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<SEC-DOCUMENT>0001193805-07-002727.txt : 20071031
<SEC-HEADER>0001193805-07-002727.hdr.sgml : 20071030
<ACCEPTANCE-DATETIME>20071031165217
ACCESSION NUMBER:		0001193805-07-002727
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20071025
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20071031
DATE AS OF CHANGE:		20071031

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GULF RESOURCES, INC.
		CENTRAL INDEX KEY:			0000885462
		STANDARD INDUSTRIAL CLASSIFICATION:	CHEMICALS & ALLIED PRODUCTS [2800]
		IRS NUMBER:				133637458
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-20936
		FILM NUMBER:		071203454

	BUSINESS ADDRESS:	
		STREET 1:		CHEMING INDUSTRIAL PARK
		STREET 2:		UNIT - HAOYUAN CHEMICAL COMPANY LIMITED
		CITY:			SHOUGUANG CITY, SHANDONG
		STATE:			F4
		ZIP:			262714
		BUSINESS PHONE:		(310) 470-2886

	MAIL ADDRESS:	
		STREET 1:		CHEMING INDUSTRIAL PARK
		STREET 2:		UNIT - HAOYUAN CHEMICAL COMPANY LIMITED
		CITY:			SHOUGUANG CITY, SHANDONG
		STATE:			F4
		ZIP:			262714

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DIVERSIFAX INC
		DATE OF NAME CHANGE:	19940331
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>e602773_8k-gulf.txt
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                         Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                Date of Report (date of earliest event reported):
                                October 25, 2007


                              GULF RESOURCES, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


    Delaware                         000-20936                      13-3637458
  -------------                     -----------                    ------------
    State of                         Commission                    IRS Employer
  Incorporation                     File Number                    I.D. Number


        CHEMING INDUSTRIAL PARK, UNIT - HAOYUAN CHEMICAL COMPANY LIMITED,
                     SHOUGUANG CITY, SHANDONG, CHINA 262714
        -----------------------------------------------------------------
                     Address of principal executive offices

                  Registrant's telephone number: (310)470-2886

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)
|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))
|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

Item 1.01.      Entry into a Material Definitive Agreement.
Item 2.01.      Completion of Acquisition or Disposition of Assets

      On October 25, 2007, Shuoguang City Haoyuan Chemical Company Limited
("SCHC"), a wholly-owned subsidiary of Gulf Resources, Inc. (the "Registrant"),
and Jiancai Wang ("Wang") completed an Asset Purchase Agreement (the "Renjia
Agreement") pursuant to which SCHC acquired substantially all of the assets
owned by Wang in the Shouguang City Renjia Area (the "Renjia Assets") in a cash
transaction valued at $6,399,147 (the "Purchase Price"). Pursuant to the Renjia
Agreement, in exchange for the Renjia Assets, the SCHC delivered to Wang
$2,519,664 of the Purchase Price at the closing and shall deliver the remaining
amount of $3,879,483 within five (5) days after the closing. A copy of the
Agreement is filed as Exhibit 10.1 to this Current Report.

      SCHC and Wang made customary representations, warranties and covenants in
the Renjia Agreement.

      The Renjia Assets include a 50-year mineral rights and land lease covering
2,165 acres of real property, with annual production of 3,700 tons of bromine.
The Renjia Assets acquired include the 398 wells and the related production
facility, the wells, the pipelines, other production equipment, and the
buildings located on the property.

      On October 26, 2007, SCHC, the Registrant's wholly-owned subsidiary, and
Xingji Liu ("Liu") completed an Asset Purchase Agreement (the "Houxing
Agreement") pursuant to which SCHC acquired substantially all of the assets
owned by Liu in the Shouguang City Houxing Area (the "Houxing Assets") in a cash
transaction valued at $6,665,778 (the "Purchase Price"). Pursuant to the Houxing
Agreement, in exchange for the Houxing Assets, the SCHC delivered to Liu
$2,879,616 of the Purchase Price at the closing and shall deliver the remaining
amount of $3,786,162 within five (5) days after the closing. A copy of the
Agreement is filed as Exhibit 10.2 to this Current Report.

      SCHC and Liu made customary representations, warranties and covenants in
the Houxing Agreement.

      The Houxing Assets include a 50-year mineral rights and land lease
covering 2,310 acres of real property, with annual production of 3,900 tons of
bromine. The Houxing Assets acquired include the 432 wells and the related
production facility, the wells, the pipelines, other production equipment, and
the buildings located on the property.

Item 7.01.      Regulation FD Disclosure.

      On October 29, 2007, the Registrant issued a press release announcing the
acquisition of the Renjia Assets. A copy of that press release is attached to
this Current Report as Exhibit 99.1 and is incorporated herein by reference.

