MESABI TRUST_July 31, 2026

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-4488

MESABI TRUST

(Exact name of registrant as specified in its charter)

New York

13-6022277

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)

c/o Deutsche Bank Trust Company Americas

Trust & Agency Services

1 Columbus Circle, 17th Floor

Mail Stop: NYC01-1710

New York, New York

10019

(Address of principal executive offices)

(Zip Code)

(904) 271-2520

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Units of Beneficial Interest, no par value	MSB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 11, 2026, there were 13,120,010 Units of Beneficial Interest in Mesabi Trust outstanding.

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TABLE OF CONTENTS

	Page

PART I – FINANCIAL INFORMATION	3
Item 1. Financial Statements. (Note 1)	3
Condensed Statements of Income Three and Six Months Ended July 31, 2026 and 2025 -	3
Condensed Balance Sheets July 31, 2026 and January 31, 2026	4
Condensed Statements of Cash Flows Six Months Ended July 31, 2026 and 2025	5
Notes to Condensed Financial Statements	6
Item 2. Trustees’ Discussion and Analysis of Financial Condition and Results of Operations.	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	18
Item 4. Controls and Procedures.	18

PART II - OTHER INFORMATION	19
Item 1. Legal Proceedings	19
Item 1A. Risk Factors	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3. Defaults upon Senior Securities	19
Item 4. Mine Safety Disclosures	20
Item 5. Other Information	20
Item 6. Exhibits.	20

SIGNATURES	21

Forward-Looking Statements

Certain information included in this Quarterly Report on Form 10-Q contains, or incorporates by reference, not only historical information, but also “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All such forward-looking statements, including those statements regarding estimation of iron ore pellet production, shipments, pricing, royalties and other matters, are based on information from the lessee/operator (and its parent corporation) of the mine located on the lands owned and held in trust for the benefit of the holders of units of beneficial interest of Mesabi Trust (“Mesabi Trust” or the “Trust”). These statements may be identified by the use of forward-looking words, such as “may,” “will,” “could,” “project,” “predict,” “intend,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “should,” “assume,” “forecast” and other similar words. Such forward-looking statements are inherently subject to known and unknown risks and uncertainties. Actual results and future developments could differ materially from the results or developments expressed in or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, volatility of iron ore and steel prices, market supply and demand, competition, environmental hazards, health and safety conditions, regulation or government action, litigation, uncertainties about estimates of reserves, general adverse business and industry economic trends, uncertainties arising from war, terrorist events and other global events, higher or lower customer demand for steel and iron ore, decisions by mine operators regarding curtailments or idling production lines or entire plants, 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, market inputs tied to indexed price adjustment factors found in some Cliffs’ customer contracts resulting in future 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 interim and final adjustments, which can be positive or negative, and are dependent in part on multiple price and inflation index factors under agreements to which Mesabi Trust is not a party and that are not known until after the end of a contract year. It is possible that future negative price adjustments could partially or even completely offset royalties or royalty income that would otherwise be payable to the Trust in any particular quarter, or at year-end, thereby potentially reducing cash available for distribution to the Trust’s Unitholders (as defined below) in future quarters.

For a discussion of the factors, including without limitation, those that could materially and adversely affect Mesabi Trust’s actual results and performance, see “Risk Factors” set forth on pages 4 through 18 of Mesabi Trust’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026, the Trust’s Risk Factor described in “Risk Factors” set forth on page 18 of Mesabi Trust’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2026 (filed June 12, 2026) and as set forth on page 19 of this Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2026. These risks and uncertainties are not exclusive and further information concerning the Trust, including factors that potentially could materially affect our operating results, financial condition or the market price of the Units, may emerge from time to time. Mesabi Trust undertakes no obligation, other than that imposed by law, to make any revisions to the forward-looking statements contained in this filing or to update them to reflect circumstances occurring after the date of this filing. We advise you, however, to consult any further disclosures we make on related subjects in our future Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K that we file with or furnish to the Securities and Exchange Commission.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements. (Note 1)

Mesabi Trust

Condensed Statements of Income

Three and Six Months Ended July 31, 2026 and 2025


		Three Months Ended						Six Months Ended
		July 31,						July 31,
		2026			2025			2026			2025
		(unaudited)			(unaudited)			(unaudited)			(unaudited)
A. Condensed Statements of Income

Revenues
Royalty income		$	2,328,523		$	5,416,904		$	4,406,335		$	9,766,376
Interest			151,833			189,851			319,910			574,921

Total revenues			2,480,356			5,606,755			4,726,245			10,341,297

Expenses			2,575,369			862,873			3,733,795			1,966,206

Net (loss) income		$	(95,013)		$	4,743,882		$	992,450		$	8,375,091

WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING
Number of units outstanding			13,120,010			13,120,010			13,120,010			13,120,010

Net (loss) income per unit (Note 2)		$	(0.0072)		$	0.3616		$	0.0756		$	0.6383

Distributions declared per unit (Note 4)		$	0.0500		$	0.1200		$	0.2900		$	0.6800

See Notes to Condensed Financial Statements.

