EUROPEAN GOLD RESOURCES INC. - Material Change Report.

TORONTO--(BUSINESS WIRE)--June 23, 1999--

The Reporting Issuer is EUROPEAN GOLD RESOURCES INC. (EGRI), Suite 420, 111 Richmond Street West, Toronto, Ontario, M5H 2G4. Telephone [phone], Fax [phone], e-mail [e-mail].

The material change occurred on June 7, 1999.

A press release was made through Canada Newswire on June 21, 1999 reading as follows:

"EUROPEAN GOLD RESOURCES INC. (Canadian Dealing Network Inc. trading symbol EGRI), announces that, to take advantage of the fact that it would be the sole producer of Irish gold, it has enlarged its business strategy to embrace the manufacture and marketing of premium certified Irish gold jewellery, commemorative medals and similar high margin luxury products. These premium products will be marketed utilizing the Internet, as well as all of the conventional direct and indirect selling techniques. Market research in Ireland and America has demonstrated that certified Irish gold products will be well received and that the Company initially needs at its disposal approximately 6,000 ounces per year of certified Irish gold. The extraction facility in Omagh, which will be Ireland's first and only gold mine, has been sized on this basis. This capacity is sufficient to support profitably the commercial manufacture of the high margin premium Irish gold products.

A 20-tonne bulk sample of high grade ore is en route to Lakefield Research in Canada for the recovery of sufficient gold and silver to manufacture and retail a launch stock of the Company's products.

The Company has appointed a senior executive from the premium jewellery industry, Mr. Roland Phelps, as managing director of its jewellery division. Other key individuals have been selected for the design, manufacturing and marketing centre to be located in Dublin.

To replenish working capital, the Company in April filed notice of a private placement of 1,983,333 shares at $0.30 per share to provide $595,000. This transaction which involved both non arms length and arms length purchasers has been completed. The issued capital of the Company now stands at 23,716,452 shares.

This press release has been prepared by Mr. L. J. Gunter, the President of EGRI, who takes full responsibility for its contents."

A full description of the material changes is as follows:

EGRI has decided to establish a vertically integrated premium jewellery business based on gold and silver production from its mine at Omagh in County Tyrone which will be the first and only gold mine in Ireland.

EGRI is the Canadian parent of wholly-owned Omagh Minerals Limited ("Omagh"), a Northern Ireland company which holds a Prospecting Licence and associated Crown Mining Lease giving exclusive rights to work gold and silver on lands covering an area of 189 square kilometres in Northern Ireland near the town of Omagh.

Detailed engineering was commenced earlier this year with the object of bringing a mine into production by year end. As the ore grade is relatively high and the mine will be low cost, shallow open cut, the operation would be profitable as a small gold mine. However, market research in Ireland and the United States shows that a substantial premium can be obtained for jewellery, medals, reproduction artefacts and similar hallmarked luxury products certified as made from "Irish Gold" produced at the mine. Marketing of premium, certified and fingerprinted "Irish Gold" and silver jewellery will commence on the Internet through e-commerce, supported by a high profile advertising campaign.

Mr. Roland Phelps, an experienced executive from the premium jewellery business, has been EGRI's consultant during the last nine months. He has agreed to become managing director of the wholly-owned manufacturing and marketing subsidiary, Irish Gold and Jewellery Limited.

The immediate aim is to bring the property into production so as to supply certified "Irish Gold" and silver to a manufacturing and marketing subsidiary which will establish in Dublin a jewellery design, manufacturing and marketing centre. The cost to complete this immediate aim on a minimum basis is estimated at Cdn. $4 million.

Jewellery will be designed and partly manufactured by company goldsmiths. Medals will be produced by a commercial mint under contract, the first special edition to be issued in late 1999 and early 2000 commemorating both the Millenium and the pouring of Ireland's first gold.

The manufacturing and marketing centre will be established in Dublin. The marketing campaign will seek to emulate that of other Irish suppliers of luxury products and will make full use of e-commerce, using both existing web sites featuring Irish-Celtic products and its own specialized web site describing and offering certified "Irish Gold" and silver products.

Designs will have strong Irish traditional and Celtic themes in four product groups, all containing certified Irish precious metals from the mine at Omagh:

- "Pure Irish Gold" 14ct and 18ct designs

- Irish "Motif" designs priced for a broad cross-section of the market

- Limited editions of commemorative medals and jewellery

- Special commissions

The market for the products has been segmented as follows:

- Ireland with 5 million people; 1995 jewellery market of 125 Pounds million

- Britain with 2.4 million Irish born and first generation; 1994 jewellery market of 1.7 Pounds billion

- North America with 45 million Irish identified; 1992 jewellery market of $14 billion

- Other, e.g., Australia, with large Irish element and renewed interest in Irish culture

The marketing campaign would include pre-announcements in mid-1999, the taking of a bulk sample of ore in the second quarter (already done) to recover gold and silver to manufacture promotional stock, a high profile launch in the fourth quarter coinciding with the first gold pour at the mine, and having in place a retailer network by year end.

EGRI will take full advantage of the opportunity to market its unique premium products directly via the Internet and the name, "goldireland.com", has been reserved. EGRI's current web site, gold.ica.net will be upgraded to an interactive e-commerce site. The services of a web site designer have been engaged. Each item of the range of products will be illustrated and described by means of an interactive "slide show" enabling potential consumers to view its products with ease. EGRI will implement the latest and most powerful secure software to allow customers to make purchases for delivery anywhere in the world, paying by credit card, or alternatively, by contacting the company using on-line forms or by telephone to arrange purchases.

An interactive element will be incorporated into the web site, allowing users to join in discussion groups and "chat" about products and other aspects of interest such as the history of product items, Irish holidays, folklore in particular the Celtic heritage. The aim will be to create an owners' club to help promote return visits to the company's web site and encourage repeat purchases. EGRI will also promote its products on other popular Irish web sites through advertising, special promotions, affiliate programs and other marketing opportunities the Internet has to offer.

Mr. L.J. Gunter, the President of EGRI at the address and telephone number given above, is knowledgeable about the material change and this report.

The foregoing accurately discloses the material change referred to herein.

DATED at Toronto this 21st day of June, 1999.

"L.J. Gunter"

L. J. GUNTER