      On October 31, 2007, the Registrant issued a press release announcing the
acquisition of the Houxing Assets. A copy of that press release is attached to
this Current Report as Exhibit 99.2 and is incorporated herein by reference.


                                       2
<PAGE>

Item 9.01.      Financial Statements and Exhibits.

  (c)   Exhibits.

  10.1  Asset Purchase Agreement, dated October 25, 2007, between SCHC and Wang.

  10.2  Asset Purchase Agreement, dated October 26, 2007, between SCHC and Liu.

  99.1  Press Release dated October 29, 2007.

  99.2  Press Release dated October 31, 2007.


                                       3
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.

Dated: October 31, 2007

                                        GULF RESOURCES, INC.


                                        By: /s/ Min Li
                                            -----------------------
                                            Min Li,
                                            Chief Financial Officer


                                       4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>e602773_ex10-1.txt
<TEXT>

                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                 SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED

                                       AND

                                  Jiancai Wang

                                   DATED AS OF

                               October 25th, 2007

- --------------------------------------------------------------------------------

INDEX OF SCHEDULES AND EXHIBITS

Schedules:

1. Shouguang City Renjia Area Asset Checklist

2. Leased Property Description

- --------------------------------------------------------------------------------

This ASSET PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of October
25th, 2007 (the "Effective Date") and comes into effect on the same day by and
between the following two Parties:

(1) SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED, a company validly existing
under the laws of China ("SCHC"), a subsidiary of Gulf Resources, Inc.("GUFR");
and

(2) Jiancai Wang, ("WANG"), an individual resident of China who owns private
land located in the Shouguang City Renjia Area.

WHEREAS: WANG wishes to sell, transfer and convey certain assets to SCHC, and
SCHC wishes to purchase and acquire the same from WANG.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and
for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, SCHC, and WANG, both have reached an AGREEMENT reciprocally
as follows:


                                       1
<PAGE>

1. CERTAIN DEFINITIONS

"Ordinary Course of Business" shall mean an action taken by WANG if such action
is taken in normal operation, consistent with past practices.

"Closing" The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at SCHC's offices, on October 25, 2007 (the "Closing
Date") or as soon thereafter as is practicable.

"GUFR" shall mean Gulf Resources, Inc., a Delaware corporation and parent of
SCHC.

"Person" shall mean any individual, entity or governmental body.

"Pre-Closing Period" shall mean the period commencing as of the date of the
Agreement and ending on the Closing Date.

2. TRANSFER OF THE ASSETS

2.1 WANG agrees that, upon the Closing, he will sell, transfer and deliver unto
SCHC, its successors and assigns forever, by duly executed deed(s), bills of
sale, assignment(s) or other instrument(s) of conveyance, for the consideration
hereinafter provided, all right, title and interest in and to all assets listed
and described on Schedule 1 attached hereto and incorporated herein by reference
(the "Purchased Assets"). In addition to the Purchased Assets, WANG agrees at
Closing to convey to SCHC all rights to the Lease (the "Lease") whereby Wang
leases the leased property described in Schedule 2 attached hereto (the "Leased
Property") and to execute and deliver such instruments of transfer and
conveyance to effect the transfer of the Lease from WANG to SCHC.

2.2 As full consideration for the sale, assignment, transfer and delivery of the
Purchased Assets and the Leased Property to SCHC, and upon the terms and subject
to all of the conditions contained herein, SCHC shall pay to WANG the sum of
$6,399,147 (the "Purchase Price") of which $2,519,664 (the "Initial Payment")
shall be paid to Wang at the Closing and $3,879,483 shall be paid in cash or
readily available funds within 5 days after the Closing.

2.3 As a result of Agreement, the Purchased Assets including, without
limitation, annual estimated bromine production capacity of 3,700 tons,
buildings, equipment, wells, pipelines, and power circuits will be owned by
SCHC. SCHC is not assuming and shall not be liable for any and all debts,
obligations and liabilities of WANG relating to the Purchased Assets and the
Leased Property.

2.4 WANG covenants that the $1,106,519 lease payment due under the 50-year land
lease for the Leased Property has been paid. Any economic losses or legal
disputes relating to the ownership of the Leased Property, whether arising prior
to or after the transfer of ownership of the Leased Property from WANG to SCHC,
will be WANG's full responsibility.

2.5 If the transactions contemplated hereunder are not consummated within ten
days of the date hereof, this Agreement shall terminate, and each party shall
have no further obligation to the other party, except that if the transactions
contemplated hereunder are not consummated due to a material default or breach
on the part of SCHC, SCHC shall pay to Wang the sum of $319,957 as liquidated
damages and not as a penalty.


