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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

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FORM 10-Q

(Mark One)

|ý | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended July 31, 2002

Or

|o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number 333-66291

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

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

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

o Yes    ý No

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

Number of shares outstanding of each of the issuer's classes of common stock, as of October 2, 2002:

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

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THE DOE RUN RESOURCES CORPORATION
INDEX TO FORM 10-Q



|                                                                                                  
|--------------------------------------------------------------------------------------------------
|Part I. Financial Information                                                                     
|Item 1. Financial Statements                                                                      
|The Doe Run Resources Corporation                                                                 
|Condensed Consolidated Balance Sheets July 31, 2002 and October 31, 2001                          
|Condensed Consolidated Statements of Operations three and nine months ended July 31, 2002 and 2001
|Consolidated Statements of Comprehensive Income nine months ended July 31, 2002 and 2001          
|Condensed Consolidated Statements of Cash Flows nine months ended July 31, 2002 and 2001          
|Notes to Consolidated Financial Statements                                                        
|Doe Run Peru S.R.L.                                                                               
|Condensed Consolidated Balance Sheets July 31, 2002 and October 31, 2001                          
|Condensed Consolidated Statements of Operations three and nine months ended July 31, 2002 and 2001
|Condensed Consolidated Statements of Cash Flows nine months ended July 31, 2002 and 2001          
|Notes to Condensed Consolidated Financial Statements                                              
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations     
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                
|Part II. Other Information.                                                                       
|Item 1. Legal Proceedings                                                                         
|Item 6. Exhibits and Reports on Form 8-K.                                                         
|Signatures                                                                                        

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

|                                        |                                                                                | July 31,
2002                               |         | October 31,
2001 |        
|--------------------------------------- | ------------------------------------------------------------------------------ | ------------------------------------------- | ------- | ---------------- | -------
|
|ASSETS                                  |                                                                               
|Current assets:                         |                                                                                |                                             |         |                  |        
|                                        | Cash                                                                           |                                             | $       | 12,545           |        
|                                        | Trade accounts receivable, net of allowance for doubtful accounts              |                                             |         | 61,929           |        
|                                        | Inventories                                                                    |                                             |         | 107,541          |        
|                                        | Prepaid expenses and other current assets                                      |                                             |         | 22,798           |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total current assets                        |         |                  | 204,813
|Property, plant and equipment, net      |                                                                                |                                             | 257,916 |                  |        
|Special term deposit                    |                                                                                |                                             | 125,000 |                  |        
|Other noncurrent assets, net            |                                                                                |                                             | 5,222   |                  |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total assets                                |         | $                | 592,951
|                                        |                                                                                |                                             |         |                  |        
|LIABILITIES AND SHAREHOLDER'S DEFICIT   |                                                                               
|Current liabilities:                    |                                                                                |                                             |         |                  |        
|                                        | Short-term borrowings and current maturities of long-term debt                 |                                             | $       | 380,014          |        
|                                        | Accounts payable                                                               |                                             |         | 40,711           |        
|                                        | Accrued liabilities                                                            |                                             |         | 83,689           |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total current liabilities                   |         |                  | 504,414
|Long-term debt, less current maturities |                                                                                |                                             | 127,799 |                  |        
|Other noncurrent liabilities            |                                                                                |                                             | 59,640  |                  |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total liabilities                           |         |                  | 691,853
|Shareholder's deficit:                  |                                                                                |                                             |         |                  |        
|                                        | Common stock, $.10 par value, 1,000 shares authorized, issued, and outstanding |                                             |         |                 |        
|                                        | Additional paid-in capital                                                     |                                             |         | 5,238            |        
|                                        | Accumulated deficit                                                            |                                             |         | (90,863          | )      
|                                        | Accumulated other comprehensive losses                                         |                                             |         | (13,277          | )      
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total shareholder's deficit                 |         |                  | (98,902
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total liabilities and shareholder's deficit |         | $                | 592,951
|                                        |                                                                                |                                             |         |                  |        

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

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

|                        |                                                            | Three Months Ended
July 31,                                                                     |                                         | Nine Months Ended
July 31, |        
|----------------------- | ---------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | --------------------------------------- | -------------------------- | -------
|
|Net sales               |                                                            | $                                                                                               | 172,012                                 |                            | $      
|Costs and expenses:     |                                                            |                                                                                                 |                                         |                            |        
|                        | Cost of sales                                              |                                                                                                 |                                         | 161,304                    |        
|                        | Depletion, depreciation and amortization                   |                                                                                                 |                                         | 7,642                      |        
|                        | Selling, general and administrative                        |                                                                                                 |                                         | 7,365                      |        
|                        | Exploration                                                |                                                                                                 |                                         | 304                        |        
|                        | Unrealized (gain)/loss on derivative financial instruments |                                                                                                 |                                         | 235                        |        
|                        |                                                            |                                                                                                 |                                         |                            |        
|                        |                                                            | Total costs and expenses                                                                        |                                         |                            | 176,850
|                        |                                                            |                                                                                                 |                                         |                            |        
|                        |                                                            | Income (loss) from operations                                                                   |                                         |                            | (4,838 
|Other income (expense): |                                                            |                                                                                                 |                                         |                            |        
|                        | Interest expense                                           |                                                                                                 |                                         | (14,514                    | )      
|                        | Interest income                                            |                                                                                                 |                                         | 3,552                      |        
|                        | Other, net                                                 |                                                                                                 |                                         | (1,423                     | )      
|                        |                                                            |                                                                                                 |                                         |                            |        
|                        |                                                            |                                                                                                 | (12,385                                 | )                          |        
|                        |                                                            |                                                                                                 |                                         |                            |        
|                        |                                                            |                                                                                                 | Income (loss) before income tax benefit |                            |        
|Income tax benefit      |                                                            |                                                                                                 |                                        |                            |        
|                        |                                                            |                                                                                                 |                                         |                            |        
|                        |                                                            | Income (loss) before extraordinary item and cumulative effect of change in accounting principle |                                         |                            | (17,223
|                        |                                                            | Extraordinary item related to retirement of long term debt                                      |                                         |                            |       
|                        |                                                            | Cumulative effect of change in accounting principle, net of income tax benefit                  |                                         |                            |       
|                        |                                                            |                                                                                                 |                                         |                            |        
|                        |                                                            |                                                                                                 |                                         | Net income (loss)          |        
|                        |                                                            |                                                                                                 |                                         |                            |        

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

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THE DOE RUN RESOURCES CORPORATION        Consolidated Statements of Comprehensive Income (unaudited)        (Dollars in thousands)

|                                                         |                    | Nine Months Ended July 31, |        
|-------------------------------------------------------- | ------------------ | -------------------------- | -------
|
|Net loss                                                 |                    | $                          | (33,137
|Unrealized gain on derivative financial instruments, net |                    |                            | 36     
|                                                         |                    |                            |        
|                                                         | Comprehensive loss |                            | $      
|                                                         |                    |                            |        

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

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

|                                                  |                                                                                           | Nine Months Ended
July 31,                                       |                                          
|------------------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | -----------------------------------------
|
|Cash flows from operating activities:             |                                                                                           |                                                                  |                                          
|                                                  | Net loss                                                                                  |                                                                  | $                                        
|                                                  | Extraordinary loss on debt retirement                                                     |                                                                  |                                          
|                                                  | Cumulative effect of change in accounting principle                                       |                                                                  |                                          
|                                                  | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                                  |                                          
|                                                  |                                                                                           | Depreciation, depletion and amortization                         |                                          
|                                                  |                                                                                           | Imputed interest and amortization of deferred financing costs    |                                          
|                                                  |                                                                                           | Unrealized gain on derivative financial instruments              |                                          
|                                                  |                                                                                           | Deferred income taxes                                            |                                          
|                                                  |                                                                                           | Increase resulting from other changes in assets and liabilities: |                                          
|                                                  |                                                                                           |                                                                  |                                          
|                                                  |                                                                                           |                                                                  | Net cash provided by operating activities
|Cash flows from investing activities:             |                                                                                           |                                                                  |                                          
|                                                  | Purchases of property, plant and equipment                                                |                                                                  |                                          
|                                                  | Net proceeds from sales of assets                                                         |                                                                  |                                          
|                                                  |                                                                                           |                                                                  |                                          
|                                                  |                                                                                           | Net cash used in investing activities                            |                                          
|Cash flows from financing activities:             |                                                                                           |                                                                  |                                          
|                                                  | Proceeds from (payments on) revolving loans, net                                          |                                                                  |                                          
|                                                  | Payments on long-term debt                                                                |                                                                  |                                          
|                                                  | Payment of deferred financing costs                                                       |                                                                  |                                          
|                                                  |                                                                                           |                                                                  |                                          
|                                                  |                                                                                           | Net cash provided by (used in) financing activities              |                                          
|                                                  |                                                                                           |                                                                  |                                          
|                                                  |                                                                                           | Net increase in cash                                             |                                          
|Cash at beginning of period                       |                                                                                           |                                                                  | 6,263                                    
|                                                  |                                                                                           |                                                                  |                                          
|Cash at end of period                             |                                                                                           | $                                                                | 12,545                                   
|                                                  |                                                                                           |                                                                  |                                          
|Supplemental disclosure of cash flow information |                                                                                           |                                                                  |                                          
|                                                  | Cash paid during the period for:                                                          |                                                                  |                                          
|                                                  |                                                                                           | Interest, net of capitalized interest                            |                                          
|                                                  |                                                                                           |                                                                  |                                          
|                                                  |                                                                                           | Income taxes                                                     |                                          
|                                                  |                                                                                           |                                                                  |                                          

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

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

(1)    Summary of Significant Accounting Policies



These interim consolidated financial statements include the accounts of The Doe Run Resources Corporation 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, 2002 and results of operations for the three and nine month periods ended July 31, 2002 and 2001. Interim periods are not necessarily indicative of results to be expected
for the year.



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

(2)    Inventories

Inventories consist of the following:

July 31,
2002

October 31,
2001Finished metals and concentrates

$
19,758

$
15,887Metals and concentrates in process


58,129


59,960Materials, supplies and repair parts


29,654


31,557$
107,541

$
107,404


Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $5,635 and $5,484 at July 31, 2002 and October 31, 2001, respectively.

(3)    Debt

Due to the non-payment of interest due March 15, 2002 and the expiration of the grace period during which the Company could cure the
non-payment on the 111/4% Senior Notes due 2005, Floating Interest Rate Senior Notes due 2003 and 111/4% Senior Secured Notes due 2005 (collectively, the
Notes), as well as the violation of other financial covenants contained in its loan agreement relating to the U.S.
revolving credit facility, the Company is in default of its covenants under the Notes indentures and its U.S. revolving credit facility. In an event of default, the lenders have the right to
accelerate the payment of any unpaid principal and interest balances. As a result, the related debt balances are classified as current at July 31, 2002. No actions have been taken by the
lenders to accelerate the payment of outstanding debt balances. The Company is in negotiations with lenders to execute an amended U.S. revolving credit facility and is attempting to complete a
restructuring as described below.

On
September 20, 2002, the Company issued an exchange offer for the Notes (the Exchange Offer) that amended an earlier tender and exchange offer. Under the Exchange Offer, the
Company is offering holders of the Notes new notes (Exchange Notes) with an aggregate principal amount of $660 for each $1,000 principal amount of the 111/4% Senior Secured Notes and
$560 per $1,000 principal amount of the 111/4% Senior Notes and Floating Interest Rate Notes, in addition to warrants to purchase up to 40% of the Company's outstanding common stock
(assuming 100% participation in the

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Exchange Offer). In addition to the March 15, 2002 interest payment, the Company did not make the interest payment due September 15, 2002. The Company does not intend to pay the unpaid
accrued interest on the Notes that will be exchanged in the Exchange Offer, and by accepting the Exchange Notes, the holders will waive the receipt of any and all accrued and unpaid interest and
penalties on the Notes.

In
connection with the Exchange Offer, the Company's ultimate parent, The Renco Group, Inc. (Renco), will purchase $20,000 of the Company's preferred stock and Regiment Capital
Advisors LLC (Regiment), a significant holder of the Notes, will commit to lend the Company $15,500 at a 3% discount, pursuant to a senior credit facility (the New Senior Credit Facility). The $35,035
in proceeds from the sale of preferred stock and New Senior Credit Facility will be used to pay down the U.S. revolving credit facility, to pay the accrued interest as of March 15, 2002 and
September 15, 2002, including penalties thereon, on the Notes remaining outstanding, if any, after the Exchange Offer and to pay certain costs of the transactions.

The
consummation of the Exchange Offer is contingent upon a number of conditions including the participation in the Exchange Offer by holders of at least 95% of the aggregate principal
amount outstanding of each tranche of the Notes (the "Minimum Tender"); the closing of the New Senior Credit Facility; the satisfactory amendment of the U.S. Revolving Credit Facility; and the sale of
preferred stock to Renco. There can be no assurance that Doe Run will be able to consummate the Exchange Offer. Concurrently with the Exchange Offer, the Company is also seeking acceptances from the
holders of the Notes to a prepackaged plan of bankruptcy (the "Plan") under Chapter 11 of the United States Bankruptcy Code. In the event that the Company is unable to achieve the Minimum Tender
necessary to consummate the Exchange Offer consensually, but does receive the requisite acceptances needed to confirm the Plan, the Company intends to seek to have the Plan confirmed in the United
States Bankruptcy Court for the Southern District of New York. Acceptances from holders of at least 66 2/3% of the aggregate principal amount of each tranche of the Notes and a
majority in number of holders of each tranche of Notes, in each case actually voting on the Plan, will be necessary to confirm the Plan. If the Plan is confirmed, the Company's obligations under the
Notes will be extinguished in their entirety and holders of Notes will receive substantially the same consideration for their Notes as they would under the terms of the Exchange Offer.

On
September 17, 2002, Doe Run Peru entered into a new, three-year revolving credit facility with its lender, effective September 25, 2002. The lender has currently
committed to a maximum of $40,000, and is attempting to syndicate the balance of the $58,000 provided for under the new facility. If the Exchange Offer and related transactions are not
consummated by November 25, 2002, an event of default will occur under the new facility, which could result in the outstanding balance becoming immediately due and payable. As there can be no
assurance that the Exchange Offer and other transactions will be completed, the balance of borrowings under the current facility at July 31, 2002 are classified as current. Under the new
agreement, advance rates on certain receivables and inventory will be improved from those under the previous facility, provided that Doe Run Peru meets certain documentation requirements, which Doe
Run Peru anticipates being able to accomplish.

