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



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

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FORM 10-K

|(Mark One)                                          |                                                                                             
|--------------------------------------------------- | --------------------------------------------------------------------------------------------
|ý                                                   | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934    
|For the fiscal year ended October 31, 2004         
|or                                                 
|o                                                   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|For the transition period
from                   to

Commission File Number 333-66291

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

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registeredNone

Not Applicable


Securities registered pursuant to Section 12(g) of the Act:

None

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). o Yes    ý No

Aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant: $0; all shares of the voting
stock of the registrant are owned by its parent, DR Acquisition Corp.

Number
of shares outstanding of each of the registrant's classes of common stock, as of March 23, 2005:

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



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THE DOE RUN RESOURCES CORPORATION        INDEX TO FORM 10-K



|Part I   |               |  |                                                                                                              | 
|-------- | ------------- |  | ------------------------------------------------------------------------------------------------------------ | 
|         | Item 1.       |  | Business                                                                                                     | 
|         | Item 2.       |  | Properties                                                                                                   | 
|         | Item 3.       |  | Legal Proceedings                                                                                            | 
|         | Item 4.       |  | Submission of Matters to a Vote of Security Holders                                                          | 
|Part II  |               |  |                                                                                                              | 
|         | Item 5.       |  | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 
|         | Item 6.       |  | Selected Financial Data                                                                                      | 
|         | Item 7.       |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                        | 
|         | Item 7A.      |  | Quantitative and Qualitative Disclosures About Market Risk                                                   | 
|         | Item 8.       |  | Financial Statements and Supplementary Data                                                                  | 
|         | Item 9.       |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosures                        | 
|         | Item 9A.      |  | Controls and Procedures                                                                                      | 
|         | Item 9B.      |  | Other Information                                                                                            | 
|Part III |               |  |                                                                                                              | 
|         | Item 10.      |  | Directors and Executive Officers of the Registrant                                                           | 
|         | Item 11.      |  | Executive Compensation                                                                                       | 
|         | Item 12.      |  | Security Ownership of Certain Beneficial Owners and Management                                               | 
|         | Item 13.      |  | Certain Relationships and Related Transactions                                                               | 
|         | Item 14.      |  | Principal Accounting Fees and Services                                                                       | 
|Part IV  |               |  |                                                                                                              | 
|         | Item 15.      |  | Exhibits, Financial Statement Schedules                                                                      | 
|         | Signatures    |  | 130                                                                                                         
|         | Exhibit Index |  |                                                                                                             

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The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. The Company makes forward-looking statements in this
Annual Report on Form 10-K and in the public documents that are incorporated herein by reference, which represent the Company's expectations or beliefs about future events and
financial performance. When used in this report and the documents incorporated herein by reference, the words "expect," "believe," "anticipate," "goal," "plan," "intend," "estimate," "may," "will" or
similar words are intended to identify forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions, including those referred to
under "Risk Factors" in this Annual Report on Form 10-K and otherwise described in the Company's periodic filings.

All predictions as to future results contain a measure of uncertainty, and accordingly, actual results could differ materially. Among the factors that could cause
actual results to differ from those contemplated, projected or implied by the forward-looking statements (the order of which does not necessarily reflect their relative significance) are: general
economic and business conditions; increasing industry capacity and levels of imports of non-ferrous metals or non-ferrous metals products; industry trends, including the price
of metals, product pricing; competition; currency fluctuations; the loss of any significant customer or suppliers; availability of raw materials; availability of qualified personnel; effects of future
collective bargaining agreements; outcome of litigation; changing environmental requirements and costs, including the capital requirements in Peru; political uncertainty and terrorism; major equipment
failures; changes in accounting principles or new accounting standards; compliance with laws and regulations and other unforeseen circumstances.

In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. In addition, actual results could differ materially
from those suggested by the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on the forward-looking statements. Except as required by law, the Company
undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors should, however, review additional
disclosures made by the Company from time to time in its periodic filings with the Securities and Exchange Commission.

This Annual Report on Form 10-K and the documents incorporated herein by reference should be read completely and with the understanding that
the Company's actual future results may be materially different from what the Company expects. All forward-looking statements made by the Company in this Annual Report on Form 10-K
and in the Company's other filings with the Securities and Exchange Commission are qualified by these cautionary statements.

Part I

Item 1. Business

Overview

The Doe Run Resources Corporation (Doe Run and together with its subsidiaries, the Company) is a producer of non-ferrous and precious metals with
operations in the United States and Peru. The Company is the largest integrated lead producer in North America and the largest primary lead producer in the western world. The Company's business in the
United States includes an integrated primary lead operation, a recycling operation and a lead fabrication operation. In Peru, Doe Run's indirect subsidiary, Doe Run Peru S.R.L. (Doe Run Peru),
operates a smelter in La Oroya (La Oroya), one of the largest polymetallic processing facilities in the world, producing an extensive product mix of non-ferrous and precious
metals, including silver, copper, zinc, lead and gold. Doe Run Peru also has a copper mining and milling operation in Cobriza, Peru (Cobriza). These operations will be discussed in greater detail in
the "Overview" sections below. See "Item 8. Financial Statements and Supplementary DataNote 16 to the Company's Consolidated Financial Statements" for financial information
about operating segments and geographic areas. The Company's business does not involve

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significant: 1) seasonal
fluctuations, 2) unusual working capital requirements, 3) order backlog or 4) federal contracting. See below within this Item for a list of
risks and uncertainties that should be considered when evaluating Doe Run's business and prospects.

The
Company's auditors issued unqualified opinions on the 2004 audited financial statements of the Company and of Doe Run Peru that expressed substantial doubt about the Company's and
Doe Run Peru's ability to continue as going concerns due to net capital deficiencies, substantial debt service requirements, and significant capital requirements under environmental commitments. See
further discussion and managements' plans in "Item 7. Management's Discussion of Financial Condition and Results of OperationsLiquidity and Capital
Resources." The Company's auditors issued unqualified opinions on the 2003 audited financial statements of the Company and of Doe Run Peru
that expressed doubt about the Company's and Doe Run Peru's ability to continue as going concerns due to, among other things, liquidity concerns, defaults under loan agreements, uncertainties related
to environmental and litigation matters, as well as recurring losses.

Corporate structure

Doe Run is a New York corporation formed in 1981. Doe Run is the successor via merger to the St. Joseph Lead Company, which was formed in 1864. All of Doe
Run's issued and outstanding common and preferred stock is directly or indirectly owned by The Renco Group, Inc. (Renco). Renco is owned by trusts established by Mr. Ira Leon Rennert,
Renco's Chairman and Chief Executive Officer, for himself and members of his family. As a result of such ownership, Mr. Rennert controls the Company and its subsidiaries, subject to the
provisions of an agreement (the Investor Rights Agreement) discussed below under the caption "Restructuring" and in "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities."

Doe
Run owns 100% of Doe Run Cayman Ltd. (Doe Run Cayman), a Cayman Islands corporation. Doe Run Cayman owns in excess of 99% of the interest in Doe Run Peru, with a de minimisnumber of shares owned
by present and former employees of both Doe Run Peru and Empresa Minera del Centro del Peru S.A. (Centromin) as
required by Peruvian law. Centromin is the Peruvian government entity whose subsidiary previously owned La Oroya. That subsidiary was purchased on October 23, 1997 by Doe Run Peru.

The
Company's fiscal year ends on October 31. Any reference herein to a specific year, such as 2004, refers to thefiscal year2004, unless otherwise noted.

Restructuring

On October 29, 2002, Doe Run completed a consensual restructuring (the Restructuring) of its previously outstanding 11.25% Senior Notes due 2005, Floating
Interest Rate Senior Notes due 2003 and 11.25% Senior Secured Notes due 2005 (collectively, the Old Notes) by exchanging the Old Notes with a principal amount of $294.8 million for new notes
with a face amount of $175.8 million due November 1, 2008 (the Notes) and issuing warrants entitling holders of the Notes to purchase approximately 39% of the aggregate outstanding
common stock of Doe Run (the Warrants). The Warrants expire on October 29, 2012 and are exercisable at any time after November 1, 2008. The effect of the Restructuring was to reduce the
face amount of notes outstanding at the date of the Restructuring by $119.0 million and defer principal and interest payments. See "Item 7. Management's Discussion of Financial Condition
and Results of OperationsLiquidity and Capital Resources" for a discussion of the Restructuring.

In
connection with the Restructuring, Doe Run entered into the Investor Rights Agreement with the holders of all of its capital stock and the agent for the holders of the Warrants.
Pursuant to the Investor Rights Agreement, Doe Run's Board of Directors was expanded from one to three with one (the Independent Director) selected by holders of the majority of the Warrants (Majority

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Warrantholders).
The powers granted to the Independent Director by the Investor Rights Agreement may have a significant impact on the operation of the Company's business as well as its strategic
direction. See "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities" for a discussion of the Warrants and the Investor Rights
Agreement and "Item 10. Directors and Executive Officers of the Registrant" for information on the Directors.

OverviewU.S. Operations

The Company's primary lead operation in the U.S. consists of two primary smelters, which obtain concentrates principally from the Company's four operating mills.
In response to declining demand in the U.S. for lead metal and increasing global demand for clean lead concentrates, the Company indefinitely suspended operations at one of these smelters in
November 2003 and is selling on the open market any concentrates not required to maintain production at its Herculaneum smelter. See "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of OperationsOverview" for further discussion. The mills are supplied with ore mined from six production
shafts along approximately 40 miles of the Viburnum Trend in southeastern Missouri, one of the world's most productive lead deposits. As of October 31, 2004, the Company's U.S. ore
reserves consisted of approximately 45 million proven and probable tons, containing average grades of 5.51% lead, 1.31% zinc and 0.29% copper.

The
Company also operates the world's largest secondary lead smelter, which is located in southeastern Missouri where it produces lead metal from recycled lead-acid batteries
and other lead bearing materials.

The
Company, through its subsidiary, Fabricated Products, Inc. (FPI), produces value-added lead products such as lead oxide, lead sheet and lead pipes at facilities in Arizona and
Washington.

These
operations enable the Company to participate in and manage the entire lead life cycle from mining lead ore, to producing refined lead metal, to fabricating value-added lead
products, to recycling batteries and other materials containing lead.

In
2004, the Company's U.S. operations delivered approximately 320,000 tons of refined lead metal and lead alloy products, including lead recycled for customers (tolling). This
represented approximately 18% of North American consumption and 6% of western world consumption. In addition, the Company's U.S. operations delivered approximately 124,000 tons of lead concentrates to
international metal trading companies in 2004.

The
majority of the U.S. operations' lead metal sales in 2004 were to battery manufacturers or their suppliers. Approximately 58% of the U.S. operations' total sales in 2004 were to
battery manufacturers or their suppliers. Historically the lead-acid battery has been the dominant technology for automotive and other starting, lighting and ignition (SLI) batteries as
well as for motive power, telecommunication, network power, uninterruptible power systems and emergency lighting. Management believes this will continue to be the case for the foreseeable future
because of its cost competitiveness, recyclability and existing infrastructure. Refined lead is also used in products such as computer and television screens, ammunition, and rolled and extruded lead
products.

Fluctuations
in lead and other non-ferrous metal prices can have a material effect on the results of operations, financial condition and liquidity of the Company. These
prices are influenced by numerous factors beyond the Company's control, including speculative activities, global and regional demand and production, expectations for inflation, political and economic
conditions. The aggregate effect of these factors is impossible for the Company to predict. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of
OperationsResults of Operations" for a detailed discussion of the markets for lead and other metals affecting the Company's results of
operations. The Company, by

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taking
advantage of its extensive polymetallic ore resources and smelting assets, is somewhat able to reduce the impact of metal price volatility through adjustments to its mining, milling and
smelting plans. In addition, sales from tolling services, by-products and fabricated products provide the Company with sources of revenue that are largely independent of lead prices.

OverviewDoe Run Peru Operations

Doe Run Peru acquired La Oroya in October 1997 and Cobriza in August 1998. La Oroya's unique combination of non-ferrous
metal smelters, refineries and by-product circuits enable it to process complex polymetallic concentrates and to produce a number of high quality finished metals, including silver and
by-products. In 2004, La Oroya was one of Peru's largest exporters, exporting approximately 88% of its total sales to North America, Asia, Europe and other Latin American countries.
Its customers include end-users of non-ferrous and precious metals and metal by-products as well as international metal trading companies.

La Oroya's
operations smelt and refine complex concentrates obtained from Cobriza and from unaffiliated mining operations primarily in Peru. La Oroya typically purchases
concentrate feedstock pursuant to contracts under which the cost of concentrates is based on a percentage of the non-ferrous metal and precious metal content of the concentrates, reduced
by treatment and refining charges to process the concentrates and penalties for impurities within the concentrates. The impurities, such as arsenic, antimony and bismuth, can be processed and sold as
by-products. Non-ferrous metal prices are generally established by reference to international metal markets, primarily the London Metal Exchange (LME). Treatment charges are
negotiated with concentrate sellers, generally based on world terms. They are affected by numerous factors beyond the Company's control including: global and regional demand for smelter capacity,
availability and quality of concentrates, and expectations for inflation. The aggregate effect of these factors is impossible for the Company to predict. La Oroya's ability to process the
impurities in copper and lead concentrates allows Doe Run Peru to charge a penalty for processing these concentrates. These penalties received are significant to Doe Run Peru, and La Oroya is
one of only six smelters in the western world that can process these types of concentrates.

La Oroya
derives its operating profit primarily from treatment charges, refining charges and penalties on concentrates purchased. The smelter pays for the majority of the metal
contained in the concentrates purchased, but metallurgical recoveries are typically greater than the percentage of metal content paid for. Therefore, it generates a portion of its operating profit
from sales of the metals produced from these excess recoveries. Additional operating profit is generated from the sale of by-products as well as from premiums over market prices received
on its refined metal sales.

The
market for La Oroya's products is global, and demand depends upon worldwide economic conditions. Given the diversity of its products and by-products, Doe Run
Peru's financial performance is not solely dependent upon any single product or by-product. Also, because the La Oroya smelter is primarily a processor of complex concentrates that
are purchased based on market prices, its financial performance is less sensitive than the Company's U.S. operations to the volatility of metal prices. However, La Oroya's operating results are
sensitive to the level of treatment and refining charges and penalties received for concentrates processed and the availability of economically suitable concentrate feed. See "Doe Run Peru
OperationsRaw Materials" for a discussion of treatment charges and difficulties encountered in obtaining adequate feed supply.

The Company's U.S. Operations

Products and Services

The principal products produced by the Company's U.S. operations include refined lead from primary and recycled sources, lead, zinc and copper concentrates,
fabricated lead products and other

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by-products.
Historically, the majority of lead concentrates produced have been used to feed Doe Run's two primary smelters, but in November 2003, the Company indefinitely suspended
operations at its Glover primary smelter and began selling its excess concentrates on the open market. The Company also generates revenue from tolling fees received for recycling spent
lead-acid batteries and other lead-bearing materials for its customers. The following table sets forth net sales of products and services for the Company's U.S. operations:

Year Ended October 31,2004

2003

2002(dollars in thousands)Primary lead metal sales

$
131,919

$
134,530

$
135,438Recycling operation:Tolling


27,361


29,709


29,070Metal sales


43,026


33,717


34,540Other


6,919


4,682


4,244Lead concentrates


42,369


2,912


904Zinc concentrates


24,353


19,717


18,998Copper concentrates


7,959


4,336


1,665Fabricated products


12,658


14,771


17,877Other


7,315


4,735


2,767Total

$
303,879

$
249,109

$
245,503


For
the years ended October 31, 2004, 2003 and 2002, exports represented approximately 17%, 6% and 1%, respectively, of the U.S. operations' net sales.

Transportation

The Company's U.S. operations transport their products by truck, barge and rail. The Company is selling a significant amount of lead concentrates on the global
market requiring transloading to barge on the Mississippi River. As a result, the capacity and logistics of concentrate transport has become an issue, and in the fourth quarter of 2004, the lack of
availability of suitable barge transportation had a negative impact on the Company's sales volume and resulted in an increase in concentrate inventory.

Customers

The Company's U.S. operations had approximately 150 lead metal customers in 2004, including the largest lead-acid battery manufacturers in the world.
Approximately 58% of the Company's U.S. operations' revenues from unaffiliated customers were directly from U.S. battery
manufacturers, primarily automotive, or their suppliers. Lead concentrates are sold to international trading companies.

Competition

Doe Run is the largest integrated lead producer in North America and the largest primary producer in the western world. It is also the third largest secondary
lead producer in North America and the fourth largest in the world. The Company's U.S operations compete primarily in the North American lead metal market where its major competitors are three primary
lead producers and 12 secondary lead producers.

Competition
within the North American lead metal market is based primarily on quality, price, service, timely delivery and reliability. Because lead is generally sold on a delivered
basis with freight charges included, Doe Run's central U.S. location typically allows it to have transportation costs significantly lower than its major competitors with operations outside of North
America. Due to its location, Doe Run also is able to provide its customers just-in-time delivery at a lower cost than most

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of
its competitors. In addition, management believes Doe Run's combined primary and secondary production capabilities and focus on the lead business as its core business provide it with additional
competitive advantages. See the discussion of the current market for metal and concentrates in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of
OperationsResults of Operations."

In
response to a declining domestic metal market, and as battery manufacturers move production overseas primarily to China, Doe Run has reduced its lead metal production and is selling
more of its production as lead concentrates, competing in the global market for concentrates, where there is currently a deficit in supply. The Company's U.S. mining operations produce clean
concentrates, relatively free of impurities, which can be used with lower quality concentrates to improve smelters' feed mix.

Raw Materials

At current production levels, lead concentrates for the Company's primary smelting facilities are supplied by the Company's mining operations but, from time to
time, are purchased from third parties. For a discussion of the Company's mineral reserves, see "Item 2. PropertiesU.S.
OperationsOre Reserves." The Company's U.S. operations utilize various other raw materials, principally metallurgical coke, chemicals and
reagents, which are secured from external sources, primarily on the basis of competitive bid.

There
is a shortage in the U.S. market for coke, due to competition from China. Coke supply was an issue for the fourth quarter of 2004 and negatively affected raw material costs and
lead production by approximately 4,000 tons at the Herculaneum primary smelter. The coke supply is improving, and the Company is working on a contract for its 2005 supply requirements, although the
costs could increase from current levels. Soda ash is currently in short supply for the U.S. recycling operation. Alternative supplies have been located, and the Company does not anticipate an ongoing
problem. The Company believes that it has adequate sources of the other raw materials to meet its present U.S. production needs.

The
Company's U.S. recycling operation recycles a variety of lead-bearing materials, primarily spent batteries, which it purchases or tolls for customers. The chemistry and
composition of feed materials can have a significant impact on the cost and operating performance of the recycling operation.

Power

The primary electric power source for the majority of the Company's U.S. operations is Ameren UE, a public utility headquartered in St. Louis, Missouri.
The Viburnum-35 mine and Glover primary smelter obtain their electric power from Black River Electric Cooperative located in southeastern Missouri. Natural gas and propane are secured from
external sources, primarily under contracts that are awarded on the basis of competitive bidding, whose prices fluctuate with the market for natural gas and petroleum, respectively. The Company
believes that it has adequate power sources to meet its present U.S. production needs.

Environmental Matters

The Company's U.S. operations are subject to numerous federal, state and local environmental laws and regulations governing, among other things, air emissions,
wastewater discharge, solid and hazardous waste treatment, storage, and disposal, and remediation of releases of hazardous substances. As is the case 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. Environmental laws and regulations may become more stringent in the future,
which could increase costs of compliance.

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See
"Item 8. Financial Statements and Supplementary DataNote 19 to the Company's Consolidated Financial Statements."

Safety

Throughout its operations, the Company strongly emphasizes providing a safe working environment through extensive employee training to ensure safe work practices
and worker knowledge of proper equipment operation. In the U.S., Doe Run's mining and milling operations are regulated by the Mine Safety and Health Administration of the Department of Labor (MSHA),
and its smelting and fabricating operations are regulated by the Occupational Safety and Health Administration of the Department of Labor (OSHA). Doe Run has achieved safety results that are among the
best in its industry classifications. In 2004, the mining and milling operations' lost-time injury rate was about 1.5 times better than the national average for the underground
metal mining industry. The lost-time injury rate for Doe Run's primary smelter was 3.0 times better than the national average for the primary nonferrous metals industry. The
lost-time injury rate for Doe Run's recycling operation was 2.0 times better than the national secondary nonferrous metals industry. In addition, the lost-time injury
rate at FPI was 2.0 times better than the national fabricated metal products industry. The Fletcher, Sweetwater and Brushy Creek mines, Fletcher and Brushy Creek mills, Sweetwater and Brushy
Creek shops and yards, Glover smelter and FPI completed 2004 with no lost-time injuries.

Employees

As of October 31, 2004, the Company had 306 active salaried employees and 933 active hourly employees in the U.S., of which Local 7450 of the United
Steelworkers of America (USWA) represented five hourly employees at the Company's Glover smelter. Doe Run has a three-year agreement with the union that expires in May 2005. Doe Run
received a notice on March 31, 2004 that a petition had been filed under the National Labor Relations Act by the
United Mine Workers of America to represent the hourly employees at the mining operations. An election was held May 17 - 20, 2004. The Company was advised on
May 24, 2004 that the mining operations' employees chose not to be represented by the United Mine Workers of America.

Doe Run Peru Operations

Products

La Oroya's principal products are refined silver, copper, lead, zinc and gold. In addition, La Oroya produces a variety of by-products,
including bismuth, indium, tellurium, antimony, cadmium, selenium, sulfuric acid, zinc-silver concentrate, zinc sulfate, copper sulfate, arsenic trioxide and others. The following table
sets forth net sales, excluding sales to the Company's U.S. Operations, for each of La Oroya's principal products.

Year Ended October 31,2004

2003

2002(dollars in thousands)Silver

$
227,546

$
167,698

$
156,437Copper


116,885


104,987


98,498Lead


98,853


55,884


56,922Zinc


68,524


58,376


59,934Gold Bullion


25,261


28,496


27,917By-Products


26,350


20,065


18,578Total

$
563,419

$
435,506

$
418,286


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Transportation

Doe Run Peru primarily transports its products by ocean freight after first being transported by truck to the port of Callao in Lima, Peru. The primary exception
is that exported gold is transported via aircraft. Ocean freight availability has tightened due to competition with China, which has in turn led to higher shipping costs.

Customers

Doe Run Peru had approximately 356 customers in 2004, including a wide variety of industrial and international trading companies. In 2004, approximately 88% of
net sales were exported, with sales to Asia, Latin America, North America and Europe representing approximately 27%, 24%, 23% and 14%, respectively, of net sales. Substantially all of
La Oroya's 2004 metal sales were pursuant to contractual agreements, typically with terms of one year or less. Such contracts generally set forth pricing mechanisms with minimum volumes.
Substantially all of La Oroya's sales are denominated in U.S. dollars.

Competition

La Oroya's unique combination of non-ferrous metal smelters, refineries and by-product circuits are capable of processing complex
concentrates into high quality base and precious metals. Only five other facilities in the western world have the capability to treat lead and copper concentrates containing high antimony, arsenic,
bismuth and precious metal values in addition to a variety of residues. Chinese smelters, however, which can also process complex concentrates, are competing with Doe Run Peru in the market for
concentrates. See the discussion of concentrates below in "Raw Materials."

Raw Materials

La Oroya's primary raw material is concentrate feedstock. In addition, Doe Run Peru's processes consume various other raw materials, principally coal and
fluxes.

Copper.During 2004, approximately 67% of the copper concentrates processed at La Oroya were obtained from the
Peruvian domestic market, including approximately 27% from Cobriza. In 2005, La Oroya expects to obtain approximately 76% of its copper concentrates from the Peruvian domestic market, including
approximately 28% from Cobriza. La Oroya expects to obtain the balance primarily from neighboring Latin American countries. La Oroya requires approximately 81,000 tons per year of copper
metal contained in concentrates to produce at capacity.

Zinc.All of the zinc concentrates processed at La Oroya during 2004 were secured from the Peruvian domestic market.
La Oroya requires approximately 87,500 tons of zinc metal contained in concentrates per year to maximize production capacity. As discussed in "Item 2.
PropertiesPeruvian Operations," future capacity is expected to be decreased to 50,000 tons per year in order to reduce sulfuric acid gas
and other gas emissions as well as to reduce the disposal of liquid effluents.

Lead.Approximately 97% of La Oroya's 2004 lead concentrates were obtained from the Peruvian domestic market. The
smelter requires approximately 137,800 tons of lead contained in concentrates per year to produce at capacity.

Feed Supply.Low lead, zinc and copper prices that prevailed for several years before increasing in 2003 reduced available
concentrate supplies as miners had cutback production in response to the low price environment, making concentrate supplies very tight. Smelters competing for concentrates in this tight market drove
treatment charges and penalties down significantly. Most of La Oroya's copper, lead and zinc concentrate feed supplies are secured from a small number of suppliers in the Peruvian

8

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domestic
market. Due to the proximity of the smelter to these suppliers, it is economically advantageous for Doe Run Peru to acquire its concentrates from Peruvian suppliers. However, tightness in the
global market for concentrates has caused intense competition from buyers outside of Peru, especially in China, for all concentrates, including the complex concentrates which may have been previously
undesirable for some smelters. This intense competition has adversely affected concentrate availability and treatment charges received. However, since the middle of 2003 and through October 31,
2004, copper and lead prices have increased significantly, and zinc prices have increased moderately, primarily due to decreased availability of supply. The increase in the copper prices has
encouraged more production from the mines and, together with the decision of Chinese smelters to reduce their copper concentrate imports, has generated a radical change in the availability of copper
concentrate beginning in the last quarter of 2004. Management estimates that there will be an excess of copper concentrates for the next two years, which will improve the performance of the copper
circuit in La Oroya. In spite of the price improvements, in the case of lead and zinc concentrate, the market remains tight, and the projection is that it will be tighter for the next few years
since there are no new mining projects coming on stream.

Currently,
La Oroya has secured approximately 91% of its concentrate requirements for 2005 through material supplied by Cobriza and contracts with independent suppliers. For 2004,
all of Cobriza's output fed the La Oroya smelter, representing approximately 27% of the smelter's copper concentrate requirements. While La Oroya has contracted for most of its
concentrate requirements for 2005, and recent metal price improvements and other factors have improved the financial condition of the smelter's traditional suppliers, it remains possible that the
smelter could experience difficulties obtaining economically suitable lead and zinc concentrate feed supply. Failure to secure economically suitable concentrate could have a material adverse impact on
La Oroya's performance and Doe Run Peru's business, financial condition and results of operations.

Water.Water for La Oroya is obtained from three main sources: the Mantaro River, the Tishgo River and the Cuchimachay
Spring. Management believes these three sources, in addition to numerous adjacent springs and wells, provide adequate water supplies for the facility.

Power.La Oroya receives electric power from Empresa de Electricidad de los Andes S.A., (Electroandes), a local
electric power company owned by PSEG Global Inc. The smelting complex consumes approximately 63 megawatts of ongoing load, which represents approximately one-third of the capacity
of Electroandes. La Oroya has a supply contract with Electroandes, which expires in July 2008. Management believes this agreement provides sufficient power at satisfactory rates. Most of
Cobriza's electrical power is also provided by Electroandes. Cobriza's requirements do not represent a significant portion of Electroandes' capacity. Electroandes is not the only source of electricity
in the areas where Doe Run Peru operates.

Other.La Oroya uses various other raw materials, principally oxygen, coke, fluxes and oil. La Oroya's oxygen
plant supplies oxygen for the oxy-fuel burners of the reverberatory furnace of the copper smelter and for the blast furnaces of the lead smelter. The plant supplies all of
La Oroya's oxygen requirements.

Prior
to November 8, 2004, Doe Run Peru imported coke and it also imported coal to produce coke. In order to reduce emissions at its coke processing plant, on November 8,
2004, Doe Run Peru began importing all of its coke instead of producing it. By the end of 2004, coke prices increased significantly which resulted in higher production costs. Fluxes consumed in the
smelting process are supplied primarily by Doe Run Peru controlled mining concessions near La Oroya. Doe Run Peru also purchases silica and pyrite fluxes containing precious metals. The smelter
primarily uses industrial and diesel oil for fuel. During 2004, fuel prices increased significantly. Management believes that its sources of these materials are adequate to support operations for the
foreseeable future.

9

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Environmental Matters

Modern environmental legislation has been introduced only in the last 15 years in Peru. For mining and metallurgical activities, the Ministry of Energy and
Mines (MEM) is the principal regulatory authority. The MEM has issued "maximum permissible limits" for liquid effluent and air emissions. In addition, the National Environmental Council coordinates
government regulations and policies, including the air quality standards for Peru. The Directorate General of Environmental Health (DIGESA), a division of the Ministry of Health, issues wastewater
discharge permits based on water quality standards. Peruvian law requires all new mining or metallurgical operations, and existing operations that are undergoing an expansion of over 50% of installed
capacity, to submit to the MEM an Environmental Impact Study.

La Oroya's
operations historically and currently exceed some of the applicable MEM maximum permissible limits pertaining to air emissions and wastewater effluent quality. The
Environmental Remediation and Management Program (PAMA) projects, which are more fully discussed below, have been designed to achieve compliance with these requirements. There can be no assurance that
the Peruvian government will not, in the future, require compliance with additional environmental regulations that could adversely affect Doe Run Peru's business, financial condition and results of
operations.

Metaloroya
S.A., the former owner of the La Oroya smelter, at the time a subsidiary of Centromin, received approval from the Peruvian government for a PAMA that consisted of an
environmental impact analysis, monitoring plan and data, mitigation measures and closure plan. Doe Run Peru
assumed certain obligations under the PAMA from Metaloroya S.A. The PAMA also sets forth the actions and corresponding annual investments the concession holder agrees to undertake in order to achieve
compliance with the maximum permissible limits prior to expiration of the PAMA (ten years for smelters, such as Doe Run Peru's operations in La Oroya, and five years for any other type of
mining or metallurgical operation like Cobriza). After expiration of the PAMA, the operator must comply with all applicable standards and requirements.

Under
a subscription agreement, pursuant to which Doe Run Peru acquired La Oroya, Centromin agreed to indemnify Doe Run Peru against any environmental liability arising out of its
prior operations and their apportioned share of any other complaint related to emissions. Performance of the indemnity has been guaranteed by the Peruvian government through the enactment of 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 and
operations.

Doe
Run Peru has committed under its current approved PAMA to implement projects that include,: 1) building sulfuric acid plants for the metal circuitsincluding some
process changes that may be necessary to ensure compliance, 2) water and sewage treatment facilities and 3) slag handling equipment and disposal facilities.

The
PAMA provides a specific plan for achieving the applicable MEM maximum permissible limits pertaining to air emissions and wastewater effluent quality. However, the specific projects
included in the PAMA may be modified and amended as to the actual design and timing to be implemented, provided compliance with the applicable maximum permissible limits is achieved by the date in the
PAMA. La Oroya's current PAMA requires Doe Run Peru to complete the projects discussed above by December 31, 2006. Doe Run Peru expects that it will not be able to comply with the
spending requirements of La Oroya's PAMA investment schedule in 2005 and 2006 with respect to the construction of the sulfuric acid plant required by the PAMA and, as a result, could be subject
to penalties. Failure to comply with the PAMA could result in the cessation of operations at the La Oroya smelter, which would adversely affect the Company's business, financial condition and
results of

10

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operations.
Peruvian law has recently changed to allow companies to request an extension of the compliance date. Doe Run intends to apply for an extension to complete the construction of the sulfuric
acid plant contemplated by the original PAMA. See the discussion in "Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition" for a description of the law
and Doe Run Peru's plans.

The
Cobriza mine has a separate PAMA in which Doe Run Peru committed to complete projects to manage tailings, mine drainage, sewage and garbage. As of June 2004, Doe Run Peru
ceased discharging mine waste into the Mantaro River and was in compliance with the emissions standards required by the PAMA.

Safety

In Peru, the MEM is responsible for regulations enacted to minimize accidents. It conducts annual inspections to ensure compliance with numerous safety standards.
The Peruvian operations maintain a high regard for safety and health. During 2004, Doe Run Peru received the John T. Ryan award, granted by Mining Safety Appliances, or MSA, for obtaining the
best performance in mining safety in the category of Smelting and Refineries and for having achieved the best indexes of safety in Peru during the last two years. The La Oroya smelter completed
nearly five million employee hours without a lost-time accident between January and October 2004.

During
2004, Doe Run Peru's Cobriza mine experienced a fatal employee accident. Management has thoroughly investigated this incident and reinforced the appropriate safety procedures with
the workforce and its contractors. There were no other lost-time accidents at Cobriza during 2004.

Employees

As of October 31, 2004, Doe Run Peru's employees included 825 active salaried employees, 2,207 active hourly employees and 1,076 contractors. Management
believes its relations with employees are good. There are two unions for hourly employees and two unions for salaried employees. The principal union representing 72% of the hourly employees is the
Sindicato de Trabajadores Metalúrgicos La Oroya (La Oroya Metallurgic Workers Union). The Sindicato de Trabajadores Cobriza (Cobriza Workers Union) represents 13%, of the
hourly workers. On July 21, 2003 and September 1, 2003, Doe Run Peru entered into a five-year labor agreement with the hourly unions at La Oroya and Cobriza,
respectively. The salaried employees are represented by the Sindicato de Empleados Yauli-La Oroya (Yauli-La Oroya Employees Union), representing 33% of the
salaried employees, and by the Sindicato de Empleados Cobriza (Cobriza Employees Union), representing 4% of salaried employees. On January 6, 2003 and September 1, 2003, Doe Run Peru
entered into a five-year labor agreement with the unions representing the salaried employees at La Oroya and Cobriza, respectively.

11

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Risk Factors

The following risks and uncertainties, along with those described elsewhere in this report and in other documents filed with the Securities and Exchange
Commission (the SEC) should be considered when evaluating the Company's business and prospects. These risks are not intended to represent a complete list of the general or specific risks that may
affect the Company. Additional risks and uncertainties not presently known to the Company or that are considered immaterial may also impair the business operations.

Risks Relating to the Company

Liquidity Concerns

The Company is highly leveraged and has significant commitments for environmental matters and PAMA expenditures that require it to dedicate a substantial portion
of cash flow from operations to the payment of these obligations, which will reduce funds available for other business purposes. These factors also increase the Company's vulnerability to general
adverse conditions, limit the Company's flexibility in planning for or reacting to changes in its business and industry, and limit the Company's ability to obtain financing required to fund working
capital and capital expenditures and for other general corporate purposes. An unfavorable outcome to the lawsuits and tax assessments in Peru, as discussed in "Item 3. Legal Proceedings", would
have a further adverse effect on the Company's ability to meet its obligations when due.

The
Company has $313.2 million in outstanding indebtedness on a consolidated basis as of October 31, 2004, excluding the effects of Financial Accounting Standard
No. 15,Accounting by Debtors and Creditors for Troubled Debt Restructurings(Statement No. 15). See "Item 8. Financial Statements
and Supplementary DataNote 8 to the Company's Consolidated Financial Statements." Subsequent to October 15, 2005, Doe Run will no longer have the option to pay interest on
the Notes by a 3% cash payment with the remainder of interest paid in kind by the issuance of additional notes, as discussed in "Item 8. Financial Statements and Supplementary
DataNote 8 to the Company's Consolidated Financial Statements." This will have a further adverse effect on the Company's ability to meet its obligations when due.

Doe
Run's revolving credit facility (the Doe Run Revolving Credit Facility), Doe Run Peru's revolving credit facility (the Doe Run Peru Revolving Credit Facility), a term note with Renco
due October 29, 2005 (the Term Note) and the indenture governing the Notes contain numerous covenants and
restrictions. They include certain requirements with respect to net worth, working capital, and earnings before interest, taxes, depreciation, depletion and amortization (EBITDA), and debt to earnings
ratios. These agreements also place limitations on capital expenditures, dividend payments and other outside borrowings.

Concerns Regarding the Company's Ability to Continue as a Going Concern

The Company's net capital deficiency, substantial debt service requirements, and significant capital requirements under environmental commitments have raised
substantial doubt about the Company's ability to continue as a going concern. The Company's auditors issued unqualified opinions on the 2004 audited financial statements of the Company and of Doe Run
Peru that expressed substantial doubt about the Company's and Doe Run Peru's ability to continue as going concerns due to these issues. The Company's auditors issued unqualified opinions on the 2003
audited financial statements of the Company and of Doe Run Peru that expressed doubt about the Company's and Doe Run Peru's ability to continue as going concerns due to, among other things, liquidity
concerns, defaults under loan agreements, uncertainties related to environmental and litigation matters, as well as recurring losses.

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The
Company's continuation as a going concern will depend upon its ability to meet its obligations and ultimately to attain profitable operations. The Company's management has developed
a plan that includes other revenue enhancements and the application for an extension to complete the construction of the sulfuric acid plant contemplated by the original PAMA. See the discussion in
"Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition" for a description of the Company's plans. If the Company is unsuccessful in accomplishing any of
these tasks, the Company's ability to continue to operate as a going concern could be in doubt. Concern about the Company's ability to continue as a going concern may place additional constraints on
operations and make it more difficult for the Company to meet its obligations or adversely affect the terms of any alternative funding the Company may require. There can be no assurance that the
Company can or will operate profitably in the future, or that the Company will continue as a going concern.

Limits on Cash Flow from Peruvian Subsidiary

Doe Run has, in the past, received certain payments in the form of management fees, interest payments and other distributions from Doe Run Peru. Covenants
governing the Doe Run Peru Revolving Credit Facility place strict limitations on the ability of Doe Run Peru to pay dividends, fees and other distributions to Doe Run (based upon limitations which
make such payments contingent upon the achievement of specific financial performance by Doe Run Peru). The Doe Run Peru Revolving Credit Facility precludes Doe Run Peru from making distributions to
Doe Run in an amount
greater than $4.0 million in the aggregate per year, which payments will represent reimbursement for services and expenses provided to and advanced on behalf of Doe Run Peru by Doe Run.
Accordingly, no reliance can be made upon Doe Run's receipt of distributions from Doe Run Peru in order to meet its debt service requirements.

Volatility of Base Metal Prices; Treatment Charges and Penalties

Base metal prices, treatment charges and penalties that may be charged customers fluctuate and are affected by numerous factors beyond the Company's control,
including speculative activities, global and regional demand and production, expectations for inflation and political and economic conditions. The aggregate effect of these factors is impossible for
the Company to predict and could have a material adverse effect on the results of operations, financial condition and liquidity of the Company.

Exploration and Development

Mineral exploration is highly speculative in nature, involves many risks and frequently is nonproductive. As a result, there can be no assurance that the
Company's mineral exploration efforts will be successful. Once mineralization is discovered, it may take a number of years from the initial phases of drilling until production is possible, during
which time the economic feasibility of production may change. In addition, permitting is required to get to the production phase. The Company's ability to increase its production longevity of
concentrate feeds is dependent on the successful development of new ore bodies and/or expansion of existing mining operations. There can be no assurance that the Company's exploration programs will
yield new reserves to expand and replace existing reserves that are being depleted by current production or that the Company will be able to obtain adequate supplies of concentrate feeds in the open
market at economically acceptable terms.

Interest Rate Fluctuations

The Company is subject to interest rate risk on variable interest rate obligations. The Doe Run Revolving Credit Facility bears interest at the prime rate plus 1%
per annum. The Doe Run Peru Revolving Credit Facility bears interest at LIBOR (1-month, 3-month or 6-month rate, depending on the term of the loan) plus 3.5% per
annum. A material increase in interest rates could adversely affect the Company's business, financial condition and results of operations.

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Risks Relating to Doe Run's Business

Governmental and Environmental Regulations

Doe Run's U.S. operations are 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, storage, and disposal, and remediation of releases of hazardous substances. Environmental laws and regulations may become more stringent in the
future, which could increase costs of compliance. Insurance against environmental risks (including potential for pollution or other hazards as a result of disposal of waste products from mining,
milling and smelting) is not generally available to Doe Run or other companies in the industry. Should Doe Run be unable to fund fully the cost of compliance or of remediating an environmental issue,
Doe Run may be required to suspend operations or enter into interim compliance measures requiring additional expenditures.

Federal,
state and local authorities also regulate a variety of matters including, but not limited to, health, safety and permitting in addition to the environmental matters discussed
above. New legislation and regulations may require Doe Run to change its operations or incur increased costs. Such an occurrence could have a material adverse effect on results of operations,
financial condition and liquidity of Doe Run.

Operating Risks

The business of mining and smelting is generally subject to a number of risks and hazards, including environmental hazards, industrial accidents, labor disputes,
encountering unusual or unexpected geologic formations, cave-ins, rockbursts, flooding and periodic interruptions due to inclement or hazardous weather conditions. Such risks could result
in damage to, or destruction of, mineral properties or producing facilities, personal injury, environmental damage, delays in mining, monetary losses and possible legal liability. Although Doe Run
currently maintains insurance within ranges of coverage consistent with industry practice, no assurance can be given that such insurance will continue to be available at economically feasible
premiums. Although Doe Run's work force is not significantly unionized, there can be no assurance that Doe Run will not experience labor disputes in the future. In July 1992, Doe Run
experienced a strike by the workers at the Herculaneum smelter resulting in metal output significantly lower than planned levels and higher operating expenses due to increased security costs and
outside services. In July and August 1993, production at the Herculaneum smelter was curtailed significantly due to flooding of the Mississippi River. There can be no assurance
that Doe Run's operations will not be adversely affected in the future by flooding or other adverse conditions beyond Doe Run's control.

Raw Materials

The Company's U.S. operations utilize various other raw materials, principally metallurgical coke, chemicals and reagents, which are secured from external
sources, primarily on the basis of competitive bid. The Company's U.S. recycling operation recycles a variety of lead-bearing materials, primarily spent batteries, which it purchases or
tolls for customers. The chemistry and composition of feed materials can have a significant impact on the cost and operating performance of the recycling operation. The availability of raw materials
could be affected by natural disasters, third party shutdowns or other factors beyond Doe Run's control. Any protracted interruption in the availability of any raw materials could have a material
adverse effect on the business, financial condition and results of operations of Doe Run.

Dependence on Lead-Acid Battery Use

Doe Run sells a significant portion of its lead production for use in lead-acid batteries. Of its 150 lead metal customers, Doe Run's customers
include the six largest acid battery manufacturers in the world. The obsolescence of, or any curtailment in the worldwide use of, lead-acid batteries could have a material adverse effect
on the results of operations, financial condition and liquidity of Doe Run.

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Risks Relating to the Operation of Doe Run Peru

Raw Materials

In addition to concentrate feeds, Doe Run Peru's operations are heavily dependent on the supply of various raw materials and services, including water,
hydroelectric power, oxygen, coke and fluxes. Doe Run Peru produces its oxygen requirements from an onsite oxygen plant and extracts limestone and silica fluxes from deposits close to its facility.
The availability of raw materials could be affected by natural disasters, third party shutdowns or other factors beyond Doe Run Peru's control. Any protracted interruption in the availability of any
raw materials could have a material adverse effect on the business, financial condition and results of operations of Doe Run Peru.

Doe
Run Peru's La Oroya smelting operations depend on the availability of lead, zinc and copper concentrates as raw materials. Significant portions of these concentrates are
currently secured from the Peruvian domestic market. If one or more of these suppliers of concentrates were to cease or suspend operations, there can be no assurance that Doe Run Peru would be able to
secure replacements for these necessary raw materials on economically acceptable terms, and accordingly, such a cessation or suspension of activities of these suppliers could have a material adverse
effect on the business operations and financial condition and future prospects of Doe Run Peru.

