**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**WASHINGTON,D.C. 20549

**FORM10-Q**

| **x**                              | **QUARTERLY REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**                                                                                                                                                                                                                                                                                  |
|------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                                                                                                                                                                                                                                                                          |
|                               | **For the quarterly period ended July 31, 2007**                                                                                                                                                                                                                                                                                                                              |
|                               |                                                                                                                                                                                                                                                                                                                                                                          |
|                               | **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)

| **New York**                                               |   | **13-6022277**                        |
|------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of                           |   | (I.R.S. Employer  Identification No.) |
| incorporation or  organization)                            |   |                                  |
|                                                       |   | ** **                            |
| **c/o  Deutsche Bank Trust Company Americas**              |   |                                  |
| **Trust  & Securities Services – GDS**            |   |                                  |
| **60 Wall  Street**                                        |   |                                  |
| **27th  Floor**                                            |   |                                  |
| **New  York, New York**                                    |   | **10005**                             |
| (Address of  principal executive offices)                  |   | (Zip code)                            |
| ** **                                                 |   | ** **                            |
| **(615) 835-2749**                                         |
| (Registrant’s  telephone number, including area code) |

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.              Yes  x   No  o

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act:

Large accelerated filer  o                   Accelerated filer  x                            Non-acceleratedfiler  o

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).                          Yes  o   No  x

As of September 6, 2007, there were 13,120,010 Units of BeneficialInterest in Mesabi Trust outstanding.

 

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**PART I - FINANCIAL INFORMATION**

**Item 1.****                    ****Financial Statements.  (Note 1)**

**Mesabi Trust**

**Condensed Statements of Income**

**Three and Six Months Ended July 31, 2007 and 2006**
| ** ** | ** **                               | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|------------|------------------------------------------|----------------------------------|------------|--------------------------------|------------|
| ** ** | ** **                               | **July 31,**                | ** ** | **July 31,**              | ** ** |
| ** ** | ** **                               | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| ** ** | ** **                               | **(unaudited)**                  | ** ** | **(unaudited)**                | ** ** | **(unaudited)** | ** ** | **(unaudited)** | ** ** |
| **A.**     | **Condensed Statements of Income**       | ** **                       | ** ** | ** **                     | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
|       |                                     |                             |       |                           |       |   |   |   |   |   |
|       | Revenues                                 |                             |       |                           |       |   |   |   |   |   |
|       | Royalty income                           |                             | $          | 4,427,036                      |       | $ | 6,310,152 |   | $ | 6,206,177 |   | $ | 7,947,151 |   |
|       | Interest income                          |                             | 8,448      |                           | 16,962     |   | 14,362 |   | 24,934 |   |
|       |                                     |                             | 4,435,484  |                           | 6,327,114  |   | 6,220,539 |   | 7,972,085 |   |
|       |                                     |                             |       |                           |       |   |   |   |   |   |
|       | Expenses                                 |                             | 261,345    |                           | 137,759    |   | 346,783 |   | 308,876 |   |
|       |                                     |                             |       |                           |       |   |   |   |   |   |
|       | Net income                               |                             | $          | 4,174,139                      |       | $ | 6,189,355 |   | $ | 5,873,756 |   | $ | 7,663,209 |   |
|       |                                     |                             |       |                           |       |   |   |   |   |   |
|       | Number of units  outstanding             |                             | 13,120,010 |                           | 13,120,010 |   | 13,120,010 |   | 13,120,010 |   |
|       |                                     |                             |       |                           |       |   |   |   |   |   |
|       | Net income per unit  (Note 2)            |                             | $          | 0.3182                         |       | $ | 0.4717 |   | $ | 0.4477 |   | $ | 0.5841 |   |
|       |                                     |                             |       |                           |       |   |   |   |   |   |
|       | Distributions declared per unit (Note 3) |                             | $          | 0.3100                         |       | $ | 0.4000 |   | $ | 0.3550 |   | $ | 0.7000 |   |

 

See Notes to Condensed Financial Statements.

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**Mesabi Trust**

**Condensed Balance Sheets**

**July 31,2007 and January 31, 2007**
| ** ** | ** **                                                                 | **July 31, 2007** | ** ** | **January 31, 2007** | ** ** |
|------------|----------------------------------------------------------------------------|-----------------------------|------------|--------------------------------|------------|
| ** ** | ** **                                                                 | **(unaudited)**             | ** ** | ** **                     | ** ** |
| **B.**     | **Condensed Balance Sheets**                                               | ** **                  | ** ** | ** **                     | ** ** | ** ** |
|       |                                                                       |                        |       |                           |       |   |
| ** ** | **Assets**                                                                 | ** **                  | ** ** | ** **                     | ** ** | ** ** |
|       |                                                                       |                        |       |                           |       |   |
|       | Cash                                                                       |                        | $          | 4,284,481                      |       | $ | 4,258,201 |   |
|       |                                                                       |                        |       |                           |       |   |
|       | U.S. Government  securities, at amortized cost (which approximates market) |                        | 434,962    |                           | 727,883    |   |
|       |                                                                       |                        |       |                           |       |   |
|       | Accrued income  receivable                                                 |                        | 1,756,107  |                           | 409,764    |   |
|       | Prepaid expenses                                                           |                        | 54,354     |                           | 18,701     |   |
|       |                                                                       |                        | 6,529,904  |                           | 5,414,549  |   |
|       |                                                                       |                        |       |                           |       |   |
|       | 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          |   |
|       |                                                                       |                        |       |                           |       |   |
|       |                                                                       |                        | $          | 6,529,907                      |       | $ | 5,414,552 |   |
|       |                                                                       |                        |       |                           |       |   |
| ** ** | **Liabilities, Unallocated  Reserve and Trust Corpus**                     | ** **                  | ** ** | ** **                     | ** ** | ** ** |
|       |                                                                       |                        |       |                           |       |   |
|       | Liabilities                                                                |                        |       |                           |       |   |
|       | Distribution  payable                                                      |                        | $          | 4,067,203                      |       | $ | 4,132,803 |   |
|       | Accrued expenses                                                           |                        | 106,873    |                           | 142,072    |   |
|       |                                                                       |                        | 4,174,076  |                           | 4,274,875  |   |
|       |                                                                       |                        |       |                           |       |   |
|       | Unallocated  Reserve (Note 4)                                              |                        | 2,355,828  |                           | 1,139,674  |   |
|       | Trust Corpus                                                               |                        | 3          |                           | 3          |   |
|       |                                                                       |                        |       |                           |       |
|       |                                                                       | $                           | 6,529,907  |                           | $          | 5,414,552 |   |

 

See Notes to CondensedFinancial Statements.

