Mesabi Trust
MSB
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ROIC.AI
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- Mesabi Trust (NYSE: MSB) operates as a royalty trust that collects and distributes income derived from iron ore mining royalties on its mineral properties located on the Mesabi Iron Range in northeastern Minnesota. The Trust holds exclusive royalty rights under the Peters Lease and Cloquet Lease, receiving payments from Northshore Mining Company, a wholly owned subsidiary of Cleveland-Cliffs Inc., which operates the Peter Mitchell Mine near Babbitt, Minnesota, and processes taconite ore into iron ore pellets at its Silver Bay facility on Lake Superior. Royalties consist of base royalties calculated as a percentage of the shipped value of pellets produced from Trust lands, bonus royalties based on the highest arms-length pellet sale price in the preceding four calendar quarters, and occasional minimum advance royalties; the Trust passes through substantially all net royalty income to holders of its Units of Beneficial Interest after deducting administrative expenses, with no involvement in mining operations, exploration, or pellet production. The Trust conducts all activities within the United States, targeting iron ore pellet royalties primarily supporting steel production in North American blast furnaces, electric arc furnaces, and direct reduction plants. Organized under New York law on July 18, 1961, with administration handled by Deutsche Bank Trust Company Americas as corporate trustee and four individual trustees based at 1 Columbus Circle, New York, New York, the Trust remains a single-segment pass-through entity focused solely on royalty collection, expense management, asset conservation, and unitholder distributions. Its iron ore reserves underpin long-term royalty potential, subject to exhaustion under lease terms ending upon depletion of minable reserves. Recent developments include the conclusion of a multi-year arbitration dispute with Cleveland-Cliffs Inc. and Northshore Mining Company, resulting in a unanimous American Arbitration Association award of $59.8 million in underpaid royalties plus $11.3 million in pre-award interest for periods in 2020 through early 2022 due to improper pricing methodologies; Cliffs and Northshore paid the full $71.2 million on October 4, 2024, with the award confirmed by New York County Supreme Court on March 7, 2025. In fiscal 2025 (ended January 31, 2025), quarterly royalty reports indicated Northshore's increased shipments to Cliffs affiliates over third-party arms-length sales following Cliffs' 2020 acquisition of ArcelorMittal USA and 2021 Toledo HBI plant startup, contributing to a lower bonus royalty rate effective July 1, 2025, amid evaluations of ongoing royalty calculation compliance under the agreements. Third quarter fiscal 2026 results (ended October 31, 2025) reflected sharply lower revenues of $3.6 million versus $79.0 million a year earlier, primarily due to the absence of the prior-year arbitration award, alongside reduced shipments and bonus rates; the Trustees declared a $0.34 per Unit distribution payable to unitholders.