**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      DC 20549





**FORM
      10-Q/A**


**(Amendment
      No. 1)**


(Mark
      One)


**[X]**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**For
                the quarterly period ended**January
                31, 2006**or**[
                ]**
            **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 333-66291**




**The
                Doe Run Resources Corporation**(Exact
                name of registrant as specified in its charter)**New
                York**
            
            **13-1255630**(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)**1801
                Park 270 Drive, Suite 300**
              **St.
                Louis, Missouri**
            
            **63146**(Address
                of principal executive offices)
            
            (Zip
                Code)**(314)
                453-7100**(Registrant’s
                telephone number, including area
                code)








Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.





**[
                ]**
            **Yes**
            
            **[X]**
            **No**





**Note:
      The Registrant files pursuant to an indenture, but is not otherwise subject
      to
      the reporting requirements of Section 13 or 15(d).**





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):





**[
                ]Larger accelerated filer**
            **[
                ] Accelerated filer**
            **[X]
                Non-accelerated filer**





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


**[
                ]**
            **Yes**
            
            **[X]**
            **No**





Number
      of
      shares outstanding of each of the issuer’s classes of common stock, as of
      October 19, 2006:





Common
      stock, $.10 par value  1,000
      shares








**EXPLANATORY
      NOTE**





The
      Doe
      Run Resources Corporation (the “Company”) is filing this Amendment No. 1 on Form
      10-Q/A (the “Amended Filing”) to the Company’s Form 10-Q for the fiscal quarter
      ended January 31, 2006, as filed with the Securities and Exchange Commission
      on
      April 28, 2006 (the “Original Filing”), for the purpose of revising its
      disclosure of gross margin on sales under subheading “Results of Operations -
      The 2006 First Quarter Compared to the 2005 First Quarter” in “Item 2.
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations” to reflect all costs of sales, including depreciation, depletion and
      amortization amounts attributable to cost of sales.





This
      Amended Filing also revises the Condensed Consolidated Statements of Cash Flows
      in “Item 1. Financial Statements” to reflect certain individual changes in the
      Company’s assets and liabilities.





Additionally,
      this Amended Filing clarifies the disclosure under “Item 4. Controls and
      Procedures” by stating that the Company’s disclosure controls and procedures
      were effective as of the date of the Company’s evaluation.





Finally,
      this Amended Filing corrects certain typographical errors in the Original
      Filing.





Except
      as
      described above, no other changes have been made to the Original Filing and
      this
      Amended Filing does not amend, update or change any other items or disclosures
      in the Original Filing. This Amended Filing continues to speak as of the date
      of
      the Original Filing and the Company has not updated the disclosure in this
      Amended Filing to speak to any later date.













**Part
        I. FINANCIAL INFORMATION**




**Item
                1. Financial Statements.****THE
                DOE RUN RESOURCES CORPORATION****Condensed
                Consolidated Balance Sheets****(Dollars
                in thousands, except share and per share data)****January
                31,**
            
            **October
                31,****2006**
            
            **2005****(unaudited)****ASSETS**Current
                assets:Cash
            
            $
            29,460
            
            $
            23,486Trade
                accounts receivable, net of allowance for doubtful accounts
            
            
            104,751
            
            
            85,740Inventories
            
            
            138,217
            
            
            105,634Prepaid
                expenses and other current assets
            
            
            26,516
            
            
            20,814Total
                current assets
            
            
            298,944
            
            
            235,674Property,
                plant and equipment, net
            
            
            260,506
            
            
            253,263Other
                noncurrent assets, net
            
            
            8,779
            
            
            5,838Total
                assets
            
            $
            568,229
            
            $
            494,775**LIABILITIES
                AND SHAREHOLDER'S DEFICIT**Current
                liabilities:Current
                maturities of long-term debt
            
            $
            132,704
            
            $
            114,947Accounts
                payable
            
            
            128,926
            
            
            92,275Accrued
                liabilities
            
            
            79,721
            
            
            87,060Total
                current liabilities
            
            
            341,351
            
            
            294,282Long-term
                debt, less current maturities
            
            
            271,566
            
            
            271,566Other
                noncurrent liabilities
            
            
            69,179
            
            
            68,337Total
                liabilities
            
            
            682,096
            
            
            634,185Series
                A redeemable preferred stock, $1,000 par value per share, 5,000 sharesauthorized;
                2,939 and 2,849 shares issued and outstanding at January 31, 2006
                andOctober
                31, 2005, respectively; liquidation and redemption value
            
            
            29,385
            
            
            28,495Shareholder's
                deficit:Common
                stock, $.10 par value per share, 1,667 shares authorized;1,000
                shares issued and outstanding
            
            
            -
            
            
            -Accumulated
                deficit
            
            
            (97,598
            )
            
            (123,141
            )Accumulated
                preferred stock dividends in excess of paid in capital
            
            
            (4,147
            )
            
            (3,257
            )Accumulated
                other comprehensive losses
            
            
            (41,507
            )
            
            (41,507
            )Total
                shareholder's deficit
            
            
            (143,252
            )
            
            (167,905
            )Total
                liabilities and shareholder's deficit
            
            $
            568,229
            
            $
            494,775The
                accompanying notes are an integral part of these condensed consolidated
                financial statements.











**THE
                DOE RUN RESOURCES CORPORATION****Condensed
                Consolidated Statements of Operations (unaudited)****(Dollars
                in thousands)****Three
                Months Ended****January
                31,****2006**
            
            **2005**Net
                sales
            
            $
            314,124
            
            $
            235,982Costs
                and expenses:Cost
                of sales
            
            
            263,387
            
            
            198,003Depreciation,
                depletion and amortization
            
            
            6,113
            
            
            6,137Selling,
                general and administrative
            
            
            13,107
            
            
            10,927Unrealized
                gain on derivative financial instruments
            
            
            (1,955
            )
            
            (798
            )Other
            
            
            1,307
            
            
            1,837Total
                costs and expenses
            
            
            281,959
            
            
            216,106Income
                from operations
            
            
            32,165
            
            
            19,876Other
                income (expense):Interest
                expense, net
            
            
            (2,737
            )
            
            (3,441
            )Other,
                net
            
            
            (94
            )
            
            252(2,831
            )
            
            (3,189
            )Income
                before income tax expense
            
            
            29,334
            
            
            16,687Income
                tax expense
            
            
            1,842
            
            
            -Net
                income
            
            $
            27,492
            
            $
            16,687Preferred
                stock dividends
            
            
            (890
            )
            
            (792
            )Net
                income allocable to common shares
            
            $
            26,602
            
            $
            15,895Total
                comprehensive income
            
            $
            27,492
            
            $
            16,791The
                accompanying notes are an integral part of these condensed consolidated
                financial statements.














**THE
                DOE RUN RESOURCES CORPORATION****Condensed
                Consolidated Statements of Cash Flows (unaudited)****(Dollars
                in thousands)****Three
                Months Ended****January
                31,****2006**
            
            **2005**Cash
                flows from operating activities:Net
                income
            
            $
            27,492
            
            $
            16,687Adjustments
                to reconcile net income to net cashprovided
                by operating activities:Depreciation,
                depletion and amortization
            
            
            6,113
            
            
            6,137Imputed
                interest and amortization of deferred financing costs
            
            
            60
            
            
            1,346Unrealized
                gain on derivative financial instruments
            
            
            (1,955
            )
            
            (798
            )Losses
                from impairment and disposal of long-lived assets
            
            
            126
            
            
            1,210Increase
                (decrease) resulting from changes in:Trade
                receivables
            
            
            (19,011
            )
            
            (6,214
            )Inventories
            
            
            (32,583
            )
            
            (15,281
            )Prepaid
                expenses and other current assts
            
            
            (5,738
            )
            
            (17,049
            )Accounts
                payable
            
            
            36,651
            
            
            24,122Accrued
                liabilities
            
            
            (7,331
            )
            
            (5,473
            )Other
                noncurrent assets and liabilities, net
            
            
            (2,179
            )
            
            (841
            )Net
                cash provided by operating activities
            
            
            1,645
            
            
            3,846Cash
                flows from investing activities:Purchases
                of property, plant and equipment
            
            
            (13,264
            )
            
            (16,569
            )Net
                cash used in investing activities
            
            
            (13,264
            )
            
            (16,569
            )Cash
                flows from financing activities:Proceeds
                from (payments on) revolving loans, net
            
            
            17,689
            
            
            (2,097
            )Payments
                on long-term debt
            
            
            (96
            )
            
            (12
            )Net
                cash provided by (used in) financing activities
            
            
            17,593
            
            
            (2,109
            )Net
                increase (decrease) in cash
            
            
            5,974
            
            
            (14,832
            )Cash
                at beginning of period
            
            
            23,486
            
            
            20,318Cash
                at end of period
            
            $
            29,460
            
            $
            5,486The
                accompanying notes are an integral part of these condensed consolidated
                financial statements.














**THE
      DOE RUN RESOURCES CORPORATION**





**Notes
      to Condensed Consolidated Financial Statements**


**(Dollars
      in thousands)**





**(1)**  **Summary
      of Significant Accounting Policies**





***Unaudited
      Interim Financial Statements***





These
      interim consolidated financial statements include the accounts of The Doe Run
      Resources Corporation (“Doe Run”) and its subsidiaries, including Doe Run Peru
      S.R.L. ( “Doe Run Peru”, and on a consolidated basis, the “ Company”). Doe Run’s
      issued and outstanding common stock is owned by a subsidiary of The Renco Group,
      Inc. (“Renco”). In the opinion of management, the interim consolidated financial
      statements contain all adjustments, consisting of normal recurring accruals,
      necessary to present fairly the consolidated financial position as of January
      31, 2006 and the results of operations for the three month periods ended January
      31, 2006 and 2005. Interim periods are not necessarily indicative of results
      to
      be expected for the year.





***Reclassifications***





Certain
      prior period balances have been reclassified in order to conform to current
      presentation.





**(2)**  **Financial
      Condition**




The
        Company is highly leveraged and has significant commitments both in the U.S.
        and
        Peru for environmental matters and for Environmental Remediation and Management
        Program (“PAMA”) expenditures that require it to dedicate a substantial portion
        of cash flow from operations to the payment of these obligations, which will
        reduce funds available for other business purposes (see Note 7: Asset Retirement
        and Environmental Obligations). These factors also increase the Company’s
        vulnerability to general adverse conditions, limit the Company’s flexibility in
        planning for or reacting to changes in its business and industry, and limit
        the
        Company’s ability to obtain financing required to fund working capital and
        capital expenditures and for other general corporate purposes. An unfavorable
        outcome to certain contingencies, discussed below, would have a further adverse
        effect on the Company’s ability to meet its obligations when due. The Company’s
        ability to meet these obligations is also dependent upon future operating
        performance and financial results which are subject to financial, economic,
        political, competitive and other factors affecting Doe Run, many of which
        are
        beyond the Company’s control.


Metal
      prices have risen dramatically over the past two fiscal years. Lead prices
      increased from a London Metal Exchange (“LME”) settlement monthly average of
      $911.76 per short metal ton in October 2005 to $1,026.20 per short metal ton
      in
      January 2006. The Company has benefited from this price increase in both its
      lead metal and lead concentrate sales. In response to continued strong metal
      prices, our primary lead division made significant changes to operations in
      2005. The lead grade of ore mined was lowered while the tonnage processed
      increased. These changes were made in an effort to optimize the return on Doe
      Run’s ore reserves. Doe Run continued to sell a substantial portion of the lead
      concentrates produced from its mines into the open market.





The
      consolidated financial statements have been prepared assuming the Company will
      continue as a going concern. Doe Run’s indirect subsidiary, Doe Run Peru,
      however, has significant capital requirements under environmental commitments,
      substantial contingencies related to Peruvian taxes and has significant debt
      service obligations, each of which, if not satisfied, could result in a default
      under the Company’s credit agreements and collectively raise substantial doubt
      about the Company’s ability to continue as a going concern. Management believes
      that the price improvements seen through fiscal year 2005 and the continuing
      increases seen in the first quarter of fiscal year 2006, the potential revenues
      and cash flow enhancements from the Company’s new ferrite project in Peru and
      the anticipated approval by the Peruvian government of the application to extend
      the PAMA requirement for the construction of the sulfuric acid plants, will
      enable the Company to continue as a going concern. However, there can be no
      assurance that these actions will achieve the desired results.












The
      Company continues to have substantial cash requirements in the future, including
      maturities in 2006 of $8,000 for a term note, cash interest payments on bonds
      of
      $25,729 during 2006 and revolving credit facilities, as described below, and
      also significant capital requirements under environmental commitments (see
      Note
      7: Asset Retirement and Environmental Obligation). In addition, there are
      substantial contingencies related to taxes (see Note 4: Income Taxes) and
      litigation (see Note 8: Litigation).





Net
      unused availability at January 31, 2006 under the Doe Run Revolving Credit
      Facility was $23,100. Net unused availability at January 31, 2006 under the
      Doe
      Run Peru Revolving Credit Facility was approximately $200. In addition to the
      availability under its revolving credit facilities, cash balance at Doe Run
      was
      $4,746 at January 31, 2006 and the cash balance at Doe Run Peru was $24,714
      at
      January 31, 2006 . Doe Run Peru has reached and maintained its maximum borrowing
      level under the Doe Run Peru Revolving Credit Facility due in part to the higher
      metal prices resulting in higher outlays for concentrate purchases and higher
      VAT payments funded by cash from operations.





The
      Doe
      Run Revolving Credit Facility expires on August 29, 2008. The Doe Run Peru
      Revolving Credit Facility expires in the third quarter of 2006, and will require
      renegotiation to extend its terms. There can be no assurance that the Company
      will be successful, or if it is successful, that the renewal would be at terms
      that are favorable to the Company. The maturity date of the $8,000 term note
      has
      been extended to June 16, 2006 with an amended repayment schedule. The term
      note
      has been paid in full subsequent to January 31, 2006.





A
      default
      under the requirements of the PAMA could result in a default under the Doe
      Run
      Peru Revolving Credit Facility. A default under the requirements of the Doe
      Run
      Peru Revolving Credit Facility results in defaults under the Doe Run Revolving
      Credit Facility and the indenture governing the bonds.





**(3)**  **Inventories**





Inventories
      consist of the following:





**January
                31,**
            
            **October
                31,****2006**
            
            **2005**Finished
                metals and concentrates
            
            $
            25,135
            
            $
            18,461Metals
                and concentrates in process
            
            
            80,425
            
            
            55,681Materials,
                supplies and repair parts
            
            
            32,657
            
            
            31,492$
            138,217
            
            $
            105,634





Materials,
      supplies and repair parts are stated net of reserves for obsolescence of
      approximately $5,422 and $5,389 at January 31, 2006 and October 31, 2005,
      respectively.





**(4)**  **Income
      Taxes**





Doe
      Run
      Peru has received income tax assessments from Peru’s tax authority, (“SUNAT”),
      for tax years 1998 through 2001. The assessments primarily relate to Doe Run
      Peru’s income tax treatment of the December 1997 merger of Metaloroya S.A into
      Doe Run Peru., which was purchased by Doe Run Peru in October 1997, and its
      effects on subsequent years’ taxable income. Under the assessment by SUNAT, the
      tax basis of Doe Run Peru’s fixed assets acquired would decrease, resulting in
      lower tax depreciation expense than originally claimed. The
      assessments of years 1999 through 2001 also relate to the disallowance of the
      deduction of interest paid, the offsetting of losses on derivatives executed
      in
      the U.S. and some leaseback and leasing operations. The
      estimated assessed amount consisting of additional income taxes due, penalties
      and interest as of January 31, 2006 totals approximately $116,200. The Company
      estimates that the effect of a similar assessment for tax years after 2001
      would
      be approximately $30,700. Furthermore, Doe Run Peru would also be required
      to
      make additional workers’ profit sharing payments equal to 8% of the increase in
      taxable income generated by the changes discussed above, or approximately
      $11,300 for calendar years 1998 through 2005.





