FORM 10-KSB/A
                               (Amendment No. 1)


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(Mark One)

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


                   For the fiscal year ended December 31, 2001

                                       OR

[ ]      TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934


                         Commission file number 0-18026

       EUROPEAN AMERICAN RESOURCES, INC. (Formerly Merlin Mining Company)
             (Exact name of registrant as specified in its charter)

       Delaware                                                 87-0443214
------------------------------                              ------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation of organization)                             Identification No.)

 91 South Main Street, Eureka, Nevada                             89316
----------------------------------------                        ---------
(Address of principal executive offices)                        (Zip Code)


Registrant's telephone number, including area code: (775) 237-7943

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

                                      NONE
                                 --------------
                                (Title of Class)

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
requirement for the past 90 days. Yes X No

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  registrant's  knowledge,  in definite proxy or  information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
it.
[X]


As of August  28,  2002,  the Issuer had  outstanding  24,050,408  shares of its
common stock,  as adjusted,  par value $0.0001 per share. As of August 28, 2002,
11,848,758 shares were held by non-affiliates  with an aggregate market value of
approximately $3,198,140.





<PAGE>

                                     PART I

Item 1. Business.
        ---------

     General Development of Business
     -------------------------------


         The Company was  incorporated in the State of Delaware on July 6, 1987.
We are an Exploratory Mining Company. Since inception,  the Company has acquired
various  mining  rights  and  has  held up to as  many  as  approximately  6,700
patented,  unpatented  lode, mill sites and placer claims on certain  properties
located throughout the State of Nevada.  During the year ended December 31, 2000
the Company waived its rights to approximately  727 claims and received a refund
of $391,333 of BLM fees for claims and costs with an aggregate carrying value of
$413,281,  resulting in a $21,940 charge to operating  expenses  during the year
ended  December 31, 2000. At December 31, 2000,  the  Company's  interest in the
joint venture with Homestake  Mining contained 103 of the 109 claims the Company
controlled.  Certain of these  rights  were  acquired  by  agreements  to pay an
aggregate  total  royalty  based upon  various  percentages  of the net  profits
delivered from the properties  computed by a predefined  formula. As of December
20, 2001,  Homestake Mining recorded the mining claims back into EPAR's name and
both parties  mutually  released each other from the terms of the joint venture.
Additionally, Homestake assigned the rights to an interest in 23 patented and 23
unpatented claims, in the same are of interest of its 109 claims now controlled,
which subject to due diligence,  the Company plans on retaining. The Company was
also given an option to  acquire  approximately  100  additional  claims,  which
subject to due diligence,  the Company plans on pursuing  approximately 50 to 75
of such claims in the area of interest.  Since  acquisition of these properties,
the Company has not commenced any extractive mining operations.


         Over the past several years the Company has primarily  concentrated its
efforts on the 62 patented claims and mill sites and 47 unpatented claims in the
Prospect  Mountain  region,  which in May of 1998 the Company  renegotiated  and
closed  title to these  claims.  The  Company's  claim  sites in this region are
within  approximately  one mile of the  Archimedes  (Ruby  Hill)  open  pit,  an
actively  producing gold mining  operation,  which is owned by Homestake  Mining
Company.  The extraction costs in this region are some of the lowest reported in
the industry  ($104 per ounce in 1999 and $106 in 2000).  Although this provides
no  assurance  in itself  that the  Company's  claims in this region can provide
similar results, management considers this to be an enhancement to the Company's
position  to exploit  its claims in this  region.  It should be noted that these
claims are  subject to a net  smelter  agreement  with the former  sellers  (see
Commitments included in the financial statements included in Item 13).


         Effective  December 1, 2001,  the Company had entered  into a agreement
with ASDI,  LLC. a California  holding  company,  and Western Mine  Development,
Inc., (WMD) a Nevada  corporation,  whereby the Company could acquire the entire
interest of ASDI's Relief Canyon Project,  and a 50% interest in the future gold
production of the Victorine  project from WMD. The  transaction  was tentatively
valued at up to $8 million in convertible  preferred  stock of the Company to be
issued based on performance clauses, all of which were subject to due diligence,
and was extended  through June 2002. On June 28, 2002, the Company  notified WMD
that it had  terminated  its  interest  in the  letter of  intent  and would not
proceed further with WMD at this time.



         Apart from 62 patented lode claims in the Prospect Mountain region, the
unpatented  claims occur on federal lands that are managed under the auspices of
the U.S.  Department  of the  Interior  Bureau of Land  Management,  pursuant to
procedures established by the General Mining Law of 1872, as amended. Unpatented
claims, when properly located, staked, and posted according to regulation,  give
the claimant  possessory  rights only. As such, the validity of the 47 remaining
unpatented  mining  claims are  subject to inherent  uncertainties.  The cost of
these claims were being borne by the joint  venture,  from February 2000 through
December 2001 and since the exchange of mutual releases from the Company and the
joint  venture  partner,  the  cost  of  maintaining  these  claims  are now the
responsibility of the Company.


                                        2
<PAGE>

         Possessory  title  to an  unpatented  claim,  when  validly  initiated,
endures unless lost through abandonment due to failure to perform and file proof
of  required  annual   assessment   work,   through  failure  to  timely  record
conveyances, or through a forfeiture which results from an adverse location made
while the prior location is in default with respect to the performance of annual
assessment  work.  Because many of these factors involve findings of fact, title
validity  cannot be determined  solely from an  examination  of the record.  The
continuing validity of these claims is subject to many contingencies,  including
the  availability  of land for location at the time the  location was made,  the
making of valid mineral discoveries within the boundary of each claim compliance
with  all  regulations,  both  state  and  federal,  for  locating  claims,  the
performance of annual assessment work of $100 per year per claim, and the making
of required annual and other filings with the Bureau of Land Management (BLM)and
the county in which the claims are located. Failure to perform annual assessment
work and failure to make required filings subjects the claimant to forfeiture of
rights through valued subsequent  locations by others or through cancellation by
the government agency involved.

         Title to unpatented  claims and other mining  properties in the western
United  States  typically  involves  certain  other  inherent  risks  due to the
frequently ambiguous conveyancing history  characteristics of such properties as
well as the  frequently  ambiguous  or  imprecise  language  of mineral  leases,
agreements, and royalty obligations.  The Issuer has not obtained title opinions
on all of its  claims,  during 1998 the  Company  did obtain  title  opinions in
connection with the 62 patented and 47 unpatented  claim sites,  acquired in May
of 1998. In December,  2001 the Company and Homestake  exchange  mutual releases
and the claims have been re-assigned to the Company.


         The  Company's  in place grade and tonnage of  non-reserve  mineralized
material listed below was estimated utilizing EPAR's drill information:

     1)   Mineral  resources  calculated by Dirigo  Research  utilizing the EPAR
          drill data indicated that Prospect  Mountain  contains  328,853 tons @
          0.056 oz/ton gold using a 0.010 oz/ton gold cut-off grade.

     2)   A second mineral resource  estimate of EPAR's drill results  completed
          by Fleshman & Associates  shows that the project  hosts 331,977 tons @
          0.057 0z/ton gold and 0.639 oz/ton silver using a 0.010 oz/ton cut-off
          grade.


Each  of  the  above  mineral   resource   estimates   was  completed   using  a
3-dimensional,  simple  polygonal  approach,  applied a  cut-off  grade of 0.010
oz/ton gold, and tonnage factor of 13 cubic feet per ton.



                                       3
<PAGE>

         The  following  chart sets forth the mining  claims now retained by the
Issuer:

         EUROPEAN AMERICAN RESOURCES, INC.-MINING CLAIMS RETAINED AS OF
                                DECEMBER 31, 2001

                        Mining Approx.    State of Nevada     Number of
Project Name              District           County            Claims

                                                              Note (1)
*Diamond Silverado         Eureka            Eureka       47 (Plus 62 Patents &
                                                                Mill Sites)

                                                 TOTAL   109  *Note (2)
                                                         ===
Chart Notes:

(1)  103 of these claims,  including 56 patented claims and 47 unpatented claims
     in the Diamond  Silverado  Project in Eureka,  that had been contributed to
     the  "Earn-In,"  exploration  joint  venture  with  Homestake,   have  been
     reassigned to the Company.

(2)  Does not  include  the  claims  whereby  Homestake  assigned  the rights to
     acquire an interest in 23 patented and 23  unpatented  claims,  in the same
     are of  interest,  which  subject to due  diligence,  the Company  plans on
     retaining.  The Company  was also given an option to acquire  approximately
     100 additional claims, which subject to due diligence, the Company plans on
     pursuing approximately 50 to 75 of such claims in the area of interest.


(3)  Geological information including path of access and maps and a map locating
     these properties is attached as exhibits to this form 10KSB/A.

     Geological  results  indicate  that the Company  has yet to develop  proven
     reserves,  however the Company was informed by the geological consultant in
     1997 that  exploration  results have  indicated  that the Company's  claims
     exhibit the  potential  for the  development  of  economic  mineralization.
     (These  results  are  presently  being  reviewed  by the  Commission  - See
     Financial Statements,  Note 1) Since these claims are not proven, estimates
     of their potential value are not available at this time.

                                        4
<PAGE>


         Description of Securities
         -------------------------

         The Issuer  has  250,000,000  shares of common  stock  authorized,  and
effective July 25, 2001 the Board  resolved to amend this to 50,000,000  subject
to shareholder  approval,  at a par value of $.0001;  and  25,000,000  shares of
convertible  preferred stock  authorized,  and effective July 25, 2001 the Board
resolved to amend this to 1,000,000  subject to shareholder  approval,  at a par
value of $.0001, of which none are issued or outstanding.

         Competition
         -----------

         The Issuer  faces  competition  in the mining field by companies in the
same sector of the business and in the same regions  where the Issuer  maintains
its claims. However, such competition, as fierce as it may be, does not directly
effect the individual claims controlled by the Company, provided fees and annual
required procedures are maintained in accordance with plan procedures.

         Employees
         ---------

         During 2000 and 2001 the Company's  workforce was 9 and 10 individuals,
respectively   including:  a  contractual  executive  consultant,   an  in-house
managerial  consultant,   an  in-house  contracted  geologist,   an  independent
geologist  and one  administrative  staff  employee in addition to the Company's
Board of Directors.  Additionally,  the company has  supplemented its work force
with various  consultants on an as needed basis.  Until active mining operations
are  commenced,  management  has  made  a  concerted  effort  to  keep  employee
compensation at a minimum.

Item 2. Properties.
-------------------

         The Company  presently  maintains  its office at 91 South Main  Street,
P.O. Box 1066, Eureka, NV 89316.

Item 3. Legal Proceedings.
--------------------------

         The  Company is from time to time  involved  in various  claims,  legal
proceedings and complaints  arising in the ordinary  course of its business.  It
does not believe  that any  pending or  threatened  proceeding  related or other
matters,  or any amount which it may be required to pay by reason thereof,  will
have a material  adverse effect on the financial  condition or future results of
operations of the Company.

         During 2001,  the Company has initiated two lawsuits  against its prior
president,  Mr. Martin  Sportschuetz,  for unspecified  damages,  the first suit
asserts breach of fiduciary duties,  diversion of corporate  opportunity as well
as other  claims  and was  instituted  in  Nevada  of the U.S.  District  Court,
district of Nevada. The second suit was filed against Mr. Sportshuetz and German
American   Investors,   LTD,   asserting  various  claims  including  Fraud  and
Conversion,  in U.S. District Court, New York,  Southern District.  At this time
there can be no assurance as to the amount or likelihood of recovery.

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

         None.



                                        5

<PAGE>



                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
------------------------------------------------------------------------------

   (a) Market Prices of Common Stock
   ----------------------------------

         The  primary  market  for our common  stock is the Nasdaq OTC  Bulletin
Board,  where it trades under the symbol "EPAR".  The following table sets forth
the high and low closing bid prices for the shares for the periods  indicated as
provided by the NASD's OTCBB System.  The quotations shown reflect  inter-dealer
prices, without retail mark- up, mark-down,  or commission and may not represent
actual transactions.

2001                                        High               Low
----                                       ------            -------

        First Quarter                      $ .42              $ .19
        Second Quarter                     $ .60              $ .19
        Third Quarter                      $ .64              $ .37
        Fourth Quarter                     $ .50              $ .19


2000
----
        First Quarter                      $1.69              $ .75
        Second Quarter                     $1.06              $ .59
        Third Quarter                      $1.09              $ .52
        Fourth Quarter                     $ .72              $ .19

         (b)  Shareholders.
         -----------------

         As of March 15, 2002 the Company had 22,650,408  shares of common stock
outstanding, held by individual shareholders and brokerage firms and/or clearing
houses,  holding the Company's  common shares in street names for their clients.
The Company believes that there are approximately 2,100 beneficial owners of its
common stock.

         (c) Dividends.
         --------------

         The  Company  has not paid or declared  any  dividends  upon its Common
Stock since its inception  and does not  contemplate  or  anticipate  paying any
dividends upon its Common Stock in the foreseeable future.






                                        6

<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition and Results
        ------------------------------------------------------------------------
        and Plan of Operations
        ----------------------

         The  following  is  management's  discussion  and  analysis  of certain
significant  factors which have affected the  Company's  financial  position and
operating  results during the periods included in the accompanying  consolidated
financial  statements,  as well as  information  relating  to the  plans  of the
Company's current management.

                              RESULTS OF OPERATIONS

Twelve Months Ended December 31, 2001 vs. December 31, 2000


         The Company  recorded a net loss, as restated,  of  $1,199,745  for the
year ended  December  31, 2001 as  compared  to a loss of $872,682  for the year
ended  December  31, 2000.  This  represents a loss per common share of $.06 for
2001 vs. $.05 for 2000.

