Use these links to rapidly review the documentTHE DOE RUN RESOURCES CORPORATION INDEX TO FORM 10-Q



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 
|For the quarterly period endedJuly 31, 2003                  
|Or                                                           
|o                                                             | Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
|For the transition period
from                             to

Commission File Number 333-66291

The Doe Run Resources Corporation(Exact name of registrant as specified in its charter)

|New York(State or other jurisdiction of incorporation or organization)                     |  | 13-1255630(IRS Employer Identification No.)
|------------------------------------------------------------------------------------------ |  | -------------------------------------------
|1801 Park 270 Drive, Suite 300
St. Louis, Missouri(Address of principal executive offices) |  | 63146(Zip Code)                            
|Registrant's telephone number, including area code(314) 453-7100                          

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
proceeding 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.    o    Yes    ý    No

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

Number
of shares outstanding of each of the issuer's classes of common stock, as of June 4, 2004:

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



---



THE DOE RUN RESOURCES CORPORATION  INDEX TO FORM 10-Q



|Part I  |         | 
|------- | ------- | 
|        | Item 1. | 
|        | Item 2. | 
|        | Item 3. | 
|        | Item 4. | 
|Part II |         | 
|        | Item 1. | 
|        | Item 4. | 
|        | Item 6. | 

---





Item 1. Financial Statements

THE DOE RUN RESOURCES CORPORATION  Condensed Consolidated Balance Sheets  (Dollars in thousands, except per share amounts)

|                                                                                                                                                      |                                                                                            | July 31,
2003                               |         | April 30,
2003 |          | January 31,
2003 |          | October 31,
2002 |        
|----------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------------- | ------- | -------------- | -------- | ---------------- | -------- | ---------------- | -------
|
|ASSETS                                                                                                                                                |                                                                                           
|Current assets:                                                                                                                                       |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      | Cash                                                                                       |                                             | $       | 8,024          |          | $                | 3,742    |                  | $      
|                                                                                                                                                      | Trade accounts receivable, net of allowance for doubtful accounts                          |                                             |         | 60,121         |          |                  | 65,559   |                  |        
|                                                                                                                                                      | Inventories                                                                                |                                             |         | 109,336        |          |                  | 110,893  |                  |        
|                                                                                                                                                      | Prepaid expenses and other current assets                                                  |                                             |         | 22,463         |          |                  | 18,647   |                  |        
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      |                                                                                            | Total current assets                        |         |                | 199,944  |                  |          | 198,841          |        
|Property, plant and equipment, net                                                                                                                    |                                                                                            |                                             | 235,497 |                |          | 239,017          |          |                  | 244,932
|Other noncurrent assets, net                                                                                                                          |                                                                                            |                                             | 4,020   |                |          | 4,654            |          |                  | 5,120  
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      |                                                                                            | Total assets                                |         | $              | 439,461  |                  | $        | 442,512          |        
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        
|LIABILITIES AND SHAREHOLDER'S DEFICIT                                                                                                                 |                                                                                           
|Current liabilities:                                                                                                                                  |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      | Short-term borrowings and current maturities of long-term debt                             |                                             | $       | 46,976         |          | $                | 48,692   |                  | $      
|                                                                                                                                                      | Accounts payable                                                                           |                                             |         | 47,599         |          |                  | 45,409   |                  |        
|                                                                                                                                                      | Accrued liabilities                                                                        |                                             |         | 57,851         |          |                  | 49,966   |                  |        
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      |                                                                                            | Total current liabilities                   |         |                | 152,426  |                  |          | 144,067          |        
|Long-term debt, less current maturities                                                                                                               |                                                                                            |                                             | 367,786 |                |          | 367,621          |          |                  | 382,688
|Other noncurrent liabilities                                                                                                                          |                                                                                            |                                             | 72,893  |                |          | 72,432           |          |                  | 72,816 
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      |                                                                                            | Total liabilities                           |         |                | 593,105  |                  |          | 584,120          |        
|Series A redeemable preferred stock, $1,000 par value, 5,000 shares authorized, 2,000 shares issued and outstanding; liquidation and redemption value |                                                                                            |                                             | 21,889  |                |          | 21,264           |          |                  | 20,639 
|Shareholder's deficit:                                                                                                                                |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding |                                             |         |               |          |                  |         |                  |        
|                                                                                                                                                      | Additional paid-in capital                                                                 |                                             |         | 3,350          |          |                  | 3,975    |                  |        
|                                                                                                                                                      | Accumulated deficit and other comprehensive losses                                         |                                             |         | (178,883       | )        |                  | (166,847 | )                |        
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      |                                                                                            | Total shareholder's deficit                 |         |                | (175,533 | )                |          | (162,872         | )      
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        
|                                                                                                                                                      |                                                                                            | Total liabilities and shareholder's deficit |         | $              | 439,461  |                  | $        | 442,512          |        
|                                                                                                                                                      |                                                                                            |                                             |         |                |          |                  |          |                  |        

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

2

---



THE DOE RUN RESOURCES CORPORATION  Condensed Consolidated Statements of Operations (unaudited)  (Dollars in thousands, except per share amounts)

|                             |                                                            | Nine Months Ended
July 31,                                                     |                                | Three Months Ended
July 31,          |         | Six Months Ended
April 30, |         | Three Months Ended
April 30, |         | Three Months Ended
January 31, |        
|---------------------------- | ---------------------------------------------------------- | ------------------------------------------------------------------------------ | ------------------------------ | ------------------------------------ | ------- | -------------------------- | ------- | ---------------------------- | ------- | ------------------------------ | -------
|
|Net sales                    |                                                            | $                                                                              | 492,325                        |                                      | $       | 489,388                    |         | $                            | 169,204 |                                | $      
|Costs and expenses:          |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             | Cost of sales                                              |                                                                                |                                | 457,737                              |         |                            | 445,683 |                              |         | 159,560                        |        
|                             | Depreciation, depletion and amortization                   |                                                                                |                                | 23,546                               |         |                            | 22,790  |                              |         | 7,605                          |        
|                             | Selling, general and administrative                        |                                                                                |                                | 20,603                               |         |                            | 20,388  |                              |         | 7,857                          |        
|                             | Other                                                      |                                                                                |                                | 1,634                                |         |                            | 765     |                              |         | 770                            |        
|                             | Unrealized (gain)/loss on derivative financial instruments |                                                                                |                                | 1,013                                |         |                            | (1,404  | )                            |         | 1,599                          |        
|                             |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             |                                                            | Total costs and expenses                                                       |                                |                                      | 504,533 |                            |         | 488,222                      |         |                                | 177,391
|                             |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             |                                                            | Income (loss) from operations                                                  |                                |                                      | (12,208 | )                          |         | 1,166                        |         |                                | (8,187 
|Other income (expense):      |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             | Interest expense                                           |                                                                                |                                | (9,790                               | )       |                            | (42,685 | )                            |         | (3,239                         | )      
|                             | Interest income                                            |                                                                                |                                | 23                                   |         |                            | 10,619  |                              |         | 7                              |        
|                             | Other, net                                                 |                                                                                |                                | (460                                 | )       |                            | (2,237  | )                            |         | (520                           | )      
|                             |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             |                                                            |                                                                                | (10,227                        | )                                    |         | (34,303                    | )       |                              | (3,752  | )                              |        
|                             |                                                            |                                                                                | Loss before income tax expense |                                      |         | (22,435                    | )       |                              | (33,137 | )                              |        
|Income tax expense (benefit) |                                                            |                                                                                |                               |                                      |         |                           |         |                              |        |                                |        
|                             |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             |                                                            | Loss before cumulative effect of change in accounting principle                |                                |                                      | (22,435 | )                          |         | (33,137                      | )       |                                | (11,939
|                             |                                                            | Cumulative effect of change in accounting principle, net of income tax benefit |                                |                                      | (3,940  | )                          |         |                             |         |                                |       
|                             |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             |                                                            |                                                                                |                                | Net loss                             |         |                            | (26,375 | )                            |         | (33,137                        | )      
|                             |                                                            |                                                                                |                                | Cumulative preferred stock dividends |         |                            | (1,889  | )                            |         |                               |        
|                             |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        
|                             |                                                            |                                                                                |                                | Net loss allocable to common shares  |         | $                          | (28,264 | )                            | $       | (33,137                        | )      
|                             |                                                            |                                                                                |                                |                                      |         |                            |         |                              |         |                                |        

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

3

---



THE DOE RUN RESOURCES CORPORATION  Condensed Consolidated Statements of Cash Flows (unaudited)  (Dollars in thousands)

|                                      |                                                                                 | Nine Months Ended
July 31,                                                 |       | Six Months Ended
April 30, |         | Three Months Ended
January 31, |        
|------------------------------------- | ------------------------------------------------------------------------------- | -------------------------------------------------------------------------- | ----- | -------------------------- | ------- | ------------------------------ | -------
|
|Cash flows from operating activities: |                                                                                 |                                                                            |       |                            |         |                                |        
|                                      | Net loss                                                                        |                                                                            | $     | (26,375                    | )       | $                              | (33,137
|                                      | Cumulative effect of change in accounting principle                             |                                                                            |       | 3,940                      |         |                                |       
|                                      | Adjustments to reconcile net loss to net cash provided by operating activities: |                                                                            |       |                            |         |                                |        
|                                      |                                                                                 | Depreciation, depletion and amortization                                   |       |                            | 23,546  |                                |        
|                                      |                                                                                 | Imputed interest and amortization of deferred financing costs              |       |                            | 1,803   |                                |        
|                                      |                                                                                 | Unrealized gain on derivative financial instruments                        |       |                            | 1,013   |                                |        
|                                      |                                                                                 | Increase/(decrease) resulting from other changes in assets and liabilities |       |                            | (1,410  | )                              |        
|                                      |                                                                                 |                                                                            |       |                            |         |                                |        
|                                      |                                                                                 | Net cash provided by (used in) operating activities                        |       |                            | 2,517   |                                |        
|Cash flows from investing activities: |                                                                                 |                                                                            |       |                            |         |                                |        
|                                      | Purchases of property, plant and equipment                                      |                                                                            |       | (12,343                    | )       |                                | (16,581
|                                      |                                                                                 |                                                                            |       |                            |         |                                |        
|                                      |                                                                                 | Net cash used in investing activities                                      |       |                            | (12,343 | )                              |        
|Cash flows from financing activities: |                                                                                 |                                                                            |       |                            |         |                                |        
|                                      | Proceeds from revolving loans and short term borrowings, net                    |                                                                            |       | 17,705                     |         |                                | 14,414 
|                                      | Payments on long-term debt                                                      |                                                                            |       | (6,391                     | )       |                                | (3,156 
|                                      | Payment of financing costs                                                      |                                                                            |       | (482                       | )       |                                | (119   
|                                      |                                                                                 |                                                                            |       |                            |         |                                |        
|                                      |                                                                                 | Net cash provided by financing activities                                  |       |                            | 10,832  |                                |        
|                                      |                                                                                 |                                                                            |       |                            |         |                                |        
|                                      |                                                                                 | Net increase (decrease) in cash                                            |       | $                          | 1,006   |                                | $      
|                                      |                                                                                 |                                                                            |       |                            |         |                                |        
|Cash at beginning of period           |                                                                                 | $                                                                          | 7,018 |                            | $       | 6,263                          |        
|                                      |                                                                                 |                                                                            |       |                            |         |                                |        
|Cash at end of period                 |                                                                                 | $                                                                          | 8,024 |                            | $       | 12,545                         |        
|                                      |                                                                                 |                                                                            |       |                            |         |                                |        

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

4

---





THE DOE RUN RESOURCES CORPORATION        Notes to Condensed Consolidated Financial Statements        (Dollars in thousands)

(1)   Summary of Significant Accounting Policies



These interim consolidated financial statements include the accounts of The Doe Run Resources Corporation (Doe Run) and its subsidiaries (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, 2003, April, 30, 2003 and
July 31, 2003 and results of operations for the three-month period ended January 31, 2003 and 2002, the three and six-month periods ended April 30, 2003 and 2002 and
the three and nine-month periods ended July 31, 2003 and 2002. All material intercompany balances and transactions have been eliminated. Interim periods are not necessarily
indicative of results to be expected for the year.



Certain balances have been reclassified from their previous presentation in order to conform to the current year presentation.

(2)   Financial Condition

The Company has had recurring losses over several years, primarily the result of the declining treatment charges discussed below and low metal prices, a condition
exacerbated by the Company's significant interest costs prior to the restructuring of the Company's public debt in 2002. Doe Run's liquidity has been affected by these factors, as well as by Doe Run
Peru's liquidity. As noted in Note 4, the Company has failed to meet certain financial covenant requirements contained in Doe Run's revolving credit agreement and a term note (the Term Note)
during the first nine months of fiscal 2003, and failed a financial covenant in Doe Run Peru's revolving credit facility subsequent to the end of the third quarter. As discussed in Notes 6 and 7, the
Company has uncertainties related to environmental and litigation matters. These issues combined raise substantial doubt about the Company's ability to continue as a going concern.

Doe
Run Peru's results of operations and liquidity have been severely impacted by declining treatment charges that Doe Run Peru receives for processing raw materials resulting from a
shortage in the global supply of concentrates. The effects of low metals prices for the past several years have also caused some of Doe Run Peru's current suppliers of concentrates to suffer financial
distress, which has affected the availability of concentrate feed. During 2003, deliveries of lead and zinc concentrates to La Oroya from a major Peruvian supplier were below contracted amounts. While
Doe Run Peru was able to replace a portion of this shortfall with concentrates from other suppliers, total concentrate receipts were less than expected and the resulting changes in concentrate mix and
interruptions in delivery schedules adversely affected Doe Run Peru's metal production and results of operations. If one or more of Doe Run Peru's significant local suppliers were to cease delivery of
concentrates, there could be no assurance La Oroya would be able to secure sufficient replacement feedstock at economically acceptable terms. If such shortages resulted in a significant interruption
in feed supply, a material reduction in the production of metals from La Oroya or an interruption of production in the lead and zinc circuits could result, which could have a significant adverse
effect on the Company's results of operations, financial condition and liquidity.

5

---



As
discussed in Note 6, Doe Run Peru is proceeding with efforts to identify alternative methods of achieving compliance with environmental requirements. These efforts include, but
are not limited to,
reducing or curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These efforts must take into
consideration the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru intends to submit a request in 2004 to modify its existing requirements. There can be no
assurance that the alternatives will be approved by the Peruvian government or that they will achieve compliance in the timeframe required. If the La Oroya smelter does not operate within the required
limits after December 31, 2006, Doe Run Peru could be forced to cease operations at the La Oroya smelter.

Doe
Run Peru implemented cost savings during fiscal 2003 and accelerated cash receipts, as well as other measures, to improve its liquidity. In addition, the retirement of Doe Run Peru's
loan from a foreign bank reduced Doe Run Peru's interest payments by approximately $14,000 per year. These changes improved Doe Run Peru's cash flow and availability of borrowings under the revolving
credit agreement in the first nine months of 2003.

Doe
Run Peru's ability to pay fees to Doe Run is currently limited by Doe Run Peru's revolving credit facility, unless Doe Run Peru meets an excess cash flow test. Due to Doe Run Peru's
lack of liquidity, no payments for fees were made during the first nine months of 2003, although payments of $4,000 annually were allowed for 2003 under Doe Run Peru's revolving credit facility. In
addition, beginning in 2003, Doe Run will not receive approximately $14,000 per year in interest income from a deposit that was surrendered to retire Doe Run Peru's loan from a foreign bank. The
deposit, plus unpaid interest, was replaced in September 2002 by an intercompany note that does not bear interest during the term of Doe Run Peru's revolving credit facility. These factors
along with nearly five years of low metals prices have affected Doe Run's liquidity.

Doe
Run has implemented cost savings measures over the last several years to mitigate the impact of lower metal prices, including: reductions of production levels, changes in mine plans
and the elimination of hourly and salaried positions. These efforts succeeded in reducing Doe Run's costs over the last several years. Management will continue to assess market and operating
conditions to maximize its operating profit or limit losses, while allowing Doe Run to fulfill its environmental obligations.

(3)   Inventories

Inventories consist of the following:

|                                     |  | July 31,
2003 |         | April 30,
2003 |   | January 31,
2003 |  | October 31,
2002
|------------------------------------ |  | ------------- | ------- | -------------- | - | ---------------- |  | ----------------
|Finished metals and concentrates     |  | $             | 22,186  |                | $ | 17,885           |  | $               
|Metals and concentrates in process   |  |               | 59,901  |                |   | 65,424           |  |                 
|Materials, supplies and repair parts |  |               | 27,249  |                |   | 27,584           |  |                 
|                                     |  |               |         |                |   |                  |  |                 
|                                     |  | $             | 109,336 |                | $ | 110,893          |  | $               
|                                     |  |               |         |                |   |                  |  |                 

Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $4,475, $5,246, $5,192 and $5,157 at July 31, 2003, April 30, 2003, January 31,
2003 and October 31, 2002, respectively.

(4)   Debt

Effective March 27, 2003, Doe Run entered into an amendment to the loan agreement governing Doe Run's revolving credit facility which reduced the
consolidated net worth measurement that the Company is required to maintain and waived certain events of default. Pursuant to the amendment the

6

---



lenders
waived events of default at that time resulting from the failure of Doe Run to maintain financial covenants and waived the event of default resulting from the failure of Doe Run to deliver
timely financial reports.

