust’s actual results and performance, see “Risk Factors” set forth on pages 4 through 17 of Mesabi Trust’s Annual Report on Form 10-K for the fiscal year-ended January 31, 2023 (filed April 24, 2023) and the Trust’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2023 (filed June 13, 2023).

Iron Ore Pricing and Contract Adjustments

During the course of its typical fiscal year, some portion of the royalties paid to Mesabi Trust is based in part on estimated prices for certain iron ore products sold under some of the Cliffs’ Customer Contracts. Mesabi Trust is not a party to any of the Cliffs’ Customer Contracts. 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 various benchmark pellet prices, hot band steel prices and various Producer Price Indexes. Although Northshore makes interim adjustments to the royalty

17

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. These variations, which can be positive or negative, cannot be predicted by Mesabi Trust. It is possible that future negative price adjustments could partially or even completely offset 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.

Effects of Securities Regulation

The Trust is a publicly traded, pass-through royalty trust with its Trust Certificates 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”), each as amended, 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 a publicly-traded pass-through royalty trust such as Mesabi Trust. In particular, Sarbanes-Oxley mandated the adoption by 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 royalty trust. Pursuant to NYSE rules, as a pass-through royalty trust, 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 provide for, a board of directors, an audit committee, a corporate governance committee, a compensation committee or executive officers. The Trust has no employees. The Trustees closely monitor the SEC’s and NYSE’s rulemaking activities and will comply with their rules and regulations to the extent applicable.

The Trust’s website is located at www.mesabi-trust.com.

Critical Accounting Policies and 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.

There have been no material changes in the Trust’s critical accounting policies or significant accounting estimates during the three months ended October 31, 2023. For a complete description of the Trust’s significant accounting policies, please see Note 2 to the financial statements included in the Trust’s Annual Report on Form 10-K for the year ended January 31, 2023 (filed April 24, 2023).

Certain Tax Information

The Trust is not taxable as a corporation for federal or state income tax purposes and is instead qualified as a nontaxable grantor trust. Since the Trust’s inception, all net taxable income is annually attributable directly to Unitholders for tax purposes regardless of whether the income is distributed or retained by the Trust in its reserve account. As such, in lieu of the Trust paying income taxes, Unitholders report their pro rata share of the various items of Trust income and deductions on their income tax returns. This reporting is required whether or not the earnings of the Trust are distributed as to Unitholders. During calendar year 2021, any funds retained to increase the Trust’s unallocated reserve, which were derived from reportable royalty income, will nonetheless become taxable as reportable income to Unitholders, depending on each individual’s personal tax situation. Information regarding the background on the changes in the Trust’s unallocated reserve is described above under “Results of Operations — Comparison of Unallocated Reserve as of October 31, 2023, October 31, 2022 and January 31, 2023” beginning on page 14. Unitholders are encouraged to consult with their own tax advisors to plan for any financial impact related to this and to review their personal tax situations related to investing in, holding or selling units of beneficial interest in Mesabi Trust.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

18

Item 4. 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 the 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 SEC. Due to the pass-through nature of the Trust, the Trust’s disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Trust is received from Cliffs and its wholly-owned subsidiary, Northshore. In order to help ensure the accuracy and completeness of the information required to be disclosed in the Trust’s periodic and current reports, the Trust employs certified public accountants, geological consultants, and attorneys. These professionals hired by the Trust advise the Trust in its review and compilation of the information in this Form 10-Q 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 Cliffs, 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 performs inspections of the Northshore mine and its pelletizing operations, observes production and shipping activities, 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. Based on this evaluation, the Trustees have concluded that such disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting. To the knowledge of the Trustees, there were no changes in the Trust’s internal control over financial reporting that occurred during the Trust’s last fiscal quarter that have materially affected, or are reasonably 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 or Cliffs.