Doe
      Run
      Peru has also received Value Added Tax (“VAT”) assessments for the
      tax
      years 1999 through 2001 and for the period from January through July
      2004 .
      The
      assessments primarily relate to Doe Run Peru’s exports with











holding
      certificates and differences in a tax credit
      application. The total assessment for these periods was approximately $46,200.
      SUNAT offset the amount assessed for 2004 of approximately $2,300 against Doe
      Run Peru’s VAT receivable balance from July 2004. Future VAT reimbursements
      cannot be used to offset the assessment by SUNAT. The Company discontinued
      the
      use of holding certificates for exports in June 2004. The Company estimates
      expected additional assessments related to VAT for tax years 2002 and 2003
      to
      total approximately $21,500 in regard to its exports with holding
      certificates.


Management
      of the Company believes that in each case Doe Run Peru has followed the
      applicable Peruvian tax statutes and intends to pursue all available
      administrative and judicial appeals. Doe Run Peru is not required to make any
      payments pending the administrative appeal process. If Doe Run Peru is not
      successful in the administrative appeal processes and were to appeal in the
      judicial system, some type of financial assurance would be required. No amounts
      have been accrued as liabilities related to these actions.





The
      Company expects to utilize all Doe Run Peru’s net operating loss carryforwards
      in the current fiscal year. As a result, Doe Run Peru has recorded $1,842 of
      income tax expense for the first quarter of 2006. Pursuant to the Company’s tax
      sharing agreement with Renco, dividends payable of $2,333 and $384 were
      reflected in the Company’s balance sheets at January 31, 2006 and October 31,
      2005, respectively. The dividend payable at January 31, 2006 is scheduled to
      be
      paid in the second quarter of 2006. The dividend payable at January 31, 2005
      was
      paid in the second quarter of 2005.




**(5)**  **Employee
      Benefits**





***Defined
      Benefit Plans***





Net
      periodic benefit cost is comprised of the following:





**Three
                Months Ended****January
                31,****2006**
            
            **2005**Service
                cost
            
            $
            226
            
            $
            547Interest
                cost on projected benefit obligation
            
            
            835
            
            
            1,655Expected
                return on assets
            
            
            (740
            )
            
            (1,423
            )Net
                amortization and deferral of unrecognized net losses
            
            
            524
            
            
            708Net
                periodic benefit cost
            
            $
            845
            
            $
            1,487








The
      Company is required to make total contributions of $10,082 in 2006, of which
      $2,021 had been paid as of January 31, 2006.





***Net
      Worth Appreciation Agreements***





Certain
      employees are parties to net worth agreements with Doe Run, pursuant to which,
      upon termination of each person’s employment with Doe Run, they are entitled to
      receive a fixed percentage of the increase in the net worth of the Company,
      as
      defined in such agreement, from a base date until the end of the fiscal quarter
      preceding the date of his termination. Such amount is payable without interest
      in 40 equal quarterly installments, commencing three months after the
      termination of each person’s employment, and at three month intervals
      thereafter. The net worth appreciation agreements also provide that, in the
      event of payment of a dividend, other than a dividend pursuant to the tax
      sharing agreement, or a sale of the Company, the active participants will be
      entitled to receive a percentage of the dividend or the net proceeds of the
      sale
      equal to their maximum percentages under the agreements. The Company recorded
      $672 in expense during the first quarter of 2006.










**(6)**  **Segment
      Information**





The
      Company’s operating segments are separately managed business units that are
      distinguished by products, location and production processes. The primary lead
      segment includes integrated mining, milling and smelting operations located
      in
      Missouri. The recycling operation segment, located in Missouri, recycles
      lead-bearing materials, primarily spent batteries. The fabricated products
      segment produces value-added lead products. Doe Run Peru produces an extensive
      product mix of non-ferrous and precious metals.





*Operating
                Segments - Revenues*
            
            **Three
                Months Ended**
              **January
                31,****2006**
            
            **2005**Revenues
                from external customers:Doe
                Run Peru
            
            $
            202,692
            
            $
            148,385Primary
                lead
            
            
            82,774
            
            
            63,937Recycling
                operation
            
            
            24,088
            
            
            18,566Fabricated
                products
            
            
            3,363
            
            
            3,815Total
            
            
            312,917
            
            
            234,703Revenues
                from other operating segments: (1)Doe
                Run Peru
            
            
            6,240
            
            
            2,724Primary
                lead
            
            
            679
            
            
            502Recycling
                operation
            
            
            82
            
            
            98Total
            
            
            7,001
            
            
            3,324Total
                reportable segments
            
            
            319,918
            
            
            238,027Metal
                sales not attributed to operating segments
            
            
            5,144
            
            
            2,521Realized
                losses on derivative contracts
            
            
            (3,937
            )
            
            (1,242
            )Intersegment
                eliminations
            
            
            (7,001
            )
            
            (3,324
            )Total
                revenues
            
            $
            314,124
            
            $
            235,982




(1)
            Transactions
                between segments consist of metal sales recorded based on sales contracts
                that are negotiated between segments on terms that management feels
                are
                similar to those that would be negotiated between unrelated
                parties.





The
      measure of segment profit and loss used by the Company is earnings of the
      segment before interest, taxes, depletion, depreciation, and amortization
      (“EBITDA”), as adjusted to exclude losses from impairment and disposal of
      long-lived assets and unrealized gains (losses) on derivatives (“Adjusted
      EBITDA”). Consolidated Adjusted EBITDA also excludes accretion expense under
      Statement of Financial Accounting Standards No. 143, *Asset
      Retirement Obligations* (Statement No. 143), adopted November 1, 2002 *.*














*Operating
                Segments - Adjusted EBITDA*
            
            **Three
                Months Ended**
              **January
                31,****2006**
            
            **2005**Doe
                Run Peru
            
            $
            12,124
            
            $
            8,476Primary
                lead
            
            
            31,696
            
            
            22,246Recycling
                operation
            
            
            4,179
            
            
            3,601Fabricated
                products
            
            
            305
            
            
            457Total
                reportable segments
            
            
            48,304
            
            
            34,780Realized
                losses on derivatives
            
            
            (3,937
            )
            
            (1,242
            )Other
                revenues and expenses (1)
            
            
            (962
            )
            
            (350
            )Corporate
                selling, general and administrative expenses
            
            
            (6,713
            )
            
            (6,255
            )Intersegment
                eliminations
            
            
            41
            
            
            25Consolidated
                adjusted EBITDA
            
            
            36,733
            
            
            26,958Depreciation,
                depletion and amortization
            
            
            (6,113
            )
            
            (6,137
            )Interest
                expense, net
            
            
            (2,737
            )
            
            (3,441
            )Unrealized
                gain on derivatives
            
            
            1,955
            
            
            798Losses
                from impairment and disposal of long-lived assets
            
            
            (125
            )
            
            (1,210
            )Asset
                retirement obligation accretion expense
            
            
            (379
            )
            
            (374
            )Other
            
            
            -
            
            
            93Income
                before income taxes
            
            $
            29,334
            
            $
            16,687




(1)    Other
      revenues and expenses consists of the profit on metal sales not attributed
      to
      operating segments and expenses not allocated to operating segments, including
      environmental expenses relating to historic operations of $261 and $0 for the
      three months ended January 31, 2006 and 2005, respectively.





**(7)**  **Asset
      Retirement and Environmental Obligations**





The
      Company is subject to numerous federal, state and local environmental laws
      and
      regulations governing, among other things, air emissions, wastewater discharges,
      solid and hazardous waste treatment, storage and disposal and remediation of
      releases of hazardous substances. The Company’s facilities are located on sites
      that have been used for heavy industrial purposes for decades and may require
      remediation. The Company has made and intends to continue making the necessary
      expenditures for environmental remediation and compliance with environmental
      laws and regulations. Environmental laws and regulations may become more
      stringent in the future, which could increase costs of compliance.




***Asset
      Retirement Obligations***




Asset
      retirement obligations (“AROs”) are recognized as liabilities when incurred,
      with the initial measurement at fair value. These liabilities will be increased
      to full value over time through charges of accretion to operating expense.
      In
      addition, an asset retirement cost is capitalized as part of the related asset’s
      carrying value and will be depreciated over the asset’s useful life. Changes in
      the ARO liability resulting from revisions to the timing or the amount of the
      original estimate of undiscounted cash flows shall be recognized as an increase
      or a decrease in the carrying amount of the liability for an ARO and the related
      asset retirement cost capitalized as part of the carrying amount of the related
      long-lived asset.




Doe
      Run’s
      mines and related processing facilities are governed by various agencies that
      have established minimum standards for reclamation. Doe Run’s primary smelter
      slag produced by and stored at the primary smelter in Herculaneum, Missouri,
      is
      currently exempt from hazardous waste regulation under the Resource Conservation
      and Recovery Act of 1976, as amended (“RCRA”), but is subject to a state closure
      permit, which requires Doe Run to contain and cover the pile upon cessation
      of
      operations. Doe Run’s mining and milling operations are subject to Missouri mine
      waste closure permit requirements and lease agreements that require Doe Run
      to
      reclaim surface areas, including remediation of mining waste disposal areas,
      and
      to perform closure activities underground. These activities,











which
      tend to be site specific, generally include
      costs for earthwork, revegetation, water treatment and demolition. Closure
      activities may be performed over time.




Doe
      Run
      has a RCRA permit addressing the closure of portions of its recycling operation.
      The majority of the cost will arise from removing hazardous materials from
      the
      facility. No ARO liability or related asset cost has been recorded because
      the
      fair value of the obligation cannot be determined due to the indeterminate
      timing. The cost of closure, based on third party estimates for bonding
      purposes, is approximately $3,000. The life of the operation is considered
      indeterminable because there is not currently a cost-effective alternative
      to
      the lead acid batteries and because battery manufacturers are required to
      recycle the batteries.




Mine
      Closure Law No. 28090 (“Law”) became effective in Peru as of October 15, 2005.
      It applies to smelters and mines. The Law establishes the obligations and
      procedures that titleholders of mining activities must follow, including a
      financial guarantee for environmental issues.   Doe Run Peru must
      submit a mine closure plan to the Ministry of Energy and Mines by August 17,
      2006. Doe Run Peru intends to hire a technical mining consultant to prepare
      the mine closure plan to include all the technical and legal requirements.
      The
      mine closure plan must include a description of the remediation measures to
      be
      done, along with their cost and timing, and the expected amount of the financial
      guarantee. Pursuant to the tax stabilization agreement, Doe Run Peru is exempt
      from new obligations that could result in a reduction of its cash availability,
      such as the guarantee discussed above.  Therefore, Doe Run Peru considers
      that the establishment of the corresponding environmental guarantees would
      be in
      opposition to the provisions set forth in the tax stabilization agreement.
      The
      mining authorities could disagree with our position or there may be future
      obligations when our tax stabilization agreement expires on December 31,
      2006.





Doe
      Run
      Peru has AROs at its Cobriza mine, related to the costs associated with closing
      the mine openings and covering acid rock. Doe Run Peru is also responsible
      for
      the eventual covering and revegetation of mixed lead and copper slag also stored
      in Huanchan, an area a short distance from the La Oroya smelter where the slag
      is currently stored.





The
      Company’s total recorded liability for AROs was approximately $15,566 and
      $15,188 as of January 31, 2006 and October 31, 2005, respectively.





***Environmental
      remediation - Domestic Operations***





The
      Company had recorded liabilities of approximately $15,700 and $20,000 related
      to
      remediation obligations as of January 31, 2006 and October 31, 2005,
      respectively.





Doe
      Run
      is subject to an Administrative Order on Consent (“AOC”), effective May 29,
      2001, to study and address issues related to the slag pile, plant property,
      community soils adjacent to the primary smelter in Herculaneum, Missouri,
      elevated blood lead levels in the community and lead releases from the plant.
      Under this AOC, Doe Run completed additional soil testing in the area within
      a
      one-mile radius of the smelter and subsequently signed a second AOC with the
      U.S. Environmental Protection Agency (“ U.S.EPA), on December 21, 2001, which
      has essentially been completed. The May 29, 2001 AOC was modified effective
      on
      May 20, 2004. At January 31, 2006 the estimated remaining cost of remediating
      these properties was approximately $688.




Doe
      Run
      signed a settlement agreement with the State of Missouri on April 26, 2002,
      whereby it agreed to offer to purchase approximately 160 residential properties
      in an area close to the smelter if the owner requests such an offer. The offers
      have expired except for a few with pending closing dates or special arrangements
      for a total of $138. As of January 31, 2006, a total of 150 homeowners had
      requested and were delivered offers, and 142 of those offers had been accepted.
      As of January 31, 2006, the Company had spent approximately $10,300 under the
      residential property purchase plan and another $1,700 of offers were not
      accepted or were accepted and have subsequently expired. Doe Run has complied
      in
      all material respects with the property purchase provisions of the settlement
      agreement.




The
      Company’s statements of operations reflect losses from impairment or retirement
      of long-lived assets primarily related to the residential properties owned
      in
      Herculaneum, as it cannot be assured that the cost of the properties will be
      recovered through future cash flows. The Company’s recorded liability for
      remediation does not include the future purchase costs relating to the
      residential property purchase plan as these costs are capitalized.











Doe
      Run
      is subject to a State Implementation Plan (“SIP”) with the Missouri Department
      of Natural Resources and the Missouri Air Conservation Commission to attain
      and
      maintain compliance with the ambient air quality standard for lead promulgated
      under the federal Clean Air Act for the city of Herculaneum. The plan was
      included in a consent judgment entered into by Doe Run and has been approved
      at
      the state level and by the U.S. EPA. The air quality monitors reflected
      attainment of the lead standard for 10 of the last 14 quarters. Once the air
      quality monitors reflected two quarters of non-compliance, the permitted annual
      capacity of the Herculaneum primary smelter decreased from 250,000 to 200,000
      tons, which does not affect results at current production levels. Further
      non-compliance could result in SIP revisions that could have a material adverse
      financial impact on the Company. Management is in discussions with the Missouri
      Department of Natural Resources to explore options intended to improve the
      smelter’s ability to attain and maintain compliance in the future.




Doe
      Run
      has received notice that it is a potentially responsible party (“PRP”) subject
      to liability under The Comprehensive Environmental Response, Compensation and
      Liability Act of 1980, as amended (“CERCLA), at the following sites: six sites
      in St. Francois County, Missouri, including the Big River Mine Tailings site,
      the Bonne Terre site, the Federal site, the National site, the Rivermines site
      and the Leadwood site; sites comprising areas along roads in Iron, Dent and
      Reynolds counties in Missouri; the Oronogo-Durenweg site in Jasper County,
      Missouri; the Cherokee County site in Cherokee County, Kansas; the Tar Creek
      site in Ottawa County, Oklahoma; the Block “P” site in Cascade County and Judith
      County, Montana; and the Missouri Electric Works site in Cape Girardeau,
      Missouri. There are two additional sites in St. Francois County for which the
      U.S. EPA has indicated it will issue notice. CERCLA provides for strict and,
      in
      certain circumstances, joint and several liability for response costs and
      natural resource damages. The Company’s estimate of the cost of the remediation
      of these sites, including the two additional sites in St. Francois County,
      is
      included in the total liability for remediation obligations, which the Company
      believes is adequate based on its investigations to date. However, depending
      upon the types of remediation required and certain other factors, additional
      costs at these sites, individually or collectively, could have a material
      adverse effect on the results of operations, financial condition and liquidity
      of the Company.




