Exhibit 13

Annual Report to Certificate Holders

#### GREAT NORTHERN IRONORE PROPERTIES

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#### Ninety-NinthAnnual Report of the
Trusteesto Certificate HoldersforYear Ended December 31,
2005



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#### GREAT NORTHERN IRON ORE PROPERTIES

W-1290 First National Bank Building332 Minnesota Street
Saint Paul, Minnesota 55101-1361(651) 224-2385Fax (651)
224-2387

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| | Trustees                                                                                                         | Officers                                                                                                                                                                 
| | ---------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Joseph S. Micallef  President
of the TrusteesRoger W. Staehle*Robert A.
Stein*John H. Roe, III*
*Audit Committee | Joseph S. Micallef
  Chief Executive OfficerThomas A. Janochoski
  Chief Financial Officer  Vice President & Secretary
Roger P. Johnson  Chief Engineer  Manager of
Mines

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Shareholder Relations Department, Transfer Office
and Registrar

Wells Fargo Bank, N.A.P.O. Box 64854Saint Paul, Minnesota
55164-0854Toll-free: 1-800-468-9716Mesabi Iron Range Office801
East Howard StreetHibbing, Minnesota 55746-0429(218)
262-3886Fax (218) 262-4295



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#### GREAT NORTHERN IRON ORE PROPERTIES SUMMARY OF
OPERATIONS



Year Ended December 312005

2004

2003

2002

2001Shipments from our mines (tons)



8,673,198


9,167,200


9,772,338


7,094,446


5,677,672Royalty
income


$
17,998,451

$
14,141,775

$
11,800,870

$
9,141,886

$
9,810,504Other income


$
362,761

$
305,623

$
382,534

$
443,763

$
590,286Net income


$
15,720,620

$
12,242,010

$
9,967,544

$
7,661,762

$
8,646,878Total
assets


$
19,455,519

$
18,407,999

$
17,413,589

$
16,873,663

$
17,455,283Average shares outstanding



1,500,000


1,500,000


1,500,000


1,500,000


1,500,000Earnings
per share, based on weighted-average shares outstanding during the year


$
10.48

$
8.16

$
6.65

$
5.11

$
5.76Declared
distributions per share


$
10.40
(1)
$
8.20
(2)
$
6.50
(3)
$
5.40
(4)
$
6.00
(5)


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|(1) $2.20 pd 4/29/05; $2.40 pd 7/29/05; $2.80
pd 10/31/05; $3.00 pd 1/31/06(2) $1.80 pd 4/30/04; $1.90 pd
7/30/04; $2.10 pd
10/29/04; $2.40 pd 1/31/05(3) $1.50 pd 4/30/03; $1.60 pd 7/31/03;
$1.70 pd 10/31/03; $1.70 pd 1/30/04(4) $1.10 pd 4/30/02; $1.40 pd
7/31/02; $1.40 pd 10/31/02; $1.50 pd 1/31/03(5) $1.40 pd 4/30/01;
$1.50 pd 7/31/01; $1.50 pd 10/31/01; $1.60 pd 1/31/02
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2

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#### Trustees & Managements Discussion and Analysis of Financial Condition
and Results of Operations

Overview: Great Northern Iron Ore Properties (Trust) is a conventional nonvoting
trust organized under the laws of the State of Michigan pursuant to a Trust Agreement dated December 7, 1906. The Trust owns
interests in fee, both mineral and nonmineral lands, on the Mesabi Iron Range in northern Minnesota. With the properties and
offices all located in Minnesota, the Trust is under the jurisdiction of the Ramsey County District Court in Saint Paul,
Minnesota.

The terms of the Great Northern Iron Ore Properties Trust Agreement, created December 7, 1906,
state that the Trust shall continue for twenty years after the death of the last surviving of eighteen persons named in the Trust
Agreement. The last survivor of these eighteen named in the Trust Agreement died April 6, 1995. Accordingly, the Trust
terminates twenty years from April 6, 1995.

At the end of the Trust, that being April 6, 2015, the certificates of beneficial interest (shares)
in the Trust will cease to trade on the New York Stock Exchange and thereafter will represent only the right to receive certain
distributions payable to the certificate holders of record at the time of the termination of the Trust. Upon termination, the
Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after
paying and providing for all expenses and obligations of the Trust), plus the balance in the Principal Charges account (see Note D
of the Financial Statements). All other Trust property (most notably the Trusts mineral properties) must be conveyed and
transferred to the reversioner (currently Glacier Park Company, a wholly owned subsidiary of Burlington Resources, Inc.) under the
terms of the Trust Agreement.

The exact final distribution, though not determinable at this time, will generally consist of the sum of
the Trusts net monies (essentially, total assets less liabilities and properties) and the balance in the Principal Charges
account, less any and all expenses and obligations of the Trust upon termination. To offer a hypothetical example, without
factoring in any expenses and obligations of the Trust upon its termination, and using the financial statement values as of
December 31, 2005, the net monies were approximately $10.5 million and the Principal Charges account balance was
approximately $5.3 million, resulting in a final distribution payable of approximately $15.8 million, or about $10.53 per share.
After payment of this final distribution, the certificates of beneficial interest (shares) would be cancelled and will have no
further value. It is important to note, however, that the actual net monies on hand and the Principal Charges account balance will
most likely fluctuate during the ensuing years and will not be final until after the termination and wind-down of the
Trust. We offer this example to further inform investors about the conceptual nature of the final distribution and do not imply or
guarantee a specific known final distribution amount.

