Homeland Energy Group Announces Sale of Eloff Property

Homeland Energy Group Announces Sale of Eloff Property 
TORONTO, CANADA -- (Marketwire) -- 03/26/13 -- Homeland Energy Group
Ltd. (TSX:HEG) ("Homeland" or the "Company") wishes to announce that
it has entered into an agreement dated March 25, 2013 to dispose of
its 50% interest in the Eloff Property, through the sale of shares of
Tshedza Mining Resource (Pty) Ltd., in consideration for the payment
of ZAR110 million (approximately $12 million). The purchaser of
Homeland's interest in the Eloff Property is the Company's current
BEE partner, which already holds a 50% interest in the property. An
initial payment of ZAR70 million has been made with the balance being
paid upon receipt of the required regulatory approvals in South
Africa. The transaction has been approved by the board of directors
of the Company. Funds will be used to reduce the principal amount of
the bank loan to ICICI Bank and for general working capital. 
The decision was made by Homeland to divest itself of the Eloff
Property following the completion of a feasibility study that
indicated that the quality of the coal at Eloff would result in it
only being saleable to ESKOM or for export to India. The logistics
infrastructure difficulties and evacuation costs would make the
export of this coal to be uneconomical. The risks associated with the
substantial capital cost of commencing production at Eloff were
considered to be too high given the limited upside of the project.  
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 Energy
Group Ltd. is currently traded on the Toronto Stock Exchange under
the symbol "HEG" with 472,204,149 common shares issued and
outstanding. www.homelandenergygroup.com.
Homeland Energy Group Ltd.
Ajay Gupta
Chief Financial Officer
+1 416 506-1979
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