UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended April 30, 2004

 

or

 

o                                 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)

 

 

(615) 835-2749

(Registrant’s telephone number, including area code)

 

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  ý      No  o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  o      No  ý

 

As of May 31, 2004, there were 13,120,010 Units of Beneficial Interest in Mesabi Trust outstanding.

 

 

PART I - FINANCIAL INFORMATION

 

Item 1.    Financial Statements.  (Note 1)

 

			Three Months Ended April 30,
			2004			2003
A.	Condensed Statements of Income
	Revenues
	Royalty income		$	927,207		$	366,092
	Interest income		10,502			12,073
			937,709			378,165
	Expenses		101,742			128,162
	Net income		$	835,967		$	250,003
	Number of units outstanding		13,120,010			13,120,010
	Net income per unit (Note 2)		$	0.0637		$	0.0191
	Distributions declared per unit		$	0.05		$	—

 

See Notes to Financial Statements.

 

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			April 30, 2004			January 31, 2004
B.	Condensed Balance Sheets
	Assets
	Cash		$	811,523		$	98,692
	U.S. Government securities, at amortized cost (which approximates market)		751,133			4,826,046
	Accrued income		674,150			449,780
	Prepaid expenses		34,054			15,560
			2,270,860			5,390,078
	Fixed property, including intangibles, at nominal values
	Amended Assignment of Peters Lease		1			1
	Assignment of Cloquet Lease		1			1
	Certificate of beneficial interest for 13,120,010 units of land trust		1			1
			3			3
			$	2,270,863		$	5,390,081
	Liabilities, Unallocated Reserve and Trust Corpus
	Liabilities
	Distribution payable		$	656,000		$	3,936,003
	Accrued expenses		26,309			45,491
			682,309			3,981,494
	Unallocated Reserve (Note 3)		1,588,551			1,408,584
	Trust Corpus		3			3
			$	2,270,863		$	5,390,081

 

See Notes to Financial Statements.

 

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			Three Months Ended April 30,
			2004			2003
C.	Condensed Statements of Cash Flows
	Cash flows from operating activities
	Royalties received		$	693,349		$	262,626
	Interest received		19,989			19,910
	Expenses paid		(139,417		)	(98,338		)
	Net cash provided by operating activities		573,921			184,198
	Cash flows from investing activities
	Maturities of U.S. Government Securities		4,174,886			99,420
	Purchases of U.S. Government Securities		(99,973		)	(214,902		)
	Net cash provided by (used for) investing activities		4,074,913			(115,482		)
	Cash flow from financing activity
	Distributions to Unitholders		(3,936,003		)	(2,492,802		)
	Net change in cash		712,831			(2,424,086		)
	Cash, beginning of year		98,692			2,515,457
	Cash, end of quarter		$	811,523		$	91,371
	Reconciliation of net income to net cash provided by operating activities
	Net income		$	835,967		$	250,003
	(Increase) in accrued income		(224,370		)	(95,629		)
	(Increase) Decrease in prepaid insurance		(18,494		)	5,762
	Increase (Decrease) in accrued expenses		(19,182		)	24,062
	Net cash provided by operating activities		$	573,921		$	184,198

 

See Notes to Financial Statements.

 

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MESABI TRUST

 

NOTES TO FINANCIAL STATEMENTS

 

Note 1.                             The financial statements included herein have been prepared without audit (except for the balance sheet at January 31, 2004) in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.  In the opinion of the Trustees, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the results of operations for the three months ended April 30, 2004 and 2003, (b) the financial positions at April 30, 2004 and January 31, 2004, and (c) the cash flows for the three months ended April 30, 2004 and 2003, have been made.

 

Note 2.                             Earnings per unit are based on weighted average number of units outstanding during the period (13,120,010 units).

 

Note 3.                             The Trustees have determined to maintain an Unallocated Reserve of at least $1,000,000 in liquid assets.  The actual amount of such Unallocated Reserve may vary from quarter to quarter depending upon conditions in the industry and the judgment of the Trustees.  At April 30, 2004, the Unallocated Reserve was represented by $914,401 in unallocated cash and U.S. Government securities, and $674,150 of accrued revenue primarily representing royalties not yet received by the Trust but anticipated to be received in July 2004 from Northshore Mining Company as part of the royalty due with respect to the first fiscal quarter, based upon reported lessee shipping activity for the month of April 2004.

