Homeland Energy Purchase of Appolo Fuels to Add 114 Million Tons Measured & Indicated Coal to Homeland’s Global Resource
TORONTO, ONTARIO–(Marketwire – Aug. 27, 2008) – Homeland Energy Group Ltd. (TSX:HEG) (‘Homeland’ or the ‘Company’) is pleased to report the receipt of initial results of a mineral resource study relating to Homeland’s recently announced acquisition of Appolo Fuels, Inc. (Appolo) (see Homeland Energy press release August 27, 2008). The resource estimation is being performed by Norwest Corporation’s (Norwest) Charleston, West Virginia office in compliance with Canada’s National Instrument 43-101, Standards of Disclosure for Mineral Projects. Norwest is an internationally- recognized leader in providing consulting expertise to the energy, mining, and natural resources industries.
Norwest reports that, as of August 21, 2008, Appolo’s properties host an in situ Measured & Indicated resource of 114.3 million short tons (Mt) of High Volatile A Bituminous coal, located on approximately 33,000 acres of leased coal property in Bell County, Kentucky and Claiborne County, Tennessee. Norwest identified an additional 17.7Mt that met the criteria of Inferred resource. The table below summarizes these resource estimates. ————————————————————– ________________Appolo Fuels, Inc. Resource Summary ————————————————————– ________________Coal Resources (Million Short Tons) ————————————————————– ____________________ Measured________Indicated________Inferred ————————————————————– Surface__________________26.1____________ 14.3____________ 5.4 ————————————————————– Underground______________55.2____________ 18.7____________12.3 ————————————————————– Total____________________81.3____________ 33.0____________17.7 ————————————————————– Combined Total__________________114.3____________________ 17.7 ————————————————————– Note: Multiply short tons by 0.9072 for equivalent metric tonnes.
In developing the estimate of coal resources, Norwest utilized drill hole (465 holes) and mine map information provided by Appolo, field verification of mining operations, and quality data from Appolo coal deliveries and shipments supported by the Kentucky Geological Survey database. The estimates listed above represent in- place geologic resources and do not necessarily reflect resources which may be technically and economically recoverable. Further mining and economic studies are required to determine the extent to which any of this resource is commercially viable.
Mr. Kevin Whipkey, P.E., a professional mining engineer employed by Norwest, is the “Qualified Person” as defined under National Instrument 43-101 for purposes of resource verification and estimation for this property. Mr. Warren Evenson, P. Geol., a senior geologist with Norwest is also listed as “Qualified Person”. Both Mr. Whipkey and Mr. Evenson have reviewed and verified the technical content of this press release.
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 – the Kendal Mine near Witbank, South Africa and the Northfield site reclamation project near Dundee, South Africa; 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.
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