Gulf Resources Withdraws its Registration Statement on Form S-3

Published Jul 20th, 2011

SHANDONG, China, July 20, 2011 -- Gulf Resources, Inc. (Nasdaq:GURE - News) ("Gulf Resources" or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, today announced that it has requested the immediate withdrawal of its registration statement on Form S-3, which was declared effective on August 31, 2010 with the Securities and Exchange Commission (the "SEC"). The Company has not sold and/or distributed any of the securities registered in the filing.
 

"We decided to withdraw our registration statement because we think our share price remains undervalued and do not intend to sell any securities under the registration statement," said Mr. Xiaobin Liu, Chief Executive Officer of Gulf Resources. "To fund our current operations and future growth, we expect to mainly use cash on hand and cash generated from operations, in combination with debt. As of March 31, 2011 we had $87.9 million in cash and we believe our healthy balance sheet can sustain increased leverage."

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 one of the largest producers 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 about the Company, please visit http://www.gulfresourcesinc.cn/.

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.