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Mesabi Trust

Condensed Balance Sheets

July 31, 2026 and January 31, 2026


		July 31, 2026			January 31, 2026
		(unaudited)
B. Condensed Balance Sheets

Assets
Cash and cash equivalents		$	17,385,397		$	23,162,609
Accrued income receivable			967,961			782,363
Contract asset			1,050,186			263,982
Prepaid expenses			439,662			147,371
Current assets			19,843,206			24,356,325

Fixed property, including intangibles, at nominal values

Assignments of leased property

Amended assignment of Peters Lease			1			1

Assignment of Cloquet Leases			1			1

Certificate of beneficial interest for 13,120,010 units of Land Trust			1			1
			3			3

Total assets		$	19,843,209		$	24,356,328

Liabilities, Unallocated Reserve And Trust Corpus

Liabilities
Distribution payable		$	656,001		$	3,411,203
Accrued expenses			1,596,686			542,250
Total liabilities			2,252,687			3,953,453

Unallocated reserve			17,590,519			20,402,872

Trust corpus			3			3

Total liabilities, unallocated reserve and trust corpus		$	19,843,209		$	24,356,328

See Notes to Condensed Financial Statements.

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Mesabi Trust

Condensed Statements of Cash Flows

Six Months Ended July 31, 2026 and 2025


		Six Months Ended
		July 31,
		2026			2025
			(unaudited)			(unaudited)
C. Condensed Statements of Cash Flows

Operating activities
Royalties received		$	3,433,080		$	7,727,463
Interest received			321,363			805,974
Expenses paid			(2,971,650)			(2,077,510)

Net cash from operating activities			782,793			6,455,927

Financing activity
Distributions to unitholders			(6,560,005)			(85,411,267)

Net change in cash and cash equivalents			(5,777,212)			(78,955,340)

Cash and cash equivalents, beginning of period			23,162,609			100,204,531

Cash and cash equivalents, end of period		$	17,385,397		$	21,249,191

Reconciliation of net income to net cash from operating activities

Net income		$	992,450		$	8,375,091
Increase in accrued income receivable			(185,598)			(283,114)
Increase in contract asset			(786,204)			(1,524,746)
Increase in prepaid expenses			(292,291)			(195,687)
Increase in accrued expenses			1,054,436			84,383

Net cash from operating activities		$	782,793		$	6,455,927

Non cash financing activity

Distributions declared and payable		$	656,001		$	1,574,401

See Notes to Condensed Financial Statements.

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Mesabi Trust

Notes to Condensed Financial Statements

July 31, 2026 (Unaudited)

Note 1. The condensed financial statements and notes to the condensed financial statements of Mesabi Trust (the “Trust”) included herein have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Trustees of Mesabi Trust (the “Trustees”), all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the results of operations for the three and six months ended July 31, 2026 and 2025, (b) the financial position as of July 31, 2026 and (c) the cash flows for the six months ended July 31, 2026 and 2025, have been made. For further information, refer to the financial statements and footnotes included in Mesabi Trust’s Annual Report on Form 10-K for the year ended January 31, 2026.

Note 2. Net income (loss) per unit is based on 13,120,010 units outstanding during all periods presented.

The Trust accounts for revenue in accordance with ASC 606 - Revenue from Contracts with Customers. All revenue is recognized as the performance obligations are satisfied. Mesabi Trust holds all of the interests formerly owned by Mesabi Iron Company (“MIC”), including all right, title and interest in the Amendment of Assignment, Assumption and Further Assignment of Peters Lease dated August 17, 1989 among the trustees of Mesabi Trust, Bruce D. Sherling, as Trustee in Bankruptcy for the Estate of Reserve Mining Company, and Cypress Northshore Mining Corporation, predecessor to Northshore Mining Company (referred to as the “Amended Assignment of Peters Lease” or the “Royalty Agreement”). In accordance with the Royalty Agreement, the Trust recognizes revenue for providing access to the lands and minerals only after the consideration that it is entitled to receive is determinable. The Trust is entitled to payment upon production of pellets to be sold for internal use by facilities owned by Cleveland Cliffs Inc. (“Cliffs”), the parent company of Northshore Mining Company (“Northshore” or “NMC”), or its subsidiaries. As a result, the Trust recognizes revenue for internal use pellets upon production of those pellets, which are deemed to be shipped under the Royalty Agreement, regardless of pellet grade. Pellets that are not designated for internal use by Cliffs, or its subsidiaries, are recognized as revenue upon shipment from Silver Bay, Minnesota. Shipped product and deemed shipped product are hereafter collectively referred to as “shipped.”

Disaggregation of Revenues

The following table represents a disaggregation of royalty revenue for the three and six months ended July 31, 2026 and July 31, 2025.


