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The Trustees of Mesabi Trust (NYSE: MSB) declared a distribution of forty-nine cents ($0.49) per Unit of Beneficial Interest payable on February 20, 2013 to Mesabi Trust unitholders of record at the close of business on January 30, 2013. This compares to a distribution of seventy-six cents ($0.76) per Unit for the same period last year.
The twenty-seven cents ($0.27) per Unit decrease in the current distribution, as compared to the distribution announced in same quarter last year, is primarily due to a 19% decrease in the average price per ton credited to the Trust on all shipments during the fourth calendar quarter of 2012, as compared to the fourth calendar quarter of 2011. In addition, there was a 13% decrease in the volume of shipments credited to Mesabi Trust and shipped from Silver Bay, Minnesota, reported by Northshore Mining Company (“Northshore”), the lessee/operator of the mine on Mesabi Trust lands, during the fourth quarter of calendar year 2012, as compared to the fourth calendar quarter of 2011. Finally, for the fourth calendar quarter of 2012, the Trust is expecting to receive approximately $150,000 of negative pricing adjustments relating to prior shipments and royalty payments paid to the Trust during the first three calendar quarters of 2012, while the Trust received approximately $632,000 of positive pricing adjustments in the fourth calendar quarter of 2011.
Based on the shipments of iron ore reported by Northshore during the fourth calendar quarter of 2012, on January 30, 2013, Mesabi Trust is expecting to receive a base royalty of $4,472,552. Mesabi Trust is also expecting to receive a bonus royalty in the amount of $2,236,276. Mesabi Trust is also expecting to have its royalties from Northshore reduced by $149,251 as a result of negative pricing adjustments to prior shipments and royalty payments previously paid to Mesabi Trust during the first three calendar quarters of 2012. Accordingly, the total royalty payment expected to be received by Mesabi Trust from Northshore is $6,727,912 (including a royalty payment of $168,336 payable to the Mesabi Land Trust).