`                          FORM 10-KSB
                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, 1998

                                OR

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

For the transition period from 1/1/98 to 12/31/98
Commission file number 33-3492-D

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.)

400 Cleveland Street, Suite 901, Clearwater, FL           33755  
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code: (727) 298-0636

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-KB or any amendment to
it. [X]

As of December 31, 1998, the Issuer had outstanding 16,205,158 shares of its
common stock, as adjusted, par value $0.0001 per share.  As of December 31,
1998, 8,763,815 shares were held by non-affiliates with an aggregate market
value of $6,353,766.













                                   1
                                   <PAGE>
                                 PART I

Item 1   .Business.

         General Development of Business

         The Company was incorporated in the State of Delaware on July 6, 1987.
Since inception, the Company, which considers itself a Junior Mining 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. Presently the Company
controls 850 of such claims, approximately 165 of which are subject to an
appeal with the IBLA for the "overstaking" by another mining company in which
the Company believes it will ultimately prevail. (see Table under this Section).
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 formulas. Since acquisition of these
properties, the Company has not commenced any extractive mining operations.

         During 1998 the Company, expanding on the results of its drilling
program of 1997, focused its geological efforts on inventorying the claims it
now controls, subject to the IBLA appeal discussed above, a total of 788
unpatented and 62 patented claims and mill sites (see Table under this Section)
; primarily concentrating these 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.  In addition to the  excitement over the
quantities of resources exhibited at Archimedes Open Pit, the extraction costs
are some of thelowest reported in the industry.  Although this provides no
assurance in itself that the Company's claims in this region can provide
similar results, it has generated a significant amount of interest by potential
Joint Venture partners and the Company has been evaluating its best course of
action to exploit its claims in this region; with the possibilities ranging
from undertaking the extractive process with such a co-venture partner to the
outright sale of these claims. It should be noted that these claims are subject
to a net smelter agreement with the sellers (see Commitments under this
Section and in the financial statements; see Item 13).

         The patented and unpatented lode and placer mining claims are in
numerous separate claim groups throughout Nevada.  Although several of the
claims are contiguous, many are not, therefore the Issuer has been required
to conduct exploration and other field work to satisfy the annual assessment
work on the claims in numerous separate locations.

         The validity of all unpatented mining claims, which constitutes most
of the Issuer's property holdings, is subject to inherent uncertainties.
Apart from 62 patented lode claims in the Prospect Mountain region, most of the
unpatented claims, if retained (also subject to an expected IBLA decision),
will be leased from the Bureau of Land Management.  Such claims are located on
federal land 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.

         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

                                2
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.
With respect to the remaining 741 leased claims the Company has yet to obtain
title opinions and has to expect an IBLA decision  If the Issuer should
experience a failure of title, then costs of action, acquisition, and initial
investigation may be lost.

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

EUROPEAN AMERICAN RESOURCES, INC. - MINING CLAIMS RETAINED AS OF 
                        DECEMBER 31, 1998

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

Bellehelen         Bellehelen      Nye                                39

Ellendale          Ellendale       Nye                                50

Diamond Silverado
 (includes Dugout
 Canyon & Robinson
 Canyon)           Eureka          Eureka                            285
                                                                (Plus 62
                                                               Patents &
                                                             Mill Sites)

Spring Valley      Eureka          Eureka                            192

Mahogany Hills     Eureka          Eureka                             28

Klondike           Klondike        Esmeralda                          45

Ruby Hills         Ruby Hills      White Pine                         85

Siegel Canyon      Aurum           White Pine                         85

                                   TOTAL                             850

    During the year, geological results indicate that the Company has yet to
prove its reserves, however results have indicated the Company's claims do have
indications that productive reserves for certain claims are probable.  Since
these claims are not proven, estimates of their potential value are not
available at this time.



                                3
    Description of Securities

    The Issuer has 250,000,000 shares of common stock authorized at a par value
of $.0001; and 25,000,000 shares of convertible preferred stock authorized 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 operations or profitability of the Company as long as the claims are
maintained with the BLM and the Issuer proceeds with the acquisition or joint
venture agreements in order to actively mine such claims.

    Employees

    In 1997 the Company employed directly or as consultants 10 people. During
1998 the Company engaged 8 individuals. In 1996 the Company engaged 2 people and
prior to 1996 the Company had been mostly inactive. Until active mining
operations are commenced, the present management has made a concerted effort to
keep employee compensation at a minimum.

Item 2.  Properties.

    The Company maintained its offices at 400 Cleveland Street Suite 901,
Clearwater, Florida 33755 and at 91 South Main Street, P.O. Box 1066, Eureka, NV
89316.

Item 3.  Legal Proceedings.

    The Company instituted legal proceedings in Nevada on July 9, 1998 with its
former president.  On October 16, 1998, the Company's former president and the
Company agreed to mutual releases and the former president agreed to return to
the Company's treasury 350,000 shares, net of an assignment of 50,000 shares,
upon acceptance of this stipulation by the court in Nevada.

        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.  In August 1998, a lawsuit was commenced against the Company by German
American Investments Limited ("GAI").  GAI was the assignor of the above
distribution rights granted by the Company to eight of its shareholders in 1997,
including its current CEO, Martin Sportschuetz.  The suit alleged that EPAR's
former president, Michael Ogilvie had fraudulently induced the shareholders to
enter into the distribution agreements and sought rescission of the distribution
agreements and return of the shares, along with damages.  At the time of the
suit the Company's current CEO was neither a shareholder of "GAI", nor did he
have a financial interest in GAI.  This lawsuit was subsequently settled.  The
initial settlement required that EPAR rescind the distribution agreements and
return 2,187,500 unrestricted shares to GAI, and issue warrants exercisable at
$0.50 to the GAI investors.  The settlement was amended whereas the Company is
to issue 1,312,500 unrestricted shares and 1,750,000 restricted shares to
rescind the distribution agreement and these were recorded at the original value
ascribed to the distribution rights, an increase of $437,500 in common stock
and additional paid in capital.  The Company also is to issue 1,093,500
restricted shares, valued at one-half of the market price of the Company's
common stock on December 31, 1998, or $.3625 per share, totaling $396,485,
consistent with the value of restricted stock agreed to by the parties for the
recision, which was charged to settlement expense.





                                4
    In December, 1998, a subcontractor filed a lawsuit in Utah state court
against the Company seeking $60,000 for the breach of an alleged oral employment
agreement. The Company has filed a motion to dismiss for lack of personal
jurisdiction.  The motion is.  The Company intends to defend the case
vigorously.

No amounts were recorded in the financial statement.