	Three Months Ended July 31,
	2026		2025
Base overriding royalties	$	2,096,377	$	3,216,028
Bonus royalties		—		2,018,440
Fee royalties		232,146		182,436
Total royalty income	$	2,328,523	$	5,416,904


	Six Months Ended July 31,
	2026		2025
Base overriding royalties	$	3,982,077	$	5,641,122
Bonus royalties		—		3,802,274
Fee royalties		424,258		322,980
Total royalty income	$	4,406,335	$	9,766,376

Base overriding royalties

The performance obligation for the base overriding royalty consists of providing NMC access to the Peters Lands, Cloquet Lands, and Mesabi Lands and the right to mine on these lands. The consideration to be received from this access under the Amended Assignment of Peters Lease relates to the volume of iron ore shipped. The Trust receives royalties at the greater of (i) the aggregate quantity of iron ore products shipped, that were mined from Mesabi Trust Lands, and (ii) a portion of the aggregate quantity of all iron ore products shipped, that were mined from any lands during the calendar year, such portion being 90% of the first four million tons shipped during such year, 85% of the next two million tons shipped, during such year, and 25% of all tonnage shipped in excess of six million tons during such year.

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The royalty percentage paid to the Trust increases as the aggregate tonnage of iron ore products shipped, attributable to the Trust in any calendar year increases. The Trust earns a 2.5% royalty on the first million tons shipped in a calendar year, 3.5% on the second million tons, 5.0% on the third million tons, 5.5% on the fourth million tons and 6.0% beyond four million tons. The base overriding royalties contain variable consideration, as the transaction price is based on a percentage that varies based on the total cumulative tons of iron ore shipped. Under the Royalty Agreement, measurement of the total cumulative volumes of iron ore shipped and the applicable royalty percentages are reset at the beginning of each calendar year. The Trust estimates the variable consideration it expects to be entitled to receive based on the estimated average royalty percentage over the calendar year periods that are included in the Trust’s fiscal year. The Trust evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained and includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Trust estimates the base overriding royalty percentage using the expected value method, which calculates the estimate based on historical, current, and forecasted shipments. At each quarter end, the Trust updates its estimate of total tons expected to be shipped for the calendar year and applies the estimated annual royalty rate to actual tons shipped in the quarter. The Trust recognizes revenue for base overriding royalties on a quarterly basis based on actual shipments, the estimated annual royalty rate and estimated prices for iron ore products sold under Cliffs’ customer contracts.

Bonus royalties

The performance obligation for the bonus royalties consists of providing NMC access to the Peters Lands, Cloquet Lands, and Mesabi Lands and the right to mine on these lands. The consideration to be received from this access under the Amended Assignment of Peters Lease relates to the volume of iron ore shipped by NMC. The Trust recognizes bonus royalties on a quarterly basis based on shipments for the fiscal quarter at the actual royalty percentage for those shipments and based on the anticipated prices for iron ore products sold under Cliffs’ customer contracts. The Trust is paid royalty bonuses when iron ore products shipped are sold at anticipated prices above a threshold price per ton. The royalty bonus is based on a percentage of the gross proceeds of product shipped. The royalty bonus percentage ranges from 1/2 of 1% of the gross proceeds (on all tonnage shipped for sale at prices between the threshold price and $2.00 above the threshold price) to 3% of the gross proceeds (on all tonnage shipped for sale at prices $10.00 or more above the threshold price). The threshold price is adjusted annually for inflation and is $71.70 per ton for calendar year 2026 and was $69.41 per ton for calendar year 2025.

Fee royalties

Fee royalties are determined based on the volume of crude ore mined on a quarterly basis. The Trust recognizes fee royalties on a quarterly basis based on the actual crude ore mined during the fiscal quarter. Fee royalties are payable to the Mesabi Land Trust, a Minnesota land trust, which holds a 20% interest as fee owner in the Amended Assignment of Peters Lease. The Trust holds the entire beneficial interest in the Mesabi Land Trust for which U.S. Bank N.A. acts as the corporate trustee. The Trust receives the net income of the Mesabi Land Trust, which is generated from royalties on the amount of crude ore mined after the payment of expenses to U.S. Bank N.A. for its services as the corporate trustee. The fee royalty on crude ore is based on an agreed price per ton, subject to certain indexing.

Accrued income receivable

Accrued income receivable represents royalty income earned but not yet received by the Trust. Accrued income receivable is comprised of (i) shipments during the last month of the Trust’s fiscal quarter, if any, and (ii) net positive price adjustments, if any, (which may include the sum of positive and negative price adjustments) resulting from price adjustment mechanisms in the agreements between Cliffs and its customers that determine the final sales price of the shipments from Silver Bay, Minnesota.

