DRC-2011-007512 - 0901a0688027eb72

Department of
Environmental Quali
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
State of Utah
GARY R. HERBERT
Governor
GREG BELL
Lieutenant Govenwr
October 14, 2011
CERTIFIED MAIL
(Return Receipt Requested)
Jo Ann Tischler, Director, Compliance and Permitting
Denison Mines (USA) Corp.
1050 n'*" Street
Suite 950
Denver, CO 80265
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Certified Fee
Return Receipt Fee. Postmarlt
^Rej RE: findings & settlement/TR
Toi Jo Ann Tischler
ssFi Denison Mines (USA) Corp
strei 1050 Seventeenth ST, STE 950
Denver, Co 80265 orPt
city'
.PS Form 3800. August 2006 See Reverse for Instructions
Subject: September 19, 2011 Denison Mines (USA) Corp. (DUSA) Response to DRC Notice
of Violation UGWl 1-04: DRC Findings and Proposed Settlement Agreement and
Monetary Penalty
Dear Ms. Tischler:
The Utah Division of Radiation Control (DRC) has reviewed DUSA's September 19, 2011 response
to Notice of Violation and Compliance Order, Docket No. UGWl 1-04 (NOV).
The table below summarizes the violations cited in the Order, the DUSA response, and the DRC
findings.
Violation Summary DUSA June 13, 2011 Response DRC Findings
Violation 1 - NOV cites
violation of Parts I.E. 1(b)(2) and
I.G.l(b)l of the Groundwater
Permit for failing to accelerate
samples for TDS in wells MW-
26 and MW-31 and Uranium in
well MW-25 during December
2010.
Failure to Accelerate Violation
DUSA does not contest the violation. DRC notes that this violation type
has been cited in 3 previous NOV's,
UGW07-04, UGW08-01 and
UGW08-02.
A penalty has been calculated for
the violation.
1 Violation Stands
195 North 1950 West * Sait Uke City. UT,
Mailing Address: P.O.Box 144850 • Salt Lake City, UT 84114-4850
Telephone [phone] • Fax [phone] • T D D. [phone]
www.deq.Utah i;()v
Printed on lOC/i recycled p;iper
Page 2
Violation 2 - NOV cites
violation of Part I.e. 1(a) of the
Groundwater Permit and Section
8.2 and Table 1 of the DUSA
QAP for failing to perfonn
analysis for mercury in 10 wells
and one blind duplicate within
the recommended holding time
(28 days).
Sample Holding Time Violation
DUSA requests retraction of the
violation and believes that
affirmative defense per Part I.G.3.(c)
of the Groundwater Permit is
applicable. Specifically, per the
September 19, 2011 DUSA response
(and Appendix B - January 26, 2011
DUSA Notice) it is argued that:
1. DUSA provided oral and
written notification per
requirements of UACR317-
6-6.13,
2. The holding time
exceedances were not
intentional or caused by
negligence but were caused
by a "misinterpretation" of
the required holding time by
the contract laboratory,
3. DUSA has taken adequate
measures to meet permit
conditions by notifying the
contract laboratory of the
holding time discrepancy.
4. Provisions of UCA 19-5-107
have not been violated since
the violation did not result in
a pollutant discharge into
waters of the State.
DRC notes that this violation type
has been cited previously in an
April 1, 2008 NOV (UGW08-02,
Violation #3).
The violation is related to "Ground
Water Compliance" Monitoring and
does not fall under monitoring types
for DMT or BAT (See Parts I.E.7
and I.E.8 ofthe Groundwater
Permit for specifics). Therefore,
DUSA's proposal for DRC to
retract the violation based on Part
I.G.3(c) of the Groundwater Permit
''Affirmative Defense'" is not
applicable.
However, in consideration of the
affirmative defense arguments
made by DUSA, DRC will allow
full credit in the penalty calculation
for: 1. Degree of Willfulness and/or
Negligence, and, 2. Good faith
efforts to comply.
1 Violation Stands
Violation 3 - NOV cites
violation of Part I.E. 1(a) of the
Permit and Section 7.1 and
Attachment 1 ofthe DUSA QAP
for failing to use the currently
approved Field Data Worksheet
for Groundwater for the 4'^
Quarter 2010 monitoring events.