         The primary  fluctuations in year to year expenses included an increase
in Operating  Costs from  $155,301 in 2000 to $169,400 in 2001, as certain costs
of  maintaining  claims were borne by Homestake  direct during 2001,  other than
those  costs the  Company  previously  capitalized  (see note 1), a decrease  in
General and  Administration  expenses  from $697,407 in 2000 to $432,027 in 2001
due to a concerted  effort by management  to reduce  overhead and an increase in
Stock Based Compensation from $85,313 in 2000 to $309,000 in 2001.

         Also,  in  2000,  the  Company  reserved  $267,500  against  its  claim
receivable  on  foreign  investments  which it has  pursued  for  several  years
recording a $267,500  charge to loss from operations and reducing its book value
to $0 at December 31, 2000. In April of 2001 the remaining  rights,  if any, the
Company held to this claim were  assigned to FAE  Holdings,  Inc. in  connection
with the  cancellation of debt and issuance of shares,  and the Company recorded
$252,000 settlement expense in connection with the same.


Plan of Operations
------------------

         In early  November  2001, the Company was notified by its joint venture
partner,  Homestake  Mining  Co.  they  would not be  proceeding  with the joint
venture  under the same  terms and  conditions  which had been set  forth,  more
specifically, Homestake Mining senior officials informed the Company that due to
the merger with American Barrick and uncertainty of the direction new management
would  take  in  reference  to  the  Ruby  Hill  Mine  and  the  Archimedes  Pit
re-assessment,  the existing  budget for the joint venture was  suspended.  In a
mutual release  Homestake mining and EPAR agreed in late December 2001 to return
all the claims and related properties back to EPAR.

         Since that development,  various confidential  communications have been
ongoing  between the Company and a major  mining  company  that has  expressed a
serious  interest in pursuing  EPAR's mining  interest in the Prospect  Mountain
Claims.


         Effective  December 1, 2001,  the Company had entered  into a agreement
with ASDI,  LLC. a California  holding  company,  and Western Mine  Development,
Inc., (WMD) a Nevada  corporation,  whereby the Company could acquire the entire
interest of ASDI's Relief Canyon Project,  and a 50% interest in the future gold
production of the Victorine  project from WMD. The  transaction  was tentatively
valued at up to $8 million in convertible  preferred  stock of the Company to be
issued based on performance clauses, all of which were subject to due diligence,
and was extended  through June 2002. On June 28, 2002, the Company  notified WMD
that it had  terminated  its  interest  in the  letter of  intent  and would not
proceed further with WMD at this time.


                                        7
<PAGE>

         In April, the Company claim holder of the material  patented claims and
the  holder  of the  distribution  rights  agreement  agreed to  stand-still  on
existing  agreements  until  July 31,  2002 and in May  2002  the  claim  holder
extended indefinitely and the holder of the distribution rights extended through
September 30, 2002, until the Company  determined the next course of action with
respect to all these properties.

Liquidity and Capital Resources
-------------------------------

         At  December  31, 2001 the  Company  had a working  capital  deficit of
$419,745.

         As a result of  anticipated  capital  expenditures,  including  a Claim
Royalty  payment  of up to  $150,000  to the claim  holder  under  the  existing
contract,  unless  restructured,  and operating  losses, we may raise additional
working  capital  through  either  the  expansion  of  the  distribution  rights
agreement for up to an additional $500,000, or a total of approximately $758,000
which represents  approximately  17.5% of the Company's interest in net earnings
from the mining claims existing on December 31, 2001, exclusive of the potential
acquisition of the Western Mine Development;  or the issuance of common stock to
sophisticated  investors in a transaction  exempt from registration  pursuant to
Rule 506 of Regulation D promulgated by the  Securities and Exchange  Commission
under the Securities Act of 1933. As a result of existing Financing Arrangements
and potential private offerings, we anticipate having sufficient working capital
through the end of fiscal year ending 2002 and beyond.

Forward looking and other statements
------------------------------------

         We have  made  statements  in this  document  that are  forward-looking
statements that involve  substantial risks and  uncertainties.  You can identify
these  statements  by  forward-looking  words such as "may,"  "will,"  "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they: (1) discuss our
future expectations; (2) contain projections of our future results of operations
or of our fiscal condition; or (3) state other "forward looking" information.

         We believe it is  important  to  communicate  our  expectations  to our
investors.  However,  there may be events in the future  that we are not able to
accurately  predict or which we do not fully  control.  Important  factors  that
could cause actual results to differ materially from these expressed; or implied
by our forward-looking statements,  include, but are not limited to those risks,
uncertainties and other factors discussed in this document.

         For further information visit the Company's website at: WWW.
EPAR-NV.COM.

         Inflation
         ---------

         The rate of inflation has had little impact on the Company's results of
operations  and is  expected  to not have a  significant  impact  on  continuing
operations.


Item 7. Financial Statement and Supplementary Data.
---------------------------------------------------

         See Item 13.

Item 8. Changes in and Disagreements with Accountants on Accounting and
-----------------------------------------------------------------------

         Financial Disclosure.
         ---------------------




                                        8
<PAGE>



                                    PART III

Item 9. Directors and Executive Officers of Registrant.
-------------------------------------------------------

         (a) Directors and Officers.  The following schedule sets forth the name
of each director and officer of the Company and the nature of all positions, and
offices with the Company presently held by them. Each director and officer,  has
been  elected by  majority  vote as of  February 7, 2001 and October 19, 2001 at
special shareholders meetings.

         The executive officers and directors of the Company are as follows:

Name                             Position Held
----                             -------------
Evangelos Kechayans              President & CEO
John Sgarlat                     Director
Mark Beloyan                     Director
Stefan Wasser                    Director
Richard Cokl                     Director

         Evangelos  Kechayans,  is a  mechanical/marine  engineer who resides in
Athens Greece,  educated at Brooklyn Polytechnic  Institute and is currently the
president  and  managing  director of Metrix  Systems S.A. He has also worked in
Greece as a project management consultant for major projects such as the Kavalla
Oil Refinery Project and Salarris Navy Underground Tanks. Mr. Kechayans has also
worked for Pelasgus Corp. and  Martechnics  Ltd where he was the general manager
for both companies.


         John Sgarlat is a graduate of Villanova  University,  Magnum Cum Laude,
with a Bachelor of Arts in  Philosophy.  He also  attended a three year graduate
program at the University of  Pennsylvania/Wharton  School of Finance. From 1909
through 1998, Mr.  Sgarlat's  family owned and operated F.B.  Sgarlat,  Inc. and
North American Mining Corporation,  private producers of sand, gravel, slate and
coal in Pennsylvania. Mr. Sgarlat founded and was the Chief Executive Officer of
e-Content  Inc., a producer of  television  programs and  educational  marketing
programs for public broadcasting  stations and certain commercial networks where
he was the  president,  CEO and chairman of the board of directors  until April,
2001. He also worked as a registered  representative with Hornblower and Wheels.
In 1974,  he became  Director of Marketing  for Elkins and  Company,  a New York
Stock Exchange firm. Mr. Sgarlat has extensive  experience in investment banking
and the media industries.



                                        9

<PAGE>

         Mark  Beloyan  is  licensed  with the NASD,  and state  agencies.  Mark
Beloyan has over 15 years experience as an Investment executive and a broker. He
is the President of Beloyan Investment Securities, Inc., a fully licensed broker
dealer  which  reports  to the NASD  and the SEC.  He is a  graduate  of  Temple
University with a Bachelor of Business  Administration majoring in marketing and
management.  Mr. Beloyan is also a Member of the NASD Board of Arbitrators.  Mr.
Beloyan  agreed to separate  from service as the Company's  president  effective
October 19, 2001 and resigned as a director effective December 31, 2001.

         Mr.  Wasser has over fifteen  years  experience  in finance and project
management.  Since 1990 he has been  involved  with  different  corporations  in
projects  with long term  contractual  clients  such as Siemens AG, and Deutsche
Bahn AG. These projects include the development,  construction, and exploitation
of  worldwide  properties  in the  energy  and  power  production  fields,  chip
facilities,  and industrial and business parks. Some of these projects have been
the Urban Entertainment  Center in Frankfurt for Stella Musical and Trizec Hanh;
Badischer  Bahnhof,  Basel,  Swiss,  a  prestigious  project of a large  Central
railroad station and freight traffic  station.  Mr. Wasser holds an MBA from the
University of St. Gallen,  and a Law Degree from the University of Tuebingen and
has  served  as  State  Attorney,  lawyer  and  judge at the  District  Court of
Tuebingen.

         Mr. Cokl has fourteen years experience in the real estate and insurance
business. He is currently the President of Art Immobilien, a real estate company
specializing in the management of client funds and commercial real estate assets
all over  Europe.  Mr.  Cokl has also served as Manager of Aufina Real Estate in
charge of 60 offices with 1,000 real estate  brokers.  He has also served on the
Board of  Directors of MMB Gmbh,  in charge of the  National  and  International
Finance  Departments.  Mr.  Cokl was part of the  management  of the  Bayerische
Beatmen  Lebensversicherung  A.G.,  as  well  as  Assistant  of the  head of the
organization  department of the Stuttgarter  Lebensversicherung  A.G., both Life
Insurance   companies.   His   education   and   training  is  in  the  business
administration fields.



                                        10

<PAGE>



Item 10. Executive Compensation.
--------------------------------

         The following table sets forth the renumeration  paid or accrued by the
Company during the two most recent fiscal years ended December 31, 2001, to each
of its Chief Executive Officer, its officers and directors,  and to all officers
and directors as a group.
<TABLE>
<CAPTION>

                                                                                             Securities of
                                                                           Salaries            Property
                                                                         Management Fees       Insurance
Name of Individual                                                       Directors' Fees       Benefits or
or Number of Persons         Capacities in                               Commission and       Repayment of
in Group                     Which Served                Year                Bonuses        Personal Benefits
<S>                        <C>                          <C>               <C>               <C>
Mark Beloyan                 Director/CEO/   (1)         2001                  48,814         100,000 shares
                                 President               2000                       -                      -

Barry Klein                  Director/CEO/   (2)         2001                       -                      -
                         Interim President               2000                $ 17,775                      -

Martin Sportschuetz          Director/CEO/   (3)         2001                       -                      -
                                 President               2000                $ 42,000         105,000 shares

Dale M. Hendrick             Director/       (4)         2001                       -                      -
                                  Chairman               2000                       -                      -

Robert C. Bryce, P.Eng       Director        (4)         2001                       -                      -
                                                         2000                       -                      -

John Sgarlat                 Director                    2001                       -         350,000 shares
                                                         2000                       -                      -

Evangelos Kechayans          Director/CEO/   (5)         2001                       -         300,000 shares
                                 President               2000                       -                      -

Officers and Directors
as a group                                               2001                $ 48,814         750,000 shares
                                                         2000                $ 59,775         105,000 shares
                                                                    $ 6,296 Health (3) Benefits


(1)      Effective February 12, 2001 through October 19, 2001 as president, through
         12/31/01 as director
(2)      Interim President from October 26 through February 7, 2000
(3)      President through October 26, 2000.
(4)      Resigned, effective April 4, 2001.
(5)      President and CEO effective October 19, 2001.

</TABLE>


                                       11

<PAGE>



Item 11. Security Ownership of Certain Beneficial Owners and Management.
         ---------------------------------------------------------------


         The  following  table  sets  forth the  number of Common  Shares of the
Company owned by record,  or to the knowledge of the Company,  beneficially,  by
each  Director of the Company and by each person  owning five percent or more of
the Company's  outstanding  shares based upon 24,050,408  shares of common stock
outstanding, as of August 28, 2002.

<TABLE>
<CAPTION>
                                            Amount and
                                             Nature of
                                             Beneficial               Percentage of
Name and Address                             Ownership                 Class Owned
--------------------                  -----------------------         -------------
<S>                                   <C>                             <C>

John Sgarlat (1)                         350,000  Director                 1.45%
Florida Resident

Evangelos Kechayans                               Current President
Athens, Greece                           300,000  & CEO/ Director          1.25%

Richard Cokl                                   0  Director                 0.00%
Germany

Stephan Wasser                                 0  Director                 0.00%
                                         -------                           -----


Subtotal - Officers & Directors (3)      650,000                           2.70%
                                         -------                           -----

George Whitney                         3,166,000  Shareholder             13.16%
Florida Resident

FAH, Holdings, Inc.(2) (4)
Delaware Corporation                   3,300,000  Shareholder             13.44%
                                       ---------                          -----

German American Investors, LTD
a Foreign Corporation                  4,287,500  Shareholder             17.83%
                                      ----------                          -----

Total                                 11,403,500                          47.13%
                                      ==========                          =====

(1)      These  shares are  subject  to a  forevearance  agreement  in which Mr.
         Sgarlat is in default.

(2)      Includes a warrant to purchase  500,000 shares effective April 22, 2002
         for a price of $.20 through July 31,  2002,  extended to September  31,
         2002, and $.40 thereafter through April 30, 2003.

(3)      Does not  include  180,000  shares to be issued  to  Directors,  45,000
         shares each, effective April 22, 2002, subject to standstill agreement.

(4)      Does  not  include  820,000  shares  held  by  William  O'Callaghan,  a
         shareholder  of  FAH,  Inc.,  as to  which  only  Mr.  O'Callaghan  has
         dispositive power.


</TABLE>

                                       12

<PAGE>



Item 12. Certain Relationships and Related Transactions
-------------------------------------------------------

         Amounts due to related party at December 31, 1997  represented cash and
expense advances by a company  affiliated with a stockholder and director of the
Company totaling  $134,093 after the reduction of $250,000 for 357,143 shares to
be issued. During 1997 the company paid $30,480 for interest on this obligation.

         During 1997, the Company  retired  2,187,500  shares of common stock in
exchange for distribution rights valued at $437,500.