Effective
March 21, 2003 Renco and the lenders of the Term Note entered into an Assignment and Acceptance Agreement whereby Renco purchased all of the rights of the agent and
lenders under the Term Note. Accordingly, Renco became the agent and lender under the Term Note with the identical rights to payment of interest, principal and fees and to the same collateral, as had
the previous lenders. On March 27, 2003 Renco, in its capacity as agent and lender under the Term Note, waived existing and impending defaults, including, among other things, Doe Run's failure
to provide the lender with certain reports and Doe Run's failure to comply with financial covenants.

Subsequent
to the waivers and amendments discussed above, certain financial and reporting covenant requirements contained in Doe Run's revolving credit agreement and the Term Note were
not met. Subsequent to July 31, 2003, Doe Run Peru defaulted on its net worth covenant contained in its revolving credit agreement. These defaults continued until the agreements were amended in
the second quarter of fiscal 2004. See discussion in Note 8 regarding amendments to these agreements.

(5)   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 secondary lead segment, also located in Missouri, recycles lead-bearing feed 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.

The
accounting policies of the segments are the same as those of the Company, except that the primary lead, secondary lead and fabricated products segments value finished metals and
concentrates, work in process and raw materials inventories at FIFO cost. Certain functions are performed at the Company's corporate office for the primary lead and secondary lead segments, such as
sales and billing, as well as the general administration of the Company. Related accounts receivable and corporate overhead expenses are not allocated to operating segments.

7

---



|                                           |                     | Three Months Ended
January 31, |         | Three Months Ended
April 30, |         | Six Months Ended
April 30, |        
|------------------------------------------ | ------------------- | ------------------------------ | ------- | ---------------------------- | ------- | -------------------------- | -------
|
|Operating SegmentsRevenues                |                     |                                |         |                              |         |                            |        
|Revenues from external customers:          |                     |                                |         |                              |         |                            |        
|                                           | Peruvian operations |                                | $       | 102,063                      |         | $                          | 101,455
|                                           | Primary lead        |                                |         | 36,859                       |         |                            | 33,103 
|                                           | Secondary lead      |                                |         | 15,502                       |         |                            | 16,970 
|                                           | Fabricated products |                                |         | 4,144                        |         |                            | 4,007  
|                                           |                     |                                |         |                              |         |                            |        
|                                           |                     | Total                          |         |                              | 158,568 |                            |        
|Revenues from other operating segments:(1) |                     |                                |         |                              |         |                            |        
|                                           | Peruvian operations |                                |         | 243                          |         |                            |       
|                                           | Primary lead        |                                |         | 210                          |         |                            | 585    
|                                           | Secondary lead      |                                |         | 198                          |         |                            | 86     
|                                           | Fabricated products |                                |         |                             |         |                            |       
|                                           |                     |                                |         |                              |         |                            |        
|                                           | Total               |                                |         | 651                          |         |                            | 671    
|                                           |                     |                                |         |                              |         |                            |        
|Total reportable segments                  |                     |                                | 159,219 |                              |         | 156,206                    |        
|Other revenues/gains (losses)(2)           |                     |                                | 443     |                              |         | 1,001                      |        
|Intersegment eliminations                  |                     |                                | (651    | )                            |         | (671                       | )      
|                                           |                     |                                |         |                              |         |                            |        
|Total revenues                             |                     | $                              | 159,011 |                              | $       | 156,536                    |        
|                                           |                     |                                |         |                              |         |                            |        

|                                           |                     | Three Months Ended
July 31, |         | Nine Months Ended
July 31, |        
|------------------------------------------ | ------------------- | --------------------------- | ------- | -------------------------- | -------
|
|Operating SegmentsRevenues                |                     |                             |         |                            |        
|Revenues from external customers:          |                     |                             |         |                            |        
|                                           | Peruvian operations |                             | $       | 106,934                    |        
|                                           | Primary lead        |                             |         | 39,938                     |        
|                                           | Secondary lead      |                             |         | 17,656                     |        
|                                           | Fabricated products |                             |         | 3,649                      |        
|                                           |                     |                             |         |                            |        
|                                           |                     | Total                       |         |                            | 168,177
|Revenues from other operating segments:(1) |                     |                             |         |                            |        
|                                           | Peruvian operations |                             |         | 90                         |        
|                                           | Primary lead        |                             |         | 142                        |        
|                                           | Secondary lead      |                             |         | 217                        |        
|                                           | Fabricated products |                             |         |                           |        
|                                           |                     |                             |         |                            |        
|                                           | Total               |                             |         | 449                        |        
|                                           |                     |                             |         |                            |        
|Total reportable segments                  |                     |                             | 168,626 |                            |        
|Other revenues/gains (losses)(2)           |                     |                             | 1,027   |                            |        
|Intersegment eliminations                  |                     |                             | (449    | )                          |        
|                                           |                     |                             |         |                            |        
|Total revenues                             |                     | $                           | 169,204 |                            | $      
|                                           |                     |                             |         |                            |        

---

8

---



|                                                           |                              | Three Months Ended
January 31, |        | Three Months Ended
April 30, |   | Six Months Ended
April 30, |       
|---------------------------------------------------------- | ---------------------------- | ------------------------------ | ------ | ---------------------------- | - | -------------------------- | ------
|
|Operating SegmentsAdjusted EBITDA                         |                              |                                |        |                              |   |                            |       
|Peruvian operations                                        |                              | $                              | 4,270  |                              | $ | 7,381                      |       
|Primary lead                                               |                              |                                | 1,458  |                              |   | 3,881                      |       
|Secondary lead                                             |                              |                                | 3,410  |                              |   | 4,381                      |       
|Fabricated products                                        |                              |                                | 892    |                              |   | 501                        |       
|                                                           |                              |                                |        |                              |   |                            |       
|                                                           | Total reportable segments    |                                |        | 10,030                       |   |                            | 16,144
|Other income and expenses(3)                               |                              |                                | (733   | )                            |   | (360                       | )     
|Corporate selling, general and administrative expenses     |                              |                                | (4,398 | )                            |   | (3,389                     | )     
|Intersegment eliminations                                  |                              |                                | (71    | )                            |   |                           |       
|                                                           |                              |                                |        |                              |   |                            |       
|                                                           | Consolidated adjusted EBITDA |                                |        | 4,828                        |   |                            | 12,395
|Depreciation, depletion and amortization                   |                              |                                | (7,947 | )                            |   | (7,502                     | )     
|Interest income                                            |                              |                                | 11     |                              |   | 3,539                      |       
|Interest expense                                           |                              |                                | (3,065 | )                            |   | (13,970                    | )     
|Other                                                      |                              |                                | (430   | )                            |   |                           |       
|Unrealized gain (loss) on derivative financial instruments |                              |                                | 97     |                              |   | 1,386                      |       
|                                                           |                              |                                |        |                              |   |                            |       
|                                                           | Loss before income taxes     |                                | $      | (6,506                       | ) | $                          | (4,152
|                                                           |                              |                                |        |                              |   |                            |       

|                                                           |                           | Three Months Ended
July 31, |        | Nine Months Ended
July 31, |        
|---------------------------------------------------------- | ------------------------- | --------------------------- | ------ | -------------------------- | -------
|
|Operating SegmentsAdjusted EBITDA                         |                           |                             |        |                            |        
|Peruvian operations                                        |                           | $                           | (1,849 | )                          | $      
|Primary lead                                               |                           |                             | 4,739  |                            |        
|Secondary lead                                             |                           |                             | 4,616  |                            |        
|Fabricated products                                        |                           |                             | 433    |                            |        
|                                                           |                           |                             |        |                            |        
|                                                           | Total reportable segments |                             |        | 7,939                      |        
|Other income and expenses(3)                               |                           |                             | (1,310 | )                          |        
|Corporate selling, general and administrative expenses     |                           |                             | (4,976 | )                          |        
|Intersegment eliminations                                  |                           |                             |       |                            |        
|                                                           |                           |                             |        |                            |        
|Consolidated adjusted EBITDA                               |                           |                             | 1,653  |                            |        
|Depreciation, depletion and amortization                   |                           |                             | (7,605 | )                          |        
|Interest income                                            |                           |                             | 7      |                            |        
|Interest expense                                           |                           |                             | (3,239 | )                          |        
|Other                                                      |                           |                             | (1,156 | )                          |        
|Unrealized gain (loss) on derivative financial instruments |                           |                             | (1,599 | )                          |        
|                                                           |                           |                             |        |                            |        
|                                                           |                           | Loss before income taxes    |        | $                          | (11,939
|                                                           |                           |                             |        |                            |        

---

(6)   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

9

---



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.



On November 1, 2002 the Company adopted Statement No. 143"Accounting for Asset Retirement
Obligations"(Statement No. 143). With the adoption of this Statement, asset retirement obligations (AROs) are recognized as liabilities when incurred, with the initial
measurement at fair value. These liabilities will be accreted to full value over time through charges to income. In addition, an asset retirement cost was capitalized as part of the related asset's
carrying value and will be depreciated over the asset's useful life.

The
Company's mines and related processing facilities are subject to governance by various agencies that have established minimum standards for reclamation. The Company'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 activities to contain and cover the pile. The Company's mining and milling operations are subject to Missouri mine waste closure permit
requirements and lease agreements which require the Company 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.

Doe
Run Peru also 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 covering
and revegetation of mixed lead and copper slag stored in Huanchan, an area a short distance from the smelter where the slag is currently stored.

The
following table summarizes the balance sheet impact associated with the adoption of Statement No. 143:

|                                                    |  | October 31,
2002
As Reported |          | Statement
No. 143
Adoption
Impact |   | November 1,
2002
After
Adoption |  
|--------------------------------------------------- |  | ---------------------------- | -------- | --------------------------------- | - | ------------------------------- | -
|Property, plant and equipment                       |  | $                            | 435,922  |                                   | $ | (3,137                          | )
|Accumulated depreciation                            |  |                              | (186,255 | )                                 |   | 1,049                           |  
|Plant, property and equipment, net                  |  |                              | 249,667  |                                   |   | (2,088                          | )
|Liability for AROs                                  |  |                              | 12,059   |                                   |   | 1,852                           |  
|Cumulative effect of change in accounting principle |  |                              |         |                                   |   | (3,940                          | )

10

---



The
pro forma effects of the application of Statement No. 143 as if it had been adopted on November 1, 2001 are presented below:

|                                                               |  | Three Months Ended
January 31, |         | Three Months Ended
April 30, |   | Six Months Ended
April 30, |  
|-------------------------------------------------------------- |  | ------------------------------ | ------- | ---------------------------- | - | -------------------------- | -
|
|Loss before cumulative effect of accounting change as reported |  | $                              | (6,506  | )                            | $ | (4,691                     | )
|Additional accretion and depreciation expense, net of tax      |  |                                |        |                              |   | (294                       | )
|                                                               |  |                                |         |                              |   |                            |  
|Pro formaloss before cumulative effect of accounting change    |  | $                              | (6,506  | )                            | $ | (4,985                     | )
|                                                               |  |                                |         |                              |   |                            |  
|Net loss as reported                                           |  | $                              | (10,446 | )                            | $ | (4,691                     | )
|Pro formanet loss                                              |  | $                              | (6,506  | )                            | $ | (8,925                     | )

|                                                               |  | Three Months Ended
July 31, |         | Nine Months Ended
July 31, |  
|-------------------------------------------------------------- |  | --------------------------- | ------- | -------------------------- | -
|
|Loss before cumulative effect of accounting change as reported |  | $                           | (11,939 | )                          | $
|Additional accretion and depreciation expense, net of tax      |  |                             |        |                            |  
|                                                               |  |                             |         |                            |  
|Pro formaloss before cumulative effect of accounting change    |  | $                           | (11,939 | )                          | $
|                                                               |  |                             |         |                            |  
|Net loss as reported                                           |  | $                           | (11,939 | )                          | $
|Pro formanet loss                                              |  | $                           | (11,939 | )                          | $

The
pro forma asset retirement obligation liability balance at October 31, 2001 as if Statement No. 143 had been adopted at that date is $12,322.

The
following illustrates the activity pertaining to the AROs for the period ended July 31, 2003.

AROs as of October 31, 2002

$
12,059Transition adjustment


1,852Liabilities settled


(7
)Accretion expense


1,148AROs as of July 31, 2003

$
15,052


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



Doe Run is subject to a voluntary 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

11

---



the
primary smelter in Herculaneum, 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 mile radius of the smelter, and subsequently signed a second AOC with the U.S. EPA on December 21,
2001, which has essentially been completed. The Company signed a modification to the May 29, 2001 AOC on January 16, 2004. This modification calls for soil replacement in an estimated
129 properties where the lead content exceeds 800 ppm. The estimated costs of remediating these properties is approximately $1,740 to be spent in 2004, and $380 in the following year. The estimated
costs for the properties to be completed after 2004 assumes the use of phosphate treatment to stabilize them. If the use of such treatment is not accepted by the EPA, costs of remediation will be
higher than those currently estimated.

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. Under the terms of the residential property purchase plan, Doe Run immediately extended offers to the owners of twenty properties having children
less than 72 months old living in them. Of the remaining 140 homeowners, those that request an offer will be extended offers by the end of 2004. The amount paid to the homeowners who accept an
offer is based on an appraisal of the property's value at August 31, 2001, plus, if a replacement property is purchased, an amount for owner-occupied residences representing the lesser of the
difference between the appraisal amount and the cost of a similar property in another designated community or the difference between the appraisal amount and the replacement property. The estimated
cost associated with the residential property purchase plan could be as high as $10,000 if all qualifying homeowners request an offer and accept the purchase offer. Through July 31, 2003, Doe
Run had spent approximately $1,800 on 22 properties under the residential property purchase plan. All but two of the twenty owners of homes with children living in them have accepted Doe Run's offer.
Of the seventy-one properties whose owners were given the opportunity to request purchase in calendar 2003, fifty-seven owners have requested an appraisal, and twenty-five of
forty-nine offers have been accepted. Management believes that it is highly unlikely that all of the qualifying homeowners will accept the offer, but it cannot currently be estimated how
many of the remaining homeowners will accept the offer, or, if the offer is accepted, what price will be paid for the property. If Doe Run does not comply with the material property purchase
provisions of the settlement agreement, Doe Run will be subject to a $1,000 penalty.

Doe
Run will attempt to rent out certain purchased properties, once approval is received by the regulatory agencies. The properties must remain vacant while owned by Doe Run until
regulators and the city agree that re-occupancy is not a risk to human health. Management believes there is current evidence that no health risk exists as a result of smelter operations,
due to soil remediation efforts and low concentrations of lead in the air in the buyout area, and that other sources of lead contamination could be remedied. Based on an analysis of information
currently available, Doe Run believes it should ultimately be able to rent or sell the properties.

The
Company's statement of operations reflects an impairment loss that is primarily related to properties owned in Herculaneum, as approval for reoccupancy of the properties has not yet
been received and it cannot be assured that the cost of the properties will be recovered through future cash flows. If the cost of the property cannot be recovered through future cash flows,
additional impairment losses will be recognized as properties are purchased. The Company's accrual for remediation does not include any future purchase costs relating to the residential property
purchase plan.

On
April 11, 2002, a report in the media contained allegations by former employees of improper disposal of hazardous materials on the Herculaneum site. Doe Run does not believe
there has been any violation of law and is cooperating with state and federal agencies in their investigations into the allegations, including having provided equipment and an operator to the
government to excavate

12

---



various
areas of the Herculaneum smelter site, which excavations failed to turn up any evidence of illegal toxic dumping. The investigation is still officially open.

Doe
Run, working with the Missouri DNR and the Missouri Air Conservation Commission, has developed a plan to bring the Herculaneum smelter in compliance with the ambient air quality
standard for lead promulgated under the federal Clean Air Act. 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. Minimal
capital expenditures were required in 2003 to complete the project, and the plan has been essentially implemented, and the air quality monitors have reflected compliance since July 2002.

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; 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, Montana; and the Missouri Electric Works site in Cape Girardeau, Missouri. There are two additional sites in St. Francois County for which the 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 this
remediation is approximately $9,200 for these sites, including the two additional sites in St. Francois County, which the Company
believes is adequate based on its investigations to date. However, depending upon the types of remediation required and certain other factors, 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.

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 underway on the east side with completion expected in 2005.

Doe
Run is subject to a voluntary AOC with the 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, Rivermines, and Leadwood sites for remediation of mine waste areas. The National EE/CA is complete, the
Rivermines EE/CA is under public review and has been submitted to the EPA for approval, and the Leadwood EE/CA is due by the end of fiscal 2004. In addition, Doe Run has signed an AOC with the EPA to
conduct a Remedial Investigation/Feasibility Study (RI/FS) to assess potential off-site impacts of these site operations on and the need for remediation regarding groundwater, residential
soils, several creeks and a river. The initial draft of the RI/FS was submitted in early March 2002. Doe Run has signed an order to conduct interim measures through April 2004,
consisting of blood lead testing of young children, residential soil sampling, and limited soil remediation as indicated by the testing and sampling results and has signed 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.

