Larry Lehtinen, President of Mesabi Nugget, LLC (MNC) announced the successful conclusion of the pilot plant testing phase of the Mesabi Nugget Project. The announcement culminates twelve months of engineering and construction followed by fourteen months of plant operations. The company will now proceed forward with commercialization of the Kobe Steel ITmk3 Process^® and the iron nugget technology.

Mesabi Nugget, LLC is a limited liability company formed in 2001 with a mission to develop the ITmk3 Process to a state of commercial readiness and apply it to produce and sell iron nuggets as a merchant pig iron substitute on a global basis. In 2002 Cleveland-Cliffs Inc, Kobe Steel, Ltd., and Steel Dynamics, Inc. (SDI) joined Ferrometrics, Inc, the founder of MNC as equity members of Mesabi Nugget, LLC.

In addition to the significant investment by Kobe Steel in the ITmk3 Process technology prior to its MNC involvement, Mesabi Nugget has spent an additional $32 million to bring the ITmk3 Process to the point of commercial readiness. Of the total MNC investment to date, $16 million was provided by loans from the State of Minnesota’s Iron Range Resources Agency (IRR) and the Minnesota Department of Employment and Economic Development (DEED) and $5.4 million was awarded to MNC through a Cooperative Research Agreement with the United States Department of Energy.

Mesabi Nugget has commenced environmental permitting for a large-scale demonstration plant expected to locate at a site north of Hoyt Lakes, Minn., on property presently owned by Cliffs Erie LLC and previously occupied by the former LTV Steel Mining Co. taconite pellet making complex. On May 19, 2004, Governor Tim Pawlenty signed into law, new legislation that provided a more efficient and faster environmental permitting process for the plant that paved the way for implementing the next phase of ITmk3 technology development in a commercial-sized facility. Mesabi Nugget expects permitting and other commercial arrangements to be completed such that construction can begin at the Cliffs Erie site next April 2005. If construction can commence next spring, then production of iron nuggets could begin during the last half of 2006. The Erie Nugget Plant of Mesabi Nugget, LLC would have a plant capacity of 500,000 tonnes per year with most of the plant output going to Steel Dynamics, Inc. in Indiana under a long-term off take contract. The Erie Nugget Plant will likely sell to other customers as well.

Mesabi Nugget is also considering building a commercial nugget facility near one of the SDI steel mill facilities in Butler, Ind. If permitting and financing for this facility are successful, it could begin construction next spring and iron nugget production sometime in late 2006 as well.

Mesabi Nugget, LLC is a Minnesota limited liability company organized for the purpose of developing value-added iron projects utilizing the ITmk3 iron nugget process owned by Kobe Steel, Ltd. Mesabi Nugget equity partners include Cleveland-Cliffs Inc., the largest iron ore supplier in North America; Kobe Steel, Ltd., the inventor and owner of the iron nugget ITmk3 Process; Steel Dynamics, Inc. (SDI), one of the world’s most respected electric furnace steelmakers; and Ferrometrics, Inc., founder of MNC.