Contract asset and contract liability

The contract asset and contract liability are presented net in the accompanying balance sheets as both the contract asset and contract liability are derived from one customer contract. A net contract asset in the amount of $1,050,186 is reflected on the Balance Sheet as of July 31, 2026. The net contract asset is made up of a contract asset in the amount of $1,050,186 and no contract liability. As of January 31, 2026, the Trust recorded a net contract asset in the amount of $263,982, made up of a contract asset of $263,982 and no contract liability. The contract asset relates to variable consideration for base overriding royalties that occurs as a result of escalating base overriding royalty rates earned as thresholds for tons of ore shipped are reached, as described in the base overriding royalties section above. The recorded contract asset represents the additional revenue earned based on the estimated annual royalty rate compared to the effective contracted rate for tons shipped during the period. The contract asset is not available for distribution to the Unitholders until the applicable royalties are actually received by the Trust.

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Note 3. The Trustees determine whether to declare a distribution each year in April, July, October and January. The Trust’s financial statements are prepared on an accrual basis and present the Trust’s results of operations based on each of the Trust’s fiscal quarters, which end one month after the close of each calendar quarter. Because (i) distributions, if any, are declared by the Trustees based on, among other considerations, the amount of royalties actually paid to the Trust through the end of each calendar quarter prior to April, July, October and January of each year, the Trustees’ evaluation of known and projected Trust expenses in the current and future quarters, the then-current level of Unallocated Reserve and general economic conditions, and (ii) the Trust’s Net income is calculated as of the end of each fiscal quarter, the distributions declared by the Trust are not equivalent to the Trust’s Net income during the periods reported in this Quarterly Report on Form 10-Q.

Note 4. On July 14, 2026, the Trustees declared a distribution of $0.05 per Unit of Beneficial Interest payable on August 20, 2026 to Mesabi Trust Unitholders of record at the close of business on July 30, 2026. The declared distribution of $656,001 is recorded as a distribution payable on the Condensed Balance Sheet for the quarter ended July 31, 2026 (unaudited) as compared to a distribution payable of $0.12 per Unit of Beneficial Interest for the quarter ended July 31, 2025.

On July 30, 2026, the Trustees received the quarterly royalty report of iron ore production and shipment during the calendar quarter ended June 30, 2026 from Cliffs. See “Recent Developments— Receipt of Quarterly Royalty Report and Royalty Payment Received from Cliffs” as set forth on page 15 of this Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2026.

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, 2026 and January 31, 2026, 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, 2026		January 31, 2026
Cash and cash equivalents	$	17,385,397	$	23,162,609
Distribution payable		(656,001)		(3,411,203)

Unallocated cash and cash equivalents	$	16,729,396	$	19,751,406

A reconciliation of the Trust’s Unallocated Reserve and Trust Corpus for the three and six months ended July 31, 2026 and 2025 is as follows:


		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of April 30, 2026	$	18,341,533	$	3	$	18,341,536

Net loss		(95,013)		—		(95,013)
Distributions declared - $0.0500 per unit		(656,001)		—		(656,001)

Balances as of July 31, 2026	$	17,590,519	$	3	$	17,590,522


		Unallocated		Trust
		Reserve		Corpus		Total
Balances as of January 31, 2026	$	20,402,872	$	3	$	20,402,875

Net income		992,450		—		992,450
Distributions declared - $0.2900 per unit		(3,804,803)		—		(3,804,803)

Balances as of July 31, 2026	$	17,590,519	$	3	$	17,590,522

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		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, 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

Item 2. Trustees’ Discussion and Analysis of Financial Condition and Results of Operations.

This discussion should be read in conjunction with the condensed financial statements and notes presented in this Quarterly Report on Form 10-Q and the financial statements and notes in the last filed Annual Report on Form 10-K for the year ended January 31, 2026 for a full understanding of Mesabi Trust’s financial position and results of operations for the three and six months ended July 31, 2026.

All references in this discussion and in this Quarterly Report on Form 10-Q to iron ore products “shipped” or “shipments” shall include iron ore products that are actually shipped from Silver Bay, Minnesota and/or stockpiled for intercompany use that Cleveland Cliffs Inc. (“Cliffs”) has deemed shipped, as referenced by the parties to, and in accordance with, the Amended Assignment of Peters Lease. Following the outcome of the 2019 arbitration, Cliffs began accruing royalty payments to the Trust for both DR pellets and standard pellets to be sold for internal use at facilities owned by Cliffs or its subsidiaries. This accrual method was upheld in the September 6, 2024 arbitration award. As a result, the Trust recognizes revenue for Cliffs’ internal use pellets upon production of those pellets, regardless of pellet grade. Pellets produced by Northshore Mining Company (“Northshore” or “NMC”) that are not designated for internal use by Cliffs, or its subsidiaries, and instead are intended for sale to third parties in arms’-length sales, continue to be recognized as revenue upon shipment from Silver Bay, Minnesota.