13

---





Doe Run has been advised that the 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 issued in 1989. This will involve remediation of
solid waste management units at the site, although the plan for corrective action is not expected to be finalized until late in fiscal 2004. The Company's estimate of the cost of this corrective
action is $2,000. The storage area is also covered under the permit, but management does not believe the cost of closure is significant. 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.

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 were not maintained, additional improvements to its treatment facilities could be required.

The
Company had recorded liabilities of approximately $13,000, $13,000, $13,700 and $14,200 related to these remediation obligations as of July 31, 2003, April 30, 2003,
January 31, 2003 and October 31, 2002, respectively.



Metaloroya S.A., the former owner of the La Oroya smelter, at the time a subsidiary of Centromin, received approval from the Peruvian government for an
Environmental Adjustment and Management Program (PAMA) that consisted of an environmental impact analysis, monitoring plan and data,
mitigation measures and closure plan. Doe Run Peru assumed the obligations under the PAMA. 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 for
any other type of mining or metallurgical operation like Cobriza). Once approved, the PAMA, as modified from time to time, functions as the equivalent of an operating permit with which the operator
must comply. After expiration of the PAMA, the operator must comply with all applicable standards and requirements. Future changes in legal rules and maximum permissible levels would not be applicable
to Doe Run Peru for the remaining period of the PAMA, except for certain closure requirements. Because these costs improve the property or prevent future environmental contamination, they are
capitalized.

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



14

---





Through
July 31, 2003, Doe Run Peru had spent approximately $36,300 on projects under the La Oroya PAMA.

Estimated
annual spending on a calendar year basis for the projects approved in the La Oroya PAMA, as amended, most recently on January 25, 2002, are as follows:

Year

Estimated
Cost2003

$
9,3502004


12,8002005


53,5002006


67,700$
143,350


The
current estimate for the total to be expended on environmental projects under the PAMA and on additional related process changes for Doe Run Peru is approximately $168,000 for the
remaining term of the PAMA. The PAMA provides a specific plan for achieving the applicable Ministry of Energy and Mines (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. Although the PAMA currently requires Doe Run Peru to construct certain sulfuric acid plants, estimated to cost approximately $107,500, in conjunction with a portion of the
PAMA in order to reduce emissions, Doe Run Peru is also proceeding with efforts to identify alternative methods of achieving compliance. These efforts include, but are not limited to, reducing or
curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These efforts must take into
consideration the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru intends to submit a request to MEM in 2004 to modify the requirements of the existing PAMA.
There can be no assurance that the Peruvian government will approve the alternatives or that they will achieve compliance in the timeframe required by the PAMA. If the La Oroya smelter does not
operate within the current PAMA limits after December 31, 2006, Doe Run Peru could be forced to cease operations at the La Oroya smelter.

Doe
Run Peru's operations historically and currently exceed some of the applicable MEM maximum permissible limits pertaining to air emissions, ambient air quality and wastewater effluent
quality. The PAMA projects have been designed to achieve compliance with such requirements prior to the expiration of the PAMA on December 31, 2006. 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. Further, 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 or results of operations. 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

15

---



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 or results of operations.

The
Cobriza mine has a separate PAMA in which Doe Run Peru has committed to complete projects to manage tailings, mine drainage, sewage and garbage. Doe Run Peru had spent approximately
$10,000 under the PAMA as of July 31, 2003. On July 3, 2002, the government of Peru enacted the Supreme Decree No. 022-2002-EM, extending the PAMA for all
companies not yet in compliance with their PAMA for a period of not less than 12 months, and up to 18 months if approved by MEM. Companies not in compliance at the end of the extension
period would have an additional period to close their operations. Doe Run Peru has received approval from MEM to extend the date of required compliance with the PAMA to April of 2004, and has a
request pending to
extend the compliance period for the full 18 months allowed by the Supreme Decree. Doe Run Peru expects that it will complete its PAMA requirements by the end of June 2004 including a
mine water treatment system and by making a surface paste fill from tailings. If the extension is not granted, Doe Run Peru may be subject to legal redress in the form of fines, which management does
not believe will be material. Ore reserves are now estimated to be approximately four years at current production levels and space has been identified to store the associated tailings.

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 all periods presented.



The Company believes its recorded liabilities 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.

(7)   Litigation

Doe Run is a defendant in ten lawsuits alleging certain damages stemming from the operations at the Herculaneum smelter. Two 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. Five of the cases are personal injury actions by 24 individuals who allege damages from the
effects of lead due to operations at the smelter. Punitive damages also are being sought in each case.

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 five 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

16

---



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 fifth case alleges personal injury
against two children living in St. Francois County.

A
railroad carrier has communicated to Doe Run that it intends to seek contribution from Doe Run for cleanup actions at a rail car clean-out area that the carrier was ordered
to take by the federal government. The carrier pled guilty to a felony and paid a criminal fine for its actions. It is Doe Run's position that Doe Run cannot be held liable for another's criminal
actions. No lawsuit has been filed.

This
railroad carrier has also threatened Doe Run with possible legal action for claims for indemnity allegedly arising out of contracts with Doe Run or its predecessors for payments
that the railroad has made in regard to personal injury claims against the railroad by railway workers and others, including those made in 114 cases previously settled by Doe Run. Doe Run is currently
in the process of investigating these claims.

Doe
Run is a defendant in lawsuits alleging certain damages from past mining operations in Ottawa County, Oklahoma. Ten lawsuits have been filed alleging personal injury to
twenty-five children and one adult living in Ottawa County against eight companies, including Doe Run, who allegedly, either through predecessors or subsidiaries, mined lead and zinc in
Ottawa County or commercially used the chat or tailings in Ottawa County. One case is a class action lawsuit for personal injury and property damage 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 and several other parties have been named defendants in a suit brought by the City of St. Louis, Missouri for costs allegedly incurred and to be incurred by the plaintiff for the
care of
lead-poisoned persons, education programs for children injured by exposure to lead and the abatement of lead hazards purportedly created by the defendants in the City of St. Louis. The
complaint alleges that the defendants made material misrepresentations and intentional omissions of material facts to the City and/or its residents regarding the nature of lead and lead products, such
as paint. The suit also seeks punitive damages.

FPI
(Fabricated Products, Inc), a subsidiary of Doe Run received a judgment against it in a breach of contract/warranty action for damages arising from the sale of allegedly impure lead.
The amount of the judgment was $4,300, including interest. See Note 8 for discussion of a settlement reached with the plaintiffs.

Doe
Run has been named in asbestos injury suits by two individuals against numerous companies, alleging that they were exposed to asbestos, including at the St. Joe Minerals Corporation
(Doe Run's predecessor) premises. Doe Run was served a Writ of Summons in a third case filed in Pennsylvania in May 2003 but has not yet been served with a complaint, so few details of the case
are known, including the alleged location of the exposure.

Doe
Run has been named in a suit claiming alleged damages to the property of a small business in the vicinity of Doe Run's recycling facility. Because the facility meets the required
national ambient air

17

---



standard
for lead and given the scope of any potential economic loss as measured by property values in the area, it is not probable that such a claim would have a material impact on Doe Run.

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.

A
law firm in Lima, Peru has initiated a large number of lawsuits in the Lima labor courts against various mining companies in Peru. All lawsuits allege that workers have contracted lung
disease from working at the mining facilities. Currently, Doe Run Peru has 44 cases pending, with all claims totaling approximately $714. Only one case has resulted in a judgment of approximately $8
against Doe Run Peru that was upheld on appeal.

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.
Therefore, 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.

(8)   Subsequent Events



An additional class action lawsuit for damages to natural resources and land owned by members of the Quapaw Tribe in Ottawa County, Oklahoma was filed on
December 10, 2003 against seven companies, including Doe Run. See discussion of Ottawa County lawsuits in Note 7.

In
February 2004, FPI reached a settlement of the judgment received in the breach of contract/warranty case. See discussion of this lawsuit and judgment in Note 7.

Six
individuals filed an additional class action lawsuit against six companies, including Doe Run, in Ottawa County, Oklahoma on February 9, 2004. See discussion of Ottawa County
lawsuits in Note 7. The Company is unable at this time to estimate the expected outcome and any final costs of this action.

In
February 2004 the U.S. Department of Agriculture issued a Unilateral Administrative Order ordering certain remediation activities by Doe Run at the Block "P" millsite,
discussed in Note 6. 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.

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 and trucking companies involved in the transportation of concentrates. Approximately 412 houses were identified as potentially requiring remediation. Doe Run expects that its share
of the potential remediation costs will not be significant.



On December 26, 2003, the Peru tax authority, SUNAT notified Doe Run Peru of an income tax assessment for the 1998 tax year. The assessment primarily
relates to Doe Run Peru's income tax treatment of the December 1997 merger of Doe Run Peru and Metaloroya S.A., which was purchased by Doe Run Peru in October 1997. Under the assessment
by SUNAT, the tax basis of Doe Run Peru's

18

---



fixed
assets acquired would decrease, resulting in lower tax depreciation expense than originally claimed and additional income taxes due.

Under
the assessment, the reduction in depreciation would result in additional taxes of approximately $6,600, plus penalties and interest of $9,600 to date for the 1998 tax year. For tax
years after 1998, the Company estimates that additional taxes of approximately $5,700 would be due related to the decrease in the amount of depreciation originally claimed plus penalties and interest
of approximately $20,000 to date in the event SUNAT would prevail. Interest would also be assessed on the prepayments of taxes that were not made as a result of the depreciation deductions taken by
Doe Run Peru in the years affected, estimated at approximately $5,800.

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 change discussed
above, or approximately $3,500.

Management
of the Company believes that Doe Run Peru has followed the applicable Peruvian 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 appeals process and were to appeal in the judicial system, some
type of financial assurance would be required.

On
February 16, 2004, Doe Run Peru entered into an amendment of the its revolving credit facility. The amendment lowered the levels of net worth Doe Run Peru must comply with from
the date of the amendment through September 30, 2004, among other things. Based on current forecasted results, assuming metal prices higher than those experienced in fiscal 2003, management
expects to remain in compliance with all covenants relating to Doe Run Peru's revolving credit facility for the foreseeable future. The amendment does not cure or waive defaults in existence before
the date of the amendment. The amendment also limits payment of fees to Doe Run through September 30, 2004 to $2,800. In the event Doe Run Peru's net worth would fall to a level lower than the
requirement at the quarterly reporting dates, the amendment permanently reduces the amount available under Doe Run Peru's
revolving credit facility by the amount of the difference between the required and the actual net worth. If Doe Run Peru is not successful with its administrative appeal of the tax assessment
discussed above, the lender can, at its discretion, require that the amount of the assessment reduce net worth as defined in Doe Run Peru's revolving credit facility amendment. Such reduction along
with other factors, including metal prices and results of operations, could affect Doe Run Peru's ability to comply with the net worth requirement.

On
April 9, 2004 Doe Run entered into an amendment of Doe Run's revolving credit facility. The amendment waives existing defaults and lowers the net worth requirement. The
amendment became effective when waivers of default under the Term Note were received, as discussed below. Based on current projections, assuming metal prices continuing higher than those experienced
during fiscal 2003, management expects to remain in compliance under Doe Run's revolving credit facility, as amended, through October 31, 2004.

On
April 30, 2004 Doe Run entered into an amendment of the Term Note. The amendment waives existing defaults and amends various covenant requirements, among other things. The
amendment also requires that certain information be delivered to the lender at various times within 30 days after the amendment date, which dates have subsequently been extended. Based on
current projections, assuming metal prices continuing higher than those experienced during fiscal 2003, management expects to remain in compliance under the Term Note, as amended, through
October 31, 2004.

On
May 7, 2004, Doe Run received a notice of default from the trustee of the 11.75% Notes that it is in default of the indenture requirements. The notice gives Doe Run
30 days from the date of

19

---



receipt
of the notice to remedy such defaults by filing its quarterly and annual reports for the 2003 fiscal year with the SEC and to provide a written statement from the Company's independent
certified public accountants indicating whether any defaults have come to their attention. If the defaults are not remedied within 30 days of receipt of the notice, the trustee may declare all
unpaid principal and interest immediately payable. Management intends to remedy the defaults in the timeframe required.

(9)   Guarantor Subsidiaries

The Guarantor Subsidiaries (Fabricated Products, Inc. (FPI) and DR Land Holdings, LLC (together, the Domestic Guarantors), Buick Resource Recycling
Facility, LLC (whose assets were contributed by Doe Run in April 2003), Doe Run Cayman Ltd. (Doe Run Cayman) and its subsidiary Doe Run Peru) have jointly and severally, fully,
unconditionally and irrevocably guaranteed the Unsecured Notes, Secured Notes and 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.

20

---



Condensed Consolidating Balance Sheet (unaudited)  As of July 31, 2003

|                                               |                                                                                            | The Company
Excluding
Guarantor
Subsidiaries         |        | Buick
Resource
Recycling
Facility, LLC |          | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |   | Eliminations |        | The
Company |        
|---------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ------ | -------------------------------------- | -------- | ------------------- | ------ | ----------------------------- | - | ------------ | ------ | ----------- | -------
|ASSETS                                         |                                                                                           
|Current assets:                                |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               | Cash                                                                                       |                                                      | $      |                                       |          | $                   |       |                               | $ |             |        | $           | 8,024  
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                          |                                                      |        | 37,396                                 |          |                     |       |                               |   | 3,075        |        |             | 19,777 
|                                               | Inventories                                                                                |                                                      |        | 45,385                                 |          |                     |       |                               |   | 1,515        |        |             | 62,476 
|                                               | Prepaid expenses and other current assets                                                  |                                                      |        | 10,650                                 |          |                     |       |                               |   | 83           |        |             | 11,730 
|                                               | Due from subsidiaries                                                                      |                                                      |        | 25,683                                 |          |                     | 191    |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current assets                                 |        |                                        | 119,114  |                     |        | 191                           |   |              | 4,673  |             |        
|                                               | Property, plant and equipment, net                                                         |                                                      |        | 82,548                                 |          |                     | 14,304 |                               |   | 2,703        |        |             | 135,942
|                                               | Due from subsidiaries                                                                      |                                                      |        | 139,063                                |          |                     |       |                               |   |             |        |             |       
|                                               | Other noncurrent assets, net                                                               |                                                      |        | 3,580                                  |          |                     |       |                               |   | 151          |        |             | 289    
|                                               | Investment in subsidiaries                                                                 |                                                      |        | (2,922                                 | )        |                     |       |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total assets                                         |        | $                                      | 341,383  |                     | $      | 14,495                        |   | $            | 7,527  |             | $      
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                           
|Current liabilities:                           |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                             |                                                      | $      | 44,268                                 |          | $                   |       |                               | $ |             |        | $           | 2,708  
|                                               | Accounts payable                                                                           |                                                      |        | 16,051                                 |          |                     |       |                               |   | 521          |        |             | 31,155 
|                                               | Accrued liabilities                                                                        |                                                      |        | 34,434                                 |          |                     |       |                               |   | 1,857        |        |             | 21,560 
|                                               | Due to parent                                                                              |                                                      |        | 191                                    |          |                     |       |                               |   | 7,966        |        |             | 17,716 
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current liabilities                            |        |                                        | 94,944   |                     |        |                              |   |              | 10,344 |             |        
|                                               | Long-term debt, less current maturities                                                    |                                                      |        | 331,786                                |          |                     |       |                               |   |             |        |             | 36,000 
|                                               | Due to parent                                                                              |                                                      |        |                                       |          |                     |       |                               |   |             |        |             | 139,063
|                                               | Other noncurrent liabilities                                                               |                                                      |        | 68,297                                 |          |                     |       |                               |   | 798          |        |             | 3,798  
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities                                    |        |                                        | 495,027  |                     |        |                              |   |              | 11,142 |             |        
|Series A redeemable preferred stock            |                                                                                            |                                                      | 21,889 |                                        |          |                    |        |                               |  |              |        |            |        
|Shareholders' equity (deficit):                |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding |                                                      |        |                                       |          |                     |       |                               |   |             |        |             |       
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued and outstanding                |                                                      |        |                                       |          |                     |       |                               |   | 1            |        |             |       
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding            |                                                      |        |                                       |          |                     |       |                               |   |             |        |             | 2,005  
|                                               | Additional paid in capital                                                                 |                                                      |        | 3,350                                  |          |                     | 15,115 |                               |   | 1,205        |        |             |       
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive loss           |                                                      |        | (178,883                               | )        |                     | (620   | )                             |   | (4,821       | )      |             | (15,767
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total shareholders' equity (deficit)                 |        |                                        | (175,533 | )                   |        | 14,495                        |   |              | (3,615 | )           |        
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities and shareholders' equity (deficit) |        | $                                      | 341,383  |                     | $      | 14,495                        |   | $            | 7,527  |             | $      
|                                               |                                                                                            |                                                      |        |                                        |          |                     |        |                               |   |              |        |             |        

