Gulf Resources Announces Asset Purchase Agreement with
Shouguang City Renjia Area
Expected to initially
add 3,700 tons of incremental annual bromine production
capacity
equating to $6.8 million in revenue and $1.8 million in net
income
LOS ANGELES and SHENZHEN, China, October 29, 2007
/Xinhua-PRNewswire/ -- Gulf
Resources, Inc. (the "Company") (OTC Bulletin Board: GUFR - News) a
leading
producer of Bromine and crude salt in China through its
wholly-owned subsidiary
Shuoguang City Haoyuan Chemical Company Limited (SCHC), announced
today it
signed a definitive agreement to acquire substantially all of the
assets of
Shouguang City Renjia Area, a bromine producer located in close
proximity to
SCHC for approximately $6.4 million in total consideration.
The assets include a 50-year mineral rights and land lease covering
2,165 acres
through December, 2054, which has been paid in the full. The
property has
200,000 to 250,000 metric tons of proven bromine reserves.
Additional assets to
be conveyed with the purchase include the related production
facility, wells,
pipelines and other production equipment, in addition to the
current buildings
and other assets on the property. The Company executed an asset
purchase
agreement with Mr. Jiancai Wang, the sole owner on October 25,
2007.
The facility is currently operating at 65 percent capacity and
produces
approximately 3,700 metric tons of bromine annually through 398
wells, which
equates to $6.8 million in revenues and $1.8 million in net income
at current
market prices. Gulf Resources anticipates making $4.2 million in
facility
upgrades and capital expenditures over a four month period, which
are expected
to increase capacity utilization to 85 percent and increase overall
bromine
production output to 4,800 metric tons annually. In addition, the
Company
estimates the property will yield approximately 25,000
