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 periods endedJanuary 31, 2004              
|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 July 30, 2004:

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



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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 6. | 

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Item 1. Financial Statements.

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

|                                                                                                                                               |                                                                                             | January 31,
2004                            |         | October 31,
2003 |         
|---------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------------------------- | ------- | ---------------- | --------
|
|ASSETS                                                                                                                                         |                                                                                            
|Current assets:                                                                                                                                |                                                                                             |                                             |         |                  |         
|                                                                                                                                               | Cash                                                                                        |                                             | $       | 12,243           |         
|                                                                                                                                               | Trade accounts receivable, net of allowance for doubtful accounts                           |                                             |         | 59,979           |         
|                                                                                                                                               | Inventories                                                                                 |                                             |         | 105,055          |         
|                                                                                                                                               | Prepaid expenses and other current assets                                                   |                                             |         | 35,445           |         
|                                                                                                                                               |                                                                                             |                                             |         |                  |         
|                                                                                                                                               |                                                                                             | Total current assets                        |         |                  | 212,722 
|Property, plant and equipment, net                                                                                                             |                                                                                             |                                             | 228,769 |                  |         
|Other noncurrent assets, net                                                                                                                   |                                                                                             |                                             | 4,596   |                  |         
|                                                                                                                                               |                                                                                             |                                             |         |                  |         
|                                                                                                                                               |                                                                                             | Total assets                                |         | $                | 446,087 
|                                                                                                                                               |                                                                                             |                                             |         |                  |         
|LIABILITIES AND SHAREHOLDER'S DEFICIT                                                                                                          |                                                                                            
|Current liabilities:                                                                                                                           |                                                                                             |                                             |         |                  |         
|                                                                                                                                               | Short-term borrowings and current maturities of long-term debt                              |                                             | $       | 83,249           |         
|                                                                                                                                               | Accounts payable                                                                            |                                             |         | 72,990           |         
|                                                                                                                                               | Accrued liabilities                                                                         |                                             |         | 86,671           |         
|                                                                                                                                               |                                                                                             |                                             |         |                  |         
|                                                                                                                                               |                                                                                             | Total current liabilities                   |         |                  | 242,910 
|Long-term debt, less current maturities                                                                                                        |                                                                                             |                                             | 330,586 |                  |         
|Other noncurrent liabilities                                                                                                                   |                                                                                             |                                             | 72,432  |                  |         
|                                                                                                                                               |                                                                                             |                                             |         |                  |         
|                                                                                                                                               |                                                                                             | Total liabilities                           |         |                  | 645,928 
|Series A redeemable preferred stock, $1,000 par value, 5,000 authorized, 2,000 shares issued and outstanding; liquidation and redemption value |                                                                                             |                                             | 23,139  |                  |         
|Shareholder's deficit:                                                                                                                         |                                                                                             |                                             |         |                  |         
|                                                                                                                                               | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued, and outstanding |                                             |         |                 |         
|                                                                                                                                               | Additional paid-in capital                                                                  |                                             |         | 2,100            |         
|                                                                                                                                               | Accumulated deficit                                                                         |                                             |         | (187,368         | )       
|                                                                                                                                               | Accumulated other comprehensive losses                                                      |                                             |         | (37,712          | )       
|                                                                                                                                               |                                                                                             |                                             |         |                  |         
|                                                                                                                                               |                                                                                             | Total shareholder's deficit                 |         |                  | (222,980
|                                                                                                                                               |                                                                                             |                                             |         |                  |         
|                                                                                                                                               |                                                                                             | Total liabilities and shareholder's deficit |         | $                | 446,087 
|                                                                                                                                               |                                                                                             |                                             |         |                  |         

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

1

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

|                        |                                                            | Three Months Ended
January 31,                                                 |                                     
|----------------------- | ---------------------------------------------------------- | ------------------------------------------------------------------------------ | ------------------------------------
|
|Net sales               |                                                            | $                                                                              | 190,004                             
|Costs and expenses:     |                                                            |                                                                                |                                     
|                        | Cost of sales                                              |                                                                                |                                     
|                        | Depreciation, depletion and amortization                   |                                                                                |                                     
|                        | Selling, general and administrative                        |                                                                                |                                     
|                        | Unrealized (gain) loss on derivative financial instruments |                                                                                |                                     
|                        | Other                                                      |                                                                                |                                     
|                        |                                                            |                                                                                |                                     
|                        |                                                            | Total costs and expenses                                                       |                                     
|                        |                                                            |                                                                                |                                     
|                        |                                                            | Loss from operations                                                           |                                     
|Other income (expense): |                                                            |                                                                                |                                     
|                        | Interest expense, net                                      |                                                                                |                                     
|                        | Other, net                                                 |                                                                                |                                     
|                        |                                                            |                                                                                |                                     
|                        |                                                            |                                                                                | (3,227                              
|                        |                                                            |                                                                                |                                     
|                        |                                                            |                                                                                | Loss before income tax expense      
|Income tax expense      |                                                            |                                                                                | 565                                 
|                        |                                                            |                                                                                |                                     
|                        |                                                            | Loss before cumulative effect of change in accounting principle                |                                     
|                        |                                                            | Cumulative effect of change in accounting principle, net of income tax benefit |                                     
|                        |                                                            |                                                                                |                                     
|                        |                                                            |                                                                                | Net loss                            
|                        |                                                            |                                                                                | Cumulative preferred stock dividends
|                        |                                                            |                                                                                |                                     
|                        |                                                            |                                                                                | Net loss allocable to common shares 
|                        |                                                            |                                                                                |                                     

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

2

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

|                                      |                                                                                 | Three Months
Ended
January 31,                                   |                                      
|------------------------------------- | ------------------------------------------------------------------------------- | ---------------------------------------------------------------- | -------------------------------------
|
|Cash flows from operating activities: |                                                                                 |                                                                  |                                      
|                                      | Net loss                                                                        |                                                                  | $                                    
|                                      | Cumulative effect of change in accounting principle                             |                                                                  |                                      
|                                      | Adjustments to reconcile net loss to net cash provided by operating activities: |                                                                  |                                      
|                                      |                                                                                 | Depreciation, depletion and amortization                         |                                      
|                                      |                                                                                 | Imputed interest and amortization of deferred financing costs    |                                      
|                                      |                                                                                 | Unrealized (gain) loss on derivative financial instruments       |                                      
|                                      |                                                                                 | Decrease resulting from other changes in assets and liabilities: |                                      
|                                      |                                                                                 |                                                                  |                                      
|                                      |                                                                                 |                                                                  | Net cash used in operating activities
|Cash flows from investing activities: |                                                                                 |                                                                  |                                      
|                                      | Purchases of property, plant and equipment                                      |                                                                  |                                      
|                                      |                                                                                 |                                                                  |                                      
|                                      |                                                                                 | Net cash used in investing activities                            |                                      
|Cash flows from financing activities: |                                                                                 |                                                                  |                                      
|                                      | Proceeds from revolving loans and short term borrowings, net                    |                                                                  |                                      
|                                      | Payments on long-term debt                                                      |                                                                  |                                      
|                                      |                                                                                 |                                                                  |                                      
|                                      |                                                                                 | Net cash provided by financing activities                        |                                      
|                                      |                                                                                 |                                                                  |                                      
|                                      |                                                                                 | Net increase (decrease) in cash                                  |                                      
|Cash at beginning of period           |                                                                                 |                                                                  | 16,794                               
|                                      |                                                                                 |                                                                  |                                      
|Cash at end of period                 |                                                                                 | $                                                                | 12,243                               
|                                      |                                                                                 |                                                                  |                                      

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

3

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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, 2004 and the results of operations
for the three month periods ended January 31, 2004 and 2003. Interim periods are not necessarily indicative of results to be expected for the year.



Certain prior year balances have been reclassified in order to conform to current 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. Doe
Run's liquidity has been affected by these factors, as well as Doe Run Peru's liquidity. Doe Run failed to meet certain financial covenant requirements contained in its revolving credit agreement and
a term note (the Term Note) and Doe Run Peru failed to meet certain financial covenant requirements contained in its revolving credit agreement during fiscal 2003, which defaults continued at
January 31, 2004. These agreements were amended in the second quarter of fiscal 2004. See discussion of amendments in Note 7. As discussed in Notes 4 and 5, 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.