Field Data Worksheet Violation
DUSA requests retraction of the
violation. DUSA states that the field
sheet used for the 4"" Quarter 2010
monitoring contained the same
information as the field sheet in the
DUSA QAP Revision 6 and was only
different in appearance. DUSA
states that these cosmetic changes
were required for the electronic data
capture system which was
implemented in 2010. DUSA also
provides an Appendix A with the
September 19, 2011 letter which
compares the two forms side by side
to show that the information tabs are
the same.
Based on DRC review of the Field
Data Sheets provided as Appendix
A of the DUSA September 19, 2011
response to NOV Docket UGWl 1-
04 it appears that all information
required on Attachment 1 of the
DUSA QAP, Revision 6 was
included on the altemate form.
Therefore, DRC agrees with
DUSA's response that the forms are
functionally equivalent.
1 Violation Retracted
3 violations cited 2 violations stand
Page 3
Based on the findings above, DRC has calculated a monetary penalty for the 2 standing violations.
Also note that DRC has taken the DUSA arguments related to affirmative defense into consideration
in the calculation (see attached memo).
Two copies of a settlement agreement (SA) contract, based on the proposed civil penalty are
attached. If you wish to resolve the August 15, 2011 NOV based on the enclosed calculations,
please review the SA and sign both copies (do not date them), and then return them both to this
office within ten (10) calendar days of receipt of this letter.
Thereafter, the Co-Executive Secretary will sign and date the SA contracts and return one original to
you. Payment of the penalty will then be due within 30 calendar days of the date the final SA
document is signed by the Go-Executive Secretary.
If you would like to discuss the proposed monetary penalty or the content of the SA further, please
contact Tom Rushing at [phone] to arrange a settlement meeting or conference call.
Sincerely,
UTAH WATER QUALITY BOARD
Rusty Lundberg
Co-Executive Secretary
Enclosures: 1. Proposed Penalty Calculation, 2. Settlement Agreement Contract UGW 11-048A (2 copies)
RL.TR.tr
F:\DUSA\UGW11-04\UGW11-04 DRC Violations Findings Resp Ltr.doc
State of Utah
GARY R. HERBERT
• Govemor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
MEMORANDUM
TO: File
THROUGH: Phil Goble, Compliance Section Manager
FROM: Tom Rushing, P.G. /d
DATE: October 13, 2011
SUBJECT: Notice of Violation and Order Docket No. UGWl 1-04, Review of Denison Mines ^
(USA) Corp. (DUSA) September 19, 2011 response to the NOV, Utah Division of
Radiation Control (DRC) Findings and Proposed Civil Penalty for Standing Violations
This memo is to provide; 1. The DRC review findings regarding DUSA's September 19, 2011 letter
response (Response) to Notice of Violation and Order Docket No. UGWl 1-04 (NOV), and 2. A civil
penalty calculation for standing violations related to the NOV.
1. DRC Review of the Response
Per review of the Response, DUSA did not reserve their right to request a hearing before the Water
Quality Board. ^
The Order requires DUSA to prepare a response with the following items:
a) The root cause of the noncompliance,
b) Corrective steps taken or to be taken to prevent re-occurrence of the noncompliance,
c) Date when compliance was or will be achieved.
Table 1 below summarizes the violations cited in the Order, the violations requested to be rescinded
by DUSA per the Response, and the DRC findings.
195 North 1950 West • Salt Uke City, UT
Mailing Address: P.O. Box 144850 • Salt Uke City, UT 84114-4850
Telephone [phone] • Fax [phone] • T.D.D. [phone]
www.deq.Utah.fiov ,
Printed on 100% recycled paper
Page 2
Table 1 - Summary of Violations NOV and Order Docket UGWl 1-04, DUSA Responses and DRC Findings
Violation Summary I DUSA September 19, 2011 Response DRC Findings
Violation 1 - NOV cites
violation of Parts I.E. 1(b)(2)
and I.G.l(b)l ofthe
Groundwater Permit for
failing to accelerate sarnples
for TDS in wells MW-26 and
MW-31 and Uranium in wdl
MW-25 during December
2010.