                                       2
<PAGE>

2.6 Three days after the Effective Date, SCHC and WANG will both establish an
asset assessment team to assess all of the Purchased Assets and the Leased
Property for transfer and conveyance to SCHC.

3. REPRESENTATIONS AND WARRANTIES

3.1 WANG represents and warrants to SCHC the following:

(a) Authority. WANG has the power and authority to execute and deliver this
Agreement and to perform his obligations hereunder, and to consummate the
transactions hereby, and upon the execution and delivery of the instruments and
documents specified herein, no further action will be required of WANG to vest
legal title to and possession of the Purchased Assets and the Leased in the
Purchaser, its successors and assigns forever.

(b) Title to Assets. WANG has good and marketable title to the Purchased Assets
and holds a valid leasehold interest to the Leased Property pursuant to the
Lease, free and clear of liens or encumbrances of any kind and no person, firm
or corporation has any undisclosed adverse interest therein. The Lease pursuant
to which Wang holds the Leased Property is in full force and effect and the
assignment of the Lease to SCHC as provided for herein shall not give rise to a
breach of the Lease.

(c) Condition of Purchased Assets. The Purchased Assets are in operating
condition and repair, ordinary wear and tear excepted, and are suitable for
continued use by SCHC in the production of bromine. The material buildings,
plants, machinery and equipment necessary of in connection with the production
of bromine located on the Leased Property as presently conducted are
structurally sound, are in good operating condition and repair and are adequate
for the uses to which they are being put or would be put in the Ordinary Course
of Business, in each case, taken as a whole, and none of such buildings, plants,
machinery or equipment is in need of maintenance or repairs, except for
ordinary, routine maintenance and repairs that are not material in nature or
cost.

(d) Disclosure. No representation or warranty by WANG contained in this
Agreement or any written statement furnished to SCHC pursuant hereto, contains
any untrue statement of a material fact, or omits to state a material fact
necessary to make the statement contained herein true and not misleading.

(e) Reliance. The foregoing representations and warranties have been made by
WANG with the knowledge and expectation that SCHC is placing reliance thereon,
and all such representations and warranties shall survive the Closing for a
period of one (1) year.


                                       3
<PAGE>

3.2 Each of SCHC and WANG represents and warrants respectively to the other as
follows:

(a) Each of SCHC and WANG warrants that has taken all necessary actions for the
execution and performance of this Agreement.

(b) The performance of the transaction contemplated hereunder is not subject to
the consent, approval or order of any governmental authorities or any other
third parties, nor is it subject to any conditions precedent as registration
with, qualification verification by or document delivery to any governmental
authorities or any other third parties.

4. INDEMNIFICATION

4.1 WANG agrees to indemnify, hold harmless and reimburse the Purchaser at all
times after the Closing, against and with respect to:

(a) any damage or deficiency resulting from any misrepresentation, breach of
warranty or non-fulfillment of any covenant or agreement on the part of WANG
made in this Agreement, any other agreement or instrument delivered by WANG at
the Closing;

(b) any damages or claims asserted against the Purchaser on account of any
liability of WANG in connection with his ownership of the Purchased Assets and
the Leased Property ; and

(c) all actions, suits, proceedings, demands, assessments, judgments, costs and
expenses, including reasonable attorneys' fees, incident to the foregoing.

5. MISCELLANEOUS PROVISIONS.

5.1 No Assumption of Liabilities. Except as specifically set forth in this
Agreement, nothing in this Agreement shall be construed to impose upon SCHC the
assumption of any claim against or liability or obligation of WANG, arising out
of his business, or the use, operation or possession of the Purchased Assets,
through the Closing, or thereafter.

5.2 Books and Records. Those books and records reasonably deemed primarily to
relate to the Purchased Assets and maintained separately from the other records
of WANG shall be delivered to and become the property of SCHC.

5.3 Expenses of Negotiation and Transfer. Each party to this Agreement shall pay
its own expenses and other costs incidental to or resulting from this Agreement,
whether or not the transactions contemplated hereby are consummated.

5.4 Entire Agreement. This Agreement, along with the documents and agreements to
be executed in connection herewith, constitutes the full understanding of the
parties, a complete allocation of risks between them and a complete and
exclusive statement of the terms and conditions of their agreement relating to
the subject matter hereof and supersedes any and all prior agreements, whether
written or oral, that may exist between the parties with respect thereto. Except
as otherwise specifically provided in this Agreement, no conditions, usage of
trade, course of dealing or performance, understanding or agreement purporting
to modify, vary, explain or supplement the terms or conditions of this Agreement
shall be binding unless hereafter made in writing and signed by the party to be


                                       4
<PAGE>

bound, and no modification shall be effected by the acknowledgment or acceptance
of documents containing terms or conditions at variance with or in addition to
those listed in this Agreement. No waiver by any party with respect to any
breach or default or of any right or remedy and no course of dealing shall be
deemed to constitute a continuing waiver of any other breach or default or of
any other right or remedy, unless such waiver be expressed in writing signed by
the party to be bound. Failure of a party to exercise any right shall not be
deemed a waiver of such right or rights in the future.

