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

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q

(Mark One)

|ý  |  | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 
|-- |  | ----------------------------------------------------------------------------------------
|   |  | For the quarterly period ended April 30, 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

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

|New York                                                       |  | 13-1255630                       
|-------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction
of incorporation or organization) |  | (IRS Employer Identification No.)
|1801 Park 270 Drive, Suite 300
St. Louis, Missouri             |  | 63146                            
|(Address of principal executive offices)                       |  | (Zip Code)                       

Registrant's telephone number, including area code(314) 453-7100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the proceeding 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. o
Yes        ý No

Number
of shares outstanding of each of the issuer's classes of common stock, as of June 28, 2001:

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 April 30, 2002 and October 31, 2001                         
|Condensed Consolidated Statements of Operations three and six months ended April 30, 2002 and 2001
|Condensed Consolidated Statements of Comprehensive Income six months ended April 30, 2002 and 2001
|Condensed Consolidated Statements of Cash Flows six months ended April 30, 2002 and 2001          
|Notes to Consolidated Financial Statements                                                        
|Doe Run Peru S.R.L.                                                                               
|Condensed Consolidated Balance Sheets April 30, 2002 and October 31, 2001                         
|Condensed Consolidated Statements of Operations three and six months ended April 30, 2002 and 2001
|Condensed Consolidated Statements of Cash Flows six months ended April 30, 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                                                                                        





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

|                                        |                                                                                | April 30,
2002                              |         | October 31,
2001 |        
|--------------------------------------- | ------------------------------------------------------------------------------ | ------------------------------------------- | ------- | ---------------- | -------
|
|ASSETS                                  |                                                                               
|Current assets:                         |                                                                                |                                             |         |                  |        
|                                        | Cash                                                                           |                                             | $       | 2,251            |        
|                                        | Trade accounts receivable, net of allowance for doubtful accounts              |                                             |         | 63,083           |        
|                                        | Inventories                                                                    |                                             |         | 116,270          |        
|                                        | Prepaid expenses and other current assets                                      |                                             |         | 25,957           |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total current assets                        |         |                  | 207,561
|Property, plant and equipment, net      |                                                                                |                                             | 261,232 |                  |        
|Special term deposit                    |                                                                                |                                             | 125,000 |                  |        
|Other noncurrent assets, net            |                                                                                |                                             | 5,476   |                  |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total assets                                |         | $                | 599,269
|                                        |                                                                                |                                             |         |                  |        
|LIABILITIES AND SHAREHOLDER'S DEFICIT   |                                                                               
|Current liabilities:                    |                                                                                |                                             |         |                  |        
|                                        | Short-term borrowings and current maturities of long-term debt                 |                                             | $       | 371,940          |        
|                                        | Accounts payable                                                               |                                             |         | 47,476           |        
|                                        | Accrued liabilities                                                            |                                             |         | 72,027           |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total current liabilities                   |         |                  | 491,443
|Long-term debt, less current maturities |                                                                                |                                             | 128,931 |                  |        
|Other noncurrent liabilities            |                                                                                |                                             | 60,602  |                  |        
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total liabilities                           |         |                  | 680,976
|Shareholder's deficit:                  |                                                                                |                                             |         |                  |        
|                                        | Common stock, $.10 par value, 1,000 shares authorized, issued, and outstanding |                                             |         |                 |        
|                                        | Additional paid-in capital                                                     |                                             |         | 5,238            |        
|                                        | Accumulated deficit                                                            |                                             |         | (73,640          | )      
|                                        | Accumulated other comprehensive losses                                         |                                             |         | (13,305          | )      
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total shareholder's deficit                 |         |                  | (81,707
|                                        |                                                                                |                                             |         |                  |        
|                                        |                                                                                | Total liabilities and shareholder's deficit |         | $                | 599,269
|                                        |                                                                                |                                             |         |                  |        

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





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

|                             |                                                     | Three Months Ended
April 30,                                                   |                                          | Six Months Ended
April 30, |        
|---------------------------- | --------------------------------------------------- | ------------------------------------------------------------------------------ | ---------------------------------------- | -------------------------- | -------
|
|Net sales                    |                                                     | $                                                                              | 160,840                                  |                            | $      
|Costs and expenses:          |                                                     |                                                                                |                                          |                            |        
|                             | Cost of sales                                       |                                                                                |                                          | 146,898                    |        
|                             | Depletion, depreciation and amortization            |                                                                                |                                          | 7,646                      |        
|                             | Selling, general and administrative                 |                                                                                |                                          | 6,770                      |        
|                             | Exploration                                         |                                                                                |                                          | 262                        |        
|                             | Unrealized gain on derivative financial instruments |                                                                                |                                          | (253                       | )      
|                             |                                                     |                                                                                |                                          |                            |        
|                             |                                                     | Total costs and expenses                                                       |                                          |                            | 161,323
|                             |                                                     |                                                                                |                                          |                            |        
|                             |                                                     | Income (loss) from operations                                                  |                                          |                            | (483   
|Other income (expense):      |                                                     |                                                                                |                                          |                            |        
|                             | Interest expense                                    |                                                                                |                                          | (14,201                    | )      
|                             | Interest income                                     |                                                                                |                                          | 3,528                      |        
|                             | Other, net                                          |                                                                                |                                          | (606                       | )      
|                             |                                                     |                                                                                |                                          |                            |        
|                             |                                                     |                                                                                | (11,279                                  | )                          |        
|                             |                                                     |                                                                                |                                          |                            |        
|                             |                                                     |                                                                                | Loss before income tax expense (benefit) |                            |        
|Income tax expense (benefit) |                                                     |                                                                                | (539                                     | )                          |        
|                             |                                                     |                                                                                |                                          |                            |        
|                             |                                                     | Loss before cumulative effect of change in accounting principle                |                                          |                            | (11,223
|                             |                                                     | Cumulative effect of change in accounting principle, net of income tax benefit |                                          |                            |       
|                             |                                                     |                                                                                |                                          |                            |        
|                             |                                                     |                                                                                |                                          | Net loss                   |        
|                             |                                                     |                                                                                |                                          |                            |        

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



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

|                                                         |                    | Six Months Ended
April 30, |        
|-------------------------------------------------------- | ------------------ | -------------------------- | -------
|
|Net loss                                                 |                    | $                          | (15,914
|Unrealized gain on derivative financial instruments, net |                    |                            |       
|                                                         |                    |                            |        
|                                                         | Comprehensive loss |                            | $      
|                                                         |                    |                            |        

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





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

|                                                   |                                                                                 | Six Months Ended
April 30, |                                                                 
|-------------------------------------------------- | ------------------------------------------------------------------------------- | -------------------------- | ----------------------------------------------------------------
|
|Cash flows from operating activities:              |                                                                                 |                            |                                                                 
|                                                   | Net loss                                                                        |                            | $                                                               
|                                                   | Cumulative effect of change in accounting principle                             |                            |                                                                 
|                                                   | Adjustments to reconcile net loss to net cash provided by operating activities: |                            |                                                                 
|                                                   |                                                                                 |                            | Depreciation, depletion and amortization                        
|                                                   |                                                                                 |                            | Imputed interest and amortization of deferred financing costs   
|                                                   |                                                                                 |                            | Unrealized gain on derivative financial instruments             
|                                                   |                                                                                 |                            | Deferred income taxes                                           
|                                                   |                                                                                 |                            | Increase resulting from other changes in assets and liabilities:
|                                                   |                                                                                 |                            |                                                                 
|                                                   |                                                                                 |                            |                                                                 
|Cash flows from investing activities:              |                                                                                 |                            |                                                                 
|                                                   | Purchases of property, plant and equipment                                      |                            |                                                                 
|                                                   |                                                                                 |                            |                                                                 
|                                                   |                                                                                 |                            | Net cash used in investing activities                           
|Cash flows from financing activities:              |                                                                                 |                            |                                                                 
|                                                   | Proceeds from revolving loans and short term borrowings, net                    |                            |                                                                 
|                                                   | Payments on long-term debt                                                      |                            |                                                                 
|                                                   | Payment of deferred financing costs                                             |                            |                                                                 
|                                                   |                                                                                 |                            |                                                                 
|                                                   |                                                                                 |                            | Net cash provided by financing activities                       
|                                                   |                                                                                 |                            |                                                                 
|                                                   |                                                                                 |                            | Net decrease in cash                                            
|Cash at beginning of period                        |                                                                                 |                            | 6,263                                                           
|                                                   |                                                                                 |                            |                                                                 
|Cash at end of period                              |                                                                                 | $                          | 2,251                                                           
|                                                   |                                                                                 |                            |                                                                 
|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.





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 April 30, 2002 and results of operations for the three and six month periods ended April 30, 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:

April 30,
2002

October 31,
2001Finished metals and concentrates

$
22,094

$
15,887Metals and concentrates in process


64,491


59,960Materials, supplies and repair parts


29,685


31,557$
116,270

$
107,404


Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $5,673 and $5,484 at April 30, 2002 and October 31, 2001, respectively.

(3)  Debt

Due to the non-payment of interest due March 15, 2002 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), the expiration of the grace period during which the Company could cure the non-payment and the
violation of other financial covenants, the Company is in default of its covenants under the Notes indentures and its revolving credit facilities. 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 April 30, 2002. No actions have been taken by the
lenders to accelerate the payment of outstanding debt balances. The Company is in restructuring negotiations as described below and in negotiations with the lenders of its revolving credit facilities
to execute amended revolving credit facilities.

On
June 6, 2002, the Company simultaneously commenced (a) a consensual cash tender offer pursuant to which it will spend up to $44,000 to purchase a portion of its
outstanding Notes (the Cash Offer), and (b) an exchange offer for the balance of the Notes (the Exchange Offer) (collectively, the Offers). Under the Cash Offer, the Company will select the
highest price specified by a holder of the Notes validly tendered in the Cash Offer that will allow the purchase of the maximum amount of Notes for an aggregate purchase price not to exceed $44,000.
This price will not be greater than $350 or less than $250 per $1,000 face amount of Notes tendered (prices not in thousands). Under the Exchange Offer, the Company is offering holders of the Notes Exchange Notes with an aggregate principal amount of $770 per $1,000 principal amount of the 111/4% Senior Secured Notes and $670
per $1,000 principal amount of the 111/4% Senior Notes and Floating Interest Rate Notes, in addition to interest due and unpaid thereon.

