DRC-2010-002263 - 0901a0688016fa37

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March 3, 2010
VIA PDF AND FEDERAL EXPRESS
Dane L. Finerfrock, Co-Executive Secretary
Utah Water Quality Board
Utah Department of Environmental Quality
168 North 1950 West
P.O. Box 144810
SaU Lake City, UT 84114-4810
Dear Mr. Finerfrock:
Denison Mines (USA) Corp.
105017th Street, Suite 950
Denver, CO 80265
USA
Tel: [phone]
Fax:[phone]
www.denisonmines.com
Re: State of Utah Ground Water Discharge Permit No. UGW370004 White Mesa
Uranium Mill - Notice Pursuant to Part I.G.3 ofthe Permit and UAC R317-6-6.16(C)
Please take notice pursuant to Part I.G.3 of the White Mesa Mill's (the "Mill's") State of Utah
Groundwater Discharge Permit No. UGW370004 (the "Permit") and Utah Administrative Code
("UAC") R313-6-6.16(C) that Denison Mines (USA) Corp., as operator ofthe Mill and holder of
the Permit, failed to meet the discharge minimization technology ("DMT") standards in Part
I.D.2 of the Permit, by allowing the wastewater elevation in the Mill's tailings Cell 3 to exceed
the freeboard limit for that Cell by approximately 8.5 inches, as described in more detail below. •
This exceedance was discovered at 2:45pm on Friday Febmary 26, 2010. Initial notice of this
failure to maintain DMT was given by telephone to the Utah Department of Environmental
Quality ("UDEQ") Duty Officer at 8:30am on Saturday Febmary 27, 2010 at 801-536-4123
(within 24 hours of the discovery).
1. Facts and Background Information
a) Condition 10.3 of the Mill's State of Utah Radioactive Materials License No.
UTI900479 (the "License") provides that freeboard limits for Cells 1 and 3 shall be set
in accordance with procedures that have been approved by the U.S. Nuclear Regulatory
Commission ("NRC"). Under those procedures:
(i) The freeboard limits are set as per the January 10, 1990 Drainage Report for Cell
1 at a liquid maximum elevation of 5,615.4 feet above mean sea level ("fmsl");
(ii) The freeboard limit for Cell 3 is determined annually using a formula set out in
the procedure. The current freeboard limit for Cell 3 was previously calculated
under this procedure at 5,601.6 fmsl. However, in UDEQ correspondence dated
November 20, 2008 an interim variance and limit was established at 5,602.5 fmsl
for Cell 3;
(iii) In conjunction with the variance established under (ii) above, an interim
maximum elevation for Cell 4A was also established at 5,593.74 fmsl;
(iv) The maximum elevation of 5,593.74 fmsl for Cell 4A has been set assuming that
the total probable maximum precipitation ("PMP") volume for Cells 2, 3 and 4A
will be accommodated in Cell 4A. By letter dated December 11, 2008, Denison
applied for an amendment to the License to set the freeboard limit for Cell 4A at
5,593.74 fmsl and to eliminate the need to set a freeboard limit for Cell 3, given
that the freeboard limit of 5,593.74 fmsl for Cell 4A is adequate to accommodate
the total PMP volume for Cells 2, 3 and 4A;
(v) The spillway between Cell 3 and Cell 4A is in-place and will safely pass any
excess solutions from Cell 3 to Cell 4A due to precipitation events; and
(vi) In addition. Part I.D.2 of the Permit provides that under no circumstances shall the
freeboard of any tailings cell be less than three feet, as measured from the top of
the flexible membrane liner ("FML"). The top of the FML in Cell 1 is at 5,618.5
fmsl, and the top of the FML in Cell 3 is at 5,608.5 fmsl. This means that Part
I.D.2 of the Permit provides a secondary requirement that the maximum
wastewater pool elevations in Cells 1 and 3 can not exceed 5,615.5 and 5,605.5
fmsl, respectively.
b) During the weekly tailings inspection performed at approximately 2:30pm on Febmary
26, 2010, Cell 3 was observed visually to be high in elevation compared to the previous
week. When the elevation survey was performed at 2:45pm on Febmary 26, 2010, this
observation was confirmed. The survey was repeated to verify the results of the first
survey. The verified survey results indicated a wastewater pool elevation of 5,603.21
fmsl, compared to the current freeboard limit for Cell 3 of 5,602.5 fmsl, representing
an exceedance of 0.71 feet, or 8.52 inches.