On
March 12, 2002, Doe Run Peru, with the consent of its parent company, The Doe Run Resources Corporation, (Doe Run) did not pay $7,031 of interest due to Banco de Credito
Overseas Limited (the Bank) under a Contract for a Loan in Foreign Currency. Failure to pay such interest was cured by instructing the Bank to offset the amount of such payment against the amount
otherwise payable by the Bank to Doe Run under a Special Term Deposit Contract. Effective September 12, 2002, the remaining balance of the Loan in Foreign Currency, including the
September 12, 2002 interest payment, was offset against the Special Term Deposit, and in return, Doe Run Peru delivered a

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non-interest bearing intercompany note to Doe Run in the amount of $139,063. The obligations of Doe Run Peru under the intercompany note are subordinate to those under Doe Run Peru's new revolving
credit facility.

(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).

|                                           |                     | Three Months Ended July 31,            |                                  | Nine months Ended July 31   |        
|------------------------------------------ | ------------------- | -------------------------------------- | -------------------------------- | --------------------------- | -------
|
|Operating SegmentsRevenues                |                     |                                        |                                  |                             |        
|Revenues from external customers:          |                     |                                        |                                  |                             |        
|                                           | Peruvian operations |                                        | $                                | 109,584                     |        
|                                           | Primary lead        |                                        |                                  | 42,321                      |        
|                                           | Secondary lead      |                                        |                                  | 15,888                      |        
|                                           | Fabricated products |                                        |                                  | 4,646                       |        
|                                           |                     |                                        |                                  |                             |        
|                                           |                     |                                        | Total                            |                             |        
|Revenues from other operating segments:(1) |                     |                                        |                                  |                             |        
|                                           | Peruvian operations |                                        |                                  |                            |        
|                                           | Primary lead        |                                        |                                  | 482                         |        
|                                           | Secondary lead      |                                        |                                  | 224                         |        
|                                           | Fabricated products |                                        |                                  |                            |        
|                                           |                     |                                        |                                  |                             |        
|                                           |                     | Total                                  |                                  |                             | 706    
|                                           |                     |                                        |                                  |                             |        
|                                           |                     | Total revenues for reportable segments |                                  |                             | 173,145
|                                           |                     |                                        | Other revenues/gains (losses)(2) |                             |        
|                                           |                     |                                        | Intersegment eliminations        |                             |        
|                                           |                     |                                        |                                  |                             |        
|                                           |                     |                                        |                                  | Total consolidated revenues |        
|                                           |                     |                                        |                                  |                             |        

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|                                                                                                                                            |                                                            | Three Months Ended July 31,       |   | Nine months Ended July 31 |        
|------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------------------- | - | ------------------------- | -------
|
|Operating SegmentsEBITDA (Earnings before interest, taxes, and depletion, depreciation and amortization), excluding the effects of FAS 133 |                                                            |                                   |   |                           |        
|                                                                                                                                            | Peruvian operations                                        |                                   | $ | 5,259                     |        
|                                                                                                                                            | Primary lead                                               |                                   |   | (628                      | )      
|                                                                                                                                            | Secondary lead                                             |                                   |   | 3,209                     |        
|                                                                                                                                            | Fabricated products                                        |                                   |   | 853                       |        
|                                                                                                                                            |                                                            |                                   |   |                           |        
|                                                                                                                                            |                                                            | Total reportable segments         |   |                           | 8,693  
|                                                                                                                                            | Other revenues and expenses(3)                             |                                   |   | (2,384                    | )      
|                                                                                                                                            | Corporate selling, general and administrative expenses     |                                   |   | (4,682                    | )      
|                                                                                                                                            | Intersegment eliminations                                  |                                   |   | (11                       | )      
|                                                                                                                                            |                                                            |                                   |   |                           |        
|                                                                                                                                            |                                                            | Consolidated EBITDA               |   |                           | 1,616  
|                                                                                                                                            | Depreciation, depletion and amortization                   |                                   |   | (7,642                    | )      
|                                                                                                                                            | Interest income                                            |                                   |   | 3,552                     |        
|                                                                                                                                            | Interest expense                                           |                                   |   | (14,514                   | )      
|                                                                                                                                            | Unrealized gain (loss) on derivative financial instruments |                                   |   | (235                      | )      
|                                                                                                                                            |                                                            |                                   |   |                           |        
|                                                                                                                                            |                                                            | Income (loss) before income taxes |   | $                         | (17,223
|                                                                                                                                            |                                                            |                                   |   |                           |        

(5)    Hedging and Derivative Financial Instruments

A significant portion of the Company's sales contracts are priced based on an average London Metal Exchange (LME) or other exchange prices for the respective
metal plus a negotiated premium. As such, the prices of the Company's products fluctuate due to factors in the market that are beyond the Company's control. These price changes expose the Company to
variability in its cash receipts. The purpose of the Company's price risk management program is to limit the Company's risk to acceptable levels, while enhancing revenue through the receipt of option
premiums.

The
Company's price risk management program uses various derivative instruments in its attempt to mitigate commodity price risks. The Company uses purchased futures contracts as a fair
value hedge of the change in fair value of inventory related to firm sales commitments with customers or as a cash flow hedge to lock in the price of lead purchases for its fabricated products
subsidiary. In fair value hedges, the futures contracts are established at terms (quantities, prices and timing) that mirror those
of the firm commitments. The Company uses sold futures contracts as a cash flow hedge to lock in the price of a portion of forecasted lead metal sales and to lock in the price of
by-product sales whose prices are based on an average for a period after they are shipped.

The
Company routinely writes call options that, if exercised, will create sold futures contracts that will be designated as cash flow hedges of forecasted lead metal sales. The options
generate premium income, which enhance revenues. The Company also uses futures contracts and options and combinations thereof to enhance revenue at contract prices that are acceptable to the Company,
should the options be exercised. Because these instruments do not meet the requirements for hedge accounting under FAS 133, the changes in fair market value related to these instruments
(including the

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time value portion), which reflect market prices and volatility at the balance sheet date, are recorded in results of operations, and are expected to increase the volatility of reported results.

The
unrealized gain reflected in the consolidated statement of operations relates to the change in fair market value of derivative financial instruments that are not designated as
hedges. For derivative instruments designated as hedges (futures contracts), the Company assesses effectiveness based on changes in the forward rate, and as a result, does not expect hedge
ineffectiveness.

The
fair market value of the Company's derivative financial instruments reflected in the Company's balance sheet as of July 31, 2002 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.

The
Company's open derivative financial instruments at July 31, 2002 were: (numbers not in thousands)



|Metal          |  | Quantity |   | Weighted
Average Price |  | Fair Market
Value |  | Period
|-------------- |  | -------- | - | ---------------------- |  | ----------------- |  | ------
|Lead (Hedges)  |  | (7,909   | ) | tons                   |  | $435.00/ton       |  | $     
|Gold           |  | (6,198   | ) | oz                     |  | $287.00/oz        |  |       
|Copper (Other) |  | (213     | ) | tons                   |  | $1625.00/ton      |  |       
|Silver         |  | 850,175  |   | oz.                    |  | $5.14/oz          |  |       
|               |  | (987,300 | ) | oz                     |  | $5.37/oz          |  |       



|Metal  |  | Quantity      |   | Price Range |  | Fair Market
Value                                             |  | Period
|------ |  | ------------- | - | ----------- |  | ------------------------------------------------------------- |  | ------
|Copper |  | 5,813
(4,129  | ) | tons
tons   |  | $1,451.00/ton to $1,600.00/ton
$1,520.00/ton to $1,565.00/ton |  | $     
|Lead   |  | 18,601
(4,823 | ) | tons
tons   |  | $440.00/ton to $522.00/ton
$476.00/ton                        |  |       
|Silver |  | 460,740       |   | oz          |  | $4.28/oz. to $4.60/oz.                                        |  |       
|Gold   |  | 8,118
(1,646  | ) | oz
oz.      |  | $260.00/oz
$287.00/oz                                         |  |       



|Metal  |  | Quantity      |   | Price Range |  | Fair Market
Value                      |  | Period         
|------ |  | ------------- | - | ----------- |  | -------------------------------------- |  | ---------------
|Lead   |  | 15,846
(1,378 | ) | tons
tons   |  | $404.00/ton to $445.00/ton
$431.00/ton |  | (675,077
60,375
|Silver |  | 197,460       |   | oz.         |  | $4.25/oz.                              |  | (9,844         
|Gold   |  | 4,827
(2,743  | ) | oz.
oz      |  | $264.00/oz.
$283.00/oz.                |  | (31,489
29,633 

---

At
July 31, 2002, the Company had recorded an asset of $105 and a liability of $1,806 related to the fair market values of these instruments. The Company also had recorded an
asset of $19 for the fair value of firm commitments designated as the hedged item in fair value hedges.

(6)    Environmental and Litigation Matters

Environmental

The Company has recorded a liability of approximately $25,900 as of July 31, 2002, which represents management's best estimate of known obligations
relating to the environmental and reclamation matters that are discussed below.



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 signed a voluntary Administrative Order on Consent (AOC) in September 2000 to study and address issues related to the slag pile, plant property, community soils
adjacent to the primary smelter in Herculaneum, elevated blood lead levels in the community and lead releases from the plant. The U.S. Environmental Protection Agency (EPA) and the Missouri Department
of Natural Resources (DNR) signed the AOC with an effective date of May 29, 2001. In addition, the Company has agreed to replace the soil in yards of private residences within a
four-tenths of a mile radius of the smelter. The
Company also agreed to test soils in an area outside the four-tenths of a mile zone to determine if additional remediation is required.

As
a result of the completion of this testing, the Company signed an AOC with the U.S. EPA on December 21, 2001. The new AOC requires additional yard replacement relating to those
residences with the highest soil lead measurements and those with children. The remaining cost of community cleanup at July 31, 2002, included in the Company's accrual for remediation costs, is
approximately $800, with the spending to be completed by the end of calendar 2002. At this time, it is not possible to determine the outcome of the remaining areas of study or what additional
remediation actions may be required after the study is completed. Estimated costs may change if required levels of remediation are different than currently estimated or if additional homes are
identified as a result of additional regulatory decisions.

On
April 26, 2002, the Company signed a Settlement Agreement with the State of Missouri whereby it agreed to offer buyouts to approximately 160 homeowners in an area close to the
smelter. Under the terms of the buyout plan, an estimated 20 homeowners, each having children less than 72 months old living in them, have been offered immediate buyouts with the remaining
affected

---

homeowners to be extended buyout offers by the end of 2004. The amount to be paid to the homeowners who accept the buyout offer will be based on an appraisal of the property's value at
August 31, 2001. The cost associated with the buyout plan could be as high as $10,000 if all affected homeowners accept the Company's buyout offer. Management believes that it is highly
unlikely that all of the qualifying homeowners will accept the offer, but it cannot currently be estimated how many of the homeowners will accept the buyout offer, or, if the buyout offer is accepted,
what the price to be paid for the property will be. The Company will attempt to rent out certain purchased houses, once they are remediated to the standards required by the regulatory agencies.
Because air emissions from the smelter have been reduced as expected, under the improvements made as described below, and management expects that the Company will meet the ambient air lead standard in
the third quarter 2002 and thereafter, management believes that the houses that are in appropriate condition will be rented. To the extent the Company will be able to rent these properties, the fair
value will be capitalized. To the extent the properties cannot be rented out, or the amount paid exceeds the fair value of the property at the buyout date, an impairment loss will be recognized.
Accordingly, the Company's accrual for remediation at July 31, 2002 does not include any cost relating to the buyout plan.

The
Company, working with the Missouri DNR and the Missouri Air Conservation Commission, has developed a plan to bring the Herculaneum smelter in compliance with the ambient air quality
standard for lead promulgated under the federal Clean Air Act. The plan was included in a consent judgment entered into by the Company in December 2000, and has been approved at the state level
and by the U.S. EPA. Capital expenditures are expected to total $5,500 in fiscal 2002, of which $5,000 had been spent at July 31, 2002, and $200 in 2003. A substantial part of the equipment is
now operational and the monitors are reflecting compliance.

On
April 11, 2002, a report in the media contained allegations by former employees of improper disposal of hazardous materials on the Herculaneum smelter site. The Company does not
believe that there has been any violation of law and is cooperating with state and federal agencies in their investigation into the allegations.

The
Company has received from the Missouri DNR a notice of violation at its Glover primary smelter claiming violations of the smelter's metallic minerals permits concerning the receipt
of information regarding the storage of slag material. The Company believes that the resolution of this matter will not have a material adverse impact on the Company.

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, 2002 of approximately $5,400 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 has completed an Engineering Evaluation/Cost Analysis (EE/CA) for the Bonne Terre site, and has signed two AOC's to conduct removal actions on the west and east portions of
the site. Work began in late fiscal 2001 and is scheduled for completion by approximately the end of calendar 2004.

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 has been substantially completed, and will
be followed by revegetation and ongoing monitoring and maintenance activities.

The
Company has also signed AOC's to perform an EE/CA on each of the National, Rivermines, and Leadwood sites for remediation of the mine waste areas at these sites. The National EE/CA
is complete, the Rivermines EE/CA is due by the end of fiscal 2002 and the Leadwood EE/CA is due by the end of fiscal 2003. In 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 initial draft of the RI/FS was submitted in early March 2002. 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. The Company and
the owner of the other 50% share of stock in the company that mined the site have signed an AOC to conduct an RI/FS at the site. This site is substantially smaller than the sites in St. Francois
County where the Company has been named a PRP, and the potential issues are less complex. 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. Further review will be required before a determination can be made as to whether
the Company has any liability at the main 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, 2002 of approximately $1,200
for corrective action and $2,900 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 possible that stricter discharge limits than
previously in effect may be included in certain permits now in renewal. If additional treatment facilities were required under these permits, capital expenditures of approximately $2,500 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. Certain closure requirements have
already been

---

performed, and the remaining estimated cost of future closure activities is approximately $7,600. The Company's mine and mill closure reserves were approximately $7,500 as of July 31, 2002.

The
Company received from the Missouri DNR a notice of violation relating to blowing tailings at its Fletcher Mine. After meeting with Missouri DNR, management believes that the
resolution of this matter will not have a material adverse effect on the Company.



