NEW YORK – Mesabi Trust (NYSE:MSB) has disclosed its financial results and royalty income for the quarter ended September 30, 2024, revealing a total royalty income of $7,355,929. The announcement was made on Thursday, following the receipt of the quarterly royalty report from Cleveland-Cliffs (NYSE:CLF) Inc., the parent company of Northshore Mining Company.
The trust, which trades on the New York Stock Exchange under the symbol MSB, was credited with a base royalty of $4,469,814 and a bonus royalty of $2,718,456 for the quarter. Additionally, a royalty payment of $167,659 was paid to the Mesabi Land Trust. Compared to the same quarter in the previous year, the total tonnage of iron ore shipped decreased from 1,019,311 tons to 972,154 tons.
The fluctuations in royalty income, which Mesabi Trust receives, are influenced by several factors, including production decisions by Cleveland-Cliffs, customer delivery schedules, general economic conditions in the iron ore industry, and weather conditions affecting Great Lakes shipping. These factors can lead to significant variations in royalties from quarter to quarter and year to year.
As of the last update in April 2023, Cleveland-Cliffs had partially restarted operations at Northshore, running at less than full capacity for the remainder of that year. For 2024, there have been no specific updates provided to Mesabi Trust regarding the expected shipments of iron ore products or the percentage of shipments that will be sourced from Mesabi Trust lands.
The forward-looking statements included in the report, which pertain to iron ore pellet production, pricing, shipments, and royalty amounts, are made under the safe harbor protections of the Private Securities Litigation Reform Act of 1995. However, these statements are subject to inherent risks and uncertainties, including market conditions, customer demand, production decisions by mine operators, and global events such as the COVID-19 pandemic.
In other recent news, mineral royalty trader, Mesabi Trust, reported an increase in its total royalty payments. The company announced that it received royalty payments amounting to $5,325,522, reflecting an increase in iron ore shipments compared to the same quarter of the previous year. This data was provided in a quarterly royalty report by Cleveland-Cliffs Inc., the parent company of Northshore Mining Company.
The base royalty for the Trust was $2,783,747, with an additional bonus royalty of $2,386,069 for the quarter. An extra royalty payment of $155,706 was paid to the Mesabi Land Trust. The report indicated no adjustments were made to the royalties in the second quarter.
Shipments for the quarter amounted to 949,718 tons, marking an increase from the 886,301 tons shipped in the second quarter of 2023. Notably, the volume of shipments and production can vary significantly from quarter to quarter due to various factors. These are recent developments in the company's operations.
InvestingPro Insights
Mesabi Trust's recent financial results can be further contextualized with some key metrics from InvestingPro. The trust currently boasts a market capitalization of $322.49 million, reflecting its significant presence in the iron ore royalty space. With a P/E ratio of 18.15, MSB is trading at a level that suggests investors are willing to pay a premium for its earnings, possibly due to its strong market position and consistent dividend history.
Speaking of dividends, InvestingPro Tips highlight that Mesabi Trust "pays a significant dividend to shareholders" and has "maintained dividend payments for 35 consecutive years." This is particularly noteworthy given the cyclical nature of the iron ore industry. The current dividend yield stands at an attractive 6.47%, which could be appealing to income-focused investors.
Another InvestingPro Tip points out that MSB is "trading near its 52-week high," with the price sitting at 94.4% of its highest point over the past year. This aligns with the reported strong performance and could indicate positive investor sentiment towards the trust's prospects.
For readers interested in a deeper dive into Mesabi Trust's financials and market position, InvestingPro offers 10 additional tips and a comprehensive set of real-time metrics to inform investment decisions.
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