19

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

As previously announced, on October 14, 2022, Mesabi Trust initiated arbitration against Northshore and its parent, Cliffs (jointly, the “Operator”), the lessee/operator of the leased lands. The arbitration proceeding was commenced with the American Arbitration Association. The Trust seeks an award of damages relating to the Operator’s underpayment of royalties in 2020, 2021, and 2022 by virtue of the Operator’s failure to use the highest price arm’s length iron ore pellet sale from the preceding four quarters in pricing internal production during the fourth quarter of 2020 through 2022. The Trust also seeks declaratory relief related to the Trust’s entitlement to certain documentation and to the time the Operator’s royalty obligation accrues on internal production. The arbitration is in discovery.

Item 1A. Risk Factors

The limited or lack of arm’s-length third party sales of iron ore products (processed at Northshore using Mesabi Trust iron ore) by Cliffs could lead to uncertainty under the royalty agreement with respect to the calculation of royalties, which could in turn result in potential disputes regarding the amount of royalties owed to the Trust.

In order to calculate the royalties owed by Northshore to Mesabi Trust, the 1989 royalty agreement requires that Northshore make sales of iron ore products to third parties on an arm’s-length basis without regard to any other business relationship between Northshore and the third-party buyer of the iron ore products. In order to calculate royalties on less than arm’s-length sales (including sales from Northshore to Cliffs’ corporate affiliates), the royalty agreement requires reference to the highest contract price obtained by Northshore in the preceding four calendar quarters in a sale to a buyer not affiliated with Northshore and made on an arms’-length basis. Since Cliffs’ acquisition of ArcelorMittal USA in late-2020, and accelerating after Cliffs’ Toledo HBI plant came online in mid-2021, Northshore has increased the proportion of iron ore mined from the Mesabi Trust Lands that it sells to Cliffs’ corporate affiliates and decreased the proportion of such iron ore that it sells to third parties in arms’-length transactions. Cliffs’ public statements beginning in third quarter of 2021 have indicated that Cliffs will be limiting the tonnage of iron ore pellets that it sells to third parties from all of its mines, and particularly Northshore, which Cliffs idled from May 2022 to April 2023, announced a partial restart in April 2023, and said it will continue to run as a swing operation. For the twelve month period ended September 30, 2023, Cliffs has reported to the Trust two low volume shipments of iron ore pellets (produced with iron ore principally mined from Mesabi Trust Lands) to a single third party customer, which shipments together are much less than one typical boatload of iron ore normally shipped from Silver Bay in arms’-length third-party sale transactions. Cliffs’ quarterly royalty report used the highest price from those two transactions to set the price for royalty purposes for subsequent shipments intended for Cliffs’ affiliates’ internal consumption beginning in July 2023, subject to any newly reported arms-length third-party customer sale transaction thereafter. The Trust is continuing to evaluate whether such transactions meet the requirements of the royalty agreement. Without consistent arms’-length sales from Northshore to third parties, the calculation of royalties on iron ore Northshore ships to Cliffs’ affiliates could be uncertain under the royalty agreement, which could in turn result in potential disputes regarding the amount of royalties owed to the Trust.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

Mine Safety and Health Administration Safety Data. Pursuant to §1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Cliffs started reporting information related to certain mine safety results at Northshore. This information is available in Part II, Item 4 of Cliffs’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on October 25, 2023.

20

Item 6. Exhibits.

(a)Exhibits

The following exhibits are being filed or furnished with this Quarterly Report on Form 10-Q:

Exhibit No.	Exhibit	Filing Method
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	Furnished herewith
99.1	Report of Boulay PLLP, dated December 14, 2023 regarding its review of the unaudited interim financial statements of Mesabi Trust as of and for the three and nine months ended October 31, 2023	Filed herewith
101	Inline XBRL Instance Document	Filed herewith
104	Cover Page Interactive Data File	Embedded within the Inline XBRL document and contained in Exhibit 101

21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MESABI TRUST
	(Registrant)
	By:	DEUTSCHE BANK TRUST COMPANY AMERICAS
		Corporate Trustee
	Principal Administrative Officer and duly authorized signatory:*
December 14, 2023		By:	/s/ Chris Niesz
		Name: Chris Niesz*
		Title: Vice President

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

22

EX-31

Exhibit 31

CERTIFICATION

I, Chris Niesz, certify that:

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

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 periods presented in this 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 disclosure 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 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 report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this 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 Northshore Mining Company/Cleveland-Cliffs Inc. and Eveleth Fee Office, Inc.