The Trust is solely involved with the leasing and care of its properties. The management of the Trust is
vested in the Trustees. The Trustees have no duty to

3

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sell property unless required to do so to serve both the term beneficiaries and reversionary beneficiary
impartially; and, if the need arises, the Trustees may petition the Court for further instructions defining what is required in a
particular case to balance the interests of the certificate holders and reversioner. The major source of income to the Trust is
earned royalties derived from taconite production from the Trusts properties by the Trusts lessees (customers) and
minimum royalties, pursuant to mineral leases. Earned royalties are based on the taconite tonnage extracted (also
referred to as produced or shipped) from the Trusts lands applied to a royalty rate as defined in the various specific and
confidential operating agreements (also referred to as leases) with the Trusts lessees. Certain leases have minimum
royalty provisions that require payment to the Trust for holding the leasehold interest. The leases are generally very
long-term in nature and, while they periodically are amended at the request of a lessee, the Trust is bound by the lease
provisions throughout the term of the lease.

Pursuant to a Court Order in 1988, the Trustees filed an election under Section 646 of the Internal
Revenue Code with the Internal Revenue Service that allowed the Trust to be taxed as a grantor trust versus a corporation.
Accordingly, certificate holders (shareholders) are taxed on their allocable share of the Trusts income whether or not the
income is distributed. A Tax Return Guide is prepared by the Trust and mailed annually to investors, which is intended to assist
them in their preparation of their income tax returns with respect to income allocated from the Trust.

Results of Operations: Royalty income for 2005 was greater than that of 2004
primarily due to greater net minimum royalties and increases in our royalty rates due to escalation of producer price indices,
offset in part by a decrease in tonnage mined from Trust lands. Royalty income for 2004 was greater than that of 2003
mainly due to increases in our royalty rates due to escalation of producer price indices. Other income for 2005 was
greater than that of 2004 primarily due to an overall improved yield on our funds held for investment. Other income
for 2004 was less than that of 2003 mainly due to an overall reduced yield on our funds held for investment. Net
income for 2005 was the highest in the history of the Trust, greater than that of 2004, primarily due to increased Royalty
income (as explained above), offset in part by additional pension costs associated with funding the plan and expensing these costs
by the Trusts termination date. Net income for 2004 was greater than that of 2003 mainly due to increased
Royalty income (as explained above).

Liquidity: In the interest of preservation of principal of Court-approved reserves and guided by
the restrictive provisions of Section 646 of the Tax Reform Act of 1986, as amended, monies are invested primarily in United
States Treasury securities with maturity dates not to exceed three years and, along with cash flows from operations, are deemed
adequate to meet currently foreseeable liquidity needs. The only contractual obligations are operating leases for office
facilities (see

4

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Note G of the Financial Statements) and deferred compensation listed as Noncurrent Liabilities in the
Balance Sheet, both deemed to have a minimal effect on future liquidity.

Critical Accounting Policies: Royalties from the Trusts mineral leases are taken
into income as earned. Tonnage extracted is agreed upon between Trust and lessee engineers based on various engineering methods.
Many of the leases provide for escalation or de-escalation that, for the most part, is based on independent producer price indices
as published by the U.S. Department of Labor  Bureau of Labor Statistics. In addition, a number of the Trusts leases
have minimum royalty provisions that require the lessee to pay the Trust a payment for holding the leasehold interest, regardless
of production. These minimum royalties can accumulate and do provide the mining companies the ability to offset excess royalties
(over the minimum royalty requirements) on future taconite production. Minimum royalties, if not recovered before the termination
of the lease, are forfeitable. In that event, no minimum royalties will be returned to the lessee.

Pension Plan Valuations are based on a number of assumptions used to determine the benefit
obligation and asset valuation. These assumptions are evaluated annually by the Trustees and management in conjunction with
outside actuaries. Assumptions affecting the pension plan valuations include the discount rate, compensation increase level and
expected long-term rate of return. These assumptions reflect and incorporate the expected cash flow payouts of the pension plan
given the determinate time frame to the termination of the Trust. Please refer to Note E of the Financial Statements for
additional pension plan information.

The Principal Charges account represents a first and prior lien of certificate holders on any
property transferable to the reversioner at the end of the Trust and reflects an allocation of beneficiaries equity between
the certificate holders and the reversioner. This Court-ordered account is neither an asset nor a liability of the Trust. Rather,
this account maintains and represents a balance which will be payable to the certificate holders of record from the reversioner at
the end of the Trust. The account balance, as stated in Note D of the Financial Statements, primarily represents the costs of
acquiring homes and surface lands in accordance with provisions of a lease with United States Steel Corporation. This account
balance, which may increase or decrease, will be added to the cash distributable to the certificate holders of record at the
termination of the Trust.

Forward-Looking and Cautionary Statements: Certain expectations and projections regarding future
performance of the Trust referenced in this report are forward-looking statements. These expectations and projections are based on
currently available industry and financial data and may be subject to certain events and uncertainties beyond the Trusts
control. We caution readers that in addition to factors described elsewhere in this report, the following factors and comments,
among others, could cause the Trusts operations and financial results to differ materially from the expectations and
projections contained in the forward-looking statements.