Doe Run Peru submitted to and received approval from the Peruvian government for an Environmental Adjustment and Management Program (PAMA) that consisted of an
environmental impact analysis, monitoring plan and data, mitigation measures and closure plan. The PAMA also sets forth the actions and corresponding annual investments the concession holder agrees to
undertake in order to achieve compliance with the maximum applicable limits prior to expiration of the PAMA (ten years for smelters, such as Doe Run Peru's operations in La Oroya, and five years for
any other type of mining or metallurgical operation like Cobriza). 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 the operator must comply. After expiration of the PAMA, the operator must comply with all applicable standards and requirements. Future changes in legal
rules and maximum permissible levels would not be applicable to Doe Run Peru for the remaining period of the PAMA.

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



Through
July 31, 2002, the Company had spent approximately $28,900 on projects under the La Oroya PAMA.

---

Annual
spending on a calendar year basis approved in the La Oroya PAMA, as amended, most recently on January 25, 2002, is as follows:

Year

Estimated
cost2002

$
5,7502003


9,3502004


12,8002005


53,5002006


67,700$
149,100


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 $174,000 for the
remaining term of the PAMA.

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 have been designed to achieve compliance with such requirements prior to the expiration of the PAMA on January 13, 2007. No assurance can be
given that implementation of the PAMA projects is feasible or that their implementation will achieve compliance with the applicable legal requirements by the end of the PAMA period. Further, there can
be no assurance that the Peruvian government will not in the future require compliance with additional or different environmental obligations that could adversely affect Doe Run Peru's business,
financial condition or results of operations. Under the purchase agreement related to the acquisition of the La Oroya assets in October 1997, Centromin agreed to indemnify Doe Run Peru against
environmental liability arising out of its prior operations, and performance of the indemnity has been guaranteed by the Peruvian government through the enactment of the Supreme Decree
No. 042-97-PCM. However, there can be no assurance that Doe Run Peru will satisfy its environmental obligations and investment requirements, including those in its PAMA,
or that the guarantee by Centromin will be honored. Any failure to satisfy its environmental obligations could adversely affect Doe Run Peru's business, financial condition or results of operations.

The
PAMA governing the Cobriza facility expired in May, 2002 without Doe Run Peru having met it obligations thereunder. Pursuant to Supreme Decree No. 022-2002-EM, to which the continued
operation of the Cobriza facility is subject, Doe Run Peru expects that this facility will be allowed (subject to its payment of a fine in an amount between $25 and $35) a period of from 12-18 months
to effect compliance with its PAMA obligations. To achieve compliance with its PAMA obligations at the Cobriza facility, Doe Run Peru will have to make significant capital expenditures. The
aforementioned capital expenditures have an estimated cost of $10,000 - $20,000. In the event that Doe Run Peru is unable to achieve compliance with its PAMA obligations by April 2004, it will be
subject to additional fines and/or closure. In the event that the Cobriza facility is closed, Doe Run Peru may have difficulty obtaining replacement concentrate supplies on economically advantageous
terms.

Doe
Run Peru 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 believes that this reserve is adequate.

---



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.



The Company is a defendant in seven lawsuits alleging certain damages stemming from the operations at the Herculaneum smelter. Three of these cases are class
action lawsuits. In one case, the plaintiffs seek to have certified a class of property owners in a certain section of Herculaneum, alleging that property values have been damaged due to the
operations of the smelter. In another case, plaintiffs seek to have certified a class of children who lived in Herculaneum during a period of time when they were nine months to six years old and
children born to mothers who lived in Herculaneum during their pregnancies. The remedy sought is medical monitoring for the class. In a third case, plaintiffs seek to have certified a class of
employees of independent contractors who worked at the Herculaneum smelter. Three of the cases are personal injury actions by 13 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 last suit is a property damage case alleging lead contamination of fill material used on the plaintiff's
property.

A
resident of Herculaneum has claimed personal injuries allegedly resulting from exposure to emissions from the smelter. No suit has yet been filed against the Company in this matter,
but a request for settlement has been made by the individual.

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

Seven
lawsuits have been filed against the Company each alleging personal injury to a child living in Ottawa County, Oklahoma as a result of lead contamination from chat piles and/or
tailings generated by historic operations of the Company's predecessor.

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

The
Company and several other parties have been named defendants in a suit brought by the City of St. Louis, Missouri for costs allegedly incurred and to be incurred by the plaintiff for
the care of lead-poisoned persons, education programs for children injured by exposure to lead and the abatement

---

of lead hazards purportedly created by the defendants in the City of St. Louis. The complaint alleges that the defendants made material misrepresentations and intentional omissions of material facts
to the City and/or its residents regarding the nature of lead and lead products, such as paint. The suit also seeks punitive damages.

One
hundred and sixteen individuals are plaintiffs in 12 cases that list the Company among other defendants, alleging that the employees or ex-employees of Burlington
Northern Railroad who filed the cases were exposed to lead from the hauling of lead concentrates by the railroad. An ex-employee of the Terminal Rail Road Association of St. Louis has
filed a similar case.

The
Company has been named as a defendant in a breach of contract/warranty action for damages arising from the sale of allegedly impure lead. The plaintiff has indicated that its claims
exceed are approximately $4,000. The trial has been scheduled for November, 2002.

On
January 15, 2002, the Company received a Demand for Arbitration regarding the amounts Fabricated Products, Inc.(FPI) paid under an Asset Purchase Agreement with the
previous owners of the assets of the Seafab Metals division of FPI. The Company has entered a counterclaim in the arbitration proceedings.

On
June 24, 2002 Company was named in an asbestos injury suit by an individual against fifty-nine companies, alleging that he was exposed for over 44 years to
asbestos including at St. Joe Minerals Corporation premises in Viburnum and Bixby, Missouri. To date, the Company has not been legally served and believes that the court in which the case was filed
does not have jurisdiction over the Company.

The
Company is unable at this time to estimate the expected outcome of and the final costs of any of these actions. Therefore, there can be no assurance that these cases would not have a
material adverse effect, both individually and in the aggregate, on the results of operations, financial condition and liquidity of the Company. The Company has and will continue to vigorously defend
itself against all these claims.

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

(7)  Liquidity

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 $75,000 less outstanding letters of credit, based on specific
percentages of eligible receivables and inventories. 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 $40,000, less outstanding letters of credit, guarantee letters and customs bonds based upon specific percentages of eligible receivables and inventories.

Low
metal prices over the past four years, coupled with the Company's substantial debt service requirements, have severely impacted the Company's liquidity. Reductions in receivables
coupled with increases in borrowings on revolving credit lines have reduced availability under revolving credit

---

facilities to minimal levels. In the 2002 period, the Company's availability under its revolving credit lines was not sufficient to make the $16,700 interest payment due March 15, 2002 on the
Notes.

Net
unused availability at July 31, 2002 was $1,600 under the Doe Run Revolving Credit Facility and $100 under the Doe Run Peru Revolving Credit Facility. In addition to
availability under the credit facilities, the Company had $12,500 of cash at July 31, 2002. At August 31, 2002 availability was $3,200 under the Doe Run Revolving Credit Facility and
$300 under the Doe Run Peru Revolving Credit Facility, and the Company's cash balance was $1,500.

On
September 17, 2002, Doe Run Peru entered into a new three-year revolving credit facility with its lender, effective September 25, 2002. The lender has currently
committed to a maximum of $40,000, and is attempting to syndicate the balance of the $58,000 provided for under the new facility. If the Exchange Offer and related transactions are not consummated by
November 25, 2002, an event of default will occur under the new facility, which could result in the outstanding balance becoming immediately due and payable.

If
successful, the Exchange Offer will significantly reduce the Company's future debt service requirements. By deferring the maturities of the Company's obligations under the Notes as
well as providing the Company with the option to pay interest in kind for certain periods in lieu of a cash only interest payment, the Exchange Notes and related New Senior Credit Facility will also
provide substantial cash flow benefits in the near term. For the life of the Exchange Notes, principal and interest payments will be reduced by approximately $40,500 (assuming 100% participation in
the
Exchange Offer and that the Company elects a pay in kind feature available on the New Notes). Over the next three years, (assuming 100% participation in the Exchange Offer and election of the pay in
kind feature) cash required for principal and interest payments on the Exchange Notes and the New Senior Credit Facility will be approximately $336,400 less than the amount due under the Notes. These
savings may be partially offset by payments due to holders of the warrants upon exercise of the warrants put option described in the Exchange Offer. The proceeds from Renco's purchase from the sale of
$20,000 of Doe Run's preferred stock as well as the proceeds from the New Senior Credit Facility will significantly improve the Company's current liquidity. In addition, Renco will provide up to
$15,000 in credit support in connection with the new U.S. revolving credit facility. The Company plans to continue operating all of its facilities at present levels and does not expect that the
completion of these transactions will have an adverse affect on the Company's trade creditors.

(8)  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 its subsidiary Doe Run Peru have jointly and severally, fully, unconditionally and irrevocably guaranteed the Unsecured Notes and Secured Notes of the Company. Doe Run Cayman has no operations
separate from those of Doe Run Peru. Separate financial statements and other disclosures concerning certain Guarantor Subsidiaries and disclosures concerning non-Guarantor Subsidiaries
have not been presented because management has determined that such information is not material to investors. Intercompany transactions eliminated in consolidation consist of various service and
agency fees between The Doe Run Resources Corporation 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.

Doe
Run Peru was merged with its parent, Doe Run Mining S.R.L. effective June 1, 2001. The following consolidating statements reflect the historical cost basis of assets and
liabilities and the results of operations of assuming the merger had occurred on October 23, 1997, the date at which common control was established.

---

Condensed Consolidating Balance Sheet

As of July 31, 2002 (unaudited)

|                                               |                                                                                  | The Company
Excluding
Guarantor
Subsidiaries         |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|---------------------------------------------- | -------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|ASSETS                                         |                                                                                 
|Current assets:                                |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Cash                                                                             |                                                      | $       |                    |         | $                             |      |              | $       | 12,545      |        
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                |                                                      |         | 32,486              |         |                               | 4,174 |              |         | 25,620      |        
|                                               | Inventories                                                                      |                                                      |         | 46,846              |         |                               | 1,437 |              |         | 59,282      |        
|                                               | Prepaid expenses and other current assets                                        |                                                      |         | 12,148              |         |                               | 57    |              |         | 10,593      |        
|                                               | Due from subsidiaries                                                            |                                                      |         | 24,600              |         |                               |      |              |         |            |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total current assets                                 |         |                     | 116,080 |                               |       | 5,668        |         |             | 108,040
|Property, plant and equipment, net             |                                                                                  |                                                      | 111,856 |                     |         | 4,122                         |       |              | 141,938 |             |        
|Special term deposit                           |                                                                                  |                                                      | 125,000 |                     |         |                              |       |              |        |             |        
|Other noncurrent assets, net                   |                                                                                  |                                                      | 4,942   |                     |         | 161                           |       |              | 119     |             |        
|Investment in subsidiaries                     |                                                                                  |                                                      | 9,722   |                     |         |                              |       |              |        |             |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total assets                                         |         | $                   | 367,600 |                               | $     | 9,951        |         | $           | 250,097
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                 
|Current liabilities:                           |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                   |                                                      | $       | 340,928             |         | $                             |      |              | $       | 39,086      |        
|                                               | Accounts payable                                                                 |                                                      |         | 16,913              |         |                               | 606   |              |         | 23,543      |        
|                                               | Accrued liabilities                                                              |                                                      |         | 57,685              |         |                               | 650   |              |         | 25,354      |        
|                                               | Due to parent                                                                    |                                                      |         |                    |         |                               | 6,499 |              |         | 18,101      |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total current liabilities                            |         |                     | 415,526 |                               |       | 7,755        |         |             | 106,084
|Long-term debt, less current maturities        |                                                                                  |                                                      | 91      |                     |         |                              |       |              | 127,708 |             |        
|Other noncurrent liabilities                   |                                                                                  |                                                      | 50,885  |                     |         | 1,415                         |       |              | 7,340   |             |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total liabilities                                    |         |                     | 466,502 |                               |       | 9,170        |         |             | 241,132
|Shareholders' equity (deficit):                |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Common stock, $.10 par value, 1,000 shares authorized, issued, and outstanding   |                                                      |         |                    |         |                               |      |              |         |            |        
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued, and outstanding     |                                                      |         |                    |         |                               | 1     |              |         |            |        
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding  |                                                      |         |                    |         |                               |      |              |         | 2,005       |        
|                                               | Additional paid in capital                                                       |                                                      |         | 5,238               |         |                               | 1,205 |              |         |            |        
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive loss |                                                      |         | (104,140            | )       |                               | (425  | )            |         | 6,960       |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total shareholders' equity (deficit)                 |         |                     | (98,902 | )                             |       | 781          |         |             | 8,965  
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total liabilities and shareholders' equity (deficit) |         | $                   | 367,600 |                               | $     | 9,951        |         | $           | 250,097
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        

---

Condensed Consolidating Balance Sheet

As of October 31, 2001

|                                               |                                                                                  | The Company
Excluding
Guarantor
Subsidiaries         |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|---------------------------------------------- | -------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|ASSETS                                         |                                                                                 
|Current assets:                                |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Cash                                                                             |                                                      | $       |                    |         | $                             |      |              | $       | 6,263       |        
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                |                                                      |         | 41,944              |         |                               | 5,975 |              |         | 25,352      |        
|                                               | Inventories                                                                      |                                                      |         | 44,654              |         |                               | 1,623 |              |         | 61,152      |        
|                                               | Prepaid expenses and other current assets                                        |                                                      |         | 10,695              |         |                               | 89    |              |         | 8,547       |        
|                                               | Due from subsidiaries                                                            |                                                      |         | 16,783              |         |                               |      |              |         |            |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total current assets                                 |         |                     | 114,076 |                               |       | 7,687        |         |             | 101,314
|Property, plant and equipment, net             |                                                                                  |                                                      | 118,927 |                     |         | 5,126                         |       |              | 140,247 |             |        
|Special term deposit                           |                                                                                  |                                                      | 125,000 |                     |         |                              |       |              |        |             |        
|Other noncurrent assets, net                   |                                                                                  |                                                      | 7,401   |                     |         | 185                           |       |              | 225     |             |        
|Investment in subsidiaries                     |                                                                                  |                                                      | 19,690  |                     |         |                              |       |              |        |             |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total assets                                         |         | $                   | 385,094 |                               | $     | 12,998       |         | $           | 241,786
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                 
|Current liabilities:                           |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                   |                                                      | $       | 37,423              |         | $                             |      |              | $       | 25,188      |        
|                                               | Accounts payable                                                                 |                                                      |         | 21,361              |         |                               | 2,770 |              |         | 28,171      |        
|                                               | Accrued liabilities                                                              |                                                      |         | 36,140              |         |                               | 397   |              |         | 21,792      |        
|                                               | Due to parent                                                                    |                                                      |         |                    |         |                               | 7,910 |              |         | 8,873       |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total current liabilities                            |         |                     | 94,924  |                               |       | 11,077       |         |             | 84,024 
|Long-term debt, less current maturities        |                                                                                  |                                                      | 302,402 |                     |         |                              |       |              | 130,968 |             |        
|Other noncurrent liabilities                   |                                                                                  |                                                      | 53,569  |                     |         | 1,660                         |       |              | 7,340   |             |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total liabilities                                    |         |                     | 450,895 |                               |       | 12,737       |         |             | 222,332
|Shareholders' equity (deficit):                |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Common stock, $.10 par value, 1,000 shares authorized, issued, and outstanding   |                                                      |         |                    |         |                               |      |              |         |            |        
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued, and outstanding     |                                                      |         |                    |         |                               | 1     |              |         |            |        
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding  |                                                      |         |                    |         |                               |      |              |         | 2,005       |        
|                                               | Additional paid in capital                                                       |                                                      |         | 5,238               |         |                               | 1,205 |              |         |            |        
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive loss |                                                      |         | (71,039             | )       |                               | (945  | )            |         | 17,449      |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total shareholders' equity (deficit)                 |         |                     | (65,801 | )                             |       | 261          |         |             | 19,454 
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total liabilities and shareholders' equity (deficit) |         | $                   | 385,094 |                               | $     | 12,998       |         | $           | 241,786
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        

