~~Use~~UNITED ~~these links to rapidly review the document THE DOE RUN RESOURCES CORPORATION INDEX TO FORM 10-K Part IV~~ STATES

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549

~~FORM 10-K~~ Washington, DC 20549

(Mark One)
ý	Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended October 31, 2003
or
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to

FORM 10-K

(Mark ~~Commission File Number 333-52285~~ One)

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

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, 2005

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

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

Commission File Number 333-66291

~~(Registrant's telephone~~The ~~number,~~Doe ~~including~~Run ~~area~~Resources ~~code) (314) 453-7100~~ Corporation

~~Securities~~(Exact ~~registered~~name ~~pursuant~~of registrant toas ~~Section 12(b)~~specified ofin ~~the~~its ~~Act:~~ charter)

Title of Each Class Name of Each Exchange on Which Registered None Not Applicable

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

1801 Park 270 Drive, Suite 300 St. Louis, Missouri		63146
(Address of principal executive offices)		(Zip Code)

(314) 453–7100
(Registrant’s telephone number, including area code)

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

~~None (~~Title of ~~Class)~~each class Name of each exchange on which registered None Not Applicable

~~Indicate by~~Securities ~~check~~registered ~~mark~~pursuant ~~whether the registrant (1) has filed all reports required~~ to ~~be filed by~~ Section 13 ~~or 15~~12(dg) 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).~~ None

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,~~is ina ~~definitive~~well-known ~~proxy~~seasoned orissuer, ~~information~~as ~~statements~~defined ~~incorporated by reference~~ in ~~Part III~~Rule 405 of ~~this Form 10-K or any amendment to this~~the ~~Form 10-K. ý~~Securities Act.

~~Number~~o ofYes ~~shares~~ý ~~outstanding of each of the issuer's classes of common stock, as of June 2, 2004: Common stock, $.10 par value 1,000 shares~~ No

~~Aggregate~~Indicate ~~market~~by ~~value~~check ofmark if the ~~voting~~registrant ~~stock~~is ~~held~~not byrequired ~~non-affiliates~~to offile ~~the~~reports ~~registrant:~~pursuant ~~$0;~~to ~~all~~Section ~~shares~~13 ofor Section ~~the~~15(d) ~~voting stock~~ of the ~~registrant are owned by its parent, DR Acquisition Corp.~~ Act

ý ~~THE~~Yes ~~DOE~~o ~~RUN RESOURCES CORPORATION INDEX TO FORM 10-K~~ No

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 and Related Stockholder Matter
	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
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
Part IV
	Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K
	Signatures
	Exhibit Index

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 ~~Part I~~ ý No

Note: The Registrant files pursuant to an indenture, ~~Item~~but 1.is ~~Business~~ not otherwise subject to the reporting requirements of Section 13 or 15(d).

~~Overview~~ 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

~~The~~Indicate ~~Doe~~by ~~Run~~check ~~Resources Corporation (Doe Run and together with its subsidiaries, the Company) is a producer of non-ferrous and precious metals with~~mark ~~operations~~whether in the ~~United~~registrant ~~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 ~~secondary~~large ~~lead~~accelerated ~~operation and lead fabrication operations. In Peru~~filer, ~~Doe~~an ~~Run's~~accelerated ~~indirect subsidiary~~filer, ~~Doe~~or ~~Run Peru S.R.L. (Doe Run Peru),~~a ~~operates the La Oroya smelter (La Oroya), one of the largest polymetallic processing facilities in the world producing an extensive product mix of~~ non-~~ferrous~~accelerated ~~and precious metals, including silver, copper, zinc, lead and gold~~filer. ~~Doe~~See ~~Run~~definition ~~Peru~~of ~~also~~“accelerated ~~has~~filer ~~a copper mining~~ and ~~milling~~large accelerated ~~operation~~filer ~~(Cobriza)~~ in ~~Peru.~~Rule ~~These~~12b-2 ~~operations~~of ~~will be discussed in greater detail in~~ the ~~"Overview" sections~~Exchange ~~below~~Act. ~~See~~(Check "Item 8. Financial Statements and Supplementary Data—Note 17 to the Company's Consolidated Financial Statements", for detailed operating segment information. The Company's business does not involve significant: 1one) ~~seasonal fluctuations, 2) unusual working capital requirements, 3) order backlog or 4) federal contracting.~~

~~Financial~~o ~~Condition~~ Larger accelerated filer o Accelerated filer ý Non-accelerated filer

~~The~~Indicate ~~Company's~~by ~~auditors~~check ~~have~~mark whether ~~issued unqualified opinions on~~ the ~~2003~~registrant ~~audited~~is ~~financial~~a ~~statements~~shell ofcompany ~~the Company and of Doe Run Peru that express doubt about the Company's and Doe Run Peru's ability to continue~~ (as ~~going~~defined ~~concerns due to, among other things, liquidity concerns, defaults under loan agreements, uncertainties related to environmental and litigation matters, as well as recurring losses that are discussed~~ in ~~"Item~~Rule ~~8. Financial Statements and Supplementary Data—Note~~ 12b-2 toof the ~~Company's Consolidated Financial Statements" and "Item 8. Financial~~ ~~Statements~~Exchange ~~and Supplementary Data—Note 18 to Doe Run Peru's Consolidated Financial Statements"~~Act).

~~The Company~~o ~~continues~~Yes toý deal with challenges posed by the market for its metal products and feed supply shortages in Peru. In the U.S., a declining demand for lead, mainly due to the movement of lead consuming industries from the U.S. to lower labor cost areas of the world, particularly China, has affected the domestic metal market. Imports of lead-acid batteries from Mexico, China, South Korea, and Brazil, displacing U.S. production, are expected to continue into 2004. These challenges also include the effects of increasing metal production in China, which has affected the global demand for concentrates. These challenges have affected the results of operations and liquidity for the U.S. and Doe Run Peru. See discussion of market issues and their impact in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity." See discussion of feed supply issues in "Doe Run Peru—Raw Materials". No

~~Restructuring~~ 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.

OnNumber ~~October 29, 2002, Doe Run completed a consensual restructuring (the Restructuring)~~ of ~~its previously~~ shares outstanding ~~11.25% Senior Notes due 2005, Floating Interest Rate Senior Notes due 2003 and 11.25% Senior Secured Notes due 2005 (collectively, Old Notes) by exchanging notes with a principal amount~~ of ~~$294.8 million~~each ~~for new notes with a face amount~~ of ~~$175.8 million due November 1, 2008 (~~the ~~Notes)~~registrant’s ~~and~~classes ~~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~~as ~~and are exercisable at any time after November 1, 2008. The effect~~ of ~~the~~March ~~Restructuring was to reduce the face amount of~~21, ~~notes~~2006: ~~outstanding~~Common bystock, $~~119.~~0 ~~million and defer principal and interest payments~~.10 ~~See~~par ~~"Item~~value ~~7. Management's Discussion of Financial Condition and Results of~~per ~~Operations—Restructuring~~share; ~~and Long-Term Debt" for a discussion of the Restructuring. Pursuant to the Restructuring~~1,000 ~~Doe Run's Board of Directors was expanded from one to three with one~~ shares

1THE DOE RUN RESOURCES CORPORATION

~~(the Independent~~INDEX ~~Director)~~TO ~~selected~~FORM by holders of the majority of the Warrants (Majority Warrantholders) pursuant to an Investor Rights Agreement. 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 and Related Stockholder Matters" for a discussion of the Investor Rights Agreement and "Item 10~~. Directors and Executive Officers of the Registrant" for information on the Directors.~~ -K

Corporate structure

Part I

	Item 1.	Business.

	Item 1A.	Risk Factors.

	Item 1B.	Unresolved Staff Comments.

	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 Disclosure.

	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 and Related Stockholder Matters.

	Item 13.	Certain Relationships and Related Transactions.

	Item 14.	Principal Accounting Fees and Services.

Part IV

	Item 15.	Exhibits, Financial Statement Schedules.

Signatures

Exhibit Index

All of Doe Run's issued and outstanding capital stock is 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 the Investor Rights Agreement discussed above. 2

~~Doe Run~~The ~~owns~~Private ~~100%~~Securities ofLitigation ~~Doe~~Reform ~~Run~~Act of ~~Cayman Ltd.~~1995 ~~(Doe~~provides ~~Run~~a ~~Cayman),~~“safe aharbor” ~~Cayman~~for ~~Islands~~forward-looking ~~corporation~~statements. ~~Doe~~We make forward-looking ~~Run~~statements ~~Cayman~~in ~~owns~~this inAnnual ~~excess~~Report ofon ~~99%~~Form of10-K and in the ~~interest~~public documents inthat ~~Doe~~are ~~Run~~incorporated ~~Peru~~herein by reference, ~~with~~which ~~a de~~represent ~~minimis~~our expectations ~~number~~or ofbeliefs ~~shares~~about ~~owned~~future events and financial performance. When byused ~~present~~in this report and ~~former~~the ~~employees~~documents ofincorporated ~~both~~herein ~~Doe~~by ~~Run~~reference, ~~Peru~~the words “expect,” “believe,” “anticipate,” “goal,” “plan,” “intend,” “estimate,” “may,” “will” and ~~Empresa~~similar ~~Minera~~words, ~~del~~or ~~Centro~~the ~~del~~negative ~~Peru~~of ~~S.A.~~such ~~(Centromin)~~words, ~~as required~~are byintended ~~Peruvian~~to identify ~~law~~forward-looking statements. ~~Centromin~~These isforward-looking ~~the~~statements ~~Peruvian~~are subject ~~government~~to ~~entity~~known ~~whose~~and ~~subsidiary~~unknown ~~previously~~risks, ~~owned~~uncertainties Laand ~~Oroya.~~assumptions, ~~That~~including those ~~subsidiary~~referred ~~was~~to ~~purchased~~under “Risk Factors” in this Annual Report on ~~October 23,~~Form ~~1997~~10-K byand otherwise ~~Doe~~described ~~Run~~in ~~Peru.~~our periodic filings.

~~Overview—U~~All predictions as to future results contain a measure of uncertainty, and accordingly, actual results could differ materially.S. ~~Operations~~ 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:

~~The~~• general ~~Company's~~economic primary lead operation in the U.S. consists of two primary smelters, which obtain concentrates from the Company's four operating mills, supplemented from time to time with concentrates purchased in the open market. The Company indefinitely suspended operations at one of these smelters in November 2003. (See further discussion in "Item 7. Management's Discussion and ~~Analysis—Recent~~business Events".) The mills are supplied with ore mined from five 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, 2003, the Company's U.S. ore reserves consisted of approximately 48 million proven and probable tons, containing average grades of 5.51% lead, 1.25% zinc and .29% copper. conditions;

~~The Company~~• increasing ~~also~~industry ~~operates~~capacity inand ~~southeastern~~levels ~~Missouri~~of ~~the~~imports ~~world's~~of non-ferrous ~~largest~~metals ~~secondary~~or ~~lead smelter where it produces lead metal from recycled lead~~non-~~acid~~ferrous ~~batteries~~metals ~~and other lead bearing materials.~~ products;

~~The Company,~~• industry ~~through its subsidiary~~trends, ~~Fabricated~~including ~~Products, Inc. (FPI), produces value-added lead products such as lead oxide, lead sheet and lead bricks at facilities in Arizona, Washington and Texas. These operations permit~~ the ~~Company~~price toof ~~participate~~metals in and ~~manage the entire lead life cycle from mining lead ore, to producing refined lead metal, to fabricating value-added lead~~ ~~products,~~product to recycling batteries and other materials containing lead. See discussion in "Item 7. Management's Discussion and Analysis—Recent Events" for discussion of the status of certain of these operations subsequent to the end of the fiscal year. pricing;

In fiscal 2003, the Company's U.S. operations delivered approximately 424,000 tons of refined lead metal and lead alloy products, including lead recycled for customers (tolling), representing approximately 21% of North American consumption and 7% of western world consumption. • competition;

~~Approximately 64%~~• currency of the U.S. operation's sales for the fiscal year ended October 31, 2003 (2003) 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. 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 fluctuations;

2• the loss of any significant customer or supplier;

~~computer and~~• availability ~~television~~of ~~screens,~~raw ~~ammunition, and stationary batteries used as backup power sources and rolled and extruded lead products used in radiation shielding and roofing~~ materials. ;

~~Fluctuations in~~• availability ~~lead and other non-ferrous metal prices can have a material effect on the results~~ of ~~operations,~~qualified financial condition and liquidity of the Company. These prices are affected by numerous factors beyond the Company's control, including expectations for inflation, speculative activities, global and regional demand and production, political and economic conditions and production costs in major producing regions. 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 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 largely independent of lead prices. personnel;

~~Overview—Doe~~• effects ~~Run~~of ~~Peru~~ future collective bargaining agreements;

~~The~~• outcome ~~Doe Run Peru operations consist~~ of the La Oroya smelting complex, acquired in October 1997, and the Cobriza copper mine and mill acquired 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 high quality finished metals and by-products. In 2003, La Oroya was one of Peru's largest exporters, exporting approximately 91% of its total sales to North America, Europe and Asia, as well as 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. litigation;

~~La Oroya's~~• historical ~~operations~~environmental smelt and refine complex concentrates obtained from Cobriza and from unaffiliated mining operations. 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, such as arsenic, antimony and bismuth, which the smelter can process and sell 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: expectations for inflation, global and regional demand for smelter capacity, availability and quality of concentrates and production costs in major producing regions. 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 are significant to Doe Run Peru, and La Oroya is one of only four smelters in the western world that can process these types of concentrates. liabilities;

~~La Oroya~~• changing ~~derives~~environmental ~~its~~requirements ~~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~~costs, ~~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~~including ~~metals produced from these excess recoveries. Additional operating profit is generated from~~ the ~~sale~~capital ofrequirements ~~by-products,~~in ~~as well as from premiums over market prices received on its refined metal sales.~~ Peru;

~~The markets~~• political ~~for~~uncertainty ~~La Oroya's products are global~~ and demand depends upon world wide 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 terrorism;

3• major equipment failures;

~~primarily a~~• changes ~~processor~~in ofaccounting ~~complex~~principles ~~concentrates~~or ~~that~~new ~~are purchased based on market prices, its financial performance is less sensitive than the Company's U.S. operations to the volatility of metal~~accounting ~~prices.~~standards; ~~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.

~~Doe Run~~• compliance ~~Peru's~~with ~~financial~~laws ~~condition~~ and ~~results~~regulations ofand ~~operations could be adversely affected by changes in economic or~~ other ~~policies of the Peruvian government, including reversal of the~~ ~~trend~~unforeseen ~~toward privatization, or other political or economic developments in Peru~~circumstances.

~~Recently~~In light of these risks, uncertainties and ~~Peru~~assumptions, ~~has~~the ~~experienced~~forward-looking aevents ~~certain~~discussed ~~level~~in ofthis ~~political~~Annual ~~unrest~~Report ~~and~~on Form 10-K may not occur. In addition, ifactual ~~this~~results ~~political~~could ~~unrest~~differ ~~were~~materially from those suggested by the forward-looking statements. Accordingly, investors are cautioned not to ~~increase~~place ~~significantly~~undue reliance on the forward-looking statements. Except as required by law, ~~Doe~~we ~~Run~~undertake ~~Peru's~~no ~~financial~~obligation ~~condition~~to ~~and~~publicly ~~results~~update ofor revise any ~~operations~~forward-looking ~~may~~statements, bewhether ~~adversely~~as ~~affected~~a result of new information, future events or otherwise. Investors should, however, review additional disclosures we make from time to time in our periodic filings with the Securities and Exchange Commission.

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

~~Products and Services~~ Part I

~~The~~Item ~~principal products produced by the Company's U~~1.S. operations include refined lead from primary and secondary sources, lead, zinc and copper concentrates, fabricated lead products and other by-products. Historically, the majority of lead concentrates produced have been used to feed Doe Run's primary smelters. 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 for the Company's products and services: Business

		Year Ended October 31,
		2003		2002		2001
		(dollars in thousands)
Primary lead metal sales		$	134,530	$	135,438	$	169,955
Secondary lead:
	Tolling		29,709		29,070		26,003
	Metal sales		33,717		34,540		47,917
	Other		4,682		4,244		4,743
Zinc concentrates			19,717		18,998		23,654
Copper concentrates			4,336		1,665		1,102
Fabricated products			14,771		17,877		25,271
Other			7,647		3,671		4,501
	Total	$	249,109	$	245,503	$	303,146

All references in this Annual Report on Form 10-K to “we,” “us,” “our” or “Company” refer to The Doe Run Resources Corporation and its subsidiaries. All dollars are in thousands except where noted otherwise.

For the year ended October 31, 2003, exports represented approximately 6% of the U.S. operations' net sales. For the years ended October 31, 2002, and 2001, exports were approximately 1% of the U.S. operations' net sales. Overview

~~Customers~~ General

The Company's U.S. operations had approximately 150 lead metal customers including the six largest lead-acid battery manufacturers in the world. These six customers accounted for approximately 33% of U.S. net sales in fiscal 2003. The loss of any of the Company's large customers or curtailment of purchases by these customers could have a material adverse effect on the results of operations, financial condition and liquidity of the Company. 3

4We are a producer of non-ferrous and precious metals with operations in the United States and Peru. We are also the largest integrated lead producer in North America and the largest primary lead producer in the western world. We operate our business in the United States through The Doe Run Resources Corporation, which we refer to as Doe Run, and our wholly owned subsidiary Fabricated Products, Inc., which we refer to as Fabricated Products. We operate our Peruvian operations through Doe Run Peru S.R.L., an indirect subsidiary of Doe Run that we refer to as Doe Run Peru. Doe Run operates an integrated primary lead operation and a recycling operation located in Missouri, referred to as Buick Resource Recycling. Fabricated Products operates a lead fabrication operation located in Arizona and a lead oxide business located in Washington. Doe Run Peru, operates a smelter in La Oroya, Peru, 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 in the region of Huancavelica, which is approximately 200 miles southeast of La Oroya in Peru. See “Item 8. Financial Statements and Supplementary Data—Note 16 to Consolidated Financial Statements” for financial information about operating segments and geographic areas.

~~Competition~~ Our auditors issued unqualified opinions on the 2005 audited consolidated financial statements of the Company and the 2005 audited financial statements 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 management’s plans in “Item 7. Management’s Discussion of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

~~The Company 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~~Corporate lead producer in North America and the fourth largest in the world. The Company's U.S operations compete primarily in the North American market where its major competitors are three primary lead producers and nine secondary lead producers. Competition within the North American 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, the Company'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, the Company also is able to provide its customers just-in-time delivery at a lower cost than most of its competitors. In addition, management believes the Company's primary and secondary production capacities and focus on the lead business as its core business provide the Company with additional competitive advantages. In response to a declining domestic metal market, as battery manufacturers move production overseas, Doe Run has reduced its lead metal production and is selling some of its production as lead concentrates, and competing in the global market for concentrates. See discussion of operation changes in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Recent Events" and a 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." Structure

~~Raw~~Doe ~~Materials~~ 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 Doe Run and its subsidiaries, including Doe Run Peru, subject to the provisions of an Investor Rights Agreement discussed in “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”

~~Lead~~Doe ~~concentrates~~Run ~~are~~owns ~~supplied~~100% of byDoe ~~the~~Run ~~Company's~~Cayman ~~mining operations and~~Ltd., ~~from~~a ~~time~~Cayman toIslands ~~time~~corporation, ~~purchased~~which ~~from~~in ~~third~~turn ~~parties.~~owns ~~For~~in excess aof ~~discussion~~99% of the ~~Company's~~interest ~~mineral reserves,~~in ~~see~~Doe ~~"Item~~Run 2Peru. ~~Properties—Ore~~As ~~Reserves."~~required Atby ~~current~~Peruvian ~~production levels~~law, the remainder ~~Company's~~of ~~U.S.~~Doe ~~mining~~Run ~~operations~~Peru’s ~~produce~~shares ~~all~~are ofowned ~~the concentrates required~~ by ~~its~~present ~~primary~~and ~~smelter.~~former ~~The~~employees ~~Company's~~of both ~~U.S.~~Doe ~~operations~~Run ~~utilize~~Peru ~~various~~and ~~other~~Empresa ~~raw~~Minera ~~materials,~~del ~~principally~~Centro ~~spent~~del ~~batteries,~~Peru ~~coke~~S.A., ~~chemicals and reagents, which are secured from~~(Centromin). ~~external~~Centromin ~~sources,~~is ~~primarily on~~ the ~~basis~~Peruvian ofgovernment ~~competitive~~entity ~~bid.~~whose ~~The~~subsidiary ~~Company~~previously ~~believes~~owned La ~~that~~Oroya. itDoe ~~has~~Run ~~adequate~~Peru ~~sources~~purchased ofthat ~~these~~subsidiary ~~raw~~on ~~materials~~October to23, ~~meet its present production needs~~1997.

~~Power~~ Doe Run’s fiscal year ends on October 31. Any reference herein to a specific year, such as 2005, refers to the fiscal year 2005, unless otherwise noted.

~~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, a public utility 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 production needs. Operations

~~Environmental~~Doe ~~Matters~~ Run’s primary lead operation in the U.S. consists of two primary lead smelters, one of which is active and the other is indefinitely suspended as a result of market conditions. The active smelter obtains concentrates principally from Doe Run’s four operating mills. 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, 2005, our U.S. ore reserves consisted of approximately 34 million proven and probable tons, containing average grades of 6.23% lead, 1.36% zinc and 0.26% copper.

~~The~~Doe ~~Company's~~Run ~~U.S. operations are subject to numerous federal, state and local environmental laws and regulations governing, among other things, air emissions,~~also ~~wastewater~~operates ~~discharge,~~the ~~solid~~world’s ~~and~~largest ~~hazardous~~secondary ~~waste~~lead ~~treatment~~smelter, ~~storage,~~which ~~and~~is ~~disposal and remediation of releases of hazardous substances. In common with much of the mining industry, the Company's facilities are~~ located ~~on sites that have been used for heavy industrial purposes for decades and may require remediation. Environmental laws and regulations may become more stringent~~ in ~~the future~~ ~~which~~southeastern ~~could~~Missouri ~~increase~~and ~~costs~~produces oflead ~~compliance.~~metal ~~See~~from ~~"Item~~recycled 8.lead-acid ~~Financial Statements~~ batteries and ~~Supplementary~~other ~~Data—Note 20~~lead-bearing ~~to the Company's Consolidated Financial Statements"~~materials.

5Fabricated Products produces value-added lead products such as lead oxide, lead sheet and lead pipes at facilities in Arizona and Washington.

~~Exploration~~ 4

~~The~~These ~~Company~~operations enable ~~continues~~our ~~to explore for additional reserves within the Viburnum Trend, located in southeastern Missouri, one of the world's most productive lead ore districts~~U.S. ~~Current~~operations ~~exploration~~to isparticipate ~~focused on surface and underground drilling~~ in and ~~adjacent~~manage to the ~~operating~~entire ~~mines~~lead ~~for the purpose of discovering new ore reserves, as well as delineating previously~~life ~~drilled~~cycle ~~ores~~from ~~for~~ mining ~~purposes.~~lead ~~In addition~~ore, ~~drilling work is being pursued in most of the mines~~ to ~~access~~producing ~~ore~~refined ~~beyond~~lead ~~the present mining areas. The Company~~metal, ~~also~~to ~~holds exploration tracts outside the~~fabricating ~~Viburnum Trend in the U.S. and through a subsidiary, in the Republic of South Africa. In Missouri, 50 miles east of the Viburnum trend, the Company has conducted pre~~value-~~development~~added ~~work on a~~ lead~~-zinc-cobalt~~ ~~deposit. In South Africa~~products, ~~the~~to ~~Company~~recycling ~~has~~batteries ~~conducted pre-feasibility work on a lead~~ and ~~zinc~~other ~~deposit approximately 100 miles from Kimberly, in the~~materials ~~Northern~~containing ~~Cape province~~lead. These properties are currently being held with minimal cost pending further economic evaluation. In fiscal 2003, 2002 and 2001, the Company's U.S. operations spent $3.8 million, $3.0 million and $3.8 million, respectively, on exploration activities, including $2.7 million, $1.6 million and $2.4 million, respectively, outside the Viburnum Trend.

~~Safety~~ In 2005, our U.S. operations delivered approximately 324,000 tons of refined lead metal and lead alloy products, including lead recycled for customers (tolling). This represented approximately 17% of North American consumption and 6% of western world consumption. In addition, our U.S. operations delivered approximately 152,000 tons of lead concentrates to international metal trading companies in 2005.

~~Throughout~~Approximately ~~its~~50% ~~operations,~~of ~~the~~our ~~Company~~U.S. ~~strongly~~operations’ ~~emphasizes~~sales ~~providing~~in ~~employees~~2005 awere ~~safe working environment through extensive training~~ to ~~ensure safe work practices~~battery ~~and~~manufacturers ~~worker~~or ~~knowledge~~their ~~of proper equipment operation~~suppliers. ~~In the U.S.~~Historically, the ~~Company's~~lead-acid ~~mining~~battery ~~and~~has ~~milling~~been the ~~operations~~dominant ~~are~~technology ~~regulated~~for byautomotive ~~the Mine Safety~~ and ~~Health~~other ~~Administration~~starting, oflighting ~~the Department of Labor~~and ~~(MSHA)~~ignition ~~and~~batteries ~~its~~as ~~smelting~~well ~~and~~as ~~fabricating~~for ~~operations~~motive ~~are~~power, ~~regulated~~telecommunication, bynetwork power, ~~the~~uninterruptible ~~Occupational~~power ~~Safety~~systems and ~~Health~~emergency ~~Administration of the Department of Labor (OSHA)~~lighting. ~~The Company~~ Management believes itthis ~~has~~will ~~achieved~~continue ~~safety~~to ~~results~~be ~~that~~the ~~are~~case ~~among~~for the ~~best~~foreseeable infuture because of its ~~industry~~cost ~~classifications. In 2003~~competitiveness, ~~the~~recyclability ~~employees of the mining~~ and ~~milling~~existing ~~operations continued their outstanding safety performance~~infrastructure. ~~The~~Refined lead ~~internal~~is ~~lost-time~~also ~~injury~~used ~~rate~~in ~~was~~products ~~about~~such ~~2.5~~as ~~times~~computer ~~better~~and ~~than~~television ~~the national average for the underground metal mining industry. In fiscal~~screens, ~~2003~~ammunition, ~~the~~and ~~Fletcher~~rolled ~~mine, the Herculaneum smelter~~ and ~~FPI~~extruded ~~completed~~lead ~~the year with no lost time injuries~~products.

~~Employees~~ 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 Doe Run’s results of operations. By taking advantage of our extensive polymetallic ore resources and smelting assets, we are somewhat able to reduce the impact of metal price volatility through adjustments to our mining, milling and smelting plans beyond the short-term. In addition, sales from tolling services, by-products and fabricated products provide Doe Run with sources of revenue that are largely independent of lead prices.

~~As of October 31, 2003, the Company had 325 active salaried employees and 1,033 active hourly employees in the United States, of which Local 7450 of the~~Peruvian United Steelworkers of America (USWA) represented 137 hourly employees at the Company's Glover smelter. Doe Run has a three-year agreement with the union that expires in May 2005. An election was held February 13, 14 and 15, 2003 to determine whether approximately 465 hourly and non-exempt salaried employees at the mining operations would be represented by the United Mine Workers of America. On February 24, 2003, the National Labor Relations Board certified that the mining operations' employees chose not to be represented by the United Mine Workers of America. 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. 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. In 2005, La Oroya was one of Peru’s largest exporters, exporting approximately 89% of its total sales to North America, Latin America, Asia and Europe. Its customers include end-users of non-ferrous and precious metals and metal by-products as well as international metal trading companies.

~~Products~~ 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 Doe Run Peru’s control including:

La• global ~~Oroya's principal products are refined silver, copper, zinc, lead~~ and ~~gold.~~regional Indemand ~~addition,~~for Lasmelter ~~Oroya produces a variety of by-products~~capacity, ~~including bismuth, indium, tellurium, antimony, cadmium, selenium, sulfuric acid, zinc-silver concentrate, zinc sulfate, copper sulfate, arsenic trioxide and others. The~~

6• availability and quality of concentrates and

~~following table~~• expectations ~~sets forth net sales, excluding sales to Doe Run,~~ for ~~each of La Oroya's principal products~~inflation.

		Year Ended October 31,
		2003		2002		2001
		(dollars in thousands)
Silver		$	167,698	$	156,437	$	153,993
Copper			104,987		98,498		106,772
Zinc			58,376		59,934		76,039
Lead			55,884		56,922		59,165
Gold Bullion			28,496		27,917		22,756
By-Products			20,065		18,578		15,611
	Total	$	435,506	$	418,286	$	434,336

The aggregate effect of these factors is impossible for us 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 are a significant source of revenue to Doe Run Peru, and La Oroya is one of only six smelters in the western world that can process these types of concentrates.

~~Customers~~ 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

La Oroya had approximately 332 customers in 2003, including a wide variety of industrial and international trading companies, of which the five largest accounted for approximately 45% of its net sales. In 2003, approximately 91% of net sales were exported, with sales to North American countries representing approximately 37% of net sales, followed by Latin America, Asia and Europe with approximately 19%, 18% and 16% of net sales, respectively. Substantially all of La Oroya's 2003 metal sales were pursuant to contractual agreements, typically one year or less. Such contracts generally set forth minimum volumes and pricing mechanisms. Substantially all of La Oroya's sales are denominated in U.S. dollars. 5

~~Competition~~ metal sales.

The market for La Oroya'’s ~~unique~~products ~~combination~~is ofglobal, ~~non-ferrous~~and ~~metal~~demand ~~smelters,~~depends ~~refineries~~upon worldwide ~~and~~economic ~~by-product~~conditions. ~~circuits~~Given ~~are~~the ~~capable~~diversity of ~~processing~~its ~~complex~~products and ~~concentrates~~by-products, ~~into~~Doe ~~high~~Run ~~quality~~Peru’s ~~base~~financial ~~and~~performance ~~precious~~is ~~metals.~~not ~~Only~~solely ~~three~~dependent ~~other~~upon any ~~facilities~~single inproduct ~~the~~or ~~western~~by-product. ~~world~~Also, ~~have~~because the ~~capability~~La toOroya ~~treat~~smelter ~~lead~~is primarily ~~and~~a ~~copper~~processor of complex concentrates ~~containing~~that ~~high~~are ~~antimony,~~purchased ~~arsenic,~~based on ~~bismuth~~market ~~and~~prices, ~~precious~~its ~~metal~~financial ~~values~~performance inis ~~addition~~less sensitive than Doe Run’s U.S. operations to athe ~~variety~~volatility of ~~residues~~metal prices. ~~Chinese~~La ~~smelters~~Oroya’s operating results, however, ~~who~~are ~~can~~sensitive ~~also~~to ~~process~~the ~~complex~~level of treatment and refining charges and penalties received for concentrates, ~~are~~processed ~~competing~~and ~~with~~the availability of economically suitable concentrate feed. See “Doe Run Peru’s inOperations—Raw ~~the~~Materials” ~~market~~ for ~~concentrates—see~~ a discussion of treatment ~~market~~charges ~~below~~and difficulties encountered in ~~"Raw~~obtaining ~~Materials".~~adequate feed supply.

~~Raw~~Doe ~~Materials~~ Run’s U.S. Operations

~~La Oroya's primary raw material is concentrate feedstock. In addition, Doe Run Peru's process consumes various other raw materials, principally coal~~ Products and ~~fluxes.~~ Services

~~Copper. During~~The ~~2003,~~principal products ~~approximately~~produced ~~64%~~by ofDoe ~~the~~Run’s ~~copper~~operations ~~concentrates~~include ~~processed~~refined atlead Lafrom ~~Oroya~~primary ~~were~~and recycled ~~obtained~~sources, ~~from~~lead, ~~the~~zinc ~~Peruvian~~and copper concentrates, fabricated lead products ~~domestic~~and ~~market~~other by-products. ~~Approximately~~Historically, ~~27%~~the majority of Lalead ~~Oroya's~~concentrates ~~total~~produced have ~~copper~~been ~~concentrate~~used to feed ~~comes~~Doe ~~from~~Run’s ~~Cobriza.~~two Inprimary ~~fiscal 2004~~smelters, Labut ~~Oroya~~in ~~expects~~November to2003, Doe ~~obtain~~Run ~~approximately~~indefinitely ~~69%~~suspended ofoperations at its ~~copper~~Glover ~~concentrates~~primary ~~from~~smelter ~~the~~and ~~Peruvian~~began ~~domestic~~selling ~~market,~~its ~~with~~excess ~~Cobriza~~concentrates ~~supplying~~on ~~approximately~~the ~~27%~~open ofmarket. ~~the~~Doe ~~total~~Run ~~requirement.~~also generates ~~The~~revenue ~~balance~~from istolling ~~expected~~fees toreceived befor ~~obtained~~recycling ~~primarily~~spent ~~from~~lead-acid batteries ~~neighboring~~and ~~Latin~~other ~~American~~lead-bearing ~~countries.~~materials Lafor ~~Oroya requires~~its ~~approximately~~customers. ~~81,000~~The ~~tons~~following table ofsets ~~copper~~forth ~~metal~~net ~~contained~~sales inof ~~concentrates~~products toand ~~produce~~services atfor ~~capacity.~~Doe Run:

	Year Ended October 31,
	2005		2004		2003
	(dollars in thousands)

Primary lead metal sales	$	174,285	$	131,919	$	134,530
Recycling operation:
Tolling	35,178		27,361		29,709
Metal sales	41,432		43,026		33,717
Other	9,204		6,919		4,682
Lead concentrates	59,417		42,369		2,912
Zinc concentrates	30,627		24,353		19,717
Copper concentrates	16,924		7,959		4,336
Fabricated products	14,203		12,658		14,771
Other	6,918		7,315		4,735
Total	$	388,188	$	303,879	$	249,109

~~Zinc. All~~For of the ~~zinc~~years ~~concentrates~~ended October ~~processed~~31, at2005, La2004 ~~Oroya~~and 2003, ~~during~~exports ~~2003~~represented approximately 17%, ~~were~~17% ~~secured~~and 6%, ~~from~~respectively, ~~the~~of ~~Peruvian~~Doe ~~domestic~~Run’s ~~market~~operations’ net sales. LaSee the discussion in “Item ~~Oroya~~7. ~~requires~~Management’s ~~approximately~~Discussion ~~90,000~~and ~~tons~~Analysis of ~~zinc~~Financial ~~metal~~Condition ~~contained~~and inResults ~~concentrates~~of Operations—Results ~~per~~of ~~year~~Operations” tofor ~~maximize~~information regarding ~~production~~the ~~capacity.~~impact of price and volume on sales.

Lead. Approximately 95% of La Oroya's 2003 lead concentrates were obtained from the Peruvian domestic market. The smelter requires approximately 137,000 tons of lead contained in concentrates per year to produce at capacity. Transportation

~~Feed~~Doe ~~Supply. Low~~Run ~~lead, zinc and copper prices over the past five years have reduced available concentrate supplies as miners~~transports ~~have~~its ~~cutback~~products ~~production~~by ~~in response to the low price environment~~truck, ~~making~~barge ~~concentrate supplies very tight. Smelters competing for concentrates in this tight market have driven treatment charges~~ and ~~penalties~~ ~~down significantly in recent years~~rail. ~~Most~~It ofsells ~~La Oroya's copper, lead and zinc concentrate feed supplies are secured from~~ a ~~small~~significant ~~number~~amount of ~~suppliers in the Peruvian domestic market. Due to~~lead ~~the proximity of the smelter to these suppliers, it is economically advantageous for Doe Run Peru to acquire its~~ concentrates ~~from~~on ~~Peruvian suppliers. However, tightness in~~ the global market ~~for concentrates~~requiring ~~has~~transloading caused intense competition from buyers outside of Peru, especially China, for all concentrates, including the complex concentrates which may have been previously undesireable for some smelters. This intense competition has adversely affected concentrate availability and treatment charges received. In addition, the effects of low metals prices have caused some of La Oroya's suppliers to ~~suffer~~barge ~~financial~~on ~~distress, which in some cases has led to production shortfalls and negatively impacted raw material supply at~~ the ~~smelter. Currently, La Oroya has secured approximately~~ ~~86%~~Mississippi ~~of its concentrate requirements for fiscal 2004, through material supplied by Cobriza and contracts with independent suppliers~~River. For the year ended October 31, 2003, approximately 27% of the La Oroya smelter's copper concentrate requirements were met by Cobriza, representing 100% of Cobriza's output. While La Oroya has contracted for 86% of its concentrate requirements for fiscal 2004, and recent metal price improvements and other factors have improved the financial condition of the smelter's traditional suppliers, in light of current market conditions, it remains possible that the smelter could experience difficulties obtaining economically suitable concentrate feed supply. Failure to secure economically suitable concentrate could have a material impact on La Oroya's performance.

Water. Water for the La Oroya facility 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. Customers

~~Power. La~~Doe ~~Oroya~~Run ~~receives~~had ~~electric~~approximately ~~power~~128 ~~from~~lead ~~Empresa~~metal decustomers ~~Electricidad~~in ~~de los Andes S.A.~~2005, ~~(Electroandes), a local electric~~ ~~power~~including ~~company~~the ~~owned~~largest ~~by PSGE Global Inc. The smelting complex consumes approximately 63 megawatts of ongoing load, which represents approximately one~~lead-~~third~~acid ofbattery ~~the~~manufacturers ~~capacity of Electroandes. La Oroya has a supply contract with Electroandes, which expires~~ in ~~July 2008.~~the ~~Management believes this agreement provides sufficient power~~world. atApproximately ~~satisfactory~~50% ~~rates. Most~~ of ~~Cobriza'~~Doe Run’s ~~electrical~~revenues ~~power~~from isunaffiliated ~~also~~customers ~~provided~~were directly byfrom ~~Electroandes~~U.S. ~~Cobriza's~~battery ~~requirements~~manufacturers, doprimarily ~~not~~automotive, ~~represent~~or ~~a significant portion of Electroandes' capacity~~their suppliers. ~~Electroandes~~Lead isconcentrates ~~not the~~are ~~only~~sold ~~source~~to ~~of electricity in the areas where Doe Run Peru operates.~~ international

Other. At La Oroya, an 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 oxygen plant was installed in 1994 with a capacity of 344 tons per day. It was owned by a local bank and leased to Doe Run Peru under a sale and leaseback agreement, which ended in February 2004. At that time, ownership of the plant reverted back to Doe Run Peru pursuant to a bargain purchase option. Coal is imported to produce coke used in the lead circuit blast furnaces. 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. Management believes that its sources of these materials are adequate to support operations for the foreseeable future. 6

8trading companies.

