Mesabi Trust Press Release

Rhea-AI Summary

Mesabi Trust (NYSE:MSB) has declared a distribution of $0.56 per Unit of Beneficial Interest, payable on May 20, 2025, to unitholders of record as of April 30, 2025. This represents a significant increase from the $0.29 per Unit distributed in the same period last year.

The higher distribution reflects increased royalty payments from Cleveland-Cliffs Inc., which rose to $8,986,464 in January 2025 from $6,432,434 in January 2024. The Trustees' decision considers various factors, including Cliffs' plans to increase scrap iron usage, volatility in iron ore and steel industries, global economic uncertainties, and trade-related concerns.

The next quarterly royalty payment and report from Cliffs and Northshore for Q1 iron ore production and shipments are due April 30, 2025.

Positive

• Distribution per Unit increased 93% to $0.56 from $0.29 year-over-year
• Royalty payments increased 40% to $8.99M from $6.43M compared to January 2024

Negative

• Uncertainty regarding Cliffs' plans to increase scrap iron usage, potentially affecting future iron ore demand
• Ongoing volatility in iron ore and steel industries
• No specific updates provided on Northshore iron ore operations or shipment plans

Insights

Mining Royalty Trust Analyst

Mesabi Trust's announcement of a $0.56 per unit distribution represents a substantial 93% increase compared to the $0.29 paid in the same period last year, signaling significantly improved royalty income. This distribution boost is directly attributed to higher royalty payments from Cleveland-Cliffs, which increased to $8.99 million in January 2025 from $6.43 million in January 2024.

The nearly doubling of distribution reflects improved operational performance at the underlying mining operations that generate Mesabi's royalty stream. However, investors should note the Trust's cautious tone regarding several risk factors, including Cliffs' strategic shift toward increased scrap iron usage in its supply chain, which could potentially reduce future reliance on iron ore from mines covered by Mesabi's royalty agreements.

The Trust's forward-looking statements appropriately highlight industry volatility and uncertainties, including potential trade policy impacts on iron ore pricing. Mesabi's business model, with its complete dependence on Cleveland-Cliffs' production decisions and iron ore market dynamics, remains unchanged. The lack of specific updates on Northshore operations for the current year introduces some uncertainty despite the improved distribution.

This substantial distribution increase represents a meaningful cash flow improvement for unitholders in the near term, though the cautionary language suggests the Trust remains concerned about longer-term production stability at the properties generating its royalty income.

NEW YORK--(BUSINESS WIRE)-- Announcement of Mesabi Trust Distribution

The Trustees of Mesabi Trust (NYSE:MSB) declared a distribution of fifty-six cents ($0.56) per Unit of Beneficial Interest payable on May 20, 2025 to Mesabi Trust Unitholders of record at the close of business on April 30, 2025. This compares to a twenty-nine cents ($0.29) per Unit distribution declared for the same period last year.

The Trustees’ announcement today of a fifty-six cents ($0.56) per Unit distribution, as compared to the twenty-nine cents ($0.29) per Unit distribution announced by the Trust at the same time last year, reflects several points. The Trust’s receipt of total royalty payments of $8,986,464 on January 30, 2025, from Cleveland-Cliffs Inc. (“Cliffs”), the parent company of Northshore Mining Company (“Northshore”), was higher than the total royalty payments of $6,432,434 received by the Trust from Cliffs in January 2024.

The Trustees’ distribution announcement today also takes into account numerous other factors, including uncertainties resulting from Cliffs’ prior announcements to increase the use of scrap iron in its vertical supply chain planning, the current volatility in the iron ore and steel industries generally, national and global economic uncertainties, potential changes in trade laws, the volume of unfairly traded imports, the imposition or termination of duties or tariffs and further potential disturbances from global unrest.

The Trustees have received no specific updates on Cliffs’ plans for the current year concerning Northshore iron ore operations or Northshore sale or shipments of iron ore products.

Quarterly royalty payments from Cliffs and Northshore for iron ore production and shipments during the first calendar quarter, which are payable to Mesabi Trust under the royalty agreement, are due April 30, 2025, together with the quarterly royalty report. After receiving the quarterly royalty report, Mesabi Trust plans to file a summary of the quarterly royalty report with the Securities and Exchange Commission in a Current Report on Form 8-K.

Forward-Looking Statements

This press release contains certain forward-looking statements with respect to Northshore operations and Cliffs during 2025 and other matters, which statements are intended to be made under the safe harbor protections of the Private Securities Litigation Reform Act of 1995, as amended. Actual production, prices, price adjustments, sales and shipments of iron ore pellets, as well as actual royalty payments (including bonus royalties) could differ materially from current expectations due to inherent risks and uncertainties such as general adverse business and industry economic trends, uncertainties arising from war, terrorist events, imposition or termination of duties or tariffs and retaliatory tariffs, 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 historically found in some of the pellet supply agreements between Cliffs and certain of its customers, which may result in future adjustments to royalties payable to Mesabi Trust and other factors. Further, historically some of the royalties earned by Mesabi Trust have been based on estimated prices that are subject to interim and final adjustments, which can be positive or negative, and may be dependent in part on multiple price and inflation index factors under agreements to which Mesabi Trust was not a party and that were not known until after the end of a contract year. Although the Mesabi Trustees believe that any such forward-looking statements are based on reasonable assumptions, 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 under the caption “Risk Factors” in Mesabi Trust’s filings with the Securities and Exchange Commission. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250415143951/en/

Mesabi Trust SHR Unit

Deutsche Bank Trust Company Americas

904-271-2520

Source: Mesabi Trust

FAQ

What is the new distribution amount for Mesabi Trust (MSB) and when is it payable?

Mesabi Trust declared a distribution of $0.56 per Unit, payable on May 20, 2025, to unitholders of record as of April 30, 2025.

How much did Mesabi Trust's distribution increase compared to last year?

The distribution increased by 93%, from $0.29 to $0.56 per Unit compared to the same period last year.

What was the total royalty payment received by MSB from Cleveland-Cliffs in January 2025?

Mesabi Trust received total royalty payments of $8,986,464 from Cleveland-Cliffs on January 30, 2025.

When is the next quarterly royalty payment due to Mesabi Trust (MSB)?

The next quarterly royalty payment from Cliffs and Northshore is due on April 30, 2025.