 

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

 

Forward-Looking Information

 

Certain statements contained in this document are forward-looking, including specifically those statements estimating calendar year 2004 production or shipments and comments related to the commencement of construction and opening of additional plants in 2004 and beyond.  All such forward-looking statements are based on input from Northshore Mining Company (“Northshore”), which is the lessee/operator and a wholly-owned subsidiary of Cleveland-Cliffs Inc (“CCI”), and published announcements of CCI.  The Trust has no control over the operations or activities of Northshore except within the framework of current agreements.  Actual results could differ materially from those indicated in such statements.  Important factors that could cause actual results to differ materially include those listed below under the heading “Important Factors Affecting Mesabi Trust”.

 

Background

 

Leasehold royalty income constitutes the principal source of the Trust’s revenue.  Royalty rates are determined in accordance with the terms of Mesabi Trust’s leases and assignments of leases.  Three types of royalties comprise the Trust’s leasehold royalty income:

 

•                  Overriding royalties, which historically constitute the majority of Mesabi Trust’s royalty income, are determined by both the volume and selling price of iron ore products shipped.

 

•                  Fee royalties, which historically constitute a smaller component of the Trust’s royalty income, are payable to Mesabi Land Trust, a Minnesota land trust of which Mesabi Trust is the sole beneficiary and for which US Bank N.A. acts as trustee, and are based on the amount of crude ore mined.  Currently, the fee royalty on crude ore is based on an agreed price per ton, subject to certain indexing.  Crude ore is the source of iron oxides used to make iron ore pellets and other products.

 

•                  Minimum advance royalties, the third type of royalty, are discussed below.

 

With respect to the volume component of royalty calculation, Northshore is obligated to pay Mesabi Trust base overriding royalties in varying amounts.  The volume component of overriding royalties constitutes a percentage of the gross proceeds of iron ore products produced at Mesabi Trust lands (and to a limited extent other lands) and shipped from Silver Bay, Minnesota.  The percentage ranges from 2-1/2% of the gross proceeds for the first one million tons of iron ore products so shipped annually to 6% of the gross proceeds for all iron ore products in excess of 4 million tons so shipped annually.

 

With respect to the selling price component of the overriding royalty calculation, Northshore is obligated to pay to Mesabi Trust royalty bonuses.  The royalty bonus is a percentage of the gross proceeds of product shipped from Silver Bay and sold at prices above a threshold price.  The threshold price is adjusted (but not below $30.00) on an annual basis for inflation and deflation (the “Adjusted Threshold Price”).  The Adjusted Threshold Price was $40.61 per ton for calendar year 2002, $41.13 per ton for calendar year 2003, and is $41.76 per ton for calendar year 2004.  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.  No royalty bonus has been paid to the Trust for several years.

 

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Generally, Northshore’s obligation to pay base overriding royalties and royalty bonuses with respect to the sale of iron ore products accrues upon the shipment of those products from Silver Bay.  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 and deflation.  Advance royalties payable were $676,814 for calendar year 2002, $685,630 for calendar year 2003, and are $696,161 for calendar year 2004.  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 advance minimum royalties are essentially prepayments of base overriding and bonus royalties earned each year, any advance minimum royalties paid in a fiscal quarter are recouped by credits against base overriding and bonus royalties earned in later fiscal quarters during the year.  Historically, advance minimum royalties have been paid in the first fiscal quarter and recouped in the second fiscal quarter.

 

Northshore is obligated to make quarterly royalty payments in January, April, July and October of each year.  In the case of base overriding royalties and royalty bonuses, these quarterly royalty payments are to be made whether or not the related proceeds of sale have been received by Northshore by the time such payments become due.