Environmental Issues In Peru

Doe Run Peru is subject to numerous environmental laws and regulations enacted in the last 15 years in Peru governing, among other things, air emissions,
waste water discharge, solid and hazardous waste storage, treatment and disposal, and remediation of releases of hazardous materials. Doe Run Peru is also subject to certain Peruvian constitutional
provisions assuring each person the right to a clean and healthful environment. The current and future application of these laws and regulations related to Doe Run Peru is subject to certain
agreements with the MEM. Given the developing nature of environmental law and enforcement policies in Peru, however, the Peruvian government could in the future require compliance with additional
environmental requirements that would adversely affect Doe
Run Peru's business, financial condition and results of operations. Further, the Peruvian government or other interested persons may seek changes in the future to the terms and conditions of any of
the agreements made by Doe Run Peru with the MEM that may adversely affect Doe Run Peru's business, financial conditions and results of operations.

Doe
Run Peru also is potentially subject to claims for alleged personal injury and property and other damages resulting from release of certain substances into the environment, to the
extent such liabilities were not retained and/or are not satisfied by Centromin pursuant to the agreement between Doe Run and Centromin for the purchase of La Oroya. See the discussion in "Doe
Run Peru OperationsEnvironmental Matters" above for more details on the agreement. Compliance with environmental laws and regulations, as
well as personal injury and property and other damage claims, could have a material adverse effect on Doe Run Peru's business, financial condition and results of operations.

Insurance
against environmental risks (including potential liability for pollution or other hazards as a result of disposal of waste products occurring from exploration and production)
is not generally available to Doe Run Peru or to other companies within the industry. Should Doe Run Peru be unable to fund fully the cost of complying with environmental requirements, it could be
required to suspend operations or take interim compliance measures pending completion of the required remedy. The aforementioned costs of environmental remediation and compliance by Doe Run Peru could
have a material adverse effect on Doe Run Peru's business condition and future prospects and could impair Doe Run Peru's future ability to make payments, dividends and other distributions to Doe Run.

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Doe
Run Peru's commitments under its PAMA are significant. Doe Run Peru's existing PAMA requires it to perform projects in 2005 and 2006 at a total cost of $121.2 million. See the
discussion of the PAMA in "Doe Run Peru OperationsEnvironmental Matters" above and also in "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of OperationsOverviewDoe Run
Peru." If the La Oroya smelter does not comply with the investment schedule of the PAMA or does not operate within the current PAMA limits, Doe Run Peru could be forced
to cease operations at the La Oroya smelter. 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. There can be no assurance that the Peruvian government will not, in the future, require compliance with additional environmental
regulations that could adversely affect Doe Run Peru's business, financial condition and results of operations.

Labor Matters

Approximately 88% and 37% of Doe Run Peru's hourly and salaried workforce, respectively, are represented by labor unions. Doe Run Peru has five-year
collective bargaining agreements with each of its labor unions which expire in 2008. Although management believes its present labor relations are generally good, in the past, work stoppages and
strikes have occurred. There can be no assurance that a work stoppage or strike will not occur prior to the expiration of the current labor agreements or during negotiations for new labor agreements
(including extensions of the existing labor agreements) or as to the effect of any such work stoppage or strike on Doe Run Peru's production levels. Work stoppages or other labor-related developments
affecting Doe Run Peru could have a material adverse effect on the business, financial condition and results of operations of Doe Run Peru.

Operating Risks

The business of smelting and refining complex concentrates generally is subject to a number of risks and hazards, including environmental hazards, industrial
accidents and labor disputes. Such risks could result in personal injury, environmental damage, delays in operation, monetary losses and possible legal liability. Although Doe Run Peru maintains
insurance within ranges of coverage consistent with industry practice, no assurance can be given that such insurance will be available in the future at economically feasible premiums.

Factors Relating to the Economic and Political Situation in Peru

Political and Economic Situation in Peru

During the past 30 years, Peru has experienced political instability under both civilian and military governments. These governments have pursued various
policies, including frequent intervention in the economic and social structure. Past governments have imposed controls on prices, exchange rates, local and foreign investment and international trade,
restricted the ability of companies to dismiss employees, expropriated private sector assets, and prohibited the remittance of "profits" to foreign investors and payments to foreign creditors. In
1974, the government of Peru expropriated the assets of Doe Run Peru's predecessor and transferred them to Centromin, a government-owned conglomerate.

Doe
Run Peru's financial condition and results of operations could be adversely affected by changes in economic or other policies of the Peruvian government, including reversal of the
trend toward privatization, or other political or economic developments in Peru.

Exchange Controls

During the 1970s and 1980s, government policies restricted the ability of companies in Peru to, among other things, repatriate funds and import products,
including oil, from abroad. In addition, currency exchange rates were strictly controlled, and all export sales revenues were required to be

16

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deposited
in the Central Bank, where they were exchanged from U.S. dollars to the then local currency at less-than-market rates of exchange. The current Peruvian legal
framework imposes no restrictions on the ability of a company operating in Peru to transfer foreign currency from Peru to other countries or to convert Peruvian currency into foreign currency or
foreign currency into Peruvian currency. There can be no assurance that the Peruvian government will continue its current policy of permitting currency transfers and conversions without restriction.
Reinstitution of exchange controls by the Peruvian government could have a material impact on Doe Run Peru's financial condition and results of operations.

Terrorist Activity

Peru experienced significant terrorist activity in the 1980s and early 1990s, during which period terrorist groups escalated their acts of violence against the
government, the private sector and Peruvian residents. Recently, there has been increased concern over terrorist activity in Peru, which could cause direct or indirect harm to Doe Run's Peruvian
operations, and Doe Run's overall business, financial condition and results of operations may be adversely affected. Although Doe Run Peru has implemented certain anti-terrorist practices,
there can be no assurance that future terrorist activity will not have a material adverse effect on the business, financial condition and results of operations of Doe Run Peru.

Inflation And Currency Devaluation

Peru has in the past experienced high levels of inflation. In addition, the Peruvian currency has been devalued numerous times in the past 20 years. A
portion of the operating costs of Doe Run Peru are
denominated in nuevos soles and, therefore, could be significantly affected by the rate of inflation in Peru. If inflation in Peru were to increase significantly without a corresponding devaluation of
the nuevo sol, the financial condition and results of operations of Doe Run Peru could be materially and adversely affected.

Risks Relating to Control by Renco

Control by Renco

Doe Run is an indirect subsidiary of Renco, of which Mr. Ira Leon Rennert is the controlling shareholder. As a result of his indirect ownership of Doe Run,
and his status as a director, Mr. Rennert is, and will continue to be, able to influence the policies of the Company, including mergers, sales of assets and similar transactions. Pursuant to
the Investor Rights Agreement, the Board of Directors of Doe Run is comprised of three individuals, including the Independent Director as designated by the Majority Warrantholders. However,
Mr. Rennert will still be able to exert significant influence upon the Company as he effectively controls, pending exercise of the Warrants, 100% of the capital stock of Doe Run.

Certain Pension Controlled Group Liabilities

The Company is a member of a controlled group with other Renco-owned companies. Accordingly the Company is jointly and severally liable with all other members of
the controlled group under Title IV of the Employee Retirement Income Security Act (ERISA) for obligations of other members of the controlled group that could include certain pension funding and
excise taxes in the event that any member of the controlled group does not satisfy certain of its pension obligations arising pursuant to ERISA.

In
such an event, statutory liens would arise in favor of the Pension Benefit Guaranty Corporation (the PBGC) upon the assets of the other members of the controlled group not in
bankruptcy, and the PBGC may seek to obtain court approval to terminate the plan (a PBGC Termination) and may

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require
the other members of the controlled group to satisfy such pension plan obligations. In the event that a PBGC Termination occurs, and the PBGC requires that the Company satisfy such pension
plan obligations, such requirements would have a materially adverse effect on the Company's financial condition and liquidity.

Additional Information

The Company files annual, quarterly and current reports with the SEC. Any materials filed with the SEC may be read and copied at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington D.C. 20549. Further information is available at 1-800-SEC-0330. Reports are also available on the SEC's website at
www.sec.gov.

Additional
information related to the Company is available on its website at www.doerun.com. The Company's website and information contained on its website are not part of this Annual
Report on Form 10-K and are not incorporated by reference herein.

Item 2. Properties

U.S. Operations

Mining Operations

The Company's Missouri mining operations have seven production shafts, six of which are currently active, that form a north-south line along approximately
40 miles of the Viburnum Trend ore body. Two production shafts, Viburnum-29 and Viburnum-35, lie within a five-mile radius, north and south, respectively, of
Viburnum, Missouri, which is located approximately 125 miles southwest of St. Louis, Missouri. The Buick, Brushy Creek, Fletcher, West Fork and Sweetwater production shafts are within 30 miles of
Viburnum. Six of the production shafts are currently operating. The West Fork production shaft is on care and maintenance status, and mining at the Viburnum-28 production shaft ended
permanently on November 20, 2003.

The
Company also has available five grinding/flotation mills located near its production shafts, four of which are currently operating as shown below. All of the mining and milling
facilities are accessible by state or county roads or Company-owned haul roads. Products are shipped by truck over public roads.

The
production capacities of the Company's mills are as follows:

Mill

Milling Capacity
(Tons of Ore Per Day)Buick

7,200Sweetwater

6,800Fletcher

5,000Brushy Creek

5,000West Fork(a)

4,000


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The
Company owns the property where the necessary surface structures for mining and milling are located. The mineral rights are held either by fee title or mineral leases with either
private landowners or the federal government. There are also numerous prospecting permits, most of which are for exploration of new mineral ore deposits. Five of the production leases are private
leases and 13 are government leases. Doe Run makes royalty payments under these leases. The mineral leases with private landowners have no expiration periods. The government leases are for a period of
either 10 or

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20 years
and are renewable at Doe Run's option, if no default exists under the agreement, subject to negotiation of specific terms of the lease, including royalty rates. Although no assurance
can be given, management anticipates that these leases will be renewed at rates that do not exceed the current levels.

Doe
Run's producing leases from the federal government consist of the following:

Location

Number of
Producing Leases

Expiration
DateViburnum

7

March 31, 2018Fletcher

2

May 31, 2013Buick

1

October 31, 2014Brushy Creek

2

May 31, 2013West Fork

1

January 31, 2013


Ore Reserves

The following table sets forth the mineable reserves estimated by the Company as of October 31, 2004.

Mineable Reserves
As of October 31, 2004

GradeTons

Lead

Zinc

Copper(in thousands)Proven

10,858

7.65
%
1.63
%
0.29
%Probable

34,355

4.83
%
1.23
%
0.30
%Total Proven and Probable

45,213

5.51
%
1.31
%
0.29
%


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The
term "reserve" means that part of a mineral deposit that could be economically and legally extracted or produced at the time of the reserve determination. The term "proven (measured)
reserves" means reserves for which: 1) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of
detailed sampling and 2) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of
reserves are well-established. The term "probable (indicated) reserves" means reserves for which quantity and grade and/or quality are computed from information similar to that used for
proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for
proven (measured) reserves, is high enough to assume continuity between points of observation.

Included
in the table of mineable reserves is the Higdon deposit, which is outside of the Viburnum trend, consisting of 2,682,000 tons of ore with a grade of 5.30% lead and 2.08% copper.
While the surface structures and shaft are in place for the hoisting of ore from the mine, underground mine development would be required in order to generate production from the mine.

19

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Smelting Operations

The Herculaneum primary lead smelter is located approximately 35 miles south of St. Louis on the Mississippi River in Herculaneum, Missouri. It has a capacity of
250,000 tons per year and is currently producing approximately 165,000 tons annually. The smelter, which began operations in 1892, is the largest primary lead smelter in North America and the third
largest in the world.

Located
in Glover, Missouri, approximately 20 miles southeast of the Sweetwater production shaft is the Glover primary smelter, which began operations in 1968 and has a capacity of
approximately 136,000 tons per year. Operations at the Glover primary smelter were indefinitely suspended in the first quarter of 2004 due to decreased U.S. demand for lead. See the discussion in
"Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsOverview."

The
recycling operation, located in Boss, Missouri, approximately ten miles south of Viburnum, began operations in 1991 and currently has an annual physical capacity of approximately
165,000 tons. The facility operates under a Resource Conservation and Recovery Act (RCRA) permit allowing it to handle waste, primarily lead-bearing material. During 2004, the smelter was
permitted for 152,410 tons of furnace production annually; however, the facility can recycle lead metal scrap materials that are not required to go through the furnaces in order to achieve additional
metal production.

A
permit to permanently expand the emissions capacity of the recycling operation to allow approximately 175,000 tons of production was received in January 2005. While production
capacity constraints will prevent production at the level allowed by the permit, the permit allows the Company's recycling facility to operate at higher levels without requiring annual approvals.

The
Company owns its two primary smelters and its secondary smelter.

FPI
operates in leased facilities located in Casa Grande, Arizona, and Vancouver, Washington. The Company ended production at FPI's Lone Star Lead Construction facility in Houston, Texas
in December 2003.

Substantially
all of the assets of the Company's U.S. operations are pledged as collateral under various financing agreements.

Peruvian Operations

Smelting Operations

La Oroya's operations are located in the central Peruvian Andes town of La Oroya, approximately 110 miles east of the Peruvian capital of Lima and at an altitude
of approximately 12,000 feet above sea level. The complex is linked to port facilities by highway and railroad service. Most supply sources also have rail service. Doe Run Peru owns the facilities,
which consist of a copper smelter, lead smelter, copper refinery, lead refinery, copper fabricating plant, zinc refinery, precious metals refinery, antimony plant, arsenic plant, coke plant, cadmium
plant, maintenance shops and other support facilities. Current production capacities of primary products are as follows:

Product

Annual CapacityCopper (short tons)

77,000Lead (short tons)

137,800Zinc (short tons)

88,200Silver (thousands of troy ounces)

39,000Gold (thousands of troy ounces)

94


During
2004, La Oroya produced at less than capacity primarily due to environmental limits and insufficient availability of suitable feed materials. See the discussion in "Item 1.
BusinessDoe Run Peru OperationsRaw Materials." See the discussion of production levels for 2004 in "Item 7.

20

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Management's
Discussion and Analysis of Financial Condition and Results of OperationsResults of Operations."

For
2005, La Oroya expects to cease operations of its three New Jersey zinc roasters, which are costly to operate and environmentally inefficient. The decision should result in a
reduction of refined zinc production to 50,000 tons per year, down from the previous capacity of 88,200. The Company believes that this change will reduce sulfuric acid gas and other gas emissions as
well as reduce the disposal of liquid effluents.

Mining Operations

The Cobriza mine is located approximately 250 miles southeast of Lima in the district of San Pedro de Coris, Churcampa Province. Access to the site is by improved
unpaved road through rugged terrain. Concentrates produced at the mine are trucked 130 miles over unpaved road to Huancayo and then an additional 70 miles over paved road to the La Oroya smelter.
Cobriza's mill has a capacity of 10,000 short tons per day and used approximately half of its capacity as of October 31, 2004.

Landholdings
at Cobriza include approximately 2,700 acres of surface ownership and approximately 112,000 acres of mining concessions. The current mining operation is located on a portion
of the area held. Economic mineralization outside the existing mining area has not been confirmed as of October 31, 2004. Doe Run Peru's estimates indicate mineable proven and probable ore
reserves of approximately 6.2 million short tons containing approximately 1.28% copper.

Exploration

The Company continues to explore for additional reserves within the Viburnum Trend, one of the world's most productive lead ore districts, located in southeastern
Missouri. Current exploration is focused on surface and underground drilling in and adjacent to the operating mines for the purpose of discovering new ore reserves in the mines as well as discovering
additional ore bodies in the general area of the existing mines. Drilling in the Viburnum Trend was successful in 2004 in identifying a new ore body, the RC West Fork ore body, which is scheduled for
development in mid-2005
with full production beginning in late 2006. This resource now stands at approximately 2.9 million tons grading 6.65% lead and 0.83% zinc. The RC West Fork ore body remains open both to the
north and south and will remain a focus for further drilling planned for 2005.

The
Company holds additional exploration tracts outside the Viburnum Trend in the U.S. In Missouri, 50 miles east of the Viburnum Trend, the Company has conducted
pre-development work on a lead-zinc-cobalt deposit.

Current
mine exploration at Doe Run Peru is focused on underground drilling in the Cobriza mine for the purpose of discovering new ore reserves. Regional exploration is ongoing on Doe
Run Peru landholdings in the Cobriza region. Geological mapping and surface sampling as well as airborne and ground geophysical methods are being utilized in the search for new ore bodies.

In
South Africa, through a subsidiary, the Company has conducted pre-feasibility work on a zinc and lead deposit approximately 100 miles from Kimberly, in the Northern Cape
Province. These properties are currently being held with minimal cost pending further economic evaluation.

Item 3. Legal Proceedings

In addition to the items discussed below, the Company is involved in various litigation and claims, government investigations and other legal proceedings that
arise from time to time in the ordinary course of business. While management does not believe any of these matters will have a material adverse effect on the Company's financial position, litigation
is inherently unpredictable, and excessive verdicts do occur. Although management believes valid defenses exist in these matters, Doe Run or any

21

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of
its subsidiaries could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its financial condition, liquidity and results of operations.

Doe
Run is a defendant in eight lawsuits alleging certain damages from lead emissions stemming from the operations at the Herculaneum smelter. The cases were brought in the Circuit Court
of the City of St. Louis:Meyer, et al. v. Fluor Corporation, et al. (formerly known as Mitchell, et al. v. Fluor Corporation, et al.), Doyle, et al. v. Fluor Corporation, et
al.andFigge, et al. v. Fluor Corporation et al., all filed
July 9, 2001;Gross v. Fluor Corporation et al., filed May 9, 2002;Warden, et al. vs. Fluor Corporation et
al., filed September 12, 2002;Cross v. Fluor Corporation et al., filed January 10, 2003; and Johnson, et al. v. Fluor Corporation, et
al.andBrowning, et al. v. Fluor Corporation, et al., filed
September 9, 2003.

The Doyle, Meyer, and Johnsoncases are class action lawsuits. In theDoyleand
Johnsoncases, 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 theMeyercase, plaintiffs seek to have certified a class of children who lived in Herculaneum
during a period of time when they were six years old or younger and children born to mothers who lived in Herculaneum during their pregnancies. The remedy sought is medical monitoring for the class.

The Figge, Gross, Warden, CrossandBrowningcases are personal injury actions by 24
individuals who allege damages from the effects of lead poisoning they attribute to operations at the smelter and seek punitive damages.

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 did not
believe that there had been any violation of law and cooperated with State and federal agencies in their investigations into the allegations, including having provided equipment and an operator to the
government to excavate various areas of the Herculaneum smelter site, which excavations failed to turn up any evidence of illegal toxic dumping. The Company was subsequently notified that the
investigation was closed and there would be no prosecution in the matter.

Doe
Run is a defendant in five lawsuits alleging certain damages from past mining operations in St. Francois County, Missouri. On July 9, 2001,Dowd, et
al. v. Fluor Corporation, et al.was filed in the Circuit Court of the City of St. Louis, Missouri. The case alleges injury to two children living in St. Francois County,
Missouri as a result of emissions from tailings, chat piles and other wastes from past mining operations. On December 13, 2001 Doe Run was served regardingLee Ann
Stotler and Keely Stotler v. Fluor Corporation, et al.This case, which was filed in the Circuit Court of the City of St. Louis, Missouri, seeks a class action for property
damages in Bonne Terre, caused by tailings and related operations. On December 14, 2001, Doe Run was served regardingLayne Stotler v. Fluor Corporation, et
al.This case, which was filed in the Circuit Court of the City of St. Louis, Missouri, seeks a class action for medical monitoring for minors who lived, went to school or went
to day care in Bonne Terre or whose mothers lived in Bonne Terre when they were pregnant. The action alleges damages caused by tailings and related operations. On April 29, 2002, Doe Run was
served regardingCharles Mullins v. The Doe Run Resources CorporationandCharles Mullins II v. The Doe Run Resources
Corporation, filed in the Circuit Court of the City of St. Louis, Missouri, class actions for property damage and medical monitoring, respectively, concerning alleged damages
caused by chat, tailings and related operations in six areas in St. Francois County, Missouri.

Doe
Run, with several other defendants, was named in several lawsuits alleging personal injuries as a result of lead poisoning from exposure to lead paint and tetraethyl lead dust. While
filed in the summer of 2000, these suits have not been served on Doe Run:Hall v. Lead Industries Association, Inc. et al., Hart v. Lead Industries Association, Inc. et
al.,Williams v. Lead Industries Association, Inc. et
al.andRandell v. Lead Industries Association, Inc. et al. The suits were all filed in the Circuit Court of Baltimore,
Maryland and seek damages, including punitive damages.

22

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On
January 26, 2000,City of St. Louis v. Lead Industries Association, Inc. et alwas filed in the Circuit Court of the City
of St. Louis, Missouri. Doe Run and several other parties were named defendants in the suit 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 alleged 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
sought punitive damages. The Company filed a motion for summary judgment, but, instead of responding, the plaintiff dismissed the Company from the case without prejudice in 2004.

Bray, et al. v. BNSF, et al. (filed June 10, 2004), Storie, et al. v. BNSF, et al.(filed June 18,
2004), Barnicle, et al., v. BNSF, et al,(filed July 1, 2004),Abney, et al. v. BNSF, et al(filed July 9,2004),Cooper, et al. v. BNSF(filed July 19, 2004),Blackwell, et al. v. BNSF, et
al.(filed July 28, 2004),Gold, et al. v. BNSF, et al.(filed August 13, 2004),Barnes,
et al. v. BNSF, et al.(filed August 27, 2004),Bennett, et al. v. BNSF, et al.(filed August 31, 2004), Berendt, et al. v. BNSF, et
al.(filed September 1, 2004),Boyer, et al. v. BNSF, et al.(filed
September 16, 2004),Bowers, et al. v. BNSF, et al.(filed September 21, 2004),Bellm, et al. v. BNSF, et
al.(filed October 8, 2004),Brutcher, et al. v. BNSF, et al.(filed October 15, 2004), Cox, et al. v. BNSF(filed
November 1, 2004),Green v. BNSF, et al.(filed November 5,
2004), andNichols v. BNSF, et al.(filed November 5, 2004) were filed in the Circuit Court of the City of St. Louis, Missouri and listed Doe Run
among the defendants. The suits allege that a total of 116 employees or ex-employees of Burlington Northern and Santa Fe Railway Co. (BNSF) were exposed to lead from the hauling of lead
concentrates by the railroad. Similar lawsuits were settled in fiscal 2003.Barnicle, et al., v. BNSF, et al,(filed December 21, 2004) was filed
in the Court of the City of St. Louis, Missouri and listed Doe Run among the defendants. This case is an action by the spouses of four railway workers related to the exposure to lead from the hauling
of lead concentrates by the railroad. Doe Run has reached tentative settlement with all but four of the plaintiffs in these cases.

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

Two
class action suits,Cole et al. v. Asarco, Inc., et al., (filed May 14, 2003) andEvans et al.
v. Asarco Inc. et al.(filed February 9, 2004) were filed in the U.S. District Court for the Northern District of Oklahoma alleging personal injury and property
damage in Picher, Oklahoma and Quapaw, Oklahoma respectively.Barr, et al. v. Asarco, Inc., et al., Brewer, et al. v. Asarco, Inc., et al., Crawford, et al. v.
Asarco, Inc., et al., Kloer, et al. v. Asarco, Inc., et al.andRhoten, et al. v. Asarco, Inc., et al.were
filed on July 8, 2003 andHayworth, et al. v. Asarco, Inc., et al., Moss, et al. v. Asarco, Inc., et al., Nowlin, et al. v. Asarco, Inc., et al.,
Sargent, et al. v. Asarco, Inc., et al.andSouth, et al. v. Asarco, Inc., et al.were filed July 29, 2003
in the District Court of Ottawa County, Oklahoma and allege personal injury to children living in Picher, Oklahoma. These cases were subsequently removed to the U.S. District Court for the Northern
District of Oklahoma. TheBarrcase was dismissed on June 9, 2004. TheCrawfordcase was
dismissed on May 4, 2004. TheHayworth, KloerandRhotencases were dismissed on April 27,
2004. Another class action suit,The Quapaw Tribe of Oklahoma, et al. v. Asarco, Inc. et al., was filed in the U.S. District Court for the
Northern District of Oklahoma on December 10, 2003 against seven companies, including Doe Run. This action alleges damage to natural resources and to property of members of the Quapaw Tribe.

On
February 25, 2003,Straussner v. Union Carbide Corporation, et al., was filed in the Circuit Court of Madison County, Illinois
against 62 defendants, including Doe Run, alleging that a contractor was injured by exposure to asbestos while working at the defendants' locations, including the St. Joe

23

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Minerals
Corporation premises. Doe Run was served on May 13, 2003. TheStraussnerlawsuit was settled in June 2004. A similar suit, Priesmeyer v. Union Carbide, et
al.was filed in the Circuit Court of Madison County, Illinois on May 16, 2002, but Doe Run has not been properly
served. Doe Run received notice that another similar suit,Hawrylak v. Allied Glove Corp., et al., (filed May 16, 2003) was filed in the Court of
Common Pleas of Lawrence County, Pennsylvania; however, no actual complaint has yet been served. On November 1, 2004, Doe Run was served withOverberg v. Arch City
Drywall Supply, et al., a case filed in the Circuit Court of the City of St. Louis against 35 defendants, including Doe Run, alleging that a contractor was injured by exposure
to asbestos while working at the defendants' locations, including the St. Joe Minerals Corporation premises. On December 31, 2004, Doe Run was served withPagano and
Roti v. Anheuser-Busch, Inc., et al.(filed December 17, 2004), a case filed with the Circuit Court of Madison County, Illinois against 43 defendants, including
Doe Run, by a person who did laundry for insulation workers in her family. The plaintiff alleges that the workers were exposed to asbestos at Doe Run's Herculaneum, Missouri facility.

On
December 26, 2003, Peru's tax authority, SUNAT, notified Doe Run Peru of an income tax assessment for the 1998 tax year. On December 23, 2004, assessments were received
for tax years 1999 through 2001. The assessments primarily relate to Doe Run Peru's income tax treatment of the December 1997 merger of Doe Run Peru and Metaloroya S.A., which was purchased by
Doe Run Peru in October 1997, and its effects on subsequent years' taxable income. Under the assessment by SUNAT, the tax basis of Doe Run Peru's fixed assets acquired would decrease, resulting
in lower tax depreciation expense than originally claimed. The assessed amount consisting of additional income taxes due, penalties and interest totals approximately $96.5 million. The Company
estimates that the effect of a similar assessment for tax years after 2001 would be approximately $0.8 million.

Furthermore,
Doe Run Peru would also be required to make additional workers' profit sharing payments equal to 8% of the increase in taxable income generated by the changes discussed
above, or approximately $5.8 million for tax years 1998 through 2004.

On
November 15, 2004, SUNAT notified Doe Run Peru of a Value Added Tax (VAT) assessment for the period from January through July 2004. On December 23, 2004.
Doe Run Peru received additional VAT assessments for tax years 1999 through 2001. The assessments primarily relate to Doe Run Peru's exports with holding certificates and differences in a tax credit
application. The total assessment for these periods was approximately $39.1 million. SUNAT offset the amount assessed for 2004 of $2.3 million against Doe Run Peru's VAT receivable
balance from July 2004. Future VAT reimbursements cannot be used to offset the assessment by SUNAT. The Company estimates expected additional assessments related to VAT for tax years 2002 and
2003 to total approximately $18.0 million in regard to its exports with holding certificates.

Management
of the Company believes that in each case Doe Run Peru has followed the applicable Peruvian tax statutes and intends to pursue all available administrative and judicial
appeals. Doe Run Peru is not required to make any payments pending the administrative appeal process. If Doe Run Peru is not successful in the administrative appeal processes and were to appeal in the
judicial system, some type of financial assurance would be required.

All
existing and pending litigation at the time of the acquisition of Doe Run Peru were retained by Centromin, the prior owner of the La Oroya smelter and Cobriza mine. Centromin has
also agreed to indemnify Doe Run Peru against environmental liability arising out of its prior operations and their apportioned share of any other complaint related to emissions.

Doe
Run Peru is a defendant in 123 lawsuits in the Lima, Peru labor courts that allege damage to workers from industrial diseases. Doe Run Peru has made claims in most of the cases
against Centromin and has also made claims against both governmental agencies and private companies that provide workers' insurance. The average claim is $18 thousand. Of seven concluded cases
in this category, six were dismissed and one resulted in a payment by Doe Run Peru of $9 thousand.

24

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Doe
Run Peru is also a defendant in 136 lawsuits by workers alleging that they are owed certain differences in salaries and benefits. The average claim is $23 thousand. Of 22
concluded cases in this category, 21 were dismissed and one resulted in a payment by Doe Run Peru of $2 thousand. Doe Run Peru is also a defendant in a lawsuit by the Yauli-La Oroya
Employees Union concerning salaries and benefits. The claims of the 150 workers remaining in the lawsuit total $0.7 million.

On
January 19, 2005, Doe Run Peru was served with a lawsuit by an association of municipalities of the Junin Region of Peru against Doe Run Peru and two other mining companies.
This lawsuit alleges environmental damages to the Mantaro River basin in the amount of $5.0 billion. Material liability to Doe Run Peru is believed to be remote because it is the opinion of
management and outside counsel for Doe Run Peru that the probability under Peruvian law of this case proceeding to a conclusion at the favor of the plaintiffs is low. Any potential judgment would be
subject to the indemnification obligations of Centromin, which are guaranteed by the Peruvian government.

Doe
Run is a party to a number of orders with various regulatory agencies that require ongoing expenditures for compliance. See "Item 8. Financial Statements and Supplementary
DataNote 19 to the Company's Consolidated Financial Statements" for a discussion of these matters.

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

Refer
to "Item 8. Financial Statements and Supplementary DataNotes 13, 19 and 20 to the Company's Consolidated Financial Statements" for further information regarding
the aforementioned legal proceedings.

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

No matters were submitted to a vote of security holders during the quarter ended October 31, 2004.

25

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Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

All of Doe Run's issued and outstanding 1,000 shares of common stock, $.10 par value, are owned by a single stockholder, DR Acquisition Corp. (DRAC), a wholly
owned subsidiary of Renco. There is no established public trading market for these shares. Renco is owned by trusts established by Mr. Ira Leon Rennert, Renco's Chairman and Chief Executive
Officer, for himself and members of his family. As a result of such ownership, Mr. Rennert controls Doe Run and its subsidiaries, subject to the provisions of the Investors Rights Agreement
discussed below.

Pursuant
to the Restructuring, Doe Run issued Warrants to purchase 644.7813 shares of its common stock, representing approximately 39% of Doe Run's common stock on a fully diluted basis,
to holders of the Old Notes who exchanged them for the Notes in the Restructuring. The Warrants expire on October 29, 2012 and are exercisable at any time after November 1, 2008. During
the period beginning on October 29, 2005 and ending on October 29, 2012, the Majority Warrantholders will have the right to require Doe Run to repurchase all, but not less than all, of
the Warrants and any outstanding shares issued upon the exercise thereof at a price equal to the fair market value of the Warrants, as determined by a third party appraisal. Doe Run and Renco each
have the right to call all, but not less than all, of the Warrants and any outstanding shares issued upon their exercise at any time after the borrowings from a credit facility governing the Term Note
are repaid and prior to the expiration of the Warrants, except that, if exercised by Doe Run within 48 months of the Restructuring, the Notes issued in the Restructuring must be redeemed by Doe
Run at the applicable redemption prices. The call price will be the greater of $10.0 million or the fair market value of the Warrants at such time, as determined by a third party appraisal.

On
October 29, 2002, Renco purchased 2,000 shares of Series A Redeemable Preferred Stock (Redeemable Preferred Stock) of Doe Run for $20.0 million. The Redeemable
Preferred Stock accrues dividends at a rate of 12.5% per annum, which are payable only in kind as long as the Term Note or Warrants are outstanding. The Redeemable Preferred Stock ranks senior to all
other classes of capital stock of Doe Run for purposes of liquidation preference and dividends and is redeemable, at the option of Renco, at any time after May 1, 2009. Renco was issued 251 and
282 shares on November 1, 2003 and October 31, 2004, respectively, as payment of the aforementioned dividends. See "Item 8. Financial Statements and Supplementary
DataNote 9 to the Company's Consolidated Financial Statements" for further information regarding the Redeemable Preferred Stock and related dividends.

Pursuant
to the Restructuring, Doe Run adopted new by-laws that expand the number of seats on the Board of Directors to three, including the one currently held by
Mr. Rennert. The Investor Rights Agreement provides that DRAC may elect two of these directors and the Majority Warrantholders may appoint one. The Independent Director nominated by the
Majority Warrantholders to serve on Doe Run's Board of Directors could have significant influence over the operations of Doe Run's business. Pursuant to the Investor Rights Agreement, Doe Run may not
take, nor permit any of its subsidiaries to take, certain actions without the approval of the Independent Director. These actions
include filing a voluntary bankruptcy petition, merging or consolidating with another entity, issuing capital stock or securities convertible into capital stock, making certain changes to its charter
documents or incurring certain levels of indebtedness.

The
Majority Warrantholders may, upon the occurrence of a "major default," as defined in the Investor Rights Agreement (which includes a payment default under the Term Note as described
in "Item 8. Financial Statements and Supplementary DataNote 8 to the Company's Consolidated Financial Statements"), appoint a director (the Special Director) to Doe Run's
Board of Directors who would have super-majority voting powers and be able to require Doe Run to undertake certain transactions. Upon such appointment, the Special Director would be entitled to cast a
majority of the votes at all meetings of directors, and Doe Run would be required to take any of the following actions if approved by the Special Director: (i) sell all of its capital stock or
of any of its subsidiaries, (ii) merge or consolidate itself or any of its subsidiaries with any other entity, and (iii) sell off any or all of its assets or any of its subsidiaries and
apply the proceeds of such sale to cure any payment default with respect to the Notes. The Special Director, if appointed to Doe Run's Board of Directors by the Majority Warrantholders, could have a
significant impact on the operation of Doe Run's business as well as its strategic direction.

The
indentures governing the Notes and Old Notes and Doe Run's credit facilities restrict its ability to pay dividends on its outstanding capital stock.

26

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Item 6. Selected Financial Data

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables set forth historical consolidated financial data of the Company for the five fiscal years ended October 31, 2004, which have been
derived from the Company's audited consolidated financial statements. It is important that the selected historical consolidated financial data presented below be read in conjunction with
"Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's audited financial statements and the accompanying notes included elsewhere in
this document.

The
cumulative effects of the changes in accounting principles presented below relate to the adoption of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations(Statement No. 143), in 2003 and to the adoption of Statement of Financial Accounting Standards
No. 133,Accounting for Derivative Instruments and Hedging Activities(Statement No. 133),in 2001.

|                              |                                                                                       | Year Ended October 31, |  
|----------------------------- | ------------------------------------------------------------------------------------- | ---------------------- | -
|
|
|Statement of Operations Data: |                                                                                       |                        |  
|                              | Net sales                                                                             |                        | $
|                              | Cost of sales                                                                         |                        |  
|                              | Depletion, depreciation and amortization                                              |                        |  
|                              | Selling, general and administrative expenses                                          |                        |  
|                              | Exploration expense                                                                   |                        |  
|                              | Losses from impairment and disposal of long-lived assets                              |                        |  
|                              | Unrealized (gain) loss on derivative financial instruments                            |                        |  
|                              |                                                                                       |                        |  
|                              | Operating income (loss)                                                               |                        |  
|                              | Interest expense                                                                      |                        |  
|                              | Interest income                                                                       |                        |  
|                              | Loss on retirement/restructure of long term debt                                      |                        |  
|                              | Other income (expense)                                                                |                        |  
|                              |                                                                                       |                        |  
|                              | Income (loss) before income tax expense and cumulative change in accounting principle |                        |  
|                              | Income tax expense (benefit)                                                          |                        |  
|                              |                                                                                       |                        |  
|                              | Income (loss) before cumulative change in accounting principle                        |                        |  
|                              | Cumulative effect of change in accounting principle net of income tax benefit         |                        |  
|                              |                                                                                       |                        |  
|                              | Net income (loss)                                                                     |                        | $
|                              |                                                                                       |                        |  

|                    |                                        | As of October 31, |  
|------------------- | -------------------------------------- | ----------------- | -
|
|
|Balance Sheet Data: |                                        |                   |  
|                    | Cash                                   |                   | $
|                    | Working capital                        |                   |  
|                    | Property, plant and equipment, net     |                   |  
|                    | Total assets                           |                   |  
|                    | Total debt (including current portion) |                   |  
|                    | Other noncurrent liabilities           |                   |  
|                    | Redeemable preferred stock             |                   |  
|                    | Shareholder's deficit                  |                   |  

27

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements of the Company and the notes thereto, and
other financial information included herein.

Overview

Metal prices

Metal prices rose dramatically in 2004. Lead prices increased from a LME settlement monthly average of $532.60 per short ton in October 2003 to $847.40 per
short ton in October 2004. The Company benefited from this price increase in both its U.S. operations' lead metal and lead concentrate sales. See further discussion below in
"Results of OperationsImpact of Metals Pricing."

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

Primary lead operations

In 2004, Doe Run made a significant change in its primary lead operations in the U.S. In response to declining demand in the U.S. for lead metal and increasing
global demand for clean lead concentrates, Doe Run indefinitely suspended operations at its Glover smelter in November 2003 and is selling on the
open market any concentrates not required to maintain production at its Herculaneum smelter, where the Company increased production in 2004.

Doe
Run also adjusted its mine production plan in the second quarter to take advantage of higher metal prices, including copper recovery equipment that was installed at its Buick
mine/mill to increase copper concentrate production. As a result, copper concentrate production for 2004 increased by 6,700 tons, or 48%, over 2003. The adjusted mine production plan also provided Doe
Run with the ability to mine at a lower ore grade than in the prior year in order to optimize Doe Run's ore reserves.

Recycling operation

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

Process
modifications have been implemented to increase the desulfurization capability of the battery breaking/desulfurization/crystallization (BDC) plant, which has improved the
facility's capability to process the new feed mix. Production levels are expected to improve, resulting in an additional 1,500 tons of lead metal production a month, and the Company believes results
of operations should improve in 2005 as a result.

Doe Run Peru

Doe Run Peru expects that it will not be able to comply with the spending requirements of La Oroya's PAMA investment schedule in 2005 and 2006 with respect to the
construction of the sulfuric acid plant required by the PAMA and, as a result, could be subject to penalties.

On
December 29, 2004 the Peruvian Government issued a Supreme Decree No. 046-2004-EM (Supreme Decree), which recognized that exceptional
circumstances may justify an extension of one or more projects within the scope of a PAMA. The Supreme Decree specifies that companies have until

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December 31,
2005 to apply for an extension. The maximum extension is for three years and the MEM may authorize an additional year based upon the results of a health risk study.

Doe
Run intends to apply for an extension to complete the construction of the sulfuric acid plant contemplated by the original PAMA.

The
application for a PAMA extension must be supported by a health risk study performed by a third party. The application must contain an engineering description and funding plan of any
project to be extended, a discussion of how and when environmental emission standards will be met, a plan to monitor emissions with the participation of the community, proof that at least three public
workshops were held in various districts to provide information on Doe Run Peru's financial situation and health programs, proof that two public hearings were held regarding the extension plans, and
other financial information. In order to meet these requirements, the Company does not expect to apply for the extension until the end of 2005.

Upon
approval of a modified PAMA, Doe Run Peru would be required to create a trust account. The trust account would administer the receipts and disbursements related to the extended PAMA
project. The Supreme Decree requires that receipts from sales, in an amount sufficient to fund the monthly cash requirements of the extended PAMA project, be remitted directly to the trust account.
Such an arrangement is prohibited by the Doe Run Peru Revolving Credit Facility, which expires on September 23, 2005. Accordingly, a renegotiated Doe Run Peru Revolving Credit Facility will
need to comply with the requirements established by the Supreme Decree, should Doe Run Peru's PAMA be extended.

The
Supreme Decree also requires that, within 30 days of the approval of the PAMA extension, the Company provide financial security in an amount equal to 20% of the projected cost
of the project or projects to be extended. The Company currently expects the overall investment required to build the sulfuric acid plant to be approximately $102.0 million. The Company cannot
assure that it will be successful in obtaining the necessary financial security required.

Doe
Run Peru will perform other environmental projects to reduce fugitive emissions, including heavy metal dust, to address the health issues of the community. The total cost of the
currently remaining PAMA projects, including the sulfuric acid plant construction, and these projects is approximately $143.0 million.

Management
believes that Doe Run Peru will obtain an approval of an extension to complete the sulfuric acid plant. There is no assurance, however, that Doe Run Peru will receive an
extension, or, if it does, that the project will be completed within the time limitation specified by the Supreme Decree.

Doe
Run Peru has developed a business plan that identifies several revenue generating and cost reduction activities. Management believes the plan will enhance liquidity, which would
improve Doe Run Peru's ability to make the investments under the proposed modifications to the PAMA. Revenue enhancement and cost reduction projects include the processing of zinc ferrites and an
effort to bring more recycled feed into the smelter. Cost reduction measures include manpower reductions through voluntary retirement and decreased power usage in the zinc circuit.

Doe
Run Peru has received assessments of income tax, including penalties and interest, and VAT totaling $96.5 million and $39.1 million, respectively. The income tax
assessments primarily relate to Doe Run Peru's income tax treatment of the December 1997 merger of Doe Run Peru and Metaloroya S.A., which was purchased by Doe Run Peru in October 1997,
and its effects on subsequent years' taxable income. Under the assessment by SUNAT, the tax basis of Doe Run Peru's fixed assets acquired would decrease, resulting in lower tax depreciation expense
than originally claimed. The VAT assessments primarily relate to Doe Run Peru's exports with holding certificates and differences in a tax credit application. See further discussion in
"Liquidity and Capital Resources." No amounts have been accrued as liabilities related to these assessments.

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Results of Operations

Impact of Metals Pricing

The Company's results for 2004 reflect significant increases in the market prices of lead, copper, zinc, and silver compared to 2003. The following table sets
forth average LME prices for lead, copper and zinc and the average London Bullion Market Association (LBMA) price for silver for the periods indicated:

Year Ended October 31,2004

2003

2002Average PricesLead ($/short ton)

$
759.00

$
436.20

$
416.40Copper ($/short ton)


2,452.00


1,535.40


1,392.60Zinc ($/short ton)


921.80


727.00


704.00Silver ($/troy ounce)


6.34


4.74


4.54


The
average annual LME lead price increased dramatically in 2004 by nearly $323.00 per short ton, or 74%. This increase was a result of several factors, including reduced supply of both
lead concentrates and lead metal in the world market and an increase in global lead demand, particularly from China. Previously, the price had declined approximately 38% from 1996 through 2003. These
low lead prices from 1996 through mid-2003 resulted in several lead producing mines closing, suspending operations or reducing production, mainly in North America and Australia.

In
the United States and Western Europe, lead demand continues to decline as lead consuming industries move to lower labor cost areas. In the U.S., this movement has been most pronounced
in automotive lead-acid batteries. Conversely, U.S. lead consumption in industrial batteries rebounded sharply in 2004 in line with overall economic improvements. The net result has been a
significant tightening in lead metal availability.

