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Mesabi Trust Declares Distribution

The Trustees of Mesabi Trust (NYSE: MSB) declared a distribution of eighty cents ($0.80) per Unit of Beneficial Interest payable on August 20, 2010 to Mesabi Trust unitholders of record at the close of business on July 30, 2010. The Trust did not declare a distribution for the same period a year ago.

The current distribution of eighty cents ($0.80) per Unit is attributable to increases in the volume of shipments of iron ore pellets during the most recent quarter and for the year to date, as reported by Northshore Mining Company (“Northshore”), the lessee/operator of the mine on Mesabi Trust lands. The substantial increase in the volume of shipments from Silver Bay, Minnesota resulted in the shipment of additional tons at higher royalty rates, as compared to the same quarter last year, thereby adding to the amount of the base royalty payment. The increase in the volume of shipments from Silver Bay, Minnesota, together with the higher average sales price per ton of iron ore pellets, contributed to the increase in the bonus royalty payment.

Based on the shipments of iron ore reported by Northshore during the second calendar quarter of 2010, Mesabi Trust is expecting to receive a base royalty of $6,024,876 (based on actual shipments of iron ore mined from Mesabi Trust lands of 2,189,889 tons). Mesabi Trust is also expecting to receive a bonus royalty in the amount of $4,882,270 based on the average sales price per ton of iron ore pellets and the volume of shipments during the second calendar quarter of 2010. In addition to the base and bonus royalty payments, Mesabi Trust is also expecting to receive $281,360 as a result of positive pricing adjustments to shipments made during the first calendar quarter of 2010. Northshore has informed the Mesabi Trust that the first quarter minimum advance royalty payment of $203,432 together with $1,068,297 of negative price adjustments from prior periods will be deducted from the royalty payment for the second calendar quarter of 2010. Therefore, the total royalty payment expected to be received by Mesabi Trust from Northshore is $10,024,087 (including a royalty payment of $107,310 payable to the Mesabi Land Trust). A portion of the total distribution that the Trust expects to pay to Unitholders on August 20, 2010 will come from the Trust’s cash reserve for potential future liabilities, which cash reserve was $1,518,249 as of April 30, 2010 (unaudited). In making this decision, the Trustees considered the need for the Trust to maintain adequate reserves to cover the Trust’s current expenses, as well as present and future potential liabilities.

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