Mesabi Trust Reports $79M Revenue and $78.3M Net Income in Latest Quarter

Mesabi Trust reported significant financial performance improvements in its latest quarterly filing, with total revenues reaching $79.0 million for the three months ended October 31, 2024, compared to $4.9 million for the same period in 2023. This substantial increase is primarily attributed to a one-time arbitration award of $71.2 million received from Northshore Mining Company and Cleveland-Cliffs Inc., alongside a rise in royalty income driven by increased iron ore shipments and pricing. Net income for the quarter surged to $78.3 million, a dramatic increase from $4.1 million in the prior year, resulting in a net income per unit of $5.97, up from $0.31.

For the nine months ending October 31, 2024, Mesabi Trust reported total revenues of $91.7 million, compared to $16.6 million in the same period last year. The increase in revenue was bolstered by a total royalty income of $19.6 million, up from $16.1 million, reflecting a recovery in operations following the idling of Northshore's facilities until April 2023. The Trust's royalty income was primarily driven by base overriding royalties, which increased to $11.1 million from $8.6 million, and bonus royalties, which rose to $8.0 million from $7.1 million.

Operationally, Mesabi Trust reported that production and shipments of iron ore pellets from its lands totaled 1,066,665 tons for the three months ended October 31, 2024, compared to 918,482 tons in the same period of 2023. For the nine-month period, production and shipments reached 3,019,695 tons, a significant increase from 2,123,063 tons in the prior year. This growth is attributed to the full resumption of Northshore's operations and increased demand from customers. The Trust's unallocated reserve also saw a substantial increase, rising to $95.3 million as of October 31, 2024, compared to $21.1 million a year earlier.

Looking ahead, Mesabi Trust's Trustees have indicated that future distributions will depend heavily on the volume of iron ore shipments and the pricing environment. The Trust has declared a distribution of $0.39 per unit, payable on November 20, 2024, an increase from $0.35 per unit in the previous year. However, the Trustees caution that the unpredictable nature of the iron ore market, including potential negative price adjustments, could impact future royalty income and distributions. The Trust remains vigilant in monitoring market conditions and the operational decisions of Northshore, which are beyond its control.