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 Information.  The Company's Common Stock is traded in the over-
the-counter market with the trading symbol "EPAR".

    The following table sets forth the high and low bid quotations for each
quarter for the two-year period through December 31, 1998, based upon
information received from the National Quotation Bureau.  Such quotations
reflect inter-dealer prices, and do not include retail mark-up, mark-down or
commission.  They may not represent actual transactions.

1997     First Quarter                    $1.45          $1.29
         Second Quarter                   $1.84          $1.62
         Third Quarter                    $1.41          $1.28
         Fourth Quarter                   $1.56          $1.47

1998     First Quarter                    $1.72          $0.84
         Second Quarter                   $1.66          $1.00
         Third Quarter                    $1.40          $0.78
         Fourth Quarter                   $1.22          $0.56

    (b) Shareholders.  As of December 31, 1998, the Company had 16,205,158
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 950 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.

Item 6.  Management's Plan of Operations

    The Company has for the most part in this fiscal year been concentrating
on geological efforts with its resource properties.  The Company maintained its
patented and unpatented claims with the BLM and has negotiated to attract a
joint venture partner for all of its mining operations. On May 8, 1998, the
Company entered into a significant commitment in connection with its
acquisition of 62 patented and 47 unpatented claims in the Prospect Mountain
region. The Company's geological efforts focused on these claims due to the
success of its 1997 drilling program and Homestake's Archimedes (Ruby Hill)
pit (operation), which is within approximately one mile from these claims of
the Company.  The Company is as excited about its proximity to the Ruby Hill Pit
as it is with the extractive costs cited by Homestake in the region.

    For the year ending December 31, 1999 the Company plans on continuing to
develop its resource properties in an effort to establish proven reserves.  The
Company estimates the cost in 1999 to continue the exploration program for its
resource properties will approximate up to $4,700,000 should the Company
successfully complete a secondary offering of its common stock for up to
$8,000,000, which is planned to be completed during the third quarter of 1999. 
With the proceeds of the offering the Company can strengthen its position with
potential co-venturers and relieve working capital limitations on the Company's
efforts to complete the exploration stage and to ultimately realize success in
some form from the extractive process.  The extent of these costs when combined
with expected operating costs of $600,000 to $1,200,000, are dependent upon the
completion of the secondary offering or other capital event. The Company still 


                                6
will pursue to supplement its cash requirements by the sale of its tailings,
which are residual products from former mining efforts on the claim properties,
as practical in light of the Company's resources and the potential candidates
the Company has the opportunity to enter into an extraction agreement.
Geological information indicates that approximately 300,000 to 350,000 tons,
depending on density factors, could be processed without extensive mining
efforts. The Company has experienced a stronger willingness of potential
co-venturers to undertake the exploration for the ultimate purpose of a major
extraction or outright purchase of the Company's claims than the smaller
undertaking of processing these dumps sites or tailings.

    On February 11, 1999, the Company executed a Letter of Intent with Ikar
Minerals Inc. for the purchase of the vast majority of their mining concessions
in the Republic of Tajikistan, a former Soviet Union State. According to
preliminary reports, the properties could contain exciting numbers of gold,
silver and tungsten, which is mainly used in the field of steel production.  The
intended purchase price totals $39,850,000, payable in convertible preferred
stock of the Company and in cash. Certain conditions apply including the Company
undertaking intensive due diligence by having its representatives visit the
Republic of Tajikistan, and having an independent geologist render an opinion on
the properties, and prior to a final commitment to a contract, evaluating the
ability of the Company to export  minerals out of that country.  Upon completion
of the due diligence, the Board of the Company may decide to enter into a final 
agreement with Ikar Mining, Inc. If such is the case, the Company may launch a
first drilling program in the most promising parts of the approximately 100,000
acres of mining concessions.  Another opportunity may be to process the vast
amount of tons of dump sites and tailings, which could themselves contain
considerable amounts of minerals, such as gold and silver.

    For further information visit the Company's website at "EPARGOLD.COM" or
send us an E-mail at "epar17@gte.net".

    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.

         None.
                            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 as of the shareholders's meeting in Eureka, Nevada on June 24,1998,
when the company enlarged its number of directors to five individuals; except
for Evan Kechayans.  Mr. Kechayans was appointed by majority vote by the board
of directors and subsequently is to be approved at the next shareholders'
meeting for a period of one year until the next annual meeting of
shareholders of the Company, or until a successor has been elected.




                                7
<PAGE>
  The executive officers and directors of the Company are as follows:

Name                           Position Held

Martin Sportschuetz            President & CEO
Dale M. Hendrick, P.Eng.       Chairman & Technical Director
Carl Leaman                    Director
John Sgarlat                   Director
Evangelos Kechayans            Director

    Dale M. Hendrick, P. Eng., is a geologist, born in Ottawa, Ontario,
educated in Ottawa University and Queen's University, and is now the President
of Dale M. Hendrick and Associates.  He has 41 years of experience in
exploration and mining having worked as a Mine Geologist at Rio Algom Mines
(Milliken) at Elliot Lake and Quemont Mines Ltd.  At Noranda, P.Q.  He joined
Herr Addison in 1964 and was Chief Geologist, Exploration from 1973 to 1988.
Since 1989 through Dale M. Hendrick and Associates, he has demonstrated an
excellent and strong track record as a corporate technical and financial advisor
to growth oriented junior resource companies on a global basis.

    Martin Sportschuetz has held several executive positions in Germany,
including the Export Director of Reisser GMBH (LTD.), a company with a large
concentration of sales in the Middle East and Central Africa.  He was the
Managing Director of GVA MBH (LTD.), a Financial Consulting Concern.  He is also
the Managing Director of GVA IMMOBILIEN GMBH (LTD.).  He had a tour of military
service in Munich. He has also studied law and economics in Tuebingen, Germany. 

    Carl Leaman is the president and founder of Paradise Construction Inc. He
is a resident of Georgia.  He attended Lancaster Architectural School where he
studied drafting and design.  He also studied business administration at
Kennesaw College. He also worked as a hydraulic engineer for Morgan Corporation.

    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.  Mr.
Sgarlat is presently the president of Media Vision Properties Inc., a producer
of childrens' television programs and educational marketing programs for public
broadcasting stations.  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.  Two years later he became a partner
of the firm and headed several departments.  In 1985, Mr. Sgarlat helped
restructure a failing company with a new name, National Media Corporation.
He is the founder and chairman of the company where he served as the president
and chief executive officer.  Mr. Sgarlat has extensive experience in
investment banking and the media industries.

    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.