In
      addition to being asked to conduct remediation at these sites, the U.S. EPA
      may
      also seek reimbursement from Doe Run for response actions it has conducted
      at
      these sites. The U.S. Government has advised PRP’s at the Tar Creek site,
      including Doe Run, that it will seek reimbursement for approximately $125
      million of such costs. Given legal issues about Doe Run’s responsibility for
      activities of a former subsidiary, the fact that the former subsidiary’s
      activities at the site were localized and small (less than 1% of the waste),
      and
      the major involvement at the site of the U.S. Government through the Bureau
      of
      Land Management’s and the Bureau of Indian Affairs’ management of mineral
      leasing at the site, the Company is unable to estimate the expected outcome
      of
      any such potential claim.




In
      February 2004 the U.S. Department of Agriculture issued a Unilateral
      Administrative Order (“UAO”) ordering certain remediation activities by Doe Run
      at the Block “P” mill site in Montana. Doe Run has requested that other parties
      be added to the order. Doe Run will seek reimbursement from the U.S. Government
      and these other parties. The final remediation was essentially completed as
      of
      October 31, 2005.




Doe
      Run
      has completed an Engineering Evaluation/Cost Analysis (“EE/CA”) for the Bonne
      Terre site and has signed two AOCs to conduct removal actions on the west and
      east portions of the site. Work is completed on the west Bonne Terre site and
      is
      nearly finished on the east site with completion expected in mid 2006.




Doe
      Run
      has completed an EE/CA for the Rivermines site and, while unable to accept
      certain financial assurance provisions of a proposed AOC, has agreed to conduct
      a removal action at the site under a UAO. Work has commenced on the removal
      action. The EPA accelerated the timeframe to complete the majority of the
      remediation effort by the summer of 2006.




Doe
      Run
      is subject to an AOC with the U.S. EPA to remediate the Big River Mine Tailings
      site. The remediation work required by the AOC has been substantially completed
      and will continue with revegetation and ongoing monitoring and maintenance
      activities.




Doe
      Run
      has also signed AOCs to perform an EE/CA on each of the National and Leadwood
      sites for remediation of mine waste areas. The National EE/CA was completed
      by
      the PRPs and was submitted to the U.S. EPA for approval. The U.S. EPA then
      prepared two EE/CA’s, the last of which, is currently open for public
      discussion. The cost of their remedy is higher than that estimated by the EE/CA
      prepared by Doe Run. The Leadwood EE/CA has been











submitted
      to the U.S. EPA for approval. In addition,
      Doe Run has signed an AOC with the U.S. EPA to conduct a Remedial
      Investigation/Feasibility Study (“RI/FS”) to assess potential off-site impacts
      of these site operations on groundwater, residential soils, several creeks
      and a
      river and the need for related remediation. The initial draft of the RI/FS
      was
      submitted in early March 2002. Doe Run signed an order to conduct interim
      measures, which consisted of blood lead testing of young children, residential
      soil sampling and limited soil remediation as indicated by the testing and
      sampling results, which was terminated and replaced by an AOC to conduct certain
      additional soil remediation in the area and has included its best estimate
      of
      these efforts in its recorded liabilities. The Company believes the recorded
      liabilities related to these sites are adequate. However, should remediation
      goals or areas change, requiring substantially increased measures, there can
      be
      no assurance that the recorded liabilities would be adequate.




In
      March
      2004, Doe Run received notice that it is a PRP subject to liability under CERCLA
      for contamination along roads in Iron, Dent and Reynolds counties in Missouri,
      along with a number of mining companies involved in the transportation of
      concentrates. After sampling approximately 750 houses by the U.S. EPA and the
      Missouri Department of Natural Resources, approximately 150 houses were
      identified as potentially requiring some level of remediation. Doe Run and
      four
      other mining companies have signed an AOC to conduct soil remediation at
      approximately 40 of these houses. Recorded liabilities could change, due to
      changes in management’s estimates of the number of houses requiring remediation,
      remediation methods, the costs of remediation and Doe Run’s apportionment of the
      costs. Also, in regard to potential contamination from transportation activities
      in and near the City of Viburnum, Doe Run has signed an AOC to conduct sampling
      and prepare a Preliminary Assessment/Site Inspection report.




Doe
      Run
      has been advised that the U.S. EPA is considering taking certain response
      actions at a mine site in Madison County, Missouri known as the Mine LaMotte
      Site. Doe Run and the owner of the other 50% share of stock in the company
      that
      mined the site have signed an AOC to conduct an RI/FS at the site. This site
      is
      substantially smaller than the sites in St. Francois County where the Company
      has been named a PRP, and the potential issues are less complex. Doe Run has
      also been advised that remediation is required at a related small satellite
      mine
      site. After conducting an investigation, Doe Run has determined that it was
      not
      involved in operations at the satellite site, but further review will be
      required before a determination can be made as to whether it has any liability
      at the main site. At this time, based on preliminary information and an
      inspection of the sites, management does not believe that any future action
      will
      result in a material adverse impact to the results of operations, financial
      condition or liquidity of the Company.




Doe
      Run’s
      recycling facility is subject to corrective action requirements under RCRA
      as a
      result of a storage permit for certain wastes initially issued in 1989. This
      will involve remediation of solid waste management units at the site, and it
      is
      expected that the plan for corrective action will be approved in fiscal 2006.
      The Company’s estimate of the cost of this corrective action is $1,000. While
      management believes that recorded liabilities are adequate based on expectations
      of the closure plan requirements, regulators could require that additional
      measures be included in the finalized plan, which could change the estimate
      of
      the costs for corrective action.




On
      August
      25, 2004, the U.S. EPA issued a Notice of Violation to the Company alleging
      past
      violations of the recycling facility’s air permit conditions regarding
      production limits for its reverbatory furnace. Management believes the facility
      has operated in compliance with state and federal air requirements and has
      objected to the Notice of Violation . Consequently, management believes this
      issue will not cause a material adverse impact on the Company.




The
      domestic operating facilities have wastewater discharge permits issued under
      the
      federal Clean Water Act, as amended. Doe Run currently meets the effluent limits
      under these permits, but if compliance is not maintained, additional
      improvements to its treatment facilities could be required.




***Environmental
      remediation - Foreign Operations***




Doe
      Run
      Peru’s La Oroya operations historically and currently exceed some of the
      applicable Ministry of Energy and Mines (“MEM”) maximum permissible limits
      pertaining to air emissions and wastewater effluent quality. Prior to our
      acquisition of La Oroya, Metaloroya S.A., the former owner, a subsidiary of
      Empresa Minera del Centro del Peru S.A., which we refer to as Centromin,
      received approval from the Peruvian government for a PAMA. The PAMA was designed
      to achieve compliance with MEM’s air and wastewater limits. It consisted of an
      environmental impact analysis, monitoring plan and data, mitigation measures
      and
      a closure plan. The PAMA also sets forth the actions and











corresponding
      annual investments the concession holder
      agrees to undertake in order to achieve compliance with the maximum permissible
      limits prior to expiration of the PAMA (ten years for smelters, such as Doe
      Run
      Peru’s operations in La Oroya, and five years mining operation such as Cobriza).
      The PAMA projects, which are more fully discussed below, have been designed
      to
      achieve compliance with these requirements. The Peruvian government may, in
      the
      future, require compliance with additional environmental regulations that could
      adversely affect Doe Run Peru’s business, financial condition and results of
      operations. After expiration of the PAMA, the operator must comply with all
      applicable standards and requirements. Because these costs improve the property
      or prevent future environmental contamination, they are
      capitalized.


Doe
      Run
      Peru has committed under its current approved PAMA to implement the following
      projects at its La Oroya smelter through December 31, 2006:





·  Construct
      new sulfuric acid plants;


·  Construct
      a treatment plant for the copper refinery effluent;


·  Construct
      an industrial wastewater treatment plant for the smelter and
      refinery;


·  Improve
      the slag handling system;


·  Improve
      Huanchan lead and copper slag deposits;


·  Construct
      an arsenic trioxide deposit;


·  Improve
      the zinc ferrite disposal site;


·  Construct
      domestic wastewater treatment and domestic waste disposal; and


·  Construct
      a monitoring station.





An
      investment schedule in the PAMA provides a specific plan for achieving the
      applicable MEM maximum permissible limits pertaining to air emissions and
      wastewater effluent quality. The PAMA may be modified and amended as to the
      actual design and timing of projects to be implemented, provided compliance
      with
      the applicable maximum permissible limits is achieved by December 31, 2006.
      The
      required estimated spending for the projects approved in the La Oroya PAMA,
      as
      amended on January 25, 2002, is $101,000 for calendar 2006.





Doe
      Run
      Peru expects that it will not be able to comply with the spending requirements
      of La Oroya’s PAMA investment schedule in 2006 with respect to the construction
      of the sulfuric acid plants required by the PAMA and, as a result, could be
      subject to penalties. Failure to comply with the PAMA could result in the
      cessation of operations at the La Oroya smelter, which would adversely affect
      our business, financial condition and results of operations.





On
      December 29, 2004 the Peruvian government issued a Supreme Decree No.
      046-2004-EM (“Supreme Decree”), which recognized that exceptional circumstances
      may justify an extension of one or more projects within the scope of a PAMA.
      The
      Supreme Decree specifies that companies had until December 31, 2005 to apply
      for
      an extension. The maximum extension is for three years and the MEM may authorize
      an additional year based upon the results of a health risk study.





Pursuant
      to the Supreme Decree, the application for a PAMA extension must be supported
      by
      a health risk study performed by a third party. The application must contain
      an
      engineering description and funding plan of any project to be extended, a
      discussion of how and when environmental emission standards will be met, a
      plan
      to monitor emissions with the participation of the community, proof that at
      least three public workshops were held in various districts to provide
      information on Doe Run Peru’s financial situation and health programs, proof
      that two public hearings were held regarding the extension plans, and other
      financial information. Upon meeting these requirements, Doe Run Peru applied
      for
      an extension on December 20, 2005. As part of the procedure, the MEM made 90
      observations to the request of extension, to which Doe Run Peru responded on
      March 20, 2006. MEM has 60 days from the date of Doe Run Peru’s submission to
      evaluate the application and the responses to its observations and make a
      decision.





In
      the 90
      observations made by MEM, additional requirements have been levied as a
      condition of the extension. Doe Run Peru has responded to the MEM that it
      believes it can technically comply with the sulfuric acid plants requirement
      within the three year extension. However, no assurance can be given that
      implementation of the PAMA projects is feasible or that their implementation
      will achieve compliance with the applicable legal requirements by the end of
      the
      PAMA period. Furthermore, there can be no assurance that the Peruvian government
      will not in the future











require
      compliance with additional or different
      environmental obligations that could adversely affect Doe Run Peru’s business,
      financial condition and results of operations.


The
      Cobriza mine has a separate PAMA in which Doe Run Peru committed to complete
      projects to manage tailings, mine drainage, sewage and garbage. Doe Run Peru
      completed its PAMA requirements with respect to Cobriza in June 2004, ceased
      discharging mine waste into the Mantaro River and is in compliance with the
      emissions standards required by the PAMA.





Upon
      approval of a modified PAMA, Doe Run Peru would be required to create a trust
      account to administer the receipts and disbursements related to the extended
      PAMA. The Supreme Decree requires that receipts from sales be remitted monthly
      directly to the trust account, in an amount sufficient to fund the cash
      requirements of the extended PAMA.





The
      Supreme Decree also requires that Doe Run Peru provide financial security within
      30 days of the approval of the PAMA extension in an amount equal to 20% of
      the
      projected cost of the project or projects to be extended. The Company currently
      expects the remaining investment needed to build the sulfuric acid plants to
      be
      approximately $103,000.





To
      achieve the financial guarantee and the trust contract required by Supreme
      Decree, the Doe Run Peru has amended the Doe Run Peru Revolving Credit Facility
      to allow for those arrangements and has filed a draft of a trust guarantee
      contract with a local bank. Additionally, on December 10, 2005 Doe Run Peru
      signed a Working Capital Financial Facility Agreement for up to $30,000 (named
      Ferrites Loan) with Servicios Mineros Integrados S.A.C., a Trafigura Beheer
      B.V.
      subsidiary, and intends to use such funds in the fulfillment of the financial
      security as mentioned above. It is unlikely that Doe Run Peru will be able
      to
      utilize the entire facility due to production limitations and other conditions
      within the agreement. As of January 31, 2006, Doe Run Peru has received $10,000
      from this facility.





Doe
      Run
      Peru has performed other environmental projects to reduce fugitive emissions
      in
      2005 including the installation of a second short rotary furnace, enclosing
      the
      blast furnace and dross plant, along with other complementary work. Major
      projects scheduled for fiscal year 2006 include an upgrade of the ventilation
      system in the Sinter plant, completion of the enclosure work around the lead
      and
      dross furnace, the enclosure of the anode residue plant along with the
      elimination of its nitrous gases, and the reduction of fugitive emissions from
      the copper and lead beds. The total cost of the currently remaining PAMA
      projects, including the sulfuric acid plant construction, and these projects
      is
      approximately $122,000.





Management
      believes that Doe Run Peru will obtain an approval of an extension to complete
      the sulfuric acid plants. There is no assurance, however, that Doe Run Peru
      will
      receive an extension, or, if it does, that the project will be completed within
      the time limitation specified by the Supreme Decree.





In
      the
      future, to reduce gas volume while enriching sulfurous gas feed to the copper
      circuit sulfuric acid plant, we are planning to replace the oxy-fuel
      reverberatory furnace with a submerged lanced reactor furnace to smelt copper
      concentrates. The anticipated cost is approximately $57 million and the project
      will likely require additional financing.





Under
      the
      purchase agreement related to the acquisition of the La Oroya assets in October
      1997, Centromin, the prior owner of the La Oroya smelter and Cobriza mine,
      agreed to indemnify Doe Run Peru against environmental liability arising out
      of
      its prior operations and their apportioned share of any other complaint related
      to emissions. Performance of the indemnity has been guaranteed by the Peruvian
      government through the enactment of the Supreme Decree No. 042-97-PCM. However,
      there can be no assurance that Centromin will satisfy its environmental
      obligations and investment requirements, including those in its PAMA, or that
      the guarantee will be honored. Any failure by Centromin to satisfy its
      environmental obligations could adversely affect Doe Run Peru’s business,
      financial condition and results of operations.





In
      addition to its PAMA obligations, Doe Run Peru is responsible for the
      remediation costs relating to a zinc ferrite disposal site. The current closure
      plan provides for encapsulating the ferrite residues in place at Huanchan,
      an
      area a short distance from the smelter where they are currently stored, for
      which an environmental liability of $1,600 has been recorded as of January
      31,
      2006 and October 31, 2005.











***Environmental
      remediation -***  ***Consolidated***




The
      Company believes its reserves for domestic and foreign environmental, mine
      closure and reclamation matters are adequate, based on the information currently
      available. Depending upon the type and extent of activities required, revisions
      to management’s estimates of costs to perform these activities are reasonably
      possible in the near term. Therefore, there can be no assurance that additional
      costs, both individually and in the aggregate, would not have a material adverse
      effect on the results of operations, financial condition and liquidity of the
      Company.





