The Trustees of Mesabi Trust declared a distribution of thirty-one and one-half cents ($0.315) per Unit of Beneficial Interest payable on February 20, 2007 to Mesabi Trust Unitholders of record at the close of business on January 30, 2007. This compares to a distribution of forty-seven cents ($0.47) per Unit for the same period last year.

The decrease in the distribution ($0.155) per Unit as compared to the same quarter last year is due primarily to significantly lower shipments of iron ore pellets during the fourth calendar quarter of 2006. The Trust receives royalties based on the volume of shipments and the selling prices of iron ore pellets shipped by Northshore Mining Co., the lessee/operator of the Mesabi Trust lands.

Although iron ore pellet prices realized by Northshore (with respect to pellets shipped from Mesabi Trust lands) were, on average, approximately 9.9% higher as compared to the fourth quarter of 2005, total shipments credited to the Trust decreased 41%, from 1,298,179 gross tons in the fourth quarter of 2005 to 764,807 gross tons in the fourth quarter of 2006. The lower volume of shipments in the fourth calendar quarter of 2006 resulted in there being no shipments at the Trust’s highest royalty rate of 6% of the realized price per ton. This compares to 308,633 gross tons were shipped at the 6% royalty rate in the fourth quarter of 2005.

The current distribution also reflects certain negative adjustments to royalties paid to the Trust in the previous three calendar quarters of 2006, as discussed more fully below.

The total royalty payment expected to be received by Mesabi Trust on January 31, 2007 is $4,255,620 (which includes the fee royalty expected to be received by the Mesabi Land Trust). With respect to shipments of iron ore during the fourth calendar quarter of 2006, Mesabi Trust was credited with a base royalty of $2,674,720 and a bonus royalty of $1,721,180. These royalty amounts were decreased by an aggregate of $248,439, representing negative adjustments of $148,793 and $99,646, respectively, to base royalty and bonus royalty amounts credited to the Trust during the first three calendar quarters of 2006. These adjustments resulted primarily from changes in the prices of iron ore pellets shipped under supply agreements between Northshore, Cleveland-Cliffs Inc. (Northshore’s parent), and certain of their customers (the CCI Pellet Agreements).

As previously disclosed by Mesabi Trust, prices under the CCI Pellet Agreements are subject to interim and final pricing adjustments, dependent in part on multiple price and inflation index factors that are not known until after the end of a contract year. As described above, the royalty payment attributable to the fourth calendar quarter of 2006 (and thus the announced distribution) was decreased as a result of negative adjustments to royalty payments previously received by Mesabi Trust due to changes in the estimated selling prices of iron ore pellets under the CCI Pellet Agreements and Northshore’s previous estimate of shipments attributed to Mesabi Trust during the first calendar quarter of 2006.

Royalty payments received by the Trust in 2005 and 2006 continue to reflect pricing estimates for shipments of iron ore products that may be subject to further adjustment (upward or downward) in accordance with the CCI Pellet Agreements. Northshore’s volume of iron ore pellet shipments varies based on such factors as weather conditions on the Great Lakes, customer-requested delivery schedules, and general economic conditions in the iron ore industry. Royalties paid to the Trust are dependent on the volume of shipments for the quarter and year-to-date, the pricing of the iron ore product sales, and the relative percentage of iron ore pellet shipments from Mesabi Trust lands (rather than from other lands). Northshore has not provided the Mesabi Trustees with a forecast of either the production of iron ore pellets from Northshore or the volume of shipments of iron ore pellets or what percentage of such production and shipments will be from Mesabi Trust iron ore.