Exhibit 99.1
Mesabi Trust Press Release
July 13, 2020 04:30 PM Eastern Daylight Time
NEW YORK--(BUSINESS WIRE)—The Trustees of Mesabi Trust (NYSE:MSB) declared a distribution of five cents ($0.05) per Unit of Beneficial Interest payable on August 20, 2020 to Mesabi Trust Unitholders of record at the close of business on July 30, 2020. This compares to a distribution of twenty-one cents ($0.21) per Unit for the same period last year.
The sixteen cents ($0.16) per Unit decrease in the current distribution, as compared to the distribution announced by the Trust at the same time last year, is primarily attributable to the Trust’s receipt of total royalty payments of $ 448,246 on April 30, 2020 from Cleveland-Cliffs Inc. (“Cliffs”), the parent company of Northshore Mining Company, which was lower than the total royalty payments of $ 3,149,582 received by the Trust from Cliffs in April 2019. The decrease in the royalty received by the Trust in the first calendar quarter of 2020, as compared to the royalty received in the first calendar quarter of 2019, is primarily attributable to negative pricing adjustments reflected in the first quarter 2020 base and bonus royalty calculations related to changes in price estimates made in prior quarters. The Trust’s announcement today also reflects that the Trust’s most recent balance sheet includes a contract liability, which represents, among other things, anticipated negative pricing adjustments and iron ore that has not been shipped by Northshore, but for which the Trust has received a royalty payment based on an initial estimated price. See Mesabi Trust’s Quarterly Report on Form 10-Q, Note 2 (regarding “Contract asset and contract liability”), for the fiscal quarter ended April 30, 2020 (filed June 8, 2020). Finally, the Trust’s announcement today also reflects the Trustees’ determination that Mesabi Trust will have sufficient reserves available to make such a distribution while also maintaining an appropriate level of unallocated reserves in order for the Trust to be positioned to meet current and future expenses, and present and future liabilities (whether fixed or contingent), that may arise.
Quarterly royalty payments from Northshore for iron ore shipments during the second calendar quarter, which are payable to Mesabi Trust under the royalty agreement, are due on July 30, 2020, 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.
The Trustees have received no information to update Cliffs’ April 13, 2020 announcement about the temporary idling production at Northshore Mining in Minnesota. At that time, Cliffs said it expected to restart Northshore production in August.
Forward-Looking Statements
This press release contains certain forward-looking statements with respect to iron ore pellet production, iron ore pricing and adjustments to pricing, shipments by Northshore in 2020, royalty (including bonus royalty) amounts, timing of quarterly royalty payments and quarterly royalty reports, 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, and shipments of iron ore pellets, as well as actual royalty payments (including bonus
