Homeland Energy Provides Update of Status of Nedbank Facility

TORONTO, CANADA -- (Marketwire) -- 06/29/10 -- Homeland Energy Group Ltd. (TSX: HEG) ('Homeland' or the 'Company') is required to make a loan repayment to Nedbank on June 30, 2010, as previously disclosed, and as per the terms of its credit facility with NedBank (the 'Nedbank Facility'). This payment is approximately ZAR12,000,000, or approximately CAD$1,650,000 (the 'June 30 payment'). The Company is not in a position to make this payment out of current cash flow. Cashflow generated during Q2 has been adversely affected by a three week railway strike (see press release dated June 15, 2010). Kendal sells a major part of its coal on a FOR (free on rail) basis.

Consequently, the Company's largest shareholder, GMR Energy Ltd. ('GMR') has agreed to advance the necessary funds to ensure the Company meets its June 30 obligation with Nedbank. In addition to the June 30 payment, GMR has agreed to provide any additional comfort that is required to ensure that Homeland meets its obligations under the Nedbank Facility. Funds provided by GMR will be secured with the same assets currently supporting the existing advances from GMR and its affiliates and will bear interest at the same rate. The term of this loan will be three months. GMR and its affiliates are currently owed approximately CAD$8,000,000. This amount will be repaid from the rights offering announced June 2, 2010 (the 'Rights Offering'). However, following the closing of the Rights Offering, GMR will continue to be a secured creditor of the Company with respect to the June 30 payment and any additional advances.

To reduce liquidity and market risk and to address the continued difficulties the Company has faced with respect to the NedBank Facility, the Company, along with support from GMR, is actively pursuing the potential to refinance the loan with Nedbank and improve the Company's capital structure. The loan provided by GMR is to be repaid in full once this refinancing is completed, which is anticipated in Q3 2010.

Under the rules of the Toronto Stock Exchange and applicable securities laws, the Company is not permitted to extend the expiry date of the rights granted pursuant to the final prospectus (the 'Final Prospectus') (see press release dated June 2, 2010) without seeking exemptive relief, the outcome of which is uncertain. Consequently, the Company is advising shareholders that if they wish to exercise their rights they must do so by 5:00pm Toronto time on June 30, 2010. The Company will provide a further update as soon as possible.

The loan from GMR described herein is exempt from the valuation requirements of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ('MI 61-101') by virtue of the exemption contained in section 5.5(c) as it involves the issuance of securities for cash. The loan is also exempt from the minority shareholder approval requirements by virtue of the exemption contained in section 5.7(f) as the loan will be made on reasonable commercial terms.

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 will continue to seek out interests in additional coal projects in South Africa and neighbouring countries as well as internationally. Homeland is a shareholder in Homeland Uranium Inc., a Canadian uranium exploration company focused on projects in Niger and the United States. Homeland Energy Group Ltd. is currently traded on the Toronto Stock Exchange under the symbol 'HEG' with 302,115,756 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.'

Contacts:

Homeland Energy Group Ltd.

Jeff Lowe

Acting Chief Financial Officer

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