---

Consolidating Statement of Operations

Nine Months Ended July 31, 2002 (unaudited)

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

---

Consolidating Statement of Operations

Nine Months Ended July 31, 2001 (unaudited)

|                             |                                          | The Company
Excluding
Guarantor
Subsidiaries                                                    |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |        | Eliminations |         | The
Company |        
|---------------------------- | ---------------------------------------- | ----------------------------------------------------------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ------ | ------------ | ------- | ----------- | -------
|Net sales                    |                                          | $                                                                                               | 216,198 |                     | $       | 17,981                        |        | $            | 334,095 |             | $      
|Costs and expenses:          |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             | Cost of sales                            |                                                                                                 |         | 191,519             |         |                               | 15,165 |              |         | 294,330     |        
|                             | Depletion, depreciation and amortization |                                                                                                 |         | 14,099              |         |                               | 1,186  |              |         | 7,228       |        
|                             | Selling, general and administrative      |                                                                                                 |         | 11,254              |         |                               | 1,138  |              |         | 16,059      |        
|                             | Exploration                              |                                                                                                 |         | 1,215               |         |                               |       |              |         |            |        
|                             | Unrealized (gain)/loss on derivatives    |                                                                                                 |         | (1,212              | )       |                               | (45    | )            |         | (586        | )      
|                             |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             |                                          | Total costs and expenses                                                                        |         |                     | 216,875 |                               |        | 17,444       |         |             | 317,031
|                             |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             |                                          | Income (loss) from operations                                                                   |         |                     | (677    | )                             |        | 537          |         |             | 17,064 
|Other income (expense):      |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             | Interest expense                         |                                                                                                 |         | (31,916             | )       |                               | (636   | )            |         | (13,977     | )      
|                             | Interest income                          |                                                                                                 |         | 11,314              |         |                               |       |              |         | 608         |        
|                             | Other, net                               |                                                                                                 |         | 765                 |         |                               | (18    | )            |         | (634        | )      
|                             | Equity in earnings of subsidiaries       |                                                                                                 |         | 3,377               |         |                               |       |              |         |            |        
|                             |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             |                                          |                                                                                                 | (16,460 | )                   |         | (654                          | )      |              | (14,003 | )           |        
|                             |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             |                                          | Income (loss) before income tax expense (benefit)                                               |         |                     | (17,137 | )                             |        | (117         | )       |             | 3,061  
|Income tax expense (benefit) |                                          |                                                                                                 | 59      |                     |         |                              |        |              | (1,568  | )           |        
|                             |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             |                                          | Income (loss) before extraordinary item and cumulative effect of change in accounting principle |         |                     | (17,196 | )                             |        | (117         | )       |             | 4,629  
|                             |                                          | Extraordinary item related to retirement of long term debt                                      |         |                     | (159    | )                             |        |             |         |             |       
|                             |                                          | Cumulative effect of change in accounting principle, net of income tax benefit                  |         |                     | (2,649  | )                             |        |             |         |             | (1,125 
|                             |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        
|                             |                                          | Net income (loss)                                                                               |         | $                   | (20,004 | )                             | $      | (117         | )       | $           | 3,504  
|                             |                                          |                                                                                                 |         |                     |         |                               |        |              |         |             |        

---

Consolidating Statement of Operations

Three Months Ended July 31, 2002 (unaudited)

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

---

Consolidating Statement of Operations

Three Months Ended July 31, 2001 (unaudited)

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries               |        | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | ---------------------------------------------------------- | ------ | ------------------- | ------ | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                                          | 66,437 |                     | $      | 6,760                         |       | $            | 109,583 |             | $      
|Costs and expenses:     |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        | Cost of sales                            |                                                            |        | 55,722              |        |                               | 5,601 |              |         | 93,860      |        
|                        | Depletion, depreciation and amortization |                                                            |        | 4,610               |        |                               | 395   |              |         | 2,474       |        
|                        | Selling, general and administrative      |                                                            |        | 3,258               |        |                               | 359   |              |         | 4,949       |        
|                        | Exploration                              |                                                            |        | 387                 |        |                               |      |              |         |            |        
|                        | Unrealized (gain)/loss on derivatives    |                                                            |        | (1,913              | )      |                               | (39   | )            |         | 475         |        
|                        |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                                   |        |                     | 62,064 |                               |       | 6,316        |         |             | 101,758
|                        |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Income from operations                                     |        |                     | 4,373  |                               |       | 444          |         |             | 7,825  
|Other income (expense): |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        | Interest expense                         |                                                            |        | (10,391             | )      |                               | (213  | )            |         | (4,580      | )      
|                        | Interest income                          |                                                            |        | 3,735               |        |                               |      |              |         | 433         |        
|                        | Other, net                               |                                                            |        | 270                 |        |                               | (7    | )            |         | (501        | )      
|                        | Equity in earnings of subsidiaries       |                                                            |        | 4,981               |        |                               |      |              |         |            |        
|                        |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        |                                          |                                                            | (1,405 | )                   |        | (220                          | )     |              | (4,648  | )           |        
|                        |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense (benefit)          |        |                     | 2,968  |                               |       | 224          |         |             | 3,177  
|                        | Income tax expense (benefit)             |                                                            |        | 9                   |        |                               |      |              |         | (1,591      | )      
|                        |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Income (loss) before extraordinary item                    |        |                     | 2,959  |                               |       | 224          |         |             | 4,768  
|                        |                                          | Extraordinary item related to retirement of long term debt |        |                     | (159   | )                             |       |             |         |             |       
|                        |                                          |                                                            |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Net income (loss)                                          |        | $                   | 2,800  |                               | $     | 224          |         | $           | 4,768  
|                        |                                          |                                                            |        |                     |        |                               |       |              |         |             |        

---

Condensed Consolidating Statement of Cash Flows

Nine Months Ended July 31, 2002 (unaudited)

|                                                    |                                                              | The Company
Excluding
Guarantor
Subsidiaries        |        | Domestic
Guarantors |       | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |        
|--------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------- | ------ | ------------------- | ----- | ----------------------------- | ------ | ------------ | ------ | ----------- | -------
|Net cash provided by (used in) operating activities |                                                              | $                                                   | (3,131 | )                   | $     | 1,516                         |        | $            | 3,363  |             | $      
|Cash flows from investing activities:               |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    | Purchases of property, plant and equipment                   |                                                     |        | (6,144              | )     |                               | (108   | )            |        | (10,375     | )      
|                                                    | Net proceeds from sales of assets                            |                                                     |        | 43                  |       |                               | 3      |              |        |            |        
|                                                    | Investment in subsidiaries                                   |                                                     |        | 9,976               |       |                               |       |              |        |            |        
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    |                                                              | Net cash provided by (used in) investing activities |        |                     | 3,875 |                               |        | (105         | )      |             | (10,375
|Cash flows from financing activities:               |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    | Proceeds from revolving loans and short-term borrowings, net |                                                     |        | 614                 |       |                               |       |              |        | 13,800      |        
|                                                    | Payments on long-term debt                                   |                                                     |        | (79                 | )     |                               |       |              |        | (3,077      | )      
|                                                    | Payment of deferred financing costs                          |                                                     |        | (119                | )     |                               |       |              |        |            |        
|                                                    | Due to/due from parent/subsdiaries                           |                                                     |        | (1,160              | )     |                               | (1,411 | )            |        | 2,571       |        
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    |                                                              | Net cash provided by (used in) financing activities |        |                     | (744  | )                             |        | (1,411       | )      |             | 13,294 
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|                                                    |                                                              | Net increase in cash                                |        |                     |      |                               |        |             |        |             | 6,282  
|Cash at beginning of period                         |                                                              |                                                     |       |                     |       |                              |        |              | 6,263  |             |        
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        
|Cash at end of period                               |                                                              | $                                                   |       |                     | $     |                              |        | $            | 12,545 |             | $      
|                                                    |                                                              |                                                     |        |                     |       |                               |        |              |        |             |        

---

Condensed Consolidating Statement of Cash Flows

Nine Months Ended July 31, 2001 (unaudited)

|                                                    |                                                                            | The Company
Excluding
Guarantor
Subsidiaries        |     | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |     | Eliminations |        | The
Company |        
|--------------------------------------------------- | -------------------------------------------------------------------------- | --------------------------------------------------- | --- | ------------------- | ------ | ----------------------------- | --- | ------------ | ------ | ----------- | -------
|Net cash provided by (used in) operating activities |                                                                            | $                                                   | (81 | )                   | $      | (996                          | )   | $            | 32,041 |             | $      
|Cash flows from investing activities:               |                                                                            |                                                     |     |                     |        |                               |     |              |        |             |        
|                                                    | Purchases of property, plant and equipment                                 |                                                     |     | (10,265             | )      |                               |    |              |        | (8,121      | )      
|                                                    | Net proceeds from sales of assets                                          |                                                     |     | 4,912               |        |                               |    |              |        |            |        
|                                                    | Investment in subsidiaries                                                 |                                                     |     | (3,377              | )      |                               |    |              |        |            |        
|                                                    |                                                                            |                                                     |     |                     |        |                               |     |              |        |             |        
|                                                    |                                                                            | Net cash used in investing activities               |     |                     | (8,730 | )                             |     |             |        |             | (8,121 
|Cash flows from financing activities:               |                                                                            |                                                     |     |                     |        |                               |     |              |        |             |        
|                                                    | Proceeds from (payments on) revolving loans and short-term borrowings, net |                                                     |     | 16,532              |        |                               |    |              |        | (21,315     | )      
|                                                    | Payments on long-term debt                                                 |                                                     |     | (5,224              | )      |                               |    |              |        | (2,786      | )      
|                                                    | Payment of deferred financing costs                                        |                                                     |     | (375                | )      |                               |    |              |        |            |        
|                                                    | Due to/due from parent/subsdiaries                                         |                                                     |     | (2,122              | )      |                               | 996 |              |        | 1,126       |        
|                                                    |                                                                            |                                                     |     |                     |        |                               |     |              |        |             |        
|                                                    |                                                                            | Net cash provided by (used in) financing activities |     |                     | 8,811  |                               |     | 996          |        |             | (22,975
|                                                    |                                                                            |                                                     |     |                     |        |                               |     |              |        |             |        
|                                                    |                                                                            | Net increase in cash                                |     |                     |       |                               |     |             |        |             | 945    
|Cash at beginning of period                         |                                                                            |                                                     |    |                     |        |                              |     |              | 8,295  |             |        
|                                                    |                                                                            |                                                     |     |                     |        |                               |     |              |        |             |        
|Cash at end of period                               |                                                                            | $                                                   |    |                     | $      |                              |     | $            | 9,240  |             | $      
|                                                    |                                                                            |                                                     |     |                     |        |                               |     |              |        |             |        

---



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

|                                        |                                                                                                              | July 31,
2002                              |         | October 31,
2001
|--------------------------------------- | ------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------- | ----------------
|
|ASSETS                                 
|Current assets:                         |                                                                                                              |                                            |         |                 
|                                        | Cash                                                                                                         |                                            | $       | 12,545          
|                                        | Trade accounts receivable, net of allowance for doubtful accounts                                            |                                            |         | 25,620          
|                                        | Inventories                                                                                                  |                                            |         | 59,282          
|                                        | Prepaid expenses and other current assets                                                                    |                                            |         | 10,593          
|                                        |                                                                                                              |                                            |         |                 
|                                        |                                                                                                              | Total current assets                       |         |                 
|Property, plant and equipment, net      |                                                                                                              |                                            | 141,938 |                 
|Other noncurrent assets, net            |                                                                                                              |                                            | 119     |                 
|                                        |                                                                                                              |                                            |         |                 
|                                        |                                                                                                              | Total assets                               |         | $               
|                                        |                                                                                                              |                                            |         |                 
|LIABILITIES AND SHAREHOLDERS' EQUITY    |                                                                                                              |                                            |         |                 
|Current liabilities:                    |                                                                                                              |                                            |         |                 
|                                        | Short-term borrowings and current maturities of long-term debt                                               |                                            | $       | 39,086          
|                                        | Accounts payable                                                                                             |                                            |         | 23,543          
|                                        | Accrued liabilities                                                                                          |                                            |         | 25,354          
|                                        | Due to parent                                                                                                |                                            |         | 18,101          
|                                        |                                                                                                              |                                            |         |                 
|                                        | Total current liabilities                                                                                    |                                            |         | 106,084         
|Long-term debt, less current maturities |                                                                                                              |                                            | 127,708 |                 
|Other noncurrent liabilities            |                                                                                                              |                                            | 7,340   |                 
|                                        |                                                                                                              |                                            |         |                 
|                                        |                                                                                                              | Total liabilities                          |         |                 
|Shareholders' equity:                   |                                                                                                              |                                            |         |                 
|                                        | Capital stock, $0.01 par value, 15,912,083,739 shares in 2002, $0.3709 par value, 729,548,157 shares in 2001 |                                            |         | 2,005           
|                                        | Retained earnings                                                                                            |                                            |         | 6,960           
|                                        |                                                                                                              |                                            |         |                 
|                                        |                                                                                                              | Total shareholders' equity                 |         |                 
|                                        |                                                                                                              |                                            |         |                 
|                                        |                                                                                                              | Total liabilities and shareholders' equity |         | $               
|                                        |                                                                                                              |                                            |         |                 