         Additionally, in 1997 the Company sold 2,075,000 shares during the year
in private  transactions  for $1.00 a share,  which,  net of  offering  costs of
$109,925,  generated  net proceeds to the Company of  $1,265,075  and a $700,000
stock subscription receivable, which was collected on March 4, 1998.

         Also in 1997,  the Company  issued  400,000  shares to the president in
connection with his employment agreement.

         In  1997,  the  Company  issued  250,000  shares  to an  affiliate  for
investment banking services which were valued at $1.16 or $290,000.

         In 1997, the Company issued 25,000 shares to a finder,  valued at $1.00
per share, with a like amount charged to additional paid in capital.

         In March 1998,  the Company  issued  750,000 shares to an affiliate for
exploration and reactivation services performed through December 31, 1997 valued
at $.70 per share.

         The Company  issued  105,000 shares of common stock to the President in
May of 1998 valued at $.85 per share, or $89,250,  based upon their market value
subject to Rule "144" restrictions. Of this amount $44,625 was added to resource
properties and $44,625 was recorded as stock based  compensation  based upon the
Company's estimate of where the president directed his efforts.

         The Company also agreed to issue 105,000 shares to a director, provided
he  remained  employed by the  Company  through  April 30,  1999.  The  director
resigned  from  employment  in an effort to curtail  expenses,  and remains as a
director today. The Company issued 90,000 restricted shares,  valued at $.85 per
share,  or  $69,300,  based  upon  their  market  value  subject  to Rule  "144"
restrictions.  Of this  amount,  $34,650  was added to resource  properties  and
$34,650 was recorded as stock based compensation.

         During June of 1998 the Company  advanced this  investor  $60,000 at 8%
interest  of which  $50,000  was  repaid  during  the year  leaving a balance of
$12,234 including accrued interest.  During the year ended December 31, 1998 the
Company recorded $2,234 of interest income from this loan.

         The  Company  issued  400,000  restricted  shares to the  chairman  and
director for services  during the year ended  December 31, 1998,  valued at $.77
per share or  $308,000,  based upon  their  market  value  subject to Rule "144"
restrictions.  Of this  amount  $154,000  was added to resource  properties  and
$154,000 was recorded as stock based compensation.

         Effective May 1999,  the Company  issued 105,000 shares of common stock
to a former president  valued at $1.08 per share or $112,350,  which as included
in stock based compensation expense for 1999.

         Effective May 2000,  the Company  issued 105,000 shares of common stock
to a former president valued at $.8125 per share, or $85,313,  which is included
in stock based compensation.

         In November 2000, the Company issued 300,000 shares in connection  with
consulting services.



                                       13

<PAGE>


         On April 10,  2001,  the Company  issued  1,500,000  shares,  valued at
$346,669 as of December 31, 2000 and $360,000 for the  forgiveness  of notes and
accrued  interest  through that date. For  accounting  purposes these shares are
treated as outstanding on December 31, 2000.


         On April 4, 2001, the Company agreed to issue up to 2,800,000 shares of
its common stock to another  creditor in connection with the  cancellation of up
to $280,000 of notes and accrued  interest  and the  assignment  of the claim on
foreign  investment  receivable.  These shares were issued effective May 2, 2001
and valued at $532,000, in which, as restated, the Company recorded a settlement
expense of $252,000 in 2001 for this transaction.

         During 2001, the Company entered into a distribution  agreement whereby
it assigned 5.8% interest in the Company's share of net earnings,  as defined in
the agreement, in the mining claims controlled by the Company as of December 31,
2001. The holder of this distribution agreement,  FAE Holdings, Inc. is the same
related  party  that  was  issued  2,800,000  shares  of  common  stock  for the
cancellation of certain notes during 2001.  This agreement was extended  through
July 31, 2002, and again to September 30, 2002.


         In March 2001, the Company issued 300,000 shares of its common stock to
a consultant for services valued at $54,000.

         In March 2001, the Company agreed to issue 100,000 shares of its common
stock in connection with the issuance of a $100,000 short term note. A charge of
$21,000  was  recorded  as loan fees  included  in  general  and  administrative
expenses. This note plus accrued interest was repaid in July 2001.

         In April 2001, the Company issued 200,000 shares of its common stock to
its preceding  president and 200,000  options to purchase  200,000 shares of the
Company's  common  stock,  at an  exercise  price of $.50 per share  through the
earlier of March 2003 or 30 days after the completion of service,  in connection
with  an  executive   consulting   agreement  which  also  provided  for  annual
compensation of $100,000 through  February,  2002. In October,  2001 the Company
and Mr. Beloyan agreed to separate,  with 100,000 of the shares  returned to the
Company by Mr.  Beloyan and 100,000  shares to be retained as fully paid.  These
shares were valued at $21,000.  Additionally,  the options under this  agreement
were canceled.

         In May 2001,  the Company issued 75,000 shares of its common stock to a
consultant for services valued at $15,750.

         In July 2001,  the Company  issued  348,000  shares of its common stock
valued at $69,400 to its  geological  consultant  and treated  this amount as an
addition to capitalized exploration costs.

         In July 2001,  the Company issued 300,000 shares of its common stock to
Evangelos  Kechayans,  President  and CEO and director  for  services  valued at
$120,000.

         In September  2001,  the Company  issued  350,000  shares of its common
stock to John Sgarlat, a director for services valued at $168,000.



                                       14

<PAGE>



                                     PART IV

Item 13. Exhibits, Financial Statements and Schedules.
         ---------------------------------------------

         (1) Condensed Financial Data



                       CONDENSED QUARTERLY FINANCIAL DATA



         The condensed  quarterly  financial data set forth below should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of  Operations"  and the historical  financial  statements and notes
included  in this  Form  10KSB  including  Note 1 - Basis  of  Presentation  and
restatement  for Accounting  Changes.  The statement of operations  data for the
quarters ended March 31, 2000 and 2001, June 30, 2000 and 2001 and September 30,
2000 and 2001 are derived from financial  statements  that have been reviewed by
Schuhalter, Coughlin & Suozzo, LLC.


<TABLE>
<CAPTION>

                                                      For the Three Months Ended March 31,
                                                      2000                             2001
                                           ----------------------------    ----------------------------
                                            Originally     As Restated     Originally      As Restated
                                             Reported          (1)          Reported            (1)
<S>                                        <C>             <C>             <C>             <C>
Revenue
  Sales                                    $       --      $       --      $       --      $       --
                                           ------------    ------------    ------------    ------------

Direct Operating Expenses
  Operating costs                                19,700          29,700            --              --
  General and administrative                    232,435         232,435         208,466         208,466
  Depreciation and amortization                     626             626           1,205           1,205
                                           ------------    ------------    ------------    ------------

      Total Direct Operating Expenses           252,761         262,761         209,671         209,671
                                           ------------    ------------    ------------    ------------

Loss from operations, before other
  income (expense)                             (252,761)       (262,761)       (209,671)       (209,671)

Other Operating Income (Expense)
 Interest expense                               (16,325)        (16,325)        (15,550)        (15,550)
                                           ------------    ------------    ------------    ------------
  Total Other Operating Income (Expense)        (16,325)        (16,325)        (15,550)        (15,550)
                                           ------------    ------------    ------------    ------------

Loss from operations before income taxes       (269,086)       (279,086)       (225,221)       (225,221)

  Income tax expense                               --              --              --              --
                                           ------------    ------------    ------------    ------------

      Net Loss                             $   (269,086)   $   (279,086)   $   (225,221)   $   (225,221)
                                           ============    ============    ============    ============


Basic Loss per share                       $      (.016)   $       (.17)   $      (.012)   $      (.012)
                                           ============    ============    ============    ============

Average common shares outstanding            16,314,908      16,314,908      18,567,408      18,567,408
                                           ============    ============    ============    ============






(1) As restated for changes in accounting principles as discussed in Note 1 to financial statement


                                       15
<PAGE>



                                                            For the Three Months Ended June 30,
                                                           2000                             2001
                                               ----------------------------    ----------------------------
                                                Originally     As Restated      Originally      As Restated
                                                 Reported          (1)           Reported            (1)
Revenue
  Sales                                        $       --      $       --      $       --      $       --
                                               ------------    ------------    ------------    ------------

Direct Operating Expenses
  Operating costs                                    41,648          94,851            --              --
  General and administrative                        139,169         139,169         229,675         229,675
  Stock based compensation                           85,313          85,313          21,000          21,000
  Depreciation and amortization                         626             626             782             782
                                               ------------    ------------    ------------    ------------

      Total Direct Operating Expenses               266,756         319,959         251,457         251,457
                                               ------------    ------------    ------------    ------------

Loss from operations, before other
  income (expense)                                 (266,756)       (319,959)       (251,457)       (251,457)
                                               ------------    ------------    ------------    ------------

Other Operating Income (Expense)
 Settlement expense                                    --              --              --          (252,000)
 Loan Fees                                             --              --           (16,275)        (16,275)
 Interest expense                                   (12,138)        (12,138)        (11,510)        (11,510)
                                               ------------    ------------    ------------    ------------

      Total Other Operating Income (Expense)        (12,138)        (12,138)        (27,785)       (279,785)
                                               ------------    ------------    ------------    ------------

Loss from operations before income taxes           (278,894)       (332,097)       (279,242)       (531,242)

  Income tax expense                                   --              --              --              --
                                               ------------    ------------    ------------    ------------

      Net Loss                                 $   (278,894)   $   (332,097)   $   (279,242)   $   (531,242)
                                               ============    ============    ============    ============

Basic Loss per share                           $      (.017)   $      (.020)   $      (.014)   $      (.026)
                                               ============    ============    ============    ============


Average common shares outstanding                16,399,908      16,399,908      20,559,590      20,559,590
                                               ============    ============    ============    ============




(1)  As restated for changes in accounting  method and estimate as discussed in Note 1 to financial statement


                                       16
<PAGE>


                                                         For the Three Months Ended September 30,
                                                          2000                             2001
                                              ----------------------------    ----------------------------
                                               Originally     As Restated      Originally      As Restated
                                                Reported          (1)           Reported         (1)(2)
Revenue
  Sales                                       $       --      $       --      $       --      $       --
                                              ------------    ------------    ------------    ------------

Direct Operating Expenses
  Operating costs                                    3,185           3,185            --            89,400
  General and administrative                       216,889         216,889          63,864          43,864
  Stock based compensation                            --              --              --           309,000
  Depreciation and amortization                        626             626             217             217
                                              ------------    ------------    ------------    ------------

      Total Direct Operating Expenses              220,700         220,700          64,018         442,481
                                              ------------    ------------    ------------    ------------

Loss from operations, before other
  income (expense)                                (220,700)       (220,700)        (64,018)       (442,481)

Other Operating Income (Expense)
  Loan fees                                           --              --              --              --
  Interest expense                                 (14,375)        (14,375)           --              --
                                              ------------    ------------    ------------    ------------

     Total Other Operating Income (Expense)        (14,375)        (14,375)           --              --
                                              ------------    ------------    ------------    ------------

Loss from operations before income taxes          (235,075)       (235,075)        (64,018)       (442,481)

  Income tax expense                                  --              --              --              --
                                              ------------    ------------    ------------    ------------

      Net Loss                                $   (235,075)   $   (235,075)   $    (64,018)   $   (442,481)
                                              ============    ============    ============    ============


Basic Loss per share                          $      (.014)   $      (.014)   $      (.002)   $      (.020)
                                              ============    ============    ============    ============

Average common shares outstanding               16,694,908      16,694,908      21,478,808      22,450,973
                                              ============    ============    ============    ============




(1)  As restated for change in accounting method as discussed in Note 1 to financial statement

(2)  Restated to also include stock issued for services rendered prior to September 30, 2001



</TABLE>

                                       17
<PAGE>

         (2) The following financial statements are included herein and commence
on page F-1 as follows:



Independent Auditors' Report - Schuhalter, Coughlin & Suozzo, LLC         F-1

Balance Sheet, December 31, 2001                                          F-2

Statement of Operations, for the Two Years Ended December 31, 2001
     and From July 6, 1987 (Date of Inception) to December 31, 2001       F-3

Statements of Changes in Stockholders' Equity From Inception on
     July 6, 1987 through December 31, 2001                               F-4

Statement of Cash Flows for the Two Years Ended December 31, 2001
     and from July 6, 1987 (Date of Inception) to December 31, 2001       F-9

Notes to Consolidated Financial Statements                               F-11



                                       18
<PAGE>



                          INDEPENDENT AUDITORS' REPORT





Board of Directors
European American Resources, Inc.
91 South Main Street
Eureka, Nevada  89316



We have audited the consolidated  balance sheet of European American  Resources,
Inc. (An  Exploratory  Stage  Company) as of December 31, 2001,  and the related
consolidated  statements of operations for the two years then ended,  changes in
stockholders'  equity,  and cash flows from July 6, 1987 (Date of  Inception) to
December 31, 2001 and for the two years then ended in the accompanying  index to
financial   statements   (Item  13.).   These   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.


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

In our opinion,  the financial  statements  listed in the accompanying  index to
financial  statements (Item 13.) present fairly, in all material  respects,  the
financial position of European American Resources, Inc. as of December 31, 2001,
and the  results  of its  operations  and its cash  flows for the two years then
ended  December 31, 2001 in  conformity  with  accounting  principles  generally
accepted in the United States.


                                       /s/ Schuhalter, Coughlin & Suozzo, LLC
                                           ----------------------------------
                                           Schuhalter, Coughlin & Suozzo, LLC


Raritan, New Jersey

April 22, 2002, except for Note 1 to which the date is
  September 10, 2002.



