Executive Summary

Q4 2025 featured a reduced quarterly distribution of $0.34 per unit (payable Nov 20), down from $0.39 in the same period last year, as Trustees balanced current royalties and reserves against ongoing industry and operational uncertainties .
The quarter included receipt of $4.01M in royalties (paid Oct 30) tied to Q3 2025 shipments, with 987,370 tons credited (+1.6% YoY vs. Q3 2024), though the bonus component was notably lower QoQ, implying pricing/mix pressure and/or index adjustments .
Management highlighted the presence of three third‑party pellet sales in September that remain subject to due diligence and reiterated that price inputs used in royalty calculations are subject to change, introducing potential subsequent-period adjustments .
No formal guidance was issued; catalysts remain Northshore’s operating cadence under Cleveland‑Cliffs, realized pellet pricing and index adjustments, and any future third‑party sales—each of which can drive sharp quarter‑to‑quarter variability in MSB royalties and distributions .

What Went Well and What Went Wrong

What Went Well

Slight YoY improvement in credited volumes: 987,370 tons in Q3 2025 vs. 972,154 in Q3 2024 (+1.6% YoY), supporting base royalty resilience despite mixed pricing .
Continued royalty inflows: $4,005,142 received Oct 30 (base $2,817,500; bonus $973,410), sustaining cash distributions while maintaining reserves .
Evidence of external demand: Cliffs’ report cited three third‑party pellet sale transactions in September 2025, potentially supportive for pricing/benchmarks pending due diligence .

What Went Wrong

QoQ decline in total royalties: $4.01M (Oct 30) vs. $5.30M (Jul 30), driven primarily by a lower bonus royalty ($0.97M vs. $2.59M), indicating weaker realized pricing/indices or mix vs. the prior quarter .
Distribution cut YoY: $0.34 per unit declared this quarter vs. $0.39 last year as Trustees balanced reserves and acknowledged macro/industry uncertainties and Northshore planning opacity .
Elevated uncertainty persists: Royalty prices are subject to change; potential future production curtailments or idling at Northshore and broader macro/trade factors could materially affect royalties and distributions .

Financial Results

Note: MSB is a royalty trust; operating “revenue” is best proxied by royalty payments received. GAAP EPS/margins are not the primary drivers disclosed in quarterly 8‑K updates.

Royalty payments received in 2025 (cash basis; columns ordered oldest → newest)

Metric	Q2 2025 (Paid Apr 30)	Q3 2025 (Paid Jul 30)	Q4 2025 (Paid Oct 30)
Total Royalty Payments ($)	$2,422,329	$5,300,287	$4,005,142
Base Royalty ($)	$1,067,762	$2,514,060	$2,817,500
Bonus Royalty ($)	$1,281,315	$2,588,784	$973,410
Mesabi Land Trust Payment ($)	$73,252	$197,443	$214,232

Underlying shipments (tons) tied to the paid quarters (ordered oldest → newest)

Metric	Q1 2025 (for Apr 30 payment)	Q2 2025 (for Jul 30 payment)	Q3 2025 (for Oct 30 payment)
Tons Credited (tons)	457,728	924,442	987,370
YoY Comparator (tons)	1,006,692 (Q1 2024)	949,718 (Q2 2024)	972,154 (Q3 2024)

Distributions declared within the quarter (Q4 2025)

Metric	Current	Prior Year Same Period
Distribution per Unit	$0.34, payable Nov 20, 2025; record Oct 30, 2025	$0.39

Estimates vs. Actuals

No S&P Global consensus EPS or revenue estimates were available for MSB for Q4 2025; therefore, no beat/miss analysis is presented. Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial Guidance (Revenue, Margins, EPS)	Q4 2025	None provided	None provided	Maintained (no guidance)
Distribution Policy / Reserves	Q4 2025	Not quantified	Trustees maintained “appropriate level of reserves” to meet expenses/liabilities	Emphasis on prudence; not quantitative guidance