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

---



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

|                        |                                                            | Three Months
Ended July 31,                                                    |         | Nine Months
Ended July 31, |        
|----------------------- | ---------------------------------------------------------- | ------------------------------------------------------------------------------ | ------- | -------------------------- | -------
|
|Net sales               |                                                            | $                                                                              | 109,584 |                            | $      
|Costs and expenses:     |                                                            |                                                                                |         |                            |        
|                        | Cost of sales                                              |                                                                                |         | 101,960                    |        
|                        | Depreciation and amortization                              |                                                                                |         | 2,835                      |        
|                        | Selling, general and administrative                        |                                                                                |         | 4,713                      |        
|                        | Exploration                                                |                                                                                |         | 134                        |        
|                        | Unrealized loss (gain) on derivative financial instruments |                                                                                |         | (126                       | )      
|                        |                                                            |                                                                                |         |                            |        
|                        |                                                            | Total costs and expenses                                                       |         |                            | 109,516
|                        |                                                            |                                                                                |         |                            |        
|                        |                                                            | Income from operations                                                         |         |                            | 68     
|Other income (expense): |                                                            |                                                                                |         |                            |        
|                        | Interest expense                                           |                                                                                |         | (3,982                     | )      
|                        | Interest income                                            |                                                                                |         | 12                         |        
|                        | Other, net                                                 |                                                                                |         | 97                         |        
|                        |                                                            |                                                                                |         |                            |        
|                        |                                                            |                                                                                | (3,873  | )                          |        
|                        |                                                            |                                                                                |         |                            |        
|                        |                                                            | Income (loss) before income tax benefit                                        |         |                            | (3,805 
|Income tax benefit      |                                                            |                                                                                |        |                            |        
|                        |                                                            |                                                                                |         |                            |        
|                        |                                                            | Income (loss) before cumulative effect of change in accounting principle       |         |                            | (3,805 
|                        |                                                            | Cumulative effect of change in accounting principle, net of income tax benefit |         |                            |       
|                        |                                                            |                                                                                |         |                            |        
|                        |                                                            | Net income (loss)                                                              |         | $                          | (3,805 
|                        |                                                            |                                                                                |         |                            |        

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

---



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

|                                          |                                                                            | Nine Months
Ended July 31,                          |       
|----------------------------------------- | -------------------------------------------------------------------------- | --------------------------------------------------- | ------
|
|Net cash provided by operating activities |                                                                            | $                                                   | 3,363 
|Cash flows from investing activities:     |                                                                            |                                                     |       
|                                          | Purchases of property, plant and equipment                                 |                                                     |       
|                                          |                                                                            |                                                     |       
|                                          |                                                                            | Net cash used in investing activities               |       
|Cash flows from financing activities:     |                                                                            |                                                     |       
|                                          | Proceeds from (payments on) revolving loans and short-term borrowings, net |                                                     |       
|                                          | Payments on long-term debt                                                 |                                                     |       
|                                          | Loans with parent                                                          |                                                     |       
|                                          |                                                                            |                                                     |       
|                                          |                                                                            | Net cash provided by (used in) financing activities |       
|                                          |                                                                            |                                                     |       
|                                          |                                                                            | Net increase in cash                                |       
|Cash at beginning of period               |                                                                            |                                                     | 6,263 
|                                          |                                                                            |                                                     |       
|Cash at end of period                     |                                                                            | $                                                   | 12,545
|                                          |                                                                            |                                                     |       

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

---



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

(1)    Basis of Presentation



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, 2002 and results of operations for the three and nine month periods ended
July 31, 2002 and 2001. Interim periods are not necessarily indicative of results to be expected for the year.

(2)    Inventories

|                                         |  | July 31,
2002 |        | October 31,
2001
|---------------------------------------- |  | ------------- | ------ | ----------------
|
|Refined metals and concentrates for sale |  | $             | 2,052  |                 
|Metals and concentrates in process       |  |               | 43,848 |                 
|Materials, supplies and spare parts      |  |               | 13,382 |                 
|                                         |  |               |        |                 
|                                         |  | $             | 59,282 |                 
|                                         |  |               |        |                 

Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $1,067 and $826 at July 31, 2002 and October 31, 2001, respectively.

(3)    Hedging and Derivative Financial Instruments

Doe Run Peru uses derivative financial instruments primarily to enhance revenue by receiving premiums on option contracts. Doe Run Peru sells futures contracts
and options and combinations thereof that effectively establish contract prices for sales and purchases that are acceptable, should the options be exercised. The options generate premium income, which
enhance revenues. Because these instruments do not meet the requirements for hedge accounting under FAS 133, the changes in fair market value related to these instruments (including the time
value portion), which reflect market prices and volatility at the balance sheet date, are recorded in results of operations, and are expected to increase the volatility of reported results.

The
amount reflected in other income/(expenses) relates to the change in fair market value of derivative financial instruments that are not designated as hedges. For derivative
instruments designated as hedges (futures contracts), Doe Run Peru assesses effectiveness based on changes in the forward rate, and as a result, does not expect hedge ineffectiveness.

The
fair market value of Doe Run Peru's derivative financial instruments reflected in Doe Run Peru's balance sheet as of July 31, 2002 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 Doe Run Peru would receive (pay) if the contracts were canceled on the balance sheet
date.

Doe
Run Peru's open derivative financial instruments at July 31, 2002 were: (numbers not in thousands)

---



|Metal          |  | Quantity         |   | Weighted
Average Price |  | Fair Market
Value |  | Period
|-------------- |  | ---------------- | - | ---------------------- |  | ----------------- |  | ------
|Gold           |  | (6,198           | ) | oz                     |  | $287/oz           |  | $     
|Copper (Other) |  | (213             | ) | tons                   |  | $1625.00/ton      |  |       
|Silver         |  | 850,175
(987,300 | ) | oz.
oz                 |  | $5.14/oz
$5.37/oz |  |       



|Metal  |  | Quantity     |   | Price Range |  | Fair Market
Value                            |  | Period
|------ |  | ------------ | - | ----------- |  | -------------------------------------------- |  | ------
|Copper |  | 5,813
(2,200 | ) | tons
tons   |  | $1,451.00/ton to $1,600.00/ton
$1,520.00/ton |  | $     
|Silver |  | 460,740      |   | oz          |  | $4.28/oz. to $4.60/oz.                       |  |       
|Gold   |  | 8,118
(1,646 | ) | oz
oz.      |  | $260.00 /oz
$287.00 /oz                      |  |       



|Metal  |  | Quantity     |   | Price Range |  | Fair Market
Value       |  | Period
|------ |  | ------------ | - | ----------- |  | ----------------------- |  | ------
|Lead   |  | 827          |   | tons        |  | $435.00/ton             |  | $     
|Silver |  | 197,460      |   | oz.         |  | $4.25/oz.               |  |       
|Gold   |  | 4,827
(2,743 | ) | oz.
oz      |  | $264.00/oz.
$283.00/oz. |  |       

At
July 31, 2002, Doe Run Peru had recorded an asset and a liability of $33 and $826, respectively, related to the fair market values of these instruments.

(4)    Related party transactions

Effective November 1, 2000, Doe Run Peru terminated all previously existing agreements for services with Doe Run Mining S.R.L and the Doe Run Resources
Corporation (Doe Run) and replaced them with a Hedging Services Contract and an International Sales Agency Services Contract with Doe Run. Under the Hedging Services Contract, the Company will pay to
Doe Run $42 per month for trading and hedging services. Under the International Sales Agency Services Contract, the Company will pay to Doe Run a commission of 21/4% of foreign sales.
The Contracts cover an initial term of two years, and are annually renewable thereafter. Amounts expensed in the nine months ended July 31, 2002 were $378 and $6,523 under the Hedging Services
Contract and the International Sales Agency Services Contract, respectively. Amounts expensed in the nine months ended July 31, 2001 were $378 and $6,764 under the Hedging Services Contract and
the International Sales Agency Services Contract, respectively.

---

On
March 12, 2002, with the consent of its parent company, Doe Run, Doe Run Peru did not pay $7,031 of interest due to Banco de Credito Overseas Limited (the Bank) under a
Contract for a Loan in Foreign Currency. Failure to pay such interest was cured by instructing the Bank to offset the amount of such payment against the amount otherwise payable by the Bank to Doe Run
under a Special Term Deposit Contract. Effective September 12, 2002, the remaining balance of the note, including the September 12, 2002 interest payment, was offset against the Special
Term Deposit, and in return, Doe Run Peru delivered a non-interest bearing intercompany note to Doe Run in the amount of $139,063. The obligations of Doe Run Peru under the intercompany note are
subordinate to those under Doe Run Peru's revolving credit facility.

(5)    Liquidity



---



---

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

The following discussion and analysis includes both the U.S. operations and the Peruvian operations of the Company and should be read in conjunction with the
consolidated financial statements of the Company and the notes thereto, and other financial information included herein. Holders of Notes and other readers of this Form 10-Q are urged to read The
Company's Amended and Restated Exchange Offer (the Exchange Offer), Consent Solicitation and Solicitation of Acceptances (the Offering Memorandum) dated September 20,2002 as well as the plan attached
as Exhibit A thereto, for a complete description of the Exchange Offer, the plan and its effects on holders of Notes and other interested parties. The Offering Memorandum and plan have been provided
to holders of Notes and are also available as an exhibit to the Company's Current Report on Form 8-K dated September 23, 2002.



Low metal prices over the past four years, coupled with the Company's substantial debt service requirements, have severely impacted the Company's liquidity. In
fiscal 2001, cash from operating activities was sufficient to meet the Company's capital and debt service requirements only because of a significant reduction in working capital. During the nine
months ended July 31, 2002 (the 2002 period) the Company continued to reduce working capital. Reductions in receivables coupled with increases in
borrowings on revolving credit lines resulted in reduced availability under revolving credit facilities to the minimal levels discussed below. In the 2002 period, the Company's liquidity was not
sufficient to make the $16.7 million interest payment due March 15, 2002 on its 111/4% Senior Notes due 2005, Floating Interest Rate Senior Notes due 2003 and
111/4% Senior Secured Notes due 2005 (collectively, the Notes) and the Company is in default of its covenants under the Notes indentures and the U.S. revolving Credit Facility. See
further discussion under "Recent Events" below.

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 $75.0 million less outstanding letters of credit, based on specific percentages
of eligible receivables and inventories. 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 $40.0 million, less outstanding letters of credit, guarantee letters and customs bonds based upon specific percentages of eligible receivables and inventories. On
September 17, 2002, Doe Run Peru entered into a new three-year credit facility with Banco de Credito del Peru (the BCP Revolving Credit Facility). This facility replaced the Doe Run
Peru Revolving Credit Facility, which had been extended. See "Recent Events" below for details of the BCP Revolving Credit Facility.

Net
unused availability at July 31, 2002 was $1.6 million under the Doe Run Revolving Credit Facility and $0.1 million under the Doe Run Peru Revolving Credit
Facility. In addition to availability under the credit facilities, the Company had $12.5 million of cash at July 31, 2002. At August 31, 2002 availability was $2.9 million
under the Doe Run Revolving Credit Facility and $0.3 million under the Doe Run Peru Revolving Credit Facility, and the Company's cash balance was $1.5 million.

---

The
deterioration of liquidity has adversely affected the Company's operating and financial results. As a result of extending accounts payable in order to conserve cash, procurement of
materials, supplies and equipment has become more difficult and at times more costly. Discounts are being missed, late charges are being incurred and in some cases the Company is not able to obtain
normal trade credit or purchase from the low cost supplier. The Company's commodity hedging activity has been significantly reduced as a result of the cancellation of margin credit lines by a number
of counterparties. In order to generate cash, during the 2002 period, the Company made certain lead metal shipments worth approximately $7.3 million that are subject to a put option exercisable
by the buyers. See "Obligations and CommitmentsNote (e)" for details of these transactions. The options expire in varying monthly increments between September and December 2002.
While these transactions enhanced the current liquidity situation by accelerating cash receipts, there may be negative impacts in the future as current prices have fallen below the transaction prices
and accordingly the buyer may elect to exercise its options. In general, the current liquidity situation has severely limited the Company's ability to pursue certain revenue enhancement, including
commodity hedging, and cost reduction opportunities and to take advantage of other business opportunities.



Due to the non-payment of interest due March 15, 2002 and the expiration of the grace period during which the Company could cure the
non-payment on the 111/4% Senior Notes due 2005, Floating Interest Rate Senior Notes due 2003 and 111/4% Senior Secured Notes due 2005 (collectively, the
Notes), as well as the violation of other financial covenants contained in its loan agreement relating to the U.S. revolving credit facility, the Company is in default of its covenants under the Notes
indentures and its U.S. revolving credit facility. In an event of default, the lenders have the right to accelerate the payment of any unpaid principal and interest balances. As a result, the related
debt balances are classified as current at July 31, 2002. No actions have been taken by the lenders to accelerate the payment of outstanding debt balances. The Company is in negotiations with
lenders to execute an amended U.S. revolving credit facility and is attempting to complete a restructuring as described below.

On
September 20, 2002, the Company issued an exchange offer for the Notes (the Exchange Offer) that amended an earlier tender and exchange offer. Under the Exchange Offer, the
Company is offering holders of the Notes new notes (Exchange Notes) with an aggregate principal amount of $660 for each $1,000 principal amount of the 111/4% Senior Secured Notes and
$560 per $1,000 principal amount of the 111/4% Senior Notes and Floating Interest Rate Notes, in addition to warrants to purchase up to 40% of the Company's outstanding common stock
(assuming 100% participation in the Exchange Offer). In addition to the March 15, 2002 interest payment, the Company did not make the interest payment due September 15, 2002. The Company
does not intend to pay the unpaid accrued interest on the Notes that will be exchanged in the Exchange Offer, and by accepting the Exchange Notes, the holders will waive the receipt of any and all
accrued and unpaid interest and penalties on the Notes.