                                       F-1

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                                  BALANCE SHEET
                                DECEMBER 31, 2001
                                 (As Restated)


   Assets

Current Assets
 Cash and cash equivalents                              $      4,780
                                                        ------------

   Total Current Assets                                        4,780
                                                        ------------

Property and equipment, at cost, net of accumulated
 depreciation of $9,626                                        2,894

Other Assets
 Security Deposit                                                500
                                                        ------------

   Total Other Assets                                            500
                                                        ------------

   Total Assets                                         $      8,174
                                                        ============


   Liabilities and Stockholders' Equity

Current Liabilities
 Accounts payable and accrued expenses                       380,338
 Due to related parties                                       44,197
                                                        ------------

   Total Current Liabilities                                 424,535

Commitments (Note 9)                                            --

Distribution rights agreement (Note 9)                       258,530
Other liabilities, related parties, expected to be
 converted to equity                                          28,607

Stockholders' Equity
 Preferred stock; $.0001 par value, 25,000,000 shares
  authorized, no shares issued or outstanding                   --
 Common stock; $.0001 par value, 250,000,000 shares
  authorized, 22,650,508 shares issued
  and outstanding                                              2,265
 Additional paid in capital                               12,536,009
 Deficit accumulated since inception                     (13,241,772)
                                                        ------------

   Total Stockholders' Equity                               (703,498)
                                                        ------------

   Total Liabilities and Stockholders' Equity           $      8,174
                                                        ============




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

                                       F-2

<PAGE>
<TABLE>
<CAPTION>


                                  EUROPEAN AMERICAN RESOURCES, INC.
                                    (AN EXPLORATORY STAGE COMPANY)
                                       STATEMENTS OF OPERATIONS
                                            (As Restated)

                                                                                           From
                                                                                          July 6,
                                                                                           1987
                                                                                         (Date of
                                                       For the Years Ended             Inception) to
                                                           December 31,                 December 31,
                                                        2000             2001              2001
                                                     ---------        ---------         ----------
                                                   (As Restated)    (As Restated)      (As Restated)
<S>                                                 <C>              <C>               <C>
Revenues
 Sales                                              $        -       $        -        $    29,028
                                                     ---------        ---------         ----------

Direct Operating Expenses
 Operating costs                                       155,301          169,400          6,901,765
 General and administration                            697,407          432,027          3,686,961
 Depreciation and amortization                           2,504            2,421            328,952
 Stock based compensation                               85,313          309,000          1,656,938
 Royalty Expense                                             -                -             43,960
                                                     ---------        ---------         ----------

  Total Direct Operating Expenses                      940,525          912,848        (12,618,576)
                                                     ---------        ---------         ----------

Loss from operations, before other operating
  income (expense)                                    (940,525)        (912,848)       (12,589,548)

Other Operating Income (Expense)
 Interest income                                             -                -            316,963
 Interest expense                                      (55,990)         (34,897)          (229,410)
 Settlement (expense) income                                 -         (252,000)          (248,484)
 Loss on the sale of assets                                  -                -            (14,755)
 Net realized losses on marketable
  securities                                                 -                -           (256,668)
 Loss on write off related party
  receivable                                                 -                -            (15,980)
 Recoveries of mineralization costs                     391,333               -            391,333
 Reserve for claim on foreign investment,
  net of earnings and gain on debt
  cancellation to related parties                     (267,500)               -           (595,223)
                                                     ---------        ---------         ----------

  Total Other Operating Income (Expense)                67,843         (286,897)          (652,224)
                                                     ---------        ---------         ----------

Loss from operations before income taxes              (872,682)      (1,199,745)          (652,224)

Income tax expense                                           -                -                  -
                                                     ---------        ---------         ----------

Net Loss                                            $ (872,682)     $(1,199,745)      $(13,241,772)
                                                     =========        =========         ==========

Basic Loss Per Common Share                        $      (.05)      $     (.06)
                                                     =========        =========

Average Common Shares Outstanding                   16,556,038       21,062,433
                                                    ==========       ==========


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

                                                F-3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                          EUROPEAN AMERICAN RESOURCES, INC.
                                           (AN EXPLORATORY STAGE COMPANY)
                                          STATEMENT OF STOCKHOLDERS' EQUITY
                              FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 2001
                                                    (As Restated)

                                                                                                          Deficit
                                                                                     Additional          Accumulated
                                                          Common Stock                 Paid In              Since
                                                    Shares             Amount          Capital            Inception
                                                   ---------           ------         ---------           ---------
<S>                                                <C>                 <C>           <C>                 <C>
Balance, July 6, 1987                                      -            $   -        $        -          $        -

Shares issued to officers
 and directors of the
 Company and other
 individuals, for cash July
 through September, 1997                           1,000,000              100           371,783                   -

Net loss for the period
 ended December 31, 1987                                   -                -                 -             (95,060)
                                                   ---------             ----         ---------           ---------


Balance, December 31, 1987                         1,000,000              100           371,783             (95,060)

Effect of recapitalization
 of Paradise Valley Mining,
 Inc. on March 11, 1988                            1,000,000              100           200,418                   -

Shares sold by private
 placement for cash at $1.00
 per share in July, 1988,
 net of $4,808 in offering
 costs                                               151,000               15           146,177                   -

Shares sold by private
 placement for cast at $0.33
 per share in October, 1988                          150,000               15            49,985                   -

Net loss for the year ended
 December 31, 1988                                         -                -                 -            (275,547)
                                                   ---------              ---         ---------           ---------

Balance, December 31, 1988                         2,301,000              230           768,363            (370,607)

Shares  sold by private  placement
 for cash at $10.00 per share during April
 through June 1989, net of $518,576 in
 offering costs                                      429,374               43         3,774,785                   -

Shares issued in payment of
 interest at $10.00 per
 share during April and May
 1989                                                  2,991                -            29,918                   -

Net loss for the year ended
 December 31, 1989                                         -                -                 -            (463,583)
                                                   ---------              ---         ---------           ---------

Balance, December 31, 1989                         2,733,365            $ 273        $4,573,066         $  (834,190)
                                                   ---------              ---         ---------           ---------


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

                                                         F-4
</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                                 EUROPEAN AMERICAN RESOURCES, INC.
                                   (AN EXPLORATORY STAGE COMPANY)
                                 STATEMENT OF STOCKHOLDERS' EQUITY
                      FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 2001
                                           (As Restated)

                                                                                         Deficit
                                                                    Additional          Accumulated
                                         Common Stock                 Paid In              Since
                                   Shares             Amount          Capital            Inception
                                  ---------           ------         ---------           ---------
<S>                               <C>                 <C>           <C>                 <C>

Balance, January 1, 1990          2,733,365            $ 273       $ 4,573,066          $ (834,190)

Net loss for the year ended
 December 31, 1990                        -                -                 -          (1,620,689)
                                  ---------              ---         ---------            --------

Balance, December 31, 1990        2,733,365              273         4,573,066          (2,454,879)

Net loss for the year ended
 December 31, 1991                        -                -                 -            (477,967)
                                  ---------              ---         ---------           ---------

Balance, December 31, 1991        2,733,365              273         4,573,066          (2,932,846)

Shares sold by private
 placement for cash at
 $.2714 per share during
 September, 1992                  7,000,000              700         1,899,300                   -

Net loss for the year ended
 December 31, 1992                        -                -                 -            (694,935)
                                  ---------              ---         ---------           ---------

Balance, December 31, 1992        9,733,365              973         6,472,366          (3,627,781)

Net loss for the year ended
 December 31, 1993                        -                -                 -            (730,281)
                                  ---------              ---         ---------           ---------

Balance, December 31, 1993        9,733,365              973         6,472,366          (4,358,062)

Net loss for the year ended
 December 31, 1994                        -                -                 -            (332,383)
                                  ---------              ---         ---------           ---------

Balance, December 31, 1994        9,733,365              973         6,472,366          (4,690,445)

Net loss for the year ended
 December 31, 1995                        -                -                 -            (249,838)
                                  ---------              ---         ---------           ---------

Balance, December 31, 1995        9,733,365              973         6,472,366          (4,940,283)
 net loss for the year ended
 December 31, 1996                        -                -                 -            (116,786)
                                  ---------              ---         ---------           ---------

Balance, December 31, 1996        9,733,365            $ 973       $ 6,472,366         $(5,057,069)
                                  ---------              ---         ---------          -----------





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

                                                F-5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                 EUROPEAN AMERICAN RESOURCES, INC.
                                   (AN EXPLORATORY STAGE COMPANY)
                                 STATEMENT OF STOCKHOLDERS' EQUITY
                      FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 2001
                                           (As Restated)

                                                                                              Deficit
                                                                         Additional          Accumulated
                                              Common Stock                 Paid In              Since
                                        Shares             Amount          Capital            Inception
                                       ---------           ------         ---------           ---------
<S>                                    <C>                 <C>           <C>                 <C>

Balance, January 1, 1997               9,733,365            $ 973       $ 6,472,366         $(5,057,069)

Retirement of shares for
 distribution rights                  (2,187,500)            (219)         (437,281)                  -

Shares sold for $1.00 per
 share in private place-
 ments during the year,
 net of $109,925 offering
 costs                                 2,075,000              208         1,964,867                   -

Shares issued for services
 in connection with the
 employment agreement of
 the former president
 valued at $1.00                         400,000               40           399,960                   -

Shares issued for
 cancellation of debt to
 related party, valued at
 $.70 per share                          357,143               36           249,963                   -

Shares issued for services
 at, $1.16, $1.00 and $.70
 per share                             1,025,000              102           814,898                   -

Net loss for the year ended
  December 31, 1997 (as restated)              -                -                 -          (3,400,131)
                                       ---------              ---         ---------           ---------

Balance, December 31, 1997            11,403,008          $ 1,140       $ 9,464,773         $(8,457,200)
                                      ----------            -----         ---------           ---------




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

                                                   F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                 EUROPEAN AMERICAN RESOURCES, INC.
                                   (AN EXPLORATORY STAGE COMPANY)
                                 STATEMENT OF STOCKHOLDERS' EQUITY
                      FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 2001
                                           (As Restated)

                                                                                              Deficit
                                                                         Additional          Accumulated
                                              Common Stock                 Paid In              Since
                                        Shares             Amount          Capital            Inception
                                       ---------           ------         ---------           ---------
<S>                                    <C>                 <C>           <C>                 <C>

Balance, January 1, 1998              11,403,008          $ 1,140       $ 9,464,773        $ (8,457,200)

Shares issued for services
 at $1.21, $.85 and $.77                 995,900              100           834,715                   -

Shares issued to retire
 distribution rights and
 settlement                            4,156,250              416           833,569                   -

Retirement of shares in
 connection with termination
 of employment agreement with
 the former president                   (350,000)             (35)         (349,965)                  -

Net loss for the year ended
 December 31, 1998 (as restated)               -                -                 -          (1,951,100)
                                       ---------              ---         ---------           ---------

Balance, December 31, 1998            16,205,158            1,621        10,783,092          (10,408,300)

Shares issued for services
 at $1.08 and $ .80                      160,000               16           156,334                   -

Return of shares in connection
 with settlement subsequent to
 termination of employment
 agreement with the former president     (50,250)              (5)          (49,995)                  -

Net loss for the year ended
 December 31, 1999 (as restated)               -                -                 -            (761,045)
                                      ----------            -----        ----------           ---------

Balance, December 31, 1999            16,314,908            1,632        10,889,431          (11,169,345)
                                      ----------            -----        ----------           ---------
</TABLE>



                                                F-7
<PAGE>
<TABLE>
<CAPTION>

                                  EUROPEAN AMERICAN RESOURCES, INC.
                                  (AN EXPLORATORY STAGE COMPANY)
                                  STATEMENT OF STOCKHOLDERS' EQUITY
                       FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 2001
                                           (As Restated)


                                                                                  Deficit
                                                                  Additional    Accumulated
                                           Common Stock            Paid In         Since
                                      Shares         Amount        Capital       Inception
                                   ------------   ------------   ------------   ------------
<S>                                <C>            <C>            <C>                 <C>

Balance, December 31, 1999           16,314,908          1,632     10,889,431    (11,169,345)

Shares issued for services
 at $.73 and $.67                       380,000             37        266,525           --

Shares issued to settle loan          1,500,000            150        346,519           --

Net loss for the year ended
 December 31, 2000 (as restated)           --             --             --         (872,682)
                                   ------------   ------------   ------------   ------------

Balance, December 31, 2000           18,194,908   $      1,819   $ 11,502,475   $(12,042,027)
                                   ------------   ------------   ------------   ------------

Shares issued for services
  at $.18, $.20, $.21,
  $.40 and $.48                       1,473,000            148        448,002           --

Shares sold by private
  placement at $.20 per
  share in February, 2001                82,500              8         16,492           --

Shares issued to settle loan          2,800,000            280        531,720           --

Shares issued to pay loan
  fees                                  100,000             10         20,990           --

Cancellation of loan interest              --             --           16,330           --

Net loss for the year ended
  December 31, 2001 (as restated)          --             --             --       (1,199,745)
                                   ------------   ------------   ------------   ------------

Balance, December 31, 2001           22,650,408          2,265   $ 12,536,009   $(13,241,772)
                                   ============   ============   ============   ============



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

                                                 F-8
</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                             EUROPEAN AMERICAN RESOURCES, INC.
                                  STATEMENTS OF CASH FLOWS
                              (AN EXPLORATORY STAGE COMPANY)
                      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                     (As Restated)

                                                                                    From
                                                                                   July 6,
                                                                                    1987
                                                                                  (Date of
                                                  For the Years Ended            Inception) to
                                                       December 31,              December 31,
                                                 2000              2001              2001
                                             ------------      ------------      ------------
                                            (As Restated)      (As Restated)     (As Restated)
<S>                                          <C>               <C>               <C>
Cash Flows Used By Operating
 Activities

 Net Loss                                    $   (872,682)     $ (1,199,745)     $(13,261,792)