Copper
prices rebounded strongly in 2004. The copper price increased by nearly $917.00 per short ton, or 60% from 2003 to 2004. Again, Chinese demand was the main influence. The high
copper prices have resulted in several producers announcing the re-opening of closed mines or increasing copper production of existing mines. Several commodity-forecasting services are
predicting a surplus of copper concentrates in 2005, ultimately resulting in the copper market moving into balance by mid-2005.

Zinc
prices have also recovered from the lows set in 2002. Fundamentals for zinc improved as zinc metal consumption exceeded zinc production in 2004. Zinc prices, like lead and copper,
also benefited from a weak U.S. dollar.

Changes
in the market prices for metals expose the Company to variability in its cash receipts. The Company employs a commodity price risk management strategy using forward sales
commitments, futures and commodity put and call option contracts. 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. See the discussion in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk."

As
with lead prices mentioned above, low zinc and copper prices in the preceding five years have induced mine closures and cutbacks and slowed development of new copper, zinc and lead
projects. In addition, new smelting capacity has come on stream in China and India, increasing demand for concentrates. As a result, supplies of lead and zinc concentrates have been very tight. Copper
concentrates, however, are no longer in tight supply due to the re-opening of closed mines and increased copper production of existing mines. Smelters competing for concentrates in the
tight lead

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and
zinc market have driven treatment charges and penalties down significantly, and this decline has negatively impacted profitability of Doe Run Peru's La Oroya smelter.

Production

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

Year Ended October 31,2004

2003

2002U.S. OperationsLead metalprimary (short tons)

171,664

281,531

288,642Lead metalsecondary (short tons)

133,986

149,616

152,888Lead concentrates (metal content, short tons)

274,950

295,581

306,208Ore grade (lead)

5.73
%
6.53
%
6.23
%Peruvian OperationsRefined copper (short tons)

63,518

68,958

71,197Refined lead (short tons)

130,959

122,946

132,925Refined zinc (short tons)

75,163

80,679

85,093Refined silver (thousands of troy ounces)

35,804

35,305

34,291Refined gold (thousands of troy ounces)

66

82

94Copper concentrates (metal content, short tons)

16,683

17,944

17,306Ore grade (copper content)

1.10
%
1.10
%
1.02
%


In
response to strengthening lead metal market conditions at the beginning of 2004, the Company made a number of changes in its U.S. primary lead division during the year. The
Viburnum-29 and Viburnum-35 mines were taken off care and maintenance and placed back in production, and the Company mined at a lower lead grade of ore in the last three
quarters of 2004 in an effort to optimize the earnings on the mineral resources in the Company's mines. Lead grade of ore processed was lowered from a planned 6.25% to 5.73%, and the volume of ore
processed was increased by 160,000 tons, or 3%. Several significant ground falls were experienced while extracting pillars from the Buick mine in 2004 that resulted in the lower lead grade which
caused the lead metal contained in concentrates to be lower in 2004 than in 2003. Technical changes were made to the pillar recovery process that allowed the Buick mine to improve its production
performance in the last month of 2004.

The
Company also installed a copper pre-float circuit at its Buick mill in the first half of 2004 that enabled it to process more high grade copper ores from the
Viburnum-29 and Viburnum-35 mines and improve copper recoveries from the Buick mill. Major infrastructure improvement projects were implemented during the year at the Buick and
Sweetwater mills in an effort to improve mineral recovery and equipment availability. These improvements are expected to enable the Company to increase the throughput of total ore processed in 2005
and to improve the reliability of the mining operations' assets. Manpower at the U.S. primary lead division mining operations was increased by 16% throughout the year to process the higher ore volume
in 2004 and to prepare for a planned ore production increase at a lower grade in 2005.

As
a result of the startup costs for Viburnum-29 and Viburnum-35 mines, operating costs related to the addition of the copper pre-float circuit, lower
ore grade, infrastructure improvement costs, lower concentrate production and inflationary cost increases for many consumables, unit production costs in 2004 were approximately 30% higher than in
2003. These costs were partially offset due to the U.S. government granting Doe Run a lower royalty rate retroactively for 2002 and 2003. This benefit was applied towards the operating costs for 2004
and represented a $3.3 million reduction in costs.

In
2004, the primary smelter operations' lead metal production was 39% lower than in 2003 due to the indefinite suspension of operations at the Glover smelter. As a result, the Glover
smelter produced

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approximately
7,000 tons in 2004 versus 135,000 in 2003. Production at the Herculaneum smelter was approximately 165,000 tons for 2004. This was an increase of about 12% over the same period in 2003.
Despite the increase in production over the prior year, increased maintenance expenditures and higher raw material and alloy additive costs resulted in unit production costs in 2004 being
approximately 18% higher than in the prior year.

The
Company's recycling operation produced about 134,000 tons of finished lead products in 2004, or approximately 10% less than in 2003. The production shortfall was the result of
reduced availability of high lead content feed which changed the mix of feed processed by the recycling facility, and adversely affected production and costs. The recycling operation was able to
partially offset this loss of plant scrap feed by increasing the amount of battery scrap it processed. This processing increase was made
possible by the increased desulfurization capacity that was added to the facility during 2003 and 2004. Consecutive monthly records were set in September and October of 2004 for
batteries processed and reverb furnace lead produced as a result of the improvements. Unit production costs in 2004 were about 18% higher than in 2003, primarily as a result of the lower production,
increased maintenance costs and higher alloy additive costs. In 2004, the cost of feed materials was 62% higher than in 2003, primarily due to the shortage in supply of certain feed materials and
current market conditions.

A
permit to permanently expand the emissions capacity of the recycling operation to allow approximately 175,000 tons of production was received in January 2005. While production
capacity constraints will prevent production at the level allowed by the permit, the permit allows the Company's recycling facility to operate at higher levels without requiring annual approvals.

Doe
Run Peru's La Oroya smelter copper production was affected by frequent stoppages to reduce gaseous emissions and to perform maintenance on the reverberatory furnace, resulting in a
decrease in copper production of 8% in 2004 as compared to 2003. Temperature inversions experienced at La Oroya can trap gases in the mountain peaks surrounding the plant. In order to reduce the level
of gases, management may cease operations of the reverberatory furnace. The temperature inversions also caused increased maintenance to replace the bricks in the furnace, since repeated heating and
cooling shorten the life of the bricks. Receipts of lead concentrates improved in 2004, resulting in a 7% increase in lead production in 2004 compared to 2003. Feed costs increased substantially as a
result of the increase in metal prices. The lack of availability of ocean vessels for shipment of Doe Run Peru's products is also expected to remain an issue for the next several months.

Ore
production at Doe Run Peru's Cobriza mine in 2004 was approximately 7% lower than 2003, caused by ground stability and equipment availability issues. Management is implementing
corrective actions to address the ground stability issues based on studies by the Company's technical services personnel and outside consultants. Cobriza is in the process of obtaining new equipment,
which management believes should improve production volume.

The
aging of the Company's assets has resulted in increased maintenance costs to keep them in condition to operate at current levels. All operations have seen an increase in maintenance
costs over comparable periods in prior years.

Results
of operations for the years ended October 31, 2004, 2003, and 2002 include the results of the Company's U.S. operations and Doe Run Peru. In order to provide a more
meaningful analysis, the results of operations attributable to Doe Run Peru will be noted and discussed separately under "Results of Doe Run Peru."



Gross margin on sales(net sales less cost of sales) increased from $40.7 million in 2003 to
$84.5 million in 2004. Gross margin on sales for the Company's U.S. operations increased from $26.2 million in 2003 to $49.1 million in 2004. A 35% increase in the U.S.
operation's realized prices

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for
lead metal, fueled by higher LME prices, contributed an additional $61.4 million to Doe Run's U.S. operations' gross margin on sales in 2004 compared to prior year. The increase in the lead
metal net realized price in 2004 was less than the increase in the average LME settlement price, due to the effects of the Company's risk management strategy, which reduced the Company's exposure to
changes in the market price in an attempt to fix an acceptable price for its products. Increases in copper and zinc metal prices in 2004 fueled an increase in the net realized price for copper and
zinc concentrate sales, which contributed an additional $9.1 million to gross margin compared to 2003. The sale of lead concentrates contributed an additional $9.4 million to margins in
2004 over 2003. These increases were offset by higher costs per unit of metal produced at the U.S. operations driven by the increases in repairs and maintenance costs, payroll and benefit costs,
higher feed and raw material costs and the effects of the change in feed mix on the production at the recycling operation.

Selling, general and administrative costsincreased $7.5 million in 2004 compared to 2003, $1.5 million of which relates to
Doe Run Peru. The remaining increase was due primarily to insurance refunds received in 2003 applicable to legal fees incurred in a previous fiscal year and credited to selling, general and
administrative costs, and to increased salaries and employee benefit costs and insurance expense.

Losses from impairment and disposal of long-lived assetsrelate primarily to recognition of impairment losses for the value of
houses purchased in Herculaneum relating to properties purchased under a residential property purchase plan in the town of Herculaneum.

As
of December 31, 2004, a total of 147 homeowners had requested offers, and 111 of 138 delivered offers had been accepted. As of December 31, 2004, the Company had spent
approximately $7.9 million under the residential property purchase plan, with another $0.7 million in accepted offers awaiting a closing date and $2.2 million in outstanding
offers. Management cannot estimate how many of the remaining homeowners will accept offers.

Unrealized losses on derivative financial instrumentsare related to the change in fair market value of derivative financial instruments
that were a part of Doe Run's risk management strategy. The decrease in unrealized losses in 2004 compared to 2003 is the result of the substantial increase in the LME price
at the end of 2003, which caused large unrealized losses to be recognized in the fourth quarter of 2003. See also "Item 7A. Quantitative and Qualitative Disclosures About Market Risk."

Income tax expense (benefit)in 2004 reflects a reversal of a U.S. federal income tax liability and a change in tax law in Peru. In 2004,
the Company reversed a U.S. federal income tax liability related to years that are closed to audit of $2.8 million. Offsetting this reversal were taxes of $2.2 million paid in the third
quarter of 2004 pursuant to a law passed in Peru in December 2003, under which certain technical services that Doe Run provided under an agreement with Doe Run Peru are taxed at 30%.

Renco
has elected for the Company to be treated as a qualified subchapter S subsidiary (QSSS) for U.S. federal tax purposes. Most states in which the Company operates will follow similar
tax treatment. QSSS status requires the ultimate shareholders to include their pro rata share of the Company's income or loss in their individual tax returns. As a result of the Company's tax status
in the U.S., the Company is not generally subject to U.S. federal and most state income taxes, however, under a tax sharing agreement with Renco, the Company is liable to Renco for pro forma federal
and state income taxes as defined in the agreement. See "Item 13. Certain Relationships and Related Transactions" for more information.

Cumulative effect of change in accounting principleresulted in a charge of $3.9 million in the first quarter of 2003, which
relates to the adoption of Statement No. 143.

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Gross margin on sales(net sales less cost of sales) decreased from $49.2 million in 2002 to
$40.7 million in 2003. Gross margin on sales for the Company's U.S. operations increased from $18.4 million in 2002 to $26.2 million in 2003. Net sales increased in 2003 from
2002, primarily due to the results of Doe Run Peru. U.S. net sales increased slightly in 2003 compared to 2002, primarily due to higher realized prices for lead metal and copper, zinc and lead
concentrates, and partially offset by lower volume of lead metal, due to the soft domestic market and the reduction of production. The LME average lead price increased during 2003, with the majority
of this increase occurring in the fourth quarter. However, the increase in cost of sales more than offset the increase in sales. The consolidated increase in cost of sales was driven by Doe Run Peru
as discussed below. U.S. cost of sales in 2003 was slightly less than 2002, primarily due to lower lead metal and zinc concentrate sales volumes along with operating cost reductions at the primary
lead operations, driven by lower headcount and reduced overtime, and partially offset by higher energy costs. More efficient production due to higher ore grades also contributed to the lower costs.

Selling, general and administrative costsdecreased $0.1 million from 2002 primarily from the results of U.S. operations, which
were largely due to an increase of $1.3 million in insurance reimbursements in 2003 for legal fees incurred in prior years offset by an increase in Doe Run Peru's costs.

Losses from impairment and disposal of long-lived assetsdecreased primarily at Doe Run Peru as discussed below. In 2003, the
U.S. operations wrote down the value of properties purchased in Herculaneum, near the Company's primary smelter. The loss in 2002 related to the write-down of Herculaneum properties in
addition to the permanent cessation of operation of a blast furnace at the Herculaneum smelter that was dismantled in 2003.

Unrealized (gains) losses on derivativesrelates to the change in fair market value of derivative financial instruments pursuant to
Statement No. 133. In 2003 the Company experienced an unrealized loss, compared to an unrealized gain in 2002. In the U.S., the loss was primarily the result of the substantial increase in the
LME price at the end of 2003. These unrealized losses required the payment of margin to brokers.

Interest expensedecreased $42.1 million in 2003 compared to 2002 primarily as a result of the Restructuring and the related
accounting for the transaction and the repayment of Doe Run Peru's note payable to a foreign bank discussed inInterest incomebelow.

Interest incomedecreased $12.2 million in 2003 versus 2002 due primarily to the loss of the U.S. operation's interest income on
the $125 million that it had on deposit with a foreign bank (the Special Term Deposit) used to collateralize Doe Run Peru's note payable to a foreign bank. On September 12, 2002, The
Special Term Deposit was tendered to repay the note.

Loss on retirement/restructure of long-term debtrepresents costs related to the issuance of the Notes and the Term Note in
accordance with Statement No. 15.

Income tax expensereflects the provision for the Company's Peruvian subsidiaries. Renco elected for the Company to be treated as a QSSS
for federal tax purposes. Most states in which the Company operates will follow similar tax treatment. QSSS status requires the ultimate shareholders to include their pro rata share of the Company's
income or loss in their individual tax returns. As a result of the Company's tax status in the U.S., the Company is generally not subject to U.S. federal and most state income taxes.

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

34

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Results of Doe Run Peru



Gross margin on sales(net sales less cost of sales) for Doe Run Peru increased from $14.5 million in 2003
to $35.4 million in 2004. The increase in metal prices also benefited Doe Run Peru, contributing to price related increases of $32.2 million to gross margin in 2004. Conversion costs
increased slightly due to increases in maintenance, fuel and coke costs. Maintenance expense increased as Doe Run Peru completed maintenance programs originally scheduled for 2003 in 2004. These
increases were partially offset by lower labor costs as the benefits of a 2003 reduction in labor were realized in 2004.

Selling, general and administrative costsfor Doe Run Peru increased by $1.5 million in 2004 compared to the prior year. The
difference is due primarily to increases in contributions to community and regional activities, compensation costs and professional fees, partially offset by a decrease in insurance expense.

Other, netfor Doe Run Peru decreased in 2004 compared to 2003, primarily due to exchange losses on transactions denominated in Peruvian
nuevos soles as a result of the effect of an increase in the value of nuevos soles against the U.S. dollar.

Income tax expensefor Doe Run Peru was $0 in 2004 and 2003, reflecting tax losses and management's belief that sufficient uncertainty
exists regarding the realization of certain deferred tax assets, which requires that a valuation allowance be established.



Gross margin on sales(net sales less cost of sales) for Doe Run Peru decreased from $30.8 million in 2002
to $14.5 million in 2003. Net sales for 2003 increased compared to 2002 primarily due to higher realized prices for all major metals and an increase in sales volume for silver, partially offset
by a decrease in sales volume for copper, lead, zinc and gold. Compared to 2002, the increases in LME prices contributed $26.2 million to the net sales increase. Higher sales volumes for
silver, reflecting higher production levels, and an increase in byproduct sales also contributed to the increased sales in 2003. These increases were partially offset by lower sales volume for all
major metals, except silver, resulting from the reduced feed available at La Oroya. However, the increase in cost of sales more than offset the increase in sales. Cost of sales increased for 2003 from
2002 due primarily to higher feed cost and the higher unit conversion costs at La Oroya, which were partially offset by improved unit production cost at Cobriza and reduced production volume. Feed
costs were higher due to the increases in market prices for copper, zinc, silver and gold and to significantly lower treatment charges for concentrates purchased. Lead, zinc and copper concentrate
treatment charges declined 14%, 13% and 17%, respectively, in 2003, due to the very tight supply situation in the world market and the resultant competition for concentrates by smelters.

Losses from impairment and disposal of long-lived assetsfor Doe Run Peru decreased from $8.0 million in 2002 to
$0.1 million in 2003. The loss recorded in 2002 related to the write off of the backfill plant at the Cobriza mining operation, which was determined to be uneconomical to complete and operate.

Interest expensefor Doe Run Peru decreased from $14.8 million in 2002 to $2.6 million in 2003 due primarily to the
reduction of Doe Run Peru's long-term debt resulting from Doe Run's Special Term Deposit being tendered to repay the Note.

Other, netfor Doe Run Peru decreased in 2003, primarily due to exchange losses on transactions denominated in Peruvian nuevos soles as a
result of the effect of an increase in the value of nuevos soles against the U.S. dollar.

35

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Income tax expensefor Doe Run Peru was $0 in 2003 and 2002 reflecting management's belief that sufficient uncertainty exists regarding
the realization of certain deferred tax assets, which requires that a valuation allowance be established.

Liquidity and Capital Resources

The Company is highly leveraged and has significant commitments for environmental matters and PAMA expenditures that require it to dedicate a substantial portion
of cash flow from operations to the payment of these obligations, which will reduce funds available for other business purposes. See "Contractual
Obligations"for a summary of these and other contractual obligations. These factors also increase the Company's vulnerability to general adverse conditions, limit the
Company's flexibility in planning for or reacting to changes in its business and industry, and limit the Company's ability to obtain financing required to fund working capital and capital expenditures
and for other general corporate purposes. An unfavorable outcome to the lawsuits and tax assessments in Peru, as discussed in "Item 3. Legal Proceedings", would have a further adverse effect on
the Company's ability to meet its obligations when due. These factors are discussed in more detail below.

The
Company's primary available sources of liquidity are cash provided by operating activities and its two revolving credit facilities. The Doe Run Revolving Credit Facility allows Doe
Run and certain U.S. subsidiaries to borrow up to $75.0 million and expires October 29, 2005. The availability of loans under the Doe Run Revolving Credit Facility is limited to a
percentage of eligible U.S. accounts receivable and inventories, less any outstanding loans and letters of credit. All cash received by Doe Run's domestic operations is transferred by wire daily to
the financial institutions to pay down the outstanding loan balance, if any. The Doe Run Peru Revolving Credit Facility expires September 23, 2005 and provides Doe Run Peru with working capital
loans up to $40.0 million, with a limit on letters of credit of $5.0 million, but the total commitments may not exceed the maximum line of $40.0 million.

Net
unused availability at October 31, 2004 under the Doe Run Revolving Credit Facility and Doe Run Peru Revolving Credit Facility was approximately $22.5 million and
$30 thousand, respectively. In addition to the availability under its revolving credit facilities, cash balances at Doe Run and Doe Run Peru were $13.4 million and $6.9 million,
respectively, at October 31, 2004. Net unused availability at October 31, 2003 was approximately $14.4 million and $3.8 million under the Doe Run Revolving Credit Facility
and Doe Run Peru Revolving Credit Facility, respectively, and cash balances at Doe Run and Doe Run Peru were $2.9 million and $16.8 million, respectively, at October 31, 2003.
Availability improved under the Doe Run Revolving Credit Facility over the last year as a result of the higher metals prices and improved financial performance. In Peru, higher metal prices resulted
in higher outlays for concentrate purchases and higher VAT payments funded by cash from operations, as Doe Run Peru has reached its maximum borrowing level under the Doe Run Peru Revolving Credit
Facility.

The
Company's auditors issued unqualified opinions on the 2004 audited financial statements of the Company and of Doe Run Peru that expressed substantial doubt about the Company's and
Doe Run Peru's ability to continue as going concerns due to net capital deficiencies, substantial debt service requirements, and significant capital requirements under environmental commitments. The
Company's auditors issued unqualified opinions on the 2003 audited financial statements of the Company and of Doe Run Peru that expressed doubt about the Company's and Doe Run Peru's ability to
continue as going concerns due to, among other things, liquidity concerns, defaults under loan agreements, uncertainties related to environmental and litigation matters, as well as recurring losses.

The
Company has substantial debt service requirements in the future, as shown in "Contractual Obligations," including the maturities in
2005 of $15.5 million for the Term Note and $7.5 million for the Old Notes. The Doe Run Revolving Credit Facility and the Doe Run Peru Revolving Credit Facility expire in the fourth
quarter of 2005, and will require renegotiation to extend their term. Furthermore, a renegotiated Doe Run Peru credit facility will need to comply with the cash assignment requirements

36

---



established
by the Supreme Decree, should Doe Run Peru's PAMA be extended, as discussed in the "Overview." There can be no assurance that the Company
will be successful in renewing the agreements, or if it is successful, that the renewal would be at terms favorable to the Company. Discussions have been held with Renco to extend the Term Note, but
there can be no assurance that the term will be extended. The Term Note also requires prepayments based on an annual cash flow measurement after the annual financial statements are provided to the
lender. Based on the results of the cash flow measurement for the year ended October 31, 2004, a prepayment of approximately $11,000 would be required in the second quarter of 2005. On
February 25, 2005, Renco waived the Company's requirement to make the payment, which will take effect once the defaults with respect to the delivery of audited financial statements and other
reporting requirements noted below are cured.

Pursuant
to the Restructuring, debt holders exchanged Old Notes with an aggregate principal amount of $294.8 million, or 97% of the $305.0 million of Old Notes outstanding,
plus unpaid accrued interest of $37.5 million, for the Notes with a principal amount of $175.8 million, and the Warrants described in "Item 5. Market for Registrant's Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities." In addition to the reduction of principal, the Notes improved the Company's liquidity by extending the maturity date to
November 1, 2008, and provided that a portion of interest may be paid in kind with the issuance of additional notes whereby, through October 15, 2005, interest may be paid, at the option
of Doe Run, at an annual rate of either 3% in cash and 11.5% paid in kind or 8.5% paid in cash. After October 15, 2005, interest will accrue at the rate of 11.75% per annum and will be payable
in cash. The Notes are recorded in accordance with Statement No. 15. See the discussion inSignificant Accounting Policies and Estimatesfor a
description of Statement No. 15. The effect of this accounting is that Doe Run will recognize substantially less interest expense related to the Notes during their term than is reflected in the
stated rate of interest, because the majority of the interest payments are reflected in the carrying amount of the Notes.

The
Company's balance sheet reflected $417.3 million and $408.7 million of total debt on a consolidated basis as of October 31, 2004 and 2003, respectively. The face
amount of indebtedness outstanding at October 31, 2004 was $313.2 million, an increase of $33.7 million from the balance at October 31, 2003 of $279.5 million. The
increase in debt is primarily a result of the issuance of additional notes totaling $23.2 million as payment in kind of interest on the Notes and an increase in the Doe Run Revolving Credit
Facility due to an increase of cash in Doe Run's lockbox that had not yet been swept to pay down the loan account.

The
Company was in compliance with its covenants under its various agreements as of October 31, 2004, with the exception of the delivery of audited financials and other reporting
requirements for the
year ended October 31, 2004 by January 29, 2005 under the Doe Run Revolving Credit Facility and the Term Note.

During
the period beginning on October 29, 2005 and ending on October 29, 2012, the Majority Warrantholders will have the right to require Doe Run to repurchase all, but
not less than all, of the Warrants and any outstanding shares issued upon the exercise thereof at a price equal to the fair market value of the Warrants, as determined by a third party appraisal.
Management engaged a nationally recognized valuation firm to calculate the fair value of the Warrants. Management's estimate of the fair value of the Warrants based on the valuation is approximately
$0.6 million at October 31, 2004.

The
Doe Run Revolving Credit Facility, the Doe Run Peru Revolving Credit Facility, the Term Note and the indenture governing the Notes contain numerous covenants and restrictions. They
include certain requirements with respect to net worth, working capital, EBITDA and debt to earnings ratios. These agreements also place limitations on capital expenditures, dividend payments and
other outside borrowings. The Doe Run Peru Revolving Credit Facility also contains covenants that restrict Doe Run Peru's ability to make distributions to Doe Run in excess of a $4.0 million
management fee.

37

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The
Company is a party to lawsuits arising from operations at various facilities as discussed in "Item 3. Legal Matters."

The
Company's commitments under agreements with regulatory agencies for environmental activities are significant. The Company's recorded liability for environmental matters and asset
retirement obligations was $35.0 million at October 31, 2004, which does not include capital expenditures related to Doe Run Peru's PAMAs. Spending estimates may change based on the
activities required, which could have a significant adverse impact on the Company's liquidity.

Doe
Run Peru's existing PAMA requires it to perform projects in 2005 and 2006 at a total cost of $121.2 million Doe Run Peru expects that it will not be able to comply with the
spending requirements of the PAMA investment schedule in 2005 and 2006 and could be subject to penalties. Doe Run Peru will submit an application for extension discussed in the
"OverviewDoe Run Peru" to modify the requirements of the existing PAMA and extend the term of the PAMA. Doe Run Peru will perform other
environmental projects to reduce fugitive emissions, including heavy metal dust, to address the health issues of the community. The total cost of the currently remaining PAMA projects, including the
sulfuric acid plant construction, and these projects is approximately $143.0 million. If the extension of the PAMA is approved, management expects to fund the PAMA projects from cash from
operations. Failure to comply with the PAMA could result in the cessation of operations at the La Oroya smelter. See the discussion of PAMA requirements and compliance in "Item 1.
BusinessDoe Run Peru OperationsEnvironmental Matters." A default
under the requirements of the PAMA could result in a default under the Doe Run Peru Revolving Credit Facility. A default under the Doe Run Peru Revolving Credit Facility would result in a default
under the Doe Run Revolving Credit Facility.

Doe
Run Peru has received assessments of income tax, including penalties and interest, and VAT totaling $96.5 million and $39.1 million, respectively. In addition, the
Company estimates that the effect of similar assessments for periods not yet assessed would be approximately $0.8 million and $18.0 million for the income tax and VAT matters,
respectively. Furthermore, Doe Run Peru would also be required to make additional workers' profit sharing payments equal to 8% of the increase in taxable income generated by the changes discussed
above, or approximately $5.8 million for tax years 1998 through 2004.

Management
of the Company believes that in each case Doe Run Peru has followed the applicable Peruvian tax statutes and intends to pursue all available administrative and judicial
appeals. Doe Run Peru is not required to make any payments pending the administrative appeal process. If Doe Run Peru is not successful in the administrative appeal processes and were to appeal in the
judicial system, some type of financial assurance would be required, which would have a significant adverse effect on liquidity.

Effective
July 1, 2004, Doe Run and Doe Run Peru cancelled a sales agency agreement under which Doe Run acted as a sales agent on behalf of Doe Run Peru. Under the cancellation,
the balance owed to Doe Run of $22.6 million will be paid in $1.0 million quarterly installments or as otherwise agreed by the parties.

Management
believes that the price improvements and other revenue enhancements, and the issuance of the Supreme Decree allowing an application to extend La Oroya's PAMA requirement for
the construction of the sulfuric acid plant will enable the Company to continue as a going concern. The Company's ability to meet obligations after 2005 could be affected by the factors discussed in
"Item 1. BusinessRisk Factors" or an unfavorable outcome to the items noted above, and, accordingly, no assurance can be given that
it will be able to meet such obligations.

During
2004, net cash provided by operating activities was $21.6 million. Cash used by investing activities was $29.7 million, primarily for capital expenditures. Cash
provided by financing activities was $8.8 million in 2004, which reflects proceeds from the revolving loan less payments on long-term debt.

38

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The
Company made all scheduled principal and interest payments on its long-term debt balances in 2004. Increases in accounts receivable, inventories and prepaids and other current assets
were almost entirely offset by increases in current maturities of long-term debt and accounts payable.

The
Company had capital expenditures of $29.8 million in 2004 and has projected capital expenditures of approximately $58.8 million for 2005, including spending on Doe Run
Peru's PAMA projects. In the U.S., the Company had capital expenditures of $10.7 million in 2004 and has projected total capital expenditures of approximately $21.7 million for 2005,
primarily to fund expansion, to support ongoing operations and for operational and environmental improvements, including expenditures required pursuant to a settlement agreement with the State of
Missouri that established a residential property purchase plan in Herculaneum. See "Item 8. Financial Statements and Supplementary DataNote 19 to the Company's Consolidated
Financial Statements." The Company was also able to replace during 2004 several pieces of older mining equipment, which had become expensive to repair and maintain, with new or newer pieces of
equipment. In addition to these capital investments, the Company's U.S. operations expended approximately $66.5 million, $51.3 million and $52.0 million on repairs and maintenance
for 2004, 2003 and 2002, respectively. Doe Run Peru had capital expenditures of $19.1 million in 2004 and has projected capital expenditures of approximately $37.1 million for 2005,
primarily for PAMA projects and to support ongoing operations. Doe Run Peru expended approximately $19.6 million, $16.8 million and $16.7 million on repairs and maintenance for
2004, 2003 and 2002, respectively. As a result of these expenditures, the Company believes that it operates and will continue to maintain modern and efficient facilities.

Off-Balance Sheet Arrangements

In the normal course of business, the Company is involved in certain off-balance sheet arrangements. These include letters of credit, surety bonds and
joint and several liability with all other members of a controlled group under ERISA for obligations of other members of the controlled group. Liabilities related to these arrangements are not
reflected in the Company's consolidated balance sheets. The Company does not expect any material adverse effect on the results of operations, financial condition and liquidity to result from these
off-balance sheet arrangements. See "Item 1. BusinessRisk FactorsRisks Relating to Control by
RencoCertain Pension Controlled Group Liabilities" for more information on the pension controlled group liabilities.

Contractual Obligations

The following table summarizes the Company's contractual obligations at October 31, 2004 (in millions):

|                              |       |   |       | Payments Due By Period |  
|----------------------------- | ----- | - | ----- | ---------------------- | -
|
|Long-term debt(a)             |       | $ | 313.2 |                        | $
|Redeemable Preferred Stock(b) |       |   | 25.3  |                        |  
|Operating leases              |       |   | 23.4  |                        |  
|Purchase obligations(c)       |       |   | 711.0 |                        |  
|Royalty obligations(d)        |       |   | 1.7   |                        |  
|Pension funding obligations   |       |   | 9.0   |                        |  
|                              |       |   |       |                        |  
|                              | Total |   | $     | 1,083.6                |  
|                              |       |   |       |                        |  

---



39

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For
a discussion of environmental and reclamation obligations, see "Item 8. Financial Statements and Supplementary DataNote 19 to the Company's Consolidated
Financial Statements." The Company's recorded liability for environmental matters and asset retirement obligations (AROs) was $35.0 million at October 31, 2004. Timing of the related
spending is dependent upon a number of factors, including the required completion date of reclamation work under agreements with regulatory agencies and the date of facility closures. Therefore, these
obligations are not included in the table. The table also does not include costs related to Doe Run Peru's PAMA, as Doe Run Peru expects to submit an application for extension of its PAMA (see the
discussion in "Overview" and "Liquidity and Capital Resources").

Significant Accounting Policies and Estimates

The consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation.
Significant accounting policies and estimates that most impact the consolidated financial statements are those related to revenue recognition, mineral interests, impairment of long-lived
assets, estimated liabilities for environmental and legal claims, income taxes, pension benefits and derivative instruments.

Sales
are recorded as products are delivered to customers or as tolling services are performed. Concentrate and certain smelter product sales are recorded based upon estimated weights
and metal contents and metal prices in effect at time of delivery. Revenues are adjusted between month of delivery and month of settlement based on changes in market prices. Adjustments with respect
to such sales are recorded based on final settlement weights, metal contents and metal prices pursuant to applicable customer agreements.

40

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Mineral
interests are amortized using the units of production method. The Company's ore reserves are based on geological studies and test hole drillings conducted by the Company's
geologists. These estimates are reviewed and certified periodically by an independent mining consultant. The most recent independent report on the Company's ore reserves was issued in
January 2004. Ore reserves can and do
fluctuate with the underlying market price or prices of the metals to be mined. As such, there can be no assurances that the reserves currently reported would be economical to mine in the future.

Long-lived
assets, such as property, plant and equipment, and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the
estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the
amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying
amount or fair value less costs to sell and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and
liability sections of the balance sheet.

The
Restructuring was accounted for in accordance with Statement No. 15. Under Statement No. 15, a debtor may not change the carrying amount of the payable at the time of
restructuring unless the total future cash payments, including interest, specified by the new terms are less than the carrying amount of the payable at the time of restructuring. Under the terms of
the 11.75% Notes, total expected payments, including all amounts contingently payable, will be greater than the carrying amount of the Old Notes exchanged. In accordance with Statement No. 15
the 11.75% Notes are recorded on the balance sheet at a carrying amount equal to the carrying amount of the notes exchanged, including unpaid accrued interest, reduced by deferred issue costs related
to the Old Notes exchanged and the fair value of the warrants issued.

The
Company accrues for loss contingencies, including costs associated with environmental remediation obligations, when it is probable that a liability has been incurred and can be
reasonably estimated. Liability estimates for environmental remediation obligations are based on an evaluation of, among other factors, currently available facts, existing technology, presently
enacted laws and regulations, the Company's experience in remediation, the Company's status as a potentially responsible party (PRP) and the ability of other PRPs to pay their allocated portions.
Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of costs from other parties are recorded as assets when their receipt is
deemed probable, as is consistent with the American Institute of Certified Public Accountants Statement of Position 96-1,Environmental Remediation
Liabilities. However, there can be no assurance established liabilities will be sufficient to cover the costs of the actual commitments or that in the future new commitments
will not arise that could have a material adverse effect on the results of operations, financial condition and liquidity of the Company. See "Item 8. Financial Statements and Supplementary
DataNotes 19 and 20 to the Company's Consolidated Financial Statements" for a more detailed discussion of environmental and litigation matters.

As
of November 1, 2002, the Company adopted Statement No. 143, 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. Prior to the adoption of Statement No. 143 the Company accrued for mine and other closure obligations at their estimated,
undiscounted cost. Statement No. 143 requires that the fair value of a liability for an ARO 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. These

41

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liabilities
will be increased to full value over time through charges of accretion to operating expense. Changes in the ARO liability resulting from revisions to the timing or the amount of the
original estimate of undiscounted cash flows shall be recognized as an increase or a decrease in the carrying amount of the liability for an ARO and the related asset retirement cost capitalized as
part of the carrying amount of the related long-lived asset. 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
cumulative effect related to the adoption of Statement No. 143 for the year ended October 31, 2003 was a loss of $3.9 million, a net decrease to plant, property
and equipment of $2.1 million and an increase of $1.9 million to the liability for asset retirement obligations.

Renco
has elected for the Company to be treated as a QSSS for U.S. federal tax purposes. Most states in which the Company operates will follow similar tax treatment. QSSS status requires
the ultimate shareholders to include their pro rata share of the Company's income or loss in their individual tax returns. The election does not affect foreign income taxes related to the Company's
foreign subsidiaries.

Deferred
tax assets and liabilities are recognized in foreign jurisdictions for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and the respective tax bases of these assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. Management believes that sufficient uncertainty exists regarding the realization of certain deferred
tax assets such that a valuation allowance is required.

Doe
Run sponsors a noncontributory defined benefit plan for its U.S. employees. The Company has also adopted a supplemental defined benefit plan, the Supplemental Employee Retirement
Plan (SERP), effective November 1, 1996. The SERP provides benefits to those participants of the defined benefit plan whose benefits under the plan are limited by Sections 401(a)(17) or 415 of
the Internal Revenue Code. Changes in the assumptions used to calculate Doe Run's accumulated benefit obligation and periodic pension cost can have a significant effect on the Company's results of
operations.

The
Company carries all derivative instruments in the balance sheet at fair value. The accounting for changes in the fair value (that is, gains and losses) of a derivative instrument
depends on whether it has been designated and qualifies as part of a hedging relationship, and if so, whether the derivative instrument is designated as a hedge of exposures to changes in fair value
or cash flows. If the hedged exposure is an exposure to changes in the fair value of a fixed commitment, the gain (loss) is recognized in earnings in the period of change, with an equal and offsetting
(loss) gain recognized on the change in value of the hedged item. If the hedged exposure is an exposure to changes in forecasted cash flows, the effective portion of the gain (loss) is reported as a
component of other comprehensive income (outside earnings) until the forecasted hedged transaction affects earnings, when it is reclassified into earnings.

Recent Accounting Pronouncements

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, "Inventory Costsan amendment of ARB
No. 43, Chapter 4," which requires that amounts of idle facility expense, freight, handling costs, and wasted material be recognized as current-period charges. In addition, the Statement
requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company does not expect the adoption of this
interpretation to have a material impact on its financial statements.

In
December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, "Exchanges of Nonmonetary Assetsan amendment of APB Opinion
No. 29," which amends

42

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Opinion 29
to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have
commercial substance. The Company does not expect the adoption of this interpretation to have a material impact on its financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

In the normal course of its business, the Company has used in the past, and may use in the future, forward sales commitments and commodity put and call option
contracts to manage its exposure to fluctuations in the prices of lead, copper, zinc, silver and gold. Contract positions are designed to ensure that the Company will receive a defined minimum price
for certain quantities of its production. None of the aforementioned activities have been entered into for speculative purposes. See "Item 8. Financial Statements and Supplementary
DataNote 18 to the Company's Consolidated Financial Statements" for a more detailed discussion of the Company's use of hedging and derivative financial instruments. A 10% increase
in metal prices would result in additional losses of approximately $0.8 million to the Company related to open contracts at October 31, 2004, which would be offset by higher prices on
the Company's sales of physical metal.

Interest Rate Risk

The Company is subject to interest rate risk on variable interest rate obligations. The Doe Run Revolving Credit Facility bears interest at the prime rate plus 1%
per annum. The Doe Run Peru Revolving Credit Facility bears interest at LIBOR (1-month, 3-month or 6-month rate, depending on the term of the loan) plus 3.5% per
annum. A material increase in interest rates could adversely affect the Company's business, financial condition and results of operations. A 1% increase in the interest rate under the Doe Run
Revolving Credit Facility and the Doe Run Peru Revolving Credit Facility would result in additional annual interest expense of approximately $0.7 million, based on the loan balances outstanding
as of October 31, 2004.

Foreign Currency Risk

Doe Run Peru's sales and feed costs are denominated in U.S. dollars. Certain operating costs, such as labor, are denominated in Peruvian nuevos soles. While all
revenues and significant costs are denominated in U.S. dollars, a material weakening of exchange rates could still have an adverse affect on the Company's business, financial condition and results of
operations.

Item 8. Financial Statements and Supplementary Data

Financial statements and supplementary data follow immediately and are listed in Item 15 of Part IV of this report.

43

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board
of Directors and Shareholders
The Doe Run Resources Corporation
St. Louis, Missouri

We
have audited the accompanying consolidated balance sheet of The Doe Run Resources Corporation and subsidiaries as of October 31, 2004 and the related consolidated statements of
operations, comprehensive losses and shareholders' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Doe Run Resources Corporation and
subsidiaries as of October 31, 2004, and the results of their operations and their cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial
statements, the Company has a net capital deficiency, substantial debt service requirements, and has significant capital requirements under environmental commitments that raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.



Oak
Brook, Illinois

January 6,
2005, except for
    Note 20 as to which the date
    is January 19, 2005

44

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The
Board of Directors
The Doe Run Resources Corporation:

We
have audited the accompanying consolidated balance sheet of The Doe Run Resources Corporation and subsidiaries (the Company) as of October 31, 2003, and the related
consolidated statements of operations, comprehensive income (losses) and shareholder's equity (deficit), and cash flows for each of the years in the two-year period ended
October 31, 2003. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Doe Run Resources Corporation and
subsidiaries as of October 31, 2003, and the results of their operations and their cash flows for each of the years in the two-year period ended October 31, 2003 in
conformity with U.S. generally accepted accounting principles.

The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated
financial statements, the Company has suffered recurring net losses, has a net capital deficiency, and has liquidity concerns that raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of
this uncertainty.

As
discussed in Notes 1 and 19 to the consolidated financial statements, the Company adopted the provisions of SFAS No. 143,Accounting for Asset
Retirement Obligations, as of November 1, 2002.