In
connection with the Offers, pursuant to an agreement in principle announced on April 15, 2002, 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 $35 million and
will offer other holders of Notes the opportunity to participate in making such loan. The $55 million in proceeds of the Renco investment and the loan from Regiment, together with borrowings
under its revolving credit facility will be used to finance the cash tender offer, to pay the accrued interest as of March 15, 2002 on the Notes exchanged in the exchange offer and to pay
certain costs of the transactions. If successful, the cash tender offer and the exchange offer will significantly reduce the Company's future debt service in an effort to provide sufficient liquidity
to continue to operate all its facilities at present levels and will not adversely affect the Company's trade creditors.

Consummation
of the offers is subject to agreement on the terms with Regiment, definitive documentation and the successful completion of several conditions, including, among others, the
participation by holders of at least 90% of the aggregate principal amount of each class of Notes in the Offers and the satisfactory modification of Doe Run's United States and Peruvian revolving
credit facilities.

(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
April 30,           |                                   | Six Months Ended
April 30   |        
|------------------------------------------- | ------------------- | -------------------------------------- | --------------------------------- | --------------------------- | -------
|
|Operating Segments  Revenues               |                     |                                        |                                   |                             |        
|Revenues from external customers:           |                     |                                        |                                   |                             |        
|                                            | Peruvian operations |                                        | $                                 | 104,326                     |        
|                                            | Primary lead        |                                        |                                   | 33,714                      |        
|                                            | Secondary lead      |                                        |                                   | 18,491                      |        
|                                            | Fabricated products |                                        |                                   | 4,468                       |        
|                                            |                     |                                        |                                   |                             |        
|                                            |                     | Total                                  |                                   |                             | 160,999
|Revenues from other operating segments: (1) |                     |                                        |                                   |                             |        
|                                            | Peruvian operations |                                        |                                   |                            |        
|                                            | Primary lead        |                                        |                                   | 401                         |        
|                                            | Secondary lead      |                                        |                                   | 153                         |        
|                                            | Fabricated products |                                        |                                   |                            |        
|                                            |                     |                                        |                                   |                             |        
|                                            |                     | Total                                  |                                   |                             | 554    
|                                            |                     |                                        |                                   |                             |        
|                                            |                     | Total revenues for reportable segments |                                   |                             | 161,553
|                                            |                     |                                        | Other revenues/gains (losses) (2) |                             |        
|                                            |                     |                                        | Intersegment eliminations         |                             |        
|                                            |                     |                                        |                                   |                             |        
|                                            |                     |                                        |                                   | Total consolidated revenues |        
|                                            |                     |                                        |                                   |                             |        

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|                                                                                                                                              |                           | Three Months Ended
April 30, |         | Six Months Ended
April 30 |  
|--------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ---------------------------- | ------- | ------------------------- | -
|
|Operating Segments  EBITDA (Earnings before interest, taxes, and depletion, depreciation and amortization), excluding the effects of FAS 133 |                           |                              |         |                           |  
|Peruvian operations                                                                                                                           |                           | $                            | 4,367   |                           | $
|Primary lead                                                                                                                                  |                           |                              | 3,090   |                           |  
|Secondary lead                                                                                                                                |                           |                              | 4,231   |                           |  
|Fabricated products                                                                                                                           |                           |                              | 758     |                           |  
|                                                                                                                                              |                           |                              |         |                           |  
|                                                                                                                                              | Total reportable segments |                              |         | 12,446                    |  
|Other revenues and expenses (3)                                                                                                               |                           |                              | (2,031  | )                         |  
|Corporate selling, general and administrative expenses                                                                                        |                           |                              | (4,123  | )                         |  
|Intersegment eliminations                                                                                                                     |                           |                              | 12      |                           |  
|                                                                                                                                              |                           |                              |         |                           |  
|                                                                                                                                              | Consolidated EBITDA       |                              |         | 6,304                     |  
|Depreciation, depletion and amortization                                                                                                      |                           |                              | (7,646  | )                         |  
|Interest income                                                                                                                               |                           |                              | 3,528   |                           |  
|Interest expense                                                                                                                              |                           |                              | (14,201 | )                         |  
|Unrealized gain on derivative financial instruments                                                                                           |                           |                              | 253     |                           |  
|                                                                                                                                              |                           |                              |         |                           |  
|                                                                                                                                              | Loss before income taxes  |                              | $       | (11,762                   | )
|                                                                                                                                              |                           |                              |         |                           |  

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(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 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 April 30, 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 April 30, 2002 were: (numbers not in thousands)



|Metal          |  | Quantity      |  | Weighted
Average Price |             | Fair Market
Value |   | Period    
|-------------- |  | ------------- |  | ---------------------- | ----------- | ----------------- | - | ----------
|Lead (Hedges)  |  | (1,000) tons  |  | $                      | 465.58/ton  |                   | $ | (37,543   
|Lead (Other)   |  | (3,767) tons  |  | $                      | 464.56/ton  |                   |   | (166,581  
|Copper (Other) |  | (213) tons    |  | $                      | 1610.00/ton |                   |   | (29,750   
|Silver         |  | 775,000 oz.   |  | $                      | 5.63/oz.    |                   |   | 856,220   
|               |  | (900,000) oz. |  | $                      | 5.84/oz.    |                   |   | (1,198,620



|Metal  |  | Quantity      |  | Price Range                    |  | Fair Market
Value |          | Period
|------ |  | ------------- |  | ------------------------------ |  | ----------------- | -------- | ------
|Copper |  | 7,910 tons    |  | $1,451.00/ton to $1,600.00/ton |  | $                 | (198,887 | )     
|       |  | (6,254) tons  |  | $1,520.00/ton to $1,565.00/ton |  |                   | 23,734   |       
|Lead   |  | 48,529 tons   |  | $431.00/ton to $522.00/ton     |  |                   | (187,167 | )     
|       |  | (6,531) tons  |  | $431.00/ton to $476.00/ton     |  |                   | 44,937   |       
|Silver |  | 980,000 oz.   |  | $4.50/oz. to $5.00/oz.         |  |                   | (112,006 | )     
|       |  | (610,000) oz. |  | $4.50/oz. to $4.75/oz.         |  |                   | 47,884   |       
|Gold   |  | 14,800 oz.    |  | $280.00/oz. to $305.00/oz.     |  |                   | (451,767 | )     
|       |  | (13,550) oz.  |  | $280.00/oz. to $310.00oz.      |  |                   | 262,215  |       



|Metal  |  | Quantity     |  | Price Range                    |  | Fair Market
Value |          | Period
|------ |  | ------------ |  | ------------------------------ |  | ----------------- | -------- | ------
|Copper |  | 4,134 tons   |  | $1,451.00/ton to $1,565.00/ton |  | $                 | (353,602 | )     
|       |  | (3,142) tons |  | $1451.00/ton to $1565.00/ton   |  |                   | 256,894  |       
|Lead   |  | 34,640 tons  |  | $404.00/ton to $445.00/ton     |  |                   | (554,332 | )     
|       |  | (2,976) tons |  | $431.00/ton                    |  |                   | 36,937   |       
|Silver |  | 180,000 oz.  |  | $4.25/oz.                      |  |                   | (23,324  | )     
|Gold   |  | 7,400 oz.    |  | $280.00/oz.                    |  |                   | (57      | )     



At
April 30, 2002, the Company had recorded an asset of $258 and a liability of $1,204 related to the fair market values of these instruments. The Company also had recorded an
asset of $38 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 $27,471 as of April 30, 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 half-mile zone to determine if additional
remediation is required. In September 2001, the Company agreed to an acceleration of the lead testing program on the remaining area within one mile of the smelter. 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 current total estimated cost of community cleanup, included in the Company's accrual for remediation costs, is approximately $1,500, 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, if any, 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 proposed buyout plan, an estimated 26 homeowners, each having children less than 72 months old living in them, would be 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 accrual for cleanup at April 30, 2002 does not include any cost associated with the buyout plan, which 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. 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.

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, 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 for this plan were $5,900 in fiscal 2001. Capital expenditures are expected to total $4,500 in fiscal 2002, and $1,000 in 2003. A substantial part of the
equipment is now in place and the monitors are reflecting compliance.

In
June 2002, the Company received from the Missouri DNR two notices of violation at the Herculaneum and Glover primary smelters claiming violations of the smelters' metallic
minerals permits concerning the storage of slag material. A request for informal settlement meetings, as provided under
the statute, has been made. The Company does not believe that resolution of these matters will have an 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 April 30, 2002 of approximately $6,200 for these sites, including the two additional sites in St. Francois County, which the
Company believes is adequate based on its investigations to date. However, depending upon the types of remediation required and certain other factors, costs at these sites, individually or
collectively, could have a material adverse effect on the results of operations, financial condition and liquidity of the Company.

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 within two years.

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 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 April 30, 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
April 30, 2002.

In
June 2002, the Company received from the Missouri DNR a notice of violation relating to blowing tailings at its Fletcher Mine. Until more information is obtained from the Missouri
DNR, the Company is unable to determine whether this matter could 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
April 30, 2002, the Company had spent approximately $27,500 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, which are more fully discussed below, 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 Centromin will satisfy its environmental obligations and investment requirements, including those in its PAMA, or that the guarantee will be honored. Any failure by Centromin to satisfy its environmental
obligations could adversely affect Doe Run Peru's business, financial condition or results of operations.