~~Environmental Matters~~ Competition

~~Modern~~Doe ~~environmental~~Run ~~legislation~~is ~~has~~the largest ~~been~~integrated ~~introduced~~lead ~~only~~producer in ~~the~~North ~~last~~America ~~decade in Peru. For mining~~ and ~~metallurgical activities,~~ the ~~Ministry~~largest ~~of Energy and Mines~~primary ~~(MEM)~~producer isin the ~~principal~~western ~~regulatory authority~~world. ~~The~~It ~~MEM~~is ~~has~~also ~~issued "maximum permissible limits" for liquid effluent and air emissions. In addition,~~ the ~~National~~third ~~Environmental~~largest ~~Council~~secondary ~~coordinates~~lead ~~government~~producer ~~regulations~~in ~~and~~North ~~policies,~~America ~~including~~and the ~~air~~fourth ~~quality~~largest ~~standards~~in ~~for~~the ~~Peru~~world. ~~The~~Doe ~~Directorate~~Run primarily ~~General~~services ~~of Environmental Health (DIGESA), a division of~~ the ~~Ministry~~North ofAmerican ~~Health,~~lead ~~issues~~metal ~~wastewater discharge permits based on standards governing receiving water quality. Peruvian law requires all new mining or metallurgical operations~~market, ~~and~~where ~~existing~~its ~~operations~~major competitors ~~that~~ are ~~undergoing~~three anprimary ~~expansion~~lead ~~of over~~producers ~~50%~~and of12 ~~installed~~secondary ~~capacity,~~lead ~~to submit to the MEM an Environmental Impact Study~~producers.

~~For mining~~Competition ~~and metallurgical operations in existence prior to 1994, concession holders (i.e. owner/operators) were required to submit to~~ within the ~~MEM~~North aAmerican ~~Preliminary~~lead ~~Environmental~~metal ~~Assessment (EVAP)~~market ~~that~~is ~~identified~~based ~~environmental~~primarily ~~impacts after twelve months of baseline monitoring. Based~~ on ~~the results of the EVAP~~quality, ~~the operator submitted to the MEM an Environmental Remediation and Management~~price, ~~Program (PAMA) that consisted of an environmental impact analysis~~service, ~~monitoring~~timely ~~plan~~delivery and ~~data, mitigation measures and closure plan~~reliability. ~~The~~Because ~~PAMA~~lead ~~also~~is ~~sets~~generally ~~forth~~sold ~~the~~on ~~actions and corresponding annual~~a ~~investments~~delivered ~~the~~basis ~~concession holder agrees to undertake in order to achieve compliance~~ with ~~the~~freight ~~applicable~~charges ~~standards prior to expiration of the PAMA (ten years for smelters~~included, ~~such~~Doe ~~as La Oroya'~~Run’s ~~operations,~~ ~~and~~central ~~five years for any other type of mining or metallurgical operation, like Cobriza)~~U.S. ~~Once~~location typically ~~approved,~~allows ~~the~~it ~~PAMA~~to ~~functions~~have astransportation ~~the~~costs ~~equivalent~~significantly oflower anthan ~~operating~~its major ~~permit~~competitors with ~~which~~operations ~~the~~outside ~~operator must~~of ~~comply~~North America. ~~After~~Due ~~expiration~~to ~~of the PAMA~~its location, ~~the~~Doe ~~operator~~Run ~~must~~also ~~comply~~is ~~with~~able ~~all~~to ~~applicable~~provide ~~standards~~its ~~and~~customers ~~requirements.~~just-in-time ~~Mining, metallurgical and processing operators must present annual sworn~~delivery ~~statements~~at toa ~~the~~lower ~~MEM~~cost ~~that~~than ~~describe~~most ~~their~~of ~~operations~~its ~~and resultant emissions~~competitors. In addition, ~~Peruvian~~management ~~environmental~~believes Doe ~~law~~Run’s ~~allows~~combined ~~operators~~primary toand ~~sign~~secondary ~~with~~production ~~the~~capabilities ~~Peruvian~~and ~~government~~focus ~~an Environmental Stability~~on ~~Agreement,~~the ~~which~~lead ~~allows~~business ~~operators~~as toits becore ~~exempt~~business ~~from~~provide ~~changes~~it inwith ~~environmental~~additional ~~regulations, particularly permissible limits of emission, during the life of the PAMA, except for certain closure~~competitive ~~requirements~~advantages.

LaIn ~~Oroya's~~response ~~operations~~to ~~historically~~a ~~and~~declining ~~currently~~domestic ~~exceed~~metal ~~some of the applicable MEM maximum permissible limits pertaining to air emissions~~market, and ~~wastewater~~as ~~effluent~~battery ~~quality. The PAMA~~manufacturers ~~projects,~~move ~~which~~production ~~are more fully discussed below~~overseas, ~~have~~primarily ~~been designed~~ to ~~achieve compliance with these requirements prior to the expiration of the PAMA on December 31~~China, ~~2006.~~Doe NoRun ~~assurance~~has ~~can~~reduced beits lead ~~given~~metal ~~that~~production ~~implementation~~and ~~of the PAMA projects~~ is ~~feasible~~selling ormore ~~that~~of ~~their~~its ~~implementation~~production ~~will~~as ~~achieve~~lead ~~compliance~~concentrates, competing ~~with~~in the ~~applicable~~global ~~legal~~market ~~requirements~~for byconcentrates, ~~the~~where ~~end~~there ofis ~~the~~currently ~~PAMA~~a deficit ~~period~~in supply. ~~In January 2002,~~ Doe Run ~~Peru~~produces ~~received~~clean ~~permission~~concentrates, ~~from~~relatively ~~the~~free ~~MEM to change certain PAMA projects and the timing~~ of ~~their completion. However~~ impurities, ~~there~~which can be noused ~~assurance that the Peruvian government will not, in the future, require compliance~~ with ~~additional~~lower ~~environmental~~quality ~~regulations~~concentrates ~~that~~to ~~could~~improve smelters’ ~~adversely~~feed ~~affect Doe Run Peru's business, financial condition or results of operations~~mix.

~~Under~~Raw the Subscription Agreement, pursuant to which Doe Run Peru acquired La Oroya, Centromin 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 Supreme Decree No. 042-97-PCM. However, there can be no assurance that Centromin will satisfy its environmental obligations and investment requirements, including those in its PAMA, or that the guarantee will be honored. Any failure by Centromin to satisfy its environmental obligations could adversely affect Doe Run Peru's business, financial condition or results of operations. Materials

AsAt ~~part~~current ofproduction ~~the~~levels, ~~acquisitions~~lead ofconcentrates Lafor ~~Oroya~~Doe ~~and~~Run’s ~~Cobriza,~~primary ~~Doe~~smelting operation ~~Run~~are ~~Peru~~supplied ~~entered~~by ~~into~~its ~~certain~~mining ~~agreements~~operations. ~~with~~However, ~~MEM~~should toproduction levels ~~expand~~change, ~~and~~lead ~~modernize~~concentrates ~~their~~may ~~operations~~, ~~including~~from ~~expenditures~~time to ~~comply~~time, ~~with environmental~~be ~~regulations~~purchased infrom third ~~Peru,~~parties. ~~such~~For asa ~~those~~discussion ~~governing~~of ~~the~~our ~~treatment~~mineral reserves, ~~handling~~see ~~and~~“Item ~~disposal~~2. Properties—U.S. ofOperations—Ore ~~solid~~Reserves.” Doe ~~wastes~~Run utilizes various other raw materials, ~~liquid~~principally ~~effluent~~metallurgical ~~discharges~~coke, chemicals and ~~gaseous~~reagents, ~~emissions.~~which ~~Principal~~are ~~projects~~secured ~~related~~from toexternal sources, primarily on the basis of competitive bids.

9There is a shortage in the U.S. market for coke due to competition from China. Coke supply was an issue in 2005 as was increased raw material costs at the Herculaneum primary smelter and Buick Resource Recycling Poor coke quality negatively impacted production at Buick Resource Recycling by approximately 4,000 tons in 2005. We believe the coke supply is improving, and Doe Run is working on a contract for the 2006 supply requirements although the costs have continued to increase from current cost levels. Increased natural gas and propane costs also contributed to negative cost variances at the Herculaneum primary smelter and at the secondary operations. Soda ash was in short supply for the U.S. recycling operation in the first half of 2005. Alternative supplies have been located, and we do not anticipate an ongoing problem. We believe that Doe Run has adequate sources of the other raw materials to meet its present production needs.

~~environmental matters~~Doe atRun’s ~~the~~recycling Laoperation ~~Oroya~~recycles ~~smelter~~a ~~include:~~variety ~~1) building~~of lead-bearing ~~sulfuric~~materials, ~~acid~~primarily ~~plants~~spent ~~for the metal circuits~~batteries,~~—including~~ ~~some~~which ~~process~~it ~~changes~~purchases ~~that may be necessary to ensure~~from ~~compliance,~~customers ~~2) water~~or ~~and~~tolls ~~sewage~~for ~~treatment~~customers. ~~facilities,~~The ~~and~~chemistry ~~3) slag~~ and ~~slimes~~composition ~~handling~~of ~~equipment~~feed materials ~~and~~can ~~disposal~~have ~~facilities.~~a ~~Expenditures~~significant ~~related~~impact toon the ~~projects~~cost ~~specified~~and inoperating ~~the PAMA and~~performance ~~related~~of ~~process~~the ~~changes~~recycling ~~are currently estimated to be $168~~operation.~~3 million for fiscal 2004 through fiscal 2007.~~

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 December 31, 2006. Although the PAMA currently requires Doe Run Peru to construct certain sulfuric acid plants estimated to cost approximately $107.5 million in order to reduce emissions, Doe Run Peru is also proceeding with efforts to identify alternative methods of achieving compliance. These efforts include, but are not limited to, reducing or curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These efforts must take into consideration the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru intends to submit a request to MEM in the second quarter of 2004 to modify the requirements of the existing PAMA for the La Oroya Smelter. There can be no assurance that the Peruvian government will approve these alternatives or that they will achieve compliance in the timeframe required by the PAMA. If the La Oroya smelter does not operate within the current PAMA limits after December 31, 2006, Doe Run Peru could be forced to cease operations at the La Oroya smelter. Power

The primary ~~Cobriza~~electric ~~mine~~power ~~has~~source afor ~~separate~~the ~~PAMA~~majority inof ~~which~~ Doe Run’s ~~Peru~~operations ~~committed~~is toAmeren ~~complete projects to manage tailings~~UE, ~~mine~~a public ~~drainage,~~utility ~~sewage~~headquartered ~~and~~in ~~garbage~~St. ~~Doe Run Peru has spent approximately $10.0 million under the PAMA as of October 31~~Louis, ~~2003~~Missouri. OnThe ~~July 3, 2002, the government of Peru enacted the Supreme Decree No. 022~~Viburnum-~~2002-EM,~~35 ~~extending~~mine ~~the~~obtains ~~PAMA~~its ~~for~~electric ~~all~~power ~~companies~~from ~~not~~Black ~~yet~~River inElectric ~~compliance~~Cooperative ~~with~~located ~~their PAMA for a period of not less than 12 months, and up to 18 months if approved by MEM. Companies not~~ in ~~compliance at the end~~ ofsoutheastern ~~the extension period would have an additional period to close their operations~~Missouri. ~~Doe~~Natural ~~Run~~gas ~~Peru~~and ~~has~~propane ~~received~~are ~~approval~~secured from ~~MEM~~external sources, toprimarily ~~extend~~under ~~the~~contracts ~~date~~that ofare ~~required~~awarded ~~compliance~~on ~~with~~ the ~~PAMA~~basis ~~to April~~ of ~~2004~~competitive ~~and~~bidding, ~~has~~whose aprices ~~request~~fluctuate ~~pending~~with ~~to extend~~ the ~~compliance~~market ~~period~~ for ~~the~~natural ~~full~~gas ~~18 months allowed under the Supreme Decree. Doe Run Peru now believes that it will complete its PAMA requirements by June of 2004 including a mine water treatment system~~ and ~~by making a surface paste fill from tailings. If the extension is not granted~~petroleum, ~~Doe Run Peru may be subject to legal redress most likely in the form~~ ofrespectively. ~~fines,~~We ~~which,~~believe Doe Run ~~Peru~~has ~~believes~~adequate ~~will~~power ~~not~~sources ~~be material. Ore reserves are now estimated~~ to bemeet ~~approximately~~its ~~4 years at current~~ present production ~~rates and space has been identified to store the associated tailings~~needs.

~~Exploration~~ 7

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

~~Safety~~ Doe Run’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, Doe Run’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. See “Item 8. Financial Statements and Supplementary Data—Note 19 to Consolidated Financial Statements.”

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. Doe Run Peru's Cobriza operation completed the fiscal year with no lost time accidents and by October 31, 2003, the La Oroya smelter had completed nearly five million employee hours without a lost time accident. Safety

10For both our U.S. and Peruvian operations, we strongly emphasize 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., the Mine Safety and Health Administration of the Department of Labor regulates Doe Run’s mining and milling operations, and the Occupational Safety and Health Administration of the Department of Labor regulates its smelting and fabricating operations. Doe Run has achieved safety results that are among the best in its industry classifications. In 2005, the mining and milling operations’ lost-time injury rate was about two times better than the national average for the underground metal mining industry. The lost-time injury rate for Doe Run’s primary smelter and its recycling operation was three times better than the national average for the primary nonferrous metals industry. In addition, the lost-time injury rate at Fabricated Products was two times better than the national fabricated metal products industry. The Fletcher, Viburnum #29, Viburnum #35 and Sweetwater mines, Buick Resource Recycling, and Fabricated Products completed 2005 with no lost-time injuries. Doe Run and its predecessor companies have won the prestigious Sentinels of Safety award 23 times in the past 31 years. The annual award is sponsored by the Mine Safety & Health Administration and the National Mining Association. The Doe Run Brushy Creek Mine won the award for 2004, and five of the six SEMO mines are in contention for the 2005 award.

During 2003, the Cobriza mine experienced a fatal accident that involved a contractor's employee. Management has thoroughly investigated this incident and reinforced the appropriate safety procedures with the workforce and its contractors. Employees

~~Employees~~ As of October 31, 2005, Doe Run had 332 active salaried employees and 1,034 active hourly employees, of which Local 7450 of the United Steelworkers of America (USWA) represented five active hourly employees at our Glover primary smelter. Doe Run has extended a three-year labor agreement with the USWA for an additional period of one year. The labor agreement expires in May 2006.

AsWe ofreceived ~~October 31,~~a letter ~~2003,~~on ~~Doe~~February ~~Run Peru's employees included 841 active salaried employees~~24, ~~2,296~~2006 ~~active~~from ~~hourly~~the ~~employees,~~National ~~and~~Labor ~~957~~Relations ~~contractors.~~Board ~~Management~~requesting ~~believes~~a ~~its~~representation ~~relations~~election ~~with employees are good. There are three unions~~ for ~~hourly~~all ~~employees~~Buick ~~and~~Resource ~~three~~Recycling’s ~~unions for salaried employees. The principal union representing 66% of the~~ hourly ~~employees is the~~production, ~~Sindicato~~maintenance ~~de Trabajadores Metalúrgicos La Oroya (La Oroya Metallurgic Workers Union). The Sindicato de Trabajadores Ferroviarios La Oroya (La Oroya Railway Workers Union)~~ and ~~the Sindicato~~materials dehandling Trabajadores Cobriza (Cobriza Workers Union) represent 3% and 12%, respectively, of the hourly workers. The remaining hourly workers, 19%, are not affiliated with a union. On July 26, 2003, Doe Run Peru entered into a five-year labor agreement with the hourly unions at La Oroya. The salaried employees ~~are represented~~ by the ~~Sindicato~~International ~~de Empleados Yauli-La Oroya (Yauli-La Oroya Employees Union)~~union, ~~representing 34% of the salaried employees and by the Sindicato de Empleados Ferroviarios La Oroya (La Oroya Railway Employees~~United ~~Union)~~Automobile, ~~representing~~Aerospace ~~3% of salaried employees~~ and byAgricultural ~~the~~Implement ~~Sindicato~~Workers ~~de Empleados Cobriza (Cobriza Employees Union), representing 4%~~ of ~~salaried employees. The remaining salaried employees~~America, ~~59%, are not affiliated with a union. On January 6, 2003, Doe Run Peru entered into five~~AFL-~~year labor agreements with the two unions representing the salaried employees at La Oroya~~CIO. ~~On July 21, 2003, Doe Run Peru entered into a five-year labor agreement with the two unions representing the salaried and hourly employees at Cobriza.~~

Doe Run Peru’s ~~Item 2. Properties~~ Operations

~~U.S. Operations~~ Products

~~Mining~~Doe ~~Operations~~ Run Peru’s principal products are refined silver, copper, lead, zinc and gold. In addition, Doe Run Peru produces a variety of by-products. The following table sets forth net sales, excluding sales to Doe Run, for each of Doe Run Peru’s principal products.

The Company's Missouri mining operations currently have eight production shafts that form a north-south line along approximately 40 miles of the Viburnum Trend ore body. Three production shafts, Viburnum-28, Viburnum-29 and Viburnum-35, lie within a five-mile radius east, 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 thirty miles of Viburnum. Five of the production shafts are currently operating. The Viburnum-29 and West Fork production shafts are on care and maintenance status and mining at the Viburnum-28 production shaft ended permanently on November 20, 2003.

	Year Ended October 31,
	2005		2004		2003
	(dollars in thousands)

Silver	$	238,671	$	227,546	$	167,698
Copper	156,945		116,885		104,987
Lead	106,709		98,853		55,884
Zinc	58,955		68,524		58,376
Gold Bullion	30,063		25,261		28,496
By-Products	49,909		27,120		20,832
Total	$	641,252	$	564,189	$	436,273

The Company also has available five grinding/flotation mills located near its production shafts. Four of the mills are currently operating. The West Fork mill is on care and maintenance status, where production at the facility is temporarily suspended, but certain maintenance activities are continued. 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 or by rail. 8

~~The~~See the discussion ~~production~~in ~~capacities~~“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” for information regarding the ~~Company's~~impact ~~mills~~of ~~are~~price asand ~~follows:~~volume on sales.

Mill		Milling Capacity (Tons of Ore Per Day)
Buick		7,200
Fletcher		5,000
Brushy Creek		5,000
West Fork		4,000
Sweetwater		6,800

Transportation

11Doe Run Peru primarily transports its products by ocean freight after first being transported by truck and rail 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 for cargo vessels with China, which has in turn led to higher shipping costs.

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 11 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 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. Customers

Doe Run Peru had approximately 327 customers in 2005, including a wide variety of industrial and international trading companies. In 2005, approximately 89% of net sales were exported, with sales to North America, Latin America, Asia and Europe representing approximately 37%, 24%, 16% and 12%, respectively, of net sales. Substantially all of Doe Run' Peru’s ~~producing~~2005 ~~leases~~metal ~~from~~sales ~~the~~were ~~federal~~pursuant ~~government~~to contractual ~~consist~~agreements, typically with terms of ~~the~~one ~~following:~~year or less. Such contracts generally set forth pricing mechanisms with minimum volumes. Substantially all of Doe Run Peru’s sales are denominated in U.S. dollars.

Location	Number of Producing Leases	Expiration Date
Viburnum	5	March 31, 2018
Fletcher	2	May 31, 2013
Buick	1	October 31, 2014
Brushy Creek	2	May 31, 2013
West Fork	1	January 31, 2013

Competition

The unique ~~following~~combination ~~table~~of ~~sets~~non-ferrous ~~forth~~metal ~~the~~smelters, ~~mineable~~refineries ~~reserves,~~and asby-product ofcircuits at ~~October 31,~~La ~~2003~~Oroya ~~for~~are ~~the~~capable ~~Viburnum~~of ~~Trend~~processing ~~mineral~~complex ~~deposits~~concentrates into high quality base and ~~the~~precious ~~Higdon~~metals. ~~deposit,~~Only ~~which~~five isother ~~outside~~facilities in the ~~Viburnum~~western ~~Trend.~~world have ~~The~~the ~~reserve~~capability ~~estimate~~to ~~presented~~treat ~~below~~lead ~~has~~and ~~been~~copper ~~audited~~concentrates bycontaining ~~the~~high ~~mining~~antimony, arsenic, ~~consulting~~bismuth ~~firm~~and ofprecious ~~Pincock~~metal ~~Allen &~~values ~~Holt,~~in addition to a ~~division~~variety of residues. ~~Hart~~Chinese ~~Crowser~~smelters, ~~Inc.~~ ~~Pincock~~however, ~~Allen &~~which ~~Holt~~can ~~reviewed~~also ~~the~~process complex ~~methodology~~concentrates, ~~and~~are ~~cost~~competing ~~basis~~with ~~used~~Doe inRun ~~the~~Peru ~~reserve calculation, as discussed~~ in ~~their~~the ~~report~~market ~~dated~~for ~~January 29,~~concentrates. See ~~2004,~~the ~~and~~discussion ~~approved~~of ~~the~~concentrates ~~resulting~~below ~~reserve~~in ~~calculation~~“Raw Materials. ”

Raw ~~Mineable Reserves As of October 31, 2003~~ Materials

			Grade†
		Tons	Lead		Zinc		Copper
		(in thousands)
Proven		11,561	7.64	%	1.54	%	0.31	%
Probable		36,125	4.83	%	1.16	%	0.29	%
	Total Proven and Probable	47,686	5.51	%	1.25	%	0.29	%

Doe Run Peru’s primary raw material is concentrate feedstock. In addition, Doe Run Peru’s processes consume various other raw materials, principally coke and fluxes.

~~The~~Copper. ~~term~~During ~~"reserve"~~2005, approximately ~~means~~65% ~~that part~~ of athe ~~mineral~~copper ~~deposit~~concentrates ~~that~~processed ~~could be economically and legally extracted or produced~~ at ~~the~~La ~~time~~Oroya ~~of the reserve determination. The term "proven (measured)~~were ~~reserves"~~obtained ~~means reserves for which: 1) quantity is computed~~ from ~~dimensions~~the ~~revealed~~Peruvian indomestic ~~outcrops~~market, ~~trenches,~~including ~~workings~~approximately or25% ~~drill holes; grade and/or quality are computed~~ from ~~the results of~~ ~~detailed~~Cobriza. ~~sampling~~In ~~and~~2006, ~~2) the~~we ~~sites~~expect ~~for~~to ~~inspection,~~obtain ~~sampling~~approximately ~~and~~66% ~~measurement~~of ~~are~~La ~~spaced~~Oroya’s socopper concentrate ~~closely~~requirements ~~and~~from the ~~geologic~~Peruvian ~~character~~domestic ~~is so well defined that size~~market, ~~shape, depth and mineral content of~~including ~~reserves~~approximately ~~are~~26% ~~well-established~~from Cobriza. ~~The~~We ~~term~~expect ~~"probable~~to ~~(indicated)~~obtain ~~reserves"~~the ~~means~~remaining ~~reserves~~34% ~~for which quantity and grade and/or quality are computed~~ primarily from ~~information~~neighboring ~~similar~~Latin toAmerican ~~that~~countries. ~~used~~La ~~for proven~~Oroya ~~(measured)~~requires ~~reserves~~approximately 77,000 ~~but~~tons ~~the~~per ~~sites~~year ~~for~~of ~~inspection,~~copper ~~sampling,~~metal ~~and~~contained ~~measurement~~in ~~are~~concentrates ~~farther~~to ~~apart~~produce ~~or are otherwise less adequately~~ at capacity.

12Zinc. All of the zinc concentrates processed at La Oroya during 2005 were secured from the Peruvian domestic market. La Oroya requires approximately 50,000 tons of zinc metal contained in concentrates per year to optimize production volume. During 2005, the capacity was voluntarily decreased from 88,200 tons 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.

~~spaced~~Lead. ~~The~~During ~~degree~~2005, approximately 96% of ~~assurance,~~the ~~although~~lead ~~lower~~concentrates ~~than~~processed ~~that~~at ~~for~~La ~~proven~~Oroya ~~(measured)~~were ~~reserves,~~obtained from isthe ~~high~~Peruvian ~~enough~~domestic tomarket. ~~assume~~The ~~continuity~~smelter ~~between~~requires ~~points~~approximately 134,000 tons of ~~observation.~~lead contained in concentrates per year to produce at capacity.

~~Smelting~~Feed Supply. ~~Operations~~ Most of Doe Run Peru’s copper, lead and zinc concentrate feed supplies are secured from a small number of suppliers in the Peruvian domestic market. Due to the proximity of La Oroya to these suppliers, it is economically advantageous for Doe Run Peru to acquire its concentrates from Peruvian suppliers. Tightness in the

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 150,000 tons annually. The smelter, which began operations in 1892, is the largest primary lead smelter in North America and the second largest in the world. 9

~~Located~~global inmarket ~~Glover~~for concentrates, ~~Missouri~~however, ~~approximately~~has 20caused ~~miles~~intense ~~southeast~~competition from buyers outside of ~~the~~Peru, ~~Sweetwater~~especially ~~production~~in ~~shaft~~China, for all concentrates, including the complex ~~Glover~~concentrates ~~primary~~that ~~smelter,~~may ~~which~~have ~~began~~been ~~operations~~previously inundesirable ~~1968,~~for ~~operated~~some smelters. atThis ~~its~~intense ~~capacity~~competition has adversely affected concentrate availability and treatment charges received. Since the middle of 2003 and ~~approximately~~through ~~136~~October 31,~~000~~ ~~tons~~2005, ~~per~~however, ~~year~~copper, ~~during~~zinc ~~fiscal~~and ~~2003~~lead prices have increased significantly, primarily due to decreased availability of supply. The ~~Glover~~increase in ~~primary~~the ~~smelter~~copper ~~was~~prices ~~placed~~has onencouraged ~~care~~more production from the mines and, together ~~maintenance~~with ~~status~~the ~~(see~~decision ~~description~~of ~~above~~Chinese smelters to reduce their copper concentrate imports, has generated a radical change in ~~Mining~~the availability of ~~Operations)~~copper concentrate beginning in the ~~first~~last quarter of ~~fiscal~~ 2004. ~~due~~Management toestimates that ~~decreased~~there ~~U.S.~~will ~~demand~~be an excess of copper concentrates for ~~lead~~the near future, ~~see~~which will ~~further~~improve ~~discussion~~the performance of the copper circuit in ~~"Item~~La 7Oroya. ~~Management's~~In ~~Discussion~~spite of the price improvements, in the case of lead and zinc concentrate, the market ~~Analysis—Recent~~remains ~~Events".~~tight, and we project that it will be tighter for the next few years since there are only a few mining projects coming on stream.

~~The secondary lead recycling smelter~~Currently, ~~located~~Doe inRun Peru ~~Boss,~~has ~~Missouri,~~secured approximately ~~ten~~95% ~~miles south~~ of ~~Viburnum,~~its ~~began~~concentrate ~~recycling~~requirements ~~operations~~for ~~in 1991 and currently has an annual capacity of~~2006 ~~approximately~~through ~~165,000~~material ~~tons.~~supplied ~~The~~by ~~facility~~Cobriza ~~operates under a Resource Conservation~~ and ~~Recovery~~contracts ~~Act~~with ~~(RCRA)~~independent ~~permit allowing it to handle waste, primarily lead-bearing material~~suppliers. ~~The smelter is~~ ~~currently~~For ~~permitted for 152~~2005,~~410~~ ~~tons~~all of ~~furnace~~Cobriza’s ~~production~~output ~~annually,~~fed ~~however,~~ the ~~facility~~La ~~can~~Oroya ~~recycle~~smelter, ~~lead~~representing approximately ~~metal~~25% ~~scrap~~of ~~materials that are not required to go through~~ the ~~furnaces~~smelter’s incopper ~~order~~concentrate ~~to achieve additional metal production~~requirements.

~~The~~Water. ~~Company~~Doe ~~owns~~Run ~~its~~Peru obtains water for La Oroya from two ~~primary~~main ~~smelters~~sources: the Tishgo River and ~~its~~the Cuchimachay ~~secondary~~Spring. ~~smelter~~The Mantaro River was another source of water until September 2005 when we stopped taking water out of the river and began to recycle our industrial water. Management believes the remaining two sources, in addition to numerous adjacent springs and wells, provide adequate water supplies for the facility.

~~FPI~~Power. ~~operates~~La inOroya ~~leased~~receives electric ~~facilities~~power ~~located~~from inEmpresa ~~Casa~~de ~~Grande,~~Electricidad ~~Arizona,~~de ~~Vancouver,~~los ~~Washington~~Andes S.A., ~~and~~also ~~Houston~~known as Electroandes, ~~Texas~~a local electric power company owned by PSEG Global Inc. The smelting ~~Company~~complex ~~ended~~consumes ~~production~~approximately 63 megawatts of ongoing load, which represents approximately 45% of the capacity of Electroandes. Doe Run Peru has a supply contract with Electroandes that expires in July 2008. Management believes this agreement provides sufficient power at ~~FPI'~~satisfactory rates. Most of Cobriza’s ~~Lone~~electrical ~~Star~~power ~~Lead~~is ~~Construction~~also ~~facility~~provided by Electroandes. Cobriza’s inrequirements ~~Houston,~~do ~~Texas~~not inrepresent ~~December 2003~~a significant portion of Electroandes’ capacity. Electroandes is not the only source of electricity in the areas where Doe Run Peru operates.

~~Substantially~~Other. ~~all~~Doe ofRun ~~the~~Peru ~~assets~~uses various ofother ~~the~~raw ~~Company's~~materials, ~~U.S.~~principally ~~operations~~oxygen, ~~are~~coke, ~~pledged~~fluxes asand ~~collateral~~oil. ~~under~~Its oxygen ~~various~~plant ~~financing~~at ~~agreements.~~La ~~See~~Oroya ~~"Item~~supplies 7.oxygen ~~Management's~~for ~~Discussion~~the ofoxy-fuel ~~Financial~~burners ~~Condition~~of the ~~and~~reverberatory ~~Results~~furnace of ~~Operations—Recent~~the ~~Events"~~copper smelter and for athe ~~discussion~~blast furnaces of ~~these~~the lead ~~agreements~~smelter. The plant supplies all of La Oroya’s oxygen requirements.

~~Peruvian~~Historically, ~~Operations~~ Doe Run Peru consumed coke it produced and coke it imported. 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.

~~Smelting Operations~~ Environmental Matters

LaModern environmental ~~Oroya's~~legislation ~~operations~~has ~~are~~been ~~located~~introduced only in the ~~central~~last ~~Peruvian~~15 ~~Andes~~years ~~town~~in Peru. ofNevertheless, Lawe ~~Oroya,~~are ~~approximately~~governed ~~110~~by ~~miles~~a ~~east~~number of ~~the~~agencies. ~~Peruvian~~For ~~capital~~instance, ofthe National ~~Lima~~Environmental ~~and~~Council atcoordinates angovernment ~~altitude of~~regulations ~~approximately~~and 12policies,~~000~~ including ~~feet~~the ~~above~~air ~~sea~~quality ~~level~~standards for Peru. The ~~complex~~Directorate isGeneral ~~linked~~of Environmental toHealth ~~port~~(DIGESA), ~~facilities~~a bydivision ~~highway~~of ~~and~~the ~~railroad~~Ministry ~~service.~~of ~~Most~~Health, ~~supply~~issues wastewater ~~sources~~discharge ~~also~~permits ~~have~~based ~~rail~~on ~~service.~~water ~~Doe~~quality ~~Run~~standards. ~~Peru~~For ~~owns~~mining ~~the~~and metallurgical ~~facilities~~activities, ~~which~~ ~~consist~~the Ministry of aEnergy ~~copper~~and ~~smelter~~Mines, ~~lead~~known ~~smelter,~~as ~~copper~~the ~~refinery~~MEM, is ~~lead~~the ~~refinery,~~principal ~~copper~~regulatory ~~fabricating~~authority. ~~plant,~~The ~~zinc~~MEM ~~refinery,~~has ~~precious~~issued ~~metals~~“maximum ~~refinery,~~permissible limits” ~~antimony~~for ~~plant,~~liquid ~~arsenic~~effluent ~~plant,~~and ~~coke~~air ~~plant,~~emissions. ~~cadmium~~MEM also requires all new mining ~~plant,~~or ~~maintenance~~metallurgical ~~shops~~operations, and ~~other~~existing ~~support~~operations ~~facilities.~~expanding ~~Current~~by ~~production~~over ~~capacities~~50% of installed ~~primary~~capacity, ~~products~~to ~~are~~submit asan ~~follows:~~Environmental Impact Study to the MEM.

Product		Annual Capacity
Copper (short tons)		81,000
Lead (short tons)		133,000
Zinc (short tons)		87,000
Silver (thousands of troy ounces)		39,000
Gold (thousands of troy ounces)		87

La Oroya’s operations historically and currently exceed some of the applicable MEM maximum permissible limits pertaining to air emissions and wastewater effluent quality. Prior to our acquisition of La Oroya, Metaloroya S.A., the former owner, and at the time a subsidiary of Centromin, received approval from the Peruvian government for an Environmental Remediation and Management Program, known as a PAMA. The PAMA was designed to

During 2003, La Oroya produced at less than capacity primarily due to insufficient availability of suitable feed materials; see discussion in "Item 1. Business, Doe Run Peru operations—Raw Materials". 10

13achieve compliance with MEM’s air and wastewater limits. It consisted of an environmental impact analysis, monitoring plan and data, mitigation measures and a closure plan. The PAMA also sets forth the actions and corresponding annual investments the concession holder agrees to undertake in order to achieve compliance with the maximum 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. The PAMA projects, which are more fully discussed below, have been designed to achieve compliance with these requirements. The Peruvian government may, in the future, require compliance with additional environmental regulations that could adversely affect Doe Run Peru’s business, financial condition and results of operations.

~~See~~As part of our ~~production~~acquisition ~~levels~~of ~~for~~La ~~2003~~Oroya, inDoe ~~Item~~Run 7.Peru ~~Management's~~assumed ~~Discussion~~certain obligations under the PAMA, and ~~Analysis~~Centromin agreed to indemnify Doe Run Peru against any environmental liability arising out of ~~Financial~~its ~~Condition~~prior operations and ~~Results~~its apportioned share of ~~Operations—"Results~~any other liabilities related to emissions as mentioned above. Performance of the ~~Operations"~~indemnity has been guaranteed by the Peruvian government through the enactment of Supreme Decree No. 042-97-PCM. There can be no assurance, however, that Centromin will satisfy its environmental obligations and investment requirements, including those in its PAMA, or that the governmental 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. 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.

~~Mining~~The ~~Operations~~ 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.

~~The~~Under ~~Cobriza mine is located approximately 250 miles southeast of Lima in~~ the ~~district~~current approved ~~of San Pedro de Coris~~PAMA, ~~Churcampa~~Doe ~~Province.~~Run ~~Access~~Peru tohas ~~the~~committed ~~site is by improved unpaved road through rugged terrain. Concentrates produced at the mine are trucked 130 miles over unpaved road~~ to ~~Huancayo~~implement ~~and~~projects ~~then~~that ~~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 its current throughput is approximately 4,710 short tons per day.~~ include:

~~Landholdings at~~• constructing ~~Cobriza~~water ~~include approximately 2,700 acres of surface ownership~~ and ~~approximately 128,000 acres of mining concessions. The current mining operation is located on a portion~~ ofsewage ~~the~~treatment area held. Economic mineralization outside the existing mining area has not been confirmed as of October 31, 2003. Doe Run Peru's estimates, which have not been audited, indicate mineable proven and probable ore reserves of approximately 5.6 million short tons containing approximately 1.21% copper. facilities

• installing slag handling ~~Item~~equipment 3.and ~~Legal~~disposal ~~Proceedings~~ facilities and

In• building ~~addition~~sulfuric ~~to the items discussed below, Doe Run and its subsidiaries are involved in various litigation and claims, government investigations, and other legal~~acid ~~proceedings~~plants ~~that~~for ~~arise from time to time in~~ the ~~ordinary~~metal ~~course~~circuits of— ~~business.~~including ~~While~~some ~~management~~process ~~does~~changes ~~not~~that ~~believe~~may ~~any~~be ~~of these matters will have a material adverse effect on the Company's financial~~necessary ~~position,~~to ~~litigation~~ensure iscompliance ~~inherently~~with ~~unpredictable,~~Peru ~~and excessive~~government ~~verdicts~~agency ~~do occur~~regulations. Although management believes valid defenses exist in these matters, Doe Run or any 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 or results of operations.

14La Oroya’s current PAMA requires Doe Run Peru to complete these projects 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 2006 with respect to the construction of the sulfuric acid plants required by the PAMA and, as a result, could be subject to penalties. Failure to comply with the PAMA could result in the forced cessation of operations at the La Oroya smelter, which would adversely affect our business, financial condition and results of operations. Peruvian law changed in 2004 to allow companies to request an extension of the compliance date. Doe Run Peru applied 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 Financial Condition and Results of Operations—Liquidity and Capital Resources” for a description of the law and Doe Run Peru’s plans.

