London Royalty Firm Acquires $132.5 Million Stake in Minnesota Iron Ore Project

The Metals Royalty Company announced a $132.5 million deal to acquire a 1% production royalty interest in the Mesabi Metallics iron ore project located in Nashwauk, Minnesota. The London-based firm, which trades on Nasdaq under the ticker TMCR, said the acquisition expands its exposure to United States steel supply chains.

The project is one of the country's few active iron ore developments and produces direct-reduction grade pellets used in electric arc furnace steelmaking. The purchase price includes $125 million in cash and $7.5 million in company stock. The company is financing the transaction through a $75 million private investment in public equity raise priced at $13 per share, a proposed credit facility of up to $50 million, and $15 million from founders and insiders.

The royalty applies to production of up to 8.5 million tons annually, with a smaller royalty above that level. The agreement includes a $150-per-ton revenue floor based on DR-grade pellet pricing, providing protection if iron ore prices decline. The company estimates the royalty could generate more than $13 million in annual cash flow once the project reaches full production, depending on output volumes and market prices.

The Mesabi Metallics project spans more than 16,000 acres in northern Minnesota. It is backed by Essar Group, which has invested more than $2 billion in equity, with total project investment expected to exceed $2.5 billion. First production is scheduled for the second half of 2026, followed by full ramp-up in 2027.

The project has secured a $520 million senior secured facility from Breakwall Capital and a $150 million liquidity line from Macquarie Group. The US Export-Import Bank has announced support of up to $10 billion, citing the project's role in the domestic steel supply chain.

“I believe Mesabi is one of the most strategically significant industrial projects currently under development in the United States." — Brian Paes-Braga (New York Post) The company chairman and chief executive described the acquisition as a defining milestone. He noted that the project aligns with efforts to reshore steel supply chains and reduce reliance on imported raw materials.”