<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q
(Mark One)
[X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934 For the quarterly period ended JULY 31, 2000

                                       Or

[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

           For the transition period from _______ to _______

                        COMMISSION FILE NUMBER 333-66291

                        THE DOE RUN RESOURCES CORPORATION
             (Exact name of registrant as specified in its charter)

                      NEW YORK                                 13-1255630
        (State or other jurisdiction of                      (IRS Employer
         incorporation or organization)                     Identification No.)

           1801 PARK 270 DRIVE, SUITE 300
                 ST. LOUIS, MISSOURI                             63146
      (Address of principal executive offices)                 (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.
                                                       [ ]    YES      [X]    NO

Number of shares outstanding of each of the issuer's classes of common stock, as
of September 11, 2000:
COMMON STOCK, $.10 PAR VALUE                                        1,000 SHARES


<PAGE>

                        THE DOE RUN RESOURCES CORPORATION
                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>

                                                                                                           PAGE NO.
                                                                                                           --------

<S>                                                                                                        <C>
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                        THE DOE RUN RESOURCES CORPORATION

Condensed Consolidated Balance Sheets
  July 31, 2000 and October 31, 1999                                                                           3
Consolidated Statements of Operations
  three and nine months ended July 31, 2000 and 1999                                                           4
Condensed Consolidated Statements of Cash Flows
  nine months ended July 31, 2000 and 1999                                                                     5
Notes to Consolidated Financial Statements                                                                    6-21

                               DOE RUN PERU S.R.L.

Condensed Consolidated Balance Sheets
   July 31, 2000 and October 31, 1999                                                                         22
Condensed Consolidated Statements of Operations
   three and nine months ended July 31, 2000 and 1999                                                         23
Condensed Consolidated Statements of Cash Flows
   nine months ended July 31, 2000 and 1999                                                                   24
Notes to Condensed Consolidated Financial Statements                                                          25


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF                                                             26-36
   FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
   MARKET RISK                                                                                                37

PART II.  OTHER INFORMATION.

ITEM 1.  LEGAL PROCEEDINGS                                                                                    37

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  EXHIBITS                                                                                                 37

SIGNATURES                                                                                                    38

</TABLE>

<PAGE>

                        THE DOE RUN RESOURCES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                                                JULY 31,             OCTOBER 31,
                                                                                                 2000                   1999
                                                                                           -----------------      -----------------
                                                                                              (UNAUDITED)
                                     ASSETS
<S>                                                                                        <C>                    <C>
Current assets:
    Cash                                                                                   $           7,024      $           9,886
    Trade accounts receivable, net of allowance for
       doubtful accounts                                                                              76,730                 88,884
    Inventories                                                                                      139,070                120,261
    Prepaid expenses and other current assets                                                         43,993                 33,861
    Net deferred tax assets                                                                            2,268                  2,115
                                                                                           -----------------      -----------------
       Total current assets                                                                          269,085                255,007

Property, plant and equipment, net                                                                   271,756                269,042
Special term deposit                                                                                 125,000                125,000
Net deferred tax assets                                                                                1,969                  1,606
Other noncurrent assets, net                                                                          11,249                 14,062
                                                                                           -----------------      -----------------
       Total assets                                                                        $         679,059      $         664,717
                                                                                           =================      =================

                      LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
    Short-term borrowings and current maturities of long-term debt                         $          12,377      $           8,582
    Accounts payable                                                                                  50,106                 54,736
    Accrued liabilities                                                                               60,323                 49,793
                                                                                           -----------------      -----------------
       Total current liabilities                                                                     122,806                113,111

Long-term debt, less current maturities                                                              504,423                477,286
Other noncurrent liabilities                                                                          55,262                 57,699
                                                                                           -----------------      -----------------
       Total liabilities                                                                             682,491                648,096

Shareholder's equity:

    Common stock, $.10 par value, 1,000 shares authorized,
         issued, and outstanding                                                                           -                      -
    Additional paid-in capital                                                                         5,238                  5,238
    Retained earnings                                                                                 (7,885)                12,168
    Accumulated other comprehensive income                                                              (785)                  (785)
                                                                                           -----------------      -----------------
       Total shareholder's equity                                                                     (3,432)                16,621
                                                                                           -----------------      -----------------
       Total liabilities and shareholder's equity                                          $         679,059      $         664,717
                                                                                           =================      =================

</TABLE>

                                       3
<PAGE>


                       THE DOE RUN RESOURCES CORPORATION
               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                             JULY 31,                       JULY 31,
                                                                 -------------------------------  -------------------------------
                                                                      2000            1999             2000            1999
                                                                 ---------------  --------------  ---------------  --------------

<S>                                                              <C>              <C>             <C>              <C>
Net sales                                                        $       194,788  $      203,998  $       597,299  $      574,664

Costs and expenses:
         Cost of sales                                                   175,963         172,748          532,441         493,095
         Depletion, depreciation and amortization                          7,399           7,684           22,263          24,064
         Selling, general and administrative                               7,243           8,186           23,809          22,777
         Exploration                                                       1,689           1,005            3,230           2,855
                                                                 ---------------  --------------  ---------------  --------------
            Total costs and expenses                                     192,294         189,623          581,743         542,791
                                                                 ---------------  --------------  ---------------  --------------

            Income from operations                                         2,494          14,375           15,556          31,873
Other income (expense):
         Interest expense                                                (15,601)        (14,972)         (46,026)        (44,413)
         Interest income                                                   3,613           3,629           10,832          11,202
         Other, net                                                          949            (888)           1,065          (1,557)
                                                                 ---------------  --------------  ---------------  --------------
                                                                         (11,039)        (12,231)         (34,129)        (34,768)
                                                                 ---------------  --------------  ---------------  --------------

            Income (loss) before income tax expense (benefit)             (8,545)          2,144          (18,573)         (2,895)
Income tax expense (benefit)                                                (173)          1,186            1,480           9,710
                                                                 ---------------  --------------  ---------------  --------------
            Net income (loss)                                    $        (8,372) $          958  $       (20,053) $      (12,605)
                                                                 ===============  ==============  ===============  ==============

</TABLE>

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


                                       4
<PAGE>

                       THE DOE RUN RESOURCES CORPORATION
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                                  NINE MONTHS
                                                                                                 ENDED JULY 31,
                                                                                        --------------------------------
                                                                                             2000             1999
                                                                                        ---------------  ---------------

<S>                                                                                     <C>              <C>
Cash flows from operating activities:
    Net loss                                                                            $      (20,053)  $      (12,605)
    Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
        Depreciation, depletion and amortization                                                22,263           24,064
        Amortization of deferred financing fees                                                  2,628            2,666
        Deferred income taxes                                                                     (516)           7,187
        Imputed interest                                                                           205              358
        Increase (decrease) resulting from changes in assets and liabilities                   (12,323)              58
                                                                                        ---------------  ---------------

           Net cash provided by (used in) operating activities                                  (7,796)          21,728

Cash flows from investing activities:
    Purchases of property, plant and equipment                                                 (25,197)         (24,912)
                                                                                        ---------------  ---------------
        Net cash used in investing activities                                                  (25,197)         (24,912)

Cash flows from financing activities:
    Proceeds from revolving loans and
      short term borrowings, net                                                                32,863          (15,544)
    Proceeds from long-term debt                                                                     -            5,665
    Payments on long-term debt                                                                  (2,732)          (2,075)
    Proceeds from sale/leaseback transactions                                                        -           17,922
    Payment of deferred financing costs                                                              -             (467)
                                                                                        ---------------  ---------------
        Net cash provided by financing activities                                               30,131            5,501
                                                                                        ---------------  ---------------
        Net increase (decrease) in cash                                                         (2,862)           2,317

Cash at beginning of period                                                                      9,886            4,646
                                                                                        ---------------  ---------------
Cash at end of period                                                                   $        7,024   $        6,963
                                                                                        ==============   ===============

Supplemental disclosure of cash flow information
    Cash paid during the period for:
      Interest, net of capitalized interest                                             $       30,699   $       29,206
                                                                                        ==============   ===============
      Income taxes                                                                      $        1,314   $        6,739
                                                                                        ==============   ===============

</TABLE>

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

                                       5
<PAGE>



                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


(1)      SUMMARY OF  SIGNIFICANT ACCOUNTING POLICIES

                  UNAUDITED INTERIM FINANCIAL STATEMENTS

         These interim consolidated financial statements include the accounts of
         The Doe Run Resources Corporation and its subsidiaries (collectively,
         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 July 31, 2000 and results of operations for
         the three and nine month periods ended July 31, 2000 and 1999. Interim
         periods are not necessarily indicative of results to be expected for
         the year.

                  RECLASSIFICATIONS

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

(2)      CHANGE IN TAXABLE STATUS

         On January 15, 1999, the Company's parent, The Renco Group, Inc.
         (Renco), filed an election, with the consent of its shareholders, with
         the Internal Revenue Service to change its taxable status from that of
         a subchapter C corporation to that of a subchapter S corporation,
         effective November 1, 1998. At the same time, Renco elected for the
         Company to be treated as a qualified subchapter S subsidiary (QSSS).
         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. The election does not affect foreign income
         taxes related to the Company's foreign subsidiaries, and the Company
         will continue to provide for state and local taxes for those
         jurisdictions that do not recognize QSSS status. As a result of this
         change in tax status, the elimination of federal and most state
         deferred tax assets and liabilities for income tax purposes resulted in
         a charge to income tax expense of $6,200 for the nine months ended July
         31, 1999.

(3)      INVENTORIES

         Inventories consist of the following:

<TABLE>
<CAPTION>

                                                                       JULY 31,     OCTOBER 31,
                                                                         2000           1999
                                                                     -------------  -------------

<S>                                                                  <C>            <C>
         Finished metals and concentrates                            $      25,099  $      10,527
         Metals and concentrates in process                                 70,859         66,958
         Materials, supplies and repair parts                               43,112         42,776
                                                                     -------------  -------------

                                                                     $     139,070  $     120,261
                                                                     =============  =============
</TABLE>


         Materials, supplies and repair parts are stated net of reserves for
         obsolescence of approximately $4,300 and $4,200 at July 31, 2000 and
         October 31, 1999, respectively.

(4)      SEGMENT INFORMATION

         The Company's operating segments are separately managed business units
         that are distinguished by products, location and production processes.
         The primary lead segment includes integrated mining, milling and
         smelting operations located in Missouri. The secondary lead segment,
         also located in Missouri, recycles lead-bearing feed materials,
         primarily spent batteries. The fabricated products segment produces
         value-added lead products. The Peruvian operations produce an extensive
         product mix of non-ferrous and precious metals through a subsidiary,
         Doe Run Peru S.R.L. (Doe Run Peru).


                                       6
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                THREE MONTHS ENDED          NINE MONTHS ENDED
                                                                     JULY 31,                   JULY 31,
                                                            --------------------------------------------------------
        OPERATING SEGMENTS - REVENUES                            2000         1999         2000           1999
                                                            ------------  -----------  ------------    -------------
<S>                                                         <C>           <C>          <C>             <C>
        Revenues from external customers:
           Peruvian operations                              $    118,689  $   117,840  $   361,001    $   330,942
           Primary lead                                           52,644       60,344      167,346        174,286
           Secondary lead                                         17,786       14,464       46,601         42,208
           Fabricated products                                     6,402        7,146       20,580         19,108
                                                            ------------  -----------  ------------    -------------
                   Total                                         195,521      199,794      595,528        566,544

        Revenues from other operating segments: (1)
           Peruvian operations                                        24           80        1,573          2,850
           Primary lead                                              826          505        1,949          1,031
           Secondary lead                                             10           73          371            381
           Fabricated products                                         6            -           17              -
                                                            ------------  -----------  ------------    -------------
            Total                                                    866          658        3,910          4,262
                                                            ------------  -----------  ------------    -------------
            Total revenues for reportable segments               196,387      200,452      599,438        570,806
                   Other revenues (2)                               (733)       4,204        1,771          8,120
                   Intersegment eliminations                        (866)        (658)      (3,910)        (4,262)
                                                            ------------  -----------  ------------    -------------
                     Total consolidated revenues            $    194,788  $   203,998  $   597,299     $  574,664
                                                            ============  ===========  ============    =============
</TABLE>

       (1) Transactions between segments consist of metal sales recorded based
           on sales contracts that are negotiated between segments on terms that
           management feels are similar to those that would be negotiated
           between unrelated parties.
       (2) Other revenues consist of metal sales not attributed to operating
           segments and gains (losses) on hedging transactions.