KPMG
LLP

February 2,
2004

45

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

|                                                                                                                                                                                                                                 |                                                                                                      | October 31,
2004                            |         | October 31,
2003 |         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------------------------------- | ------- | ---------------- | --------
|ASSETS                                                                                                                                                                                                                           |                                                                                                      |                                             |         |                  |         
|Current assets:                                                                                                                                                                                                                  |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 | Cash                                                                                                 |                                             | $       | 20,318           |         
|                                                                                                                                                                                                                                 | Trade accounts receivable, net of allowance for doubtful accounts                                    |                                             |         | 64,219           |         
|                                                                                                                                                                                                                                 | Inventories                                                                                          |                                             |         | 103,309          |         
|                                                                                                                                                                                                                                 | Prepaid expenses and other current assets                                                            |                                             |         | 35,858           |         
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      | Total current assets                        |         |                  | 223,704 
|Property, plant and equipment, net                                                                                                                                                                                               |                                                                                                      |                                             | 229,640 |                  |         
|Other noncurrent assets, net                                                                                                                                                                                                     |                                                                                                      |                                             | 4,075   |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      | Total assets                                |         | $                | 457,419 
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         
|LIABILITIES AND SHAREHOLDER'S DEFICIT                                                                                                                                                                                            |                                                                                                      |                                             |         |                  |         
|Current liabilities:                                                                                                                                                                                                             |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 | Current maturities of long-term debt                                                                 |                                             | $       | 96,767           |         
|                                                                                                                                                                                                                                 | Accounts payable                                                                                     |                                             |         | 65,855           |         
|                                                                                                                                                                                                                                 | Accrued liabilities                                                                                  |                                             |         | 83,878           |         
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      | Total current liabilities                   |         |                  | 246,500 
|Long-term debt, less current maturities                                                                                                                                                                                          |                                                                                                      |                                             | 320,561 |                  |         
|Other noncurrent liabilities                                                                                                                                                                                                     |                                                                                                      |                                             | 75,765  |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      | Total liabilities                           |         |                  | 642,826 
|Series A redeemable preferred stock, $1,000 par value per share, 5,000 shares authorized; 2,533 and 2,000 shares issued and outstanding at October 31, 2004 and October 31, 2003, respectively; liquidation and redemption value |                                                                                                      |                                             | 25,329  |                  |         
|Shareholder's deficit:                                                                                                                                                                                                           |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 | Common stock, $.10 par value per share, 1,667 shares authorized, 1,000 shares issued and outstanding |                                             |         |                 |         
|                                                                                                                                                                                                                                 | Additional paid-in capital                                                                           |                                             |         |                 |         
|                                                                                                                                                                                                                                 | Accumulated deficit                                                                                  |                                             |         | (168,700         | )       
|                                                                                                                                                                                                                                 | Accumulated other comprehensive losses                                                               |                                             |         | (42,036          | )       
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      | Total shareholder's deficit                 |         |                  | (210,736
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         
|                                                                                                                                                                                                                                 |                                                                                                      | Total liabilities and shareholder's deficit |         | $                | 457,419 
|                                                                                                                                                                                                                                 |                                                                                                      |                                             |         |                  |         

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

46

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

|                        |                                                                                | Year Ended October 31,                                                                          |        
|----------------------- | ------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------- | -------
|
|Net sales               |                                                                                | $                                                                                               | 867,298
|Costs and expenses:     |                                                                                |                                                                                                 |        
|                        | Cost of sales                                                                  |                                                                                                 |        
|                        | Depreciation, depletion and amortization                                       |                                                                                                 |        
|                        | Selling, general and administrative                                            |                                                                                                 |        
|                        | Exploration                                                                    |                                                                                                 |        
|                        | Losses from impairment and disposal of long-lived assets                       |                                                                                                 |        
|                        | Unrealized (gain) loss on derivative financial instruments                     |                                                                                                 |        
|                        |                                                                                |                                                                                                 |        
|                        |                                                                                | Total costs and expenses                                                                        |        
|                        |                                                                                |                                                                                                 |        
|                        |                                                                                | Income (loss) from operations                                                                   |        
|Other income (expense): |                                                                                |                                                                                                 |        
|                        | Interest expense                                                               |                                                                                                 |        
|                        | Interest income                                                                |                                                                                                 |        
|                        | Loss on retirement/restructure of long-term debt                               |                                                                                                 |        
|                        | Other, net                                                                     |                                                                                                 |        
|                        |                                                                                |                                                                                                 |        
|                        |                                                                                |                                                                                                 | (13,455
|                        |                                                                                |                                                                                                 |        
|                        |                                                                                | Income (loss) before income tax benefit and cumulative effect of change in accounting principle |        
|Income tax benefit      |                                                                                |                                                                                                 | (661   
|                        |                                                                                |                                                                                                 |        
|                        | Income (loss) before cumulative effect of change in accounting principle       |                                                                                                 |        
|                        | Cumulative effect of change in accounting principle, net of income tax benefit |                                                                                                 |        
|                        |                                                                                |                                                                                                 |        
|                        |                                                                                | Net income (loss)                                                                               |        
|                        |                                                                                | Preferred stock dividends                                                                       |        
|                        |                                                                                |                                                                                                 |        
|                        |                                                                                | Net income (loss) allocable to common shares                                                    |        
|                        |                                                                                |                                                                                                 |        

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

47

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THE DOE RUN RESOURCES CORPORATION  Consolidated Statements of Comprehensive Income and Shareholder's Deficit  (Dollars in thousands)

|                                                                |                                 | Year Ended October 31, |         
|--------------------------------------------------------------- | ------------------------------- | ---------------------- | --------
|
|Net income (loss)                                               |                                 | $                      | 4,914   
|Unrealized gain (loss) on derivative financial instruments, net |                                 |                        | 1,757   
|Unrealized gain (loss) on available-for-sale investments        |                                 |                        | (10     
|Minimum pension liability                                       |                                 |                        | (5,516  
|                                                                |                                 |                        |         
|                                                                | Comprehensive income (loss)     |                        |         
|                                                                | Preferred stock dividends       |                        |         
|                                                                |                                 |                        |         
|                                                                | Change in shareholder's deficit |                        |         
|Shareholder's deficit, beginning of year                        |                                 |                        | (209,066
|                                                                |                                 |                        |         
|Shareholder's deficit, end of year                              |                                 | $                      | (210,736
|                                                                |                                 |                        |         

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

48

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

|                                                  |                                                                                          | Year Ended October 31, |                                                              
|------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---------------------- | -------------------------------------------------------------
|
|Cash flows from operating activities:             |                                                                                          |                        |                                                              
|                                                  | Net income (loss)                                                                        |                        | $                                                            
|                                                  | Cumulative effect of change in accounting principle                                      |                        |                                                              
|                                                  | Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                        |                                                              
|                                                  |                                                                                          |                        | Depreciation, depletion and amortization                     
|                                                  |                                                                                          |                        | Imputed interest and amortization of deferred financing costs
|                                                  |                                                                                          |                        | Unrealized (gain) loss on derivative financial instruments   
|                                                  |                                                                                          |                        | Losses from impairment and disposal of long-lived assets     
|                                                  |                                                                                          |                        | Accrued interest refinanced in debt restructuring            
|                                                  |                                                                                          |                        | Loss on retirement/restructure of long-term debt             
|                                                  |                                                                                          |                        | Increase (decrease) resulting from changes in:               
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|Cash flows from investing activities:             |                                                                                          |                        |                                                              
|                                                  | Special term deposit                                                                     |                        |                                                              
|                                                  | Purchases of property, plant and equipment                                               |                        |                                                              
|                                                  | Net proceeds from (expenses of) disposal of assets                                       |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        | Net cash provided by (used in) investing activities          
|Cash flows from financing activities:             |                                                                                          |                        |                                                              
|                                                  | Proceeds from (payments of) revolving loans, net                                         |                        |                                                              
|                                                  | Proceeds from long-term debt                                                             |                        |                                                              
|                                                  | Payments on long-term debt                                                               |                        |                                                              
|                                                  | Payment of financing costs                                                               |                        |                                                              
|                                                  | Issuance of preferred stock                                                              |                        |                                                              
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        | Net cash provided by (used in) financing activities          
|                                                  |                                                                                          |                        |                                                              
|                                                  |                                                                                          |                        | Net increase in cash                                         
|Cash at beginning of period                       |                                                                                          |                        | 19,700                                                       
|                                                  |                                                                                          |                        |                                                              
|Cash at end of period                             |                                                                                          | $                      | 20,318                                                       
|                                                  |                                                                                          |                        |                                                              
|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 consolidated financial statements.

49

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THE DOE RUN RESOURCES CORPORATION

Notes to Consolidated Financial Statements
October 31, 2004, 2003 and 2002
(Dollars in thousands, except share data)

(1)   Summary of Significant Accounting Policies

Principles of Consolidation

These consolidated financial statements include the accounts of The Doe Run Resources Corporation (Doe Run) and its wholly owned subsidiaries (on a consolidated
basis, the Company). All material intercompany balances and transactions have been eliminated.

Nature of Business

The principal domestic business of the Company is the exploration, development, mining and processing of non-ferrous metals, primarily lead, and
recycling of lead-acid batteries and other lead-bearing materials. Doe Run, doing business as The Doe Run Company, has mines in southern Missouri, primary smelters in
Herculaneum, Missouri and Glover, Missouri, and operates a recycling facility in Boss, Missouri. Operations at the Glover smelter were indefinitely suspended in the first quarter of 2004. Fabricated
Products, Inc. (FPI), a subsidiary, fabricates lead products used in radiation, X-ray shielding and nuclear shielding and is a leader in the production of shaped anodes and anode
sheets for those applications. In Peru, Doe Run Peru S.R.L. (Doe Run Peru) is engaged in the mining, smelting and refining of
polymetallic concentrates, producing mainly silver, copper, lead, zinc and gold, which are sold as refined metals primarily to customers located outside of Peru. Doe Run's issued and outstanding
common and preferred stock is owned directly or indirectly by The Renco Group, Inc. (Renco).

Foreign Currency Translation

The functional currency of the Company's foreign subsidiaries is the U.S. Dollar. Accordingly, foreign currency translation gains and losses are included in
determining net income (loss).

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.

Cash Management

All cash received by Doe Run's domestic operations is transferred daily by wire to pay down the outstanding balance, if any, of its revolving credit facility (the
Doe Run Revolving Credit Facility), which is described in further detail in Note 8. Doe Run borrows under the Doe Run Revolving Credit Facility to fund its accounts on a daily basis as checks
are disbursed. At October 31, 2004 and 2003, outstanding checks of $2,859 and $3,434, respectively, are included in accounts payable.

Inventories

Finished metals and concentrates, metals and concentrates in process and raw materials are stated at the lower of cost or market. The last-in,
first-out (LIFO) method of determining cost is used for the

50

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majority
of the Company's inventories. Supplies and repair parts are principally stated at average cost, net of reserves for obsolescence.

Inventory
costs include labor, material and other production costs.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. In accordance with Statement of Financial Accounting Standards Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, long-lived assets, such as property, plant and equipment, and
purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by
the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value
of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell and are no longer depreciated.
The assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet.

Major
additions and improvements to property, plant and equipment are capitalized, at cost, when they significantly increase the productive capacity or the life of the asset. Repair and
maintenance expenditures which are routine, unanticipated, or for which the timing cannot be estimated, and which do not extend the useful life or increase the productive capacity of the asset, are
charged to operations as incurred. Major expenditures required to maintain the originally anticipated productive capacity and life of the asset (such as furnace rebuilds), for which both the amount
and timing can be reasonably
estimated, are accrued and charged to operations over the period through the next anticipated maintenance date.

Costs
to treat environmental contamination are capitalized when they extend the life, increase the capacity or improve the safety or efficiency of the property, when they mitigate or
prevent future environmental contamination or when they are incurred in preparing property for sale.

Mineral
interests are amortized using the units of production method.

Depreciation
is computed using the straight-line method over the estimated useful lives of the assets, as follows:

Buildings and improvements

3 to 20 yearsMachinery and equipment

2 to 15 years


Facilities
at which operations have temporarily ceased may be placed on a standby care and maintenance basis. The Company continues to depreciate the related assets during the standby
period.

Exploration and Development Costs

Exploration costs and development costs incurred to maintain production at operating mines are charged to operations as incurred. Development expenditures for
mining properties that are considered to be commercially feasible, but are not yet producing, and major development expenditures at operating mines that are expected to benefit future production are
capitalized and amortized using the units of production method over the estimated proven ore reserves to be benefited.

51

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Reclamation and Mine Closure Costs

The Company's mines and related processing facilities are subject to governance by various agencies that have established minimum standards for reclamation.

As
of November 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 143,Accounting for Asset Retirement
Obligations(Statement No. 143), 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.

Prior
to the adoption of Statement No. 143, the Company accrued for mine and other closure obligations at their estimated, undiscounted cost. 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. These liabilities will be increased to full value over
time through charges of accretion 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
cumulative effect related to the adoption of Statement No. 143 for the year ended October 31, 2003 was a loss of $3,940, a net decrease to plant, property and equipment
of $2,088, and an increase of $1,852 to the liability for asset retirement obligations.

Commitments and Contingencies

The Company accrues for loss contingencies, including costs associated with environmental remediation obligations, when it is probable that a liability has been
incurred and can be reasonably estimated. Liability estimates for environmental remediation obligations are based on an evaluation of, among other factors, currently available facts, existing
technology, presently enacted laws and regulations, the Company's experience in remediation, the Company's status as a potentially responsible party (PRP), and the ability of other PRPs to pay their
allocated portions. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of costs from other parties are recorded as assets when
their receipt is deemed probable, as is consistent with the American Institute of Certified Public Accountants Statement of Position 96-1,Environmental Remediation
Liabilities.

Revenue Recognition

Sales are recorded as products are delivered to customers or as tolling services are performed. Concentrate and certain smelter product sales are recorded based
upon estimated weights and metal contents and metal prices in effect at the time of delivery. Revenues are adjusted between the month of delivery and the month of settlement based on changes in market
prices. Adjustments with respect to such sales are recorded based on final settlement weights, metal contents and metal prices using applicable customer agreements.

Derivative Instruments and Hedging Activities

Statement of Financial Accounting Standards No. 133,Accounting for Derivative Instruments and Hedging
Activities, was issued by the Financial Accounting Standards Board in June 1998 and amended by Statement No. 138,Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an amendment of FASB Statement No. 133, issued in June 2000 (collectively, Statement No. 133). Under
Statement No. 133, the Company carries all derivative instruments on the balance sheet at fair value.

52

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The
accounting for changes in the fair value (i.e. gains and losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and if so,
whether the derivative instrument is designated as a hedge of exposures to changes in fair value or cash flows. If the hedged exposure is an exposure to changes in the fair value of a fixed
commitment, the gain (loss) is recognized in earnings in the period of change, with an equal and offsetting (loss) gain recognized on the change in value of the hedged item. If the hedged exposure is
an exposure to changes in forecasted cash flows, the effective portion of the gain (loss) is reported as a component of other comprehensive income (outside earnings) until the forecasted hedged
transaction affects earnings, when it is reclassified into earnings.

Research and Development

Research and development costs are expensed when incurred and are included in selling, general and administrative expenses on the statements of operations.
Research and development costs are not significant.

Income Taxes

Renco has elected for the Company to be treated as a qualified subchapter S subsidiary (QSSS) for U.S. federal tax purposes. Most states in which the Company
operates will follow similar tax treatment. QSSS status requires the ultimate shareholders to include their pro rata share of the Company's income or loss in their individual tax returns. The election
does not affect foreign income taxes related to the Company's foreign subsidiaries.

Deferred
tax assets and liabilities are recognized in foreign jurisdictions for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and the respective tax bases of these assets and liabilities. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Recent Accounting Pronouncements

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151,Inventory
Costs, which requires that amounts of idle facility expense, freight, handling costs, and wasted material be recognized as current-period charges. In addition, the Statement
requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The Company does not expect the adoption of this
interpretation to have a material impact on its financial statements.

In
December 2004, the FASB issued Statement of Financial Accounting Standards No. 153,Exchanges of Nonmonetary Assets,
which eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial
substance. The Company does not expect the adoption of this interpretation to have a material impact on its financial statements.

Reclassifications

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

(2)   Financial Condition

For the year ended October 31, 2003 and for several years prior, the Company reported recurring losses, primarily the result of the declining treatment
charges discussed below and low metal prices, a

53

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condition
exacerbated by the Company's significant interest costs prior to a restructuring in October 2002. Doe Run's liquidity was affected by these factors, as well as Doe Run Peru's
liquidity. The Company failed to meet certain financial covenant requirements contained in its revolving credit agreements and a term note (the Term Note) during fiscal 2003, which defaults continued
into fiscal 2004. In addition, the Company has uncertainties related to environmental and litigation matters. These issues combined raised substantial doubt about the Company's ability to continue as
a going concern.

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

Doe
Run Peru proceeded with efforts to identify alternative methods of achieving compliance with environmental requirements. These efforts included, but were not limited to, reducing or
curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These efforts took into consideration
the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru had intended to submit a request in 2004 to modify its existing requirements. Failure to comply with
environmental requirements could result in the cessation of operations at the La Oroya smelter.

During
fiscal year 2003, Doe Run Peru implemented cost savings, including a reduction of approximately 10% of its workforce, acceleration of cash receipts, as well as other measures, to
improve its liquidity. In addition, the retirement of Doe Run Peru's loan from a foreign bank, reduced Doe Run Peru's interest payments by approximately $14,000 per year. These changes improved Doe
Run Peru's cash flow and availability in 2003. The cash balance and net unused availability under Doe Run Peru's revolving credit facility were approximately $16,800 and $3,800 at October 31,
2003, respectively.

Doe
Run Peru's ability to pay fees to Doe Run were limited by Doe Run Peru's revolving credit facility to $2,800 through September 2004, unless Doe Run Peru meets an excess cash
flow test.

As
a result of Doe Run Peru's unfavorable results of operations and limited availability, only $1,394 was paid to Doe Run during 2003. In addition, in 2003, Doe Run did not receive
approximately $14,000 per year in interest income from a deposit that was surrendered to retire Doe Run Peru's loan from a foreign bank. The deposit, plus unpaid interest, was replaced in
September 2002 by an intercompany note that does not bear interest during the term of Doe Run Peru's revolving credit facility. These factors along with five years of low metals prices affected
Doe Run's liquidity.

Prior
to fiscal 2004, Doe Run had implemented cost savings measures over the previous several years to mitigate the impact of lower metal prices, including: reductions of production
levels, changes in mine plans and the elimination of hourly and salaried positions. These efforts succeeded in reducing Doe Run's costs over the last several years.

54

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Doe
Run and Doe Run Peru were in the process of negotiating amendments to agreements governing the revolving credit facilities and the Term Note at October 31, 2003, and
amendments to the revolving credit facilities were finalized subsequent to October 31, 2003.

The
Company is highly leveraged and has significant commitments for environmental matters and Environmental Remediation and Management Program (PAMA) expenditures that require it to
dedicate a substantial portion of cash flow from operations to the payment of these obligations, which will reduce funds available for other business purposes. See Notes 8 and 19 for further
discussion of these obligations. These factors also increase the Company's vulnerability to general adverse conditions, limit the Company's flexibility in planning for or reacting to changes in its
business and industry, and limit the Company's ability to obtain financing required to fund working capital and capital expenditures and for other general corporate purposes. An unfavorable outcome to
certain contingencies discussed below, would have a further adverse effect on the Company's ability to meet its obligations when due. These factors are discussed in more detail below. The Company's
ability to meet these obligations is also dependent upon future operating performance and financial results, which are subject to financial, economic, political, competitive and other factors
affecting the Company, many of which are beyond the Company's control.

The
Company has substantial debt service requirements in the future, including maturities in 2005 of $15,500 for the Term Note and $7,500 for the Old Notes, and also significant capital
requirements under environmental commitments in Peru. The Company's revolving credit facilities also expire in the fourth quarter of 2005, and will require renegotiation to extend their terms. There
can be no assurance that the Company will be successful, or if it is successful, that the renewal would be at terms that are
favorable to the Company. Discussions have been held with Renco to extend the Term Note, but there can be no assurance that the term will be extended.

Metal
prices rose dramatically in fiscal 2004. Lead prices increased from a London Metal Exchange (LME) settlement monthly average of $532.60 per short ton in October 2003 to
$847.40 per short ton in October 2004. The Company has benefited from this price increase in both its lead metal and lead concentrate sales.

Management
will continue to assess market and operating conditions to maximize its operating profit or limit losses, while allowing the Company to fulfill its environmental obligations.
In response to declining demand in the U.S. for lead metal and increasing global demand for clean lead concentrates, the Company indefinitely suspended operations at its Glover smelter in November,
2003 and is selling on the open market any concentrates that are not required to maintain production at its Herculaneum smelter.

As
discussed in Note 19, Doe Run Peru's existing PAMA requires it to perform projects in 2005 and 2006 at a total cost of $121,200. Doe Run Peru expects that it will not be able
to comply with the spending requirements of the PAMA investment schedule in 2005 and 2006 with respect to the construction of the sulfuric acid plant required by the PAMA and, as a result, could be
subject to penalties. Failure to comply with the PAMA could result in the cessation of operations at the La Oroya smelter.

The
Peruvian Government has issued a supreme decree (Supreme Decree), which recognized that exceptional circumstances may justify an extension of one or more projects within the scope of
a PAMA. Doe Run Peru will submit an application for extension to modify the requirements of the existing PAMA and extend the term of the PAMA to complete the construction of the sulfuric acid plant
contemplated by the original PAMA. Doe Run Peru will perform other environmental projects to reduce fugitive emissions, including heavy metal dust, to address the health issues of the community. The
total cost of the currently remaining PAMA projects, including the sulfuric acid plant construction, and these projects is approximately $143,000. If the extension of the PAMA is approved, management
expects to fund the PAMA projects from cash from operations.

55

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Upon
approval of a modified PAMA, Doe Run Peru would be required to create a trust account. The trust account would administer the receipts and disbursements related to the extended PAMA
project. The Supreme Decree requires that receipts from sales, in an amount sufficient to fund the monthly cash requirements of the extended PAMA project, be remitted directly to the trust account.
Such an arrangement is prohibited by Doe Run Peru's revolving credit facility (the Doe Run Peru Revolving Credit Facility), which expires on September 23, 2005. Accordingly, a renegotiated Doe
Run Peru
Revolving Credit Facility will need to comply with the requirements established by the Supreme Decree, should Doe Run Peru's PAMA be extended.

The
Supreme Decree also requires that, within 30 days of the approval of the PAMA extension, the Company provide financial security in an amount equal to 20% of the projected cost
of the project or projects to be extended. The company currently expects the overall investment required to build the sulfuric acid plant to be approximately $102,000.

A
default under the requirements of the PAMA could result in a default under the Doe Run Peru Revolving Credit facility. A default under the Doe Run Peru Revolving Credit Facility would
result in a default under the Doe Run Revolving Credit Facility.

These
issues raise substantial doubt about the Company's ability to continue as a going concern. Management believes that Doe Run Peru will obtain an approval of an extension to complete
the sulfuric acid plant. There is no assurance, however, that Doe Run Peru will receive an extension, or, if it does, that the project will be completed within the time limitation specified by the
Supreme Decree. Doe Run Peru has developed a business plan that identifies several revenue generating and cost reduction activities. Management believes the plan will enhance liquidity, which is
expected to improve Doe Run Peru's ability to make the investments under the PAMA, assuming an extension is received. Revenue enhancement and cost reduction projects include the processing of zinc
ferrites and an effort to bring more recycled feed into the smelter. Cost reduction measures include manpower reductions through voluntary retirement and decreased power usage in the zinc circuit.

Doe
Run Peru has received assessments of income tax, including penalties and interest, and Value Added Tax (VAT) totaling $96,500 and $39,100, respectively, as discussed in
Note 13. In addition, the Company estimates that the effect of similar assessments for periods not yet assessed would be approximately $800 and $18,000 for the income tax and VAT matters,
respectively. Furthermore, Doe Run Peru would also be required to make additional workers' profit sharing payments equal to 8% of the increase in taxable income generated by the changes discussed
above, or approximately $5,800 for tax years 1998 through 2004.

Management
of the Company believes that in each case Doe Run Peru has followed the applicable Peruvian tax statutes and intends to pursue all available administrative and judicial
appeals. Doe Run Peru is not required to make any payments pending the administrative appeal process. If Doe Run Peru is not successful in the administrative appeal processes and were to appeal in the
judicial system, some type of financial assurance would be required, which would have a significant adverse effect on liquidity.

Net
unused availability at October 31, 2004 under Doe Run's revolving credit facility (the Doe Run Revolving Credit Facility) and Doe Run Peru's revolving credit facility (the Doe
Run Peru Revolving Credit Facility) was approximately $22,506 and virtually none, respectively. In addition to the availability under its revolving credit facilities, cash balances at Doe Run and Doe
Run Peru were $13,413 and $6,905, respectively, at October 31, 2004. Net unused availability at October 31, 2003 was approximately $14,373 and $3,830 under the Doe Run Revolving Credit
Facility and Doe Run Peru Revolving Credit Facility, respectively, and Doe Run and Doe Run Peru's cash balances totaled $2,906 and $16,794, respectively. Availability improved under the Doe Run
Revolving Credit Facility over the last year as a result of the higher metals prices and improved financial performance. In Peru, higher metal prices resulted in higher outlays for concentrate
purchases and higher VAT payments funded by

56

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cash
from operations, as Doe Run Peru has reached its maximum borrowing level under the Doe Run Peru Revolving Credit Facility.

Management
believes that the price improvements and other revenue enhancements, and the issuance of the Supreme Decree, by allowing an application to extend La Oroya's PAMA requirement
for the construction of the sulfuric acid plant, will enable the Company to continue as a going concern through October 31, 2005.

(3)   Related Party Transactions

Doe Run has entered into a management consulting agreement with Renco. Under the agreement, Renco will provide Doe Run with management services for an annual fee.
The agreement is automatically renewed every three years, unless either party gives six months prior notice, with the current term ending October 31, 2006. Fees expensed under this agreement
were $2,400 in each of the years ended October 31, 2004, 2003 and 2002. Fees outstanding and unpaid were $7,600 and $6,400 at October 31, 2004 and 2003, respectively. The indenture for
the 11.75% Notes limits the payment of fees to $1,200 per year unless defined earnings before interest, taxes, depreciation and amortization for the Company, less that for Doe Run Peru, exceeds
$35,000, in which case an additional $1,200 is allowed. No additional management fees were permitted to be paid to Renco for 2004 and 2003 under this provision of the 11.75% Notes.

Renco
held 2,533 and 2,000 shares of Doe Run's Series A Redeemable Preferred Stock at October 31, 2004 and October 31, 2003, respectively. See Note 9 for more
information.

On
October 29, 2002, Renco signed a Junior Participation Agreement with the lender under the Doe Run Revolving Credit Facility to provide credit support for supplemental loans to
Doe Run. The agreement requires Renco to participate with the lenders in supplemental loans in an amount up to
$15,000 when availability is less than $2,500 for five consecutive days and the Doe Run Revolving Credit Facility lenders have received cash from Renco in the amount of the supplemental loans. No
supplemental loans have been made.

At
October 31, 2003 and 2004, Doe Run owed $15,500 on the Term Note due to Renco pursuant to a credit facility. See further discussion in Note 8.

On
October 29, 2002, Doe Run and Renco signed a tax sharing agreement. See the discussion in Note 13. No amounts were due under the agreement for the years ending
October 31, 2004 and 2003.

At
times, to obtain the advantages of volume, Renco purchased certain insurance policies for a number of its subsidiaries, including the Company. The actual cost of such policies,
without markup, is reimbursed by the covered subsidiaries. For the years ended October 31, 2004, 2003 and 2002, the Company made payments to Renco of approximately $35, $23 and $299,
respectively, under the Renco insurance program. These insurance payments were primarily for losses incurred prior to 2000 under policies in effect at such time.

(4)   Inventories

Inventories consist of the following:

October 31,2004

2003Finished metals and concentrates

$
16,646

$
12,466Metals and concentrates in process


58,664


56,399Materials, supplies and repair parts


27,999


26,815$
103,309

$
95,680


57

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Materials,
supplies and repair parts are stated net of reserves for obsolescence of $5,146 and $4,411 at October 31, 2004 and 2003, respectively.

The
FIFO cost of inventories valued under the LIFO cost method were approximately $113,092 and $77,534 at October 31, 2004 and 2003, respectively. If the FIFO cost method had been
used to determine cost, inventories would have been approximately $38,289 higher at October 31, 2004 and $8,830 higher at October 31, 2003.

As
a result of reducing certain inventory quantities valued on the LIFO basis in 2004, 2003 and 2002, inventory costs prevailing in previous years were charged to cost of sales. The
Company calculates the effect of LIFO liquidations on results of operations based on the current cost method. The effect of such liquidations on the results of operations was an increase to net income
of approximately $1,900 for the year ended October 31, 2004. The impact was not significant in 2003 and 2002.

In
2004, the Company changed its methodology of calculating the remaining effect of adjustments to lower of cost or market on inventory costed on a LIFO basis in years after the initial
year the adjustment to market was recorded. The effect of this change would not be material to the Company's retained earnings at the beginning of the year. Inventory at October 31, 2004 would
have been $855 lower under the method used prior to 2004.

(5)   Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following:

October 31,2004

2003Land

$
12,689

$
12,516Buildings and improvements


84,886


86,689Machinery and equipment


297,615


287,241Mineral interests


31,313


31,313Construction in progress


42,574


27,183469,077


444,942Less accumulated depreciation and depletion


239,437


214,575Property, plant and equipment, net

$
229,640

$
230,367


Depreciation
and depletion expense are as follows:

Year Ended October 31,2004

2003

2002Depreciation

$
23,795

$
28,285

$
28,739Depletion

$
1,527

$
2,122

$
2,102


The
net book value of the Company's mineral interests was $10,929 and $12,456 at October 31, 2004 and 2003, respectively.

The
implementation of Statement No. 143 resulted in a decrease to the cost of plant, property and equipment of $3,137 and a decrease to accumulated depreciation of $1,049 as of
November 1, 2002. Changes to the estimates of expected cash flows related to asset retirement obligations resulted in an additional decrease to plant, property and equipment of $1,547 and $691
as of October 31, 2004 and October 31, 2003. See additional disclosures related to Statement No. 143 in Note 19.

Losses
from impairment or retirement of long-lived assets for the years ended October 31, 2004, 2003 and 2002 includes $3,588, $1,255 and 1,801, respectively, relating
to residential properties

58

---



purchased
under a residential property purchase plan in the town of Herculaneum, Missouri, where one of the Company's primary smelters is located, for which approval to rent is pending from regulatory
agencies. See further discussion of the residential property purchase plan in Note 19. Losses from impairment or retirement of long-lived assets for the year ended
October 31, 2002 includes an impairment loss of $7,849 related to the Cobriza backfill plant project. This project was designed to enable the Company to put tailings produced from the mining
process back into the mine. In fiscal year 2002, due to the lack of success in identification of new ore reserves at its Cobriza mine, the decrease in exploration activities as a result of the
Company's financial condition, the outlook for continued low copper prices and higher costs than were originally anticipated to complete the project, the Company made the decision to cease its
construction on the project. Also in fiscal 2002, the Company recognized a loss of $784 related to a blast furnace that it dismantled in fiscal 2003 at one of its primary division smelters, and a loss
of $1,801 was recognized related to the residential property purchase plan.

Rental
expense applicable to minimum rentals under operating leases was $8,063, $7,725 and $8,766 for the years ended October 31, 2004, 2003 and 2002, respectively. Contingent
rental payments, based primarily on equipment usage, were $796, $666 and $353 for the years ended October 31, 2004, 2003 and 2002, respectively.

The
Company's operating leases relate primarily to operating equipment, office facilities and office equipment. The minimum rental commitments under noncancellable leases, with terms in
excess of one year are as follows:

Fiscal year ending October 31:2005

$
5,9202006


4,2752007


3,3712008


1,4202009


1,281Thereafter


7,147$
23,414


(6)   Valuation and Qualifying Accounts

Year Ended October 31,2004

2003

2002Allowance for doubtful accountsBalance at beginning of year

$
1,479

$
1,160

$
684Amounts charged to costs and expenses


144


458


586Deductionswrite-offs against allowance


(47
)

(139
)

(110
)Balance at end of year

$
1,576

$
1,479

$
1,160Allowance for inventory obsolescenceBalance at beginning of year

$
4,411

$
5,157

$
5,896Amounts charged to costs and expenses


1,254


905


(89
)Deductionswrite-offs against allowance


(519
)

(1,651
)

(650
)Balance at end of year

$
5,146

$
4,411

$
5,157


59

---



Accrual for major maintenanceBalance at beginning of year

$
2,155

$
3,061

$
3,559Amounts charged to costs and expenses


317


477


245Deductionswrite-offs against allowance


(824
)

(1,383
)

(743
)Balance at end of year

$
1,648

$
2,155

$
3,061


(7)   Accrued Liabilities

Accrued liabilities consist of the following:

October 31,2004

2003Payroll, related taxes and employee benefits

$
23,531

$
21,877Accrued pension benefit liability (see Note 14)


9,025


15,232Fair value of derivatives


8,976


11,004Reclamation and environmental (see Note 19)


5,444


5,321Other


36,902


31,049$
83,878

$
84,483


(8)   Debt

Long-term debt consists of the following:

October 31,2004

2003Revolving credit facilities

$
71,201

$
59,12611.75% secured notes due November 1, 2008 (face amount of $218,967 and $195,803 at October 31, 2004 and 2003, respectively)


323,139


324,95811.25% unsecured senior notes due March 15, 2005


5,750


5,75011.25% secured senior notes due March 15, 2005, less unamortized discount of $12 and $40 at October 31, 2004 and 2003, respectively


1,738


1,710Term note, due October 29, 2005


15,500


15,500Note payable, no stated interest rate, monthly payments of $9 through July 2004





93Sale and leaseback and capital lease obligations





1,559417,328


408,696Less current maturities


96,767


78,117Long-term debt, less current maturities

$
320,561

$
330,579


The
Company has available two revolving credit facilities. The first facility, the Doe Run Revolving Credit Facility, allows Doe Run and certain U.S. subsidiaries to borrow up to $75,000
and expires October 29, 2005. The availability of loans under the Doe Run Revolving Credit Facility is limited to a percentage of eligible U.S. accounts receivable and inventories, less any
outstanding loans and letters of credit. The Doe Run Revolving Credit Facility bears interest at the prime rate plus 1% per annum for an effective rate of 5.75% at October 31, 2004 and requires
an unused line fee equal to 0.25% on the amount by which the maximum credit of $75,000 exceeds the average daily balance of outstanding loans and letters of credit. All cash received by Doe Run's
domestic operations is transferred by wire daily to

60

---



the
financial institutions to pay down the outstanding loan balance, if any. Revolving loans outstanding under this facility were $31,801 and $23,126 at October 31, 2004 and 2003, respectively.
Actual availability was $22,506 at October 31, 2004. Because the agreement requires a lockbox for cash receipts and contains a subjective acceleration clause, loans under this agreement are
classified as current in the balance sheet.

On
April 9, 2004 Doe Run entered into an amendment of Doe Run's Revolving Credit Facility. The amendment waived existing defaults and lowered the net worth measurement the Company
is required to maintain.

The
second facility, the Doe Run Peru Revolving Credit Facility, allows Doe Run Peru to borrow up to $40,000 and expires September 23, 2005. The Doe Run Peru Revolving Credit
Facility provides for working capital loans up to $40,000, with a limit on letters of credit of $5,000, but the total commitments may not exceed the maximum line of $40,000. The Doe Run Peru Revolving
Credit Facility bears interest at LIBOR (1-month, 3-month or 6-month rate, depending on the term of the loan) plus 3.5% per annum for an effective rate of 4.95% at
October 31, 2004. An unused line fee of .375% per annum on the average unused portion of the line is payable quarterly, in arrears. Availability of loans under the Doe Run Peru Revolving Credit
Facility is limited to a percentage of Doe Run Peru's eligible accounts receivable and inventories, less any outstanding loans and letters of credit. Revolving loans outstanding under this facility
were $39,400 and $36,000 at October 31, 2004 and 2003, respectively. At October 31, 2004 there was virtually no availability.

The
Doe Run Revolving Credit Facility and the Doe Run Peru Revolving Credit Facility will require renegotiation to extend their term. Furthermore, a renegotiated Doe Run Peru credit
facility will need to comply with the cash assignment requirements established by the Supreme Decree, should Doe Run Peru's PAMA be extended, as discussed in Note 2. There can be no assurance
that the Company will be successful in renewing the agreements, or if it is successful, that the renewal would be at terms favorable to the Company. Discussions have been held with Renco to extend the
Term Note, but there can be no assurance that the term will be extended.

On
October 29, 2002, Doe Run consummated a consensual restructuring (the Restructuring) of most of its previously outstanding notes (Old Notes) by exchanging Old Notes with a
principal amount of $294,840, plus unpaid accrued interest of $37,473, for stock warrants (Warrants) exercisable for an aggregate of approximately 39% of the fully diluted common stock of Doe Run and
new notes with a principal amount of $175,832 (the 11.75% Notes). In connection with the completion of the exchange offer, Doe Run borrowed $15,500 under the Term Note and received $20,000 from the
sale of redeemable preferred stock to Renco, and used the proceeds from these transactions to pay down the balance on the Doe Run Revolving Credit Facility, pay certain fees related to the transaction
and pay interest due and unpaid, plus penalties, on the outstanding notes that were not exchanged.

The
Restructuring was accounted for in accordance with Statement of Financial Accounting Standards No. 15,Accounting by Debtors and Creditors for Troubled
Debt Restructurings(Statement No. 15). Under Statement No. 15, a debtor may not change the carrying amount of the payable at the time of restructuring unless the
total future cash payments, including interest, specified by the new terms are less than the carrying amount of the payable at the time of restructuring. Under the terms of the 11.75% Notes, total
expected payments, including all amounts contingently payable, will be greater than the carrying amount of the Old Notes exchanged. In accordance with Statement No. 15 the 11.75% Notes were
recorded on the balance sheet on October 29, 2002 at a carrying amount equal to the carrying amount of the Old Notes exchanged, including unpaid accrued interest, reduced by deferred issue
costs related to the Old Notes exchanged and the fair value of the warrants issued.

The
effect of this accounting treatment is that substantially less interest expense will be recognized related to the 11.75% Notes during their term because the majority of the interest
payments are reflected in the carrying amount of the 11.75% Notes. In addition, Statement No. 15 required that all

61

---



costs
of restructuring were expensed when incurred. Because contingent amounts payable are assumed payable in the application of Statement No. 15, a gain may result in future periods if
contingent amounts payable are not paid. In conjunction with the Restructuring, the Company recognized a loss of $550 and $7,439 in the years ended October 31, 2003 and 2002, respectively,
representing the costs of restructuring.

The
face amount of the 11.75% Notes, plus accrued interest, was $220,290 at October 31, 2004. Interest on the 11.75% Notes is paid semi-annually in arrears on
April 15 and October 15, except that on each payment date occurring on or prior to October 15, 2005, Doe Run, at its option, may pay interest by either a) a cash payment of
accrued interest at an annual rate of 3% and issuance of additional notes with a principal amount equal to interest accrued since the last payment date at a rate of 11.5% or b) a cash payment
of accrued interest at an annual rate of 8.5%. During 2004 and 2003, interest was paid in cash at the 3% rate and additional notes totaling $23,165 and $19,971 were issued during the years ended
October 31, 2004 and 2003, respectively. Doe Run may redeem the notes prior to maturity at a premium dependent on the date of redemption. Renco has the right, at any time, to purchase all or
part of the then outstanding notes at a price equal to the price (including accrued interest) that Doe Run would have to pay to redeem such notes at that time. The 11.75% Notes are guaranteed by
certain subsidiaries of Doe Run.

The
11.25% unsecured senior notes (the Unsecured Notes) and 11.25% senior secured notes (the Secured Notes) are guaranteed by certain subsidiaries of the Company. Interest on the Secured
and Unsecured notes is payable semi-annually in arrears on March 15 and September 15.

The
Term Note is due to Renco, pursuant to a credit facility (Senior Credit Facility). The Senior Credit Facility allows for loans and letters of credit up to $35,500, as agreed to by
Doe Run and the lender. Interest is paid monthly at the rate of 11.25% per annum, plus contingent interest of $3,000 paid no later than April 29, 2005. Interest is accrued ratably over the life
of the Term Note assuming the maximum amount of contingent interest will be paid. In addition, an annual anniversary fee of $75 is payable on each anniversary prior to the maturity date and at
maturity. The loan matures on October 29, 2005 but requires prepayments based on an annual cash flow measurement after the annual financial statements are provided to the lender. Based on the
results of the cash flow measurement for the year ended October 31, 2004, a prepayment of approximately $11,000 would be required in the second quarter of 2005. On February, 25, 2005, Renco
waived the Company's requirement to make the payment, which will take effect once the defaults with respect to the delivery of audited financial statements and other reporting requirements noted below
are cured.

On
April 30, 2004 Doe Run entered into an amendment of the Term Note. The amendment waived existing defaults and amended various covenant requirements, among other things.

In
2002, Doe Run tendered a deposit made in 1998 (the Special Term Deposit) in payment of a loan made to Doe Run Peru by a foreign bank, and, in return, Doe Run Peru delivered an
intercompany note to Doe Run in an equivalent amount, plus accrued and unpaid interest, for an aggregate balance of $139,063. This intercompany note does not bear interest during the term of the Doe
Run Peru Revolving Credit Facility. Obligations under the intercompany note are subordinate to Doe Run Peru's obligations under its revolving credit facility.

62

---



The
aggregate estimated amounts of long-term debt maturing after October 31, 2004 are as follows:

Fiscal year ending October 31:2005

$
96,7672006


24,5182007


24,8512008


26,3192009


244,873Thereafter


$
417,328


Included
in the maturities of long-term debt are a portion of the interest payments on the 11.75% Notes that are included in the carrying amount of the 11.75% Notes under
Statement No. 15. Interest of $2,578, $24,518, $24,851 and $26,319 is included in the maturities of long-term debt for the fiscal years ending October 31, 2005, 2006, 2007,
and 2008, respectively.

Substantially
all of the Company's U.S. assets and the accounts receivable and inventory of Doe Run Peru are pledged as collateral to secure the Company's debt obligations. The Doe Run
Revolving Credit Facility is secured by substantially all of the accounts receivable and inventory relating to the Company's U.S. operations. The Doe Run Peru Revolving Credit Facility is secured by
the accounts receivable and inventory of Doe Run Peru. The lender of the Term Note has a second priority security interest in the accounts receivable and inventory pledged under the Doe Run Revolving
Credit Facility for its U.S. operations and a first priority security interest in the remainder of the Company's assets of its U.S. operations, except for the assets that secure the Secured Notes. The
11.75% Notes have a second priority interest in substantially all of the assets related to U.S. operations, except for accounts receivable and inventory pledged under the Doe Run Revolving Credit
Facility.

At
October 31, 2004, the Company's various debt agreements contained certain requirements with respect to net worth, working capital, earnings before interest, taxes,
depreciation, depletion and amortization (EBITDA), and debt to earnings ratios. These agreements also place limitations on capital expenditures, dividend payments and other outside borrowings. The Doe
Run Peru Revolving Credit Facility limits Doe Run Peru's ability to make distributions to Doe Run in excess of management fees of $4,000 per year unless certain cash flow tests are met. The Company
was in compliance with its covenants as of October 31, 2004, with the exception of the delivery of audited financials and other reporting requirements for the year ended October 31, 2004
by January 29, 2005 under the Doe Run Revolving Credit Facility and the Term Note.

If
Doe Run Peru is not successful with its administrative appeal of the tax assessment discussed in Note 13, the lender can, at its discretion, require that the amount of the
assessment reduce net worth as defined under Doe Run Peru's Revolving Credit Facility. Such reduction along with other factors, including metal prices and results of operations, would affect Doe Run
Peru's ability to comply with the net worth requirement.

(9)   Redeemable Preferred Stock

The Company has 2,533 outstanding shares of Series A Redeemable Preferred Stock (Redeemable Preferred Stock). The Redeemable Preferred Stock is redeemable
only by the holder of the shares after May 1, 2009. The shares have a par value of $1,000 per share and a liquidation and redemption value of $10,000 per share. There were no accrued or unpaid
dividends at October 31, 2004. Dividends of 12.5% of the liquidation value per share per annum accrue and are payable only in kind as long as obligations under the Senior Credit Facility or
Warrants remain outstanding. Because the Company has

63

---



an
accumulated deficit, dividends are recorded as a reduction to additional paid-in capital until depleted, after which the accumulated deficit will be increased. Of the 2,533 outstanding
shares of Redeemable Preferred Stock, 2,000 were issued to Renco for $20,000 on October 29, 2002 in conjunction with the Restructuring referred to in Note 8. The other 251 and 282 shares
were issued to Renco on November 1, 2003 and October 31, 2004, respectively, as payment of the aforementioned dividends.

The
Redeemable Preferred Stock's dividend rights and liquidation preference rank prior and in preference to the Company's common stock. The holder of the Redeemable Preferred Stock has
voting rights with respect to matters of mergers, issuance of debt or equity securities, stock transactions and reorganization.

(10) Warrants

In conjunction with the Restructuring, Warrants were issued to holders of the 11.75% Notes. The Warrants entitle warrant-holders to purchase 644.7813 shares of
common stock, representing approximately 39% of the common stock outstanding on a diluted basis, at the initial exercise price of $5,997 per share beginning November 1, 2008 until
October 29, 2012 (Expiration Date). Alternatively, the Warrants may be converted into common stock whereby the holders will be entitled to receive a number of shares whose fair value is equal
to the difference between the fair value of the shares the holder would receive upon exercise and the exercise value of the shares. The Warrants may not be
exercised or converted unless a majority of Warrant holders vote in favor of such, and then all Warrants must be exercised or converted.

The
Warrants are also subject to a call and a put feature. Either Doe Run or Renco may, at any time, call all (but not less than all) of the Warrants and any outstanding shares of stock
issued upon exercise thereof at a price equal to the greater of $10,000 or the appraised fair market value of the Warrants, provided that in the event that this call option is exercised by Doe Run
during the first 48 months after the Warrants are issued, Doe Run will be required to, at the same time, redeem the 11.75% Notes at the applicable redemption prices. Doe Run will not be able to
call the Warrants without the prior or concurrent repayment in full of the Senior Credit Facility. Holders of the Warrants may, at any time beginning October 29, 2005, require Doe Run to
repurchase all (but not less than all) of the Warrants at a price equal to the appraised fair market value of the stock the Warrantholders would receive if exercised. If this option is exercised by
the Warrant Holders, Doe Run may, under certain circumstances, defer the payment of the purchase price to the Holders of the Warrants. Such a deferral of the purchase price would require interest to
accrue on any unpaid amounts and, upon the third anniversary of the exercise of the put option with such purchase price still unpaid, the holders of the Warrants will have the right to cause the Doe
Run's stockholders to elect a special director to serve on Doe Run's Board of Directors for the remainder of the period such purchase price remains unpaid.