**(8)**  **Litigation** ******





Doe
      Run
      is a defendant in 29 lawsuits alleging certain damages stemming from the
      operations at the Herculaneum primary smelter. Three of these cases are class
      action lawsuits. In two cases, the plaintiffs seek to have certified a class
      of
      property owners in a certain section of Herculaneum, alleging that property
      values have been damaged due to the operations of the smelter. In another case,
      plaintiffs seek to have certified a class of children who lived in Herculaneum
      during a period of time when they were less than six years old and children
      born
      to mothers who lived in Herculaneum during their pregnancies. The remedy sought
      is medical monitoring for the class. Twenty-six of the cases are personal injury
      actions by 161 individuals who allege damages from the effects of lead due
      to
      operations at the smelter. Punitive damages also are being sought in each case.
      Doe Run is also a defendant in a wrongful death action concerning a drowning
      in
      the City of Herculaneum.




A
      resident of Herculaneum has claimed personal injuries allegedly resulting from
      exposure to emissions from the smelter. No suit has yet been filed in this
      matter.




Doe
      Run
      is a defendant in 17 lawsuits alleging certain damages from discontinued mine
      facilities in St. Francois County. Four of the cases are class action lawsuits.
      The first case seeks to have certified a class consisting of property owners
      in
      Bonne Terre, Missouri, alleging that property values have been damaged due
      to
      the tailings from the discontinued operations. In the second case plaintiffs
      seek to have certified a class of children who lived, went to school or day
      care
      in Bonne Terre, or whose mothers lived in Bonne Terre during their pregnancies.
      The third and fourth cases are class actions for property damage and medical
      monitoring concerning alleged damages caused by chat, tailings and related
      operations in six areas in St. Francois County. The remainder of the cases
      allege personal injury to 28 individuals who were exposed to lead in St.
      Francois County.




Doe
      Run
      is a defendant in a lawsuit by the BNSF Railway Company, who has alleged that
      Doe Run and other companies associated with lead mining operations in Missouri
      are responsible for property damage at certain rail yards and for contribution
      and indemnity for costs incurred by BNSF associated with settlement by BNSF
      of
      lead exposure cases. Given the early stage of this case, the Company is unable
      at this time to estimate the expected outcome and any final costs of this
      action.




Doe
      Run
      is a defendant in five lawsuits alleging certain damages from past mining
      operations in Ottawa County, Oklahoma.  Three of these suits are class
      actions alleging personal injury and property damage in Picher and Quapaw,
      Oklahoma.  One lawsuit, a consolidation of five suits, alleges injury to
      seven children living in Picher, Oklahoma.  One lawsuit, a consolidation of
      two suits, alleges injury to 42 children living in Ottawa County.




Doe
      Run,
      with several other defendants, has been named in four cases in Maryland but
      has
      not yet been joined as a defendant in any of these cases. These suits seek
      damages, alleging personal injuries as a result of lead poisoning from exposure
      to lead paint and tetraethyl lead dust. The suits seek punitive damages. Doe
      Run
      was dismissed from two similar cases in which it was joined as a defendant.
      Until Doe Run is actually joined as a defendant in one or more of these cases,
      material liability from these cases is considered remote.




Doe
      Run
      is currently a defendant in three asbestos injury suits filed in Madison County,
      Illinois, each alleging that a worker was exposed to asbestos at the premises
      of
      the St. Joe Minerals Corporation. However, Doe Run has not been properly served
      in one of these cases. Doe Run has reached a tentative settlement in another
      of
      these cases prior to going to trial. Doe Run is also a defendant in an asbestos
      case filed in Lawrence County, Pennsylvania. Doe Run was named in an asbestos
      injury suit in the City of St. Louis, Missouri but that case was subsequently
      dismissed.











Doe
      Run
      is in a commercial dispute with a buyer concerning one ocean shipment of lead
      concentrates. Buyer is seeking reimbursement of expenses incurred to address
      a
      large amount of water that appeared during the voyage on top of concentrates
      in
      the forward holds. This contract dispute is in arbitration before the
      LME.




Doe
      Run
      is a defendant in a lawsuit by Korea Zinc Co. and affiliates filed on January
      19, 2006 in the Circuit Court of St. Louis County, concerning alleged violations
      of an agreement regarding the sale of zinc concentrates. Doe Run disputes the
      claim and will seek dismissal because the dispute should be subject to
      arbitration.




Doe
      Run
      has been named as a party in various lawsuits relating to certain operations
      of
      its predecessor. Fluor Corporation, the owner of Doe Run’s predecessor, retained
      the obligation for any costs of defense or claims relating to these lawsuits.
      Should Fluor Corporation become unable to fulfill its contractual obligation,
      Doe Run could be liable for any costs or claims resulting from these lawsuits.
      There is no reason at this time to believe that Fluor Corporation could not
      fulfill its contractual obligations.




Doe
      Run
      Peru is currently a defendant in 197 lawsuits in the Lima, Peru labor courts
      that allege damage to workers from industrial diseases. Doe Run Peru has made
      claims in most of the cases against Centromin and has also made claims against
      both governmental agencies and private companies that provide workers’
insurance. The average claim is $17. Of 19 previously concluded cases in this
      category, 18 were dismissed and 1 resulted in an award of $9.




Doe
      Run
      Peru is also currently a defendant in 156 lawsuits by workers alleging that
      they
      are owed certain differences in salaries and benefits. (Some of the open cases
      date to 1991). The average claim is $20. Of 38 previously concluded cases in
      this category, 29 were dismissed and 9 resulted in awards totaling $19. Doe
      Run
      Peru is also a defendant in a lawsuit by the Yauli-La Oroya Employees Union
      concerning salaries and benefits. The claims of the 149 workers remaining in
      the
      lawsuit have been valued at a total of $218 according to a report by an expert
      appointed by the court.




Doe
      Run
      Peru is also currently a defendant in 21 lawsuits alleging various labor claims
      including indemnification for arbitrary dismissal, nullity of dismissal, moral
      damage compensation, compensatory damages from work accident and readmission
      of
      worker. The average claim is $7. Of 30 previously concluded cases in this
      category, 26 were dismissed and 4 resulted in awards totaling $21.




The
      amount of awards in the various categories of lawsuits referenced above
      represented total judgments issued by the relevant courts. For certain of these
      lawsuits, Centromin will pay a portion of the total award.




On
      January 19, 2005, Doe Run Peru was served with a lawsuit by an association
      of
      municipalities of the Junin Region of Peru against Doe Run Peru and two other
      mining companies. This lawsuit alleges environmental damages to the Mantaro
      River basin in the amount of $5 billion. On February 2, 2006, Doe Run Peru
      was
      served with a lawsuit by the municipality of Jauja. This lawsuit alleges
      environmental damages to the Mantaro River basin in the amount of $5,000.
      Material liability to Doe Run Peru, in these two actions, is believed to be
      remote based on the opinion of management and outside counsel for Doe Run Peru.
      Any potential judgment would be subject to the indemnification obligations
      of
      Centromin, which are guaranteed by the Peruvian government.




On
      July
      11, 2005, Doe Run Peru filed an administrative lawsuit against the Yauli -
      La
      Oroya Provincial City Hall in order to nullify and void a number of fines for
      the amount of $2,800. Doe Run Peru was fined for not having construction
      licenses for the PAMA projects.




Since
      most of the above cases are either in the pleading or discovery stages, the
      Company is unable at this time to estimate the expected outcome and the final
      costs, except as noted, of these actions. The total legal accrual estimated
      as
      of January 31, 2006 was $475. There can be no assurance that these cases would
      not have a material adverse effect, both individually and in the aggregate,
      on
      the results of operations, financial condition and liquidity of the Company.
      The
      Company has and will continue to vigorously defend itself against such
      claims.











**(9)**  **Guarantor
      Subsidiaries**





The
      Guarantor Subsidiaries (Fabricated Products, Inc. (FPI) and DR Land Holdings,
      LLC (together, the Domestic Guarantors) Buick Resource Recycling Facility,
      LLC,
      Doe Run Cayman Ltd. (Doe Run Cayman) and its subsidiary Doe Run Peru) have
      jointly and severally, fully, unconditionally and irrevocably guaranteed the
      11.75% notes of the Company. Doe Run Cayman has no operations separate from
      those of Doe Run Peru. Separate financial statements and other disclosures
      concerning certain Guarantor Subsidiaries and disclosures concerning
      non-Guarantor Subsidiaries have not been presented because management has
      determined that such information is not material to investors. Intercompany
      transactions eliminated in consolidation consist of various service and agency
      fees between Doe Run and Doe Run Peru and sales of metal to Doe Run by Doe
      Run
      Peru and to FPI by Doe Run.










**Condensed
                Consolidating Balance Sheet (unaudited)****As
                of January 31, 2006****(Amounts
                in thousands, except share and per share
                data)**The
                Company
            
            BuickExcluding
            
            Resource
            
            Other
            
            Doe
                RunGuarantor
            
            Recycling
            
            Domestic
            
            Cayman
                and
            
            
            
            TheSubsidiaries
            
            Facility,
                LLC
            
            Guarantors
            
            Subsidiary
            
            Eliminations
            
            Company**ASSETS**Current
                assets:Cash
            
            $
            4,745
            
            $
            -
            
            $
            1
            
            $
            24,714
            
            $
            -
            
            $
            29,460Trade
                accounts receivable, net of allowance fordoubtful
                accounts
            
            
            74,460
            
            
            -
            
            
            1,800
            
            
            32,656
            
            
            (4,165
            )
            
            104,751Inventories
            
            
            37,648
            
            
            -
            
            
            1,272
            
            
            99,292
            
            
            5
            
            
            138,217Prepaid
                expenses and other current assets
            
            
            6,181
            
            
            -
            
            
            42
            
            
            20,293
            
            
            -
            
            
            26,516Due
                from subsidiaries
            
            
            151,477
            
            
            2,282
            
            
            -
            
            
            -
            
            
            (153,759
            )
            
            -Total
                current assets
            
            
            274,511
            
            
            2,282
            
            
            3,115
            
            
            176,955
            
            
            (157,919
            )
            
            298,944Property,
                plant and equipment, net
            
            
            75,404
            
            
            15,404
            
            
            905
            
            
            168,793
            
            
            -
            
            
            260,506Due
                from subsidiaries
            
            
            13,312
            
            
            -
            
            
            -
            
            
            -
            
            
            (13,312
            )
            
            -Other
                noncurrent assets, net
            
            
            8,717
            
            
            -
            
            
            62
            
            
            -
            
            
            -
            
            
            8,779Investment
                in subsidiaries
            
            
            14,096
            
            
            -
            
            
            -
            
            
            -
            
            
            (14,096
            )
            
            -Total
                assets
            
            $
            386,040
            
            $
            17,686
            
            $
            4,082
            
            $
            345,748
            
            $
            (185,327
            )
            $
            568,229**LIABILITIES
                AND SHAREHOLDERS' EQUITY (DEFICIT)**Current
                liabilities:Current
                maturities of long-term debt
            
            $
            82,815
            
            $
            -
            
            $
            -
            
            $
            49,889
            
            $
            -
            
            $
            132,704Accounts
                payable
            
            
            29,137
            
            
            -
            
            
            605
            
            
            103,349
            
            
            (4,165
            )
            
            128,926Accrued
                liabilities
            
            
            48,449
            
            
            -
            
            
            735
            
            
            30,537
            
            
            -
            
            
            79,721Due
                to parent/subsidiaries
            
            
            2,282
            
            
            -
            
            
            8,414
            
            
            143,063
            
            
            (153,759
            )
            
            -Total
                current liabilities
            
            
            162,683
            
            
            -
            
            
            9,754
            
            
            326,838
            
            
            (157,924
            )
            
            341,351Long-term
                debt, less current maturities
            
            
            271,566
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            271,566Due
                to parent
            
            
            -
            
            
            -
            
            
            -
            
            
            13,312
            
            
            (13,312
            )
            
            -Other
                noncurrent liabilities
            
            
            65,658
            
            
            -
            
            
            2
            
            
            3,519
            
            
            -
            
            
            69,179Total
                liabilities
            
            
            499,907
            
            
            -
            
            
            9,756
            
            
            343,669
            
            
            (171,236
            )
            
            682,096Series
                A redeemable preferred stock
            
            
            29,385
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            29,385Shareholders'
                equity (deficit):Common
                stock, $.10 par value per share, 1,667 shares authorized,1000
                shares issued and outstanding
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Common
                stock, $1 par value per share, 1,000 shares authorized,issued
                and outstanding
            
            
            -
            
            
            -
            
            
            1
            
            
            -
            
            
            (1
            )
            
            -Common
                stock, $1 par value per share, 2,005,000 shares
                authorized,issued
                and outstanding
            
            
            -
            
            
            -
            
            
            -
            
            
            2,005
            
            
            (2,005
            )
            
            -Additional
                paid in capital
            
            
            -
            
            
            23,305
            
            
            1,205
            
            
            -
            
            
            (24,510
            )
            
            -Accumulated
                preferred stock dividends inexcess
                of paid in capital
            
            
            (4,147
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (4,147
            )Retained
                earnings (accumulated deficit) and accumulatedother
                comprehensive losses
            
            
            (139,105
            )
            
            (5,619
            )
            
            (6,880
            )
            
            74
            
            
            12,425
            
            
            (139,105
            )Total
                shareholders' equity (deficit)
            
            
            (143,252
            )
            
            17,686
            
            
            (5,674
            )
            
            2,079
            
            
            (14,091
            )
            
            (143,252
            )Total
                liabilities and shareholders' equity (deficit)
            
            $
            386,040
            
            $
            17,686
            
            $
            4,082
            
            $
            345,748
            
            $
            (185,327
            )
            $
            568,229











**Condensed
                Consolidating Balance Sheet****As
                of October 31, 2005****(Amounts
                in thousands, except share and per share
                data)**The
                Company
            
            BuickExcluding
            
            Resource
            
            Other
            
            Doe
                RunGuarantor
            
            Recycling
            
            Domestic
            
            Cayman
                and
            
            
            
            TheSubsidiaries
            
            Facility,
                LLC
            
            Guarantors
            
            Subsidiary
            
            Eliminations
            
            Company**ASSETS**Current
                assets:Cash
            
            $
            8,916
            
            $
            -
            
            $
            1
            
            $
            14,569
            
            $
            -
            
            $
            23,486Trade
                accounts receivable, net of allowance for doubtful
                accounts
            
            
            56,454
            
            
            -
            
            
            2,202
            
            
            31,637
            
            
            (4,553
            )
            
            85,740Inventories
            
            
            35,613
            
            
            -
            
            
            1,301
            
            
            68,756
            
            
            (36
            )
            
            105,634Prepaid
                expenses and other current assets
            
            
            4,564
            
            
            -
            
            
            59
            
            
            16,191
            
            
            -
            
            
            20,814Due
                from subsidiaries
            
            
            151,617
            
            
            2,037
            
            
            -
            
            
            -
            
            
            (153,654
            )
            
            -Total
                current assets
            
            
            257,164
            
            
            2,037
            
            
            3,563
            
            
            131,153
            
            
            (158,243
            )
            
            235,674Property,
                plant and equipment, net
            
            
            74,604
            
            
            16,083
            
            
            1,013
            
            
            161,563
            
            
            -
            
            
            253,263Due
                from subsidiaries
            
            
            14,057
            
            
            -
            
            
            -
            
            
            -
            
            
            (14,057
            )
            
            -Other
                noncurrent assets, net
            
            
            5,775
            
            
            -
            
            
            63
            
            
            -
            
            
            -
            
            
            5,838Investment
                in subsidiaries
            
            
            6,708
            
            
            -
            
            
            -
            
            
            -
            
            
            (6,708
            )
            
            -Total
                assets
            
            $
            358,308
            
            $
            18,120
            
            $
            4,639
            
            $
            292,716
            
            $
            (179,008
            )
            $
            494,775**LIABILITIES
                AND SHAREHOLDERS' EQUITY (DEFICIT)**Current
                liabilities:Current
                maturities of long-term debt
            
