Homeland Energy and GMR Extend Share Delivery Date to Finalize Alternative Transaction

Homeland Energy Group Ltd. announces that GMR Energy Limited, of Bangalore India, and Homeland Energy have agreed to a further extension of the completion date by which Homeland Energy Corp. must complete the repurchase of the shares of the Company’s South African operations from GMR.

The extension to February 7, 2009 is expected to allow the Company to finalize an alternative commercial solution with GMR or another party. Any alternative arrangement, if agreed, will be to the economic and commercial benefit of Homeland. Homeland continues to maintain the right to repurchase the 10% holding of its South African operations with the issuance of 75,792,027 shares, at C$0.455175 per share.

The original date of delivery was January 5, 2009 under the terms of the Share Purchase Agreement between Homeland Energy Corp., Homeland Mining & Energy SA (Pty) Limited and GMR Energy Limited. This date was extended to January 20, 2009 (see Homeland Energy’s press release dated January 6, 2009) and is now being extended further to February 7, 2009. If delivered, GMR will own 33.5% of the issued and outstanding shares of Homeland Energy Group Ltd.

Short-Term Loan to Homeland by Homeland Uranium Inc.

Homeland has received a cash loan from Homeland Uranium Inc. in the amount of C$2.5 million, at an interest rate of 10% for a term of one year, to cover the Company’s short-term cash obligations. Pledged against this loan are 22,250,000 shares of Homeland Uranium owned by Homeland Energy. Homeland Energy will issue 250,000 common shares priced at $0.20 per share to Homeland Uranium as a placement fee in respect of this transaction. The loan was approved by the independent directors of both companies.

As Homeland Energy owns approximately 39% of the issued and outstanding capital of Homeland Uranium, this transaction is a related party transaction within the meaning of Multilateral Instrument 61-101 (“MI 61-101″). The transaction is exempt from the valuation and minority shareholder approval requirements of MI 61-101 pursuant to the exemptions contained in sections 5.5(a) and 5.7(a) of MI 61-101 in that the fair market value of the transaction does not exceed 25% of Homeland Energy’s market capitalization.

Kendal Colliery Operating Cash Flow Positive

Homeland Mining & Energy SA, the Company’s South African operating subsidiary, continues the ramp up of production and coal sales at the Kendal Colliery. Kendal Colliery has been generating revenue for the past six months. As part of the commissioning process all cash generated in South Africa must remain in South Africa under the obligations of the Nedbank operating loan, which security provisions are typical of this sort of facility. Once the Kendal Colliery meets commercial production status, a complete update of the operation and outlook will be provided. Current cash holdings for the group, including holdings in South Africa, are approximately $7 million.