On
the Expiration Date, the Company must purchase all outstanding Warrants or shares issued pursuant to an exercise or conversion of the warrants. With the Company's permission, Renco
may honor the purchase.

Management
engaged a nationally recognized valuation firm to calculate the fair value of the Warrants. Management estimates that the fair value of the Warrants based on the valuation was
$639 at October 31, 2004 and October 31, 2003, and is reflected in other noncurrent liabilities. Any changes in the fair market value of the Warrants will be recorded in the Company's
results of operations as interest expense.

64

---



(11) Accumulated Other Comprehensive Losses

Accumulated other comprehensive losses consist of the following:

October 31,2004

2003Minimum pension liability (see Note 14)

$
41,902

$
36,386Unrealized loss on available-for-sale investments


37


27Unrealized loss on derivative financial instruments (see Note 18)


97


1,854Accumulated other comprehensive losses

$
42,036

$
38,267


(12) Fair Value of Financial Instruments

At October 31, 2004 and 2003, the fair values of the Company's financial instruments, except for long-term debt, were not materially different
from their carrying amounts. The fair value of the Company's long-term debt was approximately $282,513 and $256,662 at October 31, 2004 and 2003, respectively. The fair values of
the Company's long-term debt were based on the estimates of incremental borrowing rates for similar types of borrowing arrangements or dealer quotes.

(13) Income Taxes

Renco has elected for the Company to be treated as a QSSS for U.S. federal tax purposes. Most states in which the Company operates will follow similar tax
treatment. QSSS status requires the ultimate shareholders to include their pro rata share of the Company's income or loss in their individual tax returns. The election does not affect foreign income
taxes related to the Company's foreign subsidiaries.

Doe
Run is subject to a tax sharing agreement with Renco, effective October 29, 2002. Pursuant to the agreement, Doe Run is required to make quarterly payments based on a pro
forma U.S. federal and state income tax liability, assuming that the Company is not and never was a subsidiary of Renco (subject to certain limitations), and amounts reasonably determined by Renco to
cover tax liabilities of current or prior years not reflected in the Company's pro forma tax calculations. The pro forma income tax liabilities will assume that Doe Run became a C corporation under
the Internal Revenue Code of 1986 (the Code) on the day after the Restructuring, and will include no income attributable to any cancellation of indebtedness prior to the Restructuring or any effect of
such cancellation on the basis of the assets of the Company.

Doe
Run Cayman is subject to the regulations of the Cayman Islands, which currently have no corporate income or capital gains tax. Doe Run Cayman's subsidiaries located in Peru are
subject to Peruvian taxation. The statutory income tax rate in Peru is 30%. Doe Run Peru has obtained a ten-year tax stabilization agreement with the Peruvian government, which provides
for Peruvian taxation based on tax statutes and regulations prevailing on November 6, 1997, beginning with the Peruvian tax year ending on December 31, 1997 through December 31,
2006.

On
December 30, 1997, Doe Run Peru signed a Contract of Guarantees and Measures to Promote Investments, as modified in 2005. This agreement is effective beginning in the calendar
year ended December 31, 2007, provided that Doe Run Peru complies with the committed investments related to the improvements of the facilities, and provides tax stability through
December 31, 2021. The principal provisions are similar to those established in the Tax Stabilization Agreement, except that Doe Run Peru will utilize the tax statutes prevailing as of
December 23, 1997.

The
current contract requires Doe Run Peru to spend $108,442 to expand and modernize its facilities, including environmental expenditures, by December 31, 2006. Through
October 31, 2004, Doe

65

---



Run
Peru had invested $84,314. The Contract of Guarantees and Measures to Promote Investments requires spending of approximately $38,000 before December 31, 2006 towards the construction of the
sulfuric acid plant required by the PAMA as discussed in Note 19. If the Contract of Guarantees and Measures to Promote Investments is not amended to allow the required spending on the sulfuric
acid plant to be replaced with spending on other projects, Doe Run Peru would lose the benefits described above.

As
a result of the Company's status as a QSSS, the Company was not subject to U.S. federal income taxation for the years ended October 31, 2004, 2003 and 2002, and recognized no
state or U.S. federal income tax expense during that period. For the year ended October 31, 2004, certain technical services that Doe Run provides under an agreement with Doe Run Peru were
taxed at 30%, under a law passed in Peru in December 2003. Taxes of $2,146 were paid in the third quarter of 2004. Offsetting this tax was the reversal of a U.S. federal income tax liability
related to years that are closed to audit of $2,807. Doe Run Peru had no foreign income tax expense for the years ended October 31, 2004 and 2003 due to tax losses and an increase in the
valuation allowance against deferred tax assets, as discussed below.

The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

October 31,2004

2003Deferred tax assets:Inventories

$
7,865

$
3,051Property, plant and equipment


6,565


6,206Accrued liabilities


2,488


2,207Tax loss carryforwards


27,344


33,652Other noncurrent assets and liabilities


1,035


1,45445,297


46,570Less valuation allowance


(38,720
)

(40,007
)Total deferred tax assets


6,577


6,563Deferred tax liabilities:Property, plant and equipment


(6,577
)

(6,563
)Total deferred tax liabilities


(6,577
)

(6,563
)Net deferred tax assets

$


$



The
deferred tax balances as of October 31, 2004 and 2003 relate solely to the Company's Peruvian subsidiaries. The deferred tax assets and liabilities related to property, plant
and equipment are principally due to differences in book and tax allocations of the excess of the fair value of the sum of assets acquired, less liabilities assumed over the purchase price paid and
accelerated depreciation methods used for tax purposes.

Net
operating loss carryforwards in Peru are available for use for four years beginning with the first year the Company has taxable income against which it can take a credit.

Management
believes that sufficient uncertainty exists regarding the realization of certain deferred tax assets such that a valuation allowance is required. The valuation allowance
decreased $1,287 for the year ended October 31, 2004 and increased $5,473 and $4,375 in the years ended October 31, 2003 and 2002, respectively.

66

---



On December 26, 2003, Peru's tax authority, SUNAT, notified Doe Run Peru of an income tax assessment for the 1998 tax year. On December 23, 2004, assessments were received
for tax years 1999 through 2001. The assessments primarily relate to Doe Run Peru's income tax treatment of the December 1997 merger of Doe Run Peru and Metaloroya S.A., which was purchased by
Doe Run Peru in October 1997, and its effects on subsequent years' taxable income. Under the assessment by SUNAT, the tax basis of Doe Run Peru's fixed assets acquired would decrease, resulting
in lower tax depreciation expense than originally claimed. The assessed amount consisting of additional income taxes due, penalties and interest totals approximately $96,500.

The
Company estimates that the effect of a similar assessment for tax years after 2001 would be approximately $800.

Furthermore,
Doe Run Peru would also be required to make additional workers' profit sharing payments equal to 8% of the increase in taxable income generated by the changes discussed
above, or approximately $5,800 for tax years 1998 through 2004.

On
November 15, 2004, SUNAT notified Doe Run Peru of a VAT assessment for the period from January through July 2004. On December 23, 2004. Doe Run Peru received
additional VAT assessments for tax years 1999 through 2001. The assessments primarily relate to Doe Run Peru's exports with holding certificates and differences in a tax credit application. The total
assessment for these periods was approximately $39,100. SUNAT offset the amount assessed for 2004 of approximately $2,300 against Doe Run Peru's VAT receivable balance from July 2004. Future
VAT reimbursements cannot be used to offset the assessment by SUNAT. The Company estimates expected additional assessments related to VAT for tax years 2002 and 2003 to total approximately $18,000 in
regard to its exports with holding certificates.

Management
of the Company believes that in each case Doe Run Peru has followed the applicable Peruvian tax statutes and intends to pursue all available administrative and judicial
appeals. Doe Run Peru is not required to make any payments pending the administrative appeal process. If Doe Run Peru is not successful in the administrative appeal processes and were to appeal in the
judicial system, some type of financial assurance would be required. No amounts have been accrued as liabilities related to these actions.

(14) Employee Benefits

Domestic Plans



The Company sponsors a noncontributory defined benefit plan for its U.S. employees. Benefits provided to salaried employees under the defined benefit plan are
based on average final compensation and years of service. Benefits provided to hourly employees are based on a flat rate and years of service. The Company has also adopted a supplemental defined
benefit plan, The Supplemental Employee Retirement Plan (SERP), effective November 1, 1996. The SERP provides benefits to those participants of the defined benefit plan whose benefits under the
plan are limited by Sections 401(a)(17) or 415 of the Code. Benefits under the SERP represent the amount by which the benefits under the defined benefit plan, if such benefits were not limited,
exceed those benefits the participants are entitled to receive. The SERP plan is unfunded.

The
Company uses a measurement date of October 31 for its pension benefit plans.

67

---



Net
periodic pension expense is comprised of the following:

Year ended October 31,2004

2003

2002Service cost

$
2,122

$
1,952

$
1,889Interest cost on projected benefit obligation


6,450


5,742


5,534Expected return on assets


(4,660
)

(4,344
)

(4,788
)Net amortization and deferral of unrecognized net losses


3,420


1,605


919Net periodic pension expense

$
7,332

$
4,955

$
3,554


The
following assumptions were used in the determination of net periodic pension expense:

Year ended October 31,2004

2003

2002Discount rates

6.25
%
7.00
%
7.10
%Rate of increase in compensation levels

3.00
%
3.00
%
3.00
%Expected long-term rate of return on assets

8.50
%
9.00
%
9.00
%


The
expected return on assets assumption for fiscal 2004 was 8.50% and will continue to remain at 8.50% for fiscal 2005. The expected long-term rate of return on plan assets
is based on the historical and projected rates of return for the asset classes in the plan's investment portfolio. Assumed projected rates of return for each asset class were selected after analyzing
historical experience, future expectations of the returns and the volatility of the various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of
return for the portfolio was developed, with adjustments for the historical and expected future experience of active portfolio management results compared to benchmark returns and for the effect of
expenses paid from plan assets.

The
following table sets forth the funded status of the Company's defined benefit plan:

October 31,2004

2003Change in benefit obligation:Beginning of year

$
102,298

$
81,818Service cost


2,122


1,952Interest cost


6,450


5,742Actuarial loss


7,804


18,231Benefits paid


(5,921
)

(5,445
)End of year(a)

$
112,753

$
102,298


---

68

---



The
following assumptions were used to determine benefit obligations, at the end of the year

Discount rate


5.75
%

6.25
%Rate of compensation increase


3.00
%

3.00
%Change in plan assets:Beginning of year at fair value

$
54,849

$
50,240Actual return on plan assets


4,449


7,264Employer contributions


13,003


2,790Benefits paid


(5,921
)

(5,445
)End of year at fair value

$
66,380

$
54,849


The
target allocation for 2005, by asset category and the asset allocation for Doe Run's U.S. pension plan at October 31, 2004 and 2003 follows.

Percentage of Plan Assets at October 31,Target
Allocation

2004

2003Asset Category:Equity securities

60.0
%
59.1
%
56.0
%Fixed income

40.0
%
38.3
%
40.5
%Real estate

0.0
%
0.0
%
0.0
%Cash equivalents

0.0
%
2.6
%
3.5
%Total

100.0
%
100.0
%
100.0
%


Pension
plan assets are managed in accordance with the Employees Retirement Income Securities Act of 1974 (ERISA) and its fiduciary standards, including the "prudent investor"
guidelines. The Plan's investment strategy supports the objectives of the fund, which are to promote stability and, to the extent appropriate, growth in the funded status. Investments are diversified
across asset classes, sectors and manager styles to minimize the risk of large losses. The Company delegates investment management to specialists in each asset class and, where appropriate, provides
the investment manager with specific guidelines, which include allowable and/or prohibited investment types. The Company monitors manager performance and compliance with the established investment
guidelines.

Reconciliation of funded status:Projected benefit obligation in excess of plan assets

$
(46,373
)
$
(47,449
)Unamortized net transition asset


427


467Unrecognized actuarial loss


47,353


42,750Unrecognized prior service cost


116


84Net amount recognized

$
1,523

$
(4,148
)Amounts recognized in the balance sheet:Intangible asset


938


1,024Accrued benefit liabilitycurrent


(9,025
)

(15,232
)Accrued benefit liabilitynoncurrent


(32,292
)

(26,326
)Accumulated other comprehensive income


41,902


36,386Net asset (liability) at end of year

$
1,523

$
(4,148
)


69

---



Information
regarding the expected cash flows for the pension plans is as follows:

Pension BenefitsEmployer Contributions2005 (expected)

$
9,025Expected Benefit Payments2005

$
6,0002006

$
6,3002007

$
6,5002008

$
6,7002009

$
7,0002010 - 2014

$
39,800


The
Company is a member of a controlled group with other Renco-owned companies. Accordingly, the Company is jointly and severally liable with all other members of the controlled group
under Title IV of ERISA for obligations of other members of the controlled group that could include certain pension funding and excise taxes in the event that any member of the controlled group
does not satisfy certain of its pension obligations arising pursuant to ERISA.

In
such an event, statutory liens would arise in favor of the Pension Benefit Guaranty Corporation (the PBGC) upon the assets of the other members of the controlled group not in
bankruptcy, and the PBGC may seek to obtain court approval to terminate the plan (a PBGC Termination) and may require the other members of the controlled group to satisfy such pension plan
obligations. In the event that a PBGC Termination occurs, and the PBGC requires that the Company satisfy such pension plan obligations, such requirements would have a materially adverse effect on the
Company's financial condition and liquidity.



The Company sponsors three postretirement medical plans for its U.S. employees. Two of these plans are self-insured plans. The plans generally cover
medical expenses subject to deductibles,
copayments and limits on specified coverage. For persons retired on or before January 1, 1992, the retiree's contribution to the cost of these plans varies primarily based upon the date of
retirement and the respective plan. The Company's contribution to the cost of coverage of employees retiring after that date decreased gradually, until 1997, when retirees began to pay 100% of the
cost of coverage. The Company maintains stop-loss insurance for claims exceeding $175 per person under the age of 65 in any calendar year for those plans that are self-insured.
The Company also sponsors a life-insurance plan for its U.S. employees who become eligible for this benefit after retirement and reaching age 55. The benefit upon retirement is
based on final salary, but gradually decreases to $6 in the fifth year after retirement and remains at that level thereafter.

The
Company uses a measurement date of October 31 for its postretirement benefit plans.

Net
periodic postretirement benefit cost includes the following components:

Year ended October 31,2004

2003

2002Service cost

$
87

$
48

$
72Interest cost


571


619


703Amortization of gains


(153
)

(164
)

(144
)Amortization of unrecognized prior service cost


19


19


19Net periodic postretirement benefit cost

$
524

$
522

$
650


70

---



The
following assumptions were used in the determination of net periodic postretirement benefit cost:

Year ended October 31,2004

2003

2002Discount rates

6.25
%
7.00
%
7.10
%


The
postretirement benefit plans are unfunded. The following illustrates the Company's postretirement benefit obligation:

October 31,2004

2003Change in benefit obligation:Beginning of year

$
9,549

$
9,822Service cost


87


48Interest cost


571


619Actuarial loss


232


155Benefits paid


(1,253
)

(1,095
)End of year

$
9,186

$
9,549


The
following assumptions were used to determine benefit obligations at:

October 31,2004

2003Discount rate


5.75
%

6.25
%Trend rate


9.00
%

9.00
%Reconciliation of funded status:Projected benefit obligation in excess of plan assets

$
(9,186
)
$
(9,549
)Unrecognized prior service cost


155


175Unrecognized actuarial gain


(2,803
)

(3,188
)Accrued postretirement benefit cost

$
(11,834
)
$
(12,562
)Current portion

$
(1,300
)
$
(953
)Noncurrent portion

$
(10,534
)
$
(11,609
)


Information
regarding the expected cash flows for the other postretirement benefit plans is as follows:

Postretirement BenefitsEmployer Contributions2005 (expected)

$
1,300Expected Benefit Payments2005

$
1,3002006

$
1,4002007

$
1,4002008

$
1,5002009

$
1,5002010-2014

$
7,500


71

---



The
following table provides information regarding the assumed health care cost trend rates at October 31:

October 31,2004

2003Health care cost trend rate

9.00
%
9.00
%Ultimate trend rate

5.00
%
5.00
%Year that the rate reaches the ultimate trend rate

2009

2008


Assumed
health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost
trend rates would have the following effects:

Effect of
1% Increase

Effect of
1% DecreaseAccumulated postretirement benefit obligation

$
540

$
(482
)Net periodic postretirement benefit cost

$
31

$
(28
)




The Company sponsors a 401(k) plan that covers substantially all U.S. employees. Participants can contribute up to 50% of compensation on a before-tax
basis subject to certain restrictions. The Company's mandatory match under the plan is 25% of the first 6% of a participant's before-tax contribution. The Company may make additional
contributions at management's discretion. The Company's expense representing its matching contribution was $527, $535 and $545 for the years ended October 31, 2004, 2003 and 2002, respectively.
Plan assets consist primarily of investments in common stock and debt securities.

The
Company has a profit sharing program, which covers substantially all U.S. employees. The program provides for a distribution to employees equal to 15% of U.S. income before income
tax expense, plus any extraordinary items, excluding the related tax effect. At management's discretion, a portion of the distribution may be made in the form of a contribution to the 401(k) plan. The
remainder is paid in cash to employees. The Company had expense of approximately $400 under this program for the year ended October 31, 2004, and no expense for the years ended
October 31, 2003 and 2002 as a result of losses before income tax expense in the U.S.

Foreign Plans

Doe Run Peru is required to make monthly deposits into a bank account for severance indemnity benefits for Peruvian employees under Peruvian government
regulations. The balance in the account represents the full benefit due to such employees upon termination. The Company accrues for the additional amount that would be contributed to the account since
the last deposit date as if all such employees were to terminate as of the balance sheet date. The Company's expense related to severance indemnity benefits was $3,428, $3,974 and $3,456 for the years
ended October 31, 2004, 2003 and 2002, respectively.

In
accordance with government regulations in Peru, employees are entitled to receive 8% of Doe Run Peru's taxable income, 50% of which is distributed to employees based on the number of
days worked and the remaining distributed in proportion to their salaries. Such profit sharing, which is tax deductible, is limited to 18 times the annual salary for each worker. Any excess is
to be reserved and used for training the workers. The Company had no expense relating to workers' profit sharing payments for the years ended October 31, 2004, 2003 and 2002 due to tax losses
in those years.

72

---



(15) Business and Credit Concentrations

Metal prices fluctuate and are affected by numerous factors beyond the Company's control, including expectations for inflation, speculative activities, the
relative exchange rate of the U.S. dollar, global and regional demand and production, political and economic conditions and production costs in major producing regions. The aggregate effect of these
factors makes it impossible for the Company to predict metal prices. Fluctuations in metal prices can have a material adverse effect on the results of operations, financial condition and liquidity of
the Company.

For
the years ended October 31, 2004, 2003 and 2002, approximately 58%, 64% and 64%, respectively, of the Company's U.S. operations' revenues from unaffiliated customers were from
U.S. battery manufacturers (primarily automotive) or their suppliers. At October 31, 2004 and 2003, the accounts receivable balances related to these U.S. battery manufacturers were $26,708 and
$28,735, respectively.

No
single customer accounted for greater than 10% of consolidated revenues for the years ended October 31, 2004, 2003 and 2002.

(16) Segment Information

The Company's operating segments are separately managed business units that are distinguished by products, location and production process. The primary lead
segment includes integrated mining, milling and smelting operations located in Missouri. The recycling operation segment, located in Missouri, recycles lead-bearing materials, primarily
spent batteries. The fabricated products segment produces value-added lead products. Doe Run Peru produces an extensive product mix of non-ferrous and precious metals.

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

Operating SegmentsRevenues

Year Ended October 31,2004

2003

2002Revenues from external customers:Peruvian operations

$
563,419

$
435,506

$
418,286Primary lead


221,613


164,324


160,434Recycling operation


76,979


67,453


67,288Fabricated products


12,658


14,866


17,877Total


874,669


682,149


663,885Revenues from other operating segments:(1)Peruvian operations


2,996


707


Primary lead


1,425


1,035


1,995Recycling operation


327


655


565Total


4,748


2,397


2,560Total reportable segments


879,417


684,546


666,445Other revenues (losses)(2)


(7,371
)

2,466


(96
)Intersegment eliminations


(4,748
)

(2,397
)

(2,560
)Total revenues

$
867,298

$
684,615

$
663,789


---

73

---



Revenues by Country(3)

Year Ended October 31,2004

2003

2002United States

$
383,489

$
397,776

$
363,900Peru


68,288


38,888


43,159Japan


99,821


57,034


26,958Brazil


79,355


56,994


61,765Taiwan


44,669


15,013


2,984Switzerland


25,034


25,188


27,728United Kingdom


444


6,793


63,494Other


166,198


86,929


73,801Total revenues

$
867,298

$
684,615

$
663,789


---

The
measure of segment profit and loss used by the Company is earnings of the segment before interest, taxes, depletion, depreciation and amortization (EBITDA), as
adjusted to exclude losses from
impairment and disposal of long-lived assets and Doe Run Peru's expenses related to hedging and agency fees under an agreement with Doe Run (Adjusted EBITDA). Consolidated Adjusted EBITDA
also excludes accretion expense under Statement No. 143.

Operating SegmentsAdjusted EBITDA (Earnings before interest, taxes and depletion, depreciation and amortization)

Year Ended October 31,2004

2003

2002Peruvian operations

$
22,528

$
3,798

$
21,042Primary lead


55,397


12,281


6,222Recycling operation


15,857


12,413


15,888Fabricated products


1,452


731


1,604Total reportable segments


95,234


29,223


44,756Other revenues and expenses(4)


(25,198
)

(226
)

(7,896
)Corporate selling, general and administrative expenses


(21,594
)

(15,584
)

(17,218
)Intersegment eliminations


(21
)

(14
)

4Consolidated adjusted EBITDA


48,421


13,399


19,646Depreciation, depletion and amortization


(25,322
)

(30,407
)

(30,847
)Interest income


19


29


12,276Interest expense


(13,289
)

(13,270
)

(55,337
)Unrealized gain (loss) on derivatives


(231
)

(7,220
)

1,408Losses from impairment and disposal of long-lived assets


(3,591
)

(1,409
)

(10,606
)Asset retirement obligation accretion expense


(1,754
)

(1,530
)

Loss on retirement/restructure of long-term debt





(550
)

(7,439
)Income (loss) before income taxes and cumulative effect of change in accounting principle

$
4,253

$
(40,958
)
$
(70,899
)


---

74

---



Operating SegmentsTotal Assets

October 31,2004

2003Peruvian operations

$
251,764

$
230,148Primary lead


97,745


101,379Recycling operation


34,752


27,573Fabricated products


4,367


5,959Total reportable segments


388,628


365,059Unallocated corporate assets(5)


210,731


201,878Intersegment eliminations


(141,940
)

(137,504
)Total assets

$
457,419

$
429,433


---

(17) Commitments and Contingencies

Tolling

The Company has entered into tolling arrangements with major battery manufacturers whereby the manufacturers will deliver spent lead-acid batteries
and other lead-bearing material to the Company's recycling facility and, for a processing fee, the Company will return finished lead metal. The largest of these contracts expire in
December 2005 and September 2007. The agreements cover approximately 25%(unaudited)of the Company's anticipated combined primary and
secondary lead metal production for 2005.

Sales Commitments

The Company has commitments to sell approximately 85% (unaudited) of its anticipated 2005 lead metal production
and 100% (unaudited) of its lead, zinc and copper concentrates. Metal sales agreements are usually less than one year; concentrate sales agreements are
typically evergreen with a one-year cancellation. Metal sales prices are generally based on the average quoted exchange prices for the month of shipment, plus a premium. Concentrate sales
terms are based on average quoted exchange prices less a treatment charge. Treatment charges are usually based on a world benchmark.

Letters of Credit

At October 31, 2004, the Company had outstanding irrevocable standby letters of credit totaling $5,420 in connection with the Company's insurance and
bonding activities. The Company also had outstanding customs bonds of $2,075 relating to concentrate and other purchases.

Employment Agreements

The Company has employment agreements with a number of its senior executives through October 31, 2005, with automatic renewal annually thereafter unless
written notice is given at least three months prior to the expiration date.

(18) Hedging and Derivative Financial Instruments

A significant portion of the Company's sales contracts are priced based on an average LME or other exchange price for the respective metal plus a negotiated
premium. As such, the prices of the

75

---



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 may use 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.

For
derivative instruments designated as hedges (futures contracts), the Company assesses effectiveness by comparing the changes in fair value or cash flows relating the hedged
transaction with all changes in the fair values or cash flows of the related derivative contract. Because the futures fluctuate in the same amount as the hedged transaction (the change in the LME
price), the hedges are considered effective.

The
Company writes call options that, if exercised, will create sold futures contracts that are economic hedges of forecasted lead metal sales. The options generate premiums that enhance
revenues. Because these instruments do not meet the requirements for hedge accounting, the changes in fair value of these instruments are recorded in results of operations as unrealized (gain) loss on
derivative financial instruments.

The
fair value of the Company's derivative financial instruments reflected in the Company's balance sheets as of October 31, 2004 and 2003 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 cancelled on the balance
sheet date.

The
Company's open derivative financial instruments at October 31, 2004 were:



|Metal                 |  | Quantity                  |  | Weighted
Average
Price      |  | Fair Value |                       | Period
|--------------------- |  | ------------------------- |  | --------------------------- |  | ---------- | --------------------- | ------
|Lead                  |  | 66,965 tons
(65,808) tons |  | $618.86/ton
$698.76/ton     |  | $          | (13,325,766
7,831,684 | )     
|Leadcash flow hedges |  | 4,960 tons
(551) tons     |  | $768.28/ton
$762.94/ton     |  |            | (113,250
16,000       | )     
|Copper                |  | 3,580 tons
(3,031) tons   |  | $2,269.54/ton
$2,450.01/ton |  |            | (1,311,261
693,575    | )     
|Zinc                  |  | 4,905 tons
(5,016) tons   |  | $816.33/ton
$948.78/ton     |  |            | (680,388
31,375       | )     
|Silver                |  | 850,175 oz.
(987,300) oz. |  | $5.26/oz.
$5.56/oz.         |  |            | (1,191,098
1,088,910  | )     
|Gold                  |  | 6,472 oz.
(6,198) oz.     |  | $264.36/oz.
$299.91/oz.     |  |            | (792,370
538,445      | )     

76

---





|Metal  |  | Quantity                 |  | Price Range                                  |  | Fair Value |                   | Period
|------ |  | ------------------------ |  | -------------------------------------------- |  | ---------- | ----------------- | ------
|Lead   |  | 12,125 tons
(1,653) tons |  | $521.63/ton to $952.54/ton
$816.47/ton       |  | $          | (1,389,883
27,313 | )     
|Copper |  | 1,100 tons
(1,102) tons  |  | $2,500.00/ton
$2,608.16/ton to $2,948.35/ton |  |            | (262,086
74,097   | )     
|Zinc   |  | (1,653) tons             |  | $997.90ton                                   |  |            | 28,150            |       
|Silver |  | 416,860 oz.
(54,850) oz. |  | $5.47/oz. to $7.06/oz.
$7.06/oz.             |  |            | (479,378
10,889   | )     



|Metal  |  | Quantity      |  | Price Range   |  | Fair Value |         | Period
|------ |  | ------------- |  | ------------- |  | ---------- | ------- | ------
|Copper |  | (1,764) tons  |  | $2,512.90/ton |  | $          | 204,748 |       
|Silver |  | (164,550) oz. |  | $6.20/oz.     |  |            | 23,880  |       

The
Company's open derivative financial instruments at October 31, 2003 were:



|Metal                 |  | Quantity                  |  | Weighted
Average
Price  |  | Fair Value |                  | Period
|--------------------- |  | ------------------------- |  | ----------------------- |  | ---------- | ---------------- | ------
|Lead                  |  | 6,476 tons
(6,476) tons   |  | $465.26/ton
$453.92/ton |  | $          | (841,313
914,740 | )     
|Leadcash flow hedges |  | 17,417 tons               |  | $489.00/ton             |  |            | (1,853,855       | )     
|Copper                |  | 4,171 tons                |  | $1,816.18/ton           |  |            | (243,305         | )     
|Zinc                  |  | 1,102 tons
(1,102) tons   |  | $805.58/ton
$798.32/ton |  |            | (77,890
74,500   | )     
|Silver                |  | 850,175 oz.
(987,300) oz. |  | $5.21/oz.
$5.47/oz.     |  |            | 507,548
(841,410 | )     
|Gold                  |  | 6,472 oz.
(6,198) oz.     |  | $262.08/oz.
$292.53/oz. |  |            | (572,985
359,996 | )     



|Metal  |  | Quantity                  |  | Price Range                                   |  | Fair Value |                    | Period
|------ |  | ------------------------- |  | --------------------------------------------- |  | ---------- | ------------------ | ------
|Lead   |  | 69,363 tons
(5,512) tons  |  | $430.91/ton to $544.31/ton
$566.99/ton        |  | $          | (7,474,861
156,802 | )     
|Copper |  | 1,650 tons                |  | $1,680.00/ton to $1,780.00/ton                |  |            | (296,022           | )     
|Zinc   |  | 8,984 tons                |  | $771.11ton to $816.47/ton                     |  |            | (824,212           | )     
|Silver |  | 351,040 oz.
(109,700) oz. |  | $5.65/oz. to $5.47/oz.
$4.88/oz. to $5.01/oz. |  |            | (42,658
2,926      | )     



|Metal |  | Quantity                  |  | Price Range                            |  | Fair Value |                | Period
|----- |  | ------------------------- |  | -------------------------------------- |  | ---------- | -------------- | ------
|Lead  |  | 20,117 tons
(24,251) tons |  | $385.55/ton to $439.98/ton
$462.66/ton |  | $          | (9,687
132,004 | )     

77

---



At
October 31, 2004 and 2003, the Company had recorded an asset of $0 and $86 respectively, and a liability of $8,976 and $11,004, respectively, related to the fair market values
of these instruments.

The
Company does not obtain collateral or other security to support hedge instruments subject to credit risk but assesses the reliability and reputation of its counterparties before
contracts are established.

(19) Asset Retirement and Environmental Obligations

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

Asset Retirement Obligations

On November 1, 2002 the Company adopted Statement No. 143. With the adoption of this Statement, asset retirement obligations (AROs) are recognized
as liabilities when incurred, with the initial measurement at fair value. These liabilities will be increased to full value over time through charges of accretion to operating expense. In addition, an
asset retirement cost is capitalized as part of the related asset's carrying value and will be depreciated over the asset's useful life. Changes in the ARO liability resulting from revisions to the
timing or the amount of the original estimate of undiscounted cash flows shall be recognized as an increase or a decrease in the carrying amount of the liability for an ARO and the related asset
retirement cost capitalized as part of the carrying amount of the related long-lived asset.

The
Company's mines and related processing facilities are subject to governance by various agencies that have established minimum standards for reclamation. The Company's primary smelter
slag produced by and stored at the primary smelter in Herculaneum, Missouri is currently exempt from hazardous waste regulation under the Resource Conservation and Recovery Act of 1976, as amended
(RCRA), but is subject to a state closure permit, which requires activities to contain and cover the pile upon cessation of operations. The Company's mining and milling operations are subject to
Missouri mine waste closure permit requirements and lease agreements which require the Company to reclaim surface areas, including remediation of mining waste disposal areas, and to perform closure
activities underground. These activities, which tend to be site specific, generally include costs for earthwork, revegetation, water treatment and demolition. Closure activities may be performed over
time.

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

Doe
Run Peru also has AROs at its Cobriza mine related to the costs associated with closing the mine openings and covering acid rock. Doe Run Peru is also responsible for the covering
and revegetation of mixed lead and copper slag stored in Huanchan, an area a short distance from the smelter where the slag is currently stored.

78

---



Activity
related to the Company's AROs during the years ended October 31, 2004 and 2003 are as follows:

October 31,2004

2003AROs as of beginning of year

$
14,622

$
12,059Transition adjustment





1,852Liabilities settled


(225
)

(128
)Accretion expense


1,754


1,530Changes in estimated cash flows


(1,547
)

(691
)AROs as of end of year

$
14,604

$
14,622


Environmental remediationDomestic Operations

Doe Run is subject to a voluntary Administrative Order on Consent (AOC), effective May 29, 2001, to study and address issues related to the slag pile,
plant property, community soils adjacent to the primary smelter in Herculaneum, elevated blood lead levels in the community and lead releases from the plant.

Under
this AOC Doe Run completed additional soil testing in the area within a mile radius of the smelter and subsequently signed a second AOC with the U.S. EPA on December 21,
2001, which has essentially been completed. The May 29, 2001 AOC was modified effective on May 20, 2004. The modification accelerated the number of properties to be remediated in 2004.
The estimated remaining cost of remediating these properties is approximately $1,480, with approximately $1,100 to be spent in calendar 2005.

Doe
Run signed a settlement agreement with the State of Missouri on April 26, 2002 whereby it agreed to offer to purchase approximately 160 residential properties in an area close
to the smelter if the owner requests such an offer. The homeowners have until June 30, 2005 to accept any offers made. The amount paid to the homeowners who accept an offer is based on an
appraisal of the property's value at August 31, 2001, plus, if a replacement property is purchased, an amount for owner-occupied residences representing the lesser of the difference between the
appraisal amount and the cost of a similar property in another designated community or the difference between the appraisal amount and the replacement property.

As
of December 31, 2004, a total of 147 homeowners had requested offers, and 111 of 138 delivered offers had been accepted. As of December 31, 2004, the Company had spent
approximately $7,900 under the residential property purchase plan, with another $700 in accepted offers awaiting a closing date and $2,200 in outstanding offers. Management cannot estimate how many of
the remaining homeowners will accept offers.

Doe
Run will attempt to rent out certain purchased properties, if approval is received by the regulatory agencies. The properties must remain vacant while owned by Doe Run until
regulators and the city agree that re-occupancy is not a risk to human health. Management believes that there is current evidence that no health risk exists as a result of smelter
operations, due to soil remediation efforts and low concentrations of lead in the air in the buyout area, and that other sources of lead contamination could be remedied. If Doe Run does not comply
with the material property purchase provisions of the settlement agreement, Doe Run will be subject to a $1,000 penalty.

The
Company's statements of operations reflect losses from impairment or retirement of long-lived assets for the years ended October 31, 2004, 2003 and 2002 of $3,588,
$1,255 and 1,801, respectively, related to the properties owned in Herculaneum as it cannot be assured that the cost of the properties will be recovered through future cash flows. If the cost of the
properties cannot be recovered through

79

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future
cash flows, additional impairment losses will be recognized as properties are purchased. The Company's recorded liability for remediation does not include the future purchase costs relating to
the residential property purchase plan as these costs are capitalized.

Doe
Run has implemented a plan with the Missouri Department of Natural Resources and the Missouri Air Conservation Commission to bring the Herculaneum smelter in compliance with the
ambient air quality standard for lead promulgated under the federal Clean Air Act. The plan was included in a consent judgment entered into by Doe Run and has been approved at the state level and by
the U.S. EPA. The air quality monitors have reflected compliance since July 2002.

Doe
Run has received notice that it is a potentially responsible party (PRP) subject to liability under The Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (CERCLA), at the following sites: six sites in St. Francois County, Missouri, including the Big River Mine Tailings site, the Bonne Terre site, the Federal site, the National site,
the Rivermines site and the Leadwood site; the Oronogo-Durenweg site in Jasper County, Missouri; the Cherokee County site in Cherokee County, Kansas; the Tar Creek site in Ottawa County, Oklahoma; the
Block "P" site in Cascade County and Judith County, Montana; and the Missouri Electric Works site in Cape Girardeau, Missouri. There are two additional sites in St. Francois County for which
the EPA has indicated it will issue notice. CERCLA provides for strict and, in certain circumstances, joint and several liability for response costs and natural resource damages. The Company's
estimate of the cost of this remediation is approximately $11,500 for these sites, including the two additional sites in St. Francois County, which the Company believes is adequate based on its
investigations to date. However, depending upon the types of remediation required and certain other factors, costs at these sites, individually or collectively, could have a material adverse effect on
the results of operations, financial condition and liquidity of the Company. In February 2004 the U.S. Department of Agriculture issued a Unilateral Administrative Order ordering certain
remediation activities by Doe Run at the Block "P" millsite. Doe Run has requested that other parties be added to the order. Doe Run will seek reimbursement from the U.S. Government and these other
parties.

Doe
Run has completed an Engineering Evaluation/Cost Analysis (EE/CA) for the Bonne Terre site and has signed two AOCs to conduct removal actions on the west and east portions of the
site. Work is completed on the West Bonne Terre site and is underway on the east side with completion expected in early 2005.

Doe
Run is subject to a voluntary AOC with the EPA to remediate the Big River Mine Tailings site. The remediation work required by the AOC has been substantially completed, and will
continue with revegetation and ongoing monitoring and maintenance activities.

Doe
Run has also signed AOCs to perform an EE/CA on each of the National, Rivermines, and Leadwood sites for remediation of mine waste areas. The National EE/CA is complete, the
Rivermines EE/CA is under public review and has been submitted to the EPA for approval, and the Leadwood EE/CA has been submitted to the EPA for approval. In addition, Doe Run has signed an AOC with
the EPA to conduct a Remedial Investigation/Feasibility Study (RI/FS) to assess potential off-site impacts of these site operations on and the need for remediation regarding groundwater,
residential soils, several creeks and a river. The initial draft of the RI/FS was submitted in early March 2002. Doe Run signed an order to conduct interim measures, which consisted of blood
lead testing of young children, residential soil sampling and limited soil remediation as indicated by the testing and sampling results, which was terminated and replaced by an AOC to conduct certain
additional soil remediation in the area and has included its best estimate of these efforts in its recorded liabilities. The Company believes the recorded liabilities related to these sites are
adequate. However, should remediation goals or areas change, requiring substantially increased measures, there can be no assurance that the recorded liabilities would be adequate.

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In
March 2004, Doe Run received notice that it is a PRP subject to liability under CERCLA for contamination along roads in Iron, Dent and Reynolds counties in Missouri, along with
a number of mining companies involved in the transportation of concentrates. Approximately 521 houses were identified as potentially requiring remediation. Doe Run and four other mining companies have
signed an AOC to conduct soil remediation at approximately 40 of these houses. Doe Run expects that its share of the potential remediation costs will not be significant, based on management's
estimates of the number of houses requiring remediation, remediation methods and Doe Run's apportionment of the costs.

Doe
Run has been advised that the EPA is considering taking certain response actions at a mine site in Madison County, Missouri known as the Mine LaMotte Site. Doe Run and the owner of
the other 50% share of stock in the company that mined the site have signed an AOC to conduct an RI/FS at the site. This site is substantially smaller than the sites in St. Francois County
where the Company has been named a PRP, and the potential issues are less complex. Doe Run has also been advised that remediation is required at a related small satellite mine site. After conducting
an investigation, Doe Run has determined that it was not involved in operations at the satellite site, but further review will be required before a determination can be made as to whether it has any
liability at the main site. At this time, based on preliminary information and an inspection of the sites, management does not believe that any future action will result in a material adverse impact
to the results of operations, financial condition or liquidity of the Company.

Doe
Run's recycling facility is subject to corrective action requirements under RCRA as a result of a storage permit for certain wastes issued in 1989. This will involve remediation of
solid waste management units at the site, although the plan for corrective action will not be finalized until fiscal 2005. The Company's estimate of the cost of this corrective action is $2,000. The
storage area is also covered under the permit, but management does not believe the cost of closure is significant. While management believes that recorded liabilities are adequate based on
expectations of the closure plan
requirements, regulators could require that additional measures be included in the finalized plan, which could change the estimate of the costs for corrective action.

On
August 25, 2004, the EPA issued a Notice of Violation (NOV) to the Company alleging past violations of the recycling facility's air permit conditions regarding production
limits for its reverbatory furnace. Management believes the facility has operated in compliance with state and federal air requirements and will contest the NOV. If the EPA prevails, there is a
reasonable possibility that fines based on this action could have a material adverse effect on the Company's liquidity or results of operations.

The
domestic operating facilities have wastewater discharge permits issued under the federal Clean Water Act, as amended. Doe Run currently meets the effluent limits under these permits,
but if compliance were not maintained, additional improvements to its treatment facilities could be required.

The
Company had recorded liabilities of approximately $18,800 and $14,400 related to these remediation obligations as of October 31, 2004 and 2003, respectively.

Foreign Operations

La Oroya's operations historically and currently exceed some of the applicable Ministry of Energy and Mines (MEM) maximum permissible limits pertaining to air
emissions and wastewater effluent quality. The PAMA projects, which are more fully discussed below, have been designed to achieve compliance with these requirements. There can be no assurance that the
Peruvian government will not, in the future, require compliance with additional environmental regulations that could adversely affect Doe Run Peru's business, financial condition and results of
operations.

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Metaloroya S.A., the former owner of the La Oroya smelter, at the time a subsidiary of Centromin, received approval from the Peruvian government for a PAMA that consisted of an
environmental impact analysis, monitoring plan and data, mitigation measures and closure plan. Doe Run Peru assumed the obligations under the PAMA. The PAMA also sets forth the actions and
corresponding annual investments the concession holder agrees to undertake in order to achieve compliance with the maximum permissible limits prior to expiration of the PAMA (ten years for smelters,
such as Doe Run Peru's operations in La Oroya, and five years for any other type of mining or metallurgical operation like Cobriza). After expiration of the PAMA, the operator must comply with all
applicable standards and requirements. Because these costs improve the property or prevent future environmental contamination, they are capitalized.

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



An
investment schedule in the PAMA provides a specific plan for achieving the applicable MEM maximum permissible limits pertaining to air emissions and wastewater effluent quality. The
PAMA may be modified and amended as to the actual design and timing of projects to be implemented, provided compliance with the applicable maximum permissible limits is achieved by December 31,
2006. The required estimated annual spending on a calendar year basis for the projects approved in the La Oroya PAMA, as amended, most recently on January 25, 2002, are as follows:

Year

Estimated Cost2005

$
53,5002006


67,700$
121,200


Doe
Run Peru expects that it will not be able to comply with the spending requirements of La Oroya's PAMA investment schedule in 2005 and 2006 with respect to the construction of the
sulfuric acid plant required by the PAMA and, as a result, could be subject to penalties. Failure to comply with the PAMA could result in the cessation of operations at the La Oroya smelter.

On
December 29, 2004 the Peruvian Government issued a Supreme Decree, which recognized that exceptional circumstances may justify an extension of one or more projects within the
scope of a PAMA. The Supreme Decree specifies that companies have until December 31, 2005 to apply for an extension. The maximum extension is for three years and the MEM may authorize an
additional year based upon the results of a health risk study.