The
Company's auditors issued unqualified opinions on the 2003 audited financial statements of the Company and of Doe Run Peru that express substantial doubt about the Company's and Doe
Run Peru's ability to continue as going concerns due to the factors noted above.

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. During 2004, deliveries of copper concentrates to the La Oroya smelter were lower than the prior year. If shortages result 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.

As
discussed in Note 4 (see terms defined therein), 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 submitted a request in
July 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 requested PAMA modification is not approved, Doe Run Peru may not be in compliance with the requirements of the

4

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PAMA
investment schedule in 2005 and could be subject to penalties. If the requested PAMA modification is not approved and the La Oroya smelter does not comply with the investment schedule of the PAMA
or the La Oroya smelter does not operate within the required limits after December 31, 2006, Doe Run Peru could be forced to cease or curtail operations at the La Oroya smelter.

Doe
Run Peru has implemented cost savings, including a reduction of approximately 10% of its workforce, acceleration of cash receipts, as well as other measures, to improve its
liquidity. Doe Run Peru's ability to pay fees to Doe Run is currently limited by Doe Run Peru's revolving credit facility to $2,800 through September 2004, and $4,000 for the calendar year
ended December 31, 2004, unless Doe Run Peru meets an excess cash flow test. Doe Run received $2,000 in the second quarter and expects to receive another $2,000 in October 2004.

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.

In
response to declining demand in the U.S. for lead metal and increasing global demand for clean lead concentrates, Doe Run indefinitely suspended operations at its Glover smelter in
November, 2003 and will sell any concentrates on the open market that are not required to maintain production at its Herculaneum smelter. Headcount at the Glover smelter decreased from 163 employees
at October 31, 2003 to 11 employees at January 31, 2004. The Company recorded a severance liability related to Glover employees of approximately $1,400 at October 31, 2003. No
impairment loss was recognized with respect to this suspension of operations, as cash flows with respect to the primary lead segment should improve with the decision.

Net
unused availability at January 31, 2004 under the Doe Run Revolving Credit Facility and Doe Run Peru Revolving Credit Facility was approximately $11,200 and $2,800,
respectively. In addition to the availability under its revolving credit facilities, Doe Run Peru also had $12,243 of cash at January 31, 2004. Net unused availability at October 31,
2003 was approximately $14,100 and $3,800 under the Doe Run Revolving Credit Facility and Doe Run Peru Revolving Credit Facility, respectively, and Doe Run Peru's cash balances totaled $16,794.
Although the effect of the Company's risk management strategy and higher costs for the quarter ended January 31, 2004 offset the impact of higher metal prices and prevented an improvement in
liquidity in the first quarter, the Company's long-term liquidity outlook has improved, due to higher prices, other revenue enhancements and cost reductions. As of June 30, 2004,
net unused availability was approximately $18,800 under the Doe Run Revolving Credit Facility and $3,800 under the Doe Run Peru Revolving Credit Facility, and Doe Run Peru had cash balances of $5,348.
In the U.S. the timing of annual payments of insurance and property taxes unfavorably impacted liquidity in the first quarter. In Peru, higher metal prices resulted in higher initial outlays for
concentrate purchases and higher VAT payments, which will ultimately be recouped, which resulted in a decrease in availability of borrowing under its revolving credit agreement, however Doe Run Peru's
working capital increased between January and June 2004. The higher metal prices resulted in an increase in inventory, accounts receivable and accounts payable during the quarter. At
metal prices higher than 2003 averages, but lower than those experienced in the first quarter of 2004, Doe Run and Doe Run Peru's liquidity should improve.

5

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(3) Inventories

Inventories consist of the following:

January 31,
2004

October 31,
2003Finished metals and concentrates

$
20,210

$
12,466Metals and concentrates in process


59,105


56,399Materials, supplies and repair parts


26,340


26,815$
105,655

$
95,680


Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $5,236 and $5,220 at January 31, 2004 and October 31, 2003, respectively.

(4) Segment Information

The Company's operating segments are separately managed business units that are distinguished by products, location and production process. The primary lead
segment includes integrated mining, milling and smelting operations located in Missouri. The secondary lead segment, located in Missouri, recycles lead-bearing materials, primarily spent
batteries. The fabricated products segment produces

6

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value-added
lead products. Doe Run Peru produces an extensive product mix of non-ferrous and precious metals.

|                                           |                      | Three Months Ended
January 31, |       
|------------------------------------------ | -------------------- | ------------------------------ | ------
|
|Operating SegmentsRevenues                |                      |                                |       
|Revenues from external customers:          |                      |                                |       
|                                           | Peruvian operations  |                                | $     
|                                           | Primary lead         |                                |       
|                                           | Recycling operations |                                |       
|                                           | Fabricated products  |                                |       
|                                           |                      |                                |       
|                                           |                      |                                | Total 
|Revenues from other operating segments:(1) |                      |                                |       
|                                           | Peruvian operations  |                                |       
|                                           | Primary lead         |                                |       
|                                           | Recycling operations |                                |       
|                                           | Fabricated products  |                                |       
|                                           |                      |                                |       
|                                           |                      | Total                          |       
|                                           |                      |                                |       
|                                           |                      | Total reportable segments      |       
|Other revenues/gains (losses)(2)           |                      |                                | (2,374
|Intersegment eliminations                  |                      |                                | (308  
|                                           |                      |                                |       
|                                           |                      |                                |       
|                                           |                      |                                |       

---

7

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|                                                                                                                   |                                                        | Three Months Ended
January 31,                                                   |                             
|------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------ | -------------------------------------------------------------------------------- | ----------------------------
|
|Operating SegmentsAdjusted EBITDA (Earnings before interest, taxes, and depletion, depreciation and amortization) |                                                        |                                                                                  |                             
|                                                                                                                   | Peruvian operations                                    |                                                                                  | $                           
|                                                                                                                   | Primary lead                                           |                                                                                  |                             
|                                                                                                                   | Recycling operations                                   |                                                                                  |                             
|                                                                                                                   | Fabricated products                                    |                                                                                  |                             
|                                                                                                                   |                                                        |                                                                                  |                             
|                                                                                                                   |                                                        |                                                                                  | Total reportable segments   
|                                                                                                                   | Other revenues and expenses(3)                         |                                                                                  |                             
|                                                                                                                   | Corporate selling, general and administrative expenses |                                                                                  |                             
|                                                                                                                   | Intersegment eliminations                              |                                                                                  |                             
|                                                                                                                   |                                                        |                                                                                  |                             
|                                                                                                                   |                                                        |                                                                                  | Consolidated adjusted EBITDA
|                                                                                                                   | Depreciation, depletion and amortization               |                                                                                  |                             
|                                                                                                                   | Interest income                                        |                                                                                  |                             
|                                                                                                                   | Interest expense                                       |                                                                                  |                             
|                                                                                                                   | Unrealized gain (loss) on derivatives                  |                                                                                  |                             
|                                                                                                                   | Other                                                  |                                                                                  |                             
|                                                                                                                   |                                                        |                                                                                  |                             
|                                                                                                                   |                                                        | Loss before income taxes and cumulative effect of change in accounting principle |                             
|                                                                                                                   |                                                        |                                                                                  |                             

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(5) Asset Retirement and Environmental Obligations

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



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

8

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

The
Company's total recorded liability for AROs was approximately $14,900 and $14,600 as of January 31, 2004 and October 31, 2003, respectively.



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 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 May 29, 2001 AOC was modified effective on May 20, 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.

9

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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-one properties having
children less than 72 months old living in them. All of these owners have requested offers and all but two have accepted offers. Of the remaining one hundred thirty-nine 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
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. As of
June 30, 2004, a total of one hundred twenty-four homeowners have requested offers. Of the seventy-one properties whose owners were given the opportunity to request purchase in
calendar 2003, fifty-eight owners have requested an appraisal, and thirty-nine of fifty-eight offers have been accepted. Of the forty-nine properties whose owners have been given the opportunity to
request purchase in calendar 2004, forty-five have requested an appraisal, and five of twenty-two 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 buyout offer, or, if the buyout offer is accepted, what price will be paid
for the property. The rate of acceptance may be affected by the fact that the purchase plan prioritized properties that are closer to the smelter such that the remaining identified properties are
farther from the smelter than those that have already received offers.

