GMR

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."

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