<TABLE>
<CAPTION>

                                                                  THREE MONTHS ENDED        NINE MONTHS ENDED
        OPERATING SEGMENTS - EBITDA (EARNINGS                          JULY 31,                 JULY 31,
        BEFORE INTEREST, TAXES, AND DEPLETION,                --------------------------------------------------------
        DEPRECIATION AND AMORTIZATION)                           2000          1999         2000          1999
                                                              ------------  ------------  ------------  --------------
<S>                                                           <C>           <C>           <C>           <C>
        Peruvian operations                                   $   10,767    $   13,687    $ 33,352      $ 38,931
        Primary lead                                               1,026         7,785       6,732        20,284
        Secondary lead                                             3,418         2,717      11,002         7,556
        Fabricated products                                          581           616       1,933         1,763
                                                              ------------  ------------  ------------  --------------
                   Total reportable segments                      15,792        24,805      53,019        68,534
        Other revenues and expenses (3)                           (1,891)          451      (2,051)       (2,392)
        Corporate selling, general and
            administrative expenses                               (3,078)       (4,070)    (12,086)      (11,897)
        Intersegment eliminations                                     19           (15)          2           135
                                                              ------------  ------------  ------------  --------------
                   Consolidated EBITDA                            10,842        21,171      38,884        54,380
        Depreciation, depletion and amortization                  (7,399)       (7,684)    (22,263)      (24,064)
        Interest income                                            3,613         3,629      10,832        11,202
        Interest expense                                         (15,601)      (14,972)    (46,026)      (44,413)
                                                              ------------  ------------  ------------  --------------

                   Income (loss) before income taxes          $   (8,545)   $    2,144    $(18,573)     $ (2,895)
                                                              ============  ============  ============  ==============

</TABLE>

       (3) Other revenues and expenses include primarily exploration expenses,
           gains and losses recognized on hedge transactions, and adjustments
           necessary to state inventories at LIFO cost.


                                       7
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)



(5)      HEDGING

         The fair market value of the Company's hedging positions at July 31,
         2000 is the difference between quoted prices at the balance sheet date
         and the contract settlement value. The fair market value represents the
         estimated net cash the Company would receive (pay) if the contracts
         were canceled on the balance sheet date. As management has designated
         these contracts as hedges, the related gains and losses will be
         recognized in net sales when the related production is sold.

         The Company's open hedging positions at July 31, 2000 were:

           FUTURES SALES CONTRACTS (NUMBERS NOT IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                  FAIR
              METAL            QUANTITY               PRICE RANGE              MARKET VALUE             PERIOD
        ------------------ ------------------ -----------------------------   ---------------- -------------------------
<S>                        <C>                <C>                             <C>              <C>
        Copper                      992 tons    $.7600/lb. to $.8328/lb.      $      (17,352)    Aug. 00 to Dec. 00
        Lead                     24,113 tons    $.1946/lb. to $.2359/lb.            (923,200)    Aug. 00 to Dec. 01

</TABLE>

           SOLD CALL OPTION CONTRACTS (NUMBERS NOT IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                  FAIR
              METAL            QUANTITY               PRICE RANGE              MARKET VALUE             PERIOD
        ------------------ ------------------ -----------------------------   ---------------- -------------------------
<S>                        <C>                <C>                             <C>              <C>
        Copper                   14,075 tons    $.7800/lb. to $.9000/lb.      $   (1,984,670)    Aug. 00 to Aug. 01
        Lead                     67,516 tons    $.2041/lb. to $.2300/lb.          (1,287,885)    Aug. 00 to Aug. 01
        Zinc                     21,770 tons    $.5089/lb. to $.5670/lb.            (382,750)    Aug. 00 to Mar. 01

</TABLE>

           SOLD PUT OPTION CONTRACTS (NUMBERS NOT IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                  FAIR
              METAL            QUANTITY               PRICE RANGE              MARKET VALUE             PERIOD
        ------------------ ------------------ -----------------------------   ---------------- -------------------------
<S>                        <C>                <C>                             <C>              <C>
        Copper                    1,102 tons    $.7711/lb. to $.8051/lb.      $            -     Aug. 00 to Sep. 00
        Lead                      3,858 tons    $.1950/lb. to $.2200/lb.             (44,100)    Aug. 00 to Sep. 00
        Zinc                      6,587 tons    $.4762/lb. to $.5443/lb.            (109,951)    Aug. 00 to Dec. 00
        Silver                    20,000 oz.           $4.95/oz.                      (3,300)    Aug. 00 to Sep. 00
        Gold                       1,500 oz.          $280.00/oz.                     (2,900)    Aug. 00 to Sep. 00

</TABLE>

(6)    ENVIRONMENTAL AND LITIGATION MATTERS

       ENVIRONMENTAL

       The Company has recorded a liability of approximately $31,400 as of July
       31, 2000, which represents management's best estimate of known
       obligations relating to the environmental and reclamation matters that
       are discussed below.


                                       8
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


              DOMESTIC OPERATIONS

         The Company is subject to numerous federal, state and local
         environmental laws and regulations governing, among other things, air
         emissions, waste water discharge, solid and hazardous waste treatment,
         and storage, disposal and remediation of releases of hazardous
         materials. In common with much of the mining industry, 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.

         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. The Company
         has accrued approximately $1,000 related to the cost of closure
         pursuant to this permit, which is management's best estimate of closure
         costs under the current requirements of the permit. The Company expects
         to sign a voluntary Administrative Order of Consent (AOC) in the fourth
         quarter of 2000 to study and address issues related to the slag pile,
         plant property, community soils adjacent to the plant, and lead
         releases from the plant. At this time, it is not possible to determine
         the outcome of the study or what potential remediation actions, if any,
         may be required after the study is completed. In addition, when the
         Company signs the AOC, the Company will also agree to replace the soil
         in yards of private residences within a half-mile of the smelter. The
         estimated cost of this cleanup is approximately $800, to be performed
         in fiscal 2001 and the first part of 2002. The Company will also agree
         to test soils in an area outside the half-mile zone to determine if
         additional remediation is required. The estimated cost may change if
         required levels of remediation are different than currently estimated
         or if additional homes are identified as a result of soil testing.

         The Company is working with regulators to develop a new plan to bring
         the Herculaneum smelter in compliance with the ambient air quality
         standard for lead promulgated under the federal Clean Air Act. The will
         be submitted in September 2000, subject to final approval by
         regulators. Capital expenditures for the control measures are expected
         to total approximately $1,100 in fiscal 2000 and $9,000 thereafter,
         approximately $8,000 of which will be spent by the end of fiscal 2002.

         The Company 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. These sites involve historical
         operations of predecessors of the Company. CERCLA provides for strict
         and, in certain circumstances, joint and several liability for response
         costs and natural resource damages. The Company has a reserve as of
         July 31, 2000 of approximately $11,400 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.

         The Company signed a voluntary AOC in 1994 with the EPA to remediate
         the Big River Mine Tailings site; the remediation work required by the
         AOC will be completed in September, 2000, followed by revegetation and
         ongoing monitoring and maintenance activities.

         The Company has also signed AOCs to perform an Engineering
         Evaluation/Cost Analysis (EE/CA) on each of the Bonne Terre, National,
         Rivermines, and Leadwood sites for remediation of the mine waste areas
         at these sites. In


                                       9
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


         addition, the Company has signed an AOC with the EPA to conduct a
         Remedial Investigation/Feasibility Study (RI/FS) to assess potential
         off-site impacts of site operations on and the need for remediation
         regarding groundwater, residential soils, several creeks and a river.
         The RI/FS is being conducted by a third party with completion currently
         expected within three years. The Company has signed an order to conduct
         interim measures until the RI/FS is complete, consisting of blood lead
         testing of young children, residential soil sampling, and limited soil
         remediation as indicated by the testing and sampling results. The
         Company believes the current reserves assigned to these sites are
         adequate. However, should remediation goals or areas change, requiring
         substantially increased measures, there can be no assurance that the
         reserves would be adequate.

         The Company has been advised by the EPA that it is considering taking
         certain response actions at a mine site in Madison County, Missouri
         known as the Mine LaMotte Site. A predecessor of the Company was a
         former operator of the site in a joint venture with another company.
         The EPA has not decided whether any action will be taken, but the
         Company and the joint venture partner 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. The Company has also been advised
         that remediation is required at a related small satellite mine site.
         After conducting an investigation, the Company has determined that it
         was not involved in operations at the satellite site. At this time,
         based on this 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.

         The Company's Buick 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
         has not yet been finalized. The Company has reserves as of July 31,
         2000 of approximately $1,800 for corrective action and $2,600 for
         closure costs for the permitted storage area. While management believes
         these reserves 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 Company's domestic operating facilities have wastewater discharge
         permits issued under the federal Clean Water Act, as amended. It is
         expected that stricter discharge limits than previously in effect may
         be included in permits now subject to renewal. If additional treatment
         facilities were required under these permits, capital expenditures of
         approximately $4,000 would be required. Management does not expect an
         appreciable increase in operating costs.

         The Company's mining and milling operations include six mine waste
         disposal facilities that are subject to Missouri mine closure permit
         requirements. The total expected cost of closure is $14,600. Certain
         closure requirements have already been performed. The Company accrues
         for the cost of ultimate closure at a rate of approximately $500 per
         year. The Company's mine and mill closure reserves were approximately
         $7,400 as of July 31, 2000.

              FOREIGN OPERATIONS

         Doe Run Peru has submitted to and received approval from the Peruvian
         government for the Programa de Adecuacion y Manejo Ambiental
         (Environmental Adjustment and Management Program) (the PAMA) for its La
         Oroya smelter that consisted of an environmental impact analysis,
         monitoring plan and data, mitigation measures and closure plan. The
         PAMA also sets forth the actions and corresponding annual investments
         that Doe Run Peru must undertake in order to achieve compliance with
         the maximum applicable limits prior to expiration of the PAMA (ten
         years from the date of the PAMA for smelters and five years for any
         other type of mining or metallurgical operation). The required amount
         of annual investment must not be less than one percent of annual sales.
         Once approved, the PAMA functions as the equivalent of an operating
         permit with which Doe Run Peru must comply. After expiration of the
         PAMA, Doe Run Peru must comply with all applicable standards and
         requirements in effect at that time, in the case of the La Oroya
         smelter, after December 31, 2006.


                                       10
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


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

     -   New sulfuric acid plants
     -   Elimination of fugitive gases from the coke plant
     -   Use of oxygenated gases in the anodic residue plant
     -   Water treatment plant for the copper refinery
     -   Recirculation system for cooling waters at the smelter
     -   Management and disposal of acidic solutions at the silver refinery
     -   Industrial waste water treatment plant for the smelter and refinery
     -   Containment dam for the lead muds near the zileret plant
     -   Granulation process water at the lead smelter
     -   Anode washing system at the zinc refinery
     -   Management and disposal of lead and copper slag wastes
     -   Domestic waste water treatment and domestic waste disposal

Annual capital spending on a calendar year basis approved in the PAMA is as
follows:

<TABLE>
<CAPTION>
                                                               ESTIMATED
                      YEAR                                        COST
                                                              -------------
<S>                                                         <C>
                      2000                                  $     11,265
                      2001                                        13,800
                      2002                                        14,300
                      2003                                        13,180
                      2004                                        30,055
                      2005                                        34,790
                      2006                                        42,040
                                                              -------------
                                                            $    159,430
                                                              =============
</TABLE>

         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 $189,950 for this period. Fiscal 2000
         spending through July 31, 2000 was approximately $9,100.

         Doe Run Peru's Cobriza mine has a separate PAMA to be completed by
         mid-2002. The total estimated cost of capital projects to manage
         tailings, sewage and garbage under the PAMA is approximately $9,600,
         with approximately $5,100 spent through July 31, 2000. The Company is
         delaying further spending on the tailing projects in the PAMA while
         tailings management options and cost estimates are reviewed. Once this
         process is completed, the estimate of costs under the PAMA could
         increase.

         Doe Run Peru's operations historically and currently exceed some of the
         applicable Ministry of Energy and Mines (MEM) maximum permissible
         limits pertaining to air emissions, ambient air quality and waste water
         effluent quality. The PAMA projects described above have been designed
         to achieve compliance with such requirements prior to the expiration of
         the respective PAMA periods. 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. Doe Run Peru has advised
         the MEM that it intends to seek changes in certain PAMA projects that
         it believes will more effectively achieve compliance. However, there
         can be no assurance that the MEM will approve proposed changes to the
         PAMA or that implementation of the changes will not increase the cost
         of compliance. Further, there can be no assurance that the Peruvian
         government will not in


                                       11
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


         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, Empresa Minera del Centro del Peru S.A. (Centromin), the
         previous owner of the La Oroya assets, agreed to indemnify Doe Run Peru
         against certain environmental liabilities arising out of its prior
         operations. The Peruvian government, through the enactment of the
         Supreme Decree No. 042-97-PCM, has guaranteed the indemnity. 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 Company is responsible for the closure costs relating to a zinc
         ferrite disposal site. The Company has accrued $7,200 for the closure
         costs and, although a plan for closure of the site has not been
         finalized, management feels that this reserve is adequate.