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c) It should be noted that the current freeboard limit in Cell 3 of 5,602.5 fmsl is 6 feet
below the top of the FML in Cell 3, so the exceedance of the current freeboard limil by
8.52 inches resulted in a wastewater pool elevation that was still more than five feet
below the top of the FML and more than two feet below the secondary freeboard limit
of 5,605.5 feet set out in Part I.D.2 of the Permit. As a result, there was no risk of the
wastewater in Cell 3 overflowing over the top of the Cell 3 FML. Also, as mentioned
above, since the freeboard limit in Cell 4A has been set to accommodate the PMP
event for Cells 2, 3 and 4A, there was also no risk that even if a PMP event were to
occur there would not have been adequate freeboard available in Cell 4A. The
wastewater elevation survey for Cell 4A performed on February 26, 2010 indicated a
wastewater elevation of 5,584.96 fmsl, well below the freeboard limit of 5,593.74 fmsl
for that Cell.
d) No tailings solutions or solids were being disposed of in Cells 1 or 3 at the time. All
Mill tailings solutions and solids had been disposed of directly into Cell 4A for several
months before this incident.
2. Action Taken
Upon receipt of the initial survey results, the Mill's Environmental Coordinator notified the Mill
Manager at 2:50pm that day. The following plan of action was immediately put into place in
accordance with section 5.1 ofthe Mill's Contingency Plan:
a) The Mill Manager contacted the Mill's maintenance department and had all solutions
that were being discharged into Cell 3 diverted to Cell 4A or stopped altogether;
b) The Cell 3 transfer pump was then checked to ensure that it was discharging Cell 3
solutions into Cell 4A to draw the solution elevation in Cell 3 back down below the
freeboard limit;
c) The motor on the Cell 3 transfer pump was found to be mnning, but the pump was not
pumping. The Mill's maintenance department fixed the pump and it resumed
pumping;
d) This plan was implemented by 3:20pm on Friday Febmary 26, 2010;
e) Verbal notification was given to the Executive Secretary at 8:30am on Febmary 27,
2010, within 24 hours of discovery. This verbal notification was followed by this
written notification within five days of discovery;
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f) Due to inflow of snowmeh directly into Cell 3, the pump from Cell 3 to Cell 4A has
been stmggling to keep up. Water levels have gone down somewhat in Cell 3, but are
not yet at or below the freeboard limit in that Cell; and
g) Mill staff replaced the existing pump in Cell 3 on March 3, 2010, to increase the flow
rate of solutions from Cell 3 to Cell 4A.
3. Root Cause
The root cause analysis is as follows
a) The Mill area has had unusually high levels of snowfall recently. This has resulted in
water from snowmelt directly entering each of Cell 1 and Cell 3;
b) In an effort to manage the influx of water into the Mill's tailings system from
snowmelt, the Mill had been pumping solutions from Cell 1 into Cell 3 and from Cell 3
into Cell 4A;
c) The survey performed on the wastewater elevation in Cell 3 during the previous week
showed the water level in Cell 3 to be more than 13 inches below the freeboard limit,
so there was no concem that the solution level in Cell 3 were close to the freeboard
limit;
d) The remaining pond area in Cell 3 is small, approximately 7 to 10 acres; and
e) Upon review of the circumstances, after the discovery of the exceedance. Mill staff
determined that the transfer pump from Cell 3 into Cell 4A was not operating at full
capacity, and that the transfer pump from Cell 1 to Cell 3 was operating at a
sufficiently higher capacity than the transfer pump from Cell 3 to Cell 4A. This alone
would likely not have caused the levels in Cell 3 to exceed the freeboard limit before
the problem could have been identified. However, the addition of water from
snowmelt directly into Cell 3 was enough to cause a relatively rapid increase in the
solution level in Cell 3, particularly given that the remaining pool area in Cell 3 is
small. These factors all taken together resulted in the rapid increase in the wastewater
elevation in Cell 3 and the exceedance of the freeboard limit in that Cell.