The
Cobriza mine has a separate PAMA in which the Company has committed to complete projects to manage tailings, mine drainage, sewage and garbage by mid-2002. The Company
has spent approximately $9,000 under the PAMA as of April 30, 2002. After beginning construction on the largest of the projects, the tailings backfill project, revisions to the cost estimate
increased substantially. As a result, the Company has requested a revision of its PAMA from the MEM, which would allow it to operate for a time after the end of the current PAMA without completing the
backfill project. Future economic and operating conditions could affect the Company's ability to complete the backfill project. In April 2002, the MEM proposed a regulation authorizing an
extension of the PAMA to all mining facilities for up to 18 months for work remaining under the PAMA. For companies still not in compliance at the end of this extension period, each company
would be required to close the operation, pursuant to the approval of a closure plan. In light of this pending regulation, the Company will be re-evaluating its options with the
expectation that a decision will be made within the next six to twelve months regarding the future course of action to be taken.

The
Company is responsible for the closure costs relating to a zinc ferrite disposal site. The Company has accrued $7,200 for the closure costs and, although a plan for closure of the
site has not been finalized, management 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 twelve lawsuits alleging certain damages stemming from the operations at the Herculaneum smelter. Four of these cases are class
action lawsuits. In two separate cases, the plaintiffs seek to have certified a class of property owners in a certain section of Herculaneum, alleging that property values have been damaged due to the
operations of the smelter. In a third 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 fourth case, plaintiffs seek to have certified a class of
employees of independent contractors who worked at the Herculaneum smelter. Seven of the cases are personal injury actions by 35 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 retained counsel who has forwarded to the Company information about 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, 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, filed in July 2001, alleges personal injury against two children living in St. Francois County.

Six
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 have filed 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, although the
amount has not been confirmed through depositions, that its claims exceed $1,000.

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 Seafab Metals division of FPI. The Company has entered a counterclaim in the arbitration proceedings.

On
February 28, 2002, FPI and others were served with a wrongful death action on behalf of the estate of a worker at FPI's Vancouver facility.

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 exposure at St. Joe Minerals Corporation premises in Viburnum and Bixby, Missouri.

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 these all these claims.

The
Company has been named as a party in various lawsuits related to 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

Low metal prices over the past four years, coupled with the Company's substantial debt service requirements, have severely reduced 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. Reductions in
receivables and inventory coupled with increases in borrowings on revolving credit lines and accounts payable have reduced availability under revolving credit facilities to minimal levels. Further
reductions of current assets of this magnitude are very unlikely.

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

Net
unused availability at April 30, 2002 was $7.4 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 $2.2 million of cash at April 30, 2002. At May 31, 2002 availability was $7.3 million
under the Doe Run Revolving Credit Facility and $0.7 million under the Doe Run Peru Revolving Credit Facility, and the Company's cash balance was $9.9 million.

If
successful, the cash tender offer and the exchange offer described in Note 3 will significantly reduce the Company's future debt service in an effort to provide sufficient
liquidity to continue to operate all its facilities at present levels and will not adversely affect 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. The consolidating statements have been restated accordingly.

Condensed Consolidating Balance Sheet
As of April 30, 2002 (unaudited)

|                                               |                                                                                  | The Company
Excluding
Guarantor
Subsidiaries         |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|---------------------------------------------- | -------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|ASSETS                                         |                                                                                 
|Current assets:                                |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Cash                                                                             |                                                      | $       |                    |         | $                             |      |              | $       | 2,251       |        
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                |                                                      |         | 31,905              |         |                               | 3,883 |              |         | 27,675      |        
|                                               | Inventories                                                                      |                                                      |         | 51,273              |         |                               | 1,562 |              |         | 63,447      |        
|                                               | Prepaid expenses and other current assets                                        |                                                      |         | 9,653               |         |                               | 55    |              |         | 16,249      |        
|                                               | Due from subsidiaries                                                            |                                                      |         | 22,753              |         |                               |      |              |         |            |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total current assets                                 |         |                     | 115,584 |                               |       | 5,500        |         |             | 109,622
|Property, plant and equipment, net             |                                                                                  |                                                      | 114,509 |                     |         | 4,442                         |       |              | 142,281 |             |        
|Special term deposit                           |                                                                                  |                                                      | 125,000 |                     |         |                              |       |              |        |             |        
|Other noncurrent assets, net                   |                                                                                  |                                                      | 5,166   |                     |         | 169                           |       |              | 141     |             |        
|Investment in subsidiaries                     |                                                                                  |                                                      | 13,217  |                     |         |                              |       |              |        |             |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total assets                                         |         | $                   | 373,476 |                               | $     | 10,111       |         | $           | 252,044
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                 
|Current liabilities:                           |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Short-term borrowings and current maturities of long-term debt                   |                                                      | $       | 338,774             |         | $                             |      |              | $       | 33,166      |        
|                                               | Accounts payable                                                                 |                                                      |         | 17,782              |         |                               | 638   |              |         | 29,436      |        
|                                               | Accrued liabilities                                                              |                                                      |         | 46,996              |         |                               | 511   |              |         | 24,520      |        
|                                               | Due to parent                                                                    |                                                      |         |                    |         |                               | 7,093 |              |         | 15,660      |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total current liabilities                            |         |                     | 403,552 |                               |       | 8,242        |         |             | 102,782
|Long-term debt, less current maturities        |                                                                                  |                                                      | 105     |                     |         |                              |       |              | 128,826 |             |        
|Other noncurrent liabilities                   |                                                                                  |                                                      | 51,526  |                     |         | 1,410                         |       |              | 7,666   |             |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total liabilities                                    |         |                     | 455,183 |                               |       | 9,652        |         |             | 239,274
|Shareholders' equity (deficit):                |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               | Common stock, $.10 par value, 1,000 shares authorized, issued, and outstanding   |                                                      |         | 0                   |         |                               |      |              |         |            |        
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued, and outstanding     |                                                      |         |                    |         |                               | 1     |              |         |            |        
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding  |                                                      |         |                    |         |                               |      |              |         | 2,005       |        
|                                               | Additional paid in capital                                                       |                                                      |         | 5,238               |         |                               | 1,205 |              |         |            |        
|                                               | Retained earnings (accumulated deficit) and accumulated other comprehensive loss |                                                      |         | (86,945             | )       |                               | (747  | )            |         | 10,765      |        
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total shareholders' equity (deficit)                 |         |                     | (81,707 | )                             |       | 459          |         |             | 12,770 
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        
|                                               |                                                                                  | Total liabilities and shareholders' equity (deficit) |         | $                   | 373,476 |                               | $     | 10,111       |         | $           | 252,044
|                                               |                                                                                  |                                                      |         |                     |         |                               |       |              |         |             |        



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   |                                                      |         | 0                   |         |                               |      |              |         |            |        
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued, and outstanding     |                                                      |         |                    |         |                               | 1     |              |         |            |        
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding  |                                                      |         |                    |         |                               |      |              |         | 2,005       |        
|                                               | 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
Six Months Ended April 30, 2002 (unaudited)

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



Consolidating Statement of Operations
Six Months Ended April 30, 2001 (unaudited)

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries                                   |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | ------------------------------------------------------------------------------ | ------- | ------------------- | ------- | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                                                              | 149,761 |                     | $       | 11,221                        |       | $            | 224,512 |             | $      
|Costs and expenses:     |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        | Cost of sales                            |                                                                                |         | 135,797             |         |                               | 9,564 |              |         | 200,470     |        
|                        | Depletion, depreciation and amortization |                                                                                |         | 9,489               |         |                               | 791   |              |         | 4,754       |        
|                        | Selling, general and administrative      |                                                                                |         | 7,996               |         |                               | 779   |              |         | 11,110      |        
|                        | Exploration                              |                                                                                |         | 828                 |         |                               |      |              |         |            |        
|                        | Unrealized (gain)/loss on derivatives    |                                                                                |         | 701                 |         |                               | (6    | )            |         | (1,061      | )      
|                        |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                                                       |         |                     | 154,811 |                               |       | 11,128       |         |             | 215,273
|                        |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income from operations                                                         |         |                     | (5,050  | )                             |       | 93           |         |             | 9,239  
|Other income (expense): |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        | Interest expense                         |                                                                                |         | (21,525             | )       |                               | (423  | )            |         | (9,397      | )      
|                        | Interest income                          |                                                                                |         | 7,579               |         |                               |      |              |         | 175         |        
|                        | Other, net                               |                                                                                |         | 495                 |         |                               | (11   | )            |         | (133        | )      
|                        | Equity in earnings of subsidiaries       |                                                                                |         | (1,604              | )       |                               |      |              |         |            |        
|                        |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        |                                          |                                                                                | (15,055 | )                   |         | (434                          | )     |              | (9,355  | )           |        
|                        |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense                                        |         |                     | (20,105 | )                             |       | (341         | )       |             | (116   
|                        | Income tax expense                       |                                                                                |         | 50                  |         |                               |      |              |         | 23          |        
|                        |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Income (loss) before cumulative effect of change in accounting principle       |         |                     | (20,155 | )                             |       | (341         | )       |             | (139   
|                        |                                          | Cumulative effect of change in accounting principle, net of income tax benefit |         |                     | (2,649  | )                             |       |             |         |             | (1,125 
|                        |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        
|                        |                                          | Net income (loss)                                                              |         | $                   | (22,804 | )                             | $     | (341         | )       | $           | (1,264 
|                        |                                          |                                                                                |         |                     |         |                               |       |              |         |             |        



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

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



Consolidating Statement of Operations
Three Months Ended April 30, 2001 (unaudited)