21

---





Condensed Consolidating Balance Sheet (unaudited)  As of April 30, 2003

|                                               |                                                                                            | The Company
Excluding
Guarantor
Subsidiaries         |         | Domestic
Guarantors |          | Doe Run
Cayman and
Subsidiary |        | Eliminations |         | The
Company |        
|---------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ------- | ------------------- | -------- | ----------------------------- | ------ | ------------ | ------- | ----------- | -------
|ASSETS                                         |                                                                                           
|Current assets:                                |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Cash                                                                                       |                                                      | $       |                    |          | $                             |       |              | $       | 3,742       |        
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                          |                                                      |         | 37,194              |          |                               | 3,575  |              |         | 25,106      |        
|                                               | Inventories                                                                                |                                                      |         | 43,964              |          |                               | 1,432  |              |         | 65,536      |        
|                                               | Prepaid expenses and other current assets                                                  |                                                      |         | 9,339               |          |                               | 94     |              |         | 9,214       |        
|                                               | Due from subsidiaries                                                                      |                                                      |         | 24,350              |          |                               |       |              |         |            |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total current assets                                 |         |                     | 114,847  |                               |        | 5,101        |         |             | 103,598
|Property, plant and equipment, net             |                                                                                            |                                                      | 99,783  |                     |          | 3,059                         |        |              | 136,175 |             |        
|Due from subsidiaries                          |                                                                                            |                                                      | 139,063 |                     |          |                              |        |              |        |             |        
|Other noncurrent assets, net                   |                                                                                            |                                                      | 4,184   |                     |          | 148                           |        |              | 322     |             |        
|Investment in subsidiaries                     |                                                                                            |                                                      | (10,268 | )                   |          |                              |        |              |        |             |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total assets                                         |         | $                   | 347,609  |                               | $      | 8,308        |         | $           | 240,095
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                           
|Current liabilities:                           |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                             |                                                      | $       | 44,866              |          | $                             |       |              | $       | 3,826       |        
|                                               | Accounts payable                                                                           |                                                      |         | 19,383              |          |                               | 771    |              |         | 25,571      |        
|                                               | Accrued liabilities                                                                        |                                                      |         | 29,422              |          |                               | 1,807  |              |         | 18,737      |        
|                                               | Due to parent                                                                              |                                                      |         |                    |          |                               | 9,049  |              |         | 15,301      |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total current liabilities                            |         |                     | 93,671   |                               |        | 11,627       |         |             | 63,435 
|Long-term debt, less current maturities        |                                                                                            |                                                      | 327,621 |                     |          |                              |        |              | 40,000  |             |        
|Due to parent                                  |                                                                                            |                                                      |        |                     |          |                              |        |              | 139,063 |             |        
|Other noncurrent liabilities                   |                                                                                            |                                                      | 67,925  |                     |          | 828                           |        |              | 3,679   |             |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total liabilities                                    |         |                     | 489,217  |                               |        | 12,455       |         |             | 246,177
|Series A redeemable preferred stock            |                                                                                            |                                                      | 21,264  |                     |          |                              |        |              |        |             |        
|Shareholders' equity (deficit):                |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding |                                                      |         |                    |          |                               |       |              |         |            |        
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued and outstanding                |                                                      |         |                    |          |                               | 1      |              |         |            |        
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding            |                                                      |         |                    |          |                               |       |              |         | 2,005       |        
|                                               | Additional paid in capital                                                                 |                                                      |         | 3,975               |          |                               | 1,205  |              |         |            |        
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive loss           |                                                      |         | (166,847            | )        |                               | (5,353 | )            |         | (8,087      | )      
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total shareholders' equity (deficit)                 |         |                     | (162,872 | )                             |        | (4,147       | )       |             | (6,082 
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total liabilities and shareholders' equity (deficit) |         | $                   | 347,609  |                               | $      | 8,308        |         | $           | 240,095
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        

22

---



Condensed Consolidating Balance Sheet (unaudited)  As of January 31, 2003

|                                               |                                                                                            | The Company
Excluding
Guarantor
Subsidiaries         |         | Domestic
Guarantors |          | Doe Run
Cayman and
Subsidiary |        | Eliminations |         | The
Company |        
|---------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ------- | ------------------- | -------- | ----------------------------- | ------ | ------------ | ------- | ----------- | -------
|ASSETS                                         |                                                                                           
|Current assets:                                |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Cash                                                                                       |                                                      | $       |                    |          | $                             |       |              | $       | 8,209       |        
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                          |                                                      |         | 36,966              |          |                               | 4,239  |              |         | 19,864      |        
|                                               | Inventories                                                                                |                                                      |         | 44,242              |          |                               | 1,533  |              |         | 65,790      |        
|                                               | Prepaid expenses and other current assets                                                  |                                                      |         | 7,867               |          |                               | 115    |              |         | 15,026      |        
|                                               | Due from subsidiaries                                                                      |                                                      |         | 22,039              |          |                               |       |              |         |            |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total current assets                                 |         |                     | 111,114  |                               |        | 5,887        |         |             | 108,889
|Property, plant and equipment, net             |                                                                                            |                                                      | 103,888 |                     |          | 3,425                         |        |              | 137,619 |             |        
|Due from subsidiaries                          |                                                                                            |                                                      | 139,063 |                     |          |                              |        |              |        |             |        
|Other noncurrent assets, net                   |                                                                                            |                                                      | 4,615   |                     |          | 149                           |        |              | 356     |             |        
|Investment in subsidiaries                     |                                                                                            |                                                      | (7,763  | )                   |          |                              |        |              |        |             |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total assets                                         |         | $                   | 350,917  |                               | $      | 9,461        |         | $           | 246,864
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                           
|Current liabilities:                           |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                             |                                                      | $       | 30,551              |          | $                             |       |              | $       | 4,537       |        
|                                               | Accounts payable                                                                           |                                                      |         | 18,767              |          |                               | 550    |              |         | 32,611      |        
|                                               | Accrued liabilities                                                                        |                                                      |         | 27,189              |          |                               | 1,703  |              |         | 20,017      |        
|                                               | Due to parent                                                                              |                                                      |         |                    |          |                               | 9,160  |              |         | 12,879      |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total current liabilities                            |         |                     | 76,507   |                               |        | 11,413       |         |             | 70,044 
|Long-term debt, less current maturities        |                                                                                            |                                                      | 344,312 |                     |          |                              |        |              | 38,376  |             |        
|Due to parent                                  |                                                                                            |                                                      |        |                     |          |                              |        |              | 139,063 |             |        
|Other noncurrent liabilities                   |                                                                                            |                                                      | 67,716  |                     |          | 1,421                         |        |              | 3,679   |             |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total liabilities                                    |         |                     | 488,535  |                               |        | 12,834       |         |             | 251,162
|Series A redeemable preferred stock            |                                                                                            |                                                      | 20,639  |                     |          |                              |        |              |        |             |        
|Shareholders' equity (deficit):                |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding |                                                      |         |                    |          |                               |       |              |         |            |        
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued and outstanding                |                                                      |         |                    |          |                               | 1      |              |         |            |        
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding            |                                                      |         |                    |          |                               |       |              |         | 2,005       |        
|                                               | Additional paid in capital                                                                 |                                                      |         | 4,599               |          |                               | 1,205  |              |         |            |        
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive loss           |                                                      |         | (162,856            | )        |                               | (4,579 | )            |         | (6,303      | )      
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total shareholders' equity (deficit)                 |         |                     | (158,257 | )                             |        | (3,373       | )       |             | (4,298 
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total liabilities and shareholders' equity (deficit) |         | $                   | 350,917  |                               | $      | 9,461        |         | $           | 246,864
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        

23

---



Condensed Consolidating Balance Sheet  As of October 31, 2002

|                                               |                                                                                            | The Company
Excluding
Guarantor
Subsidiaries         |         | Domestic
Guarantors |          | Doe Run
Cayman and
Subsidiary |        | Eliminations |         | The
Company |        
|---------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------- | ------- | ------------------- | -------- | ----------------------------- | ------ | ------------ | ------- | ----------- | -------
|ASSETS                                         |                                                                                           
|Current assets:                                |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Cash                                                                                       |                                                      | $       |                    |          | $                             |       |              | $       | 7,018       |        
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                          |                                                      |         | 35,428              |          |                               | 4,247  |              |         | 25,261      |        
|                                               | Inventories                                                                                |                                                      |         | 42,931              |          |                               | 1,226  |              |         | 59,211      |        
|                                               | Prepaid expenses and other current assets                                                  |                                                      |         | 7,665               |          |                               | 109    |              |         | 11,819      |        
|                                               | Due from subsidiaries                                                                      |                                                      |         | 20,187              |          |                               |       |              |         |            |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total current assets                                 |         |                     | 106,211  |                               |        | 5,582        |         |             | 103,309
|Property, plant and equipment, net             |                                                                                            |                                                      | 107,375 |                     |          | 3,782                         |        |              | 138,510 |             |        
|Due from subsidiaries                          |                                                                                            |                                                      | 139,063 |                     |          |                              |        |              |        |             |        
|Other noncurrent assets, net                   |                                                                                            |                                                      | 5,254   |                     |          | 151                           |        |              | 389     |             |        
|Investment in subsidiaries                     |                                                                                            |                                                      | (6,478  | )                   |          |                              |        |              |        |             |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total assets                                         |         | $                   | 351,425  |                               | $      | 9,515        |         | $           | 242,208
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                           
|Current liabilities:                           |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                             |                                                      | $       | 11,932              |          | $                             |       |              | $       | 4,410       |        
|                                               | Accounts payable                                                                           |                                                      |         | 21,645              |          |                               | 600    |              |         | 26,789      |        
|                                               | Accrued liabilities                                                                        |                                                      |         | 32,821              |          |                               | 1,640  |              |         | 20,607      |        
|                                               | Due to parent                                                                              |                                                      |         |                    |          |                               | 9,615  |              |         | 10,572      |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total current liabilities                            |         |                     | 66,398   |                               |        | 11,855       |         |             | 62,378 
|Long-term debt, less current maturities        |                                                                                            |                                                      | 347,617 |                     |          |                              |        |              | 38,259  |             |        
|Due to parent                                  |                                                                                            |                                                      |        |                     |          |                              |        |              | 139,063 |             |        
|Other noncurrent liabilities                   |                                                                                            |                                                      | 64,581  |                     |          | 1,424                         |        |              | 5,200   |             |        
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total liabilities                                    |         |                     | 478,596  |                               |        | 13,279       |         |             | 244,900
|Series A redeemable preferred stock            |                                                                                            |                                                      | 20,000  |                     |          |                              |        |              |        |             |        
|Shareholders' equity (deficit):                |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding |                                                      |         |                    |          |                               |       |              |         |            |        
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued and outstanding                |                                                      |         |                    |          |                               | 1      |              |         |            |        
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding            |                                                      |         |                    |          |                               |       |              |         | 2,005       |        
|                                               | Additional paid in capital                                                                 |                                                      |         | 5,238               |          |                               | 1,205  |              |         |            |        
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive loss           |                                                      |         | (152,409            | )        |                               | (4,970 | )            |         | (4,697      | )      
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total shareholders' equity (deficit)                 |         |                     | (147,171 | )                             |        | (3,764       | )       |             | (2,692 
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        
|                                               |                                                                                            | Total liabilities and shareholders' equity (deficit) |         | $                   | 351,425  |                               | $      | 9,515        |         | $           | 242,208
|                                               |                                                                                            |                                                      |         |                     |          |                               |        |              |         |             |        

24

---



Condensed Consolidating Statement of Operations (unaudited)  Nine Months Ended July 31, 2003

|                                                    |                                                                          | The Company
Excluding
Guarantor
Subsidiaries |         | Buick
Resource
Recycling
Facility, LLC |         | Other
Domestic
Guarantors |      | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |        
|--------------------------------------------------- | ------------------------------------------------------------------------ | -------------------------------------------- | ------- | -------------------------------------- | ------- | ------------------------- | ---- | ----------------------------- | ------ | ------------ | ------ | ----------- | -------
|Net sales                                           |                                                                          | $                                            | 175,832 |                                        | $       |                          |      | $                             | 11,514 |              | $      | 313,645     |        
|Costs and expenses:                                 |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    | Cost of sales                                                            |                                              |         | 150,990                                |         |                           |     |                               |        | 8,897        |        |             | 299,593
|                                                    | Depletion, depreciation and amortization                                 |                                              |         | 13,031                                 |         |                           | 810  |                               |        | 1,084        |        |             | 8,621  
|                                                    | Selling, general and administrative                                      |                                              |         | 11,558                                 |         |                           |     |                               |        | 1,574        |        |             | 14,376 
|                                                    | Other                                                                    |                                              |         | 1,634                                  |         |                           |     |                               |        |             |        |             |       
|                                                    | Unrealized (gain)/loss on derivatives                                    |                                              |         | 1,121                                  |         |                           |     |                               |        |             |        |             | (108   
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    |                                                                          | Total costs and expenses                     |         |                                        | 178,334 |                           |      | 810                           |        |              | 11,555 |             |        
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    |                                                                          | Income (loss) from operations                |         |                                        | (2,502  | )                         |      | (810                          | )      |              | (41    | )           |        
|Other income (expense):                             |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    | Interest expense                                                         |                                              |         | (7,715                                 | )       |                           |     |                               |        | (446         | )      |             | (2,012 
|                                                    | Interest income                                                          |                                              |         | 388                                    |         |                           |     |                               |        |             |        |             | 18     
|                                                    | Other, net                                                               |                                              |         | (510                                   | )       |                           | 191  |                               |        | 7            |        |             | (148   
|                                                    | Equity in earnings of subsidiaries                                       |                                              |         | (12,188                                | )       |                           |     |                               |        |             |        |             |       
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    |                                                                          |                                              | (20,025 | )                                      |         | 191                       |      |                               | (439   | )            |        | (2,142      | )      
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    |                                                                          | Income (loss) before income tax expense      |         |                                        | (22,527 | )                         |      | (619                          | )      |              | (480   | )           |        
|Income tax expense                                  |                                                                          |                                              |        |                                        |         |                          |      |                               |       |              |        |            |        
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    | Income (loss) before cumulative effect of change in accounting principle |                                              |         | (22,527                                | )       |                           | (619 | )                             |        | (480         | )      |             | (10,979
|Cumulative effect of change in accounting principle |                                                                          |                                              | (3,848  | )                                      |         |                          |      |                               |       |              |        | (92         | )      
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    | Net income (loss)                                                        |                                              |         | (26,375                                | )       |                           | (619 | )                             |        | (480         | )      |             | (11,071
|                                                    | Cumulative preferred stock dividends                                     |                                              |         | (1,889                                 | )       |                           |     |                               |        |             |        |             |       
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        
|                                                    | Net income (loss) allocable to common shares                             |                                              | $       | (28,264                                | )       | $                         | (619 | )                             | $      | (480         | )      | $           | (11,071
|                                                    |                                                                          |                                              |         |                                        |         |                           |      |                               |        |              |        |             |        

25

---



Condensed Consolidating Statement of Operations (unaudited)  Nine Months Ended July 31, 2002

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |        | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | -------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ------ | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                            | 169,734 |                     | $       | 13,121                        |        | $            | 315,365 |             | $      
|Costs and expenses:     |                                          |                                              |         |                     |         |                               |        |              |         |             |        
|                        | Cost of sales                            |                                              |         | 146,865             |         |                               | 10,076 |              |         | 290,675     |        
|                        | Depletion, depreciation and amortization |                                              |         | 13,521              |         |                               | 1,116  |              |         | 8,153       |        
|                        | Selling, general and administrative      |                                              |         | 12,194              |         |                               | 956    |              |         | 14,139      |        
|                        | Other                                    |                                              |         | 584                 |         |                               |       |              |         | 181         |        
|                        | Unrealized (gain)/loss on derivatives    |                                              |         | (1,465              | )       |                               | (7     | )            |         | 68          |        
|                        |                                          |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                          | Total costs and expenses                     |         |                     | 171,699 |                               |        | 12,141       |         |             | 313,216
|                        |                                          |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                          | Income (loss) from operations                |         |                     | (1,965  | )                             |        | 980          |         |             | 2,149  
|Other income (expense): |                                          |                                              |         |                     |         |                               |        |              |         |             |        
|                        | Interest expense                         |                                              |         | (30,314             | )       |                               | (492   | )            |         | (12,371     | )      
|                        | Interest income                          |                                              |         | 11,067              |         |                               |       |              |         | 44          |        
|                        | Other, net                               |                                              |         | (1,950              | )       |                               | 24     |              |         | (311        | )      
|                        | Equity in earnings of subsidiaries       |                                              |         | (9,975              | )       |                               |       |              |         |            |        
|                        |                                          |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                          |                                              | (31,172 | )                   |         | (468                          | )      |              | (12,638 | )           |        
|                        |                                          |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                          | Income (loss) before income tax expense      |         |                     | (33,137 | )                             |        | 512          |         |             | (10,489
|Income tax expense      |                                          |                                              |        |                     |         |                              |        |              |        |             |        
|                        |                                          |                                              |         |                     |         |                               |        |              |         |             |        
|                        | Net income (loss)                        |                                              | $       | (33,137             | )       | $                             | 512    |              | $       | (10,489     | )      
|                        |                                          |                                              |         |                     |         |                               |        |              |         |             |        