                                8
<PAGE>
Item 10. Executive Compensation.

    The following table sets forth the renumeration paid or accrued by the
Company during the fiscal year ending December 31, 1998, to each of its Chief
Executive Officer, its officers and directors, and to all officers and directors
as a group.
                                                             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         Bonuses       Personal Benefits

Michael D. Ogilvie    Director/CEO/             46,000     -
                      (Through 4/22/98)

Martin Sportschuetz   Director/CEO/             64,000     105,000 shares
                      President/Officer
                      (4/22/98 to present)

Dale M. Hendrick      Director/Chairman              -     400,000 shares

Carl Leaman           Director                  27,000     $ 8,000 Health
                                                                   benefits

                                                            90,000 shares

John Sgarlat          Director                       -     -

William O'Callaghan   Director -
                      (resigned 11/25/98)            -     -                
Officers and Directors
as a group            -                       $137,000     595,000 shares

                                                           $ 8,000 Health
                                                                   Benefits




























                                9
<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, as of December 31, 1998.

                                 Amount and
                                 Nature of
                                 Beneficial                   Percentage of
Name and Address                 Ownership                     Class Owned 


Martin Sportschuetz               505,000   President & CEO        3.12% 
Florida Resident

Dale M. Hendrick, P. Eng.         400,000   Chairman &             2.47%
Canadian Resident                            Technical Director

Carl Leaman                       216,500   Director               1.54%
Georgia Resident

John Sgarlat                            0   Director                -0-   
Florida Resident

Evangelos Kechayans                     0   Director                -0-
Athens, Greece

George Whitney                  1,370,000   Shareholder            8.45%
Florida Resident

Total                           2,491,500                         15.38%

         .

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.


                                10
<PAGE>
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.








































                                11

<PAGE>
                             PART IV



Item 13. Exhibits, Financial Statement Schedules.

         (1) The following financial statements are included herein at pages F-1
through F-17 as follows:

Independent Auditors' Report - Schuhalter, Coughlin & Suozzo, LLCF-1 

Balance Sheet, December 31, 1998                                           F-2 

Statement of Operations, for the Two Years Ended December 31, 1998
         and From July 6, 1987 (Date of Inception) to December 31, 1998   F-3

Statements of Changes in Stockholders' Equity From Inception on                
         July 6, 1987 through December 31, 1998                           F-4 

                                                                 
Statement of Cash Flows for the Two Years Ended December 31, 1998
         and from July 6, 1987 (Date of Inception) to December 31, 1998   F-8 

Notes to Consolidated Financial Statements                               F-10 








































                                1O
<PAGE>

                   INDEPENDENT AUDITORS' REPORT





Board of Directors
European American Resources, Inc.
400 Cleveland Street, Suite 901
Clearwater, Florida 33755


We have audited the accompanying balance sheet of European American Resources,
Inc. (an Exploration Stage Company) as of December 31, 1998 and the related
statement of operations, shareholders' deficit accumulated during the
Exploration Stage, and cash flows for the two years then ended and for the
period from July 6, 1987 (Date of Inception) through December 31, 1998.  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 generally accepted auditing 
standards Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
from material misstatement.  An audit includes examining, on a test basis,
evidence supportingthe accounting principals 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 referred to above present fairly, in
all material respects, the financial position of European American Resources,
Inc. at December 31, 1998 and the results of their operations and cash flows for
the year then ended in conformity with generally accepted accounting principles

As discussed in Note 1, the Company is in the exploration stage as of December
31, 1998.  Recovery of the Company's assets is dependent upon future events, the
outcome of which is indeterminable.  In addition, successful completion of the
Company's exploration program and its transition, ultimately, to attaining
profitable operations is dependent upon obtaining adequate financing to fulfill
its exploration activities and achieving a level of sales adequate to support
the Company's cost structure.


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


March 29, 1999

Raritan, New Jersey









                                                                          F-1
<PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
                 (AN EXPLORATION STAGE COMPANY)
                         BALANCE SHEET
                       DECEMBER 31, 1998


      Assets

Current Assets
 Cash and cash equivalents                                     $   21,419
 Prepaid rent on mining claims                                     52,533
 Note receivable from affiliate                                    13,439

      Total Current Assets                                         87,391

Resource properties                                             2,803,110

Property and equipment, at cost, net of accumulated
 depreciation of $11,451                                           31,069

Other Assets
 Claim Receivable, net of valuation reserve of $964,459           321,333
 Deferred offering costs                                           62,500
 Other Assets                                                      44,808

      Total Other Assets                                          428,641

      Total Assets                                              3,350,211


     Liabilities and Stockholders' Equity

Current Liabilities
 Accounts payable and accrued expenses                            155,687
 Note Payable to Related Party                                     15,000

      Total Current Liabilities                                   170,687

Commitments                                                             -

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, 16,205,158 shares issued
    and outstanding                                                 1,621
 Additional paid in capital                                    10,783,092
 Deficit accumulated during the exploration stage              (7,605,189)

      Total Stockholders' Equity                                3,179,524

      Total Liabilities and Stockholders' Equity              $ 3,350,211








The accompanying notes are an integral part of these financial statements.
                                                              F-2
<PAGE>
              EUROPEAN AMERICAN RESOURCES, INC.
                 (AN EXPLORATION STAGE COMPANY)
                    STATEMENTS OF OPERATIONS

                                                                From
                                                                July 6,
                                                                  1987
                                                               (Date of
                                       For the Years Ended     Inception) to
                                            December 31,       December 31,
                                        1997           1998        1998   
Revenues                                          

  Sales                                 $        -  $        -$    29,028

Operating Expenses
 Operating costs                            78,300      78,800  3,669,254
 General and administration                432,164     576,433  2,052,007
 Depreciation and amortization               3,436       8,801    317,460
 Stock based compensation                  840,000     310,275  1,150,275
 Royalty Expense                                 -           -     43,960

   Total Operating Expenses              1,353,900     974,309  7,232,956

Loss from operations                    (1,353,900)   (974,309)(7,203,858)

Other Income (Expense)
 Interest income                             4,050      20,862    316,963
 Interest expense                          (30,480)     (7,192)  (113,100)
 Settlement expense                              -     (46,484)   (46,484)
 Loss on the sale of assets                      -           -    (12,172)
 Earnings on managed foreign investment          -           -    190,569
 Net realized losses on marketable 
   securities                                    -           -   (256,668)
 Gain on cancellation of long term
   debt-related party                            -           -    500,000
 Loss on write off related party                  
   receivable                                    -           -    (15,980)
 Reserve for claim on foreign 
   investment                                    -    (160,667)  (964,459)

