Mesabi Trust Reports 56% Revenue Decline and Net Loss for Fiscal Quarter Ending July 31, 2026

Mesabi Trust reported a significant decline in financial performance for the fiscal quarter ending July 31, 2026, as detailed in its latest 10-Q filing. The Trust's total revenues for the three months amounted to $2.48 million, a decrease of 56% from $5.61 million in the same period last year. This decline was primarily driven by a drop in royalty income, which fell to $2.33 million from $5.42 million, reflecting lower prices for iron ore pellets and the absence of bonus royalty revenue. The Trust recorded a net loss of $95,013 for the quarter, a stark contrast to the net income of $4.74 million reported in the previous year.

For the six-month period ending July 31, 2026, total revenues also decreased to $4.73 million from $10.34 million, with net income dropping to $992,450 from $8.38 million year-over-year. The Trust's expenses surged to $3.73 million, up from $1.97 million, largely due to increased legal fees associated with ongoing arbitration matters. The Trust declared a distribution of $0.05 per unit, significantly lower than the $0.12 per unit declared in the same quarter of the previous year.

Operationally, Mesabi Trust reported that production and shipments of iron ore pellets from its lands totaled 975,722 tons for the three months ended July 31, 2026, compared to 943,955 tons in the same period of 2025. For the six-month period, production and shipments increased to 1.88 million tons from 1.58 million tons, attributed to higher demand and the absence of extended maintenance shutdowns that affected operations in the previous year. However, the Trust did not receive any bonus royalties during the quarter, as all shipments were sold below the adjusted threshold price.

The Trust's balance sheet as of July 31, 2026, showed total assets of $19.84 million, down from $24.36 million at the beginning of the fiscal year. The unallocated reserve decreased to $17.59 million, reflecting a reduction in cash and cash equivalents and accrued income receivable. The Trust's cash and cash equivalents stood at $17.39 million, down from $23.16 million at the start of the year. The Trustees noted that future distributions will depend heavily on the timing and amount of royalty income received, which is influenced by market conditions and operational decisions made by Northshore Mining Company, the Trust's lessee.

Looking ahead, the Trust's outlook remains cautious due to the unpredictable nature of the iron ore market and the reliance on Northshore's operational decisions. The Trustees emphasized the importance of maintaining adequate reserves while balancing distributions to unitholders. The Trust's financial health will continue to be closely monitored, particularly in light of ongoing legal proceedings and market volatility affecting iron ore prices.