26

---



Condensed Consolidating Statement of Operations (unaudited)  Three Months Ended July 31, 2003

|                        |                                              | The Company
Excluding
Guarantor
Subsidiaries |         | Buick
Resource
Recycling
Facility, LLC |         | Other
Domestic
Guarantors |      | Doe Run
Cayman and
Subsidiary |       | Eliminations |       | The
Company |        
|----------------------- | -------------------------------------------- | -------------------------------------------- | ------- | -------------------------------------- | ------- | ------------------------- | ---- | ----------------------------- | ----- | ------------ | ----- | ----------- | -------
|Net sales               |                                              | $                                            | 61,345  |                                        | $       |                          |      | $                             | 3,650 |              | $     | 107,024     |        
|Costs and expenses:     |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        | Cost of sales                                |                                              |         | 50,718                                 |         |                           |     |                               |       | 2,935        |       |             | 106,355
|                        | Depletion, depreciation and amortization     |                                              |         | 3,690                                  |         |                           | 810  |                               |       | 357          |       |             | 2,748  
|                        | Selling, general and administrative          |                                              |         | 4,986                                  |         |                           |     |                               |       | 275          |       |             | 4,962  
|                        | Other                                        |                                              |         | 770                                    |         |                           |     |                               |       |             |       |             |       
|                        | Unrealized (gain)/loss on derivatives        |                                              |         | 1,581                                  |         |                           |     |                               |       |             |       |             | 18     
|                        |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        |                                              | Total costs and expenses                     |         |                                        | 61,745  |                           |      | 810                           |       |              | 3,567 |             |        
|                        |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        |                                              | Income (loss) from operations                |         |                                        | (400    | )                         |      | (810                          | )     |              | 83    |             |        
|Other income (expense): |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        | Interest expense                             |                                              |         | (2,588                                 | )       |                           |     |                               |       | (182         | )     |             | (588   
|                        | Interest income                              |                                              |         | 120                                    |         |                           |     |                               |       |             |       |             | 6      
|                        | Other, net                                   |                                              |         | (673                                   | )       |                           | 191  |                               |       | 2            |       |             | (40    
|                        | Equity in earnings of subsidiaries           |                                              |         | (8,398                                 | )       |                           |     |                               |       |             |       |             |       
|                        |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        |                                              |                                              | (11,539 | )                                      |         | 191                       |      |                               | (180  | )            |       | (622        | )      
|                        |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        |                                              | Income (loss) before income tax expense      |         |                                        | (11,939 | )                         |      | (619                          | )     |              | (97   | )           |        
|                        | Income tax expense                           |                                              |         |                                       |         |                           |     |                               |       |             |       |             |       
|                        |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        | Net income (loss)                            |                                              |         | (11,939                                | )       |                           | (619 | )                             |       | (97          | )     |             | (7,681 
|                        | Cumulative preferred stock dividends         |                                              |         | (625                                   | )       |                           |     |                               |       |             |       |             |       
|                        |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        
|                        | Net income (loss) allocable to common shares |                                              | $       | (12,564                                | )       | $                         | (619 | )                             | $     | (97          | )     | $           | (7,681 
|                        |                                              |                                              |         |                                        |         |                           |      |                               |       |              |       |             |        

27

---



Condensed Consolidating Statement of Operations (unaudited)  Three Months Ended July 31, 2002

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | -------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                            | 60,873  |                     | $       | 4,646                         |       | $            | 109,584 |             | $      
|Costs and expenses:     |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Cost of sales                            |                                              |         | 56,578              |         |                               | 3,461 |              |         | 101,960     |        
|                        | Depletion, depreciation and amortization |                                              |         | 4,434               |         |                               | 373   |              |         | 2,835       |        
|                        | Selling, general and administrative      |                                              |         | 4,682               |         |                               | 355   |              |         | 4,713       |        
|                        | Other                                    |                                              |         | 170                 |         |                               |      |              |         | 134         |        
|                        | Unrealized (gain)/loss on derivatives    |                                              |         | 361                 |         |                               |      |              |         | (126        | )      
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                     |         |                     | 66,225  |                               |       | 4,189        |         |             | 109,516
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) from operations                |         |                     | (5,352  | )                             |       | 457          |         |             | 68     
|Other income (expense): |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Interest expense                         |                                              |         | (10,532             | )       |                               | (159  | )            |         | (3,982      | )      
|                        | Interest income                          |                                              |         | 3,699               |         |                               |      |              |         | 12          |        
|                        | Other, net                               |                                              |         | (1,544              | )       |                               | 24    |              |         | 97          |        
|                        | Equity in earnings of subsidiaries       |                                              |         | (3,494              | )       |                               |      |              |         |            |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          |                                              | (11,871 | )                   |         | (135                          | )     |              | (3,873  | )           |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense      |         |                     | (17,223 | )                             |       | 322          |         |             | (3,805 
|Income tax expense      |                                          |                                              |        |                     |         |                              |       |              |        |             |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Net income (loss)                        |                                              | $       | (17,223             | )       | $                             | 322   |              | $       | (3,805      | )      
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        

28

---



Condensed Consolidating Statement of Operations (unaudited)  Six Months Ended April 30, 2003

|                        |                                                                          | The Company
Excluding
Guarantor
Subsidiaries |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ------------------------------------------------------------------------ | -------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                                                          | $                                            | 114,487 |                     | $       | 7,864                         |       | $            | 206,621 |             | $      
|Costs and expenses:     |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Cost of sales                                                            |                                              |         | 100,272             |         |                               | 5,962 |              |         | 193,238     |        
|                        | Depletion, depreciation and amortization                                 |                                              |         | 9,341               |         |                               | 727   |              |         | 5,873       |        
|                        | Selling, general and administrative                                      |                                              |         | 6,572               |         |                               | 1,299 |              |         | 9,414       |        
|                        | Other                                                                    |                                              |         | 864                 |         |                               |      |              |         |            |        
|                        | Unrealized (gain)/loss on derivatives                                    |                                              |         | (460                | )       |                               |      |              |         | (126        | )      
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                                                          | Total costs and expenses                     |         |                     | 116,589 |                               |       | 7,988        |         |             | 208,399
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                                                          | Income (loss) from operations                |         |                     | (2,102  | )                             |       | (124         | )       |             | (1,778 
|Other income (expense): |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Interest expense                                                         |                                              |         | (5,127              | )       |                               | (264  | )            |         | (1,424      | )      
|                        | Interest income                                                          |                                              |         | 268                 |         |                               |      |              |         | 12          |        
|                        | Other, net                                                               |                                              |         | 163                 |         |                               | 5     |              |         | (108        | )      
|                        | Equity in earnings of subsidiaries                                       |                                              |         | (3,790              | )       |                               |      |              |         |            |        
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                                                          |                                              | (8,486  | )                   |         | (259                          | )     |              | (1,520  | )           |        
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                                                          | Income (loss) before income tax expense      |         |                     | (10,588 | )                             |       | (383         | )       |             | (3,298 
|Income tax expense      |                                                                          |                                              |        |                     |         |                              |       |              |        |             |        
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Income (loss) before cumulative effect of change in accounting principle |                                              |         | (10,588             | )       |                               | (383  | )            |         | (3,298      | )      
|                        | Cumulative effect of change in accounting principle                      |                                              |         | (3,848              | )       |                               |      |              |         | (92         | )      
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Net income (loss)                                                        |                                              | $       | (14,436             | )       | $                             | (383  | )            | $       | (3,390      | )      
|                        | Cumulative preferred stock dividends                                     |                                              |         | (1,264              | )       |                               |      |              |         |            |        
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Net income (loss) allocable to common shares                             |                                              | $       | (15,700             | )       | $                             | (383  | )            | $       | (3,390      | )      
|                        |                                                                          |                                              |         |                     |         |                               |       |              |         |             |        

29

---



Condensed Consolidating Statement of Operations (unaudited)  Six Months Ended April 30, 2002

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | -------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                            | 108,861 |                     | $       | 8,475                         |       | $            | 205,781 |             | $      
|Costs and expenses:     |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Cost of sales                            |                                              |         | 90,287              |         |                               | 6,615 |              |         | 188,715     |        
|                        | Depletion, depreciation and amortization |                                              |         | 9,087               |         |                               | 743   |              |         | 5,318       |        
|                        | Selling, general and administrative      |                                              |         | 7,512               |         |                               | 601   |              |         | 9,426       |        
|                        | Other                                    |                                              |         | 414                 |         |                               |      |              |         | 47          |        
|                        | Unrealized (gain)/loss on derivatives    |                                              |         | (1,826              | )       |                               | (7    | )            |         | 194         |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                     |         |                     | 105,474 |                               |       | 7,952        |         |             | 203,700
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income from operations                       |         |                     | 3,387   |                               |       | 523          |         |             | 2,081  
|Other income (expense): |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Interest expense                         |                                              |         | (19,782             | )       |                               | (333  | )            |         | (8,389      | )      
|                        | Interest income                          |                                              |         | 7,368               |         |                               |      |              |         | 32          |        
|                        | Other, net                               |                                              |         | (406                | )       |                               |      |              |         | (408        | )      
|                        | Equity in earnings of subsidiaries       |                                              |         | (6,481              | )       |                               |      |              |         |            |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          |                                              | (19,301 | )                   |         | (333                          | )     |              | (8,765  | )           |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense      |         |                     | (15,914 | )                             |       | 190          |         |             | (6,684 
|Income tax expense      |                                          |                                              |        |                     |         |                              |       |              |        |             |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Net income (loss)                        |                                              | $       | (15,914             | )       | $                             | 190   |              | $       | (6,684      | )      
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        

30

---





Condensed Consolidating Statement of Operations (unaudited)  Three Months Ended April 30, 2003

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries |        | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | -------------------------------------------- | ------ | ------------------- | ------ | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                            | 59,044 |                     | $      | 3,720                         |       | $            | 104,315 |             | $      
|Costs and expenses:     |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        | Cost of sales                            |                                              |        | 51,165              |        |                               | 3,063 |              |         | 97,830      |        
|                        | Depletion, depreciation and amortization |                                              |        | 4,690               |        |                               | 367   |              |         | 2,937       |        
|                        | Selling, general and administrative      |                                              |        | 2,317               |        |                               | 800   |              |         | 4,749       |        
|                        | Other                                    |                                              |        | 582                 |        |                               |      |              |         |            |        
|                        | Unrealized (gain)/loss on derivatives    |                                              |        | (466                | )      |                               |      |              |         | (23         | )      
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                     |        |                     | 58,288 |                               |       | 4,230        |         |             | 105,493
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Income (loss) from operations                |        |                     | 756    |                               |       | (510         | )       |             | (1,178 
|Other income (expense): |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        | Interest expense                         |                                              |        | (2,789              | )      |                               | (121  | )            |         | (697        | )      
|                        | Interest income                          |                                              |        | 122                 |        |                               |      |              |         | 4           |        
|                        | Other, net                               |                                              |        | 282                 |        |                               |      |              |         | 87          |        
|                        | Equity in earnings of subsidiaries       |                                              |        | (2,361              | )      |                               |      |              |         |            |        
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        |                                          |                                              | (4,746 | )                   |        | (121                          | )     |              | (606    | )           |        
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense      |        |                     | (3,990 | )                             |       | (631         | )       |             | (1,784 
|                        | Income tax expense                       |                                              |        |                    |        |                               |      |              |         |            |        
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Net income (loss)                            |        | $                   | (3,990 | )                             | $     | (631         | )       | $           | (1,784 
|                        |                                          | Cumulative preferred stock dividends         |        |                     | (625   | )                             |       |             |         |             |       
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Net income (loss) allocable to common shares |        | $                   | (4,615 | )                             | $     | (631         | )       | $           | (1,784 
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |        

31

---



Condensed Consolidating Statement of Operations (unaudited)  Three Months Ended April 30, 2002

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | -------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                            | 54,895  |                     | $       | 4,468                         |       | $            | 104,326 |             | $      
|Costs and expenses:     |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Cost of sales                            |                                              |         | 46,689              |         |                               | 3,418 |              |         | 97,357      |        
|                        | Depletion, depreciation and amortization |                                              |         | 4,576               |         |                               | 371   |              |         | 2,699       |        
|                        | Selling, general and administrative      |                                              |         | 4,123               |         |                               | 292   |              |         | 4,650       |        
|                        | Other                                    |                                              |         | 215                 |         |                               |      |              |         | 47          |        
|                        | Unrealized (gain)/loss on derivatives    |                                              |         | (329                | )       |                               | (7    | )            |         | 83          |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                     |         |                     | 55,274  |                               |       | 4,074        |         |             | 104,836
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) from operations                |         |                     | (379    | )                             |       | 394          |         |             | (510   
|Other income (expense): |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        | Interest expense                         |                                              |         | (9,986              | )       |                               | (160  | )            |         | (4,329      | )      
|                        | Interest income                          |                                              |         | 3,790               |         |                               |      |              |         | 12          |        
|                        | Other, net                               |                                              |         | (359                | )       |                               |      |              |         | (247        | )      
|                        | Equity in earnings of subsidiaries       |                                              |         | (4,289              | )       |                               |      |              |         |            |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          |                                              | (10,844 | )                   |         | (160                          | )     |              | (4,564  | )           |        
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense      |         |                     | (11,223 | )                             |       | 234          |         |             | (5,074 
|                        | Income tax benefit                       |                                              |         |                    |         |                               |      |              |         | (539        | )      
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Net income (loss)                            |         | $                   | (11,223 | )                             | $     | 234          |         | $           | (4,535 
|                        |                                          |                                              |         |                     |         |                               |       |              |         |             |        

32

---



Condensed Consolidating Statement of Operations (unaudited)  Three Months Ended January 31, 2003

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries                             |        | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | ------------------------------------------------------------------------ | ------ | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                                                        | 55,443 |                     | $       | 4,144                         |       | $            | 102,306 |             | $      
|Costs and expenses:     |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        | Cost of sales                            |                                                                          |        | 49,107              |         |                               | 2,899 |              |         | 95,408      |        
|                        | Depletion, depreciation and amortization |                                                                          |        | 4,651               |         |                               | 360   |              |         | 2,936       |        
|                        | Selling, general and administrative      |                                                                          |        | 4,255               |         |                               | 499   |              |         | 4,665       |        
|                        | Other                                    |                                                                          |        | 282                 |         |                               |      |              |         |            |        
|                        | Unrealized (gain)/loss on derivatives    |                                                                          |        | 6                   |         |                               |      |              |         | (103        | )      
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                                                 |        |                     | 58,301  |                               |       | 3,758        |         |             | 102,906
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) from operations                                            |        |                     | (2,858  | )                             |       | 386          |         |             | (600   
|Other income (expense): |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        | Interest expense                         |                                                                          |        | (2,338              | )       |                               | (143  | )            |         | (727        | )      
|                        | Interest income                          |                                                                          |        | 146                 |         |                               |      |              |         | 8           |        
|                        | Other, net                               |                                                                          |        | (119                | )       |                               | 5     |              |         | (195        | )      
|                        | Equity in earnings of subsidiaries       |                                                                          |        | (1,429              | )       |                               |      |              |         |            |        
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        |                                          |                                                                          | (3,740 | )                   |         | (138                          | )     |              | (914    | )           |        
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense                                  |        |                     | (6,598  | )                             |       | 248          |         |             | (1,514 
|                        | Income tax expense                       |                                                                          |        |                    |         |                               |      |              |         |            |        
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) before cumulative effect of change in accounting principle |        |                     | (6,598  | )                             |       | 248          |         |             | (1,514 
|                        |                                          | Cumulative effect of change in accounting principle                      |        |                     | (3,848  | )                             |       |             |         |             | (92    
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Net income (loss)                                                        |        | $                   | (10,446 | )                             | $     | 248          |         | $           | (1,606 
|                        |                                          | Cumulative preferred stock dividends                                     |        |                     | (639    | )                             |       |             |         |             |       
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Net income (loss) allocable to common shares                             |        | $                   | (11,085 | )                             | $     | 248          |         | $           | (1,606 
|                        |                                          |                                                                          |        |                     |         |                               |       |              |         |             |        

33

---



Condensed Consolidating Statement of Operations (unaudited)  Three Months Ended January 31, 2002

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries |        | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |       
|----------------------- | ---------------------------------------- | -------------------------------------------- | ------ | ------------------- | ------ | ----------------------------- | ----- | ------------ | ------- | ----------- | ------
|Net sales               |                                          | $                                            | 53,966 |                     | $      | 4,007                         |       | $            | 101,455 |             | $     
|Costs and expenses:     |                                          |                                              |        |                     |        |                               |       |              |         |             |       
|                        | Cost of sales                            |                                              |        | 43,598              |        |                               | 3,197 |              |         | 91,358      |       
|                        | Depletion, depreciation and amortization |                                              |        | 4,511               |        |                               | 372   |              |         | 2,619       |       
|                        | Selling, general and administrative      |                                              |        | 3,389               |        |                               | 309   |              |         | 4,776       |       
|                        | Other                                    |                                              |        | 199                 |        |                               |      |              |         |            |       
|                        | Unrealized (gain)/loss on derivatives    |                                              |        | (1,497              | )      |                               |      |              |         | 111         |       
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |       
|                        |                                          | Total costs and expenses                     |        |                     | 50,200 |                               |       | 3,878        |         |             | 98,864
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |       
|                        |                                          | Income from operations                       |        |                     | 3,766  |                               |       | 129          |         |             | 2,591 
|Other income (expense): |                                          |                                              |        |                     |        |                               |       |              |         |             |       
|                        | Interest expense                         |                                              |        | (9,796              | )      |                               | (173  | )            |         | (4,060      | )     
|                        | Interest income                          |                                              |        | 3,578               |        |                               |      |              |         | 20          |       
|                        | Other, net                               |                                              |        | (47                 | )      |                               |      |              |         | (161        | )     
|                        | Equity in earnings of subsidiaries       |                                              |        | (2,192              | )      |                               |      |              |         |            |       
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |       
|                        |                                          |                                              | (8,457 | )                   |        | (173                          | )     |              | (4,201  | )           |       
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |       
|                        |                                          | Income (loss) before income tax expense      |        |                     | (4,691 | )                             |       | (44          | )       |             | (1,610
|                        | Income tax expense                       |                                              |        |                    |        |                               |      |              |         | 539         |       
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |       
|                        |                                          | Net income (loss)                            |        | $                   | (4,691 | )                             | $     | (44          | )       | $           | (2,149
|                        |                                          |                                              |        |                     |        |                               |       |              |         |             |       