 

Under the relevant documents, Northshore may mine and ship iron ore products from lands other than Mesabi Trust lands.  To encourage the use of iron ore products from Mesabi Trust lands, Mesabi Trust receives royalties on stated percentages of iron ore shipped from Silver Bay, 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 from Mesabi Trust lands, and (ii) a portion of the aggregate quantity of all iron ore products shipped that were from any lands, such portion being 90% of the first four million tons shipped during such year, 90% 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.

 

Mesabi Trust has no employees, but it engages independent consultants to assist the Trustees in monitoring, among other things, the amount and sales prices of iron ore products shipped by Northshore from Silver Bay, Minnesota.  As noted above, the information regarding amounts and sales prices of shipped iron ore products is used to compute the royalties payable to Mesabi Trust by Northshore.  Deutsche Bank Trust Company Americas, the Corporate Trustee, also performs certain administrative functions for Mesabi Trust.

 

Current Developments

 

General.  CCI indicated in its Form 10-Q filed April 29, 2004 that 2004 production for Northshore is currently forecast at 5.0 million tons of iron ore pellets, an increase of 100,000 tons from the forecast in CCI’s annual report filed February 13, 2004.

 

Northshore has not provided the Trust with an estimate for total calendar year 2004 shipments.  (See description of the uncertainty of market conditions in the iron ore and steel industry under “Important Factors Affecting Mesabi Trust” below.)  During calendar years 2003, 2002, 2001, 2000, and 1999, the percentage of shipments of iron ore products from Mesabi Trust lands was approximately 95.5%, 97.5%, 99.2%, 99.8%, and 98.9%, respectively, of total shipments.  Northshore has not advised the Trustees as to the percentage of iron ore products it anticipates shipping from Mesabi Trust lands in calendar year 2004.

 

Mesabi Nugget Project.  CCI is participating in the Mesabi Nugget Project with Kobe Steel, Ltd. (“Kobe”), Steel Dynamics, Inc. (“SDI”), Ferrometrics, Inc. (“Ferrometrics”) and the State of Minnesota.

 

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The project’s objective is to develop and apply a new iron making technology (Kobe Steel’s Itmk3 process) for converting iron ore into nearly pure iron nugget form.  CCI has indicated that if the Mesabi Nugget Project successfully achieves commercialization, iron nuggets from this new process would be used as an alternative to steel scrap as a raw material for electric steel furnaces and blast furnaces or basic oxygen furnaces of integrated steel producers.

 

Construction of the pilot plant at the Northshore facility to test the Itmk 3 process was completed in May 2003.  CCI stated in its Form 10-Q filed April 29, 2004 that the pilot plant is in a third operating phase, intended to confirm the commercial viability of the Itmk 3 technology.  This third phase is scheduled to be completed in June 2004.  In a published interview, CCI’s chairman and chief executive officer stated that Mesabi Nugget LLC (which is owned by CCI (through its wholly-owned subsidiary Iron Units LLC), Kobe, SDI and Ferrometrics) is considering construction of the first commercial plant, probably a $100 million, 500,000 tons-per-year facility (the location of which is still undetermined) that could begin production in early 2006.  CCI’s chairman and chief executive officer stated in the same interview that CCI intends to seek permits to build two additional nugget plants at Silver Bay, each with capacity for about 750,000 tons of nuggets annually, sometime in the future.  In a later published report, the president of Mesabi Nugget LLC stated that Mesabi Nugget LLC intends to build a full-scale nugget plant in Silver Bay sometime in the future.

 

Although the pilot plant is located at Northshore, it is not certain that, if a fully operational facility is constructed, it will be on Mesabi Trust lands.  CCI reported in its Form 10-Q filed April 29, 2004 that while the project participants are investigating environmental requirements timelines for various potential commercial sites in Minnesota and Indiana, a decision to proceed on construction has not been made.  Construction of a fully operational facility in Minnesota, Indiana or in both states would be subject to Mesabi Nugget LLC’s obtaining the necessary governmental permits.  However, in May 2004, the Minnesota state legislature enacted legislation to shorten the environmental permitting timeline should the commercial plant be developed at another site owned by CCI in Hoyt Lakes, Minnesota, while Minnesota state agencies may offer tax and financial incentives for construction at the Hoyt Lakes site.