The
following summarizes the activity as of January 31, 2004 relating to the voluntary purchase plan since its inception:

Number

Total CostProperties purchased

37

$
2,705Offers accepted and not yet purchased

8


657Outstanding offers

26


2,033


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 that 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. 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.

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

10

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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 recorded liability for remediation does not include the 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
that 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 various areas of the Herculaneum smelter site, which excavations failed to turn up any evidence of
illegal toxic dumping. Doe Run has been advised by counsel that the government has ended its investigation and will not prosecute.

Doe
Run has implemented a plan with the Missouri DNR and the Missouri Air Conservation Commission 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. 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 $9,800 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. 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. 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.

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.

11

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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 signed an order to conduct interim measures which consisted of blood lead testing of young
children, residential soil sampling, and limited soil remediation as indicated by the testing and sampling results, which was terminated and replaced by an AOC to conduct certain additional soil
remediation in the area and has included its best estimate of these efforts in its recorded liabilities. The Company believes the recorded liabilities related to these sites are adequate. However,
should remediation goals or areas change, requiring substantially increased measures, there can be no assurance that the recorded liabilities would be adequate.

In
March 2004, Doe Run received notice that it is a PRP subject to liability under CERCLA for contamination along roads in Iron, Dent and Reynolds counties in Missouri, along with
a number of mining companies involved in the transportation of concentrates. Approximately 412 houses were identified as potentially requiring remediation. Doe Run expects that its share of the
potential remediation costs will not be significant, based on management's estimates of the number of houses requiring remediation, remediation methods and Doe Run's apportionment of the costs.

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 will not 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.

12

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The
Company had recorded liabilities of approximately $14,500 and $14,400 related to these remediation obligations as of January 31, 2004 and October 31, 2003,
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 La Oroya's 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:



13

---







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
Cost2004


12,8002005


53,5002006


67,700$
134,000


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 investment schedule in 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 begin construction of certain sulfuric acid plants in 2005, estimated to cost approximately $107,500, 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
submitted a request to MEM in July 2004 to modify the requirements of the existing PAMA. Although the required compliance date under the proposal would be extended, total spending will be
higher than what is currently required under the existing PAMA, with an estimated cost of approximately $155,000 over the calendar years 2005-2011. 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 requested PAMA modification is not approved, Doe Run Peru may
not be in compliance with the requirements of the PAMA investment schedule in 2005 and could be subject to penalties. If the requested PAMA modification is not approved and the La Oroya smelter does
not comply with the investment schedule of the PAMA or does not operate within the current PAMA limits after December 31, 2006, Doe Run Peru could be forced to cease or curtail 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

14

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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. As of June 2004, Doe Run Peru
ceased discharging mine waste into the Mantaro River, and was in compliance with the emissions standards required by the PAMA. Doe Run Peru will have ongoing projects, including a mine water treatment
system and the production of surface paste fill from tailings that it expects to complete in August 2004.

Doe
Run Peru is responsible for the remediation costs relating to a zinc ferrite disposal site. The current closure plan provides for encapsulating the ferrite residues in place at
Huanchan, an area a short distance from the smelter where they are currently stored, for which an environmental liability of $1,600 has been recorded as of January 31, 2004 and
October 31, 2003.



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.

(6) Litigation

Doe Run is a defendant in eight lawsuits alleging certain damages stemming from the operations at the Herculaneum smelter. Three of these cases are class action
lawsuits. In two cases, the plaintiffs seek to have certified a class of property owners in a certain section of Herculaneum, alleging that property values have been damaged due to the
operations of the smelter. In another case, plaintiffs seek to have certified a class of children who lived in Herculaneum during a period of time when they were less than six years old and
children born to mothers who lived in Herculaneum during their pregnancies. The remedy sought is medical monitoring for the class. 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

15

---



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 to
two children living in St. Francois County.

Doe
Run has been named in five suits filed by thirty-five railway employees against a railroad carrier and multiple lead mining companies alleging personal injury resulting
from exposure to lead concentrates hauled by the railroad carrier. The 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.

This
railroad carrier has also 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.

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. Five of these suits were
dismissed leaving claims alleged by seven children. An additional class action lawsuit for damages to natural resources and land owned by members of the Quapaw Tribe was filed on December 10,
2003 against seven companies, including Doe Run. Six individuals filed an additional class action lawsuit against six companies, including Doe Run, in Ottawa County, Oklahoma on February 9,
2004. The Company is unable at this time to estimate the expected outcome and any final costs of this action. Two additional cases alleging personal injury to forty-five children and three
children, respectively, were filed in July 2004.

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

16

---



of
lead hazards purportedly created by the defendants in the City of St. Louis. Doe Run was dismissed from the case in June 2004.

Doe
Run has been named in an asbestos injury suit by an individual against numerous companies, alleging that they were exposed to asbestos, including at the St. Joe Minerals Corporation
(Doe Run's predecessor) premises but has not been served with a complaint. Doe Run was served a Writ of Summons in a second 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 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.

Doe
Run Peru is a defendant in sixty-four 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. While the total of all claims is approximately $1,149, Doe Run Peru has made claims in most of the cases against Centromin, the prior owner and has also
made claims against both governmental agencies and private companies that provide workers' insurance. In one of the 64 pending cases, the lower court has issued a decision in which it awarded just 40%
of the claim, with Doe Run Peru to pay 25% of the award and Centromin the rest.

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 $10,000 through June 30, 2004 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 $23,700 through June 30, 2004 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 $6,000 through June 30, 2004.

17

---



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.

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.

(7) Subsequent Events

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 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 were extended. Based on current projections,
assuming

18

---



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 gave 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. The defaults were remedied in the timeframe required.

On
July 1, 2004, Doe Run received a similar notice for the quarterly report for the quarter ended January 31, 2004 from the trustee of the 11.75% Notes. If the default is
not remedied within 30 days of the receipt of the notice, the trustee may declare all unpaid principal and interest immediately payable. Management intends to remedy the default in the
timeframe required.

(8) Guarantor Subsidiaries

The Guarantor Subsidiaries (Fabricated Products, Inc. (FPI) and DR Land Holdings, LLC (together, the Domestic Guarantors) Buick Resource Recycling
Facility, LLC, Doe Run Cayman Ltd. (Doe Run Cayman) and its subsidiary Doe Run Peru) have jointly and severally, fully, unconditionally and irrevocably guaranteed the 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.

19

---





(8) Guarantor Subsidiaries (Continued)

