Homeland Energy Group Announces Agreement for Sale of Kendal Property and Late Filing of Financial Statements

TORONTO, CANADA -- (Marketwire) -- 03/28/13 -- Homeland Energy Group Ltd. (TSX: HEG) ("Homeland" or the "Company") wishes to announce that it has entered into heads of agreement (the "HOA") with Joe Singh Group of Companies (Pty) Ltd. (the "Purchaser") pursuant to which the Purchaser will acquire a 100% interest in the Kendal Colliery, including the wash plant and all mining rights, through the purchase of all of the issued and outstanding common shares of Ferret Coal (Kendal)(Pty)(Ltd.). The total purchase price for the assets is ZAR235 million (approximately $25.7 million). ZAR110 million of this amount has been advanced. A further ZAR55 million is payable on May 31, 2013 and the balance of ZAR70 million will be paid on receipt of final approvals from applicable regulatory approvals in South Africa. As part of this transaction, African Spirit Trading 307 (Pty) Ltd., Homeland's current BEE partner at Kendal, has agreed to sell its 26% interest in Kendal to Homeland for transfer to the Purchaser in consideration for the forgiveness of all loans owed to Homeland and its subsidiaries and the payment of ZAR8 million by Homeland. The proceeds from the sale of Kendal will be used to repay the balance of the loan from ICICI Bank, to repay all outstanding third party obligations and to provide some working capital during the transition phase. The balance will be used to reduce the outstanding obligations to GMR Energy Group Limited ("GMR") pursuant to loans advanced to the Corporation starting in 2010.

The sale of Kendal is subject to a number of conditions including approval by applicable regulatory authorities in South Africa and by the minority shareholders of Homeland. Shareholder approval must be obtained by June 30, 2013 and will be sought at the upcoming annual meeting of shareholders. The date of the meeting is still being determined. All conditions must be met by August 31, 2013. If the transaction is terminated, all advances against the purchase price will be refunded.

Following numerous operational setbacks over the past two years including flooding in the mine, the significant incidence of dykes and sills in the coal seams, the discovery that the underground workings in the E Block had been mined to a more significant extent than had previously been indicated and the difficulties in retaining a mining contractor on a cost effective basis, management of the Company was of the view that positive cash flow from operations would not be achieved in the short or medium term. Rather than incurring further losses, the decision was made to seek a buyer for the property who could more effectively conduct operations as a result of economies of scale. The Purchaser and its affiliates are already active in the coal mining business in South Africa. Pursuant to the terms of the HOA, the Purchaser has been retained to commence mining operations at Kendal effective April 1, 2013. All costs and liabilities associated with such operations will be on the purchaser's account and the Purchaser will be entitled to all revenue generated from such operations.

As a result of this transaction and the previously announced sale of the Eloff Property, the Company no longer has any operating assets. All employees in South Africa are being terminated effective March 31, 2013.

GMR has been very supportive of the Corporation historically and continues to be so. The Corporation is considering what options are available to it at this time to preserve value for the minority shareholders.

Late Filing of Financial Statements

As a result of the timing of the execution of agreements with respect to both the sale of Kendal and the sale of the Eloff Property, Homeland may not be able to complete its financial statements and accompanying management discussion and analysis and annual information form for the year ended December 31, 2012 (the "Financial Disclosure") which are due to be filed on or before April 1, 2013 pursuant to relevant securities laws. Additional disclosures must be included in the Financial Disclosure which is the cause of the delay.

The Company intends to work diligently to file the Financial Disclosure as soon as possible and it has applied for a Management Cease Trade Order ("MCTO") under National Policy 12-203 (the "Policy") pending the filing of the Financial Disclosure on SEDAR. The Company is confident that the Financial Disclosure will be filed by no later than April 15, 2013. The granting of an MCTO is at the discretion of the Ontario Securities Commission and there can be no guarantee that an MCTO will be granted.

If an MCTO is granted under the Policy, it will be imposed against some or all of the persons who have been directors, officers or insiders of the Company instead of a cease trade order being imposed against all securities of the Company. An MCTO would not generally affect the ability of persons who have not been directors, officers or insiders of the Company to trade the securities of the Company pending the filing of the Financial Disclosure on SEDAR.

If the MCTO is granted, the Company intends to satisfy the provisions of the Alternate Information Guidelines as set out in the Policy for as long as it remains in default, including the issuance of bi-weekly default status reports, each of which will be issued in the form of a press release.

Homeland Energy Group Ltd. (TSX: HEG) is a company seeking out interests in viable coal projects in South Africa and neighbouring countries as well as internationally. Homeland Energy Group Ltd. is currently traded on the Toronto Stock Exchange under the symbol "HEG" with 472,204,149 common shares issued and outstanding. www.homelandenergygroup.com.

Contacts:

Homeland Energy Group Ltd.

Ajay Gupta

Chief Financial Officer

+1 416 506-1979
info@homelandenergygroup.com
www.homelandenergygroup.com