Doe
Run intends to apply for an extension to complete the construction of the sulfuric acid plant contemplated by the original PAMA. .The application for a PAMA extension must be
supported by a

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health
risk study performed by a third party. The application must contain an engineering description and funding plan of any project to be extended, a discussion of how and when environmental
emission standards will be met, a plan to monitor emissions with the participation of the community, proof that at least three public workshops were held in various districts to provide information on
Doe Run Peru's financial situation and health programs, proof that two public hearings were held regarding the extension plans, and other financial information. In order to meet these requirements,
the Company does not expect to apply for the extension until the end of 2005.

Upon
approval of a modified PAMA, Doe Run Peru would be required to create a trust account. The trust account would administer the receipts and disbursements related to the extended PAMA
project. The Supreme Decree requires that receipts from sales, in an amount sufficient to fund the monthly cash requirements of the extended PAMA project, be remitted directly to the trust account.
Such an arrangement is prohibited by the Doe Run Peru Revolving Credit Facility, which expires on September 23, 2005. Accordingly, a renegotiated Doe Run Peru credit facility will need to
comply with the requirements established by the Supreme Decree, should Doe Run Peru's PAMA be extended.

The
Supreme Decree also requires that, within 30 days of the approval of the PAMA extension, the Company provide financial security in an amount equal to 20% of the projected cost
of the project or projects to be extended. The Company currently expects the overall investment required to build the sulfuric acid plant to be approximately $102,000. The Company cannot assure that
it will be successful in obtaining the necessary financial security required.

Doe
Run Peru will perform other environmental projects to reduce fugitive emissions, including heavy metal dust, to address the health issues of the community. The total cost of the
currently remaining PAMA projects, including the sulfuric acid plant construction, and these projects is approximately $143,000.

Management
believes that Doe Run Peru will obtain an approval of an extension to complete the sulfuric acid plant. There is no assurance, however, that Doe Run Peru will receive an
extension, or, if it does, that the project will be completed within the time limitation specified by the Supreme Decree.

The
PAMA projects have been designed to achieve compliance with such requirements prior to the expiration of the PAMA. 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 and results of operations.

Under
the purchase agreement related to the acquisition of the La Oroya assets in October 1997, Centromin, the prior owner of the La Oroya smelter and Cobriza mine, agreed to
indemnify Doe Run Peru against environmental liability arising out of its prior operations and their apportioned share of any other complaint related to emissions. Performance of the indemnity has
been guaranteed by the Peruvian government through the enactment of the Supreme Decree No. 042-97-PCM. However, there can be no assurance that Centromin will satisfy its
environmental obligations and investment requirements, including those in its PAMA, or that the guarantee will be honored. Any failure by Centromin to satisfy its environmental obligations could
adversely affect Doe Run Peru's business, financial condition and results of operations.

The
Cobriza mine has a separate PAMA in which Doe Run Peru has committed to complete projects to manage tailings, mine drainage, sewage and garbage. As of June 2004, Doe Run Peru
ceased discharging mine waste into the Mantaro River and was in compliance with the emissions standards required by the PAMA.

Doe
Run Peru is responsible for the remediation costs relating to a zinc ferrite disposal site. The current closure plan provides for encapsulating the ferrite residues in place at
Huanchan, an area a

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short
distance from the smelter where they are currently stored, for which an environmental liability of $1,600 has been recorded as of October 31, 2004 and October 31, 2003.



The Company believes its liabilities for domestic and foreign environmental, mine closure and reclamation matters are adequate, based on the information currently
available. Depending upon the
type and extent of activities required, revisions to management's estimates of costs to perform these activities are reasonably possible in the near term. Therefore, there can be no assurance that
additional costs, both individually and in the aggregate, would not have a material adverse effect on the results of operations, financial condition and liquidity of the Company.

(20) Litigation

Doe Run is a defendant in eight lawsuits alleging certain damages stemming from the operations at the Herculaneum smelter. Three of these cases are class action
lawsuits. In two cases, the plaintiffs seek to have certified a class of property owners in a certain section of Herculaneum, alleging that property values have been damaged due to the operations of
the smelter. In another case, plaintiffs seek to have certified a class of children who lived in Herculaneum during a period of time when they were less than six years old and children born to mothers
who lived in Herculaneum during their pregnancies. The remedy sought is medical monitoring for the class. Five of the cases are personal injury actions by 24 individuals who allege damages from the
effects of lead due to operations at the smelter. Punitive damages also are being sought in each case.

A
resident of Herculaneum has claimed personal injuries allegedly resulting from exposure to emissions from the smelter. No suit has yet been filed in this matter.

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

Doe
Run has been named in 17 suits filed by 116 railway employees against a railroad carrier and multiple lead mining companies alleging personal injury resulting from exposure to lead
concentrates hauled by the railroad carrier. In addition, Doe Run has been named in an action by the spouses of four railway workers related to the exposure to lead from the hauling of lead
concentrates by the railroad. Doe Run has reached tentative settlement with all but four of the plaintiffs in these cases.

The
railroad carrier has also threatened Doe Run with possible legal action for claims for indemnity allegedly arising out of contracts with Doe Run or its predecessors for payments that
the railroad has made in regard to personal injury claims against the railroad by railway workers and others, including those made in 114 cases previously settled by Doe Run. This railroad carrier has
also communicated to Doe Run that it intends to seek contribution from Doe Run for cleanup actions at a rail car
clean-out area that the carrier was ordered to take by the federal government. The carrier pled guilty to a felony and paid a criminal fine for its actions. It is Doe Run's position that
Doe Run cannot be held liable for another's criminal actions. No lawsuit has been filed.

Doe
Run is a defendant in lawsuits alleging certain damages from past mining operations in Ottawa County, Oklahoma. Ten lawsuits have been filed alleging personal injury to 25 children
and one

84

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adult
living in Ottawa County against eight companies, including Doe Run, who allegedly, either through predecessors or subsidiaries, mined lead and zinc in Ottawa County or commercially used the chat
or tailings in Ottawa County. Five of these suits were dismissed, leaving claims alleged by seven children. Two cases are class action lawsuits for personal injury and property damage in Picher and
Quapaw, Ottawa County. An additional class action lawsuit for damages to natural resources and land owned by members of the Quapaw Tribe was filed on December 10, 2003 against seven companies,
including Doe Run. The Company is unable at this time to estimate the expected outcome and any final costs of this action. Two additional cases alleging personal injury to 45 children and three
children, respectively, were filed in July 2004.

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

Doe
Run has been named in an asbestos injury suit in the City of St. Louis by an individual against numerous companies and public entities, alleging that he was exposed to asbestos,
including at the premises of the St. Joe Minerals Corporation (Doe Run's predecessor). Doe Run was named in two similar suits filed in Madison County, Illinois, one alleging that a worker was exposed
to asbestos at premises of the St. Joe Minerals Corporation, in which Doe Run has not been properly served, and the other filed by a person who did laundry for insulation workers in her family who
were allegedly exposed to asbestos at Doe Run's Herculaneum, Missouri facility. Doe Run was served a Writ of Summons in a fourth case filed in Pennsylvania in May 2003 but has not yet been
served with a complaint, so few details of the case are known, including the alleged location of the exposure.

Doe
Run has been named in a suit claiming alleged damages to the property of a small business in the vicinity of Doe Run's recycling facility. On December 3, 2004 the plaintiff
filed to dismiss the case.

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

Doe
Run Peru is a defendant in 123 lawsuits in the Lima, Peru labor courts whereby workers have alleged damages from industrial diseases. Doe Run Peru has made claims in most of the
cases against Centromin and has also made claims against both governmental agencies and private companies that provide workers' insurance. The average claim is $18. Of seven concluded cases in this
category, six were dismissed and one resulted in a payment by Doe Run Peru of $9.

Doe
Run Peru is also a defendant in 136 lawsuits by workers alleging that they are owed certain differences in salaries and benefits. The average claim is $23. Of 22 concluded cases in
this category, 21 were dismissed and one resulted in a payment by Doe Run Peru of $2. Doe Run Peru is also a defendant in a lawsuit by the Yauli-La Oroya Employees Union concerning
salaries and benefits. The claims of the 150 workers remaining in the lawsuit total approximately $660.

On
January 19, 2005, Doe Run Peru was served with a lawsuit by an association of municipalities of the Junin Region of Peru against Doe Run Peru and two other mining companies.
This lawsuit alleges environmental damages to the Mantaro River basin in the amount of $5.0 billion. Material liability to Doe Run Peru is believed to be remote because it is the opinion of
management and outside counsel for Doe Run Peru that the probability under Peruvian law of this case proceeding to a

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conclusion
at the favor of the plaintiffs is low. Any potential judgment would be subject to the indemnification obligations of Centromin, which are guaranteed by the Peruvian government.

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

(21) Guarantor Subsidiaries

The Guarantor Subsidiaries (Fabricated Products, Inc. (FPI) and DR Land Holdings, LLC (together, the Domestic Guarantors) Buick Resource Recycling
Facility, LLC, Doe Run Cayman Ltd. (Doe Run Cayman) and its subsidiary Doe Run Peru) have jointly and severally, fully, unconditionally and
irrevocably guaranteed the Unsecured Notes, Secured Notes and 11.75% Notes of the Company. Doe Run Cayman has no operations separate from those of Doe Run Peru. Separate financial statements and other
disclosures concerning certain Guarantor Subsidiaries and disclosures concerning non-Guarantor Subsidiaries have not been presented because management has determined that such information
is not material to investors. Intercompany transactions eliminated in consolidation consist of various service and agency fees between Doe Run and Doe Run Peru and sales of metal to Doe Run by Doe Run
Peru and to FPI by Doe Run.

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(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Balance Sheet  As of October 31, 2004

|                                               |                                                                                            | The Company
Excluding
Guarantor
Subsidiaries         |   | Buick
Resource
Recycling
Facility, LLC |          | Other
Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |   | Eliminations |        | The
Company |        
|---------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------- | - | -------------------------------------- | -------- | ------------------------- | ------ | ----------------------------- | - | ------------ | ------ | ----------- | -------
|ASSETS                                         |                                                                                           
|Current assets:                                |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               | Cash                                                                                       |                                                      | $ | 13,412                                 |          | $                         |       |                               | $ | 1            |        | $           | 6,905  
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                          |                                                      |   | 42,269                                 |          |                           |       |                               |   | 1,942        |        |             | 22,217 
|                                               | Inventories                                                                                |                                                      |   | 36,359                                 |          |                           |       |                               |   | 1,130        |        |             | 65,876 
|                                               | Prepaid expenses and other current assets                                                  |                                                      |   | 19,898                                 |          |                           |       |                               |   | 59           |        |             | 15,901 
|                                               | Due from subsidiaries                                                                      |                                                      |   | 11,998                                 |          |                           | 1,162  |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current assets                                 |   |                                        | 123,936  |                           |        | 1,162                         |   |              | 3,132  |             |        
|                                               | Property, plant and equipment, net                                                         |                                                      |   | 72,716                                 |          |                           | 14,739 |                               |   | 1,442        |        |             | 140,743
|                                               | Due from subsidiaries                                                                      |                                                      |   | 156,495                                |          |                           |       |                               |   |             |        |             |       
|                                               | Other noncurrent assets, net                                                               |                                                      |   | 3,890                                  |          |                           |       |                               |   | 63           |        |             | 122    
|                                               | Investment in subsidiaries                                                                 |                                                      |   | (12,647                                | )        |                           |       |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total assets                                         |   | $                                      | 344,390  |                           | $      | 15,901                        |   | $            | 4,637  |             | $      
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                           
|Current liabilities:                           |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               | Current maturities of long-term debt                                                       |                                                      | $ | 57,367                                 |          | $                         |       |                               | $ |             |        | $           | 39,400 
|                                               | Accounts payable                                                                           |                                                      |   | 23,310                                 |          |                           |       |                               |   | 662          |        |             | 44,092 
|                                               | Accrued liabilities                                                                        |                                                      |   | 55,625                                 |          |                           |       |                               |   | 1,054        |        |             | 27,199 
|                                               | Due to parent/subsidiaries                                                                 |                                                      |   | 1,162                                  |          |                           |       |                               |   | 7,998        |        |             | 143,063
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current liabilities                            |   |                                        | 137,464  |                           |        |                              |   |              | 9,714  |             |        
|                                               | Long-term debt, less current maturities                                                    |                                                      |   | 320,561                                |          |                           |       |                               |   |             |        |             |       
|                                               | Due to parent                                                                              |                                                      |   |                                       |          |                           |       |                               |   |             |        |             | 17,432 
|                                               | Other noncurrent liabilities                                                               |                                                      |   | 71,772                                 |          |                           |       |                               |   | 533          |        |             | 3,460  
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities                                    |   |                                        | 529,797  |                           |        |                              |   |              | 10,247 |             |        
|                                               | Series A redeemable preferred stock                                                        |                                                      |   | 25,329                                 |          |                           |       |                               |   |             |        |             |       
|Shareholders' equity (deficit):                |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding |                                                      |   |                                       |          |                           |       |                               |   |             |        |             |       
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued and outstanding                |                                                      |   |                                       |          |                           |       |                               |   | 1            |        |             |       
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding            |                                                      |   |                                       |          |                           |       |                               |   |             |        |             | 2,005  
|                                               | Additional paid in capital                                                                 |                                                      |   |                                       |          |                           | 19,348 |                               |   | 1,205        |        |             |       
|                                               | Accumulated deficit and accumulated other comprehensive losses                             |                                                      |   | (210,736                               | )        |                           | (3,447 | )                             |   | (6,816       | )      |             | (24,887
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total shareholders' equity (deficit)                 |   |                                        | (210,736 | )                         |        | 15,901                        |   |              | (5,610 | )           |        
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities and shareholders' equity (deficit) |   | $                                      | 344,390  |                           | $      | 15,901                        |   | $            | 4,637  |             | $      
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        

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(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Balance Sheet  As of October 31, 2003

|                                               |                                                                                            | The Company
Excluding
Guarantor
Subsidiaries         |   | Buick
Resource
Recycling
Facility, LLC |          | Other
Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |   | Eliminations |        | The
Company |        
|---------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------- | - | -------------------------------------- | -------- | ------------------------- | ------ | ----------------------------- | - | ------------ | ------ | ----------- | -------
|ASSETS                                         |                                                                                           
|Current assets:                                |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               | Cash                                                                                       |                                                      | $ | 2,906                                  |          | $                         |       |                               | $ |             |        | $           | 16,794 
|                                               | Trade accounts receivable, net of allowance for doubtful accounts                          |                                                      |   | 37,310                                 |          |                           |       |                               |   | 2,590        |        |             | 16,982 
|                                               | Inventories                                                                                |                                                      |   | 40,432                                 |          |                           |       |                               |   | 1,202        |        |             | 54,081 
|                                               | Prepaid expenses and other current assets                                                  |                                                      |   | 13,093                                 |          |                           |       |                               |   | 86           |        |             | 8,352  
|                                               | Due from subsidiaries                                                                      |                                                      |   | 26,642                                 |          |                           | 371    |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current assets                                 |   |                                        | 120,383  |                           |        | 371                           |   |              | 3,878  |             |        
|                                               | Property, plant and equipment, net                                                         |                                                      |   | 80,086                                 |          |                           | 14,312 |                               |   | 2,286        |        |             | 133,683
|                                               | Due from subsidiaries                                                                      |                                                      |   | 139,063                                |          |                           |       |                               |   |             |        |             |       
|                                               | Other noncurrent assets, net                                                               |                                                      |   | 5,174                                  |          |                           |       |                               |   | 66           |        |             | 256    
|                                               | Investment in subsidiaries                                                                 |                                                      |   | (13,506                                | )        |                           |       |                               |   |             |        |             |       
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total assets                                         |   | $                                      | 331,200  |                           | $      | 14,683                        |   | $            | 6,230  |             | $      
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |                                                                                           
|Current liabilities:                           |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               | Current maturities of long-term debt                                                       |                                                      | $ | 40,558                                 |          | $                         |       |                               | $ |             |        | $           | 37,559 
|                                               | Accounts payable                                                                           |                                                      |   | 19,475                                 |          |                           |       |                               |   | 621          |        |             | 31,425 
|                                               | Accrued liabilities                                                                        |                                                      |   | 59,258                                 |          |                           |       |                               |   | 2,207        |        |             | 23,018 
|                                               | Due to parent/subsidiaries                                                                 |                                                      |   | 371                                    |          |                           |       |                               |   | 7,604        |        |             | 19,038 
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total current liabilities                            |   |                                        | 119,662  |                           |        |                              |   |              | 10,432 |             |        
|                                               | Long-term debt, less current maturities                                                    |                                                      |   | 330,579                                |          |                           |       |                               |   |             |        |             |       
|                                               | Due to parent                                                                              |                                                      |   |                                       |          |                           |       |                               |   |             |        |             | 139,063
|                                               | Other noncurrent liabilities                                                               |                                                      |   | 67,511                                 |          |                           |       |                               |   | 760          |        |             | 3,237  
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities                                    |   |                                        | 517,752  |                           |        |                              |   |              | 11,192 |             |        
|                                               | Series A redeemable preferred stock                                                        |                                                      |   | 22,514                                 |          |                           |       |                               |   |             |        |             |       
|Shareholders' equity (deficit):                |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               | Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding |                                                      |   |                                       |          |                           |       |                               |   |             |        |             |       
|                                               | Common stock, $1 par value, 1,000 shares authorized, issued and outstanding                |                                                      |   |                                       |          |                           |       |                               |   | 1            |        |             |       
|                                               | Common stock, $1 par value, 2,005,000 shares authorized, issued and outstanding            |                                                      |   |                                       |          |                           |       |                               |   |             |        |             | 2,005  
|                                               | Additional paid in capital                                                                 |                                                      |   | 2,724                                  |          |                           | 16,062 |                               |   | 1,205        |        |             |       
|                                               | Accumulated deficit and accumulated other comprehensive losses                             |                                                      |   | (211,790                               | )        |                           | (1,379 | )                             |   | (6,168       | )      |             | (25,197
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total shareholders' equity (deficit)                 |   |                                        | (209,066 | )                         |        | 14,683                        |   |              | (4,962 | )           |        
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        
|                                               |                                                                                            | Total liabilities and shareholders' equity (deficit) |   | $                                      | 331,200  |                           | $      | 14,683                        |   | $            | 6,230  |             | $      
|                                               |                                                                                            |                                                      |   |                                        |          |                           |        |                               |   |              |        |             |        

88

---





(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Operations  Year Ended October 31, 2004

|                        |                                          | The Company
Excluding
Guarantor
Subsidiaries |         | Buick
Resource
Recycling
Facility, LLC |         | Other
Domestic
Guarantors |       | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |        
|----------------------- | ---------------------------------------- | -------------------------------------------- | ------- | -------------------------------------- | ------- | ------------------------- | ----- | ----------------------------- | ------ | ------------ | ------ | ----------- | -------
|Net sales               |                                          | $                                            | 300,811 |                                        | $       |                          |       | $                             | 12,658 |              | $      | 566,415     |        
|Costs and expenses:     |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        | Cost of sales                            |                                              |         | 246,664                                |         |                           |      |                               |        | 9,849        |        |             | 530,995
|                        | Depletion, depreciation and amortization |                                              |         | 9,647                                  |         |                           | 2,859 |                               |        | 844          |        |             | 11,972 
|                        | Selling, general and administrative      |                                              |         | 21,026                                 |         |                           |      |                               |        | 1,937        |        |             | 20,362 
|                        | Unrealized (gain) loss on derivatives    |                                              |         | 237                                    |         |                           |      |                               |        |             |        |             | (6     
|                        | Other                                    |                                              |         | 5,577                                  |         |                           | 29    |                               |        | (1           | )      |             | 164    
|                        |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                          | Total costs and expenses                     |         |                                        | 283,151 |                           |       | 2,888                         |        |              | 12,629 |             |        
|                        |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                          | Income (loss) from operations                |         |                                        | 17,660  |                           |       | (2,888                        | )      |              | 29     |             |        
|Other income (expense): |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        | Interest expense, net                    |                                              |         | (10,422                                | )       |                           |      |                               |        | (689         | )      |             | (2,159 
|                        | Other, net                               |                                              |         | (558                                   | )       |                           | 820   |                               |        | 12           |        |             | (459   
|                        | Equity in earnings of subsidiaries       |                                              |         | (2,427                                 | )       |                           |      |                               |        |             |        |             |       
|                        |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                          |                                              | (13,407 | )                                      |         | 820                       |       |                               | (677   | )            |        | (2,618      | )      
|                        |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                          | Income (loss) before income tax benefit      |         |                                        | 4,253   |                           |       | (2,068                        | )      |              | (648   | )           |        
|                        | Income tax benefit                       |                                              |         | (661                                   | )       |                           |      |                               |        |             |        |             |       
|                        |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                          | Net income (loss)                            |         |                                        | 4,914   |                           |       | (2,068                        | )      |              | (648   | )           |        
|                        |                                          | Preferred stock dividends                    |         |                                        | (2,815  | )                         |       |                              |        |              |       |             |        
|                        |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                          | Net income (loss) allocable to common shares |         | $                                      | 2,099   |                           | $     | (2,068                        | )      | $            | (648   | )           | $      
|                        |                                          |                                              |         |                                        |         |                           |       |                               |        |              |        |             |        

89

---



(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Operations  Year Ended October 31, 2003

|                        |                                                  | The Company
Excluding
Guarantor
Subsidiaries                                   |         | Buick
Resource
Recycling
Facility, LLC |         | Other
Domestic
Guarantors |       | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |        
|----------------------- | ------------------------------------------------ | ------------------------------------------------------------------------------ | ------- | -------------------------------------- | ------- | ------------------------- | ----- | ----------------------------- | ------ | ------------ | ------ | ----------- | -------
|Net sales               |                                                  | $                                                                              | 245,483 |                                        | $       |                          |       | $                             | 14,866 |              | $      | 436,213     |        
|Costs and expenses:     |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        | Cost of sales                                    |                                                                                |         | 212,013                                |         |                           |      |                               |        | 12,608       |        |             | 421,655
|                        | Depletion, depreciation and amortization         |                                                                                |         | 15,435                                 |         |                           | 1,721 |                               |        | 1,442        |        |             | 11,809 
|                        | Selling, general and administrative              |                                                                                |         | 15,146                                 |         |                           |      |                               |        | 1,843        |        |             | 20,535 
|                        | Unrealized loss on derivatives                   |                                                                                |         | 7,162                                  |         |                           |      |                               |        |             |        |             | 58     
|                        | Other                                            |                                                                                |         | 2,312                                  |         |                           | 29    |                               |        | 58           |        |             | 88     
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                                  | Total costs and expenses                                                       |         |                                        | 252,068 |                           |       | 1,750                         |        |              | 15,951 |             |        
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                                  | Loss from operations                                                           |         |                                        | (6,585  | )                         |       | (1,750                        | )      |              | (1,085 | )           |        
|Other income (expense): |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        | Interest expense, net                            |                                                                                |         | (10,079                                | )       |                           |      |                               |        | (619         | )      |             | (2,543 
|                        | Loss on retirement/restructure of long term debt |                                                                                |         | (550                                   | )       |                           |      |                               |        |             |        |             |       
|                        | Other, net                                       |                                                                                |         | (116                                   | )       |                           | 371   |                               |        | (123         | )      |             | 67     
|                        | Equity in earnings of subsidiaries               |                                                                                |         | (23,720                                | )       |                           |      |                               |        |             |        |             |       
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                                  |                                                                                | (34,465 | )                                      |         | 371                       |       |                               | (742   | )            |        | (2,476      | )      
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                                  | Income (loss) before income tax expense                                        |         |                                        | (41,050 | )                         |       | (1,379                        | )      |              | (1,827 | )           |        
|                        | Income tax expense                               |                                                                                |         |                                       |         |                           |      |                               |        |             |        |             |       
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                                  | Income (loss) before cumulative effect of change in accounting principle       |         |                                        | (41,050 | )                         |       | (1,379                        | )      |              | (1,827 | )           |        
|                        |                                                  | Cumulative effect of change in accounting principle, net of income tax benefit |         |                                        | (3,848  | )                         |       |                              |        |              |       |             |        
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                                  | Net income (loss)                                                              |         |                                        | (44,898 | )                         |       | (1,379                        | )      |              | (1,827 | )           |        
|                        |                                                  | Preferred stock dividends                                                      |         |                                        | (2,514  | )                         |       |                              |        |              |       |             |        
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        
|                        |                                                  | Net income (loss) allocable to common shares                                   |         | $                                      | (47,412 | )                         | $     | (1,379                        | )      | $            | (1,827 | )           | $      
|                        |                                                  |                                                                                |         |                                        |         |                           |       |                               |        |              |        |             |        

90

---





(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Operations  Year Ended October 31, 2002

|                        |                                                  | The Company
Excluding
Guarantor
Subsidiaries |         | Domestic
Guarantors |         | Doe Run
Cayman and
Subsidiary |        | Eliminations |         | The
Company |        
|----------------------- | ------------------------------------------------ | -------------------------------------------- | ------- | ------------------- | ------- | ----------------------------- | ------ | ------------ | ------- | ----------- | -------
|Net sales               |                                                  | $                                            | 239,264 |                     | $       | 17,877                        |        | $            | 418,286 |             | $      
|Costs and expenses:     |                                                  |                                              |         |                     |         |                               |        |              |         |             |        
|                        | Cost of sales                                    |                                              |         | 214,659             |         |                               | 14,976 |              |         | 387,492     |        
|                        | Depletion, depreciation and amortization         |                                              |         | 18,015              |         |                               | 1,493  |              |         | 11,339      |        
|                        | Selling, general and administrative              |                                              |         | 16,588              |         |                               | 1,948  |              |         | 18,611      |        
|                        | Unrealized (gain)/loss on derivatives            |                                              |         | (1,445              | )       |                               | (7     | )            |         | 44          |        
|                        | Other                                            |                                              |         | 3,438               |         |                               | (10    | )            |         | 8,250       |        
|                        |                                                  |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                                  | Total costs and expenses                     |         |                     | 251,255 |                               |        | 18,400       |         |             | 425,736
|                        |                                                  |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                                  | Income (loss) from operations                |         |                     | (11,991 | )                             |        | (523         | )       |             | (7,450 
|Other income (expense): |                                                  |                                              |         |                     |         |                               |        |              |         |             |        
|                        | Interest expense                                 |                                              |         | (40,513             | )       |                               | (636   | )            |         | (14,778     | )      
|                        | Interest income                                  |                                              |         | 12,809              |         |                               |       |              |         | 57          |        
|                        | Loss on retirement/restructure of long term debt |                                              |         | (7,439              | )       |                               |       |              |         |            |        
|                        | Other, net                                       |                                              |         | (485                | )       |                               | 21     |              |         | 25          |        
|                        | Equity in earnings of subsidiaries               |                                              |         | (23,280             | )       |                               |       |              |         |            |        
|                        |                                                  |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                                  |                                              | (58,908 | )                   |         | (615                          | )      |              | (14,696 | )           |        
|                        |                                                  |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                                  | Income (loss) before income tax expense      |         |                     | (70,899 | )                             |        | (1,138       | )       |             | (22,146
|                        | Income tax expense                               |                                              |         |                    |         |                               |       |              |         |            |        
|                        |                                                  |                                              |         |                     |         |                               |        |              |         |             |        
|                        |                                                  | Net income (loss)                            |         | $                   | (70,899 | )                             | $      | (1,138       | )       | $           | (22,146
|                        |                                                  |                                              |         |                     |         |                               |        |              |         |             |        

91

---



(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Cash Flows  Year Ended October 31, 2004

|                                                    |                                            | The Company
Excluding
Guarantor
Subsidiaries |        | Buick
Resource
Recycling
Facility, LLC |        | Other
Domestic
Guarantors |       | Doe Run
Cayman and
Subsidiary |      | Eliminations |     | The
Company |        
|--------------------------------------------------- | ------------------------------------------ | -------------------------------------------- | ------ | -------------------------------------- | ------ | ------------------------- | ----- | ----------------------------- | ---- | ------------ | --- | ----------- | -------
|Net cash provided by (used in) operating activities |                                            | $                                            | 16,640 |                                        | $      | (1,162                    | )     | $                             | (393 | )            | $   | 4,939       |        
|Cash flows from investing activities:               |                                            |                                              |        |                                        |        |                           |       |                               |      |              |     |             |        
|                                                    | Purchases of property, plant and equipment |                                              |        | (10,699                                | )      |                           |      |                               |      |             |     |             | (19,063
|                                                    | Net proceeds from disposal of assets       |                                              |        | 28                                     |        |                           |      |                               |      |             |     |             |       
|                                                    | Investment in subsidiaries                 |                                              |        | 1,573                                  |        |                           |      |                               |      |             |     |             |       
|                                                    |                                            |                                              |        |                                        |        |                           |       |                               |      |              |     |             |        
|                                                    |                                            | Net cash used in investing activities        |        |                                        | (9,098 | )                         |       |                              |      |              |    |             |        
|Cash flows from financing activities:               |                                            |                                              |        |                                        |        |                           |       |                               |      |              |     |             |        
|                                                    | Proceeds from revolving loans, net         |                                              |        | 8,675                                  |        |                           |      |                               |      |             |     |             | 3,400  
|                                                    | Payments on long-term debt                 |                                              |        | (1,761                                 | )      |                           |      |                               |      |             |     |             | (1,559 
|                                                    | Due to/due from parent/subsdiaries         |                                              |        | (3,950                                 | )      |                           | 1,162 |                               |      | 394          |     |             | 2,394  
|                                                    |                                            |                                              |        |                                        |        |                           |       |                               |      |              |     |             |        
|                                                    |                                            | Net cash provided by financing activities    |        |                                        | 2,964  |                           |       | 1,162                         |      |              | 394 |             |        
|                                                    |                                            |                                              |        |                                        |        |                           |       |                               |      |              |     |             |        
|                                                    |                                            | Net increase (decrease) in cash              |        |                                        | 10,506 |                           |       |                              |      |              | 1   |             |        
|Cash at beginning of period                         |                                            |                                              | 2,906  |                                        |        |                          |       |                               |     |              |     | 16,794      |        
|                                                    |                                            |                                              |        |                                        |        |                           |       |                               |      |              |     |             |        
|Cash at end of period                               |                                            | $                                            | 13,412 |                                        | $      |                          |       | $                             | 1    |              | $   | 6,905       |        
|                                                    |                                            |                                              |        |                                        |        |                           |       |                               |      |              |     |             |        

92

---





(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Cash Flows  Year Ended October 31, 2003

|                                                    |                                                    | The Company
Excluding
Guarantor
Subsidiaries        |         | Domestic
Guarantors |        | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |       
|--------------------------------------------------- | -------------------------------------------------- | --------------------------------------------------- | ------- | ------------------- | ------ | ----------------------------- | ------ | ------------ | ------ | ----------- | ------
|Net cash provided by (used in) operating activities |                                                    | $                                                   | (16,982 | )                   | $      | 1,825                         |        | $            | 15,703 |             | $     
|Cash flows from investing activities:               |                                                    |                                                     |         |                     |        |                               |        |              |        |             |       
|                                                    | Purchases of property, plant and equipment         |                                                     |         | (6,061              | )      |                               | (5     | )            |        | (9,283      | )     
|                                                    | Net proceeds from (expenses of) disposal of assets |                                                     |         | 54                  |        |                               |       |              |        |            |       
|                                                    | Investment in subsidiaries                         |                                                     |         | 21,902              |        |                               |       |              |        |            |       
|                                                    |                                                    |                                                     |         |                     |        |                               |        |              |        |             |       
|                                                    |                                                    | Net cash provided by (used in) investing activities |         |                     | 15,895 |                               |        | (5           | )      |             | (9,283
|Cash flows from financing activities:               |                                                    |                                                     |         |                     |        |                               |        |              |        |             |       
|                                                    | Proceeds from (payments of) revolving loans, net   |                                                     |         | 14,924              |        |                               |       |              |        | (700        | )     
|                                                    | Payments on long-term debt                         |                                                     |         | (3,735              | )      |                               |       |              |        | (4,410      | )     
|                                                    | Payment of financing costs                         |                                                     |         | (550                | )      |                               |       |              |        |            |       
|                                                    | Due to/due from parent/subsdiaries                 |                                                     |         | (6,646              | )      |                               | (1,820 | )            |        | 8,466       |       
|                                                    |                                                    |                                                     |         |                     |        |                               |        |              |        |             |       
|                                                    |                                                    | Net cash provided by (used in) financing activities |         |                     | 3,993  |                               |        | (1,820       | )      |             | 3,356 
|                                                    |                                                    |                                                     |         |                     |        |                               |        |              |        |             |       
|                                                    |                                                    | Net increase in cash                                |         |                     | 2,906  |                               |        |             |        |             | 9,776 
|Cash at beginning of period                         |                                                    |                                                     |        |                     |        |                              |        |              | 7,018  |             |       
|                                                    |                                                    |                                                     |         |                     |        |                               |        |              |        |             |       
|Cash at end of period                               |                                                    | $                                                   | 2,906   |                     | $      |                              |        | $            | 16,794 |             | $     
|                                                    |                                                    |                                                     |         |                     |        |                               |        |              |        |             |       

93

---



(21) Guarantor Subsidiaries (Continued)

Condensed Consolidating Statement of Cash Flows  Year Ended October 31, 2002

|                                                    |                                                    | The Company
Excluding
Guarantor
Subsidiaries        |       | Domestic
Guarantors |          | Doe Run
Cayman and
Subsidiary |        | Eliminations |        | The
Company |        
|--------------------------------------------------- | -------------------------------------------------- | --------------------------------------------------- | ----- | ------------------- | -------- | ----------------------------- | ------ | ------------ | ------ | ----------- | -------
|Net cash provided by (used in) operating activities |                                                    | $                                                   | 2,704 |                     | $        | 1,324                         |        | $            | (6,597 | )           | $      
|Cash flows from investing activities:               |                                                    |                                                     |       |                     |          |                               |        |              |        |             |        
|                                                    | Loss on retirement/restructure of long term debt   |                                                     |       | 125,000             |          |                               |       |              |        |            |        
|                                                    | Purchases of property, plant and equipment         |                                                     |       | (8,638              | )        |                               | (144   | )            |        | (19,982     | )      
|                                                    | Net proceeds from (expenses of) disposal of assets |                                                     |       | (62                 | )        |                               | 10     |              |        |            |        
|                                                    | Investment in subsidiaries                         |                                                     |       | 23,280              |          |                               |       |              |        |            |        
|                                                    |                                                    |                                                     |       |                     |          |                               |        |              |        |             |        
|                                                    |                                                    | Net cash provided by (used in) investing activities |       |                     | 139,580  |                               |        | (134         | )      |             | (19,982
|Cash flows from financing activities:               |                                                    |                                                     |       |                     |          |                               |        |              |        |             |        
|                                                    | Proceeds from (payments of) revolving loans, net   |                                                     |       | (29,173             | )        |                               |       |              |        | 15,700      |        
|                                                    | Proceeds from long-term debt                       |                                                     |       | 15,035              |          |                               |       |              |        |            |        
|                                                    | Payments on long-term debt                         |                                                     |       | (105                | )        |                               |       |              |        | (129,102    | )      
|                                                    | Payment of financing costs                         |                                                     |       | (8,095              | )        |                               |       |              |        | (400        | )      
|                                                    | Issuance of redeemable preferred stock             |                                                     |       | 20,000              |          |                               |       |              |        |            |        
|                                                    | Due to/due from parent/subsdiaries                 |                                                     |       | (139,946            | )        |                               | (1,190 | )            |        | 141,136     |        
|                                                    |                                                    |                                                     |       |                     |          |                               |        |              |        |             |        
|                                                    |                                                    | Net cash provided by (used in) financing activities |       |                     | (142,284 | )                             |        | (1,190       | )      |             | 27,334 
|                                                    |                                                    |                                                     |       |                     |          |                               |        |              |        |             |        
|                                                    |                                                    | Net increase in cash                                |       |                     |         |                               |        |             |        |             | 755    
|Cash at beginning of period                         |                                                    |                                                     |      |                     |          |                              |        |              | 6,263  |             |        
|                                                    |                                                    |                                                     |       |                     |          |                               |        |              |        |             |        
|Cash at end of period                               |                                                    | $                                                   |      |                     | $        |                              |        | $            | 7,018  |             | $      
|                                                    |                                                    |                                                     |       |                     |          |                               |        |              |        |             |        

94

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Shareholders
Doe Run Peru S.R.L.

We
have audited the accompanying balance sheet of Doe Run Peru S.R.L. (a Peruvian Company subsidiary of Doe Run Cayman Ltd.) as of October 31, 2004 and the related
statements of operations, changes in shareholders' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Doe Run Peru S.R.L. as of October 31, 2004, and the
results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 17 to the financial statements, the Company
has a net capital deficiency, substantial debt service requirements, and has significant capital requirements under environmental commitments that raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also described in Note 17. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.

Lima,
Peru

December 29,
2004, except for
    Note 12, as to which the date
    is January 19, 2005

Countersigned
by

|/s/ Raúl D'Angelo A., (partner)Raúl D'Angelo A.
Peruvian Public Accountant
Registration No. 2896 |  |  |  | 
|------------------------------------------------------------------------------------------------ |  |  |  | 

95

---



REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM

To
the Shareholders
Doe Run Peru S.R.L.:

We
have audited the accompanying consolidated balance sheet of Doe Run Peru S.R.L. (a Peruvian Company) as of October 31, 2003, and the related consolidated statements of
operations, changes in shareholders' equity (deficit), and cash flows for each of the years in the two-year period ended October 31, 2003. These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Doe Run Peru S.R.L. as of October 31,
2003, and the results of their operations and their cash flows for each of the years in the two-year period ended October 31, 2003 in conformity with U.S. generally accepted accounting
principles.

The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 17 to the consolidated
financial statements, the Company has jointly and severally, fully, unconditionally guaranteed notes issued by Doe Run Resources. Also, the Company has suffered recurring losses and has a net capital
deficiency. These conditions, along with other matters as set forth in Note 17, indicate the existence of material uncertainties that raises substantial doubt about its ability to continue as
going concern. Management's plans in regards to these matters are also described in Note 17. The consolidated financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

As
discussed in Note 3 to the consolidated financial statements, the Company adopted the provisions of SFAS No. 143Accounting for Asset Retirement
Obligations, as of November 1, 2002.

Lima,
Peru

February 4,
2004

Countersigned
by:

Juan
José Córdova (Partner)
Peruvian Public Accountant
Registration No  18869

96

---



DOE RUN PERU S.R.L.
Balance Sheets
(U.S. dollars in thousands, except share data)

|                                          |                                                                   | October 31,                                 |        
|----------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------- | -------
|
|ASSETS                                    |                                                                   |                                             |        
|Current assets:                           |                                                                   |                                             |        
|                                          | Cash                                                              |                                             | $      
|                                          | Trade accounts receivable, net of allowance for doubtful accounts |                                             |        
|                                          | Inventories                                                       |                                             |        
|                                          | Prepaid expenses and other current assets                         |                                             |        
|                                          |                                                                   |                                             |        
|                                          |                                                                   | Total current assets                        |        
|Property, plant and equipment, net        |                                                                   |                                             | 140,743
|Other non current assets, net             |                                                                   |                                             | 122    
|                                          |                                                                   |                                             |        
|                                          |                                                                   | Total assets                                |        
|                                          |                                                                   |                                             |        
|LIABILITIES AND SHAREHOLDERS' DEFICIT     |                                                                   |                                             |        
|Current liabilities:                      |                                                                   |                                             |        
|                                          | Current maturities of long-term debt                              |                                             | $      
|                                          | Accounts payable                                                  |                                             |        
|                                          | Accrued liabilities                                               |                                             |        
|                                          | Due to related parties                                            |                                             |        
|                                          |                                                                   |                                             |        
|                                          |                                                                   | Total current liabilities                   |        
|Due to parent company and related parties |                                                                   |                                             | 17,432 
|Other noncurrent liabilities              |                                                                   |                                             | 3,460  
|                                          |                                                                   |                                             |        
|                                          |                                                                   | Total liabilities                           |        
|Shareholders' deficit:                    |                                                                   |                                             |        
|                                          | Capital stock, $0.01 par value, 15,912,083,739 shares, fully paid |                                             |        
|                                          | Accumulated deficit                                               |                                             |        
|                                          |                                                                   |                                             |        
|                                          |                                                                   | Total shareholders' deficit                 |        
|                                          |                                                                   |                                             |        
|                                          |                                                                   | Total liabilities and shareholders' deficit |        
|                                          |                                                                   |                                             |        

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

97

---



DOE RUN PERU S.R.L.
Statements of Operations
(U.S. dollars in thousands)

|                                                                               |                                                                          | Year ended October 31,        |        
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------ | ----------------------------- | -------
|
|Net sales                                                                      |                                                                          | $                             | 566,415
|Costs and expenses:                                                            |                                                                          |                               |        
|                                                                               | Costs of sales                                                           |                               |        
|                                                                               | Depreciation                                                             |                               |        
|                                                                               | Fees and commissions to related parties                                  |                               |        
|                                                                               | Selling, general and administrative                                      |                               |        
|                                                                               | Exploration                                                              |                               |        
|                                                                               | Losses from impairment/disposal of long-lived assets                     |                               |        
|                                                                               | Unrealized (gain) loss on derivatives                                    |                               |        
|                                                                               |                                                                          |                               |        
|                                                                               |                                                                          | Total costs and expenses      |        
|                                                                               |                                                                          |                               |        
|                                                                               |                                                                          | Income (loss) from operations |        
|                                                                               |                                                                          |                               |        
|Other income (expense):                                                        |                                                                          |                               |        
|                                                                               | Interest expense                                                         |                               |        
|                                                                               | Interest income                                                          |                               |        
|                                                                               | Exchange gain (loss)                                                     |                               |        
|                                                                               | Other, net                                                               |                               |        
|                                                                               |                                                                          |                               |        
|                                                                               |                                                                          |                               | (2,618 
|                                                                               |                                                                          |                               |        
|                                                                               | Income (loss) before cumulative effect of change in accounting principle |                               |        
|Cumulative effect of change in accounting principle, net of income tax benefit |                                                                          |                               |       
|                                                                               |                                                                          |                               |        
|                                                                               |                                                                          | Net income (loss)             |        
|                                                                               |                                                                          |                               |        

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

98

---



DOE RUN PERU S.R.L.
Statements of Changes in Shareholders' Equity (Deficit)
For the Years Ended October 31, 2004, 2003 and 2002
(U.S. dollars in thousands)

|                               |            | Capital
Stock |       | Retained Earnings
(Accumulated
Deficit) |   | Total   |        
|------------------------------ | ---------- | ------------- | ----- | --------------------------------------- | - | ------- | -------
|Balance as of October 31, 2001 |            | $             | 2,005 |                                         | $ | 17,449  |        
|                               | Net loss   |               |       |                                        |   |         | (22,146
|                               |            |               |       |                                         |   |         |        
|Balance as of October 31, 2002 |            |               | 2,005 |                                         |   | (4,697  | )      
|                               | Net loss   |               |       |                                        |   |         | (20,500
|                               |            |               |       |                                         |   |         |        
|Balance as of October 31, 2003 |            |               | 2,005 |                                         |   | (25,197 | )      
|                               | Net income |               |       |                                        |   |         | 310    
|                               |            |               |       |                                         |   |         |        
|Balance as of October 31, 2004 |            | $             | 2,005 |                                         | $ | (24,887 | )      
|                               |            |               |       |                                         |   |         |        

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

99

---



DOE RUN PERU S.R.L.
Statements of Cash Flows
(U.S. dollars in thousands)

|                                                 |                                                                                             | Year ended October 31,                                   |                                                    
|------------------------------------------------ | ------------------------------------------------------------------------------------------- | -------------------------------------------------------- | ---------------------------------------------------
|
|Cash flows from operating activities:            |                                                                                             |                                                          |                                                    
|                                                 | Net income (loss)                                                                           |                                                          | $                                                  
|                                                 | Cumulative effect of change in accounting principle                                         |                                                          |                                                    
|                                                 | Adjustments to reconcile net income to net cash provided by (used in) operating activities: |                                                          |                                                    
|                                                 |                                                                                             | Depreciation                                             |                                                    
|                                                 |                                                                                             | Amortization of deferred financing fees                  |                                                    
|                                                 |                                                                                             | Unrealized (gain) loss on derivatives                    |                                                    
|                                                 |                                                                                             | Losses from impairment and disposal of long-lived assets |                                                    
|                                                 | Increase (decrease) resulting from changes in:                                              |                                                          |                                                    
|                                                 |                                                                                             | Trade accounts receivable                                |                                                    
|                                                 |                                                                                             | Inventories                                              |                                                    
|                                                 |                                                                                             | Prepaid expenses and other current assets                |                                                    
|                                                 |                                                                                             | Trade accounts payable                                   |                                                    
|                                                 |                                                                                             | Accrued liabilities                                      |                                                    
|                                                 |                                                                                             | Other non-current assets and liabilities                 |                                                    
|                                                 |                                                                                             |                                                          |                                                    
|                                                 |                                                                                             |                                                          | Net cash provided by (used in) operating activities
|                                                 |                                                                                             |                                                          |                                                    
|Cash flows from investing activities:            |                                                                                             |                                                          |                                                    
|                                                 | Purchases of plant, property and equipment                                                  |                                                          |                                                    
|                                                 |                                                                                             |                                                          |                                                    
|                                                 |                                                                                             |                                                          | Net cash used in investing activities              
|                                                 |                                                                                             |                                                          |                                                    
|Cash flows from financing activities:            |                                                                                             |                                                          |                                                    
|                                                 | Proceeds from (payments on) revolving loans, net                                            |                                                          |                                                    
|                                                 | Payments on long term debt                                                                  |                                                          |                                                    
|                                                 | Payments of financing fees                                                                  |                                                          |                                                    
|                                                 | Increase in amount due to related parties                                                   |                                                          |                                                    
|                                                 |                                                                                             |                                                          |                                                    
|                                                 |                                                                                             |                                                          | Net cash provided by financing activities          
|                                                 |                                                                                             |                                                          |                                                    
|                                                 |                                                                                             |                                                          | Net increase (decrease) in cash                    
|Cash at beginning of year                        |                                                                                             |                                                          | 16,794                                             
|                                                 |                                                                                             |                                                          |                                                    
|Cash at end of year                              |                                                                                             | $                                                        | 6,905                                              
|                                                 |                                                                                             |                                                          |                                                    
|Supplemental disclosure of cash flow information |                                                                                             |                                                          |                                                    
|                                                 | Cash paid during the period for:                                                            |                                                          |                                                    
|                                                 |                                                                                             | Interest                                                 |                                                    
|                                                 |                                                                                             |                                                          |                                                    
|                                                 |                                                                                             | Peruvian income tax                                      |                                                    
|                                                 |                                                                                             |                                                          |                                                    

The
accompanying notes are integral part of these financial statements.