    Total Other Income (Expense)           (26,430)   (193,481)  (401,331)

Loss before income taxes                (1,380,330) (1,167,790)(7,605,189)

Income tax expense                               -           -          -

Net Loss                               $(1,380,330)$(1,167,790)$(7,605,189)

Basic Loss Per Common Share            $      (.14) $     (.10)

Average Common Shares Outstanding        9,733,365  11,851,389








The accompanying notes are an integral part of these financial statements.
                                                              F-3
<PAGE>
              EUROPEAN AMERICAN RESOURCES, INC.
                 (AN EXPLORATION STAGE COMPANY)
               STATEMENT OF STOCKHOLDERS' EQUITY
    FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 1998

                                                                  Deficit
                                                                Accumulated
                                                    Additional   During the
                                  Common Stock       Paid In     Exploration
                                Shares    Amount     Capital        Stage  

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                       -     -           -        (462,583)

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
<PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
                 (AN EXPLORATION STAGE COMPANY)
               STATEMENT OF STOCKHOLDERS' EQUITY
    FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 1998

                                                                  Deficit
                                                                Accumulated
                                                    Additional   During the
                                  Common Stock       Paid In     Exploration
                               Shares    Amount     Capital        Stage  

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       9,733,363  973   6,472,366     (4,940,283)

Net loss for the year ended
 December 31, 1996                       -    -           -       (116,786)

Balance, December 31, 1996       9,733,363 $973 $ 6,472,366    $ 5,057,069








The accompanying notes are an integral part of these financial statements.
                                                              F-5
         <PAGE>
                 EUROPEAN AMERICAN RESOURCES, INC.
                 (AN EXPLORATION STAGE COMPANY)
               STATEMENT OF STOCKHOLDERS' EQUITY
    FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 1998

                                                                  Deficit
                                                                Accumulated
                                                    Additional   During the
                                  Common Stock       Paid In     Exploration
                                Shares    Amount     Capital        Stage  

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    27     249,963             -

Shares issued for exploration,
 market making services and
 reactivation services
 rendered through December
 31, 1997, valued at, $1.16,
 $1.00 and $.70 per share        1,025,000   102     814,898             -

Net loss for the year
 ended December 31, 1997                 -     -           -     (1,380,330)

Balance, December 31, 1997      11,403,008$1,140 $ 9,464,773   $ (6,437,399)
















The accompanying notes are an integral part of these financial statements.
                                                              F-6
         <PAGE>
      EUROPEAN AMERICAN RESOURCES, INC.
                 (AN EXPLORATION STAGE COMPANY)
               STATEMENT OF STOCKHOLDERS' EQUITY
    FROM INCEPTION ON JULY 6, 1987 THROUGH DECEMBER 31, 1998

                                                                  Deficit
                                                                Accumulated
                                                    Additional   During the
                                  Common Stock       Paid In     Exploration
                                Shares    Amount     Capital        Stage  

Balance, January 1, 1998        11,403,008$ 1,140 $ 9,464,773  $ (6,437,399)

Shares issued for services
 and additions to resource
 properties 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                       -      -           -    (1,167,790)

Balance, December 31, 1998      16,205,158$ 1,621 $10,783,092   $(7,605,189)





























The accompanying notes are an integral part of these financial statements.
                                                              F-7
<PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
                    STATEMENTS OF CASH FLOWS
                 (AN EXPLORATION STAGE COMPANY)
        INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



                                                                From
                                                                July 6,
                                                                  1987
                                                               (Date of
                                       For the Years Ended     Inception) to
                                            December 31,       December 31,
                                        1997           1998        1998   

Cash Flows Operating Activities

  Net Loss                             $(1,380,330)$(1,167,790)$(7,605,189)
                                                  
Adjustments to reconcile net loss                 
 to net cash provided (used) by
 operating activities:
 Depreciation and amortization               3,436       8,801    317,460
 Reserve for claim compensation and
  settlement                                     -     160,667    964,459
 Issuance of common stock charged
  to expense                               840,000     356,759  1,196,759
 Adjustments to resource properties
  charged to operations                          -           -  1,624,310
 Loss on the sale of fixed assets                -           -     12,172
 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
     rent                                   (3,534)      2,667    (52,533)
   (Decrease) increase in accounts
      payable and accrued expenses         314,827    (207,714)   155,687
    (Increase) in other assets             (23,500)    (11,955    (44,808)
    (Increase) in deferred offering
      costs                                      -     (62,500)   (62,500)
    (Increase) in interest receivable
      - affiliate                                -      (3,439)    (3,439
      Total Adjustments                  1,131,229     243,286  3,689,646

Net Cash Used by Operating Activities     (240,101)   (924,504)(3,915,543)









The accompanying notes are an integral part of these financial statements.
                                                              F-8
<PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
             STATEMENTS OF CASH FLOWS - (CONTINUED)
                 (AN EXPLORATION STAGE COMPANY)
        INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



                                                                From
                                                                July 6,
                                                                  1987
                                                               (Date of
                                       For the Years Ended     Inception) to
                                            December 31,       December 31,
                                        1997           1998        1998   

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                    -           -    174,151
 Advance to affiliate                            -     (60,000)   (75,980)
 Repayment from affiliate                        -      50,000     50,000
 Resource properties                      (608,112)   (258,770) (3,617,027)
 Purchase of fixed assets                  (30,000)    (12,520)   (359,980)
      Net Cash Provided (Used In)
        Investing Activities               626,923    (281,290) (5,282,149)


Cash Flows from Financing Activities
 Proceeds from issuance of common
   stock, net of offering costs of
   $109,925 in 1997 and $622,309
   from inception                        1,265,075     700,000  8,543,252
 Proceeds from issuance of notes
  payable to related parties               267,493      15,000    399,093
 Repayment of notes payable - related
  party                                          -    (134,093)  (134,093)
 Proceeds from long term debt -
  related party                                  -           -    500,000
      Net Cash Provided By Financing
        Activities                       1,532,568     580,907  9,308,252

Net Increase in Cash and Cash                     
  Equivalents                              645,355    (624,887)         -
Cash and Cash Equivalents at Beginning
  of Period                                    951     646,306     21,419
Cash and Cash Equivalents at End of 
  Period                                $  646,306  $   21,419 $   21,419











The accompanying notes are an integral part of these financial statements.
                                                              F-9
<PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION (AN EXPLORATION STAGE
         COMPANY)