Condensed Consolidating Balance Sheet (unaudited)
As of January 31, 2004

|                                               |                                                                                           | The Company
Excluding
Guarantor
Subsidiaries         |   | Buick
Resource
Recycling
Facility, LLC |          | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |   | Eliminations |        | The
Company |        
|---------------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------------------------------- | - | -------------------------------------- | -------- | ------------------- | ------ | ----------------------------- | - | ------------ | ------ | ----------- | -------
|ASSETS                                         |                                                                                          
|Current assets:                                |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               | Cash                                                                                      |                                                      | $ |                                       |          | $                   |       |                               | $ |             |        | $           | 12,243 
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                         |                                                      |   | 39,709                                 |          |                     |       |                               |   | 2,335        |        |             | 18,112 
|                                               | Inventories                                                                               |                                                      |   | 34,793                                 |          |                     |       |                               |   | 1,297        |        |             | 68,980 
|                                               | Prepaid expenses and other current assets                                                 |                                                      |   | 19,632                                 |          |                     |       |                               |   | 109          |        |             | 15,704 
|                                               | Due from subsidiaries                                                                     |                                                      |   | 29,594                                 |          |                     | 537    |                               |   |             |        |             |       
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                           | Total current assets                                 |   |                                        | 123,728  |                     |        | 537                           |   |              | 3,741  |             |        
|                                               | Property, plant and equipment, net                                                        |                                                      |   | 78,947                                 |          |                     | 13,458 |                               |   | 2,075        |        |             | 134,289
|                                               | Due from subsidiaries                                                                     |                                                      |   | 139,063                                |          |                     |       |                               |   |             |        |             |       
|                                               | Other noncurrent assets, net                                                              |                                                      |   | 4,308                                  |          |                     |       |                               |   | 66           |        |             | 222    
|                                               | Investment in subsidiaries                                                                |                                                      |   | (19,797                                | )        |                     |       |                               |   |             |        |             |       
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                           | Total assets                                         |   | $                                      | 326,249  |                     | $      | 13,995                        |   | $            | 5,882  |             | $      
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                          
|Current liabilities:                           |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                            |                                                      | $ | 45,873                                 |          | $                   |       |                               | $ |             |        | $           | 37,376 
|                                               | Accounts payable                                                                          |                                                      |   | 21,177                                 |          |                     |       |                               |   | 562          |        |             | 51,428 
|                                               | Accrued liabilities                                                                       |                                                      |   | 59,485                                 |          |                     |       |                               |   | 2,140        |        |             | 25,046 
|                                               | Due to parent/subsidiaries                                                                |                                                      |   | 537                                    |          |                     |       |                               |   | 7,775        |        |             | 21,819 
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                           | Total current liabilities                            |   |                                        | 127,072  |                     |        |                              |   |              | 10,477 |             |        
|                                               | Long-term debt, less current maturities                                                   |                                                      |   | 330,586                                |          |                     |       |                               |   |             |        |             |       
|                                               | Due to parent                                                                             |                                                      |   |                                       |          |                     |       |                               |   |             |        |             | 139,063
|                                               | Other noncurrent liabilities                                                              |                                                      |   | 68,432                                 |          |                     |       |                               |   | 719          |        |             | 3,281  
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                           | Total liabilities                                    |   |                                        | 526,090  |                     |        |                              |   |              | 11,196 |             |        
|                                               | Series A redeemable preferred stock                                                       |                                                      |   | 23,139                                 |          |                     |       |                               |   |             |        |             |       
|Shareholders' equity (deficit):                |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               | Common stock, $.10 par value, 1,667 shares authorized, 1000 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                                                                |                                                      |   | 2,100                                  |          |                     | 16,062 |                               |   | 1,205        |        |             |       
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive losses        |                                                      |   | (225,080                               | )        |                     | (2,067 | )                             |   | (6,520       | )      |             | (30,468
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                           | Total shareholders' equity (deficit)                 |   |                                        | (222,980 | )                   |        | 13,995                        |   |              | (5,314 | )           |        
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                           | Total liabilities and shareholders' equity (deficit) |   | $                                      | 326,249  |                     | $      | 13,995                        |   | $            | 5,882  |             | $      
|                                               |                                                                                           |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        

20

---



(8) Guarantor Subsidiaries (Continued)

Condensed Consolidating Balance Sheet
As of October 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                                                                                       |                                                      | $ |                                       |          | $                   |       |                               | $ |             |        | $           | 16,794 
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                          |                                                      |   | 37,310                                 |          |                     |       |                               |   | 2,590        |        |             | 16,982 
|                                               | Inventories                                                                                |                                                      |   | 40,432                                 |          |                     |       |                               |   | 1,202        |        |             | 54,081 
|                                               | Prepaid expenses and other current assets                                                  |                                                      |   | 13,093                                 |          |                     |       |                               |   | 86           |        |             | 8,352  
|                                               | Due from subsidiaries                                                                      |                                                      |   | 26,642                                 |          |                     | 371    |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current assets                                 |   |                                        | 117,477  |                     |        | 371                           |   |              | 3,878  |             |        
|                                               | Property, plant and equipment, net                                                         |                                                      |   | 80,086                                 |          |                     | 14,312 |                               |   | 2,286        |        |             | 133,683
|                                               | Due from subsidiaries                                                                      |                                                      |   | 139,063                                |          |                     |       |                               |   |             |        |             |       
|                                               | Other noncurrent assets, net                                                               |                                                      |   | 5,174                                  |          |                     |       |                               |   | 66           |        |             | 256    
|                                               | Investment in subsidiaries                                                                 |                                                      |   | (13,506                                | )        |                     |       |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total assets                                         |   | $                                      | 328,294  |                     | $      | 14,683                        |   | $            | 6,230  |             | $      
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                           
|Current liabilities:                           |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                             |                                                      | $ | 40,558                                 |          | $                   |       |                               | $ |             |        | $           | 37,559 
|                                               | Accounts payable                                                                           |                                                      |   | 16,569                                 |          |                     |       |                               |   | 621          |        |             | 31,425 
|                                               | Accrued liabilities                                                                        |                                                      |   | 59,258                                 |          |                     |       |                               |   | 2,207        |        |             | 23,018 
|                                               | Due to parent/subsidiaries                                                                 |                                                      |   | 371                                    |          |                     |       |                               |   | 7,604        |        |             | 19,038 
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current liabilities                            |   |                                        | 116,756  |                     |        |                              |   |              | 10,432 |             |        
|                                               | Long-term debt, less current maturities                                                    |                                                      |   | 330,579                                |          |                     |       |                               |   |             |        |             |       
|                                               | Due to parent                                                                              |                                                      |   |                                       |          |                     |       |                               |   |             |        |             | 139,063
|                                               | Other noncurrent liabilities                                                               |                                                      |   | 67,511                                 |          |                     |       |                               |   | 760          |        |             | 3,237  
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities                                    |   |                                        | 514,846  |                     |        |                              |   |              | 11,192 |             |        
|                                               | Series A redeemable preferred stock                                                        |                                                      |   | 22,514                                 |          |                     |       |                               |   |             |        |             |       
|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                                                                 |                                                      |   | 2,724                                  |          |                     | 16,062 |                               |   | 1,205        |        |             |       
|                                               | Accumulated deficit and accumulated other comprehensive losses                             |                                                      |   | (211,790                               | )        |                     | (1,379 | )                             |   | (6,168       | )      |             | (25,197
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total shareholders' equity (deficit)                 |   |                                        | (209,066 | )                   |        | 14,683                        |   |              | (4,962 | )           |        
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities and shareholders' equity (deficit) |   | $                                      | 328,294  |                     | $      | 14,683                        |   | $            | 6,230  |             | $      
|                                               |                                                                                            |                                                      |   |                                        |          |                     |        |                               |   |              |        |             |        

21

---





(8) Guarantor Subsidiaries (Continued)

Consolidating Statement of Operations (unaudited)
Three Months Ended January 31, 2004

|                        |                                                     | The Company
Excluding
Guarantor
Subsidiaries                             |        | Buick
Resource
Recycling
Facility, LLC |         | Domestic
Guarantors |     | Doe Run
Cayman and
Subsidiary |       | Eliminations |       | The
Company |        
|----------------------- | --------------------------------------------------- | ------------------------------------------------------------------------ | ------ | -------------------------------------- | ------- | ------------------- | --- | ----------------------------- | ----- | ------------ | ----- | ----------- | -------
|Net sales               |                                                     | $                                                                        | 67,187 |                                        | $       |                    |     | $                             | 2,808 |              | $     | 122,973     |        
|Costs and expenses:     |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        | Cost of sales                                       |                                                                          |        | 57,984                                 |         |                     |    |                               |       | 2,167        |       |             | 118,588
|                        | Depletion, depreciation and amortization            |                                                                          |        | 2,483                                  |         |                     | 854 |                               |       | 211          |       |             | 2,917  
|                        | Selling, general and administrative                 |                                                                          |        | 5,681                                  |         |                     |    |                               |       | 606          |       |             | 5,495  
|                        | Unrealized loss on derivatives                      |                                                                          |        | 4,390                                  |         |                     |    |                               |       |             |       |             | 634    
|                        | Other                                               |                                                                          |        | 1,002                                  |         |                     | 29  |                               |       | (1           | )     |             | 1      
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        |                                                     | Total costs and expenses                                                 |        |                                        | 71,540  |                     |     | 883                           |       |              | 2,983 |             |        
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        |                                                     | Income (loss) from operations                                            |        |                                        | (4,353  | )                   |     | (883                          | )     |              | (175  | )           |        
|Other income (expense): |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        | Interest expense, net                               |                                                                          |        | (2,524                                 | )       |                     |    |                               |       | (175         | )     |             | (478   
|                        | Other, net                                          |                                                                          |        | (112                                   | )       |                     | 195 |                               |       | (2           | )     |             | (131   
|                        | Equity in earnings of subsidiaries                  |                                                                          |        | (6,291                                 | )       |                     |    |                               |       |             |       |             |       
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        |                                                     |                                                                          | (8,927 | )                                      |         | 195                 |     |                               | (177  | )            |       | (609        | )      
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        |                                                     | Income (loss) before income tax expense                                  |        |                                        | (13,280 | )                   |     | (688                          | )     |              | (352  | )           |        
|                        | Income tax expense                                  |                                                                          |        | 565                                    |         |                     |    |                               |       |             |       |             |       
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        |                                                     | Income (loss) before cumulative effect of change in accounting principle |        |                                        | (13,845 | )                   |     | (688                          | )     |              | (352  | )           |        
|                        | Cumulative effect of change in accounting principle |                                                                          |        |                                       |         |                     |    |                               |       |             |       |             |       
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        |                                                     | Net income (loss)                                                        |        |                                        | (13,845 | )                   |     | (688                          | )     |              | (352  | )           |        
|                        |                                                     | Cumulative preferred stock dividends                                     |        |                                        | (625    | )                   |     |                              |       |              |      |             |        
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        
|                        |                                                     | Net income (loss) allocable to common shares                             |        | $                                      | (14,470 | )                   | $   | (688                          | )     | $            | (352  | )           | $      
|                        |                                                     |                                                                          |        |                                        |         |                     |     |                               |       |              |       |             |        