100

---



DOE RUN PERU S.R.L.

Notes to Financial Statements
October 31, 2004, 2003 and 2002
(U.S. dollars and nuevos soles in thousands, except share data)

(1)   Nature of Business

Doe Run Peru S.R.L. (Doe Run Peru or the Company) is a Peruvian company incorporated on September 8, 1997, and since June 1, 2001, 99.9% owned by
Doe Run Cayman Ltd. (Doe Run Cayman). Prior to June 1, 2001, Doe Run Peru was 99.9% owned by Doe Run Mining S.R.L. (Doe Run Mining), a subsidiary of Doe Run Cayman.

Doe
Run Peru is engaged in the mining, smelting and refining of polymetallic concentrates, producing mainly copper, lead, zinc and silver which are sold as refined metals primarily to
customers located outside of Peru.

(2)   Basis of Presentation

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.
GAAP).



The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from these estimates.



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

(3)   Summary of Significant Accounting Policies



Finished metals and concentrates, metals and concentrates in process, and raw materials are stated at the lower of cost or market. The last-in,
first-out (LIFO) method of determining cost is used for the majority of the Company's inventories. Supplies and repair parts are principally stated at average cost, net of reserves for
obsolescence.

Inventory
costs include concentrates purchased, labor, material and other production costs.



Property, plant and equipment are recorded at cost. In accordance with Statement of Financial Accounting Standards Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, long-lived assets are reviewed for impairment when events or
circumstances indicate that the carrying amount of the assets may not be recoverable. The impairment loss on such assets, as well as long-lived assets and certain identifiable intangibles
to be disposed of, is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets.

Recoverability
of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by
the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is

101

---



recognized
by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the
lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale are presented separately in the
appropriate asset and liability sections of the balance sheet.

Major
additions and improvements to property, plant and equipment are capitalized, at cost, when they significantly increase the productive capacity or the life of the asset. Repair and
maintenance expenditures which are routine, unanticipated, or for which the timing cannot be estimated, and which do not extend the useful life or increase the productive capacity of the asset, are
charged to operations as incurred.

Costs
to treat environmental contamination are capitalized when they extend the life, increase the capacity, or improve the safety or efficiency of the property; when they mitigate or
prevent future environmental contamination or when they are incurred in preparing property for sale.

Depreciation
is calculated on a straight-line basis at the rates indicated in Note 7.



Exploration costs and development costs incurred to maintain production at operating mines are charged to operations as incurred. Development expenditures for
mining properties that are considered to be commercially feasible, but are not yet producing, and major development expenditures at operating mines that are expected to benefit future production are
capitalized and amortized using the units of production method over the estimated proven ore reserves to be benefited.



The Company's mining and smelting facilities are subject to governance by various agencies that have established minimum standards for reclamation.

As
of November 1, 2002 the Company adopted Financial Accounting Standards Statement No. 143,Accounting for Asset Retirement
Obligations(Statement No. 143), 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.

Prior
to the adoption of Statement No. 143, the Company accrued for mine and other closure obligations at their estimated, undiscounted cost. 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
cumulative effect related to the adoption of Statement No. 143 for the year ended October 31, 2003 was a loss of $92, a net decrease to plant, property and equipment of
$1,613, and a decrease of $1,521 to the liability for asset retirement obligations.



The Company accrues for loss contingencies, including costs associated with environmental remediation obligations, when it is probable that a liability has been
incurred and can be reasonably

102

---



estimated.
Liability estimates for environmental remediation obligations are based on an evaluation of, among other factors, currently available facts, existing technology, presently enacted laws and
regulations and the Company's experience in remediation. Costs of future expenditures for environmental remediation obligations are not discounted to their present value.



Sales are recorded as products are delivered to customers or as tolling services are performed. Concentrate and certain smelter product sales are recorded based
upon estimated weights and metal contents and metal prices in effect at time of delivery. Revenues are adjusted between month of delivery and month of settlement based on changes in market prices.
Adjustments with respect to such sales are recorded based on final settlement weights, metal contents and metal prices using applicable customer agreements.



Statement of Financial Accounting Standards No. 133,Accounting for Derivative Instruments and Hedging
Activities, was issued by the Financial Accounting Standards Board in June 1998, and amended by Statement No. 138,Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an amendment of FASB Statement No. 133, issued in June 2000 (collectively, Statement No. 133). Under
Statement No. 133, the Company carries all derivative instruments in the balance sheet at fair value. The accounting for changes in the fair value (i.e. gains and losses) of a derivative
instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and if so, whether the derivative instrument is designated as a hedge of exposures to changes in
fair values, or cash flows. If the hedged exposure is an exposure to changes in the fair value of a fixed commitment, the gain (loss) is recognized in earnings in the period of change, with an equal
and offsetting (loss) gain recognized on the change in value of the hedged item. If the hedged exposure is an exposure to changes in forecasted cash flows, the effective portion of the gain (loss) is
reported as a component of
other comprehensive income (outside earnings) until the forecasted hedged transaction affects earnings, when it is reclassified into earnings.



Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and the respective tax bases of these assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled.



In accordance with government regulations in Peru, employees are entitled to receive 8% of Doe Run Peru's taxable income, 50% of which is distributed to employees
based on number of days worked, and the remaining amount is distributed in proportion to their salaries. Such profit sharing, which is tax deductible, is limited to 18 times the annual salary
for each worker. Any excess is to be reserved and used for training of the workers.

Because
workers' profit sharing is calculated on taxable income, the Company recognizes the effect of temporary differences between financial reporting and tax bases of assets and
liabilities related to workers' profit sharing on a basis consistent with that used for income taxes.

103

---





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

(4)   Remeasurement into U.S. Dollars

The methodology utilized for the remeasurement of nuevos soles (S/) into U.S. dollars, as established by Statement of Financial Accounting Standards
No. 52,Foreign Currency Translation, is as follows:



(5)   Foreign Currency Transaction and Exchange Risk Exposure

Under current law, foreign currency transactions are made through the Peruvian financial banking system at free market exchange rates. The exchange rates in
effect were S/3.325, S/3.473 and S/3.602 to U.S. dollar for assets at October 31, 2004, 2003 and 2002, respectively, and S/3.322, S/3.472 and S/3.600 to U.S. dollar for liabilities at
October 31, 2004, 2003 and 2002, respectively.

Assets
and liabilities denominated in Peruvian nuevos soles (S/) are as follows:

October 31,2004

2003

2002Assets:Cash

S/
221

S/
10,463

S/
12,346Prepaid expenses and other current assets


3,213


5,533


2,9153,434


15,996


15,261Liabilities:Accounts payable


3,207


5,567


5,058Accrued liabilities


37,915


37,176


32,49141,122


42,743


37,549Net position

S/
(37,688
)
S/
(26,747
)
S/
(22,288
)


The
Company recorded net foreign currency transaction gains (losses) relating to transactions denominated in Peruvian nuevos soles of $(471) for the year ended October 31,
2004, $(157) for the year ended October 31, 2003 and $97 for the year ended October 31, 2002, which have been reflected in the statements of operations.

104

---



(6)   Inventories

Inventories consist of the following:

October 31,2004

2003Refined metals for sale

$
8,356

$
2,535Metals and concentrates in process


44,523


39,654Materials, supplies and spare parts


12,997


11,892$
65,876

$
54,081


Materials,
supplies and spare parts are stated net of reserves for obsolescence of $1,436 and $911 at October 31, 2004 and 2003, respectively.

The
FIFO cost of inventories valued under the LIFO cost method were approximately $78,977 and $48,828 at October 31, 2004 and 2003, respectively. If the FIFO cost method had been
used to determine cost, inventories would have been $26,417 and $7,350 higher at October 31, 2004 and 2003, respectively.

As
a result of reducing certain inventory quantities valued on the LIFO basis in 2003 and 2002, inventory costs prevailing in previous years were charged to cost of sales. The Company
calculates the effect of LIFO liquidations on results of operations based on the current cost method. The effects of these liquidations on the results of operations in the years ended
October 31, 2003 and 2002 were not significant.

(7)   Property, Plant and Equipment, Net

Property, plant and equipment consists of the following:

October 31,Average Annual
Depreciation Rate2004

2003Cost:Land



$
5,847

$
5,948Buildings and improvements

5% and 10%


35,966


36,456Machinery and equipment

6.67%


105,317


99,654Transportation units

33.33%


4,147


4,182Other equipment

10% and 20%


20,328


20,050Construction in progress




37,252


23,560208,857


189,850Less accumulated depreciation




68,114


56,167$
140,743

$
133,683


The
implementation of Statement No. 143 resulted in a decrease to the cost of property, plant and equipment of $2,523, and a decrease in accumulated depreciation of $910 as of
November 1, 2002. Changes to the estimates of expected cash flows related to asset retirement obligations resulted in an additional decrease to plant, property and equipment of $600 as of
October 31, 2003. See additional disclosures related to Statement No. 143 in Note 12.

Losses
from impairment or retirement of long-lived assets for the year ended October 31, 2002 includes an impairment loss of $7,849 related to the Cobriza backfill
plant project. This project was designed to enable the Company to put tailings produced from the mining process back into the mine. In fiscal year 2002, due to the lack of success in identification of
new ore reserves at its Cobriza mine,

105

---



the
decrease in exploration activities as a result of the Company's financial condition, the outlook for continued low copper prices, and higher costs than were originally anticipated to complete the
project, the Company made the decision to cease construction on the project.

(8)   Accrued Liabilities

Accrued liabilities consist of the following:

October 31,2004

2003Salaries, wages and employee benefits

$
10,513

$
10,001Accounts payable to contractors


5,983


3,977Income taxes payable


1,601


1,601Due to power company


4,415


4,062Other accrued liabilities


4,687


3,377$
27,199

$
23,018


(9)   Debt

Long-term debt consists of the following:

October 31,2004

2003Revolving credit facility

$
39,400

$
36,000Sale and leaseback obligations





1,481Capital leases





7839,400


37,559Less current maturities


39,400


37,559Long-term debt, less current maturities

$


$



The
revolving credit facility (the Doe Run Peru Revolving Credit Facility) allows Doe Run Peru to borrow up to $40,000 and expires September 23, 2005. The Doe Run Peru Revolving
Credit Facility provides for working capital loans up to $40,000, including a limit on letters of credit of $5,000, but the total commitments may not exceed the maximum line of $40,000. The Doe Run
Peru Revolving Credit Facility bears interest at LIBOR (1-month, 3-month or 6-month rate, depending on the term of the loan) plus 3.5% per annum for an effective
rate of 4.95% at October 31, 2004. An unused line fee of .375% per annum on the average unused portion of the line is payable quarterly, in arrears. The Doe Run Peru Revolving Credit Facility
is secured by accounts receivable and inventories. Availability of loans under the facility is limited to a percentage of Doe Run Peru's eligible accounts receivable and eligible inventories, less any
outstanding loans and letters of credit. Revolving loans outstanding under the Doe Run Peru Revolving Credit Facility were $39,400 and $36,000 at October 31, 2004 and 2003, respectively. At
October 31, 2004 there was virtually no availability.

The
Doe Run Peru Revolving Credit Facility will require renegotiation to extend its term. Furthermore, a renegotiated Doe Run Peru credit facility will need to comply with the cash
assignment requirements established by a supreme decree, should Doe Run Peru's Environmental Adjustment and Management Program (PAMA) be extended, as discussed in Note 12. There can be no
assurance that Doe Run Peru will be successful in renewing the agreement, or if it is successful, that the renewal would be at terms favorable to Doe Run Peru.

106

---



The
Doe Run Peru Revolving Credit Facility contains certain covenants governing minimum net worth requirements, limitations on indebtedness and investments, capital expenditures, and
restrictions on the payments of dividends in the event of default. The Company was in compliance with all of the covenants as of October 31, 2004.

If
Doe Run Peru is not successful with its administrative appeal of the tax assessment discussed in Note 10, the lender can, at its discretion, require that the amount of the
assessment reduce net worth as defined under Doe Run Peru's Revolving Credit Facility. Such reduction along with other factors, including metal prices and results of operations, would affect Doe Run
Peru's ability to comply with the net worth requirement.

In
2002, The Doe Run Resources Corporation (Doe Run), Doe Run Cayman's parent, tendered a special term deposit in payment of a loan made to Doe Run Peru by a foreign bank, and, in
return, Doe Run Peru delivered an intercompany note to Doe Run in an equivalent amount, plus accrued and unpaid interest, for an aggregate balance of $139,063. This intercompany note will not bear
interest during the term of the Doe Run Peru Revolving Credit Facility. The due date of the intercompany note is October 1, 2005, however obligations under the intercompany note are subordinate
to obligations under the Doe Run Peru Revolving Credit Facility.

(10) Taxation

Doe Run Cayman is subject to the regulations of the Cayman Islands, which currently have no corporate income or capital gains tax. Doe Run Cayman's subsidiaries
located in Peru are subject to Peruvian taxation. The statutory income tax rate in Peru is 30%. Doe Run Peru is a party to a Tax Stabilization Agreement and a Contract of Guarantees and Measures to
Promote Investments with the Peruvian Government as follows:



The Tax Stabilization Agreement expires as of December 31, 2006. Under this agreement, Doe Run Peru utilizes tax statutes prevailing as of
November 6, 1997. The principal provisions of the agreement are as follows:





On December 30, 1997, Doe Run Peru signed a Contract of Guarantees and Measures to Promote Investments, as modified in 2005. This agreement is effective
beginning in the calendar year ended December 31, 2007, provided that Doe Run Peru complies with the committed investments related to the improvements of the facilities, and provides tax
stability through December 31, 2021. The principal provisions are similar to those established in the Tax Stabilization Agreement, except that Doe Run Peru will utilize the tax statutes
prevailing as of December 23, 1997.

The
current contract requires Doe Run Peru to spend $108,442 to expand and modernize its facilities, including environmental expenditures, by December 31, 2006. Through
October 31, 2004, Doe

107

---



Run
Peru had invested $84,314. The Contract of Guarantees and Measures to Promote Investments requires spending of approximately $38,000 before December 31, 2006 towards the construction of the
sulfuric acid plant required by the PAMA as discussed in Note 12. If the Contract of Guarantees and Measures to Promote Investments is not amended to allow the required spending on the sulfuric
acid plant to be replaced with spending on other projects, Doe Run Peru would lose the benefits described above.



The Company had no expense relating to Peruvian income tax for the years ended October 31, 2004, 2003 and 2002, due to changes in valuation allowance
described below.

Peruvian
income tax expense (benefit) differed from the amount computed by applying the statutory income tax rate of 30% to income before income tax expense (benefit) as a result of the
following:

Year ended October 31,2004

2003

2002Income tax expense at statutory rate

$
93

$
(6,122
)
$
(6,644
)Increase (reduction) in income tax expenseResulting from:Change in valuation allowance


(1,287
)

5,473


4,375Effect of converting Peruvian nuevos soles into U.S. dollars








(118
)Non-deductible interest on long term debt








675Other, net


1,194


649


1,712$


$


$





The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

October 31,2004

2003Deferred tax assets:Inventories

$
7,865

$
3,051Property, plant and equipment


6,565


6,206Accrued liabilities


2,488


2,207Tax loss carryforwards


27,344


33,652Other noncurrent assets and liabilities


1,035


1,45445,297


46,570Less valuation allowance


(38,720
)

(40,007
)Total deferred tax assets


6,577


6,563Deferred tax liabilities:Property, plant and equipment


(6,577
)

(6,563
)Total deferred tax liabilities


(6,577
)

(6,563
)Net deferred tax assets

$


$



108

---



The
deferred tax assets and liabilities related to property, plant and equipment are principally due to differences in book and tax allocations of the excess of the fair value of the sum
of assets acquired, less
liabilities assumed over the purchase price paid and accelerated depreciation methods used for tax purposes.

The
net operating loss carryforwards in Peru are available for use for four years beginning with the first year the Company obtains taxable income against which it can take a credit.

Management
believes that sufficient uncertainty exists regarding the realization of certain deferred tax assets that a valuation allowance is required. The valuation allowance decreased
$1,287 for the year ended October 31, 2004 and increased $5,473 and $4,375 for the years ended October 31, 2003 and 2002, respectively.



On December 26, 2003, Peru's tax authority, SUNAT, notified Doe Run Peru of an income tax assessment for the 1998 tax year. On December 23, 2004,
assessments were received for tax years 1999 through 2001. The assessments primarily relate to Doe Run Peru's income tax treatment of the December 1997 merger of Doe Run Peru and Metaloroya
S.A., which was purchased by Doe Run Peru in October 1997, and its effects on subsequent years' taxable income. Under the assessment by SUNAT, the tax basis of Doe Run Peru's fixed assets
acquired would decrease, resulting in lower tax depreciation expense than originally claimed. The assessed amount consisting of additional income taxes due, penalties and interest totals approximately
$96,500.

The
Company estimates that the effect of a similar assessment for tax years after 2001 would be approximately $800.

Furthermore,
Doe Run Peru would also be required to make additional workers' profit sharing payments equal to 8% of the increase in taxable income generated by the changes discussed
above, or approximately $5,800 for tax years 1998 through 2004.

On
November 15, 2004, SUNAT notified Doe Run Peru of a Value Added Tax (VAT) assessment for the period from January through July 2004. On December 23, 2004. Doe Run
Peru received additional VAT assessments for tax years 1999 through 2001. The assessments primarily relate to Doe Run Peru's exports with holding certificates and differences in a tax credit
application. The total assessment for these periods was approximately $39,100. SUNAT offset the amount assessed for 2004 of approximately $2,300 against Doe Run Peru's VAT receivable balance from
July 2004. Future VAT reimbursements cannot be used to offset the assessment by SUNAT. The Company estimates expected additional assessments related to VAT for tax years 2002 and 2003 to total
approximately $18,000 in regard to its exports with holding certificates.

Management
of the Company believes that in each case Doe Run Peru has followed the applicable Peruvian tax statutes and intends to pursue all available administrative and judicial
appeals. Doe Run Peru is not required to make any payments pending the administrative appeal process. If Doe Run Peru is not successful in the administrative appeal processes and were to appeal in the
judicial system, some type of financial assurance would be required. No amounts have been accrued as liabilities related to these actions.

(11) Employee Benefits



Doe Run Peru is required to make monthly deposits into a bank account for severance indemnity benefits for Peruvian employees under Peruvian government
regulations. The balance in the account represents the full benefit due to such employees upon termination. The Company accrues for the

109

---



additional
amount that would be contributed to the account since the last deposit date as if all such employees were to terminate as of the balance sheet date. The Company's expense related to
severance indemnity benefits was $3,428, $3,974 and $3,456 for the years ended October 31, 2004, 2003 and 2002, respectively.



In accordance with government regulations in Peru, employees are entitled to receive 8% of the Doe Run Peru's taxable income, 50% of which is distributed to
employees based on number of days worked, and the remaining distributed in proportion to their salaries. Such profit sharing, which is tax deductible, is limited to 18 times the annual salary
for each worker. Any excess is to be reserved and used for training of the workers. The Company had no expense relating to workers' profit sharing payments for the years ended October 31, 2004,
2003 and 2002, due to tax losses in those years.

(12) Commitments and Contingencies



La Oroya's operations historically and currently exceed some of the applicable MEM maximum permissible limits pertaining to air emissions and wastewater
effluent quality. The PAMA projects, which are more fully discussed below, have been designed to achieve compliance with these requirements. There can be no assurance that the Peruvian government will
not, in the future, require compliance with additional environmental regulations that could adversely affect Doe Run Peru's business, financial condition and results of operations.

Metaloroya
S.A., the former owner of the La Oroya smelter, at the time a subsidiary of Centromin, received approval from the Peruvian government for a PAMA that consisted of an
environmental impact analysis, monitoring plan and data, mitigation measures and closure plan. Doe Run Peru assumed the obligations under the PAMA. The PAMA also sets forth the actions and
corresponding annual investments the concession holder agrees to undertake in order to achieve compliance with the maximum permissible limits prior to expiration of the PAMA (ten years for smelters,
such as Doe Run Peru's operations in La Oroya, and five years for any other type of mining or metallurgical operation like Cobriza). After expiration of the PAMA, the operator must comply with
all applicable standards and requirements. Because these costs improve the property or prevent future environmental contamination, they are capitalized.

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



110

---





An
investment schedule in the PAMA provides a specific plan for achieving the applicable MEM maximum permissible limits pertaining to air emissions and wastewater effluent quality. The
PAMA may be modified and amended as to the actual design and timing of projects to be implemented, provided compliance with the applicable maximum permissible limits is achieved by December 31,
2006. The required estimated annual spending on a calendar year basis for the projects approved in the La Oroya PAMA, as amended, most recently on January 25, 2002, are as follows:

Year

Estimated Cost2005

$
53,5002006


67,700$
121,200


Doe
Run Peru expects that it will not be able to comply with the spending requirements of La Oroya's PAMA investment schedule in 2005 and 2006 with respect to the construction of
the sulfuric acid plant required by the PAMA and, as a result, could be subject to penalties. Failure to comply with the PAMA could result in the cessation of operations at the La Oroya smelter.

On
December 29, 2004 the Peruvian Government issued a supreme decree (Supreme Decree), which recognized that exceptional circumstances may justify an extension of one or more
projects within the scope of a PAMA. The Supreme Decree specifies that companies have until December 31, 2005 to apply for an extension. The maximum extension is for three years and the MEM may
authorize an additional year based upon the results of a health risk study.

Doe
Run intends to apply for an extension to complete the construction of the sulfuric acid plant contemplated by the original PAMA. The application for a PAMA extension must be
supported by a health risk study performed by a third party. The application must contain an engineering description and funding plan of any project to be extended, a discussion of how and when
environmental emission standards will be met, a plan to monitor emissions with the participation of the community, proof that at least three public workshops were held in various districts to provide
information on Doe Run Peru's financial situation and health programs, proof that two public hearings were held regarding the extension plans, and other financial information. In order to meet these
requirements, the Company does not expect to apply for the extension until the end of 2005.

Upon
approval of a modified PAMA, Doe Run Peru would be required to create a trust account. The trust account would administer the receipts and disbursements related to the extended PAMA
project. The Supreme Decree requires that receipts from sales, in an amount sufficient to fund the monthly cash requirements of the extended PAMA project, be remitted directly to the trust account.
Such an arrangement is prohibited by the Doe Run Peru Revolving Credit Facility, which expires on September 23, 2005. Accordingly, a renegotiated Doe Run Peru credit facility will need to
comply with the requirements established by the Supreme Decree, should Doe Run Peru's PAMA be extended.

The
Supreme Decree also requires that, within 30 days of the approval of the PAMA extension, the Company provide financial security in an amount equal to 20% of the projected cost
of the project or projects to be extended. The Company currently expects the overall investment required to build the sulfuric acid plant to be approximately $102,000. The Company cannot assure that
it will be successful in obtaining the necessary financial security required.

Doe
Run Peru will perform other environmental projects to reduce fugitive emissions, including heavy metal dust, to address the health issues of the community. The total cost of the
currently remaining PAMA projects, including the sulfuric acid plant construction, and these projects is approximately $143,000.

111

---



Management
believes that Doe Run Peru will obtain an approval of an extension to complete the sulfuric acid plant. There is no assurance, however, that Doe Run Peru will receive an
extension, or, if it does, that the project will be completed within the time limitation specified by the Supreme Decree.

The
PAMA projects have been designed to achieve compliance with such requirements prior to the expiration of the PAMA. 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 and results of operations.

Under
the purchase agreement related to the acquisition of the La Oroya assets in October 1997, Centromin, the prior owner of the La Oroya smelter and Cobriza mine,
agreed to indemnify Doe Run Peru against environmental liability arising out of its prior operations and their apportioned share of any other complaint related to emissions. Performance of the
indemnity has been guaranteed by the Peruvian government through the enactment of the Supreme Decree No. 042-97-PCM. However, there can be no assurance that Centromin
will satisfy its environmental obligations and investment requirements, including those in its PAMA, or that the guarantee will be honored. Any failure by Centromin to satisfy its environmental
obligations could adversely affect Doe Run Peru's business, financial condition and results of operations.

The
Cobriza mine has a separate PAMA in which Doe Run Peru has committed to complete projects to manage tailings, mine drainage, sewage and garbage. As of June 2004, Doe Run Peru
ceased discharging mine waste into the Mantaro River and was in compliance with the emissions standards required by the PAMA.

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



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

Doe
Run Peru has AROs at its Cobriza mine, related to the costs associated with closing the mine openings and covering acid rock. Doe Run Peru is also responsible for the covering and
revegetation of mixed lead and copper slag also stored in Huanchan, an area a short distance from the smelter where the slag is currently stored.

112

---



Activity
related to Doe Run Peru's AROs for the years ended October 31, 2004 and 2003 are as follows:

October 31,2004

2003AROs as of beginning of year

$
1,643

$
3,606Transition adjustment





(1,521
)Liabilities settled





Accretion expense


223


158Changes in estimated cash flows





(600
)AROs as of end of year

$
1,866

$
1,643




Doe Run Cayman and its wholly-owned subsidiary, Doe Run Peru, have jointly and severally, fully, unconditionally guaranteed notes issued by Doe Run. The total
principal amounts owed under these notes as of October 31, 2004 and 2003 was $241,967 and $218,803, respectively. These notes are secured by a second priority interest in substantially all of
the assets of Doe Run's U.S. operations, except for substantially all accounts receivable and inventory.

The
guarantee of Doe Run Peru is contractually subordinated to the indebtedness of Doe Run Peru under the Revolving Credit Facility described in Note 9.



All existing and pending litigations at the time of the acquisition of Doe Run Peru were retained by Centromin, the prior owner of the La Oroya smelter and
Cobriza mine.

Doe
Run Peru is a defendant in 123 lawsuits in the Lima, Peru labor courts whereby workers have alleged damages from industrial diseases. Doe Run Peru has made claims in most of the
cases against Centromin and has also made claims against both governmental agencies and private companies that provide workers' insurance. The average claim is $18. Of seven concluded cases in this
category, six were dismissed and one resulted in a payment by Doe Run Peru of $9.

Doe
Run Peru is also a defendant in 136 lawsuits by workers alleging that they are owed certain differences in salaries and benefits. The average claim is $23. Of 22 concluded cases in
this category, 21 were dismissed and one resulted in a payment by Doe Run Peru of $2. Doe Run Peru is also a defendant in a lawsuit by the Yauli-La Oroya Employees Union concerning
salaries and benefits. The claims of the 150 workers remaining in the lawsuit total approximately $660.

On
January 19, 2005 Doe Run Peru was served with a lawsuit by an association of municipalities of the Junin Region of Peru against Doe Run Peru and two other mining companies.
This lawsuit alleges environmental damages to the Mantaro River basin in the amount of $5.0 billion. Material liability to Doe Run Peru is believed to be remote because it is the opinion of
management and outside counsel for Doe Run Peru that the probability under Peruvian law of this case proceeding to a conclusion at the favor of the plaintiffs is low. Any potential judgment would be
subject to the indemnification obligations of Centromin, which are guaranteed by the Peruvian government.

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

113

---







At October 31, 2004, the Company had outstanding customs bonds of $2,075 relating to materials and supplies and other purchases.



The Company has commitments to sell approximately 100%, 100%, 80%, 75% and 25% of its anticipated 2005 gold, copper, zinc, lead and silver metal production,
respectively under agreements, with terms of generally less than one year. Sales prices are generally based on the average quoted exchange prices for the month of shipment, plus a premium.

Doe
Run Peru derives its revenue from the sale of its refined metals and other products to numerous customers. Doe Run Peru's three largest customers accounted for 17%, 14% and 10%,
respectively, of net sales in the year ended October 31, 2004, 15%, 9% and 8%, respectively, of net sales in the year ended October 31, 2003, and 14%, 8% and 7%, respectively, of net
sales in the year ended October 31, 2002. The customers have sales contracts, under which the Company will supply products at prices based on international market quotations.

(13) 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 Statement No. 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 or loss reflected in the 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 by comparing the changes in fair value or cash flows relating to the hedged transaction with all
changes in the fair values or cash flows of the related derivative contract. Because the futures contracts fluctuate by the same amount as the hedged transaction (the change in the London Metal
Exchange price), the hedges are considered effective.

The
fair market value of the Company's derivative financial instruments reflected in the Company's balance sheet as of October 31, 2004 and 2003 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 positions as of October 31, 2004 were:

Sold / (Purchased) futures contracts(tons, ounces and dollar amounts not in thousands)

Metal

Quantity

Weighted Average Price

Fair Value

PeriodCopper

1,102
tons
$2,400.41/ton

$
(148,421
)
Nov 04 - Aug 05Silver

850,175
(987,300
oz)oz
$5.26/oz
$5.56/oz

$$
(1,191,098
1,088,910
)
Nov 04
Nov 04Gold

6,472
(6,198
oz)oz
$264.36/oz
$299.91/oz

$$
(792,370
538,445
)
Nov 04
Nov 04


114

---



Sold / (Purchased) call option contracts(tons, ounces and dollar amounts not in thousands)

Metal

Quantity

Price range

Fair Value

PeriodSilver

416,860
(54,850
oz)oz
$5.47 - $7.06/oz
$7.06/oz

$$
(479,378
10,889
)
Dec 04 - Mar 05
Dec 04


Sold / (Purchased) put option contracts(tons, ounces and dollar amounts not in thousands)

Metal

Quantity

Price range

Fair Value

PeriodCopper

(1,764
) tons
$2,512.90/ton

$
204,748

Jan 05 - Apr 05


The
Company's open derivative positions as of October 31, 2003 were:

Sold / (Purchased) futures contracts(tons, ounces and dollar amounts not in thousands)

Metal

Quantity

Weighted Average Price

Fair Value

PeriodCopper

3,519
(213
tons)tons
$1,839.10/ton
$1,721.00/ton

$
33,150
(122,788
)
Nov 03 - Feb 04
Dec 03Silver

850,175
(987,300
oz)oz
$5.21/oz
$5.47/oz


507,548
(841,410
)
Dec 03
Dec 03Gold

6,472
(6,198
oz)oz
$262.08/oz
$292.53/oz


(572,985
359,996
)
Dec 03
Dec 03


Sold / (Purchased) call option contracts(tons, ounces and dollar amounts not in thousands)

Metal

Quantity

Price range

Fair Value

PeriodCopper

550
tons
$1,720.00 - $1,760.00/ton

$
(98,074
)
Feb 04 - Mar 04Silver

323,615
(109,700
oz)oz
$4.65 - $5.47/oz
$4.88 - $5.01/oz


(42,658
2,926
)
Nov 03 - Mar 04
Nov 03


At
October 31, 2004 and 2003, the Company had recorded an asset of $1 and $13, respectively, and a liability of $768 and $774, respectively, related to the fair values of these
instruments.

The
Company does not obtain collateral or other security to support hedge instruments subject to credit risk but assesses the reliability and reputation of its counterparties before
contracts are established.

(14) Fair Value of Financial Instruments

The fair values of the Company's long-term debt were estimated using discounted cash flow analysis, based on the estimates of incremental borrowing
rates for similar types of borrowing arrangements. At October 31, 2004 and 2003, the fair values of the Company's financial instruments were not materially different from their carrying
amounts.

(15) Related Party Transactions

The Company has signed the following agreements with Doe Run:

Pursuant
to the terms and conditions included in an International Sales Agency Services Contract dated November 1, 2000, Doe Run agreed to perform marketing and sales services for
Doe Run Peru. The term of this agreement is for two years after which it is automatically renewed on an annual basis unless either party gives notice of non-renewal. The commission is
2.25% of the sales revenue. Doe Run Peru expensed $7,502, $9,046 and $8,574 for the years ended October 31, 2004, 2003 and 2002, respectively. Effective July 1, 2004, Doe Run and Doe Run
Peru cancelled the International Sales Agency Services Contract under which Doe Run acted as a sales agent on behalf of Doe Run Peru.

115

---



Under
the cancellation, the balance owed to Doe Run of $22,600 will be paid in $1,000 quarterly installments or as otherwise agreed by the parties.

Pursuant
to the terms and conditions included in a Hedging Services Contract renewed November 1, 2002, Doe Run agreed to perform trading and hedging services. The agreement is
automatically renewed on an annual basis unless either party gives notice of non-renewal. The commission is $42 per month. Doe Run Peru expensed $336 for the year ended October 31,
2004 and $504 for the years ended October 31, 2003 and 2002, respectively. On July 1, 2004 Doe Run and Doe Run Peru amended the Hedging Service Contract changing the terms of the
commission calculation through January 1, 2006.

In
addition to the above, Doe Run has paid expenses on behalf of Doe Run Peru of $666 and $311 in 2004 and 2003, respectively. The following balances relating to inter-company
transactions were outstanding as of October 31, 2004 and 2003:



Doe
Run Peru has guaranteed notes of Doe Run. See the related discussion in Note 12.

Certain
of Doe Run's debt agreements contain covenants that limit the ability of Doe Run Peru to, among other things, incur additional indebtedness, make certain restricted payments,
consummate certain asset sales, enter into certain transactions with affiliates, incur lines, impose restrictions on the ability of a subsidiary to pay dividends or make certain payments to Doe Run,
merge or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets.

(16) Geographic Data

The following is an analysis of net sales by country of destination:

Year Ended October 31,2004

2003

2002USA

$
133,394

$
161,604

$
119,998Japan


99,821


57,034


26,573Brazil


79,355


56,994


60,883Peru


68,288


38,888


42,543Taiwan


44,669


15,013


2,984Switzerland


25,034


25,188


27,728Spain


23,326


15,067


7,533Other


92,528


66,425


130,044Total net sales

$
566,415

$
436,213

$
418,286


116

---



(17) Financial Condition

For the year ended October 31, 2003 and for several years prior, Doe Run Peru reported recurring losses, primarily due to the decline of treatment charges
Doe Run Peru received for processing raw materials over the prior five years, which had severely impacted Doe Run Peru's liquidity. Doe Run Peru had failed to meet certain financial covenant
requirements contained in its revolving credit agreement during fiscal 2003, which default continued into fiscal 2004. The Company has substantial environmental commitments that will affect the
Company's liquidity. These issues combined raise substantial doubt about the Company's ability to continue as a going concern.

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

Doe
Run Peru proceeded with efforts to identify alternative methods of achieving compliance with environmental requirements. These efforts included, but were not limited to, reducing or
curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These efforts took into consideration
the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru had intended to submit a request in 2004 to modify its existing requirements. Failure to comply with the
PAMA could result in the cessation of operations at the La Oroya smelter.

During
fiscal year 2003, Doe Run Peru implemented cost savings, including a reduction of approximately 10% of its workforce, acceleration of cash receipts, as well as other measures, to
improve its liquidity. In addition, the retirement of Doe Run Peru's loan from a foreign bank, reduced Doe Run Peru's interest payments by approximately $14,000 per year. These changes improved Doe
Run Peru's cash flow and availability in 2003. The cash balance and net unused availability under Doe Run Peru's revolving credit facility were approximately $16,800 and $3,800 at October 31,
2003, respectively.

Metal
prices rose dramatically in 2004. Doe Run Peru's revenues and feed costs increased as a result of the price increases, as did accounts receivable, inventory and accounts payable as
of October 31, 2004.

Net
unused availability at October 31, 2004 and 2003 under the Doe Run Peru Revolving Credit Facility was virtually none and $3,830, respectively. In addition to the availability
under its revolving credit facilities, cash balances at Doe Run Peru were $6,905 and 16,794, respectively, at October 31, 2004 and 2003. Higher metal prices resulted in higher outlays for
concentrate purchases and higher VAT payments funded by cash from operations, as Doe Run Peru has reached its maximum borrowing level under the Doe Run Peru Revolving Credit Facility.

117

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As
discussed in Note 12, Doe Run Peru's existing PAMA requires it to perform projects in 2005 and 2006 at a total cost of $121,200. Doe Run Peru expects that it will not be able
to comply with the spending requirements of the PAMA investment schedule in 2005 and 2006 with respect to the construction of the sulfuric acid plant required by the PAMA and, as a result, could be
subject to penalties. Failure to comply with the PAMA could result in the cessation of operations at the La Oroya smelter.

The
Peruvian Government has issued the Supreme Decree, which recognized that exceptional circumstances may justify an extension of one or more projects within the scope of a PAMA. Doe
Run Peru will submit an application for extension to modify the requirements of the existing PAMA and extend the term of the PAMA to complete the construction of the sulfuric acid plant contemplated
by the original PAMA. Doe Run Peru will perform other environmental projects to reduce fugitive emissions, including heavy metal dust, to address the health issues of the community. The total cost of
the currently remaining PAMA projects, including the sulfuric acid plant construction, and these projects is approximately $143,000. If the extension of the PAMA is approved, management expects to
fund the PAMA projects from cash from operations.

Upon
approval of a modified PAMA, Doe Run Peru would be required to create a trust account. The trust account would administer the receipts and disbursements related to the extended PAMA
project. The Supreme Decree requires that receipts from sales, in an amount sufficient to fund the monthly cash requirements of the extended PAMA project, be remitted directly to the trust account.
Such an arrangement is prohibited by Doe Run Peru's revolving credit facility, which expires on September 23, 2005. Accordingly, a renegotiated Doe Run Peru credit facility will need to comply
with the requirements established by the Supreme Decree, should Doe Run Peru's PAMA be extended.

The
Supreme Decree also requires that, within 30 days of the approval of the PAMA extension, the Company provide financial security in an amount equal to 20% of the projected cost
of the project or projects to be extended. The company currently expects the overall investment required to build the sulfuric acid plant to be approximately $102,000.

Management
believes that Doe Run Peru will obtain an approval of an extension to complete the sulfuric acid plant. There is no assurance, however, that Doe Run Peru will receive an
extension, or if it does, that the project will be completed within the time limitation specified by the Supreme Decree.

A
default under the requirements of the PAMA could result in a default under the Doe Run Peru Revolving Credit Facility.

These
issues raise substantial doubt about the Company's ability to continue as a going concern. Doe Run Peru has developed a business plan that identifies several revenue generating and
cost reduction activities. Management believes the plan will enhance liquidity, which is expected to improve Doe Run Peru's ability to make the investments under the PAMA, assuming an extension is
received. Revenue enhancement and cost reduction projects include the processing of zinc ferrites and an effort to bring more recycled feed into the smelter. Cost reduction measures include manpower
reductions through voluntary retirement and decreased power usage in the zinc circuit.

Doe
Run Peru has received assessments of income tax, including penalties and interest, and VAT totaling $96,500 and $39,100, respectively, as discussed in Note 10. In addition,
the Company estimates that the effect of similar assessments for periods not yet assessed would be approximately $800 and $18,000 for the income tax and VAT matters, respectively. Furthermore, Doe Run
Peru would also be required to make additional workers' profit sharing payments equal to 8% of the increase in taxable income generated by the changes discussed above, or approximately $5,800 for tax
years 1998 through 2004.

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Management
believes that in each case Doe Run Peru has followed the applicable Peruvian tax statutes and intends to pursue all available administrative and judicial appeals. Doe Run Peru
is not required to make any payments pending the administrative appeal process. If Doe Run Peru is not successful in the administrative appeal processes and were to appeal in the judicial system, some
type of financial assurance would be required, which would have a significant adverse effect on liquidity.

Management
believes that the price improvements and other revenue enhancements, and the issuance of the Supreme Decree allowing an application to extend La Oroya's PAMA requirement for
the construction of the sulfuric acid plant will enable Doe Run Peru to continue as a going concern through October 31, 2005.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

On July 27, 2004, the Company decided to replace KPMG LLP (KPMG) as the Company's independent auditors effective upon KPMG's completion of its review of
the Company's financial statements as of and for the three months ended January 31, 2004. Such dismissal was effective as of July 30, 2004.

The
reports of KPMG on the financial statements of the Company for the past two fiscal years contained no adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles, except as follows:



In
connection with its audit for each of the two most recent fiscal years and through July 30, 2004, the date of KPMG's dismissal, there had been no disagreements with KPMG on any
matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused KPMG to
make reference thereto in their report in the financial statements for such years.

During
the 2002 and 2003 fiscal years, and through July 30, 2004, there have been no reportable events as defined in Regulation S-K, Item 304(a)(1)(v).