Adjustments  to  reconcile
 net loss to net cash  provided (used)
 by  operating activities:
 Depreciation and amortization                      2,504             2,421           328,952
 Reserve for claim on foreign investment          267,500              --           1,285,792
 Issuance of equity charged
   to expense                                     266,563           737,481         3,300,857
 Loss on the sale of fixed assets                    --                --              14,755
 Earnings on managed foreign investment              --                --            (190,569)
 Losses on marketable securities                     --                --             156,668
 Gain on cancellation of long term
   debt - related party                              --                --            (500,000)
 Loss on write off - related party
   receivable                                        --                --              15,980

 Changes in assets and liabilities:
  (Increase) decrease in prepaid
    expenses                                       27,533            25,000              --
  (Decrease) increase in accounts
    payable and accrued expenses                  135,110            11,167           378,127
  (Increase) decrease in other assets             188,489              --                (500)
  (Increase) in interest receivable
   - affiliate                                       --                --              (1,618)
  Increase in accrued interest                     43,264             2,210            45,474
                                             ------------      ------------      ------------

   Total Adjustments                              930,963           778,279         4,833,915
                                             ------------      ------------      ------------

Net Cash Used by Operating Activities              58,281          (421,466)       (8,427,877)
                                             ------------      ------------      ------------


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

                                            F-9
</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                              EUROPEAN AMERICAN RESOURCES, INC.
                           STATEMENTS OF CASH FLOWS - (CONTINUED)
                              (AN EXPLORATORY STAGE COMPANY)
                      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                        (As Restated)

                                                                                   From
                                                                                  July 6,
                                                                                   1987
                                                                                 (Date of
                                                 For the Years Ended            Inception) to
                                                      December 31,              December 31,
                                               2000              2001               2001
                                           ------------      ------------      ------------
                                          (As Restated)      (As Restated)     (As Restated)
<S>                                        <C>               <C>               <C>
Cash Flows From (Used In) Investing
 Activities
 Investment in foreign managed funds               --                --          (2,250,000)
 Foreign investment withdrawals                    --                --             964,208
 Investment in marketable securities               --                --            (256,668)
 Proceeds from sale of assets                      --                --             188,251
 Advance to affiliate                              --                --             (75,980)
 Repayment from affiliate                          --                --              50,000
 Purchase of fixed assets                          --                --            (359,980)
                                           ------------      ------------      ------------

   Net Cash Provided (Used In)
    Investing Activities                           --                --          (1,740,169)
                                           ------------      ------------      ------------

Cash Flows from Financing Activities
 Proceeds from issuance of common
  stock, net of offering costs of
  $622,309 from inception                          --              16,500         8,559,752
 Proceeds from issuance of notes
 payable to related parties                        --             251,069           650,162
 (Repayment) proceeds of notes
  payable - related party (net)                 (56,200)         (100,000)          204,382
 Proceeds from long term debt -
 related parties                                   --                --             500,000
 Proceeds from Distribution
 rights agreement                                  --             258,530           258,530
                                           ------------      ------------      ------------

   Net Cash Provided By Financing
    Activities                                  (56,200)          426,099        10,172,826
                                           ------------      ------------      ------------

Net Increase(Decrease) in Cash and
 Cash Equivalents                                (2,081)            4,633             4,780

Cash and Cash Equivalents at Beginning
 of Period                                        2,228               147              --
                                           ------------      ------------      ------------

Cash and Cash Equivalents at End of
 Period                                    $        147      $      4,780      $      4,780
                                           ============      ============      ============



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

                                            F-10
</TABLE>

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001


NOTE 1 BASIS OF FINANCIAL STATEMENT  PRESENTATION AND RESTATEMENT FOR ACCOUNTING
       CHANGES

         The Company was  incorporated in the State of Delaware on July 6, 1987.
         Since  inception,  the Company  acquired mining rights to mine precious
         metals to as many as approximately  6,700 claims; at December 31, 2001,
         the Company  controlled 62 patented and 47 unpatented claims in Nevada.
         Additionally,  the Company has been  assigned the rights to an interest
         in 23 patented and 23 unpatented claims, in the same are of interest of
         its 109 claims now  controlled,  which  subject to due  diligence,  the
         Company  plans on  retaining.  The  Company was also given an option to
         acquire  approximately  100  additional  claims,  which  subject to due
         diligence, the Company plans on pursuing approximately 50 to 75 of such
         claims  in  the  area  of  interest.  Since  inception  and  since  the
         acquisition  of an  interest in these  properties,  the Company has not
         commenced planned principal  operations,  and accordingly had initially
         been considered an exploratory  stage company as defined in SFAS No. 7,
         "Accounting and Reporting for Development Stage Companies". The Company
         is also subject to Industry Guide 7, promulgated by the U.S. Securities
         and Exchange  Commission,  "the  Commission",  which  relates to mining
         companies.

         CHANGE IN ACCOUNTING METHOD

         The  Company  has  incurred  material  amounts  for direct  exploratory
         activity  costs  since   acquisition  of  the  right  to  these  mining
         properties.  In  accounting  for  these  costs  the  Company  initially
         selected an  accounting  policy  which  capitalized  exploratory  costs
         rather than expensing them as incurred. Amortization of these costs was
         to be calculated  by the units of  production  method when the property
         was put into production.  Costs incurred on properties later determined
         to  be  unproductive  were  to be  expensed  by  the  Company  as  that
         determination  is made.  As of  December  31,  2001,  the  Company  had
         recorded  $2,549,665  in  total  exploration  costs on the  claims  the
         Company now controls.

         During 1997, and periodically  thereafter,  the Securities and Exchange
         Commission (SEC) staff reconsidered  existing accounting  practices for
         mineral expenditures by United States junior mining companies. They now
         interpret  generally  accepted  accounting  policy  for  junior  mining
         companies to permit  capitalization  of  acquisition,  exploration  and
         development  costs  only  after  persuasive   engineering  evidence  is
         obtained  to  support  recoverability  of  these  costs  (ideally  upon
         determination  of proven  and/or  probably  reserves  based  upon dense
         drilling  samples and feasibility  studies by a recognized  independent
         engineer).  Although the Company has performed drilling samples, and an
         independent  engineer has deemed the gold properties contain profitable
         reserves in excess of property and equipment costs incurred, management
         has  chosen to follow the more  conservative  method of  accounting  by
         expending the  previously  capitalized  gold mineral  costs,  for which
         there is no  feasibility  study,  effective  for 1997.  The  cumulative
         effect  of  this  accounting   change  in  1997  for  prior  years  was
         $1,036,690,  and loss from  operations  was $2,363,441 and the net loss
         was  $3,400,131  or $.35 per  share,  $1,951,000  or $.16 per share and
         $761,045  or $.05 per  share for 1997,  1998 and 1999 as  restated,  as
         compared to 1,380,300 or $.14,  $1,167,790 or $.10 and $849,812 or $.05
         as previously reported for 1997, 1998 and 1999, respectively.


                                      F-11

<PAGE>

                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001

NOTE 1  BASIS OF FINANCIAL STATEMENT PRESENTATION AND RESTATEMENT FOR ACCOUNTING
        CHANGES (CONTINUED)

        CHANGE IN ACCOUNTING ESTIMATE

        The Company  changed  the method it  utilized to estimate  the value of
        restricted  common stock issued in large blocks to cancel  indebtedness
        in 2001.  Previously  the Company  considered the debt cancelled as the
        best indication of increase of value ascribed to such shares and during
        2001,  the Company used the trading  price of its shares on the date of
        the  parties  reached  agreement  to  exchange  shares  for debt as the
        preferable  value to restricted  common stock issued in large blocks to
        cancel indebtedness.

        RESTATEMENT

        The following  illustrates the effect of the restatement for the change
        in accounting  principle to expensing  exploratory  mining costs in the
        year incurred and change in accounting estimate in 2001:

                                                    2000              2001
                                                  --------          --------

      Net loss, as reported                     $(1,206,761)     $  (778,345)
                                                  =========        =========
      Net loss - as restated -
        expensing mining exploratory
        costs and change in accounting
        estimate in 2001                        $  (872,682)     $(1,199,745)
                                                  =========        =========

      Shareholders' equity, as reported         $ 1,852,523      $ 1,846,168
                                                  =========        =========
      Shareholders' equity (deficit) -
        as restated - expensing mining
        exploratory costs and change in
        accounting estimate in 2001             $  (537,733)     $  (703,498)
                                                  =========        =========



NOTE 2   LOSSES SINCE INCEPTION

          The Company has incurred  operating  losses totaling  $13,241,772 from
          inception (July 6, 1987) through December 31, 2001.

          The  Company  is  an  exploratory   stage   company  and  its  present
          activities  are  focused on  pursuing  opportunities  to  exploit  its
          interest in certain mining claims in light of its current alternatives
          including   possible   co-ventures   with  Senior  Mining   Companies,
          availability of working capital and present market conditions. Because
          European  American  Resources is an exploratory  stage   company,  the
          accompanying  financial  statements  should not be regarded as typical
          for normal operating periods.

          The Company  believes that its remaining  assets at December 31, 2001,
          along with cash flows  already  committed and expected to be generated
          from  financings  that are anticipated to close in the short term will
          be sufficient to fund the Company's  operations through 2001. However,
          there can be no assurance  that the Company will ever obtain  positive
          cash  flow  from  operations  or  that  sufficient   capital  will  be
          available, when required, to permit the Company to realize its plans.



                                      F-12
<PAGE>

                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001


NOTE 3   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Property and Equipment

         Property and  equipment is recorded at cost.  Depreciation  is computed
         for financial  statement  purposes  using the straight line method over
         the estimated  useful lives of the related  assets.  The useful related
         lives of property and  equipment  range from 3 to 5 years.  For federal
         income  tax  purposes,  depreciation  is  computed  under the  modified
         acceleration cost recovery system.

         Statement of Cash Flows

         For the purposes of the statement of cash flows, the Company  considers
         all highly liquid debt  investments  purchased with a maturity of three
         months or less to be cash equivalents.


         The  following  items  represent a schedule of non-cash  investing  and
         financing activities:

                                                        2000          2001
                                                      --------      --------
                                                                  (As restated)

      Issuance of common stock for the
       cancellation of debt and accrued interest     $ 346,669      $ 548,331
                                                       =======        =======


         Operating  activities  include interest paid of $12,726 and $11,196 for
         the years ended  December 31, 2000 and 2001,  respectively.  During the
         year ended  December 31, 2001,  the Company  issued  100,000  shares of
         common  stock  valued at $21,000  which was charged to loan fees and is
         included in general and administrative  expenses,  in connection with a
         $100,000 short term note.

         Loss per Common Share

         The Company  accounts for net loss per common share in accordance  with
         the provisions of Statements of Financial Accounting Standards ("SFAS")
         No.  128,  "Earnings  per Share"  ("EPS").  SFAS No. 128  reflects  the
         potential dilution that could occur if securities or other contracts to
         issue  common stock were  exercised  or converted  into common stock or
         resulted  in the  issuance  of common  stock  that  then  shared in the
         earnings of the entity.  Common  equivalent  shares have been  excluded
         from the computation of diluted EPS since their effect is antidilutive.

         Dividends

         The Company has not paid any dividends and any dividends which might be
         paid in the future will depend upon the financial  requirements  of the
         Company and other relevant factors.

         Reclassification

         The financial  statements presented for 1997 and from Inception on July
         6, 1987 through December 31, 2001 have been  reclassified to conform to
         the current year's presentation.

         Use of Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities and disclosure of contingent  assets and liabilities at the
         date of the financial  statements  and the reported  amounts of revenue
         and expense  during the reporting  period.  Actual results could differ
         from those estimates.  These estimates  include property and equipment,
         depreciation,   the   carrying   value  of  resource   properties   and
         distribution rights payable.

         Stock-Based Compensation

         The Company  accounts for stock based  compensation  in accordance with
         SFAS No. 123, "Accounting for "Stock-Based Compensation," which permits
         entities to recognize as expense over the vesting period the fair value
         of all stock-based awards on the date of grant. Alternatively, SFAS No.
         123 also allows  entities to  continue to apply the  provisions  of the
         Accounting  Principles Board (APB) Opinion No. 25 and provide pro forma
         net income and pro forma  earnings per share  disclosures  for employee
         stock  option  grants  made in 1995  and  future  years  as if the fair
         value-based  method, as defined in SFAS No. 123, had been applied.  The
         Company has elected to continue to apply the  provisions of APB Opinion
         No. 25 and provide the pro forma  disclosure  required by SFAS No. 123.
         As such,  compensation  expense is  generally  recorded  on the date of
         grant only if the current market price of the underlying stock exceeded
         the exercise price.


                                      F-13
<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001


NOTE 3   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

         Investment in Mineralized Properties

         Investment in mineralized properties,  including advances on royalties,
         prospecting  and  exploration  costs  incurred  in the  search  for new
         mineralized properties are charged to expense as incurred. Direct costs
         associated  with  the  development  of  identified   reserves  will  be
         capitalized at such time supportable  "reserves" are established  until
         the  related  geologic  areas are either put into  production,  sold or
         abandoned.  As of December 31, 2001, there were no geologic areas under
         production and no capitalized costs, as restated.

         Equity Method

         The  investment  in  exploration  joint  venture in which the Company's
         joint  venture  partner  had  committed  to  spend up to a  minimum  of
         $2,000,000 by the end of 2002, and in turn said partner would be vested
         51% in the joint  venture  and the  Company or its  assignees  would be
         vested 49%, was accounted for under the equity method.  This investment
         was initially carried at cost, which included the carrying value on the
         books of the Company for those claims contributed to the joint venture.
         As restated, the investment was carried at a cost of $0.

         The Joint  Venture was  terminated  in  December,  2001 with the claims
         controlled  by the  Company  being  reassigned  to the  Company  and at
         December 31, 2001.