          CONSOLIDATED

         The Company believes its reserves for domestic and foreign
         environmental and reclamation matters are adequate, based on the
         information currently available. Depending upon the type and extent of
         remediation activities required, costs in excess of established
         reserves are reasonably possible. 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.

          LITIGATION

         The Company is a defendant in seven lawsuits alleging certain damages
         stemming from the operations at the Herculaneum smelter. Two of these
         cases are class action lawsuits. In one case, the plaintiffs seek to
         have certified two separate classes. The first class would consist of
         property owners in a certain section of Herculaneum, alleging that
         property values have been damaged due to the operations of the smelter.
         The second class would be composed of children who lived in Herculaneum
         during a period of time when they were nine months to six years old,
         and the remedy sought is medical monitoring for the class. The second
         case is similarly seeking certification of a class of property owners
         allegedly damaged by operations from the smelter, but the purported
         size of the class is every home in Herculaneum, Missouri. The other
         five cases are personal injury actions by eighteen individuals who
         allege damages from the effects of lead poisoning due to operations at
         the smelter. Punitive damages also are being sought in each case. The
         Company is vigorously defending all of these claims.

         Preliminary investigation and research by the Company indicates
         property values in Herculaneum are consistent with those of surrounding
         communities and have not been affected by the smelter. Finally, based
         on rules for class certification, the Company believes class
         certification is not appropriate. Because the cases are in discovery,
         the Company is unable at this time to state with certainty the expected
         outcome of and the final costs of any of these cases. 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.

         On May 21, 1999, a lawsuit was filed against the Company alleging
         certain damages from discontinued mine facilities in St. Francois
         County. The plaintiffs seek to have certified two separate classes. The
         first class would consist of property owners, alleging that property
         values have been damaged due to the tailings from the discontinued
         operations. The second class would be composed of children, and the
         remedy sought is medical monitoring for the class. The Company intends
         to vigorously defend itself against this claim. The Company is unable
         at this time to state with certainty the expected outcome of and the
         final costs of this suit. Therefore, there can be no assurance the suit
         will not have a material adverse effect on the results of operations,
         financial condition and liquidity of the Company.


                                       12
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


         The Company, with several other defendants, has been named in two cases
         in Maryland. The first case is seeking certification as a class the
         owners of all housing in the State of Maryland built prior to 1978 that
         have lead paint on the premises. The complaint alleges that all
         defendants were members of Lead Industries Association (LIA), a trade
         association, and that the defendants improperly promoted lead paint.
         The suit seeks damages for paint removal for all such housing in the
         State of Maryland. The other suit seeks damages, alleging personal
         injuries to children as a result of lead poisoning from lead paint in
         the family residence. Both suits seek punitive damages. Discovery has
         just begun, and the Company is unable at this time to state with
         certainty the expected outcome of and the final costs of any of these
         cases. Therefore, there can be no assurance that these cases would not
         have a material adverse effect on the results of operations, financial
         condition and liquidity of the Company.

         In February, 2000 the Company and several other parties were named
         defendants in a suit brought by the City of St. Louis, Missouri for
         costs allegedly incurred and to be incurred by the plaintiff for the
         care of lead-poisoned persons, education programs for children injured
         by exposure to lead and the abatement of lead hazards purportedly
         created by the defendants in the City of St. Louis. The complaint
         alleges that the defendants made material misrepresentations and
         intentional omissions of material facts to the City and/or its
         residents regarding the nature of lead and lead products, such as
         paint. The suit also seeks punitive damages. Discovery has yet to be
         initiated, the Company is unable at this time to state with certainty
         the expected outcome of and the final costs of any of these cases.
         Therefore, there can be no assurance that these cases would not have a
         material adverse effect on the results of operations, financial
         condition and liquidity of the Company.


(7)      GUARANTOR SUBSIDIARIES

         The Guarantor Subsidiaries (Fabricated Products, Inc. (FPI) and DR Land
         Holdings, LLC (the Domestic Guarantors); Doe Run Cayman Ltd. (Doe Run
         Cayman) and certain subsidiaries, including Doe Run Mining S.R.L. and
         its subsidiaries Doe Run Development S.A.C. and Doe Run Peru) have
         jointly and severally, fully, unconditionally and irrevocably
         guaranteed the public debt of the Company. 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 The Doe Run Resources Corporation and Doe Run Mining S.R.L, The
         Doe Run Resources Corporation and Doe Run Peru, and Doe Run Mining
         S.R.L and Doe Run Peru; and sales of metal to The Doe Run Resources
         Corporation by Doe Run Peru and to FPI by The Doe Run Resources
         Corporation.


                                       13
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


(7) GUARANTOR SUBSIDIARIES (CONTINUED)

                      CONDENSED CONSOLIDATING BALANCE SHEET
                         AS OF JULY 31, 2000 (UNAUDITED)

<TABLE>
<CAPTION>

                                                                   The Company
                                                                    Excluding                         Doe Run Cayman
                                                                    Guarantor         Domestic         and Certain
                                                                   Subsidiaries      Guarantors       Subsidiaries
                                                                   ------------      ----------       ------------

                                     ASSETS
Current assets:
<S>                                                                <C>               <C>               <C>
     Cash                                                          $        478      $     (478)       $        45
     Trade accounts receivable, net of allowance for
         doubtful accounts                                               44,306           5,639                  -
     Inventories                                                         56,532           1,944                  -
     Prepaid expenses and other current assets                           11,037             169                583
     Net deferred tax assets                                                  -               -                  -
     Due from subsidiaries                                               18,550               -                  -
     Due from parent                                                          -               -                  -
                                                                   ------------      ----------       ------------
         Total current assets                                           130,903           7,274                628
Property, plant and equipment, net                                      131,105           7,015                  -
Special term deposit                                                    125,000               -                  -
Net deferred tax assets                                                       -               -                (59)
Other noncurrent assets, net                                             10,583             229                208
Investment in subsidiaries                                               29,237               -            194,109
                                                                   ------------      ----------       ------------
         Total assets                                              $    426,828      $   14,518       $    194,886
                                                                   ============      ==========       ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Short-term borrowings and current maturities
         of long-term debt                                         $        386      $        -       $      1,473
     Accounts payable                                                    13,090           2,073                  -
     Accrued liabilities                                                 37,175             386              7,120
     Due to subsidiaries                                                      -               -             27,952
     Due to parent                                                            -          10,211              2,734
                                                                   ------------      ----------       ------------
         Total current liabilities                                       50,651          12,670             39,279
Long-term debt, less current maturities                                 333,589               -            126,359
Other noncurrent liabilities                                             46,020           1,841                  -
                                                                   ------------      ----------       ------------
         Total liabilities                                              430,260          14,511            165,638
Shareholders' equity:
     Common stock, $.10 par value, 1,000 shares authorized,
         issued, and outstanding                                              0               -                  -
     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
     Common stock, one nuevo sole par value, 729,548,057
         shares authorized, issued and outstanding                            -               -                  -
     Additional paid in capital                                           5,238           1,205                  -
     Due from parent                                                          -               -                  -
     Foreign currency translation adjustment                                  -               -                  -
     Retained earnings and accumulated other
         comprehensive income                                            (8,670)         (1,199)            27,243
                                                                   ------------      ----------       ------------
         Total shareholders' equity                                      (3,432)              7             29,248
                                                                   ------------      ----------       ------------
         Total liabilities and shareholders' equity                $    426,828      $   14,518       $    194,886
                                                                   ============      ==========       ============

<CAPTION>


                                                                     Doe Run
                                                                     Peru and                             The
                                                                   Subsidiaries      Eliminations       Company
                                                                   ------------      ------------       ---------
<S>                                                                <C>               <C>                <C>
                                     ASSETS
Current assets:
     Cash                                                          $      6,979      $          -       $   7,024
     Trade accounts receivable, net of allowance for
         doubtful accounts                                               27,375              (590)         76,730
     Inventories                                                         80,612               (18)        139,070
     Prepaid expenses and other current assets                           34,430            (2,226)         43,993
     Net deferred tax assets                                              2,268                 -           2,268
     Due from subsidiaries                                                    -           (18,550)              -
     Due from parent                                                     27,952           (27,952)              -
                                                                   ------------      ------------       ---------
         Total current assets                                           179,616           (49,336)        269,085
Property, plant and equipment, net                                      133,636                 -         271,756
Special term deposit                                                          -                 -         125,000
Net deferred tax assets                                                   2,028                 -           1,969
Other noncurrent assets, net                                                229                 -          11,249
Investment in subsidiaries                                                    -          (223,346)              -
                                                                   ------------      ------------       ---------
         Total assets                                              $    315,509      $   (272,682)      $ 679,059
                                                                   ============      ============       =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Short-term borrowings and current maturities
         of long-term debt                                         $     10,518      $          -       $  12,377
     Accounts payable                                                    35,533              (590)         50,106
     Accrued liabilities                                                 17,868            (2,226)         60,323
     Due to subsidiaries                                                      -           (27,952)              -
     Due to parent                                                        5,605           (18,550)              -
                                                                   ------------      ------------       ---------
         Total current liabilities                                       69,524           (49,318)        122,806
Long-term debt, less current maturities                                  44,475                 -         504,423
Other noncurrent liabilities                                              7,401                 -          55,262
                                                                   ------------      ------------       ---------
         Total liabilities                                              121,400           (49,318)        682,491
Shareholders' equity:
     Common stock, $.10 par value, 1,000 shares authorized,
         issued, and outstanding                                              -                 -               0
     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)              -
     Common stock, one nuevo sole par value, 729,548,057
         shares authorized, issued and outstanding                      271,435          (271,435)              -
     Additional paid in capital                                         (16,234)           15,029           5,238
     Due from parent                                                   (105,257)          105,257               -
     Foreign currency translation adjustment                            (19,743)           19,743               -
     Retained earnings and accumulated other
         comprehensive income                                            63,908           (89,952)         (8,670)
                                                                   ------------      ------------       ---------
         Total shareholders' equity                                     194,109          (223,364)         (3,432)
                                                                   ------------      ------------       ---------
         Total liabilities and shareholders' equity                $    315,509      $   (272,682)      $ 679,059
                                                                   ============      ============       =========


</TABLE>

                                       14
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


(8) GUARANTOR SUBSIDIARIES (CONTINUED)

              CONDENSED CONSOLIDATING BALANCE SHEET
                AS OF OCTOBER 31, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   The Company
                                                                    Excluding                        Doe Run Cayman
                                                                    Guarantor         Domestic        and Certain
                                                                   Subsidiaries      Guarantors       Subsidiaries
                                                                   ------------      ----------       ------------

                                     ASSETS
<S>                                                                <C>               <C>              <C>
Current assets:
     Cash                                                          $      7,197      $   (1,347)      $         39
     Trade accounts receivable, net of allowance for
         doubtful accounts                                               46,162           4,292                 67
     Inventories                                                         47,368           1,791                  -
     Prepaid expenses and other current assets                            6,580             145                (77)
     Net deferred tax assets                                                  -               -                (50)
     Due from subsidiaries                                               11,321               -                  -
     Due from parent                                                          -               -                  -
                                                                   ------------      ----------       ------------
         Total current assets                                           118,628           4,881                (21)
Property, plant and equipment, net                                      140,663           7,784                  -
Special term deposit                                                    125,000               -                  -
Net deferred tax assets                                                       -               -                (40)
Other noncurrent assets, net                                             13,205             292                242
Investment in subsidiaries                                               33,029               -            188,227
                                                                   ------------      ----------       ------------
         Total assets                                              $    430,525      $   12,957       $    188,408
                                                                   ============      ==========       ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Short-term borrowings and current maturities
         of long-term debt                                         $        357      $        -       $      1,279
     Accounts payable                                                    16,479           1,901                 67
     Accrued liabilities                                                 30,967             478              2,546
     Due to subsidiaries                                                      -               -             23,744
     Due to parent                                                            -           8,666              1,386
                                                                   ------------      ----------       ------------
         Total current liabilities                                       47,803          11,045             29,022
Long-term debt, less current maturities                                 317,693               -            126,359
Other noncurrent liabilities                                             48,408           1,890                  -
                                                                   ------------      ----------       ------------
         Total liabilities                                              413,904          12,935            155,381
Shareholders' equity:
     Common stock, $.10 par value, 1,000 shares authorized,
         issued, and outstanding                                              0               -                  -
     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
     Common stock, one nuevo sole par value, 729,548, 057
         shares authorized, issued and outstanding                            -               -                  -
     Additional paid in capital                                           5,238           1,205                  -
     Due from parent                                                          -               -                  -
     Foreign currency translation adjustment                                  -               -                  -
     Retained earnings and accumulated other
         comprehensive income                                            11,383          (1,184)            31,022
                                                                   ------------      ----------       ------------
         Total shareholders' equity                                      16,621              22             33,027
                                                                   ------------      ----------       ------------
         Total liabilities and shareholders' equity                $    430,525      $   12,957       $    188,408
                                                                   ============      ==========       ============


