Hello Six Bravo, Love what you are doing. I recently discovered this channel when researching coal. I also had a long position on TPL with identical investment thesis so I was immediately drawn to your channel. Now I've been reading your archived post. I don't know about how trust or partnership work so I have a question: why is all the land and mineral rights not count towards part of the asset of MSB? I looked into the 10-Q and realized that all is worth $3: $1 for Amended assignment of Peters Lease, $1 for Assignment of Cloquet Leases, and $1 for Certificate of beneficial interest for 13,120,010 units of Land Trust. How come? Won't this massively understate the asset of MSB? Is it because MSB is a trust? Thank you!
Haiyu, thanks for your kind words and question. We hope our material proves helpful.
When the Mesabi Trust was created, it needed to have ownership of certain mining properties, like the Peter's Lease and the Cloquet Leases. In the legal paperwork establishing the trust, these properties were given a value of $1 each. However, this $1 value doesn't really mean the properties are worth so little; it's more of a technical or symbolic amount used for legal reasons.
The main reason for the Mesabi Trust's existence is to receive money (royalties) from iron ore mining on these properties. So, even though the initial paperwork says the properties are worth $1, their real value comes from the income generated by mining iron ore. The $1 is just a way of setting things up legally and doesn't reflect the true value of the mining properties.
We hope that answer is helpful! Thanks again for your encouragement.
Hello Six Bravo, Love what you are doing. I recently discovered this channel when researching coal. I also had a long position on TPL with identical investment thesis so I was immediately drawn to your channel. Now I've been reading your archived post. I don't know about how trust or partnership work so I have a question: why is all the land and mineral rights not count towards part of the asset of MSB? I looked into the 10-Q and realized that all is worth $3: $1 for Amended assignment of Peters Lease, $1 for Assignment of Cloquet Leases, and $1 for Certificate of beneficial interest for 13,120,010 units of Land Trust. How come? Won't this massively understate the asset of MSB? Is it because MSB is a trust? Thank you!
Haiyu, thanks for your kind words and question. We hope our material proves helpful.
When the Mesabi Trust was created, it needed to have ownership of certain mining properties, like the Peter's Lease and the Cloquet Leases. In the legal paperwork establishing the trust, these properties were given a value of $1 each. However, this $1 value doesn't really mean the properties are worth so little; it's more of a technical or symbolic amount used for legal reasons.
The main reason for the Mesabi Trust's existence is to receive money (royalties) from iron ore mining on these properties. So, even though the initial paperwork says the properties are worth $1, their real value comes from the income generated by mining iron ore. The $1 is just a way of setting things up legally and doesn't reflect the true value of the mining properties.
We hope that answer is helpful! Thanks again for your encouragement.