            $
            75,126
            
            $
            -
            
            
            -
            
            $
            39,821
            
            $
            -
            
            $
            114,947Accounts
                payable
            
            
            29,007
            
            
            -
            
            
            706
            
            
            67,115
            
            
            (4,553
            )
            
            92,275Accrued
                liabilities
            
            
            55,392
            
            
            -
            
            
            468
            
            
            31,200
            
            
            -
            
            
            87,060Due
                to parent/subsidiaries
            
            
            2,037
            
            
            -
            
            
            8,554
            
            
            143,063
            
            
            (153,654
            )
            
            -Total
                current liabilities
            
            
            161,562
            
            
            -
            
            
            9,728
            
            
            281,199
            
            
            (158,207
            )
            
            294,282Long-term
                debt, less current maturities
            
            
            271,566
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            271,566Due
                to parent
            
            
            -
            
            
            -
            
            
            -
            
            
            14,057
            
            
            (14,057
            )
            
            -Other
                noncurrent liabilities
            
            
            64,590
            
            
            -
            
            
            281
            
            
            3,466
            
            
            -
            
            
            68,337Total
                liabilities
            
            
            497,718
            
            
            -
            
            
            10,009
            
            
            298,722
            
            
            (172,264
            )
            
            634,185Series
                A redeemable preferred stock
            
            
            28,495
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            28,495Shareholders'
                equity (deficit):Common
                stock, $.10 par value per share, 1,667 shares authorized,1,000
                shares issued and outstanding
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Common
                stock, $1 par value per share, 1,000 shares authorized,issued
                and outstanding
            
            
            -
            
            
            -
            
            
            1
            
            
            -
            
            
            (1
            )
            
            -Common
                stock, $1 par value per share, 2,005,000 shares
                authorized,issued
                and outstanding
            
            
            -
            
            
            -
            
            
            -
            
            
            2,005
            
            
            (2,005
            )
            
            -Additional
                paid in capital
            
            
            -
            
            
            23,305
            
            
            1,205
            
            
            -
            
            
            (24,510
            )
            
            -Accumulated
                preferred stock dividends inexcess
                of paid in capital
            
            
            (3,257
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (3,257
            )Accumulated
                deficit and accumulated othercomprehensive
                losses
            
            
            (164,648
            )
            
            (5,185
            )
            
            (6,576
            )
            
            (8,011
            )
            
            19,772
            
            
            (164,648
            )Total
                shareholders' equity (deficit)
            
            
            (167,905
            )
            
            18,120
            
            
            (5,370
            )
            
            (6,006
            )
            
            (6,744
            )
            
            (167,905
            )Total
                liabilities and shareholders' equity (deficit)
            
            $
            358,308
            
            $
            18,120
            
            $
            4,639
            
            $
            292,716
            
            $
            (179,008
            )
            $
            494,775











**Condensed
                Consolidating Statement of Operations (unaudited)****Three
                Months Ended January 31, 2006****(Amounts
                in thousands)**The
                Company
            
            BuickExcluding
            
            Resource
            
            
            
            Doe
                RunGuarantor
            
            Recycling
            
            Domestic
            
            Cayman
                and
            
            
            
            TheSubsidiaries
            
            Facility,
                LLC
            
            Guarantors
            
            Subsidiary
            
            Eliminations
            
            CompanyNet
                sales
            
            $
            108,830
            
            $
            -
            
            $
            3,363
            
            $
            208,932
            
            $
            (7,001
            )
            $
            314,124Costs
                and expenses:Cost
                of sales
            
            
            77,454
            
            
            -
            
            
            2,541
            
            
            190,434
            
            
            (7,042
            )
            
            263,387Depletion,
                depreciation and amortization
            
            
            2,324
            
            
            680
            
            
            110
            
            
            2,999
            
            
            -
            
            
            6,113Selling,
                general and administrative
            
            
            6,467
            
            
            -
            
            
            656
            
            
            5,984
            
            
            -
            
            
            13,107Unrealized
                loss (gain) on derivatives
            
            
            315
            
            
            -
            
            
            -
            
            
            (2,270
            )
            
            -
            
            
            (1,955
            )Other
            
            
            1,017
            
            
            -
            
            
            -
            
            
            290
            
            
            -
            
            
            1,307Total
                costs and expenses
            
            
            87,577
            
            
            680
            
            
            3,307
            
            
            197,437
            
            
            (7,042
            )
            
            281,959Income
                (loss) from operations
            
            
            21,253
            
            
            (680
            )
            
            56
            
            
            11,495
            
            
            41
            
            
            32,165Other
                income (expense):Interest
                expense, net
            
            
            (1,153
            )
            
            -
            
            
            (116
            )
            
            (1,468
            )
            
            -
            
            
            (2,737
            )Other,
                net
            
            
            (241
            )
            
            245
            
            
            2
            
            
            (100
            )
            
            -
            
            
            (94
            )Equity
                in earnings of subsidiaries
            
            
            7,633
            
            
            -
            
            
            -
            
            
            -
            
            
            (7,633
            )
            
            -6,239
            
            
            245
            
            
            (114
            )
            
            (1,568
            )
            
            (7,633
            )
            
            (2,831
            )Income
                (loss) before income tax expense
            
            
            27,492
            
            
            (435
            )
            
            (58
            )
            
            9,927
            
            
            (7,592
            )
            
            29,334Income
                tax expense
            
            
            -
            
            
            -
            
            
            -
            
            
            1,842
            
            
            -
            
            
            1,842Net
                income (loss)
            
            
            27,492
            
            
            (435
            )
            
            (58
            )
            
            8,085
            
            
            (7,592
            )
            
            27,492Preferred
                stock dividends
            
            
            (890
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (890
            )Net
                income (loss) allocable to common shares
            
            $
            26,602
            
            $
            (435
            )
            $
            (58
            )
            $
            8,085
            
            $
            (7,592
            )
            $
            26,602











**Condensed
                Consolidating Statement of Operations (unaudited)****Three
                Months Ended January 31, 2005****(Amounts
                in thousands)**The
                Company
            
            BuickExcluding
            
            Resource
            
            
            
            Doe
                RunGuarantor
            
            Recycling
            
            Domestic
            
            Cayman
                and
            
            
            
            TheSubsidiaries
            
            Facility,
                LLC
            
            Guarantors
            
            Subsidiary
            
            Eliminations
            
            CompanyNet
                sales
            
            $
            84,382
            
            $
            -
            
            $
            3,815
            
            $
            151,109
            
            $
            (3,324
            )
            $
            235,982Costs
                and expenses:Cost
                of sales
            
            
            60,038
            
            
            -
            
            
            2,950
            
            
            138,364
            
            
            (3,349
            )
            
            198,003Depletion,
                depreciation and amortization
            
            
            2,028
            
            
            854
            
            
            100
            
            
            3,155
            
            
            -
            
            
            6,137Selling,
                general and administrative
            
            
            6,026
            
            
            -
            
            
            587
            
            
            4,314
            
            
            -
            
            
            10,927Unrealized
                loss (gain) on derivatives
            
            
            (1,109
            )
            
            -
            
            
            -
            
            
            311
            
            
            -
            
            
            (798
            )Other
            
            
            1,521
            
            
            29
            
            
            153
            
            
            134
            
            
            -
            
            
            1,837Total
                costs and expenses
            
            
            68,504
            
            
            883
            
            
            3,790
            
            
            146,278
            
            
            (3,349
            )
            
            216,106Income
                (loss) from operations
            
            
            15,878
            
            
            (883
            )
            
            25
            
            
            4,831
            
            
            25
            
            
            19,876Other
                income (expense):Interest
                expense, net
            
            
            (2,679
            )
            
            -
            
            
            (156
            )
            
            (606
            )
            
            -
            
            
            (3,441
            )Other,
                net
            
            
            (50
            )
            
            195
            
            
            2
            
            
            105
            
            
            -
            
            
            252Equity
                in earnings of subsidiaries
            
            
            3,538
            
            
            -
            
            
            -
            
            
            -
            
            
            (3,538
            )
            
            -809
            
            
            195
            
            
            (154
            )
            
            (501
            )
            
            (3,538
            )
            
            3,189
            )Net
                income (loss)
            
            
            16,687
            
            
            (688
            )
            
            (129
            )
            
            4,330
            
            
            (3,513
            )
            
            16,687Preferred
                stock dividends
            
            
            (792
            )
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (792
            )Net
                income (loss) allocable to common shares
            
            $
            15,895
            
            $
            (688
            )
            $
            (129
            )
            $
            4,330
            
            $
            (3,513
            )
            $
            15,895











**Condensed
                Consolidating Statement of Cash Flows (unaudited)****Three
                Months Ended January 31, 2006****(Amounts
                in thousands)**The
                Company
            
            BuickExcluding
            
            Resource
            
            
            
            Doe
                RunGuarantor
            
            Recycling
            
            Domestic
            
            Cayman
                and
            
            
            
            TheSubsidiaries
            
            Facility,
                LLC
            
            Guarantors
            
            Subsidiary
            
            Eliminations
            
            CompanyNet
                cash provided by (used in) operating activities
            
            $
            (417
            )
            $
            1,120
            
            $
            634
            
            $
            10,998
            
            $
            (10,690
            )
            $
            1,645Cash
                flows from investing activities:Purchases
                of property, plant and equipment
            
            
            (3,250
            )
            
            -
            
            
            (2
            )
            
            (10,012
            )
            
            -
            
            
            (13,264
            )Investment
                in subsidiaries
            
            
            (10,690
            )
            
            -
            
            
            -
            
            
            -
            
            
            10,690
            
            
            -Net
                cash used in investing activities
            
            
            (13,940
            )
            
            -
            
            
            (2
            )
            
            (10,012
            )
            
            10,690
            
            
            (13,264
            )Cash
                flows from financing activities:Proceeds
                from revolving loans andshort-term
                borrowings, net
            
            
            7,689
            
            
            -
            
            
            -
            
            
            10,000
            
            
            -
            
            
            17,689Payments
                on long-term debt
            
            
            -
            
            
            -
            
            
            -
            
            
            (96
            )
            
            -
            
            
            (96
            )Due
                to/due from parent/subsidiaries
            
            
            2,497
            
            
            (1,120
            )
            
            (632
            )
            
            (745
            )
            
            -
            
            
            -Net
                cash provided by (used in) financing activities
            
            
            10,186
            
            
            (1,120
            )
            
            (632
            )
            
            9,159
            
            
            -
            
            
            17,593Net
                increase (decrease) in cash
            
            
            (4,171
            )
            
            -
            
            
            -
            
            
            10,145
            
            
            -
            
            
            5,974Cash
                at beginning of period
            
            
            8,916
            
            
            -
            
            
            1
            
            
            14,569
            
            
            -
            
            
            23,486Cash
                at end of period
            
            $
            4,745
            
            $
            -
            
            $
            1
            
            $
            24,714
            
            $
            -
            
            $
            29,460











**Condensed
                Consolidating Statement of Cash Flows (unaudited)****Three
                Months Ended January 31, 2005****(Amounts
                in thousands)**The
                Company
            
            BuickExcluding
            
            Resource
            
            
            
            Doe
                RunGuarantor
            
            Recycling
            
            Domestic
            
            Cayman
                and
            
            
            
            TheSubsidiaries
            
            Facility,
                LLC
            
            Guarantors
            
            Subsidiary
            
            Eliminations
            
            CompanyNet
                cash provided by (used in) operating activities
            
            $
            (854
            )
            $
            196
            
            $
            (175
            )
            $
            9,133
            
            $
            (4,454
            )
            $
            3,846Cash
                flows from investing activities:Purchases
                of property, plant and equipment
            
            
            (3,816
            )
            
            -
            
            
            (105
            )
            
            (12,648
            )
            
            -
            
            
            (16,569
            )Investment
                in subsidiaries
            
            
            (4,454
            )
            
            -
            
            
            -
            
            
            -
            
            
            4,454
            
            
            -Net
                cash used in investing activities
            
            
            (8,270
            )
            
            -
            
            
            (105
            )
            
            (12,648
            )
            
            4,454
            
            
            (16,569
            )Cash
                flows from financing activities:Proceeds
                from revolving loans andshort-term
                borrowings, net
            
            
            (2,677
            )
            
            -
            
            
            -
            
            
            580
            
            
            -
            
            
            (2,097
            )Payments
                on long-term debt
            
            
            -
            
            
            -
            
            
            -
            
            
            (12
            )
            
            -
            
            
            (12
            )Due
                to/due from parent/subsidiaries
            
            
            (74
            )
            
            (196
            )
            
            280
            
            
            (10
            )
            
            -
            
            
            -Net
                cash provided by (used in) financing activities
            
            
            (2,751
            )
            
            (196
            )
            
            280
            
            
            558
            
            
            -
            
            
            (2,109
            )Net
                decrease in cash
            
            
            (11,875
            )
            
            -
            
            
            -
            
            
            (2,957
            )
            
            -
            
            
            (14,832
            )Cash
                at beginning of period
            
            
            13,412
            
            
            -
            
            
            1
            
            
            6,905
            
            
            -
            
            
            20,318Cash
                at end of period
            
            $
            1,537
            
            $
            -
            
            $
            1
            
            $
            3,948
            
            $
            -
            
            $
            5,486








**DOE
      RUN PERU S.R.L.**


**Condensed
      Balance Sheets**


**(U.S.
      dollars in thousands, except share and per share data)**





**January
                31,**
            
            **October
                31,****2006**
            
            **2005****ASSETS**
            
            **(unaudited)**Current
                assets:Cash
            
            $
            24,714
            
            $
            14,569Trade
                accounts receivable, net of allowance for doubtful
                accounts
            
            
            32,656
            
            
            31,637Inventories
            
            
            99,292
            
            
            68,756Prepaid
                expenses and other current assets
            
            
            20,293
            
            
            16,191Total
                current assets
            
            
            176,955
            
            
            131,153Property,
                plant and equipment, net
            
            
            168,793
            
            
            161,563Total
                assets
            
            $
            345,748
            
            $
            292,716**LIABILITIES
                AND SHAREHOLDERS’ EQUITY (DEFICIT)**Current
                liabilities:Current
                maturities of long-term debt
            
            $
            49,889
            
            $
            39,821Accounts
                payable
            
            
            103,349
            
            
            67,115Accrued
                liabilities
            
            
            30,537
            
            
            31,200Due
                to related parties
            
            
            143,063
            
            
            143,063Total
                current liabilities
            
            
            326,838
            
            
            281,199Due
                to parent company and related parties
            
            
            13,312
            
            
            14,057Other
                non current liabilities
            
            
            3,519
            
            
            3,466Total
                liabilities
            
            
            343,669
            
            
            298,722Shareholders’
                equity (deficit):Capital
                stock, $ 0.01 par value per share, 15,912,083,739 shares, fully
                paid
            
            
            2,005
            
            
            2,005Retained
                earnings (deficit) and other comprehensive income (loss)
            
            
            74
            
            
            (8,011
            )Total
                shareholders’ equity (deficit)
            
            
            2,079
            
            
            (6,006
            )Total
                liabilities and shareholders’ equity (deficit)
            
            $
            345,748
            
            $
            292,716





The
      accompanying notes are an integral part of these financial
      statements.