3

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**Mesabi Trust**

**Condensed Statements of Cash Flows**

**Six MonthsEnded July 31, 2007 and 2006**
| ** ** | ** **                                                                     | **Six Months Ended** | ** ** |
|------------|--------------------------------------------------------------------------------|--------------------------------|------------|
| ** ** | ** **                                                                     | **July 31,**              | ** ** |
| ** ** | ** **                                                                     | **2007**                       | ** ** | **2006** | ** ** |
| ** ** | ** **                                                                     | **(unaudited)**                | ** ** | **(unaudited)** | ** ** |
| **C.**     | **Condensed  Statements of Cash Flows**                                        | ** **                     | ** ** | ** ** | ** ** | ** ** |
|       |                                                                           |                           |       |   |   |   |
|       | Cash flows from  operating activities                                          |                           |       |   |   |   |
|       | Royalties received                                                             |                           | $          | 4,853,799 |   | $ | 9,591,781 |   |
|       | Interest received                                                              |                           | 20,398     |   | 26,915 |   |
|       | Expenses paid                                                                  |                           | (417,636   | ) | (475,264 | ) |
|       |                                                                           |                           |       |   |   |   |
|       | Net cash provided by operating activities                                      |                           | 4,456,561  |   | 9,143,432 |   |
|       |                                                                           |                           |       |   |   |   |
|       | Cash flows from  investing activities                                          |                           |       |   |   |   |
|       | Maturities of U.S. Government Securities                                       |                           | 5,231,254  |   | 10,810,385 |   |
|       | Purchases of U.S. Government Securities                                        |                           | (4,938,331 | ) | (10,830,579 | ) |
|       |                                                                           |                           |       |   |   |   |
|       | Net cash provided by (used for) investing activities                           |                           | 292,923    |   | (20,194 | ) |
|       |                                                                           |                           |       |   |   |   |
|       | Cash flow from  financing activities                                           |                           |       |   |   |   |
|       | Distributions to Unitholders                                                   |                           | (4,723,204 | ) | (10,102,408 | ) |
|       |                                                                           |                           |       |   |   |   |
|       | Net change in  cash                                                            |                           | 26,280     |   | (979,170 | ) |
|       |                                                                           |                           |       |   |   |   |
|       | Cash, beginning  of year                                                       |                           | 4,258,201  |   | 6,377,990 |   |
|       |                                                                           |                           |       |   |   |   |
|       | Cash, end of  quarter                                                          |                           | $          | 4,284,481 |   | $ | 5,398,820 |   |
|       |                                                                           |                           |       |   |   |   |
| ** ** | **Reconciliation  of net income to net cash provided by operating activities** | ** **                     | ** ** | ** ** | ** ** | ** ** |
|       |                                                                           |                           |       |   |   |   |
|       | Net income                                                                     |                           | $          | 5,873,756 |   | $ | 7,663,209 |   |
|       | (Increase) decrease  in accrued income receivable                              |                           | (1,346,343 | ) | 1,646,612 |   |
|       | Increase in  prepaid expense                                                   |                           | (35,653    | ) | (36,897 | ) |
|       | Decrease in  accrued expenses                                                  |                           | (35,199    | ) | (129,492 | ) |
|       |                                                                           |                           |       |   |   |   |
|       | Net cash  provided by operating activities                                     |                           | $          | 4,456,561 |   | $ | 9,143,432 |   |

 

See Notes to CondensedFinancial Statements.

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**MesabiTrust**

**Notes to Condensed Financial Statements**

Note 1.                            The financial statements included herein havebeen prepared without audit (except for the balance sheet at January 31, 2007)in accordance with the instructions to Form 10-Q pursuant to the rules andregulations of the Securities and Exchange Commission.  Certain information and footnote disclosuresnormally included in financial statements prepared in accordance with generallyaccepted accounting principles have been condensed or omitted pursuant to suchrules and regulations.  In the opinion ofthe Trustees, all adjustments, consisting only of normal recurring adjustments,necessary for a fair statement of (a) the results of operations for the threemonths and six months ended July 31, 2007 and 2006, (b) the financial positionat July 31, 2007 and (c) the cash flows for the six months ended July 31, 2007and 2006, have been made.

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

Note 3.                            Distributions are required to be declaredeach year in April, July, October and January after receiving notification fromNorthshore Mining Company as to the amount of royalty income that is expectedto be received by the Trust.  The Trustreceives notification of the expected royalty amounts as of the close of eachcalendar quarter, while the financial statements included herein are preparedon an accrual basis and present the Trust’s results of operations for the threeand six month periods ended July 31, 2007 and 2006.  The Trustees determine the amount ofdistributions to be made to Unitholders after considering any known oranticipated expenses, liabilities and obligations of the Trust.  Accordingly, distributions declared may notreflect the Trust’s current results of operations.

Note 4.                            The Trustees have determined that theunallocated cash and U.S. Government securities portion of the UnallocatedReserve should be maintained at a prudent level, usually within the range of$500,000 to $1,000,000, to meet present or future liabilities of theTrust.  Accordingly, although the actualamount of the Unallocated Reserve will fluctuate from time to time, and mayincrease or decrease from its current level, it is currently intended thatfuture distributions will be highly dependent upon royalty income as it isreceived quarterly and the level of Trust expenses that the Trustees anticipateoccurring in subsequent quarters.  AtJuly 31, 2007, the Unallocated Reserve was represented by $599,721 in unallocatedcash and U.S. Government securities, and $1,756,107 of accrued revenueprimarily representing royalties not yet received by the Trust but anticipatedto be received from Northshore Mining Company in October 2007 based uponreported lessee shipping activity during the month of July 2007.