Background

Mesabi Trust, formed pursuant to the Agreement of Trust, is a trust organized under the laws of the State of New York. Mesabi Trust holds all of the interests formerly owned by Mesabi Iron Company (“MIC”), including all right, title and interest in the Amendment of Assignment, Assumption and Further Assignment of Peters Lease dated August 17, 1989 among the trustees of Mesabi Trust, Bruce D. Sherling, as Trustee in Bankruptcy for the Estate of Reserve Mining Company, and Cypress Northshore Mining Corporation, predecessor to Northshore (referred to as the “Amended Assignment of Peters Lease” or the “Royalty Agreement”), the Amendment of Assignment, Assumption and Further Assignment of Cloquet Lease (the “Amended Assignment of Cloquet Lease” and together with the Amended Assignment of Peters Lease, the “Amended Assignment Agreements”), the beneficial interest in a trust organized under the laws of the State of Minnesota to administer the Mesabi Fee Lands (as defined below) as the trust corpus in compliance with the laws of the State of Minnesota on July 18, 1961 (the “Mesabi Land Trust”) and all other assets and property identified in the Agreement of Trust. The Amended Assignment of Peters Lease relates to an Indenture made as of April 30, 1915 among East Mesaba Iron Company (“East Mesaba”), Dunka River Iron Company (“Dunka River”) and Claude W. Peters (the “Peters Lease”) and the Amended Assignment of Cloquet Lease relates to an Indenture made May 1, 1916 between Cloquet Lumber Company and Claude W. Peters (the “Cloquet Lease”).

The Agreement of Trust specifically prohibits the Trustees of the Mesabi Trust (the “Trustees”) from entering into or engaging in any business. This prohibition applies even to business activities the Trustees may deem necessary or proper for the preservation and protection of the Trust Estate. Accordingly, the Trustees’ activities in connection with the administration of Trust assets are limited to collecting income, paying expenses and liabilities, distributing net income to the holders of Certificates of Beneficial Interest in Mesabi Trust (“Unitholders”) after the payment of, or provision for, such expenses and liabilities, and protecting and conserving the assets held by the Trust.

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The Trustees do not intend to expand their responsibilities beyond those permitted or required by the Agreement of Trust, as amended by the Amendment to the Agreement of Trust dated October 25, 1982 (the “Agreement of Trust”), and those required under applicable law. Mesabi Trust has no employees, but it engages independent consultants to assist the Trustees in, among other things, monitoring the volume and sales prices of iron ore products shipped, based on information supplied to the Trustees by Northshore, the lessee/operator of the lands leased under the Peters Lease and Cloquet Lease (the “Peters Lease Lands” and “Cloquet Lease Lands,” respectively) and the 20% fee interest of certain lands that are particularly described in, and subject to a mining lease under, the Peters Lease (the “Mesabi Fee Lands,” and together with the Peters Lease Lands and Cloquet Lease Lands, the “Mesabi Trust Lands”), and its parent company, Cliffs. References to Northshore or NMC in this quarterly report, unless the context requires otherwise, are applicable to Cliffs as well.

Leasehold royalty income constitutes the principal source of the Trust’s revenue. The income of the Trust is highly dependent upon the activities and operations of Northshore. Royalty rates and the resulting royalty payments received by the Trust are determined in accordance with the terms of the Trust’s leases and assignments of leases.

Three types of royalties, as well as royalty bonuses, comprise the Trust’s leasehold royalty income:

●

Base overriding royalties. Base overriding royalties have historically constituted the majority of the Trust’s royalty income. Base overriding royalties are determined by both the volume and selling price of iron ore products shipped. Northshore is obligated to pay the Trust base overriding royalties in varying amounts, based on the volume of iron ore products shipped. Base overriding royalties are calculated as a percentage of the gross proceeds of iron ore products produced at Mesabi Trust Lands (and to a limited extent other lands) and shipped. The percentage ranges from 2-1/2% of the gross proceeds for the first one million tons of iron ore products shipped annually to 6% of the gross proceeds for all iron ore products in excess of four million tons shipped annually. Base overriding royalties typically are subject to interim and final price adjustments under Cliffs’ customer contracts and, as described elsewhere in this report, such adjustments may be positive or negative.

●

Royalty bonuses. The Trust earns royalty bonuses when iron ore products shipped are sold at prices above a threshold price per ton. The royalty bonus is based on a percentage of the gross proceeds of product shipped. The threshold price is adjusted (but not below $30.00 per ton) on an annual basis for inflation and deflation (the “Adjusted Threshold Price”). The Adjusted Threshold Price is $71.70 per ton for calendar year 2026 and was $69.41 per ton for calendar year 2025. The royalty bonus percentage ranges from 1/2 of 1% of the gross proceeds (on all tonnage shipped for sale at prices between the Adjusted Threshold Price and $2.00 above the Adjusted Threshold Price) to 3% of the gross proceeds (on all tonnage shipped for sale at prices $10.00 or more above the Adjusted Threshold Price). Royalty bonuses typically are subject to price adjustments under Cliffs’ customer contracts and, as described elsewhere in this report, such adjustments may be positive or negative.

