Gulf Resources, Inc. (Nasdaq:GURE) ("Gulf Resources" or the
"Company"), a leading manufacturer of bromine, crude salt and
specialty chemical products in China, today announces a delay in
the completion of its first brine water and natural gas well field
construction in Sichuan Province due to excessive rainfall and
severe flooding.
Portions of Sichuan Province and much of central
and southern China were hit by the largest amount of rainfall in
over 20 years. As can be seen from some of the quotes below, which
come from the news media and can all be easily found online, this
flooding cost China $33 billion and left millions of people
homeless. The first series of storms began in June. Further storms
hit in July and August. Finally, as can be seen from the final
quote, even more storms hit Sichuan from September 18th onwards,
which is quite unusual.
“Several days of heavy rain and flooding in southern and eastern
China has left at least 128 people dead and over 40 missing,
according to Chinese authorities. Some areas have recorded over 200
mm of rain in 24 hours.”
(Floodlist- July 5, 2016 5 JULY, 2016 BY RICHARD DAVIES IN ASIA,
NEWS)
“China’s Ministry of Civil Affairs (MCA) says that since 30
June, floods, hail, landslides, mudslides and other disasters have
affected the 11 provinces of Jiangsu, Anhui, Jiangxi, Henan, Hubei,
Hunan, Guangxi, Chongqing, Sichuan, Guizhou and Yunnan.”
(Floodlist- July 5, 2016 5 JULY, 2016 BY RICHARD DAVIES IN ASIA,
NEWS)
“The death toll of 128, as reported on 04 July, has risen over
the last few days. Since 30 June, the severe weather has now left
140 people dead, with 41 still missing, according to MCA
figures.”
“The flooding that struck parts of China during July this year
were some of the worst since 1998, and are likely to cost $33
billion, according to Aon catastrophe report.”
(5 AUGUST, 2016 BY FLOODLIST NEWS IN ASIA, INSURANCE)
“Since 18 September, torrential rainfall has caused flooding,
mud flows and landslides in Sichuan and Yunnan provinces. As of 22
September, 14 deaths were confirmed and nine people were reported
missing while an additional 5,400 people were temporarily
relocated. 81,000 people across 28 counties and 13 cities in the
two provinces have been affected, including over 8,000 people who
need immediate assistance. (OCHA, 26 Sep 2016)”
Relief Web-China: Floods and Landslides - Jun 2016
Our first well field is being constructed in a
very rural and mountainous region. Due to the unexpected rains
which had impact on the construction for equipment housing,
underground pipe network, reservoir, plant fence, and etc.
We believed that the weather would follow its
normal patterns, with some rain in June and July. We had not
expected the severe flooding during these months. However, even
with the rains in July and August, we had thought we could achieve
our original schedule. We had not expected the massive rains at the
end of September and beginning of October, which are normally a
drier period.
As a result of the rain and the floods, we now believe our first
well will be delayed and will be in operation by January.
In addition, once the brine water and natural
gas well field construction been completed, we do not believe that
the normal floods will have any intermediate or long-term impact on
our natural gas project. The local governments are assisting us to
moving this project forward as quickly as possible. The first roads
that we have built will also make it easier for us to construct
subsequent wells and drilling operations. Despite this delay, we
continue to be extremely optimistic about the opportunities in
Sichuan.
China still has a severe shortage of natural
gas, and with the government focusing on improving the environment,
we believe natural gas prices will continue to rise.
Gulf Resources will be reporting its third
quarter 2016 results by the second week of November. This delay in
the first well operation will have virtually no impact on the
financial results.
About Gulf Resources, Inc.Gulf Resources, Inc.
operates through four wholly-owned subsidiaries, Shouguang City
Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical
Industry Co., Limited ("SYCI"), Shouguang City Rongyuan Chemical
Co, Limited (“ SCRC”) and Daying County Haoyuan Chemical Company
Limited (“DCHC”). 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 and
gas field explorations and papermaking chemical agents. SCRC is a
leading manufacturer of materials for human and animal antibiotics
in China and other parts of Asia. DCHC was established to further
explore and develop natural gas and brine resources (including
bromine and crude salt) in China. For more information, visit
www.gulfresourcesinc.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.
CONTACT: Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu (Haiyan Xu)
beishengrong@vip.163.com
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