~~Doe~~The ~~Run~~Cobriza ismine has a ~~defendant~~separate inPAMA ~~ten lawsuits alleging certain damages from lead emissions stemming from the operations at the Herculaneum smelter. The cases brought~~ in ~~the~~which ~~Circuit Court 23rd Judicial Circuit at Hillsboro, Jefferson County, Missouri are: Enos Green v. The~~ Doe Run ~~Resources~~Peru ~~Corp.~~committed ~~et al., filed~~to ~~November 30,~~complete ~~1999~~projects ~~and~~to ~~State~~manage ~~of Missouri v. Enos Green filed May 9~~tailings, ~~2003~~mine ~~(third party complaint against Doe Run filed June 13~~drainage, ~~2003).~~ ~~The~~sewage ~~cases~~and ~~brought in the Circuit Court of the City of St~~garbage. ~~Louis are: Mitchell, et al. v. Fluor Corporation, et al., Doyle, et al. v. Fluor Corporation, et~~Doe ~~al.,~~Run ~~Figge,~~Peru etcompleted ~~al.~~its v.PAMA ~~Fluor~~requirements ~~Corporation~~with etrespect ~~al.,~~to ~~all~~Cobriza ~~filed July 9,~~in ~~2001;~~June ~~Gross v. Fluor Corporation et al.~~2004, ~~filed May 9, 2002; Warden, et al. vs. Fluor Corporation et~~ ~~al.,~~ceased ~~filed~~discharging ~~September 12,~~mine ~~2002;~~waste ~~Cross~~into v.the ~~Fluor~~Mantaro ~~Corporation~~River ~~et al., filed January 10, 2003;~~ and ~~Johnson,~~ etis ~~al.~~in v.compliance ~~Fluor Corporation, et~~with ~~al.~~the ~~and~~emissions ~~Browning,~~standards etrequired ~~al.~~by v.the ~~Fluor Corporation, et al~~PAMA. ~~filed September 9, 3003.~~

The Doyle, Mitchell, and Johnson cases are class action lawsuits. In the Doyle and Johnson 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 the Mitchell case, 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. Safety

In Peru, the MEM is also 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 ~~Figge,~~safety ~~Gross,~~and ~~Warden~~health. During 2004, ~~Cross~~Doe ~~and~~Run ~~Browning~~Peru ~~cases~~received ~~are~~the ~~personal~~John ~~injury~~T. ~~actions~~Ryan award, granted by ~~24 individuals~~Mining ~~who~~Safety ~~allege~~Appliances, ~~damages~~or ~~from~~MSA, for obtaining the ~~effects~~best ofperformance in ~~lead~~mining ~~poisoning~~safety ~~they~~in ~~attribute~~the tocategory ~~operations~~of atSmelting ~~the~~and ~~smelter~~Refineries and ~~seek~~for ~~punitive~~having achieved ~~damages~~the best indexes of safety in Peru during the last two years. The La Oroya smelter

~~In the two Enos Green cases, Mr. Green is seeking damages for the alleged disposal of lead contaminated fill material on Mr. Green's property. The Green cases have been settled.~~ 11

~~Doe Run~~completed isnearly atwo ~~party~~million toemployee hours without a ~~number~~lost-time ofaccident ~~orders~~between ~~with~~July ~~various regulatory agencies that require ongoing expenditures for compliance. See "Item 8. Financial Statements~~ and ~~Supplementary Data—Notes 20~~October ~~and 22 to the Company's Consolidated Financial Statements" for a discussion of these matters~~2005.

~~On April 11,~~During ~~2002~~2005, aLa Oroya ~~report~~experienced ina ~~the~~fatal ~~media~~accident ~~contained~~involving ~~allegations~~a bycontractor’s ~~former~~employee, ~~employees~~and Cobriza ofexperienced ~~improper~~a ~~disposal~~fatal ofaccident ~~hazardous~~involving ~~materials~~an onemployee ~~the~~in ~~Herculaneum~~February ~~smelter site~~2005. ~~The Company does~~ ~~not~~Management ~~believe that there~~ has ~~been~~thoroughly ~~any~~investigated ~~violation~~these ofincidents ~~law~~ and isreinforced ~~cooperating with State and federal agencies in their investigations into~~ the ~~allegations, including having provided equipment and an~~ ~~operator~~appropriate tosafety ~~the~~procedures ~~government~~with ~~to excavate various areas of~~ the ~~Herculaneum~~workforce ~~smelter~~and ~~site,~~its ~~which~~contractors. ~~excavations~~There were ~~failed~~no toother ~~turn~~lost-time upaccidents ~~any~~at ~~evidence~~Doe ofRun ~~illegal~~Peru’s ~~toxic~~operations ~~dumping.~~during 2005.

Doe Run is a defendant in five lawsuits alleging certain damages from past mining operations in St. Francois County. 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 regarding Lee 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 regarding Layne 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 regarding Charles Mullins v. The Doe Run Resources Corporation and Charles 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. Employees

15As of October 31, 2005, Doe Run Peru’s employees included 779 active salaried employees, 2,119 active hourly employees and 1,185 contractors. Management believes its relations with employees are good. There are three unions for hourly employees and two unions for salaried employees. The principal union, representing 73% 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) and the Sindicato de Trabajadores Ferroviarios La Oroya (La Oroya Railroad Workers Union) represent 14% and 3% of the hourly workers, respectively. On July 21, 2003 and September 1, 2003, Doe Run Peru entered into a five-year labor agreement with the unions representing the hourly employees 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.

~~Doe Run,~~Additional 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. and Randle 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. Information

~~On January 26,~~We ~~2000,~~file ~~City of St. Louis v. Lead Industries Association~~annual, ~~Inc.~~ etquarterly aland ~~was~~current ~~filed~~reports inwith the ~~Circuit Court of the City~~SEC. ofAny ~~St.~~materials ~~Louis,~~filed ~~Missouri.~~with ~~Doe Run and several other parties were named defendants in~~ the ~~suit~~SEC ~~for~~may ~~costs~~be ~~allegedly~~read ~~incurred~~ and tocopied beat ~~incurred by~~ the ~~plaintiff~~SEC’s ~~for the care of lead-poisoned~~Public ~~persons,~~Reference ~~education~~Room ~~programs~~at ~~for~~450 ~~children~~Fifth ~~injured~~Street, byN.W., ~~exposure~~Washington ~~to lead and the abatement of lead hazards purportedly created by the defendants in the City of St~~D.C. ~~Louis~~20549. ~~The complaint alleges that the~~Further ~~defendants~~information ~~made~~is ~~material~~available ~~misrepresentations~~at ~~and~~1-800-SEC-0330. ~~intentional~~Reports ~~omissions~~are ofalso ~~material~~available ~~facts~~on to the SEC’s ~~City~~website ~~and/or~~at ~~its residents regarding the nature of lead and lead products, such as paint~~www. ~~The suit also seeks punitive damages~~sec. gov.

~~On November 1,~~Additional ~~2000 one hundred and seven individual cases, four of which were later dismissed, were filed in the Circuit Court of the City of St. Louis, Missouri, that list Doe~~information ~~Run~~related ~~among the defendants, alleging that the employees or ex-employees of Burlington Northern and Santa Fe Railway Co. (BNSF) who filed the cases were exposed~~ to ~~lead~~us ~~from~~is ~~the~~available ~~hauling of lead concentrates by the railroad. An additional suit was filed~~ on ~~April 8,~~our ~~2002,~~website ~~nine~~at ~~additional cases were filed on May 14, 2002, and an additional case was filed on May 20, 2002 for a total of one hundred and fourteen cases~~www. ~~Harris v~~doerun. ~~Terminal Rail Road Assn~~com., etOur ~~al.~~website ~~was~~and information ~~filed~~contained inon ~~the~~our ~~Circuit~~website ~~Court~~are ofnot ~~the~~part ~~City~~ of ~~St.~~this ~~Louis, Missouri~~Annual ~~and~~Report ~~Doe Run was served~~ on ~~November 9, 2001. This is an individual action for damages by an~~Form ex10-~~employee~~K ~~of Terminal Rail Road alleging exposure to lead from hauling concentrates, similar to the one hundred~~ and ~~fourteen~~are ~~cases~~not ~~discussed~~incorporated ~~above.~~by ~~One~~reference ~~hundred and thirteen of the BNSF cases and the Harris case were settled on April 2, 2003~~herein. ~~The last remaining BNSF railway worker case was settled on August 22, 2003.~~

Doe RunItem is a defendant in lawsuits alleging certain damages from past mining operations in Ottawa County, Oklahoma1A. HerdRisk v. Asarco, Inc. et al., Reeves v. Asarco, Inc., et al., Carr v. Asarco, Inc., et al., Edens v. Asarco, Inc., et al., Giveswater v. Asarco, Inc., et al, Eby v. Asarco, Inc., et al., and Lee Anna Smith v. Asarco Inc., et al., each alleging injury to a child living in Ottawa County, Oklahoma as a result of lead contamination, were filed in the District Court of Ottawa County, Oklahoma on November 5, 2001, January 10, 2002, February 5, 2002, and May 30, 2002, June 5, 2002, June 24, 2002 and July 1, 2002 respectively. All of these cases were subsequently removed to the U.S. District Court for the Northern District of Oklahoma. The Giveswater case was dismissed without prejudice on October 28, 2002. Herd, Reeves, Carr, Edens, Eby and Lee Anna Smith were settled August 1, 2003. Two class action suits, Cole et al. v. Asarco, Inc., et al., filed on May 14, 2003, and Evans et al. v. Asarco Inc. et al., filed on February 9, 2004 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., and Rhoten, et al. v. Asarco, Inc., et al., were filed on July 8, 2003 and Hayworth, 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., and South, 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. 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. Factors

16The following risks and uncertainties, along with those described elsewhere in this report and in other documents filed with the SEC should be considered when evaluating our business and prospects. These risks are not intended to represent a complete list of the general or specific risks that may affect us. Additional risks and uncertainties not presently known to us or that are considered immaterial may also impair our business operations.

~~Taracorp~~Risks ~~Industries, Inc.~~Relating ~~(Taracorp) v. Fabricated Products, Inc., filed on March 21, 2000, in the Circuit Court of the City of St. Louis, Missouri. The suit alleges that FPI sold impure lead~~ to the plaintiff, who used the lead to manufacture a product commercially used in radiation shielding aprons. A judgment based on breach of implied warranty was entered against FPI in the amount of $4.3 million dollars on January 13, 2003. FPI and Taracorp reached a settlement of this judgment in February 2004. Company

OnOUR ~~February 25,~~SUBSTANTIAL ~~2003~~DEBT, ~~Straussner~~EQUITY v.AND ~~Union~~ENVIRONMENTAL ~~Carbide~~OBLIGATIONS ~~Corporation,~~MAY etPLACE ~~al.,~~LIMITS ~~was filed in the Circuit Court of Madison County, Illinois~~ON ~~against~~FUNDS 62AVAILABLE ~~defendants,~~FOR ~~including~~OTHER ~~Doe~~BUSINESS Run, alleging that a contractor was injured by exposure to asbestos while working at the defendants' locations, including the St. Joe Minerals Corporation premises. Doe Run was served on May 13, 2003. A similar suit, Priesmeyer v. Union Carbide, et al. was filed in the Circuit Court of Madison County, Illinois May 16, 2002, but Doe Run has not been properly served. Doe Run received notice of another similar suit, Hawrylik v. Allied Glove Corp., et al. in the Court of Common Pleas of Lawrence County, Pennsylvania; however, no actual complaint has yet been served. PURPOSES

AWe are highly leveraged and have ~~law~~significant ~~firm~~commitments infor ~~Lima,~~environmental ~~Peru~~matters ~~has~~and ~~initiated~~PAMA expenditures that require us to dedicate a ~~large~~substantial ~~number~~portion of ~~lawsuits~~cash inflow from operations to the ~~Lima~~payment ~~labor~~of ~~courts~~these ~~against~~obligations, ~~various~~which ~~mining~~will ~~companies~~reduce infunds ~~Peru~~available for other business purposes. ~~All~~See “Item ~~lawsuits~~8. ~~allege~~Financial ~~that~~Statements ~~workers~~and ~~have~~Supplementary ~~contracted~~Data—Note ~~lung disease~~8 ~~from~~and ~~working~~Note at19 ~~the~~to ~~mining~~Consolidated Financial ~~facilities~~Statements.” These ~~Currently,~~factors ~~Doe~~also ~~Run~~increase ~~Peru~~our ~~has~~vulnerability 44to general ~~cases~~adverse ~~pending~~conditions, ~~with~~limit ~~all~~our ~~claims~~flexibility ~~totaling~~in ~~approximately~~planning ~~$0.7 million.~~for ~~Only~~or ~~one~~reacting to ~~case~~changes ~~has~~in ~~resulted~~our inbusiness aand ~~judgment~~industry ofand limit our ability to obtain ~~approximately~~financing $8required to fund working capital and capital expenditures and for other general corporate purposes.~~0 thousand~~ ~~against~~An ~~Doe~~unfavorable ~~Run~~outcome to the lawsuits and tax assessments in Peru, ~~that~~as ~~was~~discussed ~~upheld~~in on“Item ~~appeal~~3. Legal Proceedings,” would further restrict our ability to meet our obligations when due.

~~Because most~~We ofhave ~~the~~$308.2 ~~above~~million ~~cases are either~~ in ~~the~~outstanding indebtedness ~~pleading~~on ora ~~discovery~~consolidated ~~stages,~~basis ~~the~~as ~~Company~~of isOctober ~~unable at this time~~31, ~~except as noted~~2005, toexcluding ~~estimate~~ the effects ~~expected~~of ~~outcome~~Financial ~~and~~Accounting ~~the~~Standard ~~final costs of these actions~~No. ~~Therefore~~15, ~~there~~Accounting ~~can~~by beDebtors ~~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~~Creditors ~~and~~for ~~liquidity~~Troubled ~~of Doe Run. The Company has and will continue to vigorously defend itself against these claims.~~ Debt

Centromin retained all existing litigation involving La Oroya at the time of the acquisition. Doe Run Peru is involved in various claims and lawsuits incidental to the ordinary course of its business that are not expected to have a material adverse effect on the business, financial condition and results of operations of Doe Run Peru. 12

Restructurings (Statement No. 15). See “Item 48. ~~Submission~~Financial Statements and Supplementary Data—Note 8 to Consolidated Financial Statements.” Doe Run has 11.75% secured notes outstanding with a face amount of ~~Matters~~$219.0 million due November 1, 2008. Subsequent to October 15, 2005, Doe Run no longer has the option to pay interest on the 11.75% notes by a ~~Vote~~3% cash payment with the remainder of ~~Security~~interest ~~Holders~~ paid in kind by the issuance of additional notes, as discussed in “Item 8. Financial Statements and Supplementary Data—Note 8 to Consolidated Financial Statements.” The additional cash required to service the 11.75% notes will further reduce our ability to meet our obligations when due.

OnDoe ~~October 29,~~Run’s revolving ~~2002~~credit facility, Doe Run' Peru’s ~~stockholder~~revolving ~~elected~~credit ~~Ira~~facility, L.a ~~Rennert~~term note with Renco due June 16, 2006 and ~~Dennis~~the Aindenture governing the 11.75% ~~Sadlowski,~~notes contain ~~Esq~~numerous covenants and restrictions. toThey ~~Doe~~include ~~Run's~~certain ~~Board~~requirements with ofrespect ~~Directors~~to net worth, ~~approved~~working ~~the~~capital, ~~amendment~~earnings ofbefore interest, taxes, ~~Doe~~depreciation, ~~Run's~~depletion ~~Certificate~~and ofamortization ~~Incorporation~~(EBITDA) and ~~approved~~debt ~~the~~to ~~adoption~~earnings ofratios. These ~~amended~~agreements ~~and~~also ~~restated~~place ~~by-laws~~limitations ofon ~~Doe~~capital ~~Run.~~expenditures, dividend payments and other outside borrowings.

OnIn addition, each holder of the Company’s 11.75% notes due 2008 issued ~~January 13~~under the indenture received a proportionate share of warrants that at any time on or after October 29, ~~2003~~2005 and on or prior to October 29, ~~Doe~~2012 ~~Run's~~shall ~~stockholder~~have ~~elected~~the right, ~~Thomas~~upon ~~Krasner~~majority vote, to ~~Doe~~exercise ~~Run's~~the ~~Board~~warrants. The exercise of ~~Directors.~~these warrants could further reduce our ability to meet our obligations when due.

WE MAY ~~Part II~~ NOT BE ABLE TO CONTINUE AS A GOING CONCERN

Doe Run Peru has ~~Item~~significant 5.capital ~~Market~~requirements ~~for~~under ~~Registrant'~~environmental commitments, which, if not met, could result in defaults of the Company’s ~~Common~~credit ~~Equity~~agreements; has substantial contingencies related to tax; and ~~Related~~has ~~Stockholder~~significant ~~Matters~~ debt service obligations that raise substantial doubt about the Company’s ability to continue as a going concern. Our auditors issued unqualified opinions on the 2005 audited consolidated financial statements of the Company and the 2005 audited financial statements 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.

~~All~~Our ofability ~~Doe~~to ~~Run's~~continue as ~~issued~~a ~~and~~going ~~outstanding~~concern ~~1,000~~will ~~shares~~depend ofupon ~~common~~our ~~stock,~~ability ~~$.10~~to ~~par~~meet ~~value,~~our ~~are~~obligations ~~owned~~and ultimately byto asustain ~~single~~profitable ~~stockholder,~~operations. DRManagement ~~Acquisition~~has ~~Corp.~~developed ~~(DRAC),~~ a ~~wholly~~plan ~~owned~~that ~~subsidiary~~includes ofother ~~Renco.~~revenue ~~There~~enhancements isand noan ~~established~~extension, ~~public~~for ~~trading~~which ~~market~~we ~~for~~have applied, ~~these~~to ~~shares.~~complete ~~Renco~~the isconstruction ~~owned~~of bythe ~~trusts~~sulfuric ~~established~~acid plant contemplated by Mrthe original PAMA. ~~Ira~~ ~~Leon~~See ~~Rennert,~~the ~~Renco's~~discussion ~~Chairman~~in ~~and~~“Item ~~Chief~~7. ~~Executive~~Management’s Discussion ~~Officer,~~and ~~for~~Analysis ~~himself~~of Financial Condition and ~~members~~Results of ~~his~~Operations” ~~family~~for a description of our plans. AsIf awe ~~result~~are ofunsuccessful ~~such~~in ~~ownership~~accomplishing any of these tasks, Mrour ability to continue to operate as a going concern could be in doubt. ~~Rennert~~ Concern ~~controls~~about ~~Doe~~our ~~Run~~ability to continue as a going concern may place additional constraints on operations and ~~its~~make ~~subsidiaries,~~it ~~subject~~more difficult for us to meet our obligations or adversely affect the ~~provisions~~terms of ~~the~~any ~~Investors~~alternative ~~Rights~~funding ~~Agreement discussed~~we ~~below~~may require.

~~Pursuant~~EXISTING toOR ~~the~~NEW ~~Restructuring,~~LITIGATION ~~Doe~~MAY ~~Run~~HAVE ~~issued~~AN ~~the~~ADVERSE ~~Warrants~~IMPACT toON 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 Old Notes who received the Notes in the Restructuring. The Warrants expire on October 29, US

17Doe Run is currently engaged in the defense of numerous personal injury claims and class actions regarding damages allegedly caused by exposure to lead and other metals from past and present mining and smelting operations in Missouri and past mining operations in Oklahoma. Doe Run is also engaged in the defense of a lawsuit by a railroad regarding damages allegedly caused by exposures to lead associated with the rail transportation of lead concentrates.

~~2012~~Doe ~~and~~Run ~~are~~Peru ~~exercisable~~is atcurrently ~~any~~engaged ~~time~~in ~~after November 1, 2008. During~~ the ~~period~~defense ~~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~~numerous ~~warrants~~industrial ~~and any outstanding shares issued upon the exercise thereof at a price equal to the fair market value of the~~disease ~~warrants,~~claims ~~as determined by a third party appraisal (the Put Feature). Doe Run~~ and ~~Renco~~claims ~~each~~for ~~have~~benefits ~~the right to call all, but not less than all, of the warrants~~ and ~~any~~is ~~outstanding~~also ~~shares~~engaged ~~issued upon their exercise, at any time after the borrowings under a new credit facility (See discussion~~ in ~~Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations—Restructuring and Long Term Debt") are repaid and prior to~~ the ~~expiration~~defense of ~~the~~a ~~warrants, except that, if exercised by Doe Run~~lawsuit ~~within~~regarding ~~48 months~~alleged ofimpacts ~~the~~on ~~Restructuring,~~ the ~~Notes~~Mantaro ~~issued~~River infrom ~~the Restructuring must be redeemed by~~ Doe Run atPeru ~~the applicable redemption prices~~operations. 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. See Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Restructuring and Long Term Debt".

~~Pursuant~~While ~~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~~Peru ofare ~~Directors~~vigorously ~~could~~defending ~~have~~these ~~significant influence over the operations of Doe Run's business. The Majority Warrantholders may~~lawsuits, ~~upon~~there ~~the~~can occurrence of a major default, as defined in such agreement (which includes a payment default under the Term Note), appoint a 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. 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~~no ~~any~~assurance ofthat ~~the~~final ~~following~~judgments ~~actions~~in ifsome ~~approved~~or ~~by the Special Director: (i) sell~~ all of ~~its~~these ~~capital~~lawsuits ~~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~~ orsimilar ~~any~~new oflawsuits ~~its~~will ~~subsidiaries~~not ~~and~~occur ~~apply~~that the proceeds of such sale to cure any payment default with respect to the Exchange Notes. The Independent Director and the Special Director, if elected to Doe Run's Board of Directors by the Majority Warrantholders, could have a ~~significant~~material ~~impact~~adverse impact on the ~~operation~~results of ~~Doe~~operations, ~~Run's~~financial ~~business~~condition asand ~~well~~liquidity asof ~~its strategic direction. 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~~ ofDoe ~~indebtedness.~~Run Peru.

~~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.~~ 13

LIMITS ON ~~Item~~CASH 6.FLOW ~~Selected~~FROM ~~Financial~~DOE ~~Data~~ RUN PERU MAY HAVE AN ADVERSE AFFECT ON DOE RUN’S LIQUIDITY

Covenants governing the Doe Run Peru revolving credit facility place strict limitations on the ability of Doe Run ~~SELECTED~~Peru ~~HISTORICAL~~to ~~CONSOLIDATED~~pay ~~FINANCIAL~~dividends, ~~DATA~~ fees and other distributions to Doe Run (based upon limitations that make those payments contingent upon the achievement of specific financial performance targets 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 for the annual administration fee. Any amount of the $4.0 million annual administration fee not paid by Doe Run Peru in any given year can be accumulated and carried forward to be paid in a subsequent year. Since July 2004 there has been no administration fees charged to Doe Run Peru. The payments made to Doe Run are for prior years’ accruals. Doe Run Peru is allowed under this covenant to reimburse Doe Run 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.

~~The following tables set forth historical consolidated financial data of The Doe Run Resources Corporation and subsidiaries for the five fiscal years ended~~BASE ~~October 31,~~METAL ~~2003~~PRICES, ~~which~~TREATMENT ~~have~~CHARGES ~~been~~AND ~~derived~~PENALTIES ~~from~~MAY ~~the~~ADVERSELY 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 FLUCTUATE

18Base metal prices, treatment charges and penalties that may be charged to customers fluctuate and are affected by numerous factors beyond our 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 us to predict and could have a material adverse effect on our results of operations, financial condition and liquidity.

~~Company's~~WE MAY ~~audited~~NOT ~~financial~~BE ~~statements~~ABLE ~~and~~TO ~~the~~FIND ~~accompanying~~AND ~~notes~~DEVELOP ~~included~~NEW ~~elsewhere~~MINERAL ~~in this document.~~ DEPOSITS

		Year Ended October 31,
		1999			2000			2001			2002			2003
		(dollars in thousands)
Statement of Operations Data:
	Net sales	$	800,274		$	815,042		$	737,482		$	663,789		$	684,615
	Cost of sales		686,027			723,178			665,279			614,563			643,893
	Depletion, depreciation and amortization		31,400			30,520			30,461			30,847			30,407
	Selling, general and administrative expenses		30,842			32,142			29,726			28,069			27,276
	Exploration expense		3,919			4,337			1,602			1,072			1,078
	Losses from impairment and disposal of long-lived assets		426			170			996			10,606			1,409
	Unrealized (gain) loss on derivative financial instruments		—			—			(1,764	)		(1,408	)		7,220
	Operating income (loss)		47,660			24,695			11,182			(19,960	)		(26,668	)
	Interest expense		59,417			61,595			59,992			55,337			13,270
	Interest income		14,755			14,433			14,870			12,276			29
	Loss on retirement/restructure of long term debt		—			—			(159	)		(7,439	)		(550	)
	Other income (expense)		(920	)		1,105			(680	)		(439	)		(499	)
	Income (loss) before income tax expense and cumulative change in accounting principle		2,078			(21,362	)		(34,779	)		(70,899	)		(40,958	)
	Income tax expense		3,488			1,753			8,226			—			—
	Loss before cumulative change in accounting principle		(1,410	)		(23,115	)		(43,005	)		(70,899	)		(40,958	)
	Cumulative effect of change in accounting principle net of income tax benefit		—			—			(3,774	)		—			(3,940	)
Net loss		$	(1,410	)	$	(23,115	)	$	(46,779	)	$	(70,899	)	$	(44,898	)

Mineral exploration is highly speculative in nature, involves many risks and frequently is nonproductive. As a result, our current mineral exploration efforts may not 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. Our ability to increase our production longevity of concentrate feeds is dependent on the successful development of new ore bodies and/or expansion of existing mining operations. Our exploration programs may not yield new reserves to expand and replace existing reserves that are being depleted by current production. If we deplete our reserves, we may not be able to obtain adequate supplies of concentrate feeds in the open market at economically acceptable terms.

		As of October 31,
		1999		2000			2001			2002			2003
		(dollars in thousands)
Balance Sheet Data:
	Cash	$	9,886	$	8,295		$	6,263		$	7,018		$	16,794
	Working capital		130,083		102,953			33,027			74,449			(20,328	)
	Property, plant and equipment, net		269,042		275,514			264,300			249,667			230,367
	Total assets		664,717		664,945			603,115			450,196			426,527
	Total debt (including current portion)		485,868		513,510			495,981			402,219			408,696
	Redeemable preferred stock		—		—			—			20,000			22,514
	Shareholder's equity (deficit)		16,621		(6,914	)		(65,801	)		(147,171	)		(209,066	)

INTEREST RATES MAY ADVERSELY INCREASE

19We are subject to interest rate risk on variable interest rate obligations. The Doe Run revolving credit facility bears interest at either the prime rate plus 0.75% per annum or at LIBOR plus 3.0%. 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. Because of our current limited cash flow, we may not be able to service a material increase in interest rates. If we default on our debt obligations, the lenders will be entitled to a number of remedies, including accelerating all of the outstanding indebtedness.

~~Item~~OUR 7.COMPLIANCE ~~Management's~~WITH ~~Discussion~~THE REQUIREMENTS ~~and~~OF ~~Analysis~~SECTION of404 ~~Financial~~OF ~~Condition~~THE ~~and~~SARBANES-OXLEY ~~Results~~ACT ofWILL ~~Operations~~ RESULT IN SIGNIFICANT COSTS

~~The~~We ~~following~~are ~~discussion~~required ~~and~~to ~~analysis~~comply ~~should be read in conjunction~~ with the ~~consolidated~~provisions ~~financial~~of Section ~~statements~~404 of the ~~Company~~Sarbanes-Oxley ~~and~~Act ~~the~~of ~~notes~~2002 ~~thereto,~~by ~~and~~October ~~other financial~~31, ~~information included herein~~2007.

~~Restructuring~~Section 404 requires that we document and ~~Long-Term~~test ~~Debt~~ our internal controls over financial reporting and issue management’s assessment of those controls. Section 404 also requires that our independent registered public accounting firm opine upon our internal controls and management’s assessment of those controls. We are currently evaluating our existing controls using the framework established by the Committee of Sponsoring Organizations of the Treadway Commission. During the course of our evaluation, we may identify areas requiring improvement, and we may have to change processes and enhance controls to address identified issues.

On October 29, 2002, Doe Run consummated the Restructuring, pursuant to the terms of its Amended and Restated Exchange Offer, Consent Solicitation and Solicitation of Acceptances (the Exchange Offer). Under the Exchange Offer, debt holders exchanged Old Notes with a 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 below. In addition to the reduction of principal, the Notes provide two other important features that improve Doe Run's liquidity. The first is that the principal maturity is extended to November 1, 2008. The second is that the Notes have a pay in kind feature 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. 14

~~After giving~~We ~~effect~~believe tothe out-of-pocket costs of complying with the ~~Exchange~~requirements ~~Offer,~~of ~~Doe~~Section ~~Run~~404 ~~had~~of ~~outstanding~~the Sarbanes-Oxley Act will be approximately $101.2 5 million. ~~aggregate~~We ~~principal~~also believe management will need to spend a significant amount of ~~its~~time ~~Old~~focusing ~~Notes,~~on ~~with~~our ~~maturities~~compliance ofefforts ~~$2.7 million~~rather ~~paid~~than ~~in March 2003,~~on ~~which~~our ~~retired~~day-to-day operations until the ~~Floating~~date ~~Interest~~we ~~Rate~~are ~~Senior~~compliant ~~Notes,~~with ~~and~~Section $7404.~~5 million~~ inIf ~~March 2005~~the ontime ~~the~~and costs ~~11.25%~~associated ~~Senior~~with ~~Notes~~our ~~and~~compliance ~~the~~exceed ~~11.25%~~our ~~Senior~~current ~~Secured~~expectations, ~~Notes.~~our productivity and profitability could decrease.

InWe cannot be certain that we will be able to ~~connection~~successfully ~~with~~complete the ~~Exchange~~assessment ~~Offer,~~process ~~each~~required ~~holder~~by ofSection ~~Old~~404 ~~Notes~~on ~~who~~a timely ~~received~~basis ~~Notes~~or ~~pursuant~~that we or our independent registered public accounting firm will not identify material weaknesses in our internal controls over financial reporting. If we fail to ~~Doe~~comply ~~Run's~~with ~~restructuring~~the ~~received~~requirements aof ~~pro~~Section ~~rata~~404, ~~share~~or if we or our independent registered public accounting firm identifies any material weaknesses, the accuracy and timeliness of the ~~Warrants~~filing ~~exercisable~~of ~~for~~our annual and ~~approximately~~quarterly ~~39%~~reports may be negatively affected and could cause investors to lose confidence in our reported financial information. In addition, a material weakness in the ~~aggregate,~~effectiveness of ~~Doe~~our ~~Run's~~internal ~~common~~controls ~~stock.~~over ~~See~~financial ~~description~~reporting could ofresult in fraud, the ~~Warrants~~loss inof ~~Item~~customers, 5or adversely affect our ability to obtain financing. ~~"Market~~Remediating ~~for~~any ~~Registrant's~~such ~~Common~~material ~~Equity~~weakness may require additional management attention and ~~Related~~increased ~~Stockholder~~compliance ~~Matters"~~costs.

~~In conjunction~~Risks ~~with~~Relating ~~the Exchange Offer, Doe Run entered into a credit facility with institutional investors pursuant~~ to which it borrowed $15.5 million, at a discount of $.5 million, under a three-year term note (the Term Note) and it received $20.0 million from the issuance of redeemable preferred stock to Renco. The proceeds from these transactions were used to pay down the balance on its U.S. revolving credit facility (the Doe Run ~~Revolving Credit Facility), to pay~~’s ~~certain transaction fees and to pay interest and penalties due on the outstanding notes that were not exchanged. Renco purchased the Term Note March 21, 2003.~~ Business

~~The~~MODIFIED ~~redeemable~~OR ~~preferred~~NEW ~~stock~~GOVERNMENTAL ~~accrues~~LEGISLATION ~~dividends~~OR atENVIRONMENTAL aREGULATIONS ~~rate~~MAY ofHAVE ~~12.5% annually, which are payable only in kind as long as the Term Note or Warrants are outstanding. The redeemable~~AN ~~preferred~~ADVERSE ~~stock~~IMPACT ~~has~~ON anDOE ~~aggregate liquidation value of $20.0 million, plus unpaid dividends of $2.5 million at October 31, 2003.~~ RUN

~~On October 29,~~Doe ~~2002~~Run is subject to numerous federal, state inand ~~conjunction~~local ~~with~~environmental ~~the~~laws ~~Exchange~~and ~~Offer~~regulations governing, ~~Doe~~among ~~Run~~other things, ~~entered~~air ~~into~~emissions, anwaste ~~Amended~~water ~~and~~discharge, ~~Restated~~solid ~~Loan~~ and ~~Security~~hazardous ~~Agreement~~waste treatment, ~~governing~~storage ~~the~~and ~~Doe~~disposal, ~~Run~~and ~~Revolving~~remediation ~~Credit Facility.~~of ~~Similar~~releases toof ~~the~~hazardous ~~previous~~substances. Environmental ~~facility,~~laws ~~this~~and ~~credit~~regulations ~~facility~~may ~~provides~~become ~~for~~more ~~advances~~stringent byin the ~~lenders~~future, which tocould aincrease ~~maximum~~costs of ~~$75~~compliance.~~0 million~~ ~~less~~Insurance ~~outstanding~~against ~~letters~~environmental ofrisks (including ~~credit,~~potential ~~based~~pollution onor ~~specific percentages~~other hazards as a result of ~~eligible~~disposal ~~receivables~~of waste ~~and~~products ~~inventories.~~from ~~The~~mining, ~~new~~milling ~~agreement~~and ~~waived~~smelting) ~~existing~~is ~~defaults~~not ~~resulting~~generally ~~from~~available to Doe Run's ~~failure~~or toother ~~maintain~~companies ~~consolidated~~in ~~net~~the ~~worth~~industry. ~~and~~Should ~~EBITDA~~Doe ~~for~~Run ~~U.S.~~be ~~operations,~~unable asto fund ~~required~~fully by the ~~agreements~~cost ~~governing~~of ~~the~~compliance ~~previous~~or ~~revolving~~of ~~credit~~remediating ~~facility.~~an ~~The~~environmental issue, Doe Run may ~~Revolving~~be ~~Credit~~required ~~Facility~~to ~~has~~suspend aoperations ~~three-year~~or ~~term~~enter ~~and~~into ~~may~~interim becompliance ~~renewed~~measures requiring ~~annually~~additional ~~thereafter~~expenditures.

~~Also on October 29~~Federal, ~~2002,~~state ~~Renco~~and ~~entered~~local ~~into~~authorities aalso ~~Junior~~regulate ~~Participation~~a ~~Agreement~~variety of ~~with~~matters, ~~the~~including, ~~Doe~~but ~~Run~~not ~~Revolving~~limited ~~Credit Facility lenders. Pursuant~~ to, ~~this agreement~~health, ~~advances~~safety inand ~~excess~~permitting ofin ~~the~~addition ~~amounts~~to ~~otherwise~~the ~~available~~environmental ~~under~~matters ~~the~~discussed ~~Doe~~above. ~~Run~~New ~~Revolving~~legislation ~~Credit~~and regulations ~~Facility~~may ~~(Supplemental~~require ~~Loans)~~Doe upRun to anmake ~~aggregate~~material ~~amount~~changes ofto ~~$15.0 million~~its ~~will~~operations, resulting bein ~~made~~significant toincreases ~~Doe~~in ~~Run,~~costs ~~when~~that ~~Doe~~are ~~Run's~~not ~~availability is~~within ~~less~~in ~~than~~our current budget.

20DOE RUN MAY BE MATERIALLY IMPACTED BY ADVERSE CONDITIONS RELATED TO THE NATURE OF MINING

$2The 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.~~5 million~~ Such risks ~~for~~could 5result ~~consecutive~~in ~~days~~damage to, or destruction of, mineral properties or producing facilities, personal injury, environmental damage, delays in mining, monetary losses and ~~the~~possible legal liability. Although Doe Run ~~Revolving~~currently ~~Credit~~maintains insurance ~~Facility~~within ~~lenders~~ranges ~~have~~of ~~received~~coverage ~~cash~~consistent ~~from~~with ~~Renco~~industry inpractice, ~~the~~no assurance ~~amount~~can ofbe ~~the~~given ~~Supplemental~~that ~~Loans~~such insurance will continue to be available at economically feasible premiums. NoAlthough ~~loans~~Doe ~~had~~Run’s ~~been~~work ~~made~~force ~~under~~is ~~this~~not ~~agreement~~significantly asunionized, ofthere ~~the~~can ~~date~~be ~~hereof.~~no assurance that Doe Run’s workforce will not become significantly unionized and experience labor disputes in the future.

~~On September 12,~~A ~~2002,~~PROTRACTED ~~Doe~~INTERRUPTION ~~Run~~IN ~~tendered~~THE ~~the~~AVAILABILITY ~~$125.0 million~~OF ~~that it had on deposit with a foreign bank (the Special Term Deposit) in payment of Doe Run Peru's outstanding~~RAW ~~$125.0~~MATERIALS ~~loan~~COULD ~~from~~ADVERSELY aAFFECT ~~foreign~~DOE bank. Simultaneously, Doe Run Peru issued a $139.1 million non-interest bearing subordinated promissory note to Doe Run (the Intercompany Note) for the principal of $125.0 million plus accrued interest of $14.1 million. Obligations under the Intercompany Note are subordinate to Doe Run Peru's obligations under the Doe Run Peru's revolving credit facility, discussed below. RUN

~~On September 25, 2002,~~ Doe Run ~~Peru~~utilizes ~~entered~~various ~~into~~raw anmaterials, ~~amended~~principally metallurgical coke, chemicals and ~~restated~~reagents, ~~revolving~~which ~~credit~~are ~~facility~~secured ~~with~~from aexternal sources, ~~Peruvian~~primarily ~~bank~~on (the ~~Doe~~basis ~~Run~~of ~~Peru~~competitive ~~Revolving Credit Facility)~~bids. ~~This~~Doe ~~facility provides~~Run ~~for~~recycles ~~borrowing up to~~ a ~~maximum amount~~ variety of ~~$40.0 million~~lead-bearing ~~based~~materials, onprimarily aspent ~~borrowing~~batteries, ~~base~~which ~~consisting~~it ofpurchases ~~eligible~~or tolls ~~accounts~~for ~~receivable and inventories~~customers. The ~~$40.0 million~~chemistry ~~maximum~~and ~~includes~~composition ~~a $5.0 million letter~~ of ~~credit~~feed ~~sub-facility.~~materials ~~Under~~can ~~the~~have ~~provisions~~a significant ofimpact ~~the amended agreement, lending rates~~ on ~~certain~~the ~~receivables~~cost and ~~inventories~~operating ~~were~~performance ~~improved~~of ~~compared to~~ the ~~previous~~ ~~revolving credit facility~~recycling operation. The

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 above 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 holder of the Term Note has a second priority security interest in the accounts receivable and inventory pledged under the Doe Run Revolving Credit Facility and a first priority security interest in the remainder of the assets of the Company's U.S. operations, except for certain assets that secure the remaining 11.25% Senior Secured Notes due 2005, including the Intercompany Note and the equity interest in Doe Run Peru. The 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. 15

~~On March 21,~~availability ~~2003 Renco and the Term Note lenders entered into an Assignment and Acceptance Agreement whereby Renco purchased all~~ of ~~the~~raw ~~rights~~materials ofcould ~~the~~be ~~agent~~affected ~~and~~by ~~lenders under the~~natural ~~Term Note. Accordingly~~disasters, ~~Renco~~third ~~became~~party ~~the~~shutdowns ~~agent~~or ~~and~~other ~~lender~~factors ~~under~~beyond ~~the~~Doe ~~Term~~Run’s ~~Note~~control. ~~with the identical rights to payment of interest, principal and fees and to the same collateral as had the previous~~Any ~~lenders.~~protracted ~~Furthermore,~~interruption ~~Renco,~~ in ~~its capacity as agent and lender under~~ the ~~credit~~availability ~~facility~~of ~~waived~~any ~~certain~~raw ~~existing~~materials ~~and~~could ~~impending~~cause ~~defaults, including, among other things, Doe Run's failure to provide~~a ~~the~~decrease ~~lender~~in ~~with~~productivity ~~certain reports~~ and ~~failure to comply with a financial covenant~~profitability.