Failure to Accelerate
Violation
DUSA does not contest the violation. DRC notes that this violation type has
been cited in 3 previous NOV's,
UGW07-04, UGW08-01 and UGW08-
02.
A penalty has been calculated for the
violation.
1 Violation Stands
Violation 2 - NOV cites
violation of Part I.e. 1(a) of
the Groundwater Permit and
Section 8.2 and Table 1 of the
DUSA QAP for failing to
perform analysis for mercury
in 10 wells and one blind
duplicate within the
recommended holding time
(28 days).
Sample Holding Time
Violation
DUSA requests retraction of the
violation and believes that
affirmative defense per Part I.G.3.(c)
of the Groundwater Permit is
applicable. Specifically, per the
September 19, 2011 DUSA response
(and Appendix B - January 26, 2011
DUSA Notice) it is argued that:
1. DUSA provided oral and
written notification per
requirements of UAC R317-
6-6.13,
2. The holding time
exceedances were not
intentional or caused by
negligence but were caused
by a "misinterpretation" of
the required holding time by
the contract laboratory,
3. DUSA has taken adequate
measures to meet permit
conditions by notifying the
contract laboratory of the
holding time discrepancy.
. 4. Provisions of UCA 19-5-107
have not been violated since
the violation did not result in
a pollutant discharge into
waters of the State.
DRC notes that this violation type has
been cited previously in an April 1,
2008 NOV (UGW08-02, Violation #3).
The violation is related to "Ground
Water Compliance" Monitoring and
does not fall under monitoring types for
DMT or BAT (See Parts I.E.7 and I.E;8
of the Groundwater Permit for
specifics). Therefore, DUSA's proposal
for DRC to retract the violation based
on Part LG.3.(c) of the Groundvyater
Permit ''Affirmative Defense" is not
applicable.
However, in consideration of the
affirmative defense arguments made by
DUSA, DRC will allow full credit in
the penalty calculation for: 1. Degree of
Willfulness and/or Negligence, and, 2.
Good faith efforts to comply.
1 Violation Stands
Page 3
Violation 3 - NOV cites
violation of Part I.E. 1(a) of
the Groundwater Permit and
Section 7.1 and Attachment 1
of the DUSA QAP for failing
to use the currently approved
Field Data Worksheet for
Groundwater for the 4'*'
Quarter 2010 monitoring
events.
Fieldsheet Violation
DUSA requests retraction of the
violation. DUSA states that the field
sheet used for the 4^^ Quarter 2010
monitoring contained the same
information as the field sheet in the
DUSA QAP Revision 6 and was only,
different in appearance. DUSA
states that these cosmetic changes
were required for the electronic data
capture system which was
implemented in 2010. DUSA also
provides an Appendix A with the
September 19, 2011 letter which
compares the two forms side by side
to show that the information tabs are
the same.
Based on DRC review of the Field Data
Sheets provided as Appendix A of the
DUSA September 19, 2011 response to
NOV Docket UGW 11-04 it appears that
all information required on Attachment
1 of the DUSA QAP, Revision 6 was
included on the altemate form.
Therefore, DRC agrees with DUSA's
response that the forms are functionally
equivalent.
1 Violation Retracted
3 violations cited 2 violations stand
Each DUSA response to the 3 NOV violations is listed below, followed by DRC findings.
VIOLATION 1
DUSA RESPONSE - VIOLATION 1
L Parts I.E.l(b)(2) and I.G.l(b)(l) of the Permit for failing to accelerate samples for TDS in
weWs MW-26 and MW-31 and Uranium in well MW-25 during December 2010. This is also a
continuing violation previously cited in three DRC NOVs dated January 11, 2008 (UGW07-04),
February 28, 2008 (UGW08-01), and April 1, 2008 (UGW08-02).
a) Root Cause ofthe Noncompliance
The Denison Corporate Quality Assurance Manager noted the exceedances ofthe Groundwater
Compliance Limits ("GWCLs") for Q3 2010 and appropriately reported the exceedances in the
November 15, 2010 Exceedance Notice. The Quality Assurance Manager failed to notify Mill
Personnel ofthe additional accelerated sampling requirements. The Denison Corporate Quality
Assurance Manager noted this oversight during the 4t quarter 2010 data review, and accelerated
monitoring was started in January 2011.
b) Steps That Have Been Taken to Correct the Violation .
