Oh, you had a subdirectory with it.
Even then it should have been `-lfmod-3.75 -Llib`.
Try placing the libraries after the object files on the linker command line.
A cosmetic remark about your Makefile: use LIBS for the libraries you want to link to, use LDFLAGS for any other options you want to pass to the loader (debug/profile options, for instance). Don't export the variable (although I don't think it actually hurts).