Homeland Energy Completes $29 Million Debt Financing

TORONTO, CANADA -- (Marketwire) -- 09/27/10 -- Homeland Energy Group Limited (TSX: HEG) ('Homeland Energy') is pleased to announce that it has completed a debt financing of US$29 Million provided by GMR Energy. The proceeds of the loan will be used by Homeland Energy to repay the outstanding loan owed to Nedbank Limited by its South African subsidiary, Ferret Coal (Proprietary) Ltd ('Ferret Coal'), for immediate capital and working capital requirements of Homeland and its subsidiaries. The loan from GMR is for an initial term of one year and extendable by another 2 years, subject to TSX approval. The loan bears interest at the rate of LIBOR plus 4.5% per annum, calculated monthly and payable quarterly during the term of the loan. The principal is repayable at the end of the initial term, provided that if the term is extended, then the entirety of the principal will be repayable at the end of the 3rd year. Homeland Energy retains the flexibility to refinance the loan and prepay GMR Energy at any time without any prepayment penalty.

Homeland Energy has agreed to grant security to GMR for the debt including a charge over certain real and personal property of Ferret Coal including security over the Kendal mine, process facilities and infrastructure, subject to exchange control approvals in South Africa.

The terms of the loan provided by GMR Energy were reviewed by the Committee of Independent Directors of Homeland Energy appointed for this purpose, in comparison to the terms of loans offered by other institutional lenders. The Committee concluded that the terms of the loan from GMR Energy were the most favourable to Homeland Energy and that they would lower the cost of borrowing funds in comparison to the terms of other institutional lenders and existing Nedbank loan facility.

'The completion of loan transaction was very critical for Homeland Energy, to ease the financial stress on its operating mines and to advance and develop its mining projects in South Africa', stated Mr Ajay Gupta, Homeland's Chief Financial Officer.

The terms of the loan from GMR Energy were reviewed and approved by the committee of independent directors of Homeland as well as Homeland's board of directors. The loan from GMR Energy described above is exempt from valuation and minority approval requirements set forth in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ('MI 61-101').

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 471,204,149 common shares issued and outstanding. www.homelandenergygroup.com.

Please visit www.homelandenergygroup.com

Contacts:

Homeland Energy Group Ltd.

Ajay Gupta

Chief Financial Officer

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