5.5 Binding Effect. All of the covenants, conditions, agreements and
undertakings set forth in this Agreement shall extend to and be binding upon
WANG and SCHC and their respective successors and assigns.

5.6 Assignability. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof nor any of the documents
executed in connection herewith may be assigned by any party without the consent
of the other parties

5.7 Headings. Headings as to the contents of particular Sections are for
convenience only and are in no way to be construed as part of this Agreement or
as a limitation of the scope of the particular Sections to which they refer.

5.8 Exhibits and Schedules. The Exhibits and Schedules (and any appendices
thereto) referred to in this Agreement are and shall be incorporated herein and
made a part hereof.

5.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together will constitute an integral
party of this Agreement.


                                       5
<PAGE>

IN WITNESS HEREOF, SCHC and WANG have caused this Agreement to be executed by
their duly authorized representatives as of the date first hereinabove
mentioned.


SCHC: SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED

Signed by: /s/ Ming Yang
           ---------------------------------
Name:      Ming Yang
Position:  CEO


           JIANCAI WANG

           /s/ Jiancai Wang
           ---------------------------------
                     Jiancai Wang


                                       6
<PAGE>

<TABLE>
<CAPTION>
Schedule 1
- -------------------------------------------------------------------------------------------------
                           Shouguang City Renjia Area Asset checklist
- -------------------------------------------------------------------------------------------------
Check Time              Fixed Asset                     Unit                       Quantity
- ----------------------- ------------------------------- -------------------------- --------------
<S>                     <C>                             <C>                        <C>
October/23/2007         Plant                           7150 square meter                       1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Garage                                                                  1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Boiler                          0.2 ton                                 1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Unerwater pump                                                         23
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Power cable                                                275 meter
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Water container                 4.5 square meter                        1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Generator                                                               1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Stove                                                                   1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         PVC pipe                                                   650 meter
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Vaporizer                                                               2
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Stove Operating Room                                                    1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Shower Room                                                             1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Sulfur stove                                                            1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Washing Tower                                                           1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Precipitation Cylinder                                                  1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Water Pump                                                              1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         sulfuric acid container         15 cubic meter                          1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Liquid Chlorine cylinder                                               30
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         brimstone storage                                                       3
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Control Room                                                            1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Laboratory                                                              1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Blowing Tower                                                           1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Receiving Tower                                                         1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Brine Pool                      10,000 cubic meter                      1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         High Voltage wire set           1250KVA                                 1
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Bromine well                                                          398
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         convey trench                                              7,830 meter
- ----------------------- ------------------------------- -------------------------- --------------

<CAPTION>
                        Raw Material
- ----------------------- ------------------------------- -------------------------- --------------
<S>                     <C>                             <C>                        <C>
October/23/2007         Sulfuric Acid                   ton                                   8.2
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Brimstone                       ton                                 17.45
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Coal                            ton                                 30.15
- ----------------------- ------------------------------- -------------------------- --------------
October/23/2007         Liquid Chlorine                 ton                                    13
- ----------------------- ------------------------------- -------------------------- --------------

- ----------------------- ------------------------------- -------------------------- --------------
Checker: Min Li                                         Owner:Jiancai Wang
- ----------------------- ------------------------------- -------------------------- --------------
</TABLE>


                                       7
<PAGE>

Schedule 2
Leased Property Description

Shouguang City Renjia Area

Area: 2165 Acres

Lease Period: 50 years (01/01/2005-12/31/2054)
Lease Payment: (Annual Rent of $10.22/ Acre, totaled $1,106,519)
Payment terms: One-time payment paid off by WANG.
Ownership: The properties and mining rights of the lands above and underground
120 meters are belonged to owner.


                                       8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>e602773_ex10-2.txt
<TEXT>

                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                 SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED

                                       AND

                                   Xingji Liu

                                   DATED AS OF

                               October 26th, 2007

- --------------------------------------------------------------------------------

INDEX OF SCHEDULES AND EXHIBITS

Schedules:

1. Shouguang City Houxing Area Asset Checklist

2. Leased Property Description

- --------------------------------------------------------------------------------

This ASSET PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of October
26th, 2007 (the "Effective Date") and comes into effect on the same day by and
between the following two Parties:

(1) SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED, a company validly existing
under the laws of China ("SCHC"), a subsidiary of Gulf Resources, Inc.("GUFR");
and

(2) Xingji Liu, ("LIU"), an individual resident of China who owns private land
located in the Shouguang City Houxing Area.