<CAPTION>
                                                                     Doe Run
                                                                     Peru and                             The
                                                                   Subsidiaries      Eliminations        Company
                                                                   ------------      ------------       ---------
<S>                                                                <C>               <C>                <C>
                                     ASSETS
Current assets:
     Cash                                                          $      3,997      $          -       $   9,886
     Trade accounts receivable, net of allowance for
         doubtful accounts                                               38,864              (501)         88,884
     Inventories                                                         71,122               (20)        120,261
     Prepaid expenses and other current assets                           27,958              (745)         33,861
     Net deferred tax assets                                              2,165                 -           2,115
     Due from subsidiaries                                                  122           (11,443)              -
     Due from parent                                                     23,622           (23,622)              -
                                                                   ------------      ------------       ---------
         Total current assets                                           167,850           (36,331)        255,007
Property, plant and equipment, net                                      120,595                 -         269,042
Special term deposit                                                          -                 -         125,000
Net deferred tax assets                                                   1,646                 -           1,606
Other noncurrent assets, net                                                323                 -          14,062
Investment in subsidiaries                                                    -          (221,256)              -
                                                                   ------------      ------------       ---------
         Total assets                                              $    290,414      $   (257,587)      $ 664,717
                                                                   ============      ============       =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Short-term borrowings and current maturities
         of long-term debt                                         $      6,946      $          -       $   8,582
     Accounts payable                                                    36,790              (501)         54,736
     Accrued liabilities                                                 16,547              (745)         49,793
     Due to subsidiaries                                                      -           (23,744)              -
     Due to parent                                                        1,269           (11,321)              -
                                                                   ------------      ------------       ---------
         Total current liabilities                                       61,552           (36,311)        113,111
Long-term debt, less current maturities                                  33,234                 -         477,286
Other noncurrent liabilities                                              7,401                 -          57,699
                                                                   ------------      ------------       ---------
         Total liabilities                                              102,187           (36,311)        648,096
Shareholders' equity:
     Common stock, $.10 par value, 1,000 shares authorized,
         issued, and outstanding                                              -                 -               0
     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)              -
     Common stock, one nuevo sole par value, 729,548, 057
         shares authorized, issued and outstanding                      271,435          (271,435)              -
     Additional paid in capital                                         (16,234)           15,029           5,238
     Due from parent                                                   (104,865)          104,865               -
     Foreign currency translation adjustment                            (20,135)           20,135               -
     Retained earnings and accumulated other
         comprehensive income                                            58,026           (87,864)         11,383
                                                                   ------------      ------------       ---------
         Total shareholders' equity                                     188,227          (221,276)         16,621
                                                                   ------------      ------------       ---------
         Total liabilities and shareholders' equity                $    290,414      $   (257,587)      $ 664,717
                                                                   ============      ============       =========

</TABLE>
                                       15
<PAGE>

                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

(7) GUARANTOR SUBSIDIARIES (CONTINUED)

                      CONSOLIDATING STATEMENT OF OPERATIONS
                  THREE MONTHS ENDED JULY 31, 2000 (UNAUDITED)

<TABLE>
<CAPTION>

                                                The Company
                                                 Excluding                  Doe Run Cayman     Doe Run
                                                 Guarantor     Domestic      and Certain       Peru and                     The
                                                Subsidiaries   Guarantors    Subsidiaries     Subsidiaries  Eliminations  Company
                                                ------------   ----------    ------------     ------------  ------------  -------
<S>                                             <C>            <C>           <C>              <C>           <C>            <C>
Net sales                                           $ 75,187    $ 6,408         $ 3,641         $118,713      $ (9,161)   $ 194,788

Costs and expenses:
     Cost of sales                                    66,701      5,464               -          104,683          (885)     175,963
     Depletion, depreciation and amortization          4,762        387               -            2,250             -        7,399
     Selling, general and administrative               3,078        355           2,500            9,605        (8,295)       7,243
     Exploration                                         783          -               -              906             -        1,689
                                                    ---------     ------       ---------          ------        ------     ---------
        Total costs and expenses                      75,324      6,206           2,500          117,444        (9,180)     192,294
                                                    ---------     ------       ---------          ------        ------     ---------

        Income from operations                          (137)       202           1,141            1,269            19        2,494

Other income (expense):
     Interest expense                                (10,564)      (257)         (3,670)          (1,363)          253      (15,601)
     Interest income                                   3,776          -               -               90          (253)       3,613
     Other, net                                          409         (7)            (17)             564             -          949
     Equity in earnings of subsidiaries               (1,639)         -             793                -           846            -
                                                    ---------     ------       ---------          ------        ------     ---------
                                                      (8,018)      (264)         (2,894)            (709)          846      (11,039)
                                                    ---------     ------       ---------          ------        ------     ---------
        Income (loss) before income tax
              expense (benefit)                       (8,155)       (62)         (1,753)             560           865       (8,545)
     Income tax expense (benefit)                        217          -            (157)            (233)            -         (173)
                                                    ---------     ------       ---------          ------        ------     ---------

        Net income (loss)                           $ (8,372)     $ (62)       $ (1,596)          $  793         $ 865      $(8,372)
                                                    =========     ======       =========          ======        ======     =========

</TABLE>

                                       16
<PAGE>

                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

(7) GUARANTOR SUBSIDIARIES (CONTINUED)

                      CONSOLIDATING STATEMENT OF OPERATIONS
                  THREE MONTHS ENDED JULY 31, 1999 (UNAUDITED)

<TABLE>
<CAPTION>

                                                The Company
                                                 Excluding                 Doe Run Cayman      Doe Run
                                                 Guarantor      Domestic    and Certain       Peru and                      The
                                                Subsidiaries   Guarantors   Subsidiaries    Subsidiaries   Eliminations   Company
                                                ------------   ----------   ------------    ------------   ------------   -------
<S>                                             <C>            <C>          <C>             <C>            <C>            <C>
Net sales                                         $ 84,152       $ 7,145       $ 3,191        $117,920       $ (8,410)    $ 203,998

Costs and expenses:
     Cost of sales                                  67,724         6,069             -          99,598           (643)      172,748
     Depletion, depreciation and amortization        5,393           382             -           1,909              -         7,684
     Selling, general and administrative             4,069           433         2,804           8,632         (7,752)        8,186
     Exploration                                     1,005             -             -               -              -         1,005
                                                    -------        ------       ------          -------        -------      --------
        Total costs and expenses                    78,191         6,884         2,804         110,139         (8,395)      189,623
                                                    -------        ------       ------          -------        -------      --------

        Income (loss) from operations                5,961           261           387           7,781            (15)       14,375

Other income (expense):
     Interest expense                              (10,189)         (273)       (3,698)         (1,030)           218       (14,972)
     Interest income                                 3,796             -             -              51           (218)        3,629
     Other, net                                         92           (29)         (433)           (518)             -          (888)
     Equity in earnings of subsidiaries              1,497             -         5,884               -         (7,381)            -
                                                    -------        ------       ------          -------        -------      --------
                                                    (4,804)         (302)        1,753          (1,497)        (7,381)      (12,231)
                                                    -------        ------       ------          -------        -------      --------
        Income (loss) before income tax
              expense                                1,157           (41)        2,140           6,284         (7,396)        2,144
     Income tax expense                                199             -           587             400              -         1,186
                                                    -------        ------       ------          -------        -------      --------

        Net income (loss)                           $  958          $(41)     $  1,553         $ 5,884        $(7,396)       $  958
                                                    =======        ======     ========        ========       =========       =======

</TABLE>

                                       17
<PAGE>

                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

(7) GUARANTOR SUBSIDIARIES (CONTINUED)

                      CONSOLIDATING STATEMENT OF OPERATIONS
                   NINE MONTHS ENDED JULY 31, 2000 (UNAUDITED)

<TABLE>
<CAPTION>

                                                The Company
                                                  Excluding                 Doe Run Cayman   Doe Run
                                                  Guarantor     Domestic     and Certain     Peru and                     The
                                                 Subsidiaries  Guarantors    Subsidiaries   Subsidiaries  Eliminations   Company
                                                 ------------  ----------    ------------   ------------  ------------   -------
<S>                                              <C>           <C>           <C>            <C>           <C>             <C>
Net sales                                          $ 232,129    $ 20,597       $ 10,171       $362,574      $(28,172)    $ 597,299

Costs and expenses:
     Cost of sales                                   200,183      17,656              -        318,514        (3,912)      532,441
     Depletion, depreciation and amortization         14,442       1,169              -          6,652             -        22,263
     Selling, general and administrative              12,086         988          7,430         27,567       (24,262)       23,809
     Exploration                                       2,324           -              -            906             -         3,230
                                                    --------     -------         ------       --------       --------     --------
        Total costs and expenses                     229,035      19,813          7,430        353,639       (28,174)      581,743
                                                    --------     -------         ------       --------       --------     --------

        Income from operations                         3,094         784          2,741          8,935             2        15,556

Other income (expense):
     Interest expense                                (31,113)       (780)       (11,017)        (3,885)          769       (46,026)
     Interest income                                  11,353           -              -            248          (769)       10,832
     Other, net                                        1,057         (19)           (73)           100             -         1,065
     Equity in earnings of subsidiaries               (3,792)         -           5,882              -        (2,090)           -
                                                    --------     -------         ------       --------       --------     --------
                                                     (22,495)       (799)        (5,208)        (3,537)       (2,090)      (34,129)
                                                    --------     -------         ------       --------       --------     --------
        Income (loss) before income tax
              expense (benefit)                      (19,401)        (15)        (2,467)         5,398        (2,088)      (18,573)
     Income tax expense (benefit)                        652           -          1,312           (484)            -         1,480
                                                    --------     -------         ------       --------       --------     --------

        Net income (loss)                          $ (20,053)   $    (15)      $ (3,779)      $  5,882      $ (2,088)    $ (20,053)
                                                   ==========   =========      =========      ========      =========    ==========

</TABLE>

                                       18
<PAGE>

                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

(7) GUARANTOR SUBSIDIARIES (CONTINUED)

                      CONSOLIDATING STATEMENT OF OPERATIONS
                   NINE MONTHS ENDED JULY 31, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
                                                 The Company
                                                  Excluding                 Doe Run Cayman    Doe Run
                                                  Guarantor     Domestic      and Certain      Peru and                    The
                                                 Subsidiaries  Guarantors     Subsidiaries   Subsidiaries  Eliminations  Company
                                                 ------------  ----------     ------------   ------------  ------------  -------
<S>                                              <C>           <C>            <C>            <C>           <C>           <C>
Net sales                                        $  238,862     $ 19,108         $ 8,913      $ 333,792     $ (26,011)    $ 574,664

Costs and expenses:
     Cost of sales                                  197,256       16,105               -        284,131        (4,397)      493,095
     Depletion, depreciation and amortization        17,221        1,144               -          5,699             -        24,064
     Selling, general and administrative             11,896        1,128           7,358         24,144       (21,749)       22,777
     Exploration                                      2,855            -               -              -             -         2,855
                                                   ---------    ---------       --------      ---------      ---------     --------
        Total costs and expenses                    229,228       18,377           7,358        313,974       (26,146)      542,791
                                                   ---------    ---------       --------      ---------      ---------     --------

        Income from operations                        9,634          731           1,555         19,818           135        31,873

