Gulf Resources Signs Letter of Intent with Southwest Synthetic Pharmaceutical Corporation Ltd.

Tuesday, September 11, 2007 General News
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LOS ANGELES and SHANDONG, China, Sept. 11 Gulf Resources (OTC Bulletin Board: GUFR) announced today that its wholly-owned subsidiary, Shouguang Yuxin Chemical Industry Company Limited ("SYCI"),has signed a letter of intent with Southwest Synthetic PharmaceuticalCorporation Ltd. and until a purchase agreement is formalized, neither partyhas an obligation. The relationship contemplated calls for "SYCI" to become asupplier of a chemical compound named 3.4.5-Trimethoxybenzaldehyde (T.M.B.) toSouthwest. T.M.B.s are produced from bromine and provides Gulf Resources withthe opportunity to become vertically integrated while driving end customercosts. T.M.B. is currently utilized as an intermediary to produce a line ofT.M.P. anti-biotic drugs at Southwest's production facility.

Gulf Resources Inc. CEO Mr. Ming Yang commented, "This contemplatedrelationship is aimed at leveraging SYCI's core research and developmentcompetencies with our bromine production capabilities to segway into newcompounds utilized in pharmaceutical products. Currently, only four companiespossess the T.M.B. formula and Professor Ji, our partner from East ChinaUniversity of Science and Technology is the fourth. Our recently signedpartnership enables us to utilize this formula for commercialization.Establishing a relationship with a large, well established Company likeSouthwest Synthetic Pharmaceutical Corporation Ltd. is an endorsement for ourentire organization and our new research capabilities. Currently SouthwestSynthetic Pharmaceutical utilizes approximately 500 tons of T.M.B annually,equating to approximately $7.5 million in product purchases. Further, ourresearch shows that global demand for T.M.B's is approximately 5,000 tonswhile current production supply is between 3,500 and 4,000 tons, creatingadditional opportunities to gain market share."

Founded in 1965 and based in Chongqing City, Southwest SyntheticPharmaceutical Corporation Ltd. is one of the largest developers,manufacturers and exporters of pharmaceuticals in West China. The Company waslisted on the Shenzhen Stock Exchange in 1997 with the trading code 000788 andin 2006 its revenues were $65 million.

Southwest Synthetic Pharmaceutical Corporation Ltd. produces a broadportfolio of both bulk pharmaceuticals and preparation compounds through itsGMP certified facility. Four of its products are approved by U.S. FDA,including Sulfamethazine, Trimethoprim, Sulfamethoxazole, SulfamethazineSodium, and another four have been registered in the European Directorate forthe Quality of Medicines, including Sulfadimidine, Trimethoprim,Sulfamethoxazole, and Sulfadiazine. The Company also maintains productsregistered and approved in Canada, Russia, and India.

About Gulf Resources, Inc.

Gulf Resources, Inc. operates through two wholly-owned subsidiaries: SCHC,which is engaged in manufacturing and trading Bromine and Crude Salt in China-- Bromine is used to manufacture a wide variety of compounds utilized inindustry and agriculture -- and SYCI, which manufactures chemical productsutilized in oil & gas field explorations and as papermaking chemical agents.For more information, please visit .

Safe Harbor Statement:

Certain statements in this news release may contain forward-lookinginformation about Gulf Resources and its subsidiaries business and productswithin the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6under the Securities Exchange Act of 1934, and are subject to the safe harborcreated by those rules. The actual results may differ materially depending ona number of risk factors including, but not limited to this contemplatedrelationship with Southwest Synthetic Pharmaceutical Corporation Ltd., thegeneral economic and business conditions in the PRC, future productdevelopment and production capabilities, shipments to end customers, marketacceptanc

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