34

---



Condensed Consolidating Statement of Cash Flows  Nine Months Ended July 31, 2003 (unaudited)

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |         | Buick
Resource
Recycling
Facility, LLC |       | Other
Domestic
Guarantors |     | Doe Run
Cayman and
Subsidiary |       | Eliminations |        | The
Company |       
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ------- | -------------------------------------- | ----- | ------------------------- | --- | ----------------------------- | ----- | ------------ | ------ | ----------- | ------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | (15,372 | )                                      | $     | (191                      | )   | $                             | 1,462 |              | $      | 5,488       |       
|Cash flows from investing activities:               |                                                              |                                                     |         |                                        |       |                           |     |                               |       |              |        |             |       
|                                                    | Purchases of property, plant and equipment                   |                                                     |         | (4,672                                 | )     |                           |    |                               |       | (5           | )      |             | (7,666
|                                                    | Investment in subsidiaries                                   |                                                     |         | 11,130                                 |       |                           |    |                               |       |             |        |             |      
|                                                    |                                                              |                                                     |         |                                        |       |                           |     |                               |       |              |        |             |       
|                                                    |                                                              | Net cash provided by (used
in) investing activities |         |                                        | 6,458 |                           |     |                              |       |              | (5     | )           |       
|Cash flows from financing activities:               |                                                              |                                                     |         |                                        |       |                           |     |                               |       |              |        |             |       
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |         | 18,405                                 |       |                           |    |                               |       |             |        |             | (700  
|                                                    | Payments on long-term debt                                   |                                                     |         | (3,131                                 | )     |                           |    |                               |       |             |        |             | (3,260
|                                                    | Payment of financing costs                                   |                                                     |         | (482                                   | )     |                           |    |                               |       |             |        |             |      
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |         | (5,878                                 | )     |                           | 191 |                               |       | (1,457       | )      |             | 7,144 
|                                                    |                                                              |                                                     |         |                                        |       |                           |     |                               |       |              |        |             |       
|                                                    |                                                              | Net cash provided by (used
in) financing activities |         |                                        | 8,914 |                           |     | 191                           |       |              | (1,457 | )           |       
|                                                    |                                                              |                                                     |         |                                        |       |                           |     |                               |       |              |        |             |       
|                                                    |                                                              | Net increase in cash                                |         |                                        |      |                           |     |                              |       |              |       |             |       
|Cash at beginning of period                         |                                                              |                                                     |        |                                        |       |                          |     |                               |      |              |        | 7,018       |       
|                                                    |                                                              |                                                     |         |                                        |       |                           |     |                               |       |              |        |             |       
|Cash at end of period                               |                                                              | $                                                   |        |                                        | $     |                          |     | $                             |      |              | $      | 8,024       |       
|                                                    |                                                              |                                                     |         |                                        |       |                           |     |                               |       |              |        |             |       

35

---



Condensed Consolidating Statement of Cash Flows (unaudited)  Nine Months Ended July 31, 2002

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |        | Domestic
Guarantors |       | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |        
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ------ | ------------------- | ----- | ----------------------------- | ------ | ------------ | ------ | ----------- | -------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | (3,131 | )                   | $     | 1,516                         |        | $            | 3,363  |             | $      
|Cash flows from investing activities:               |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    | Purchases of property, plant and equipment                   |                                                     |        | (6,101              | )     |                               | (105   | )            |        | (10,375     | )      
|                                                    | Investment in subsidiaries                                   |                                                     |        | 9,976               |       |                               |       |              |        |            |        
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    |                                                              | Net cash provided by (used in) investing activities |        |                     | 3,875 |                               |        | (105         | )      |             | (10,375
|Cash flows from financing activities:               |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |        | 614                 |       |                               |       |              |        | 13,800      |        
|                                                    | Payments on long-term debt                                   |                                                     |        | (79                 | )     |                               |       |              |        | (3,077      | )      
|                                                    | Payment of deferred financing costs                          |                                                     |        | (119                | )     |                               |       |              |        |            |        
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |        | (1,160              | )     |                               | (1,411 | )            |        | 2,571       |        
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    |                                                              | Net cash provided by (used in) financing activities |        |                     | (744  | )                             |        | (1,411       | )      |             | 13,294 
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    |                                                              | Net increase in cash                                |        |                     |      |                               |        |             |        |             | 6,282  
|Cash at beginning of period                         |                                                              |                                                     |       |                     |       |                              |        |              | 6,263  |             |        
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|Cash at end of period                               |                                                              | $                                                   |       |                     | $     |                              |        | $            | 12,545 |             | $      
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        

36

---



Condensed Consolidating Statement of Cash Flows (unaudited)  Six Months Ended April 30, 2003

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |        | Domestic
Guarantors |       | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |       
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ------ | ------------------- | ----- | ----------------------------- | ------ | ------------ | ------ | ----------- | ------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | (9,406 | )                   | $     | 1,015                         |        | $            | (4,011 | )           | $     
|Cash flows from investing activities:               |                                                              |                                                     |        |                     |       |                               |        |              |        |             |       
|                                                    | Purchases of property, plant and equipment                   |                                                     |        | (2,676              | )     |                               | (1     | )            |        | (5,151      | )     
|                                                    | Investment in subsidiaries                                   |                                                     |        | 3,342               |       |                               |       |              |        |            |       
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |       
|                                                    |                                                              | Net cash provided by (used in) investing activities |        |                     | 666   |                               |        | (1           | )      |             | (5,151
|Cash flows from financing activities:               |                                                              |                                                     |        |                     |       |                               |        |              |        |             |       
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |        | 15,907              |       |                               |       |              |        | 3,300       |       
|                                                    | Payments on long-term debt                                   |                                                     |        | (3,114              | )     |                               |       |              |        | (2,143      | )     
|                                                    | Payment of financing costs                                   |                                                     |        | (338                | )     |                               |       |              |        |            |       
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |        | (3,715              | )     |                               | (1,014 | )            |        | 4,729       |       
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |       
|                                                    |                                                              | Net cash provided by (used in) financing activities |        |                     | 8,740 |                               |        | (1,014       | )      |             | 5,886 
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |       
|                                                    |                                                              | Net decrease in cash                                |        |                     |      |                               |        |             |        |             | (3,276
|Cash at beginning of period                         |                                                              |                                                     |       |                     |       |                              |        |              | 7,018  |             |       
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |       
|Cash at end of period                               |                                                              | $                                                   |       |                     | $     |                              |        | $            | 3,742  |             | $     
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |       

37

---



Condensed Consolidating Statement of Cash Flows  Six Months Ended April 30, 2002 (unaudited)

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |        | Domestic
Guarantors |       | Doe Run
Cayman and
Subsidiary |      | Eliminations |        | The
Company |       
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ------ | ------------------- | ----- | ----------------------------- | ---- | ------------ | ------ | ----------- | ------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | (1,299 | )                   | $     | 874                           |      | $            | (2,180 | )           | $     
|Cash flows from investing activities:               |                                                              |                                                     |        |                     |       |                               |      |              |        |             |       
|                                                    | Purchases of property, plant and equipment                   |                                                     |        | (4,363              | )     |                               | (57  | )            |        | (7,883      | )     
|                                                    | Investment in subsidiaries                                   |                                                     |        | 6,481               |       |                               |     |              |        |            |       
|                                                    |                                                              |                                                     |        |                     |       |                               |      |              |        |             |       
|                                                    |                                                              | Net cash provided by (used in) investing activities |        |                     | 2,118 |                               |      | (57          | )      |             | (7,883
|Cash flows from financing activities:               |                                                              |                                                     |        |                     |       |                               |      |              |        |             |       
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |        | (1,335              | )     |                               |     |              |        | 8,000       |       
|                                                    | Payments on long-term debt                                   |                                                     |        | (52                 | )     |                               |     |              |        | (2,079      | )     
|                                                    | Payment of deferred financing costs                          |                                                     |        | (119                | )     |                               |     |              |        |            |       
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |        | 687                 |       |                               | (817 | )            |        | 130         |       
|                                                    |                                                              |                                                     |        |                     |       |                               |      |              |        |             |       
|                                                    |                                                              | Net cash provided by (used in) financing activities |        |                     | (819  | )                             |      | (817         | )      |             | 6,051 
|                                                    |                                                              |                                                     |        |                     |       |                               |      |              |        |             |       
|                                                    |                                                              | Net decrease in cash                                |        |                     |      |                               |      |             |        |             | (4,012
|Cash at beginning of period                         |                                                              |                                                     |       |                     |       |                              |      |              | 6,263  |             |       
|                                                    |                                                              |                                                     |        |                     |       |                               |      |              |        |             |       
|Cash at end of period                               |                                                              | $                                                   |       |                     | $     |                              |      | $            | 2,251  |             | $     
|                                                    |                                                              |                                                     |        |                     |       |                               |      |              |        |             |       

38

---





Condensed Consolidating Statement of Cash Flows  Three Months Ended January 31, 2003 (unaudited)

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |         | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |      | Eliminations |       | The
Company |       
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ------- | ------------------- | ------ | ----------------------------- | ---- | ------------ | ----- | ----------- | ------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | (12,162 | )                   | $      | 456                           |      | $            | 2,298 |             | $     
|Cash flows from investing activities:               |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       
|                                                    | Purchases of property, plant and equipment                   |                                                     |         | (1,683              | )      |                               | (1   | )            |       | (3,658      | )     
|                                                    | Investment in subsidiaries                                   |                                                     |         | 1,285               |        |                               |     |              |       |            |       
|                                                    |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       
|                                                    |                                                              | Net cash provided by (used in) investing activities |         |                     | (398   | )                             |      | (1           | )     |             | (3,658
|Cash flows from financing activities:               |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |         | 14,438              |        |                               |     |              |       | 1,300       |       
|                                                    | Payments on long-term debt                                   |                                                     |         | (26                 | )      |                               |     |              |       | (1,056      | )     
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |         | (1,852              | )      |                               | (455 | )            |       | 2,307       |       
|                                                    |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       
|                                                    |                                                              | Net cash provided by (used in) financing activities |         |                     | 12,560 |                               |      | (455         | )     |             | 2,551 
|                                                    |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       
|                                                    |                                                              | Net increase in cash                                |         |                     |       |                               |      |             |       |             | 1,191 
|Cash at beginning of period                         |                                                              |                                                     |        |                     |        |                              |      |              | 7,018 |             |       
|                                                    |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       
|Cash at end of period                               |                                                              | $                                                   |        |                     | $      |                              |      | $            | 8,209 |             | $     
|                                                    |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       

39

---



Condensed Consolidating Statement of Cash Flows  Three Months Ended January 31, 2002 (unaudited)

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |       | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |       
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ----- | ------------------- | ------ | ----------------------------- | ------ | ------------ | ------ | ----------- | ------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | 4,180 |                     | $      | 1,403                         |        | $            | (5,812 | )           | $     
|Cash flows from investing activities:               |                                                              |                                                     |       |                     |        |                               |        |              |        |             |       
|                                                    | Purchases of property, plant and equipment                   |                                                     |       | (2,302              | )      |                               | (5     | )            |        | (2,438      | )     
|                                                    | Investment in subsidiaries                                   |                                                     |       | 2,192               |        |                               |       |              |        |            |       
|                                                    |                                                              |                                                     |       |                     |        |                               |        |              |        |             |       
|                                                    |                                                              | Net cash used in investing activities               |       |                     | (110   | )                             |        | (5           | )      |             | (2,438
|Cash flows from financing activities:               |                                                              |                                                     |       |                     |        |                               |        |              |        |             |       
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |       | (4,312              | )      |                               |       |              |        | 8,000       |       
|                                                    | Payments on long-term debt                                   |                                                     |       | (26                 | )      |                               |       |              |        | (1,067      | )     
|                                                    | Payment of deferred financing costs                          |                                                     |       | (100                | )      |                               |       |              |        |            |       
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |       | 368                 |        |                               | (1,398 | )            |        | 1,030       |       
|                                                    |                                                              |                                                     |       |                     |        |                               |        |              |        |             |       
|                                                    |                                                              | Net cash provided by (used in) financing activities |       |                     | (4,070 | )                             |        | (1,398       | )      |             | 7,963 
|                                                    |                                                              |                                                     |       |                     |        |                               |        |              |        |             |       
|                                                    |                                                              | Net decrease in cash                                |       |                     |       |                               |        |             |        |             | (287  
|Cash at beginning of period                         |                                                              |                                                     |      |                     |        |                              |        |              | 6,263  |             |       
|                                                    |                                                              |                                                     |       |                     |        |                               |        |              |        |             |       
|Cash at end of period                               |                                                              | $                                                   |      |                     | $      |                              |        | $            | 5,976  |             | $     
|                                                    |                                                              |                                                     |       |                     |        |                               |        |              |        |             |       

40

---



DOE RUN PERU S.R.L.  Condensed Consolidated Balance Sheets  (Dollars in thousands, except per share amounts)

|                                               |                                                                              | July 31,
2003                               |         | April 30,
2003 |         | January 31,
2003 |        | October 31,
2002 |        
|---------------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------------- | ------- | -------------- | ------- | ---------------- | ------ | ---------------- | -------
|
|ASSETS                                         |                                                                             
|Current assets:                                |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               | Cash                                                                         |                                             | $       | 8,024          |         | $                | 3,742  |                  | $      
|                                               | Trade accounts receivable, net of allowance for doubtful accounts            |                                             |         | 19,777         |         |                  | 25,106 |                  |        
|                                               | Inventories                                                                  |                                             |         | 62,476         |         |                  | 65,536 |                  |        
|                                               | Prepaid expenses and other current assets                                    |                                             |         | 11,730         |         |                  | 9,214  |                  |        
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               |                                                                              | Total current assets                        |         |                | 102,007 |                  |        | 103,598          |        
|Property, plant and equipment, net             |                                                                              |                                             | 135,942 |                |         | 136,175          |        |                  | 137,619
|Other noncurrent assets, net                   |                                                                              |                                             | 289     |                |         | 322              |        |                  | 356    
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               |                                                                              | Total assets                                |         | $              | 238,238 |                  | $      | 240,095          |        
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                             
|Current liabilities:                           |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               | Short-term borrowings and current maturities of long-term debt               |                                             | $       | 2,708          |         | $                | 3,826  |                  | $      
|                                               | Accounts payable                                                             |                                             |         | 31,155         |         |                  | 25,571 |                  |        
|                                               | Accrued liabilities                                                          |                                             |         | 21,560         |         |                  | 18,737 |                  |        
|                                               | Due to parent                                                                |                                             |         | 17,716         |         |                  | 15,301 |                  |        
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               |                                                                              | Total current liabilities                   |         |                | 73,139  |                  |        | 63,435           |        
|Long-term debt, less current maturities        |                                                                              |                                             | 36,000  |                |         | 40,000           |        |                  | 38,376 
|Due to parent                                  |                                                                              |                                             | 139,063 |                |         | 139,063          |        |                  | 139,063
|Other noncurrent liabilities                   |                                                                              |                                             | 3,798   |                |         | 3,679            |        |                  | 3,679  
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               |                                                                              | Total liabilities                           |         |                | 252,000 |                  |        | 246,177          |        
|Shareholders' deficit:                         |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               | Capital stock, $0.01 par value, 15,912,083,739 shares issued and outstanding |                                             |         | 2,005          |         |                  | 2,005  |                  |        
|                                               | Accumulated deficit and other comprehensive loss                             |                                             |         | (15,767        | )       |                  | (8,087 | )                |        
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               |                                                                              | Total shareholders' deficit                 |         |                | (13,762 | )                |        | (6,082           | )      
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        
|                                               |                                                                              | Total liabilities and shareholders' deficit |         | $              | 238,238 |                  | $      | 240,095          |        
|                                               |                                                                              |                                             |         |                |         |                  |        |                  |        