5

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The Trusts lessees (customers) primarily include Minntac and Keewatin Taconite Company
(Keetac), owned and operated by United States Steel Corporation, and Hibbing Taconite Company (Hibtac),
owned by Mittal Steel USA, Cleveland Cliffs Inc. and Stelco, and operated by Cleveland Cliffs Inc. Because the Trusts
revenues are primarily dependent upon a limited number of customers, there are associated inherent risks resulting therefrom.
While the steel and taconite industries are generally having good years, any significant adverse event at any of the Trusts
primary lessees, or the loss of any of the Trusts primary lessees, could materially adversely affect the Trusts future
financial results.

A decline in market demand for steel, and correspondingly taconite, could adversely affect the
Trusts financial results. However, other related and sometimes compensating factors include the Trusts lessees
operating levels, ore body quality, metallurgical and geological characteristics, proximity of Trust lands, extreme weather
conditions and labor contracts at the mines. Though the Trust is not a party to these labor contracts, all pertinent labor
contracts affecting production from Trust lands have been ratified by the steelworkers and extend until mid-2008.

Royalty rates can fluctuate due to the escalation and de-escalation of producer price indices as
a result of provisions present in many of the Trusts leases. To the extent these indices decline (All Commodities or the
Iron and Steel subgroup), royalty rates, and correspondingly royalty income, could be adversely affected. Conversely, higher
producer price indices may increase royalty rates and royalty income.

Compliance with Section 646 of the Internal Revenue Code, as explained in Note F of the Financial
Statements, is integral to the level of distributions paid to the certificate holders. Should it be determined that the Trust
violated the requirements of Section 646, it would be taxed as a corporation versus a grantor trust. This would mean the
Trusts income would be taxable upon receipt by the Trust and again upon receipt by the certificate holders. It is the
Trustees opinion, based on independent tax firm reviews, that the Trust has remained in compliance with the provisions of
Section 646 since its election in 1988.

The outlook for 2006 is that we expect taconite production from Trust lands to be lower than that
of 2005, resulting in lower anticipated earnings than the record year of 2005. Nevertheless, we think historically that 2006 will
be another good year for the Trust.

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#### MANAGEMENTS REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING

The management of Great Northern Iron Ore Properties (Trust) is responsible for establishing
and maintaining adequate internal control over financial reporting. The Trusts internal control system was designed to
provide reasonable assurance to the Trusts management and Board of Trustees regarding the preparation and fair presentation
of published financial statements. All internal control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement
preparation and presentation.

The Trusts management assessed the effectiveness of the Trusts internal control over
financial reporting as of December 31, 2005. In making this assessment, it used the criteria set forth in a report by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Internal Control  Integrated
Framework. Based on our assessment, we believe that, as of December 31, 2005, the Trusts internal control over
financial reporting is effective based on the COSO criteria.

The Trusts Independent Registered Public Accounting Firm, Ernst & Young LLP, has issued an
audit report on our assessment of the Trusts internal control over financial reporting. Their report appears on
pages 21 and 22.

| | Respectfully submitted,       
| | ------------------------------
|
| | Joseph S. Micallef,           
| | Chief Executive Officer       
| | and President of the Trustees 
|
| | Thomas A. Janochoski,         
| | Chief Financial Officer       
| | and Vice President & Secretary

7

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Letter to Certificate Holders:

The Trustees of Great Northern Iron Ore Properties
(Trust) own fee title to certain mineral and nonmineral lands situated on the Mesabi Iron Range of Minnesota. Many of
these properties are leased to companies that mine the mineral lands for taconite iron ore. The Trust has no subsidiaries.

During 2005, the major source of income to the Trust was
royalty income derived from taconite production and minimum royalties. Certain leases provide the mining companies the ability to
offset excess royalties due on future production, if any and when mined, against minimum royalties paid in prior periods.
Accumulated minimum royalties amounted to $3,288,083 on December 31, 2005. A Summary of Shipments is tabulated on
the last page of this report.

The Trustees declared four quarterly distributions in
2005 totaling $10.40 per share. The first, in the amount of $2.20 per share, was paid on April 29, 2005, to certificate
holders of record on March 31, 2005; the second, in the amount of $2.40 per share, was paid on July 29, 2005, to
certificate holders of record on June 30, 2005; the third, in the amount of $2.80 per share, was paid on October 31,
2005, to certificate holders of record on September 30, 2005; and the fourth, in the amount of $3.00 per share, was paid on
January 31, 2006, to certificate holders of record on December 30, 2005.

The Trustees declared four quarterly distributions in
2004 totaling $8.20 per share. The first, in the amount of $1.80 per share, was paid on April 30, 2004, to certificate
holders of record on March 31, 2004; the second, in the amount of $1.90 per share, was paid on July 30, 2004, to
certificate holders of record on June 30, 2004; the third, in the amount of $2.10 per share, was paid on October 29,
2004, to certificate holders of record on September 30, 2004; and the fourth, in the amount of $2.40 per share, was paid on
January 31, 2005, to certificate holders of record on December 31, 2004.

The Trustees intend to continue quarterly distributions
and set the record date as of the last business day of each quarter. The next distribution will be paid in late April 2006 to
certificate holders of record on March 31, 2006.