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Fee royalties. Fee royalties have historically constituted a smaller component of the Trust’s total royalty income. Fee royalties are payable to the Mesabi Land Trust, a Minnesota land trust, which holds a 20% interest as fee owner in the Amended Assignment of Peters Lease. Mesabi Trust holds the entire beneficial interest in the Mesabi Land Trust for which U.S. Bank N.A. acts as the corporate trustee. Mesabi Trust receives the net income of the Mesabi Land Trust, which is generated from royalties on the amount of crude ore mined after the payment of expenses to U.S. Bank N.A. for its services as the corporate trustee. Crude ore is the source of iron oxides used to make iron ore pellets and other products. The fee royalty on crude ore is based on an agreed price per ton, subject to certain indexing.

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Minimum advance royalties. Northshore’s obligation to pay base overriding royalties and royalty bonuses with respect to the sale of iron ore products generally accrues upon the shipment of those products. However, regardless of whether any shipment has occurred, Northshore is obligated to pay to Mesabi Trust a minimum advance royalty. Each year, the amount of the minimum advance royalty is adjusted (but not below $500,000 per annum) for inflation or deflation. The minimum advance royalty is $1,195,452 for calendar year 2026 and was $1,157,261 for calendar year 2025. Until overriding royalties (and royalty bonuses, if any) for a particular year equal or exceed the minimum advance royalty for the year, Northshore must make quarterly payments of up to 25% of the minimum advance royalty for the year. Because minimum advance royalties are essentially prepayments of base overriding royalties and royalty bonuses earned each year, any minimum advance royalties paid in a fiscal quarter are recouped by credits against base overriding royalties and royalty bonuses earned in later fiscal quarters during the year.

The current royalty rate schedule became effective on August 17, 1989 pursuant to the Amended Assignment Agreements, which the Trust entered into with Cyprus Northshore Mining Corporation (“Cyprus NMC”). Pursuant to the Amended Assignment Agreements, overriding royalties are determined by both the volume and selling price of iron ore products shipped. In 1994, Cyprus NMC was sold by its parent corporation to Cliffs and renamed Northshore Mining Company. Cliffs now operates Northshore as a wholly owned subsidiary.

Under the relevant agreements, Northshore has the right to mine and ship iron ore products from lands other than Mesabi Trust Lands. Northshore alone determines whether to conduct mining operations on Mesabi Trust Lands and/or such other lands based on its current mining and engineering plan. The Trustees do not exert any influence over mining operational decisions. To encourage the use of iron ore products from Mesabi Trust Lands, Mesabi Trust receives royalties on stated percentages of iron ore shipped,

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whether or not the iron ore products are from Mesabi Trust Lands. Mesabi Trust receives royalties at the greater of (i) the aggregate quantity of iron ore products shipped that were mined from Mesabi Trust Lands, and (ii) a portion of the aggregate quantity of all iron ore products shipped that were mined from any lands, such portion being 90% of the first four million tons shipped during such year, 85% of the next two million tons shipped during such year, and 25% of all tonnage shipped during such year in excess of six million tons. The royalty percentage paid to the Trust increases as the aggregate tonnage of iron ore products shipped, attributable to the Trust, in any calendar year increases past each of the ton volume thresholds. Assuming a consistent sales price per ton throughout a calendar year, shipments of iron ore product attributable to the Trust later in the year generate a higher royalty to the Trust, as total shipments for the year exceed the one million ton thresholds.

During the course of its typical fiscal year, historically some portion of royalties expected to be paid to Mesabi Trust would be based in part on estimated prices for certain iron ore products sold under some of the Cliffs’ customer contracts. Generally, Cliffs’ customer contracts have typically used estimated prices which are subject to interim and final pricing adjustments, which can be positive or negative, and are dependent in part on multiple price and inflation index factors that are not known until after the end of a contract year. Even though Mesabi Trust is not a party to the Cliffs’ customer contracts, these adjustments can result in significant variations in royalties payable to Mesabi Trust (and, in turn, the resulting amount available for distribution to Unitholders by the Trust) from quarter to quarter and on a comparative historical basis, and these variations, which can be positive or negative, cannot be predicted by the Trust. In either case, when used in Cliffs’ third party customer contracts, these price adjustments would impact future royalties payable to the Trust and, in turn, would impact cash reserves that may become available for distribution to Unitholders.

Historically, sales volumes under most of its multi-year supply agreements with Cliffs’ customers, in general, are largely dependent on customer requirements and contain a base price that is adjusted annually using one or more adjustment factors. The factors that could result in price adjustments under Cliffs’ customer contracts include changes in the Platts 62% Price, hot-rolled coil steel price, the Atlantic Basin pellet premium, published Platts international indexed freight rates and changes in specified producer price indices, including those for industrial commodities, fuel and steel.