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

41

---



DOE RUN PERU S.R.L.  Condensed Consolidated Statements of Operations (unaudited)  (Dollars in thousands)

|                             |                                          | Nine Months Ended
July 31,                                                             |         | Three Months Ended
July 31, |         | Six Months Ended
April 30, |         | Three Months Ended
April 30, |         | Three Months Ended
January 31, |        
|---------------------------- | ---------------------------------------- | -------------------------------------------------------------------------------------- | ------- | --------------------------- | ------- | -------------------------- | ------- | ---------------------------- | ------- | ------------------------------ | -------
|
|Net sales                    |                                          | $                                                                                      | 313,645 |                             | $       | 315,365                    |         | $                            | 107,024 |                                | $      
|Costs and expenses:          |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             | Cost of sales                            |                                                                                        |         | 299,593                     |         |                            | 290,675 |                              |         | 106,355                        |        
|                             | Depletion, depreciation and amortization |                                                                                        |         | 8,621                       |         |                            | 8,153   |                              |         | 2,748                          |        
|                             | Selling, general and administrative      |                                                                                        |         | 14,376                      |         |                            | 14,139  |                              |         | 4,962                          |        
|                             | Other                                    |                                                                                        |         |                            |         |                            | 181     |                              |         |                               |        
|                             | Unrealized (gain)/loss on derivatives    |                                                                                        |         | (108                        | )       |                            | 68      |                              |         | 18                             |        
|                             |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             |                                          | Total costs and expenses                                                               |         |                             | 322,482 |                            |         | 313,216                      |         |                                | 114,083
|                             |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             |                                          | Income (loss) from operations                                                          |         |                             | (8,837  | )                          |         | 2,149                        |         |                                | (7,059 
|Other income (expense):      |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             | Interest expense                         |                                                                                        |         | (2,012                      | )       |                            | (12,371 | )                            |         | (588                           | )      
|                             | Interest income                          |                                                                                        |         | 18                          |         |                            | 44      |                              |         | 6                              |        
|                             | Other, net                               |                                                                                        |         | (148                        | )       |                            | (311    | )                            |         | (40                            | )      
|                             |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             |                                          |                                                                                        | (2,142  | )                           |         | (12,638                    | )       |                              | (622    | )                              |        
|                             |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             |                                          | Loss before income tax expense                                                         |         |                             | (10,979 | )                          |         | (10,489                      | )       |                                | (7,681 
|Income tax (benefit) expense |                                          |                                                                                        |        |                             |         |                           |         |                              |        |                                |        
|                             |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             |                                          | Loss before extraordinary item and cumulative effect of change in accounting principle |         |                             | (10,979 | )                          |         | (10,489                      | )       |                                | (7,681 
|                             |                                          | Cumulative effect of change in accounting principle, net of income tax benefit         |         |                             | (92     | )                          |         |                             |         |                                |       
|                             |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        
|                             |                                          | Net loss                                                                               |         | $                           | (11,071 | )                          | $       | (10,489                      | )       | $                              | (7,681 
|                             |                                          |                                                                                        |         |                             |         |                            |         |                              |         |                                |        

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

42

---



DOE RUN PERU S.R.L.  Condensed Consolidated Statements of Cash Flows (unaudited)  (Dollars in thousands)

|                                                    |                                                                            | Nine Months Ended
July 31,                |       | Six Months Ended
April 30, |        | Three Months Ended
January 31, |        
|--------------------------------------------------- | -------------------------------------------------------------------------- | ----------------------------------------- | ----- | -------------------------- | ------ | ------------------------------ | -------
|
|Net cash provided by (used in) operating activities |                                                                            | $                                         | 5,488 |                            | $      | 3,363                          |        
|Cash flows from investing activities:               |                                                                            |                                           |       |                            |        |                                |        
|                                                    | Purchases of property, plant and equipment                                 |                                           |       | (7,666                     | )      |                                | (10,375
|                                                    |                                                                            |                                           |       |                            |        |                                |        
|                                                    |                                                                            | Net cash used in investing activities     |       |                            | (7,666 | )                              |        
|Cash flows from financing activities:               |                                                                            |                                           |       |                            |        |                                |        
|                                                    | Proceeds from (payments on) revolving loans and short-term borrowings, net |                                           |       | (700                       | )      |                                | 13,800 
|                                                    | Payments on long-term debt                                                 |                                           |       | (3,260                     | )      |                                | (3,077 
|                                                    | Loans with parent                                                          |                                           |       | 7,144                      |        |                                | 2,571  
|                                                    |                                                                            |                                           |       |                            |        |                                |        
|                                                    |                                                                            | Net cash provided by financing activities |       |                            | 3,184  |                                |        
|                                                    |                                                                            |                                           |       |                            |        |                                |        
|                                                    |                                                                            | Net increase/(decrease) in cash           |       |                            | 1,006  |                                |        
|Cash at beginning of period                         |                                                                            | $                                         | 7,018 |                            | $      | 6,263                          |        
|                                                    |                                                                            |                                           |       |                            |        |                                |        
|Cash at end of period                               |                                                                            | $                                         | 8,024 |                            | $      | 12,545                         |        
|                                                    |                                                                            |                                           |       |                            |        |                                |        

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

43

---





DOE RUN PERU S.R.L  Notes to Condensed Consolidated Financial Statements  (Dollars in thousands)

(1)   Summary of Significant Accounting Policies



These interim condensed consolidated financial statements include the accounts of Doe Run Peru S.R.L (Doe Run Peru or the Company). 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,
2003, April, 30, 2003 and July 31, 2003 and results of operations for the three-month period ended January 31, 2003 and 2002, the three and six-month periods ended
April 30, 2003 and 2002 and the three and nine-month periods ended July 31, 2003 and 2002. All material intercompany balances and transactions have been eliminated. Interim
periods are not necessarily indicative of results to be expected for the year.



Certain balances have been reclassified from their previous presentation in order to conform to the current year presentation.

(2)   Inventories

Inventories consist of the following:

|                                     |  | July 31,
2003 |        | April 30,
2003 |   | January 31,
2003 |  | October 31,
2002
|------------------------------------ |  | ------------- | ------ | -------------- | - | ---------------- |  | ----------------
|Finished metals and concentrates     |  | $             | 5,906  |                | $ | 3,246            |  | $               
|Metals and concentrates in process   |  |               | 44,736 |                |   | 50,023           |  |                 
|Materials, supplies and repair parts |  |               | 11,834 |                |   | 12,267           |  |                 
|                                     |  |               |        |                |   |                  |  |                 
|                                     |  | $             | 62,476 |                | $ | 65,536           |  | $               
|                                     |  |               |        |                |   |                  |  |                 

Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $332 at July 31, 2003, April 30, 2003, January 31, 2003 and
October 31, 2002.

(3)   Debt

Subsequent to July 31, 2003, Doe Run Peru defaulted on its net worth covenant contained in its revolving credit agreement. These defaults continued until
the agreements were amended in the second quarter of fiscal 2004. See discussion in Note 6 regarding amendments to this agreement.

(4)   Asset Retirement and Environmental Obligations



On November 1, 2002 Doe Run Peru adopted Statement No. 143"Accounting for Asset Retirement
Obligations"(Statement No. 143). With the adoption of this Statement, asset retirement obligations (AROs) are recognized as liabilities when incurred, with the initial
measurement at fair value. These liabilities will be accreted to full value over time through charges to income. In addition, an asset retirement cost was capitalized as part of the related asset's
carrying value and will be depreciated over the asset's useful life.

44

---



Doe
Run Peru also 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 covering
and revegetation of mixed lead and copper slag stored in Huanchan, an area a short distance from the smelter where the slag is currently stored.

The
following table summarizes the balance sheet impact associated with the adoption of Statement No. 143:

|                                                    |  | October 31,
2002
As Reported |         | SFAS
No. 143
Adoption
Impact |   | November 1,
2002
After
Adoption |  
|--------------------------------------------------- |  | ---------------------------- | ------- | ---------------------------- | - | ------------------------------- | -
|Property, plant and equipment                       |  | $                            | 183,910 |                              | $ | (2,523                          | )
|Accumulated depreciation                            |  |                              | (45,400 | )                            |   | 910                             |  
|                                                    |  |                              |         |                              |   |                                 |  
|Property, plant and equipment, net                  |  |                              | 138,510 |                              |   | (1,613                          | )
|                                                    |  |                              |         |                              |   |                                 |  
|Liability for asset retirement obligations          |  |                              | 3,606   |                              |   | (1,521                          | )
|                                                    |  |                              |         |                              |   |                                 |  
|Cumulative effect of change in accounting principle |  |                              |        |                              |   | (92                             | )
|                                                    |  |                              |         |                              |   |                                 |  

The
pro forma effects of the application of Statement No. 143 on net income/(loss) are insignificant.

The
pro forma asset retirement obligation liability balance at October 31, 2001 as if Statement No. 143 had been adopted at that date is $1,740.

The
following illustrates the activity pertaining to the AROs for the period ended July 31, 2003.

|AROs as of October 31, 2002 |  | $ | 3,606  |  
|--------------------------- |  | - | ------ | -
|Transition adjustment       |  |   | (1,521 | )
|Accretion expense           |  |   | 119    |  
|                            |  |   |       
|AROs as of July 31, 2003    |  | $ | 2,204  |  
|                            |  |   |       



Metaloroya S.A., the former owner of the La Oroya smelter, at the time a subsidiary of Centromin, received approval from the Peruvian government for an
Environmental Adjustment and Management Program (PAMA) that consisted of an environmental impact analysis, monitoring plan and data, mitigation measures and closure plan. Doe Run Peru assumed the
obligations under the PAMA. 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 for any other type of mining or metallurgical operation like
Cobriza). Once approved, the PAMA, as modified from time to time, functions as the equivalent of an operating permit with which the operator must comply. After expiration of the PAMA, the operator
must comply with all applicable standards and requirements. Future changes in legal rules and maximum permissible levels would not be applicable to Doe Run Peru for the remaining period of the PAMA,
except for certain closure requirements. Because these costs improve the property or prevent future environmental contamination, they are capitalized.

45

---



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



Through
July 31, 2003, Doe Run Peru had spent approximately $36,300 on projects under the La Oroya PAMA.

Estimated
annual spending on a calendar year basis for the projects approved in the La Oroya PAMA, as amended, most recently on January 25, 2002, are as follows:

Year

Estimated
Cost2003

$
9,3502004


12,8002005


53,5002006


67,700$
143,350


The
current estimate for the total to be expended on environmental projects under the PAMA and on additional related process changes for Doe Run Peru is approximately $168,000 for the
remaining term of the PAMA. The PAMA provides a specific plan for achieving the applicable Ministry of Energy and Mines (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. Although the PAMA currently requires Doe Run Peru to construct certain sulfuric acid plants, estimated to cost approximately $107,500, in conjunction with a portion of the
PAMA in order to reduce emissions, Doe Run Peru is also proceeding with efforts to identify alternative methods of achieving compliance. These efforts include, but are not limited to, reducing or
curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These efforts must take into
consideration the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru intends to submit a request to MEM in 2004 to modify the requirements of the existing PAMA.
There can be no assurance that the Peruvian government will approve the alternatives or that they will achieve compliance in the timeframe required by the PAMA. If the La Oroya smelter does not
operate within the current PAMA limits after December 31, 2006, Doe Run Peru could be forced to cease operations at the La Oroya smelter.

Doe
Run Peru's operations historically and currently exceed some of the applicable MEM maximum permissible limits pertaining to air emissions, ambient air quality and wastewater effluent
quality. The PAMA projects have been designed to achieve compliance with such requirements prior to

46

---



the
expiration of the PAMA on December 31, 2006. 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. Further, 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 or results of operations. 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 or results of operations.

The
Cobriza mine has a separate PAMA in which Doe Run Peru has committed to complete projects to manage tailings, mine drainage, sewage and garbage. Doe Run Peru had spent approximately
$10,000 under the PAMA as of July 31, 2003. On July 3, 2002, the government of Peru enacted the Supreme Decree No. 022-2002-EM, extending the PAMA for all
companies not yet in compliance with their PAMA for a period of not less than 12 months, and up to 18 months if approved by MEM. Companies not in compliance at the end of the extension
period would have an additional period to close their operations. Doe Run Peru has received approval from MEM to extend the date of required compliance with the PAMA to April of 2004, and has a
request pending to extend the compliance period for the full 18 months allowed by the Supreme Decree. Doe Run Peru expects that it will complete its PAMA requirements by the end of
June 2004 including a mine water treatment system and by making a surface paste fill from tailings. If the extension is not granted, Doe Run Peru may be subject to legal redress in the form of
fines, which management does not believe will be material. Ore reserves are now estimated to be approximately four years at current production levels and space has been identified to store the
associated tailings.

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 all periods presented.

(5)   Financial Condition

Doe Run Peru's results of operations and liquidity have been severely impacted by declining treatment charges that Doe Run Peru receives for processing raw
materials resulting from a shortage in the global supply of concentrates. The effects of low metals prices for the past several years have also caused some of Doe Run Peru's current suppliers of
concentrates to suffer financial distress, which has affected the availability of concentrate feed. During 2003, deliveries of lead and zinc concentrates to La Oroya from a major Peruvian supplier
were below contracted amounts. While Doe Run Peru was able to replace a portion of this shortfall with concentrates from other suppliers, total concentrate receipts were less than expected and the
resulting changes in concentrate mix and interruptions in delivery schedules adversely affected Doe Run Peru's metal production and results of operations. If one or more of Doe Run Peru's significant
local suppliers were to cease delivery of concentrates, there could be no assurance La Oroya would be able to secure sufficient replacement feedstock at economically acceptable terms. If such
shortages resulted in a significant interruption in feed supply, a material reduction in the production of metals from La Oroya or an interruption of production in the lead and zinc circuits could
result, which could have a significant adverse effect on the Company's results of operations, financial condition and liquidity.

47

---



As
discussed in Note 4, Doe Run Peru is proceeding with efforts to identify alternative methods of achieving compliance with environmental requirements. These efforts include, but
are not limited to, reducing or curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These
efforts must take into consideration the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru intends to submit a request in 2004 to modify its existing
requirements. There can be no assurance that the alternatives will be approved by the Peruvian government or that they will achieve compliance in the timeframe required. If the La Oroya smelter does
not operate within the required limits after December 31, 2006, Doe Run Peru could be forced to cease operations at the La Oroya smelter.

Doe
Run Peru implemented cost savings during fiscal 2003 and accelerated cash receipts, as well as other measures, to improve its liquidity. In addition, the retirement of Doe Run Peru's
loan from a foreign bank reduced Doe Run Peru's interest payments by approximately $14,000 per year. These changes improved Doe Run Peru's cash flow and availability of borrowings under the revolving
credit facility in the first nine months of 2003.

Doe
Run Peru's ability to pay fees to Doe Run is limited by Doe Run Peru's revolving credit facility, unless Doe Run Peru meets an excess cash flow test. Due to Doe Run Peru's lack of
liquidity, no payments for fees were made during the first nine months of 2003, although payments of $4,000 annually were allowed for 2003 under Doe Run Peru's revolving credit facility. In addition,
beginning in 2003, Doe Run will not receive approximately $14,000 per year in interest income from a deposit that was surrendered to retire Doe Run Peru's loan from a foreign bank. The deposit, plus
unpaid interest, was replaced in September 2002 by an intercompany note that does not bear interest during the term of Doe Run Peru's revolving credit facility. These factors along with five
years of low metals prices have affected Doe Run's liquidity.

(6)   Subsequent Events

On December 26, 2003, the Peru tax authority, SUNAT notified Doe Run Peru of an income tax assessment for the 1998 tax year. The assessment primarily
relates to Doe Run Peru's income tax treatment of the December 1997 merger of Doe Run Peru and Metaloroya S.A., which was purchased by Doe Run Peru in October 1997. 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 and additional income taxes due.

Under
the assessment, the reduction in depreciation would result in additional taxes of approximately $6,600, plus penalties and interest of $9,600 to date for the 1998 tax year. For tax
years after 1998, the Company estimates that additional taxes of approximately $5,700 would be due related to the decrease in the amount of depreciation originally claimed plus penalties and interest
of approximately $20,000 to date in the event SUNAT would prevail. Interest would also be assessed on the prepayments of taxes that were not made as a result of the depreciation deductions taken by
Doe Run Peru in the years affected, estimated at approximately $5,800.

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 change discussed
above, or approximately $3,500.

Management
of the Company believes that Doe Run Peru has followed the applicable Peruvian 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 were to appeal in the judicial system, some type of financial assurance would be required.

48

---



On
February 16, 2004 Doe Run Peru entered into an amendment of the Doe Run Peru Revolving Credit Facility. The amendment lowered the levels of net worth Doe Run Peru must comply
with from the date of the amendment through September 2004, among other things. Based on current forecasted results, assuming metal prices higher than those experienced in fiscal 2003,
management expects to remain in compliance for the foreseeable future. The amendment does not cure or waive defaults in existence before the date of the amendment. The amendment also limits payment of
fees to Doe Run through September 30, 2004 to $2,800. In the event Doe Run Peru's net worth would fall to a level lower than the requirement at the quarterly reporting dates, the amendment
permanently reduces the amount available under the Doe Run Peru Revolving Credit Facility if Doe Run Peru does not meet its required net worth by the amount of the difference between the required and
the actual net worth. If Doe Run Peru is not successful with its administrative appeal of the tax assessment discussed above,
the lender can, at its discretion, require that the amount of the assessment reduce net worth as defined in the Doe Run Peru Revolving Credit Facility amendment. Such reduction along with other
factors, including metal prices and results of operations, could affect Doe Run Peru's ability to comply with the net worth requirement.

49

---



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, as well as the Company's Form 10K for the year ended
October 31, 2003 filed June 2, 2004.

Financial Position and Liquidity

A discussion of changes in the Company's financial condition and liquidity is incorporated by reference to Item 7 in the Company's Form 10K for the year
ended October 31, 2003 filed June 2, 2004.