Earnings Call Themes & Trends

Note: MSB did not provide an earnings call transcript in filings; themes are drawn from the 8‑K and press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2025)	Trend
Northshore operating cadence (Cliffs)	Trustees “received no specific updates” on Northshore plans; Northshore treated as swing operation historically	No specific updates; variability in production/shipments continues to drive royalties	Unchanged uncertainty
Pricing/Index Adjustments	Royalties tied to prices “subject to change”; historical index-based adjustments noted	Royalty calculations “based on prices that are subject to change”	Persistent pricing adjustability
Third‑party pellet sales	No additional third‑party arms’-length transactions in Q1 and Q2 beyond Dec 2024 low-volume shipments	Three pellet sale transactions in September to a single third‑party subject to due diligence	Potentially constructive if validated
Macro/trade/tariffs	Macro and tariff risks flagged repeatedly as key uncertainties	Continued emphasis on risks, including tariffs and global events	Ongoing headwind risk flagging
Distributions and reserves	Distributions vary with royalties; Trustees preserve reserves amid uncertainty	$0.34 per unit; reserve prudence reiterated	Stable, cautious posture

Management Commentary

“As reported to Mesabi Trust by Cliffs in the Royalty Report… Mesabi Trust was credited with a base royalty of $2,817,500 [and] a bonus royalty… $973,410… total royalty payments… $4,005,142.”
“Cliffs’ Royalty Report reported three sale transactions of iron ore pellets shipped to a single third‑party during September 2025, which are subject to continued due diligence review. Cliffs’ Royalty Report also indicated that royalty calculations are based on prices that are subject to change.”
“The Trustees… declared a distribution of thirty‑four cents ($0.34) per Unit… [which] reflects… total royalty payments of $5,300,287 on July 30, 2025… and [a] determination to maintain an appropriate level of reserves…”
“Actual production, prices… and shipments… as well as actual royalty payments… could differ materially… [due to] duties or tariffs… customer demand… [and] any future production curtailments or idling of Northshore operations…”

Q&A Highlights

Not applicable; management commentary was provided via 8‑K filings and press releases rather than an earnings call .

Estimates Context

No Wall Street (S&P Global) consensus EPS or revenue estimates were available for MSB for Q4 2025; as a royalty trust with variable distributions, MSB typically has limited sell‑side estimate coverage. Values retrieved from S&P Global.

Key Takeaways for Investors

Q4 cash inflow step‑down: Royalty receipts fell QoQ to $4.01M as the bonus component compressed; monitor realized pellet pricing and index adjustments that drive bonus variability .
Volume constructive but not decisive: Credited tons rose modestly YoY in Q3 2025, aiding base royalties; however, pricing dynamics dominated QoQ outcomes .
Potential pricing signal: Three third‑party pellet sales in September—if validated—could support external price references; keep an eye on any subsequent revisions to royalty pricing .
Distribution prudence: Trustees cut the Nov distribution YoY to $0.34 and emphasized reserves amid macro and Northshore planning uncertainties; expect continued variability quarter to quarter .
Risk skew remains operational/macro: Northshore’s swing‑operation status and possible curtailments, plus tariffs and global demand, remain the key swing factors for future royalties and distributions .
Near‑term trading implications: Headlines around third‑party sales validation, Iron Ore price moves, or any Cliffs commentary on Northshore cadence are likely to move MSB given the direct royalty linkage .
Medium‑term thesis: MSB remains a high‑beta, income‑oriented vehicle on Great Lakes pellet volumes and pricing; without formal guidance, positioning should anticipate significant intra‑year volatility driven by Cliffs’ operating decisions and price/index resets .

Appendix: Additional Period Context

Prior quarter royalty snapshot (for comparison): $5,300,287 total (base $2,514,060; bonus $2,588,784); 924,442 tons credited; no additional third‑party sales beyond Dec 2024 at that time .
Earlier 2025 snapshot: $2,422,329 total (base $1,067,762; bonus $1,281,315); 457,728 tons credited; no additional third‑party arms’-length transactions since Dec 2024 .
Distributions earlier in 2025: $0.56 per unit declared in April (supported by Jan 30 royalties of $8,986,464 for Q4 2024), vs. $0.29 last year .

MESABI TRUST (MSB)·Q4 2025 Earnings Summary