     The Company was incorporated in the state of Delaware on July 6, 1987. 
     Since inception, the Company acquired mining rights to mine precious
     metals for as many as approximately 6,700 claims; as of December 31, 1998
     the Company is the holder of a total of 850 patented, unpatented lode,
     mill sites and placer claims on certain properties located throughout the
     state of Nevada.  The Company is a Junior Mining Company.  Since the
     acquisition of these properties, the Company has not commenced planned
     principal operations and accordingly has been considered an exploratory
     stage company as defined in SFAS No. 7, "Accounting and Reporting for
     Development Stage Companies".  During 1997, sufficient testing was
     completed to indicate certain of the Company's reserves were probable.  At
     that time management considered the Company to be completed with the
     exploration stage and sought co-venturers for the extraction of certain
     dump rocks, which are enriched residual deposits from prior mining
     efforts, or tailings, and did not present the Company in the 1997
     Financial Statements as an exploration stage company.  During the year
     ended December 31, 1998 the Company could not locate a joint venture
     partner to extract the tailings without also entering into a commitment to
     extract the all of the Company's claims on Prospect Mountain, subject to
     the Company, first having to prove the value of the reserves these claims
     hold, which will require more exploratory activities.  The 1998 financial
     statements  present the Company as an exploration stage company.

     The Company has incurred over $4,400,000 in expenditures on resource
     properties since inception which, after adjusting for claims the Company
     no longer controlled and geological determinations, were adjusted downward
     by $1,624,310 through December 31, 1995.  The amounts capitalized as
     resource properties include direct exploratory costs since the acquisition
     of the right to mine these properties.  In accounting for these costs the
     Company selected an accounting policy which capitalizes exploratory costs
     rather than expensing them as incurred.  Amortization of these costs is to
     be calculated by the units of production method based upon proven or
     probable reserves.  Costs incurred on properties later determined to be
     unproductive are expensed by the Company as that determination is made. 
     As of December 31, 1998, the Company has $2,803,110 of resource
     properties.  If these costs had been expensed rather than capitalized, the
     deficit accumulated during the exploration stage at December 31, 1998
     would have been $10,408,299 rather than $7,605,189.

     The Company has been in the exploration stage to determine the amount of
     proven and/or probable reserves of its resource properties, if any. 
     During 1997, geological testing indicated that certain reserves of the
     Company are probable and in excess of the amounts capitalized.  They are
     not proven as of December 31, 1998, and estimates of their potential value
     are not available at this time.  Sufficient capital resources and credit
     facilities are available for the Company to maintain its mining claims and
     the existing cost structure for personnel and administrative offices for
     the near term (defined as one year).  Additional capital or financing is
     required to complete the Company's exploration program, and its
     transition, ultimately, to obtaining profitable operations, is dependent
     on future events, the outcome of which is indeterminable.



                                                             F-10
<PAGE>
              EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principals of Consolidation

     The accompanying consolidated financial statements include the accounts of
     European American Resources, Inc. (Formerly Merlin Mining Company) and
     Paradise Valley Mining, Inc; a subsidiary of the Company through December
     31, 1995, which was spun off without a gain or loss.

     All significant intercompany accounts and transactions have been
     eliminated in consolidation.

     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:

                                                         1998        1997  
     Issuance of common stock in exchange
     for the cancellation of indebtedness           $       -   $ 250,000
     Issuance of common stock for services
     relating to capitalized resource properties    $ 524,540   $ 375,000

     Distribution rights payable for the
     retirement of common stock                     $       -   $ 437,500

     Issuance of common stock for the
     retirement of distribution rights              $ 437,500  $       -

     Operating activities include interest paid of $87,143 and $30,480 for the
     years ended December 31, 1998 and 1997 respectively.

     Loss per Common Share

     For the year ending December 31, 1997, and all periods presented
     thereafter, the Company adopted FASB 128 to compute earnings per share. 
     Basic EPS excludes dilution and is computed by dividing income available
     to common stockholders by the weighted-average number of common shares
     outstanding for the period.  Diluted EPS 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.

                                                             F-11
 <PAGE>
                EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


     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, 1998 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.

     Resource properties

     The Company records its interest in resource properties at cost. 
     Producing properties will be amortized on the unit-of-production basis. 
     The ultimate recovery of costs associated with non-producing properties is
     dependent upon the discovery and development of economic reserves or the
     profitable sale of the properties.  If a property is abandoned or sold,
     the proceeds on the sale, less the cost of the property and any related
     deferred expenditures, will be included in operations at that time.  The
     Company periodically reviews its mineral properties to ascertain whether
     an impairment in value has occurred.  Where a property is considered
     uneconomic it is written off. At December 31, 1998 the Company had owned 
     and/or leased the rights to control a total of 850 claims, which are
     considered probable and have a value based upon geological determinations
     greater than the amount capitalized; yet no reserves are proven.


                                                             F-12
  <PAGE>
                 EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


     Income Taxes

     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 carryforwards.  Deferred tax assets and
     liabilities are measured using enacted tax rates expected to apply to
     taxable income in the years in which those temporary differences are
     expected to be realized or settled.  The effect on deferred tax assets and
     liabilities of a change in tax rates is recognized in income in the period
     that includes the enactment date.  Valuation allowances are established
     when necessary to reduce deferred tax assets to the amounts expected to be
     realized.

     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.

     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
     reviews 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.

     Other Accounting Pronouncements

     The FASB has issued SFAS No. 130, Reporting Comprehensive Income effective
     for fiscal years beginning after December 15, 1997, which establishes
     standards for the reporting of comprehensive income and its components.
     The Company implemented SFAS No. 130 during the year ended December 31,
     1998 and as such the effect was not material to its financial position or
     results of operations.

NOTE 3 - MANAGED FOREIGN INVESTMENTS AND 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.  SFU had been notified of the Company's
     intent to withdraw the funds and had indicated the funds would be wire
     transferred in October 1993.  SFU defaulted and did not liquidate the
     account as instructed.  SFU sent various payments in partial liquidation
     totaling US $964,208 which payments were received sporadically through
     December 22, 1995.  After 1993, the Company increased its effort to 
     obtain the return of its investment and received confirmation from the
     fiduciary of SFU that the funds were still intact. Subsequently the 


                                                             F-13
 <PAGE>
                EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


     fiduciary representation has been unsupported and the company believes it
     was fraudulent and no underlying funds from the original investment remain
     at that time under his control, and furthermore the Company believes its
     prospects for collection were materially damaged by the fiduciary's
     actions.  The Company has filed a claim under German law, against the
     fiduciary, for "fraudulent statements" which holds German attorneys
     accountable for certain representations as well as requires minimum and
     annually adjusted amounts of liability insurance for such claims as a
     requirement for licensure. The Company believes it will collect up to
     approximately $1,286,000, which represents the net amount of the original
     investment which has not been returned to the Company.  The Company's
     counsel has advised management that it is probable they will receive an
     amount greater than the net carrying value remaining in the financial
     statements.  Management has also classified this claim as a long term
     asset and reserved an amount for both the recoverability and the costs
     associated with the claim. The possibility does exist that the company may
     not realize any amount should they not prevail in their action against the
     attorney.  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.  The new counsel has advised the Company 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 has further reserved an additional $160,667 against this claim.