Shares of beneficial interest in the Trust are traded on
the New York Stock Exchange under the ticker symbol GNI (CUSIP No. 391064102). There were 1,480 certificate holders of
record on December 31, 2005. The high and low prices for the quarterly periods commencing January 1, 2004, through
December 31, 2005, inclusive, were as follows:

2005

2004Quarter

High

Low

High

LowFirst


$
142.09

$
101.00

$
98.50

$
84.00Second



123.50


93.00


101.00


88.26Third



124.50


101.00


120.00


96.03Fourth



141.00


113.00


127.75


96.30


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The following is a summary of quarterly results of
operations (unaudited) for the years ended December 31, 2005 and 2004 (in thousands of dollars, except per share
amounts):

Quarter EndedMarch 31

June 30

Sept. 30

Dec. 312005Royalty income


$
4,296

$
5,257

$
4,213

$
4,232Interest and other income



95


72


90


106Gross income



4,391


5,329


4,303


4,338Expenses



646


675


622


697Net income


$
3,745

$
4,654

$
3,681

$
3,641Earnings per share


$
2.50

$
3.10

$
2.45

$
2.432004Royalty income


$
3,467

$
3,985

$
3,525

$
3,165Interest and other income



77


50


108


70Gross
income



3,544


4,035


3,633


3,235Expenses



628


526


526


525Net income


$
2,916

$
3,509

$
3,107

$
2,710Earnings per share


$
1.94

$
2.34

$
2.07

$
1.81


As previously reported, Section 646 of the Tax Reform
Act of 1986, as amended, provided a special elective provision under which the Trust was allowed to convert from taxation as a
corporation to that of a grantor trust. Pursuant to an Order of the Ramsey County District Court, the Trustees filed the Section
646 election with the Internal Revenue Service on December 30, 1988. For years 1989 and thereafter, certificate holders are
taxed on their allocable share of the Trusts income whether or not the income is distributed.

A Tax Return Guide was mailed in January 2006 to all
record date certificate holders shown on our stock transfer agents records during 2005. This guide was intended
to assist the investor in addressing many of the issues that arise in reporting the Trust operations for federal and state income
tax purposes due to Section 646.

We will, upon request, be happy to furnish certificate
holders an Annual Report on Form 10-K and a Tax Return Guide for any recent year.

Respectfully submitted,
Joseph S. Micallef            Roger W. Staehle
 Robert A. Stein                 John H. Roe, III

Saint Paul, Minnesota
January 27, 2006

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#### GREAT NORTHERN IRON ORE PROPERTIES STATEMENTS OF INCOME

Year Ended December 312005

2004

2003RevenuesRoyalties


$
17,998,451

$
14,141,775

$
11,800,870Interest earned



252,037


179,806


214,072Rent and other



110,724


125,817


168,46218,361,212


14,447,398


12,183,404ExpensesRoyalties



4,623


4,623


4,623Real estate and payroll
taxes



139,090


129,744


140,840Inspection and care of
property



531,830


524,695


506,291Administrative and
general



1,723,535


1,302,100


1,317,476Provision for
depreciation and amortization



241,514


244,226


246,6302,640,592


2,205,388


2,215,860Net Income


$
15,720,620

$
12,242,010

$
9,967,544Earnings per
Share


$
10.48

$
8.16

$
6.65STATEMENTS OF BENEFICIARIES EQUITYYear Ended December 312005


2004


2003Balance at beginning of year


$
14,683,943

$
14,741,933

$
14,524,389Net income for the year



15,720,620


12,242,010


9,967,54430,404,563


26,983,943


24,491,933Deduct declaration of distributions
on shares of beneficial interest, per share:     2005  $10.40; 2004 
$8.20; 2003  $6.50



15,600,000


12,300,000


9,750,000Balance at end of year


$
14,804,563

$
14,683,943

$
14,741,933


See accompanying notes.

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#### GREAT NORTHERN IRON ORE PROPERTIES BALANCE SHEETS
 ASSETS

December 312005

2004Current
AssetsCash and cash equivalents


$
774,916

$
788,779United States Treasury securities (Note B)



6,209,745


4,788,363Royalties receivable



3,881,737


2,834,944Prepaid expenses



2,110


2,760Total Current
Assets



10,868,508


8,414,846Noncurrent AssetsUnited States Treasury
securities (Note B)



3,391,684


4,619,534Prepaid
pension expense (Note E)



855,340


941,3274,247,024


5,560,861PropertiesMineral and
surface lands (Notes B and C)



38,691,707


38,587,307Less allowances for depletion and amortization



34,499,185


34,289,9654,192,522


4,297,342Building and equipment  at cost, less allowances for accumulated depreciation
            (2005  $223,654; 2004  $214,287)



147,465


134,9504,339,987


4,432,292$
19,455,519

$
18,407,999LIABILITIES AND BENEFICIARIES
EQUITYCurrent LiabilitiesAccounts
payable and accrued expenses


$
90,156

$
81,756Distributions



4,500,000


3,600,000Total Current
Liabilities



4,590,156


3,681,756Noncurrent Liabilities



60,800


42,300Beneficiaries
Equity, including certificate holders equity, represented by
1,500,000 shares         of beneficial interest authorized and outstanding, and
reversionary interest (Notes A and D)



14,804,563


14,683,943$
19,455,519

$
18,407,999


See accompanying notes.

