Trustees of the Mesabi Trust declared a distribution of $0.33 per Unit of Beneficial Interest of Mesabi Trust. The royalty, which is payable on May 20, 2005 to Mesabi Trust unitholders of record at the close of business on April 30, 2005, compares to $0.05 per Unit for the same period last year.

Mesabi Trust typically receives only a minimum advance royalty for the first calendar quarter, as the Great Lakes shipping lanes are normally frozen during most of the period, resulting in little or no shipments of iron ore by lessee/operator Northshore Mining Co.

The substantial increase (+$0.28) in per Unit distribution is due to several factors that are now impacting royalties received by the Trust. These factors, which could continue to impact royalties in the foreseeable future, commenced when the Mesabi Trust became entitled to a royalty bonus for iron ore shipments from Silver Bay sold at prices above a threshold price. In addition, during the course of its fiscal year some portion of the royalties will be paid to Mesabi Trust using estimated prices for iron ore products sold under term contracts between Northshore, Cleveland Cliffs Inc. and certain of their customers (the CCI Pellet Agreements). These prices are subject to interim and final pricing adjustments, which can be positive or negative, and which adjustments are 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 and frequent variations in royalties from quarter to quarter and on a comparative historical basis. These variations, which can be positive or negative, cannot be predicted by Mesabi Trust.

The total royalty payment expected to be received by Mesabi Trust on April 29, 2005 from Northshore will be $4,463,468 (which includes the royalty received by the Mesabi Land Trust). With the announced $0.33 per Unit distribution, Trustees of Mesabi Trust are distributing $4,329,603 of this total royalty payment. With respect to shipments of iron ore during the first quarter of 2005, Mesabi Trust received a base royalty of $702,275 (actual shipments of iron ore mined from Mesabi Trust lands were approximately 484,621 tons, while the Mesabi Trust was credited with 493,681 tons of iron ore products shipped). Mesabi Trust also received a bonus royalty in the amount of $842,730 with respect to shipments during the first quarter of 2005. Further, Mesabi Trust received $1,388,844 representing final adjustments for 2003 pricing, and a royalty payment of $1,432,200 based on estimated adjustments to 2004 pricing, a portion of which is subject to further adjustment in the future.

The Mesabi Trust cautions that the April 2005 aggregate royalty payment expected to be received by the Trust on April 29 is not predictive of future royalty payments. Furthermore, the 2004 and 2005 royalty payments reflect pricing estimates for shipments of iron ore products that may be subject to further adjustment either up or down pursuant to CCI Pellet Agreements.

As discussed above, the increase is due largely to increased royalty revenue recognized at the end of fiscal 2005 resulting from contract pricing adjustments of pellets shipped during 2003 and 2004 pursuant to CCI Pellet Agreements. Mesabi Trust is not a party to the CCI Pellet Agreements. Contract pricing adjustments and royalty revenue increases were calculated by Northshore/CCI during the first three months of 2005. The resulting positive impact on actual royalties expected to be paid to Mesabi Trust on April 29 were finally confirmed to the Trust earlier this week. Future price adjustments will impact future royalties received by the Trust that become available for distribution to Unitholders.

The volume of shipments by Northshore varies from quarter to quarter and year to year based on a number of factors, including weather conditions on the Great Lakes, the requested delivery schedules of customers and general economic conditions in the iron ore industry. The resulting royalties are dependent on shipment volumes, pricing (which has recently been trending higher) of the iron ore product sales, and the relative percentage of iron ore shipments from Mesabi Trust.

With respect to the balance of 2005, Northshore has not advised Mesabi Trust as to its expected 2005 shipments of iron ore products or what percentage of 2005 shipments will be from Mesabi Trust iron ore. Northshore has indicated that currently scheduled 2005 pellet production (using iron ore mined from both Mesabi Trust lands and from other than Mesabi Trust lands) will approximate 5.2 million tons.

Cliffs recently announced that the estimated effect of the increase in international pellet pricing will result in increased Cliffs sales revenues and that Cliffs will realize an increase in pricing representing a combination of known contractual base price increases, lag year adjustments, and capped pricing on one of its contracts. Because shipments of iron ore products using iron ore mined from Mesabi Trust lands represent only a fraction of Cliffs’ overall sales and because Mesabi Trust is not party to Cliffs’ customer contracts, while this news indicates that the trend of prices realized by Cliffs appears higher, the actual impact on royalties (and ultimately distributions by Mesabi Trust) cannot be estimated.