~~Effective~~A ~~March 27,~~DECREASE ~~2003~~IN ~~the~~THE ~~Company~~WORLD’S ~~entered~~RELIANCE ~~into~~ON anLEAD-ACID ~~amendment~~BATTERIES toMAY ~~the~~REDUCE ~~loan~~DEMAND ~~agreement governing the Doe Run Revolving Credit Facility, which reduced the level of consolidated net~~FOR ~~worth~~DOE ~~that~~RUN’S ~~the~~LEAD Company is required to maintain. Pursuant to the amendment, the lenders waived an event of default resulting from the failure of Doe Run to maintain a financial covenant and an event of default resulting from the failure of Doe Run to deliver timely financial reports. PRODUCTION

~~On October 29, 2002, pursuant to~~ Doe Run's ~~Restructuring,~~sells ~~Doe~~a ~~Run~~significant ~~entered~~portion ~~into~~of its anlead ~~Asset~~production ~~Transfer~~for ~~Agreement~~use ~~with~~in ~~The~~lead-acid ~~Buick~~batteries. ~~Resource~~Of ~~Recycling~~its ~~Facility~~128 ~~LLC~~lead ~~("Buick"), a wholly owned~~metal ~~subsidiary of Doe Run. Pursuant to this agreement~~customers, Doe Run’s ~~transferred~~customers include the ~~assets~~four of ~~its~~the ~~recycling~~six ~~facility~~largest tolead-acid battery ~~Buick~~manufacturers onin ~~April 23,~~the ~~2003~~world. ~~consisting~~The obsolescence of, ~~all~~or ~~fixed~~any ~~assets~~curtailment ~~(including certain~~in ~~contractual rights) pertaining to~~ the ~~recycling~~worldwide ~~facility.~~use ~~Buick's~~of, ~~assets~~lead-acid ~~(other~~batteries ~~than~~could ~~those~~materially ~~pledged~~reduce todemand ~~the lenders under the~~ for Doe Run’s ~~Revolving~~lead ~~Credit~~production, ~~Facility)~~which ~~and~~could ~~the~~have ~~membership~~a ~~interest~~material inadverse ~~Buick~~effect ~~are pledged~~on ~~as collateral to secure Doe Run's obligations arising under~~ the business, ~~Term~~financial ~~Note~~condition and ~~under~~results ~~the~~of ~~indenture~~operations ~~governing~~due ~~the~~to ~~Notes.~~a reduction in productivity.

21Risks Relating to the Operation of Doe Run Peru’s Business

~~Recent~~A PROTRACTED ~~Events~~ INTERRUPTION IN THE AVAILABILITY OF RAW MATERIALS COULD ADVERSELY AFFECT DOE RUN PERU

~~During~~In ~~fiscal~~addition ~~2003, subsequent~~ to ~~the~~concentrate ~~waivers and amendments discussed above~~feeds, Doe Run ~~failed to meet certain financial and reporting covenant requirements~~ ~~contained~~Peru’s inoperations ~~the~~are ~~Doe~~heavily ~~Run~~dependent ~~Revolving~~on ~~Credit Facility and~~ the ~~Term~~supply ~~Note. On April 9, 2004 Doe Run entered into an amendment~~ of ~~its~~various ~~Doe~~raw ~~Run Revolving Credit Facility. The amendment waives existing~~materials ~~defaults~~ and ~~lowers~~services, ~~the~~including ~~net~~water, ~~worth~~hydroelectric ~~requirement.~~power, ~~The~~oxygen, ~~amendment became effective when waivers of default under the Term Note were received~~coke, asfluxes ~~discussed~~and petroleum ~~below~~products. ~~On April 30, 2004~~ Doe Run ~~entered into~~Peru anproduces ~~amendment~~its ofoxygen ~~the~~requirements ~~Term~~from ~~Note.~~an onsite ~~The~~oxygen ~~amendment~~plant ~~waives~~and ~~existing~~extracts ~~defaults~~limestone and ~~amends~~silica ~~various~~fluxes ~~covenant~~from ~~requirements,~~deposits close ~~among~~to ~~other~~its ~~things~~facility. The ~~amendment~~availability ~~also~~of ~~requires~~raw ~~that~~materials ~~certain~~could ~~information~~ be ~~delivered~~ toaffected ~~the lender at various times within 30 days after the amendment date, which dates have subsequently been extended. Based on current projections, assuming metal prices continuing~~by ~~higher~~natural ~~than those experienced during fiscal 2003~~disasters, ~~management~~third ~~expects~~party toshutdowns ~~remain~~or inother ~~compliance~~factors ~~under~~beyond ~~the~~ Doe Run ~~Revolving Credit Facility and the Term Note, as amended, through October 31, 2004.~~Peru’s Ascontrol. aAny ~~result~~protracted ofinterruption ~~these~~in ~~defaults,~~ the ~~balance~~availability ~~under the Term Note is reflected in current maturities~~ of ~~long-term~~raw ~~debt~~materials ~~in the Company's balance sheet at October 31, 2003. Because the~~could ~~agreement~~have ~~governing the Doe Run Revolving Credit Facility requires~~ a ~~lockbox~~material ~~for~~adverse ~~cash~~effect ~~receipts~~on ~~and~~the ~~contains a subjective acceleration clause~~business, ~~loans~~financial ~~are~~condition ~~classified~~and ~~as current in the balance sheet for~~results ~~all~~of ~~periods~~operations ~~presented.~~due ~~Prior periods balances in "Item 6. Selected Financial Data" have been reclassified~~ to ~~conform~~a toreduction ~~this~~of ~~presentation~~productivity.

OnWhile ~~May 7, 2004,~~ Doe Run ~~received~~Peru ahas ~~notice~~contracted offor ~~default~~most ~~from the trustee~~ of ~~the~~its ~~Notes~~concentrate ~~that~~requirements itfor is2006, and inrecent ~~default~~metal ofprice ~~the~~improvements ~~indenture~~and ~~requirements.~~other ~~The~~factors ~~notice~~have ~~gives~~improved ~~Doe Run 30 days~~the ~~from~~financial ~~the~~condition ~~date~~ of ~~receipt of~~ the ~~notice~~smelter’s totraditional ~~remedy~~suppliers, ~~such~~it ~~defaults~~remains bypossible that ~~filing~~the ~~its~~smelter ~~quarterly~~could ~~and~~experience ~~annual~~difficulties ~~reports~~obtaining ~~for~~economically ~~the~~suitable lead ~~2003~~and ~~fiscal~~zinc ~~year~~concentrate ~~with~~feed ~~the~~supply. ~~SEC~~Failure ~~and~~ to ~~provide~~secure aeconomically ~~written statement from the Company's~~suitable ~~independent~~concentrate ~~certified~~could ~~public accountants indicating whether any defaults~~ have ~~come~~a tomaterial ~~their~~adverse ~~attention.~~impact Ifon ~~the~~La ~~defaults~~Oroya’s ~~are~~performance ~~not~~and Doe ~~remedied~~Run ~~within~~Peru’s ~~30 days of receipt of the notice~~business, ~~the~~financial ~~trustee~~condition ~~may declare all unpaid principal~~ and ~~interest~~results ~~immediately~~of ~~payable~~operations. ~~Management intends to remedy the defaults in the timeframe required.~~

~~In fiscal 2003,~~ Doe Run Peru’s ~~failed~~La toOroya ~~meet certain financial and reporting covenant requirements contained in the Doe Run Peru Revolving Credit Facility. On February 16, 2004,~~smelting ~~Doe~~operations ~~Run~~depend ~~Peru~~on ~~entered into an amendment of~~ the ~~Doe~~availability ~~Run Peru Revolving Credit Facility. The amendment lowered the levels~~ of ~~net~~lead, ~~worth~~zinc ~~Doe~~and ~~Run~~copper ~~Peru~~concentrates ~~must comply with from the date of the amendment through~~as ~~September 30,~~raw ~~2004, among other things~~materials. ~~Based~~Significant onportions ~~current~~of ~~forecasted~~these ~~results,~~concentrates ~~assuming~~are ~~metal~~currently ~~prices higher than those experienced during fiscal 2003, management expects to remain in compliance~~secured ~~with~~from ~~all covenants relating to~~ the ~~Doe~~Peruvian ~~Run~~domestic ~~Peru Revolving Credit Facility for the foreseeable future~~market. ~~The~~If ~~amendment~~one ~~does not cure~~ or ~~waive~~more ~~defaults in existence before the date~~ of ~~the~~these ~~amendment.~~suppliers ~~The~~of ~~amendment~~concentrates ~~also~~ceases ~~limits~~or ~~payment~~suspends ~~of fees to Doe Run through September 30~~operations, ~~2004~~there tocan ~~$2.8 million.~~be Tono ~~the~~assurance ~~extent~~that Doe Run Peru's ~~net~~will ~~worth~~be ~~would~~able ~~fall~~ to asecure ~~level~~replacements ~~lower~~for ~~than~~these ~~the~~necessary ~~requirement~~raw atmaterials ~~the~~on ~~quarterly~~economically ~~reporting~~acceptable ~~dates~~terms, ~~the~~and ~~amendment~~accordingly, ~~permanently~~such ~~reduces~~a ~~the~~cessation ~~amount~~or suspension ~~available~~of ~~under~~activities ~~the~~of ~~Doe~~these ~~Run~~suppliers ~~Peru~~could ~~Revolving~~have ~~Credit~~a ~~Facility~~material byadverse effect on the ~~amount~~business, offinancial ~~the~~condition ~~difference~~and ~~between~~results ~~the~~of ~~required~~operations ~~and~~due ~~the~~to a ~~actual~~reduction ~~net~~in ~~worth~~productivity.

InNEW OR ~~response~~MODIFIED toENVIRONMENTAL aLEGISLATION ~~decreasing~~OR ~~domestic~~REGULATIONS ~~market~~MAY ~~for~~HAVE ~~lead,~~AN ~~the~~ADVERSE ~~Company~~IMPACT ~~indefinitely suspended operations at its Glover smelter in November, 2003. The Company will sell any concentrates on the~~ON ~~open~~DOE ~~market~~RUN ~~that are not required to maintain production at the Herculaneum smelter. The decision should improve the Company's net sales premiums at current market conditions.~~ PERU

OnDoe Run Peru is subject to numerous ~~December 26,~~environmental ~~2003,~~laws and regulations enacted in the ~~Peru~~last ~~tax~~15 ~~authority~~years in Peru, governing, ~~SUNAT~~among ~~notified~~other ~~Doe~~things, ~~Run~~air ~~Peru~~emissions, ofwaste anwater ~~income~~discharge, ~~tax~~solid ~~assessment~~and hazardous ~~for~~waste ~~the~~storage, ~~1998~~treatment ~~tax~~and ~~year.~~disposal, ~~The~~and ~~assessment~~remediation ~~primarily~~of ~~relates~~releases toof hazardous materials. Doe Run Peru's is also subject to certain Peruvian ~~income~~constitutional ~~tax~~provisions ~~treatment~~assuring ofeach person the ~~December 1997~~right ~~merger~~to ofa ~~Doe~~clean ~~Run~~and healthful ~~Peru~~environment. The current and ~~Metaloroya~~future ~~S.A.,~~application ~~which~~of ~~was~~these ~~purchased~~laws byand regulations related to Doe Run Peru inis ~~October 1997~~subject to certain agreements with the MEM. ~~Under~~Given the ~~assessment~~developing bynature ~~SUNAT~~of environmental law and enforcement policies in Peru, however, the ~~tax~~Peruvian ~~basis~~government ofcould in the future require compliance with additional environmental requirements that would adversely affect Doe Run Peru'’s ~~fixed~~business, ~~assets~~financial ~~acquired~~condition ~~would~~and ~~decrease~~results of operations. Further, ~~resulting~~the inPeruvian ~~lower~~government ~~tax~~or ~~depreciation~~other ~~expense~~interested ~~than~~persons ~~originally~~may ~~claimed~~seek ~~and~~changes in ~~additional~~the ~~income~~future ~~taxes~~to ~~due.~~the ~~Under~~terms and conditions of any of the ~~assessment,~~agreements made by Doe Run Peru with the ~~reduction~~MEM inthat may adversely affect Doe Run Peru’s business, ~~depreciation~~financial ~~would~~conditions ~~result~~and inresults of operations.

22Mine Closure Law No. 28090 (Law) became effective as of October 15, 2005. The Law establishes the obligations and procedures that titleholders of mining activities must adhere to, including a financial guarantee for

additional taxes of approximately $6.6 million, plus penalties and interest of $9.6 million to date for the 1998 tax year. For tax years after 1998, the Company estimates that additional taxes of approximately $5.7 million would be due related to the decrease in the amount of depreciation originally claimed plus penalties and interest of approximately $20.0 million to date in the event SUNAT would prevail. Interest would also be assessed on the prepayments of taxes that were not made as a result of the depreciation deductions taken by Doe Run Peru in the years affected, estimated at approximately $5.8 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 change discussed above, or approximately $3.5 million. 16

~~Management of~~environmental ~~the~~issues. ~~Company believes that~~ Doe Run Peru ~~has~~must ~~followed~~submit a mine closure plan to the ~~applicable~~Ministry ~~Peruvian~~of ~~statutes~~Energy and ~~intends~~Mines by August 17, 2006. The mine closure plan must include a description of the remediation measures to ~~pursue~~be ~~all~~done, ~~available~~along ~~administrative~~with their cost and ~~judicial~~timing, ~~appeals~~and the expected amount of the financial guarantee. Pursuant to the Tax Stabilization Agreement, Doe Run Peru is ~~not~~exempt ~~required~~from tonew ~~make~~obligations that ~~any~~could ~~payments~~result ~~pending~~in ~~the~~a ~~administrative~~reduction ~~appeal~~of ~~process~~its cash availability, such as the guarantee discussed above. IfTherefore, Doe Run Peru isconsiders ~~not~~that ~~successful~~the establishment inof the ~~administrative~~corresponding ~~appeals~~environmental ~~process~~guarantee ~~and~~would ~~were~~be in opposition to ~~appeal~~the provisions set forth in the ~~judicial~~Tax ~~system,~~Stabilization ~~some~~Agreement. There ~~type~~is ofa ~~financial~~risk ~~assurance~~that ~~would~~mining authorities could disagree with our position. There is also a risk that there may be ~~required~~future obligations when our tax stability agreement expires on December 31, 2006. Management feels that Doe Run Peru will comply with all the obligations.

If Doe Run Peru also is ~~not~~potentially ~~successful~~subject to ~~with~~claims ~~its~~for ~~administrative~~alleged ~~appeal~~personal ofinjury and property and other damages resulting from the ~~tax~~release ~~assessment~~of ~~discussed~~certain ~~above~~substances into the environment, to the ~~lender~~extent ~~can,~~such liabilities atwere ~~its~~not ~~discretion,~~retained ~~require~~and/or ~~that~~are ~~the~~not ~~amount~~satisfied ofby ~~the~~Centromin ~~assessment~~pursuant to ~~reduce~~the ~~net~~agreement ~~worth~~between asDoe ~~defined~~Run inand Centromin for the purchase of La Oroya. See the discussion in “Doe Run Peru ~~Revolving~~Operations—Environmental ~~Credit~~Matters” above ~~Facility~~for ~~amendment.~~more ~~Such~~details ~~reduction~~on ~~along~~the agreement. Compliance with ~~other~~environmental ~~factors~~laws and regulations, ~~including~~as ~~metal~~well ~~prices~~as personal injury and ~~results~~property ofand ~~operations,~~other damage claims, could ~~affect~~have a material adverse effect on Doe Run Peru'’s ~~ability~~business, tofinancial ~~comply~~condition and ~~with~~results ~~the~~of ~~net worth requirement~~operations.

Insurance ~~Liquidity~~ 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.

~~Low~~Doe ~~metal~~Run ~~prices~~Peru’s ~~and~~commitments ~~declining~~under ~~treatment~~its ~~charges~~PAMA ~~over~~are ~~the~~significant. ~~past~~Doe ~~five~~Run ~~years,~~Peru’s existing ~~coupled~~PAMA ~~with~~requires ~~the~~it ~~Company's~~to ~~substantial~~perform ~~debt~~projects ~~service~~during ~~requirements~~2006 ~~prior~~at toa ~~the Restructuring,~~cost ~~have~~of ~~severely~~$108.0 million. ~~impacted~~See the ~~Company's~~discussion ~~liquidity.~~of Asthe aPAMA ~~result,~~in ~~the~~“Doe ~~Company's~~Run ~~auditors~~Peru ~~have~~Operations—Environmental ~~issued~~Matters” ~~unqualified~~above ~~opinions~~and onalso ~~the~~in ~~2003~~“Item ~~audited~~7. ~~financial~~Management’s ~~statements~~Discussion and Analysis of ~~the~~Financial ~~Company~~Condition and Results of Operations—Overview—Doe Run Peru.” ~~that~~If ~~express~~the ~~doubt~~La ~~about~~Oroya smelter does not comply with the investment ~~Company's~~schedule ~~and~~of ~~Doe~~the ~~Run~~PAMA ~~Peru's~~or ~~ability~~does tonot ~~continue~~operate aswithin ~~going~~the ~~concerns~~current ~~due~~PAMA limits, toDoe ~~liquidity~~Run ~~and~~Peru ~~other~~could ~~issues~~be ~~related~~forced to ~~defaults~~cease ~~under~~operations ~~loan~~at ~~agreements,~~the ~~uncertainties~~La Oroya ~~related~~smelter. toNo ~~environmental~~assurance can ~~and~~be ~~litigation~~given ~~matters,~~that asimplementation ~~well~~of as the ~~Company's~~PAMA ~~recurring~~projects ~~losses~~is ~~that~~feasible ~~are~~or ~~discussed~~that intheir implementation ~~"Item~~will 8.achieve ~~Financial~~compliance ~~Statements~~with ~~and~~the ~~Supplementary~~applicable ~~Data—Note 2~~legal torequirements by the ~~Company's~~end ~~Consolidated~~of ~~Financial~~the ~~Statements"~~PAMA period. ~~Based~~Furthermore, ~~on current~~there ~~projections,~~can ~~assuming~~be ~~metal~~no ~~prices~~assurance ~~continuing~~that ~~higher~~the Peruvian ~~than~~government ~~those~~will ~~experienced~~not, in ~~fiscal~~the ~~2003~~future, ~~management~~require ~~expects~~compliance with additional environmental regulations that ~~Doe~~could ~~Run~~adversely ~~and~~affect Doe Run Peru’s ~~will~~business, financial ~~continue~~condition asand ~~going~~results ~~concerns~~of ~~through October 31, 2004~~operations.

~~The~~WORK ~~Company's~~STOPPAGES ~~primary~~AND ~~available~~STRIKES ~~sources~~FROM ofDOE ~~liquidity~~RUN ~~are~~PERU’S ~~cash~~UNIONIZED ~~provided~~WORKFORCE byMAY ~~operating activities and the two revolving credit facilities discussed above. In addition to the amount~~CAUSE ~~available~~OPERATIONAL under the Doe Run Revolving Credit Facility, Supplemental Loans up to an aggregate amount of $15.0 million will be made to Doe Run under the Doe Run Revolving Credit Facility when Doe Run's availability is less than $2.5 million for 5 consecutive days and the Revolving Credit Facility lenders have received cash from Renco in the amount of the Supplemental Loans. No Supplemental Loans have been received. At October 31, 2003, net unused availability under the Doe Run Revolving Credit Facility was $14.1 million. Net unused availability was $26.3 million under the Doe Run Revolving Credit Facility at October 31, 2002, primarily resulting from the pay down of the balance outstanding under the Doe Run Revolving Credit facility from the net proceeds of the Term Note and the issuance of preferred stock, less certain transactions costs. The decrease is due primarily to the effect of operating losses on cash flows and an increase in the amount due from Doe Run Peru in fiscal 2003. Net unused availability under the Doe Run Peru Revolving Credit Facility was $3.8 million and $0.2 million at October 31, 2003 and October 31, 2002, respectively. Doe Run Peru had cash balances of $16.8 million and $7.0 million at October 31, 2003 and 2002, respectively. The reason for the increase is a reduction of interest payments due to the pay down of the loan to a foreign bank with the Special Term Deposit discussed above in "Restructuring and Long Term Debt". DISRUPTIONS

23Approximately 90% 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. As a result, work stoppages and strikes may occur prior to the expiration of the current labor agreements or during negotiations for new labor agreements (including extensions of the existing labor agreements), and a work stoppage or strike may significantly restrict Doe Run Peru’s production levels.

~~While liquidity~~OPERATING ~~was~~RISKS ~~significantly~~RELATED ~~improved~~TO atTHE ~~the~~BUSINESS ~~Restructuring~~OF ~~date,~~SMELTING ~~Doe Run remains highly leveraged and market prices for lead, zinc and copper, as well as treatment charges earned on~~AND ~~the~~REFINING ~~processing~~MAY ofSUBJECT ~~concentrates~~DOE atRUN ~~Doe~~PERU ~~Run~~TO ~~Peru~~ENVIRONMENTAL, ~~remained~~PERSONAL ~~low~~INJURY ~~during~~AND ~~most of 2003. Significant recovery of metal prices began during the fourth quarter of 2003, and the improvement has continued into~~OTHER ~~fiscal~~SIMILAR 2004. As a result of the low metal prices over the past five years however, trade credit continues to be restricted. The deterioration of liquidity has adversely affected Doe Run's operating and financial results. As a result of extending accounts payable in order to conserve cash, procurement of materials, supplies and equipment has become more difficult and at times more costly. Suppliers have requested prepayments, discounts are being foregone, late charges are being incurred and in some cases Doe Run is not able to obtain normal trade credit or purchase from the low cost supplier. CLAIMS

~~If current~~The ~~price~~business ~~levels~~of ~~continue,~~smelting ~~Doe~~and ~~Run's~~refining ~~cash~~complex ~~flow~~concentrates generally ~~from operations should significantly improve along with liquidity. This improvement~~ is ~~expected~~subject into ~~the~~a ~~second~~number ~~quarter~~ of ~~2004,~~risks ~~once certain fixed price forward sales commitments are fulfilled~~ and ~~outstanding derivative contracts~~hazards, ~~discussed~~including ~~below~~environmental hazards, ~~expire~~industrial inaccidents ~~the~~and ~~first~~labor ~~quarter of 2004~~disputes. ~~Based~~Such onrisks ~~current~~could ~~projections,~~result ~~at price levels~~in ~~lower~~personal ~~than~~injury, ~~those~~environmental atdamage, ~~the~~delays ~~end~~in ofoperation, ~~the~~monetary ~~first~~losses ~~quarter~~and possible oflegal ~~2004,~~liability. ~~Doe~~Although ~~Run and~~ Doe Run Peru ~~expect~~maintains ~~adequate~~insurance ~~liquidity~~within ranges toof ~~continue~~coverage ~~operations~~consistent ~~through~~with ~~October 31~~industry practice, ~~2004.~~any ~~Availability~~claims ~~was~~that are ~~$17.7 million~~covered ~~under~~by ~~the~~our ~~Doe~~insurance ~~Run~~policies ~~Revolving~~may ~~Credit~~cause ~~Facility~~our ~~and~~premiums ~~$5.4 million~~to ~~under~~increase, ~~the~~and ~~Doe~~we may ~~Run~~not ~~Peru~~be ~~Revolving~~able ~~Credit~~to ~~Facility~~maintain atadequate ~~April 30, 2004.~~ insurance

The Company employs a commodity price risk management strategy using forward sales commitments, futures and commodity put and call option contracts to manage its exposure to fluctuations in the prices of lead, copper, zinc, silver, and gold. See discussion in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk". The Company's commodity hedging activity has been significantly reduced as a result of the cancellation of credit lines by a number of counterparties. As a result of the cancellation of credit, and the increase in the LME price for lead in the fourth quarter of 2003, the Company's liquidity was adversely affected by margins paid to brokers totaling $4.3 million at October 31, 2003 to cover mark to market losses on outstanding derivatives contracts. Further price increases may result in additional margin payments. 17

~~A significant~~coverage ~~portion~~levels ofin ~~La Oroya's feed supply is currently secured from~~ the ~~Peruvian~~future domestic market. The effects of low metals prices have caused some of Doe Run Peru's current suppliers to suffer financial distress. If one or more of the local producers were to significantly reduce or cease delivery of concentrates, there can be no assurance Doe Run Peru would be able to secure sufficient replacement feedstock at economically ~~acceptable terms. A significant interruption in feed supply could result in shutdown or a material reduction in the production of metals from La~~feasible ~~Oroya, which would likely have a significant adverse effect on Doe Run Peru's results of operations, financial condition and liquidity~~premiums. This in turn, would affect Doe Run Peru's ability to fulfill its obligations under its guarantee of the Notes and ability to pay contractual annual management fees to Doe Run, currently limited by the Doe Run Peru Revolving Credit Facility to $2.8 million. The recent metal price improvements and other factors have improved the financial condition of the smelter's traditional suppliers, which should improve the availability of economically suitable concentrates.

~~The Company's~~TAX ~~commitments~~MATTERS ~~under~~RESULTING ~~agreements~~FROM with regulatory agencies for environmental activities are significant. Spending requirements may change based on the activities required. See discussion of U.S. commitments in "Item 8. Financial Statements and Supplementary Data—Note 20 to the Company's Consolidated Financial Statements" and see a discussion of Peru requirements in "Capital Resources". OPERATIONS

Doe Run Peru has received assessments of income tax, including penalties and interest calculated as of October 31, 2005, for the tax years 1998 through 2001 and Value Added Tax (VAT) for the tax years 1999 through 2001 and for the period from January through July 2004, totaling $109.0 million and $43.5 million, respectively, as discussed in Note 13 to the Consolidated Financial ~~Position~~ Statements. In addition, the Company estimates that the effect of similar assessments for periods not yet assessed would be approximately $30.3 million and $20.2 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 $11.2 million for tax years 1998 through 2005.

Management ~~Accounting~~of ~~Treatment~~the Company ~~for~~believes ~~Restructuring~~ 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.

~~The~~Risks ~~Restructuring~~Relating ~~was~~to ~~accounted~~the ~~for in accordance with Statement of Financial Accounting Standard No. 15—Accounting by Debtors~~ Economic and ~~Creditors for~~Political ~~Troubled~~Situation ~~Debt~~in ~~Restructurings ("Statement~~ Peru

24POLITICAL AND ECONOMIC INSTABILITY MAY ADVERSELY AFFECT DOE RUN PERU

~~No. 15"). Under~~During ~~Statement~~the ~~No. 15,~~past a30 ~~debtor~~years, ~~may~~Peru ~~not~~has experienced ~~change~~political ~~the~~instability ~~carrying~~under ~~amount~~both ofcivilian ~~the~~and ~~payable~~military atgovernments. These ~~the~~governments ~~time~~have ofpursued ~~restructuring~~various ~~unless the total future cash payments~~policies, including ~~interest,~~frequent ~~specified~~intervention byin the ~~new~~economic ~~terms~~and ~~are~~social ~~less than the carrying amount of the payable at the time of restructuring~~structure. ~~Under~~Past ~~the~~governments ~~terms~~have imposed ofcontrols ~~the~~on ~~Notes~~prices, ~~total~~exchange ~~future payments are expected to be greater than the carrying amount of the Old Notes exchanged~~rates, ~~primarily~~local ~~due~~and toforeign ~~the~~investment ~~extended maturities~~ and international ~~increased~~trade; ~~interest~~restricted ~~rate, assuming~~ the ~~paid~~ability ~~in kind option~~ of ~~the~~companies ~~Notes~~to ~~will~~dismiss ~~be exercised. In accordance with~~employees; ~~Statement~~expropriated ~~No. 15~~private ~~Doe~~sector ~~Run~~assets; ~~recorded~~and ~~the~~prohibited ~~new notes on its balance sheet at a carrying amount equal to~~ the ~~carrying~~remittance ~~amount~~ of ~~the notes exchanged, plus unpaid accrued interest, reduced by deferred~~“profits” ~~issue costs related~~ to ~~the~~foreign ~~notes~~investors ~~exchanged~~ and ~~the~~payments ~~fair~~to ~~value~~foreign ~~of the warrants issued~~creditors. AsIn ~~a result~~1974, the ~~related carrying amount on Doe Run's balance sheet at October 31, 2002 of~~government ~~$325.6 million~~of ~~exceeded~~Peru expropriated the ~~$175.8 million~~assets ~~face amount by $149.8 million. The effect~~ of ~~this accounting is that~~ Doe Run ~~will~~Peru’s ~~recognize~~predecessor ~~substantially~~and ~~less interest expense related~~transferred them to ~~the Notes during their term than is reflected in the stated rate of interest~~Centromin, ~~because~~a ~~the~~government-owned ~~majority of the interest payments are reflected in the carrying amount of the Notes~~conglomerate.

~~The following~~Doe ~~table~~Run isPeru’s ~~provided~~financial tocondition ~~illustrate~~and ~~the~~results of ~~reduction~~operations incould ~~principal~~be ~~amount~~adversely ofaffected ~~debt achieved~~ by ~~the~~changes ~~Restructuring~~in ~~and~~economic ~~related~~or ~~transactions~~other policies ~~and~~of the ~~impact~~Peruvian ofgovernment, ~~Statement~~including ~~No. 15 on~~reversal of the ~~carrying~~trend ~~amounts~~toward privatization, ofor ~~debt~~other onpolitical ~~the~~or ~~Company's~~economic ~~balance~~developments ~~sheet:~~in Peru.

		October 31, 2002
Long-Term Debt (including current maturities)		Pro Forma Principal Amounts Before Restructuring(a)		Restructured Principal Amounts		Financial Statement Amounts
		(dollars in thousands)
Doe Run Revolving Credit Facility		$	40,500	$	8,202	$	8,202
Doe Run Peru Revolving Credit Facility			36,700		36,700		36,700
Term Note			—		15,500		15,500
Notes (b)			—		175,832		325,613
Old Notes
	Unsecured Senior Notes		200,000		5,750		5,750
	Floating Rate Senior Secured Notes		55,000		2,660		2,660
	Secured Senior Notes		50,000		1,750		1,683
Other			6,111		6,111		6,111
Total Long-Term Debt (including current maturities)		$	388,311	$	252,505	$	402,219

REINSTITUTION OF EXCHANGE CONTROLS COULD SIGNIFICANTLY REDUCE OUR PROFITABILITY AND RESTRICT OUR CASH FLOW

25During 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 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 significantly reduce our profitability and restrict our cash flow.

Changes in Long-Term Debt (including current maturities)		Year Ended October 31, 2002
		(dollars in thousands)
Revolving credit facilities
	Increase in borrowings, net (excluding Restructuring)	$	18,825
	Pay down of Doe Run Revolving Credit Facility at Restructuring		(32,298	)
Retirement of Doe Run Peru bank loan			(125,000	)
Reduction of face amount of notes at Restructuring			(119,008	)
Adjustment to reflect the Notes at carrying amount of Old Notes plus accrued interest less issue costs pursuant to Statement No. 15			151,617
Borrowing on Term Note			15,500
Imputed interest and other			(3,398	)
Reduction of Long-Term Debt (including current maturities)		$	(93,762	)

INCREASED INFLATION WITHOUT A CURRENCY DEVALUATION MAY ADVERSELY AFFECT DOE RUN PERU

~~Financial~~Peru ~~Position~~ 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

During 2003, net cash provided by operating activities was $19.5 million. Cash used by investing activities was $15.3 million, primarily for capital expenditures. Cash provided by financing activities was $5.5 million in 2003, which reflects proceeds from the revolving loan less payments on long-term debt. The Company made all scheduled principal and interest payments on its long-term debt balances in fiscal 2003. During 2003, interest on the Notes was paid at the 3% rate, and additional notes totaling approximately $20.0 million were issued. The Company's working capital fell $94.8 million in 2003 due primarily to the current classification of maturities of long-term debt due to the defaults on the loan covenants discussed in "Recent Events", a reduction of inventories and receivables, margin payments to brokers discussed in "Liquidity" and an increase in the current pension contribution liability to $15.2 million at October 31, 2003 from $2.8 million at October 31, 2002. The Company reduced concentrate inventories and supplies in Peru and work in process inventories in the U.S. in an effort to improve cash flows. Doe Run Peru's receivables decreased approximately $8.3 million, resulting from efforts to improve the documentation process on export sales in order to accelerate collections. 18

~~Results~~operations of ~~Operations~~ Doe Run Peru could be materially and adversely affected.

Risks ~~Fiscal~~Relating ~~2003 compared~~ to ~~Fiscal~~Control ~~2002~~ by Renco

~~The Company reported a net loss for 2003 and for the twelve months ended October 31, 2002 (2002), reflecting continuing low metal prices and treatment~~RENCO ~~charges.~~IS ~~The~~ABLE ~~Company's~~TO ~~U.S.~~EXERT ~~operations~~SIGNIFICANT ~~reported~~INFLUENCE aUPON ~~net~~THE loss of $34.1 million (excluding intercompany fees) for 2003 compared to $57.8 million in 2002. The improvement is due to an increase in gross margins of $7.9 million and a decrease in net interest expense and restructuring costs, partially offset by unrealized losses on derivative financial instruments. COMPANY

~~Doe Run~~We ~~Peru~~are ~~reported~~an aindirect ~~net~~subsidiary ~~loss~~of Renco, of ~~$11~~which Mr.~~1 million~~ inIra ~~2003~~Leon ~~versus~~Rennert ~~$13.1 million~~is inthe ~~2002~~controlling shareholder. ~~The~~As ~~decreased~~a ~~loss~~result inof ~~2003~~his indirect ownership of us, and his status as a director, Mr. Rennert is, ~~primarily~~and will ~~due~~continue to ~~lower~~be, ~~interest~~able ~~expense~~to ~~resulting~~influence ~~from the~~our ~~pay~~policies, ~~down~~including mergers, sales of assets and similar transactions. Pursuant to the ~~loan~~Investor ~~from~~Rights aAgreement, the ~~foreign~~Board ~~bank~~of ~~discussed~~Directors ~~above~~of inDoe ~~"Restructuring~~Run ~~and~~is ~~Long-Term~~comprised ~~Debt"~~of atthree ~~October 29~~individuals, ~~2002~~including the independent director as designated by the holders of the majority of the warrants, ~~and~~as ~~decreased~~described in “Item ~~losses~~5. onMarket ~~the~~for ~~impairment~~Registrant’s Common Equity, Related Stockholder Matters and ~~disposal~~Issuer Purchases of ~~long-lived~~Equity ~~assets~~Securities.” However, ~~partially~~Mr. ~~offset~~Rennert bywill ~~lower~~still ~~gross~~be ~~margins,~~able to ~~which~~exert ~~are~~significant ~~primarily~~influence over us as he effectively controls, pending exercise of the ~~result~~warrants, 100% of ~~lower~~the ~~treatment~~capital ~~charges~~stock ~~for~~of ~~concentrates~~Doe ~~processed~~Run.

26DOE RUN MAY HAVE OBLIGATIONS UNDER A CONTROLLED GROUP THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON US

~~The Company's~~Doe ~~results~~Run ~~for~~is ~~the~~a ~~year~~member ~~ended~~of ~~October 31~~a controlled group with other Renco-owned companies. Accordingly, ~~2003~~we ~~reflect~~are ~~modest~~jointly ~~increases~~and inseverally ~~the~~liable ~~market~~with all ~~prices~~other members of ~~lead,~~the ~~copper,~~controlled ~~zinc,~~group ~~and~~under ~~silver~~Title ~~compared~~IV toof ~~2002.~~the ~~The~~Employee Retirement ~~following~~Income ~~table sets~~Security ~~forth~~Act ~~average~~for ~~London~~obligations ~~Metal~~of ~~Exchange~~other ~~(LME)~~members ~~prices~~of ~~for~~the controlled ~~lead,~~group ~~copper~~that ~~and~~could ~~zinc~~include certain pension funding and excise taxes in the ~~average~~event ~~London~~that ~~Bullion~~any ~~Market~~member ~~Association~~of ~~(LBMA)~~the ~~price~~controlled ~~for~~group ~~silver~~does ~~for~~not ~~the~~satisfy ~~periods~~certain ~~indicated:~~of its pension obligations arising pursuant to ERISA.

		Year Ended October 31,
		2003		2002		2001
Average Prices
	Lead ($/short ton)	$	436.20	$	416.40	$	428.80
	Copper ($/short ton)	$	1,535.40	$	1,392.60	$	1,485.20
	Zinc ($/short ton)	$	727.00	$	704.00	$	846.40
	Silver ($/troy ounce)	$	4.74	$	4.54	$	4.44

In such an event, statutory liens would arise in favor of the Pension Benefit Guaranty Corporation, referred to as 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 and may require the other members of the controlled group to satisfy such pension plan obligations. In the event the PBGC obtains a court-approved termination, and the PBGC requires that the Company satisfy such pension plan obligations, such requirements could have a material adverse effect on our financial condition and liquidity. Obligations under the controlled group have not been determined.

~~The average~~On ~~annual~~February ~~LME~~3, ~~lead~~2006, ~~price~~the ~~has~~PBGC ~~declined~~notified ~~approximately~~another ~~38%~~member of ~~from~~the ~~1996~~controlled ~~through~~group ~~2003~~of asits ~~new~~intention ~~mines~~to ~~have~~seek ~~been~~a ~~developed~~PBGC inTermination ~~Australia~~of ~~and~~that member’s ~~Ireland~~plan. On the same day, ~~and~~the asPBGC ~~China~~filed ~~has~~a ~~increased~~complaint ~~its~~in ~~lead~~the US District ~~metal~~Court ~~production~~seeking ~~and~~to ~~exports.~~terminate ~~The~~the ~~fourth~~plan ~~quarter~~as of ~~fiscal~~February ~~2003~~3, ~~saw~~2006 ~~substantial~~and ~~improvements~~for inthe appointment ~~lead~~of ~~prices~~the inPBGC ~~addition~~as to the ~~modest~~plan’s ~~price~~Trustee ~~improvements~~under ~~seen~~ERISA. An agreement in principal ~~the~~has ~~first~~been ~~three~~reached ~~quarters.~~whereby ~~The~~sponsorship ~~recent~~of the member’s plan would be ~~price~~transferred ~~increase~~to ~~reflects~~Renco aand ~~significant~~upon ~~tightening~~the inagreement being finalized, the ~~worldwide~~PBGC ~~lead~~would withdraw ~~supply~~its complaint and PBGC Termination. In ~~2003~~any event, ~~six~~Renco ~~Western~~has ~~World~~assured the ~~lead~~Company ~~smelters~~that ~~either~~these ~~closed~~actions orwill ~~temporarily~~not ~~suspended~~have ~~operations~~an ~~resulting~~impact inon athe ~~slight decline~~Company’s infinancial ~~world wide production~~condition.