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#### GREAT NORTHERN IRON ORE PROPERTIES STATEMENTS OF CASH
FLOWS

Year Ended December 312005

2004

2003Operating ActivitiesCash received from royalties and
rents


$
16,957,982

$
13,665,771

$
12,361,792Cash
paid to suppliers and employees



(2,285,541
)

(2,087,987
)

(2,050,743
)Interest received



202,093


188,621


272,497Net Cash Provided
by                  Operating Activities



14,874,534


11,766,405


10,583,546Investing ActivitiesUnited
States Treasury securities purchased



(5,232,326
)

(4,297,396
)

(5,075,000
)United States Treasury securities matured



5,088,738


3,725,000


4,175,000Net
expenditures for building and equipment



(44,809
)

(11,629
)

(40,377
)Net
Cash Used in                  Investing Activities



(188,397
)

(584,025
)

(940,377
)Financing ActivitiesDistributions
paid



(14,700,000
)

(11,250,000
)

(9,450,000
)Net Cash Used in                  Financing
Activities



(14,700,000
)

(11,250,000
)

(9,450,000
)Net (Decrease) Increase in
Cash                  and Cash Equivalents



(13,863
)

(67,620
)

193,169Cash and Cash
Equivalents                  at Beginning of Year



788,779


856,399


663,230Cash and Cash
Equivalents                  at End of Year


$
774,916

$
788,779

$
856,399Reconciliation of Net
Income to Net      Cash Provided by Operating ActivitiesNet
income


$
15,720,620

$
12,242,010

$
9,967,544Adjustments
to reconcile net income to net cash provided by operating
activities:Depreciation and
amortization



241,514


244,226


246,630Net
(increase) decrease in
assets:Accrued interest



(49,944
)

8,815


58,425Royalties receivable



(1,046,793
)

(591,521
)

392,460Prepaid
expenses



86,637


(129,225
)

(103,895
)Surface lands



(104,400
)

(10,300
)

Net increase in
liabilities:Accrued liabilities



26,900


2,400


22,382Net Cash Provided by                           Operating
Activities


$
14,874,534

$
11,766,405

$
10,583,546


See accompanying notes.

12

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#### GREAT NORTHERN IRON ORE PROPERTIES NOTES TO FINANCIAL
STATEMENTS December 31, 2005

NOTE A  Business and Termination of the Trust and Legal Proceedings

Great Northern Iron Ore Properties (Trust)
is presently involved solely with the leasing and maintenance of mineral and nonmineral lands owned by the Trust on the Mesabi
Iron Range of Minnesota. Royalty income is derived from taconite production and minimums. Royalty income (which is not in direct
ratio to tonnage shipped) from two significant operating lessees was as follows: 2005  $11,930,000 and $6,068,000; 2004
 $8,942,000 and $5,197,000; and 2003  $9,048,000 and $2,714,000.

The terms of the Great Northern Iron Ore Properties
Trust Agreement, created December 7, 1906, state that the Trust shall continue for twenty years after the death of the last
surviving of eighteen persons named in the Trust Agreement. The last survivor of these eighteen named in the Trust Agreement died
April 6, 1995. Accordingly, the Trust terminates twenty years from April 6, 1995.

At the end of the Trust, that being April 6, 2015,
the certificates of beneficial interest (shares) in the Trust will cease to trade on the New York Stock Exchange and thereafter
will represent only the right to receive certain distributions payable to the certificate holders of record at the time of the
termination of the Trust. Upon termination, the Trust is obligated to distribute ratably to these certificate holders the net
monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations of the Trust), plus the
balance in the Principal Charges account (see Note D). All other Trust property (most notably the Trusts mineral properties)
must be conveyed and transferred to the reversioner under the terms of the Trust Agreement.

In proceedings commenced in 1972, the Minnesota Supreme
Court determined that while by the terms of the Trust, the Trustees are given discretionary powers to convert Trust assets to cash
and to distribute the proceeds to certificate holders, they are limited in their exercise of those powers by the legal duty
imposed by well-established law of trusts to serve the interests of both term beneficiaries and the reversionary beneficiary with
impartiality. Thus, the Trustees have no duty to exercise the powers of sale and distribution unless required to do so to serve
both term and reversionary interests; and, if the need arises, the Trustees may petition the District Court of Ramsey County,
Minnesota, for further instructions defining what is required in a particular case to balance the interests of certificate holders
and reversioner. Also, the Court, in effect, held that the Trust is a conventional trust, rather than a business trust, and must
operate within the framework of well-established trust law.

13

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NOTE A  Business and Termination of the Trust and Legal Proceedings (continued)

By a letter dated March 9, 2005, certificate
holders of record as of December 31, 2004, and the reversioner were notified of a Hearing on June 1, 2005, in Ramsey
County Courthouse, Saint Paul, Minnesota, for the purpose of settling and allowing the Trust accounts for the year 2004. By Court
Order signed and dated June 1, 2005, the 2004 accounts were settled and allowed in all respects. By previous Orders, the
Court settled and allowed the accounts of the Trustees for preceding years of the Trust.

By a letter dated September 1, 2005, certificate
holders of record as of June 30, 2005, and the reversioner were notified of a Hearing on October 19, 2005, in Ramsey
County Courthouse, Saint Paul, Minnesota, for the purpose of requesting increases in Trustee compensation. By Court Order signed
and dated October 20, 2005, the Court granted the requested fee increase of $10,000 per annum for each Trustee (including the
President), effective July 1, 2005, and, further, granted the requested potential bonus increase of $10,000 per annum for the
President of the Trustees, effective for the year 2005.

As previously reported, Section 646 of the Tax Reform
Act of 1986, as amended, provided a special elective provision under which the Trust was allowed to convert from taxation as a
corporation to that of a grantor trust. Pursuant to an Order of the Ramsey County District Court, the Trustees filed the Section
646 election with the Internal Revenue Service on December 30, 1988. On January 1, 1989, the Trust became exempt from
federal and Minnesota corporate income taxes. For years 1989 and thereafter, certificate holders are taxed on their allocable
share of the Trusts income whether or not the income is distributed. For certificate holder tax purposes, the Trusts
income is determined on an annual basis, one-fourth then being allocated to each quarterly record date.