     The Company will record as income any amounts recovered, net of expenses,
     above the remaining carrying value of $321,333, only in such period they
     were actually realized, yet record as additional expense any further
     reserve should the likelihood of recovery diminish.

NOTE 4 - PROPERTY AND EQUIPMENT

     Property and equipment consist of the following:

                                                           December 31, 1998

      Automobiles and trucks                                  $ 30,000
      Office equipment                                          12,520
                                                                42,520

      Less:  accumulated depreciation                          (11,451)

                                                              $ 31,069






                                                             F-14
<PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


NOTE 5 - 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, 1998:

          Total deferred tax assets                           $1,514,484
          Less: Valuation allowance                           (1,514,484)

          Net deferred tax assets                             $        0

     Deferred tax assets are attributable to available net operating loss
     carryforwards.  The valuation allowance was increased by $171,360 and
     $221,124 during the years ended December 31, 1997 and 1998 respectively.

     The Company has net operating loss carry forwards of approximately
     $4,454,325 which expire in various years through the year 2011.  The
     amount of the operating loss carry forwards may be subject to annual
     limitations limited by IRS regulations as a result of the sale of a
     majority interest.

NOTE 6 - RELATED PARTY TRANSACTIONS

     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 controlled by a former director, Mr.  Jochen A. Brenner.  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 Mr. Brenner
     and were invested in his name or the names of other entities under his
     control in certain pooled investments which were to be invested in foreign
     exchange forward contracts.  All transactions were to be made at the risk
     of Mr. Brenner, 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
     Mr. Brenner, he 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 Mr. 
     Brenner and a German fiduciary; and received partial payments totaling $
     964,208.  Mr.  Brenner failed to return 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 3,
     retroactively to December 31, 1993.

     The Company received all working capital through September 30, 1987 from
     stockholder/officers.  These parties agreed to have all payments through 


                                                             F-15
   <PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS

     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, at that
     time, of the Company.  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.

     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.

     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.

     On April 22, 1998, the Company entered into a consulting agreement with
     its current 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 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.  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.

                                                             F-16
   <PAGE>
                  EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


     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.

     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 December 1998, an affiliate agreed to make a $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.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

     In order to maintain the Company's current unpatented mineral lease claims
     [See Note 1], the Company must pay an annual rental fee of $100 per claim
     to the Bureau of Land Management.  The fees have been paid through August
     31, 1998.  During 1997, some of these properties were "overstated" by a
     third party and the Company has won a stay of decision from the finding of
     the Bureau of Land Management(BLM), which has caused this overstaking,
     pending the review of the Interior Board of Land Appeals(IBLA) relating to
     this claim. The Company does not expect the result of this review,
     regardless of outcome, to have an adverse effect on the carrying value of
     the resource properties. 

     Royalty Commitment

     On March 19, 1997 the Company's prior president 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 gave
     the Company all 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 million dollars 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
     resource properties.




                                                             F-17
 <PAGE>
                 EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


     The preceding agreement was canceled and replaced by the current
     management 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 is included in
     resource properties, and $19,300 for repayment of additional filing fees
     which may be subject to reimbursement to the Company; this amount is
     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
          2)   $50,000 on or before the first anniversary
          3)   $90,000 on or before the second anniversary
          4)   $120,000 on or before the third anniversary
          5)   $150,000 on or before the fourth anniversary
          6)   $200,000 on or before the fifth anniversary and $200,000 each
               year 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.

     The above advance on minimum royalties will be accelerated when 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.
 
     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.

     In August 1998, a lawsuit was commenced against the Company by German
     American Investments Limited ("GAI").  GAI was the assignor of the above
     distribution rights granted by the Company to eight of its shareholders in
     1997, including its current CEO, Martin Sportschuetz.  The suit alleged
     that EPAR's former president, Michael Ogilvie had fraudulently induced the
     shareholders to enter into the distribution agreements and sought
     rescission of the distribution agreements and return of the shares, along
     with damages.  At the time of the suit the Company's current CEO was
     neither a shareholder of "GAI", nor did he have a financial interest in
     GAI.  This lawsuit was subsequently settled.  The initial settlement
     required that EPAR rescind the distribution agreements and return
     2,187,500 unrestricted shares to GAI, and issue 2,187,500 warrants
     exercisable at $0.50 to the GAI investors.  The settlement was amended
     whereas the Company is to issue 1,312,500 unrestricted shares and
     1,750,000 restricted shares to rescind the distribution agreement and 


                                                             F-18
 <PAGE>
                EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


     these were recorded at the original value ascribed to the distribution
     rights, an increase of $437,500 in common stock and additional paid in
     capital.  The Company also agreed to issue 1,093,500 restricted shares,
     valued at one-half of the market price of the Company's common stock on
     December 31, 1998, or $.3625 per share, totaling $396,485  consistent with
     the value of restricted stock agreed to by the parties for the recision,
     which was charged to settlement expense.

     On May 8, 1997, the Company entered into an employment agreement with the
     former president for a period of seven (7) years, which provided former
     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 employee stock
     bonuses, including 400,000 shares of common stock, 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 shares increasing annually to
     $8.50 per share.

     On April 22, 1998, the Company terminated the former president.  In July
     1998, EPAR filed a lawsuit against its former president, Michael Ogilvie
     alleging fraud and breach of his employment contract with the Company. 
     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 December, 1998 a subcontractor filed a lawsuit in Utah state court
     against the Company seeking $60,000 for the breach of an alleged oral
     employment agreement.  The Company has filed a motion to dismiss for lack
     of personal jurisdiction. The Company intends to defend the case
     vigorously.  No amounts were recorded in the financial statement.

     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.



                                                             F-19
 <PAGE>
               EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


NOTE 8 - COMMON STOCK

     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 
     the 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.



                                                             F-20
 <PAGE>
                EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


     As discussed in Note 6, 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 team.  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.

     Reserved Shares

     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 begins on September 3, 1999 and runs 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 begins on September 3, 1999 and runs 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.