~~Average metal~~Item ~~prices increased modestly in 2003 from recent historic lows experienced earlier in the year~~1B. ~~The~~Unresolved ~~improvements~~Staff reduced but did not stem the operating loss generated by the Company's U.S. operations in 2003. The Company has implemented changes to its operations, described below, in an effort to mitigate the impact of low metal prices. These actions reduced production costs and mitigated a portion of the margin deterioration caused by low prices. Comments

~~In the~~Not Uapplicable.S., a declining demand for lead, mainly due to the movement of lead consuming industries from the U.S. to lower labor cost areas of the world, had exacerbated the price situation. See discussion of changes made in operations and marketing to combat the decline in U.S. demand in "Recent Events". Imports of lead-acid batteries from Mexico, China, South Korea, and Brazil, displacing U.S. production, are expected to continue into 2004. A weaker U.S. dollar may make lead acid battery imports less attractive, but the long-term outlook is uncertain. U.S. lead consumption was down 9.4% in 2002 versus 2001, and down an additional 4.5% in 2003 versus 2002.

~~Metal prices~~Item ~~rose sharply during the fourth quarter of 2003 and have continued their increase into the first quarter of fiscal 2004~~2. The recent upturn in the lead price has been mainly supply driven. LME lead prices have increased by 74% from the lowest monthly (April) average in 2003. LME lead inventories declined by approximately 75,000 tons in calendar 2003, another indication that lead demand exceeds current lead supply. Properties

~~Zinc prices~~Doe also have recovered from the low in 2002, to improve slightly in fiscal 2003. In January 2004, zinc prices were over $925/short ton. The bulk of the improvement in zinc prices reflects a weak U.S. dollar rather than strong fundamentals. LME zinc inventories actually increased by approximately 90,000 tons in calendar 2003 and, in January 2004, were at the same levels as in November 2002. Run

~~The~~Mining average LME copper price was higher in 2003 compared to 2002. In mid-January, 2004, the copper price was 41% higher than the fiscal 2003 average price. Increased demand, mainly from China, coupled with supply problems have contributed to the rise in the copper price. LME copper inventories declined by over 400,000 tons in calendar 2003. Operations

~~Low~~Doe Run’s mining ~~lead~~operations are based in Missouri. It has seven production shafts, ~~zinc~~six ~~and~~of ~~copper~~which are ~~prices~~currently inoperating, ~~the~~that ~~preceding~~form ~~five~~a ~~years~~north-south ~~have~~line ~~induced~~along ~~mine~~approximately ~~closures~~40 miles of an ore body. Two of its production shafts, Viburnum-29 and Viburnum-35, ~~cutbacks~~lie within a five-mile radius, north and ~~slowed~~south, ~~development~~respectively, of Viburnum, ~~new~~Missouri, ~~copper~~which is located approximately 125 miles southwest of St. Louis, ~~zinc~~Missouri. Doe Run’s Buick, Brushy Creek, Fletcher, West Fork and Sweetwater ~~lead~~production ~~projects~~shafts are within 30 miles of Viburnum. InThe ~~addition~~seventh production shaft, ~~new smelting~~known as West Fork, is on care and maintenance status.

27Doe Run also has five grinding/flotation mills located near its production shafts, four of which are currently

capacity has come on stream in China and India, increasing demand for concentrates. As a result, supplies of lead, zinc and copper concentrates have been very tight. Smelters competing for concentrates in this tight market have driven treatment charges and penalties down significantly and this decline has negatively impacted profitability of Doe Run Peru's La Oroya smelter. 19

~~The~~operating ~~tight~~as ~~market~~shown ~~conditions~~below. ~~for~~All ~~lead,~~of ~~zinc~~the mining and ~~copper~~milling ~~concentrates~~facilities are ~~expected~~accessible toby state ~~continue~~or ~~into~~county ~~2004,~~roads ~~when~~or ~~higher~~haul ~~metal~~roads ~~prices~~owned ~~are~~by ~~expected~~Doe toRun. ~~induce~~Products ~~producers~~are toshipped ~~increase~~by truck ~~output.~~over public roads.

28The production capacities of Doe Run’s mills are as follows:

Most of La Oroya's feed supply is secured from the Peruvian domestic market. The effects of low metals prices in the preceding five years have caused some of Doe Run Peru's suppliers to suffer financial distress, which in some cases caused production shortfalls. As a result, deliveries of lead, copper and zinc concentrates to La Oroya from a major Peruvian supplier were significantly below the contracted amounts during the 2003 period. Doe Run Peru replaced a portion of this shortfall with concentrates from other suppliers, but the total receipts of lead, zinc and copper concentrates for the period were less than the planned amounts. In addition, the resulting changes in concentrate mix and erratic deliveries adversely affected metal production and the cost of spot purchases increased La Oroya's feed cost. With improved metal prices, the financial condition of La Oroya's traditional suppliers has improved and concentrate receipts for fiscal year 2004 are expected to meet planned levels. However, current market conditions remain tight, and it is possible that the smelter could experience difficulties obtaining economically suitable concentrate feed.

		Milling Capacity
Mill		(Tons of Ore Per Day)
Sweetwater		6,800
Buick		6,400
Fletcher		5,000
Brushy Creek		5,000
West Fork (1)		4,000

(1) The West ~~following~~Fork ~~table~~mill ~~sets~~is ~~forth~~on ~~the~~care ~~Company's~~and ~~production~~maintenance ~~statistics~~status, ~~for~~where production at the ~~periods~~facility is ~~indicated:~~temporarily suspended, but certain maintenance activities are continued.

		Year Ended October 31,
		2003		2002		2001
U.S. Operations
	Lead metal—primary (short tons)	281,531		288,642		329,594
	Lead metal—secondary (short tons)	149,616		152,888		157,562
	Lead concentrates (metal content, short tons)	295,581		306,208		318,744
	Ore Grade	6.53	%	6.23	%	6.17	%
Peruvian Operations
	Refined copper (short tons)	68,958		71,197		71,419
	Refined lead (short tons)	122,946		132,925		133,144
	Refined zinc (short tons)	80,679		85,093		87,303
	Refined silver (thousands of troy ounces)	35,305		34,291		34,525
	Refined gold (thousands of troy ounces)	82		94		85
	Copper concentrates (metal content, short tons)	17,944		17,306		17,906
	Ore Grade (copper content)	1.10	%	1.02	%	1.07	%

Doe Run 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 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.

~~In response~~Doe to the poor lead metal market conditions over the past several years, the Company has implemented operational and organizational changes at its U.S. primary lead division since 2001. The key elements of this plan were that the Company'Run’s ~~Herculaneum primary smelter reduced its annual refined metal production by reducing blast furnace and sinter plant~~ ~~operating~~producing ~~time.~~leases ~~The~~from Company eliminated purchases of lead concentrates and reduced production of concentrates at its southeast Missouri mining operations, while improving ore grades in order to reduce unit production costs. The Company reduced total concentrate production at all of its mines, and placed the ~~No. 29~~federal ~~mine~~government onconsist ~~care and maintenance status resulting in reduced ore production during 2002~~ of ~~approximately 284,000 tons or 5%. Ore grade improved over~~ the ~~prior~~following: year which partially offset the impact of reduced ore tonnage, resulting in only a slight reduction in lead metal contained in concentrates in 2002, compared to 2001. A similar production strategy in 2003 resulted in reductions in ore production and slightly higher ore grades.

These production changes necessitated reductions in the workforce. Approximately 280 hourly positions were eliminated which involved both terminations and an early retirement program, completed in the first quarter of 2002. In the fourth quarter of 2002, the company eliminated 22 salaried positions and approximately 60 contract labor positions at the Herculaneum smelter. Overtime has been significantly reduced as well.

Location	Number of Producing Leases	Expiration Date

Viburnum	7	March 31, 2018
Fletcher	2	May 31, 2013
Buick	1	October 31, 2014
Brushy Creek	2	May 31, 2013
West Fork	1	January 31, 2013

~~Doe Run~~Ore ~~also applied for a royalty rate reduction on its leases with government agencies and identified other savings in raw materials, supplies, and equipment costs. However, at the time of this~~ Reserves

The following tables set forth the mineable reserves estimated by Doe Run for the fiscal years ended October 31, 2005 and 2003, which have been audited by the mining consulting firm of Pincock, Allen & Holt (PAH), a division of Runge, Inc. PAH reviewed the methodology and cost basis used in the reserve calculation, as discussed in their reports dated January 16, 2006 and January 29, 2004, and believe that the reserve estimations have been performed in a reasonable manner consistent with industry accepted standards. The table below does not include the total proven and mineable reserves as of the fiscal year ended October 31, 2004, which were estimated by the Company to be 45.2 million tons consisting of 5.51% lead, 1.31% zinc and 0.29% copper. The 2004 mineable reserves were not audited.

~~filing Doe Run has not been granted the royalty rate reductions it has requested so no reductions in royalties were recognized in 2003.~~ 20

~~Despite~~Audited ~~Doe~~Mineable Run's lower production levels, cost per ton of primary metal sold remained about the same as in 2002, as a result of net spending reductions related to lower headcount and other cost reductions related to salaries and benefits, noted above, offset by higher energy costs. Reserves

~~In response~~As ~~to a decreasing domestic market for lead, the Company announced the indefinite suspension~~ of ~~operations~~October ~~at its Glover smelter~~31, effective December 1, 2003. The Company will sell any concentrates that are not required to maintain production at the Herculaneum smelter. The decision is expected to improve the Company's net sales premiums at current market conditions. Severance benefits associated with this action totaled $1.4 million, which will be paid mostly in fiscal 2004. 2005

Production at the Company's Buick secondary smelter decreased in 2003, compared to the prior year, primarily due to an effort to conserve cash by reducing work in process inventories, while continuing to meet environmental standards. The very low lead content of these inventories resulted in reduced lead metal production when these items were recycled.

		Grade(1)
	Tons	Lead		Zinc		Copper
	(in thousands)
Proven (measured) reserves	10,709	8.17	%	1.52	%	0.30	%
Probable (indicated) reserves	23,574	5.34	%	1.28	%	0.24	%

Total proven and probable reserves	34,283	6.23	%	1.36	%	0.26	%

~~In September 2003,~~As ~~in an effort to reduce costs, Doe Run Peru announced a work force reduction~~ of ~~10%~~October ~~primarily at La Oroya~~31, ~~which was achieved by December~~ 2003~~. Total severance benefits accrued in fiscal 2003 were $3.2 million, of which $1.4 million was paid during fiscal 2003 and the remainder will be paid in 2004 and 2005.~~

At the La Oroya metallurgical complex, production of copper, lead, zinc and gold in 2003 was less than in 2002. These declines did not result from operational problems, but were attributable to the difficulties in obtaining economically suitable feed concentrate material discussed above. Silver production increased compared to the prior year primarily due to Doe Run Peru's successful effort to decrease in-process inventories. Unit conversion costs at La Oroya increased compared to the prior year, primarily due to the decreased production rate, higher fuel costs and severance costs associated with the workforce reduction discussed above.

Proven (measured) reserves	11,561	7.64	%	1.54	%	0.31	%
Probable (indicated) reserves	36,125	4.83	%	1.16	%	0.29	%

Total Proven and Probable reserves	47,686	5.51	%	1.25	%	0.29	%

~~At the~~(1) The ~~Cobriza~~estimated ~~copper~~average ~~mining~~extraction ~~operation~~recovery of metals, ~~ore~~after ~~production~~allowing for ~~2003~~expected ~~declined~~dilution byfor 5%lead, ~~compared~~zinc ~~to 2002. Ore grade improved by 8%~~ and, ~~as a result~~copper, ~~production of metal contained in concentrates~~is ~~improved by~~ approximately 489%~~, compared to the 2002 period~~. ~~Operating~~This ~~costs~~dilution ~~for~~is ~~2003~~included ~~were~~in 6%the ~~lower~~above ~~than~~reserve ~~the~~table. ~~prior~~Estimated ~~year,~~average ~~due~~metallurgical torecoveries ~~the~~for ~~reduced~~lead, ~~ore~~zinc ~~production~~ and ~~Doe~~copper ~~Run~~are ~~Peru's~~96.5%, 83.0% ~~continuing~~and ~~efforts~~50.0%, ~~to reduce operating costs~~respectively. ~~The~~Metallurgical ~~combination~~recovery oflosses ~~increased~~have ~~metal~~not ~~production and reduced operating cost resulted in a~~been ~~decline~~included in ~~unit~~the ~~production~~above ~~costs.~~reserve table.

~~The~~Included ~~following~~in ~~tables~~the ~~set~~2005 ~~forth~~table of mineable reserves is the ~~separate~~Higdon ~~operating~~deposit, ~~results~~which is outside of the Viburnum trend, ~~sales~~consisting ~~volumes~~of 2.3 million tons of ore with a grade of 5.7% lead and ~~realized~~2.2% ~~prices~~zinc. ~~for~~Similarly, the ~~Company's~~table Urepresenting the 2003 mineable reserves includes Higdon, which consisted of 2.7 Smillion tons of ore with a grade of 5.7% lead and ~~Doe~~2.0% ~~Run~~zinc. ~~Peru~~While ~~(excluding~~the ~~intercompany~~surface ~~transactions)~~structures and shaft are in place for the hoisting of ore from the mine, underground mine development ~~periods~~requiring ~~indicated:~~significant investment would be necessary in order to generate production from the mine. Processing of any ore mined from the Hidgon resource would require permitting and construction of a mill at the site or haulage of the ore to an existing mill in the Viburnum trend.

30Total mineable reserves for 2005 declined 28% from the audited 2003 total. PAH attributed this reduction due mainly to higher operating costs, which resulted in higher cutoff grades for the calculation. Additionally, mine production decreases to the reserve base were only partially offset by ore added through exploration.

The term “reserve” means that part of a mineral deposit that could be economically and legally ~~Results~~extracted or produced at the time of Uthe reserve determination.S 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. ~~Operations~~ 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.

			Year Ended October 31,
			2003			2002			2001
Net sales (a)			$	249,109		$	245,503		$	303,146
Costs and expenses:
	Cost of sales (a)			222,746			227,071			280,808
	Depletion, depreciation and amortization			18,598			19,508			20,275
	Selling, general and administrative			16,989			18,536			18,351
	Exploration			1,078			828			1,602
	Losses from impairment and disposal of long-lived assets			1,321			2,600			930
	Unrealized (gain) loss on derivative financial instruments			7,162			(1,452	)		(566	)
		Total costs and expenses		267,894			267,091			321,400
		Loss from operations		(18,785	)		(21,588	)		(18,254	)
Other income (expense):
	Interest expense			(10,706	)		(40,559	)		(41,994	)
	Interest income			8			12,219			14,214
	Loss on retirement/restructure of long-term debt			(550	)		(7,439	)		(159	)
	Other, net			132			(464	)		493
				(11,116	)		(36,243	)		(27,446	)
	Loss before income tax expense and cumulative effect of change in accounting principle			(29,901	)		(57,831	)		(45,700	)
Income tax expense				—			—			59
	Loss before cumulative effect of change in accounting principle			(29,901	)		(57,831	)		(45,759	)
Cumulative effect of change in accounting principle				(3,848	)		—			(2,649	)
	Net loss		$	(33,749	)	$	(57,831	)	$	(48,408	)

Smelting Operations

	Net sales	$	9,550	$	9,078	$	10,210
	Cost of sales		174		—		888
Sales volumes (short tons)
	Lead metal		337,846		345,722		416,249
	Tolling		86,123		83,539		73,320
	Zinc concentrates		81,625		86,994		93,253
Realized Prices ($/short ton)(b)
	Lead metal	$	498.00	$	491.66	$	523.42
	Tolling	$	347.98	$	344.96	$	354.65
	Zinc concentrates	$	241.56	$	218.38	$	258.75

Doe Run’s 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, but is limited to 200,000 tons per year by permit. The smelter is currently operating at an annualized run rate of approximately 175,000 tons. The smelter, which began operations in 1892, is the largest primary lead smelter in North America and the third largest in the world.

31Located in Glover, Missouri, approximately 20 miles southeast of the Sweetwater production shaft, is Doe Run’s Glover primary smelter, which began operations in 1968 and has a capacity of approximately 136,000 tons

~~Results of Peruvian Operations~~ 21

			Year Ended October 31,
			2003			2002			2001
Net sales (a)			$	435,506		$	418,286		$	434,336
Costs and expenses:
	Cost of sales (a)			421,147			387,492			384,471
	Depletion, depreciation and amortization			11,809			11,339			10,186
	Selling, general and administrative (a)			10,287			9,533			11,375
	Exploration			—			244			—
	Losses from impairment and disposal of long-lived assets			88			8,006			66
	Unrealized (gain) loss on derivative financial instruments			58			44			(1,198	)
		Total costs and expenses		443,389			416,658			404,900
		Income (loss) from operations		(7,883	)		1,628			29,436
Other income (expense):
	Interest expense			(2,564	)		(14,778	)		(17,998	)
	Interest income			21			57			656
	Other, net			(631	)		25			(1,173	)
				(3,174	)		(14,696	)		(18,515	)
	Income (loss) before income tax expense (benefit) and cumulative effect of change in accounting principle			(11,057	)		(13,068	)		10,921
Income tax expense				—			—			8,167
	Income (loss) before cumulative effect of change in accounting principle			(11,057	)		(13,068	)		2,754
	Cumulative effect of change in accounting principle			(92	)		—			(1,125	)
	Net income (loss)		$	(11,149	)	$	(13,068	)	$	1,629

per year. Doe Run indefinitely suspended operations at the Glover primary smelter 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.”

	Net sales		$	707	$	—	$	—
	Cost of sales			508		—		—
	Selling, general and administrative expense			9,550		9,078		9,322
Sales Volumes
		Copper (short tons)		68,822		71,105		71,445
		Lead (short tons)		122,260		133,204		133,241
		Zinc (short tons)		80,375		85,229		87,664
		Silver (thousands of troy ounces)		35,269		34,352		34,519
		Gold (thousands of troy ounces)		82		93		85
Realized Prices (b)
		Copper ($/short ton)	$	1,525.47	$	1,385.25	$	1,494.47
		Lead ($/short ton)	$	457.09	$	427.33	$	444.04
		Zinc ($/short ton)	$	726.30	$	703.21	$	867.39
		Silver ($/troy ounce)	$	4.75	$	4.55	$	4.46
		Gold ($/troy ounce)	$	348.17	$	298.85	$	268.98

Doe Run’s 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 permit allowing it to handle hazardous waste, primarily lead-bearing material. Up until January 2005, the smelter was permitted for 152,410 tons of furnace production annually. 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. The facility can, however, recycle lead metal scrap materials that are not required to go through the furnaces in order to achieve additional metal production.

32Doe Run owns its two primary smelters and its secondary smelter.

Fabricated ~~Results~~Products, ofoperates ~~operations~~in ~~for~~leased ~~the~~facilities ~~years~~located ~~ended~~in ~~October 31,~~Casa ~~2003~~Grande, ~~2002~~Arizona, and Vancouver, ~~2001 include the results of the Company's U~~Washington.S. ~~operations~~Fabricated ~~and~~Products ~~Doe~~ended ~~Run~~production ~~Peru.~~at Inits ~~order~~Lone toStar Lead ~~provide~~Construction afacility ~~more meaningful~~in ~~analysis~~Houston, ~~the~~Texas ~~results~~in ofDecember ~~operations attributable to Doe Run Peru will be noted and discussed separately under "Results of Doe Run Peru~~2003."

~~Net~~Substantially ~~sales~~all of ~~increased in 2003 from 2002, primarily due to~~ the ~~results~~assets of ~~Doe~~our ~~Run Peru.~~ U.S. ~~net~~operations ~~sales~~are ~~increased~~pledged ~~slightly~~as incollateral ~~2003,~~under ~~compared~~various tofinancing 2002, primarily due to higher realized prices for lead metal and copper, zinc, and lead concentrates, partially offset by lower volume of lead metal, due to the soft domestic market and the reduction of productionagreements. As discussed above, the LME average lead price increased during 2003, with the majority of this increase occurring in the fourth quarter. Should the LME price remain at this level for an extended period, the Company should benefit from further increased net realized prices in the coming quarters.

~~Cost of sales increased as a result of Doe Run Peru. U.S. cost of sales in 2003 was slightly less than 2002, primarily due to lower lead~~Peruvian metal and zinc concentrate sales volumes along with operating cost reductions at the primary lead operations, driven by lower headcount and reduced overtime, partially offset by higher energy costs. More efficient production due to higher ore grades also contributed to the lower costs. Operations

~~Selling, general and administrative costs decreased from 2002 primarily from the results of U.S. operations largely due to an increase of~~Smelting $1.3 million in insurance reimbursements in 2003 for legal fees incurred in prior years. The Company has received the majority of its reimbursements for legal fees incurred in previous fiscal years, but will continue to receive reimbursements for a portion of its ongoing legal fees. Operations

~~Losses~~Doe ~~from~~Run ~~impairment~~Peru’s smelting ~~and~~operations ~~disposal~~are oflocated ~~long-lived~~in ~~assets~~the ~~decreased~~central ~~primarily~~Peruvian atAndes ~~Doe~~town ~~Run~~of ~~Peru.~~La ~~In 2003~~Oroya, ~~the U.S. operations~~ ~~wrote~~approximately ~~down~~110 ~~the~~miles ~~value~~east of ~~properties~~the ~~purchased~~Peruvian incapital ~~Herculaneum,~~of ~~near~~Lima ~~the~~and ~~Company's~~at ~~primary~~an ~~smelter. (See discussion~~ altitude of ~~purchase~~approximately ~~plan~~12,000 infeet ~~"Item~~above 8sea level. ~~Financial~~The ~~Statements~~complex ~~and~~is ~~Supplementary Data—Note 20~~linked to ~~the~~port facilities ~~Company's~~by ~~Consolidated~~highway ~~Financial~~and ~~Statements")~~railroad service. ~~The~~Most ~~loss~~local insupply ~~2002~~sources ~~relates~~also tohave rail ~~the~~service. ~~write-down~~Doe ofRun ~~Herculaneum~~Peru ~~properties~~owns ~~in addition to~~ the ~~permanent cessation~~facilities, ofwhich ~~operation~~consist of a ~~blast~~copper smelter, ~~furnace~~lead atsmelter, ~~the~~copper ~~Herculaneum~~refinery, ~~smelter~~lead ~~that~~refinery, ~~was~~copper ~~dismantled~~fabricating plant, inzinc ~~2003.~~refinery, ~~The~~precious ~~impairment~~metals ~~loss~~refinery, ~~relating~~antimony toplant, ~~the~~arsenic ~~Herculaneum~~plant, coke ~~properties~~plant, ~~was~~cadmium ~~recognized~~plant, ~~due~~maintenance toshops ~~the~~and ~~current~~other ~~lack~~support offacilities. ~~approval~~Current ~~from~~production ~~regulatory~~capacities ~~agencies~~of ~~regarding~~primary ~~the~~products ~~reoccupancy~~are ofas ~~these~~follows: ~~properties.~~

Unrealized (gain)/loss on derivatives relates to the change in fair market value of derivative financial instruments pursuant to FAS 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. See discussion in "Liquidity".

Product		Annual Capacity

Copper (short tons)		77,000
Lead (short tons)		134,000
Zinc (short tons)		50,000
Silver (thousands of troy ounces)		37,000
Gold (thousands of troy ounces)		64

~~Interest~~During ~~expense~~2004, ~~decreased~~La Oroya inproduced ~~2003~~at ~~compared~~less tothan ~~2002~~capacity inprimarily ~~the~~due ~~results~~to ofenvironmental ~~Peruvian~~limits and ~~U.S.~~insufficient availability ~~operations.~~of Insuitable ~~the~~feed Umaterials.S. ~~operations,~~See ~~interest expense~~the ~~was~~discussion ~~substantially lower~~ in ~~2003~~“Item as1. Business—Doe aRun ~~result~~Peru ofOperation’s—Raw Materials.” See the ~~Restructuring~~discussion ~~and~~of ~~the~~production ~~related~~levels ~~accounting~~ for ~~the~~2004 ~~transaction~~in “Item 7. ~~See~~Management’s ~~discussion~~Discussion inand ~~"Consolidated~~Analysis of Financial ~~Position—Accounting~~Condition ~~for~~and Results of ~~Restructuring".~~Operations—Results of Operations.”

~~Interest~~In ~~income~~2005, Doe ~~decreased~~Run inPeru ~~2003~~ceased ~~due~~operating ~~primarily~~its three New Jersey zinc roasters, which were costly to ~~the~~operate ~~loss~~and ofenvironmentally Uinefficient.S. ~~operation's~~The ~~interest~~decision ~~income~~resulted onin ~~the~~a reduction ~~$125 million~~of ~~Special~~refined ~~Term Deposit~~zinc ~~used~~production to ~~collateralize~~50,000 ~~Doe~~tons ~~Run~~per ~~Peru's~~year, ~~note~~down ~~payable~~from tothe previous acapacity ~~foreign~~of ~~bank~~88,200 tons per year. OnWe ~~September 12,~~believe ~~2002,~~that ~~The~~this ~~Special~~change ~~Term~~will reduce ~~Deposit~~sulfuric ~~was~~acid ~~tendered~~gas toand ~~repay~~other ~~the~~gas ~~note,~~emissions ~~see~~as ~~discussion~~well ~~above~~as inreduce the disposal ~~"Restructuring".~~of liquid effluents.

~~Loss on retirement/restructure of long-term debt represents costs related to the issuance of the Notes and the Term Note in~~Mining ~~accordance with Statement No. 15. See "Item 8. Financial Statements and Supplementary Data—Note 2 to the Company's Consolidated Financial Statements" for a discussion of Statement No. 15.~~ Operations

33Doe Run Peru’s 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.

Income tax expense reflects the provision for the Company's Peruvian subsidiaries. Renco has elected for the Company to be treated as a qualified subchapter S subsidiary (QSSS) for federal tax purposes. Most states in which the Company operates will follow similar tax treatment. QSSS status requires the ultimate shareholders to include their pro rata share of the Company's income or loss in their individual tax returns. As a result of the Company's tax status in the U.S., the Company is generally not subject to federal and most state income taxes. 22

~~Cumulative~~Concentrates produced ~~effect~~at ofthe ~~change~~mine inare ~~accounting~~trucked ~~principle~~130 ~~relates~~miles over unpaved road to ~~the~~Huancayo ~~adoption~~and then ofan ~~Statement~~additional of70 ~~Financial~~miles ~~Accounting~~over ~~Standard~~paved ~~No. 143, Accounting~~road ~~for~~to ~~Asset~~the ~~Retirement~~La ~~Obligations~~Oroya smelter. ~~See~~Cobriza’s mill ~~"Item~~has 8.a ~~Financial~~capacity ~~Statements~~of ~~and~~10,000 ~~Supplementary~~short ~~Data—Note 20~~tons toper ~~the~~day. ~~Company's Consolidated~~Cobriza ~~Financial~~used ~~Statements~~approximately half ~~for~~of aits ~~discussion~~capacity as of ~~Statement~~October ~~No. 143.~~31, 2005.

Landholdings ~~Fiscal~~at ~~2002~~Cobriza include ~~compared~~approximately to2,700 ~~Fiscal~~acres ~~2001~~ 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, 2005. Doe Run Peru’s estimates indicate mineable proven and probable ore reserves of approximately 7.2 million short tons containing approximately 1.20% copper.

Net sales for 2002 decreased compared to 2001 due mainly to the U.S. operations' lower volume of lead metal, lower realized prices for lead metal and zinc concentrates and lower revenues from oxide at FPI, partially offset by an increase in toll volume. Due to the unfavorable market conditions production was reduced in an effort to minimize operating losses. As a result, lead metal sales volume was down in 2002, compared to the prior year, accounting for a $36.9 million decrease in net sales. As discussed in "Overview—U.S. Operations" the LME average lead price declined during 2002. Because of the market conditions in the U.S., the Company's premiums were lower as well, resulting in a decline in the net realized price for lead metal, which reduced net sales by $11.0 million. Oxide sales declined $9.0 million as FPI began charging its main oxide customer a processing fee to covert the customer's lead metal into oxide (tolling), rather than purchasing metal and selling the oxide to the customer, pursuant to a new contract. As a result, oxide revenues have been reduced to the fee that the Company receives for converting metal into oxide rather than the full value of the oxide product and cost of sales reduced to the conversion costs. Zinc concentrate net sales were lower in 2002, compared to 2001, primarily due to a decrease in the LME average zinc price and lower sales volume associated with the lower production levels discussed previously. These changes were partially offset by an increase in toll lead volume. Exploration

~~Cost~~We ofcontinue ~~sales~~to inexplore ~~2002~~for ~~decreased~~additional ~~compared~~reserves towithin ~~2001~~the ~~due~~Viburnum Trend, ~~primarily~~one toof the ~~U.S.~~world’s ~~operations'~~most ~~reduced~~productive lead-zinc ~~metal~~ore ~~volume,~~districts. ~~discussed above which~~Current ~~accounts~~exploration ~~for~~is ~~$37.1 million~~focused ofon ~~this~~surface ~~decrease.~~and Aunderground ~~decrease~~drilling ofin ~~approximately~~and ~~$16.0 million~~adjacent is to the ~~result~~operating ofmines ~~cost~~for ~~reductions at~~ the ~~primary~~purpose ~~and secondary lead production facilities. This amount includes a savings~~ of ~~approximately~~discovering ~~$4.1 million~~new ~~resulting~~ore ~~from~~reserves ~~lower~~in ~~energy~~the mines ~~costs,~~ as ~~natural~~well ~~gas~~as ~~and~~discovering ~~propane~~additional ~~prices~~ore ~~declined~~bodies ~~significantly~~in ~~from~~ the ~~abnormally~~general ~~high~~area ~~prices~~of ~~experienced~~the inexisting ~~2001, and a savings of about $2~~mines.~~9 million~~ ~~resulting~~Drilling in ~~from~~2004 ~~lower~~in ~~feed costs at~~ the ~~Buick~~Viburnum ~~recycling~~Trend ~~facility.~~led ~~The remaining $9.0 million reduction is attributable~~ to ~~efficiency improvements~~the atdiscovery ~~all~~of ~~three~~a ~~primary~~new ~~operating~~ore ~~facilities~~body, ~~and at~~ the ~~secondary~~RC West ~~smelter~~Fork ~~resulting~~ore ~~from~~body. ~~ongoing~~Development ~~efforts~~on tothe ~~reduce~~ore ~~operating~~body ~~costs.~~began ~~Lower~~in ~~feed~~the ~~cost~~first ~~for~~quarter ~~oxide production resulting from the~~of ~~tolling~~2005, ~~discussed~~with ~~above,~~full ~~also~~production ~~contributed~~scheduled to ~~the~~begin ~~decrease~~ in ~~cost~~late ~~of sales~~2006. ~~These~~This ~~cost~~resource ~~decreases~~now stands ~~were~~at ~~partially~~approximately ~~offset~~2.9 bymillion atons, $5grading 6.65% lead and 0 ~~million~~.83% ~~non-cash~~zinc. The ~~charge~~RC toWest ~~adjust~~Fork ~~environmental reserves,~~ore ~~primarily~~body ~~for~~remains ~~historic~~open ~~properties~~both ~~and~~to the ~~Herculaneum~~north ~~smelter,~~and ~~resulting~~south ~~from~~and will remain a ~~comprehensive~~focus ~~review~~for offurther ~~the~~drilling ~~Company's~~planned ~~environmental~~for ~~liabilities~~2006.

~~Selling,~~We ~~general~~hold ~~and~~additional exploration ~~administrative~~tracts ~~costs~~outside ~~decreased~~the inViburnum ~~2002~~Trend ~~compared to 2001 due mainly to Doe Run Peru. Increases~~ in the U.S. ~~operations' professional~~In ~~fees were~~Missouri, ~~offset~~50 ~~by increased insurance reimbursements for legal defense costs and a decrease in pension and healthcare expenses. Professional fees increased by $2.5 million in~~miles ~~2002~~east ~~due~~of ~~primarily~~the toViburnum ~~costs~~Trend, ~~related~~we tohave ~~extensive~~conducted ~~discovery~~pre-development ~~activity~~work on ~~two~~the Higdon ~~groups~~lead-zinc-cobalt ~~of personal injury lawsuits~~deposit. ~~Offsetting~~See ~~this~~“Ore ~~increase were anticipated insurance reimbursements totaling~~Reserves” ~~$1.9 million during 2002~~ for ~~recovery~~further ~~of legal expenditures covered by insurance, compared to $0~~detail.~~8 million in 2001. A California court ruling clarified amounts to be~~

34Current mine exploration at Doe Run Peru is focused on underground drilling in the Cobriza mine for the purpose of discovering additional 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. Drilling of developed targets began in the first quarter of 2006.

~~reimbursed,~~In South ~~relating~~Africa, tothrough ~~costs~~a ~~that~~subsidiary, we have ~~been~~conducted ~~disputed~~pre-feasibility bywork ~~the~~on ~~insurance~~a ~~company,~~zinc and ~~which~~lead ~~precipitated~~deposit ~~the~~approximately ~~recording~~100 ofmiles ~~the~~from ~~previously~~Kimberly, ~~unrecorded~~in ~~disputed~~the ~~costs~~Northern Cape Province. ~~Pension~~Surface ~~and~~rights ~~health~~to ~~care~~these ~~costs~~properties ~~were~~are ~~lower~~currently being held with inminimal ~~2002~~cost ~~because~~pending ~~2001~~further ~~included~~economic ~~special~~evaluation. ~~termination~~We ~~charges~~continue ofto ~~$2.6 million~~pursue ~~associated~~revised exploration ~~workforce~~permits ~~reductions.~~for these properties from the South African government.

~~Exploration~~Item ~~expense decreased in 2002 for the U~~3.S. ~~operations~~Legal ~~due to the Company's continuing efforts to conserve cash.~~ Proceedings

~~Losses~~In ~~from~~addition ~~impairment~~to ~~and~~the items ~~disposal~~discussed ofbelow, ~~long-lived~~we ~~assets~~are involved in ~~2002~~various ~~related~~litigation ~~primarily~~and toclaims, government ~~Doe~~investigations ~~Run~~and ~~Peru.~~other ~~The~~legal ~~results~~proceedings ofthat ~~the~~arise ~~U.S. operations~~from ~~reflect~~time ato time ~~write~~in ~~down of~~ the ~~value~~ordinary course of ~~properties~~business. ~~owned~~While ~~near~~management ~~the~~does ~~Herculaneum~~not ~~smelter~~believe ~~and~~any of ~~the~~these ~~permanent~~matters ~~cessation~~will ofhave ~~operations of~~ a ~~blast~~material ~~furnace~~adverse ateffect ~~the~~on ~~Herculaneum~~our ~~smelter.~~financial ~~See discussion in~~position, ~~"Item~~litigation 8.is ~~Financial~~inherently ~~Statements~~unpredictable, and ~~Supplementary~~excessive ~~Data—Note 20~~verdicts todo ~~the~~occur. Although ~~Company's~~management ~~Consolidated~~believes ~~Financial~~valid ~~Statements".~~defenses Inexist ~~2001~~in these matters, we could in the ~~$1.0 million~~future ~~loss~~incur isjudgments ~~primarily~~or ~~due~~enter tointo ~~the demolition~~settlements of ~~two~~claims ~~dross~~that ~~furnaces~~could ~~due~~have a tomaterial aadverse ~~change~~effect inon ~~the~~our ~~production~~financial ~~process~~condition, atliquidity ~~Herculaneum.~~and results of operations.

~~Unrealized~~Doe ~~gain~~Run onis ~~derivatives~~a defendant ~~was~~in ~~mainly~~29 lawsuits alleging certain damages from lead emissions stemming from the operations at the Herculaneum smelter. The cases were brought in the Circuit UCourt of the City of St.S Louis: Meyer, et al. ~~operations~~v. Fluor Corporation, ~~primarily~~et ~~due~~al. to(formerly aknown ~~reduction~~as inMitchell, ~~the~~et ~~quantities~~al. ofv. Fluor ~~metal~~Corporation, ~~under~~et ~~futures~~al.), Doyle, ~~contracts~~et ~~outstanding~~al. v. Fluor Corporation, ~~related~~et toal. ~~credit~~and ~~line~~Figge, ~~reductions~~et al. ~~This~~v. ~~resulted~~Fluor inCorporation ~~the~~et ~~realization~~al., ofall ~~gains~~filed inJuly ~~revenues~~9, 2001; ~~that~~Gross ~~were~~v. ~~previously~~Fluor ~~unrealized~~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; Johnson, et al. v. Fluor Corporation, et al. and Browning, et al. v. Fluor Corporation, et al., both filed September 9, 2003; Farrow, et al. v. Fluor Corporation, et al., filed May 6 2005; Dawson, et al. v. Fluor Corporation, et al., Alexander, et al. v. Fluor Corporation, et al., Pedersen, et al. v. Fluor Corporation, et al., Heilig, et al. v. Fluor Corporation, et al., Lynch, et al. v. Fluor Corporation, et al., Brown II v. Fluor Corporation, et al., Whaley, et al. v. Fluor Corporation, et al., Duncan, et al. v. Fluor Corporation, et al., Meyer v. Fluor Corporation, et al., Edmond, et al. v. Fluor Corporation, et al., Lucas, et al. v. Fluor Corporation, et

Interest expense for 2002 was lower due mainly to U.S. operations, resulting from lower interest rates on the Company's floating interest rate notes and the Doe Run Revolving Credit Facility, and due to a $4.3 million decrease in the average outstanding balance on the Doe Run Revolving Credit Facility. These declines were partially offset by penalty interest recorded on overdue interest on the Company's Old Notes. 23

~~Interest~~al., ~~income~~McCoy ~~decreased~~v. inFluor Corporation, ~~2002~~et ~~due~~al., ~~primarily~~and toDamazyn, et ~~the~~al. ~~loss~~v. ofFluor UCorporation, et al.S., ~~operations~~all ~~interest~~filed ~~income~~August on25, ~~the~~2005; ~~$125 million~~and Joyner, ~~Special~~et ~~Term~~al. v. Fluor Corporation, Miller, ~~Deposit~~et ~~used~~al. tov. ~~collateralize~~Fluor ~~Doe~~Corporation, ~~Run~~et ~~Peru's~~al., ~~note~~Wamble, ~~payable~~et toal. av. ~~foreign~~Fluor ~~bank~~Corporation, et al., OnHawley, ~~September 12~~et al. v. Fluor Corporation, ~~2002~~et al., ~~The~~Wren, ~~Special~~et ~~Term~~al. ~~Deposit~~v. ~~was~~Fluor Corporation, ~~tendered~~et toal. ~~repay~~, ~~the~~Jarvis ~~note~~v. ~~See~~Fluor ~~discussion~~Corporation, ~~above~~et ~~in "Restructuring~~al., and ~~Long~~Ruessler, ~~Term~~et ~~Debt"~~al. v. Fluor Corporation, et al., all filed August 26, 2005.