Date: December 14, 2023	By:	/s/ Chris Niesz
		Chris Niesz*
		Vice President
		Deutsche Bank Trust Company Americas
		Corporate Trustee

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

1

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 Quarterly Report of Mesabi Trust on Form 10-Q for the quarter ended October 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of Mesabi Trust.

/s/ Chris Niesz	December 14, 2023
Chris Niesz*
Vice President
Deutsche Bank Trust Company Americas
Corporate Trustee

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

1

EX-99.1

Exhibit 99.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Unitholders and Trustees of Mesabi Trust:

Results of Review of Interim Financial Information

We have reviewed the condensed balance sheet of Mesabi Trust (the Trust) as of October 31, 2023, and the related condensed statement of operations for the three-month and nine-month periods then ended, and the condensed statement of cash flows for the nine-month period then ended, and the related notes (collectively referred to as the interim financial statements). Based on our review, we are not aware of any material modifications that should be made to the Trust’s interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

Basis for Review Results

These interim financial statements are the responsibility of the Trust’s Trustees. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ Boulay PLLP

Minneapolis, Minnesota

December 14, 2023

1

XML

Document and Entity Information - shares	9 Months Ended
	Oct. 31, 2023	Dec. 11, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 31, 2023
Document Transition Report	false
Entity File Number	1-4488
Entity Registrant Name	MESABI TRUST
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	13-6022277
Entity Address, Address Line One	1 Columbus Circle, 17th Floor
Entity Address, Address Line Two	Mail Stop: NYC01-1710
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10019
City Area Code	904
Local Phone Number	271-2520
Title of 12(b) Security	Units of Beneficial Interest, no par value
Trading Symbol	MSB
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,120,010
Current Fiscal Year End Date	--01-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000065172
Amendment Flag	false

XML

Condensed Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Oct. 31, 2023	Oct. 31, 2022	Oct. 31, 2023	Oct. 31, 2022
Revenues
Royalty income	$ 4,664,092		$ 16,106,008	$ 9,794,440
Interest	231,974	$ 84,681	528,152	119,678
Total revenues	4,896,066	84,681	16,634,160	9,914,118
Expenses
Expenses	810,000	498,373	2,341,615	1,589,996
Net income (loss)	$ 4,086,066	$ (413,692)	$ 14,292,545	$ 8,324,122
Number of units outstanding	13,120,010	13,120,010	13,120,010	13,120,010
Net income (loss) per unit (Note 2) (in dollars per unit)	$ 0.3114	$ (0.0315)	$ 1.0894	$ 0.6345
Distribution declared per unit (Note 3) (in dollars per unit)	$ 0.3500	$ 0.00	$ 0.3500	$ 1.8800

XML

Condensed Balance Sheets - USD ($)	Oct. 31, 2023	Jan. 31, 2023
Assets
Cash and cash equivalents	$ 22,912,715	$ 13,966,500
Accrued income receivable	1,885,432	23,562
Contract asset	1,002,095
Prepaid expenses	212,757	127,233
Current assets	26,012,999	14,117,295
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
Total fixed property	3	3
Total assets	26,013,002	14,117,298
Liabilities, Unallocated Reserve And Trust Corpus
Distribution payable	4,592,003
Accrued expenses	282,240	380,960
Contract liability		2,298,121
Total liabilities	4,874,243	2,679,081
Unallocated reserve	21,138,756	11,438,214
Trust corpus	3	3
Total liabilities, unallocated reserve and trust corpus	$ 26,013,002	$ 14,117,298

XML

Condensed Balance Sheets (Parenthetical) - shares	Oct. 31, 2023	Jan. 31, 2023
Condensed Balance Sheets
Certificate of beneficial interest of Land Trust, units	13,120,010	13,120,010