WHEREAS: LIU wishes to sell, transfer and convey certain assets to SCHC, and
SCHC wishes to purchase and acquire the same from LIU.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and
for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, SCHC, and LIU, both have reached an AGREEMENT reciprocally
as follows:

<PAGE>

1. CERTAIN DEFINITIONS

"Ordinary Course of Business" shall mean an action taken by LIU if such action
is taken in normal operation, consistent with past practices.

"Closing" The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at SCHC's offices, on October 26, 2007 (the "Closing
Date") or as soon thereafter as is practicable.

"GUFR" shall mean Gulf Resources, Inc., a Delaware corporation and parent of
SCHC.

"Person" shall mean any individual, entity or governmental body.

"Pre-Closing Period" shall mean the period commencing as of the date of the
Agreement and ending on the Closing Date.

2. TRANSFER OF THE ASSETS

2.1 LIU agrees that, upon the Closing, he will sell, transfer and deliver unto
SCHC, its successors and assigns forever, by duly executed deed(s), bills of
sale, assignment(s) or other instrument(s) of conveyance, for the consideration
hereinafter provided, all right, title and interest in and to all assets listed
and described on Schedule 1 attached hereto and incorporated herein by reference
(the "Purchased Assets"). In addition to the Purchased Assets, LIU agrees at
Closing to convey to SCHC all rights to the Lease (the "Lease") whereby LIU
leases the leased property described in Schedule 2 attached hereto (the "Leased
Property") and to execute and deliver such instruments of transfer and
conveyance to effect the transfer of ownership of the Leased Property from LIU
to SCHC.

2.2 As full consideration for the sale, assignment, transfer and delivery of the
Purchased Assets and the Leased Property to SCHC, and upon the terms and subject
to all of the conditions contained herein, SCHC shall pay to LIU the sum of
$6,665,778 (the "Purchase Price") of which $2,879,616 (the "Initial Payment")
shall be paid to LIU at the Closing and $3,786,162 shall be paid in cash or
readily available funds within 5 days after the Closing.

2.3 As a result of Agreement, the Purchased Assets including, without
limitation, annual estimated bromine production capacity of 3,900 tons,
buildings, equipment, wells, pipelines, and power circuits will be owned by
SCHC. SCHC is not assuming and shall not be liable for any and all debts,
obligations and liabilities of LIU relating to the Purchased Assets and the
Leased Property.

2.4 LIU covenants that the $872,550 lease payment due under the 50-year land
lease for the Leased Property has been paid. Any economic losses or legal
disputes relating to the ownership of the Leased Property, whether arising prior
to or after the transfer of the Lease from LIU to SCHC, will be LIU's full
responsibility.

2.5 If the transactions contemplated hereunder are not consummated within ten
days of the date hereof, this Agreement shall terminate, and each party shall
have no further obligation to the other party, except that if the transactions
contemplated hereunder are not consummated due to a material default or breach
on the part of SCHC, SCHC shall pay to LIU the sum of $333,289 as liquidated
damages and not as a penalty.


                                       2
<PAGE>

2.6 Three days after the Effective Date, SCHC and LIU will both establish an
asset assessment team to assess all of the Purchased Assets and the Leased
Property for transfer and conveyance to SCHC.

3. REPRESENTATIONS AND WARRANTIES

3.1 LIU represents and warrants to SCHC the following:

(a) Authority. LIU has the power and authority to execute and deliver this
Agreement and to perform his obligations hereunder, and to consummate the
transactions hereby, and upon the execution and delivery of the instruments and
documents specified herein, no further action will be required of LIU to vest
legal title to and possession of the Purchased Assets and the Leased in the
Purchaser, its successors and assigns forever.

(b) Title to Assets. LIU has good and marketable title to the Purchased Assets
and holds a valid leasehold interest to the Leased Property pursuant to the
Lease, free and clear of liens or encumbrances of any kind and no person, firm
or corporation has any undisclosed adverse interest therein. The Lease pursuant
to which LIU holds the Leased Property is in full force and effect and the
assignment of the Lease to SCHC as provided for herein shall not give rise to a
breach of the Lease.

(c) Condition of Purchased Assets. The Purchased Assets are in operating
condition and repair, ordinary wear and tear excepted, and are suitable for
continued use by SCHC in the production of bromine. The material buildings,
plants, machinery and equipment necessary of in connection with the production
of bromine located on the Leased Property as presently conducted are
structurally sound, are in good operating condition and repair and are adequate
for the uses to which they are being put or would be put in the Ordinary Course
of Business, in each case, taken as a whole, and none of such buildings, plants,
machinery or equipment is in need of maintenance or repairs, except for
ordinary, routine maintenance and repairs that are not material in nature or
cost.