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries      |        | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |       | Eliminations |         | The
Company |        
|----------------------- | ---------------------------------------- | ------------------------------------------------- | ------ | ------------------- | ------ | ----------------------------- | ----- | ------------ | ------- | ----------- | -------
|Net sales               |                                          | $                                                 | 76,396 |                     | $      | 5,462                         |       | $            | 113,237 |             | $      
|Costs and expenses:     |                                          |                                                   |        |                     |        |                               |       |              |         |             |        
|                        | Cost of sales                            |                                                   |        | 66,555              |        |                               | 4,720 |              |         | 101,246     |        
|                        | Depletion, depreciation and amortization |                                                   |        | 4,753               |        |                               | 396   |              |         | 2,364       |        
|                        | Selling, general and administrative      |                                                   |        | 4,131               |        |                               | 370   |              |         | 5,277       |        
|                        | Exploration                              |                                                   |        | 411                 |        |                               |      |              |         |            |        
|                        | Unrealized (gain)/loss on derivatives    |                                                   |        | (42                 | )      |                               | 55    |              |         | (323        | )      
|                        |                                          |                                                   |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Total costs and expenses                          |        |                     | 75,808 |                               |       | 5,541        |         |             | 108,564
|                        |                                          |                                                   |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Income from operations                            |        |                     | 588    |                               |       | (79          | )       |             | 4,673  
|Other income (expense): |                                          |                                                   |        |                     |        |                               |       |              |         |             |        
|                        | Interest expense                         |                                                   |        | (10,608             | )      |                               | (211  | )            |         | (4,256      | )      
|                        | Interest income                          |                                                   |        | 3,837               |        |                               |      |              |         | 112         |        
|                        | Other, net                               |                                                   |        | 93                  |        |                               | (4    | )            |         | (74         | )      
|                        | Equity in earnings of subsidiaries       |                                                   |        | 541                 |        |                               |      |              |         |            |        
|                        |                                          |                                                   |        |                     |        |                               |       |              |         |             |        
|                        |                                          |                                                   | (6,137 | )                   |        | (215                          | )     |              | (4,218  | )           |        
|                        |                                          |                                                   |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Income (loss) before income tax expense (benefit) |        |                     | (5,549 | )                             |       | (294         | )       |             | 455    
|                        | Income tax expense (benefit)             |                                                   |        | 25                  |        |                               |      |              |         | (369        | )      
|                        |                                          |                                                   |        |                     |        |                               |       |              |         |             |        
|                        |                                          | Net income (loss)                                 |        | $                   | (5,574 | )                             | $     | (294         | )       | $           | 824    
|                        |                                          |                                                   |        |                     |        |                               |       |              |         |             |        





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

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



Condensed Consolidating Statement of Cash Flows
Six Months Ended April 30, 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 |                                                                            | $                                                   | (8,996 | )                   | $      | (962                          | )   | $            | 12,010 |             | $     
|Cash flows from investing activities:               |                                                                            |                                                     |        |                     |        |                               |     |              |        |             |       
|                                                    | Purchases of property, plant and equipment                                 |                                                     |        | (7,470              | )      |                               |    |              |        | (6,364      | )     
|                                                    | Investment in subsidiaries                                                 |                                                     |        | 1,604               |        |                               |    |              |        |            |       
|                                                    |                                                                            |                                                     |        |                     |        |                               |     |              |        |             |       
|                                                    |                                                                            | Net cash used in investing activities               |        |                     | (5,866 | )                             |     |             |        |             | (6,364
|Cash flows from financing activities:               |                                                                            |                                                     |        |                     |        |                               |     |              |        |             |       
|                                                    | Proceeds from (payments on) revolving loans and short-term borrowings, net |                                                     |        | 16,794              |        |                               |    |              |        | (5,816      | )     
|                                                    | Payments on long-term debt                                                 |                                                     |        | (194                | )      |                               |    |              |        | (1,817      | )     
|                                                    | Payment of deferred financing costs                                        |                                                     |        | (375                | )      |                               |    |              |        |            |       
|                                                    | Due to/due from parent/subsdiaries                                         |                                                     |        | (1,363              | )      |                               | 962 |              |        | 401         |       
|                                                    |                                                                            |                                                     |        |                     |        |                               |     |              |        |             |       
|                                                    |                                                                            | Net cash provided by (used in) financing activities |        |                     | 14,862 |                               |     | 962          |        |             | (7,232
|                                                    |                                                                            |                                                     |        |                     |        |                               |     |              |        |             |       
|                                                    |                                                                            | Net decrease in cash                                |        |                     |       |                               |     |             |        |             | (1,586
|Cash at beginning of period                         |                                                                            |                                                     |       |                     |        |                              |     |              | 8,295  |             |       
|                                                    |                                                                            |                                                     |        |                     |        |                               |     |              |        |             |       
|Cash at end of period                               |                                                                            | $                                                   |       |                     | $      |                              |     | $            | 6,709  |             | $     
|                                                    |                                                                            |                                                     |        |                     |        |                               |     |              |        |             |       



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

|                                        |                                                                                                                                                    | April 30,
2002                             |         | October 31,
2001
|--------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ----------------
|
|ASSETS                                  |                                                                                                                                                    |                                            |         |                 
|Current assets:                         |                                                                                                                                                    |                                            |         |                 
|                                        | Cash                                                                                                                                               |                                            | $       | 2,251           
|                                        | Trade accounts receivable, net of allowance for doubtful accounts                                                                                  |                                            |         | 27,675          
|                                        | Inventories                                                                                                                                        |                                            |         | 63,447          
|                                        | Prepaid expenses and other current assets                                                                                                          |                                            |         | 16,249          
|                                        |                                                                                                                                                    |                                            |         |                 
|                                        |                                                                                                                                                    | Total current assets                       |         |                 
|Property, plant and equipment, net      |                                                                                                                                                    |                                            | 142,281 |                 
|Other noncurrent assets, net            |                                                                                                                                                    |                                            | 141     |                 
|                                        |                                                                                                                                                    |                                            |         |                 
|                                        |                                                                                                                                                    | Total assets                               |         | $               
|                                        |                                                                                                                                                    |                                            |         |                 
|LIABILITIES AND SHAREHOLDERS' EQUITY    |                                                                                                                                                    |                                            |         |                 
|Current liabilities:                    |                                                                                                                                                    |                                            |         |                 
|                                        | Short-term borrowings and current maturities of long-term debt                                                                                     |                                            | $       | 33,166          
|                                        | Accounts payable                                                                                                                                   |                                            |         | 29,436          
|                                        | Accrued liabilities                                                                                                                                |                                            |         | 24,520          
|                                        | Due to parent                                                                                                                                      |                                            |         | 15,660          
|                                        |                                                                                                                                                    |                                            |         |                 
|                                        |                                                                                                                                                    | Total current liabilities                  |         |                 
|Long-term debt, less current maturities |                                                                                                                                                    |                                            | 128,826 |                 
|Other noncurrent liabilities            |                                                                                                                                                    |                                            | 7,666   |                 
|                                        |                                                                                                                                                    |                                            |         |                 
|                                        |                                                                                                                                                    | 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 par value, 729,548,157 shares in 2001 |                                            |         | 2,005           
|                                        | Retained earnings                                                                                                                                  |                                            |         | 10,765          
|                                        |                                                                                                                                                    |                                            |         |                 
|                                        |                                                                                                                                                    | 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 April 30,                                                   |         | Six Months
Ended April 30, |        
|---------------------------- | ---------------------------------------------------------- | ------------------------------------------------------------------------------ | ------- | -------------------------- | -------
|
|Net sales                    |                                                            | $                                                                              | 104,326 |                            | $      
|Costs and expenses:          |                                                            |                                                                                |         |                            |        
|                             | Cost of sales                                              |                                                                                |         | 97,357                     |        
|                             | Depreciation and amortization                              |                                                                                |         | 2,699                      |        
|                             | Selling, general and administrative                        |                                                                                |         | 4,650                      |        
|                             | Exploration                                                |                                                                                |         | 47                         |        
|                             | Unrealized loss (gain) on derivative financial instruments |                                                                                |         | 83                         |        
|                             |                                                            |                                                                                |         |                            |        
|                             |                                                            | Total costs and expenses                                                       |         |                            | 104,836
|                             |                                                            |                                                                                |         |                            |        
|                             |                                                            | Income (loss) from operations                                                  |         |                            | (510   
|Other income (expense):      |                                                            |                                                                                |         |                            |        
|                             | Interest expense                                           |                                                                                |         | (4,329                     | )      
|                             | Interest income                                            |                                                                                |         | 12                         |        
|                             | Other, net                                                 |                                                                                |         | (247                       | )      
|                             |                                                            |                                                                                |         |                            |        
|                             |                                                            |                                                                                | (4,564  | )                          |        
|                             |                                                            |                                                                                |         |                            |        
|                             |                                                            | Income (loss) before income tax expense (benefit)                              |         |                            | (5,074 
|Income tax expense (benefit) |                                                            |                                                                                | (539    | )                          |        
|                             |                                                            |                                                                                |         |                            |        
|                             |                                                            | Income (loss) before cumulative effect of change in accounting principle       |         |                            | (4,535 
|                             |                                                            | Cumulative effect of change in accounting principle, net of income tax benefit |         |                            |       
|                             |                                                            |                                                                                |         |                            |        
|                             |                                                            | Net income (loss)                                                              |         | $                          | (4,535 
|                             |                                                            |                                                                                |         |                            |        

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)

|                                                    |                                                                            | Six Months
Ended April 30,                          |       
|--------------------------------------------------- | -------------------------------------------------------------------------- | --------------------------------------------------- | ------
|
|Net cash provided by (used in) operating activities |                                                                            | $                                                   | (2,180
|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 decrease in cash                                |       
|Cash at beginning of period                         |                                                                            |                                                     | 6,263 
|                                                    |                                                                            |                                                     |       
|Cash at end of period                               |                                                                            | $                                                   | 2,251 
|                                                    |                                                                            |                                                     |       

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 April 30, 2002 and results of operations for the three and six month periods ended
April 30, 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)  Business Combination

At the General Shareholders' Meetings on May 14, 2001 for Doe Run Peru and Doe Run Mining, respectively, the merger by absorption of these two companies
was approved, with Doe Run Peru the absorbing company and Doe Run Mining the absorbed company. This merger was effective as of June 1, 2001.

