MESABI TRUST

Current Developments

Receipt of Quarterly Royalty Report and Royalty Payment

On January 30, 2024, the Trustees of Mesabi Trust received the quarterly royalty report of iron ore shipments out of Silver Bay, Minnesota during the calendar quarter ended December 31, 2023 (the “Quarterly Royalty Report”) from Cliffs, the parent company of Northshore.

As reported to Mesabi Trust by Cliffs in the Quarterly Royalty Report, based on production and shipments of iron ore products by Northshore during the three months ended December 31, 2023, Mesabi Trust was credited with a base royalty of $3,819,821. Also, for the three months ended December 31, 2023, Mesabi Trust was credited with a bonus royalty in the amount of $2,361,242. Cliffs reported that no adjustments were applied for the quarter. In addition, a royalty payment of $251,371 was paid to the Mesabi Land Trust. Accordingly, the total royalty payments from Cliffs received on January 30, 2024 by Mesabi Trust for the three months ended December 31, 2023 were $6,432,434.

The royalties paid to Mesabi Trust are based on the volume of iron ore pellets produced for internal use or shipped for third-party sales during the quarter, the pricing of iron ore product sales, and the percentage of iron ore pellet shipments from Mesabi Trust lands rather than from non-Mesabi Trust lands. In the fourth calendar quarter of 2023, Cliffs credited Mesabi Trust with 964,129 tons shipped or produced during the quarter, as compared to negative (54,026) tons adjusted (or applied) during the fourth calendar quarter of 2022 (based on inventory surveys conducted during the quarter), when the Northshore operations were idled.

The volume of iron ore pellets (and other iron ore products) produced or shipped by Northshore varies from quarter to quarter and year to year based on a number of factors, including, among others, Cliffs’ decisions to idle Northshore operations (which occurred from May 2022 until April 2023), the requested delivery schedules of customers (including affiliates), general economic conditions in the iron ore industry, and production schedules and weather conditions on the Great Lakes. These multiple factors can result in significant variations in royalties received by Mesabi Trust (and in turn, the resulting funds available for distribution to Unitholders by Mesabi Trust) from quarter to quarter and from year to year. These variations, which can be positive or negative, cannot be predicted by the Trustees of Mesabi Trust. Based on the above factors, and as indicated by Mesabi Trust’s historical distribution payments, the royalties received by Mesabi Trust, and the distributions paid to Unitholders, if any, in any particular quarter are not necessarily indicative of royalties that will be received, or distributions that will be paid, if any, in any subsequent quarter or full year.

Cliffs’ quarterly royalty reports normally present production and shipment volumes, as well as royalty calculations, that are based on documented transactions that are reviewed by the Trustees and are based on estimated iron ore prices that are subject to change. It is possible that future negative price adjustments could offset, or even eliminate, royalties or royalty income that would otherwise be payable to Mesabi Trust in any particular quarter, or at year end, thereby potentially reducing cash available for distribution to Mesabi Trust’s Unitholders in future quarters.

The Trustees of Mesabi Trust have received no specific updates concerning Cliffs’ plans with respect to Northshore iron ore operations. The last reported Cliffs’ public announcements made in April 2023 included that Northshore was being partially restarted and would be run at less than full capacity for the remainder of 2023, and that Cliffs would continue to treat Northshore as a swing operation.

With respect to calendar year 2024, Northshore has not advised Mesabi Trust of its expected shipments of iron ore products, or what percentage of 2024 shipments will be from Mesabi Trust iron ore. In the Cliffs’ Quarterly Royalty Report, Cliffs stated that the royalty payments being reported were based on estimated iron ore pellet prices, which are subject to change. It is possible that future production decreases, idling of the Northshore plant, or negative price adjustments could offset, or even eliminate, future royalties or royalty income that would otherwise be payable to Mesabi Trust in any particular quarter, or at year end, thereby potentially reducing cash available for distribution to Mesabi Trust’s Unitholders in future quarters.

Mesabi Trust Distribution Announcements

As previously announced by Mesabi Trust, on January 12, 2024 the Trustees of Mesabi Trust declared a distribution of thirty-seven cents ($0.37) per Unit of Beneficial Interest payable on February 20, 2024 to Mesabi Trust Unitholders of record at the close of business on January 30, 2024. This distribution was paid as announced.

