Mesabi Trust Press Release
13 July 2021 - 6:15AM
Business Wire
The Trustees of Mesabi Trust (NYSE:MSB) declared a distribution
of nine cents ($0.09) per Unit of Beneficial Interest payable on
August 20, 2021 to Mesabi Trust Unitholders of record at the close
of business on July 30, 2021. This compares to a distribution of
five cents ($0.05) per Unit for the same period last year.
The four cents ($0.04) per Unit increase in the current
distribution, as compared to the distribution announced by the
Trust at the same time last year, is primarily attributable to the
Trust’s receipt of total royalty payments of $ 6,340,032 on April
30, 2021 from Cleveland-Cliffs Inc. (“Cliffs”), the parent company
of Northshore Mining Company, which was higher than the total
royalty payments of $ 449,496 received by the Trust from Cliffs in
April 2020. The increase in the royalty received by the Trust in
the first calendar quarter of 2021, as compared to the royalty
received in the first calendar quarter of 2020, is primarily
attributable to higher prices for iron ore products reflected in
the first quarter 2021 royalty calculations, and higher volume of
shipments during the first quarter 2021, compared with shipments in
the first quarter 2020. The Trust’s announcement today also
reflects that the Trust’s most recent balance sheet includes a
contract liability, which represents, among other things, iron ore
that had not yet been shipped by Northshore, but for which the
Trust has received a royalty payment based on an initial estimated
price. See Mesabi Trust’s Quarterly Report on Form 10-Q, Note 2
(regarding “Contract asset and contract liability”), for the fiscal
quarter ended April 30, 2021 (filed June 11, 2021). Finally, the
Trust’s announcement today also reflects the Trustees’ assessment
that Mesabi Trust will have sufficient reserves available to make
such a distribution while also maintaining an appropriate level of
unallocated reserves in order for the Trust to be positioned to
meet current and future expenses, and present and future
liabilities (whether fixed or contingent), that may arise.
Quarterly royalty payments from Northshore for iron ore
shipments during the second calendar quarter, which are payable to
Mesabi Trust under the royalty agreement, are due on July 30, 2021,
together with the quarterly royalty report. After receiving the
quarterly royalty report, Mesabi Trust plans to file a summary of
the quarterly royalty report with the Securities and Exchange
Commission in a Current Report on Form 8-K.
Forward-Looking Statements
This press release contains certain forward-looking statements
with respect to iron ore pellet production, iron ore pricing and
adjustments to pricing, shipments by Northshore in 2021, royalty
(including bonus royalty) amounts, timing of quarterly royalty
payments and quarterly royalty reports, and other matters, which
statements are intended to be made under the safe harbor
protections of the Private Securities Litigation Reform Act of
1995, as amended. Actual production, prices, price adjustments, and
shipments of iron ore pellets, as well as actual royalty payments
(including bonus royalties) could differ materially from current
expectations due to inherent risks and uncertainties such as
general adverse business and industry economic trends,
uncertainties arising from war, terrorist events, potential future
impacts of the coronavirus (COVID-19) pandemic, and other global
events, higher or lower customer demand for steel and iron ore,
decisions by mine operators regarding curtailments or idling of
production lines or entire plants, announcements and implementation
of trade tariffs, environmental compliance uncertainties,
difficulties in obtaining and renewing necessary operating permits,
higher imports of steel and iron ore substitutes, processing
difficulties, consolidation and restructuring in the domestic steel
market, indexing features in Cliffs Pellet Agreements resulting in
adjustments to royalties payable to Mesabi Trust and other factors.
Further, substantial portions of royalties earned by Mesabi Trust
are based on estimated prices that are subject to quarterly and
final adjustments, which can be positive or negative, and are
dependent in part on multiple price and inflation index factors
under customer agreements to which Mesabi Trust is not a party and
that are not known until after the end of a contract year. Although
the Mesabi Trustees believe that any such forward-looking
statements are based on reasonable assumptions, such statements are
subject to risks and uncertainties, which could cause actual
results to differ materially. Additional information concerning
these and other risks and uncertainties is contained in the Trust’s
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Mesabi Trust undertakes no obligation to publicly update or revise
any of the forward-looking statements made herein to reflect events
or circumstances after the date hereof.
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