         Income Taxes

         The Company  accounts  for income  taxes using the asset and  liability
         method.  Under this  method,  deferred tax assets and  liabilities  are
         recognized for the future tax consequences  attributable to differences
         between the financial statement carrying amounts of existing assets and
         liabilities  and their  respective tax bases and operating loss and tax
         credit carryforwards.  Deferred tax assets and liabilities are measured
         using  currently  enacted tax rates.  The effect on deferred tax assets
         and  liabilities  of a change in tax rates is  recognized in results of
         operations in the period that includes the enactment  date.  Because of
         the  uncertainty  regarding the  Company's  future  profitability,  the
         future  tax  benefits  of its  losses  have been  fully  reserved  for.
         Therefore,  no benefit for the net operating  loss has been recorded in
         the accompanying consolidated financial statements.

         Fair Value of Financial Instruments

         SFAS No. 107,  "Disclosure About Fair Value of Financial  Instruments",
         requires the  determination  of fair value for certain of the Company's
         assets and liabilities.  The Company estimates that the carrying values
         of its financial instruments approximate fair value.


                                      F-14

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 3   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

         Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

         In accordance with SFAS No. 121 "Accounting for the Impairment of Long-
         Lived Assets and for Long-Lived  Assets to Be Disposed Of," the Company
         has  reviewed  for the  impairment  of  long-lived  assets and  certain
         identifiable  intangibles  to be held and used by the Company  whenever
         events and changes in circumstances indicate that the carrying value of
         an asset may not be  recoverable.


NOTE 4   CLAIM RECEIVABLE

         The Company had previously entered into a managed investment  agreement
         with  Schwabische  Finanz-und   Unternehmensberatung  Gmbh  (SFU).  The
         investment  consisted of USD $2,250,000  which was being managed by SFU
         and was being held in accounts at Dominick & Dominick AG. The agreement
         commenced  on  September  25, 1992 and the funds were  restricted  from
         withdrawal  until October 1993. The last records  obtained which showed
         the funds  intact  were in 1993 and were  invested  with  Dominick  and
         Dominick AG. Management has determined to charge the expense and record
         the  corresponding  reserve in the amount of approximately  $804,000 to
         1993, the earliest period when the Company actually  received  detailed
         records and statements of its investments.  This is consistent with the
         maturity date of October, 1993 of the original investment agreement. In
         1997 the  Company  retained  new  counsel in Germany  to  finalize  the
         recovery  of these  amounts if any,  from the German  fiduciary  (a Law
         Firm).  The new counsel  advised the Company in 1997 that the prospects
         for collection have improved due to changes in German laws. Counsel has
         also  advised the Company to reduce the amount of its demand (an amount
         in excess of the  remaining  carrying  value) to  accelerate  recovery.
         Accordingly,  during the year ended  December  31,  1998,  the  Company
         further reserved an additional $160,667 against this claim. During 1999
         the  Company  was  advised by the same  counsel  that  recovery  may be
         realized  within as soon as  twelve  months  and as long as thirty  six
         months,  and therefore  further reserved $53,833  representing the time
         value of money at 9%.  During 2000 the Company  reserved the  remaining
         $267,500 balance of this claim with a like amount charged to expense as
         the Company continued to have difficulty collecting the same.

NOTE 5   INVESTMENT IN AND TERMINATION OF EXPLORATION JOINT VENTURE

         On February  18, 2000 the Company  entered  into a group of earn-in and
         joint venture  agreements with Homestake Mining for an area of interest
         which  includes 103 of the 109 claims the Company  controls.  Homestake
         had the right to withdraw  from The Joint  Venture with 30 days written
         notice.  Homestake agreed to contribute  approximately 30 claims in the
         area of interest, as well as committing to expend a minimum of $300,000
         through the end of 2000 and  $2,000,000 in total through 2002, at which
         time Homestake would have been vested 51% in the Joint Venture.

         On April 19, 2001 the  Company  released a report  that  Homestake  had
         expended the minimum required  expenditures for year ended December 31,
         2000.


                                      F-15

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 5  INVESTMENT IN AND TERMINATION OF EXPLORATION JOINT VENTURE - (Continued)

         As a condition of the agreement,  the Company's royalty  commitment was
         to be borne by the Joint Venture partner, with such expenditure applied
         toward the  minimum  committed  expenditures.  For the year  2001,  the
         Company  agreed to fund the  $120,000  royalty  commitment,  subject to
         reimbursement  of $20,000 during 2001 and $100,000 by January 2002. The
         Company funded the $120,000 royalty commitment and received the $20,000
         reimbursement during the year ended 2001.


         In December  2001,  Homestake  recorded  the mining  claims back to the
         Company.  The Company  recorded  no revenue or expenses  from the joint
         venture for the year ended December 31, 2000 and December 31, 2001.


NOTE 6   PROPERTY AND EQUIPMENT

         Property and equipment consist of the following:

                                                   December 31, 2001

         Office equipment                             $ 12,520
         Less: accumulated depreciation                 (9,626)
                                                        ------

                                                      $  2,894
                                                        ======


NOTE 7   INCOME TAXES

         No provision for income taxes have been made for the periods  presented
         as the Company incurred losses during those periods.


         Deferred taxes consist of the following at December 31, 2001:

         Total deferred tax assets                         $ 2,414,000
         Less: Valuation allowance                          (2,414,000)
                                                             ---------

         Net deferred tax assets                           $         0
                                                             =========

         Deferred tax assets are  attributable  to available net operating  loss
         carryforwards.

         The  Company has net  operating  loss carry  forwards of  approximately
         $7,100,000  which expire in various  years  through the year 2014.  The
         amount of the  operating  loss carry  forwards may be subject to annual
         limitations  limited  by IRS  regulations  as to  changes  in  majority
         interests.



                                      F-16

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 8   RELATED PARTY TRANSACTIONS

         The Company  received all working  capital  through  September 30, 1987
         from  stockholder/officers.  These parties  agreed to have all payments
         through  September 30, 1987 amounting to $371,883 credited to equity in
         exchange for 1,000,000 shares of common stock.

         In 1989,  pursuant to the private  placement of stock, the Company paid
         stock  offering  fees to related  parties,  including  $30,000  paid to
         Merlin  Equities,  Inc.,  a  broker-dealer  and  an  affiliate  of  the
         president of the Company, at that time.  Canopus,  Ltd., a London-based
         entity and principal  shareholder of the Company was paid  $300,000.  A
         total of $418,000 was paid to two  officers of Harrier,  Inc., a public
         corporation,  for whom an officer of the  Company  served as  financial
         consultant in raising equity funding.

         On  September  25, 1992,  the Company  issued  7,000,000  shares of its
         restricted  common stock for $1,900,000 to a foreign  investor,  Trent,
         Ltd, a Company  affiliated with SFU. At the time the shares were issued
         to  Trent  they  represented   approximately  71%  of  the  issued  and
         outstanding common stock of the Company. In addition,  the Company also
         issued to Trent a $500,000  convertible  debenture  bearing interest at
         8%. As a result of the issuance of the common stock and the convertible
         debenture,  the  Company  was  controlled  by Trent.  The  accompanying
         financial  statements  include only the accounts of the Company and its
         subsidiaries  and are not consolidated in any way with respect to Trent
         nor do they include any of the accounts of Trent. The proceeds from the
         stock  issuance and debenture  remained in the control of SFU (see note
         4) and were  invested  in other  entities  and  individuals  under  the
         control of SFU in certain pooled  investments which were to be invested
         in foreign exchange forward contracts. All transactions were to be made
         at the risk of SFU,  relieving the Company and the  investment  company
         from any and all liability.  The invested  funds were  restricted as to
         withdrawal  until October,  1993.  While the invested funds were in the
         sole  control  of SFU,  they had  entered  into an  agreement  with the
         Company to liquidate the foreign  investments  and deliver the funds to
         the United States for use by the Company beginning in October 1993.

         Between January 1, 1994 and December 31, 1995 the company confirmed the
         amounts with SFU and a German fiduciary;  and received partial payments
         totaling $964,208. SFU was unable to return the balance at these funds.
         In 1996 the  Company  determined  the  debenture  should be canceled in
         conjunction with the managed foreign  investments and claim receivable,
         discussed in Note 4, retroactively to December 31, 1993.

         In 1997,  the Company  leased office space from an affiliate on a month
         to month basis via the  assumption of the  affiliates  lease to a third
         party from September, 1997 through December 31, 1997. Rent expense paid
         to the third party was $4,687.

         In  1997  the  Company  issued  250,000  shares  to  an  affiliate  for
         investment banking services valued at $290,000.


                                      F-17

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 8   RELATED PARTY TRANSACTIONS - (Continued)

         During 1997, the Company signed a note to a director  bearing  interest
         of 11%.  Interest charged to expense for this note in 1997 was $30,480.
         In March 1998, the Company issued 357,143  shares,  valued at $250,000,
         or $.70 per share,  in  cancellation of $250,000 of the note due to the
         related  party.  The  Company  also  issued  750,000  shares  valued at
         $525,000, or $.70 per share, which are assignable,  for exploration and
         reactivation services, performed through December 31, 1997. At December
         31, 1997,  $134,093  including  interest  remained  outstanding on this
         note.  The Company repaid this amount during the first quarter of 1998.
         During June of 1998 the Company  advanced this  investor  $60,000 at 8%
         interest of which  $50,000 was repaid during the year leaving a balance
         of $12,234 including  accrued interest.  During the year ended December
         31, 1998 the Company recorded $2,234 of interest income from this loan.
         This loan receivable was repaid to the Company during 1999.

         On April 22, 1998, the Company entered into a consulting agreement with
         a former  CEO  which  provides  for the  issuance  of  common  stock in
         addition to annualized  fees, as amended,  of $96,000 per year.  During
         the year ended  December 31, 1998 the  president was paid $64,000 under
         this  agreement.  The Company  issued  105,000  shares of common  stock
         valued at $.85 per share,  or $89,250,  based upon their  market  value
         subject to Rule "144" restrictions. Of this amount $44,625 was added to
         resource   properties   and  $44,625   was   recorded  as  stock  based
         compensation  based upon the Company's  estimate of where the president
         directed his efforts.

         The Company also agreed to issue 105,000 shares to a director, provided
         he  remained  employed  by the  Company  through  April 30,  1999.  The
         director resigned from employment in an effort to curtail expenses, and
         remained a director  through  April,  2000.  The Company  issued 90,000
         restricted  shares,  valued at $.85 per share,  or $69,300,  based upon
         their market value subject to Rule "144" restrictions.  Of this amount,
         $34,650 was added to resource  properties  and $34,650 was  recorded as
         stock  based   compensation.   The  agreement  initially  provided  for
         annualized  compensation  of $72,000 and during the year ended December
         31, 1999 he was paid $27,000 under this agreement.

         In May of 1998,  the Company  entered into a management  agreement  for
         internal  accounting  services for $3,000 per month and the issuance of
         100,000 restricted shares, valued at $.77 per share, or $77,000 and was
         recorded as stock based compensation.

         The  Company  issued  400,000  restricted  shares to the  chairman  and
         director for services  during the year ended December 31, 1998,  valued
         at $.77 per share or $308,000, based upon their market value subject to
         Rule "144" restrictions.  Of this amount $154,000 was added to resource
         properties and $154,000 was recorded as stock based compensation.


                                      F-18

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 8   RELATED PARTY TRANSACTIONS - (Continued)

         Credit Facilities Provided By Affiliates

         In December,  1998 one shareholder agreed to advance up to $40,000 with
         interest  at 10%  through  April 30,  1999,  or the  completion  of the
         Company's  offering of common stock,  whichever  occurs first,  and its
         secured by the  Company's  resource  properties.  In 1999 this note was
         amended to provide up to  $1,000,000 at 12%  indefinitely.  At December
         31,  1999,  $300,000 of  principle is  outstanding  on this note,  plus
         accrued interest of $10,669.  Effective December 31, 2000 the principle
         of $300,000  outstanding  on this note plus accrued  interest  totaling
         $46,669 were recorded as common stock and additional paid in capital as
         this note plus accrued  interest was canceled in exchange for 1,500,000
         shares  issued on April 10,  2001.  Interest  expense  on this note was
         $10,669 in 1999 and $36,000 in 2000.

         On April 10, 2001,  the Company issued  1,500,000  shares of its common
         stock valued at $360,000 in connection with the  cancellation of a note
         and  accrued  interest  with  a  significant  shareholder.   The  total
         cancellation  of the note and accrued  interest was $360,000,  of which
         $346,669 was  outstanding  at December 31, 2000.  During the year ended
         December 31, 2001,  $13,331 of interest was charged to interest expense
         and a like amount was added to additional paid in capital.

         In December 1998, an affiliate agreed to make $500,000 revolving credit
         available to the Company with interest at prime plus 2.5%  available to
         the Company,  on an as needed basis,  secured by the Company's resource
         properties  with no specific  repayment  terms.  At  December  31, 1999
         $55,766  was  outstanding.  Interest  expense  on this note was  $1,205
         during 1999.

         During 1999 another  affiliate  agreed to advance $139,180 for expenses
         and cash with  interest at 9%.  Interest  expense was $4,061 under this
         agreement for 1999.

         During  2000,  these  notes were  combined  and net of  advances,  this
         creditor was repaid  $56,200 at December  31, 2000.  The balance of the
         notes plus accrued interest totaled $201,735.  Interest expense for the
         year ended 2000 was $7,264.


         During 2001, the Company was advanced $78,265 in cash and expenses paid
         on  behalf  of the  Company  which  brought  the  total  of the note to
         $280,000.  Effective May 2, 2001 this note was canceled and the Company
         assigned its remaining  interest,  if any, in the claim receivable (see
         note 4) for the  issuance  of  2,800,000  shares  of  common  stock and
         recorded $252,000  settlement  expense.  During the year ended December
         31,  2001,  $2,999 was charged to  interest  expense on this note and a
         like amount was added to additional paid in capital.