     Pursuant to a 1997 agreement, 242,600 shares are expected to be issued in
     1999 for services in connection with the Company's resource properties.

     In the case of a change in control, whereby the current management would 
     be eliminated, the company agrees to first issue an option to the
     president to purchase from 189,000 to 201,000 shares of the Company's
     common stock at an exercise price of $.25. 


NOTE 10 - FAIR VALUE OF FINANCIAL INSTRUMENTS

     The estimated fair values of the Company's financial instruments as of
     December 31, 1998, are as follows:

                                                              1998
                                                       Carrying     Fair
      Assets:                                           Amount      Value 
     Cash and Equivalents                             $ 21,419   $ 21,419

     Liabilities:
     Accounts payable and accrued expenses            $155,687   $155,687
     Note payable to related party                    $ 15,000   $ 15,000






                                                             F-21
 <PAGE>
                EUROPEAN AMERICAN RESOURCES, INC.
                  (AN EXPLORATION STAGE COMPANY)
                 NOTES TO FINANCIAL STATEMENTS


NOTE 11 - SUBSEQUENT EVENTS

     The board of directors approved the issuance of the Company's common
     stock, the price and quantity of which is to be determined by negotiation
     between the Company and the underwriter, on a firm commitment basis for up
     to $8,000,000.

     On February 11, 1999, the Company signed a conditional letter of intent to
     acquire mineral concessions of "IKAR"(Ikar Mining Corporation) in the
     Republic of Tajikistan, a former Soviet Union state.  While the Company is 
     very excited about the potential to extract gold, silver and tungsten,
     which is mainly used in the field of steel production, substantial due
     diligence will be required prior to closing.  Presently the purchase
     price totals $39,850,000 which is to be paid by the issuance of
     6,600,000 shares of the Company's convertible $6.00 preferred stock,
     which at this time will be convertible on or before May 15,1999 to the
     Company's common stock at a strike price of $6.50, as well as a cash
     payments totaling $250,000. 







































                                                             F-22
<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/ Martin R. Sportschuetz                     
             Martin R. Sportschuetz, President & CEO


Dated: 



     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




/s/ Martin R. Sportschuetz
Martin R. Sportschuetz             President & CEO



















                                                             F-23
<PAGE>
                       CLOSING AGREEMENT

          This Closing Agreement entered into on the 6th day of May 1998
between Einar C. Erickson, Lynn H. Erickson, Silver International, Inc., and
Silver Viking Corporation, all Nevada corporations, (Sellers) and European
American Resources, Inc., a Delaware corporation, (Buyer),

                      W I T N E S S E T H:

          WHEREAS, the Sellers and the Buyer have previously entered into a
Mining Lease and Option to Purchase dated the 14th day of March 1997, and
          WHEREAS, the parties have determined that it is to their mutual
advantage to replace the Mining Lease and Option to Purchase with this Closing
Agreement,
          NOW THEREFORE, it is hereby agreed between the parties as follows:
1.                  Sellers do hereby agree to convey to Buyer and Buyer
     does hereby agree to purchase from Sellers the following-described
     patented and unpatented mining claims, situate in the County of Eureka,
     State of Nevada:
 See Exhibit A for a description of the patented mining claims.
See Exhibit B for a description of the unpatented mining claims.
1.             Buyer agrees to pay as the full purchase price for the
above-described patented and unpatented mining claims the sum of
$100,000,000.00, without interest, all in the following manner:
           A.    $  15,000     advance royalty upon closing date.
                 $  50,000     advance royalty on or before  1 year after
                               closing date
                 $  90,000     advance royalty on or before  2 years after
                               closing date
                 $120,000      advance royalty on or before  3 years after
                               closing date
                         
                 $150,000      advance royalty on or before  4 years after
                               closing date
                 $200,000      advance royalty on or before  5 years after
                               closing date,
                               and a like sum on or before the same date each
                               and every
                               year thereafter until paid in full.
  <PAGE>
           B.
             In addition, Buyer shall pay Sellers a production royalty of 3% of
             the net smelter returns from all minerals produced by Buyer from
             the patented and unpatented mining claims in Exhibits A and B
             above when the average price of gold (London quote) in the
             production quarter is less than $400/ounce.  If the average price
             is $400/ounce or more, the production royalty shall increase to 4%
             of the net smelter returns.  This production royalty shall be paid
             quarterly, and shall be accompanied by a statement summarizing the
             computation of net smelter returns.  The quarterly royalty
             payments will be provisional and subject to adjustment at the end
             of Buyer's accounting year.

             The term "net smelter returns" as used herein shall mean the net
             proceeds received by Buyer from the sale of minerals from the
             property after deductions for all of the following:

          (a)
             Custom smelting costs, treatment charges and penalties
             including, but without being limited to, metal losses,
             penalties for impurities and charges or deductions for
             refining, selling, and transportation from smelter to
             refinery and from refinery to market; provided, however, in
             the case of leaching operations, all processing and recovery
             costs incurred by Buyer beyond the point at which the metal
             being treated is in solution shall be considered as
             treatment charges (it being agreed and understood, however,
             that such processing and recovery costs shall not include
             the cost of mining, crushing, dump preparation, distribution
             of leach solutions or other mining and preparation costs up
             to the point at which the metal goes into solution);
               
          (b)
             Costs of transporting mineral product from the concentrator
             to a smelter or other place of treatment; and
               
          (c)
             Production taxes, severance taxes and sales, privilege and
             other taxes measured by production or the value of
             production.
               
          Advance royalties shall be credited against production royalties. 
The total of all royalties paid to Sellers shall be credited against the
purchase price. It is specifically provided herein, however, that the
aforesaid purchase price shall be discounted from $100,000,000.00 to
$27,000,000.00, if the Sellers are paid $27,000,000.00, including royalty
credits, on or before five years from closing date.

1.       Sellers warrant that their title to the patented mining
claims is as set forth in the Preliminary Title Report of First American Title
Company of Nevada dated April 14, 1998, attached hereto as Exhibit A.  Upon
closing date, Sellers shall convey said title to Buyer subject only to
Exceptions 2 through 63 thereof.  Exception 64 shall be removed by Buyer. 
Upon closing date, Buyer shall purchase a title policy on said patented claims
in the sum of $100,000.
          Likewise, upon closing date, Sellers shall convey all of their
right, title and interest to Buyer, in the unpatented claims described in
Exhibit B attached hereto.
          After closing date, Buyer shall defend all adverse claims against
its title acquired in this transaction.  If such claims arise because of the
acts or omissions of Sellers, the cost of defense shall be offset against
advance royalties payable under Paragraph 2. A. above.  In addition, Buyer
shall finance the defense of any claims filed by G&S Construction against the
Sellers even though they do not affect Buyer's title; provided however, that
the costs of such defense shall be offset against royalties payable under
Paragraph 2.A. above.
2.             The closing date of this purchase shall be on or before May
26, 1998 at the offices of First American Title Company in Ely, Nevada (the
Escrow Holder).
3.             On or before closing date the Sellers, and Linda Erickson
and Georgia Erickson, shall execute and deliver to the Escrow Holder the
following-described documents:
            (a)  Grant, Bargain and Sale Deed to the patented
                 mining claims in Exhibit A with real property
                 transfer tax in the sum of $130.00 to be paid by
                 Buyer.
                    