In
connection with the Exchange Offer, the Company's ultimate parent, The Renco Group, Inc. (Renco), will purchase $20 million of the Company's preferred stock and Regiment
Capital Advisors LLC (Regiment), a significant holder of the Notes, will commit to lend the Company $15.5 million at a 3% discount, pursuant to a senior credit facility (the New Senior Credit
Facility). The $35.0 million in

---

proceeds of the Renco investment and the loan from Regiment, will be used to pay down the U.S. revolving credit facility, to pay the accrued interest as of March 15, 2002 and
September 15, 2002, including penalties thereon, on the Notes remaining outstanding after the Exchange Offer and to pay certain costs of the transactions. If successful, the Exchange Offer will
significantly reduce the Company's future debt service requirements. By deferring the maturities of the Company's obligations under the Notes as well as providing the Company with the option to pay
interest in kind for certain periods in lieu of a cash only interest payment, the Exchange Notes and related New Senior Credit Facility will also provide substantial cash flow benefits in the near
term. For the life of the Exchange Notes, principal and interest payments will be reduced by approximately $40.5 million (assuming 100% participation in the Exchange Offer and that the Company elects
a pay in kind feature available on the Exchange Notes). Over the next three years, (assuming 100% participation in the Exchange Offer and election of the pay in kind feature) cash required for
principal and interest payments on the Exchange Notes and the New Senior Credit Facility will be approximately $336.4 million less than the amount due under the Notes. These savings may be partially
offset by payments due to holders of the warrants upon exercise of the warrants put option described in the Exchange Offer. The proceeds from Renco's purchase from the sale of $20.0 million of
Doe Run's preferred stock as well as the proceeds from the
New Senior Credit Facility will significantly improve the Company's current liquidity. In addition, Renco will provide up to $15.0 million in credit support in connection with the new U.S.
revolving credit facility. The Company plans to continue operating all of its facilities at present levels and does not expect that the completion of these transactions will have an adverse affect on
the Company's trade creditors.

The
consummation of the Exchange Offer is contingent upon a number of conditions including the participation in the Exchange Offer by holders of at least 95% of the aggregate principal
amount outstanding of each tranche of the Notes (the "Minimum Tender"); the closing of the New Senior Credit Facility; the satisfactory amendment of the U.S. Revolving Credit Facility; and the sale of
preferred stock to Renco. There can be no assurance that Doe Run will be able to consummate the Exchange Offer. Concurrently with the Exchange Offer, the Company is also seeking acceptances from the
holders of the Notes to a prepackaged plan of bankruptcy (the "Plan") under Chapter 11 of the United States Bankruptcy Code. In the event that the Company is unable to achieve the Minimum Tender
necessary to consummate the Exchange Offer consensually, but does receive the requisite acceptances needed to confirm the Plan, the Company intends to seek to have the Plan confirmed in the United
States Bankruptcy Court for the Southern District of New York. Acceptances from holders of at least 66 2/3% of the aggregate principal amount of each tranche of the Notes and a
majority in number of holders of each tranche of Notes, in each case actually voting on the Plan, will be necessary to confirm the Plan. If the Plan is confirmed, the Company's obligations under the
Notes will be extinguished in their entirety and holders of Notes will receive substantially the same consideration for their Notes as they would under the terms of the Exchange Offer.

Doe
Run will be required, pursuant to the terms of the New Senior Credit Facility and the Exchange Notes, to grant the lenders under the New Senior Credit Facility a first priority lien,
and the holders of the Exchange Notes a second priority lien, on substantially all of its assets, and those of its subsidiaries (other than Doe Run Peru), not otherwise pledged to secure its
obligations under the U.S. Revolving Credit Facility or its existing Senior Secured Notes. This collateral will include, but not be limited to, the Intercompany Note made payable to Doe Run by Doe Run
Peru and the shares of

---

capital stock of certain of its subsidiaries. Furthermore, the lenders under the New Senior Credit Facility will be granted a second priority lien on the assets pledged to secure Doe Run's
obligations under the U.S. Revolving Credit Facility.

On
September 17, 2002, Doe Run Peru entered into a new, three-year revolving credit facility with its lender, effective September 25, 2002. The lender has currently
committed to a maximum of $40.0 million and is attempting to syndicate the balance of the $58.0 million provided for under the new facility. If the Exchange Offer and related
transactions are not consummated by November 25, 2002, an event of default will occur under the new facility, which could result in the outstanding balance becoming immediately due and payable.
As there can be no assurance that the Exchange Offer and other transactions will be completed, the balance of borrowings under the current facility at July 31, 2002 are classified as current.
Under the new agreement, advance rates on certain receivables and inventory will be improved from those under the previous facility, provided that Doe Run Peru meets certain documentation
requirements, which Doe Run Peru anticipates being able to accomplish.

Results of Operations

The
Company reported a net loss of $17.2 million for the three months ended July 31, 2002 (the 2002 quarter) compared to net income of $2.8 million for the three
months ended July 31, 2001 (the 2001 quarter). The Company's U.S. operations reported a net loss of $15.8 million (excluding intercompany fee revenue of $2.4 million) for the 2002
quarter compared to a net loss of $4.3 million (excluding intercompany fees and eliminations of $2.3 million) in the 2001 quarter. The increase in U.S. net loss was primarily due to
lower realized prices for lead metal, an unrealized loss on derivatives in the 2002 quarter compared to a gain in the in the 2001 quarter, higher production costs and restructuring costs recorded in
the 2002 quarter but not in the prior year. The Company's Peruvian operations reported a net loss of $1.4 million (excluding intercompany fees of $2.4 million) in the 2002 quarter
compared to net income of $7.1 million (excluding intercompany fees of $2.3 million) in the 2001 quarter. The decrease in Peruvian net income was due primarily to lower treatment and
refining charges for lead, zinc, and copper concentrates, and the absence of deferred tax benefit, partially offset by reduced conversion costs at La Oroya.

For
the nine months ended July 31, 2002 (the 2002 period) the Company reported a net loss of $33.1 million compared to a net loss of $20.0 million for the nine
months ended July 31, 2001 (the 2001 period). The Company's U.S. operations reported a net loss of $29.5 million (excluding intercompany fee revenue of $6.9 million) for the 2002
period compared to a net loss of $30.7 million excluding intercompany fees of $6.9 million) in the 2001 period. The decrease in the U.S. net loss was primarily due to lower production
costs and an increase in the unrealized gains on derivatives and the related cumulative effect of change in accounting principle recorded in the 2001 period pursuant to FAS 133 partially offset by
lower realized prices for lead metal and zinc concentrates, and restructuring costs recorded in 2002. See "Item 1. Financial StatementsNote 5 to the Company's Consolidated
Financial Statements" for a discussion of FAS 133. The Company's Peruvian operations had a net loss of $3.6 million (excluding intercompany fees of $6.9 million) in the 2002
period compared to net income of $10.6 million (excluding intercompany fees of $8.1 million) in the 2001 period. The decrease in Peruvian net income was primarily due to the factors
discussed above partially offset by lower production costs at Cobriza.

---

The
Company's results for the 2002 quarter reflect declines in the market prices of lead and zinc and increases in the prices of copper and silver. The 2002 period reflects a slight
increase in the silver price and declines in the prices of lead, copper, and zinc. The following table sets forth average London Metal Exchange (LME) prices for lead, copper and zinc and the average
London Bullion Market Association (LBMA) price for silver for the periods indicated:

Three Months Ended
July 31,

Nine Months Ended
July 31,2002

2001

2002

2001Average PricesLead ($/short ton)

404.67

415.00

$
428.73

$
429.20Copper ($/short ton)

1,461.40

1,455.00


1,410.49


1,552.80Zinc ($/short ton)

705.00

811.40


710.69


889.60Silver ($/troy ounce)

4.84

4.33


4.56


4.48


The
average annual LME lead price has declined approximately 39% from 1996 through 2001 as new mines have been developed in Australia and Ireland, and as China has increased its lead
metal production and exports. The second and third quarters of fiscal 2002 reflect deterioration of the lead price offsetting the modest improvement seen in the first quarter. Lead prices remain
substantially below the average for the ten years 1992 through 2001.

In
the U.S. market, demand for lead has been adversely impacted by recessionary economic conditions during 2002. A significant drop in lead required for batteries for the
telecommunications industry occurred as a result of lower capital expenditures for the industry's infrastructure. For the first seven months of calendar 2002 world consumption of lead was down 1%,
western world consumption of lead declined by 2.5% and U.S. consumption declined by 5%, reflecting weakened economic conditions. This decline in demand significantly impacted the Company's sales
volume, as U.S. battery manufacturers rationalized production. Lead metal sales volume was off about 67,000 tons, or 22% in the 2002 period, compared to the 2001 period. The decline in demand has also
impacted the Company's net realized prices as premiums over the LME have declined due to a surplus of lead in the U.S. market. The Company altered its marketing strategies during the period in an
effort to improve sales volume. In addition, production was reduced, as described below, in order to reduce inventories. Despite these
efforts, sales volume for the first nine months of fiscal 2002 was well below the prior year and significantly short of the lower levels anticipated in the revised operating plan, discussed below. Any
improvement in prices and premiums is not likely to occur until demand improves or supply is reduced.

Zinc
prices dropped in 2002 as a result of weak demand and excess metal production. The last several years have seen large zinc mines open in Australia, Ireland and Peru and a major
expansion of a zinc mine in Alaska. For the first seven months of calendar 2002, world zinc mine production declined 1% and zinc metal production increased 2%. Since 1998, world zinc mine production
has increased 15% and western world zinc metal production increased 16%. Over the five-year period, demand continued to be weak as a result of general economic conditions. For the first
seven months of calendar 2002 western world zinc demand dropped 1% and U.S. zinc demand dropped 5%, compared

---

to a similar period in 2001. These market conditions impacted prices in the 2002 period as the average LME price for refined zinc declined more than 20%, compared to the 2001 period.

Copper
prices declined in the 2002 period, reflecting weakened world economic conditions, particularly in major copper consuming industries, like telecommunications, electronics,
construction and automotive. For the first seven months of calendar 2002, world copper consumption increased 1%, western world copper consumption decreased 3% and U.S. copper consumption decreased by
6% compared to the same period in 2001. During the same period, world copper supply was flat.

A
decline in lead, zinc and copper concentrate treatment charges has negatively impacted smelter profitability. Low lead, zinc and copper prices have induced mine closures and cutbacks
and slowed development of new copper, zinc and lead projects. As a result, supplies of both zinc and copper concentrates have been very tight. Smelters with under-utilized capacity competing for these
concentrates have driven treatment charges and penalties down significantly in the first nine months of 2002. The tight market conditions for lead, zinc and copper concentrates are expected to
continue into 2003. Market experts anticipate some improvement in copper treatment charges in 2003 through 2005 as smelter utilization in the copper industry may improve to 80%. However there can be
no assurance that this improvement in treatment charges will actually occur.

A
significant portion of La Oroya's concentrate feed supply is currently secured from the Peruvian domestic market. The effects of low metals prices have caused some of the Company's
suppliers to suffer financial distress. If one or more of the local producers were to cease delivery of concentrates, there can be no assurance the Company would be able to secure sufficient
replacement feedstock or at economically acceptable terms. A significant interruption in feed supply could result in a material reduction in the production of metals from La Oroya which, would likely
have a significant adverse effect on the Company's results of operations, financial condition and liquidity

---

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

Three Months Ended
July 31,

Nine Months Ended
July 31,2002

2001

2002

2001U.S. OperationsLead metalprimary (short tons)

72,845

81,584

216,398

250,943Lead metalsecondary (short tons)

36,558

38,926

113,315

114,359Lead concentrates (metal content, short tons)

74,803

77,866

230,341

240,652Ore Grade

6.23
%
6.37
%
6.25
%
6.17
%Peruvian OperationsRefined copper (short tons)

18,254

18,696

54,218

54,421Refined lead (short tons)

34,089

33,823

99,108

99,729Refined zinc (short tons)

21,389

22,042

64,365

65,278Refined silver (thousands of troy ounces)

8,825

8,789

25,686

25,857Refined gold (thousands of troy ounces)

22

22

68

64Copper concentrates (metal content, short tons)

4,180

4,630

13,066

13,381Ore Grade

0.98
%
1.09
%
1.02
%
1.07
%


In
the 2002 quarter and the 2002 period, the Company's U.S. operations generated operating losses primarily due to low lead and zinc prices. These losses were sustained in spite of
significant changes to operations implemented during fiscal 2001 and in the first quarter of 2002. These changes, which are described below, reduced certain costs, and improved operating efficiencies,
lowering overall production costs. The Company has identified additional cost reductions and efficiency improvements, which will be implemented in the fourth quarter and as a part of the operating
plan for fiscal year 2003. Despite these improvements, if prices remain at current levels or decrease further, operating losses for the Company's U.S. operations are likely to result.

In
response to continued poor lead metal market conditions, the Company implemented operational and organizational changes at its U.S. primary lead operations (the Revised Operating
Plan). Implementation of this plan was initiated in the second half of fiscal 2001 and completed in the first quarter of 2002. The key elements of this plan are that the Company's Herculaneum primary
smelter reduced its annual refined metal production rate by 95,000 tons from 250,000 to 155,000 tons by reducing blast furnace and sinter plant operating time. The Company eliminated purchases of lead
concentrates and reduced production of concentrates at its southeast Missouri mining operations. The Company placed its No. 29 mine on care and maintenance and plans to mine out its
No. 28 mine during the second half of fiscal 2002. The Company also reduced total concentrate production at its other five mines. These production changes resulted in workforce reductions of
approximately 280 employees, or approximately 21% of the primary lead operation's workforce. These reductions, which involved both terminations and an early retirement program, were completed in the
first quarter of 2002. The changes were made in an effort to allow the Company to compete more effectively in the

---

global market and improve overall financial performance by reducing production costs and enhancing product mix as the smelters focus on producing specialty and alloy products.

The
cost of severance benefits and outplacement services provided to certain employees of approximately $1.2 million was recorded during fiscal 2001 of which approximately half
was paid in 2001 and with the balance to be paid during the current year. In addition, the Company recorded charges of $2.6 million in fiscal 2001 to adjust its pension and other post
retirement benefit liabilities. The cost of these benefits will be paid as part of the ongoing funding of these programs. The estimated cost of closing the No. 28 mine, the Viburnum mill and
related surface structures and tailings areas of approximately $0.6 million was previously accrued during the operating life of the mine. These closure activities will be performed as personnel
and funds are available.