The Trustees provided annual income tax information in
January 2006 to certificate holders of record with holdings on any of the four quarterly record dates during 2005. This
information included a:

| | Substitute Form 1099-MISC  This form reported
ones 2005 allocable share of income from the Trust, distributions declared and any taxes withheld. (Foreign certificate
holders received a Form 1042S.)
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Trust Supplemental Statement  This statement reported
the number of units (shares) held on any of the four quarterly record dates in 2005.
| | -------------------------------------------------------------------------------------------------------------------------------------------

| | Tax Return Guide  This guide instructed the
certificate holders as to the preparation of their income tax returns with respect to income allocated from the Trust and various
deductions allowable.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE B  Significant Accounting Policies

Cash and Cash Equivalents:For purposes of
the statements of cash flows, the Trust considers all highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.

14

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NOTE B  Significant Accounting Policies (continued)

Securities:United States Treasury securities are classified as
held-to-maturity securities and are carried at cost, adjusted for
accrued interest and amortization of premium or discount. Securities
listed as noncurrent assets will mature in 2007. Following is an
analysis of the securities as of December 31:



Current

Noncurrent2005

2004

2005

2004Aggregate fair value


$
6,124,740

$
4,754,254

$
3,316,594

$
4,566,156Gross unrealized holding gains



(6,490
)

(1,882
)




Gross unrealized holding losses



47,423


20,872


32,736


33,258Amortized cost basis



6,165,673


4,773,244


3,349,330


4,599,414Accrued interest



44,072


15,119


42,354


20,120$
6,209,745

$
4,788,363

$
3,391,684

$
4,619,534


Mineral and Surface Lands:Mineral and
surface lands are carried at amounts which represent, principally, either cost at acquisition or values on March 1, 1913. The
value of the merchantable ore deposits was established on March 1, 1913, for federal income tax purposes. No value has been
estimated or recorded for taconite deposits held on March 1, 1913, since they were not then thought to be merchantable. The
cost of surface lands acquired to facilitate mining operations was amortized (noncash expense) in the amounts of $209,220,
$208,200 and $208,200 for the years 2005, 2004 and 2003, respectively (see Note C).

Royalty Income:Royalties from mineral
leases (with cancellation terms varying from six months to one year) are taken into income as earned. Certain leases provide the
mining companies the ability to offset excess royalties due on future production, if any and when mined, against minimum royalties
paid in prior periods. Accumulated minimum royalties amounted to $3,288,083 on December 31, 2005, and $2,496,209 on
December 31, 2004.

Use of Estimates:The preparation of
financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from
those estimates.

Earnings per Share:Earnings per share are
determined by dividing net income for the period by the number of weighted-average shares of beneficial interest outstanding.
Basic and diluted weighted-average shares outstanding were 1,500,000 as of December 31, 2005, 2004 and 2003.

15

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NOTE C  Land Acquisition

A mining agreement dated January 1, 1959, with
United States Steel Corporation provides that one-half of annual earned royalty income, after satisfaction of minimum royalty
payments, shall be applied to reimburse the lessee for a portion of its cost of acquisition of surface lands overlying the leased
mineral deposits, which surface lands are then conveyed to the Trustees (see Note B). There are surface lands yet to be purchased,
the costs of which are yet unknown and will not be known until the actual purchases are made.

NOTE D  Principal Charges Account

Pursuant to the Court Order of November 29, 1982,
the Trustees were directed to create and maintain an account designated as Principal Charges. This account constitutes
a first and prior lien of certificate holders on any property transferable to the reversioner and reflects an allocation of
beneficiaries equity between the certificate holders and the reversioner. This account is neither an asset nor a liability
of the Trust. Rather, this account maintains and represents a balance which will be payable to the certificate holders of record
from the reversioner at the end of the Trust. The balance in this account consists of attorneys fees and expenses of counsel
for adverse parties pursuant to the Court Order in connection with litigation commenced in 1972 relating to the Trustees
powers and duties under the Trust Agreement and the costs of homes and surface lands acquired in accordance with provisions of a
lease with United States Steel Corporation, net of an allowance to amortize the cost of the land based on actual shipments of
taconite and net of a credit for disposition of tangible assets. Following is an analysis of this account as of December 31:

|                             |  | 2005 |   | 2004       |  
|---------------------------- |  | ---- | - | ---------- | -
|Attorneys fees and expenses |  |      | $ | 1,024,834  |  
|Cost of surface lands        |  |      |   | 5,817,965  |  
|Cumulative
shipment credits  |  |      |   | (1,460,774 | )
|Asset disposition
credits    |  |      |   | (57,950    | )
|                             |  |      |   |            |  
|Principal Charges
account    |  |      | $ | 5,324,075  |  
|                             |  |      |   |            |  

Upon termination of the Trust, the Trustees shall either
sell tangible assets or obtain a loan with tangible assets as security to provide monies for distribution to the certificate
holders in the amount of the Principal Charges account balance.