**DOE
      RUN PERU S.R.L.**


**Condensed
      Statements of Operations (unaudited)**


**(U.S.
      dollars in thousands)**




**Three
                  Months****Ended
                  January 31,****2006**
              
              **2005**Net
                  sales
              
              $
              208,932
              
              $
              151,109Costs
                  and expenses:Costs
                  of sales
              
              
              190,434
              
              
              138,364Depletion,
                  depreciation and amortization
              
              
              2,999
              
              
              3,155Selling,
                  general and administrative expenses
              
              
              5,984
              
              
              4,314Unrealized
                  (gain) loss on derivatives
              
              
              (2,270
              )
              
              311Other
              
              
              290
              
              
              134Total
                  costs and expenses
              
              
              197,437
              
              
              146,278Income
                  from operations
              
              
              11,495
              
              
              4,831Other
                  income (expense):Interest
                  expense, net
              
              
              (1,468
              )
              
              (606
              )Other,
                  net
              
              
              (100
              )
              
              105(1,568
              )
              
              (501
              )Income
                  before income tax expense
              
              
              9,927
              
              
              4,330Income
                  tax expense
              
              
              1,842
              
              
              -Net
                  income
              
              $
              8,085
              
              $
              4,330




The
      accompanying notes are an integral part of these financial
      statements.





**DOE
      RUN PERU S.R.L.**


**Condensed
      Statements of Cash Flows (unaudited)**


**(U.S.
      dollars in thousands)**






**Three
                    Months****Ended
                    January 31,****2006**
                
                **2005**Net
                    cash provided by operating activities
                
                $
                10,998
                
                $
                9,133Cash
                    flows from investing activities:Purchases
                    of property, plant and equipment
                
                
                (10,012
                )
                
                (12,648
                )Net
                    cash used in investing activities
                
                
                (10,012
                )
                
                (12,648
                )Cash
                    flows from financing activities:Proceeds
                    from (payments on) revolving loans, net
                
                
                10,000
                
                
                580Payments
                    on long term debt
                
                
                (96
                )
                
                (12
                )Decrease
                    in amount due to related parties
                
                
                (745
                )
                
                (10
                )Net
                    cash provided by financing activities
                
                
                9,159
                
                
                558Net
                    increase (decrease) in cash
                
                
                10,145
                
                
                (2,957
                )Cash
                    at beginning of period
                
                
                14,569
                
                
                6,905Cash
                    at end of period
                
                $
                24,714
                
                $
                3,948
  The
        accompanying notes are integral part of these financial
        statements.








**DOE
      RUN PERU S.R.L.**





**Notes
      to Financial Statements**


**(U.S.
      dollars in thousands)**





**(1)**  **Summary
      of Significant Accounting Policies**





***Unaudited
      Interim Financial Statements***





These
      interim financial statements include the accounts of Doe Run Peru S.R.L. (“Doe
      Run Peru”). In the opinion of management, the interim financial statements
      contain all adjustments, consisting of normal recurring accruals, necessary
      to
      present fairly the financial position as of January 31, 2006 and results of
      operations for the three-month periods ended January 31, 2006 and 2005. All
      material intercompany balances and transactions have been eliminated. Interim
      periods are not necessarily indicative of results to be expected for the year.





***Reclassifications***





Certain
      prior period balances have been reclassified in order to conform to current
      presentation.





**(2)**  **Financial
      Condition**




Doe
        Run
        Peru is highly leveraged and has significant commitments for environmental
        matters and for Environmental Remediation and Management Program (“PAMA”)
        expenditures that require it to dedicate a substantial portion of cash flow
        from
        operations to the payment of these obligations, which will reduce funds
        available for other business purposes. (See Note 6: Asset Retirement and
        Environmental Obligations). These factors also increase Doe Run Peru’s
        vulnerability to general adverse conditions, limit Doe Run Peru’s flexibility in
        planning for or reacting to changes in its business and industry, and limit
        Doe
        Run Peru’s ability to obtain financing required to fund working capital and
        capital expenditures and for other general corporate purposes. An unfavorable
        outcome to certain contingencies, discussed below, would have a further adverse
        effect on Doe Run Peru’s ability to meet its obligations when due. Doe Run
        Peru’s ability to meet these obligations is also dependent upon future operating
        performance and financial results which are subject to financial, economic,
        political, competitive and other factors affecting Doe Run, many of which
        are
        beyond Doe Run Peru’s control.


The
      effects of higher metal prices over the past two years have been positive.
      Comparing the first quarter of 2006 to that of 2005, the value of the metal
      recovered over paid metal has increased 25% from $6,927 to $8,684. The values
      of
      by-products, too, have improved from $4,997 to $6,437, or 28%. During the first
      quarter of 2006, Doe Run Peru has benefited from its ferrites floatation plant
      which was placed in service at the end of the prior fiscal year. Though the
      plant has not reached its full capacity, it still contributed $2,504 to
      revenues.





While
      conversion costs have risen by $5,549 over the two periods and SG&A has
      risen $1,570, management believes that Doe Run Peru’s financial condition, as a
      result of the improved market conditions discussed in the preceding paragraphs,
      has stabilized. There still exists, however, the possibility that concentrate
      supplies will tighten again in one or more metals in the near future. In
      addition, one or more of Doe Run Peru’s significant local suppliers could cease
      delivery of concentrates. Under these circumstances there is no assurance that
      we would be able to secure sufficient replacement at economically favorable
      terms. An interruption in the feed supply would adversely affect production
      at
      La Oroya and impair financial condition and liquidity.





The
      financial statements have been prepared assuming Doe Run Peru will continue
      as a
      going concern. Doe Run Peru has significant capital requirements under
      environmental commitments, which, if not met, could result in defaults of Doe
      Run Peru’s credit agreements; has substantial contingencies related to tax; and
      has significant debt service obligations that raise substantial doubt about
      Doe
      Run Peru’s ability to continue as a going concern. Management believes that the
      price improvements seen through fiscal year 2005 and the continuing increases
      seen in the first quarter of fiscal year 2006, the potential revenues and cash
      flow enhancements from the new ferrite project in Peru and the anticipated
      approval of the application to extend the PAMA requirement for the construction
      of the sulfuric acid plants, will enable Doe Run Peru to continue as a going
      concern. However, there can be no assurance that these actions will achieve
      the
      desired results.












Doe
      Run
      Peru continues to have substantial cash requirements in the future, including
      the maturity of the revolving credit facility on June 23, 2006 and significant
      capital requirements under environmental commitments (see Note 6: Asset
      Retirement and Environmental Obligation). In addition, there are substantial
      contingencies related to taxes (see Note 4: Income Taxes) and litigation (see
      Note 5: Litigation).





Net
      unused availability at January 31, 2006 under the Doe Run Peru Revolving Credit
      Facility was approximately $200. In addition to the availability under its
      revolving credit facilities, the cash balance at Doe Run Peru was $24,714 at
      January 31, 2006. Doe Run Peru has reached and maintained its maximum borrowing
      level under the Doe Run Peru Revolving Credit Facility due in part to the higher
      metal prices resulting in higher outlays for concentrate purchases and higher
      Value-Added Tax (“VAT”) payments funded by cash from operations.





The
      Doe
      Run Peru Revolving Credit Facility expires in the third quarter of 2006, and
      will require renegotiation to extend their terms. There can be no assurance
      that
      Doe Run Peru will be successful, or if it is successful, that the renewal would
      be at terms that are favorable to Doe Run Peru.





A
      default
      under the requirements of the PAMA could result in a default under the Doe
      Run
      Peru Revolving Credit Facility. A default under the requirements of the Doe
      Run
      Peru Revolving Credit Facility results in defaults under the Doe Run Revolving
      Credit Facility and the indenture governing the Doe Run 11.75% notes to which
      Doe Run Peru is a guarantor.





**(3)**  **Inventories**





Inventories
      consist of the following:





**January
                31,**
            
            **October
                31,****2006**
            
            **2005**Finished
                metals and concentrates
            
            $
            12,744
            
            $
            10,397Metals
                and concentrates in process
            
            
            71,853
            
            
            44,668Materials,
                supplies and repair parts
            
            
            14,695
            
            
            13,691$
            99,292
            
            $
            68,756





Materials,
      supplies and repair parts are stated net of reserves for obsolescence of
      approximately $1,358 and $1,162 at January 31, 2006 and October 31, 2005,
      respectively.





**(4)**  **Income
      Taxes**





Doe
      Run
      Peru has received income tax assessments from Peru’s tax authority, (“SUNAT”),
      for tax years 1998 through 2001. The assessments primarily relate to Doe Run
      Peru’s income tax treatment of the December 1997 merger of Metaloroya S.A. into
      Doe Run Peru which was purchased by Doe Run Peru in October 1997, and its
      effects on subsequent years’ taxable income. Under the assessment by SUNAT, the
      tax basis of Doe Run Peru’s fixed assets acquired would decrease, resulting in
      lower tax depreciation expense than originally claimed. The assessments of
      years
      1999 through 2001 also relate to the disallowance of the deduction of interest
      paid, the offsetting of losses on derivatives executed in the U.S. and some
      leaseback and leasing operations. The estimated assessed amount consisting
      of
      additional income taxes due, penalties and interest as of January 31, 2006
      totals approximately $116,200. Doe Run Peru estimates that the effect of a
      similar assessment for tax years after 2001 would be approximately $30,700.
      Furthermore, Doe Run Peru would also be required to make additional workers’
profit sharing payments equal to 8% of the increase in taxable income generated
      by the changes discussed above, or approximately $11,300 for calendar years
      1998
      through 2005.





Doe
      Run
      Peru has also received VAT assessments for the tax years 1999 through 2001
      and
      for the period from January through July 2004. The assessments primarily relate
      to Doe Run Peru’s exports with holding certificates and differences in a tax
      credit application. The total assessment for these periods was approximately
      $46,200. SUNAT offset the amount assessed for 2004 of approximately $2,300
      against Doe Run Peru’s VAT receivable balance from July 2004. Future VAT
      reimbursements cannot be used to offset the assessment by SUNAT. Doe Run
      Peru









discontinued
      the use of holding certificates for
      exports in June 2004. Doe Run Peru estimates expected additional assessments
      related to VAT for tax years 2002 and 2003 to total approximately $21,500 in
      regard to its exports with holding certificates.




Management
      of Doe Run Peru believes that in each case Doe Run Peru has followed the
      applicable Peruvian tax statutes and intends to pursue all available
      administrative and judicial appeals. Doe Run Peru is not required to make any
      payments pending the administrative appeal process. If Doe Run Peru is not
      successful in the administrative appeal processes and were to appeal in the
      judicial system, some type of financial assurance would be required. No amounts
      have been accrued as liabilities related to these actions.





Doe
      Run
      Peru expects to utilize all of its net operating loss carryforwards in the
      current fiscal year. As a result, Doe Run Peru has recorded $1,842 of income
      tax
      expense for the first quarter of 2006.





**(5)**  **Litigation**





All
      existing and pending litigations at the time of the acquisition of Doe Run
      Peru
      were retained by Centromin, the prior owner of the La Oroya smelter and Cobriza
      mine.





Doe
      Run
      Peru is currently a defendant in 197 lawsuits in the Lima, Peru labor courts
      that allege damage to workers from industrial diseases. Doe Run Peru has made
      claims in most of the cases against Centromin and has also made claims against
      both governmental agencies and private companies that provide workers’
insurance. The average claim is $17. Of 19 previously concluded cases in this
      category, 18 were dismissed and 1 resulted in an award of $9.





Doe
      Run
      Peru is also currently a defendant in 156 lawsuits by workers alleging that
      they
      are owed certain differences in salaries and benefits. (Some of the open cases
      date back to 1991). The average claim is $20. Of 38 previously concluded cases
      in this category, 29 were dismissed and 9 resulted in awards totaling $19.
      Doe
      Run Peru is also a defendant in a lawsuit by the Yauli-La Oroya Employees Union
      concerning salaries and benefits. The claims of the 149 workers remaining in
      the
      lawsuit have been valued at a total of $218 according to a report by an expert
      appointed by the court.





Doe
      Run
      Peru is also currently a defendant in 21 lawsuits alleging various labor claims
      including indemnification for arbitrary dismissal, nullity of dismissal, moral
      damage compensation, compensatory damages from work accident and readmission
      of
      worker. The average claim is $7. Of 30 previously concluded cases in this
      category, 26 were dismissed and 4 resulted in awards totaling $21.





The
      amount of awards in the various categories of lawsuits referenced above
      represented total judgments issued by the relevant courts. For certain of these
      lawsuits, Centromin will pay a portion of the total award.





On
      January 19, 2005, Doe Run Peru was served with a lawsuit by an association
      of
      municipalities of the Junin Region of Peru against Doe Run Peru and two other
      mining companies. This lawsuit alleges environmental damages to the Mantaro
      River basin in the amount of $5 billion. On February 2, 2006, Doe Run Peru
      was
      served with a lawsuit by the municipality of Jauja. This lawsuit alleges
      environmental damages to the Mantaro River basin in the amount of $5,000.
      Material liability to Doe Run Peru, in these two actions, is believed to be
      remote based on the opinion of management and outside counsel for Doe Run Peru.
      Any potential judgment would be subject to the indemnification obligations
      of
      Centromin, which are guaranteed by the Peruvian government.





On
      July
      11, 2005, Doe Run Peru filed an administrative lawsuit against the Yauli -
      La
      Oroya Provincial City Hall in order to nullify and void a number of fines for
      the amount of $2,800. Doe Run Peru was fined for not having construction
      licenses for the PAMA projects.





Since
      most of the above cases are either in the pleading or discovery stages, Doe
      Run
      Peru is unable at this time to estimate the expected outcome and the final
      costs, except as noted, of these actions. No amounts have been accrued as
      liabilities related to these actions. There can be no assurance that these
      cases
      would not have a material adverse effect, both individually and in the
      aggregate, on the results of operations, financial condition and liquidity
      of
      Doe Run Peru. Doe Run Peru has and will continue to vigorously defend itself
      against such claims.











**(6)**  **Asset
      Retirement and Environmental Obligations**





***Asset
      Retirement Obligations***





Asset
      retirement obligations (“AROs”) are recognized as liabilities when incurred,
      with the initial measurement at fair value. These liabilities will be increased
      to full value over time through charges of accretion to operating expense.
      In
      addition, an asset retirement cost is capitalized as part of the related asset’s
      carrying value and will be depreciated over the asset’s useful life. Changes in
      the ARO liability resulting from revisions to the timing or the amount of the
      original estimate of undiscounted cash flows shall be recognized as an increase
      or a decrease in the carrying amount of the liability for an ARO and the related
      asset retirement cost capitalized as part of the carrying amount of the related
      long-lived asset.





Mine
      Closure Law No. 28090 (“Law”) became effective in Peru as of October 15, 2005.
      It applies to smelters and mines. The Law establishes the obligations and
      procedures that titleholders of mining activities must follow, including a
      financial guarantee for environmental issues.   Doe Run Peru must
      submit a mine closure plan to the Ministry of Energy and Mines by August 17,
      2006. Doe Run Peru intends to hire a technical mining consultant to prepare
      the
      mine closure plan to include all the technical and legal requirements. The
      mine
      closure plan must include a description of the remediation measures to be done,
      along with their cost and timing, and the expected amount of the financial
      guarantee. Pursuant to the tax stabilization agreement, Doe Run Peru is exempt
      from new obligations that could result in a reduction of its cash availability,
      such as the guarantee discussed above.  Therefore, Doe Run Peru considers
      that the establishment of the corresponding environmental guarantees would
      be in
      opposition to the provisions set forth in the tax stabilization agreement The
      mining authorities could disagree with our position or there may be future
      obligations when our tax stabilization agreement expires on December 31,
      2006.





Doe
      Run
      Peru has AROs at its Cobriza mine, related to the costs associated with closing
      the mine openings and covering acid rock. Doe Run Peru is also responsible
      for
      the eventually covering and revegetation of mixed lead and copper slag also
      stored in Huanchan, an area a short distance from the La Oroya smelter where
      the
      slag is currently stored.