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

**Forward-Looking Statements**

Certain information included in this Quarterly Report on Form 10-Qcontains “forward-looking statements” within the meaning of Section 21E of theSecurities Exchange Act of 1934 and Section 27A of the Securities Act of1933.  All such forward-lookingstatements, including those statements estimating iron ore pellet production orshipments, are based on information from the lessee/operator (and its parentcorporation) of the mine located on the lands owned and held in trust for thebenefit of the holders of units of beneficial interest of Mesabi Trust.  These statements may be identified by the useof forward-looking words, such as “may,” “will,” “could,” “project,” “predict,”“intend,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,”“plan,” “should,” “assume,” “forecast” and other similar words.  Such forward-looking statements areinherently subject to known and unknown risks and uncertainties.  Actual results and future developments coulddiffer materially from the results or developments expressed in or implied bythese forward-looking statements.  Theserisks and uncertainties include volatility of iron ore and steel prices,product supply and demand, competition, regulation or government action,litigation and uncertainties about estimates of reserves.  For a discussion of the factors, includingbut not limited to, those that could materially and adversely affect MesabiTrust’s actual results and performance, see “Risk Factors” in Part I – Item 1Aof Mesabi Trust’s Annual Report on Form 10-K for the year-ended January 31,2007.  Mesabi Trust undertakes noobligation, other than that imposed by law, to make any revisions to theforward-looking statements contained in this filing or to update them toreflect circumstances occurring after the date of this filing.

**Background**

Mesabi Trust (“Mesabi Trust”or the “Trust”), formed pursuant to an Agreement of Trust dated July 18, 1961(the “Agreement of Trust”), is a trust organized under the laws of the State ofNew York.  Mesabi Trust holds all of theinterests formerly owned by Mesabi Iron Company (“MIC”), including all right,title and interest in the Amendment of Assignment, Assumption and FurtherAssignment of Peters Lease (the “Amended Assignment of Peters Lease”), theAmendment of Assignment, Assumption and Further Assignment of Cloquet Lease(the “Amended Assignment of Cloquet Lease” and together with the AmendedAssignment of Peters Lease, the “Amended Assignment Agreements”), thebeneficial interest in the Mesabi Land Trust (as such term is defined below)and all other assets and property identified in the Agreement of Trust. The AmendedAssignment of Peters Lease relates to an Indenture made as of April 30, 1915among East Mesaba Iron Company (“East Mesaba”), Dunka River Iron Company (“DunkaRiver”) and Claude W. Peters (the “Peters Lease”) and the Amended Assignment ofCloquet Lease relates to an Indenture made May 1, 1916 between Cloquet LumberCompany and Claude W. Peters (the “Cloquet Lease”).

The Agreement of Trustspecifically prohibits the Trustees from entering into or engaging in anybusiness.  This prohibition applies evento business activities the Trustees may deem necessary or proper for thepreservation and protection of the Trust Estate.  Accordingly, the Trustees’ activities inconnection with the administration of Trust assets are limited to collectingincome, paying expenses and liabilities, distributing net income to the holdersof Certificates of Beneficial Interest in Mesabi Trust (“Unitholders”) afterthe payment of, or provision for, such expenses and liabilities, and protectingand conserving the assets held.

The Trustees do not intendto expand their responsibilities beyond those permitted or required by theAgreement of Trust, the Amendment to the Agreement of Trust dated October 25,1982 (the “Amendment”), and those required under applicable law.  Mesabi Trust has no employees, but it engagesindependent consultants to assist the Trustees in, among other things,monitoring the volume and sales prices of iron ore products shipped from SilverBay, Minnesota, based on information supplied to the 

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Trusteesby Northshore Mining Company (“Northshore”), the lessee/operator of the MesabiTrust lands, and its parent company Cleveland-Cliffs Inc (“CCI”).  References to Northshore in this quarterlyreport, unless the context requires otherwise, are applicable to CCI as well.

Leasehold royalty incomeconstitutes the principal source of the Trust’s revenue.  Royalty rates are determined in accordancewith the terms of Mesabi Trust’s leases and assignments of leases.

Three types of royalties, aswell as royalty bonuses, comprise the Trust’s leasehold royalty income:

·                  Base overriding royalties.  Historically base overridingroyalties have constituted the majority of Mesabi Trust’s royalty income.  Base overriding royalties are determined byboth the volume and selling price of iron ore products shipped.  Northshore is obligated to pay Mesabi Trustbase overriding royalties in varying amounts, based on the volume of iron oreproducts shipped.  Base overridingroyalties are calculated as a percentage of the gross proceeds of iron oreproducts 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 firstone million tons of iron ore products so shipped annually to 6% of the grossproceeds for all iron ore products in excess of 4 million tons so shippedannually.  Base overriding royalties aresubject to price adjustments under the CCI Pellet Agreements and, as describedelsewhere in this report, such adjustments may be positive or negative.  See the section entitled “Royalty Comparisons”below for more information.

·                  Royalty bonuses.  The Trust earns royalty bonuses when iron oreproducts shipped from Silver Bay are sold at prices above a threshold price perton.  The royalty bonus is based on apercentage of the gross proceeds of product shipped from Silver Bay and sold atprices above a threshold price.  Thethreshold price is adjusted (but not below $30.00 per ton) on an annual basisfor inflation and deflation (the “Adjusted Threshold Price”).  The Adjusted Threshold Price was $44.60 perton for calendar year 2006 and is $45.98 per ton for calendar year 2007.  The royalty bonus percentage ranges from 1/2of 1% of the gross proceeds (on all tonnage shipped for sale at prices betweenthe Adjusted Threshold Price and $2.00 above the Adjusted Threshold Price) to3% of the gross proceeds (on all tonnage shipped for sale at prices $10.00 ormore above the Adjusted Threshold Price). Royalty bonuses are subject to price adjustments under the CCI PelletAgreements and, as described elsewhere in this report, such adjustments may bepositive or negative.  See the sectionentitled “Royalty Comparisons” below for more information.