Other income (expense):
     Interest expense                               (30,530)        (826)        (11,156)        (2,672)          771       (44,413)
     Interest income                                 11,415            -               -            558          (771)       11,202
     Other, net                                        (467)        (113)            401         (1,378)            -        (1,557)
     Equity in earnings of subsidiaries               4,126            -          15,467              -       (19,593)           -
                                                   ---------    ---------       --------      ---------      ---------     --------
                                                    (15,456)        (939)          4,712         (3,492)      (19,593)      (34,768)
                                                   ---------    ---------       --------      ---------      ---------     --------
        Income (loss) before income tax
              expense                                (5,822)        (208)          6,267         16,326       (19,458)       (2,895)
     Income tax expense                               6,783            -           2,068            859             -         9,710
                                                   ---------    ---------       --------      ---------      ---------     --------

        Net income (loss)                        $  (12,605)   $    (208)       $  4,199      $  15,467     $ (19,458)   $  (12,605)
                                                 ===========   ==========       ========     ==========    ===========   ===========

</TABLE>

                                       19
<PAGE>

                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

(7) GUARANTOR SUBSIDIARIES (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                   NINE MONTHS ENDED JULY 31, 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                                     The Company
                                                      Excluding                Doe Run Cayman   Doe Run
                                                      Guarantor     Domestic    and Certain      Peru and                     The
                                                     Subsidiaries  Guarantors   Subsidiaries   Subsidiaries  Eliminations   Company
                                                     ------------  ----------   ------------   ------------  ------------   -------
<S>                                                    <C>           <C>          <C>            <C>          <C>         <C>
Net cash provided by (used in) operating activities   $ (13,436)     $  (336)     $   332        $  7,734     $ (2,090)   $  (7,796)
Cash flows from investing activities:
       Purchases of property, plant and equipment        (5,164)        (340)           -         (19,693)           -      (25,197)
       Investment in subsidiaries                         3,792            -       (5,882)             -         2,090            -
                                                       --------      --------     -------        --------     --------    ---------
         Net cash provided by (used in)
            investing activities                         (1,372)        (340)      (5,882)        (19,693)       2,090      (25,197)
Cash flows from financing activities:
       Proceeds from revolving loans
         and short-term borrowings, net                  15,584            -            -          17,279            -       32,863
       Payments on long-term debt                          (266)           -            -          (2,466)           -       (2,732)
       Loans from parent/subsidiaries                    (7,229)       1,545        5,556             128            -            -
                                                       --------      --------     -------        --------     --------    ---------
         Net cash provided by
             financing activities                         8,089        1,545        5,556          14,941            -       30,131
                                                       --------      --------     -------        --------     --------    ---------
         Net increase (decrease) in cash                 (6,719)         869            6           2,982            -       (2,862)

Cash at beginning of period                               7,197       (1,347)          39           3,997            -        9,886
                                                       --------      --------     -------        --------     --------    ---------
Cash at end of period                                 $     478      $  (478)     $    45        $  6,979     $      -    $   7,024
                                                      =========      ========     =======        ========     ========    =========

</TABLE>

                                       20
<PAGE>


                        THE DOE RUN RESOURCES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)

(7) GUARANTOR SUBSIDIARIES (CONTINUED)

                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                   NINE MONTHS ENDED JULY 31, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
                                                     The Company
                                                      Excluding                Doe Run Cayman   Doe Run
                                                      Guarantor     Domestic    and Certain      Peru and                    The
                                                     Subsidiaries  Guarantors   Subsidiaries   Subsidiaries  Eliminations  Company
                                                     ------------  ----------   ------------   ------------  ------------  -------
<S>                                                   <C>          <C>          <C>             <C>           <C>         <C>
Net cash provided by (used in) operating activities   $   7,373    $   (462)    $    9,917      $  24,295     $ (19,395)  $  21,728
Cash flows from investing activities:
       Purchases of property, plant and equipment       (11,089)       (100)             -        (13,723)            -     (24,912)
       Investment in subsidiaries                        (4,126)          -        (15,269)             -        19,395           -
                                                      ---------    --------     ----------      ---------     ---------   ---------
         Net cash provided by (used in)
            investing activities                        (15,215)       (100)       (15,269)       (13,723)       19,395     (24,912)
Cash flows from financing activities:
       Proceeds from (payments on ) revolving
         loans and short-term borrowings, net            (2,750)          -              -        (12,794)            -     (15,544)
       Proceeds from long-term debt                       5,665           -              -              -             -       5,665
       Payments on long-term debt                          (895)          -              -         (1,180)            -      (2,075)
       Proceeds from sale/leaseback transaction               -           -              -         17,922             -      17,922
       Payment of deferred financing costs                 (467)          -              -              -             -        (467)
       Loans from parent/subsidiaries                     6,289         562          5,362        (12,213)            -           -
                                                      ---------    --------     ----------      ---------     ---------   ---------
         Net cash provided by (used in)
             financing activities                         7,842         562          5,362         (8,265)            -       5,501
                                                      ---------    --------     ----------      ---------     ---------   ---------
         Net increase in cash                                 -           -             10          2,307             -       2,317

Cash at beginning of period                                   -           -             21          4,625             -       4,646
                                                      ---------    --------     ----------      ---------     ---------   ---------
Cash at end of period                                 $       -    $      -     $       31      $   6,932     $       -   $   6,963
                                                      =========    ========     ==========      =========     =========   =========

</TABLE>


                                       21
<PAGE>

                              DOE RUN PERU S.R.L.

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>

                                                                            JULY 31,           OCTOBER 31,
                                                                              2000                 1999
                                                                         ----------------     ---------------
                                                                           (UNAUDITED)
<S>                                                                         <C>                   <C>
                                     ASSETS
Current assets:
     Cash                                                                   $      6,979          $    3,997
     Trade accounts receivable, net of allowance for
         doubtful accounts                                                        27,375              38,864
     Inventories                                                                  80,612              71,122
     Prepaid expenses and other current assets                                    34,430              27,958
     Net deferred tax assets                                                       2,268               2,165
     Due from parent                                                              27,952              23,744
                                                                            ------------          ----------
         Total current assets                                                    179,616             167,850

Property, plant and equipment, net                                               133,636             120,595
Net deferred tax assets                                                            2,028               1,646
Other noncurrent assets, net                                                         229                 323
                                                                            ------------          ----------
         Total assets                                                       $    315,509          $  290,414
                                                                            ============          ==========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Short-term borrowings and current maturities of long-term debt         $     10,518          $    6,946
     Accounts payable                                                             35,533              36,790
     Accrued liabilities                                                          17,868              16,547
     Due to parent                                                                 5,605               1,269
                                                                            ------------          ----------
         Total current liabilities                                                69,524              61,552

Long-term debt, less current maturities                                           44,475              33,234
Other noncurrent liabilities                                                       7,401               7,401
                                                                            ------------          ----------
         Total liabilities                                                       121,400             102,187

Shareholders' equity:


     Common stock, one nuevo sole par value, 729,548,057
         shares authorized, issued and outstanding                               271,435             271,435
     Additional paid in capital                                                  (16,234)            (16,234)
     Due from shareholder                                                       (105,257)           (104,865)
     Foreign currency translation adjustment                                     (19,743)            (20,135)
     Retained earnings                                                            63,908              58,026
                                                                            ------------          ----------
         Total shareholders' equity                                              194,109             188,227
                                                                            ------------          ----------
         Total liabilities and shareholders' equity                         $    315,509          $  290,414
                                                                            ============          ==========

</TABLE>

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

                                       22
<PAGE>

                              DOE RUN PERU S.R.L.

         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                              THREE MONTHS                  NINE MONTHS
                                                              ENDED JULY 31,               ENDED JULY 31,
                                                       --------------------------    --------------------------
                                                           2000          1999           2000           1999
                                                       -----------    -----------    -----------    -----------
<S>                                                    <C>            <C>            <C>            <C>
Net sales                                              $   118,713    $   117,920    $   362,574    $   333,792

Costs and expenses:
    Cost of sales                                          104,683         99,598        318,514        284,131
    Depreciation and amortization                            2,250          1,909          6,652          5,699
    Selling, general and administrative                      9,605          8,632         27,567         24,144
    Exploration                                                906              -            906              -
                                                       -----------    -----------    -----------    -----------
        Total costs and expenses                           117,444        110,139        353,639        313,974
                                                       -----------    -----------    -----------    -----------

        Income from operations                               1,269          7,781          8,935         19,818

Other income (expense):
    Interest expense                                        (1,363)        (1,030)        (3,885)        (2,672)
    Interest income                                             90             51            248            558
    Other, net                                                 564           (518)           100         (1,378)
                                                       -----------    -----------    -----------    -----------
                                                              (709)        (1,497)        (3,537)        (3,492)
                                                       -----------    -----------    -----------    -----------
        Income before income tax expense (benefit)             560          6,284          5,398         16,326

Income tax expense (benefit)                                  (233)           400           (484)           859
                                                       -----------    -----------    -----------    -----------

        Net income                                     $       793    $     5,884    $     5,882    $    15,467
                                                       ===========    ===========    ===========    ===========

</TABLE>

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

                                       23
<PAGE>

                              DOE RUN PERU S.R.L.

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                          NINE MONTHS
                                                                         ENDED JULY 31,
                                                                  --------------------------
                                                                      2000          1999
                                                                  ------------  ------------
<S>                                                               <C>           <C>
Net cash provided by operating activities                         $      7,734  $     24,295
Cash flows from investing activities:
     Purchases of property, plant and equipment                        (19,693)      (13,723)
                                                                  ------------  ------------
          Net cash used in investing activities                        (19,693)      (13,723)
Cash flows from financing activities:
     Proceeds from (payments on) revolving loans
        and short-term borrowings, net                                  17,279       (12,794)
     Payments on long-term debt                                         (2,466)       (1,180)
     Proceeds from sale/leaseback transactions                               -        17,922
     Loans to parent                                                       128       (12,213)
                                                                  ------------  ------------
          Net cash provided by (used in) financing activities           14,941        (8,265)
                                                                  ------------  ------------
          Net increase in cash                                           2,982         2,307

Cash at beginning of period                                              3,997         4,625
                                                                  ------------  ------------
Cash at end of period                                             $      6,979  $      6,932
                                                                  ============  ============

</TABLE>

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

                                     24
<PAGE>

                               DOE RUN PERU S.R.L.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)



(1)      BASIS OF PRESENTATION

                  UNAUDITED INTERIM FINANCIAL STATEMENTS

         In the opinion of management, the interim condensed consolidated
         financial statements of Doe Run Peru S.R.L. (Doe Run Peru) contain all
         adjustments, consisting of normal recurring accruals, necessary to
         present fairly the condensed consolidated financial position as of July
         31, 2000 and results of operations for the three and nine month periods
         ended July 31, 2000 and 1999. Interim periods are not necessarily
         indicative of results to be expected for the year.

                  MERGER OF DOE RUN PERU AND EMPRESA MINERA COBRIZA S.A.

         Effective March 1, 1999, Doe Run Mining merged Doe Run Peru and the
         Empresa Minera Cobriza S.A. (Cobriza), an entity previously controlled
         by Doe Run Mining since the acquisition of substantially all of
         Cobriza's shares on August 31, 1998. The financial statements of the
         Company for the three and nine months ended July 31, 1999 have been
         restated to reflect the results of operations and cash flows of Cobriza
         to reflect the common control of Doe Run Peru and Cobriza before the
         merger.

                  RECLASSIFICATIONS

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

(2)      INVENTORIES

<TABLE>
<CAPTION>

                                                        JULY 31,     OCTOBER 31,
                                                          2000          1999
                                                      -------------  -----------
                                                       (UNAUDITED)
<S>                                                   <C>            <C>
         Refined metals and concentrates for sale     $      4,070   $    1,414
         Metals and concentrates in process                 54,836       47,970
         Materials, supplies and spare parts                21,706       21,738
                                                      -------------  -----------
                                                      $     80,612   $   71,122
                                                      =============  ===========

</TABLE>

                                       25
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

                  The following discussion and analysis includes the U.S.
         operations of the Company, including FPI, and the Peruvian operations
         of the Company, including Doe Run Cayman and its Peruvian subsidiaries,
         and should be read in conjunction with the consolidated financial
         statements of the Company and the notes thereto, and other financial
         information included herein.


         CONSOLIDATED FINANCIAL POSITION

                  During the nine months ended July 31, 2000 (the 2000 period)
         inventories increased by $18.8 million. In the U.S., inventories
         increased by $9.3 million primarily due to normal seasonal increases in
         finished goods inventories and to increased production at the Buick
         secondary smelter. In Peru, inventories rose $9.5 million primarily due
         to a $6.8 million increase in copper concentrate inventories intended
         to build a stock of blister copper in anticipation of major maintenance
         on the reverberatory furnace in the copper circuit, previously
         scheduled for September of 2000. This maintenance has been rescheduled
         for May of 2001 and the excess copper concentrate inventory should be
         consumed during the fourth quarter. Lead concentrates and, in
         particular, silver contained in concentrates, were also higher to
         support increased production of lead and silver metal. Finished goods
         inventories in Peru rose $2.7 million as increased production exceeded
         sales volume. Management anticipates that inventories will be reduced
         significantly during the fourth quarter. Raw material inventories at
         year end should be near the prior year end levels. Finished goods
         inventories will be higher than the prior year, primarily in the U.S.,
         as a result of increased production coupled with a slight decrease in
         lead metal sales volume.

