ROYALTY AGREEMENT

6 Months Ended

Jul. 31, 2025

ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS

ROYALTY AGREEMENT, UNALLOCATED RESERVE AND DISTRIBUTIONS

Note 4.  On July 11, 2025, the Trustees declared a distribution of $0.12 per Unit of Beneficial Interest payable on August 20, 2025 to Mesabi Trust Unitholders of record at the close of business on July 30, 2025. The declared distribution of $1,574,401 is recorded as a distribution payable on the Condensed Balance Sheet for the quarter ended July 31, 2025 (unaudited) as compared to a distribution payable of $0.30 per Unit of Beneficial Interest for the quarter ended July 31, 2024.

On July 30, 2025, the Trustees received the quarterly royalty report of iron ore production and shipment during the calendar quarter ended June 30, 2025 from Cliffs. See “Recent Developments— Receipt of Quarterly Royalty Report and Royalty Payment from Cliffs” as set forth on page 15 of this Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2025.

Each quarter, as authorized by the Agreement of Trust dated July 18, 1961, as amended (the “Agreement of Trust”), the Trustees evaluate all relevant factors, including all costs, expenses, obligations, and present and future liabilities of the Trust (whether fixed or contingent) in determining a prudent level of unallocated reserve in light of the unpredictable nature of the iron ore industry, current economic conditions and current communications from Cliffs as it relates to NMC.

Pursuant to the Agreement of Trust, the Trustees make decisions about cash distributions to Unitholders based on the royalty payments it receives from Cliffs when received, rather than as royalty income is recorded in accordance with the Trust’s revenue recognition policy. Refer to Note 3 for further information.

As of July 31, 2025 and January 31, 2025, the unallocated cash and cash equivalents portion of the Trust’s Unallocated Reserve was comprised of the following components. Cash equivalents consists of U.S. government securities with maturities of 3 months or less as of the date of acquisition by the Trust.

	July 31, 2025		January 31, 2025
Cash and cash equivalents	$	21,249,191	$	100,204,531
Distribution payable		(1,574,401)		(78,064,060)
Unallocated cash and cash equivalents	$	19,674,790	$	22,140,471

A reconciliation of the Trust’s Unallocated Reserve and Trust Corpus for the three and six months ended July 31, 2025 and 2024 is as follows:

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2025	$	23,327,717	$	3	$	23,327,720
Net income		8,375,091		—		8,375,091
Distributions declared - $0.6800 per unit		(8,921,608)		—		(8,921,608)
Balances as of July 31, 2025	$	22,781,200	$	3	$	22,781,203

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of April 30, 2025	$	19,611,719	$	3	$	19,611,722
Net income		4,743,882		—		4,743,882
Distributions declared - $0.1200 per unit		(1,574,401)		—		(1,574,401)
Balances as of July 31, 2025	$	22,781,200	$	3	$	22,781,203

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2024	$	20,975,143	$	3	$	20,975,146
Net income		8,881,678		—		8,881,678
Distributions declared - $0.5900 per unit		(7,740,806)		—		(7,740,806)
Balances as of July 31, 2024	$	22,116,015	$	3	$	22,116,018

		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of April 30, 2024	$	20,654,125	$	3	$	20,654,128
Net income		5,397,894		—		5,397,894
Distributions declared - $0.3000 per unit		(3,936,004)		—		(3,936,004)
Balances as of July 31, 2024	$	22,116,015	$	3	$	22,116,018