NOTE 9   COMMITMENTS AND CONTINGENCIES

         In order to maintain the  Company's  current  unpatented  mineral lease
         claims  [See Note 1], the  Company  must pay an annual fees of $100 per
         claim to the Bureau of Land Management. The fees have been paid through
         August  31,  2001.  The  Company  did agree to forego its rights to 192
         claims in connection with its joint venture agreement discussed herein,
         and reduced  capitalized  exploration  costs by $116,736  during  1999.
         During 2000,  the Company had foregone all of its claims other than 109
         claims of which 103 claims were  contributed  to the joint venture with
         Homestake Mining.


                                      F-19

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 9   COMMITMENTS AND CONTINGENCIES - (Continued)

         Earn-in and Joint Venture Agreement

         On February 18,  2000,  the Company  entered  into certain  earn-in and
         joint venture agreements with Homestake Mining for an area of interest,
         which contains 103 of EPAR's  Prospect  Mountain  claims  pursuant to a
         letter  of  intent  signed  in  October,   1999.  Homestake  agreed  to
         contribute  approximately 30 claims in the area of interest.  Homestake
         was the  manager of the joint  venture  and  committed  in stage one to
         expend  a  minimum  of  $300,000  through  the end of 2000.  In  total,
         Homestake had committed to spend up to a minimum of $2,000,000  through
         2002 and in turn would have been vested  with 51% in the joint  venture
         at that juncture.  This Agreement was terminated in December 2001, with
         the parties exchanging mutual releases.


         Royalty (Claim Rental) Commitment

         On March 19,  1997 the  Company  entered  into an  option  to  purchase
         previously  leased  claims from the original  lessors of 47  unpatented
         claims and owner of 62 patented  claims.  This agreement  provided that
         the Company the rights to all of the patented and unpatented claims for
         the  purchase  price of 100,000  shares of the  Company's  common stock
         subject to their restricted  legend, and certain  accelerated  payments
         under a consulting  agreement and further 10% Net Smelter  Return (NSR)
         less  applicable  expenses  up to  $100,000,000  from  the  properties.
         Additionally,  on March 19, 1997 the Company entered into a forty-eight
         (48) month  consulting  agreement with the geological  company owned by
         the original  owner of the patented  claims with a monthly  retainer of
         $4,000 and a minimum total of $192,000 to be paid under this agreement.
         During  1997,  $36,000  was paid under this  agreement  for  geological
         efforts and recorded as an addition to capitalized exploration costs.

         The  preceding  agreement was canceled and replaced by an agreement and
         on May 26, 1998, the Company acquired 62 patented claims and mill sites
         and the  rights  to 47  unpatented  claims  on  Prospect  Mountain.  In
         connection with this purchase,  the Company paid the seller $128,000 to
         buy out the  consulting  commitment  which was included in  capitalized
         exploration  costs, and $19,300 for repayment of additional filing fees
         was the  subject  to  reimbursement  to the  Company;  this  amount was
         included in other assets. The Company also issued 106,000 shares to the
         seller and a company he controls,  which were valued at $90,100 or $.85
         per share,  and a like  amount was  recorded as an addition to resource
         properties.  Additionally,  the Company  agreed to pay advance  minimum
         royalties of up to $100,000,000 as follows:

         1)       $15,000 on the closing date (1998)
         2)       $50,000 on or before the first anniversary (1999)
         3)       $90,000 on or before the second anniversary (2000)
         4)       $120,000 on or before the third anniversary (2001)
         5)       $150,000 on or before the fourth anniversary (2002)
         6)       $200,000 on or before the fifth anniversary and $200,000 each
                   year thereafter. (2003 and thereafter)

         This  commitment  ends  when a total of  $100,000,000  has  been  paid,
         including net smelting  returns,  or should the Company pay the seller,
         at the Company's discretion, $27,000,000 prior to May 26, 2003.


                                      F-20


<PAGE>
                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 9   COMMITMENTS AND CONTINGENCIES - (Continued)

         The above advance on minimum  royalties will be accelerated when and if
         the Company begins to produce extraction revenues from these properties
         and the net smelting returns, which are 4% in the case when the average
         price of gold (London quote) in each  production  quarter  exceeds $400
         per ounce and 3% in the case when the  average  price is less than $400
         per ounce;  exceeds the annual minimum.  In connection with the earn-in
         and joint venture  agreement,  the Company assigned those claims to the
         seller with the same  commitment as the royalty  commitment in the form
         of a rental commitment.

         Reserved Shares
         ---------------

         In February 2000 in connection with the earn-in joint venture agreement
         the Company pledged 1,000,000 shares as collateral to the holder of the
         royalty/rental  commitment.  In December, 2001, upon the mutual release
         of the Company and its joint venture  partner,  Homestake  Mining,  the
         Company  agreed in principle to reserve these shares to effectuate  new
         agreements;  440,000  shares were reserved for the holder of the rental
         commitment,  60,000  shares were  reserved for the counter party to the
         distribution  rights  agreement.   Additionally   500,000  shares  were
         reserved to issue for proceeds to fund these agreements.

         Distribution Agreements
         -----------------------

         During 2001, the Company entered into a distribution  agreement whereby
         it assigned 5.8% interest in the  Company's  share of net earnings,  as
         defined  in the  agreement,  in the  mining  claims  controlled  by the
         Company  as of  December  31,  2001.  The  holder of this  distribution
         agreement, FAE Holdings, Inc. is the same related party that was issued
         2,800,000  shares of common stock for the cancellation of certain notes
         during 2001.  This  agreement  was  extended  through July 31, 2002 and
         again until September 30, 2002.

         During 1997, the Company entered into net smelting agreements for up to
         $7,000,000  with former  shareholders in exchange for the retirement of
         2,187,500  shares.  The Company  charged  $437,500 to common  stock and
         additional paid in capital as this  represented the net estimated value
         of the distribution rights based upon the anticipated payments, if any,
         that would  have been made  under the  agreement.  This  agreement  was
         cancelled in 1998.

         Other Commitments
         -----------------

         On May 8, 1997, the Company entered into an employment agreement with a
         former president for a period of seven (7) years, which provided annual
         cash compensation of $144,000,  subject to a ten percent (10%) increase
         per  year and such  other  increases  as the  Board  of  Directors  may
         determine  from  time to  time  at its  sole  discretion,  and  minimum
         employee stock awards,  including 400,000 shares of common stock, which
         were  issued to the  former  president  upon  signing,  subject  to the
         restrictions of Rule 144 and thereafter  210,000 shares of common stock
         were to be issued on each anniversary for the first,  second, third and
         fourth yearly anniversary of the contract.  Additionally, the agreement
         called for stock  options  entitling  the  president  to purchase up to
         1,000,000  shares from 1999  through 2005 at prices  ranging  $5.00 per
         share  increasing  annually to $8.50 per share.  On April 22, 1998, the
         Company  terminated this former  president.  In July 1998, EPAR filed a
         lawsuit  against its former  president.  This lawsuit was  subsequently
         settled.  The settlement  required Mr. Ogilvie to return 400,000 shares
         of the  Company's  common  stock  which he  received as a result of his
         employment  by  EPAR,  50,000  of  the  shares  were  assigned  to  the
         shareholder  who made a significant  investment  in the Company  during
         1997. The Company recorded settlement income of $350,000 based upon the
         original  value  ascribed  to these  shares.  In 1999  the  significant
         shareholder  waived any rights to the  assigned  shares and the Company
         recorded $50,000 of settlement income.

                                      F-21
<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 9   COMMITMENTS AND CONTINGENCIES - (Continued)

         The Company's mining and exploration  activities are subject to various
         federal,  state and local laws and regulations governing the protection
         of the environment. These laws and regulations are continually changing
         and  generally  becoming  more  restrictive.  The Company  conducts its
         operation  so as to protect  the  public  health  and  environment  and
         believes  its  operations   are  materially  in  compliance   with  all
         applicable laws and  regulations.  The Company has made, and expects to
         make  in  the  future,  expenditures  to  comply  with  such  laws  and
         regulations.

         The  Company is from time to time  involved  in various  claims,  legal
         proceedings and complaints  arising in the ordinary course of business.
         It does not believe that any pending or threatened  proceeding  related
         or other  matters,  or any amount  which it may be  required  to pay by
         reason  thereof,  will have a material  adverse effect on the financial
         condition or future results of operations of the Company.


NOTE 10  CAPITAL STOCK

         Preferred Stock
         ---------------

         The  Company  has  25,000,000  shares of  convertible  preferred  stock
         authorized,  and  effective  July 25, 2001 the Board  resolved to amend
         this to 1,000,000  subject to shareholder  approval,  at a par value of
         $.0001, of which none are issued or outstanding.

         Common Stock
         ------------

         The Company has  250,000,000  shares of common  stock  authorized,  and
         effective  July 25, 2001 the Board resolved to amend this to 50,000,000
         subject  to  shareholder  approval,  at a  par  value  of  $.0001.

         During 1997, the Company  retired  2,187,500  shares of common stock in
         exchange for distribution rights, valued at $437,500.

         Effective for December 31, 1998 the Company  agreed to issue  1,312,500
         unrestricted  shares and  1,750,000  restricted  shares to rescind  the
         distribution  agreement.  Additionally,   1,093,500  restricted  shares
         valued at one-half of the market  price of the  Company's  common stock
         consistent with the value of restricted stock agreed to by the parties,
         which resulted in a $396,485 charge to settlement expense.

         In 1997 the Company  sold  2,075,000  shares  during the year in exempt
         transactions  for  $1.00 a  share,  which,  net of  offering  costs  of
         $109,925,  generated  net proceeds to the Company of  $1,265,075  and a
         $700,000 stock subscription receivable, which was collected on March 4,
         1998.

         Also in 1997,  the Company  issued  400,000  shares to the president in
         connection  with his  employment  agreement  as discussed in Note 7. At
         December  31, 1997  resource  properties  were  increased  $200,000 and
         $200,000 was charged to the statement of operations  for the year ended
         December 31, 1997. These shares were valued at $1.00, which represented
         the most recent selling price of restricted shares.

         In 1998 the Company terminated the president and both parties commenced
         legal  action  which  resulted  in the return to the Company of 350,000
         shares.  The Company recorded  settlement income of $350,000 based upon
         the original value ascribed to the shares.

         In  1997,  the  Company  issued  250,000  shares  to an  affiliate  for
         investment  banking  services  which were valued at $1.16 or  $290,000,
         which represented

                                      F-22

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 10  CAPITAL STOCK - (Continued)

         same  proportionate  discount for recent sales of restricted  shares to
         the market price at the time of the transaction.

         In 1997, the Company issued 25,000 shares to a finder,  valued at $1,00
         per share,  with a like amount  charged to additional  paid in capital.
         These shares were valued at the most recent selling price of restricted
         shares.

         In March,  1998,  the Company  issued  357,143 shares valued at $.70 in
         cancellation of $250,000 debt with an affiliate. The shares outstanding
         and the amounts  "Due to Related  Party" at December 31, 1997 have been
         adjusted to reflect his transaction. The value ascribed to these shares
         was adjusted for the same proportionate  discount for restricted shares
         in relation to the market price at the time of the transaction.

         In March 1998,  the Company  issued  750,000 shares to an affiliate for
         exploration and reactivation  services  performed  through December 31,
         1997  valued  at $.70 per  share or  $525,000.  At  December  31,  1997
         resource properties were increased $175,000 and $350,000 was charged to
         general and administrative  expenses in the statement of operations for
         the year ended  December 31, 1997.  The value  ascribed to these shares
         was adjusted for the same proportionate  discount for restricted shares
         in relation to the market price at the time of the transaction.

         As  discussed  in Note 7,  during  1999,  the  Company  issued  100,000
         restricted  shares  valued  at $.77  per  share,  or  $77,000;  105,000
         restricted  shares  valued  at  $.85  per  share,  or  $89,250;  90,000
         restricted  shares  valued at $.85 per share,  or $69,300  and  400,000
         restricted  shares  valued at $.77 per share,  or  $308,000  to various
         members of the  Company's  management.  Of these  amounts  $233,275 was
         added to resource  properties  and $310,275 was recorded as stock based
         compensation.

         Pursuant to a 1997 agreement,  the Company issued 194,900  unrestricted
         shares valued at $1.21 per share, or $201,165, which was recorded as an
         addition to resource properties in 1998.

         In 1999 the Company  issued  55,000  shares  valued at .80 per share of
         $44,000 for  geological  services  and  advanced  royalties  which were
         recorded as additions to resource properties.

         In 1999  the  Company  issued  105,000  shares  valued  at $1.08 to the
         president  consistent  with his  employment  agreement and recorded the
         same as stock based compensation.

         During the year ended  December 31, 2000,  the company  issued  380,000
         shares to employees and Consultants for services valued at $266,562.

         The Company granted options to an accredited  investor to purchase,  at
         $.50 per share, up to 1,225,000 shares of restricted  common stock. The
         option  period began on September 3, 1999 and ran through  September 3,
         2000 or sooner,  should the  Company  sell the control of either its 62
         patented  claims or a majority  of its  outstanding  common  stock to a
         single  purchaser.  The Company also granted an  accredited  investment
         firm options to purchase,  also at $.50 per share up to 675,000  shares
         of  restricted  common  stock.  The option period began on September 3,
         1999 and ran through  September  3, 2000 or sooner,  should the Company
         sell the control of either its 62 patented claims or a



                                      F-23

<PAGE>



                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 10  CAPITAL STOCK - (Continued)

         majority of its  outstanding  common  stock to a single  purchaser.  On
         April 10, 2001, the Company retired these options and canceled its note
         payable to the accredited  investor in exchange for 1,500,000 shares of
         the  Company's  common  stock,  which are  treated  as  outstanding  at
         December 31, 2000 for accounting purposes pursuant to FASB 128.