(d) Disclosure. No representation or warranty by LIU contained in this Agreement
or any written statement furnished to SCHC pursuant hereto, contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statement contained herein true and not misleading.

(e) Reliance. The foregoing representations and warranties have been made by LIU
with the knowledge and expectation that SCHC is placing reliance thereon, and
all such representations and warranties shall survive the Closing for a period
of one (1) year.


                                       3
<PAGE>

3.2 Each of SCHC and LIU represents and warrants respectively to the other as
follows:

(a) Each of SCHC and LIU warrants that has taken all necessary actions for the
execution and performance of this Agreement.

(b) The performance of the transaction contemplated hereunder is not subject to
the consent, approval or order of any governmental authorities or any other
third parties, nor is it subject to any conditions precedent as registration
with, qualification verification by or document delivery to any governmental
authorities or any other third parties.

4. INDEMNIFICATION

4.1 LIU agrees to indemnify, hold harmless and reimburse the Purchaser at all
times after the Closing, against and with respect to:

(a) any damage or deficiency resulting from any misrepresentation, breach of
warranty or non-fulfillment of any covenant or agreement on the part of LIU made
in this Agreement, any other agreement or instrument delivered by LIU at the
Closing;

(b) any damages or claims asserted against the Purchaser on account of any
liability of LIU in connection with his ownership of the Purchased Assets and
the Leased Property ; and

(c) all actions, suits, proceedings, demands, assessments, judgments, costs and
expenses, including reasonable attorneys' fees, incident to the foregoing.

5. MISCELLANEOUS PROVISIONS.

5.1 No Assumption of Liabilities. Except as specifically set forth in this
Agreement, nothing in this Agreement shall be construed to impose upon SCHC the
assumption of any claim against or liability or obligation of LIU, arising out
of his business, or the use, operation or possession of the Purchased Assets,
through the Closing, or thereafter.

5.2 Books and Records. Those books and records reasonably deemed primarily to
relate to the Purchased Assets and maintained separately from the other records
of LIU shall be delivered to and become the property of SCHC.

5.3 Expenses of Negotiation and Transfer. Each party to this Agreement shall pay
its own expenses and other costs incidental to or resulting from this Agreement,
whether or not the transactions contemplated hereby are consummated.

5.4 Entire Agreement. This Agreement, along with the documents and agreements to
be executed in connection herewith, constitutes the full understanding of the
parties, a complete allocation of risks between them and a complete and
exclusive statement of the terms and conditions of their agreement relating to
the subject matter hereof and supersedes any and all prior agreements, whether
written or oral, that may exist between the parties with respect thereto. Except
as otherwise specifically provided in this Agreement, no conditions, usage of
trade, course of dealing or performance, understanding or agreement purporting
to modify, vary, explain or supplement the terms or conditions of this Agreement
shall be binding unless hereafter made in writing and signed by the party to be


                                       4
<PAGE>

bound, and no modification shall be effected by the acknowledgment or acceptance
of documents containing terms or conditions at variance with or in addition to
those listed in this Agreement. No waiver by any party with respect to any
breach or default or of any right or remedy and no course of dealing shall be
deemed to constitute a continuing waiver of any other breach or default or of
any other right or remedy, unless such waiver be expressed in writing signed by
the party to be bound. Failure of a party to exercise any right shall not be
deemed a waiver of such right or rights in the future.

5.5 Binding Effect. All of the covenants, conditions, agreements and
undertakings set forth in this Agreement shall extend to and be binding upon LIU
and SCHC and their respective successors and assigns.

5.6 Assignability. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof nor any of the documents
executed in connection herewith may be assigned by any party without the consent
of the other parties

5.7 Headings. Headings as to the contents of particular Sections are for
convenience only and are in no way to be construed as part of this Agreement or
as a limitation of the scope of the particular Sections to which they refer.

5.8 Exhibits and Schedules. The Exhibits and Schedules (and any appendices
thereto) referred to in this Agreement are and shall be incorporated herein and
made a part hereof.

5.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together will constitute an integral
party of this Agreement.


                                       5
<PAGE>

IN WITNESS HEREOF, SCHC and LIU have caused this Agreement to be executed by
their duly authorized representatives as of the date first hereinabove
mentioned.