Primarily
due to changes associated with the Revised Operating Plan, the Company's U.S. mining operations reduced ore production during the 2002 period in an effort to increase grade and
decrease unit production costs. Ore grade declined in the 2002 quarter, compared to the 2001 quarter, despite a 30,000 ton reduction in ore production, resulting in a decline in production of lead
metal in concentrates of approximately 4%. While production declined, spending remained approximately the same, compared to the 2001 quarter, resulting in an increase in cost per ton of metal in
concentrates of approximately 9% for the quarter. For the 2002 period, ore production was scaled back approximately 234,000 tons or 6%, resulting in a slight improvement in ore grade. The improvement
in grade partially offset the impact of reduced ore tonnage, as production of lead metal contained in concentrates was approximately 4% lower for period, compared to 2001. The improved ore grade
coupled with spending reductions resulted in costs per ton of metal in concentrates that were 6% lower than in the 2001 period.

Primary
smelter production declined approximately 11% for the quarter and 14% for the period, compared to the prior year, primarily reflecting implementation of the Revised Operating
Plan at the Company's Herculaneum smelter. For the 2002 period, the reduction at Herculaneum was partially offset by improved performance at the Company's Glover smelter. At Herculaneum, production
volume was down 17% or about 8,000 tons for the quarter and 26% or about 41,000 tons for the period, compared to the prior year. Unit production cost declined approximately 5% for the quarter and 7%
for the period, despite the impact of lower production volume, due to reduced spending, including a reduction of approximately $1.4 million due to lower natural gas prices. Natural gas and propane
prices declined significantly from the unusually high levels experienced in 2001, favorably impacting production costs at all of the U.S. smelting operations in the 2002 period.

Production
at the Company's Glover primary smelter reflected a slight decline for the 2002 quarter as production was slowed at the end of the quarter due to structural problems with the
raw material feed system. Using alternative equipment, Glover's production has recovered to normal rates and management anticipates that the smelter will continue to produce at normal rates until
repairs can be completed in fiscal year 2003. For the 2002 period, production volume improved approximately 6%, compared to the 2001 period, when the smelter was forced to shut down three times, twice
due to mechanical failure of cooling system components and once due to the failure of a baghouse fan motor. Lower operating costs, primarily due to lower natural gas prices and reduced raw material
usage, contributed to a 3% decline in unit production costs for the 2002 quarter, compared to the 2001 quarter. Without the production problems experienced in the prior year, and with lower energy
costs,

---

Glover's cost performance improved dramatically in the 2002 period, as unit production costs were down approximately 13% compared to the prior year.

Production
at the Company's Buick secondary smelter declined 6% for the 2002 quarter and 1% for the 2002 period, compared to the prior year, primarily due to an effort to reduce work in
process inventories in order to conserve cash while continuing to meet environmental standards. Certain work in process items have very low or no lead content, which results in slower production when
these items are recycled through the process. Several options are being reviewed that will allow the facility to consume the inventory and to achieve increased lead metal production levels. Despite
the lower production, unit conversion costs for the 2002 quarter were about the same as the 2001 quarter and for the period, unit conversion costs declined 4%, compared to the prior year. The cost of
feed materials was also favorable in 2002, as unit feed cost were lower by approximately 8% for the quarter and 10% for the period, compared to the prior year.

In
Peru, at the La Oroya metallurgical complex, there were no significant changes in production volume of copper, lead, zinc or silver for either the 2002 quarter or the 2002 period,
compared to the prior year. Gold production was up 3% for the quarter and 6% for the 2002 period, compared to the prior year, primarily due to the metal content of feed. Operating costs declined
approximately 2% for the quarter and 4% for the 2002 period, compared to the prior year, due to continuing cost reductions efforts.

At
the Cobriza copper mining operation, ore production was up, but ore grades and production of metal contained in concentrates were down for both the quarter and the 2002 period.
Operating costs were lower for the 2002 quarter, but lower ore grades caused the cost per ton of metal contained to increase about 8% compared to the 2001 quarter. Operating costs were lower for the
2002 period also, resulting in a 3% decrease in unit production costs, compared to the 2001 period. The lower cost per ton of contained copper was achieved despite a 5% decline in ore grade, compared
to the prior year.

---

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

|                                                           |                                                               | Three Months Ended
July 31,                                                            |         | Nine Months Ended
July 31, |        
|---------------------------------------------------------- | ------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ------- | -------------------------- | -------
|
|Net sales(a)                                               |                                                               | $                                                                                      | 62,428  |                            | $      
|                                                           |                                                               |                                                                                        |         |                            |        
|Costs and expenses:                                        |                                                               |                                                                                        |         |                            |        
|                                                           | Cost of sales(a)                                              |                                                                                        |         | 59,344                     |        
|                                                           | Depletion, depreciation and amortization                      |                                                                                        |         | 4,807                      |        
|                                                           | Selling, general and administrative                           |                                                                                        |         | 5,037                      |        
|                                                           | Exploration                                                   |                                                                                        |         | 170                        |        
|                                                           | Unrealized (gains)/losses on derivative financial instruments |                                                                                        |         | 361                        |        
|                                                           |                                                               |                                                                                        |         |                            |        
|                                                           |                                                               | Total costs and expenses                                                               |         |                            | 69,719 
|                                                           |                                                               |                                                                                        |         |                            |        
|                                                           |                                                               | Income (Loss) from operations                                                          |         |                            | (7,291 
|Other income (expense)                                     |                                                               |                                                                                        |         |                            |        
|                                                           | Interest expense                                              |                                                                                        |         | (10,532                    | )      
|                                                           | Interest income                                               |                                                                                        |         | 3,540                      |        
|                                                           | Other, net                                                    |                                                                                        |         | (1,520                     | )      
|                                                           |                                                               |                                                                                        |         |                            |        
|                                                           |                                                               |                                                                                        | (8,512  | )                          |        
|                                                           |                                                               |                                                                                        |         |                            |        
|                                                           |                                                               | Loss before income tax expense and cumulative effect of change in accounting principle |         |                            | (15,803
|Income tax expense                                         |                                                               |                                                                                        |        |                            |        
|                                                           |                                                               |                                                                                        |         |                            |        
|                                                           |                                                               | Loss before cumulative effect of change in accounting principle                        |         |                            | (15,803
|Extraordinary item related to retirement of long-term debt |                                                               |                                                                                        |        |                            |        
|Cumulative effect of change in accounting principle        |                                                               |                                                                                        |        |                            |        
|                                                           |                                                               |                                                                                        |         |                            |        
|Net loss                                                   |                                                               | $                                                                                      | (15,803 | )                          | $      
|                                                           |                                                               |                                                                                        |         |                            |        

---

Net sales

$
2,385

$
2,727

$
6,901

$
7,142Cost of sales





402





Sales volumes (short tons)Lead metal


92,831


93,012


236,787


303,889Zinc concentrates


21,874


21,457


62,930


71,223Realized prices ($/short ton)(b)Lead metal

$
477.63

$
514.23

$
509.68

$
527.47Zinc concentrates


226.62


240.04


218.64


273.18


---

Results of Peruvian Operations

|                                                                                                          |                                                                          | Three Months Ended
July 31, |         | Nine Months Ended
July 31, |        
|--------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | --------------------------- | ------- | -------------------------- | -------
|
|Net sales                                                                                                 |                                                                          | $                           | 109,584 |                            | $      
|Costs and expenses:                                                                                       |                                                                          |                             |         |                            |        
|                                                                                                          | Cost of sales                                                            |                             |         | 101,960                    |        
|                                                                                                          | Depreciation and amortization                                            |                             |         | 2,835                      |        
|                                                                                                          | Selling, general and administrative(a)                                   |                             |         | 2,328                      |        
|                                                                                                          | Exporation                                                               |                             |         | 134                        |        
|                                                                                                          | Unrealized (gains) losses on derivative financial instruments            |                             |         | (126                       | )      
|                                                                                                          |                                                                          |                             |         |                            |        
|                                                                                                          |                                                                          | Total costs and expenses    |         |                            | 107,131
|                                                                                                          |                                                                          |                             |         |                            |        
|                                                                                                          |                                                                          | Income from operations      |         |                            | 2,453  
|Other income (expense):                                                                                   |                                                                          |                             |         |                            |        
|                                                                                                          | Interest expense                                                         |                             |         | (3,982                     | )      
|                                                                                                          | Interest income                                                          |                             |         | 12                         |        
|                                                                                                          | Other, net                                                               |                             |         | 97                         |        
|                                                                                                          |                                                                          |                             |         |                            |        
|                                                                                                          |                                                                          |                             | (3,873  | )                          |        
|                                                                                                          |                                                                          |                             |         |                            |        
|Income (Loss) before income tax expense (benefit) and cumulative effect of change in accounting principle |                                                                          |                             | (1,420  | )                          |        
|Income tax benefit                                                                                        |                                                                          |                             |        |                            |        
|                                                                                                          |                                                                          |                             |         |                            |        
|                                                                                                          | Income (Loss) before cumulative effect of change in accounting principle |                             |         | (1,420                     | )      
|Cumulative effect of change in accounting principle                                                       |                                                                          |                             |        |                            |        
|                                                                                                          |                                                                          |                             |         |                            |        
|Net income (loss)                                                                                         |                                                                          | $                           | (1,420  | )                          | $      
|                                                                                                          |                                                                          |                             |         |                            |        

---

Selling, general and administrative


2,385


2,325


6,901


7,142Sales VolumesCopper (short tons)


17,985


19,101


54,065


54,441Lead (short tons)


34,167


33,591


99,235


99,707Zinc (short tons)


21,404


22,478


64,543


65,732Silver (thousands of troy ounces)


8,811


8,798


25,673


25,744Gold bullion (thousands of troy ounces)


22


21


68


64Realized PricesCopper ($/short ton)

$
1,450.49

$
1,472.09

$
1,403.82

$
1,560.53Lead ($/short ton)


413.51


434.03


438.93


445.27Zinc ($/short ton)


701.29


835.09


708.50


908.97Silver ($/troy ounce)


4.86


4.39


4.57


4.51


---



Results of operations for the three months and the nine months ended July 31, 2002 and 2001 include the results of the Company's U.S. and Peruvian operations. In order to provide
a more meaningful analysis, the results attributable to Peruvian operations will be noted and discussed separately under "Results of Peruvian Operations".

Net salesin the 2002 quarter were $172.0 million compared to $179.2 million in the 2001 quarter. Peruvian net sales were
flat in the 2002 quarter, compared to the 2001 quarter. U.S. net sales were $7.2 million lower in the 2002 quarter, compared to the 2001 quarter, primarily due to lower realized prices for lead
metal, lower revenues from oxide at the Company's Fabricated Products operation and purchased zinc that was sold in the 2001 quarter but not in 2002. Realized prices for lead metal were lower due to
both lower LME prices and lower premiums resulting from the weakened market conditions previously discussed. Oxide sales were lower because the Company's main oxide customer began tolling, rather than
purchasing, oxide. As a result, oxide revenues represent the fee that the Company receives for converting metal into oxide rather than the full value of oxide including raw material costs.

Net salesdecreased $68.7 million in the 2002 period compared to the 2001 period, of which, $18.7 million was attributable
to Peruvian operations. U.S. net sales were $49.9 million lower in the 2002 period, compared to the 2001 period, primarily due to a decrease in lead metal sales volume which was 22% lower than
the prior year, reducing net sales by $35.4 million. The reduced volume reflects the Company's implementation of the Revised Operating Plan in response to weaker overall demand, discussed
previously. Also contributing to the sales reduction were lower realized prices for lead metal and zinc concentrates and the reduction in oxide sales discussed above.

Cost of salesincreased $7.3 million for the 2002 quarter compared to the 2001 quarter. Of this increase, $8.1 million was
attributable to Peruvian operations. U.S. cost of sales for the 2002 quarter was $0.8 million less than the 2001 quarter primarily due to lower cost of sales for oxide and the elimination of
purchased zinc sales, partially offset by increased unit production costs. Oxide declined because of the change from outright sales to toll, discussed above. Unit Production costs were higher
primarily due to increased unit production cost at the Company's mining operations resulting from a small decline in ore grade, lower ore production and increased electricity cost, compared to the
2001 quarter, which included a revenue sharing credit from the utility company.

Cost of salesfor the 2002 period was $445.7 million compared to $497.9 million for the 2001 period. A decrease of
$3.7 million was attributable to Peruvian operations. U.S. cost of sales for the 2002 period was $48.6 million less than the 2001 period. The reduced lead metal volume, discussed above,
accounts
for $35.3 million of this decrease. A decrease of approximately $7.5 million is attributable to efficiency improvements at all three primary operating facilities resulting from
implementation of the Revised Operating Plan, improved unit production cost at the secondary smelter and lower energy costs. Lower cost for oxide production also contributed to the decrease.

Selling, general and administrativeexpenses increased by $1.1 million for the 2002 quarter, compared the prior year. A decline of
$0.3 million was attributable to Doe Run Peru. Selling, general and administrative expenses for U.S. operations increased $1.4 million primarily due to increases in legal fees, expenses
related to retention bonus accruals, insurance and public relations expenses.

Selling, general and administrativeexpenses decreased by $0.9 for the 2002 period, compared the prior year. A decrease of
$1.7 million was attributable to Peruvian operations. The $0.8 million increase in selling, general and administrative expenses for U.S. operations is primarily the result of increases
in legal fees, expenses related to retention bonus accruals, gainsharing and public relations, partially offset by reductions in association dues, commissions and professional fees.

Explorationexpense decreased $0.5 million for the 2002 period, compared to the prior year. An increase of $0.1 million is
attributable to Peruvian operations. The decrease of $0.6 million for U.S.

---

operations was due to suspension of all drilling and fieldwork on the Company's Missouri and South African exploration properties in an effort to conserve cash.

Unrealized gains on derivativesrelate to the change in fair market value of derivative financial instruments pursuant to FAS 133.
Gains for the 2002 quarter and 2002 period resulted from a reduction in the quantities of contracts outstanding, due primarily to credit line reductions. This resulted in the realization of losses
that were previously unrealized.

Interest expensedeclined $0.5 million in the 2002 quarter and $3.2 million in the 2002 period, compared to the prior year.
Peruvian operations accounted for decreases of $0.5 million for the 2002 quarter and $1.6 million for the 2002 period. The slight increase for U.S. operations for the quarter is
primarily the result of a recognizing penalty interest on the overdue interest on the Company's Notes, partially offset by lower interest rates on the Company's floating interest rate notes and on the
U.S. revolving credit facility. The decline attributable to U.S. operations for the 2002 period was primarily due to the lower interest rates on the floating interest rate notes and revolving credit
facility, partially offset by the penalty interest recorded in the third quarter.