         In February  2001, the Company issued 82,500 shares of its common stock
         in a private placement at $.20 per share generating net proceeds to the
         Company of $16,500.

         In March 2001, the Company issued 300,000 shares of its common stock to
         a consultant for services valued at $54,000.

         In March 2001, the Company agreed to issue 100,000 shares of its common
         stock in connection  with the issuance of a $100,000 short term note. A
         charge of $21,000  was  recorded  as loan fees  included in general and
         administrative  expenses. This note plus accrued interest was repaid in
         July 2001.

         On April 4, 2001, the Company agreed to issue up to 2,800,000 shares of
         its  common  stock to another  creditor,  who is also the holder of the
         distribution  agreement assigned a 5.8% interest in 2001, in connection
         with the  cancellation of up to $280,000 of notes and accrued  interest
         and the assignment of the claim  receivable  (see Note 4). These shares
         were  issued on May 2, 2001 and valued at  $532,000  and  restated in a
         loss on settlement of $252,000, as restated.

         In April 2001, the Company issued 200,000 shares of its common stock to
         its preceding  president and 200,000 options to purchase 200,000 shares
         of the Company's  common stock,  at an exercise price of $.50 per share
         through  the earlier of March 2003 or 30 days after the  completion  of
         service,  in connection  with an executive  consulting  agreement which
         also provided for annual  compensation  of $100,000  through  February,
         2002. In October,  2001 the Company and Mr. Beloyan agreed to separate,
         with 100,000 of the shares  returned to the Company by Mr.  Beloyan and
         100,000  shares to be retained as fully paid.  These shares were valued
         at  $21,000.  Additionally,  the  options  under  this  agreement  were
         canceled.

         In May 2001,  the Company issued 75,000 shares of its common stock to a
         consultant for services valued at $15,750.

         In July 2001,  the Company  issued  348,000  shares of its common stock
         valued at $69,400 to its geological  consultant and treated this amount
         as an addition to capitalized exploration costs.

         In July 2001,  the Company issued 300,000 shares of its common stock to
         the  Company's  President  and CEO and director for services  valued at
         $120,000.

         In September  2001,  the Company  issued  350,000  shares of its common
         stock to a director for services valued at $168,000.


                                      F-24

<PAGE>


                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001



NOTE 11  SUBSEQUENT EVENTS

         In  December,  2001 the Company and the former  joint  venture  partner
         (Homestake Mining) entered into releases  pertaining to the termination
         of the joint  venture  agreement  of  February  18,  2000 and the joint
         venture  partner  re-assigned  to the Company all its rights in the 103
         claims the Company had contributed to the joint venture, in addition to
         the rights to approximately 23 patented and 23 unpatented claims in the
         area of interest previously held by Homestake. Concurrently the Company
         and its  counter  parties  to  these  claims  agreed  in  principle  to
         stand-still  on  existing  agreements  and  effective  April  22,  2002
         initiated a stand-still  reserve agreement,  significant terms of which
         include:

         The  1,000,000   shares   previously   reserved  to  secure  the  claim
         rental/royalty  contract  with the claim  owner have been  reserved  to
         secure the stand-still  reserve agreement;  60,000 shares to secure the
         extension of the existing terms of the  distribution  rights  agreement
         until July 31, 2002, and again until September 30, 2002, 440,000 shares
         to  secure  the claim  rental/  royalty  contract,  which  includes  62
         potential  claims and 47  unpatented  claims,  through  July 31,  2002,
         subsequently  this  agreement  was  extended  indefinitely  and 500,000
         shares have been reserved for the warrant discussed below.

         In consideration for the extension of the distribution agreement, and a
         firm  commitment  to raise or  provide  the  Company  with a minimum of
         $240,000 of  financing,  via the  obtainment  of new private  equity or
         direct funding,  including an increase in the distribution agreement to
         a  possible  total of  $758,000,  or  approximately  to 17.4%  from the
         present  5.8%  interest  in the  Company's  share of net  earnings,  as
         defined  in the  agreement,  in the  mining  claims  controlled  by the
         Company as of December 31, 2001; and a best effort  commitment to raise
         a total of  $500,000,  inclusive  of the firm  commitment,  the Company
         provided a grant of warrants to FAE Holdings,  Inc., the basic terms of
         the warrant include immediate vesting, to purchase up to 500,000 shares
         of the  Company's  common stock at $.20 per share through July 31, 2002
         and $.40 through April 30, 2003 (valued at $18,500 ). The fair value of
         the warrants on the date of the grant was based upon the  Black-Scholes
         stock  option  pricing  model  using  the  following  weighted  average
         assumptions: annual expected rate of return of 0%, annual volatility of
         108.8%, risk free interest rate of 5.0% and expected option life of one
         year.

         Effective  April 22, 2002 the board agreed to issue  180,000  shares to
         its current  directors for them to serve through the  completion of the
         stand-still  reserve,  45,000 shares each,  and agreed to issue another
         180,000 shares again 45,000 shares each, by the sooner of July 31, 2002
         or the  effective  date  of the  Company  entering  into  any  material
         contract  with  respect to its rights to the claims  including  but not
         limited to:

         1.       The contribution of these claims to a joint venture  agreement
                  with a senior mining company for purposes of ultimately mining
                  these claims,

         2.       The outright sale of the Company's interest in these claims or

         3.       Other such  arrangement  with  respect to the claims  which is
                  considered in the best interest of the Company.

         Additionally   the  directors   agreed  to  nominate  and  appoint  two
         engineering  advisors  to the board,  without  voting  rights,  for the
         purpose of  presenting  the board with its  various  alternatives  with
         respect  to these  claims  until  the  completion  and  release  of the
         stand-still reserve agreement.


                                      F-25

<PAGE>


                        EUROPEAN AMERICAN RESOURCES, INC.
                         (AN EXPLORATORY STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2001


NOTE 12 SUBSEQUENT EVENTS (UNAUDITED)

         Subsequent  to April 22, 2002,  the Company  extended its royalty claim
         agreement indefinitely with the claim holder. The Company also extended
         the  term of its  stand-still  agreement  for the  distribution  rights
         agreement,  the issuance of certain  warrants to the rights  holder and
         certain shares to its directors until September 30, 2002.

         In July 2002,  the Company  issued  820,000  shares to a consultant for
         services. In August 2002, the Company issued 580,000 to consultants for
         services.










                                      F-26
<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.





                                  European American Resources, Inc.
                                  (Registrant)



By: /s/ Evangelos Kechayans
    ---------------------------------------------------
    Evangelos Kechayans, President & CEO and Director



Dated: September 12, 2002



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.


           NAME                                  CAPACITY

By: /s/ Evangelos Kechayans
    -----------------------
      Evangelos Kechayans               President & CEO and Director

Dated: September 12, 2002

By: /s/ John Sgarlat
    ---------------------
      John Sgarlat                              Director

Dated: September 12, 2002

By: /s/ Richard Cokl
    ---------------------
      Richard Cokl                     Vice President & CFO and Director

Dated: September 12, 2002

By: /s/ Stephan Wasser
    ---------------------
      Stephan Wasser                            Director

Dated: September 12, 2002










                                       19

<PAGE>


                                     PART IV


ITEM 13  EXHIBITS, SCHEDULES AND REPORTS ON FORM 8-K

         Following is a list of exhibits  filed as part of this Annual Report on
Form 10-KSB.  Where so indicated by  footnote,  exhibits  which were  previously
filed are incorporated by reference.


EXHIBIT
NUMBER
REFERENCE      DESCRIPTION
---------      ------------
  2.a*         Articles of Incorporation, as amended

  3.b*         By-laws, as amended

 99.1          Officer Certifications

 99.2          Prospect Mountain Project Report - Includes maps locating mining
               claims the Company has an interest in as of December 31, 2001



REPORTS OF FORM 8-K:


Filed on October  22,  2001 for event  dated  October  19,  2001 re:  Management
Changes.




         * Incorporated by reference



                                       15

<PAGE>


   Certification of Procedures Followed in Connection with Sarbanes-Oxley Act
                                 Certification


     The  undersigned,   the  Chief  Executive   Officer  of  European  American
Resources,  Inc., a Delaware  Corporation (the "Company") do hereby certify, for
purposes of documenting the steps followed by the officer in connection with the
execution and delivery to the Securities and Exchange Commission of the attached
certification, as follows:

     (1) I reviewed in detail the amended  Annual  Report on Form 10KSB for 2001
which includes  restatements for the periods ending December 31, 1996,  December
31, 1997,  December 31, 1998,  December 31, 1999, December 31, 2000 and December
31, 2001, and the amended  Quarterly Reports on form 10QSB for such fiscals (the
"Report") shortly before the certification was provided.

     (2) I discussed  the  substance  of the Report  with each of the  Company's
outside auditors,  audit committee  members,  and contract  accounting  manager.
These  discussions  took  place at various  times and  covered  principally  the
financial  statement  portions of the reports  (including the notes which are an
integral part of the financial  statements) and related  financial  disclosures.
These discussions  included my verifying that the financial  statements included
in the  report  are  accurate  and  complete,  and  are  properly  prepared  and
consolidated.  I confirmed that each of the outside  auditors,  audit  committee
members and the contract accounting manager were satisfied that the notes to the
financial  statements  read  clearly  and  that the  notes  fairly  explain  the
company's significant accounting principles and significant  estimates,  as well
as disclose all material  contingencies and "off balance sheet" transactions and
commitments known to them. In addition, my discussions with outside and internal
auditors  included a  discussion  of any  material  issues that came up in their
review of the financial  statements and the  resolution of those issues.  I also
verified with the outside auditors, controller and inside auditors that internal
controls are in place and  operating to warrant  reliance upon the financial and
business information provided to me by management.

     (3) I confirmed that the consolidated  financial statements included in the
Report  are  accurate  and  complete  in  all  material  respects,  reflect  all
transactions  of the  Company  during  and for the  statement  period  following
accounting  principles  consistent with those applied in prior periods, and that
all  period  end  adjustments  have  been made in a manner  consistent  with the
accounting  principles in prior periods (other than usual and customary year end
adjustments in the case of interim statements).

     (4) I  informed  the  heads of the  Company's  primary  business  units and
divisions, as well as any officers of those business units or divisions who have
the primary  financial  reporting  responsibility,  that I would be  providing a
certification  regarding the accuracy of the Report and confirmed  orally and in
writing with each such head and financial officer that insofar as they knew, the
Report did not include any untrue  statement of a material fact or omit to state
a material fact.

     (5) As a result of the foregoing procedures,  I concluded that, to the best
of my knowledge, I was able to provide the certification without exception.

     In witness whereof,  I have executed this  certification as of the 12th day
of September, 2002.




Name:Evan Kechyans
     ---------------------------
     Chief Executive Officer







                                       20

<PAGE>


   Certification of Procedures Followed in Connection with Sarbanes-Oxley Act
                                 Certification


     The  undersigned,   the  Chief  Financial   Officer  of  European  American
Resources,  Inc., a Delaware  Corporation (the "Company") do hereby certify, for
purposes of documenting the steps followed by the officer in connection with the
execution and delivery to the Securities and Exchange Commission of the attached
certification, as follows:

     (1) I reviewed in detail the amended  Annual  Report on Form 10KSB for 2001
which includes  restatements for the periods ending December 31, 1996,  December
31, 1997,  December 31, 1998,  December 31, 1999, December 31, 2000 and December
31, 2001, and the amended  Quarterly Reports on form 10QSB for such fiscals (the
"Report") shortly before the certification was provided.

     (2) I discussed  the  substance  of the Report  with each of the  Company's
outside auditors,  audit committee  members,  and contract  accounting  manager.
These  discussions  took  place at various  times and  covered  principally  the
financial  statement  portions of the reports  (including the notes which are an
integral part of the financial  statements) and related  financial  disclosures.
These discussions  included my verifying that the financial  statements included
in the  report  are  accurate  and  complete,  and  are  properly  prepared  and
consolidated.  I confirmed that each of the outside  auditors,  audit  committee
members and the contract accounting manager were satisfied that the notes to the
financial  statements  read  clearly  and  that the  notes  fairly  explain  the
company's significant accounting principles and significant  estimates,  as well
as disclose all material  contingencies and "off balance sheet" transactions and
commitments known to them. In addition, my discussions with outside and internal
auditors  included a  discussion  of any  material  issues that came up in their
review of the financial  statements and the  resolution of those issues.  I also
verified with the outside auditors, controller and inside auditors that internal
controls are in place and  operating to warrant  reliance upon the financial and
business information provided to me by management.

     (3) I confirmed that the consolidated  financial statements included in the
Report  are  accurate  and  complete  in  all  material  respects,  reflect  all
transactions  of the  Company  during  and for the  statement  period  following
accounting  principles  consistent with those applied in prior periods, and that
all  period  end  adjustments  have  been made in a manner  consistent  with the
accounting  principles in prior periods (other than usual and customary year end
adjustments in the case of interim statements).

     (4) I  informed  the  heads of the  Company's  primary  business  units and
divisions, as well as any officers of those business units or divisions who have
the primary  financial  reporting  responsibility,  that I would be  providing a
certification  regarding the accuracy of the Report and confirmed  orally and in
writing with each such head and financial officer that insofar as they knew, the
Report did not include any untrue  statement of a material fact or omit to state
a material fact.

     (5) As a result of the foregoing procedures,  I concluded that, to the best
of my knowledge, I was able to provide the certification without exception.

     In witness whereof,  I have executed this  certification as of the 12th day
of September, 2002.




Name:  Richard Cokl
      -----------------------
      Financial Officer




                                       21