XML

Condensed Statements of Cash Flows - USD ($)	9 Months Ended
	Oct. 31, 2023	Oct. 31, 2022
Operating activities
Royalties received	$ 10,987,764	$ 15,857,438
Interest received	484,310	85,363
Expenses paid	(2,525,859)	(1,540,146)
Net cash from operating activities	8,946,215	14,402,655
Financing activity
Distributions to unitholders		(47,625,638)
Net change in cash and cash equivalents	8,946,215	(33,222,983)
Cash and cash equivalents, beginning of period	13,966,500	47,727,522
Cash and cash equivalents, end of period	22,912,715	14,504,539
Reconciliation of net income to net cash from operating activities
Net income	14,292,545	8,324,122
(Increase) decrease in accrued income receivable	(1,861,870)	4,597,050
(Increase) decrease in contract asset	(1,002,095)	1,431,633
Increase in prepaid expense	(85,524)	(87,773)
(Decrease) increase in accrued expenses	(98,720)	137,623
Decrease in contract liability	(2,298,121)
Net cash from operating activities	8,946,215	$ 14,402,655
Non cash financing activity
Distributions declared and payable	$ 4,592,003

XML

NATURE OF BUSINESS AND ORGANIZATION

9 Months Ended

Oct. 31, 2023

NATURE OF BUSINESS AND ORGANIZATION

NATURE OF BUSINESS AND ORGANIZATION

Note 1.  The condensed financial statements and notes to the condensed financial statements included herein have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Trustees of Mesabi Trust (the “Trustees”), all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the results of operations for the three and nine months ended October 31, 2023 and 2022, (b) the financial position as of October 31, 2023 and (c) the cash flows for the nine months ended October 31, 2023 and 2022, have been made. For further information, refer to the financial statements and footnotes included in Mesabi Trust’s Annual Report on Form 10-K for the year ended January 31, 2023.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Oct. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 2.  Net income per unit is based on 13,120,010 units outstanding during all periods presented.

The Trust accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers. All revenue is recognized as the performance obligations are satisfied. In accordance with the royalty agreement, the Trust recognizes revenue upon providing access to the lands and minerals only after the consideration that is entitled to be received is determinable. The Trust is entitled to payment upon production of all pellet grades to be sold for internal use by facilities owned by Cliffs, the parent company of Northshore, or its subsidiaries. For revenue recognition purposes, the Trust recognizes revenue for internal use pellets upon production of those pellets, which is when Cliffs deems these pellets to be shipped under the royalty agreement. Pellets that are not designated for internal use by Cliffs, or its subsidiaries, are recognized as revenue upon shipment from Silver Bay, Minnesota.

Disaggregation of Revenues

The following table represents a disaggregation of revenue for the three and nine months ended October 31, 2023 and October 31, 2022.

	Three Months Ended October 31,
	2023		2022
Base overriding royalties	$	2,214,651	$	—
Bonus royalties		2,252,620		—
Fee royalties		196,821		—
Total royalty income	$	4,664,092	$	—

	Nine Months Ended October 31,
	2023		2022
Base overriding royalties	$	8,550,118	$	3,829,720
Bonus royalties		7,050,557		5,722,317
Fee royalties		505,333		242,403
Total royalty income	$	16,106,008	$	9,794,440

Base overriding royalties

The performance obligation for the base overriding royalty consists of providing Northshore access to the Peters Lands, Cloquet Lands, and Mesabi Lands and the right to mine on these lands. The consideration to be received from this access relates to the volume of iron ore actually shipped to third parties, or deemed shipped upon production for internal use, by Northshore. Cliffs considers pellets designated for internal use by Cliffs to be “deemed shipped” upon production, entitling the Trust to payment under the provisions of the royalty agreement at this time. Mesabi Trust receives royalties at the greater of (i) the aggregate quantity of iron ore products shipped, or deemed shipped, that were mined from Mesabi Trust Lands, and (ii) a portion of the aggregate quantity of all iron ore products shipped, or deemed shipped, that were mined from any lands, such portion being 90% of the first four million tons shipped, or deemed shipped, during such year, 85% of the next two million tons shipped, or deemed shipped, during such year, and 25% of all tonnage shipped, or deemed shipped, during such year in excess of six million tons.