·                  Fee royalties.  Historically, fee royalties have constituteda smaller component of the Trust’s royalty income.  Fee royalties are payable to the Mesabi LandTrust, a Minnesota land trust, which holds a 20% interest as fee owner in thePeters Lease.  Mesabi Trust holds theentire beneficial interest in the Mesabi Land Trust for which US Bank N.A. actsas the corporate trustee.  Fee royaltiesare based on the amount of crude ore mined after the payment of expenses.  Currently, the fee royalty on crude ore isbased on an agreed price per ton, subject to certain indexing.  Crude ore is the source of iron oxides usedto make iron ore pellets and other products.

·                  Minimum advance royalties.  Generally, Northshore’sobligation to pay base overriding royalties and royalty bonuses with respect tothe sale of iron ore products accrues upon the shipment of those products fromSilver Bay.  However, regardless ofwhether any shipment has occurred, Northshore is obligated to pay to MesabiTrust a minimum advance royalty.  Eachyear, the amount of the minimum advance royalty is adjusted (but not below$500,000 per annum) for inflation and deflation.  The minimum advance royalty was $743,420 forcalendar year 2006 and is $766,510 for calendar year 2007.  Until overriding royalties (and royaltybonuses, if any) for a particular year equal or exceed the minimum advanceroyalty for the year, Northshore must make quarterly payments of up to 25% ofthe minimum advance royalty for the year. Because minimum advance royalties are essentially prepayments of baseoverriding royalties and royalty bonuses earned each year, any minimum 

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advance royalties paid in afiscal quarter are recouped by credits against base overriding royalties androyalty bonuses earned in later fiscal quarters during the year.

Northshore is obligated to makequarterly royalty payments in January, April, July and October of eachyear.  In the case of base overridingroyalties and royalty bonuses, these quarterly royalty payments are to be madewhether or not the related proceeds of sale have been received by Northshore bythe time such payments become due.

Under the relevantagreements, Northshore may mine and ship iron ore products from lands otherthan Mesabi Trust lands.  Northshorealone determines whether to mine off Trust and/or such other lands, based onits current mining and engineering plan. The Trustees do not exert any influence over mining operationaldecisions.  To encourage the use of ironore products from Mesabi Trust lands, Mesabi Trust receives royalties on statedpercentages of iron ore shipped from Silver Bay, whether or not the iron oreproducts are from Mesabi Trust lands. Mesabi Trust receives royalties at the greater of (i) the aggregatequantity 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 thatwere from any lands, such portion being 90% of the first four million tonsshipped during such year, 85% of the next two million tons shipped during suchyear, and 25% of all tonnage shipped during such year in excess of six milliontons.

As noted above, theinformation regarding amounts and sales prices of shipped iron ore products isused to compute the royalties payable to Mesabi Trust by Northshore.  Deutsche Bank Trust Company Americas, the CorporateTrustee, also performs certain administrative functions for Mesabi Trust.

**Resultsof Operations**

**Comparison of Iron Ore PelletProduction and Shipments for the Three and Six Months Ended July 31, 2007 andJuly 31, 2006**

As shown in the table below,production of iron ore pellets at Northshore from Mesabi Trust lands during thefiscal quarter ended July 31, 2007 totaled approximately 1.26 million tons, andactual shipments over the same period totaled approximately 1.12 million tons.  By comparison, actual pellet productionduring the same period in 2006 totaled approximately 1.25 million tons, andactual shipments approximated 1.43 million tons.
| Three Months Ended | ** ** | **Pellets Produced from   Trust Lands (tons)** | ** ** | **Shipments from Trust   Lands (tons)** | ** ** |
|------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------|------------|
| July 31, 2007                |       | 1,255,510                                                               |       | 1,119,828                                                   |       |
| July 31, 2006                |       | 1,246,138                                                               |       | 1,427,269                                                   |       |

 

As shown in the table below, during the six months ended July 31, 2007,production of iron ore pellets at Northshore from Mesabi Trust lands totaledapproximately 2.21 million tons, and actual shipments over the same periodtotaled approximately 1.59 million tons. By comparison, actual pellet production during the same period in 2006totaled approximately 2.46 million tons, and actual shipments approximated 1.96million tons.
| Six Months Ended | ** ** | **Pellets Produced from   Trust Lands (tons)** | ** ** | **Shipments from Trust   Lands (tons)** | ** ** |
|----------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------|------------|
| July 31, 2007              |       | 2,209,067                                                               |       | 1,589,298                                                   |       |
| July 31, 2006              |       | 2,464,724                                                               |       | 1,964,328                                                   |       |

8

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**Comparisonof Royalty Income for the Three and Six Months Ended July 31, 2007 and July 31,2006**

Royalties received in July2007 included a royalty bonus payment, reflecting prices of pellets shippedthat exceeded the current Adjusted Threshold Price of $45.98 per ton.  Total royalty income for the three monthsended July 31, 2007 decreased approximately 30%, as compared to the threemonths ended July 31, 2006, due to lower base overriding and bonus royaltiesresulting from a decrease in the volume of shipments, generally lower pelletprices and a higher Adjusted Threshold Price for bonus royalties.  The following table provides a summary ofMesabi Trust’s royalty income for the three months ended July 31, 2007 and July31, 2006, respectively.  
|                                          | ** ** | **Three Months Ended July 31,** | ** ** |
|------------------------------------------|------------|-----------------------------------------------------|------------|
| ** **                               | ** ** | **2007**                                            | ** ** | **2006** | ** ** |
| Base overriding  royalties               |       | $                                                   | 2,479,304  |   | $ | 3,373,097 |   |
| Bonus royalties                          |       | 2,016,291                                           |       | 2,823,672 |   |
| Minimum advance  royalty paid (recouped) |       | (191,628                                            | )          | — |   |
| Fee royalties                            |       | 123,069                                             |       | 113,383 |   |
| **Total royalty income**                 |       | $                                                   | 4,427,036  |   | $ | 6,310,152 |   |

