World Mining Exploration News

Homeland Energy Withdraws Proposed Private Placement of Convertible Senior Unsecured Debentures

Homeland Energy Group Ltd. (TSX:HEG) is withdrawing its proposed private placement offering of convertible senior unsecured debentures (the “Offering”) as announced in its press release dated September 3, 2008. While there was substantial interest in the Offering, the Company was not satisfied with the terms and pricing given current market conditions. This decision was made in consultation with the Company’s agents.

As discussed in the Company’s investor conference on August 28, 2008, the Company has been presented with numerous debt options and has recently received detailed term sheets. The Company is pleased to be able to move forward in finalizing the financing under one of these alternatives.

“As I stated on our recent conference call, we have no intention of diluting at current stock prices. We believe that the Company’s debt alternatives for the Appolo acquisition are more attractive,” said Stephen Coates, President and CEO. “The Appolo and Kendal mines are excellent projects and are expected to generate significant positive cash flow over the coming years.”

The Company continues to be unconcerned with its ability to finance the Appolo acquisition announced on August 27, 2008 given the strength of the assets being acquired.

Homeland Energy Group Ltd. is a producing coal company, traded on the Toronto Stock Exchange under the symbol “HEG”. The company is focused on energy exploration and development in Southern Africa. Homeland owns two producing operations in South Africa - the Kendal Mine near Witbank, and the Northfield site reclamation project near Dundee; an advanced development stage coal project in South Africa (Eloff Coal Mining Project) as well as a number of early-stage exploration properties in the provinces of Mpumalanga and Kwa-Zulu Natal. Total South African production for 2009 is forecast to be 2.1-million tonnes from Kendal and Northfield.

The Company is currently negotiating to acquire interests in a number of additional coal properties in eastern South Africa and neighbouring countries. Homeland is a significant shareholder in Homeland Uranium Inc., a Canadian uranium exploration and development company focused on projects in Niger and the United States, and has several other global strategic investments. Homeland Energy Group Ltd. began trading on the Toronto Stock Exchange on March 5, 2008 and has 150,079,642 common shares issued and outstanding.

Forward-looking Statement

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, 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.

The mineral resource figures for the Appolo project disclosed in this press release are estimates and no assurances can be given that the quality of resource will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that the resource estimates disclosed in this press release are well established, by their nature resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that mineral resources can be upgraded to mineral reserves through continued exploration. The Company is not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing or other issue that may materially affect these estimates of mineral resources.