 

Although Mesabi Trust is not a direct party to the Mesabi Nugget Project and its involvement in this project was not solicited, in the event that a fully-operational plant were to be located at the Northshore facility, the project would expectedly use iron ore from the Mesabi Trust lands.  In addition, iron ore from Trust lands could potentially still be used, were a fully-operational plant to be located in Indiana or at another location other than Northshore.  It is still uncertain as to whether the Mesabi Nugget Project will successfully achieve commercialization, or where a fully-operational plant would be located, or whether it would use iron ore from the Mesabi Trust lands.  Therefore, the Trustees are unable to make projections as to whether any prospective future royalties might be payable to the Trust.

 

Securities Regulation.  The Trust is a publicly-traded trust listed on the New York Stock Exchange (“NYSE”) and is therefore subject to extensive regulation under, among others, the Securities Act of 1933, the Securities Exchange Act of 1934, NYSE rules and regulations and the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”).  Issuers failing to comply with such authorities risk serious consequences, including criminal as well as civil and administrative penalties.  In most instances, these laws, rules and regulations do not specifically address their applicability to publicly-traded trusts such as Mesabi Trust.  In particular, Sarbanes-Oxley provides for the adoption by the Securities and Exchange Commission (the “SEC”) and NYSE of certain rules and regulations that may be impossible for the Trust to literally satisfy because of its nature as a pass-through trust.  During fiscal 2004, the SEC and NYSE adopted rules and regulations pursuant to Sarbanes-Oxley that require a publicly-traded company’s board of directors, audit committee or executive directors (or similar body) to act with respect to certain corporate governance matters.  The Trust does not have, nor does the Agreement of Trust provide for, a board of directors, an audit committee or any executive officers.  Moreover, the Trust has no employees at

 

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all.  Therefore, the Trust cannot literally comply with many of these rules and regulations.  The Trustees intend to follow the SEC’s and NYSE’s rulemaking closely and attempt to comply with such rules and regulations where possible.

 

Important Factors Affecting Mesabi Trust

 

The Agreement of Trust dated July 18, 1961 (the “Agreement of Trust”) specifically prohibits the Trustees from entering into or engaging in any business.  This prohibition seemingly applies even to business activities the Trustees 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 Trust’s Certificate Holders after the payment of, or provision for, such expenses and liabilities, and protecting and conserving the assets held.

 

Accordingly, the income of the Trust is highly dependent upon the activities and operations of Northshore, and the terms and conditions of the Amendment of Assignment, Assumption and Further Assignment of Peters Lease (the “Amended Assignment of Peters Lease”), the Amendment of Assignment, Assumption and Further Assignment of Cloquet Lease (the “Amended Assignment of Cloquet Lease”), and the Assumption and Assignment of Mesabi Lease (together with the Amended Assignment of Peters Lease and the Amended Assignment of Cloquet Lease, the “Amended Assignment Agreements”).  The Trust and the Trustees have no control over the operations and activities of Northshore, except within the framework of the Amended Assignment Agreements.

 

Due to winter weather, and the increasing royalty percentages based on tonnage shipped in a calendar year, results for a particular calendar quarter are typically not indicative of results for future quarters or the year as a whole.  Factors which can impact the results of the Trust in any quarter or year include:

 

1.                             Shipping Conditions in the Great Lakes.  Shipping activity by Northshore is dependent upon when the Great Lakes shipping lanes freeze for the winter months (typically in January) and when they re-open in the spring (typically late-March or April).  Base overriding royalties to Mesabi Trust are based on shipments made in a calendar quarter.  Because there ordinarily is little or no shipping activity in the first calendar quarter, the Trust typically receives only the minimum royalty (or slightly more than the minimum) for that period.

 

2.                             Operations of Northshore.  Because the primary portion of the Trust’s revenues derive from iron ore product shipped by Northshore from Silver Bay, Northshore’s processing and shipping activities directly impact the Trust’s revenues in each quarter and for each year.  In turn, a number of factors affect Northshore shipment volume.  These factors include, among others, the economic conditions in the iron ore industry, pricing by domestic and international competitors, long-term customer contracts or arrangements by Northshore or its competitors, availability of ore boats, production at Northshore’s mining operations, and production at the pelletizing/processing facility.  If any pelletizing line becomes idle for any reason, production and shipments (and, consequently, Trust income) could be adversely impacted.