As also described elsewhere in this report, under the royalty agreement, the Trust is required to be paid a bonus royalty equal to a percentage of the gross proceeds of iron ore products (mined from Mesabi Trust Lands) shipped and sold at prices above the Adjusted Threshold Price. Although 95.5% of all the iron ore products shipped during calendar 2025 was sold at prices higher than the Adjusted Threshold Price, during the six months period ended July 31, 2026, Cliffs reported no such sales at prices higher than the Adjusted Threshold Price. Consequently, the Trust did not record any royalty bonus revenue for that period. The Trustees are unable to project whether Cliffs will continue to be able to sell iron ore products at prices above the applicable Adjusted Threshold Price, entitling the Trust to any future bonus royalty payments.

Based on Cliffs’ most recent royalty report dated July 30, 2026 for shipments and deemed shipments during the second calendar quarter ended June 30, 2026, the Trust did not receive any bonus royalty revenue. See “Risk Factors – The limited third party sales of iron ore products (processed at Northshore using Mesabi Trust iron ore) by Cliffs at prices below the annual adjusted bonus royalty threshold price eliminated a bonus royalty during the Trust’s fiscal quarters ended April 30, 2026 and July 31, 2026, could continue to eliminate or reduce bonus royalties historically paid to the Trust and could result in potential disputes regarding the amount of royalties owed to the Trust,” as set forth in “Part II, Item 1A. Risk Factors” on page 19 of this Report.

As described in this report, in order to calculate the royalties owed by Northshore to Mesabi Trust, the Royalty Agreement requires that Northshore make sales of iron ore products to third parties on an arms’-length basis without regard to any other business relationship between Northshore and the third-party buyer of the iron ore products. In order to calculate royalties on less than arms’-length sales (including sales from Northshore to Cliffs’ corporate affiliates), the Royalty Agreement requires reference to the highest contract price obtained by Northshore in the preceding four calendar quarters in a sale to a buyer not affiliated with Northshore and made on an arms’-length basis. Since Cliffs’ acquisition of ArcelorMittal USA in late-2020, and accelerating after Cliffs’ Toledo HBI plant came online in mid-2021, Northshore has increased the proportion of iron ore mined from the Mesabi Trust Lands that it sells to Cliffs’ corporate affiliates and decreased the proportion of such iron ore that it sells to unaffiliated third parties in arms’-length transactions. Cliffs’ public statements beginning in October 2021 have indicated that Cliffs will be limiting the tonnage of iron ore pellets that it sells to third parties from all of its mines, and particularly Northshore. Cliffs’ recent royalty reports reported three sale transactions of iron ore pellets shipped to a single third-party customer in September and December 2025. As reported by Cliffs, these third-party customer pellet sale transactions were comprised of lower volumes than historically typical shipment volumes. These iron ore pellets shipped to a third party in September and December 2025 are priced below the 2026 Adjusted Threshold Price (which is used in calculating royalty bonuses payable to the Trust under the Royalty Agreement). The Trust did not record any royalty bonus revenue during the quarter ended July 31, 2026. See “Risk Factors – The limited third party sales of iron ore products (processed at Northshore using Mesabi Trust iron ore) by Cliffs at prices below the annual adjusted bonus royalty threshold price eliminated a bonus royalty during the Trust’s fiscal quarters ended April 30, 2026 and July 31, 2026, could continue to eliminate or reduce bonus royalties historically paid to the Trust and could result in potential disputes regarding the amount of royalties owed to the Trust” as set forth in “Part II, Item 1A. Risk Factors” on page 19 of this Report. Without consistent arms’-length sales of iron ore pellets from Northshore to third parties, the calculation of royalties on iron ore pellets that Northshore ships to Cliffs’ affiliates could be uncertain under the Royalty Agreement, which could in turn result in potential disputes regarding the amount of royalties owed to the Trust. Historically,

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Cliffs has not fully responded to the Trust’s inquiries about its planning and efforts on these matters, and Cliffs has not reported to the Trust regarding such matters.

Deutsche Bank Trust Company Americas, the Corporate Trustee of Mesabi Trust, performs certain administrative functions for Mesabi Trust. The Trust maintains a website at www.mesabi-trust.com. The Trust makes available (free of charge) its annual, quarterly and current reports (and any amendments thereto) filed with the SEC through its website as soon as reasonably practicable after electronically filing or furnishing such material with or to the SEC.

Results of Operations

Comparison of Iron Ore Pellet Production and Shipments for the Three and Six Months Ended July 31, 2026 and July 31, 2025

As shown in the table below, during the three months ended July 31, 2026, production and shipments of iron ore pellets at Northshore from Mesabi Trust Lands both totaled 975,722 tons. By comparison, pellet production and shipments for the comparable period in 2025 were both 943,955 tons. The increase in production and shipments is attributable to higher demand from Northshore’s customers as compared to the prior comparable period. For the three months ended July 31, 2026 and July 31, 2025, 100% of shipments originated from Trust lands.