22

---



(8) Guarantor Subsidiaries (Continued)

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                                    |                                                                                |        | 318                 |         |                               |      |              |         |            |        
|                        | Unrealized (gain)/loss on derivatives    |                                                                                |        | 6                   |         |                               |      |              |         | (103        | )      
|                        |                                          |                                                                                |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                                                       |        |                     | 58,337  |                               |       | 3,758        |         |             | 102,906
|                        |                                          |                                                                                |        |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) from operations                                                  |        |                     | (2,894  | )                             |       | 386          |         |             | (600   
|Other income (expense): |                                          |                                                                                |        |                     |         |                               |       |              |         |             |        
|                        | Interest expense, net                    |                                                                                |        | (2,192              | )       |                               | (143  | )            |         | (719        | )      
|                        | Other, net                               |                                                                                |        | (83                 | )       |                               | 5     |              |         | (195        | )      
|                        | Equity in earnings of subsidiaries       |                                                                                |        | (1,429              | )       |                               |      |              |         |            |        
|                        |                                          |                                                                                |        |                     |         |                               |       |              |         |             |        
|                        |                                          |                                                                                | (3,704 | )                   |         | (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, net of income tax benefit |        |                     | (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 
|                        |                                          |                                                                                |        |                     |         |                               |       |              |         |             |        

23

---





(8) Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Cash Flows (unaudited)
Year Ended January 31, 2004

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |        | Buick
Resource
Recycling
Facility, LLC |       | Domestic
Guarantors |      | Doe Run
Cayman and
Subsidiary |      | Eliminations |     | The
Company |       
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ------ | -------------------------------------- | ----- | ------------------- | ---- | ----------------------------- | ---- | ------------ | --- | ----------- | ------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | (5,703 | )                                      | $     | 166                 |      | $                             | (171 | )            | $   | (3,625      | )     
|Cash flows from investing activities:               |                                                              |                                                     |        |                                        |       |                     |      |                               |      |              |     |             |       
|                                                    | Purchases of property, plant and equipment                   |                                                     |        | (2,019                                 | )     |                     |     |                               |      |             |     |             | (3,524
|                                                    | Investment in subsidiaries                                   |                                                     |        | 6,291                                  |       |                     |     |                               |      |             |     |             |      
|                                                    |                                                              |                                                     |        |                                        |       |                     |      |                               |      |              |     |             |       
|                                                    |                                                              | Net cash provided by (used in) investing activities |        |                                        | 4,272 |                     |      |                              |      |              |    |             |       
|Cash flows from financing activities:               |                                                              |                                                     |        |                                        |       |                     |      |                               |      |              |     |             |       
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |        | 4,245                                  |       |                     |     |                               |      |             |     |             | 1,000 
|                                                    | Payments on long-term debt                                   |                                                     |        | (28                                    | )     |                     |     |                               |      |             |     |             | (1,183
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |        | (2,786                                 | )     |                     | (166 | )                             |      | 171          |     |             | 2,781 
|                                                    |                                                              |                                                     |        |                                        |       |                     |      |                               |      |              |     |             |       
|                                                    |                                                              | Net cash provided by (used in) financing activities |        |                                        | 1,431 |                     |      | (166                          | )    |              | 171 |             |       
|                                                    |                                                              |                                                     |        |                                        |       |                     |      |                               |      |              |     |             |       
|                                                    |                                                              | Net decrease in cash                                |        |                                        |      |                     |      |                              |      |              |    |             |       
|Cash at beginning of period                         |                                                              |                                                     |       |                                        |       |                    |      |                               |     |              |     | 16,794      |       
|                                                    |                                                              |                                                     |        |                                        |       |                     |      |                               |      |              |     |             |       
|Cash at end of period                               |                                                              | $                                                   |       |                                        | $     |                    |      | $                             |     |              | $   | 12,243      |       
|                                                    |                                                              |                                                     |        |                                        |       |                     |      |                               |      |              |     |             |       

24

---



(8) Guarantor Subsidiaries (Continued)

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 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 |             | $     
|                                                    |                                                              |                                                     |         |                     |        |                               |      |              |       |             |       

25

---





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

|                                      |                                                                              | January 31,
2004                            |         | October 31,
2003 |        
|------------------------------------- | ---------------------------------------------------------------------------- | ------------------------------------------- | ------- | ---------------- | -------
|
|ASSETS                                |                                                                              |                                             |         |                  |        
|Current assets:                       |                                                                              |                                             |         |                  |        
|                                      | Cash                                                                         |                                             | $       | 12,243           |        
|                                      | Trade accounts receivable, net of allowance for doubtful accounts            |                                             |         | 18,112           |        
|                                      | Inventories                                                                  |                                             |         | 68,980           |        
|                                      | Prepaid expenses and other current assets                                    |                                             |         | 15,704           |        
|                                      |                                                                              |                                             |         |                  |        
|                                      |                                                                              | Total current assets                        |         |                  | 115,039
|Property, plant and equipment, net    |                                                                              |                                             | 134,289 |                  |        
|Other noncurrent assets, net          |                                                                              |                                             | 222     |                  |        
|                                      |                                                                              |                                             |         |                  |        
|                                      |                                                                              | Total assets                                |         | $                | 249,550
|                                      |                                                                              |                                             |         |                  |        
|LIABILITIES AND SHAREHOLDERS' DEFICIT |                                                                              |                                             |         |                  |        
|Current liabilities:                  |                                                                              |                                             |         |                  |        
|                                      | Short-term borrowings and current maturities of long-term debt               |                                             | $       | 37,376           |        
|                                      | Accounts payable                                                             |                                             |         | 51,428           |        
|                                      | Accrued liabilities                                                          |                                             |         | 25,046           |        
|                                      | Due to parent                                                                |                                             |         | 21,819           |        
|                                      |                                                                              |                                             |         |                  |        
|                                      |                                                                              | Total current liabilities                   |         |                  | 135,669
|Due to parent                         |                                                                              |                                             | 139,063 |                  |        
|Other noncurrent liabilities          |                                                                              |                                             | 3,281   |                  |        
|                                      |                                                                              |                                             |         |                  |        
|                                      |                                                                              | Total liabilities                           |         |                  | 278,013
|Shareholders' deficit:                |                                                                              |                                             |         |                  |        
|                                      | Capital stock, $0.01 par value, 15,912,083,739 shares issued and outstanding |                                             |         | 2,005            |        
|                                      | Accumulated deficit and other comprehensive loss                             |                                             |         | (30,468          | )      
|                                      |                                                                              |                                             |         |                  |        
|                                      |                                                                              | Total shareholders' deficit                 |         |                  | (28,463
|                                      |                                                                              |                                             |         |                  |        
|                                      |                                                                              | Total liabilities and shareholders' deficit |         | $                | 249,550
|                                      |                                                                              |                                             |         |                  |        