For
comparability purposes, the merger of Doe Run Peru and Doe Run Mining resulted in the following adjustments to amounts previously reported for Doe Run Peru:

|                       |                     | Three months
Ended April 30, 2001 |   | Six months
Ended April 30, 2001
|---------------------- | ------------------- | --------------------------------- | - | -------------------------------
|Income from Operations |                     |                                   |   |                                
|                       | Previously Reported |                                   | $ | 4,765                          
|                       | Adjustment (a)      |                                   |   | (92                            
|                       |                     |                                   |   |                                
|                       | Reported Herein     |                                   | $ | 4,673                          
|                       |                     |                                   |   |                                

|                  |                     | Three months
Ended April 30, 2001 |   | Six months
Ended April 30, 2001 |  
|----------------- | ------------------- | --------------------------------- | - | ------------------------------- | -
|Net Income (Loss) |                     |                                   |   |                                 |  
|                  | Previously Reported |                                   | $ | 4,203                           |  
|                  | Adjustment (b)      |                                   |   | (3,379                          | )
|                  |                     |                                   |   |                                 |  
|                  | Reported Herein     |                                   | $ | 824                             |  
|                  |                     |                                   |   |                                 |  



(3)  Inventories

|                                         |  | April 30,
2002 |        | October 31,
2001
|---------------------------------------- |  | -------------- | ------ | ----------------
|
|Refined metals and concentrates for sale |  | $              | 1,729  |                 
|Metals and concentrates in process       |  |                | 48,907 |                 
|Materials, supplies and spare parts      |  |                | 12,811 |                 
|                                         |  |                |        |                 
|                                         |  | $              | 63,447 |                 
|                                         |  |                |        |                 

Materials,
supplies and repair parts are stated net of reserves for obsolescence of approximately $1,067 and $826 at April 30, 2002 and October 31, 2001, respectively.

(4)  Hedging and Derivative Financial Instruments

The Company uses derivative financial instruments primarily to enhance revenue by receiving premiums on option contracts. The Company sells futures contracts and
options and combinations thereof that effectively establish contract prices for sales and purchases that are acceptable to the Company, 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), 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 April 30, 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 April 30, 2002 were: (numbers not in thousands)

Sold/(Purchased) Futures Contracts

|Metal  |  | Quantity      |  | Price Range  |  | Fair Market
Value |   | Period 
|------ |  | ------------- |  | ------------ |  | ----------------- | - | -------
|Copper |  | (213) tons    |  | $1610.00/ton |  | (29,750           | ) | Jul. 02
|Silver |  | 775,000 oz.   |  | $5.63/oz.    |  | 856,220           |   | May 02 
|       |  | (900,000) oz. |  | $5.84/oz.    |  | (1,198,620        | ) | May 02 



Sold/(Purchased) Call Option Contracts

|Metal  |  | Quantity     |  | Price Range                   |  | Fair Market
Value |          | Period
|------ |  | ------------ |  | ----------------------------- |  | ----------------- | -------- | ------
|Copper |  | 4,713 tons   |  | $1,480.00/ton 
$1,600.00/ton |  | $                 | (167,777 | )     
|       |  | (550) tons   |  | $1,519.00/ton                 |  |                   | 5,022    |       
|Silver |  | 980,000 oz   |  | $4.50/oz  $5.00/oz           |  |                   | (112,006 | )     
|       |  | (610,000) oz |  | $4.50/oz  $4.75/oz           |  |                   | 47,884   |       
|Gold   |  | 14,800 oz    |  | $280.00/oz  $305.00/oz       |  |                   | (451,767 | )     
|       |  | (13,550) oz  |  | $280.00/oz  $310.00/oz       |  |                   | 262,215  |       

Sold/(Purchased) Put Option Contracts

|Metal  |  | Quantity   |  | Price Range        |  | Fair Market
Value |         | Period
|------ |  | ---------- |  | ------------------ |  | ----------------- | ------- | ------
|Lead   |  | 1,653 tons |  | $435.00/ton        |  | $                 | (29,997 | )     
|Silver |  | 180,000 oz |  | $4.25/oz  4.25/oz |  |                   | (23,324 | )     
|Gold   |  | 7,400 oz   |  | $260.00/oz         |  |                   | (57     | )     
|       |  | (7,400) oz |  | $260.00/oz         |  |                   | 57      |       

At
April 30, 2002, the Company had recorded a liability of $946 related to the fair market values of these instruments.

(6)  Related party transactions

Effective November 1, 2000, the Company terminated all previously existing agreements for services with Doe Run Mining S.R.L and the Doe Run Resources
Corporation and replaced them with a Hedging Services Contract and an International Sales Agency Services Contract with the Doe Run Resources Corporation. Under the Hedging Services Contract, the
Company will pay to the Doe Run Resources Corporation $42 per month for trading and hedging services. Under the International Sales Agency Services Contract, the Company will pay to the Doe Run
Resources Corporation 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 six months
ended April 30, 2002 were $252 and $4,263 under the Hedging Services Contract and the International Sales Agency Services Contract, respectively. Amounts
expensed in the six months ended April 30, 2001 were $252 and $4,565 under the Hedging Services Contract and the International Sales Agency Services Contract, respectively.

(7)  Liquidity

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.

Due
to the non-payment of interest due March 15, 2002 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), and the expiration of the grace period during which Doe Run could cure the non-payment, the Company, as a
guarantor, is in default of its covenants under the Notes indentures and its revolving credit facilities. 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 have been classified as current. No actions have been taken by the lenders to accelerate the payment of outstanding debt balances. Doe Run is in restructuring negotiations as described below and in negotiations with the lenders of its revolving credit facilities to execute amended revolving credit facilities.

On
June 6, 2002, Doe Run simultaneously commenced (a) a consensual cash tender offer pursuant to which it will spend up to $44,000 to purchase a portion of its outstanding
Notes (the Cash Offer), and (b) an exchange offer for the balance of the Notes (the Exchange Offer) (collectively, the Offers). Under the Cash Offer, Doe Run will select the highest price
specified by a holder of the Notes validly tendered in the Cash Offer that will allow the purchase of the maximum amount of Notes for an aggregate purchase price not to exceed $44,000. This price will
not be greater than $350 or less than $250 per $1,000 face amount of Notes tendered (prices not in thousands). Under the Exchange Offer, Doe Run is offering holders of the Notes Exchange Notes with an
aggregate principal amount of $770 per $1,000 principal amount of the 111/4% Senior Secured Notes and $670 per $1,000 principal amount of the 111/4% Senior Notes and
Floating Interest Rate Notes, in addition to interest due and unpaid thereon.

In
connection with the Offers, pursuant to an agreement in principle announced on April 15, 2002, Doe Run's ultimate parent, The Renco Group, Inc. (Renco), will purchase
$20 million of Doe Run's preferred stock and Regiment Capital Advisors LLC (Regiment), a significant holder of the Notes, will commit to lend Doe Run $35 million and will offer other
holders of Notes the opportunity to participate in making such loan. The $55 million in proceeds of the Renco investment and the loan from Regiment, together with borrowings under its revolving
credit facility will be used to finance the cash tender offer, to pay the accrued interest as of March 15, 2002 on the Notes exchanged in the exchange offer and to pay certain costs of the
transactions. If successful, the cash tender offer and the exchange offer will
significantly reduce Doe Run's future debt service in an effort to provide sufficient liquidity to continue to operate all its facilities at present levels and will not adversely affect Doe Run's
trade creditors.

Consummation
of the offers is subject to agreement on the terms with Regiment, definitive documentation and the successful completion of several conditions, including, among others, the
participation by holders of at least 90% of the aggregate principal amount of each class of Notes in the Offers and the satisfactory modification of Doe Run's and the Company's revolving credit
facilities.



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.



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 six months
ended April 30, 2002 (the 2002 period) the Company continued to reduce working capital. Reductions in receivables and inventory coupled with increases in borrowings on revolving credit lines
resulted in reduced availability under revolving credit facilities to the minimal levels discussed 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

Net
unused availability at April 30, 2002 was $7.4 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 $2.2 million of cash at April 30, 2002. At May 31, 2002 availability was $7.3 million
under the Doe Run Revolving Credit Facility and $0.7 million under the Doe Run Peru Revolving Credit Facility, and the Company's cash balance was $9.9 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 $10.0 million that are subject to a put option
exercisable by the buyer. See "Obligations and CommitmentsNote (e) below for details of these transactions. While these transactions enhanced the current liquidity situation by
accelerating cash receipts, there may be negative impact in the future if prices have fallen below the transaction price and accordingly the buyers elect to exercise their 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 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), the expiration of the grace period during which the Company was allowed to cure the non-payment
and the violation of other financial covenants, the Company is in default of its covenants under the Notes indentures and the terms of its revolving credit facilities. In an event of default, the lenders have the right to accelerate the payment of any unpaid principal and interest balances. No actions have been taken by the lenders to accelerate the payment of outstanding debt balances.

On
June 6, 2002, The Doe Run Resources Corporation simultaneously commenced an Exchange Offer, Cash Offer, Consent Solicitation and Senior Loan Participation (the "Offers"),
pursuant to which it will spend up to $44.0 million in a cash tender offer to purchase its outstanding 11.25% Senior Secured Notes due 2005, Series B; 11.25% Senior Notes due 2005,
Series B; and Floating Interest Rate Senior Notes due 2003, Series B (collectively, the "Old Notes"), and it will offer to exchange the balance of the Old Notes for new notes. The Offers
are being made pursuant to an agreement in principle, announced on April 15, 2002, with Renco and Regiment Capital Advisors, LLC (Regiment) for Renco and Regiment to provide the Company with
significant capital to restructure its existing debt. Pursuant to the agreement in principle, Renco will purchase $20.0 million of the Company's preferred stock and Regiment, a significant
holder of the Old Notes, will commit to lend the Company $35.0 million and will offer other holders of Notes the opportunity to participate in making such loan.

If
successful, the offers would significantly reduce the Company's future debt service requirements in an effort to provide sufficient liquidity to continue to operate all its facilities
at present levels and should not adversely affect the Company's trade creditors. However, the agreement in principle is non-binding and subject to agreement on the terms of definitive
documentation and the successful completion of the transactions is subject to several conditions, including, among others, the participation by holders of
at least 90% of the aggregate principal amount of each class of Notes in the cash tender offer and/or the exchange offer and the satisfactory modification of Doe Run's U.S. and Peruvian revolving
credit facilities. Therefore there can be no assurance that Doe Run will be able to successfully consummate the Offers or any of the other transactions described in the Exchange Offer, Cash Offer,
Consent Solicitation and Senior Loan Participation.