The royalty percentage paid to the Trust increases as the aggregate tonnage of iron ore products shipped, or deemed shipped, attributable to the Trust, in any calendar year increases. The Trust earns a 2.5% royalty on the first million tons shipped or

deemed shipped, 3.5% on the second million tons, 5.0% on the third million tons, 5.5% on the fourth million tons and 6.0% beyond four million tons. The base overriding royalties contain variable consideration, as the transaction price is based on a percentage that varies based on the total cumulative tons of iron ore shipped, or deemed shipped, for the calendar year. The Trust estimates the variable consideration it expects to be entitled to receive over the contractual period associated with the royalty agreement. Under the royalty agreement, measurement of the total cumulative volumes of iron ore shipped, or deemed shipped, and the applicable royalty percentages, is reset at the beginning of each calendar year. The Trust evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, the Trust includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. For the base overriding royalties, the Trust estimates the base overriding royalty percentage using the expected value method, which calculates the estimate based on historical, current, and forecasted shipments. The Trust recognizes base overriding royalties on a quarterly basis based on the actual third party shipments and deemed shipments for internal use for the fiscal quarter at the estimated royalty percentage as described above and based on the estimated prices for iron ore products sold under Cliffs’ Customer Contracts.

On May 1, 2022, Cliffs idled Northshore. On July 22, 2022, Cliffs announced that it was extending the ongoing idle at Northshore through at least April of 2023. Based on the change in the anticipated timing of the idling of Northshore operations, the Trust’s estimate of the variable consideration relating to the base overriding royalties to be received was determined to be constrained during the second quarter ended July 31, 2022, and all variable consideration expected to be received through the end of the fiscal year ended January 31, 2023 was reversed in the second fiscal quarter ended July 31, 2022. On April 25, 2023, Cliff's announced a partial restart of some operations at Northshore and that Cliffs will continue to treat Northshore as a swing operation. The Trust has recommenced recording a contract asset for variable consideration in the current fiscal year for base overriding royalties, based on estimated cumulative tons shipped for the current fiscal year at estimated prices for iron ore products sold under Cliffs’ Customer Contracts that will be collected in subsequent quarters as the uncertainty associated with the variable consideration is resolved.

Bonus royalties

The performance obligation for the bonus royalties consists of providing Northshore access to the Peters Lands, Cloquet Lands, and Mesabi Lands and the right to mine on these lands and the consideration to be received from this access relates to the volume of iron ore shipped, or deemed shipped, by Northshore. The Trust recognizes bonus royalties on a quarterly basis based on the actual third party shipments and deemed shipments for internal use, for the fiscal quarter at the actual royalty percentage for those shipments and based on the anticipated prices for iron ore products sold under Cliffs’ Customer Contracts. The Trust is paid royalty bonuses when iron ore products shipped are sold at anticipated prices above a threshold price per ton. The royalty bonus is based on a percentage of the gross proceeds of product shipped. The royalty bonus percentage ranges from 1/2 of 1% of the gross proceeds (on all tonnage shipped for sale at prices between the threshold price and $2.00 above the threshold price) to 3% of the gross proceeds (on all tonnage shipped for sale at prices $10.00 or more above the threshold price). The threshold price is adjusted annually for inflation and is $66.00 per ton for calendar year 2023.

Fee royalties

The Fee royalties are determined based on the volume of crude ore mined on a quarterly basis. The Trust recognizes fee royalties on a quarterly basis based on the actual crude ore mined during the fiscal quarter. 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 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 the corporate trustee. The fee royalty on crude ore is based on an agreed price per ton, subject to certain indexing.

Accrued income receivable

The accrued income receivable is included in net income per unit. The Trust recorded $1,885,432 of accrued income receivable as reflected on the Condensed Balance Sheet as of October 31, 2023 (unaudited). As of January 31, 2023, the Trust recorded accrued income receivable of $23,562. 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 the Trust’s fiscal quarter, if any, and (ii) net positive adjustments (which may include the sum of positive and negative price adjustments) calculated using 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.

