Gulf Resources Announces Its Flood Prevention Plan
Fri, November 17, 2023 at 5:30 AM PST
SHOUGUANG, China, Nov. 17, 2023 (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 announced that it has recently initiated its preventive measures for safeguarding its bromine facilities.
In 2018, Shouguang City experienced the devastating impact of Typhoon Winbiya, regarded as one of the most destructive typhoons in history, resulting in the region receiving 14.9 inches of rainfall. The overflow of three major reservoirs along the Mihe River led to extensive flooding in farmlands, residential zones, and industrial factories. All of the Company’s bromine factories, crude salt pans, and mining areas were seriously impacted. The Company incurred substantial expenses, amounting more than $40 millions of dollars, including write-offs , for road repairs, equipment replacement, salt pan reconstruction, and the re-drilling of flooded wells.
A year later, Typhoon Lekima struck Shouguang City, surpassing the destructive force of its predecessor. Once again, the Company had to spend more than $6 millions of dollars to rectify the aftermath, involving road repairs, equipment replacement, salt pan reconstruction, and the re-drilling of affected wells.
To mitigate similar damages in the future, the Company has commenced a flood prevention initiative. Our strategy involves the renovation of the channels of four major rivers within our mining area, encompassing the tributary of the Mihe River. The aim is to prevent flooding that could harm the wells, aqueducts and crude salt pans at our plant.
The projected expenditure for this initiative amounts to $50,497,652. As of the third quarter, ending on September 30, 2023, we disbursed $15,149,296 for the initial phase of this project.
Apart from reducing risk to surrounding regions, we anticipate three notable advantages from this flood prevention plan. It is expected to:
enhance the probability of obtaining approval to reopen factories #2 and #10;
enable the drilling of additional wells across our five operating factories, and
mitigate the risks and associated expenses related to future storms-induced flooding.
Given our company’s robust financial position and substantial cash resources, we believe the flood prevention program will yield favorable returns over the long-term.
