The Trustees of Mesabi Trust (NYSE: MSB) declared a distribution of five cents ($0.05) per Unit of Beneficial Interest payable on May 20, 2011 to Mesabi Trust unitholders of record at the close of business on April 30, 2011. This compares to a distribution of twelve and one-half cents ($0.125) per Unit for the same period last year. The decrease in the current distribution of seven and one-half cents ($0.075) per Unit, as compared to the same quarter last year, is due to three factors. First, the base and bonus royalties earned by Mesabi Trust (before the application of negative pricing adjustments by Northshore) decreased from approximately $1.9 million in the first calendar quarter of 2010 to approximately $1.3 million for the first calendar quarter of 2011, as a result of a decrease in tons of iron ore pellets shipped from 463,093 tons in the first calendar quarter of 2010 to 273,686 tons credited to the Trust for the first calendar quarter of 2011. Second, Northshore’s most recent quarterly royalty report reflected a $576,625 negative price adjustment to royalties previously received by Mesabi Trust for shipments by Northshore in prior years. Finally, unlike the first calendar quarter of 2010, Mesabi Trust did not add to the current distribution by using funds from the Trust’s cash reserves because the Trust does not currently have excess funds available in the cash reserve for distribution to Unitholders. Based on the shipments of iron ore pellets during the first calendar quarter of 2011 reported by Northshore, on April 29, 2011 Mesabi Trust expects to be credited with a base royalty of $533,561 (based on actual shipments of 273,686 tons of iron ore mined from Mesabi Trust lands). Mesabi Trust also expects to be credited with a bonus royalty in the amount of $640,273 based on the average sales price per ton of iron ore pellets and the volume of shipments during the first calendar quarter of 2011. As discussed above, Northshore applied a $576,625 negative price adjustment to royalties previously received by the Trust for shipments by Northshore in 2009 and 2010, thereby reducing the total royalty payment expected to be received on April 29, 2011 by Mesabi Trust from Northshore to $742,086 (including a royalty payment of $144,877 payable to the Mesabi Land Trust). The royalties paid to Mesabi Trust are based on the volume of shipments of iron ore pellets for the quarter and the year to date, the pricing of the iron ore product sales, and the percentage of iron ore pellet shipments from Mesabi Trust lands rather than from non-Trust lands. The volume of shipments of iron ore pellets (and other iron ore products) by Northshore varies from quarter to quarter and year to year based on a number of factors, including the requested delivery schedules of customers, general economic conditions in the iron ore industry, and weather conditions on the Great Lakes. Further, the prices under the term contracts between Northshore, Northshore’s parent Cliffs Natural Resources Inc. (“Cliffs”) and certain of their customers (the “Cliffs Pellet Agreements”) are subject to interim and final pricing adjustments, dependent in part on multiple price and inflation index factors that are not known until after the end of a contract year. This can result in significant variations in royalties received by Mesabi Trust (and in turn the resulting amount available for distribution to Unitholders by Mesabi Trust) from quarter to quarter and on a comparative historical basis. These variations, which can be positive or negative, cannot be predicted by the Trustees of Mesabi Trust. Royalty payments received in 2011 and prior years continue to reflect pricing estimates for shipments of iron ore products that may be subject to further adjustment (upward or downward) pursuant to the Cliffs Pellet Agreements and the negotiated settlement between Cliffs and ArcelorMittal USA, Inc., announced by Cliffs on April 8, 2011. Based on all of the above factors and as indicated by the Trust’s historical distribution payments, the royalties received by the Trust, and the distributions paid to Unitholders, in any particular quarter are not necessarily indicative of royalties that will be received, or distributions that will be paid, in any subsequent quarter or for a full year.