Contract asset and contract liability

The contract asset and contract liability are presented net in the accompanying condensed balance sheets as both the contract asset and contract liability are derived from one customer contract. A net contract asset in the amount of $1,002,095 is reflected on the Condensed Balance Sheet as of October 31, 2023 (unaudited). The net contract asset is made up of a contract asset in the amount of $1,525,140 and a contract liability in the amount of $523,045. As of January 31, 2023 the Trust recorded a net contract liability of $2,298,121. The net contract liability is made up of a contract asset in the amount of $0 and a contract liability in the amount of $2,298,121. The contract asset relates to variable consideration for base overriding royalties that occurs as a result of escalating royalty rates earned as thresholds for tons of ore shipped are reached. At each period end, the Trust updates its estimate of total tons expected to be shipped for the calendar year and applies the estimated annual royalty rate to actual tons shipped in the period. The estimate of total tons to be shipped for the calendar year is determined based on historical, current, and forecasted shipment data. The recorded contract asset represents the additional revenue earned based on the estimated annual royalty rate compared to the effective contracted rate for tons shipped during the period. The contract asset is not available for distribution to the Unitholders until the applicable royalties are actually received by the Trust. The Trust includes estimated future royalty rates on current contracted volumes within the contract asset. The contract liability represents an estimate of decreases in royalty revenue related to tons of iron ore that were shipped, or deemed 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, as well as payment for tons credited to the Trust at a minimum of 90% of total shipments when the actual tons shipped from Trust lands are less than 90% in the calendar quarter. The contract liability as of January 31, 2023 was offset against royalty payments owed to the Trust during the second fiscal quarter ended July 31, 2023.

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DIVIDEND AND DISTRIBUTION

9 Months Ended

Oct. 31, 2023

DIVIDEND AND DISTRIBUTION

DIVIDEND AND DISTRIBUTION

Note 3.  The Trustees determine whether to declare a distribution each year in April, July, October and January. The Trust’s financial statements are prepared on an accrual basis and present the Trust’s results of operations based on each of the Trust’s fiscal quarters, which end one month after the close of each calendar quarter. Because (i) distributions, if any, are declared by the Trustees based on, among other considerations, the amount of royalties actually paid to the Trust through the end of each calendar quarter prior to April, July, October and January of each year, the Trustees’ evaluation of known and projected Trust expenses in the current and future quarters, the then-current level of Unallocated Reserve and general economic conditions, and (ii) the Trust’s Net Income is calculated as of the end of each fiscal quarter, the distributions declared by the Trust are not equivalent to the Trust’s Net Income during the periods reported in this quarterly report on Form 10-Q.

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ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS

9 Months Ended

Oct. 31, 2023

ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS

ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS

Note 4.  On October 13, 2023, the Trustees declared a distribution of $0.35 per Unit of Beneficial Interest payable on November 20, 2023 to Mesabi Trust Unitholders of record at the close of business on October 30, 2023. The declared distribution of $4,592,003 is recorded as a distribution payable on the Consolidated Balance Sheet for the quarter ended October 31, 2023 (unaudited) as compared to no distribution per Unit of Beneficial Interest for the quarter ended October 31, 2022.

On October 30, 2023, the Trustees received the quarterly royalty report of iron ore production and shipment during the calendar quarter ended September 30, 2023 from Cliffs.

Each quarter, as authorized by the Agreement of Trust dated July 18, 1961, as amended (the “Agreement of Trust”), the Trustees evaluate all relevant factors, including all costs, expenses, obligations, and present and future liabilities of the Trust (whether fixed 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 Cliffs 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 October 31, 2023 and January 31, 2023, the unallocated cash and cash equivalents portion of the Trust’s Unallocated Reserve was comprised of the following components. Cash equivalents consists of U.S. government securities with original maturities of 3 months or less.

	October 31, 2023		January 31, 2023
Cash and cash equivalents	$	22,912,715	$	13,966,500
Distribution payable		(4,592,003)		—
Unallocated cash and cash equivalents	$	18,320,712	$	13,966,500

A reconciliation of the Trust’s Unallocated Reserve and Trust Corpus for the three and nine months ended October 31, 2023 and 2022 is as follows:

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2023	$	11,438,214	$	3	$	11,438,217
Net income		14,292,545		—		14,292,545
Distributions declared - $0.3500 per unit		(4,592,003)		—		(4,592,003)
Balances as of October 31, 2023	$	21,138,756	$	3	$	21,138,759

