DRC-2011-006069 - 0901a06880237a02

MINES
Denison Mines (USA) Corp.
1050 17th Street, Suite 950
Denver, CO 80265
USA
Tel: [phone]
Fax: [phone]
wyvw.denisohmines.com
May 27,2011 o I\ U L- U i X y
VIA PDF AND FEDERAL EXPRESS
Mr. Rusty Lundberg
Executive Secretary
Utah Division of Radiation Control
Utah Department of Environmental Quality
195 North 1950 West
Salt Lake City, UT 84116-3097
Re: State of Utah Ground Water Discharge Permit No. UGW370004 White Mesa
Uranium Mill - Notice Pursuant to Part I.G.3 of the Permit -Cell 2 Annual Slimes Drain
Compliance
Please take notice pursuant to Part I.G.3 ofthe White Mesa Mill's (the "Mill's") State of Utah
Groundwater Discharge Permit No. UGW3 70004 (the "Permit") and Utah Administrative Code
("UAC") R317-6-6.16(C)(1) that Denison Mines (USA) Corp., as operator ofthe Mill and holder
ofthe Permit, failed to meet the standards in Part LD.3.(b)(3) of the Permit, as described in more
detail below.
1. Facts and Background Information
a) Part I.D.3(b)(1) of the Permit requires that the Permittee shall at all times maintain the
average wastewater recovery head in the slimes drain access pipe to be as low as
reasonably achievable (ALARA) in each tailings disposal cell, in accordance with the
currently approved Discharge Minimization Technology Monitoring Plan ("DMT
Plan");
b) Part I.D.3(b)(2) of the Permit requires that the Permittee shall conduct a monthly
slimes drain recovery test at the Cell 2 slimes drain that meets the following minimum
requirements:
(i) Includes a duration of at least 90-hours, as measured from the time that pumping
ceases; and
(ii) Achieves a stable water level at the end of the test, as measured by three
consecutive hourly water level depth measurements, with no change in water
level, as measured to the nearest 0.01 foot.
c) Part I.D.3(b)(3) of the Permit requires that annual slimes drain compliance shall be
achieved when the average annual wastewater recovery elevation in the slimes drain
access pipe, as determined in the currently approved DMT Plan, meets the conditions
in the formula (the "Formula") spelled out in Part I.D.3(b)(3) ofthe Permit. That Part
also states that failure to satisfy the conditions in the Formula shall constitute DMT
failure and non-compliance with the Permit.
d) Section 3.1(b)(viii) of the DMT Plan further states that if at any time the most recent
average annual head in the Cell 2 slimes drain is found to have increased above the
average head for the previous calendar year, the Licensee will comply with the
requirements of Part I.G.3 of the Permit, including the requirement to provide
notification to the Executive Secretary orally within 24 hours followed by written
notification.
e) On February 25, 2011, Denison submitted its White Mesa Uranium Mill DMT
Performance Standards Monitoring Report and Cell 4A BA T Performance Standards
Monitoring Report for the 4^*" Quarter of 2010 (the "DMT Report"), in which it
concluded that, on the application of the Formula, annual slimes drain compliance has
not been achieved for 2010, in accordance with Part I.D.3 of the Permit. Denison first
came to this realization while finalizing the DMT Report for submittal to the Executive
Secretary.
f) Denison also noted in the DMT Report that for the reasons detailed in the Report,
Denison believes that the monitoring requirements of Part I.D.3(b)(2) of the Permit
seriously interfere with Denison's ability to comply with Parts I.D.3(b)(l) and
I.D.3(b)(3) and should be amended. Denison noted that the required monitoring
prevented pumping of the slimes drain in Cell 2 for approximately 77 days in 2010, or
approximately 20% of the year. Denison also noted that the overall elevation measured
from the first data point in 2009 to the last data point in 2010 indicated an overall
reduction in elevation over the two year period, notwithstanding the fact that
precipitation in 2010 was significantly higher than in 2009. Denison recommended
that the monitoring requirement in the Permit be modified to allow the slimes drain
pump sufficient running time to dewater the cell, and suggested as an example that the
monitoring requirement could be reduced from monthly to quarterly.