                  During the nine months ended July 31, 2000, net cash used in
         operating activities was $7.8 million and capital expenditures were
         $25.2 million. As a result, total debt, mainly revolving loans and
         short-term borrowings, increased by $30.9 million


         RESULTS OF OPERATIONS

                  The Company reported a net loss of $8.4 million for the three
         months ended July 31, 2000 (the 2000 quarter) compared to net income of
         $1.0 million for the three months ended July 31, 1999 (the 1999
         quarter). The Company's U.S. operations reported a net loss of $11.4
         million (excluding intercompany fee revenue of $4.7 million) for the
         2000 quarter, compared to a net loss of $5.2 million (excluding
         intercompany fee revenue of $4.6 million) in the 1999 quarter,
         reflecting the effects of lower realized prices for lead metal,
         partially offset by higher realized prices for copper and zinc.
         Peruvian operations generated net income of $3.1 million for the 2000
         quarter (excluding intercompany fees and eliminations of $4.7 million)
         compared to net income of $6.1 million (excluding intercompany fees and
         eliminations of $4.6 million) in the 1999 quarter. The decrease in
         Peruvian net income was due primarily to increased production costs and
         lower treatment charges for copper and lead concentrates, partially
         offset by higher copper prices and increased lead production and sales.

                  The Company reported a net loss of $20.0 million for the 2000
         period compared to a net loss of $12.6 million for the nine months
         ended July 31, 1999 (the 1999 period). The Company's U.S. operations
         reported a net loss of $30.4 million (excluding intercompany fee
         revenue of $14.1 million) for the 2000 period compared to a net loss of
         $29.8 million (excluding intercompany fee revenue of $12.8 million) for
         the 1999 period, reflecting the effects of lower realized prices for
         lead metal and higher production costs. These factors were partially
         offset by the absence, in the 2000 period, of the write-off of deferred
         tax


                                       26
<PAGE>

         balances of $6.2 million associated with a change in the Company's tax
         status to a qualified subchapter S subsidiary in the 1999 period. See
         "Item 1. Financial Statements - Note 2 to the Company's Consolidated
         Financial Statements" for a discussion of the change in tax status.
         Peruvian operations generated net income of $10.3 million for the 2000
         period (excluding intercompany fees and eliminations of $14.1 million)
         compared to net income of $17.2 million (excluding intercompany fees
         and eliminations of $12.7 million) for the 1999 period. The decrease in
         Peruvian net income was primarily due to the factors discussed above.

                  The Company's results for the three months and the nine months
         ended July 31, 2000 reflect declines in the market price of lead metal
         and increases in the price of copper and zinc from the prior year. The
         following table sets forth the 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:

<TABLE>
<CAPTION>

                                            Three Months Ended               Nine Months Ended
                                                 July 31,                         July 31,
                                       ------------------------------  ------------------------------
                                           2000            1999             2000           1999
                                       -------------- ---------------  --------------- --------------
<S>                                      <C>             <C>              <C>            <C>
AVERAGE PRICES
Lead ($/short ton)                       $    388.00     $    462.20      $    406.00    $    459.20
Copper ($/short ton)                        1,613.80        1,383.60         1,602.40       1,341.20
Zinc ($/short ton)                          1,031.20          941.20         1,033.60         911.40
Silver ($/troy ounce)                           4.98            5.16             5.09           5.14


</TABLE>

                  Over the past two years the LME lead price has declined as new
         mines have been developed in Australia and Ireland, and as China has
         increased its lead metal production and exports. During the second and
         third quarters of 2000 lead prices declined to near historical lows.
         Despite modest improvement late in the third quarter, lead prices
         remain substantially below the ten-year average. However, in the U.S.,
         demand for the Company's lead products has remained strong. Industry
         sources continue to forecast significant growth in stationary and
         industrial battery consumption. Because of excellent product quality,
         the Company's U.S. operations have a major share of this growth market.

                  Management believes that lead prices will recover from the
         current low level as several large lead producing mines will be
         depleted. This should bring about a deficit in supply versus demand.
         Recent industry developments include smelter closures in China, which
         should result in reduced exports, mine production cutbacks in the U.S.
         and Australia and a sharp reduction in LME inventories. Between April
         and August 2000 the LME lead inventory balance declined 84 thousand
         tons or approximately 41%. During the same time frame, the monthly
         average LME lead price improved approximately 12%.

                  As a result of the recent low lead price the Company's U.S.
         operations had operating losses in the quarter and the nine months
         ended July 31, 2000. The Company has made changes to its operations,
         described below, which it expects will reduce certain costs, and
         achieve certain operating efficiencies, in an effort to mitigate the
         impact of low metal prices. The Company also expects to benefit from
         increased sales volume in the fourth quarter of fiscal 2000, compared
         to the first three quarters. However, prices sustained at these levels
         or decreasing further are likely to result in the continuation of
         operating losses for the Company's U.S. operations.


                                       27
<PAGE>

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

<TABLE>
<CAPTION>

                                                               Three Months Ended        Nine Months Ended
                                                                    July 31,                 July 31,
                                                             ------------------------ -------------------------
                                                                2000        1999         2000         1999
                                                             ----------- ------------ -----------  ------------
<S>                                                              <C>          <C>        <C>           <C>
         U.S. OPERATIONS
         Lead metal - primary (short tons)                       93,669       94,433     284,292       285,570
         Lead metal - secondary (short tons)                     35,722       28,969     105,260        83,786
         Lead concentrates (metal content, short tons)           75,131       96,253     241,991       288,267
         Ore Grade (lead content)                                 5.86%        5.87%       5.77%         5.66%

         PERUVIAN OPERATIONS
         Refined copper (short tons)                             17,993       19,354      54,431        54,817
         Refined lead (short tons)                               33,228       30,607      98,121        89,365
         Refined zinc (short tons)                               21,701       20,951      64,356        60,408
         Refined silver (thousands of troy ounces)                8,627        8,543      25,973        24,206
         Refined gold (thousands of troy ounces)                     21           15          71            48

</TABLE>

                  The Company continues to evaluate mine production plans in
         light of continuing low lead metal prices. Selective mining of higher
         grade ore caused a reduction in the total ore mined, which was down 22%
         in the 2000 quarter and 18% in the 2000 period, compared to the prior
         year. As a result, production of lead metal in concentrates decreased
         by approximately 22% in the 2000 quarter and 16% in the 2000 period,
         compared to the prior year.

                  On April 19, 2000 the Company announced operating changes
         intended to increase grade and lower unit production costs. These
         changes, which were implemented in the third quarter, involved a
         restructuring of the mine/mill operations resulting in a workforce
         reduction of approximately 12% at the U.S. mining operations. Two of
         the Company's six mills were idled and placed on care and maintenance
         and three of the Company's eight mines were effectively idled,
         producing only small quantities of selected high-grade ore. Major
         mine development work initiated late in the second quarter yielded
         less than expected ore grades, and as a result ore grade estimates
         under the new operating mode have been revised. Management expects a
         reduction in annualized tons of ore mined of approximately 15% from
         the fiscal 1999 levels, but anticipates that lead and zinc ore grades
         will improve by approximately 5% and 12%, respectively. Annualized
         production of lead metal contained in concentrates is expected to
         decline approximately 10% from the 1999 level. Concentrates purchased
         in the open market are expected to replace the Company's production
         and the smelters will continue to operate near capacity. The necessary
         concentrates have been purchased for fiscal 2000. For fiscal 2001, the
         Company has contracts in place for approximately 80% of its estimated
         purchased concentrate requirement. In addition to production changes,
         management is in the process of implementing cost reduction measures
         primarily resulting from an in-depth cost analysis of the
         mining/milling operations. These measures include strategic sourcing
         of raw materials, equipment and supplies, enhanced ordering procedures
         and controls, improved maintenance planning and scheduling, improved
         maintenance procedures, and others. The benefits of these changes
         should result in modest improvements in unit production costs in the
         fourth quarter of fiscal 2000, with the full impact being realized
         by the end of fiscal 2001.

                  Primary smelter production for the 2000 quarter was 1% less
         than the 1999 quarter. For the 2000 period, total primary production
         was approximately the same as the 1999 period. Production at the
         Company's Glover primary smelter for the 2000 quarter was about 5% less
         than the 1999 quarter due primarily to cooling system failures on its
         blast furnace in early July. By the end of the quarter, Glover's
         production rate had returned to normal levels. Management anticipates
         recovery of the lost production by the end of the fiscal year. Glover's
         production for the 2000 period was 1% less than the 1999 period.


                                       28
<PAGE>

                  Secondary smelter production exceeded the prior year by 23%
         for the three months and 26% for the nine months ended July 31, 2000.
         These increases are primarily the result of installation of a new
         burner, with an improved design, on the smelter's reverberatory furnace
         during the fourth quarter of 1999, as well as modifications that were
         made to the lead blast furnace during the first quarter of 2000. These
         changes combined increased total secondary smelter capacity by
         approximately 27%.

                  In Peru, the La Oroya metallurgical complex increased the
         capacities of its lead and zinc refineries by approximately five
         percent each during the third quarter of 1999. In addition, the Company
         continues to replace equipment and make process improvements throughout
         the plant. The impact of these changes is reflected in La Oroya's
         production performance. In the 2000 quarter, production of lead, zinc,
         silver and gold all exceeded the 1999 quarter. Copper production was
         about 7% less than the 1999 quarter primarily due to a shortfall in
         copper concentrate feed from the Company's Cobriza mining operation.
         For the 2000 period, lead production increased 10% over the prior year,
         zinc and silver production were each up approximately 7% and gold
         bullion production improved by more than 47%. Copper production was 1%
         less than the prior year primarily due to the feed shortfall mentioned
         above. The increases in silver and gold production were primarily the
         result of acquiring concentrate feed with higher content of these
         metals.

                  At the Company's Cobriza copper mining operation, ore grade in
         the available working areas diminished significantly, from 1.01% in the
         1999 period to .88% in the 2000 period. In May 2000, the Company
         implemented changes in operations intended to improve ore grade and
         reduce unit production cost. The changes involved a workforce reduction
         of approximately 19% and a reduction in annualized ore production of
         approximately 31% from the fiscal 1999 levels. Ore grade improved from
         .86% in the second quarter to .92% in the third quarter and should
         continue to improve in the fourth quarter. It is anticipated that ore
         grade will average approximately 1.06% for fiscal 2001. As the new
         operating plan was implemented, ground support, ventilation and other
         development work was accelerated in an effort to improve ore grade.
         Operating costs for Cobriza were up 11% for the 2000 quarter and 19%
         for the 2000 period, compared to the prior year, primarily as a result
         of this development work. As a result of the lower grade and reduced
         ore production, copper metal contained in concentrates produced was
         40% lower for the 2000 quarter and 17% lower for the 2000 period,
         compared the prior year. The combination of reduced production and
         increased operating cost resulted in a significant increase in the
         cost of metal units delivered to La Oroya for both the 2000 quarter
         and the 2000 period.