Results of Operations

The Company reported a net loss of $12.3 million for the three months ended April 30, 2002 (the 2002 quarter) quarter compared to a net loss of
$5.6 million for the three months ended April 30, 2001 (the 2001 quarter). The Company's U.S. operations reported a net loss of $9.0 million (excluding intercompany fee revenue of
$2.3 million) for the 2002 quarter compared to a net loss of $8.8 million (excluding intercompany fee revenue of $2.4 million) in the 2001 quarter. The increase in U.S. net loss
was primarily due to lower realized prices for lead metal and zinc concentrates, partially offset by lower production costs. The Company's Peruvian operations reported a net loss of
$3.4 million (excluding intercompany fees of $2.2 million) in the 2002 quarter compared to net income of $3.2 million (excluding intercompany fees and eliminations of
$2.9 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, partially offset by
reduced conversion costs at La Oroya and lower operating costs at Cobriza.

For
the six months ended April 30, 2002 (the 2002 period) the Company reported a net loss of $17.0 million compared to a net loss of $22.8 million for the six months
ended April 30, 2001 (the 2001 period). The Company's U.S. operations reported a net loss of $13.7 million (excluding intercompany fee revenue of $4.5 million) for the 2002 period
compared to a net loss of $26.4 million excluding intercompany fees and eliminations of $4.8 million) in the 2001 period. The reduction in the U.S. net loss was primarily due lower
production costs, lower energy costs and changes 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 zinc concentrates, lower premiums for lead metal. See "Item 1. Financial StatementsNote 2 to the Company's
Consolidated Financial Statements" for a discussion of FAS 133. The Company's Peruvian operations had a net loss of $3.3 million (excluding intercompany fees of $4.5 million) in
the 2002 period compared to net income of $3.6 million (excluding intercompany fees of $4.8 million) in the 2001 period. The decrease in Peruvian net income was primarily due to the factors discussed above.

The
Company's results for the 2002 quarter reflect declines in the market prices of lead, copper and zinc and a slight increase in the price of silver. The 2002 period reflects a slight
increase in the lead price and declines in the prices of copper, zinc and silver. 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
April 30,

Six Months Ended
April 30,2002

2001

2002

2001Average PricesLead ($/short ton)

433.60

447.20

$
441.00

$
436.40Copper ($/short ton)

1,441.80

1,564.20


1,381.20


1,603.20Zinc ($/short ton)

725.20

906.20


700.80


930.00Silver ($/troy ounce)

4.51

4.44


4.42


4.55


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
mine and lead metal production and exports. Fiscal 2001 saw a modest improvement in lead prices, which continued into the first quarter of 2002. The second quarter of 2002 reflects deterioration of
the lead price offsetting almost all of the improvement seen in the first quarter. Lead prices remain below the average for the ten years 1992 through 2001.

In
the U.S. market, demand for lead has been adversely impacted by the recessionary conditions in the U.S. economy during 2001. Slower automotive replacement battery shipments have
weakened overall demand, compared 2000. Also, 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. In fiscal 2001, western world consumption of lead declined by 4% and U.S. consumption declined by 8%, reflecting weakened economic conditions. This decline in demand
significantly impacted the Company's sales volume in the 2002 period as U.S. battery manufacturers rationalized high inventory levels. Lead metal sales volume was off almost 67,000 tons, or 32% in the
2002 period, compared to the 2001 period. The decline in demand has also impacted the Company's net realized prices, as certain higher margin accounts were among those affected by the recessionary
conditions in
the U.S. economy. Some of these accounts have been replaced by lower margin accounts and by sales to metal brokers. The Company altered its marketing strategies during the period and reduced its
production, as described below, in an effort to improve sales volume and reduce inventories. Despite these efforts, sales volume for the first five 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. However, sales volumes for April and May have improved to more normal levels. Management
believes that the rationalization is complete and demand should begin to improve as the economy strengthens. Any improvement in prices and premiums is not likely to occur until demand improves.

Despite
the current demand situation, management believes that lead prices will recover from the current low level, as several large lead-producing mines will be depleted in
2002 through 2006. In 2001, mine closures and cutbacks occurred in Spain, Sweden, Canada and the U.S., reducing supply by approximately 200,000 tons, or approximately 3% of western world consumption.
These closures should significantly reduce western world production and bring about a deficit in supply versus demand. In recent months, the industry has seen evidence of this deficit as some primary
smelters have cut back production due to limited concentrate availability. In publications issued in April of 2002, international commodity consultants forecasted annual average lead prices for the
years 2002 through 2007, which are higher than those experienced in 2001.

Zinc
prices dropped precipitously in 2001 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. In 2001, world zinc mine production increased 5% and zinc metal production increased 3%. Demand was weak during 2001 because of general economic
conditions, and in particular because of weakness in the auto and construction industries. Western world zinc demand dropped 3% and U.S. zinc demand dropped 15% in 2001, compared to 2000. The impact
of these market conditions continued into the 2002 period as the average LME price for refined zinc declined almost 25%, compared to the 2001 period. Industry analysts project this zinc metal surplus
will continue to grow, making the prospects for a recovery in zinc prices unlikely in 2002. In order to balance supply and demand, zinc mine production cutbacks began to occur in 2001. As a result,
lead concentrate supplies are likely to tighten even further as lead is a by product of many zinc mines.

Annualized
copper prices were lower in 2001, reflecting weakened world economic conditions, particularly in major copper consuming industries, like telecommunications, electronics,
construction and automotive. In 2001, world copper consumption dropped 3%, western world copper consumption 8% and US copper consumption by 21% compared to 2000. During the same period, copper supply
increased by 5% resulting in a surplus of 768,000 short tons. Most analysts believe that consumption has bottomed and will increase in 2002 as the US and world economics recover. Like lead and zinc,
the low copper prices have brought about numerous mine closures and as a result, forecasts of lower refined copper production in 2002. Since November 2001, copper prices have increased as
economic activity has increased.

A
decline in lead, zinc and copper concentrate treatment charges has negatively impacted smelter profitability. Low lead and zinc prices have induced mine closures and cutbacks and
slowed development of new lead-zinc projects. As a result, supplies of both lead and zinc concentrates have been very tight. Smelters with under-utilized capacity competing for these
concentrates have driven treatment charges down significantly in 2001 and the first half of 2002. These tight market conditions for lead and zinc concentrates are expected to continue into 2003.
Tightness also exists in the market for copper concentrates and treatment charges have eroded somewhat in the first half of 2002, although not as significantly as with lead and zinc concentrates.
Market experts anticipate some improvement in copper treatment charges in 2003 through 2005 as smelter utilization in the copper industry may exceed 80%.

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.

In
the 2002 period, the Company's U.S. operations generated only a small operating loss despite the low lead and zinc prices and reduced sales volumes due, in part, to 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. Despite these improvements, if prices remain at these levels or decrease further, operating losses for the Company's U.S. operations are likely to result.

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

|                    |                                                 | Three Months Ended
April 30, |        | Six Months Ended
April 30,
|------------------- | ----------------------------------------------- | ---------------------------- | ------ | --------------------------
|
|U.S. Operations     |                                                 |                              |        |                           
|                    | Lead metal  primary (short tons)               |                              | 72,351 |                           
|                    | Lead metal  secondary (short tons)             |                              | 38,566 |                           
|                    | Lead concentrates (metal content, short tons)   |                              | 78,577 |                           
|                    | Ore Grade                                       |                              | 6.05%  |                           
|Peruvian Operations |                                                 |                              |        |                           
|                    | Refined copper (short tons)                     |                              | 17,756 |                           
|                    | Refined lead (short tons)                       |                              | 31,739 |                           
|                    | Refined zinc (short tons)                       |                              | 21,125 |                           
|                    | Refined silver (thousands of troy ounces)       |                              | 8,111  |                           
|                    | Refined gold (thousands of troy ounces)         |                              | 23     |                           
|                    | Copper concentrates (metal content, short tons) |                              | 4,066  |                           
|                    | Ore Grade                                       |                              | 1.00%  |                           

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. 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. Compared to the prior year, ore production was scaled back approximately 83,000 tons or 6% for the quarter and 204,000 tons or 7% for the period. Lead ore grade
improved approximately 2% for the quarter and 3% for the period. 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 both the 2002 quarter and the 2002 period, compared to 2001. The improved ore grade coupled with spending reductions resulted in costs per ton of metal in concentrates that, compared to the prior year, were 8% lower for the 2002 quarter and 9% lower for the 2002 period.

Primary
smelter production for 2002 was approximately 16% less than 2001 for both the quarter and the period, reflecting implementation of the Revised Operating Plan at the Company's
Herculaneum smelter, partially offset by improved performance at the Company's Glover smelter. At Herculaneum, production volume was down 27% or about 14,000 tons for the quarter and 30% or about
32,000 tons for the period, compared to the prior year. Efficiency improved, however, as unit production cost declined approximately 11% for the quarter and 7% for the period, despite the impact of
lower production volume. A portion of the unit cost improvement is attributable 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 improvement for the quarter and a 10% increase for the 2002 period 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 7% 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 18% compared to the prior year.

During
the second quarter of 2001, the Company's Buick secondary smelter replaced its blast furnace. The material feed and air control systems on the new blast furnace were redesigned,
improving output from the blast furnace by approximately 25%. The results of these improvements are reflected in Buick's production volume of lead metal, which increased 7% for the 2002 quarter and 2%
for the period. Unit conversion costs improved approximately 4% for the quarter and 6% for the 2002 period, compared to the prior year. The cost of feed materials was also favorable in the 2002, as
unit feed cost were lower by approximately 8% for the quarter and 11% for the period, compared to the prior year. Production was lower than anticipated due to growing inventory of non-lead
bearing battery components. As the smelter's production rate has increased the facility has been unable to consume all of these components. Several options are being reviewed that will allow the
facility to consume the inventory and to achieve increased lead metal production levels.

