Gulf Resources Announces Asset Purchase Agreement with
Shouguang City Houxing Area
Expected to initially add approximately 3,900 metric tons of
incremental annual
bromine
production bringing the Company's total annual production output
to
26,700 tons
LOS ANGELES and SHENZHEN, China, October 31, 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 Houxing Area, a bromine producer located in close
proximity to
SCHC for approximately $6.7 million in total consideration.
The assets include a 50-year mineral rights and land lease covering
2,310 acres
through Dctober, 2054, which has been paid in the full. The
property has 210,000
to 270,000 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. Xingji Liu, the sole owner on October 26,
2007.
The facility is currently operating at 67 percent of capacity
utilization and
produces approximately 3,900 metric tons of bromine annually
through 432 wells,
which equates to $7.2 million in revenues and $1.9 million in net
income at
current market prices. Gulf Resources anticipates making $3.1
million in total
capital expenditures, which will take approximately three months to
complete
from the time of commencement, and is expected to increase capacity
utilization
to 85 percent while increasing overall bromine production output to
4,900 metric
tons annually. In addition, the Company estimates the property will
yield
approximately 30,00