DENISO MINES
g) This matter was discussed during a conference call held on May 25, 2011 between
Denison and State of Utah Division of Radiation Control ("DRC") staff. In particular,
the parties discussed the impact the current monitoring requirements have on pumping,
the possible need to amend the Permit to reduce the frequency of monitoring, the
appropriateness of the Formula and whether or not any amendments to the Formula
may be required, and a number of measures that could be taken in the field to improve
the Cell 2 dewatering efforts. DRC staff advised that, notwithstanding these issues and
the potential need to amend the Permit, Denison may be considered in violation of the
Permit at this time. Denison and DRC staff agreed that Denison would provide this
Notice to the Executive Secretary setting out Denison's plan and schedule for
addressing this matter. This Notice is also intended to more formally provide the
information contemplated by the 5-day written notice requirement under Part I.G.3 of
the Permit relating to this matter.
2. Actions Taken
At this tirrie Denison is continuing to pump and monitor the Cell 2 slimes drain in the same
manner it has since prior to the beginning of 2009.
Included with this Notice is a figure that shows the monthly Cell 2 slimes drain elevations, in
Feet Below Top of Standpipe, from January 2009 through May 2011. It is evident from a review
of the figure that the most recent monthly result. May 2011, is lower than the last result reported
for December 2010, although there continues to be variability from month to month.
Further, the overall trend in the data since the beginning of 2009 continues to be downward,
which suggests that the Formula may not be adequately capturing this trend. This trend also
existed from January 2009 through December 2010, although not as pronounced over that shorter
period of time. The failure of the Formula to adequately track this downward trend may result
from the fact that the four years of data required as inputs into the Formula will not be available
until the end of 2012 or from some other feature of the Formula that may need to be addressed.
3. Actions That Will be Taken to Prevent a Reoccurrence of this Incident
Denison believes that a reduction in the monitoring frequency under the current pumping and
monitoring regime will likely be sufficient to result in compliance with the Formula over time,
although possibly not by the end of 2011, given that half the year has already passed. Therefore,
Denison proposes that the following additional actions, over and above a reduction in the
frequency of monitoring, also be taken to provide more assurance that a reoccurrence of this
incident will not occur:
DENISO
MINES
a) Denison will re-grade the interim fill on Cell 2 in order to reduce the potential for the
accumulation of stormwater on the surface of Cell 2, which can potentially infiltrate
into Cell 2. This re-grading will be completed on or before August 1, 2011, which is
expected to be prior to the start of the late summer Monsoon season;
b) Denison will install one or more piezometers into Cell 2 for the purposes of monitoring
the water level in Cell 2 in lieu of continued monitoring of the Cell 2 slimes drain
access pipe. This will allow for the pump that is located in the access pipe to operate
without interruption from monitoring activities. Denison will submit a plan and
schedule to the Executive Secretary on or before June 17, 2011 that will address the
plan and schedule for installing such piezometer(s). That Plan and Schedule will
contemplate that the current DMT Plan be amended, with the Executive Secretary's
approval, to reflect the manner of sampling the piezometer(s) prior to commencement
of monitoring. The piezometer(s) will be installed within 30 days after Executive
Secretary approval of the Plan and Schedule;
c) Denison will perform an engineering evaluation of the current pump in the Cell 2
access pipe to determine if any changes can be made to improve its efficiency and
output, in light of the changes described above. The results of that evaluation will be
described in the Plan and Schedule referred to in paragraph b) above; and
d) The Permit will be amended to adjust Part I.D.3(b)(2) to refiect the changes in the
monitoring of the Cell 2 water level, resulting from the installation of the piezometer(s)
and approved monitoring procedure set out in the amended DMT Plan, and to reduce
the frequency of monitoring from monthly to quarterly.
The Cell 2 water level will continue to be monitored in accordance with the current Permit
conditions and, after amended, the amended Permit conditions, through the remainder of 2011.
The monitoring results for 2011 will be compared to the results for previous years through
application ofthe Formula, and the comparison will be submitted to the Executive Secretary in
the DMT Report for the 4* quarter of 2011, which must be submitted on or before March 1,
2012.
