Homeland Energy Group Ltd.
TSX : HEG

Homeland Energy Group Ltd.

May 25, 2009 08:30 ET

Homeland Energy Group Receives Mining Licence for Eloff Coal Project, South Africa

- Anticipated production of up to 500,000 tonnes per month for a +30-year mine life - Discussions continue for Eloff mine-mouth power generation facility

TORONTO, ONTARIO--(Marketwire - May 25, 2009) - Homeland Energy Group Ltd. (TSX:HEG) ('Homeland' or 'the Company') is pleased to announce that it has received formal notification from the South Africa Department of Mining & Energy (DME) that a Mining Right has been approved for Homeland's Eloff Mineral Project (Eloff). At a potential 500,000 tonnes per month run-of-mine (ROM) - the amount for which Eloff will be initially licenced - Homeland will join the ranks of major miners in South Africa.

"Receiving the mining right for Eloff is the second significant milestone for Homeland's management and technical teams in the past year, and we are extremely proud to have achieved it," commented Stephen Coates, CEO. "With the award of the Eloff mining licence, we continue the momentum we began aggressively with the Kendal Mining Right in March 2008."

Homeland is currently in the final stages of completing pre-feasibility work on Eloff through Exxaro Engineers of South Africa. Bankable feasibility work will commence thereafter. As the feasibility studies progress, the Company will continue discussions with potential partners on the options for power development on the back of the Eloff Mining Right. The focus in South Africa on Independent Power Producers (IPP) is increasing as the country's demand for electricity increases. Homeland's largest shareholder, GMR Energy Limited, has the experience and the energy and infrastructure expertise required to make significant contributions to success of Eloff.

Table 1 - Estimated Mineral Resource Summary for Eloff Mineral Project



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Category Tonnage (tonnes)
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Measured 151.1 million
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Indicated 99.2 million
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Measured & Indicated Total 250.3 million
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Inferred 210.5 million
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Homeland expects that the majority of the resource in the Inferred category will move into Measured and Indicated categories upon completion of the resource definition drill program currently in progress.

The Eloff Project is located at the western extremity of the Witbank Coalfield approximately 10km to the south of the town of Delmas in Mpumalanga province, South Africa. The Company submitted the mining licence application in January 2008 and is grateful to the DME for their efficiency in processing this application and to our strategic partners for their input and assistance. Homeland currently owns 50% of the Eloff Project, with 50% owned by Homeland's Black Economic Empowerment (BEE) partner.

The Qualified Person with overall responsibility for the reporting of the Internal Geological Report on the Eloff Project Mineral Development, Exploration and Resources is Graham Barry Gemmell, Pr.Sci.Nat.MGSS. Mr. Gemmell is a senior geologist employed by Homeland Mining and Energy, South Africa and is an exploration and mining geologist with over 13 years experience in the coal exploration and mining industry and has been responsible for the reporting of Mineral Resources on various coal properties in South Africa.

Homeland Energy Group Ltd. (TSX:HEG) 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 continues to seek out interests in additional coal projects in South Africa and neighbouring countries as well as internationally. Homeland is a significant shareholder in Homeland Uranium Inc., a Canadian uranium exploration company focused on projects in Niger and the United States. Homeland also has an aggressive global acquisition strategy with a focus on energy resources. Homeland Energy Group Ltd. is currently traded on the Toronto Stock Exchange under the symbol "HEG" with 274,650,688 common shares issued and outstanding. www.homelandenergygroup.com.

Forward-Looking Statements

"This press release contains or refers to forward-looking information, including 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. 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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