		Pellets Produced from		Pellets Shipped from
		Trust Lands		Trust Lands
Three Months Ended		(Tons)		(Tons)
July 31, 2026		975,722		975,722
July 31, 2025		943,955		943,955

As shown in the table below, during the six months ended July 31, 2026, production and shipments of iron ore pellets at Northshore from Mesabi Trust Lands both totaled 1,881,853 tons. By comparison, pellet production and shipments for the comparable period in 2025 were both 1,581,141 tons. The increase in production and shipments is primarily attributable to Northshore being in an extended maintenance shutdown in February 2025. For the six months ended July 31, 2026 and July 31, 2025, 100% of shipments originated from Trust lands.


		Pellets Produced from		Pellets Shipped from
		Trust Lands		Trust Lands
Six Months Ended		(Tons)		(Tons)
July 31, 2026		1,881,853		1,881,853
July 31, 2025		1,581,141		1,581,141

Comparison of Royalty Income for the Three and Six Months Ended July 31, 2026 and July 31, 2025

As reflected in the table below, the Trust’s total royalty income for the three months ended July 31, 2026 decreased by $3,088,381 to $2,328,523 as compared to the three months ended July 31, 2025. The decrease in total royalty income is attributable to a decrease in prices received on pellets of iron ore which resulted in no bonus royalty revenue received during the three months ended July 31, 2026 as compared to the three months ended July 31, 2025.

The table below shows that the base overriding royalties decreased $1,119,651 and the bonus royalties decreased by $2,018,440 for the three months ended July 31, 2026, as compared to the three months ended July 31, 2025. Fee royalties increased by $49,710 over the same period. The decrease in the base overriding royalties and bonus royalties is attributable to a decrease in prices received on pellets of iron ore which resulted in no bonus royalty revenue received during the three months ended July 31, 2026 as compared to the three months ended July 31, 2025. The increase in the fee royalties is attributable to an increase in crude ore mined during the three months ended July 31, 2026 as compared to the three months ended July 31, 2025.

The table below summarizes the components of Mesabi Trust’s total royalty income for the three months ended July 31, 2026 and July 31, 2025, respectively:


	Three Months Ended July 31,
	2026		2025
Base overriding royalties	$	2,096,377	$	3,216,028
Bonus royalties		—		2,018,440
Fee royalties		232,146		182,436
Total royalty income	$	2,328,523	$	5,416,904

As reflected in the table below, the Trust’s total royalty income for the six months ended July 31, 2026 decreased by $5,360,041 to $4,406,335 as compared to the six months ended July 31, 2025. The decrease in total royalty income is attributable to a

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decrease in prices received on pellets of iron ore which resulted in no bonus royalty revenue received during the six months ended July 31, 2026 as compared to the six months ended July 31, 2025.

The table below shows that the base overriding royalties decreased $1,659,045 and the bonus royalties decreased by $3,802,274 for the six months ended July 31, 2026, as compared to the six months ended July 31, 2025. Fee royalties increased by $101,278 over the same period. The decrease in the base overriding royalties and bonus royalties is attributable to a decrease in prices received on pellets of iron ore which resulted in no bonus royalty revenue received during the six months ended July 31, 2026 as compared to the six months ended July 31, 2025. The increase in the fee royalties is attributable to an increase in crude ore mined during the six months ended July 31, 2026 as compared to the six months ended July 31, 2025, due to the extended maintenance shut down at Northshore during the fiscal quarter ended April 30, 2025.

The table below summarizes the components of Mesabi Trust’s total royalty income for the six months ended July 31, 2026 and July 31, 2025, respectively:


	Six Months Ended July 31,
	2026		2025
Base overriding royalties	$	3,982,077	$	5,641,122
Bonus royalties		—		3,802,274
Fee royalties		424,258		322,980
Total royalty income	$	4,406,335	$	9,766,376

Comparison of Net Income (Loss), Expenses and Distributions for the Three and Six Months Ended July 31, 2026 and July 31, 2025

Net loss for the three months ended July 31, 2026 was ($95,013), a decrease of $4,838,895 as compared to the three months ended July 31, 2025. The decrease in net income (loss) for the three months ended July 31, 2026 is primarily attributable to a decrease in royalty income and an increase in expenses during the quarter ended July 31, 2026 compared to the same period in the prior year. The decrease in royalty income is due to a decrease in prices received on pellets of iron ore which resulted in no bonus royalty revenue received during the three months ended July 31, 2026. The Trust’s expenses for the three months ended July 31, 2026 were $2,575,369, an increase of $1,712,496 compared to the expenses for the three months ended July 31, 2025. The increase in expenses was primarily attributable to an increase in legal fees and expenses for the three months ended July 31, 2026, as compared to the prior comparable period. See “Part II, Item 1. Legal Proceedings. AAA Arbitration” on page 19 of this Report. The table below summarizes the Trust’s income and expenses for the three months ended July 31, 2026 and July 31, 2025, respectively.


	Three Months Ended July 31,
	2026		2025
Total royalty income	$	2,328,523	$	5,416,904
Interest income