 

3.                             Increasing Royalties.  As described elsewhere in this Report, 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.  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.

 

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4.                             Percentage of Mesabi Trust Ore.  As described elsewhere in this Report, Northshore has the ability to process and ship iron ore products from lands other than Mesabi Trust lands.  In certain circumstances, the Trust may be entitled to royalties on those other shipments, but not in all cases.  In general, the Trust will receive higher royalties (assuming all other factors are equal) if a higher percentage of shipments are from Mesabi Trust lands.  The percentages of shipments that came from Mesabi Trust lands were 95.5%, 97.5%, 99.2%, 99.8%, and 98.9% in calendar years 2003, 2002, 2001, 2000, and 1999, respectively.

 

5.                             Uncertainty of Market Conditions in the Steel and Iron Ore Industry.  Although CCI reported in its Form 10-Q for its quarterly period ending March 31, 2004 that it experienced record first quarter iron ore pellet sales and is projecting an overall increase in total 2004 pellet sales (as compared to 2003), CCI cautioned in such Form 10-Q that significant risks and uncertainties may impact its forecast, including, but not limited to, changes in customer demand, an increase in certain steel imports, a decrease in iron ore production in North America due to global overcapacity of steel, customer failure, and customer or potential customer restructuring and financial difficulty (which could result in reduced production capacity over time).  Furthermore, there exists consolidation and intense competition in the domestic steel market.

 

In light of the current steel industry environment, uncertainties arising from war and other global events, and the above-mentioned risks and factors, it is uncertain whether prices on domestic steel products will be maintained at these current relatively higher levels, and whether steel mills will be able to operate at capacity levels in 2004 and beyond.  Furthermore, although overall there appears to have been an increase in the demand for domestic steel products over the last fiscal year, it is nevertheless uncertain whether this increase in demand will continue and the extent to which it will impact royalties paid to the Trust in fiscal year 2005 and beyond.

 

Comparison of three months ended April 30, 2004 and April 30, 2003

 

		Three Months Ended April 30,
		2004			2003
Total royalty income		$	927,207		$	366,092
Interest income		10,502			12,073
Gross income		$	937,709		$	378,165
Expenses		101,742			128,162
Net income		$	835,967		$	250,003

 

		As of April 30,
		2004			2003
Unallocated reserve		$	1,588,551		$	1,316,051

 

The increase in royalty income is due to increases in pellet shipments and price, and a higher applicable royalty rate, as compared to the comparable prior period.  Expenses decreased from the comparable prior period, primarily due to decreases in general and administrative expenses.

 

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The increase in Unallocated Reserve is primarily due to increased revenue for the quarter.  The Trustees anticipate that the amount of Unallocated Reserve will fluctuate from time to time, depending upon a number of factors, including but not limited to the income for a particular period, the amount and timing of distributions, uncertainty about future royalty income and the uncertainty of future expenses.

 

Royalty Comparisons

 

The following chart summarizes Mesabi Trust’s royalty income for the three months ended April 30, 2004 and April 30, 2003, respectively:

 

		Three Months Ended April 30,
		2004			2003
Base overriding royalties		$	829,941		$	234,378
Bonus royalties		0			0
Minimum advance royalty paid (recouped)		0			45,089
Fee royalties		97,266			86,625
Total royalty income		$	927,207		$	366,092

 

Item 3.  Quantitative and Qualitative Disclosure About Market Risk.

 

Not applicable.

 

Item 4.  Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.  The Trustees maintain disclosure controls and procedures designed to ensure that information required to be disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and regulations of the Securities and Exchange Commission.  Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Trust is accumulated and communicated by Northshore, and the Trust’s independent auditors and consultants to the Trustees as appropriate to allow timely decisions regarding required disclosure.

