Gulf Resources Announces Press Release Regarding Acquisition of Salt Fields
Gulf Resources (NASDAQ: GURE) announced the acquisition of five salt fields totaling 5,141,000 square meters for RMB 280,762,400. The purchase terms include 80% cash payment and 20% in stock, with final stock terms under negotiation. The company expects these acquisitions to enhance crude salt production and enable additional bromine well drilling, with projected cash-on-cash returns within 4-5 years. Management views this as a strategic investment amid China's economic recovery, prioritizing it over chemical plant equipment delivery due to better anticipated returns.
Gulf Resources (NASDAQ: GURE) ha annunciato l'acquisizione di cinque campi salini per un totale di 5.141.000 metri quadrati per un valore di RMB 280.762.400. I termini d'acquisto prevedono un pagamento dell'80% in contante e del 20% in azioni, con i termini finali delle azioni ancora in fase di negoziazione. L'azienda prevede che queste acquisizioni migliorino la produzione di sale grezzo e consentano ulteriore perforazione di pozzi di bromo, con ritorni attesi in contante entro 4-5 anni. La direzione considera questo un investimento strategico in mezzo alla ripresa economica della Cina, dando priorità a questa operazione rispetto alla consegna delle attrezzature per gli impianti chimici, grazie a ritorni migliori previsti.
Gulf Resources (NASDAQ: GURE) anunció la adquisición de cinco campos de sal que totalizan 5,141,000 metros cuadrados por RMB 280,762,400. Los términos de compra incluyen un pago del 80% en efectivo y un 20% en acciones, con términos finales de acciones aún en negociación. La empresa espera que estas adquisiciones mejoren la producción de sal crudo y permitan la perforación adicional de pozos de bromo, con retornos proyectados en efectivo dentro de 4-5 años. La dirección considera esto como una inversión estratégica en medio de la recuperación económica de China, dándole prioridad a esta operación por encima de la entrega de equipos de planta química debido a los mejores retornos anticipados.
Gulf Resources (NASDAQ: GURE)는 총 5,141,000 제곱미터의 5개 소금밭을 RMB 280,762,400에 인수하기로 발표했습니다. 구매 조건은 80% 현금 지급과 20% 주식으로 구성되어 있으며, 최종 주식 조건은 현재 협상 중입니다. 회사는 이러한 인수가 원시 소금 생산을 향상시키고 추가적인 브롬 우물 시굴을 가능하게 할 것으로 기대하고 있으며, 현금 수익률은 4-5년 이내에 예상됩니다. 경영진은 이를 중국 경제 회복 중 전략적 투자로 보고 있으며, 더 나은 예상 수익률 덕분에 화학 공장 장비 납품보다 이 거래를 우선시하고 있습니다.
Gulf Resources (NASDAQ: GURE) a annoncé l'acquisition de cinq champs de sel totalisant 5 141 000 mètres carrés pour 280 762 400 RMB. Les conditions d'achat comprennent 80 % de paiement en espèces et 20 % en actions, les conditions finales des actions étant encore en négociation. La société s'attend à ce que ces acquisitions améliorent la production de sel brut et permettent des forages supplémentaires de puits de brome, avec des rendements en espèces projetés dans un délai de 4 à 5 ans. La direction considère cela comme un investissement stratégique dans le cadre de la reprise économique de la Chine, le plaçant en priorité par rapport à la livraison d'équipements d'usine chimique en raison de meilleurs rendements prévus.
Gulf Resources (NASDAQ: GURE) kündigte die Akquisition von fünf Salzfelder mit einer Gesamtfläche von 5.141.000 Quadratmetern für RMB 280.762.400 an. Die Bedingungen des Kaufes sehen 80% Barzahlung und 20% in Aktien vor, wobei die endgültigen Aktienbedingungen noch in Verhandlung sind. Das Unternehmen erwartet, dass diese Akquisitionen die Produktion von Rohsalz verbessern und zusätzliche Bohrungen von Brombrunnen ermöglichen, mit projected cash-on-cash Renditen innerhalb von 4-5 Jahren. Das Management betrachtet dies als strategische Investition im Zuge der wirtschaftlichen Erholung Chinas und priorisiert diese Übernahme gegenüber der Lieferung von Chemiefabrigerausrüstungen aufgrund besserer erwarteter Renditen.
- Acquisition of 5,141,000 square meters of salt fields
- Expected payback period of 4-5 years on investment
- Potential increase in crude salt production capacity
- Opportunity for additional bromine well drilling
- Strong projected returns across short, medium, and long terms
- Significant cash outlay affecting balance sheet (RMB 224.6 million)
- Pending 20% stock payment may lead to shareholder dilution
- Delayed chemical plant equipment delivery
Insights
The acquisition of five salt fields for
The projected 4-5 year payback period suggests an estimated
However, investors should note that final stock payment terms remain under negotiation, which could impact the ultimate deal value. The company's bet on Chinese economic recovery adds both opportunity and risk to this significant capital deployment.
SHOUGUANG, China, Nov. 20, 2024 (GLOBE NEWSWIRE) -- Gulf Resources, Inc. (Nasdaq: GURE) ("Gulf Resources", “we”, or the "Company"), a leading manufacturer of bromine, crude salt and specialty chemical products in China today issued a press release related to the purchase of additional land for salt fields and bromine.
As previously reported by the Company in its SEC filings, in June 2024, we reached agreements to acquire five salt fields covering a total of 5,141,000 square meters for an aggregate purchase price of RMB 280,762,400. The Company paid
The Company believes that acquiring these salt fields will allow the Company to increase crude salt production and drill additional bromine wells.
In evaluating these acquisitions, management calculated that the cash-on-cash returns may provide a payback within the next four to five years, which they consider a strong return on Investment.
Mr. Liu Xiaobin, the Chief Executive Officer of Gulf Resources stated, “When we considered these acquisitions earlier this year, we were fully aware of their impact on our balance sheet. However, given our belief that Chinese economy is starting to recover, we saw this as a good investment.”
“We would like to remind investors that we postponed the delivery of equipment for our chemical plant, because we did not anticipate a short-term return. In contrast, we believe the additional salt fields and the ability to drill more wells will provide strong returns over the short, medium, and long terms.”
“We are seeing new uses for bromine and crude salt,” Mr. Liu concluded. “As the economy start to recover, we want to be in a position to maximize our returns.”
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"), Daying County Haoyuan Chemical Company Limited (“DCHC”) and Shouguang Hengde Salt Industry Co. Ltd. (“SHSI”). 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, and materials for human and animal antibiotics. Through SHSI, the Company manufactures and sells crude salt. 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, the risks associated with the COVID-19 pandemic outbreak, 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.
FAQ
What is the total value of Gulf Resources' salt field acquisition in 2024?
How many square meters of salt fields did GURE acquire in June 2024?
What is the expected payback period for GURE's salt field investment?
Why did Gulf Resources postpone their chemical plant equipment delivery?
