Mesabi Trust Files Q1 2024 10-Q

Ticker: MSB · Form: 10-Q · Filed: Jun 13, 2024 · CIK: 65172

Sentiment: neutral

Topics: 10-Q, royalty, mining

TL;DR

Mesabi Trust 10-Q filed: Financials and operations update for iron ore royalties.

AI Summary

Mesabi Trust filed its 10-Q for the period ending April 30, 2024. The filing details financial performance and operational metrics related to its iron ore royalty interests. Specific figures for reserves, shipments, and royalty income are presented, reflecting the trust's ongoing business activities in the mineral sector.

Why It Matters

This filing provides investors with an update on Mesabi Trust's financial health and operational performance, crucial for understanding the value of its iron ore royalty assets.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial and operational updates for Mesabi Trust.

Key Numbers

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The reporting period for this 10-Q filing is the quarter ended April 30, 2024.

What is Mesabi Trust's fiscal year end?

Mesabi Trust's fiscal year ends on January 31st.

What is the Central Index Key (CIK) for Mesabi Trust?

The Central Index Key for Mesabi Trust is 0000065172.

What is the business phone number listed for Mesabi Trust?

The business phone number listed for Mesabi Trust is 2122506519.

What is the filing date of this 10-Q report?

This 10-Q report was filed on June 13, 2024.

Filing Stats: 4,633 words · 19 min read · ~15 pages · Grade level 15.2 · Accepted 2024-06-13 16:30:44

Filing Documents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 3

Financial Statements. (Note 1)

Item 1. Financial Statements. (Note 1) 3 Condensed Statements of Income Three Months Ended April 30, 2024 and 2023 3 Condensed Balance Sheets April 30, 2024 and January 31, 2024 4 Condensed Statements of Cash Flows Three Months Ended April 30, 2024 and 2023 5 Notes to Condensed Financial Statements 6

Trustees' Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Trustees' Discussion and Analysis of Financial Condition and Results of Operations. 9

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 17

Controls and Procedures

Item 4. Controls and Procedures. 17

- OTHER INFORMATION

PART II - OTHER INFORMATION 18

Legal Proceedings

Item 1. Legal Proceedings 18

Risk Factors

Item 1A. Risk Factors 18

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 18

Defaults upon Senior Securities

Item 3. Defaults upon Senior Securities 18

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 18

Other Information

Item 5. Other Information 18

Exhibits

Item 6. Exhibits. 19

Forward-Looking Statements

Forward-Looking Statements Certain information included in this Quarterly Report on Form 10-Q contains, or incorporates by reference, not only historical information, but also "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All such forward-looking statements, including those statements regarding estimation of iron ore pellet production, shipments, pricing, royalties and other matters, are based on information from the lessee/operator (and its parent corporation) of the mine located on the lands owned and held in trust for the benefit of the holders of units of beneficial interest of Mesabi Trust ("Mesabi Trust" or the "Trust"). These statements may be identified by the use of forward-looking words, such as "may," "will," "could," "project," "predict," "intend," "believe," "anticipate," "expect," "estimate," "continue," "potential," "plan," "should," "assume," "forecast" and other similar words. Such forward-looking statements are inherently subject to known and unknown risks and uncertainties. Actual results and future developments could differ materially from the results or developments expressed in or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, volatility of iron ore and steel prices, market supply and demand, competition, environmental hazards, health and safety conditions, regulation or government action, litigation, uncertainties about estimates of reserves, general adverse business and industry economic trends, uncertainties arising from war, terrorist events 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 restructur

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements. (Note 1)

Item 1. Financial Statements. (Note 1) Mesabi Trust Condensed Statements of Income Three Months Ended April 30, 2024 and 2023 Three Months Ended April 30, 2024 2023 (unaudited) (unaudited) A. Condensed Statements of Income Revenues Royalty income $ 6,010,608 $ 1,711,316 Interest 239,964 137,533 Total revenues 6,250,572 1,848,849 Expenses 2,766,787 825,710 Net income $ 3,483,785 $ 1,023,139 WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING Number of units outstanding 13,120,010 13,120,010 Net income per unit (Note 2) $ 0.2655 $ 0.0780 Distributions declared per unit (Note 4) $ 0.2900 $ - See Notes to Condensed Financial Statements. 3 Table of Contents Mesabi Trust Condensed Balance Sheets April 30, 2024 and January 31, 2024 April 30, 2024 January 31, 2024 (unaudited) B. Condensed Balance Sheets Assets Cash and cash equivalents $ 21,629,973 $ 23,980,448 Accrued income receivable 1,828,842 1,960,358 Contract asset 1,559,969 451,896 Prepaid expenses 112,368 297,647 Current assets 25,131,152 26,690,349 Fixed property, including intangibles, at nominal values Assignments of leased property Amended assignment of Peters Lease 1 1 Assignment of Cloquet Leases 1 1 Certificate of beneficial interest for 13,120,010 units of Land Trust 1 1 3 3 Total assets $ 25,131,155 $ 26,690,352 Liabilities, Unallocated Reserve And Trust Corpus Distribution payable $ 3,804,803 $ 4,854,404 Accrued expenses 672,224 860,802 Total liabilities 4,477,027 5,715,206 Unallocated reserve 20,654,125 20,975,143 Trust corpus 3 3 Total liabilities, unallocated reserve and trust corpus $ 25,131,155 $ 26,690,352 See Notes to Condensed Financial Statements. 4 Table of Contents Mesabi Trust Condensed Statements of Cash Flows Three Months Ended April 30, 2024 and 2023 Three Months Ended April 30, 2024 2023 (unaudite

Trustees' Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Trustees' Discussion and Analysis of Financial Condition and Results of Operations. This discussion should be read in conjunction with the condensed financial statements and notes presented in this Quarterly Report on Form 10-Q and the financial statements and notes in the last filed Annual Report on Form 10-K for the year ended January 31, 2024 for a full understanding of Mesabi Trust's financial position and results of operations for the three months ended April 30, 2024. All references in this discussion and in this Quarterly Report on Form 10-Q to iron ore products "shipped" or "shipments" shall include iron ore products that are actually shipped from Silver Bay, Minnesota and/or stockpiled for intercompany use that Cleveland Cliffs Inc. ("Cliffs") has deemed shipped, as referenced by the parties to, and in accordance with, the Amended Assignment of Peters Lease. Following the outcome of the 2019 arbitration, Cliffs began accruing royalty payments to the Trust for both DR pellets and standard pellets to be sold for internal use at facilities owned by Cliffs or its subsidiaries. As a result, the Trust recognizes revenue for internal use pellets upon production of those pellets, regardless of pellet grade. Pellets produced by Northshore Mining Company ("Northshore" or "NMC") that are not designated for internal use by Cliffs, or its subsidiaries, and instead are intended for sale to third parties in arms'-length sales, continue to be recognized as revenue upon shipment from Silver Bay, Minnesota. Background Mesabi Trust, formed pursuant to the Agreement of Trust, is a trust organized under the laws of the State of New York. Mesabi Trust holds all of the interests formerly owned by Mesabi Iron Company ("MIC"), including all right, title and interest in the Amendment of Assignment, Assumption and Further Assignment of Peters Lease dated August 17, 1989 among the trustees of Mesabi Trust, Bruce D. Sherling, as Trustee in Bankruptcy for the Estate of Re

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