Homeland Energy Group Ltd. (TSX: HEG) ('Homeland' or 'the Company'), is pleased to announce the first formal contracts for the sale of approximately 500,000 tonnes of thermal coal from its Kendal Mine near Witbank, South Africa. Customers will take delivery between October 1, 2008 and September 30, 2009. The prices for these contracts are in excess of 700 Rand per metric tonne (US$88/tonne at current exchange rates). The current contracts, which are open to discussion for renewal in 12 months' time, are with domestic industrial users of thermal coal.

"Satisfaction of domestic demand at attractive prices positions Homeland to be a supplier of choice for quality coal in South Africa," commented Stephen Coates, President and CEO. "The quality of coal coming from Kendal has exceeded our expectations thus far and this is reflected in the pricing and the significant demand we experience."

Kendal began production in July 2008 and is currently ramping up to its projected run-of-mine production rate of 1.8 million tonnes per year. At this rate, the company anticipates approximately 850,000 tonnes of quality, washed product (such as that announced today) with the balance reflected in waste rock and raw coal sales per year.

Please go to www.homelandenergygroup.com for photos of the Kendal Colliery and its recent production.

Kendal Mine Grand Opening

Homeland Energy Group Ltd and Homeland Mining & Energy, SA will be holding a grand opening ceremony for the Kendal Colliery on Wednesday October 1, 2008. The gathering will include Government and local officials, employees, contractors, business partners and members of the local communities. The South Africa's Minister of Minerals and Energy, Her Excellency, Hon. Bulyewa Sonjica has accepted Homeland's invitation to address the gathering. The company will post photos and a copy of any speeches on the corporate website following the event.

Homeland Energy Group Ltd. (TSX: HEG) is a coal producer with operations 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 is currently negotiating to acquire interests in a number of additional coal properties in eastern South Africa and neighbouring countries as well as in the United States. Homeland is a significant shareholder in Homeland Uranium Inc., a Canadian uranium exploration and development focused on projects in Niger and the United States. Homeland also has an aggressive global acquisition strategy with a focus on energy resources.

Homeland Energy Group Ltd. is currently traded on the Toronto Stock Exchange under the symbol "HEG" with 150,079,642 common shares issued and outstanding. www.homelandenergygroup.com.

Forward-looking Statement

"This Press Release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to such risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such actual results of current exploration programs, the general risks associated with the mining industry, the price of gold and other metals, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements. Shareholders are cautioned not to put undue reliance on such forward-looking statements."

Contacts:
Homeland Energy Group Ltd.
Naomi Nemeth
Vice President, Investor Relations
(416) 506-1979
Email: [email protected]

Homeland Energy Group Ltd.
Stephen Coates
President and Chief Executive Officer
+44 207 399 4390
Email: [email protected]
Website: www.homelandenergygroup.com

SOURCE: Homeland Energy Group Ltd.

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