                                       29
<PAGE>

                  The following tables set forth the separate operating results,
         sales volumes and realized prices for the Company's U. S. and Peruvian
         operations for the periods indicated:


                           RESULTS OF U.S. OPERATIONS

<TABLE>
<CAPTION>

                                                                   Three Months Ended                 Nine Months Ended
                                                                         July 31,                          July 31,
                                                              ------------------------------      -----------------------------
                                                                  2000             1999               2000             1999
                                                              ------------      ------------      ------------      -----------

<S>                                                           <C>               <C>               <C>               <C>
          Net sales (a)                                       $     76,099      $     86,158      $    236,298      $    243,722

          Costs and expenses:
               Cost of sales                                        71,304            73,230           215,500           211,929
               Depreciation and amortization                         5,149             5,775            15,611            18,365
               Selling, general and administrative                   3,433             4,502            13,074            13,024
               Exploration                                             783             1,005             2,324             2,855
                                                              ------------      ------------      ------------      ------------
                   Total costs and expenses                         80,669            84,512           246,509           246,173
                                                              ------------      ------------      ------------      ------------

                    Income from operations                          (4,570)            1,646           (10,211)           (2,451)

          Other income (expense)
               Interest expense                                    (10,568)          (10,244)          (31,124)          (30,585)
               Interest income                                       3,523             3,578            10,584            10,644
               Other, net                                              402                63             1,038              (580)
                                                              ------------      ------------      ------------      ------------
                                                                    (6,643)           (6,603)          (19,502)          (20,521)
                                                              ------------      ------------      ------------      ------------
               Loss before income tax expense                      (11,213)           (4,957)          (29,713)          (22,972)
          Income tax expense                                           217               199               652             6,783
                                                              ------------      ------------      ------------      ------------
             Net loss                                         $    (11,430)     $     (5,156)     $    (30,365)     $    (29,755)
                                                              ============      ============      ============      ============



         (a) Intercompany fees that are eliminated in the consolidated results
             of the Company and have been excluded from the results presented
             above are as follows:

         Net Sales                                            $      4,654     $      4,561     $     14,091     $     12,836



         SALES VOLUMES (SHORT TONS)                                106,805          109,769          318,352          321,885
              Lead metal                                            24,169           24,365           71,878           74,536
              Zinc concentrates                                      2,804            4,468           10,309           11,784
              Copper concentrates

         REALIZED PRICES ($/SHORT TON)(b)                     $     495.15     $     566.85     $     516.40     $     546.20
              Lead metal                                            347.68           322.63           351.47           301.52
              Zinc concentrates                                     298.86           203.22           292.56           205.28
              Copper concentrates

</TABLE>

         (b) Net realized prices for metals, concentrates, and by-products
             include the effects of changes in: 1) premiums received, including
             charges for special alloys and shapes, 2) adjustments to
             provisionally priced sales, 3) treatment and refining charges and
             4) net hedging activity.


                                       30
<PAGE>

                         RESULTS OF PERUVIAN OPERATIONS

<TABLE>
<CAPTION>

                                                            Three Months Ended                    Nine Months Ended
                                                                 July 31,                             July 31,
                                                   -------------------------------------     -------------------------------
                                                       2000                     1999             2000              1999
                                                   --------------          -------------     -------------     -------------

<S>                                                      <C>               <C>               <C>               <C>
     Net sales (a)                                       $    118,689      $    117,840      $    361,001      $    330,942

     Costs and expenses:
          Cost of sales (a)                                   104,659            99,518           316,941           281,166
          Depreciation and amortization                         2,250             1,909             6,652             5,699
          Selling, general and administrative (a)               3,810             3,684            10,735             9,753
          Exploration                                             906                --               906                --
                                                         ------------      ------------      ------------      ------------
              Total costs and expenses                        111,625           105,111           335,234           296,618
                                                         ------------      ------------      ------------      ------------

               Income from operations                           7,064            12,729            25,767            34,324

     Other income (expense)
          Interest expense                                     (5,033)           (4,728)          (14,902)          (13,828)
          Interest income                                          90                51               248               558
          Other, net                                              547              (951)               27              (977)
                                                         ------------      ------------      ------------      ------------
                                                               (4,396)           (5,628)          (14,627)          (14,247)
                                                         ------------      ------------      ------------      ------------
          Income before income tax expense (benefit)            2,668             7,101            11,140            20,077
     Income tax expense (benefit)                                (390)              987               828             2,927
                                                         ------------      ------------      ------------      ------------
         Net income                                      $      3,058      $      6,114      $     10,312      $     17,150
                                                         ============      ============      ============      ============

    (a) Intercompany sales and fees that are eliminated in the consolidated
        results of the Company and have been excluded from the results
        presented above are as follows:

     Net sales                                           $         24      $         80      $     1,573      $     2,850
     Cost of sales                                                 24                80            1,573            2,965
     Selling, general and administrative expense                4,654             4,561           14,091           12,836

SALES VOLUMES
          Copper (short tons)                                  17,805            19,061           54,332           54,424
          Lead (short tons)                                    33,285            30,065           94,235           84,835
          Zinc (short tons)                                    21,762            21,677           63,088           60,747
          Silver (thousands of troy ounces)                     8,564             8,589           25,764           24,229
          Gold (thousands of troy ounces)                          21                18               71               48

REALIZED PRICES (b)
          Copper ($/short ton)                           $   1,605.33      $   1,335.84     $   1,598.16     $   1,317.77
          Lead ($/short ton)                                   440.78            493.66           408.90           473.87
          Zinc ($/short ton)                                 1,049.33            957.93         1,055.13           917.17
          Silver  ($/troy ounce)                                 5.02              5.19             5.11             5.16
          Gold  ($/troy ounce)                                 280.55            275.50           286.51           284.09


         (b) Net realized prices for metals include the effects of changes in:
             1) premiums received, including charges for special alloys and
             shapes, 2) adjustments to provisionally priced sales, and 3) net
             hedging activity.

</TABLE>


                                       31
<PAGE>

                  Results of operations for the three months and the nine months
         ended July 31, 2000 and 1999 include the results of the Company's U.S.
         and Peruvian operations. In order to provide a more meaningful
         analysis, the results of operations attributable to Peruvian operations
         will be noted and discussed separately under "Results of Peruvian
         Operations."

                  NET SALES in the 2000 quarter were $194.8 million compared to
         $204.0 million in the 1999 quarter. An increase of $0.8 million is
         attributable to Peruvian operations. U.S. net sales were $10.1 million,
         or 12%, lower in the 2000 quarter, compared to the 1999 quarter,
         primarily due to lower realized prices for, and slightly lower volume
         of, lead metal sales. Lead metal net sales decreased from $62.2 million
         in the 1999 quarter to $52.9 million in the 2000 quarter. Of this
         decrease, $1.7 million is attributable to a 3% reduction in lead metal
         sales volume. A slow start to the automotive battery season due to the
         cool summer in the northeastern U.S. and the Company's policy of
         maintaining higher premiums contributed to the volume decrease. Lower
         realized prices for lead metal accounted for a decrease of $7.7 million
         in lead metal net sales. The Company's net realized price for lead
         metal was 13% lower in the 2000 quarter, compared to the 1999 quarter,
         primarily due to a 16% decrease in the LME average lead price. The
         Company was able to maintain premiums over the LME price at near
         historical highs through its marketing efforts and its focus on sales
         of alloy and specialty lead products, which command higher premiums.

                  Net sales for the 2000 period were $597.3 million compared to
         $574.7 million for the 1999 period. An increase of $30.1 million is
         attributable to Peruvian operations. U.S. net sales for the 2000 period
         were $7.4 million less than the 1999 period primarily due to lower lead
         metal prices partially offset by increased realized prices for zinc
         concentrates and higher toll lead volumes. The average LME price for
         lead metal declined 12% in the 2000 period, compared to the 1999
         period. However, as a result of improved premiums, the Company's net
         realized price was only 6% lower than the prior year reducing net sales
         by $9.5 million. Due to the factors discussed above, lead metal sales
         volume was 1% lower than the prior year, reducing net sales by $1.9
         million. Zinc and copper concentrate sales were $3.4 million higher in
         the 2000 period, compared to the 1999 period, primarily due to
         increases in the LME price for these metals. The production
         improvements at the Buick secondary smelter, discussed above, coupled
         with increased demand generated a 9% increase in toll lead volume,
         which contributed $1.4 million to the net sales increase.

                  COST OF SALES for the 2000 quarter was $176.0 million compared
         to $172.7 million for the 1999 quarter. An increase of $5.1 million is
         attributable to Peruvian operations. U.S. cost of sales for the 2000
         quarter was $1.9 million less than the 1999 quarter. This decrease is
         primarily attributable to the reduced volume of lead metal sales and
         the reduced sales at Lone Star, discussed above. Reduced unit
         production cost at the Buick smelter, primarily related to volume
         improvements, also contributed to the reduction. These factors were
         partially offset by higher production costs for primary lead metal and
         zinc and copper concentrates.

                  Cost of sales for the 2000 period was $532.4 million compared
         to $493.1 million for the 1999 period. Of this increase, $35.7 million
         is attributable to Peruvian operations. U.S. cost of sales for the 2000
         period increased by $3.6 million compared to the 1999 period. The unit
         production cost of primary lead metal increased by approximately 5%,
         compared to the prior year, accounting for an increase of $6.6 million
         in cost of sales. Factors contributing to the increase in primary
         production cost per ton include: 1) the impact of reduced mine
         production volume, 2) repair costs associated with the primary smelter
         production problems which occurred during the second quarter, and 3)
         costs related to increased production of lead alloy products. The
         increased volume at Seafab Metals Company (Seafab), a division of FPI,
         contributed $2.1 million to the cost of sales increase. These increases
         were partially offset by lower lead metal sales volume and lower unit
         production costs at the Buick smelter.

                  DEPLETION, DEPRECIATION AND AMORTIZATION for the 2000 quarter
         decreased by $0.3 million compared to the 1999 quarter. For the 2000
         period, depletion, depreciation and amortization decreased


                                       32
<PAGE>

         by $1.8 million compared to the 1999 period. Increases of $0.3 million
         for the 2000 quarter and $1.0 million for the 2000 period are
         attributable to Peruvian operations. The decrease in depletion,
         depreciation, and amortization for U.S. operations of $0.6 million for
         the 2000 quarter and $2.8 million for the 2000 period was primarily
         attributable to a significant number of assets with five-year lives
         that were fully depreciated in March of 1999 and a reduction in
         depletion expense associated with lower mine production rates and the
         shifting of production to areas with lower depletion rates.

                  SELLING, GENERAL AND ADMINISTRATIVE expenses decreased by $0.9
         million in the 2000 quarter compared to the 1999 quarter. Peruvian
         operations accounted for an increase of $0.1 million. The decrease in
         selling, general and administrative expenses for U.S. operations of
         $1.0 million for the 2000 quarter is primarily due to adjustments of
         incentive compensation accruals as a result of financial performance
         and anticipated insurance reimbursements of legal fees previously paid.

                  Selling, general and administrative expenses increased by $1.0
         million in the 2000 period compared to the 1999 period. Peruvian
         operations accounted for an increase of $1.0 million. In the U.S.,
         selling, general and administrative expenses for the 2000 period were
         about the same as the 1999 period after the reductions in the 2000
         quarter and lower insurance costs were offset by increases in
         compensation in earlier quarters and legal fees relating to new
         lawsuits.

                  EXPLORATION expense was $1.7 million for the 2000 quarter
         compared to $1.0 million in the 1999 quarter. For the 2000 period,
         exploration expense was $3.2 million compared to $2.9 million in the
         prior year. An increase of $0.9 million for both the 2000 quarter and
         the 2000 period is attributable to Peruvian operations. In the U.S.,
         exploration decreased by $0.2 million for the quarter and $0.5 million
         for the 2000 period due to the completion of underground test work on a
         Missouri property, which was in process during the 1999. This reduction
         was partially offset by increased activity related to a feasibility
         study on a South African property.

                  INCOME FROM OPERATIONS for the 2000 quarter was $2.9 million
         compared to $14.4 million for the 1999 quarter. For the 2000 period,
         operating income was $16.0 million compared to $31.9 million for the
         1999 period. Decreases of $5.7 million for the quarter and $8.6 million
         for the nine months are attributable to Peruvian operations. The
         remaining fluctuation is primarily due to the factors discussed above.

                  OTHER, NET income was $0.9 million in the 2000 quarter
         compared to other net expense $0.9 in the 1999 quarter. Of this $1.8
         million change, $1.5 million is attributable to Peruvian operations.
         The remaining change is due to rental income on capital assets provided
         for Peruvian operations, which was not in the prior year.

                  Other, net income was $1.1 million in the 2000 period,
         compared to other net expense of $1.6 million in the 1999 period. Of
         the $2.6 million difference, $1.0 million is attributable to Peruvian
         operations. For U.S. operations, other net income was $1.0 million in
         the 2000 period compared to other net expense of $0.6 in the 1999
         period. The change is primarily due to rental income on capital assets
         discussed above.

                  INCOME TAX EXPENSE for the 2000 quarter and the 2000 period
         reflects the impact of a change in tax status effective at the
         beginning of the fiscal year. See "Item 1. Financial Statements--Note 2
         to the Company's Consolidated Financial Statements." As a result of
         this change in tax status, the elimination of federal and most state
         deferred tax assets and liabilities for income tax purposes resulted in
         a charge to income tax expense of $6.2 million in the 1999 period.


