Gulf Resources Acquires Bromine and Crude Salt Manufacturing Assets

Gulf Resources, Inc. (Nasdaq: GFRE) ("Gulf Resources" or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China, announced today that on June 22, 2010 the Company completed transfer of ownership of bromine and crude salt manufacturing assets and closed the asset purchase agreement which it entered into on June 8, 2010. On June 21, 2010 the Company paid the remaining 80% cash consideration of RMB 72,200,000 (approximately $10.6 million) to the sellers of the assets.

With support from the sellers of the assets, the Company signed a land lease agreement with local authorities and obtained the required land use rights for the property. The Company expects to start operations using the newly acquired assets by August 2010, after completing maintenance and upgrade.

In addition to the cash consideration, the Company will issue 70,560 shares of its common stock to the sellers of the assets. The number of shares of common stock to be issued by the Company was calculated based on a price of $9.859 per share (which is the average closing price of the Company's common stock on the NASDAQ stock market for the 30 trading days prior to June 8, 2010) and equal to $695,651 (approximately RMB4.75 million).