SHOUGUANG, China, Oct. 26, 2016 (GLOBE NEWSWIRE) -- 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.”
“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.”
“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.”
“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)”
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.
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) firstname.lastname@example.org
Source:Gulf Resources, Inc.