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

26

---



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

|                        |                                          | Three Months
Ended January 31,                                                 |        
|----------------------- | ---------------------------------------- | ------------------------------------------------------------------------------ | -------
|
|Net sales               |                                          | $                                                                              | 122,973
|Costs and expenses:     |                                          |                                                                                |        
|                        | Cost of sales                            |                                                                                |        
|                        | Depletion, depreciation and amortization |                                                                                |        
|                        | Selling, general and administrative      |                                                                                |        
|                        | Unrealized (gain)/loss on derivatives    |                                                                                |        
|                        | Other                                    |                                                                                |        
|                        |                                          |                                                                                |        
|                        |                                          | Total costs and expenses                                                       |        
|                        |                                          |                                                                                |        
|                        |                                          | Loss from operations                                                           |        
|Other income (expense): |                                          |                                                                                |        
|                        | Interest expense, net                    |                                                                                |        
|                        | Other, net                               |                                                                                |        
|                        |                                          |                                                                                |        
|                        |                                          |                                                                                | (609   
|                        |                                          |                                                                                |        
|                        |                                          | Loss before income tax expense                                                 |        
|Income tax expense      |                                          |                                                                                |       
|                        |                                          |                                                                                |        
|                        |                                          | Loss before cumulative effect of change in accounting principle                |        
|                        |                                          | Cumulative effect of change in accounting principle, net of income tax benefit |        
|                        |                                          |                                                                                |        
|                        |                                          | Net loss                                                                       |        
|                        |                                          |                                                                                |        

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

27

---





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

|                                                    |                                                              | Three Months
Ended January 31,            |       
|--------------------------------------------------- | ------------------------------------------------------------ | ----------------------------------------- | ------
|
|Net cash provided by (used in) operating activities |                                                              | $                                         | (3,625
|Cash flows from investing activities:               |                                                              |                                           |       
|                                                    | Purchases of property, plant and equipment                   |                                           |       
|                                                    |                                                              |                                           |       
|                                                    |                                                              | Net cash used in investing activities     |       
|Cash flows from financing activities:               |                                                              |                                           |       
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                           |       
|                                                    | Payments on long-term debt                                   |                                           |       
|                                                    | Loans with parent                                            |                                           |       
|                                                    |                                                              |                                           |       
|                                                    |                                                              | Net cash provided by financing activities |       
|                                                    |                                                              |                                           |       
|                                                    |                                                              | Net increase (decrease) in cash           |       
|Cash at beginning of period                         |                                                              |                                           | 16,794
|                                                    |                                                              |                                           |       
|Cash at end of period                               |                                                              | $                                         | 12,243
|                                                    |                                                              |                                           |       

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

28

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

(1) Summary of Significant Accounting Policies



These interim 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,
2004 and results of operations for the three month periods ended January 31, 2004 and 2003. 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 treatment charges Doe Run Peru receives for processing raw materials declined over the past five years, which has resulted in recurring losses and has
severely impacted Doe Run Peru's liquidity. The Company failed to meet certain financial covenant requirements contained in its revolving credit agreement during fiscal 2003, and was in default at
January 31, 2004. The agreement was amended in the second quarter of 2004, as discussed in Note 6. The Company has substantial environmental commitments that will affect the Company's
liquidity. These issues combined raise substantial doubt about the Company's ability to continue as a going concern.

The
Company's auditors issued unqualified opinions on the 2003 audited financial statements of the Company that expresses substantial doubt about the Company's ability to continue as a
going concern due to the factors named above.

Doe
Run Peru's results of operations and liquidity have been severely impacted by declining treatment charges resulting from a shortage in the global supply of concentrates. During 2004,
deliveries of copper concentrates to the La Oroya smelter were lower than prior year. If shortages result in a significant interruption in feed supply, a material reduction in the production of metals
from the La Oroya smelter 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.

As
discussed in Note 4, Doe Run Peru is proceeding with efforts to identify alternative methods of achieving compliance in conjunction with its PAMA. 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 submitted a PAMA request in July 2004 to modify the requirements
of the existing PAMA. 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 by the PAMA. If the
requested PAMA modification is not approved, Doe Run Peru may not be in compliance with the requirements of the PAMA investment schedule in 2005 and could be subject to penalties. If the requested
PAMA modification is not approved and the La Oroya smelter does not comply with the investment schedule

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of
the PAMA or the La Oroya smelter does not operate within the current PAMA limits after December 31, 2006, Doe Run Peru could be forced to cease or curtail operations at the La Oroya smelter.

Doe
Run Peru has implemented cost savings, including a reduction of approximately 10% of its workforce, acceleration of cash receipts, as well as other measures, to improve its
liquidity. Doe Run Peru's ability to pay fees to Doe Run is currently limited by Doe Run Peru's revolving credit facility to $2,800 through September 2004 and $4,000 for the calendar year ended
December 31, 2004, unless Doe Run Peru meets an excess cash flow test. Doe Run received $2,000 in the second quarter and expects to receive another $2,000 in October 2004.

Doe
Run Peru had net unused availability under the Doe Run Peru Revolving Credit Facility and cash balances at January 31, 2004 of $2,800 and $12,200, respectively. Net unused
availability at October 31, 2003 was approximately $3,800 under the Doe Run Peru Revolving Credit Facility and Doe Run Peru's cash balances totaled $16,794. Although higher costs, particularly
for feed material, for the quarter ended January 31, 2004 offset the impact of higher metal prices and prevented an improvement in liquidity in the first quarter, the Company's
long-term liquidity outlook has improved, due to the anticipation of higher prices, other revenue enhancements and cost reductions. As of June 30, 2004, net unused availability was
$3,800 under the Doe Run Peru Revolving Credit Facility and Doe Run Peru had cash balances of $5,348. Higher metal prices resulted in higher initial outlays for concentrate purchases and higher VAT
payments, which will ultimately be recouped, which resulted in a decrease in availability of borrowing under its revolving credit agreement, however Doe Run Peru's working capital increased between
January and June 2004. At metal prices higher than 2003 averages, but lower than those experienced in the first quarter of 2004, liquidity should improve.

(3) Inventories

Inventories consist of the following:

January 31,
2004

October 31,
2003Finished metals and concentrates

$
7,287

$
2,535Metals and concentrates in process


50,176


39,654Materials, supplies and repair parts


11,517


11,892$
68,980

$
54,081


Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $911 at January 31, 2004 and October 31, 2003.

(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

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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.

Doe
Run Peru has AROs at its Cobriza mine, related to the costs associated with closing the mine openings and covering acid rock. Doe Run Peru is also responsible for the 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
Company's total recorded liability for AROs was approximately $1,700 and $1,600 as of January 31, 2004 and October 31, 2003, 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 La Oroya's 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:



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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
Cost2004


12,8002005


53,5002006


67,700$
134,000


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 investment schedule in the PAMA currently requires Doe Run Peru to begin construction of certain sulfuric acid plants in 2005, estimated to cost approximately
$107,500, 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 submitted a request to MEM in July 2004 to modify the requirements of the existing
PAMA. Although the required compliance date under the proposal would be extended, total spending will be higher than what is currently required under the existing PAMA, with an estimated cost of
approximately $155,000 over the calendar years 2005-2011. 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 requested PAMA modification is not approved, Doe Run Peru may not be in compliance with the requirements of the PAMA investment schedule in 2005 and could
be subject to penalties. If the requested PAMA modification is not approved and the La Oroya smelter does not operate within the current PAMA limits after December 31, 2006, Doe Run Peru could
be forced to cease or curtail 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

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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. As of June 2004, Doe Run Peru
ceased
discharging mine waste into the Mantaro River, and was in compliance with the emissions standards required by the PAMA. Doe Run Peru will have ongoing projects, including a mine water treatment system
and the production of surface paste fill from tailings that it expects to complete in August 2004.

Doe
Run Peru is responsible for the remediation costs relating to a zinc ferrite disposal site. The current closure plan provides for encapsulating the ferrite residues in place at
Huanchan, an area a short distance from the smelter where they are currently stored, for which an environmental liability of $1,600 has been recorded as of January 31, 2004 and
October 31, 2003.

(5) Litigation

Doe Run Peru is a defendant in sixty-four 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. While the total of all claims is approximately $1,149, Doe Run Peru has made claims in most of the cases against Centromin, the
prior owner and has also made claims against both governmental agencies and private companies that provide workers' insurance. In one of the 64 pending cases, the lower court has issued a decision in
which it awarded just 40% of the claim, with Doe Run Peru to pay 25% of the award and Centromin the rest.

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 $10,000 through June 30, 2004 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 $23,700 through June 30, 2004 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 $6,000 through June 30, 2004.

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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.

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

(6) Subsequent Events

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 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.

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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.