 

Total royalty income for the six months ended July 31, 2007 decreasedapproximately 21%, as compared to the six months ended July 31, 2006.  The lower total royalty income figure is theresult of a decrease in base overriding and bonus royalties due to a decrease inthe volume of shipments, generally lower pellet prices and a higher AdjustedThreshold Price for bonus royalties.  Thefollowing table provides a summary of Mesabi Trust’s royalty income for the sixmonths ended July 31, 2007 and July 31, 2006, respectively.
|                                          | ** ** | **Six Months Ended July 31,** | ** ** |
|------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                               | ** ** | **2007**                                          | ** ** | **2006** | ** ** |
| Base overriding  royalties               |       | $                                                 | 3,004,080  |   | $ | 3,912,795 |   |
| Bonus royalties                          |       | 2,983,348                                         |       | 3,809,214 |   |
| Minimum advance  royalty paid (recouped) |       | —                                            |       | — |   |
| Fee royalties                            |       | 218,749                                           |       | 225,142 |   |
| **Total royalty income**                 |       | $                                                 | 6,206,177  |   | $ | 7,947,151 |   |

 

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**Comparisonof Trust Income for the Three and Six Months Ended July 31, 2007 and July 31,2006**

Netincome for the three months ended July 31, 2007 was $4,174,139 a decrease ofapproximately 33% as compared to net income of $6,189,355 for the three monthsended July 31, 2006.  This decrease wasdue to decreases in the base overriding royalties paid to the Trust, resultingfrom a reduction in the volume of shipments, and lower bonus royalties duringthe quarter due to lower pellet prices and a higher Adjusted ThresholdPrice.  In addition, Trust expensesincreased approximately 90% from the comparable prior period.  The increase in Trust expenses was primarilythe result of an increase of approximately $95,000 in legal and accountingfees, relating to accounting services invoiced in the second fiscal quarter andadditional legal services provided in connection with the settlement of thearbitration proceeding with CCI.  Thefollowing table provides a summary of Mesabi Trust’s results for the threemonths ended July 31, 2007 and July 31, 2006, respectively.
|                       | ** ** | **Three Months Ended July 31,** | ** ** |
|-----------------------|------------|-----------------------------------------------------|------------|
| ** **            | ** ** | **2007**                                            | ** ** | **2006** | ** ** |
| Total royalty  income |       | $                                                   | 4,427,036  |   | $ | 6,310,152 |   |
| Interest income       |       | 8,448                                               |       | 16,962 |   |
| Gross income          |       | 4,435,484                                           |       | 6,327,114 |   |
|                  |       |                                                |       |   |   |
| Expenses              |       | 261,345                                             |       | 137,759 |   |
| Net income            |       | $                                                   | 4,174,139  |   | $ | 6,189,355 |   |

 

Net income for the sixmonths ended July 31, 2007 was $5,873,756, a decrease of approximately 23% ascompared to net income of $7,663,209 for the six months ended July 31,2006.  As was the case for the threemonths ended July 31, 2007, this decrease was due to decreases in the baseoverriding royalties paid to the Trust, resulting from a reduction in thevolume of shipments, and lower bonus royalties due to lower pellet prices and ahigher Adjusted Threshold Price.  Trustexpenses increased 12% from the comparable prior period due to an increase inthe general and administrative expenses, primarily legal and accounting fees,incurred by the Trust.  The followingtable provides a summary of Mesabi Trust’s results for the six months endedJuly 31, 2007 and July 31, 2006, respectively.
|                       | ** ** | **Six Months Ended July 31,** | ** ** |
|-----------------------|------------|---------------------------------------------------|------------|
| ** **            | ** ** | **2007**                                          | ** ** | **2006** | ** ** |
| Total royalty  income |       | $                                                 | 6,206,177  |   | $ | 7,947,151 |   |
| Interest income       |       | 14,362                                            |       | 24,934 |   |
| Gross income          |       | 6,220,539                                         |       | 7,972,085 |   |
|                  |       |                                              |       |   |   |
| Expenses              |       | 346,783                                           |       | 308,876 |   |
| Net income            |       | $                                                 | 5,873,756  |   | $ | 7,663,209 |   |

 

**Unallocated Reserve**

The Unallocated Reserve asof July 31, 2007 was $2,355,828, a decrease of 32% as compared to the $3,464,226in Unallocated Reserve as of July 31, 2006. The decrease in the Unallocated Reserve is the result of a decrease inthe royalty revenue accrued on the Trust’s balance sheet at the end of thefiscal quarter ended July 31, 2007, but not yet paid to the Trust, and areduction in the unallocated cash and U.S. Government securities.  At July 31, 2007, $1,756,107, orapproximately 75% of the Unallocated Reserve was accrued revenue, primarilyrepresenting royalties not yet received by the Trust but anticipated to bereceived from Northshore in October 2007. Comparatively, at July 31, 2006, $2,631,154, or approximately 76% of theUnallocated Reserve was accrued revenue. The decrease in accrued revenue, which is based upon reported lesseeshipping activity for the month of July 2007, is reflected as accrued incomereceivable on the balance sheet at July 31, 2007.  The Trustees anticipate that the accruedincome 

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receivablebe distributed to Unitholders in October 2007, after providing for expenses andunexpected loss contingencies.

The Trustees have determinedthat a portion of the Unallocated Reserve, usually within the range of $500,000to $1,000,000 or such other amount as the Trustees may deem prudent, should bemaintained for unexpected loss contingencies. As of July 31, 2007, $599,721, or 25% of the Unallocated Reserve wasunallocated cash and U.S. Government securities, whereas, at July 31, 2006,$833,072, or 24% of the Unallocated Reserve was unallocated cash and U.S.Government securities.

The Trust’s UnallocatedReserve for the six months ended July 31, 2007 increased 107% or $1,216,154 ascompared to the Unallocated Reserve for the fiscal year ended January 31,2007.  This increase in the UnallocatedReserve is primarily due to the accrual of royalty income for shipments fromNorthshore during the month of July 2007. At January 31, 2007, $409,764, or approximately 36% of the UnallocatedReserve was accrued income receivable while $729,910 or 64% was unallocatedcash and U.S. Government securities.