SCHC: SHOUGUANG CITY HAOYUAN CHEMICAL COMPANY LIMITED

Signed by: /s/ Ming Yang
           ---------------------------------
Name:      Ming Yang
Position:  CEO


           XINGJI LIU

           /s/ Xingji Liu
           ---------------------------------
                      Xingji Liu


                                       6
<PAGE>

<TABLE>
<CAPTION>
Schedule 1
- ---------------------------------------------------------------------------------------------------------
                              Shouguang City Houxing Area Asset checklist
- ---------------------------------------------------------------------------------------------------------
Check Time              Fixed Asset                         Unit                   Quantity
- ----------------------- ----------------------------------- ---------------------- ----------------------
<S>                     <C>                                 <C>                    <C>
October/23/2007         Office                              405 square meter                          17
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Plant                                                                          1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Garage                                                                         1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Unerwater pump                      3,000 Watt                                23
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Power cable                                                205 meter
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Water container                     4.5 square meter                           1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Generator                           3.5 K watt                                 1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Stove                               2 tons                                     1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         PVC pipe                                                   480 meter
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Vaporizer                           2.5 cubic meter                            3
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Stove Operating Room                30 cubic meter                             1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Shower Room                         17.5 square meter                          1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Sulfur stove                                                                   1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Washing Tower                       4.5 cubic meter                            2
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Precipitation Cylinder              15 cubic meter                             1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Water Pump                          3.5 K watt                                 1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         sulfuric acid container             13 cubic meter                             1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Liquid Chlorine cylinder                                                      25
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         brimstone storage                   21 cubic meter                             3
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Control Room                        21 cubic meter                             1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Laboratory                          21 cubic meter                             1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Blowing Tower                                                                  2
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Receiving Tower                                                                2
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Brine Pool                          6,000 cubic meter                          1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         High Voltage wire set               1,250KVA                                   2
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Bromine well                                                                 432
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Finalized pool                      210 cubic meter                            1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Clean water processing pool         60 cubic meter                             1
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         convey trench                                              8,500 meter
- ----------------------- ----------------------------------- ---------------------- ----------------------

<CAPTION>
                        Raw Material
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Sulfuric Acid                       ton                                    35.21
- ----------------------- ----------------------------------- ---------------------- ----------------------
<S>                     <C>                                 <C>                    <C>
October/23/2007         Brimstone                           ton                                     12.5
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Coal                                ton                                     31.5
- ----------------------- ----------------------------------- ---------------------- ----------------------
October/23/2007         Liquid Chlorine                     ton                                       19
- ----------------------- ----------------------------------- ---------------------- ----------------------

- ----------------------- ----------------------------------- ---------------------- ----------------------
Checker: Min Li                                             Owner:Xingji Liu
- ----------------------- ----------------------------------- ---------------------- ----------------------
</TABLE>


                                       7
<PAGE>

Schedule 2
Leased Property Description

Shouguang City Houxing Area

Area: 2310 Acres

Lease Period: 50 years (11/01/2004-10/31/2054)
Lease Payment: (Annual Rent of $7.55/ Acre, totaled $872,550)
Payment terms: One-time payment paid off by LIU.
Ownership: The properties and mining rights of the lands above and underground
120 meters are belonged to owner.


                                       8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>e602773_ex99-1.txt
<TEXT>

             Gulf Resources Announces Asset Purchase Agreement with
                           Shouguang City Renjia Area

  Expected to initially add 3,700 tons of incremental annual bromine production
   capacity equating to $6.8 million in revenue and $1.8 million in net income

LOS ANGELES and SHENZHEN, China, October 29, 2007 /Xinhua-PRNewswire/ -- Gulf
Resources, Inc. (the "Company") (OTC Bulletin Board: GUFR - News) a leading
producer of Bromine and crude salt in China through its wholly-owned subsidiary
Shuoguang City Haoyuan Chemical Company Limited (SCHC), announced today it
signed a definitive agreement to acquire substantially all of the assets of
Shouguang City Renjia Area, a bromine producer located in close proximity to
SCHC for approximately $6.4 million in total consideration.

The assets include a 50-year mineral rights and land lease covering 2,165 acres
through December, 2054, which has been paid in the full. The property has
200,000 to 250,000 metric tons of proven bromine reserves. Additional assets to
be conveyed with the purchase include the related production facility, wells,
pipelines and other production equipment, in addition to the current buildings
and other assets on the property. The Company executed an asset purchase
agreement with Mr. Jiancai Wang, the sole owner on October 25, 2007.

The facility is currently operating at 65 percent capacity and produces
approximately 3,700 metric tons of bromine annually through 398 wells, which
equates to $6.8 million in revenues and $1.8 million in net income at current
market prices. Gulf Resources anticipates making $4.2 million in facility
upgrades and capital expenditures over a four month period, which are expected
to increase capacity utilization to 85 percent and increase overall bromine
production output to 4,800 metric tons annually. In addition, the Company
estimates the property will yield approximately 25,000 metric tons of annual
crude salt production, equating to $0.33 million in incremental revenue.