Effective
as of August 25, 2004, Crowe Chizek and Company LLC (Crowe Chizek) accepted engagement to serve as the Company's Independent Certified Public Accountants. The Company's
Audit Committee selected, and its Board of Directors ratified the appointment of, Crowe Chizek to serve as the Company's independent certified public accountants.

During
the Company's two most recent fiscal years ended October 31, 2002 and 2003, and through July 30, 2004, the Company did not consult with Crowe Chizek with respect to
the application of accounting principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, or any
matter that was either the subject of a disagreement or a reportable event.

Item 9A. Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company's management,
including the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that
evaluation, the Company's management, including the CEO and CFO, concluded the Company's disclosure controls and procedures as of October 31, 2004 were effective in ensuring that information
required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 was recorded, processed, summarized and reported on a timely basis. There have
been no changes in the Company's internal control over financial reporting that occurred during the quarter ended October 31, 2004 that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting.

Item 9B. Other Information

None.

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Part III

Item 10. Directors and Executive Officers of the Registrant

The following table sets forth certain information regarding the directors and executive officers or significant employees of Doe Run:

|Name                 |  | Age |  | Position                                                                 
|-------------------- |  | --- |  | -------------------------------------------------------------------------
|Ira Leon Rennert*    |  | 70  |  | Chairman and Director of Doe Run                                         
|Jeffrey L. Zelms     |  | 60  |  | Vice Chairman, President and Chief Executive Officer of Doe Run          
|Marvin K. Kaiser     |  | 63  |  | Executive Vice President and Chief Administrative Officer of Doe Run     
|James W. Grubbs      |  | 58  |  | Vice President Sales and Marketing                                       
|Jerry L. Pyatt       |  | 48  |  | Vice President Domestic Operations and Chief Operating Officer of Doe Run
|A. Bruce Neil        |  | 59  |  | Vice President of Doe Run and President of Doe Run Peru                  
|David A. Chaput      |  | 46  |  | Vice President Finance, Treasurer and Chief Financial Officer of Doe Run 
|Dennis A. Sadlowski* |  | 64  |  | Director and Secretary of Doe Run                                        
|Thomas P. Krasner*   |  | 42  |  | Director                                                                 

---

Pursuant
to the Investor Rights Agreement, Doe Run's Board of Directors was expanded to three members, consisting of Mr. Rennert, Mr. Sadlowski and Mr. Krasner.
Mr. Krasner was nominated for election by the Majority Warrantholders. See "Item 13Certain Relationships and Related Transactions."

Ira
Leon Rennert has been Chairman and Chief Executive Officer of Doe Run's indirect parent, Renco (including predecessors), since Renco's first acquisition in 1975 and has been Chairman
and Director of Doe Run since its acquisition by Renco in April 1994. Renco holds interests in a number of manufacturing and mining concerns operating in businesses which do not compete with
Doe Run, including, among others, controlling interests in WCI Steel, Inc. (WCI Steel) (where Mr. Rennert serves as Chairman) and U.S. Magnesium LLC and an interest in a joint venture
which controls AM General LLC (the manufacturer of the HUMVEE®where Mr. Rennert served as Chairman until August 2004). Mr. Rennert also owns, both through
Renco and other entities, a portfolio of more passive investments. Mr. Rennert also owns indirect controlling interests in Magnesium Corporation of America (Magcorp) and Lodestar
Energy, Inc. (Lodestar), both of which are no longer conducting active businesses and for both of which Mr. Rennert has served as Chairman of the Board. Magcorp (and its immediate parent
company), Lodestar (and its immediate parent company) and WCI Steel, and certain of their respective subsidiaries, have filed for bankruptcy court protection under the U.S. Bankruptcy Code.

Jeffrey
L. Zelms has served as Vice Chairman of Doe Run since December 1998 and as President and Chief Executive Officer of Doe Run and its predecessor since August 1984.
Mr. Zelms has over 30 years of experience in the mining industry. Mr. Zelms serves on the board of directors of Phoenix Textiles.

Marvin
K. Kaiser has served as Executive Vice President and Chief Administrative Officer since May 2004, as Executive Vice President and Chief Financial and Administrative Officer
from

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September 2001
through April 2004, and as Vice President and Chief Financial Officer of Doe Run and its predecessor from January 1994 through September 2001. From
June 1989 to December 1993, Mr. Kaiser was the Chief Financial Officer of AMAX Gold, Inc., a gold producing company. Mr. Kaiser is a Certified Public Accountant.

James
W. Grubbs joined Doe Run on December 1, 2004 as Vice President Sales and Marketing. Prior to that time, Mr. Grubbs served as Vice President Marketing for Ok Tedi
Mining Ltd. Mr. Grubbs has 29 years experience in the metals industry.

Jerry
L. Pyatt has served as Vice President Domestic Operations and Chief Operating Officer since September 2001. Prior to that time Mr. Pyatt served as Vice President
Secondary Smelting of Doe Run and General Manager of Doe Run's resource recycling operation. Mr. Pyatt joined the Company in 1991 as a Metallurgical Engineer.

A.
Bruce Neil has served as President and General Manager of Doe Run Peru since September 1, 2003. He was named as a Vice President of Doe Run on October 11, 2004.
Mr. Neil served as General Manager at the Glover Smelting Division from September 2001 to August 31, 2003. Prior to joining Doe Run in 1998, Mr. Neil held positions with
ASARCO, where he was involved in custom lead refining, and with Noranda Inc. and Timminco Limited smelters in Quebec, New Brunswick and Ontario, Canada. He has over 30 years of
experience in the metals industry.

David
A. Chaput was named Chief Financial Officer in May 2004, has served as Treasurer since February 1993 and as Vice President, Finance from September 2001. Prior
to serving as Treasurer, Mr. Chaput served as Manager of Credit and Financial Services from June 1987 through January 1993. Mr. Chaput has 24 years of experience in
the extractive and natural resources industries.

Dennis
A. Sadlowski, Esq. was appointed to Doe Run's Board of Directors on October 29, 2002. Mr. Sadlowski also serves as the Secretary of Doe Run. Mr. Sadlowski has
served as the Vice President-Law of Renco since 1996.

Thomas
P. Krasner was appointed to Doe Run's Board of Directors on January 13, 2003. Mr. Krasner, a Chartered Financial Analyst, co-founded Concise Capital, a
high yield hedge fund in January 2005. Mr. Krasner was Executive Vice President of Harch Capital Management, Inc., an investment management firm located in Boca Raton, Florida,
from March 1999 through December 2003. From March 1996 through March 1999, Mr. Krasner was a Principal and Portfolio Manager at Biscayne
Capital Management, Fort Lauderdale, Florida. Mr. Krasner currently serves as a member of the board of directors of Sterling Chemical, Inc. He previously served as Chairman of the Board,
CEO and President of Trism, Inc. from January 2001 through December 2001. In December 2001, Trism, Inc. filed for bankruptcy court protection under the U.S.
Bankruptcy Code. Mr. Krasner has also served as a member of the boards of directors of Birch Telecom, Inc. and FWT, Inc.

Corporate Governance and Code of Ethics

The Board of Directors acts as the Audit Committee. Thomas P. Krasner has been designated by the Board of Directors as the "audit committee financial expert" as
defined by Item 401 (h) (2) of Regulation S-K. The Board of Directors has determined that, in its judgment, Mr. Krasner meets all applicable independence
standards to serve in such a capacity.

The
Company has adopted a Code of Ethics that applies to the Company's Chief Executive Officer, Chief Financial Officer, Controller and other Company personnel. A copy of the Code of
Ethics has been filed with this document and is available on the SEC's website at www.sec.gov.

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Item 11. Executive Compensation

The following table sets forth compensation earned for the fiscal years ended October 31, 2004, October 31, 2003 and October 31, 2002, or
such shorter period as such employees were employed by the Company, to those persons who were either (a) the chief executive officer as of October 31, 2004 or (b) one of the
Company's four other most highly compensated executive officers or executive employees as of October 31, 2004 (collectively with the Chief Executive Officer, the "named executive officers").
Certain balances under the "Bonus' and "All Other Compensation' columns have been reclassified from their previous presentation in order to conform to the current year presentation, which is described
below.

|                                                                             |  |                |  | Annual
Compensation(a)(b) |                         | 
|---------------------------------------------------------------------------- |  | -------------- |  | ------------------------- | ----------------------- | 
|
|
|Jeffrey L. Zelms
Vice Chairman, President and
Chief Executive Officer        |  | 2004
2003
2002 |  | $$$                       | 500,000
500,000
500,000 | 
|Marvin K. Kaiser
Executive Vice President and
Chief Administrative Officer   |  | 2004
2003
2002 |  | $$$                       | 275,000
275,000
275,000 | 
|A. Bruce Neil
Vice President President
Doe Run Peru                         |  | 2004
2003
2002 |  | $$$                       | 216,500
135,667
107,000 | 
|Jerry L. Pyatt
Vice President and Chief
Operating OfficerU.S. Operations    |  | 2004
2003
2002 |  | $$$                       | 200,000
200,000
200,000 | 
|David A. Chaput
Vice President Finance Treasurer
and Chief Financial Officer |  | 2004
2003
2002 |  | $$$                       | 185,000
170,000
170,000 | 

---

These
individuals also participate the Company's profit sharing plan, which covers substantially all U.S. employees. The compensation is determined based on audited results, which are
not yet final, and are not included in the table above. Management estimates that the compensation for all named executives under the plan is approximately $10 thousand for 2004. No amounts
were paid under the plan for 2003 and 2002.

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Net Worth Appreciation Agreements

Messrs. Zelms, Kaiser, Pyatt and Chaput are each parties to net worth appreciation agreements, copies of which are exhibits to this report, with Doe Run,
pursuant to which, upon termination of each person's employment with Doe Run, they are entitled to receive a fixed percentage of the increase in the net worth of the Company, as defined, from a base
date until the end of the fiscal quarter preceding the date of his termination. Such amount is payable without interest in 40 equal quarterly installments, commencing three months after the
termination of each person's employment, and at three month intervals thereafter. The net worth appreciation agreements also provide that, in the event of payment of a dividend or a sale of the
Company, the active participants will be entitled to receive a percentage of the dividend or the net proceeds of the sale equal to their maximum percentages under the agreements. The following table
summarizes the net worth appreciation agreements.

Executive Officer

Vested Credit as of
10/31/04 of Net Worth
Appreciation Credit

Maximum
Credit
As of 11/1/07Jeffrey L. Zelms

0.0
%
5.0
%Marvin K. Kaiser

0.0
%
1.5
%Jerry L. Pyatt

0.0
%
1.0
%David A. Chaput

0.0
%
0.5
%


Retirement Plans

Pension Plan Table

Approximate Annual Retirement BenefitsAverage Final
Compensation

15 Years of
Service

20 Years of
Service

25 Years of
Service

30 Years of
Service

35 Years of
Service$   125,000

$
28,125

$
37,500

$
46,875

$
56,250

$
65,625150,000


33,750


45,000


56,250


67,500


78,750175,000


39,375


52,500


65,625


78,750


91,875200,000


45,000


60,000


75,000


90,000


105,000225,000


50,625


67,500


84,375


101,250


118,125250,000


56,250


75,000


93,750


112,500


131,250300,000


67,500


90,000


112,500


135,000


157,500400,000


90,000


120,000


150,000


180,000


210,000450,000


101,250


135,000


168,750


202,500


236,250500,000


112,500


150,000


187,500


225,000


262,500600,000


135,000


180,000


225,000


270,000


315,000700,000


157,500


210,000


262,500


315,000


367,500800,000


180,000


240,000


300,000


360,000


420,000900,000


202,500


270,000


337,500


405,000


472,5001,000,000


225,000


300,000


375,000


450,000


525,000


The
preceding table shows the estimated amount of annual retirement income (calculated as a straight life annuity benefit) payable to employees under The Doe Run Resources Corporation
Retirement Plan for Salaried Employees (the Plan), supplemented by the Doe Run Resources Corporation Supplemental Employee Retirement Plan (SERP) at age 65. The SERP is a non-qualified
plan under which any benefits not payable from Plan assets by reason of the limitations imposed by the Internal Revenue Code of 1986, as amended (the Code) are paid by the Company. The benefits paid
are not subject to any deduction for Social Security. In the case of Mr. Zelms and Mr. Pyatt, benefits

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are
offset by pension benefits they are entitled to receive under pension plans maintained by other employers that at one point in time were related to Doe Run.

Retirement
benefits are based on a member's average monthly "compensation" for the highest 36 consecutive months out of the final 120 months. "Compensation" covered by the Plan
includes basic salary, overtime pay, cash bonuses, amounts contributed through a salary reduction arrangement to a qualified plan which meets the requirements of Section 401(k) of the Code or
to a cafeteria plan which meets the requirements of Section 125 of the Code. "Compensation" covered by the Plan does not include commissions, income from the exercise of stock options or income
from shadow stock, other special pay or allowances, severance pay, payments in the nature of royalties, and the cost to the Company of any public or private employee benefit plan.

As
of December 31, 2004, the following executive officers had completed the number of years of service indicated opposite their names: Jeffrey L. Zelms, 36 years; Marvin K.
Kaiser, 11 years; Jerry L. Pyatt, 25 years; David A. Chaput, 17 years; and A. Bruce Neil, 6 years. Covered compensation under the Plan for the year ended October 31,
2004 did not differ by more than 10% from the compensation disclosed in the Summary Compensation Table.

Compensation of Directors

Directors, other than the Independent Director, receive no pay for their services. The Independent Director is paid $24 thousand annually for duties that
include attending four regularly scheduled meetings each year. For each additional meeting, the Independent Director receives $6 thousand or $3 thousand for attending in person or
participating telephonically, respectively.

Employment Agreements

Messrs. Zelms, Kaiser, Pyatt, Chaput and Grubbs are parties to employment agreements with Doe Run. The agreements require that, during the term of their
employment, the officers shall not, directly or indirectly, engage in any aspect of the business of lead mining, milling, recycling or sale within the continental United States as an officer,
director, partner, proprietor, investor, associate, employee or consultant except with the Company. In addition, each of the named executive officers has agreed to maintain the confidentiality of
information obtained during employment with the Company.

The
agreements are automatically renewable for additional one-year terms, unless either party gives written notice at least three months prior to the respective renewal
dates. Pursuant to the terms of these agreements compensation is composed of: 1) a base annual salary, 2) certain year-end bonuses and 3) such additional amounts, if
any, as the Chairman may determine from time to time in his discretion, subject to the terms of the credit agreements.

Mr. Neil
is a party to an employment agreement with Doe Run Peru. The term of the agreement is through April 30, 2006. Pursuant to the terms of this agreement compensation
is composed of: 1) a base annual salary, 2) certain year-end bonuses and 3) payments as a result of his international assignment in Peru.

On
November 1, 2002, Doe Run executed amendments to or restated the employment agreement of each of the named executive officers. Terms of the specific agreements as follows:

AnnualEnd of Term

Base Salary

Stay BonusJeffrey L. Zelms

October 31, 2005

$
500,000

$
250,000Marvin K. Kaiser

October 31, 2005

$
275,000

$
137,500Jerry L. Pyatt

October 31, 2005

$
200,000

$
100,000David A. Chaput

October 31, 2005

$
200,000

$
85,000


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Pursuant
to this amendment, each named executive officer received a stay bonus. These stay bonuses are also payable, in the same amounts as set forth above, on November 1, 2004
and 2005, assuming the applicable executive is employed by the Company at such time.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of Doe Run's common stock by each beneficial
owner of 5% or more of the common stock, each director and each named executive officer of Doe Run during the last fiscal year, and all directors and executive officers of Doe Run as a group. Except
as otherwise noted, the persons named in the table below have sole voting and investment power with respect to all shares or interests, as applicable, shown as beneficially owned by them.

Name

Number of
Shares

PercentThe Renco Group, Inc.(a)(b)

1,000

100.0
%DR Acquisition Corp.(a)

1,000

100.0Ira Leon Rennert(a)(b)

1,000

100.0Directors and executive officers as a group

1,000

100.0


---

By
virtue of Renco's indirect ownership of all of the outstanding common stock of Doe Run, and Mr. Rennert's ownership of the stock of Renco, Mr. Rennert is in position to
influence actions that require the consent of a majority of the holders of equity interests in Doe Run and its subsidiaries, subject to the approval of the Independent Director, which is required for
certain transactions. See the discussion below in "Item 13.Certain Relationships and Related Transactions" for actions that require approval by
the Independent Director.

Item 13. Certain Relationships and Related Transactions

Under a management consultant agreement, dated as of April 7, 1994, as amended (Management Consultant Agreement), between Renco and Doe Run, Doe Run owes
an annual fee of $2.4 million to Renco. The Management Consultant Agreement provides that Doe Run shall not make any payment, which would violate any of its agreements with respect to any of
its outstanding indebtedness. The Management Consultant Agreement extends to October 31, 2006 and thereafter shall continue for additional terms of three years each unless sooner terminated by
either party by giving six months prior written notice. In the year ended October 31, 2004, Doe Run recorded expense of $2.4 million pursuant
to the Management Consultant Agreement and made payments of $1.2 million to Renco. At October 31, 2004, $7.6 million remained unpaid to Renco. The Company believes that the cost
of obtaining the type and quality of services rendered by Renco under the Management Consultant Agreement was, and continues to be, no less favorable than that at which the Company could obtain such
services from unaffiliated entities.

At
times, to obtain the advantages of volume, Renco purchased certain insurance policies for a number of its subsidiaries, including the Company. The actual cost of such policies,
without markup, is reimbursed by the covered subsidiaries. For the years ended October 31, 2004, 2003 and 2002, the

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Company
made payments to Renco of approximately $35 thousand, $23 thousand and $299 thousand, respectively, under the Renco insurance program. These insurance payments were
primarily for losses incurred prior to 2000 under policies in effect at such time.

Doe
Run is subject to a tax sharing agreement with Renco effective October 29, 2002, as amended January 30, 2004. Pursuant to the agreement, Doe Run is required to make
quarterly payments based on a pro forma federal and state income tax liability, assuming that Doe Run is not and never was a subsidiary of Renco, plus amounts reasonably determined by Renco to cover
tax liabilities of current or prior years not reflected in Doe Run's pro forma tax calculations. Until the obligations under the Doe Run Revolving Credit Facility, the 11.75% Notes and the Warrants
have expired, the pro forma income tax liabilities will assume that Doe Run became a C corporation under the Code on the day after Restructuring, and will include no income attributable to any
cancellation of indebtedness prior to the Restructuring or any effect of such cancellation on the basis of the assets of Doe Run. No amounts have been due under the agreement since its inception.

Renco
has elected for the Company to be treated as a QSSS for U.S. federal tax purposes. Most states in which the Company operates will follow similar tax treatment. QSSS status requires
the ultimate shareholders to include their pro rata share of the Company's income or loss in their individual tax returns. The election does not affect foreign income taxes related to the Company's
foreign subsidiaries. As a result, the Company's taxable income will be included in Renco's shareholders' income tax returns. Generally, no provision for U.S. federal income taxes will be included in
the Company's statements of income for periods beginning after October 31, 1998. The Company will continue to provide for foreign, state and local income taxes for those taxing jurisdictions
that do not recognize QSSS status. However, under the "built-in gains" provisions of the Code, federal and state taxes may become payable and will be charged to the Company's statement of
income. Such taxes are measured by the excess of the fair market value of assets over their tax bases on the effective date of the QSSS election if the appreciated assets are disposed of within the
ten-year post-conversion period. It is not management's present intent to trigger any taxes under the built-in gains provisions of the Code. The Company may still
make payments to Renco pursuant to the tax sharing agreement discussed above.

On
March 21, 2003 Renco and the Term Note lenders entered into a Term Note assignment agreement whereby, Renco purchased all of the rights of the agent and lenders under the Term
Note. The Term Note was amended April 30, 2004 to amend, among other things, financial covenants and waive covenant defaults.

The
Company is a member of a controlled group with other Renco-owned companies. Accordingly the Company is jointly and severally liable with all other members of the controlled group
under Title IV of ERISA for obligations of other members of the controlled group that could include certain pension funding and excise taxes in the event that any member of the controlled group does
not satisfy certain of its pension obligations arising pursuant to ERISA.

In
such an event, statutory liens would arise in favor of the PBGC upon the assets of the other members of the controlled group not in bankruptcy, and the PBGC may seek to obtain court
approval for a PBGC Termination and may require the other members of the controlled group to satisfy such pension plan obligations. In the event that a PBGC Termination occurs, and the PBGC requires
that the Company satisfy such pension plan obligations, such requirements would have a materially adverse effect on the Company's financial condition and liquidity.

Pursuant
to an Investor Rights Agreement, dated as of October 29, 2002, at any time during which the Warrants issued pursuant to Doe Run's Restructuring are outstanding, Doe Run's
Board of Directors will consist of three individuals, two of whom are to be nominated by the stockholder of Doe Run, and one of whom, the Independent Director, is to be nominated by the Majority
Warrantholders. Pursuant to the Investor Rights Agreement, Doe Run may not take, nor permit any of its subsidiaries

127

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to
take, certain actions without the approval of the Independent Director. These actions include filing a voluntary bankruptcy petition, merging or consolidating with another entity, issuing capital
stock or securities convertible into capital stock, making certain changes to its charter documents or incurring certain levels of indebtedness. The Majority Warrantholders have chosen Thomas P.
Krasner as the Independent Director. See "Item 10. Directors and Executive Officers of the Registrant."

Under
certain circumstances (including a default by Doe Run on its payment obligations under the Warrants or in the event that Doe Run is the subject of certain insolvency proceedings),
the holders of a majority of the Warrants will be entitled to cause the stockholder of Doe Run to elect a Special Director to Doe Run's Board of Directors. The Special Director will be entitled to
cast a majority of the votes at all meetings of directors. Doe Run will be required to take any of the following actions if approved by the Special Director: (i) sell all of its capital stock
or that of any of its subsidiaries, (ii) merge or consolidate itself or any of its subsidiaries with any other entity and (iii) sell off any or all of its assets or any of its
subsidiaries and apply the proceeds of such sale to cure any payment default with respect to the Notes.

On
October 29, 2002, Renco purchased 2,000 shares of Redeemable Preferred Stock of Doe Run for $20.0 million. The Redeemable Preferred Stock accrues dividends at a rate of
12.5% per annum, which are payable only in kind as long as the Term Note or Warrants are outstanding. The Redeemable Preferred Stock ranks senior to all other classes of capital stock of Doe Run for
purposes of liquidation preference and dividends and is redeemable, at the option of Renco, at any time after May 1, 2009. Renco was issued 251 and 282 shares on November 1, 2003 and
October 31, 2004, respectively, as payment of the aforementioned dividends. See "Item 8. Financial Statements and Supplementary DataNote 9 to the Company's
Consolidated Financial Statements" for further information regarding the Redeemable Preferred Stock and related dividends.

Item 14. Principal Accounting Fees and Services

Crowe Chizek served as the Company's independent certified public accountants for the fiscal year ended October 31, 2004. KPMG served as the Company's
independent certified public accountants for the fiscal year ended October 31, 2003.

The
following fees were paid to Crowe Chizek and KPMG for services rendered during the Company's last two fiscal years (in thousands):



The
Company's board of directors has adopted a policy that requires advance approval of all audit, audit-related, tax services and other services performed by the independent certified
public accountants. The policy provides for pre-approval by the board of directors of specifically defined audit and permitted non-audit services. Unless the specific service
has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted service before the independent auditor is engaged to perform it.

128

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Part IV

Item 15. Exhibits, Financial Statement Schedules

(a).  Documents
filed as part of this Form 10-K:









(b).  Exhibits.



(c).  Financial
Statement Schedules.



129

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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)
| |  | ---------------------------------------------
| |  | By:                                          
| |  |                                              

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

|Ira Leon Rennert
Chairman of the Board and Director                                                                                 |  | /s/IRA LEON RENNERTSignature    |  | March 23, 2005Date
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- |  | ------------------
|Jeffrey L. Zelms
Vice Chairman, President and Chief Executive Officer (principal executive officer)                                 |  | /s/JEFFREY L. ZELMSSignature    |  | March 23, 2005Date
|David A. Chaput
Chief Financial Officer
Vice President and Treasurer (principal financial officer and principal accounting officer) |  | /s/DAVID A. CHAPUTSignature     |  | March 23, 2005Date
|Dennis A. Sadlowski
Director and Secretary                                                                                          |  | /s/DENNIS A. SADLOWSKISignature |  | March 23, 2005Date
|Thomas P. Krasner
Director                                                                                                          |  | /s/THOMAS P. KRASNERSignature   |  | March 23, 2005Date

130

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SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS, WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.

No
annual report to security holders covering the registrant's 2004 fiscal year and no proxy statement, form of proxy or other proxy soliciting material with respect to any annual or
other meeting of security holders has been or will be sent to security holders.

131

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EXHIBIT INDEX

|Exhibit
No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Certificate of Incorporation of Doe Run.(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3.2         |  | Certificate of Amendment of the Certificate of Incorporation of Doe Run.(10)                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3.3         |  | Amended and Restated By-laws of Doe Run.(10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3.4         |  | Certificate of Incorporation of FPI.(1) Ex. 3.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.5         |  | Bylaws of FPI.(1) Ex. 3.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3.6         |  | Certificate of Incorporation of Doe Run Cayman.(1) Ex. 3.5                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3.7         |  | Memorandum and Articles of Association of Doe Run Cayman.(1) Ex. 3.6                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.8         |  | Constitución de Sociedad Comercial de Responsibilidad Limitada de Doe Run Peru (with English translation).(1)                                                                                                                                                                                                                                                                                                                                                                                                          
|3.10        |  | Certificate of Formation of DRLH.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.11        |  | Limited Liability Company Agreement of DRLH.(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|3.12        |  | Certificate of Formation of The Buick Resource Recycling Facility LLC.(10)                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3.13        |  | Limited Liability Company Agreement of The Buick Resource Recycling Facility.(10)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4.1.1       |  | Indenture, dated as of March 12, 1998, by and among Doe Run, as issuer, FPI, Doe Run Cayman, Doe Run Mining and Doe Run Peru, as guarantors, and State Street Bank and Trust Company, as trustee, relating to the 111/4%
Senior Notes due 2005, Series A, Floating Interest Rate Senior Notes due 2003, Series A, 111/4% Senior Notes due 2005, Series B and Floating Interest Rate Senior Notes due 2003, Series B and the Guarantees thereof
(containing, as exhibits, specimens of the Notes and the Guarantees).(1)
|4.1.2       |  | First Supplemental Indenture, dated as of September 1, 1998, by and among Doe Run, as issuer, FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air and Doe Run Development, as guarantors, and State Street Bank and Trust Company, as
trustee, supplementing the Indenture, dated as of March 12, 1998.(2)                                                                                                                                                                                                  
|4.1.3       |  | Second Supplemental Indenture, dated as of September 16, 1998, by and among Doe Run, as issuer, FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air, Doe Run Development and Cobriza, as guarantors, and State Street Bank and Trust
Company, as trustee, supplementing the Indenture, dated as of March 12, 1998.(3)                                                                                                                                                                                       
|4.1.4       |  | Third Supplemental Indenture, dated as of January 13, 1999, by and among Doe Run, as issuer, FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air, Doe Run Development, Cobriza and DR Land Holdings, LLC (DRLH), as guarantors, and State
Street Bank and Trust Company, as trustee, supplementing the Indenture, dated as of March 12, 1998.(3)                                                                                                                                                            
|4.1.5       |  | Fourth Supplemental Indenture, dated as of October 29, 2002, by and among Doe Run, as issuer, Doe Run Cayman, FPI, DR Land Holdings, Doe Run Peru and Doe Run Development, as guarantors, and State Street Bank and Trust Company, as trustee,
supplementing the Indenture, dated as of March 12, 1998.(10)                                                                                                                                                                                                            
|4.2.1       |  | Indenture, dated as of September 1, 1998, by and among Doe Run, as issuer, FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air and Doe Run Development, as guarantors, and State Street Bank and Trust Company, as trustee, relating to
the 111/4% Senior Secured Notes due 2005, Series A and 111/4% Senior Secured Notes due 2005, Series B and the Guarantees thereof (containing, as exhibits, specimens of the Notes and the
Guarantees).(2)                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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|4.2.2 |  | First Supplemental Indenture, dated as of September 16, 1998, by and among Doe Run, as issuer, FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air, Doe Run Development and Cobriza, as guarantors, and State Street Bank and Trust
Company, as trustee, supplementing the Indenture, dated as of September 1, 1998.(3)                                                                          
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.2.3 |  | Second Supplemental Indenture, dated as of January 13, 1999, by and among Doe Run, as issuer, FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air, Doe Run Development, Cobriza and DRLH, as guarantors, and State Street Bank and Trust
Company, as trustee, supplementing the Indenture, dated as of September 1, 1998.(3)                                                                     
|4.2.4 |  | Pledge Agreement, dated as of January 15, 1999, by Doe Run to State Street Bank and Trust Company.(3)                                                                                                                                                                                                                                                                                                       
|4.2.5 |  | Third Supplemental Indenture, dated as of October 29, 2002, by and among Doe Run, as issuer, Doe Run Cayman, FPI, DR Land Holdings, Doe Run Peru and Doe Run Development, as guarantors, and State Street Bank and Trust Company, as trustee,
supplementing the Indenture, dated as of September 1, 1998.(10)                                                                                               
|4.4   |  | Registration Rights Agreement, dated as of September 1, 1998, by and among Doe Run, FPI, Doe Run Cayman, Doe Run Mining, Doe Run Peru, Doe Run Air, Doe Run Development and Jefferies & Company, Inc., relating to the
111/4% Senior Secured Notes due 2005.(2)                                                                                                                                             
|4.5.1 |  | Indenture, dated as of October 29, 2002, by and among Doe Run, as issuer, The Buick Resource Recycling Facility, DR Land Holdings, FPI, Doe Run Peru, Doe Run Cayman and Doe Run Development, as guarantors, and State Street Bank and Trust Company,
as trustee, relating to the 113/4% Notes due 2008 and the Guarantees thereof (containing, as exhibits, specimens of the Notes and the Guarantees).(10)
|4.5.2 |  | Security Agreement, dated as of October 29, 2002, by and among Doe Run, Doe Run Cayman, DR Land Holdings, FPI, The Buick Resource Recycling Facility and State Street Bank and Trust Company, as trustee and collateral agent.(10)                                                                                                                                                                          
|4.5.3 |  | Warrant Agreement, dated as of October 29, 2002, by and between Doe Run and State Street Bank and Trust Company, as warrant agent (containing, as an exhibit, a specimen of the Warrant Certificate).(10)                                                                                                                                                                                                   
|4.5.4 |  | Investor Rights Agreement, dated as of October 29, 2002, by and among Doe Run, DR Acquisition Corp., The Renco Group, Inc. and State Street Bank and Trust Company, as Warrant Agent.(10)                                                                                                                                                                                                                   
|4.5.5 |  | Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents, dated as of October 29, 2002, by and among Doe Run and Lisa M. Haines, as trustee, for the benefit of State Street Bank and Trust Company.(10)                                                                                                                                                                        
|4.5.6 |  | Participations Pledge Agreement, dated as of October 29, 2002, by and among Doe Run Cayman, State Street Bank and Trust Company, Regiment Capital Advisors, L.L.C. and Doe Run Peru.(10)                                                                                                                                                                                                                    
|4.5.7 |  | Intercreditor Agreement, dated as of March 21, 2003 by and among Congress Financial Corporation, The Renco Group, Inc. and U.S. Bank National Association.(10)                                                                                                                                                                                                                                              
|4.5.8 |  | Environmental Compliance and Indemnity Agreement, dated as of October 29, 2002, by and among Doe Run, The Buick Resource Recycling Facility and State Street Bank and Trust Company.(10)                                                                                                                                                                                                                    
|4.6   |  | Stock Purchase Agreement, dated as of October 29, 2002, by and between Doe Run and The Renco Group, Inc.(10)                                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                             

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|10.1.1  |  | Amended and Restated Executive Employment Agreement, dated as of April 7, 1994, as amended through November 1, 2002, between Doe Run and Jeffrey L. Zelms.(10)                                                                                                                                                                               
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1.2  |  | Amended and Restated Executive Employment Agreement, dated as of April 7, 1994, as amended through October 31, 2002, between Doe Run and Marvin K. Kaiser.(10)                                                                                                                                                                               
|10.1.3  |  | Certified Translation of Employment Agreement, dated as of March 31, 2003, between Doe Run Peru and A. Bruce Neil.(11)                                                                                                                                                                                                                       
|10.1.4  |  | Executive Employment Agreement, dated as of September 17, 2001, between Doe Run and Jerry L. Pyatt.(11)                                                                                                                                                                                                                                      
|10.1.5  |  | Employment Agreement, dated as of April 7, 1994, between Doe Run and David A. Chaput.(11)                                                                                                                                                                                                                                                    
|10.1.6  |  | Employment Agreement, dated as of November 18, 2004, between Doe Run and James W. Grubbs.(11)                                                                                                                                                                                                                                                
|10.1.7  |  | Amendment One to Employment Agreement dated November 1, 2002, between Doe Run and David A. Chaput.(11)                                                                                                                                                                                                                                       
|10.1.8  |  | Amendment One to Amended and Restated Executive Employment Agreement dated November 1, 2002 between Doe Run and Marvin Kaiser.(11)                                                                                                                                                                                                           
|10.1.9  |  | Amendment One to Employment Agreement dated November 1, 2002 between Doe Run and Jerry L. Pyatt.(11)                                                                                                                                                                                                                                         
|10.1.10 |  | Amendment One to Amended and Restated Executive Employment Agreement dated November 1, 2002 between Doe Run and Jeffrey L. Zelms.(11)                                                                                                                                                                                                        
|10.1.11 |  | Certified Translation of First Amendment to Employment Agreement dated June 1, 2004 between Doe Run Peru and A. Bruce Neil (amendment to Exhibit 10.1.3).(11)                                                                                                                                                                                
|10.2.1  |  | Net Worth Appreciation Agreement, dated as of November 1, 2002, between Doe Run and Jeffrey L. Zelms.(11)                                                                                                                                                                                                                                    
|10.2.2  |  | Net Worth Appreciation Agreement, dated as of November 1, 2002, between Doe Run and Marvin K. Kaiser.(11)                                                                                                                                                                                                                                    
|10.2.3  |  | Net Worth Appreciation Agreement, dated as of November 1, 2002, between Doe Run and Jerry L. Pyatt.(11)                                                                                                                                                                                                                                      
|10.2.4  |  | Net Worth Appreciation Agreement, dated as of November 1, 2002, between Doe Run and David A. Chaput.(11)                                                                                                                                                                                                                                     
|10.3    |  | The Doe Run Resources Corporation Supplemental Employee Retirement Plan.(1)                                                                                                                                                                                                                                                                  
|10.4    |  | The Doe Run Company Executive Tax Services Plan.(1)                                                                                                                                                                                                                                                                                          
|10.5.12 |  | Amended and Restated Loan and Security Agreement, dated as of October 29, 2002, by and among Doe Run, The Buick Resource Recycling Facility and FPI, as guarantors, the financial institutions named therein, as lenders, Congress Financial
Corporation, as agent and The CIT Group/Business Credit, Inc., as co-agent.(10)                 
|10.5.13 |  | Amendment No. 1 to Amended and Restated Loan and Security Agreement, dated as of March 11, 2003, by and among Doe Run, The Buick Resource Recycling Facility and FPI, as guarantors, the financial institutions named therein, as lenders,
Congress Financial Corporation, as agent and The CIT Group/Business Credit, Inc., as co-agent.(10)
|        |  |                                                                                                                                                                                                                                                                                                                                              

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|10.5.14 |  | Amendment No. 2 to Amended and Restated Loan and Security Agreement, dated as of April 9, 2004, by and among Doe Run, The Buick Resource Recycling Facility and FPI, as guarantors, the financial institutions named therein, as lenders,
Congress Financial Corporation, as agent and The CIT Group/Business Credit, Inc., as co-agent.(10)
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.6    |  | Contrato de Transferencia de Acciones, Aumento del Capital Social y Suscripción de Acciones de La Empresa Metalúrgica La Oroya S.A.(Contract of Stock Transfer, Capital Increase and Stock Subscription) (with English translation).(1)                                                                                                     
|10.7    |  | Programa de Adecuación y Manejo Ambiental (Environmental Remedy and Management Program) (with English translation).(1)                                                                                                                                                                                                                      
|10.8.1  |  | Convenio de Estabilidad Jurídica Entre el Estado y La Empresa Metalúrgica La Oroya S.A.(Legal Stability Agreement between the State and Empresa Metalúrgica La Oroya S.A.) (with English translation).(1)                                                                                                                                   
|10.8.2  |  | Convenio de Estabilidad Jurídica con Doe Run Mining S.R. Ltda.(Legal Stability Agreement with Doe Run Mining Commission for Foreign Investments and Technologies) (with English translation).(1)                                                                                                                                            
|10.8.3  |  | Convenio de Estabilidad Jurídica con Doe Run Mining S.R. Ltda.(Legal Stability Agreement with Doe Run Mining Ministry of Energy and Mines) (with English translation).(1)                                                                                                                                                                   
|10.8.4  |  | Convenio de Estabilidad Jurídica con Doe Run Perú S.R. Ltda.(Legal Stability Agreement with Doe Run Peru Minister of Energy and Mines) (with English translation).(1)                                                                                                                                                                       
|10.8.5  |  | Convenio de Estabilidad Jurídica con Doe Run Perú S.R. Ltda.(Legal Stability Agreement with Doe Run Peru Vice Minister of Mines) (with English translation).(1)                                                                                                                                                                             
|10.8.6  |  | Convenio de Estabilidad Jurídica con Doe Run Cayman Ltd.(Legal Stability Agreement with Doe Run Cayman Commission for Foreign Investments and Technologies) (with English translation).(1)                                                                                                                                                  
|10.8.7  |  | Remite Contrato de Estabilidad Administrativa Ambiental (Environmental Stability Agreement) (with English translation).(1)                                                                                                                                                                                                                  
|10.10   |  | Contrato de Afectación en Garantía de Pagos y/o Cobranzas y de Cuentas Cobranza (Collection Account Agreement), dated June 11, 1998, between Banco de Crédito del Perú and Doe Run Peru (with English translation).(1)                                                                                                                      
|10.11   |  | Contrato de Prenda de Minerales (Ore Collateral Agreement), dated June 11, 1998, between Banco de Crédito del Perú and Doe Run Peru (with English translation).(1)                                                                                                                                                                          
|10.12   |  | Security Agreement, dated as of September 1, 1998, by Doe Run in favor of State Street Bank and Trust Company, as trustee and collateral agent.(2)                                                                                                                                                                                          
|10.13   |  | Intercreditor Agreement, dated as of September 1, 1998, between State Street Bank and Trust Company, as note trustee, and Congress Financial Corporation, as lender.(2)                                                                                                                                                                     
|10.14   |  | Management Consulting Agreement, dated as of April 17, 1994, as amended, between The Renco Group, Inc. and The Doe Run Resources Corporation.(3)                                                                                                                                                                                            
|10.15   |  | Financial leasing dated January 20, 1999 entered into by and between Credito Leasing S.A. and Banco de Credito del Peru as party of the first part and Doe Run Peru S.R.L. as party of the second part (English).(5) Ex. 10.1                                                                                                               
|10.16   |  | Unconditional Guarantee dated June 11, 1999 by and among the Doe Run Resources Corporation, Boeing Capital Corporation and First Security Bank, N.A.(5) Ex 10.2.1                                                                                                                                                                           
|10.17   |  | Promissory Note dated July 6, 1999 by and among Boeing Capital Corporation and First Security Bank, N.A.(5) Ex 10.2.2                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                             

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|10.18    |  | Loan and Security Agreement dated June 11, 1999 by and among Boeing Capital Corporation and First Security Bank, N.A.(5) Ex 10.2.3                                                                                                                                   
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.19.1  |  | Credit Agreement, dated as of October 29, 2002, by and among Doe Run, the lenders party thereto and Regiment Capital Advisors, L.L.C., as agent for the lenders.(10)                                                                                                 
|10.19.2  |  | Term Note, dated as of October 29, 2002, between Doe Run and Regiment Capital Advisors, L.L.C.(10)                                                                                                                                                                   
|10.19.3  |  | Term Note, dated as of October 29, 2002, between Doe Run and Lathi, LLC.(10)                                                                                                                                                                                         
|10.19.4  |  | Guarantee and Security Agreement, dated as of October 29, 2002, by and among DR Acquisition Corp., Doe Run, Doe Run Cayman, Doe Run Peru, Doe Run Development, DR Land Holdings, FPI, The Buick Resource Recycling Facility and Regiment Capital
Advisors, L.L.C.(10)
|10.19.5  |  | Intercreditor Agreement, dated as of March 21, 2003, between Congress Financial Corporation and The Renco Group, Inc.(10)                                                                                                                                            
|10.19.6  |  | Deed of Trust, Security Agreement, Fixture Filing and Assignment of Leases and Rents, dated as of October 29, 2002, by and among Doe Run and Lisa M. Haines, as trustee, for the benefit of Regiment Capital Advisors, L.L.C.(10)                                    
|10.19.8  |  | Environmental Compliance and Indemnity Agreement, dated as of October 29, 2002, by and among Doe Run, The Buick Resource Recycling Facility and Regiment Capital Advisors, L.L.C.(10)                                                                                
|10.19.9  |  | Assignment and Acceptance dated as of March 21, 2003 by and among Doe Run, Regiment Capital II, L.P. and Lathi, LLC, as assignors, The Renco Group, Inc., as assignee and new agent and Regiment Capital Advisors, L.L.C. as prior agent.(10)                        
|10.19.10 |  | Amended and Restated Credit Agreement dated as of April 30, 2004 by and between Doe Run and The Renco Group, Inc., as agent and lender (10)                                                                                                                          
|10.20    |  | Asset Transfer Agreement, dated as of October 29, 2002, by and between Doe Run and The Buick Resource Recycling Facility.(10)                                                                                                                                        
|10.22    |  | Amended and Restated Tax Sharing Agreement, effective as of October 30, 2002, by and between Doe Run and The Renco Group, Inc.(10)                                                                                                                                   
|10.23.1  |  | Subordinated Promissory Note dated September 12, 2002 between Doe Run and Doe Run Peru.(10)                                                                                                                                                                          
|10.23.2  |  | Correspondence relating to cancellation of previously existing deposit and loan facilities with Banco de Credito Overseas Limited.(10)                                                                                                                               
|10.24.1  |  | Working Capital Facility dated September 17, 2002 between Doe Run Peru and Banco de Credito del Peru (with English translation).(10)                                                                                                                                 
|10.24.2  |  | Accounts Receivable Assignment of Rights Agreement dated September 17, 2002 between Doe Run Peru and Banco de Credito del Peru (with English translation).(10)                                                                                                       
|10.24.3  |  | Global and Floating Pledge Agreement dated September 17, 2002 between Doe Run Peru and Banco de Credito del Peru (with English translation).(10)                                                                                                                     
|10.24.4  |  | Amendment to Working Capital Facility dated September 17, 2002 between Doe Run Peru and Banco de Credito del Peru, dated February 16, 2004.(10)                                                                                                                      
|14       |  | Code of Ethics.(11)                                                                                                                                                                                                                                                  
|21       |  | List of Subsidiaries of Registrant.(10)                                                                                                                                                                                                                              
|         |  |                                                                                                                                                                                                                                                                      

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|31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(11)
|---- |  | -------------------------------------------------------------------------------------------------------
|31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(11)
|32.1 |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(11)
|32.2 |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(11)

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