The Trustees will continueto monitor the economic circumstances of the Trust to strike a responsiblebalance between distributions to Unitholders and the need to maintain adequatereserves at a prudent level, given the unpredictable nature of the iron oreindustry, the Trust’s dependence on the actions of the lessee/operator, and thefact that the Trust essentially has no other liquid assets.

Althoughthe actual amount of the Unallocated Reserve will fluctuate from time to time,and may increase or decrease from its current level, it is currently intendedthat future distributions will be highly dependent upon royalty income as it isreceived and the level of Trust expenses. The amount of future royalty income available for distribution will besubject to the volume of iron ore product shipments and the dollar level ofsales by Northshore.  Shipping activityis greatly reduced during the winter months and economic conditions,particularly those affecting the steel industry, may adversely affect theamount and timing of such future shipments and sales.

**Recent Developments**

***Production and Shipments***.  CCI reported in its Form 10-Qfiled August 3, 2007 that production for the first six months of 2007 forNorthshore was approximately 2.6 million tons of iron ore pellets, representingan increase in production of approximately 100,000 tons from the first sixmonths of 2006.  CCI’s estimate forcalendar year 2007 production at Northshore is currently set at 5.1 milliontons of iron ore pellets (using iron ore mined both from Mesabi Trust lands andfrom other than Mesabi Trust lands) which, if the estimate is accurate, wouldrepresent no change in production at Northshore from calendar year 2006.  Northshore has not provided Mesabi Trust withan estimate of its calendar year 2007 shipments of iron ore pellets.

During calendar years 2006, 2005, 2004, 2003 and2002, the percentage of shipments of iron ore products from Mesabi Trust landswas approximately 90.9%, 90.1%, 92.0%, 95.5% and 97.5%, respectively, of totalshipments.  Northshore has not advisedthe Trustees as to the percentage of iron ore products from Mesabi Trust landsit anticipates shipping in calendar year 2007. See the description of the uncertainty of market conditions in the ironore and steel industry under “Important Factors Affecting Mesabi Trust” below and the information under the heading “RiskFactors” in Part I – Item 1A of the Trust’s Annual Report on Form 10-K for theyear-ended January 31, 2007.

***Capacity Expansions***.  In its Form 10-Q filed August3, 2007, CCI announced that it reinitiated construction activity to restart anidled pellet furnace at Northshore’s palletizing facility in Silver Bay,Minnesota.  CCI reported that the restartof the idled furnace will increase capacity by approximately 800,000 tonsbeginning in 2008.  CCI has not indicatedwhether the increase in capacity will result in an increase in production orshipments of iron ore pellets.  TheTrustees are unable to make any projections 

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regardingthe extent to which the restart of the idled furnace at Northshore may impactfuture royalties payable to Mesabi Trust.

***Iron Ore Pricing and Contract Adjustments.***  During the course of Mesabi Trust’s fiscal year some portion of theroyalties paid to Mesabi Trust will be based on estimated prices for iron oreproducts sold under certain term contracts among Northshore, CCI and certain oftheir customers (the “CCI Pellet Agreements”). Mesabi Trust is not a party to the CCI Pellet Agreements.  The pricing provisions under the CCI Pellet Agreementsare subject to interim and final pricing adjustments, which can be positive ornegative, and which adjustments are dependent in part on multiple price andinflation index factors that are not known until after the end of a contractyear.  This can result in significant andfrequent variations in royalties received by Mesabi Trust (and in turn theresulting amount available for distribution to Unitholders by the Trust) fromquarter to quarter and on a comparative historical basis, and these variations,which can be positive or negative, cannot be predicted by Mesabi Trust.

***Mesabi Nugget Project.***  In 2002, CCI began participating in theMesabi Nugget Project with Kobe Steel, Ltd. (“Kobe Steel”), Steel Dynamics,Inc., Ferrometrics, Inc. and the State of Minnesota.  The project’s objective was to develop andapply a new iron making technology (Kobe Steel’s Itmk3 process) for convertingiron ore into nearly pure iron nugget form. In its Form 10-K filedMay 25, 2007, CCI stated that it was evaluating opportunities to develop acommercial-scale reduced iron nugget production facility to utilize Kobe Steel’sITmk3 technology.  In a Form 8-K filed August 17, 2007, CCI announced thatit and Kobe Steel intend to construct a commercial-scale reduced iron nuggetproduction facility at CCI’s Empire Mine site in Palmer, Michigan.  CCI also announced that the project issubject to obtaining environmental permits, execution of final agreementsbetween CCI and Kobe Steel, and final approval of each company’s board ofdirectors.  The Trustees are unable tomake any projections regarding the extent to which CCI’s plans to build thecommercial-scale reduced iron plant at CCI’s Empire Mine site might impactshipments from Silver Bay or future royalties payable to Mesabi Trust.

***Northshore Administrative Permit Amendment***.  According to CCI’s Form 10-K filed May 25, 2007, on December 16, 2006, CCI submitted anadministrative permit amendment application to the Minnesota Pollution ControlAgency (“MPCA”) with respect to Northshore’s Title V operating permit.  CCI reported that the proposed amendment byNorthshore requested the deletion of a 30 year old “control city” monitoringrequirement but the MPCA denied Northshore’s application on February 23,2007.  CCI also reported that it appealedthe denial of its application to the Minnesota Court of Appeals and thatsubsequent to the filing of the appeal, the MPCA advised Northshore that theMPCA considered Northshore to be in violation of the control city standard.  CCI previously reported that it was indiscussions with the MPCA with respect to the terms of a compliance schedule inwhich it would agree to take certain actions in settlement of the allegedviolation.  In CCI’s Form 10-Q filedAugust 3, 2007, it reported that on July 18, 2007, the MPCA issued a draft AdministrativeOrder to become final on August 3, 2007 requiring various investigative andmitigation actions, as well as notifying Northshore of its opportunity to filea contested case hearing by August 2, 2007. According to CCI’s Form 10-Q, on August 1, 2007, Northshore filed apetition for a contested case hearing and Northshore has filed a Motion forBriefing and Hearing Schedule Order in the United States District Court ofMinnesota to help clarify the meaning of the “control city” language.  The Trustees cannot determine what effect, ifany, there might be on future royalties payable to the Trust if CCI’s motion orappeal is unsuccessful, it is unable to meet the control city requirement asinterpreted by the MPCA or it is unable to negotiate an acceptable complianceschedule.