In
Peru, at the La Oroya metallurgical complex, production of refined copper and zinc for the 2002 quarter were approximately the same as the 2001 quarter. Silver production was down
about 5% and gold production was up 6% primarily due to changes in the metal content in the concentrate feed used. For the 2002 period, production of copper, lead, zinc and silver were flat compared
to 2001. Gold production was up 8% due to the metal content of feed. Operating costs declined approximately 6% for the quarter and 8% 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 were down for both the quarter and the 2002 period. Metal contained in concentrates was up slightly for the
2002 quarter but down about 5% for the 2002 period. Operating costs were lower for both the 2002 quarter, and the period, resulting in a 6% decline in unit production costs for the 2002 quarter and an
11% decrease for the period, 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
April 30,                                                           |                   | Six Months Ended
April 30, |       
|--------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ----------------- | -------------------------- | ------
|
|Net sales (a)                                                                                                   |                                                               | $                                                                                      | 56,514            |                            | $     
|Costs and expenses:                                                                                             |                                                               |                                                                                        |                   |                            |       
|                                                                                                                | Cost of sales (a)                                             |                                                                                        |                   | 49,541                     |       
|                                                                                                                | Depletion, depreciation and amortization                      |                                                                                        |                   | 4,947                      |       
|                                                                                                                | Selling, general and administrative                           |                                                                                        |                   | 4,415                      |       
|                                                                                                                | Exploration                                                   |                                                                                        |                   | 215                        |       
|                                                                                                                | Unrealized (gains)/losses on derivative financial instruments |                                                                                        |                   | (336                       | )     
|                                                                                                                |                                                               |                                                                                        |                   |                            |       
|                                                                                                                |                                                               | Total costs and expenses                                                               |                   |                            | 58,782
|                                                                                                                |                                                               |                                                                                        |                   |                            |       
|                                                                                                                |                                                               | Loss from operations                                                                   |                   |                            | (2,268
|Other income (expense)                                                                                          |                                                               |                                                                                        |                   |                            |       
|                                                                                                                | Interest expense                                              |                                                                                        |                   | (9,872                     | )     
|                                                                                                                | Interest income                                               |                                                                                        |                   | 3,516                      |       
|                                                                                                                | Other, net                                                    |                                                                                        |                   | (359                       | )     
|                                                                                                                |                                                               |                                                                                        |                   |                            |       
|                                                                                                                |                                                               |                                                                                        | (6,715            | )                          |       
|                                                                                                                |                                                               |                                                                                        |                   |                            |       
|                                                                                                                |                                                               | Loss before income tax expense and cumulative effect of change in accounting principle |                   |                            | (8,983
|Income tax expense                                                                                              |                                                               |                                                                                        |                  |                            |       
|                                                                                                                |                                                               |                                                                                        |                   |                            |       
|                                                                                                                |                                                               | Loss before cumulative effect of change in accounting principle                        |                   |                            | (8,983
|Cumulative effect of change in accounting principle                                                             |                                                               |                                                                                        |                  |                            |       
|                                                                                                                |                                                               |                                                                                        |                   |                            |       
|Net loss                                                                                                        |                                                               | $                                                                                      | (8,983            | )                          | $     
|                                                                                                                |                                                               |                                                                                        |                   |                            |       
|(a)    Intercompany sales and fees that are eliminated in the consolidated results of the Company and have been |                                                              
|excluded from the results presented above are as follows:                                                       |                                                               |                                                                                        |                   |                            |       
|                                                                                                                |                                                               | Net sales                                                                              |                   | $                          | 2,295 
|                                                                                                                |                                                               | Cost of sales                                                                          |                   |                            |      
|                                                                                                                |                                                               | Sales volumes (short tons)                                                             |                   |                            |       
|                                                                                                                |                                                               |                                                                                        | Lead metal        |                            |       
|                                                                                                                |                                                               |                                                                                        | Zinc concentrates |                            |       
|                                                                                                                |                                                               | Realized Prices ($/short ton)(b)                                                       |                   |                            |       
|                                                                                                                |                                                               |                                                                                        | Lead metal        |                            | $     
|                                                                                                                |                                                               |                                                                                        | Zinc concentrates |                            |       



Results of Peruvian Operations

|                                                                                                           |                                                                   | Three Months Ended
April 30,        |                                         | Six Months Ended
April 30, |        
|---------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------------------- | --------------------------------------- | -------------------------- | -------
|
|Net sales (a)                                                                                              |                                                                   | $                                   | 104,326                                 |                            | $      
|Costs and expenses:                                                                                        |                                                                   |                                     |                                         |                            |        
|                                                                                                           | Cost of sales (a)                                                 |                                     |                                         | 97,357                     |        
|                                                                                                           | Depreciation and amortization                                     |                                     |                                         | 2,699                      |        
|                                                                                                           | Selling, general and administrative (a)                           |                                     |                                         | 2,355                      |        
|                                                                                                           | Exporation                                                        |                                     |                                         | 47                         |        
|                                                                                                           | Unrealized (gains) losses on derivative financial instruments     |                                     |                                         | 83                         |        
|                                                                                                           |                                                                   |                                     |                                         |                            |        
|                                                                                                           |                                                                   | Total costs and expenses            |                                         |                            | 102,541
|                                                                                                           |                                                                   |                                     |                                         |                            |        
|                                                                                                           |                                                                   | Income from operations              |                                         |                            | 1,785  
|Other income (expense):                                                                                    |                                                                   |                                     |                                         |                            |        
|                                                                                                           | Interest expense                                                  |                                     |                                         | (4,329                     | )      
|                                                                                                           | Interest income                                                   |                                     |                                         | 12                         |        
|                                                                                                           | Other, net                                                        |                                     |                                         | (247                       | )      
|                                                                                                           |                                                                   |                                     |                                         |                            |        
|                                                                                                           |                                                                   |                                     | (4,564                                  | )                          |        
|                                                                                                           |                                                                   |                                     |                                         |                            |        
|Income before income tax expense (benefit) and cumulative effect of change in accounting principle         |                                                                   |                                     | (2,779                                  | )                          |        
|Income tax expense (benefit)                                                                               |                                                                   |                                     | (539                                    | )                          |        
|                                                                                                           | Income before cumulative effect of change in accounting principle |                                     |                                         | (2,240                     | )      
|Cumulative effect of change in accounting principle                                                        |                                                                   |                                     |                                        |                            |        
|                                                                                                           |                                                                   |                                     |                                         |                            |        
|Net income                                                                                                 |                                                                   | $                                   | (2,240                                  | )                          | $      
|                                                                                                           |                                                                   |                                     |                                         |                            |        
|(a)    Intercompany fees that are eliminated in the consolidated results of the Company and have have been |                                                                  
|excluded from the results presented above are as follows:                                                  |                                                                  
|                                                                                                           |                                                                   | Selling, general and administrative |                                         |                            | 2,295  
|                                                                                                           |                                                                   | Sales Volumes                       |                                         |                            |        
|                                                                                                           |                                                                   |                                     | Copper (short tons)                     |                            |        
|                                                                                                           |                                                                   |                                     | Lead (short tons)                       |                            |        
|                                                                                                           |                                                                   |                                     | Zinc (short tons)                       |                            |        
|                                                                                                           |                                                                   |                                     | Silver (thousands of troy ounces)       |                            |        
|                                                                                                           |                                                                   |                                     | Gold bullion (thousands of troy ounces) |                            |        
|                                                                                                           |                                                                   | Realized Prices                     |                                         |                            |        
|                                                                                                           |                                                                   |                                     | Copper ($/short ton)                    |                            | $      
|                                                                                                           |                                                                   |                                     | Lead ($/short ton)                      |                            |        
|                                                                                                           |                                                                   |                                     | Zinc ($/short ton)                      |                            |        
|                                                                                                           |                                                                   |                                     | Silver ($/troy ounce)                   |                            |        



Results
of operations for the three months and the six months ended April 30, 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 $160.8 million compared to $191.6 million in the 2001 quarter. A decrease of
$8.9 million was attributable to Peruvian operations. U.S. net sales were $21.8 million lower in the 2002 quarter, compared to the 2001 quarter, primarily due to a decrease in sales
volumes of lead metal and zinc concentrates and lower realized prices for zinc concentrates. Lead metal sales volume was 29% lower than the prior year, reducing net sales by $16.7 million. The
reduced volume reflects the Company's implementation of the Revised Operation Plan in response to weaker overall demand, discussed previously. Zinc concentrate sales volume for the 2002 quarter was
down 18% compared to the prior year, reducing net sales by $1.3 million. The net realized price for zinc concentrates was 23% lower than the prior year, reducing net sales another
$1.4 million. The zinc volume shortfall was primarily due to lower ore grades resulting in less production, while the lower realized price was the result of 16% drop in the LME zinc price.

Net salesdecreased $61.4 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 $42.7 million lower in the 2002 quarter, compared to the 2001 quarter, primarily due to the factors discussed above. Lead metal sales volume was 32%
lower accounting for a $36.1 million decrease in net sales. Zinc concentrate sales were down $5.5 million in the 2002 period, compared to the 2001 period. About $3.0 million of
the decrease was due to lower realized prices and about $2.5 million was the result of lower volume.

Cost of salesdecreased $24.5 million for the 2002 quarter compared to the 2001 quarter. Of this decrease, $3.9 million was
attributable to Peruvian operations. U.S. cost of sales for the 2002 quarter was $20.7 million less than the 2001 quarter. Volume changes, primarily lower lead metal and zinc concentrate sales,
reduced cost of sales by approximately $18.5 million. Lead metal unit production cost was down 6% compared to the prior year, decreasing cost of sales $2.3 million. This decrease is the
result of efficiency improvements at all three primary operating facilities resulting from implementation of the Revised Operating Plan, improved production cost at the secondary smelter and lower
energy costs, compared to the prior year.

Cost of salesfor the 2002 period was $284.4 million compared to $344.0 million for the 2001 period. A decrease of
$11.7 million was attributable to Peruvian operations. U.S. cost of sales for the 2002 period
was $47.8 million less than the 2001 period. Volume changes, primarily lower lead metal and zinc concentrate sales, reduced cost of sales for the period by approximately $40.0 million.
Due to the factors discussed above, lead metal unit production cost was down 10% compared to the prior year, decreasing cost of sales $7.6 million.