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of July 31, 2023	$	21,644,693	$	3	$	21,644,696
Net income		4,086,066		—		4,086,066
Distributions declared - $0.3500 per unit		(4,592,003)		—		(4,592,003)
Balances as of October 31, 2023	$	21,138,756	$	3	$	21,138,759

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2022	$	30,794,749	$	3	$	30,794,752
Net income		8,324,122		—		8,324,122
Distributions declared - $1.8800 per unit		(24,665,620)		—		(24,665,620)
Balances as of October 31, 2022	$	14,453,251	$	3	$	14,453,254

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of July 31, 2022	$	14,866,943	$	3	$	14,866,946
Net loss		(413,692)		—		(413,692)
Distributions declared - $0.00 per unit		—		—		—
Balances as of October 31, 2022	$	14,453,251	$	3	$	14,453,254

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Oct. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net Income Per Unit	Net income per unit is based on 13,120,010 units outstanding during all periods presented.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Oct. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of disaggregation of revenues

	Three Months Ended October 31,
	2023		2022
Base overriding royalties	$	2,214,651	$	—
Bonus royalties		2,252,620		—
Fee royalties		196,821		—
Total royalty income	$	4,664,092	$	—

	Nine Months Ended October 31,
	2023		2022
Base overriding royalties	$	8,550,118	$	3,829,720
Bonus royalties		7,050,557		5,722,317
Fee royalties		505,333		242,403
Total royalty income	$	16,106,008	$	9,794,440

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ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS (Tables)

9 Months Ended

Oct. 31, 2023

ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS

Schedule of unallocated cash and U.S. Government securities portion of the Trust's Unallocated Reserve

	October 31, 2023		January 31, 2023
Cash and cash equivalents	$	22,912,715	$	13,966,500
Distribution payable		(4,592,003)		—
Unallocated cash and cash equivalents	$	18,320,712	$	13,966,500

Schedule of reconciliation of Trust's Unallocated Reserve

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2023	$	11,438,214	$	3	$	11,438,217
Net income		14,292,545		—		14,292,545
Distributions declared - $0.3500 per unit		(4,592,003)		—		(4,592,003)
Balances as of October 31, 2023	$	21,138,756	$	3	$	21,138,759

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of July 31, 2023	$	21,644,693	$	3	$	21,644,696
Net income		4,086,066		—		4,086,066
Distributions declared - $0.3500 per unit		(4,592,003)		—		(4,592,003)
Balances as of October 31, 2023	$	21,138,756	$	3	$	21,138,759

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2022	$	30,794,749	$	3	$	30,794,752
Net income		8,324,122		—		8,324,122
Distributions declared - $1.8800 per unit		(24,665,620)		—		(24,665,620)
Balances as of October 31, 2022	$	14,453,251	$	3	$	14,453,254

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of July 31, 2022	$	14,866,943	$	3	$	14,866,946
Net loss		(413,692)		—		(413,692)
Distributions declared - $0.00 per unit		—		—		—
Balances as of October 31, 2022	$	14,453,251	$	3	$	14,453,254