In addition, in its Form 10-K filed May 25, 2007, CCI reported that on May 18, 2007, theMinnesota Center for Environmental Advocacy (“MCEA”) filed a motion with the Courtof Appeals to intervene in Northshore’s appeal of the denial of anadministrative amendment to Northshore’s Title V operating permit.  In CCI’s Form 10-Q filed August 3,2007, itreported that MCEA’s motion was granted by the Court of Appeals on June 7, 2007and that CCI has opposed MCEA’s motion to intervene.

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In CCI’s Form 10-Q, it reported that on May 29,2007, CCI received a Notice of Intent to Sue from the Save Lake SuperiorAssociation and the Sierra Club (the “Notice”) and on July 30, 2007, the SaveLake Superior Association and the Sierra Club filed a lawsuit in the U.S.District Court for the District of Minnesota under the Clean Air Act, whichpermits citizens to sue to enjoin violations of an emission standard orlimitation or to seek penalties for violations. CCI reported that the lawsuit references Northshore’s alleged violationof the control city standard.  TheTrustees are unable to predict what impact, if any, a decision adverse to CCIwith respect to the lawsuit described above would have on royalties payable tothe Trust.

***Securities Regulation***.  The Trust is a publicly-tradedtrust listed on the New York Stock Exchange (“NYSE”) and is therefore subjectto extensive regulation under, among others, the Securities Act of 1933, theSecurities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”)and the rules and regulations of the NYSE. Issuers failing to comply with such authorities risk seriousconsequences, including criminal as well as civil and administrative penalties.  In most instances, these laws, rules andregulations do not specifically address their applicability to publicly-tradedtrusts such as Mesabi Trust.  Inparticular, Sarbanes-Oxley mandated the adoption by the Securities and ExchangeCommission (the “SEC”) and NYSE of certain rules and regulations that areimpossible for the Trust to literally satisfy because of its nature as apass-through trust.  Pursuant to NYSErules the Trust is exempt from many of the corporate governance requirementsthat apply to publicly traded corporations.  The Trust does not have, nor does the Agreement of Trust provide for, aboard of directors, an audit committee, a corporate governance committee or acompensation committee.  The Trusteesintend to closely monitor the SEC’s and NYSE’s rulemaking activity and willcomply with such rules and regulations where applicable.

**ImportantFactors Affecting Mesabi Trust**

The Agreement of Trustspecifically prohibits the Trustees from entering into or engaging in anybusiness.  This prohibition seeminglyapplies even to business activities the Trustees deem necessary or proper forthe preservation and protection of the Trust Estate (as such term is definedbelow).  Accordingly, the Trustees’activities in connection with the administration of Trust assets are limited tocollecting income, paying expenses and liabilities, distributing net income toMesabi Trust’s Unitholders after the payment of, or provision for, suchexpenses and liabilities, and protecting and conserving the assets held.  Consequently, the income of Mesabi Trust ishighly dependent upon the activities and operations of Northshore, and theterms and conditions of the leases and assignments of leases between MesabiTrust and Northshore.

Neither Mesabi Trust nor theTrustees have any control over the operations and activities of Northshore,except within the framework of the Amended Assignment Agreements.  CCI alone controls (i) historical operatingdata, including iron ore production volumes, marketing of iron ore products,operating and capital expenditures as they relate to Northshore, environmentaland other liabilities and the effects of regulatory changes; (ii) plans forNorthshore’s future operating and capital expenditures; (iii) geological datarelating to reserves (iv) projected production of iron ore products; (v)contracts between CCI and Northshore with their customers; and (vi) thedecision to mine iron ore on or off Mesabi Trust lands.  The Trustees do not exert any influence overmining operational decisions, nor do the Trustees provide any input regardingthe ore reserve estimate reported by CCI. While the Trustees request material information for use in periodicreports as part of their evaluation of Mesabi Trust’s disclosure controls andprocedures, the Trustees do not control this information and they rely on theinformation in CCI’s periodic and current filings with the SEC to provideaccurate and timely information in Mesabi Trust’s reports filed with the SEC.

In accordance with theAgreement of Trust and the Amendment, the Trustees are entitled to, and in factdo, rely upon certain experts in good faith, including (i) the independentconsultants with respect to monthly production and shipment reports, whichinclude figures on crude ore production and iron ore 

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pelletshipments, and discussions concerning the condition and accuracy of the scalesand plans regarding the development of Mesabi Trust’s mining property; and (ii)the accounting firm they have contracted with for non-audit services, includingreviews of financial data related to shipping and sales reports provided byNorthshore and a review of the schedule of leasehold royalties payable toMesabi Trust.

For a discussion ofadditional factors, including but not limited to those that could adverselyaffect Mesabi Trust’s actual results and performance, see “Risk Factors” inPart I – Item 1A of Mesabi Trust’s Annual Report on Form 10-K for theyear-ended January 31, 2007.

**CriticalAccounting Policies**

This “Trustees’ Discussionand Analysis of Financial Condition and Results of Operations” is based uponthe Trust’s financial statements, which have been prepared in accordance withaccounting principles generally accepted in the United States.  The preparation of these financial statementsrequires the Trustees to make estimates and judgments that affect the reportedamounts of assets, liabilities, revenues and expenses, and related disclosureof contingent assets and liabilities. These estimates form the basis for making judgments about the carryingvalue of assets and liabilities that are not readily apparent from othersources.  The Trustees base theirestimates and judgments on historical experience and on various otherassumptions that the Trustees believe are reasonable under thecircumstances.  However, future eventsare subject to change and the best estimates and judgments may requireadjustment.