            (b)  Quitclaim Deed naming Buyer as Grantee, covering
                 the unpatented mining claims described in
                 Exhibit B above.
                    

1.             Likewise, Buyer shall execute and deliver to the Escrow
Holder on or before closing date the following-described documents:

            (a)  A non-recourse Promissory Note in which Buyer
                 undertakes to perform the royalty payment
                 obligations described in Paragraph 2 above.
                    
            (b)  First Deed of Trust naming Buyer as Grantor,
                 First American Title Company as Trustee and
                 Sellers as Beneficiaries, from Buyer to Sellers
                 securing payment
                 of the foregoing Promissory Note, and describing
                 the patented mining claims in Exhibit A and
                 unpatented mining claims in Exhibit B as the
                 secured property.
                    
                 The Deed of Trust shall include the following
                 provisions:
                    
                 Beginning with the annual assessment work period
                 of September 1, 1998 to September 1, 1999, and
                 for each annual assessment work year commencing
                 during the term of this Deed of Trust.  Grantor
                 shall perform for the benefit of the unpatented
                 mining claims work of a type customarily deemed
                 applicable as assessment work and of sufficient
                 value to satisfy the annual assessment work
                 requirements, if any, of all applicable Federal,
                 state and local laws, regulations and
                 ordinances, and shall prepare evidence of the
                 same in form proper for recordation and filing
                 and shall timely record and/or file such
                 evidence in the appropriate Federal, state and
                 local office as required by applicable Federal,
                 state and local laws, regulations and
                 ordinances.  If under applicable Federal laws
                 and regulations, Federal annual mining claim
                 maintenance or rental fees are required to be
                 paid for the unpatented mining claims which
                 constitute all or part of the property,
                 beginning with the annual assessment work year
                 of September 1, 1998 to September 1, 1999,
                 Grantor shall timely and properly pay the
                 Federal annual mining claim maintenance or
                 rental fees, and shall execute and record or
                 file, as applicable, proof of payment of the
                 Federal annual mining claim maintenance of
                 rental fees and of Grantor's intention to hold
                 the mining claims
                    
                 Grantor shall comply with all Federal, state and
                 local statutes and regulations, including
                 environmental statutes and regulations in its
                 maintenance and operation of the patented and
                 unpatented mining claims.  If at any time,
                 Grantor ceases operations upon any mining claim,
                 it shall comply with all reclamation laws and
                 regulations in reclaiming such mining claim.
                    
          Upon closing date, the Escrow Holder shall record the Deeds and
Deed of Trust.  The parties agree to execute all escrow instructions requested
by the Escrow Holder, but in the event of conflict the terms of Closing
Agreement shall prevail.  Escrow fees shall be paid by Buyer.
1.             The parties acknowledge that Buyer is already in possession
of the above-described patented and unpatented mining claims.
2.             The parties agree that neither of them will incur any debts
or obligations related to the above-described property, which would allow
liens or encumbrances to attach thereto prior to closing date.
3.             This Closing Agreement entirely supercedes and replaces the
Mining Lease and Option to Purchase described above.  The parties do hereby
waive and release any claims they may have against each other for the breach
of said agreement.
4.             The parties acknowledge that Buyer has an agreement pay
Geologist, Inc. the sum of $192,000 for geological consulting and other
services, upon which there is a 
balance owing of $128,000.  This balance will be paid in full, without
interest, upon closing date, but outside of escrow.
5.             The parties acknowledge that Buyer has an obligation to
transfer 100,000 shares of stock in Buyer, to Sellers and 6,000 shares of
stock in Buyer to Geologist, Inc.  This transfer will close upon closing date,
but outside of escrow.
6.             The parties further acknowledge that Buyer will reimburse
Geologist, Inc. in the sum of $19,300.00, without interest, for its duplicate
payment of unpatented claim filing fees to the Bureau of Land Management in
1996.  Therefore, Geologist, Inc. shall assign all of its right to receive the
refund of said filing fees from the BLM, upon closing date. 
Simultaneously Buyer shall pay Geologist, Inc. the aforesaid $19,300.00,
without interest, upon closing date.  This transaction shall close outside of
escrow.
7.             Should either party default in its obligations under this
Closing Agreement which obligations are not cured within 10 days after written
notice thereof is served upon the defaulting party, the non-defaulting party
may exercise all rights in law or equity available to it, including specific
performance.
          All notices provided for herein shall be deemed served if
personally delivered or mailed by certified mail to party entitled to receive
the same, at the following address:

          If to Sellers:           c/o Einar C. Erickson
                             545 South Valley View Drive #100
                             St. George, Utah  84770
                              
                                        and
                                   
                             P.O. Box 150415
                             East Ely, Nevada  89315-0415
                              
          If to Buyer:             1212 Court Street, Suite C-2
                             Clearwater, Florida  33756
                                   
     

          In the event of litigation between the parties, the prevailing
party shall be entitled to the award of a reasonable attorney's fee.  This
Closing Agreement shall be governed by the law of the State of Nevada.
1.             Neither party shall assign this Closing Agreement prior to
closing date, without the prior written consent of the other party.
2.             Subject to Paragraph 14 above, this Closing Agreement shall
be binding upon, and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.

   Sellers:                           Buyer:



   ___________________                European American Resources,Inc.,
   Einar C. Erickson                  a Delaware
                                      corporation

   ___________________                 By
                                       ___________________
   Lynn H. Erickson                                  Title 
                                       ___________________
                                   

   Silver International, Inc.

   By  ___________________________
   Title  _________________________


Silver Viking Corporation

By  ___________________________
Title  _________________________





<PAGE>
                          CONSENT

          Geologist, Inc. does hereby consent to the terms of the above-
described 

Closing Agreement.

                                           DATED:    May ______, 1998.
                    
                                           Geologist, Inc.
                                   
                                           By  ______________________________
                                           Title  ___________________________
                                   

April 1, 1999