4. Actions That Will be Taken to Prevent a Reoccurrence of this Incident
The following actions will be taken to prevent a reoccurrence of this incident:
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a) The Mill will no longer pump any solutions from Cell 1 into Cell 3 and then from Cell
3 into Cell 4A. Rather, if it is necessary to move solutions from Cell 1 to Cell 4A, the
solutions will be pumped directly from Cell 1 to Cell 4A; and
b) UDEQ is asked to complete its review of Denison's request for License and Permit
amendments to eliminate the freeboard limit in Cell 3, given the ample freeboard limit
set in Cell 4A. In order to accelerate the timing on closure of Cell 3, the Mill plans to
fill up the remaining capacity in Cell 3 with tailings solids beginning with the start of
conventional ore processing this month, and it is extremely difficult to manage the
freeboard in Cell 3 given the small size of the pond in that Cell. This will get
increasingly more difficult as Cell 3 reaches tailings capacity.
5. Affirmative Defense
Denison believes that the affirmative defense in Part I.G.3.c) of the Permit should be applicable
to this incident, for the following reasons:
a) Notification
By virtue of the initial oral notification given to the UDEQ Duty Officer at 8:30am on
Saturday Febmary 27, 2010 (within 24 hours of the discovery) and this written notice,
Denison has submitted notification according to UAC R317-6-6.13.
b) Failure was not Intentional or Caused by the Permittee's Negligence
The exceedance of the freeboard limit was not intentional or caused by Denison's
negligence, either in action or in failure to act. The freeboard limit in the tailings cells
is intended to handle major precipitation events such as the recent heavy snowfall at the
Mill site and the resultant snowmelt. The Mill was taking actions to manage the
freeboard requirements of all of its active tailings cells as a result of the snowmelt.
Based on a survey of the wastewater elevation in Cell 3 taken the previous week, it
appeared that there was ample freeboard in Cell 3, and, based on past Mill experience it
was not unreasonable for Mill staff to come to that conclusion. The fact that the water
level in Cell 3 increased at an unexpectedly fast rate was due in large part to the inflow
of water from snowmelt directly into Cell 3. This was contributed to by a poorly
operating pump from Cell 3 to Cell 4A. These two factors combined to result in a rapid
increase in the solution level in Cell 3 due to the limited amount of pond area in Cell 3.
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c) The Permittee has Taken Adequate Measures to Meet Permit Conditions
Denison has taken adequate measures to meet Permit conditions in a timely manner.
The provisions of the Mill's Contingency Plan were implemented immediately, and the
wastewater levels are currently being brought back to within the freeboard limits.
Future re-occurrences of this incident will be avoided by pumping solutions directly
from Cell 1 to Cell 4A rather than from Cell I to Cell 3 and then from Cell 3 to Cell
4A.
d) The Provisions of UCA 19-5-107 Have Not Been Violated
The provisions of Utah Code 19-5-107 have not been violated. There has been no
discharge of a pollutant into waters of the state. Denison has not caused pollution
which constitutes a menace to public health and welfare, or is harmful to wildlife, fish
or aquatic life, or impairs domestic, agricultural, industrial, recreational, or other
beneficial uses of water, nor has Denison placed or caused to be placed any waste in a
location where there is probable cause to believe it will cause pollution.
There was no discharge of solutions from the Mill's tailings impoundments, and there
was ample freeboard in Cell 4A to accommodate the PMP for Cells 2, 3 and 4A.
Please contact the undersigned if you have any questions or require any further information.
Yours tmly.
ravid C. Frydenlund
Vice President, Regulatory Affairs and Counsel
cc: Ron F. Hochstein
Harold R. Roberts
Jo Ann Tischler
David E. Turk
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