SIOUX FALLS, S.D. - A proposal to convert the abandoned Homestake Gold Mine in Lead into a national underground laboratory moved forward Thursday when it received a $500,000 grant to develop a conceptual design.

The National Science Foundation also awarded a $500,000 grant for a design from the Henderson Mine in Colorado.

Homestake and Henderson are the only two of eight lab proposals to the NSF that received grants for further study.

Gov. Mike Rounds said it is good news for the state, but comes with some qualifications.

"First, the National Science Foundation continues to say -IF- we build a Deep Underground Science and Engineering Laboratory," Rounds said in an interview.

"Second, we're still in competition. We truly believe we are the appropriate place for the underground lab, but until such time as a decision to build is announced and until we are announced as the primary site location we just have to redouble our efforts and work that much harder so that it becomes a reality."

Homestake, which closed in late 2000, has hundreds of miles of tunnels and shafts down to 8,000 feet. The depth is important because the rock protects experiments from cosmic radiation.

Rounds said scientists will work with the South Dakota Science and Technology Authority on a design. The Authority was formed in early 2004 after the state Legislature passed bills designed to help turn the mine into a lab.

"We'll be the landlord, but we want to make it clear we'll build a facility that works for the scientists. In order to do that we need their input into setting it up correctly for their needs," Rounds said.

The governor said Homestake remains in contention for several reasons: cooperation between the state and the mine owners on a use agreement, it's depth and quality of rock, and a strong commitment from the state and science community.

The final lab site will have to be approved by the National Science Board, Congress and the president.

"Establishing the National Underground Lab at Homestake has the potential to inject the region with opportunities for scientific exploration, education, economic development and tourism," said Sen. Tim Johnson, D-S.D.

Rep. Stephanie Herseth, D-S.D., said the grant shows that the National Science Foundation is serious about building the lab and considers Homestake "an excellent candidate site."