Ifthe conditions in the Formula are satisfied, then Denison will continue its dewatering activities
in 2012 and subsequent years in accordance with the amended Permit conditions and will
continue to compare the results annually as contemplated by the Formula.
Ifthe conditions in the Formula are not satisfied for 2011, but it appears from a review of the
results that the measures described in paragraphs 3 a) through d) above have been working to
improve dewatering activities after August 2011 and if implemented for a fiill year would appear
DENISO
MINES
to be likely to be successfiil in meeting the conditions in the Formula, then the Executive
Secretary will determine whether to exercise his discretion to allow the pumping and monitoring
to continue in the same manner through the remainder of 2012, after which the results for 2012
will be compared to the results for previous years using the Formula.
Ifthe conditions in the Formula are not satisfied for 2011 and the Executive Secretary does not
exercise his discretion as contemplated by the previous paragraph, then either:
e) The Executive Secretary and Denison will review the Formula to determine if it is
appropriate to determine if the pumping is maintaining the average wastewater level in
Cell 2 as low as reasonably achievable ("ALARA"), as contemplated by Part I.D.
3(b)(1) of the Permit, and if not agree on appropriate modifications to the Permit; or
f) The Executive Secretary and Denison will consider fiirther field activities that may be
performed in order to achieve the ALARA goal contemplated by Part I.D.3(b)(1) of the
Permit and a Plan and Schedule for implementing any such activities,
and the Permit will be amended to reflect the foregoing.
4. Affirmative Defense
Denison believes that the failure to meet the conditions of the Formula was caused by the
monitoring requirements of the Permit, which prevented the ability of the pump from being
active for 20% of the time. This amount of pump downtime was not contemplated by the Permit.
This is almost twice the downtime that would result from the pump being off for the 90 hours per
month contemplated by Part I.D.3(b)(2) of the Permit. As a result, Denison beUeves that its
inability to be able to comply with the Permit conditions was caused by the Permit itself and not
by its own actions or inactions. However, if any potential violation were to be identified,
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
Oral notification was not given to the UDEQ Duty Officer within 24 hours of the discovery
(which was made at the time the DMT Report was being prepared for submittal to the Executive
Secretary on February 25, 2011). However, written notice was given to UDEQ within 24 hours
ofthe discovery through the submittal of the DMT Report. Further, this Notice is being given by
Denison within five days of the May 25, 2011 conference call during which DRC staff advised
that they thought this matter may constitute a violation of the Permit. Although the oral
notification was not given, Denison submits that the written notifications given to the Executive
DENISO
MINES
Secretary in these particular circumstances constitute substantial compliance with the notification
requirements of Part I.G.3 of the Permit and Section 3.1(b)(viii) of the DMT Plan. Denison has
noted, however, that in ftiture circumstances such as these it will also provide the 24 hour oral
notice and will ensure that the written notification is given in a stand-alone notice within 5 days
of the oral notification.
b) Failure was not Intentional or Caused bv the Permittee's Negligence
The failure to satisfy the conditions in the Formula was not intentional or caused by Denison's
negligence, either in action or in failure to act. Denison continued to perform the pumping and
monitoring that is contemplated by the Permit and the DMT Plan and that it had been performing
over the last several years. Denison believes that the excessive pump downtime caused by the
frequency of monitoring has prevented Denison from meeting the conditions in the Formula.
Further, given the variability of the water levels, it has been difficult to predict annual results
prior to year end, based on monthly results or even cumulative month-to-date results at any time
during the year. It was therefore not possible to predict with any certainty during the year
whether or not compliance would be achieved for the year.
c) The Permittee has Taken Adequate Measures to Meet Permit Conditions
Denison believes that the proposed measures described in Section 3 above will be adequate to
meet Permit conditions in the fiiture.
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.
Please contact the undersigned if you have any questions or require any
DENISO
MINES
fiirther information.
^rydenlund
President, Regulatory Affairs and Counsel
cc: Ron F. Hochstein
Harold R. Roberts
Jo Ann S. Tischler
David E. Turk
Kathy A. Weinel
DENISO
MINES