                                       33
<PAGE>

         RESULTS OF PERUVIAN OPERATIONS

                  NET SALES in the 2000 quarter were $118.7 million compared to
         $117.8 million in the 1999 quarter. This increase is the result
         improved realized prices for refined copper, zinc and gold and higher
         sales volumes of lead, zinc and gold, partially offset by lower
         realized prices for lead and silver and lower copper and by-product
         volumes. The LME average price for copper was 17% higher in the 2000
         quarter, compared to the 1999 quarter. As a result, the Company's net
         realized price for refined copper increased by 20% in the 2000 quarter,
         increasing net sales by $4.8 million. Improved realized prices for zinc
         and gold contributed another $2.1 million to the net sales increase.
         These increases were partially offset by a 19% reduction in the
         realized price for lead, which reduced net sales by $3.1 million, and
         slightly lower prices for silver. Sales volume changes, primarily a 7%
         reduction in copper volume, reduced net sales by $1.0 million.

                  Net sales for the 2000 period were $361.0 million compared to
         $330.9 million in the 1999 period. The increase is primarily the result
         of higher sales volumes for lead, zinc, silver and gold and improved
         realized prices for copper, zinc and gold, partially offset by lower
         realized prices for lead and silver, and reduced by-product sales. The
         production improvements discussed previously increased refined silver
         sales volume by 1.5 million ounces or 6%, increasing net sales by $6.9
         million. Gold bullion sales volume was up almost 23 thousand ounces or
         48%, compared to the prior year, accounting for $6.5 million of the
         sales increase. Higher lead and zinc volumes added another $6.6 million
         to the net sales improvement. The Company's net realized price for
         refined copper increased by 21% in the 2000 period, increasing net
         sales by $15.2 million. Improvements in zinc realized prices added $8.7
         million to the net sales increase. These increases were partially
         offset by lower realized prices for lead metal and bullion lead, which
         reduced net sales by $7.6 million, and the absence of blister copper
         sales in the 2000 period, compared to $6.5 million in the 1999 period.
         Blister copper sales were eliminated in the 2000 period in favor of
         more profitable refined copper sales.

                  COST OF SALES increased from $99.5 million in the 1999 quarter
         to $104.7 million in the 2000 quarter. A 25% increase in the unit
         production cost of refined copper contributed $5.6 million to the
         increase in cost of sales. This increase was primarily the result of
         higher feed costs for copper due to: 1) the 17% increase in LME copper
         price, 2) the increase in the cost of concentrates produced by Cobriza,
         discussed previously, and 3) a reduction in copper treatment and
         refining charges of approximately 15%. Production costs for refined
         zinc and gold were also somewhat higher in the 2000 quarter. These
         increases were partially offset by lower feed cost for refined lead
         resulting primarily from the decline in the LME price for lead, which
         reduced cost of sales by $2.6 million. In addition, sales volume
         changes, primarily lower copper sales, accounted for a $1.0 million
         decrease in cost of sales.

                  Cost of sales was $316.9 million in the 2000 period compared
         to $281.2 million in the 1999 period. Higher sales volumes for refined
         lead, zinc, silver and gold increased cost of sales by $17.5 million.
         Increased production cost for refined copper, due to the factors
         discussed above, added $19.7 million to the cost of sales. These
         increases were partially offset by lower feed cost for lead metal and
         bullion lead, and reduced by-product sales, primarily blister copper.

                  DEPRECIATION AND AMORTIZATION expense increased by $0.3
         million for the 2000 quarter and $1.0 million the 2000 period, compared
         to the prior year, primarily due to recent capital additions.

                  EXPLORATION Expense increased due to work done to further
         delineate reserves at the Company's Cobriza mine.

                  INCOME FROM OPERATIONS decreased $5.7 million in the 2000
         quarter compared to the 1999 quarter and $8.6 million in the 2000
         period compared to the 1999 period due primarily to the factors
         discussed above.


                                       34
<PAGE>

                  INTEREST INCOME decreased $0.3 million for the 2000 period,
         compared to the prior year, due primarily to interest from a customer
         on a past due account receivable in the 1999 period, which has been
         collected.

                  OTHER, NET income was $0.5 million in the 2000 quarter
         compared to other net expense of $1.0 million in the 1999 quarter. This
         change is primarily due to fluctuations in foreign currency transaction
         gains and losses, resulting primarily from changes in the exchange
         rate, and to an insurance recovery related to the turbine failure at La
         Oroya's oxygen plant.

                  Other, net income was $0.03 million in the 2000 period
         compared to other net expense of $1.0 million in the 1999 period. The
         change is primarily the result of the insurance recovery mentioned
         above and to lower expenses related to transportation interruptions
         during the rainy season in the 2000 period.

                  INCOME TAXES for the 2000 quarter and the 2000 period reflect
         the recognition of benefits relating to deferred tax assets for which
         benefit had not previously been recognized.



         LIQUIDITY AND CAPITAL RESOURCES

                  The Company's liquidity requirements arise from its working
         capital requirements, and capital investment and debt service
         obligations. The Company's primary available sources of liquidity are
         cash provided by operating activities and two revolving credit
         facilities. In the U.S., the Company has available a revolving credit
         facility (the Doe Run Revolving Credit Facility) that provides for
         advances by the lender to a maximum of $100.0 million less outstanding
         letters of credit, based on specific percentages of eligible
         receivables and inventories. As of July 31, 2000, $27.4 million was
         outstanding, exclusive of $6.5 million of letters of credit, under the
         Doe Run Revolving Credit Facility.

                  In Peru, the Company has available a revolving credit facility
         (the Doe Run Peru Revolving Credit Facility) that provides for advances
         by the lender to a maximum of $50.0 million, less outstanding letters
         of credit, based upon specific percentages of eligible receivables and
         inventories. At July 31, 2000, $34.0 million was outstanding under the
         Doe Run Peru Revolving Credit Facility. In addition, an independent
         line of $10.0 million is available for the issuance of guarantee
         letters of which $3.0 million were outstanding as of July 31, 2000. The
         Company also has available, in Peru, unsecured and uncommitted credit
         arrangements and additional availability related to letters of credit
         and customs bonds, provided by local banks. At July 31, 2000, $6.7
         million exclusive of $10.6 million of letters of credit and customs
         bonds was outstanding under these arrangements.

                  Effective March 30, 2000 the Company's primary lender in Peru
         approved an increase in the maximum advance under the Doe Run Peru
         Revolving Credit Facility from $40.0 million to $50.0 million, under a
         written memorandum from the lender, pending completion of a formal
         contract. In addition, the lender approved the independent line of
         $10.0 discussed above. Unlike the Revolving Credit Facility, the
         independent line is not committed and is subject to modification or
         cancellation at the option of the lender.

                  Net unused availability at July 31, 2000 was $31.2 million
         under the Doe Run Revolving Credit Facility and $16.0 million under the
         Doe Run Peru Revolving Credit Facility. In addition to availability
         under the credit facilities, the Company had $7.0 million of cash at
         July 31, 2000.

                  In the 2000 quarter, cash used in operating activities was
         $2.1 million, cash used in investing activities was $16.7 million and
         cash provided by financing activities was $21.8 million. For the 2000
         period, cash used in operating activities was $7.8 million, cash used
         in investing activities was $25.2 million and cash provided by
         financing activities was $30.1 million.


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<PAGE>

                  In the U.S., the Company had capital expenditures of $5.5
         million for the 2000 period and has projected total capital
         expenditures, for fiscal 2000, of approximately $7.8 million, primarily
         to support ongoing operations and for operational and environmental
         improvements. In addition to these capital investments, the Company's
         U.S. operations expended an average of approximately $64.8 million per
         year on repairs and maintenance from fiscal 1996 through fiscal 1999.
         As a result of these expenditures, the Company believes that it
         operates and will continue to maintain modern and efficient
         facilities. As part of the acquisition of its Peruvian operations, the
         Company has undertaken a capital investment program, in part to satisfy
         an investment commitment of $120.0 million by October 23, 2002, as set
         forth in the purchase agreement. The Company estimates that it has
         spent approximately $81.4 million on qualifying expenditures under the
         investment commitment through July 31, 2000. Peruvian operations had
         capital expenditures of $19.7 million in the 2000 period and have
         projected total capital expenditures for fiscal 2000 of approximately
         $26.7 million, primarily for environmental improvements and to support
         ongoing operations.

                  The Company has substantial indebtedness and debt service
         requirements. As of July 31, 2000, on a consolidated basis, the Company
         had $516.8 million of indebtedness outstanding, or $391.8 million net
         of the Special Term Deposit securing certain indebtedness. The Company
         has recently developed projections for the fourth quarter and fiscal
         year 2001, which include the changes in mining operations and
         reductions in inventory discussed previously. Management believes,
         based on these projections, that cash flows from operations, in
         addition to availability under the revolving credit facilities, will be
         sufficient to meet the Company's liquidity needs for the foreseeable
         future. However, metal prices sustained at current levels for an
         extended period, or decreasing further, will adversely impact
         liquidity. Changes in operating results, such as production
         interruptions or less than expected ore grade could also adversely
         impact liquidity. Should liquidity be adversely impacted by these or
         any other factors, management will reevaluate capital, exploration and
         maintenance spending levels and consider further changes in operations
         in order to maintain sufficient liquidity.

                  The Doe Run Revolving Credit Facility, the Doe Run Peru
         Revolving Credit Facility, and the indentures governing the Notes
         contain numerous covenants and restrictions. Among the more restrictive
         covenants include limitations on allowable indebtedness and maintenance
         of a minimum net worth. Under the indentures covering the Company's
         Senior Notes, Senior Secured Notes and Floating Rate Notes limit
         principal outstanding under various Peruvian working capital facilities
         to $60 million. Also, the Company must maintain consolidated net worth,
         as adjusted for certain non-cash items, of no less than negative $10
         million. The Company is in compliance with all applicable covenants at
         July 31, 2000 and anticipates maintaining compliance at the end of
         fiscal 2000 and into fiscal 2001. The ability of the Company to meet
         its debt service requirements and to comply with such covenants is
         dependent upon future operating performance and financial results
         which are subject to financial, economic, political, competitive and
         other factors affecting the Company, many of which are beyond the
         Company's control. Specifically, future losses could affect the
         Company's ability to meet the net worth requirement. The company is
         working with the lender to change the requirement, but there can be no
         assurance that these efforts will be successful.

         FORWARD-LOOKING STATEMENTS

                  This report includes "forward-looking statements" within the
         meaning of the Private Securities Litigation Reform Act of 1995 which
         involve known and unknown risks, uncertainties and other important
         factors that could cause the actual results, performance or
         achievements of the Company to differ materially from any future
         results, performance or achievements expressed or implied by such
         forward-looking statements. Such risks, uncertainties, and other
         important factors include, among others: general economic and business
         conditions; political conditions; changing 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; and major equipment failures. These
         forward-looking statements speak only as of the date of this report.
         The Company expressly


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<PAGE>

         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.

                  On May 28, 2000, a presidential runoff election was held in
         Peru, after which President Fujimori was declared the winner. Amid
         allegations of irregularities, the election was boycotted by
         international election oversight organizations and by Alejandro Toledo,
         the challenger to President Fujimori. The events surrounding the
         election have been widely reported by the international press and
         criticized by the United States and other countries. As of August 31,
         2000, the Company's operations in Peru have been unaffected by these
         developments. However, management recognizes the potential for
         political instability, social unrest, and deterioration of economic
         conditions, which could adversely impact the operating activities,
         results of operations and financial condition of the Company.


         ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

                  The Company has outstanding $55 million of indebtedness on
         which interest is payable based on the six-month LIBOR rate plus 6.29%,
         reset at each interest payment date (March and September 15). The
         Company has not hedged its risk with respect to fluctuations in the
         LIBOR rate. At July 31, 2000, the effective rate was approximately
         12.65%.

                  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.


         PART II. OTHER INFORMATION.

         ITEM 1. LEGAL PROCEEDINGS

         See the report on Form 10-Q for the quarter ended April 30, 2000 for
         discussion of legal proceedings initiated in the current fiscal year.
         See "Item 1. Financial Statements - Note 6 to the Company's
         Consolidated Financial Statements" for further information regarding
         the Company's legal proceedings.


         ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

         (a) EXHIBITS.

                  Exhibit 27                Financial Data Schedule


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<PAGE>

                               S I G N A T U R E S


                  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)



<TABLE>

<S>                              <C>
        September 11, 2000       /s/ Marvin K. Kaiser
        ------------------       -----------------------------------------------
             Date                Marvin. K. Kaiser
                                 Vice President and Chief Financial Officer
                                 (duly authorized officer and principal financial officer)

</TABLE>


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