On April 16, 2024, the Trustees of Mesabi Trust declared a distribution of twenty-nine cents ($0.29) per Unit of Beneficial Interest payable on May 20, 2024 to Mesabi Trust Unitholders of record at the close of business on April 30, 2024.

Northshore Employees Ratified a New Labor Contract with United Steelworkers in September 2023

On September 8, 2023, Cliffs announced that Northshore’s employees, represented by the United Steelworkers (“USW’), ratified a three-year labor agreement that was negotiated by Cliffs. The agreement covers approximately 430 USW – represented employees at Cliffs’ Northshore operations.

Commencement of Arbitration in October 2022

As previously announced, on October 14, 2022, Mesabi Trust initiated arbitration against Northshore and its parent, Cliffs (jointly, the “Operator”), the lessee/operator of the leased lands. The arbitration proceeding was commenced with the American Arbitration Association. The Trust seeks an award of damages relating to the Operator’s underpayment of royalties in 2020, 2021 and 2022 by virtue of the Operator’s failure to use the highest price arms’-length iron ore pellet sale from the preceding four quarters in pricing internal production during the fourth quarter of 2020 through 2022. The Trust also seeks declaratory relief related to the Trust’s entitlement to certain documentation and to the time the Operator’s royalty obligation accrues. During 2023, the parties appointed a three-member arbitration panel and engaged in discovery. The AAA evidentiary hearing took place in March 2024. Post-hearing briefs will be exchanged in May 2024, and post-hearing oral argument, if any, will take place in June 2024.

Important Factors Affecting Mesabi Trust

The Agreement of Trust specifically prohibits the Trustees from entering into or engaging in any business. This prohibition seemingly applies even to business activities the Trustees deem necessary or proper for the preservation and protection of the Trust’s assets. Accordingly, the Trustees’ activities in connection with the administration of Trust assets are limited to collecting income, paying expenses and liabilities, distributing net income to Mesabi Trust’s Unitholders after the payment of, or provision for, such expenses and liabilities, monitoring royalties and protecting and conserving the held assets.

Neither Mesabi Trust nor the Trustees have any control over the operations and activities of Northshore, except within the framework of the Amended Assignment of Peters Lease. Cliffs alone controls (i) historical operating data, including iron ore production volumes, decisions to reduce or idle the Northshore plant and mining operations, marketing of iron ore products, operating and capital expenditures as they relate to Northshore, environmental and other liabilities and the effects of regulatory changes; (ii) plans for

Northshore’s future operating and capital expenditures; (iii) geological data relating to ore reserves; (iv)projected production of iron ore products; (v) contracts between Cliffs and Northshore with their customers; and (vi) the decision to mine off Mesabi Trust and/or state lands, based on Cliffs’ current mining and engineering plan. The Trustees do not exert any influence over mining operational decisions at Northshore, nor do the Trustees provide any input regarding the ore reserve estimated at Northshore as reported by Cliffs. While the Trustees request relevant information from Cliffs and Northshore in accordance with the Royalty Agreement for use in periodic reports as part of their evaluation of Mesabi Trust’s disclosure controls and procedures, the Trustees do not control this information and they rely on the information in Cliffs’ periodic and current filings with the SEC to provide accurate and timely information in Mesabi Trust’s reports filed with the SEC.

In accordance with the Agreement of Trust and the Amendment, the Trustees are entitled to, and in fact do, rely upon certain experts in good faith, including (i) the independent consultants they have contracted with, with respect to monthly production and shipment reports, which include figures on crude ore production and iron ore pellet shipments, and discussions concerning the condition and accuracy of the scales and plans regarding the development of Mesabi Trust’s mining property; and (ii) the accounting firm they have contracted with for non-audit services, including reviews of financial data related to shipping and sales reports provided by Northshore and a review of the schedule of leasehold royalties payable to Mesabi Trust.

For a discussion of additional factors, including but not limited to those that could adversely affect Mesabi Trust’s actual results and performance, see “Risk Factors” set forth on pages 4 through 17 of this Mesabi Trust’s Annual Report on Form 10-K for the fiscal year-ended January 31, 2024.