Other,net expense was $1.4 million in the 2002 quarter compared to other net income of $0.2 million for the 2001 quarter.
For the 2002 period, other net expense was $2.2 million, compared to other net income of $0.1 million for the 2001 period. Peruvian operations accounted for decreased expenses of
$0.6 million for the 2002 quarter and $0.3 million for the 2002 period. The changes in U.S. operations
for the 2002 quarter and the 2002 period are primarily due to the absence, in 2002, of rental income on the helicopter used for Peruvian operations, which was sold in the third quarter of 2001and to
restructuring costs in 2002 which were not present in the prior year.

Income tax expense (benefit)for the 2002 quarter reflects primarily the provision for the Company's Peruvian subsidiaries. As a result of
the Company's tax status in the U.S., the Company is not subject to federal and most state income taxes.

Cumulative effect of change in accounting principlerelates to the adoption of FAS 133. See "Item 1. Financial
StatementsNote 2 to the Company's Consolidated Financial Statements" for a discussion of FAS 133.

Results of Peruvian Operations

Net salesfor the 2002 quarter were nearly flat compared to the 2001 quarter, as higher realized prices for silver
and gold were partially offset by lower realized prices for zinc, lead and copper and slightly lower copper sales volume. The declines in zinc, lead and copper realized prices reflect the unfavorable
market conditions discussed earlier.

Net
sales for the 2002 period declined $18.7 million, compared to the 2001 period, primarily due to lower realized prices for zinc, copper and lead. Realized prices were down 22%
for zinc, and 10% for copper, compared to the prior year, reflecting similar declines in the LME prices for those metals. These decreases were partially offset by higher realized prices for gold and
slightly higher copper and gold sales volumes.

Cost of salesincreased $8.1 million, from the 2001 quarter to the 2002 quarter primarily due to higher concentrate feed cost,
partially offset by lower conversion costs and lower sales volumes for copper and zinc. The increase in concentrate feed cost was driven by lower treatment and refining charges for copper, zinc and
lead concentrates, reflecting the tightness in the concentrate markets discussed previously, and higher market prices for silver and gold. Higher costs at Cobriza for the quarter also contributed to
the feed cost increase. The feed cost increases were partially offset by a 2% reduction in unit conversion costs at La Oroya.

---

Cost
of sales decreased $3.7 million from the 2001 period to the 2002 period, primarily due to lower concentrate feed cost, lower conversion costs at La Oroya and lower unit
production cost at Cobriza. The decrease in feed cost was the result of lower metal prices, primarily copper and zinc, partially
offset by lower treatment and refining charges and higher prices for silver and gold. Conversion costs at La Oroya declined 4% for the period reducing cost of sales approximately $3.5 million.

Depreciation and amortizationexpense increased by $0.4 million in the 2002 quarter and $0.9 million for the 2002 period,
compared to the prior year, primarily due to recent capital additions.

Selling general and administrative expensesdecreased $0.3 million for the 2002 quarter and $1.7 million for the 2002
period, compared to the prior year, primarily due to a reduction of expenses related to the helicopter, which was sold in the third quarter of 2001.

Unrealized (gain)/loss on derivativesrelates to the change in fair market value of derivative financial instruments pursuant to
FAS 133. Gains for the 2002 quarter and 2002 period resulted from lower metal prices.

Income tax expensefor the 2002 quarter relates to adjustments to the Company's valuation allowance against Peruvian deferred tax assets
due to changes in management's assessment about whether their benefits will be realized. Due to the Company's liquidity situation, it is management's belief that it is not more likely than not that
future deferred tax timing differences will be realized.

Cumulative effect of change in accounting principlein the 2001 period relates to the adoption of FAS 133. See "Item 1. Financial
StatementsNote 2 to Doe Run Peru's Financial Statements" for a discussion of FAS 133.

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 the two revolving credit facilities discussed previously. As of July 31, 2002, $38.2 million was outstanding,
exclusive of $7.4 million of letters of credit, under the Doe Run Revolving Credit Facility and $34.8 million was outstanding under the Doe Run Peru Revolving Credit Facility. The
Company also has available in Peru an unsecured credit arrangement related to customs bonds, provided by a local insurance company. At July 31, 2002, $2.5 million of customs bonds were
outstanding under this arrangement.

As
discussed previously, the Company is currently in default of various covenants. See discussion inRecent Events.

In
the 2002 quarter, cash provided by operating activities was $7.8 million, cash used in investing activities was $4.3 million and cash provided by financing activities
was $6.7 million. For the 2002 period, cash provided by operating activities was $11.8 million, cash used in investing activities was $16.6 million and cash provided by financing
activities was $11.1 million.

In
the U.S., the Company had capital expenditures of $6.3 million for the 2002 period and has projected total capital expenditures of approximately $8.9 million for fiscal
2002, 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 $68.9 million per year on repairs and maintenance from fiscal 1996 through fiscal 2001. 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 as
set forth in the purchase agreement. For expenditures through October 31, 2001, Centromin has approved qualifying

---

expenditures under the investment commitment of approximately $103 million. Additional expenditures for the first nine months of fiscal 2002 have not yet been submitted for approval.
Management anticipates that Doe Run Peru will have enough qualifying expenditures at October 31, 2002 to meet the required investment commitment, without penalty. Peruvian operations had
capital expenditures of $10.4 million in the 2002 period and have projected capital expenditures of approximately $17.3 million for fiscal 2002, primarily for environmental improvements
and to support ongoing operations.

The
Company has substantial indebtedness and debt service requirements. As of July 31, 2002, on a consolidated basis, the Company had $507.8 million of indebtedness
outstanding, or $382.8 million net of the Special Term Deposit made in a foreign bank as collateral for a loan made to Doe Run Peru, securing indebtedness of a like amount. On
September 12, 2002 the $125.0 Special Term Deposit was used to retire the $125.0 loan made to Doe Run Peru.

The
BCP Revolving Credit Facility contains standard covenants concerning among other things: the incurrence of additional indebtedness other than permitted indebtedness by Doe Run Peru,
the entrance by Doe Run Peru into certain transactions with affiliates and the maintenance by Doe Run Peru of certain financial measures including EBITDA, interest coverage and debt service leverage
with affiliates, and negative pledges on the principal assets and the quota shares of Doe Run Peru in excess of 66.67% of the outstanding quota shares. The BCP Revolving Credit Facility also contains
covenants which will significantly restrict Doe Run Peru's ability to make distributions to Doe Run in excess of an annual $4 million management fee. If the Exchange Offer and other
transactions are not completed by November 25, 2002 an event of default will occur, which could result in the outstanding balance becoming immediately due and payable.

Contractual Obligations and Commitments

The
following tables summarize Doe Run's contractual obligations and commercial commitments at July 31, 2002. For a discussion of environmental and reclamation obligations, see
"Item 1. Financial StatementsNote 6 to the Company's Consolidated Financial Statements".

|                                           |       |   |       | Payments Due By Period
|------------------------------------------ | ----- | - | ----- | ----------------------
|
|
|Contractual Obligations:                   |       |   |       |                       
|Current portion of long-term debt(a)       |       | $ | 380.0 |                       
|Long-term debt, less current maturities(b) |       |   | 127.8 |                       
|Operating leases                           |       |   | 15.1  |                       
|Capital leases                             |       |   | 7.7   |                       
|Rents and royalties                        |       |   | 3.3   |                       
|                                           |       |   |       |                       
|                                           | Total |   | $     | 533.9                 
|                                           |       |   |       |                       

---

---

|                          |       |   |      | Payments Due By Period
|------------------------- | ----- | - | ---- | ----------------------
|
|
|Commercial Commitments:   |       |   |      |                       
|Customs bonds             |       | $ | 2.5  |                       
|Standby letters of credit |       |   | 7.3  |                       
|Tolling commitments(e)    |       |   | (c   | )                     
|Purchase commitments      |       |   | (d   | )                     
|Sales commitments(e)      |       |   | (e   | )                     
|Repurchase commitments(f) |       |   | 10.4 |                       
|                          |       |   |      |                       
|                          | Total |   | $    | 20.2                  
|                          |       |   |      |                       

---

Impact of Accounting Standards Not Yet Adopted

In June 2001, the Financial Accounting Standards Board issued Statement No. 143,Accounting for Asset Retirement
Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and (or)
normal use of the asset.

Statement
No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of
fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. The
liability is accreted at the end of each

---

period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement.

The
Company is required and plans to adopt the provisions of Statement No. 143 November 1, 2002. To accomplish this, the Company must identify all legal obligations for
asset retirement obligations, if any, and determine the fair value of these obligations on the date of adoption. The determination of fair value is complex and will require the Company to gather
market information and develop cash flow models. Additionally, the Company will be required to develop processes to track and monitor these obligations. Because of the effort necessary to comply with
the adoption of Statement No. 143, it is not practicable for management to estimate the impact of adopting this Statement at the date of this report. It is currently the Company's practice to
accrue for mine and other closure obligations at their estimated, undiscounted cost. See "Item 1. Financial Statements", Note 7 to the Company's Consolidated Financial Statements for
disclosures related to these obligations.

The
FSAB has issued SFAS No. 145,Rescission of FASB Statements No. 4, 44, and 64, Amendments of FASB Statement No. 13 and Technical
Corrections.This statement updates, clarifies and simplifies debt and accounting pronouncements related to accounting for gains and losses from the extinguishments of debt and
accounting for certain lease modifications. Management is in the process of evaluating the adoption of this standard and cannot at the time of this report determine the potential impact on our
consolidated financial statements.

The
FSAB has issued SFAS No. 146,Accounting for Costs Associated with Exit or Disposal Activities.This statement addresses the
accounting for costs associated with disposal activities covered by SFAS No. 144 or with exit activities previously covered by EITF 94-3. This statement will be applied prospectively to
any exit or disposal activities that we initiate after the adoption date.

Forward-Looking Statements

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

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

The Company has outstanding $55 million of floating interest rate senior notes 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, 2002, the
effective rate was approximately 8.54%.

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

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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. See "Item 1. Financial
StatementsNote 6 to the Company's Condensed Consolidated Financial Statements" for additional disclosures regarding these activities.

Part II.    Other Information.

Item 1.    Legal Proceedings

Karla Richardson et al. v. The Doe Run Resources Corp.,et al,filed September 12, 1995;Ronald Heath, et al. v. The Doe Run Resources Corp. et al., filed November 20, 1995; Andrea Massa, et al. v. The Doe Run Resources Corp., et
al.,filed December 8, 1995;Govreau, et al. v. The Doe Run
Resources Corp., et al, filed February 1, 1999,Casey II, et al. v. The Doe Run Resources Corp., et al.,filed
March 23, 2000, andWarden, et al. vs. The Doe Run Resources Corp. et al.filed September 21, 2001, all filed in the Circuit
Court 23rd Judicial Circuit at Hillsboro, Jefferson County, Missouri, were dismissed without prejudice during the quarter ended July 31, 2002.

Warden, et al. vs. The Doe Run Resources Corp. et al.was filed September 12 in the Circuit Court of the City of St. Louis,
Missouri alleging injury to eight children and two young adults as a result of the operations of and emissions from the Company's Herculaneum smelter.

Lee Anna Smith Vs. Asarco Inc., Et Al., filed in the District Court of Ottawa County, State of Oklahoma and received by the Company
on July 1, 2002. The suit alleges personal injuries to a child living in Ottawa County, Oklahoma as a result of lead contamination from chat piles and/or tailings.

All
of the cases against the Company previously filed in the District Court of Ottowa County, Oklahoma were removed to the U.S. District Court for the Northern District of Oklahoma.

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

(a)    Exhibits.

None

(b)    Reports on Form 8-K.

On August 5, 2002, Doe Run filed a current report on form 8-K announcing that it was extending the expiration time of the Exchange
Offer, Cash Offer and Exchange/Loan Offer (each as defined and described in the Offering Memorandum) (collectively, the "Offers") until 5:00 P.M., New York City time, on Tuesday,
August 6, 2002 and providing certain updated information regarding Doe Run.

On
August 6, 2002, Doe Run filed a current report on form 8-K announcing that it was extending the expiration time of the Offers until 5:00 P.M., New
York City time, on Wednesday, August 7, 2002.

On
August 8, 2002, Doe Run filed a current report on form 8-K announcing that it was (i) extending the expiration time of the Offers until
5:00 P.M., New York City time, on Wednesday, August 14, 2002 and (ii) amending the terms of the Offers so as to change the minimum tender required for consummation of the Offers
with respect to its Floaters to 86% from 90% of the aggregate principal amount thereof outstanding.

On
August 15, 2002, Doe Run filed a current report on form 8-K extending the expiration time of the Offers until 5:00 P.M., New York City time, on
Tuesday,August 20, 2002.

On
August 21, 2002, Doe Run filed a current report on form 8-K extending the expiration time of the Offers until 5:00 P.M., New York City time, on
Friday, August 23, 2002.

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On
August 27, 2002, Doe Run filed a current report on form 8-K extending the expiration time of the Offers until 5:00 P.M., New York City time, on
Friday, September 6, 2002.

On
September 6, 2002, Doe Run filed a current report on form 8-K attached as Exhibit 99.1 hereto announcing (i) it had reached an agreement in
principle with Regiment Capital Advisors, L.L.C. concerning the modification of its Offers and (ii) the extension of its outstanding offer for its Notes until 5:00 P.M., New York City
time, on Friday, September 20, 2002.

On
September 23, 2002, the Company filed a current report on Form 8-K to announce the commencement of an exchange offer for up to $305.0 million par
value of the Company's outstanding notes. Concurrently with the Exchange offer, the Company is also seeking acceptance from the holders of the Notes of a prepackaged plan of bankruptcy under Chapter
11 of the Bankruptcy Code. Readers are directed to the Form 8-K for a detailed description of these transactions as well as a discussion of the conditions precedent to the
consummation of such transactions. There can be no assurance that the transactions described herein or in the Form 8-K dated September 23, 2002 can be successfully completed.

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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)                                                                                                      
|--------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                    
|October 2, 2002 |  | /s/MARVIN K. KAISER                                                                                                                                
|Date            |  | Marvin. K. Kaiser Executive Vice President and Chief Financial
and Administrative Officer
(duly authorized officer and principal financial officer)

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