~~Loss~~The onDoyle, ~~retirement/restructure~~Meyer, ofand ~~long-term~~Johnson cases ~~debt~~are ~~represents~~class ~~costs~~action ~~related~~lawsuits. toIn the ~~issuance~~Doyle and ofJohnson cases, the ~~Notes~~plaintiffs seek ~~and~~to ~~the~~have ~~Term~~certified ~~Note~~a class of property owners in a certain section of ~~accordance~~Herculaneum, ~~with~~alleging ~~Statement~~that ~~No. 15.~~property ~~See~~values ~~"Item~~have 8been damaged due to the operations of the smelter. ~~Financial~~In ~~Statements~~the ~~and~~Meyer case, ~~Supplementary~~plaintiffs ~~Data—Note 3~~seek to ~~the~~have ~~Company's~~certified ~~Consolidated~~a ~~Financial~~class ~~Statements"~~of ~~for~~children who lived in Herculaneum during a ~~discussion~~period of time when they were six years old or younger and ~~Statement~~children Noborn to mothers who lived in Herculaneum during their pregnancies. 15 The remedy sought is medical monitoring for the class. The trial court has granted the property class action in Doyle, but has denied the medical monitoring class action in Meyer. Both decisions are being appealed.

~~Other,~~The ~~net~~remainder ~~expense~~of the ~~for~~29 ~~U.S.~~cases ~~operations~~are ~~was~~personal ainjury ~~net~~actions ~~expense~~by in161 ~~2002,~~individuals ~~compared~~who toallege ~~net income in 2001. This change was primarily due to a~~damages ~~reduction~~from ~~of rental income on~~ the ~~helicopter~~effects ~~used~~of ~~for~~lead ~~Doe~~poisoning ~~Run~~they ~~Peru~~attribute to operations, ~~which~~at ~~was sold in~~ the ~~third~~smelter and ~~quarter~~seek ofpunitive ~~2001~~damages.

~~Income~~Doe ~~tax~~Run ~~expense~~is ~~reflects~~also ~~the~~a defendant ~~provision~~in ~~for~~a ~~the~~wrongful ~~Company's~~death ~~Peruvian~~action, ~~subsidiaries~~Schmidt-Sido, et al., Asv. aDoe ~~result~~Run ofResources ~~the~~Corporation, ~~Company's~~filed ~~tax~~August ~~status~~26, 2005, concerning an individual who drowned in the UCity of Herculaneum.~~S., the~~ ~~Company~~The islawsuit ~~generally~~was filed ~~not~~in ~~subject~~the tocircuit ~~federal~~court ~~and~~of ~~most~~the ~~state~~City ~~income~~of ~~taxes~~St. Louis, Missouri.

~~Cumulative~~Doe ~~effect~~Run ofis ~~change~~a defendant in ~~accounting~~17 ~~principle~~lawsuits ~~relates~~alleging certain damages from past mining operations in St. Francois County, Missouri (one suit also alleges exposure to operations in Iron County) filed in the ~~adoption~~Circuit Court of ~~Statement~~the City of ~~Financial~~St. ~~Accounting~~Louis, ~~Standard~~Missouri: NoDowd, et al. ~~133~~ v. Fluor Corporation, ~~Accounting~~ ~~for~~et ~~Derivative~~al., ~~Instruments~~filed July 9, 2001; Lee Ann Stotler and ~~Hedging~~Keely ~~Activities~~Stotler v. ~~See~~Fluor ~~"Item~~Corporation, 8et al. ~~Financial~~and ~~Statements~~Layne Stotler v. Fluor Corporation, et al., both filed January 10, 2002; Mullins v. Fluor Corporation, et al. and ~~Supplementary~~Mullins II ~~Data—Note 19~~v. toFluor ~~the~~Corporation, et al., both filed April 15, 2002; Shannon v. Fluor Corporation, et al., White, et al. ~~Company's~~v. ~~Consolidated~~Fluor ~~Financial~~Corporation, ~~Statements"~~et ~~for~~al., aStotler, ~~discussion~~et ofal. ~~Statement~~v. NoFluor Corporation, et al. ~~133~~, Sorbello, et al v. Fluor Corporation, et al, and Brewer v. Fluor Corporation, et al., all filed August 24, 2005; Mullins II, et al. v. Fluor Corporation, et al., Losh, et al. v. Fluor Corporation, et al., Burnia, et al. v. Fluor Corporation, et al., Ball v. Fluor Corporation, et al., and Snyder, et al. v. Fluor Corporation, et al., all filed August 25, 2005; and Politte, et al. v. Fluor Corporation, et al and Baker v. Fluor Corporation, et al., all filed August 26, 2005.

~~Results~~The ofLee ~~Doe~~Ann ~~Run~~Stotler, ~~Peru~~ Layne Stotler, Mullins, and Mullins II cases are class action lawsuits. The Lee Ann Stotler and Layne Stotler cases are class actions for property damages and medical monitoring, respectively, concerning alleged damages caused by tailings and related operations in Bonne Terre. The Mullins and Mullins II cases are class actions for property damages and medical monitoring, respectively, concerning alleged damages caused by chat, tailings and related operations in six areas in St. Francois County, Missouri.

The ~~Fiscal~~remainder ~~2003~~of the ~~compared~~17 cases are personal injury actions by 28 individuals who allege damages from the effects of lead poisoning they attribute to ~~Fiscal~~chat, ~~2002~~ tailings and related operations and seek punitive damages.

~~Net~~Doe ~~sales~~Run, ~~for~~with ~~2003~~several ~~increased~~other ~~compared~~defendants, towas ~~2002~~named ~~primarily~~in ~~due~~several tolawsuits alleging ~~higher~~personal ~~realized~~injuries ~~prices~~as ~~for~~a ~~all~~result ~~major~~of ~~metals~~lead poisoning from exposure to lead paint and antetraethyl ~~increase~~lead dust. While filed in ~~sales~~the ~~volume for~~summer ~~silver~~of 2000, ~~partially~~these ~~offset~~suits have bynot abeen ~~decrease~~served inon ~~sales~~Doe ~~volume~~Run: ~~for~~Hall ~~copper~~v. Lead Industries Association, ~~lead~~Inc., ~~zinc~~et ~~and~~al., ~~gold~~Hart v. ~~Compared~~Lead toIndustries ~~2002~~Association, ~~realized~~Inc., ~~prices~~et ~~for~~al., Williams ~~all~~v. ~~metals~~Lead ~~rose~~Industries Association, Inc., ~~reflecting~~et ~~similar~~al. ~~increases~~and inRandell ~~LME~~v. ~~prices~~Lead Industries Association, ~~and contributing~~Inc., ~~$26~~et al.~~2 million~~ toThe suits were all filed in the Circuit ~~net~~Court ~~sales~~of ~~increase.~~Baltimore, ~~Higher~~Maryland ~~sales~~and ~~volumes~~seek damages, including punitive damages.

35Doe Run is a defendant in a lawsuit filed in the Circuit Court of the City of St. Louis, Missouri by the BNSF Railway Company who has alleged that Doe Run and other companies associated with lead mining operations in Missouri are responsible for property damage at certain rail yards and for contribution and indemnity for costs incurred by the BNSF associated with settlement by BNSF of lead exposure cases. The demands in the complaint indicate that material liability is reasonably possible, but, given the early stage of this case, we are unable at this time to estimate the expected outcome and any final costs of this action.

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 discussed previously. 24

~~Cost~~B.H., et ofal. ~~sales~~v. ~~increased~~Gold ~~for~~Fields ~~2003~~Mining ~~from 2002~~Corporation, ~~due~~et ~~primarily~~al. toand ~~higher feed cost~~R.S., et ~~and~~al. ~~the~~v. ~~higher~~Gold ~~unit~~Fields ~~conversion~~Mining ~~costs~~Corporation, atet ~~La Oroya~~al., ~~partially offset~~were byfiled ~~improved~~on ~~unit~~July 19, ~~production~~2004 ~~cost~~in atthe ~~Cobriza~~U.S. ~~and~~District ~~reduced~~Court ~~production~~for ~~volume.~~the ~~Feed~~Northern ~~costs~~District ~~were~~of ~~higher~~Oklahoma ~~due to~~ and the ~~increases~~District inCourt ~~market~~of ~~prices~~Ottawa ~~for~~County, ~~copper~~Oklahoma, ~~zinc~~respectively, ~~silver~~against four companies, ~~and~~including ~~gold~~Doe ~~and~~Run, toalleging ~~significantly lower~~personal ~~treatment~~injury ~~charges~~to ~~for~~45 ~~concentrates~~and ~~purchased.~~three ~~Lead~~minors, respectively, ~~zinc~~resulting ~~and~~from ~~copper~~past ~~concentrate~~mining ~~treatment~~operations ~~charges~~in ~~declined~~Ottawa ~~14%~~County, ~~13%~~Oklahoma. The ~~and~~latter ~~17%~~case ~~respectively,~~has inbeen ~~2003,~~removed ~~due~~ to the ~~very~~U.S. ~~tight~~District ~~supply~~Court ~~situation~~for in the Northern ~~world~~District ~~market~~of Oklahoma. These two cases have been consolidated, and six of the ~~resultant~~48 plaintiffs ~~competition~~have ~~for~~been ~~concentrates~~dismissed byfrom ~~smelters.~~the case.

~~Losses~~Two ~~from~~class ~~impairment~~action suits, Cole, et al. v. Asarco, Inc., et al., filed May 14, 2003, and ~~disposal~~Evans, et al. v. Asarco Inc., et al., filed February 9, 2004, were filed in the U.S. District Court for the Northern District of ~~long-lived~~Oklahoma, ~~assets~~alleging ~~decreased~~personal injury and property damage in Picher, Oklahoma and Quapaw, Oklahoma respectively. Brewer, et al. v. Asarco, Inc., et al., was filed on July 8, 2003, and Moss, et al. ~~The~~v. Asarco, ~~loss~~Inc., ~~recorded~~et al., Nowlin, et al. v. Asarco, Inc., et al., Sargent, et al. v. Asarco, Inc., et al. and South, et al. v. Asarco, Inc., et al., were filed July 29, 2003 in ~~2002~~the District ~~relates~~Court of Ottawa County, Oklahoma and allege personal injury to children living in Picher, Oklahoma. These cases were subsequently removed to the ~~write~~U.S. ~~off~~District Court for the Northern District of Oklahoma and have been consolidated. Another class action suit, The Quapaw Tribe of Oklahoma, et al. v. Asarco, Inc., et al., was filed in the ~~backfill~~U.S. ~~plant~~District atCourt for the ~~Cobriza~~Northern ~~mining~~District ~~operation~~of Oklahoma on December 10, ~~which~~2003 ~~was~~against ~~determined~~seven tocompanies, beincluding ~~uneconomical~~Doe Run. This action alleges damage to ~~complete~~natural resources and ~~operate.~~to property of members of the Quapaw Tribe.

~~Interest~~Priesmeyer ~~expense~~v. ~~decreased~~Union Carbide, et al. was filed in the ~~2003~~Circuit ~~period~~Court of Madison County, ~~compared~~Illinois toon ~~the~~May ~~prior~~16, ~~year~~2002, ~~due~~alleging ~~primarily~~that a contractor was injured by exposure to ~~the~~asbestos ~~reduction~~and ofis seeking reimbursement for damages, but Doe Run ~~Peru's~~has ~~long-term~~not ~~debt~~been ~~resulting~~properly ~~from~~served. Doe Run's ~~Special~~received ~~Term~~notice ~~Deposit~~that ~~being~~a ~~tendered~~similar suit, Hawrylak v. Allied Glove Corp., et al. was filed on May 16, 2003 in the Court of Common Pleas of Lawrence County, Pennsylvania. Straussner v. Union Carbide Corp., et al., an asbestos suit originally filed on February 25, 2003, was dismissed on June 8, 2005. A new suit, Straussner v. Union Carbide Corp., et al., was filed on September 13, 2005 in the Circuit Court of Madison County, Illinois against 88 corporations, including Doe Run, alleging that a contractor has a cancer caused by exposure to ~~repay~~asbestos. Overberg v. Arch City Drywall Supply, et al., an asbestos suit filed in the ~~note~~Circuit Court of the City of St. Louis, ~~see~~was ~~discussion~~dismissed ~~above~~on October 12, 2005. A tentative settlement has been reached in ~~"Restructuring~~Pagano and ~~Long~~Roti ~~Term Debt"~~v. Anheuser-Busch, Inc., et al., an asbestos suit filed in the Circuit Court of Madison County, Illinois on December 17, 2004.

~~Other,~~Doe Run ~~net~~is ~~income~~in ~~was~~a ~~decreased~~commercial indispute ~~2003,~~with ~~primarily~~a ~~due~~buyer toconcerning ~~exchange~~one ~~losses~~ocean onshipment ~~transactions~~of lead ~~denominated~~concentrates. inBuyer ~~Peruvian~~is ~~soles~~seeking asreimbursement aof ~~result~~expenses ofincurred ~~the~~to ~~effect~~address a large amount of anwater ~~increase~~that inappeared during the ~~value~~voyage ofon ~~soles~~top ~~against~~of concentrates in the ~~U.S.~~forward ~~dollar~~holds. This contract dispute is in arbitration before the LME.

~~Income~~Doe Run ~~tax~~is ~~expense~~a ~~was~~defendant $0 in ~~2003~~a lawsuit by Korea Zinc Co. and ~~2002~~affiliates ~~reflecting~~filed ~~management's~~on January ~~belief~~19, ~~that~~2006 ~~sufficient~~in ~~uncertainty~~the ~~exists~~Circuit Court of St. Louis County, concerning alleged violations of an agreement regarding the ~~realization~~sale of zinc concentrates. Doe Run ~~certain~~disputes ~~deferred~~the ~~tax~~claim ~~assets,~~and ~~which~~will ~~requires~~seek ~~that~~dismissal abecause ~~valuation~~the ~~allowance~~dispute should be subject ~~established.~~to arbitration.

On ~~Fiscal~~December ~~2002~~26, ~~compared~~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 ~~Fiscal~~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, as of October 31, 2005, totals approximately $109.0 million. We estimate that the effect of a similar assessment for tax years after 2001 would be approximately $30.3 million.

~~Net sales for 2002 decreased compared to 2001 due to lower realized prices for zinc~~Furthermore, ~~copper, and lead and lower sales volumes, partially~~ ~~offset~~Doe byRun ~~increased~~Peru ~~realized~~would ~~prices~~also ~~for~~be ~~silver~~required ~~and~~to ~~gold~~make ~~and~~additional ~~higher~~workers’ ~~gold~~profit ~~volume. The realized price decline for zinc reduced net sales by $14.0 million and lower realized prices for copper and~~sharing ~~lead~~payments ~~decreased~~equal ~~net sales by $10.0 million. Reduced production volume due~~ to ~~feed~~8% ~~supply~~of ~~problems~~the ~~resulted~~increase in ~~lower~~taxable ~~production~~income ~~and~~generated ~~sales~~by ~~volumes~~the ~~for~~changes discussed ~~all major metals except gold~~above, ~~which~~or ~~reduced net~~approximately ~~sales by~~ $311.4 2 million. ~~These reductions were partially offset by higher realized prices~~ for ~~silver~~tax ~~and~~years ~~gold~~1998 ~~and increased volumes of gold sales and toll services. Doe Run Peru increased its~~through ~~copper concentrate tolling volume in response to market conditions, which have limited the availability of concentrates for purchase~~2005.

~~Cost~~On ofNovember ~~sales for 2002 increased compared to 2001 due primarily to increased concentrate feed costs~~15, ~~partially offset by lower conversion~~2004, ~~costs~~SUNAT ~~and~~notified ~~sales~~Doe ~~volumes.~~Run ~~Feed~~Peru ~~costs~~of ~~increased~~a ~~approximately~~Value ~~$8.2 million~~Added inTax ~~2002,~~(VAT) ~~compared~~assessment ~~to 2001, primarily due to significantly lower treatment charges~~ for ~~lead, zinc and copper concentrates~~the ~~resulting~~period from ~~the~~January ~~very~~through ~~tight~~July ~~supply situation in the concentrate market~~2004. ~~The~~On ~~effect~~December of23, ~~lower treatment charges was partially offset by lower market prices for lead~~2004, ~~zinc~~Doe ~~and~~Run ~~copper. Unit conversion~~Peru ~~costs~~received atadditional LaVAT ~~Oroya~~assessments ~~decreased~~for ~~which~~tax inyears ~~turn~~1999 ~~reduced~~through ~~cost of sales by $4~~2001.~~8 million,~~ ~~compared~~The assessments ~~to the prior year. This improvement was~~ primarily ~~due~~relate to ~~cost containment efforts and resultant reductions in contract labor, maintenance, and indirect operating costs. Workers profit sharing cost was lower as well due to net losses incurred by~~ Doe Run Peru.’s ~~Despite~~exports ~~the~~with ~~impact of lower ore grade, unit production costs at the Cobriza copper mining operation were slightly lower in 2002, compared to 2001, due to reduced operating costs.~~

3625

~~Selling,~~holding ~~general~~certificates and differences ~~administrative~~in ~~costs~~a ~~decreased~~tax credit application. The total assessment for ~~2002,~~these ~~compared~~periods was toapproximately ~~the~~$43.5 ~~prior~~million. ~~year,~~SUNAT ~~primarily~~offset ~~due~~the toamount ~~reduced~~assessed ~~professional~~for ~~fees~~2004 ~~and~~of ~~expenses~~$2.3 ~~associated~~million ~~with~~against Doe Run Peru'’s ~~helicopter,~~VAT ~~which~~receivable ~~was~~balance ~~sold~~from ~~during~~July ~~the~~2004. Future ~~third~~VAT ~~quarter~~reimbursements ofcannot ~~2001,~~be ~~partially~~used to offset the assessment by ~~increased~~SUNAT. ~~insurance~~The Company ~~costs~~discontinued use of the holding certificates for exports in June 2004. We estimate expected additional assessments related to VAT for tax years 2002 and 2003 to total approximately $20.2 million in regard to its exports with holding certificates.

~~Losses~~Management ~~from~~believes ~~impairment~~that ~~and~~in ~~disposal~~each ofcase ~~long-lived~~Doe ~~assets~~Run ~~increased~~Peru inhas followed ~~2002~~the ~~compared~~applicable toPeruvian ~~2001~~tax ~~due~~statutes ~~primarily~~and intends to ~~the~~pursue ~~write~~all available ~~off~~administrative ~~of the~~and ~~backfill~~judicial ~~plant~~appeals. atDoe ~~the~~Run ~~Cobriza~~Peru ~~mining~~is ~~operation~~not inrequired ~~2002.~~to ~~Because~~make ofany payments pending the ~~continuing~~administrative ~~low~~appeal ~~copper~~process. ~~prices~~If ~~and~~Doe ~~the~~Run ~~inability~~Peru tois ~~establish~~not successful ~~significant~~in ~~new~~the ~~ore~~administrative ~~reserves,~~appeal ~~Doe~~processes ~~Run~~and ~~Peru~~were ~~has~~to ~~determined~~appeal ~~that~~in itthe ~~will~~judicial ~~not~~system, besome ~~economically~~type ~~feasible~~of tofinancial ~~complete~~assurance ~~and~~would ~~operate~~be ~~the backfill plant~~required.

~~Unrealized~~All existing ~~gain~~and onpending ~~derivatives~~litigation ~~relates~~at to the ~~change~~time inof ~~fair~~the ~~market~~acquisition ~~value~~ of ~~derivative~~Doe ~~financial~~Run ~~instruments pursuant to Statement~~Peru ~~No. 133.~~were ~~Losses~~retained inby ~~2002~~Centromin, ~~resulted~~the ~~from~~prior aowner ~~reduction~~of in the ~~quantities~~La ofOroya ~~metal~~smelter ~~under~~and ~~futures~~Cobriza mine. ~~contracts~~Centromin ~~outstanding,~~has ~~due~~also ~~primarily~~agreed to ~~credit~~indemnify ~~line~~Doe ~~reductions.~~Run ~~This~~Peru ~~resulted~~against environmental inliability ~~the~~arising ~~realization~~out of ~~losses~~ ~~through~~its ~~revenues~~prior ~~that~~operations ~~were~~and ~~previously~~their apportioned ~~unrealized.~~share ~~Gains for 2001 resulted primarily from the effect~~ of ~~falling~~any ~~copper~~other ~~prices~~complaint onrelated ~~sold~~to ~~metal futures contracts~~emissions.

~~Interest~~Doe ~~expense~~Run ~~decreased~~Peru ~~for~~is ~~2002,~~a ~~compared~~defendant toin ~~the~~198 ~~prior~~lawsuits ~~year~~in the Lima, ~~primarily~~Peru ~~dulne~~labor courts tothat ~~lower~~allege ~~interest~~damage onto ~~the~~workers ~~$125.0~~from ~~note~~industrial ~~payable~~diseases. toDoe aRun ~~foreign~~Peru has ~~bank,~~made ~~which~~claims ~~was~~in ~~retired~~most onof ~~September 12,~~the ~~2002,~~cases asagainst ~~discussed~~Centromin ~~above.~~and Inhas ~~addition,~~also ~~lower~~made ~~interest~~claims against ~~rates~~both ongovernmental ~~the~~agencies ~~Doe~~and ~~Run~~private ~~Peru~~companies ~~Revolving~~that ~~Credit~~provide ~~Facility,~~workers’ ~~increased~~insurance. The ~~capitalized~~average ~~interest~~claim ~~and~~is ~~lower outstanding~~$18. ~~balances~~Of on17 ~~capital~~concluded ~~lease~~cases ~~obligations~~in ~~contributed~~this tocategory, ~~the~~16 ~~reduction~~were dismissed and one resulted in ~~interest~~an ~~expense.~~award of $9.

~~Interest~~Doe ~~income~~Run ~~decreased~~Peru is also a defendant in ~~2002,~~163 ~~compared~~lawsuits toby ~~the~~workers ~~prior~~alleging that ~~year,~~they ~~primarily~~are ~~due~~owed tocertain ~~lower~~differences ~~interest~~in onsalaries ~~income~~and ~~taxes~~benefits. ~~due~~The toaverage claim is $21. Of 31 concluded cases in this category, 26 were dismissed and five resulted in awards totaling $15. Doe Run Peru, ~~which was~~is ~~received~~also ~~during~~a ~~2001,~~defendant ~~lower~~in ~~average~~a ~~cash~~lawsuit by ~~balances~~the Yauli-La Oroya Employees Union concerning salaries and benefits. The ~~lower~~claims ~~interest~~of ~~rates~~the on146 ~~those~~workers ~~cash~~remaining ~~balances.~~in the lawsuit have been valued at a total of $238 according to a report by an expert appointed by the court.

~~Income~~Doe ~~tax~~Run ~~expense~~Peru ~~was~~is $0also a defendant in ~~2002~~26 ~~reflecting~~lawsuits ~~Management's~~alleging ~~belief~~claims ~~that~~ranging from ~~sufficient~~industrial ~~uncertainty~~diseases ~~exists~~to ~~regarding~~salary ~~the~~disputes, ~~realization~~including ofindemnification ~~certain~~for ~~deferred~~arbitrary ~~tax~~dismissal, ~~assets~~nullity ~~and~~of ~~that~~dismissal, amoral ~~valuation~~damage ~~allowance~~compensation, compensatory isdamages ~~required.~~from ~~Tax~~work ~~expense~~accident inand ~~2001~~readmission ~~resulted~~of ~~primarily~~worker. ~~from~~The anaverage claim ~~increase~~is in$6. ~~the~~Of ~~valuation~~29 ~~allowance~~concluded ~~resulting~~cases ~~from~~in ~~management's~~this ~~assessment~~category of26 ~~the Company's~~were ~~ability~~dismissed toand ~~use~~three resulted ~~loss carry forwards~~ in ~~the~~awards ~~future.~~totaling $22.

~~Cumulative~~The ~~effect~~amount of awards ~~change~~ in ~~accounting principle relates to~~ the ~~adoption~~various categories of ~~Statement~~lawsuits ~~No. 133.~~referenced ~~See~~above ~~"Item~~represent ~~8. Financial Statements~~total ~~and~~judgments ~~Supplementary~~issued ~~Data—Note 19~~by torelevant ~~Doe~~courts. For certain ~~Run~~of ~~Peru's~~these ~~Financial~~lawsuits, ~~Statements"~~Centromin ~~for~~will pay a ~~discussion~~portion of ~~Statement~~the ~~No.133.~~total award.

~~Capital~~On ~~Resources~~ 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~~On May ~~Run has substantial indebtedness. As of October 31~~25, ~~2003~~2005, onDoe aRun ~~consolidated~~Peru ~~basis,~~was ~~the~~served ~~Company's~~with ~~balance~~a ~~sheet~~civil ~~reflected~~lawsuit ~~$408.7 million~~alleging the existence of ~~total debt~~lead in ~~accordance~~a ~~with~~person ~~Statement~~caused ~~No. 15.~~by ~~The~~Doe ~~face~~Run ~~amount~~Peru’s ~~of indebtedness outstanding at October 31, 2003 was $279~~operations.~~5 million,~~ anThe ~~increase~~claim ofis for $27100.~~1 million from October 31, 2002.~~

~~The Doe~~On ~~Run~~July ~~Revolving~~11, ~~Credit Facility~~2003, ~~the~~ Doe Run Peru ~~Revolving~~filed ~~Credit~~an ~~Facility,~~administrative lawsuit ~~the~~against ~~Term Note and~~ the ~~indenture~~Yauli ~~governing~~– ~~the~~La ~~Notes~~Oroya ~~contain~~Provincial ~~numerous~~City ~~covenants~~Hall ~~and~~in ~~restrictions.~~order ~~They include certain requirements with respect~~ to ~~net~~dismiss ~~worth,~~a number ~~working~~of ~~capital,~~fines ~~earnings~~for ~~before~~the ~~interest,~~amount ~~taxes,~~of ~~depreciation, depletion and amortization (EBITDA), and debt to earnings ratios~~$2.8 ~~These agreements also place limitations on capital expenditures, dividend payments and other outside borrowings~~million. ~~The~~ Doe Run Peru ~~Revolving~~was ~~Credit~~fined ~~Facility~~for ~~also~~not having ~~contains~~construction ~~covenants~~licenses ~~which,~~for ~~pursuant to~~ the ~~amendment discussed~~ inPAMA ~~"Recent Events", restrict through September 2004 Doe Run Peru's ability to make distributions to Doe Run in excess of a $2~~projects.~~8 million management fee.~~

~~The ability of~~ Doe Run is toa ~~meet~~party ~~its~~to ~~debt~~a ~~service~~number ~~requirements~~of ~~and~~orders ~~to comply~~ with ~~these~~various ~~covenants~~regulatory isagencies ~~dependent~~that ~~upon~~require ongoing ~~future~~expenditures ~~operating~~for ~~performance~~compliance. ~~and~~See ~~financial~~“Item ~~results,~~8. ~~which~~Financial ~~are~~Statements ~~subject to~~and ~~financial,~~Supplementary ~~economic,~~Data—Note ~~political,~~19 ~~competitive~~to ~~and~~Consolidated ~~other~~Financial ~~factors~~Statements” ~~affecting~~for ~~the~~a discussion ~~Company, many~~ of ~~which~~these ~~are beyond~~ matters.

37We are 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

~~the Company's control. The Company has been in default of several loan covenants. See discussion in "Recent Events".~~ 26

~~The~~cases ~~Company~~will ~~had~~not ~~capital~~have ~~expenditures~~a ofmaterial ~~$15.3 million~~adverse ~~in 2003 and has projected capital expenditures of approximately $27.4 million for fiscal 2004. In the U.S.~~effect, ~~the Company~~both ~~had~~individually ~~capital expenditures of $6.1million in 2003~~ and has projected total capital expenditures of approximately $11.2 million for fiscal 2004, primarily to support ongoing operations and for operational and environmental improvements, including expenditures required pursuant to an AOC that established a residential property purchase plan in ~~Herculaneum, see "Item 8. Financial Statements and Supplementary Data—Note 20 to~~ the ~~Company's Consolidated Financial Statements". In addition to these capital investments, the Company's U.S. operations expended~~ ~~approximately $51.3 million~~aggregate, ~~$52.0 million and $58.8 million~~ on ~~repairs~~our ~~and~~results ~~maintenance~~of ~~for fiscal years 2003~~operations, ~~2002~~financial condition and ~~2001 respectively~~liquidity. ~~As a result of these expenditures, the~~We ~~Company~~have ~~believes that it operates~~ and will continue to ~~maintain~~vigorously ~~modern~~defend ~~and~~ourselves ~~efficient~~against ~~facilities.~~these claims.

~~As part~~Refer ~~of the acquisition of its Peruvian operations, Doe Run Peru committed~~ to an“Item ~~investment program, in part to satisfy an investment commitment of $120~~8.~~0 million~~ asFinancial ~~set~~Statements ~~forth~~and inSupplementary ~~the~~Data—Notes ~~purchase agreement. On February~~ 13, ~~2003,~~19 ~~Doe~~and ~~Run~~20 ~~Peru~~to ~~received~~Consolidated ~~notice~~Financial ~~from~~Statements” for ~~Centromin~~further ~~that~~information itregarding ~~had~~the ~~met~~aforementioned ~~its~~legal ~~investment commitment with total approved expenditures of $120~~proceedings.~~2 million through October 23, 2002.~~

~~Doe Run~~Item ~~Peru had capital expenditures of $9~~4.~~3 million~~ inSubmission ~~2003 and has projected capital expenditures~~ of ~~approximately~~Matters ~~$16.2 million for fiscal 2004, primarily for PAMA projects and~~ to ~~support~~a ~~ongoing~~Vote ~~operations.~~of Security Holders

~~Although Doe~~No ~~Run~~matters ~~Peru's PAMA currently requires construction of certain sulfuric acid plants at the La Oroya smelter estimated to cost $107.5 million during the remaining PAMA~~were ~~period,~~submitted ~~Doe Run Peru is also proceeding with efforts~~ to ~~identify alternative methods of achieving emission compliance. Potential alternatives include, but are not limited to, reducing production from~~ a ~~portion~~vote of ~~the~~security ~~plant,~~holders ~~thus~~during ~~eliminating~~ the ~~need~~quarter ~~for~~ended ~~the~~October equipment presently contemplated and replacing it with another alternative. This evaluation must take into consideration the impacts on profitability and liquidity, as well as other economic impacts. In 2004, Doe Run Peru intends to submit a request to MEM to modify the requirements of the existing PAMA. There can be no assurance that these efforts will be approved by the Peruvian government or that they will achieve compliance in the timeframe required by the PAMA. If the La Oroya smelter does not operate within the current PAMA limits after December 31, ~~2006, Doe Run Peru could be forced to cease operations at the La Oroya smelter. See discussion~~ ~~of PAMA requirements and compliance in Item 1~~2005. ~~"Business, The Doe Run Peru Operations—Environmental".~~

~~Contractual~~Part ~~Obligations~~ II

38All of Doe Run’s issued and outstanding 1,000 shares of common stock, $0.10 par value per share, are owned by a single stockholder, DR Acquisition Corp., 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 us, subject to the provisions of the Investor Rights Agreement discussed below.

~~actual~~On October 29, 2002, the Company consummated a consensual restructuring ~~design~~(the Restructuring) of most of its previously outstanding notes (Old Notes) by exchanging Old Notes with a principal amount of $295 million, plus unpaid accrued interest of $37 million, for stock warrants, exercisable for an aggregate of approximately 39% of the fully diluted common stock of the Company and ~~timing~~new 11.75% notes with a principal amount of $176 million. Pursuant to bethe Restructuring, ~~implemented~~Doe Run issued warrants to purchase 644.7813 shares of its common stock, ~~provided~~representing ~~compliance~~approximately ~~with~~39% of Doe Run’s common stock on a fully diluted basis, to holders of its previously outstanding notes who exchanged them for the ~~applicable~~11.75% ~~maximum~~notes. ~~permissible~~The ~~limits~~warrants isexpire ~~achieved~~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 holders of a majority of the warrants 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 ~~December 31~~a third party appraisal. Doe Run and Renco each have the right to call all, ~~2006~~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 Renco 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.

				Payments Due By Period ($ millions)
Contractual Obligations:
		Total		Less Than 1 Year		1—3 Years			3—5 Years			After 5 Years
Revolving lines of Credit		$	59.1	$	59.1	$	—		$	—		$	—
Long-term Debt(a)			218.8		17.2		34.4			50.0			117.2
Redeemable Preferred Stock			22.5		—		—			—			22.5
Operating Leases			21.2		4.6		5.2			3.0			8.3
Capital Leases			1.6		1.6		—			—			—
Royalties			3.4		.3		.5			.4			2.2
Purchase Obligations(b)			604.7		303.7		290.7			10.4			—
Pension funding			15.2		15.2		(c	)		(c	)		(c	)
	Total	$	946.5	$	401.7	$	330.8		$	63.8		$	150.2

On October 29, 2002, Renco purchased 2,000 shares of Series A 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 Renco 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 316, 282 and 251 shares of redeemable preferred stock on October 31, 2005, October 31, 2004 and November 1, 2003, respectively, as payment of the aforementioned dividends. See “Item 8. Financial Statements and Supplementary Data—Note 9 to Consolidated Financial Statements” for further information regarding the redeemable preferred stock and related dividends.

~~Significant~~Pursuant ~~Accounting~~to ~~Policies~~ Doe Run’s by-laws, there are three seats on the Board of Directors. The Investor Rights Agreement provides that DR Acquisition Corp. may elect two of these directors and holders of a majority of the warrants may appoint one, who is referred to as the independent director. The independent director nominated by the holders of a majority of the warrants 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

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. 27

~~Sales~~filing ~~are~~a ~~recorded~~voluntary asbankruptcy ~~products~~petition, ~~are~~merging ~~shipped to customers and title transfers~~ or asconsolidating ~~tolling~~with ~~services~~another ~~are~~entity, issuing ~~performed.~~capital ~~Concentrate~~stock ~~and~~or ~~certain~~securities ~~smelter~~convertible ~~product~~into ~~sales~~capital ~~are~~stock, ~~recorded based upon~~making ~~estimated~~certain ~~weights~~changes ~~and~~to ~~metal~~its ~~contents~~charter ~~and~~documents ~~metal~~or ~~prices~~incurring incertain ~~effect~~levels ~~at time~~ of ~~shipment. Revenues are adjusted between month of shipment and month of settlement based on changes in market prices.~~ ~~Adjustments~~ indebtedness.

39The holders of a majority of the warrants 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 Consolidated Financial Statements”), appoint a director, referred to as the special director, to Doe Run’s Board of Directors. The special director 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 or any of its subsidiaries capital stock, (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 11.75% notes. The special director, if appointed to Doe Run’s Board of Directors, could have a significant impact on the operation of Doe Run’s business as well as its strategic direction.

~~with respect~~The toindentures ~~such~~governing ~~sales~~the ~~are~~11.75% ~~recorded~~notes ~~based~~and onDoe ~~final~~Run’s credit ~~settlement~~facilities ~~weights,~~restrict ~~metal~~its ~~contents~~ability ~~and~~to ~~metal~~pay ~~prices~~dividends ~~pursuant~~on toits ~~applicable~~outstanding capital ~~customer agreements~~stock.

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. 28

~~Long-lived assets,~~Item 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 recoverable6. ~~Recoverability~~Selected ofFinancial 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 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. Data

~~The Company~~SELECTED ~~accrues~~HISTORICAL ~~for loss contingencies, including costs associated with environmental remediation obligations, when it is probable that a liability has been incurred and can be~~CONSOLIDATED ~~reasonably~~FINANCIAL 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 20 and 21 to the Company's Consolidated Financial Statements" for a more detailed discussion of environmental and litigation matters. DATA

~~As of~~The ~~November 1,~~following ~~2002,~~tables ~~the~~set ~~Company~~forth ~~adopted~~our ~~Statement~~historical ~~No. 143,~~consolidated ~~which addresses~~ financial data ~~accounting and reporting~~ for ~~obligations associated with~~ the ~~retirement~~five offiscal ~~tangible long-lived~~years ~~assets~~ended ~~and~~October ~~the associated asset retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition~~31, ~~construction~~2005, ~~development~~which ~~and~~have ~~(or)~~been ~~normal~~derived from ~~use~~our ofaudited ~~the~~consolidated ~~asset.~~financial ~~Prior to the adoption of Statement No~~statements. ~~143~~ ~~the~~It ~~Company~~is ~~accrued~~important ~~for mine and other closure obligations at their estimated, undiscounted cost. Statement No. 143 requires~~ that the selected ~~fair~~historical ~~value~~consolidated offinancial adata ~~liability~~presented ~~for~~below ~~an asset retirement obligation~~ be ~~recognized~~read in ~~the period in which it is incurred if a~~ ~~reasonable~~conjunction ~~estimate~~with of“Item ~~fair value can be made~~7. ~~The~~Management’s ~~fair~~Discussion ~~value~~and Analysis of ~~the~~Financial Condition ~~liability~~and isResults ~~added to the carrying amount~~ of ~~the~~Operations” ~~associated asset~~ and ~~this~~our ~~additional~~audited ~~carrying~~financial ~~amount~~statements ~~is depreciated over the life~~and of the ~~asset.~~accompanying ~~The~~notes ~~liability~~included iselsewhere ~~accreted~~in atthis ~~the~~Annual ~~end~~Report ~~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.~~Form 10-K.