16

---

NOTE E  Pension Plan

The Trust has a noncontributory defined benefit plan
which covers all employees. The Trustees are not eligible for pension benefits under the plan based on services as Trustees. A
summary of the components of net periodic pension cost for 2005, 2004 and 2003 is as follows:



|                          |  | 2005 |   | 2004     |   | 2003 |         
|------------------------- |  | ---- | - | -------- | - | ---- | --------
|Service cost              |  |      | $ | 214,125  |   | $    | 117,426 
|Interest cost             |  |      |   | 282,728  |   |      | 210,396 
|Expected
return on assets |  |      |   | (300,686 | ) |      | (303,219
|Net
amortization          |  |      |   | 147,526  |   |      | 5,764   
|                          |  |      |   |          |   |      |         
|Net pension cost          |  |      | $ | 343,693  |   | $    | 30,367  
|                          |  |      |   |          |   |      |         

Weighted-average assumptions used in the measurement of
the benefit obligation as of December 31 and the net periodic pension cost for the years ended December 31 were:

|                                                                |  |  | 2005 |      |   | 2004 |     
|--------------------------------------------------------------- |  |  | ---- | ---- | - | ---- | ----
|Discount rate for benefit obligation, pre-termination of Trust  |  |  |      | 5.75 | % |      | 5.75
|Discount rate for benefit obligation, post-termination of Trust |  |  |      | 4.75 | % |      | 5.75
|Discount rate for net periodic pension cost                     |  |  |      | 5.75 | % |      | 6.25
|Rate of compensation increase                                   |  |  |      | 3.50 | % |      | 3.50
|Expected long-term return on plan assets                        |  |  |      | 7.50 | % |      | 7.50

The determination of the discount rate is based on a
high quality bond yield curve that approximates the expected cash flow payouts of the plan, coupled with a comparison to the
Moodys Aa corporate bond rate. The determination of the rate of compensation increase is based on historical salary
adjustment averages and the Trustees expectations of future increases. The determination of the expected long-term return on
plan assets is based on historical returns of the various asset categories included in the plans portfolio and a
consideration of the Trusts termination date.

The following table sets forth the change in projected
benefit obligation:

|                                            |  | 2005 |   | 2004      |  
|------------------------------------------- |  | ---- | - | --------- | -
|Projected benefit obligation at January 1   |  |      | $ | 3,946,433 |  
|Service cost                                |  |      |   | 214,125   |  
|Interest cost                               |  |      |   | 282,728   |  
|Actuarial loss                              |  |      |   | 1,159,961 |  
|Plan amendment                              |  |      |   | 157,219   |  
|Benefit payments                            |  |      |   | (256,599  | )
|                                            |  |      |   |           |  
|Projected benefit
obligation at December 31 |  |      | $ | 5,503,867 |  
|                                            |  |      |   |           |  

17

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NOTE E  Pension Plan (continued)

The following table sets forth the change in the fair value of
plan assets:

|                                         |  | 2005 |   | 2004      |  
|---------------------------------------- |  | ---- | - | --------- | -
|Fair value of plan assets at January l   |  |      | $ | 4,001,377 |  
|Contributions                            |  |      |   | 257,706   |  
|Actual return on plan assets             |  |      |   | 153,233   |  
|Benefit payments                         |  |      |   | (256,599  | )
|                                         |  |      |   |           |  
|Fair value of
plan assets at December 31 |  |      | $ | 4,155,717 |  
|                                         |  |      |   |           |  

The future benefit payments from the plan for the years 2006
through 2010, inclusive, are estimated to be
as follows:

2006

$
227,7442007


205,5202008


185,8052009


168,3252010


152,877


The future benefit payments from the plan for the period 2011
through 2015, inclusive, are estimated to be $1,119,957 in aggregate.
The 2006 contribution to the plan is estimated to approximate $260,000;
however, said amount will be recalculated upon the completion of the
plans annual actuarial valuation performed as of the plans fiscal
year-end, March 31.

The following table sets forth the plans funded status and amounts
recognized in the balance sheets at December 31:

|                                                        |  | 2005 |   | 2004       |  
|------------------------------------------------------- |  | ---- | - | ---------- | -
|Accumulated benefit
obligation                          |  |      | $ | 4,031,851  |  
|Effect of future
compensation increases                 |  |      |   | 1,472,016  |  
|                                                        |  |      |   |            |  
|Projected benefit
obligation                            |  |      |   | 5,503,867  |  
|Fair value of plan assets                               |  |      |   | 4,155,717  |  
|                                                        |  |      |   |            |  
|Plan assets (less than) in excess of
benefit obligation |  |      |   | (1,348,150 | )
|Unrecognized net loss                                   |  |      |   | 2,046,271  |  
|Unrecognized prior service cost                         |  |      |   | 157,219    |  
|                                                        |  |      |   |            |  
|Prepaid pension expense                                 |  |      | $ | 855,340    |  
|                                                        |  |      |   |            |  

18

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NOTE E  Pension Plan (continued)

The following table sets forth the plans weighted-average
asset allocations by category as of December 31:

|                                           |  |  | 2005 |     |   | 2004 |    
|------------------------------------------ |  |  | ---- | --- | - | ---- | ---
|Equity securities                          |  |  |      | 52  | % |      | 55 
|Debt securities                            |  |  |      | 43  | % |      | 39 
|Other (cash, money market,
accrued income) |  |  |      | 5   | % |      | 6  
|                                           |  |  |      |     |   |      |    
|                                           |  |  |      | 100 | % |      | 100
|                                           |  |  |      |     |   |      |    

The investment policy of the plan is to have up to approximately
55% invested in an equity index fund and the remaining monies invested
in fixed income (debt) securities and cash.