Metal prices have risen dramatically in fiscal 2004. Lead prices increased from a London Metal Exchange (LME) settlement monthly average of $532.60 per short ton
in October, 2003, to $789.40 per short ton in June, 2004. Doe Run has benefited from this price increase in both its lead metal and lead concentrate sales, partially offset by the effects of the
Company's risk management strategy. After the first quarter of 2004, when certain fixed price forward sales commitments were fulfilled and outstanding derivative contracts expired, the Company should
receive more benefit from price increases.

Doe
Run Peru's revenues and feed costs increased as a result of the price increases, as did inventory, accounts receivable, and accounts payable as of January 31, 2004.



In the first fiscal quarter, Doe Run made a significant change in its primary lead operations in the U.S. In response to declining demand in the U.S. for lead
metal and increasing global demand for clean lead concentrates, Doe Run indefinitely suspended operations at its Glover smelter in November, 2003and will sell any concentrates on the open market that
are not required to maintain production at its Herculaneum smelter.

Doe
Run adjusted its mine production plan in the second quarter to take advantage of higher metal prices, including copper recovery equipment that has been installed at our Buick
mine/mill to increase copper production by approximately 2,400 tons per year. The plan also provides for a change in the mine plan to mine at a lower grade than prior year. These changes should
improve cash flow and results of operations, while optimizing Doe Run's ore reserves.



Due to a tight market for secondary lead feed, the reduced availability of high lead content feed has changed the mix of feed processed by the recycling facility,
which has adversely affected production and costs. In addition, the increased demand for secondary lead feed has resulted in increases in the cost of feed.

Process
modifications are near completion to increase the desulfurization capability of the battery breaking/desulfurization/crystallization (BDC) plant, which will improve the
facility's capability to process the new feed mix. Production levels are expected to improve, resulting in an additional 1,500 tons of lead metal production a month and results of operations should
improve as a result.



In February 2004, Doe Run Peru previewed a plan for comment with the Ministry of Energy and Mining with the intent of modifying and extending the PAMA
through the end of 2011. The modification was submitted in July 2004. The proposal addresses environmental impacts related to fugitive emissions and the escape of heavy metal and is intended to
meet the health and safety needs of the community. Although the required compliance date under the proposal would be extended, total spending will be higher than what is currently required under the
existing PAMA, with an estimated cost of approximately $155 million over the calendar years 2005-2011, which management expects will

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be
funded by cash from operations, see discussion of revisions to business plans below. Although management believes that the modification will be approved, there can be no assurance that the Peruvian
government will approve the alternatives. If the requested PAMA modification is not approved, Doe Run Peru may not be in compliance with the requirements of the PAMA investment schedule in 2005 and
could be subject to penalties. If the requested PAMA modification is not approved Doe Run Peru could be forced to cease or curtail operations at the La Oroya smelter.

To
address important changes to the custom smelting industry, including the tight market for concentrates, Doe Run Peru has developed a business plan that identifies several revenue
generating and cost reduction activities. Management believes the plan will enhance liquidity and generate the funds to make the investments under the proposed modifications to the PAMA and to
modernize the smelter. Revenue enhancement and cost reduction projects include the processing of zinc ferrites and an effort to bring more recycled feed into the smelter. Cost reduction measures
include manpower reductions through voluntary retirement, decreased power usage in the zinc circuit and the closure of the coke plant.



The recovery of metal prices, which began late in 2003 continued into the first quarter of 2004. 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
January 31,Average Prices2004

2003Lead ($/short ton)

627.80

402.20Copper ($/short ton)

2,022.40

1,460.20Zinc ($/short ton)

880.4

708.40Silver ($/troy ounce)

5.71

4.65


The
recent price increases reflect the significant tightening in worldwide metal supply and the weakening of the U.S. dollar. Supply has tightened due to mine closures and cutbacks and
slowed development stemming from the low prices from 1998-2003.

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

Three Months Ended
January 31,2004

2003U.S. OperationsLead metal-primary (short tons)

49,558

71,241Lead metal-recycling (short tons)

32,847

36,966Lead concentrates (metal content, short tons)

62,924

72,018Ore Production (000's of dry short tons)

1,176

1,150Ore grade

5.55
%
6.41
%Doe Run Peru OperationsRefined copper (short tons)

15,775

17,122Refined lead (short tons)

32,119

30,042Refined zinc (short tons)

20,146

20,680Refined silver (thousands of troy ounces)

8,491

8,701Refined gold (thousands of troy ounces)

13

18Copper concentrates (metal content, short tons)

4,497

4,531Ore Grade (copper content)

1.12
%
1.10
%


At
the Company's primary mining operations, the lead grade of ore decreased in 2004, compared to the first quarter of 2003, as pillar recovery in the Buick mine has been less than
planned, resulting in lower volume of lead in concentrates produced. Gross production costs for the 2004 quarter increased 14% as compared with the prior year due to higher payroll and fringe costs,
higher repairs and maintenance costs and higher royalties resulting from the increase in metal prices. The Company also incurred cost to move existing equipment to enhance copper recovery at the Buick
mill. This will enable the Company to produce more copper product and allow the Company to benefit from higher copper prices. As a result of the higher production costs and lower production of lead
metal in concentrates, the unit cost of metal contained in concentrates increased 26% compared to the 2003 quarter.

In
the 2004 quarter, Doe Run's primary smelter operations production was lower than the 2003 quarter, due to the indefinite suspension of operations at the Glover smelter, which resulted
in a decrease of over 26,000 tons from the prior year. The Herculaneum smelter increased production approximately 5,000 tons. The Company is planning by the fourth quarter to increase the Herculaneum
smelter's production to a rate of approximately 16,000 tons per month for the remainder of the year. The smelter's ability to achieve this operating level is dependent upon its ability to continue
compliance with air quality monitors at the higher production levels. The production costs decreased due to the suspension of operations at the Glover smelter offset by higher payroll and fringe
costs, higher production levels and an increase in repair and maintenance costs at the Herculaneum smelter. As a result of these changes, the cost per ton of primary lead metal produced increased 24%
compared to the 2003 quarter.

Production
at the Company's Buick recycling operation declined 12% for the 2004 quarter. A change in feed mix resulting from the lack of availability of higher lead content feed sources
resulted in a higher percentage of low lead content feed, which negatively impacted production efficiency and required increased fuel and reagent use. Production costs increased 8% during 2004 due
primarily to increases in propane, oxygen, chemicals, reagents and labor costs. In addition, the cost of feed materials increased 28% when compared to the 2003 quarter, which was impacted by the
shortage in supply of certain feed and current market conditions. As a result of the decreased production and

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higher
production and feed costs, the cost per ton of lead metal produced increased 25% over the prior year.

The
intense competition for concentrates has continued into the first quarter of 2004. Doe Run Peru's La Oroya smelter copper production was affected by lower receipts from suppliers of
copper concentrates compared to the prior year, resulting in a decrease in copper production of 8% in the 2004 quarter compared to the 2003 quarter. Feed costs increased substantially as a result of
the increase in metal prices during the quarter, driving a 34%, 68%, 28% and 20% increase in unit cost of copper, lead, zinc and silver metal produced.



Gross margin on sales(net sales less cost of sales) decreased $0.6 million to $11.6 million in the
2004 quarter compared to the 2003 quarter. Gross margin on sales for the Company's U.S. operations increased $1.8 million to $7.2 million. An increase of 21% in the U.S. operation's
realized prices for lead metal, fueled by higher LME prices, contributed an additional $9.0 million to Doe Run's U.S. operations' gross margin on sales compared to prior year. The increase in
the lead metal net realized prices was less than the increase in the average LME settlement price, due to the effects of the Company's risk management strategy, which reduces the Company's exposure to
changes in the market price in an attempt to fix an acceptable price for its products. Increases in copper and zinc metal prices contributed an additional $1.8 million to gross margin compared
to the prior year. The sale of lead concentrates contributed $1.0 million to margins. These were offset by higher costs per unit of metal produced of the U.S. operations driven by increases in
repairs and maintenance, payroll and related fringes and the higher feed costs and the effects of the change in feed mix on the production at the recycling operations.

Doe
Run Peru's gross margins decreased $2.4 million to $4.4 million. The increase in metal prices also benefited Doe Run Peru, contributing $5.0 million to gross
margin in the form of reduced cost of feed through price participation, sales of copper sourced from feed from Doe Run Peru's Cobriza copper mine and free metal contained in purchased concentrates.
These benefits are offset by continuing low treatment charges received for concentrates processed, lower margins on purchased metal sales, and severance costs on employees released in the 2004 quarter
under a work force reduction plan announced in September 2003.