The cumulative ~~effect~~effects ~~related~~of the changes in accounting principles presented below relate to the adoption of Statement of Financial Accounting Standards No. 143, ~~was~~Accounting afor ~~loss~~Asset ofRetirement $3Obligations (SFAS No. 143),~~940,~~ ain ~~net~~2003 ~~decrease~~and to ~~plant,~~the ~~property~~adoption of ~~and~~Statement ~~equipment~~ of $2Financial Accounting Standards No. 133,~~088,~~ ~~and~~Accounting anfor ~~increase~~Derivative ofInstruments ~~$1,852~~and ~~to the~~Hedging ~~liability~~Activities ~~for~~(SFAS ~~asset~~No. 133), in 2001.

	Year Ended October 31,
	2001			2002			2003			2004			2005
				(dollars in thousands)
Statement of Operations Data:
Net sales	$	738,612		$	664,759		$	685,382		$	868,068		$	1,029,440
Cost of sales	665,279			614,563			643,893			782,981			911,732
Depletion, depreciation and amortization	30,461			30,847			30,407			25,322			24,170
Selling, general and administrative expenses	30,845			29,048			28,366			35,782			46,096
Exploration expense	1,602			1,072			1,078			2,178			2,984
Losses from impairment and disposal of long-lived assets	996			10,606			1,409			3,591			2,978
Unrealized (gain) loss on derivative financial instruments	(1,764		)	(1,408		)	7,220			231			(4,876		)
Operating income (loss)	11,193			(19,969		)	(26,991		)	17,983			46,356
Interest expense	59,992			55,337			13,270			13,289			10,010
Interest income	14,870			12,276			29			19			141
Gain (Loss) on retirement/restructure of long term debt	(159		)	(7,439		)	(550		)	—			9,233
Other income (expense)	(691		)	(430		)	(176		)	(460		)	666
Income (loss) before income tax expense and cumulative change in accounting principle	(34,779		)	(70,899		)	(40,958		)	4,253			46,386
Income tax expense (benefit)	8,226			—			—			(661		)	—
Income (loss) before cumulative change in accounting principle	(43,005		)	(70,899		)	(40,958		)	4,914			46,386
Cumulative effect of change in accounting principle net of income tax benefit	(3,774		)	—			(3,940		)	—			—
Net income (loss)	$	(46,779	)	$	(70,899	)	$	(44,898	)	$	4,914		$	46,386

retirement obligations. Accretion expense was approximately $1.5 million for the year ended October 31, 2003.

	As of October 31,
	2001			2002			2003			2004			2005
				(dollars in thousands)
Balance Sheet Data:
Cash	$	6,263		$	7,018		$	19,700		$	20,318		$	23,486
Working capital	33,027			74,449			(20,328		)	(22,796		)	(58,608		)
Property, plant and equipment, net	264,300			249,667			230,367			229,640			253,263
Total assets	603,115			450,196			429,433			457,419			494,775
Total debt (including current portion)	495,981			402,219			408,696			417,328			386,513
Other noncurrent liabilities	62,569			71,205			71,508			75,765			68,387
Redeemable preferred stock	—			20,000			22,514			25,329			28,495
Shareholder’s deficit	(65,801		)	(147,171		)	(209,066		)	(210,736		)	(167,905		)

Renco has elected for the Company to be treated as a qualified subchapter S subsidiary (QSSS) for federal tax purposes. Most states in which the Company operates will follow similar tax treatment. QSSS status requires the ultimate shareholders to include their pro rata share of the Company's income or loss in their individual tax returns. The election does not affect foreign income taxes related to the Company's foreign subsidiaries. 29

~~Deferred tax~~Item ~~assets~~7. ~~and~~Management’s ~~liabilities~~Discussion ~~are recognized in foreign jurisdictions for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets~~ and ~~liabilities~~Analysis ~~and the respective tax bases~~ of ~~these~~Financial ~~assets~~Condition and ~~liabilities.~~Results 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.~~ Operations

~~Doe Run~~The ~~sponsors~~following adiscussion ~~noncontributory defined benefit plan for its U.S. employees. Benefits provided to salaried employees under the defined benefit plan are based on final average compensation~~ and ~~years~~analysis ofshould ~~service.~~be ~~The~~read ~~Company~~in ~~has also adopted a supplemental defined benefit plan, the Supplemental Employee Retirement Plan (SERP), effective November 1, 1996. The SERP~~conjunction ~~provides~~with ~~benefits~~our tocondensed ~~those~~consolidated ~~participants~~financial ofstatements ~~the~~and ~~defined benefit plan whose benefits under~~ the ~~plan~~notes ~~are~~thereto ~~limited by Sections 401(a)(17) or 415 of the Internal Revenue Code. Changes in the assumptions~~and ~~used~~other tofinancial ~~calculate~~information ~~Doe~~included ~~Run's accumulated benefit obligation and periodic pension cost can have a significant effect on the Company's results of operations~~herein.

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. Overview

Forward-LookingMetal Statements prices

~~This~~Metal ~~report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 which involve known and unknown~~prices ~~risks,~~extended ~~uncertainties~~their ~~and~~dramatic ~~other~~rise ~~important~~during ~~factors that could cause the actual results~~2005, ~~performance~~continuing oron ~~achievements~~an ofupward ~~the~~trend ~~Company to differ materially from any future results, performance or~~that ~~achievements~~began ~~expressed~~in ~~or implied by such forward~~mid-~~looking statements~~2003. ~~Such~~Lead ~~risks,~~prices ~~uncertainties,~~increased ~~and~~from ~~other~~a ~~important~~LME ~~factors~~settlement ~~include,~~monthly ~~among others: general economic and business conditions; increasing~~average ~~industry capacity and levels~~ of ~~imports~~$847.40 ofper ~~non-ferrous~~short ~~metals~~ton orin ~~non-ferrous~~October ~~metals~~2004 ~~products;~~to ~~industry~~$911.40 ~~trends,~~per ~~including~~short ~~product~~ton ~~pricing;~~in ~~competition; currency fluctuations;~~October ~~the~~2005. ~~loss~~The ofCompany ~~any~~benefited ~~significant~~from ~~customer~~this orprice ~~suppliers;~~increase ~~availability~~in ofboth ~~qualified~~its ~~personnel; effects of future collective bargaining agreements; outcome of litigation; changing environmental requirements,~~U.S. ~~political~~operations’ ~~uncertainty,~~lead ~~terrorism~~metal and ~~major~~lead ~~equipment~~concentrate ~~failures~~sales. ~~These~~See ~~forward-looking~~further ~~statements~~discussion ~~speak~~below in ~~only~~“Results as of ~~the~~Operations—Impact ~~date~~ of ~~this report. The Company expressly disclaims any obligation or undertaking~~Metals to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is basedPricing. ”

41Primary lead operations

In response to continued strong metal prices, our primary lead division made significant changes to operations in 2005. The lead grade of ore mined was ~~Item~~lowered 7Aapproximately 5% compared to the 2004 period, while the tonnage processed increased by 10%. ~~Quantitative~~These ~~and~~changes ~~Qualitative~~were ~~Disclosures~~made ~~About~~in ~~Market~~an ~~Risk~~ effort to optimize the return on Doe Run’s ore reserves. As in the previous year, Doe Run continued to sell a substantial portion of the lead concentrates produced from its mines into the open market.

~~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~~A ~~contracts~~major todevelopment ~~manage~~project ~~its~~was ~~exposure~~started toat ~~fluctuations in~~ the ~~prices~~south ofend ~~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 19 to the~~ Company'’s ~~Consolidated Financial Statements" for a more detailed discussion of the Company's use of Hedging and Derivative~~ ~~Financial~~Fletcher ~~Instruments.~~mine Ato ~~10%~~access ~~increase~~an inore ~~metal~~body ~~prices~~known ~~would~~as ~~result~~RC ~~in additional losses of approximately $7~~Westfork.~~0 million~~ toWe ~~the~~expect ~~Company related~~ to ~~open contracts at October 31, 2003, which~~complete ~~would~~this bedevelopment ~~offset~~project byin ~~higher prices on the Company's sales of physical metal~~2006.

Lead production from the Herculaneum primary smelter in 2005 was 5% lower than in 2004, primarily as a result of production interruption due to storm damage to ~~Item~~some 8process buildings. ~~Financial~~Environmentally, ~~Statements~~the smelter did not meet the ambient air standard at the nearby Broad Street monitor in three of four quarters during the period. All other results were in attainment. The State Implementation Plan (“SIP”) will be revised to address attainment and maintenance ~~Supplementary~~of ~~Data~~ the standards and may include engineering controls and a buffer zone.

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

42Our recycling operation produced approximately 2% more lead in 2005 than in 2004. The increase is the result of 7% more batteries being processed than in 2004. This is the 12th consecutive year that Buick Resource Recycling has set a new production record for the volume of batteries recycled.

The mix of feed into Buick Resource Recycling continues to be an issue that is ~~Report~~limiting production. A tight scrap market and the reduced availability of ~~Independent~~high lead ~~Registered~~content ~~Public~~feed ~~Accounting~~have ~~Firm~~ adversely affected production and costs at the division.

~~The~~Production ~~Board~~costs at both the primary lead division and the recycling operation were up substantially due to inflationary cost increases of ~~Directors~~raw materials, coke, fuels and repair parts. The ~~Doe~~increased ~~Run~~costs ~~Resources~~were ~~Corporation:~~partially offset by savings realized from the implementation of lean manufacturing principles at the operations.

~~We have audited the accompanying consolidated balance sheets of The~~ Doe Run Resources Corporation and subsidiaries (the Company) as of October 31, 2003 and 2002, and the related consolidated statements of operations, comprehensive losses and shareholder's deficit, and cash flows for each of the years in the three-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. Peru

~~We conducted~~Doe ~~our~~Run ~~audits~~Peru is insubject ~~accordance~~to ~~with~~numerous ~~the~~requirements ~~standards~~pursuant ofto ~~the~~La ~~Public~~Oroya’s ~~Company~~PAMA. ~~Accounting~~See ~~Oversight~~“Item ~~Board~~1. Business ~~(United~~– ~~States).~~Doe ~~Those~~Run ~~standards~~Peru’s ~~require~~Operations ~~that~~– weEnvironmental ~~plan~~Matters.” ~~and~~Doe ~~perform~~Run ~~the~~Peru expects ~~audit~~that toit ~~obtain reasonable~~will ~~assurance~~not ~~about~~be ~~whether~~able ~~the~~to ~~financial~~comply ~~statements~~with ~~are~~the ~~free~~spending requirements of ~~material~~La Oroya’s ~~misstatement.~~PAMA Aninvestment ~~audit~~schedule ~~includes~~in ~~examining,~~2006 onwith arespect ~~test~~to ~~basis,~~the ~~evidence~~construction ~~supporting~~ of the ~~amounts~~sulfuric ~~and~~acid ~~disclosures~~plant inrequired by the ~~financial~~ ~~statements.~~PAMA Anand, ~~audit~~as ~~also~~a ~~includes~~result, ~~assessing~~could ~~the~~be ~~accounting~~subject to ~~principles~~penalties. ~~used~~Failure ~~and~~to ~~significant~~comply ~~estimates~~with ~~made~~PAMA bycould ~~management,~~result asin ~~well~~the asforced ~~evaluating~~cessation of ~~the~~operations ~~overall~~at ~~financial~~the ~~statement~~La ~~presentation. We~~Oroya ~~believe~~smelter, ~~that~~which ~~our~~would ~~audits~~adversely ~~provide~~affect aour business, ~~reasonable~~financial ~~basis~~condition ~~for~~and ~~our~~results ~~opinion.~~of operations.

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 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended October 31, 2003 in conformity with U.S. generally accepted accounting principles. 30

~~The accompanying~~On ~~consolidated~~December ~~financial~~29, ~~statements~~2004 ~~have been prepared assuming that~~ the ~~Company~~Peruvian ~~will~~Government ~~continue~~issued asSupreme aDecree ~~going concern~~No. 046-2004-EM As(Supreme ~~discussed~~Decree), inwhich ~~Note 2~~recognized tothat ~~the~~exceptional ~~consolidated financial~~circumstances ~~statements,~~may ~~the~~justify ~~Company~~an ~~has~~extension ~~suffered~~of ~~recurring~~one ~~net~~or ~~losses,~~more ~~has~~projects awithin ~~net~~the ~~capital~~scope ~~deficiency,~~of ~~and~~a PAMA. The ~~has~~Supreme ~~liquidity~~Decree ~~concerns~~specifies that ~~raise~~companies ~~substantial~~had ~~doubt~~until ~~about~~December ~~its~~31, 2005 ~~ability~~ to ~~continue~~apply asfor aan ~~going concern~~extension. ~~Management's~~ The ~~plans~~maximum inextension ~~regard to~~is ~~these~~for ~~matters~~three ~~are~~years, and ~~also~~the ~~described~~MEM inmay ~~Note 2.~~authorize ~~The~~an ~~consolidated~~additional ~~financial~~year ~~statements~~based doupon ~~not include any adjustments that might result from~~ the ~~outcome~~results of ~~this~~a ~~uncertainty.~~health risk study.

~~As discussed~~Doe inRun ~~Notes~~Peru applied 1for ~~and~~an 20extension to ~~the~~complete ~~consolidated financial statements,~~ the ~~Company~~construction ~~adopted~~of the ~~provisions~~sulfuric ofacid plant ~~SFAS~~contemplated ~~No. 143,~~by ~~Accounting~~the ~~for~~original ~~Asset~~PAMA ~~Retirement Obligations,~~on asDecember ~~of November 1~~20, ~~2002~~2005.

~~/s/~~Upon approval of a modified PAMA, Doe Run ~~KPMG~~Peru ~~LLP~~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.

~~February 2~~The Supreme Decree also requires that, within 30 days of the approval of the PAMA ~~2004~~extension, ~~except~~the asCompany provide financial security in an amount equal to ~~Note 22,~~20% of ~~which~~the isprojected ascost of ~~May 7,~~the ~~2004~~project or projects to be extended. The company currently expects the remaining investment needed to build the sulfuric acid plant to be approximately $102.0 million.

43To achieve the financial guarantee and the trust contract required by Supreme Decree, Doe Run Peru has amended the Doe Run Peru Revolving Credit Facility to allow for those arrangements and has filed a draft of a trust guarantee contract with a Peruvian bank. Additionally, on December 10, 2005 Doe Run Peru signed a Working Capital Financial Facility Agreement for the amount of $30,000 (named Ferrites Loan) with Servicios Mineros Integrados S.A.C., a Trafigura Beheer B.V. subsidiary, to use such funds in the fulfillment of the financial security requirements of the extended PAMA project.

Doe Run Peru has performed other environmental projects to reduce fugitive emissions in 2005 including the installation work on the short rotary furnace, ~~THE~~enclosing ~~DOE~~the ~~RUN~~blast ~~RESOURCES~~furnace ~~CORPORATION Consolidated~~and ~~Balance~~dross ~~Sheets (Dollars~~plant, along with other complementary work. Major projects scheduled for fiscal year 2006 include an upgrade of the ventilation system in ~~thousands~~the Sinter plant, ~~except~~completion ~~per~~of ~~share~~the ~~amounts)~~ enclosure work around the lead and dross furnace, the enclosure of the anode residue plant along with the elimination of its nitrous gases, and the reduction of fugitive emissions from the copper and lead beds. The total cost of the currently remaining PAMA projects, including the sulfuric acid plant construction, and these projects is approximately $130.0 million.

			October 31, 2003			October 31, 2002
ASSETS
Current assets:
	Cash		$	16,794		$	7,018
	Trade accounts receivable, net of allowance for doubtful accounts of $1,479 and $1,160 at October 31, 2003 and 2002, respectively			56,659			64,778
	Inventories			95,680			103,346
	Prepaid expenses and other current assets			21,531			19,593
		Total current assets		190,664			194,735
Property, plant and equipment, net				230,367			249,667
Other noncurrent assets, net				5,496			5,794
		Total assets	$	426,527		$	450,196
LIABILITIES AND SHAREHOLDER'S DEFICIT
Current liabilities:
	Short-term borrowings and current maturities of long-term debt		$	78,117		$	16,342
	Accounts payable			48,392			48,876
	Accrued liabilities			84,483			55,068
		Total current liabilities		210,992			120,286
Long-term debt, less current maturities				330,579			385,876
Other noncurrent liabilities				71,508			71,205
		Total liabilities		613,079			577,367
Series A redeemable preferred stock, $1,000 par value, 5,000 authorized, 2,000 shares issued and outstanding; liquidation and redemption value				22,514			20,000
Shareholder's deficit:
	Common stock, $.10 par value, 1,667 shares authorized, 1,000 shares issued and outstanding			—			—
	Additional paid-in capital			2,724			5,238
	Accumulated deficit			(173,523	)		(128,625	)
	Accumulated other comprehensive losses			(38,267	)		(23,784	)
		Total shareholder's deficit		(209,066	)		(147,171	)
		Total liabilities and shareholder's deficit	$	426,527		$	450,196

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~~In the future, as part of a modernization plan and to enrich sulfurous ~~accompanying~~gas ~~notes~~feed to the sulfuric acid plant, we are anplanning ~~integral~~to ~~part~~replace ofthe ~~these~~oxy-fuel reverberatoy ~~consolidated~~furnace ~~financial~~with ~~statements~~a reactor furnace to smelt copper concentrates. The anticipated cost is approximately $57 million.

44Doe Run Peru has developed a business plan that identifies several revenue generating and cost reduction activities. Management believes the plan will enhance liquidity, which will improve Doe Run Peru’s ability to make the investments under the proposed modifications to the PAMA. In fiscal year 2005 Doe Run Peru launched its zinc ferrites processing plant, which, as of October 31, 2005, is producing 845 tons/month of high silver, zinc concentrates valued at approximately $991 per ton.

Doe Run Peru has received income tax assessments from Peru’s tax authority, SUNAT for tax years 1998 through 2001. The assessments primarily relate to Doe Run ~~THE~~Peru’s ~~DOE~~income ~~RUN~~tax ~~RESOURCES~~treatment ~~CORPORATION Consolidated~~of ~~Statements~~the December 1997 merger of ~~Operations (Dollars~~Doe Run Peru and Metaloroya S.A., which was purchased by Doe Run Peru in ~~thousands)~~ 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 estimated assessed amount consisting of additional income taxes due, penalties and interest as of October 31, 2005 totals approximately $109.0 million. The Company estimates that the effect of a similar assessment for tax years after 2001 would be approximately $30.3 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 $11.2 million for calendar years 1998 through 2005.

			Year Ended October 31,
			2003			2002			2001
Net sales			$	684,615		$	663,789		$	737,482
Costs and expenses:
	Cost of sales			643,893			614,563			665,279
	Depreciation, depletion and amortization			30,407			30,847			30,461
	Selling, general and administrative			27,276			28,069			29,726
	Exploration			1,078			1,072			1,602
	Losses from impairment and disposal of long-lived assets			1,409			10,606			996
	Unrealized (gain)/loss on derivative financial instruments			7,220			(1,408	)		(1,764	)
		Total costs and expenses		711,283			683,749			726,300
		Income (loss) from operations		(26,668	)		(19,960	)		11,182
Other income (expense):
	Interest expense			(13,270	)		(55,337	)		(59,992	)
	Interest income			29			12,276			14,870
	Loss on retirement/restructure of long-term debt			(550	)		(7,439	)		(159	)
	Other, net			(499	)		(439	)		(680	)
				(14,290	)		(50,939	)		(45,961	)
		Loss before income tax expense and cumulative effect of change in accounting principle		(40,958	)		(70,899	)		(34,779	)
Income tax expense				—			—			8,226
	Loss before cumulative effect of change in accounting principle			(40,958	)		(70,899	)		(43,005	)
	Cumulative effect of change in accounting principle, net of income tax benefit			(3,940	)		—			(3,774	)
		Net loss	$	(44,898	)	$	(70,899	)	$	(46,779	)
		Cumulative preferred stock dividends		(2,514	)		—			—
		Net loss allocable to common shares	$	(47,412	)	$	(70,899	)	$	(46,779	)

Doe Run Peru has also received Value Added Tax (VAT) assessments for the tax years 1999 through 2001 and for the period from January through July 2004. The assessments primarily ~~accompanying~~relate ~~notes~~to ~~are~~Doe anRun ~~integral~~Peru’s ~~part~~exports ofwith holding certificates and differences in a tax credit application. The total assessment for these ~~consolidated~~periods ~~financial~~was approximately ~~statements~~$43.5 million. SUNAT offset the amount assessed for 2004 of approximately $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 discontinued the use of holding certificates for exports in June 2004. The Company estimates expected additional assessments related to VAT for tax years 2002 and 2003 to total approximately $20.2 million in regard to its exports with holding certificates.

45Results of Operations

Impact ~~THE DOE RUN RESOURCES CORPORATION Consolidated Statements~~ of ~~Comprehensive~~Metals ~~Losses and Shareholder's Deficit (Dollars in thousands)~~ Pricing

		Year Ended October 31,
		2003			2002			2001
Net loss		$	(44,898	)	$	(70,899	)	$	(46,779	)
Unrealized gain (loss) on derivative financial instruments:
	Unrealized gain (loss) on derivative financial instruments during period		(1,854	)		9			2,674
	Less: reclassification adjustment for amounts included in net loss		—			(1	)		(2,682	)
Unrealized gain (loss) on derivative financial instruments, net			(1,854	)		8			(8	)
Unrealized gain (loss) on available-for-sale investments			242			(226	)		(43	)
Minimum pension liability			(12,871	)		(10,253	)		(12,057	)
	Comprehensive loss		(59,381	)		(81,370	)		(58,887	)
	Preferred stock dividends		(2,514	)		—			—
Change in shareholder's deficit			(61,895	)		(81,370	)		(58,887	)
Shareholder's deficit beginning of year			(147,171	)		(65,801	)		(6,914	)
Shareholder's deficit, end of year		$	(209,066	)	$	(147,171	)	$	(65,801	)

Our results for 2005 reflect significant increases in the market prices of lead, copper, zinc and silver as compared to 2004. 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:

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

	Year Ended October 31,
	2005		2004		2003

Average Prices
Lead ($/short ton)	$	870.40	$	759.00	$	436.20
Copper ($/short ton)	3,146.60		2,452.00		1,535.40
Zinc ($/short ton)	1,165.80		921.80		727.00
Silver ($/troy ounce)	7.15		6.34		4.74

46The average annual LME lead price increased in 2005 by over $111.00 per short ton, or 15%, from 2004. 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 mid-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, however, lead demand continues to decline as lead consuming industries move to lower labor cost ~~THE~~areas. ~~DOE~~In ~~RUN~~the ~~RESOURCES~~U.S., ~~CORPORATION Consolidated~~this ~~Statements~~movement ofhas ~~Cash~~been ~~Flows (Dollars~~most pronounced in ~~thousands)~~ automotive lead-acid batteries. Conversely, U.S. lead consumption in industrial batteries rebounded sharply in 2005 in line with overall economic improvements. The net result has been a significant tightening in lead metal availability.

					Year Ended October 31,
					2003			2002			2001
Cash flows from operating activities:
	Net loss				$	(44,898	)	$	(70,899	)	$	(46,779	)
	Cumulative effect of change in accounting principle					3,940			—			4,254
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Depreciation, depletion and amortization				30,407			30,847			30,461
		Imputed interest and amortization of deferred financing costs				1,231			3,711			3,665
		Unrealized (gain)/loss on derivative financial instruments				7,220			(1,408	)		(1,764	)
		Losses from impairment and disposal of long-lived assets				1,409			10,606			996
		Deferred income taxes				—			—			7,190
		Accrued interest refinanced in debt restructuring				—			37,473			—
		Loss on retirement/restructure of long term debt				550			7,439			159
		Increase (decrease) resulting from changes in:
			Trade accounts receivable			8,119			8,228			4,012
			Inventories			7,666			4,058			11,322
			Prepaid expenses and other current assets			(2,093	)		(2,015	)		22,892
			Accounts payable			(484	)		(3,161	)		(1,701	)
			Accrued liabilities			20,496			(331	)		3,595
			Other noncurrent assets and liabilities, net			(14,021	)		(3,837	)		(1,038	)
				Net cash provided by operating activities		19,542			20,711			37,264
Cash flows from investing activities:
	Special term deposit					—			125,000			—
	Purchases of property, plant and equipment					(15,349	)		(28,764	)		(24,537	)
	Net proceeds from (expenses of) disposal of assets					54			(52	)		4,999
				Net cash provided by (cash used in) investing activities		(15,295	)		96,184			(19,538	)
Cash flows from financing activities:
	Proceeds from (repayments on) revolving loans and short term borrowings, net					14,224			(13,473	)		(8,832	)
	Proceeds from long-term debt					—			15,035			—
	Payments on long-term debt					(8,145	)		(129,207	)		(10,551	)
	Issuance of preferred stock					—			20,000			—
	Payment of financing costs					(550	)		(8,495	)		(375	)
				Net cash provided by (used in) financing activities		5,529			(116,140	)		(19,758	)
				Net increase (decrease) in cash		9,776			755			(2,032	)
Cash at beginning of period						7,018			6,263			8,295
Cash at end of period					$	16,794		$	7,018		$	6,263
Supplemental disclosure of cash flow information—
	Cash paid during the period for:
			Interest, net of capitalized interest		$	11,018		$	20,200		$	56,666
			Income taxes		$	—		$	—		$	457

Copper prices continued their strong rebound in 2005 from historically low prices. The copper price increased by nearly $695.00 per short ton, or 28%, from 2004 to 2005. 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 balanced market of copper concentrates in 2006, ultimately resulting in the refined copper market moving into surplus by 2006.

~~The~~Zinc prices have also recovered from the lows set in 2002. Fundamentals ~~accompanying~~for ~~notes~~zinc ~~are~~improved anas ~~integral~~zinc ~~part~~metal ofconsumption ~~these~~exceeded ~~consolidated~~zinc ~~financial~~production ~~statements~~in 2005. Zinc prices, like lead and copper, also benefited from a weak U.S. dollar. Currently, demand for zinc concentrates is exceeding the supply, making the market very competitive.

47Changes in the market prices for metals expose us to variability in our cash receipts. We employ a commodity price risk management strategy using forward sales commitments, futures and commodity put and call option contracts. The purpose of our price risk management program is to limit our 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.”

~~THE DOE RUN RESOURCES CORPORATION Notes to Consolidated Financial Statements October 31, 2003, 2002 and 2001 (Dollars in thousands)~~ 32

~~(1)~~As ~~Summary~~with lead prices mentioned above, low zinc and copper prices in the preceding five years have induced mine closures and cutbacks and slowed the development of ~~Significant~~new copper, ~~Accounting~~zinc ~~Policies~~ 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.

~~Principles of Consolidation~~ Production

~~These consolidated financial statements include the accounts of~~ The ~~Doe~~following table ~~Run~~sets ~~Resources~~forth ~~Corporation~~our ~~(Doe~~production ~~Run)~~statistics ~~and~~for ~~its wholly owned subsidiaries (on a consolidated basis,~~ the ~~Company).~~periods ~~All~~indicated: ~~material intercompany balances and transactions have been eliminated.~~

Reclassifications

	Year Ended October 31,
	2005		2004		2003
U.S. Operations
Lead metal - primary (short tons)	155,838		171,664		281,531
Lead metal - secondary (short tons)	136,478		133,986		149,616
Lead concentrates (metal content, short tons)	281,772		274,950		295,581
Ore grade (lead)	5.36	%	5.73	%	6.53	%

Peruvian Operations
Refined copper (short tons)	64,548		63,518		68,958
Refined lead (short tons)	132,919		130,959		122,946
Refined zinc (short tons)	49,554		75,163		80,679
Refined silver (thousands of troy ounces)	33,998		35,804		35,305
Refined gold (thousands of troy ounces)	67		66		82
Copper concentrates (metal content, short tons)	16,516		16,683		17,944
Ore grade (copper content)	1.00	%	1.10	%	1.10	%

~~Certain~~In ~~balances~~response ~~have~~to ~~been~~continued ~~reclassified~~strong lead metal market conditions at the beginning of 2005, we made a number of changes in our U.S. primary lead division during the year. We increased the amount of tons of ore mined at the Viburnum-29, Viburnum-35 and Sweetwater mines, knowing that we would be mining a slightly lower lead grade of ore for 2005 due to the extra ore from Viburnum-29, ~~their~~Viburnum-35 ~~previous~~and ~~presentation~~Sweetwater being relatively low grade. The net effect of these changes was that our lead grade of ore processed lowered from 5.73% in ~~order~~2004 to ~~conform~~5.36% in 2005, but the volume of ore processed increased by over 535,000 tons, or 11%, from 2004 to 2005. Although the ~~current~~volume ~~year~~of ~~presentation~~ore mined increased by 11% in 2005 versus 2004, our expected total ore volume was 2% less than planned because of less than planned production from the Sweetwater Mine. The Sweetwater Mine ore production shortfall was due to poor development results from the south end of the mine that limited the availability of production areas. Current production plans include the extraction of pillars and a retreat from the south end of the Sweetwater Mine with the abandonment of the last development to the south. We expect these changes will raise the grade of ore mined from Sweetwater and reduce its operating costs for the 2006 period. Also, technical changes made to the pillar recovery process in 2004 allowed the Buick mine to substantially improve its performance in 2005.

Gross ~~Nature~~operating costs from the mining operations were just over 8% over the amount planned for 2005, with some major consumable costs increasing over 20%. Major consumable costs include items such as tires, explosives, diesel fuel, repair parts and grinding media. The benefits derived from the continued implementation of ~~Business~~ lean manufacturing principles helped offset some of the inflationary cost increases. Manpower at our U.S. primary lead division mining operations increased by 6% as compared to 2004 in order to process the higher ore volume.

~~The~~We started ~~principal~~a ~~domestic~~major ~~business~~development ofto the ~~Company~~south isend ~~the exploration, development, mining and processing~~ of ~~non-ferrous~~the ~~metals,~~Fletcher ~~primarily~~mine ~~lead,~~in 2005 and ~~recycling~~will ofcontinue ~~lead-acid~~that ~~batteries~~development ~~and~~throughout ~~other lead-bearing materials~~2006. ~~Doe~~It ~~Run~~accesses ~~has~~a ~~mines~~new inmajor ~~southern Missouri, primary smelters in Herculaneum and Glover, Missouri, and a recycling~~ore ~~facility~~body incalled ~~Boss,~~RC ~~Missouri~~Westfork. ~~Fabricated~~The ~~Products, Inc.~~total ~~(FPI),~~development ais ~~subsidiary~~5,000 ~~fabricates lead products used in radiation~~feet, ~~X-ray shielding~~ and ~~nuclear shielding; and~~ is ~~a leader in the~~ ~~production~~approximately of50% ~~shaped~~complete ~~anodes~~at ~~and~~October ~~anode sheets for those applications~~2005. InAs ~~Peru,~~of ~~Doe~~October ~~Run~~2005 ~~Peru S.R.L (Doe Run Peru) is engaged in~~ the ~~mining,~~RC ~~smelting~~Westfork ~~and refining of polymetallic concentrates, producing~~ore ~~mainly~~reserves ~~copper, lead, zinc, silver and gold which~~ are ~~sold~~2.9 asmillion ~~refined~~tons ~~metals~~of ~~primarily~~ore tograding ~~customers located outside of Peru~~6.65% lead ~~Doe Run's issued~~ and ~~outstanding~~0.83% zinc. Exploration ~~common~~drilling ~~stock~~will iscontinue ~~owned~~in ~~by a subsidiary of The Renco Group, Inc~~2006. ~~(Renco).~~

In ~~Foreign~~2005, ~~Currency~~production ~~Translation~~ at the Herculaneum primary smelter was 155,800 tons, over 5% less than 2004. This was primarily due to storm damage to the sinter plant process building in the third quarter of 2005 that required several

~~The functional currency of the Company's foreign subsidiaries is the U.S. Dollar. Accordingly, foreign currency transaction gains and losses are included in determining net income (loss).~~ 33

days ~~Use~~for repair and sealing of ~~Estimates~~ the building. Production was curtailed during this period and was intermittently curtailed throughout the quarter to control emissions. Blast furnace slag chemistry control also contributed to some production shortfall in the third quarter of 2005. The reduced production combined with inflationary cost increases of coke, natural gas and repair parts resulted in higher unit costs. Process control changes and the completion of repairs to the sinter and acid plants resulted in increased fourth quarter production.

~~The~~Environmentally, ~~preparation~~the ofHerculaneum ~~consolidated~~primary ~~financial~~smelter ~~statements~~did innot ~~conformity~~meet the ~~with~~ambient ~~accounting~~air ~~principles~~lead ~~generally~~standard ~~accepted~~at in the ~~United~~Broad ~~States~~Street ofmonitoring ~~America~~station ~~requires~~in the ~~management~~first tothree ~~make~~quarters ~~estimates~~of ~~and~~2005. ~~assumptions~~However, ~~that~~it ~~affect~~was in attainment for the ~~reported~~fourth quarter. ~~amounts~~All ofother ~~assets~~monitoring ~~and~~stations’ ~~liabilities,~~results ~~the~~were ~~disclosure~~in ofattainment. ~~contingent~~Since ~~assets~~the ~~and~~air ~~liabilities~~quality atmonitors ~~the~~reflected ~~date~~three quarters of non-compliance, the ~~consolidated~~permitted ~~financial statements~~annual ~~and~~capacity of the ~~reported~~Herculaneum ~~amounts~~primary smelter ofdecreased ~~revenues~~from ~~and~~250,000 ~~expenses~~to ~~during~~200,000 ~~the~~tons, ~~reporting~~which ~~periods.~~does ~~Actual~~not affect results at ~~could~~current ~~differ~~production ~~from these estimates~~levels.

Our ~~Inventories~~ recycling operation produced 136,500 tons of finished lead products in 2005, approximately 2% more than the prior year. However, production was less than management’s expectations for 2005. The production shortfall was the result of lower blast furnace production due to poor coke quality and high levels of sulfur in the feed. Coke quality improved during the second half of the year, and we made process changes to the slag handling system at the reverb furnace that have reduced sulfur levels in the feed to the blast furnace. October’s blast furnace production was about 20% greater than the average production rate during the balance of the year.

~~Finished~~Unit ~~metals~~operating ~~and~~costs ~~concentrates,~~at ~~metals~~the ~~and~~recycling ~~concentrates~~operation inwere ~~process~~higher ~~and~~than expected ~~raw~~due ~~materials~~to ~~are~~both ~~stated~~the atproduction ~~the~~shortfall ~~lower~~described ofearlier and inflationary cost orincreases, ~~market~~particularly coke, propane and repair parts. The ~~last-in,~~ ~~first-out~~recycling ~~(LIFO)~~operation ~~method~~made ofadditional improvements to the desulfurization circuit ~~determining~~in ~~cost~~2005 isthat ~~used~~allowed ~~for~~it to process 7% more scrap batteries in the ~~majority~~period compared ofto the ~~Company's~~prior ~~inventories~~period. ~~Supplies~~This ~~and~~represented ~~repair~~the ~~parts~~12th ~~are~~consecutive year ~~principally~~that ~~stated~~Buick atResource ~~average~~Recycling ~~cost,~~set ~~net~~a ofnew ~~reserves~~record for ~~obsolescence~~tons of batteries processed. These improvements were the main contributor to the increase in production in 2005 versus 2004.

~~Inventory~~Doe Run Peru’s ~~costs~~La ~~include~~Oroya ~~labor~~smelter copper production was affected by frequent stoppages to reduce gaseous emissions and to perform maintenance on the reverberatory furnace, however ~~material~~not to the extent in 2004, therefore the overall result was an increase in copper production of 2% in 2005 as compared to 2004. 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 and ~~other~~copper converters. 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 2005, resulting in a 2% increase in lead production ~~costs~~in 2005 compared to 2004. Feed costs increased substantially as a result of the increase in metal prices.

48Ore production at Doe Run Peru’s Cobriza mine in 2005 was approximately 10% higher than 2004; however, ore grade was 9% lower. The net result was that metal content decreased by 1% from 2004 to 2005. Management is implementing corrective actions to address 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 ~~Property,~~aging ~~Plant~~of ~~and~~the ~~Equipment~~ 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.

~~Property,~~Results ~~plant~~of ~~and~~operations for ~~equipment~~the ~~are~~years ~~recorded~~ended atOctober ~~cost.~~31, In2005, ~~accordance~~2004 ~~with~~and ~~Statement~~2003 ofinclude ~~Financial~~the ~~Accounting~~results ~~Standards~~of ~~Statement~~the Company’s NoU. ~~144 "Accounting~~S. ~~for~~operations ~~the~~and ~~Impairment~~Doe orRun ~~Disposal~~Peru. ofIn ~~Long-Lived~~order ~~Assets,"~~to ~~(Statement~~provide ~~No. 144)~~a ~~long-lived assets, such as~~more ~~property,~~meaningful ~~plant~~analysis, ~~and~~the ~~equipment,~~results ~~and~~of ~~purchased~~operations ~~intangibles~~attributable ~~subject~~ to ~~amortization,~~Doe ~~are~~Run ~~reviewed~~Peru will ~~for~~be ~~impairment~~noted ~~whenever~~and ~~events~~discussed orseparately ~~changes~~under ~~in circumstances indicate that the carrying amount~~ “Results of anDoe ~~asset may~~Run ~~not be recoverable~~Peru. ”

~~Recoverability of~~Fiscal ~~assets~~2005 toCompared ~~be held and used is measured by a comparison of the carrying amount of an asset~~ to ~~the~~Fiscal 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 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. 2004

~~Major additions~~Gross ~~and~~margin ~~improvements~~on tosales ~~property,~~(net ~~plant~~sales less ~~and equipment are capitalized, at~~ cost, ~~when~~of ~~they~~sales) ~~significantly~~increased ~~increase~~from ~~the~~$85.1 ~~productive~~million ~~capacity~~in or2004 ~~the~~to ~~life of the asset~~$117.5 ~~Repair~~million ~~and~~in ~~maintenance~~2005. ~~expenditures~~Gross ~~which~~margin ~~are~~on ~~routine,~~sales ~~unanticipated, or~~ for ~~which~~our ~~the~~U.S. ~~timing~~operations ~~cannot~~increased befrom ~~estimated,~~$49.1 million ~~and~~in ~~which~~2004 doto ~~not~~$68.8 ~~extend~~million ~~the~~in ~~useful~~2005. ~~life~~A or30% increase ~~the~~in ~~productive capacity of~~ the ~~asset,~~U.S. ~~are~~operation’s ~~charged~~realized toprices ~~operations~~for aslead ~~incurred.~~metal, ~~Major~~fueled ~~expenditures~~by ~~required~~higher toLME ~~maintain the originally anticipated productive capacity and life of the asset (such as furnace rebuilds)~~prices, ~~for~~contributed ~~which both the amount~~an ~~and~~additional ~~timing~~$49.3 ~~can~~million beto ~~reasonably~~our ~~estimated,~~U.S. ~~are accrued and charged to~~ operations’ ~~over~~gross ~~the~~margin ~~period~~on ~~through~~sales ~~the~~in ~~next~~2005 compared ~~anticipated~~to ~~maintenance~~prior ~~date~~year. The increase

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. 34

~~Mineral~~in the lead metal net realized price in 2005 was more than ~~interests~~the ~~are~~increase ~~amortized~~in ~~using~~the average LME settlement price, due to the ~~units~~effects of ~~production~~our risk ~~method~~management strategy, which reduced our 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 2005 fueled an increase in the net realized price for copper and zinc concentrate sales, which contributed an additional $7.0 million to gross margin compared to 2004. The sale of lead concentrates contributed an additional $7.4 million to margins in 2005 over 2004. 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.

