Error making Sendmail with SMTP AUTH

[Nick]

I am trying to set up SMTP AUTH per the handbook section 22.10.  I have 
FreeBSD 5.3 and have installed cyrus-sasl-2.1.19_1; cyrus-sasl-1.5.28_3 
is also present.  I have set pwcheck_method: passwd and added the 3 
lines to make.conf.  I am trying to recompile Sendmail and the make 
outputs ends as below:

cc -O -pipe  -I/usr/src/usr.sbin/sendmail/../../contrib/sendmail/src 
-I/usr/src/usr.sbin/sendmail/../../contrib/sendmail/include -I. -DNEWDB 
-DNIS -DTCPWRAPPERS -DMAP_REGEX -DDNSMAP -DNETINET6 -DSTARTTLS 
-D_FFR_TLS_1 -I/usr/local/include/sasl1 -DSASL   -L/usr/local/lib -o 
sendmail alias.o arpadate.o bf.o collect.o conf.o control.o convtime.o 
daemon.o deliver.o domain.o envelope.o err.o headers.o macro.o main.o 
map.o mci.o milter.o mime.o parseaddr.o queue.o ratectrl.o readcf.o 
recipient.o savemail.o sasl.o sfsasl.o shmticklib.o sm_resolve.o 
srvrsmtp.o stab.o stats.o sysexits.o timers.o tls.o trace.o udb.o 
usersmtp.o util.o version.o -lutil -lwrap 
/usr/src/lib/libsmutil/libsmutil.a /usr/src/lib/libsm/libsm.a -lssl 
-lcrypto -lsasl
cc: /usr/src/lib/libsmutil/libsmutil.a: No such file or directory
cc: /usr/src/lib/libsm/libsm.a: No such file or directory
*** Error code 1

What am I doing wrong?

Thanks,

Nick