Doe
      Run
      Peru’s total recorded liability for AROs was approximately $1,866 as of January
      31, 2006 and October 31, 2005





***Environmental
      Remediation***





Doe
      Run
      Peru’s La Oroya operations historically and currently exceed some of the
      applicable Ministry of Energy and Mines (“MEM”) maximum permissible limits
      pertaining to air emissions and wastewater effluent quality. Prior to our
      acquisition of La Oroya, Metaloroya S.A., the former owner, a subsidiary of
      Empresa Minera del Centro del Peru S.A., which we refer to as Centomin, received
      approval from the Peruvian government for a PAMA. The PAMA was designed to
      achieve compliance with MEM’s air and wastewater limits. It consisted of an
      environmental impact analysis, monitoring plan and data, mitigation measures
      and
      a closure plan. The PAMA also sets forth the actions and corresponding annual
      investments the concession holder agrees to undertake in order to achieve
      compliance with the maximum permissible limits prior to expiration of the PAMA
      (ten years for smelters, such as Doe Run Peru’s operations in La Oroya, and five
      years mining operation such as Cobriza). The PAMA projects, which are more
      fully
      discussed below, have been designed to achieve compliance with these
      requirements. The Peruvian government may, in the future, require compliance
      with additional environmental regulations that could adversely affect Doe Run
      Peru’s business, financial condition and results of operations. After expiration
      of the PAMA, the operator must comply with all applicable standards and
      requirements. Because these costs improve the property or prevent future
      environmental contamination, they are capitalized.





Doe
      Run
      Peru has committed under its current approved PAMA to implement the following
      projects at its La Oroya smelter through December 31, 2006:





·
            Construct
                new sulfuric acid plants;


·
            Construct
                a treatment plant for the copper refinery
                effluent;


·
            Construct
                an industrial wastewater treatment plant for the smelter and
                refinery;













·
            Improve
                the slag handling system;


·
            Improve
                Huanchan lead and copper slag
                deposits;


·
            Construct
                an arsenic trioxide deposit;


·
            Improve
                the zinc ferrite disposal site;


·
            Construct
                domestic wastewater treatment and domestic waste disposal;
                and


·
            Construct
                a monitoring station.





An
      investment schedule in the PAMA provides a specific plan for achieving the
      applicable MEM maximum permissible limits pertaining to air emissions and
      wastewater effluent quality. The PAMA may be modified and amended as to the
      actual design and timing of projects to be implemented, provided compliance
      with
      the applicable maximum permissible limits is achieved by December 31, 2006.
      The
      required estimated spending for the projects approved in the La Oroya PAMA,
      as
      amended on January 25, 2002, is $101,000 for calendar 2006.





Doe
      Run
      Peru expects that it will not be able to comply with the spending requirements
      of La Oroya’s PAMA investment schedule in 2006 with respect to the construction
      of the sulfuric acid plants required by the PAMA and, as a result, could be
      subject to penalties. Failure to comply with the PAMA could result in the
      cessation of operations at the La Oroya smelter, which would adversely affect
      our business, financial condition and results of operations.





On
      December 29, 2004 the Peruvian government issued a Supreme Decree No.
      046-2004-EM (“Supreme Decree”), which recognized that exceptional circumstances
      may justify an extension of one or more projects within the scope of a PAMA.
      The
      Supreme Decree specifies that companies had until December 31, 2005 to apply
      for
      an extension. The maximum extension is for three years and the MEM may authorize
      an additional year based upon the results of a health risk study.





Pursuant
      to the Supreme Decree, the application for a PAMA extension must be supported
      by
      a health risk study performed by a third party. The application must contain
      an
      engineering description and funding plan of any project to be extended, a
      discussion of how and when environmental emission standards will be met, a
      plan
      to monitor emissions with the participation of the community, proof that at
      least three public workshops were held in various districts to provide
      information on Doe Run Peru’s financial situation and health programs, proof
      that two public hearings were held regarding the extension plans, and other
      financial information. Upon meeting these requirements, Doe Run Peru applied
      for
      an extension on December 20, 2005. As part of the procedure, MEM made 90
      observations to the request of extension, to which Doe Run Peru responded on
      March 20, 2006. MEM has 60 days from the date of Doe Run Peru’s submission to
      evaluate the application and the responses to its observations and make a
      decision.





In
      the 90
      observations made by MEM,, additional requirements have been levied as a
      condition of the extension. Doe Run Peru has responded to the MEM that it
      believes it can technically comply with the acid plant requirement within the
      three year extension. However, no assurance can be given that implementation
      of
      the PAMA projects is feasible or that their implementation will achieve
      compliance with the applicable legal requirements by the end of the PAMA period.
      Furthermore, there can be no assurance that the Peruvian government will not
      in
      the future require compliance with additional or different environmental
      obligations that could adversely affect Doe Run Peru’s business, financial
      condition and results of operations.





The
      Cobriza mine has a separate PAMA in which Doe Run Peru committed to complete
      projects to manage tailings, mine drainage, sewage and garbage. Doe Run Peru
      completed its PAMA requirements with respect to Cobriza in June 2004, ceased
      discharging mine waste into the Mantaro River and is in compliance with the
      emissions standards required by the PAMA.





Upon
      approval of a modified PAMA, Doe Run Peru would be required to create a trust
      account to administer the receipts and disbursements related to the extended
      PAMA. The Supreme Decree requires that receipts from sales be remitted monthly
      directly to the trust account, in an amount sufficient to fund the cash
      requirements of the extended PAMA.





The
      Supreme Decree also requires that Doe Run Peru provide financial security within
      30 days of the approval of the PAMA extension in an amount equal to 20% of
      the
      projected cost of the project or projects to be extended. Doe









Run
      Peru currently expects the remaining
      investment needed to build the sulfuric acid plants to be approximately
      $103,000.




To
      achieve the financial guarantee and the trust contract required by Supreme
      Decree, Doe Run Peru has amended the Doe Run Peru Revolving Credit Facility
      to
      allow for those arrangements and has filed a draft of a trust guarantee contract
      with a local bank. Additionally, on December 10, 2005 Doe Run Peru signed a
      Working Capital Financial Facility Agreement for up to $30,000 (named Ferrites
      Loan) with Servicios Mineros Integrados S.A.C., a Trafigura Beheer B.V.
      subsidiary, and intends to use such funds in the fulfillment of the financial
      security as mentioned above. It is unlikely that Doe Run Peru will be able
      to
      utilize the entire facility due to production limitations and other conditions
      within the agreement. As of January 31, 2006, Doe Run Peru has received $10,000
      from this facility.





Doe
      Run
      Peru has performed other environmental projects to reduce fugitive emissions
      in
      2005 including the installation of a second short rotary furnace, enclosing
      the
      blast furnace and dross plant, along with other complementary work. Major
      projects scheduled for fiscal year 2006 include an upgrade of the ventilation
      system in the Sinter plant, completion of the enclosure work around the lead
      and
      dross furnace, the enclosure of the anode residue plant along with the
      elimination of its nitrous gases, and the reduction of fugitive emissions from
      the copper and lead beds. The total cost of the currently remaining PAMA
      projects, including the sulfuric acid plant construction, and these projects
      is
      approximately $122,000.





Management
      believes that Doe Run Peru will obtain an approval of an extension to complete
      the sulfuric acid plants. There is no assurance, however, that Doe Run Peru
      will
      receive an extension, or, if it does, that the project will be completed within
      the time limitation specified by the Supreme Decree.





In
      the
      future, to reduce gas volume while enriching sulfurous gas feed to the copper
      circuit sulfuric acid plant, we are planning to replace the oxy-fuel
      reverberatory furnace with a submerged lanced reactor furnace to smelt copper
      concentrates. The anticipated cost is approximately $57 million and the project
      will likely require additional financing.





Under
      the
      purchase agreement related to the acquisition of the La Oroya assets in October
      1997, Centromin, the prior owner of the La Oroya smelter and Cobriza mine,
      agreed to indemnify Doe Run Peru against environmental liability arising out
      of
      its prior operations and their apportioned share of any other complaint related
      to emissions. Performance of the indemnity has been guaranteed by the Peruvian
      government through the enactment of the Supreme Decree No. 042-97-PCM. However,
      there can be no assurance that Centromin will satisfy its environmental
      obligations and investment requirements, including those in its PAMA, or that
      the guarantee will be honored. Any failure by Centromin to satisfy its
      environmental obligations could adversely affect Doe Run Peru’s business,
      financial condition and results of operations.





In
      addition to its PAMA obligations, Doe Run Peru is responsible for the
      remediation costs relating to a zinc ferrite disposal site. The current closure
      plan provides for encapsulating the ferrite residues in place at Huanchan,
      an
      area a short distance from the smelter where they are currently stored, for
      which an environmental liability of $1,600 has been recorded as of January
      31,
      2006 and October 31, 2005.





**Item
      2. Management’s Discussion and Analysis of Financial Condition and Results of
      Operations.**





The
      following discussion and analysis should be read in conjunction with the
      condensed consolidated financial statements of The Doe Run Resources Corporation
      (“Doe Run” and together with its subsidiaries, the “Company”) and the notes
      thereto, and other financial information included herein.





***Forward-Looking
      Statements***





*The
      Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for
      forward-looking statements. The Company makes forward-looking statements in
      this
      Quarterly Report on Form 10-Q, which represent the Company’s expectations or
      beliefs about future events and financial performance. When used in this report,
      the words “expect,” “believe,” “anticipate,” “goal,” “plan,” “intend,”
“estimate,” “may,” “will” or similar words are intended to identify
      forward-looking statements. These forward-looking statements are subject to
      known and unknown risks, uncertainties and assumptions, including those referred
      to in this Quarterly Report on Form 10-Q and otherwise described in the
      Company’s periodic filings.*












*All
      predictions as to future results contain a measure of uncertainty, and
      accordingly, actual results could differ materially. Among the factors that
      could cause actual results to differ from those contemplated, projected or
      implied by the forward-looking statements (the order of which does not
      necessarily reflect their relative significance) are:*




*·*
            *general
                economic and business
                conditions;*


*·*
            *increasing
                industry capacity and levels of imports of non-ferrous metals or
                non-ferrous metals products;*


*·*
            *industry
                trends, including the price of metals and product pricing;*


*·*
            *competition;*


*·*
            *currency
                fluctuations;*


*·*
            *the
                loss of any significant customer or supplier;*


*·*
            *availability
                of raw materials;*


*·*
            *availability
                of qualified personnel;*


*·*
            *effects
                of future collective bargaining agreements;*


*·*
            *outcome
                of litigation;*


*·*
            *historical
                environmental liabilities;*


*·*
            *changing
                environmental requirements and costs, including the capital requirements
                in Peru;*


*·*
            *political
                uncertainty and terrorism;*


*·*
            *major
                equipment failures;*


*·*
            *changes
                in accounting principles or new accounting standards;
                and*


*·*
            *compliance
                with laws and regulations and other unforeseen
                circumstances.*




*In
      light of these risks, uncertainties and assumptions, the forward-looking events
      discussed may not occur. In addition, actual results could differ materially
      from those suggested by the forward-looking statements. Accordingly, investors
      are cautioned not to place undue reliance on the forward-looking statements.
      Except as required by law, the Company undertakes no obligation to publicly
      update or revise any forward-looking statements, whether as a result of new
      information, future events or otherwise. Investors should, however, review
      additional disclosures made by the Company from time to time in its periodic
      filings with the Securities and Exchange Commission.*





*This
      Quarterly Report on Form 10-Q should be read completely and with the
      understanding that the Company’s actual future results may be materially
      different from what the Company expects. All forward-looking statements made
      by
      the Company in this Quarterly Report on Form 10-Q and in the Company’s other
      filings with the Securities and Exchange Commission are qualified by these
      cautionary statements.*





***Recent
      events***




On
        April
        6 and 7, 2006 Buick Resource Recycling’s hourly production, maintenance and
        materials handling employees participated in a union election conducted by
        the
        National Labor Relations Board to determine representation by the International
        Union, United Automobile, Aerospace and Agricultural Implement Workers of
        America, AFL-CIO. The majority of the employees voted against representation
        by
        the union.
 ***Results
        of Operations***





*Metals
      Pricing*





The
      following table sets forth average London Metal Exchange prices for lead, copper
      and zinc and the average London Bullion Market Association price for silver
      for
      the periods indicated:









**Three
                  Months Ended****January
                  31,****Average
                  Prices**
              
              **2006**
              
              **2005**Lead
                  ($/ton)
              
              $
              1,026.20
              
              $
              875.80Copper
                  ($/ton)
              
              
              4,102.20
              
              
              2,853.20Zinc
                  ($/ton)
              
              
              1,667.00
              
              
              1,062.80Silver
                  ($/troy ounce)
              
              
              8.53
              
              
              7.08




These
      prices reflect the continued tightening in the worldwide metal supply and the
      effect of other macroeconomic factors such as exchange rates, interest rates,
      and oil prices.





*Production*





All
      references to “tons” are in short tons.





The
      following table sets forth the Company’s production statistics for the periods
      indicated:




**Three
                  Months Ended****January
                  31,****2006**
              
              **2005**U.S.
                  OperationsLead
                  metal - primary (tons)
              
              
              41,935
              
              
              40,416Lead
                  metal - secondary (tons)
              
              
              33,064
              
              
              33,698Lead
                  concentrates (metal content, tons)
              
              
              68,800
              
              
              65,148Ore
                  grade (lead)
              
              
              5.57
              %
              
              5.36
              %Doe
                  Run Peru OperationsRefined
                  copper (tons)
              
              
              16,891
              
              
              15,914Refined
                  lead (tons)
              
              
              32,945
              
              
              31,761Refined
                  zinc (tons)
              
              
              11,508
              
              
              16,228Refined
                  silver (thousands of troy ounces)
              
              
              9,218
              
              
              8,239Refined
                  gold (thousands of troy ounces)
              
              
              18
              
              
              15Copper
                  concentrates (metal content, tons)
              
              
              4,450
              
              
              3,772Ore
                  grade (copper content)
              
              
              1.00
              %
              
              0.99
              %




The
        5.6%
        increase in lead concentrate production at the Company’s primary lead
        operation’s mines in the first quarter of 2006 over the first quarter of 2005
        was the result of an increase in ore production of 1.1% and an increase in
        ore
        grade of almost 4%. The higher volume and grade of ore processed in the first
        quarter of 2006 was primarily the result of shifting some personnel from
        the low
        grade 29 mine to the Fletcher mine and increasing production from a new high
        grade development area. Improved equipment availability (fixed and mobile
        equipment) and the growing experience of the workforce are also contributors
        to
        the increased production from the Southeast Missouri mining and milling division
        (“Semo”). Approximately a third of the Semo workforce has less than two years
        experience in our operations. The workforce additions are the result of the
        Company making the decision in 2004, during the period when metal pricing
        increased to well above its historic average, to increase ore production
        and
        mine at a lower grade to optimize the earnings on the mineral resources.
        The
        tonnage of ore treated in the first quarter of fiscal 2006 was also slightly
        greater, 0.3%, than plan for the period.


We
      expect
      development of the drift connecting the south end of the Fletcher mine to a
      new
      ore body called RC West Fork will continue at the planned pace, with ore
      production expected to begin in the 4 th calendar
      quarter of 2006.




In
      the
      first quarter of 2006, the Herculaneum primary smelter operation’s lead metal
      production was almost 4% greater than in the first quarter of 2005, but 13%
      below the planned production level for such quarter. The lower than
      planned











production
      was due to the necessary replacement of a
      major component in the acid plant in December instead of as scheduled in March.
      The scheduled March shutdown was reduced substantially as a result of the acid
      plant work that was completed in December, which allowed the smelter to make
      up
      some portion of the first quarter production shortfall.


