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Mesabi Trust Declares Distribution
Jul. 16, 2010 The Trustees of Mesabi Trust declared a distribution of $0.80 per Unit of Beneficial Interest payable on August 20, 2010, to Mesabi Trust unit holders of record at the close of business on July 30. The Trust did not declare a distribution for the same period a year ago.
The current distribution is attributable to increases in the volume of shipments of iron ore pellets during the most recent quarter and for the year to date, as reported by Northshore Mining Co., the lessee/operator of the mine on Mesabi Trust lands.
The substantial increase in the volume of shipments from Silver Bay, Minn., resulted in the shipment of additional tons at higher royalty rates, as compared to the same quarter last year, adding to the amount of the base royalty payment. That volume increase, together with the higher average sales price per ton of iron ore pellets, contributed to the increase in the bonus royalty payment.
Based on the shipments of iron ore reported by Northshore during the second calendar quarter of 2010, Mesabi Trust is expecting to receive a base royalty of $6,024,876 (based on actual shipments of iron ore mined from Mesabi Trust lands of 2,189,889 tons). The Trust also expects to receive a bonus royalty of $4,882,270 based on the average sales price per ton of iron ore pellets and the volume of shipments during the second calendar quarter of 2010.
Mesabi Trust is also expecting to receive $281,360 as a result of positive pricing adjustments to shipments made during the first calendar quarter of 2010. Northshore has informed the Mesabi Trust that the first quarter minimum advance royalty payment of $203,432 together with $1,068,297 of negative price adjustments from prior periods will be deducted from the royalty payment for the second calendar quarter of 2010.
As a result, the total royalty payment the Trust expects to receive from Northshore is $10,024,087 (including a royalty payment of $107,310 payable to the Mesabi Land Trust). A portion of the total distribution that the Trust expects to pay to unit holders on August 20 will come from its cash reserve for potential future liabilities.