NOTE F  Income Taxes

The Trustees filed an election under Section 646 of the Tax Reform Act
of 1986, as amended. As discussed in Note A, beginning in 1989 the
Trust is no longer subject to federal or Minnesota corporate income
taxes, provided the requirements of Section 646 are met. The principal
requirements are:

| |  | The Trust must be exclusively engaged in the leasing of mineral
properties and activities incidental thereto.     
| | - | ------------------------------------------------------------------------------------------------------------------
| |  | The Trust must not acquire any additional property other than
permissible acquisitions as provided by Section 646.

If these requirements are violated, the Trust will be treated as a
corporation for the taxable year in which the violation occurs and for
all subsequent taxable years. Since the election of Section 646, the
Trust has remained in compliance with these requirements.

NOTE G  Lease Commitments

The Trust leases office facilities in Saint Paul, Minnesota. These
leases include various renewal options and exclude any contingent
rental provisions. Rental expense for these operating leases amounted
to $61,823 in each of the years 2005, 2004 and 2003.

19

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#### REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM, ON AUDIT OF FINANCIAL STATEMENTS

The TrusteesGreat Northern Iron Ore Properties

We have audited the accompanying balance sheets of Great Northern
Iron Ore Properties as of December 31, 2005 and 2004, and the
related statements of income, beneficiaries equity and cash flows for
each of the three years in the period ended December 31,
2005. These financial statements are the responsibility of the Trusts
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Great
Northern Iron Ore Properties at December 31, 2005 and 2004,
and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2005, in
conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the effectiveness
of Great Northern Iron Ore Properties internal control over financial
reporting as of December 31, 2005, based on criteria
established in Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated
January 27,
2006, expressed an unqualified opinion thereon.

| | /s/ Ernst & Young LLP
| | ---------------------

Minneapolis, Minnesota January
27, 2006

20

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#### REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM, ON MANAGEMENTS REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING

The TrusteesGreat Northern Iron Ore Properties

We have audited managements assessment, included in the
accompanying Managements Report On Internal Control Over Financial
Reporting, that Great Northern Iron Ore Properties maintained effective
internal control over financial reporting as of December 31,
2005, based on criteria established in Internal Control
 Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the COSO criteria). Great Northern Iron Ore
Properties management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting. Our
responsibility is to express an opinion on managements assessment and
an opinion on the effectiveness of Great Northern Iron Ore Properties
internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial
reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial
reporting, evaluating managements assessment, testing and evaluating
the design and operating effectiveness of internal control and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis
for our opinion.

A companys internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles. A companys internal control over financial reporting
includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles and that
receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the
company and (3) provide reasonable assurance regarding prevention or
timely detection of

21

---

unauthorized acquisition, use or disposition of the companys assets
that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in
conditions or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, managements assessment that Great Northern Iron Ore
Properties maintained effective internal control over financial
reporting as of December 31, 2005, is fairly stated, in all
material respects, based on the COSO criteria. Also, in our opinion,
Great Northern Iron Ore Properties maintained, in all material
respects, effective internal control over financial reporting as of
December 31, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the 2005 financial
statements of Great Northern Iron Ore Properties, and our report dated
January 27,
2006, expressed an unqualified opinion thereon.

| | /s/ Ernst & Young LLP
| | ---------------------

Minneapolis, Minnesota January
27, 2006

22

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#### GREAT NORTHERN IRON ORE PROPERTIES SUMMARY OF SHIPMENTS

|    |    |      |                                                                                           |                    |  | Full Tons Shipped |     
|--- | -- | ---- | ----------------------------------------------------------------------------------------- | ------------------ |  | ----------------- | ----
|No. |    | Mine |                                                                                           | Ownership
Interest |  | 2005              |     
|    | 1. |      | Mahoning                                                                                  |                    |  |                   | 100%
|    | 2. |      | Ontario 100%                                                                              |                    |  |                   | 100%
|    | 3. |      | Ontario 50%                                                                               |                    |  |                   | 50% 
|    | 4. |      | L & W/Leetonia                                                                            |                    |  |                   | 50% 
|    | 5. |      | Section 18                                                                                |                    |  |                   | 100%
|    | 6. |      | Mississippi #3                                                                            |                    |  |                   | 100%
|    | 7. |      | Minntac                                                                                   |                    |  |                   | 100%
|    |    |      |                                                                                           |                    |  |                   |     
|    |    |      |                                                                                           |                    |  |                   |     
|    |    |      | Shipments from inactive mines and
those exhausted, surrendered or sold prior to this
year |                    |  |                   |     
|    |    |      |                                                                                           |                    |  |                   |     
|    |    |      | Total                                                                                     |                    |  |                   |     
|    |    |      |                                                                                           |                    |  |                   |     

No.

Operating Interest1-4

Hibbing Taconite Company5-6

United States Steel Corporation  Keewatin Taconite
Company7

United States Steel Corporation 
Minntac


23

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#### NOTES



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|GREAT NORTHERN IRON ORE PROPERTIES W-1290 FIRST NATIONAL BANK BUILDING 332 MINNESOTA STREET SAINT PAUL, MINNESOTA 55101-1361 |  | FIRST CLASS U.S. POSTAGE PAIDPERMIT #43 MINNEAPOLIS, MN | 
|---------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------- | 

FIRST CLASS MAIL

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