Selling, general and administrativeexpenses decreased by $0.6 million for the 2002 quarter and $2.0 million for the 2002
period, compared the prior year. Decreases of $0.5 million for the quarter and $1.4 million for the period were attributable to Peruvian operations. The decreases in selling, general and
administrative expenses for U.S. operations are primarily the result of reductions in association dues, legal expenses, professional fees and travel, partially offset by increases in expenses related
to retention bonus accruals, gainsharing and public relations.

Explorationexpense decreases for the 2002 quarter and the 2002 period, compared to the prior year, were 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 derivativesrelated 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 decrease in the quantities of contracts outstanding, due to the inability of the Company to receive credit from brokers. This resulted in the realization of losses that were previously unrealized.

Interest expensedeclined $0.7 million in the 2002 quarter and $2.8 million in the 2002 period, compared to the prior year.
Peruvian operations accounted for a slight increase in the 2002 quarter and a $1.0 million decline in the 2002 period. The declines attributable to U.S. operations were primarily due to lower
interest rates on the Company's floating interest rate notes and on the U.S. revolving credit facility.

Other,net expense was $0.6 million in the 2002 quarter compared to other net income of $0.02 million for the 2001 quarter.
For the 2002 period, other net expense was $0.8 million, compared to other net income of $0.4 million for the 2001 period. Peruvian operations accounted for increased expenses of
$0.2 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 2001.

Income tax benefitfor 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 decreased $8.9 million, compared to the 2001 quarter, primarily due to lower
realized prices for zinc, copper, and lead and lower silver sales volume. The realized prices for zinc, copper, and lead declined 22%, 9%, and 4% respectively, due to similar declines in market
prices, accounting for a $7.6 million reduction in net sales. Primarily due to the lower production volume discussed previously, silver sales volume declined about 7% or 597,000 ounces,
reducing net sales $2.7 million. These decreases were partially offset by higher realized prices for silver and gold and slightly higher copper and gold sales volumes.

Net
sales for the 2002 period declined $18.7 million, compared to the 2001 period, primarily due to lower realized prices for zinc, copper, silver. Realized prices were down 25%
for zinc, 14% for copper and 4% for silver, reducing net sales by $21.1 million, compared to the prior year. These decreases were partially offset by higher realized prices for gold and
slightly higher copper and gold sales volumes

Cost of salesdecreased $3.9 million, from the 2001 quarter to the 2002 quarter due to lower unit production costs and lower sales
volumes. Unit production costs were approximately 3% lower than the prior year, decreasing cost of sales approximately $4.4 million. The reduction was due to lower feed costs, resulting from
lower market prices for copper, zinc and silver, partially offset by the lower treatment and refining charges, discussed previously. In addition, unit conversion costs at LA Oroya were approximately
6% lower than the prior year. Volume changes, primarily the silver decrease discussed above, reduced cost of sales $2.0 million compared to the prior year.

Cost
of sales decreased $11.8 million from the 2001 period to the 2002 period, primarily due to lower unit production costs, which were approximately 6% lower than the prior year,
due to the factors discussed above.

Depreciation and amortizationexpense increased by $0.3 million in the 2002 quarter and $0.6 million for the 2002 period,
compared to the prior year, primarily due to recent capital additions.

Selling general and administrative expensesdecreased $0.5 million for the 2002 quarter and $1.4 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 loss on derivativesrelates to the change in fair market value of derivative financial instruments pursuant to FAS 133.
Losses for the 2002 quarter and 2002 period resulted from lower metal prices.

Income tax benefitfor the 2002 quarter relates to adjustments to the Company's valuation allowance against 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 unknown whether any 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 April 30, 2002, $36.7 million was
outstanding, exclusive of $7.8 million of letters of credit, under the Doe Run Revolving Credit Facility At April 30, 2002, $29.0 million, exclusive of $2.5 million of
letters of credit, was outstanding under the Doe Run Peru Revolving Credit Facility. The Company also has available in Peru, unsecured and uncommitted credit arrangements and additional availability
related to letters of credit and customs bonds, provided by local banks. At April 30, 2002, $2.6 million of customs bonds was outstanding under these arrangements.

In
the 2002 quarter, cash provided by operating activities was $1.9 million, cash used in investing activities was $7.6 million and cash provided by financing activities
was $1.9 million. For the 2002 period, cash provided by operating activities was $3.8 million, cash used in investing activities was $12.3 million and cash provided by financing
activities was $12.3 million.

In
the U.S., the Company had capital expenditures of $4.4 million for the 2002 period and has projected total capital expenditures of approximately $9.7 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 six months of fiscal 2002 have not yet been submitted for approval. Peruvian operations had capital expenditures of $7.9 million in
the 2002 period and have projected capital expenditures of approximately $16.4 million for fiscal 2002, primarily for environmental improvements and to support ongoing operations.

The
Company has substantial indebtedness and debt service requirements. As of April 30, 2002, on a consolidated basis, the Company had $500.9 million of indebtedness
outstanding, or $375.9 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. As has been
previously discussed, the Company announced on June 6, 2002 that it had commenced the Offers, which if successful, would significantly reduce the Company's outstanding debt. If the Company is able to complete the restructuring as planned, future debt service requirements will be reduced, liquidity will be improved and the Company
expects to be able to continue operations at current levels.

The
Doe Run Revolving Credit Facility, the Doe Run Peru Revolving Credit Facility, and the indentures governing the Notes contain numerous covenants and restrictions. The more
restrictive covenants included limitations on allowable indebtedness and maintenance of a minimum net worth, as defined, a limitation on capital expenditures in the U.S. and requirements for earnings
before interest, taxes, depreciation, depletion, amortization and adjustments made in accordance with FAS 133 (EBITDA) in the U.S. The indentures covering the Company's Notes limit principal
outstanding under various Peruvian working capital facilities to $60 million.

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

The
following tables summarize Doe Run's contractual obligations and commercial commitments at April 30, 2002. For a discussion of environmental and reclamation obligations, see
"Item 1. Financial StatementsNote 7 to the Company's Consolidated Financial Statements".

Contractual Obligations:

|                                            |       |   |       | Payments Due By Period
|------------------------------------------- | ----- | - | ----- | ----------------------
|
|
|Current portion of long-term debt (a)       |       | $ | 371.9 |                       
|Long-term debt, less current maturities (b) |       |   | 128.9 |                       
|Operating leases                            |       |   | 16.7  |                       
|Capital leases                              |       |   | 8.9   |                       
|Rents and royalties                         |       |   | 3.2   |                       
|                                            |       |   |       |                       
|                                            | Total |   | $     | 529.7                 
|                                            |       |   |       |                       



Commercial Commitments:

|                           |       |   |      | Payments Due By Period
|-------------------------- | ----- | - | ---- | ----------------------
|
|
|Customs bonds              |       | $ | 1.4  |                       
|Standby letters of credit  |       |   | 10.0 |                       
|Tolling commitments        |       |   | (c   | )                     
|Purchase commitments       |       |   | (d   | )                     
|Sales commitments          |       |   | (e   | )                     
|Repurchase commitments (f) |       |   | 10.4 |                       
|                           |       |   |      |                       
|                           | Total |   | $    | 21.8                  
|                           |       |   |      |                       





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.

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, and major equipment failures. These forward-looking statements speak only as
of the date of this report. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any
change in the Company's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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 April 30, 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 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

BELL VS. BNSF, ET AL. and eight similar cases were filed May 14, 2002 in the Circuit Court of the City of St. Louis. The cases are all individual actions
for damages by employees or ex-employees of BNSF resulting from the alleged exposure to lead from the hauling of lead concentrates. A tenth case was served on the Company June 10,
2002.

GROSS
VS. FLUOR CORPORATION, ET AL., filed in the Circuit Court of the City of St. Louis, was served on the Company May 17, 2002. The suit alleges personal injuries to a child
living in Herculaneum, Missouri stemming from the operations and emissions of the Herculaneum smelter.

GIVESWATER
VS. ASARCO INC., ET AL., filed in the District Court of Ottawa County, State of Oklahomaand received by the Company on May 30, 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.

EDENS
VS. ASARCO INC., ET AL., a similar suit and also filed in the District Court of Ottawa County, State of Oklahoma was received by the Company on June 5, 2002.

EBY
VS. ASARCO, INC., ET AL, a similar suit, also filed in the District Court of Ottawa County, State of Oklahoma, was received by the Company on June 24, 2002.

PRIESMEYER
VS. UNION CARBIDE CORPORATION, ET AL. filed in the Circuit Court for Third Judicial District, Madison County, Illinois was received by the Company May 31, 2002 and is
an asbestos injury case by an individual against fifty nine companies, who alleges he was exposed to asbestos for over 44 years, including exposure at St. Joe Minerals Corporation premises in
Viburnum and Bixby, Missouri.

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

(a)  Exhibits.

None

(b)  Reports on Form 8-K.

The
Company filed a current report on Form 8-K dated June 6, 2002 to announce the simultaneous commencement of a cash tender offer and an exchange tender offer
for up to $305.0 million par value of the Company's outstanding notes. 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 which include, among others, (i) the participation by holders of 90% of the aggregate principal amount of each
class of notes in the cash tender offer or exchange tender offer; (ii) the participation of at least $125.0 million aggregate principal amount of notes in the cash tender offer;
(iii) satisfactory modification of Doe Run's domestic and Peruvian revolving credit facilities; (iv) the entrance by Doe Run into a definitive loan agreement with Regiment Capital
Advisors, LLC ("Regiment") relating to a new senior secured credit facility pursuant to which Regiment will initially loan Doe Run $35.7 million; and (v) the absence of a material
adverse change with respect to Doe Run or Doe Run Peru. There can be no assurance that the transactions described herein or in the Form 8-K dated June 6, 2002 can be
successfully completed.



SIGNATURES

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

|                   |  | THE DOE RUN RESOURCES CORPORATION (Registrant)
|------------------ |  | ----------------------------------------------
|Date June 28, 2002 |  | By: