Homeland Energy Group Ltd.

Homeland Energy Group Ltd.

October 13, 2010 16:03 ET

Corporate Update

TORONTO, CANADA--(Marketwire - Oct. 13, 2010) - Homeland Energy Group Limited (TSX:HEG) ("Homeland Energy" or the "Company") is pleased to announce that the credit facility with Nedbank Limited has been repaid in full and closed using proceeds from the US$29 Million debt financing provided by GMR Energy Limited (see press release dated September 27, 2010).

Homeland Energy plans to utilize a portion of the financing for immediate capital requirements to advance the development of the Kendal Colliery. The plans call for a box cut excavation of soft material in "Block E" to create sufficient working face for planned production of 150,000 tonnes run-of-mine coal per month. Further, a construction of a new run-of-mine ("ROM") tip at the Kendal operation is planned on the northern boundary of "Block D" to feed the crushing system which delivers the coal onto the Phase-II of the Overland Conveyor System. Homeland Energy plans to provide for the delivery of this coal onto a stockpile situated at the existing processing plant.

Mr. Ashis Basu, Homeland Energy's Chief Executive Officer, stated "These are exciting times for Homeland Energy". The new financing is expected to provide the financial backing to proceed with the development of the Kendal Project by expanding "Block D" and to prepare for coal production in "Block E."

On a corporate level, Mr. Jeffrey Lowe has stepped down as a director of Homeland Energy Group Ltd. and its subsidiaries, as of September 30, 2010. The Board of Directors thanked Mr. Lowe for his services to the Company.

About Homeland Energy Group Ltd.

Homeland Energy Group Ltd. is a coal producer with operations in the Witbank area of South Africa. The company also has a large-scale development property in South Africa and exploration interests in Southern Africa. Homeland Energy will continue to seek out interests in additional coal projects in South Africa and neighbouring countries as well as internationally. Homeland Energy is a shareholder in Homeland Uranium Inc., a Canadian uranium exploration company focused on projects in Niger and the United States. Homeland Energy is currently traded on the Toronto Stock Exchange under the symbol "HEG" and has 471,204,149 common shares issued and outstanding. To learn more about Homeland Energy, please visit our website at www.homelandenergygroup.com.

Forward-Looking Statements

This press release contains or refers to forward-looking information, and it may include statements regarding the estimation of mineral resources, exploration results, potential mineralization, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to convert estimated mineral resources to reserves, the grade and recovery of ore which is mined varying from estimates at the Kendal Colliery, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry, and to the risk factors set forth in the Annual Information Form of Homeland Energy dated May 14, 2010 and filed on SEDAR. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward looking statements. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or revise them to reflect new events or circumstances other than as required by law.

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