Lincoln MineralsLtd. said April 6 that it signed a memorandum of understanding withthe district council of Tumby Bay over the proposed development of the graphite projectin South Australia's Eyre Peninsula.

The memorandum provides a framework for both parties to worktogether.

Outcomes include an agreement on a proposed water pipeline fromthe Tod Reservoir, upgrading and maintenance of Pillaworta road and intersectionswith Bratten Way and the Lincoln Highway, preparation of a traffic management planfor trucking operations and local commuters, and continuing engagement with thelocal community.

The Department of State Development has extended the governmentassessment process for Kookaburra Gully's mineral lease, and a mining lease offerdetermination should be advised by May.

The company earlier said that it expects a mining lease for the project within the first quarter.

Diamond drilling is underway at the proposed mine site and furtherengineering studies, soil testing, groundwater monitoring and metallurgy will beundertaken this month.