Selling, general and administrative costsincreased $1.9 million or 36% for the 2004 quarter, compared to the 2003 quarter, due
primarily to increased salaries and employee benefit costs, insurance expense and insurance refunds received in 2003 applicable to legal fees incurred in a previous fiscal year and credited to
selling, general and administrative costs.

Unrealized losses on derivativesare related to the change in fair market value of derivative financial instruments. The increase is due
to the effect of the LME price increases discussed previously on sold futures contracts and sold call option contracts. See "Item 3. Quantitative and Qualitative Disclosures About Market Risk".

Otheroperating expenses in the 2004 quarter relates primarily to recognition of impairment losses of the value of houses purchased in
Herculaneum relating to residential properties purchased under a residential property purchase plan in the town of Herculaneum. Most of the closings on properties in 2003 occurred subsequent to the
first quarter, due to the timing of offers delivered under the plan, resulting in the increase in the 2004 quarter, compared to the 2003 quarter.

Of
the seventy-one properties whose owners were given the opportunity to request purchase in calendar 2003, fifty-eight owners have requested an appraisal, and thirty-nine of
fifty-eight offers have been accepted. Of the forty-nine properties whose owners have been given the opportunity to request purchase in calendar 2004, forty-five have requested an appraisal, and five
of twenty-two offers have

38

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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 buyout offer, or, if the buyout offer is accepted, what price will be paid for the property. The rate of acceptance may be affected by the fact that the purchase plan prioritized
properties that are closer to the smelter such that the remaining identified properties are farther from the smelter than those that have already received offers.

Income tax expense (benefit)in the 2004 quarter reflects a change in tax law in Peru. Under a law passed in December 2003, certain
technical services that Doe Run provides under an agreement with Doe Run Peru will be taxed at 30%. The amounts were paid in the third quarter of 2004.

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

Cumulative effect of change in accounting principleresulted in a charge of $3.9 million in the 2003 quarter, relates to the
adoption of Statement of Financial Accounting Standards No. 143Accounting for Asset Retirement Obligations.



Doe Run failed to meet certain financial covenant requirements contained in its revolving credit agreement and a term note (the Term Note) and Doe Run Peru failed
to meet certain financial covenant requirements contained in its revolving credit agreement during fiscal 2003, which defaults continued at January 31, 2004.

The
Company's auditors issued unqualified opinions on the 2003 audited financial statements of the Company and of Doe Run Peru that express substantial doubt about the Company's and Doe
Run Peru's ability to continue as going concerns due to liquidity and other issues related to defaults under loan agreements, uncertainties related to environmental and litigation matters, as well as
the Company's recurring losses.

Management
believes that the price improvements and other revenue enhancement and cost reduction plans will enable the Company and its subsidiaries to continue as going concerns.

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 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 a tax assessment (see discussion in Item 1. Note 5 to the Company's Condensed Consolidated
Financial Statements), 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.

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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 were 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 gave 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. The defaults were remedied in the timeframe required.

On
July 1, 2004, Doe Run received a similar notice for the quarterly report for the quarter ended January 31, 2004 from the trustee of the 11.75% Notes. If the default is
not remedied within 30 days of the receipt of the notice, the trustee may declare all unpaid principal and interest immediately payable. Management intends to remedy the default in the
timeframe required.

Net
unused availability at January 31, 2004 under the Doe Run Revolving Credit Facility and Doe Run Peru Revolving Credit Facility was $11.2 million and $2.8, respectively.
In addition to the availability under its revolving credit facilities, Doe Run Peru also had $12.2 million of cash at January 31, 2004. Net unused availability at October 31, 2003
was $14.1 million and $3.8 million under the Doe Run Revolving Credit Facility and Doe Run Peru Revolving Credit Facility, respectively, and Doe Run Peru's cash balances totaled
$16.8 million. Although the factors discussed inResults of Operationsthat offset the impact of higher metal prices prevented an improvement in
liquidity in the first quarter, the Company's long-term liquidity outlook has improved, due to higher prices, other revenue enhancements and cost reductions discussed previously. As of
June 30, 2004, net unused availability was $18.8 million under the Doe Run Revolving Credit Facility and $3.8 million under the Doe Run Peru Revolving Credit Facility, and Doe Run
Peru's cash balances were $5.3 million. In the U.S. the payment of margin calls to brokers to cover unrealized losses on derivative contracts and the timing of annual payments of insurance and
property taxes unfavorably impacted liquidity in the first quarter. The broker and insurance payments resulted in an increase in prepaid expenses during the first quarter. In Peru, higher metal prices
resulted in higher initial outlays for concentrate purchases and higher value added tax pre-payments, which will ultimately be recouped, which resulted in a decrease in availability of
borrowing under its revolving credit agreement, however Doe Run Peru's working capital increased between January and June 2004. At metal prices higher than 2003 averages, but lower than those
experienced in the first quarter, Doe Run and Doe Run Peru's liquidity should improve.

In
June 2004, the Peruvian government began requalifying importers' duty and tax status. Until that process is complete, Doe Run Peru must post a bond or a third party guarantee
on imports of 30% on the cost of the items imported, an increase from the negligible amounts under its previous status. Although amounts are recovered when finished goods are exported, for as long as
our previous status is not reinstated this will have an adverse impact on liquidity. Although Doe Run Peru management is taking action to regain its previous status, and believes that Doe Run Peru
will be requalified, there is no assurance that the previous status will be reinstated.

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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, 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.

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. Gains and losses, and the related costs paid or premiums received for option contracts which hedge the sales prices of commodities are recognized in net sales
when the related production is sold. None of the aforementioned activities have been entered into for speculative purposes.

The
fair market value (gain/(loss))of the Company's derivatives was approximately $(14,800) and $(11,000) at January 31, 2004 and October 31, 2003. The majority of the
balance relates to sold lead futures and sold lead call options related to the U.S. operations.

Tons

Contract Prices

Fair Value (in 000's)01/31/04

10/31/03

01/31/04

10/31/03

01/31/04

10/31/03Sold lead futureshedges

22,046

17,417

$
634.12/ton

$
489.00/ton

(1,356
)
(1,850
)Sold lead futuresother

41,116

N/S*

$
535.19/ton


N/S*

(7,223
)
N/S*Purchased lead futuresother

(34,805
)
N/S*

$
578.48/ton


N/S*

4,720

N/S*Sold lead call options

51,450

69,363

$
453.59/ton to $571.00/ton

$
430.91/ton to $544.31/ton

(9,893
)
(7,475
)


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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 January 31, 2004 were effective in ensuring information
required to be disclosed

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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.

Doe Run received notice that it would be dismissed fromCity of St. Louis v. Lead Industries Association, Inc. et
alfiled in the Circuit Court of the City of St. Louis, Missouri.

Bray, et al. v. BNSF, et al.(filed June 10, 2004),Storie, et al. v. BNSF, et al.(filed June 18, 2004), Barnicle, et al. v. BNSF, et al,(filed July 1, 2004)Abney, et al. v. BNSF, et
al(filed July 9,2004) andCooper, et al. v. BNSF(filed July 19, 2004) were filed in the Circuit Court of the
City of St. Louis, Missouri and list Doe Run among the defendants The suits allege that a total of thirty-five employees or ex-employees, of Burlington Northern and Santa Fe
Railway Co. (BNSF) were exposed to lead from the hauling of lead concentrates by the railroad. Similar lawsuits were settled in fiscal 2003.

B.H., et al. v. Gold Fields Mining Corporation, et al.andR.S., et al. v. Gold Fields Mining Corporation, et
al.were filed on July 19, 2004 in the U.S. District Court for the Northern District of Oklahoma and the District Court of Ottawa County, Oklahoma, respectively, against
four companies, including Doe Run, alleging personal injury.to forty-five and three minors, respectively, resulting from past mining operations in Ottawa County, Oklahoma.

The
Company is unable at this time, to estimate the expected outcome and the final costs of these actions.

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

(a)   Exhibits.

31 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)   Reports on Form 8-K.

None

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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 July 30, 2004 |  | /s/DAVID A. CHAPUTDavid A. Chaput
Chief Financial Officer
(duly authorized officer and principal financial
officer)

43

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