~~Depreciation is~~Selling, ~~computed~~general ~~using~~and ~~the~~administrative ~~straight-line~~costs ~~method~~increased $10.3 ~~over~~million ~~the~~in ~~estimated~~2005 ~~useful~~compared ~~lives~~to 2004, $4.5 million of ~~the~~which ~~assets~~relates to Doe Run Peru. The increase was due to increased salaries and employee benefit costs, asincrease ~~follows:~~in professional services and an increase in insurance expense.

Buildings and improvements		3 to 20 years
Machinery and equipment		2 to 15 years

Losses from impairment and disposal of long-lived assets relate 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.

~~Facilities at~~As ~~which~~of ~~operations~~October ~~have~~31, ~~temporarily~~2005, ~~ceased~~a ~~may~~total beof ~~placed~~149 onhomeowners ahad requested ~~standby~~and ~~care~~were delivered offers, and ~~maintenance~~142 ~~basis~~of those offers had been accepted. As ~~The~~of October 31, 2005, the Company ~~continues~~had tospent ~~depreciate~~approximately $10.0 million under the ~~related~~residential ~~assets~~property ~~during~~purchase ~~the~~plan. ~~standby~~Another $1.1 million of accepted offers ~~period~~are awaiting a closing date and $0.4 million in outstanding offers have not been accepted. Doe Run has complied in all material respects with the property purchase provisions of the settlement agreement.

Unrealized ~~Exploration~~(gain) and ~~Development~~loss ~~Costs~~ on derivative financial instruments are related to the change in fair market value of derivative financial instruments that were a part of Doe Run’s risk management strategy. The increase in unrealized gains from 2003 to 2005 is the result of the continual rise in the LME price over that period. See also “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”

~~Exploration~~Income ~~costs~~tax ~~and~~expense ~~development~~(benefit) ~~costs~~in 2004 ~~incurred~~reflects toa ~~maintain~~reversal ~~production~~of ata ~~operating~~U.S. ~~mines~~federal ~~are~~income ~~charged~~tax toliability ~~operations~~and asa ~~incurred~~change in tax law in Peru. ~~Development~~In ~~expenditures~~2004, ~~for~~the Company reversed a U.S. federal income tax ~~mining~~liability ~~properties~~related to years that are ~~considered~~closed to beaudit ~~commercially~~of ~~feasible,~~$2.8 ~~but~~million. ~~are~~Offsetting this ~~not~~reversal ~~yet~~were ~~producing~~taxes of $2.2 million paid in the third quarter of 2004 pursuant to a law passed in Peru in December 2003, ~~and~~under ~~major~~which ~~development~~certain technical ~~expenditures~~services that Doe Run provided under an agreement with Doe Run Peru are taxed at 30%.

49Renco 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.

~~operating mines~~Fiscal ~~that~~2004 ~~are~~Compared ~~expected~~ to ~~benefit~~Fiscal ~~future production are capitalized and amortized using the units of production method over the estimated proven ore reserves to be benefited.~~ 2003

Gross ~~Reclamation~~margin on sales (net sales less cost of sales) increased from $41.5 million in 2003 to $85.1 million in 2004. Gross margin on sales for our 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 for lead metal, fueled by higher LME prices, contributed an additional $61.4 million to our 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 our risk management strategy, which reduced our exposure to changes in the market price in an attempt to fix an acceptable price for its products. Increases in copper and ~~Mine~~zinc ~~Closure~~metal ~~Costs~~ 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.

~~The Company's mines and related processing facilities are subject to governance by various agencies that have established minimum standards for reclamation.~~ 35

~~As of November 1~~Selling, ~~2002,~~general ~~the~~and ~~Company~~administrative ~~adopted~~costs increased ~~Statement~~$7.4 ofmillion ~~Financial~~in ~~Accounting~~2004 ~~Standards~~compared ~~No. 143~~to 2003, ~~Accounting~~$1.4 ~~for~~million ~~Asset~~of ~~Retirement Obligations (Statement No. 143),~~ which ~~addresses~~relates to ~~financial~~Doe ~~accounting~~Run ~~and~~Peru. ~~reporting~~The ~~for~~remaining ~~obligations~~increase ~~associated~~was ~~with~~due ~~the~~primarily ~~retirement~~to ofinsurance ~~tangible long-lived~~refunds ~~assets~~received ~~and~~in ~~the~~2003 ~~associated~~applicable ~~asset~~to ~~retirement~~legal ~~costs.~~fees ~~The~~incurred ~~standard~~in ~~applies~~a toprevious ~~legal~~fiscal ~~obligations~~year ~~associated~~and credited ~~with~~to ~~the~~selling, ~~retirement~~general ofand ~~long-lived~~administrative ~~assets~~costs ~~that~~and ~~result~~to ~~from~~increased ~~the acquisition,~~salaries ~~construction, development~~ and ~~(or)~~employee ~~normal~~benefit ~~use~~costs ofand ~~the~~insurance ~~asset~~expense.

~~Prior to~~Losses ~~the~~from ~~adoption~~impairment ~~of Statement No. 143 the Company accrued for mine~~ and ~~other~~disposal ~~closure~~of ~~obligations~~long-lived assets atrelate ~~their~~primarily ~~estimated,~~to ~~undiscounted~~recognition ~~cost.~~of impairment ~~Statement~~losses ~~No. 143~~for ~~requires that~~ the ~~fair~~ value of ahouses ~~liability~~purchased ~~for an asset retirement obligation be recognized~~ in ~~the~~Herculaneum ~~period~~relating into properties ~~which~~purchased itunder ~~is incurred if~~ a ~~reasonable~~residential ~~estimate~~property ofpurchase ~~fair~~plan ~~value~~in ~~can be made. The fair value of~~ the ~~liability is~~town ~~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~~Herculaneum. ~~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~~Unrealized losses on derivative financial ~~cumulative~~instruments ~~effect~~are related to the ~~adoption~~change in fair market value of ~~Statement~~derivative ~~No. 143~~financial instruments ~~was~~that were a ~~loss~~part of ~~$3,940,~~Doe aRun’s ~~net~~risk management strategy. The decrease in unrealized losses in 2004 compared to ~~plant,~~2003 ~~property~~is ~~and~~the ~~equipment~~result of ~~$2,088,~~the ~~and~~substantial an increase in the LME price at the end of $12003,~~852~~ which caused large unrealized losses to be recognized in the ~~liability~~fourth ~~for~~quarter ~~asset~~of ~~retirement~~2003. ~~obligations~~See also “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”

Income ~~Commitments~~tax expense (benefit) in 2004 reflects a reversal of a U.S. federal income tax liability and ~~Contingencies~~ 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%.

~~The~~Cumulative ~~Company~~effect 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~~change ~~other~~in ~~factors,~~accounting ~~currently~~principle ~~available~~resulted ~~facts, existing technology, presently enacted laws and regulations, the Company's experience~~ in ~~remediation, the Company's status as~~ a ~~potentially~~charge ~~responsible party (PRP), and the ability~~ of ~~other PRPs to pay their allocated portions~~$3.9 ~~Costs~~million ofin ~~future~~the ~~expenditures~~first ~~for~~quarter ~~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~~2003, aswhich isrelates ~~consistent~~to ~~with~~ the ~~American~~adoption ~~Institute~~ of ~~Certified Public Accountants~~ Statement ~~of Position 96-1, Environmental Remediation Liabilities~~No. 143.

Results ~~Revenue~~of ~~Recognition~~ Doe Run Peru

~~Sales~~Fiscal ~~are~~2005 ~~recorded~~Compared ~~as products are shipped~~ to ~~customers~~Fiscal and title transfers 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 shipment. Revenues are adjusted 2004

50Gross margin on sales (net sales less cost of sales) for Doe Run Peru increased from $36.0 million in 2004 to $48.9 million in 2005. This increase is primarily due to the improvement in treatment charges received in processing copper and lead concentrates and free metal benefits for lead and zinc. Also contributing to an improved gross margin were by-product sales such as indium, tellurium and premium improvements for copper and lead metal. These benefits were offset by higher conversion costs primarily due to higher fuel and coke prices, increased salaries combined with a weakened U.S. dollar, and higher maintenance, spare parts and supplies costs.

~~between month~~Selling, ofgeneral ~~shipment~~ and ~~month~~administrative ofcosts ~~settlement~~for ~~based~~Doe onRun ~~changes~~Peru increased by $4.5 million in ~~market~~2005 ~~prices~~compared to the prior year. ~~Adjustments~~The difference ~~with~~is ~~respect~~due primarily to ~~such~~increases ~~sales~~in ~~are~~compensation ~~recorded~~costs, ~~based~~professional fees onand ~~final~~contributions ~~settlement~~to ~~weights~~community activities, ~~metal~~partially ~~contents~~offset ~~and~~by ~~metal~~a decrease ~~prices~~in ~~using~~insurance ~~applicable customer agreements~~expense.

Other, ~~Derivative~~net ~~Instruments~~for ~~and~~Doe Run ~~Hedging~~Peru ~~Activities~~ increased by $1.2 million in 2005 compared to 2004, primarily due to exchange gains on transactions denominated in Peruvian nuevos soles as a result of the effect of a decrease in the value of nuevos soles against the U.S. dollar.

~~Statement~~Income oftax ~~Financial~~expense ~~Accounting Standards No. 133, Accounting~~ for ~~Derivative~~Doe ~~Instruments~~Run ~~and~~Peru ~~Hedging Activities,~~ was ~~issued~~$0 ~~by the Financial Accounting Standards Board~~ in ~~June 1998,~~2005 and ~~amended by Statement of Financial Accounting Standards No. 138~~2004, ~~Accounting~~ ~~for Certain Derivative~~reflecting ~~Instruments~~tax 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 (that is, gains and losses) ~~of a derivative instrument depends on whether it has been designated~~ and ~~qualifies~~management’s asbelief ~~part~~that ofsufficient auncertainty ~~hedging~~exists ~~relationship, and if so, whether the derivative instrument is~~regarding ~~designated as a hedge of exposures to changes in fair value or cash flows. If~~ the ~~hedged~~realization ~~exposure is an exposure to changes in the fair value~~ of acertain ~~fixed~~deferred ~~commitment,~~tax ~~the gain (loss) is recognized in earnings in the period of change~~assets, ~~with~~which anrequires ~~equal~~that 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~~valuation ~~reclassified~~allowance ~~into~~be ~~earnings~~established.

~~The Company~~Fiscal ~~adopted~~2004 ~~Statement~~Compared ~~No. 133~~to asFiscal of November 1, 2000, in the first quarter in which it was required by the standard, as amended. The adoption of Statement No. 133 resulted in a net transition loss of $3,774, net of income tax benefit of $480, and a gain recorded in other comprehensive income of $70. 2003

Gross ~~Research~~margin on sales (net sales less cost of sales) for Doe Run Peru increased from $15.3 million in 2003 to $36.0 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 ~~Development~~ 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.

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. 36

Selling, ~~Income~~general ~~Taxes~~ and administrative costs for Doe Run Peru increased by $1.4 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.

~~Renco~~Other, ~~has~~net ~~elected~~ for ~~the~~Doe Run ~~Company~~Peru todecreased bein ~~treated~~2004 ascompared ato ~~qualified~~2003, ~~subchapter~~primarily Sdue ~~subsidiary~~to ~~(QSSS)~~exchange losses ~~for~~on ~~federal~~transactions ~~tax~~denominated ~~purposes. Most states~~ in ~~which~~Peruvian ~~the~~nuevos ~~Company~~soles ~~operates will~~as ~~follow~~a ~~similar~~result ~~tax~~of ~~treatment. QSSS status requires~~ the effect ~~ultimate shareholders to include their pro rata share~~ of ~~the~~an ~~Company's~~increase ~~income or loss~~ in ~~their~~the ~~individual~~value ~~tax~~of ~~returns.~~nuevos ~~The~~soles ~~election~~against ~~does not affect foreign income taxes related to~~ the ~~Company's foreign subsidiaries~~U.S. dollar.

~~Deferred~~ Income tax ~~assets~~expense ~~and~~for ~~liabilities~~Doe ~~are~~Run ~~recognized~~Peru inwas ~~foreign~~$0 ~~jurisdictions~~in ~~for~~2004 ~~the~~and ~~future~~2003, reflecting tax ~~consequences~~losses ~~attributable~~and tomanagement’s ~~differences~~belief ~~between~~that ~~the~~sufficient ~~financial~~uncertainty ~~statement~~exists ~~carrying amounts~~regarding ~~of existing assets and liabilities and~~ the ~~respective~~realization ~~tax bases~~ of ~~these~~certain ~~assets~~deferred ~~and liabilities. Deferred~~ tax assets, ~~and~~which ~~liabilities~~requires ~~are~~that ~~measured~~a ~~using enacted tax rates expected to apply to taxable~~valuation ~~income~~allowance ~~in the years in which those temporary differences are expected to~~ be ~~recovered or settled~~established.

51Liquidity and Capital Resources

~~(2) Financial Condition~~ Overview

~~The~~Doe Run ~~Company~~is highly leveraged. Doe Run Peru has ~~had~~significant ~~recurring~~capital ~~losses~~requirements ~~over~~under ~~several~~environmental ~~years~~commitments, ~~primarily~~which, ~~the~~if not met, could result in defaults of the ~~declining~~Company’s ~~treatment~~credit ~~charges~~agreements; ~~discussed~~has substantial ~~below~~contingencies related to tax; and ~~low~~has ~~metal~~significant ~~prices,~~debt aservice ~~condition~~obligations ~~exacerbated~~that byraise substantial doubt about the Company'’s ~~significant~~ability ~~interest~~to ~~costs~~continue ~~prior~~as toa ~~the~~going concern. These ~~restructuring~~commitments ~~discussed~~require inus ~~Note 3.~~to dedicate ~~Doe~~a ~~Run's~~substantial ~~liquidity~~portion ~~has~~of ~~been~~cash ~~affected~~flow byfrom operations to the payment of these ~~factors~~obligations, aswhich ~~well~~will asreduce ~~Doe~~funds ~~Run~~available ~~Peru's~~for other business ~~liquidity~~purposes. AsSee ~~noted~~“Contractual inObligations” for ~~Note 9,~~a ~~the~~summary ~~Company~~of ~~failed~~these and other contractual obligations. These factors also increase our vulnerability to ~~meet~~general ~~certain~~adverse ~~financial~~conditions, ~~covenant~~limit ~~requirements~~our ~~contained~~flexibility in planning for or reacting to changes in its ~~revolving~~business ~~credit~~and ~~agreements~~industry, and alimit our ~~term~~ability ~~note~~to ~~(the~~obtain ~~Term~~financing ~~Note)~~required ~~during~~to ~~fiscal~~fund working capital and capital ~~2003,~~expenditures ~~which~~and ~~defaults~~for ~~continued~~other ~~into~~general ~~fiscal~~corporate ~~2004~~purposes. AsAn ~~discussed~~unfavorable inoutcome to ~~Notes~~the 20lawsuits and 21tax assessments in Peru, ~~the~~as ~~Company~~discussed ~~has~~in ~~uncertainties~~“Item ~~related~~3. toLegal Proceedings,” ~~environmental~~would ~~and~~have ~~litigation~~a ~~matters.~~further ~~These~~adverse ~~issues~~effect ~~combined~~on ~~raise~~our ~~substantial~~ability to meet our ~~doubt~~obligations ~~about~~when ~~the~~due. ~~Company's~~These ~~ability~~factors toare ~~continue~~discussed asin amore ~~going~~detail ~~concern~~below.

~~Doe Run~~Our ~~Peru's results of operations and liquidity have been severely impacted by declining treatment charges that Doe Run Peru receives for processing raw materials resulting from a~~auditors ~~shortage~~issued inunqualified ~~the~~opinions ~~global~~on ~~supply of concentrates. The effects of low metals prices for~~ the ~~past~~2005 ~~several~~audited ~~years~~consolidated ~~have also caused some of Doe Run Peru's current suppliers of concentrates to suffer~~ financial ~~distress,~~statements ~~which~~of ~~has affected~~ the ~~availability~~Company ofand ~~concentrate~~the ~~feed.~~audited ~~During~~financial ~~2003,~~statement ~~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~~that inexpressed ~~delivery~~substantial ~~schedules~~doubt ~~adversely~~about ~~affected~~our ~~Doe~~ability ~~Run Peru's metal production and results of operations. If one or more of Doe Run Peru's significant local suppliers were~~ to ~~cease~~continue ~~delivery~~as ofgoing ~~concentrates,~~concerns ~~there~~due ~~could be no assurance La Oroya would be able~~ to ~~secure~~net ~~sufficient~~capital ~~replacement feedstock at economically acceptable terms. If such shortages resulted in a significant interruption in feed supply~~deficiencies, asubstantial ~~material~~debt ~~reduction~~service ~~in the production of metals from La Oroya or an interruption of production in the lead~~ requirements and ~~zinc circuits could result, which could have a~~ significant ~~adverse effect~~capital onrequirements ~~the~~under ~~Company's~~environmental ~~results of operations, financial condition and liquidity~~commitments.

~~As discussed~~Cash inFlow Note 20 (see terms defined therein), Doe Run Peru is proceeding with efforts to identify alternative methods of achieving compliance with environmental requirements. These efforts include, but are not limited to, reducing or curtailing production from a portion of the plant thus eliminating the need for the equipment presently contemplated and replacing it with another alternative. These efforts must take into consideration the impacts on profitability and liquidity, as well as other economic impacts. Doe Run Peru intends to submit a request in 2004 to modify its existing requirements. There can be no assurance that the alternatives will be approved by the Peruvian government or that they will achieve compliance in the timeframe required. If the La Oroya smelter does not operate within the required limits after December 31, 2006, Doe Run Peru could be forced to cease operations at the La Oroya smelter. Summary

~~Doe Run~~Net ~~Peru has implemented cost savings, including a reduction of approximately 10% of its workforce, acceleration of~~ cash ~~receipts,~~provided ~~as well as other measures, to improve its liquidity. In addition, the retirement of Doe Run Peru's loan from a foreign bank, discussed in Note 9, reduced Doe Run Peru's interest payments~~ by ~~approximately~~or ~~$14,000~~(used ~~per year. These changes improved Doe Run Peru's cash flow and availability~~ in) ~~2003.~~activities ~~The~~of ~~cash~~the ~~balance~~Company ~~and net unused availability under Doe Run Peru's revolving credit facility were approximately $16,800 and $3,800 at~~are ~~October 31,~~identified ~~2003, respectively~~below.

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

	Year Ended October 31,
	2005		2004		2003

Operating activities	76,198		21,597		22,448
Investing activities	(50,663	)	(29,734	)	(15,295	)
Financing activities	(22,367	)	8,755		5,529
Cash and Cash Equivalents, beginning of period	20,318		19,700		7,018
Cash and Cash equivalents end of period	23,486		20,318		19,700

52We had capital expenditures of $51.3 million in 2005 and have projected capital expenditures of approximately $54.1 million for 2006, including spending on Doe Run Peru’s PAMA projects. In the U.S., we had capital expenditures of $17.2 million in 2005 and have projected total capital expenditures of approximately $14.7 million for 2006, 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 Consolidated Financial Statements.” In addition to these capital investments, our U.S. operations expended approximately $82.6 million, $66.5 million and $51.3 million on repairs and maintenance for 2005, 2004 and 2003, respectively. Doe Run Peru had capital expenditures of $34.0 million in 2005 and has

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, beginning in 2003, Doe Run will 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 have affected Doe Run's liquidity. 37

~~Doe Run~~projected ~~has~~capital ~~implemented~~expenditures ~~cost savings measures over the last several years to mitigate the impact~~ of ~~lower~~approximately $39.4 ~~metal~~million ~~prices,~~for ~~including: reductions of production levels~~2006, ~~changes~~primarily infor ~~mine~~PAMA ~~plans and~~projects ~~the elimination of hourly~~ and ~~salaried~~to ~~positions~~support ongoing operations. ~~These efforts succeeded in reducing~~ Doe Run's Peru ~~costs~~expended ~~over~~approximately ~~the~~$22.6 ~~last~~million, ~~several years~~$19.6 ~~Management~~million ~~will~~and ~~continue~~$16.8 tomillion ~~assess~~on repairs ~~market~~ and ~~operating conditions~~maintenance tofor ~~maximize~~2005, ~~its~~2004 ~~operating~~and ~~profit or limit losses~~2003, ~~while allowing Doe Run to fulfill its environmental obligations~~respectively. ~~Metal~~As ~~prices~~a ~~began~~result ~~rising in the latter part~~ of ~~the fourth quarter of~~ ~~2003.~~these ~~See~~expenditures, ~~discussion~~we inbelieve ~~Note 22~~that ~~regarding~~the ~~recent~~operations ~~changes~~will incontinue ~~market~~to ~~conditions~~maintain modern and ~~primary~~efficient ~~smelting operations~~facilities.

~~Doe Run~~Capital 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. See Note 22 for discussion. Resources

~~Based~~The onCompany’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 August 29, 2008. The availability of loans under the ~~factors~~Doe ~~discussed~~Run ~~above~~revolving credit facility is limited to a percentage of eligible U.S. accounts receivable and inventories, ~~management~~less ~~expects~~any ~~that~~outstanding ~~both~~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 had an expiration date of November 23, 2005, which was subsequently extended to June 23, 2006, and provides Doe Run Peru ~~will~~with ~~continue~~working ascapital ~~going~~loans ~~concerns~~up ~~through~~to ~~October 31~~$40.0 million, ~~2004~~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. The balances in these revolving credit facilities are classified as current liabilities on the balance sheet.

53Net unused availability at October 31, 2005 under the Doe Run revolving credit facility and Doe Run Peru revolving credit facility was approximately $22.1 million and $0.2 million, respectively. In addition to the availability under its revolving credit facilities, cash balances at Doe Run and Doe Run Peru were $8.9 million and $14.6 million, respectively, at October 31, 2005. Net unused availability at October 31, 2004 was approximately $22.5 million and $0.06 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 $13.4 million and $6.9 million, respectively, at October 31, 2004.

~~(3)~~The ~~Debt~~Doe ~~Restructuring~~ 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.

OnThe ~~October 29,~~Company has ~~2002,~~debt ~~Doe~~service ~~Run~~requirements ~~consummated~~in athe ~~consensual~~future, ~~restructuring~~as ofshown ~~most~~in of“Contractual ~~its~~Obligations,” ~~previously~~including ~~outstanding notes by exchanging notes with a principal amount~~the ofmaturity ~~$294,840,~~in ~~plus~~2006 ~~unpaid accrued interest~~ of $~~37,473,~~8.0 ~~for~~million ~~stock warrants (Warrants) exercisable~~ for anthe ~~aggregate~~term ofnote, ~~approximately 39%~~ of ~~the~~which ~~fully~~$6.0 ~~diluted~~million ~~common~~was subsequently ~~stock~~paid, ~~of Doe Run~~ and ~~new~~interest ~~notes~~payments ~~with a principal amount~~ of $~~175,832~~25.7 (million for the 11.75% ~~Notes)~~notes. At InOctober ~~connection~~31, ~~with~~ the ~~completion of the exchange offer,~~ Doe Run ~~borrowed~~Peru ~~$15,500~~revolving ~~under~~credit ~~the~~facility ~~Term~~had ~~Note~~an ~~and~~expiration date ~~received~~of ~~$20~~November 23,~~000~~ ~~from~~2005, ~~the~~which ~~sale~~was ofsubsequently ~~redeemable preferred~~extended ~~stock~~ to ~~Renco~~June 23, ~~and~~2006. ~~used~~It will ~~the~~need ~~proceeds from these transactions~~ to ~~pay~~be ~~down~~renegotiated ~~the~~and ~~balance~~there oncan abe ~~revolving~~no ~~credit~~assurance ~~facility,~~that ~~pay~~we ~~certain~~will ~~fees~~be successful ~~related~~in torenewing the ~~transaction~~agreement, ~~and~~or ~~pay~~if ~~interest~~it ~~due~~is ~~and unpaid~~successful, ~~plus~~that ~~penalties, on~~ the ~~outstanding~~renewal would ~~notes~~be ~~that~~at ~~were~~terms ~~not~~favorable ~~exchanged.~~to us.

~~The~~Effective July ~~restructuring~~1, ~~was accounted for in accordance with Statement of Financial Accounting Standards No. 15~~2004, ~~Accounting~~Doe byRun ~~Debtors~~ and ~~Creditors~~Doe ~~for~~Run ~~Troubled Debt~~Peru ~~Restructurings~~cancelled ~~(Statement No. 15). Under Statement No. 15,~~ a ~~debtor~~sales ~~may~~agency ~~not~~agreement ~~change the carrying amount of the payable at the time of restructuring unless the~~under ~~total~~which ~~future~~Doe ~~cash~~Run ~~payments,~~acted ~~including~~as ~~interest,~~a ~~specified~~sales byagent ~~the~~on ~~new~~behalf ~~terms are less than the carrying amount~~ of ~~the~~Doe ~~payable~~Run ~~at the time of restructuring~~Peru. Under the ~~terms of the 11.75% Notes, total~~ ~~expected payments~~cancellation, ~~including~~the ~~all~~balance ~~amounts~~owed ~~contingently~~to ~~payable,~~Doe ~~will~~Run ~~be greater than the carrying amount~~ of ~~the notes exchanged~~$22.6 Inmillion ~~accordance~~will ~~with~~be ~~Statement~~paid ~~No. 15~~in ~~the 11~~$1.~~75% Notes are recorded~~0 onmillion ~~the~~quarterly ~~balance~~installments ~~sheet~~or atas aotherwise ~~carrying~~agreed ~~amount equal to the carrying amount of the notes exchanged, including unpaid accrued interest, reduced~~ by ~~deferred issue costs related to~~ the ~~notes exchanged and the fair value of the warrants issued~~parties. ~~Therefore, the related carrying amounts on balance sheet exceeded the outstanding face amount due on these obligations on the date of the restructuring as follows:~~

		Face Amount			Amount Recorded Under Statement No. 15
11.75% Notes at October 29, 2002		$	175,832		$	325,592

Debt Instruments

~~The~~On ~~effect~~October 29, 2002, the Company consummated the Restructuring whereby most of ~~this~~its ~~accounting~~Old ~~treatment~~Notes iswere exchanged ~~that~~with ~~substantially~~a ~~less~~principal ~~interest~~amount ~~expense~~of ~~will~~$294.84 bemillion, ~~recognized~~plus ~~related~~unpaid toaccrued interest ~~the~~of 11$37.~~75%~~473 ~~Notes~~million, ~~during~~for ~~their~~stock ~~term~~warrants, exercisable ~~because~~for ~~the~~an aggregate of approximately ~~majority~~39% of the ~~interest~~fully ~~payments~~diluted ~~are~~common ~~reflected~~stock inof the ~~carrying~~Company ~~amount~~and ofnew ~~the~~ 11.75% ~~Notes~~notes with a principal amount of $175.832 million 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, ~~Statement~~the ~~No. 15~~notes improved ~~requires~~the Company’s liquidity by extending the maturity date to November 1, 2008, and provided that ~~all~~a ~~costs~~portion of ~~restructuring~~interest may be ~~expensed~~paid ~~when~~in ~~incurred.~~kind with the ~~Because~~issuance ~~contingent~~of ~~amounts~~additional ~~payable~~notes ~~are~~whereby, ~~assumed~~through ~~payable~~October in15, 2005, interest may be paid, at the ~~application~~option of ~~Statement~~Doe ~~No. 15~~Run, aat ~~gain~~an ~~may~~annual ~~result~~rate inof ~~future~~either ~~periods~~3% ifin ~~contingent~~cash ~~amounts~~and 11.5% ~~payable~~paid ~~are~~in ~~not~~kind or 8.5% paid in cash. ~~See~~After ~~Note 9~~October 15, 2005, interest will ~~for~~accrue ~~discussion~~at the rate of ~~contingent~~11.75% ~~amounts~~per ~~payable~~annum ~~under~~and ~~various~~will ~~debt~~be ~~agreements~~payable in cash. Beginning with the April

~~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.~~ 38

2005 interest payment, the Company began paying cash interest. The notes are recorded in accordance with Statement of Financial Accounting Standards No. 15, Accounting by Debtors and Creditors for Troubled Debt Restructurings (4SFAS No. 15). ~~Related~~See ~~Party~~the discussion ~~Transactions~~ in Significant Accounting Policies and Estimates for a description of SFAS 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.

~~Doe~~Our ~~Run~~balance ~~has~~sheet ~~entered~~reflected $386.5 ~~into~~million aand ~~management consulting agreement with Renco~~$417.3 ~~Under~~million ~~the~~of ~~agreement,~~total ~~Renco~~debt ~~will~~on ~~provide~~a ~~Doe~~consolidated ~~Run~~basis ~~with~~as ~~management services for an annual fee.~~of ~~The~~October ~~agreement is automatically renewed every three years~~31, ~~unless~~2005 ~~either~~and ~~party gives six months prior notice~~2004, ~~with the current term ending October 31, 2006~~respectively. ~~Fees~~The ~~expensed~~face ~~under~~amount ~~this~~of ~~agreement~~indebtedness ~~were~~outstanding ~~$2,400~~at ~~in each of the years ended~~ October 31, ~~2003,~~2005 ~~2002,~~ and ~~2001.~~2004 ~~Fees~~was ~~outstanding and unpaid were~~ $~~6,400~~219.0 ~~and $4,000 at~~ million.

54We were in compliance with the covenants under the various debt agreements as of October 31, 2005, with the exception of the delivery of audited financials and other reporting requirements for the year ended October 31, 2005 by January 29, 2006 under the Doe Run Revolving Credit Facility and the Term Note. Waivers for these reporting defaults were received on March 17, 2006 and March 16, 2006, respectively.

During the period beginning on October 31 29, ~~2003~~ 2005 and ~~2002,~~ending ~~respectively.~~on ~~The~~October ~~indenture~~29, ~~for~~2012, the ~~11.75%~~holders ~~Notes~~of ~~limits~~a majority of the ~~payment~~warrants ofhave ~~fees~~the right to ~~$1,200~~require ~~per~~Doe ~~year~~Run ~~unless~~to ~~defined~~repurchase ~~earnings~~all, ~~before~~but ~~interest,~~not less ~~taxes~~than all, ~~depreciation~~of the warrants and any outstanding shares issued upon the ~~amortization~~exercise ~~for~~thereof at a price equal to the ~~Company~~fair market value of the warrants, ~~less~~as determined ~~that~~by ~~for~~a ~~Doe~~third ~~Run~~party ~~Peru~~appraisal. ~~exceeds~~Management ~~$35,000,~~engaged ina ~~which~~nationally recognized ~~case~~valuation anfirm ~~additional~~to $1calculate the fair value of the warrants at October 31,~~200~~ 2005 and 2004. Management’s estimate of the fair value of the warrants based on the valuation is ~~allowed~~approximately $0.6 million at each of the years ended October 31, 2005 and 2004.

~~On October 29,~~Environmental ~~2002 Doe Run issued 2,000 shares of Series A Redeemable Preferred Stock to Renco for $20,000. See Note 11.~~ Commitments

~~On October 29,~~Our ~~2002,~~commitments ~~Renco~~under ~~signed~~agreements ~~a Junior Participation Agreement~~ with ~~the~~regulatory ~~lender~~agencies ~~of Doe Run's revolving credit facility (Doe Run Revolving Credit Facility) to provide credit~~for ~~support~~environmental ~~for~~activities ~~supplemental~~are ~~loans to Doe Run~~significant. ~~The~~Our ~~agreement~~recorded ~~requires~~liability ~~Renco~~for environmental tomatters ~~participate~~and ~~with~~asset ~~the~~retirement ~~lenders~~obligations inwas ~~supplemental~~$34.7 ~~loans~~million inat October an31, ~~amount up to $15~~2005,~~000~~ ~~when~~which ~~availability~~does isnot ~~less~~include ~~than~~capital ~~$2,500~~expenditures ~~for~~related ~~five consecutive~~to ~~days and the~~ Doe Run ~~Revolving~~Peru’s ~~Credit~~PAMAs. ~~Facility~~Spending ~~lenders~~estimates ~~have~~may ~~received~~change ~~cash~~based ~~from~~on ~~Renco in~~ the ~~amount of the supplemental loans. As of October 31~~activities required, ~~2003~~which ~~and~~could ~~October 31,~~have ~~2002~~a ~~no supplemental~~significant ~~loans~~adverse ~~had~~impact ~~been~~on ~~made.~~our liquidity.

OnDoe Run Peru’s existing PAMA ~~October 29~~requires it to perform projects in 2006 at an additional cost of $108 million. Doe Run Peru expects that it will not be able to comply with the spending requirements of the PAMA investment schedule in 2006 with respect to the construction of the sulfuric acid plant required by the PAMA and, ~~2002~~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 our business, financial condition and results of operations. Doe Run Peru submitted an application for extension discussed in the “Overview—Doe Run Peru” to modify the requirements of the existing PAMA and ~~Renco~~extend ~~signed~~the aterm ~~tax~~of ~~sharing~~the ~~agreement~~PAMA. Doe Run Peru will perform other environmental projects to reduce fugitive emissions, including ~~see~~heavy metal dust, to address the health issues of the community. The total estimated completion cost of the PAMA projects, including the sulfuric acid plant construction, and these projects is approximately $130.0 million. Doe Run Peru’s actual expenditures for these projects in 2005 was $12.7 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 the PAMA requirements and compliance in ~~Note 14~~“Item 1. Business—Doe Run Peru’s 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.

AtManagement ~~times,~~believes tothat ~~obtain~~ the ~~advantages~~price improvements and other revenue enhancements and the issuance of ~~volume,~~the ~~Renco~~Supreme ~~purchased~~Decree ~~certain~~allowing ~~insurance~~an ~~policies~~application to extend La Oroya’s PAMA requirement for athe ~~number~~construction of ~~its~~the ~~subsidiaries,~~sulfuric ~~including~~acid ~~the~~plant ~~Company.~~will ~~The~~enable ~~actual~~us to ~~cost~~continue ofas ~~such~~a ~~policies, without~~going ~~markup,~~concern. isOur ~~reimbursed~~ability byto ~~the~~meet ~~covered~~obligations ~~subsidiaries.~~after ~~For~~2005 could be affected by the ~~years~~factors ~~ended~~discussed ~~October 31,~~in ~~2003,~~“Item ~~2002~~1. ~~and~~Business—Risk ~~2001,~~Factors” ~~the~~or ~~Company~~an ~~made~~unfavorable ~~payments~~outcome to ~~Renco~~any of ~~approximately~~the items ~~$23~~noted above, ~~$299~~ and, $1accordingly,~~822, respectively,~~ ~~under~~no ~~the~~assurance ~~Renco~~can ~~insurance~~be ~~program.~~given that it will be able to meet such obligations.

~~During 2003, Renco purchased the Term Note. See further discussion in Note 9.~~ 39

~~(5)~~Tax ~~Inventories~~ Commitments

~~Inventories~~Doe Run ~~consist~~Peru has received income tax assessments from Peru’s tax authority, SUNAT for tax years 1998 through 2001. The assessments primarily relate to Doe Run Peru’s income tax treatment of the ~~following:~~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 estimated assessed amount consisting of additional income taxes due, penalties and interest as of October 31, 2005 totals approximately $109.0 million. The Company estimates that the effect of a similar assessment for tax years after 2001 would be approximately $30.3 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 $11.2 million for calendar years 1998 through 2005.

	October 31,
	2003		2002
Finished metals and concentrates	$	12,466	$	14,660
Metals and concentrates in process		56,399		59,814
Materials, supplies and repair parts		26,815		28,872
	$	95,680	$	103,346

Doe Run Peru has also received Value Added Tax (VAT) assessments for the tax years 1999 through 2001 and for the period from January through July 2004. 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 $43.5 million. SUNAT offset the amount assessed for 2004 of approximately $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 discontinued the use of holding certificates for exports in June 2004. The Company estimates expected additional assessments related to VAT for tax years 2002 and 2003 to total approximately $20.2 million in regard to its exports with holding certificates.

~~Materials,~~We believe that in each ~~supplies~~case Doe Run Peru has followed the applicable Peruvian tax statutes and ~~repair~~intends to ~~parts~~pursue ~~are~~all ~~stated~~available ~~net~~administrative ofand ~~reserves~~judicial ~~for~~appeals. ~~obsolescence~~Doe ofRun ~~$5,220~~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 ~~$5,157~~were atto ~~October 31~~appeal in the judicial system, ~~2003~~some ~~and~~type ~~2002~~of financial assurance would be required, ~~respectively.~~which would have a significant adverse effect on liquidity.

~~The FIFO~~Contractual cost of inventories valued under the LIFO cost method were approximately $77,534 and $71,326 at October 31, 2003 and 2002, respectively. If the FIFO cost method had been used to determine cost, inventories would have been $8,830 higher at October 31, 2003 and $4,989 lower at October 31, 2002. Obligations

55The following table summarizes our contractual obligations at October 31, 2005 (in millions):

As a result of reducing certain inventory quantities valued on the LIFO basis, inventory costs prevailing in previous years were charged to cost of sales in 2003, 2002 and 2001. 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, 2002 and 2001 were not significant.

			Payments Due By Period
	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		After 5 Years
Long-term debt (a)	$	308.2	$	89.2	$	219.0	$	—	$	—
Redeemable Preferred Stock (b)	28.5		—		—		28.5		—
Operating leases	30.8		8.1		7.8		4.0		10.9
Purchase obligations (c)	880.4		508.6		369.8		2.0		—
Royalty obligations (d)	1.7		0.2		0.5		0.4		0.6
Pension funding obligations

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549

FORM 10-K

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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

Forward-LookingMetal Statements prices

41Primary lead operations

Filing Compare · DOE RUN RESOURCES CORP