 

As of the end of the period covered by this Report, the Trustees carried out an evaluation of the Trust’s disclosure controls and procedures.  The Trustees have concluded that the disclosure controls and procedures are effective, while noting certain limitations on disclosure controls and procedures as set forth below.

 

Due to the contractual arrangements of the Agreement of Trust and the Amendment to the Agreement of Trust dated October 25, 1982 (the “Amendment”), there are certain potential weaknesses that may limit the effectiveness of disclosure controls and procedures established by the Trustees and their ability to verify the accuracy of certain financial information.  The contractual limitations creating potential weaknesses in disclosure controls and procedures may be deemed to include:

 

•                  Northshore alone controls (i) historical operating data, including iron ore production volumes, marketing of iron ore products, operating and capital expenditures as they relate to Northshore, environmental and other liabilities and the effects of regulatory changes; (ii) plans for Northshore’s future operating and capital expenditures; (iii) geological data relating to reserves; and (iv) projected production of iron ore products.  While the Trustees request

 

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material information for use in periodic reports as part of their disclosure controls and procedures, the Trustees do not control this information, and they rely on Northshore to provide accurate and timely information for use in the Trust’s reports filed with the Securities and Exchange Commission.  Moreover, while each quarter Northshore furnishes shipment and royalty calculations to the Trustees, Northshore has declined to support this information with a written certification attesting to whether Northshore has established disclosure controls and procedures and internal controls sufficient to enable it to verify that the information furnished to the Trustees is accurate and complete.  Northshore is not required either by contract or by governmental laws or regulations to provide such a certification.

 

•                  Eide Bailly LLP, which serves as the Trust’s independent accountants (“Eide Bailly”), has delivered a report to the Trust concluding that based upon its review of the financial statements of the Trust for its quarter ended April 30, 2004 (the “Financial Statements”), it is not aware of any material modifications that should be made to the Financial Statements in order for the Financial Statements to be in conformity with generally accepted accounting principles.

 

•                  Under the terms of the Agreement of Trust and the Amendment, the Trustees are entitled to, and in fact do rely, upon certain experts in good faith, including (i) the independent consultants with respect to monthly production and shipment reports, which include figures on crude ore production and iron ore pellet shipments and discussions concerning the condition and accuracy of the scales and plans regarding the development of the Trust’s mining property; and (ii) the independent auditors they have contracted with respect to reviews of financial data related to shipping and sales reports provided by Northshore.

 

The Trustees do not intend to expand their responsibilities beyond those permitted or required by the Agreement of Trust, the Amendment, and those required under applicable law.

 

Changes in Internal Control Over Financial Reporting.  To the knowledge of the Trustees, there has been no significant change in the Trust’s internal control over financial reporting that occurred during the Trust’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.  The Trustees note for purposes of clarification that they have no authority over, and make no statement concerning, the internal control over financial reporting of Northshore.

 

PART II - OTHER INFORMATION

 

Item 1.                     Legal Proceedings.

 

None.

 

Item 2.                     Changes in Securities and Use of Proceeds.

 

None.

 

Item 3.                     Defaults Upon Senior Securities.

 

None.

 

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Item 4.                     Submission of Matters to a Vote of Security Holders.

 

None.

 

Item 5.                     Other Information.

 

None.

 

Item 6.                     Exhibits and Reports on Form 8-K.

 

(a)           Exhibits.

 

31                                    Certification of Corporate Trustee of Mesabi Trust pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32                                    Certification of Corporate Trustee of Mesabi Trust pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

99.1                           Report of Eide Bailly LLP regarding its review of the un-audited interim financial statements of Mesabi Trust for its quarter ending April 30, 2004.

 

(b)                                 Reports on Form 8-K.

 

None.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	MESABI TRUST
	(Registrant)
		By:		DEUTSCHE BANK TRUST COMPANY AMERICAS
				Corporate Trustee
		Principal Administrative Officer and duly authorized signatory:*
Date: June 14, 2004	By:		/s/ Rodney Gaughan
			Name: Rodney Gaughan
			Title: Assistant Vice President

 

* There are no principal executive officers or principal financial officers of the registrant.

 

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