"The acquisition of Shouguang City Renjia Area is part of our strategic plan to
utilize our valuable exploitation license to complete targeted bromine asset
purchases which will further complement the Company's business by expanding its
overall reserves and increasing annual production output," stated Ming Yang,
CEO, Gulf Resources, Inc. "We will leverage our strong production capabilities
and distribution platform to create additional economies of scale for future
margin enhancements which will ultimately decrease the payback period."

The asset purchase is subject to various conditions, including applicable
regulatory approvals. Further details on the terms of this transaction can be
found in the Company's 8-K which will be filed with the Securities and Exchange
Commission.

<PAGE>

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 bromine compounds used in industry and
agriculture, and SYCI which manufactures and sells chemical products utilized in
oil & gas field explorations and as papermaking chemical agents. For more
information, please visit http://www.gulfresourcesco.com.

Safe Harbor Statement:

Certain statements in this news release may 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 following: the ability of Gulf
to complete the asset purchase of Shouguang City Renjia Area, the general
economic and business conditions in the PRC, 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 crude salt, changes in technology, 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.

Investor Relations Contact:
Ethan Chuang (714) 858-1147
Ethan@gulfresourcesco.com

Matthew Hayden
HC International, Inc.
(858) 704-5065
Matt.hayden@hcinternatioal.net

Source: Gulf Resources, Inc.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>e602773_ex99-2.txt
<TEXT>

             Gulf Resources Announces Asset Purchase Agreement with
                           Shouguang City Houxing Area

Expected to initially add approximately 3,900 metric tons of incremental annual
   bromine production bringing the Company's total annual production output to
                                   26,700 tons

LOS ANGELES and SHENZHEN, China, October 31, 2007 /Xinhua-PRNewswire/ -- Gulf
Resources, Inc. (the "Company") (OTC Bulletin Board: GUFR - News) a leading
producer of Bromine and crude salt in China through its wholly-owned subsidiary
Shuoguang City Haoyuan Chemical Company Limited (SCHC), announced today it
signed a definitive agreement to acquire substantially all of the assets of
Shouguang City Houxing Area, a bromine producer located in close proximity to
SCHC for approximately $6.7 million in total consideration.

The assets include a 50-year mineral rights and land lease covering 2,310 acres
through Dctober, 2054, which has been paid in the full. The property has 210,000
to 270,000 metric tons of proven bromine reserves. Additional assets to be
conveyed with the purchase include the related production facility, wells,
pipelines and other production equipment, in addition to the current buildings
and other assets on the property. The Company executed an asset purchase
agreement with Mr. Xingji Liu, the sole owner on October 26, 2007.

The facility is currently operating at 67 percent of capacity utilization and
produces approximately 3,900 metric tons of bromine annually through 432 wells,
which equates to $7.2 million in revenues and $1.9 million in net income at
current market prices. Gulf Resources anticipates making $3.1 million in total
capital expenditures, which will take approximately three months to complete
from the time of commencement, and is expected to increase capacity utilization
to 85 percent while increasing overall bromine production output to 4,900 metric
tons annually. In addition, the Company estimates the property will yield
approximately 30,000 metric tons of annual crude salt production, equating to
$0.39 million in incremental revenue.

"The acquisition of Shouguang City Houxing Area is further evidence of our
ability to execute and complete asset purchases at very attractive valuations,"
stated Ming Yang, CEO, Gulf Resources, Inc. With the latest two purchases, the
Company is on track to produce approximately 26,700 metric tons of bromine
during the coming twelve moths, a 40 percent increase from previous levels, with
further room for improvements once upgrades are completed. Additionally, the
Company now controls approximately 1.7 million metric tons of proven reserves, a
significant asset that will enable us to produce profitable operating results
well into the future."

The asset purchase is subject to various conditions, including applicable
regulatory approvals. Further details on the terms of this transaction can be
found in the Company's 8-K which will be filed with the Securities and Exchange
Commission.

<PAGE>

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 bromine compounds used in industry and
agriculture, and SYCI which manufactures and sells chemical products utilized in
oil & gas field explorations and as papermaking chemical agents. For more
information, please visit http://www.gulfresourcesco.com.

Safe Harbor Statement:

Certain statements in this news release may 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 following: the ability of Gulf
to complete the asset purchase of Shouguang City Houxing Area, the general
economic and business conditions in the PRC, 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 crude salt, changes in technology, 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.

Investor Relations Contact:
Ethan Chuang (714) 858-1147
Ethan@gulfresourcesco.com

Matthew Hayden
HC International, Inc.
(858) 704-5065
Matt.hayden@hcinternatioal.net

Source: Gulf Resources, Inc.
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