On
March 21, 2003 Renco and the lenders of a term note (Term Note) entered into an Assignment and Acceptance Agreement whereby The Renco Group, Inc. (Renco), the indirect
owner of all of Doe Run's capital stock, purchased all of the rights of the agent and lenders under the Term Note. Accordingly, Renco became the agent and lender under the Term Note with the identical
rights to payment of interest, principal and fees and to the same collateral as had the previous lenders. Furthermore, Renco, in its capacity as agent and lender under the credit facility waived
certain existing and impending defaults, including, among other things, Doe Run's failure to provide the lender with certain reports and failure to comply with a financial covenant.

Effective
March 27, 2003 the Company entered into an amendment to the loan agreement governing the Doe Run's revolving credit facility, which reduced the level of consolidated net
worth that the Company is required to maintain. Pursuant to the amendment, the lenders waived an event of default resulting from the failure of Doe Run to maintain a financial covenant and an event of
default resulting from the failure of Doe Run to deliver timely financial reports.

During
fiscal 2003, subsequent to the waivers and amendments discussed above, Doe Run failed to meet certain financial and reporting covenant requirements contained in the Doe Run's
revolving credit facility and the Term Note. On April 9, 2004 Doe Run entered into an amendment of its revolving credit facility. The amendment waives existing defaults and lowers the net worth
requirement. The amendment became effective when waivers of default under the Term Note were received, as discussed below. On April 30, 2004 Doe Run entered into an amendment of the Term Note.
The amendment waives existing defaults and amends various covenant requirements, among other things. The amendment also requires that certain information be delivered to the lender at various times
within 30 days after the amendment date, which dates have subsequently been extended. Based on current projections, assuming metal prices continuing higher than those experienced during fiscal
2003, management expects to remain in compliance under Doe Run's revolving credit facility and the Term Note, as amended, through October 31, 2004. As a result of these defaults, the balance
under the Term Note is reflected in current maturities of long-term debt in the Company's balance sheet at January 31, 2003, April 30, 2003 and July 31, 2003. Because
the agreement governing Doe Run's revolving credit facility requires a lockbox for cash receipts and contains a subjective acceleration clause, loans are classified as current in the Company's
condensed consolidated balance sheet for all periods presented.

On
May 7, 2004, Doe Run received a notice of default from the trustee of its 11.75% Notes that it is in default of the indenture requirements. The notice gives Doe Run
30 days from the date of receipt of the notice to remedy such defaults by filing its quarterly and annual reports for the 2003 fiscal year with the SEC and to provide a written statement from
the Company's independent certified public accountants indicating whether any defaults have come to their attention. If the defaults are not remedied within 30 days of receipt of the notice,
the trustee may declare all unpaid principal and interest immediately payable. Management intends to remedy the defaults in the timeframe required.

50

---



In
fiscal 2003, after July 31, 2003, Doe Run Peru failed to meet certain financial and reporting covenant requirements contained in Doe Run Peru's revolving credit facility. On
February 16, 2004, Doe Run Peru entered into an amendment of its revolving credit facility. The amendment lowered the levels of net worth Doe Run Peru must comply with from the date of the
amendment through September 30, 2004, among other things. Based on current forecasted results, assuming metal prices higher than those experienced during fiscal 2003, management expects to
remain in compliance with all covenants relating to Doe Run Peru's revolving credit facility for the foreseeable future. The amendment does not cure or waive defaults in existence before the date of
the amendment. The amendment also limits payment of fees to Doe Run through September 30, 2004 to $2.8 million. To the extent Doe Run Peru's net worth would fall to a level lower than
the requirement at the quarterly reporting dates, the amendment permanently reduces the amount available under Doe Run Peru's revolving credit facility by the amount of the difference between the
required and the actual net worth.

On
December 26, 2003, the Peru tax authority, SUNAT notified Doe Run Peru of an income tax assessment for the 1998 tax year. Discussion of this assessment is incorporated by
reference to Item 7
in the Company's Form 10K for the year ended October 31, 2003 filed June 2, 2004. If Doe Run Peru is not successful with its administrative appeal of the tax assessment, the
lender can, at its discretion, require that the amount of the assessment reduce net worth as defined in the Doe Run Peru's revolving credit facility amendment. Such reduction along with other factors,
including metal prices and results of operations, could affect Doe Run Peru's ability to comply with the net worth requirement.

Results of Operations

For the nine months ended July 31, 2003 (the 2003 period) the Company reported a decreased net loss compared to the nine months ended July 31, 2002
(the 2002 period). The decreased net loss was primarily due to lower net interest expense, offset by a loss from operations in the 2003 period and a charge for the cumulative effect of change in
accounting principle recorded in the 2003 period related to the adoption of Statement of Financial Accounting Standard No. 143,Accounting for Asset Retirement
Obligations(Statement No. 143) See "Item 1. Financial Statements and Supplementary DataNote 6 to the Company's Condensed Consolidated Financial
Statements" for a discussion of Statement No. 143. The lower net interest expense was the result of the restructuring of the Company's public debt in October 2002. The loss from
operations in the 2003 period, compared to income in the 2002 period, was the result of lower sales volume and higher costs related to a shortage of concentrates impacting production and feedstock
costs at the La Oroya smelter.

The
Company's realized prices for metal sales remained low through the 2003 period. The following table sets forth average London Metal Exchange (LME) prices for lead, copper and zinc
and the average London Bullion Market Association (LBMA) price for silver for the periods indicated:

|               |                       | Three Months Ended |   |          |  |  
|-------------- | --------------------- | ------------------ | - | -------- |  | -
|
|
|
|Average Prices |                       |                    |   |          |  |  
|               | Lead ($/short ton)    |                    | $ | 402.20   |  | $
|               | Copper ($/short ton)  |                    |   | 1,460.20 |  |  
|               | Zinc ($/short ton)    |                    |   | 708.40   |  |  
|               | Silver ($/troy ounce) |                    |   | 4.65     |  |  

51

---



As
domestic lead metal sales continued to be weak during 2003, the Company altered its marketing and production strategies for its domestic operations during the period and reduced its
production increasing exports of lead metal. See discussion of the impact on net sales for the period below.

Lead
prices began recovering in the third quarter after hitting a recent historic low in April 2003. Metal prices rose sharply during the fourth quarter of 2003 and have continued
their increase into fiscal 2004. The recent price increase reflects a significant tightening in the worldwide lead supply.

Low
lead, zinc and copper prices in the preceding five years have induced mine closures and cutbacks and slowed development of new copper, zinc and lead projects. In addition, new
smelting capacity has come on stream in China and India, increasing demand for concentrates. As a result, supplies of lead, zinc and copper concentrates have been very tight. Smelters competing for
concentrates in this tight market have driven treatment charges and penalties down significantly and this decline has negatively impacted profitability of the Company's La Oroya smelter.

Most
of La Oroya's feed supply is secured from the Peruvian domestic market. The effects of low metals prices in the preceding five years have caused some of Doe Run Peru's suppliers to
suffer financial distress, which in some cases caused production shortfalls. As a result, deliveries of lead, copper and zinc concentrates to La Oroya from the main Peruvian suppliers were
significantly below the contracted amounts during the 2003 period. Doe Run Peru replaced a portion of this shortfall with concentrates from other suppliers, but the total receipts of lead, zinc and
copper concentrates for the period were less than the planned amounts. In addition, the resulting changes in concentrate mix and erratic deliveries adversely affected metal production and the cost of
spot purchases increased La Oroya's feed cost. With improved metal prices beginning in the fourth quarter of 2003, the financial condition of La Oroya's traditional suppliers has improved and
concentrate receipts for fiscal year 2004 are expected to meet planned levels. However, current market conditions remain tight, and it is possible that the smelter could experience difficulties
obtaining economically suitable concentrate feed.

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

|                        |                                                 | Three Months Ended |        |   |        |   |       
|----------------------- | ----------------------------------------------- | ------------------ | ------ | - | ------ | - | ------
|
|
|
|U.S. Operations         |                                                 |                    |        |   |        |   |       
|                        | Lead metalprimary (short tons)                 |                    | 71,241 |   | 71,161 |   | 69,739
|                        | Lead metalsecondary (short tons)               |                    | 36,966 |   | 38,191 |   | 33,364
|                        | Lead concentrates (metal content, short tons)   |                    | 72,018 |   | 76,961 |   | 73,174
|                        | Ore Production (000's of dry short tons)        |                    | 1,150  |   | 1,220  |   | 1,178 
|                        | Ore grade                                       |                    | 6.41   | % | 6.51   | % | 6.37  
|Doe Run Peru Operations |                                                 |                    |        |   |        |   |       
|                        | Refined copper (short tons)                     |                    | 17,122 |   | 18,215 |   | 17,750
|                        | Refined lead (short tons)                       |                    | 30,042 |   | 33,280 |   | 28,147
|                        | Refined zinc (short tons)                       |                    | 20,680 |   | 21,851 |   | 20,372
|                        | Refined silver (thousands of troy ounces)       |                    | 8,701  |   | 8,750  |   | 8,496 
|                        | Refined gold (thousands of troy ounces)         |                    | 20     |   | 22     |   | 24    
|                        | Copper concentrates (metal content, short tons) |                    | 4,531  |   | 4,820  |   | 4,400 
|                        | Ore Grade (copper content)                      |                    | 1.10   | % | 1.07   | % | 1.12  

As a part of the Company's plan to reduce production costs and improve efficiency at the Company's U.S. mining operations, manpower was reduced
approximately 10% in the 2003 period compared to the respective period of the prior year. Ore production for the quarters of the 2003 period was lower than the quarters of the 2002 period, as planned
in order to improve costs, while the lead grade of ore improved slightly. The Company's primary smelter operations performed well during the period.

52

---



Production
at the Company's Buick secondary operation declined for the 2003 period compared to the 2002 period. Coke distribution problems in the blast furnace and mechanical problems
with the reverb
furnace occurred in the first quarter of 2003 with the reverb furnace being rebuilt during the second quarter of 2003, resulting in production improvement in the third quarter of 2003.

At
the La Oroya metallurgical complex, production of copper, lead, zinc and gold in 2003 was less than in 2002. These declines did not result from operational problems, but were
attributable to the difficulties in obtaining economically suitable feed concentrate material discussed above. At the Cobriza copper mining operation, ore grade improved and, as a result, production
of metal contained in concentrates improved compared to the 2002 period.

The
Company's results of operations include the results of the Company's U.S. operations and Doe Run Peru. In order to provide a more meaningful analysis, the results attributable to Doe
Run Peru operations will be noted and discussed separately under "Results of Doe Run Peru Operations".

Net salesincreased in the 2003 period compared to the 2002 period, due to an increase in sales volumes of lead metal for the Company's
U.S. operations and partially offset by a lower realized price for lead metal and lower sales for Doe Run Peru. U.S. operation's lead metal sales volume in the first and second quarters of 2003 were
22.6% and 14.0% higher that the comparable 2002 quarters, primarily due to an increase in export sales. The benefit from the higher volumes was offset by the lower lead metal net realized prices in
the first two quarters of the 2003 period than in the 2002 period. Net sales for the Company's U.S. operations were flat for the third quarter 2003 compared to the same quarter of 2002 as 2003 lead
metal sales volume was 7.8% lower, due to timing of customer shipments, but the net realized price for lead was higher, due to the rise in the LME price in that quarter.

Cost of salesfor the 2003 period increased compared to the 2002 period. Increases were attributable to Doe Run Peru operations as well as
the U.S. operations. The increased sales volume of lead metal for the U.S. operations in the first two quarters resulted in higher cost of sales. This increase was partially offset by lower lead metal
unit production costs. Spending for labor costs, outside services and repair costs were lower, offsetting increased energy costs and worker's compensation costs. Lower headcount associated with
production changes in the primary operations resulted in the lower labor costs. Lower feed cost at the Buick secondary smelter also contributed to the reduction in unit production cost.

Selling, general and administrative costsincreased slightly for the 2003 period, compared to the 2002 period, due primarily to the U.S.
operations. The increase in selling, general and administrative expenses for U.S. operations is primarily the result of higher legal costs and the recognition of various liability claims partially
offset by insurance proceeds received in the second quarter of 2003 for the reimbursement of various legal costs incurred in prior periods.

Unrealized losses on derivativesare related to the change in fair market value of derivative financial instruments. The losses in the
2003 period were generated in the third quarter of 2003 and resulted from an increase in the quantities of metal under contracts outstanding, and the increase in the LME price of lead metal in the
third quarter.

Interest expensedeclined substantially in the 2003 period, compared to the prior year. The declines in interest expense in the U.S. are
attributable to the October 29, 2002 restructuring of Doe Run's public debt and the related accounting treatment and Doe Run Peru's retirement of a $125.0 million note payable to a
foreign bank on September 12, 2002.

Interest incomefor the 2003 period decreased compared to the 2002 period due to the tender of Doe Run's $125.0 million deposit to
retire Doe Run Peru's note payable to a foreign bank.

53

---



Other, netexpense in the 2003 period decreased from the 2002 period because of accrued expenses in 2002 relating to the restructuring
that occurred October 29, 2002.

Cumulative effect of change in accounting principlerelates to the adoption of Statement No. 143.

Results of Doe Run Peru Operations

Net salesfor the 2003 period decreased compared to the 2002 period, primarily due to lower sales volumes for
copper, lead, zinc and gold, partially offset by increased silver sales volume and by higher realized prices for copper, zinc, silver and gold. The volume declines, which were the result of the
decrease in smelter production discussed above, reduced net sales approximately $13.5 million. Higher realized prices for gold bullion, copper and silver, following similar increases in market
prices, increased net sales by $9.2 million. The higher silver sales volume resulted in an increase of $2.0 million in net sales compared to the prior year. For the first and second
quarters, net sales increased modestly compared to the prior year, as the impact of higher metal prices was slightly greater than the effect of lower sales volumes. In the third quarter of 2003,
silver prices declined while sales volumes continued to be unfavorable which caused net sales to decline $2.6 million in the third quarter of 2003 quarter compared to the 2002 quarter.

Cost of salesincreased from the 2002 period to the 2003 period, due to higher feed cost and higher unit conversion costs at La Oroya,
partially offset by reduced sales volume and lower production cost at the Cobriza copper mining operation. Feed costs were higher due to the increases in market prices for copper, zinc, silver and
gold and to significantly lower treatment charges allowed the smelter for processing the concentrates purchased. Lead, zinc and copper concentrate treatment charges declined 14%, 13% and 15%,
respectively in 2003, due to the very tight supply situation for concentrates in the world market. Unit conversion costs at La Oroya increased primarily due to the reduced production
volume and higher fuel costs. Unit production costs at Cobriza declined approximately 10% due to a combination of increased production of metal contained in concentrates and lower operating costs. The
increases in cost of sales were greater during the first and third quarters of 2003, primarily because the impact of metal price increases was more significant during those quarters. In addition,
conversion costs were higher in the third quarter primarily due to increased costs for repairs and fuel.

Interest expensedecreased in the 2003 period, compared to the prior year, primarily due to the retirement of the $125.0 note payable to a
foreign bank, on September 12, 2002.

Cumulative effect of change in accounting principlein the 2003 period relates to the adoption of Statement No. 143.

Forward-Looking Statements

This report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 which involve known and unknown
risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such risks, uncertainties, and other important factors include, among others: general economic and business conditions; increasing
industry capacity and levels of imports of non-ferrous metals or non-ferrous metals products; industry trends, including product pricing; competition; currency fluctuations;
the loss of any significant customer or suppliers; availability of qualified personnel; effects of future collective bargaining agreements; outcome of litigation; changing environmental requirements,
political uncertainty, terrorism and major equipment failures. These forward-looking statements speak only as of the date of this report. The Company expressly disclaims any obligation or undertaking
to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions,
or circumstances on which any such statement is based.

54

---



Item 3. Quantitative and Qualitative Disclosures About Market Risk.

In the normal course of its business, the Company has used in the past, and may use in the future, forward sales commitments and commodity put and call option
contracts to manage its exposure to
fluctuations in the prices of lead, copper, zinc and silver. Contract positions are designed to ensure that the Company will receive a defined minimum price for certain quantities of its production.
None of the aforementioned activities have been entered into for speculative purposes.

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 the Company's management,
including the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on
that evaluation, the Company's management, including the CEO and CFO, concluded the Company's disclosure controls and procedures as of July 31, 2003 were effective in ensuring information
required to be disclosed in this Quarterly Report on Form 10-Q was recorded, processed, summarized and reported on a timely basis. There have been no changes in the Company's
internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting.

Part II. Other Information.

Item 1. Legal Proceedings

A discussion of litigation is incorporated by reference to Item 3 in the Company's Form 10K for the year ended October 31, 2003 filed June 2,
2004.

Item 4. Submission of Matters to a Vote of Security Holders.

A discussion of matters submitted to a vote of the security holder is incorporated by reference to Item 4 in the Company's Form 10K for the year ended
October 31, 2003 filed June 2, 2004.

Item 6. Exhibits and Reports on Form 8-K.

|31 |  | Certifications pursuant to Section 302 of the Sarbannes-Oxley Act of 2002
|-- |  | -------------------------------------------------------------------------
|32 |  | Certifications pursuant to Section 906 of the Sarbannes-Oxley Act of 2002

None

55

---





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 June 4, 2004 |  | /s/DAVID A. CHAPUTDavid A. Chaput
Chief Financial Officer
(duly authorized officer and principal financial officer)

56

---