Critical accounting policiesare those that have meaningful impact on the reporting of the Trust’s financialcondition and results, and that require significant management judgment andestimates.  The Trustees have determinedthat there are no critical accounting policies.

**Item 3.  Quantitativeand Qualitative Disclosures About Market Risk.**

Not applicable.

**Item 4.  Controls andProcedures.**

***Evaluation of Disclosure Controls and Procedures******. ***The Trusteesmaintain disclosure controls and procedures designed to ensure that informationrequired to be disclosed by the Trust in the reports that it files or submitsunder the Securities Exchange Act of 1934, as amended, is recorded, processed,summarized and reported within the time periods specified in the rules andregulations of the Securities and Exchange Commission.  Disclosure controls and procedures includecontrols and procedures designed to ensure that information required to bedisclosed by the Trust is accumulated and communicated by Northshore, andconsultants to the Trustees as appropriate, to allow timely decisions regardingrequired disclosure.

As part of their evaluationof the Trust’s disclosure controls and procedures, the Trustees rely onquarterly shipment and royalty calculations provided by Northshore.  Because Northshore has declined to supportthis information with a written certification attesting to whether Northshorehas established disclosure controls and procedures and internal controlssufficient to enable it to verify that the information furnished to theTrustees is accurate and complete, the Trustees also rely on (a) an annualcertification from Northshore and Northshore’s parent, CCI, certifying as tothe accuracy of the royalty calculations, and (b) the related due diligencereview performed by the Trust’s external accountants.  In addition, the Trust’s consultants reviewthe schedule of leasehold royalties payable and shipping and sales reports providedby Northshore against production and shipment reports prepared by the EvelethFee Office, Inc., an independent consultant to the Trust (“Eveleth Fee Office”).The Eveleth Fee Office gathers production and shipping information fromNorthshore and prepares monthly production and shipment reports for theTrustees. Furthermore, as part of its engagement by the Trust, the Eveleth Fee 

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Officealso attends Northshore’s calibration and testing of its crude ore scales andboat loader scales which are conducted on a periodic basis.

As of the end of the periodcovered by this report, the Trustees carried out an evaluation of the Trust’sdisclosure controls and procedures.  TheTrustees have concluded that such disclosure controls and procedures areeffective.

***Changes in Internal Control Over Financial Reporting******.***  Tothe knowledge of the Trustees, there has been no change in the Trust’s internalcontrol over financial reporting that occurred during the Trust’s last fiscalquarter that has materially affected, or is likely to materially affect, theTrust’s internal control over financial reporting.  The Trustees note for purposes ofclarification that they have no authority over, and make no statementconcerning, the internal controls of Northshore or CCI.

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**PART II -OTHER INFORMATION**

**Item 1.****                    ****Legal Proceedings.**

As previously reported, on September 25,2006, Mesabi Trust filed a Demand in Arbitration with the American ArbitrationAssociation (the “Demand”) naming Cleveland-Cliffs Inc (“CCI”) and itswholly-owned subsidiary Northshore Mining Company (“Northshore”) as respondents(the “Respondents”).  In June 2007,Mesabi Trust entered into a settlement agreement with the Respondents.  Under the terms of the settlement agreement,Mesabi Trust’s accountants will have access to and be permitted to examinecertain pellet supply agreements of CCI. Pursuant to the terms of the settlement agreement, which may beterminated by either party upon reasonable written notice, the parties agreedto dismiss the Demand without prejudice and each party agreed to bear fullresponsibility for its respective costs, including attorneys’ fees.
| **Item 1A.** | **Risk Factors**                                                                                                                                                                                                     |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **   |                                                                                                                                                                                                                 |   |
| ** **   | There have been no  material changes in the Trust’s risk factors as described in Part I Item 1A,  “Risk Factors” in the Trust’s Annual Report on Form 10-K for the year ended  January 31, 2007. |
| ** **   |                                                                                                                                                                                                                 |
| **Item 2.**  | **Unregistered Sales of  Equity Securities and Use of Proceeds.**                                                                                                                                                    |
| ** **   |                                                                                                                                                                                                                 |
| ** **   | None.                                                                                                                                                                                                                |
| ** **   |                                                                                                                                                                                                                 |
| **Item 3.**  | **Defaults Upon Senior  Securities.**                                                                                                                                                                                |
| ** **   | ** **                                                                                                                                                                                                           |
| ** **   | None.                                                                                                                                                                                                                |
| ** **   |                                                                                                                                                                                                                 |
| **Item 4.**  | **Submission of Matters to  a Vote of Security Holders.**                                                                                                                                                            |
| ** **   |                                                                                                                                                                                                                 |
| ** **   | None.                                                                                                                                                                                                                |
| ** **   |                                                                                                                                                                                                                 |
| **Item 5.**  | **Other Information.**                                                                                                                                                                                               |
| ** **   | ** **                                                                                                                                                                                                           |
| ** **   | None.                                                                                                                                                                                                                |
| ** **   |                                                                                                                                                                                                                 |
| **Item 6.**  | **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 Gordon, Hughes & Banks, LLP, dated  September 4, 2007 regarding its review of the unaudited interim financial  statements of Mesabi Trust as of and for the quarter ended July 31, 2007. |

 

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**SIGNATURES**

Pursuant to the requirementsof the Securities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned thereunto duly authorized.
|                   |   | MESABI TRUST                                                      |
|-------------------|--------|-------------------------------------------------------------------|
|              |   | (Registrant)                                                      |
|              |   |                                                              |
| September 7, 2007 |   | By:                                                               | DEUTSCHE BANK TRUST COMPANY AMERICAS |
|              |   |                                                              | Corporate Trustee |
|              |   | Principal Administrative Officer and duly authorized  signatory:* |
|              |   |                                                              |
|              |   | By:                                                               | DEUTSCHE BANK NATIONAL TRUST COMPANY |
|              |   |                                                              |   |
|              |   | By:                                                               | /s/ Rodney Gaughan |   |
|              |   |                                                              | Name: Rodney Gaughan |   |
|              |   |                                                              | Title:   Vice President |   |

 

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

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