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Last updated on April 17, 2014 at 16:43 EDT

Gulf Resources Announces Initiation of Environmentally Friendly Additive Production Line

September 23, 2008

Gulf Resources, Inc. (OTCBB: GFRE) (“Gulf” or the “Company”), a leading manufacturer of bromine, crude salt and specialty chemical products in China, announced the commencement of a new environmentally friendly production line and an order valued at about 1.6 million dollars for its new oil and gas exploration additive products.

Gulf has invested $7.5 million through its wholly-owned subsidiary, Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”), since April 2008 to construct the new chemical production line, particularly focusing on environmentally friendly additive products, solid lubricant and polyether lubricant, for use in oil and gas exploration. The line has an expected annual production capacity of 5,000 tons. The construction of the new chemical production line was completed on August 31, 2008 and has since passed the examination of Shouguang City Administration of Work Safety and local fire department. Formal production started on September 15, 2008.

SYCI signed an initial three-month purchase agreement with Kuerle City Xingdong Trading Co., Ltd. (“Xingdong”), a distributor of additive materials for oilfields in Xinjiang province, to deliver 800 tons of its new oil and gas exploration additive products worth a total of $1.6 million. The Company expects to complete these orders by December 31, 2008. The Company has already delivered samples of additive products to customers and successfully passed their quality controls.

“We believe that environmentally friendly additive products for oil and gas exploration have significant growth potential, given the increased environmental awareness and strong demand for new energy resources in China,” commented Ming Yang, Chief Executive Officer of Gulf Resources, “By shifting our focus towards proprietary and technology-intensive additive products with a more attractive profit margin, we plan to optimize the Company’s product mix. We are working to develop other environmentally friendly chemical products, such as non-toxic bromine used as a pharmaceutical intermediate and low-toxic flame retardants.”

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through two wholly-owned subsidiaries, Shouguang City Haoyuan Chemical Company Limited (“SCHC”) and Shouguang Yuxin Chemical Industry Co., Limited (“SYCI”). The Company believes that it is the largest producer of bromine in China. Elemental Bromine is used to manufacture a wide variety of compounds utilized in industry and agriculture. Through SYCI, the Company manufactures chemical products utilized in a variety of applications, including oil & gas field explorations and as papermaking chemical agents. For more information, please visit the Company’s website: www.gulfresourcesco.com

Forward-Looking Statements

Certain statements in this news release contain forward-looking information about Gulf Resources and its subsidiaries business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, future product development and production capabilities, shipments to end customers, market acceptance of new and existing products, additional competition from existing and new competitors for bromine and other oilfield and power production chemicals, changes in technology, the ability to make future bromine asset purchases, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company’s reports filed with the Securities and Exchange Commission. Gulf Resources undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.