Environmentally,
      the Herculaneum primary smelter did not meet the ambient air lead standard
      at
      the Broad Street monitoring station in the first calendar quarter of 2006 while
      all other monitors were in attainment. Additionally, all
      ambient air monitors at the Herculaneum primary smelter were in attainment
      for
      the fourth calendar quarter in 2005. The company continues to work with the
      community and the regulatory agencies to establish a buffer zone around the
      smelter and to make improved process modifications that management expects
      will
      allow the facility to continuously meet the ambient air standard at all
      monitoring stations.





Lead
      production at the Company’s U.S. recycling operation was essentially flat in the
      first quarter of 2006 compared to 2005, but approximately 10% lower than planned
      production. The lower than planned production was the result of feed mixes
      into
      the plant that contained high levels of sulfur and negatively impacted furnace
      operations. Several process changes have been made to both the plant’s
      desulphurization circuit and to the furnace operations in an effort to resolve
      the sulfur - related problems.





A
      permit
      to permanently expand the emissions capacity of the recycling operation to
      allow
      approximately 175,000 tons of production was granted by the Department of
      Natural Resources in January 2005. While production capacity constraints will
      prevent production at the level allowed by the permit, the permit allows the
      Company’s recycling facility to operate at higher levels without obtaining
      annual approvals.





During
      the first quarter of 2006, Doe Run Peru’s copper and lead metal production
      increased slightly from the comparable prior period. This increase was due
      in
      part to certain adverse factors that occurred during the first quarter of 2005
      that no longer affected operations in the first quarter of the 2006 fiscal
      year.
      These factors were:





·
            a
                two day work stoppage in December 2004;


·
            a
                lack of readily available coke at reasonable
                prices;


·
            frequent
                shut-downs of the oxy-fuel reverberatory furnace for maintenance
                affecting
                copper production and


·
            metallurgical
                issues in the lead cells that occurring principally during the first
                quarter of 2005.





The
      decrease in the 2006 first quarter production of zinc compared to the 2005
      first
      quarter was due to the cessation of operations of Doe Run Peru’s three New
      Jersey zinc roasters in January 2005, which were costly to operate and
      environmentally inefficient. The decision resulted in a reduction of refined
      zinc production capacity to 50,000 tons per year.





Production
      of copper concentrates (metal content) at Doe Run Peru’s Cobriza mine in the
      2006 first quarter was approximately 18% higher than the 2005 first quarter,
      due
      primarily to an increase in production related to improved mine preparation
      and
      development and correction of mine stability problems. This allowed Doe Run
      Peru
      to enhance ore grade by increasing the mining of pillars.





*The
      2006 First Quarter Compared to the 2005 First Quarter*





**Gross
      Margin** increased from $32.1 million in the 2005 first quarter to $44.8 million in
      the
      2006 first quarter and gross margin for Doe Run’s U.S operations increased from
      $22.4 million in the 2005 first quarter to $29.3 million in the 2006 first
      quarter while gross margin for Doe Run Peru increased from $9.6 million in
      the
      2005 first quarter to $15.5 million in the 2006 first quarter.





Gross
      margin is net sales less cost of sales, including depreciation, depletion,
      and
      amortization attributable to cost of sales as disclosed in the table
      below.














**Depreciation,
                Depletion and Amortization Attributable to Cost of
                Sales**for
                the First Quarter(dollars
                in the millions)2006
            
            2005U.S.
                operations
            $
                2.9
            
            $
                2.8Doe
                Run Peru
            $
                3.0
            
            $
                3.1Consolidated
            $
                5.9
            
            $
                5.9








The
      $6.9
      million increase in gross margin for our U.S. operations from the 2005 first
      quarter to the 2006 first quarter was due in part to an increase in sales in
      the
      first quarter of 2006 of approximately $23.8 million. Of this amount, $12.3
      million in sales was a result of a 23.2% increase in the U.S. operation’s
      realized prices for lead metal, fueled by a 17% increase in London Metal
      Exchange prices and higher premiums achieved over the London Metal Exchange.
      Additionally, an increase in lead concentrate sales volume and increases in
      copper and zinc metal prices contributed $0.9 million and $5.1 million of sales
      in the first quarter of 2006. These increases were offset partially by a
      decrease in copper concentrate sales volume of $3.4 million. These changes
      in
      sales were partially offset by higher production costs at Doe Run’s primary
      operations, primarily due to slightly higher production, higher salaries, wages
      and employee benefits, maintenance and fuel costs and increased conversion
      costs
      at the recycling operation, due to higher metallurgical coke and propane costs,
      which were offset by improved feed costs per unit of metal
      produced.





The
      $5.9
      million increase in Doe Run Peru’s gross margin from the first quarter 2005 to
      the first quarter 2006 is primarily the result of an improvement in the
      treatment charges received for processing concentrates and higher metal prices,
      offset by a LIFO adjustment





**Selling,
      General and Administrative costs** increased $2.2 million in the 2006 first quarter over the 2005 first quarter.
      The increase was due primarily to increased salaries and employee benefit costs,
      legal fees, and professional fees related to software
      implementation.





**Unrealized
      Gains (Losses)** on
      derivative financial instruments ** are ** related
      to the change in fair market value of derivative financial instruments that
      are
      a part of the Company’s risk management strategy. The change from an unrealized
      gain of $0.8 million in the 2005 first quarter to an unrealized gain of $2.0
      million is primarily the result of the settled 2006 first quarter positions.
      This gain is offset by realized losses included in net sales. Also see “Item 3.
      Quantitative and Qualitative Disclosures About Market Risk.”





**Other
      Expenses** decreased $0.5 million from the 2005 first quarter to the 2006 first quarter.
      The decrease in expenses primarily relate to a decrease in the recognition
      of
      impairment losses for the value of houses purchased in the town of Herculaneum,
      Missouri under a residential property purchase plan. The 2006 first quarter
      recognized less impairment losses from the comparable prior period because
      the
      program was waning in the 2006 first quarter. As of January 31, 2006, 150
      homeowners had requested offers, and 142 of 150 delivered offers had been
      accepted, however, due to the terms of the offers, 5 of the offers have expired.
      As of January 31, 2006, the Company spent approximately $10.3 million under
      the
      residential property purchase plan. Three offers totaling $0.14 million are
      awaiting closing, and another $1.7 million of offers that had not been accepted
      or had been accepted but subsequently expired.





**Income
      Tax Expense** increased $1.8 million in the 2006 first quarter over the 2005 first quarter.
      The Company expects to utilize all of Doe Run Peru’s net operating loss
      carryforwards in the current fiscal year. As a result, Doe Run Peru recorded
      $1.8 million of income tax expense.





The
      Renco
      Group, Inc., the parent company of Doe Run’s sole shareholder (referred to as
      Renco), has elected for the Company to be treated as a qualified subchapter
      S
      subsidiary for U.S. federal tax purposes. Most states in which the Company
      operates will follow similar tax treatment. Subchapter S status requires the
      ultimate shareholders to include their pro rata share of the Company’s income or
      loss in their individual tax returns. As a result of the Company’s tax status in
      the U.S., the Company is not generally subject to U.S. federal and most state
      income taxes, however, under a tax sharing











agreement
      with Renco, the Company is liable to Renco
      for pro forma federal and state income taxes as defined in the
      agreement.


***Liquidity
      and Capital Resources***





*Overview*





Our
      auditors issued unqualified opinions on the 2005 audited consolidated financial
      statements of the Company and the 2005 audited financial statements of Doe
      Run
      Peru that expressed substantial doubt about the Company’s and Doe Run Peru’s
      ability to continue as going concerns. Doe Run Peru has significant capital
      requirements under environmental commitments, which if not met, could result
      in
      defaults of the Company’s credit agreements; has substantial contingencies
      related to Peruvian tax; and has significant debt service obligations that
      raise
      substantial doubt about the Company’s ability to continue as a going concern.
      These commitments require Doe Run Peru to dedicate a substantial portion of
      cash
      flow from operations to the payment of these obligations, which will reduce
      funds available for other business purposes. In additions, the Company is highly
      leveraged. These factors also increase the Company’s vulnerability to general
      adverse conditions, limit our flexibility in planning for or reacting to changes
      in its business and industry, and limit the Company’s ability to obtain
      financing required to fund working capital and capital expenditures and for
      other general corporate purposes. An unfavorable outcome to lawsuits and tax
      assessments in Peru would have a further adverse effect on the Company’s ability
      to meet its obligations when due.




Management
      believes that high metal prices and other revenue enhancements, and the issuance
      of Supreme Decree No. 046-2004-EM issued by the Peruvian government allowing
      the
      Ministry of Energy and Mines to extend in it’s discretion, the Doe Run Peru’s La
      Oroya smelter PAMA requirement for the construction of the sulfuric acid plants,
      will enable the Company to continue as a going concern. The Company made a
      timely application for the extension in December 2005 and on March 20, 2006
      responded to 90 observations about the application that came from the Ministry
      of Energy and Mines. The Ministry has 45 days from March 20, 2006 to evaluate
      the matter and issue its decision. Management believes that it has justified
      the
      extension and will receive the extension in due course manner. The Company’s
      ability to meet obligations after 2006 could be affected by future operating
      performance and financial results, which are subject to financial, economic,
      political, competitive and other factors affecting the Company, many of which
      are beyond the Company's control, or an unfavorable outcome to the items noted
      above, and, accordingly, no assurance can be given that it will be able to
      meet
      such obligations.





*Capital
      Resources and Debt Instruments*





Net
      unused availability at January 31, 2006 under the Doe Run Revolving Credit
      Facility was approximately $23.1 million and under the Doe Run Peru Revolving
      Credit Facility was $0.2 million at January 31, 2006. In addition to the
      availability under revolving credit facilities, cash balances at Doe Run and
      Doe
      Run Peru were $4.7 million and $24.7 million, respectively, at January 31,
      2006.
      In Peru, continued high metal prices have resulted in outlays for concentrate
      purchases and value-added tax payments being funded by cash from operations,
      as
      Doe Run Peru has reached its maximum borrowing level under the Doe Run Peru
      Revolving Credit Facility. In response to the lack of borrowing availability,
      Doe Run Peru extended payments to its suppliers, which in addition to increased
      metal prices, resulted in an increase in accounts payable in the first quarter
      of 2006.




The
      Company’s outstanding term note of $8 million has been paid off subsequent to
      the reporting date however; the Company still has substantial debt service
      requirements in the future, including interest payments of $25.7 million in
      2006
      for the Company’s 11.75% notes which are due in 2008. At January 31, 2006, the
      Doe Run Peru revolving credit facility had an expiration date of June 23, 2006.
      It will need to be renegotiated and there can be no assurance that we will
      be
      successful in renewing the agreement, or if it is successful, that the renewal
      would be at terms favorable to us.




During
      the period beginning on October 29, 2005 and ending on October 29, 2012, the
      majority warrant holders, pursuant to the Warrant Agreement dated as of October
      29, 2002, between Doe Run and State Street Bank and Trust Company, as Warrant
      Agent, will have the right to require Doe Run to repurchase all, but not less
      than all, of the warrants and any outstanding shares issued upon the exercise
      thereof at a price equal to the fair market value of the warrants, as determined
      by a third party appraisal. Management
      engaged a nationally recognized valuation firm to calculate the fair
      value











of
      the warrants. Management’s
      estimate of the fair value of the warrantsbased
      on
      the valuationis
      approximately $0.6 million at January 31, 2006.


*Tax
      Commitments*





Income
      tax assessments from Peru’s tax authority, SUNAT, for the tax years 1998 through
      2001, show an assessed amount due from Doe Run Peru, consisting of additional
      income taxes due, penalties and interest as of January 31, 2006, of
      approximately $116,200. Value-added tax, referred to as VAT, assessments for
      tax
      years 1999 through 2001 and for the period from January through July 2004,
      show
      a total assessment amount of approximately $46,200. SUNAT offset the amount
      assessed for 2004 of approximately $2,300 against Doe Run Peru’s VAT receivable
      balance from July 2004. In addition, the Company estimates that the effect
      of
      similar assessments for periods not yet assessed would be approximately $30,700
      and $21,500 for the income tax and VAT matters, respectively. Furthermore,
      Doe
      Run Peru would also be required to make additional workers’ profit sharing
      payments equal to 8% of the increase in taxable income generated by the changes
      discussed above, or approximately $11,300 for calendar years 1998 through
      2005.





Management
      of the Company believes that in each case Doe Run Peru has followed the
      applicable Peruvian tax statutes and intends to pursue all available
      administrative and judicial appeals. Doe Run Peru is not required to make any
      payments pending the administrative appeal process. If Doe Run Peru is not
      successful in the administrative appeal processes and were to appeal in the
      judicial system, some type of financial assurance would be required, which
      would
      have a significant adverse effect on liquidity.





**Item
      4. Controls and Procedures.**





As
      of the
      end of the period covered by this report, an evaluation was performed under
      the
      supervision and with the participation of management, including the Chief
      Executive Officer and principal executive officer and the Chief Financial
      Officer, the principal financial officer of the Company, of the effectiveness
      of
      the design and operation of our disclosure controls and procedures (as defined
      in Rules 13a-5(e) and 15(d-15(e) promulgated under the Securities and Exchange
      Act of 1934, as amended ( the “Exchange Act”). The Chief Executive Officer and
      Chief Financial Officer concluded that the Company’s disclosure controls and
      procedures were effective as of the end the period covered by this report to
      ensure that information required to be disclosed by the Company in the reports
      that it files or submits under the Exchange Act is (a) recorded, processed,
      summarized and reported, within the time periods specified in the Securities
      and
      Exchange Commission’s rules and forms and (b) is accumulated and communicated to
      the Company’s management, including its principal executive and principal
      financial officers, or persons performing similar functions, as appropriate
      to
      allow timely decisions regarding required disclosure.





In
      performing this assessment as of October 31, 2005, management identified a
      material weakness in our internal controls over financial reporting, resulting
      from the untimely reconciliation of broker statements reporting our trading
      activity in derivative financial instruments, to our general ledger at October
      31, 2005. Although the deficiency did not result in a material change to our
      2005 interim financial statements, management determined that the deficiency
      resulted in more than a remote likelihood that a material misstatement would
      not
      be prevented or detected in the future. As a result, management determined
      that
      the deficiency was a material weakness. We believe the areas most likely to
      be
      affected by this material weakness were accrued liabilities and unrealized
      gain
      or loss on derivative financial instruments .





As
      a
      result, the Company developed a plan that immediately implemented the following
      remediation efforts to address this material weakness. The Company now performs
      timely reconciliations of the general ledger to the broker statements on a
      monthly basis that are reviewed by a member of management. The Company also
      performs an independent review of the transactions entered into on a daily
      basis
      with a monthly review of the hedging results by a hedging committee and by
      management. In the judgment of management, each of these corrective efforts
      has
      strengthened the internal control over the timely reconciliation of broker
      statements so that the related material weakness has been eliminated. Each
      of
      these corrective actions constitutes a significant change in the Company’s
      internal controls. No other significant changes were made in the Company’s
      internal controls or in other factors that could significantly affect such
      controls during the first quarter of fiscal 2006.








**Part
      II. OTHER INFORMATION**





**Item
      6. Exhibits.**





31.1
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.31.2
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.32.1
            Certification
                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.32.2
            Certification
                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002.











**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.





THE
                DOE RUN RESOURCES CORPORATION
              (Registrant)Date:
                October 19, 2006
            /s/
                Theodore P. Fox, IIITheodore
              P. Fox, IIIChief
                Financial Officer(duly
                authorized officer and principal financial
                officer)