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 31, 2023 USD ($) shares	Oct. 31, 2022 shares	Oct. 31, 2023 USD ($) contract MT $ / T shares	Oct. 31, 2022 USD ($) shares	Jan. 31, 2023 USD ($) $ / T
Disaggregation of Revenue [Line Items]
Number of units outstanding | shares	13,120,010	13,120,010	13,120,010	13,120,010
Revenue from Contract with Customer [Abstract]
Royalty income (loss)	$ 4,664,092		$ 16,106,008	$ 9,794,440
Base overriding royalties, first tier portion percentage			90.00%
Base overriding royalties, first tier shipment ceiling (in million tons) | MT			4
Base overriding royalties, second tier portion percentage			85.00%
Base overriding royalties, second tier shipment ceiling (in million tons) | MT			2
Base overriding royalties, third tier portion percentage			25.00%
Base overriding royalties, third tier shipment threshold (in million tons) | MT			6
Bonus royalty percentage			0.50%
Royalty bonuses, price above adjusted threshold price per ton | $ / T			2.00
Accrued income receivable	1,885,432		$ 1,885,432		$ 23,562
Number of customer contracts | contract			1
Net contract asset	1,002,095		$ 1,002,095
Net contract liability					2,298,121
Contract asset	1,525,140		1,525,140		0
Contract liability	523,045		$ 523,045		$ 2,298,121
Minimum percentage of total shipments			90.00%
Percentage of actual tons shipped			90.00%
Adjusted threshold price (in dollars per ton) | $ / T					66.00
Fixed Property, Including Intangibles
Percentage of fee interest owned by Mesabi Land Trust in the lands subject to the Peters Lease			20.00%
Minimum
Revenue from Contract with Customer [Abstract]
Bonus royalty, gross proceeds percentage			1.00%
Maximum
Revenue from Contract with Customer [Abstract]
Bonus royalty, gross proceeds percentage			3.00%
Royalty bonuses, adjusted threshold price | $ / T			10.00
First Million Tons Shipped or Deemed Shipped [Member]
Revenue from Contract with Customer [Abstract]
Royalty earned on tons shipped or deemed shipped, percentage			2.50%
Second Million Tons Shipped or Deemed Shipped [Member]
Revenue from Contract with Customer [Abstract]
Royalty earned on tons shipped or deemed shipped, percentage			3.50%
Third Million Tons Shipped or Deemed Shipped [Member]
Revenue from Contract with Customer [Abstract]
Royalty earned on tons shipped or deemed shipped, percentage			5.00%
Fourth Million Tons Shipped or Deemed Shipped [Member
Revenue from Contract with Customer [Abstract]
Royalty earned on tons shipped or deemed shipped, percentage			5.50%
Beyond Four Million Tons Shipped or Deemed Shipped [Member]
Revenue from Contract with Customer [Abstract]
Royalty earned on tons shipped or deemed shipped, percentage			6.00%
Base Overriding Royalties
Revenue from Contract with Customer [Abstract]
Royalty income (loss)	2,214,651		$ 8,550,118	3,829,720
Bonus Royalties
Revenue from Contract with Customer [Abstract]
Royalty income (loss)	2,252,620		7,050,557	5,722,317
Fee Royalties
Revenue from Contract with Customer [Abstract]
Royalty income (loss)	$ 196,821		$ 505,333	$ 242,403

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DIVIDEND AND DISTRIBUTION (Details)	9 Months Ended
	Oct. 31, 2023
DIVIDEND AND DISTRIBUTION
Period after the close of each calendar quarter when the fiscal quarter ends	1 month

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ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS (Details) - USD ($)		3 Months Ended		9 Months Ended
	Oct. 13, 2023	Oct. 31, 2023	Oct. 31, 2022	Oct. 31, 2023	Oct. 31, 2022	Jan. 31, 2023
Unallocated Cash and Securities portion of Unallocated Reserve
Cash and cash equivalents		$ 22,912,715		$ 22,912,715		$ 13,966,500
Distribution payable		(4,592,003)	$ (4,592,003)	(4,592,003)	$ (4,592,003)
Unallocated cash and cash equivalents		18,320,712		18,320,712		$ 13,966,500
Reconciliation of Trust's Unallocated Reserve
Beginning Balance		21,644,696	14,866,946	11,438,217	30,794,752
Net income		4,086,066	(413,692)	14,292,545	8,324,122
Distributions declared		(4,592,003)		(4,592,003)	(24,665,620)
Ending Balance		$ 21,138,759	$ 14,453,254	$ 21,138,759	$ 14,453,254
Distributions declared per unit (in dollars per unit)	$ 0.35	$ 0.3500	$ 0.00	$ 0.3500	$ 1.8800
Unallocated Reserve member
Reconciliation of Trust's Unallocated Reserve
Beginning Balance		$ 21,644,693	$ 14,866,943	$ 11,438,214	$ 30,794,749
Net income		4,086,066	(413,692)	14,292,545	8,324,122
Distributions declared		(4,592,003)		(4,592,003)	(24,665,620)
Ending Balance		21,138,756	14,453,251	21,138,756	14,453,251
Trust Corpus
Reconciliation of Trust's Unallocated Reserve
Beginning Balance		3	3	3	3
Ending Balance		$ 3	$ 3	$ 3	$ 3