Denison recently purchased a commercial database system for management ofthe Mill groundwater
data. After all data are entered and have undergone quality control review, the database/data
management capabilities of the software system will allow the Corporate Quality Assurance Manager
to provide the exceedance results to the Mill Personnel in a more timely fashion. In addition, after
completion of training, data reports will be accessible to the Mill Personnel directly which would
allow them to detennine what analytes require accelerated monitoring in addition to the notification
from the Corporate Quality Assurance Manager.
c) Date When Compliance Was or Will be Regained
Page 4
Monitoring for TDS in MW-26 and MW-31 and uranium in MW-25 was accelerated in January 2011
as required.
d) Steps Taken to Prevent Reoccurrence ofthe Noncompliance
See item (b) above.
DRC FINDINGS - VIOLATION 1
DRC notes that this violafion type (accelerafion of sampling) has been cited previously in three DRC
NOVs dated January 11, 2008 (UGW07-04), February 28, 2008 (UGW08-01), and April 1, 2008
(UGW08-02). DRC will calculate a monetary penalty for the reoccurring violafion. \
DRC accepts that the violafion was the result of failure to provide the proper notificafion ofthe need
for accelerated monitoring to the White Mesa Mill,personnel. Additionally, DRC notes that DUSA
has provided a mechanism to avoid this communicafion failure in the future.
VIOLATION 2
DUSA RESPONSE - VIOLATION 2
2. Part I.E.1(a) of the Permit and Section 8.2 and Table 1 of the DUSA QAP for failing to
perform analysis for mercury in 10 wells (MW-1, MW-3, MW-3A, MW-12, MW-18, MW-19,
MW-20, MW-23, MW-26, and MW-34) and one blind duplicate (MW-70) within the
recommended holding time (28 days). This is also a continuing violation previously cited in the
April 1,2008 NOV (UGW08-02, Violation #3).
Denison submitted a notice on January 26,2011, under Part 1.G.3, which asserted an affirmative
defense under l.G.3.(c) of the Permit and UAC R-317-6-6.16C.3 in association with this violation.
This Notice of Violation did not indicate that the Executive Secretary had considered that submittal A
copy ofthe January 26, 2011 notice is attached as Appendix B to this letter, for your convenience.
Denison believes that the affirmative defense in Part I.G.3.(c) ofthe Permit is applicable to this
incident and that this violation should be retracted.
a) Root Cause of the Noncompliance
1. Facts and Background Information
a) Denison performed its routine review of laboratory data from Energy Laboratories (UEL") and
Americ'a West Analytical Laboratories for compliance with requirements ofthe QAP during the
week of January 17, 2011.
b) The currently approved Denison White Mesa Mill QAP, Table 1, requires the use of Method
E200.8for the analysis of mercury. This table also requires a 28 day holding time for mercury:
that is, that samples be analyzed for mercury within 28 days ofthe date of sample collection.
c) EL has performed all the metals analyses for the Mill's groundwater program, since prior to
1995. EL performed the mercury analysis for the Mill's fourth quarter 2010 groundwater
samples. EL has consistently been able to meet a 28 day holding time for mercury samples;
that is, they have consistently performed mercury analysis within 28 days ofthe sample
Page 5
collection.
d) During the week of January 17, 2011, Denison identified that 10 groundwater samples and one
duplicate sample analyzed by EL for mercury were analyzed after the 28 day holding time had
expired. Denison contacted EL regarding the lab's failure to meet the holding time required in
the QAP.
e) EL is currently Utah State certified for, and uses for Denison's groundwater analyses. Method
200.8 Determination of Trace Elements in Water and Wastes by Inductively Coupled PlasmaMass
Spectrometry, Revision 5.4 dated 1994. This method, which is required by the QAP, lists
the holding time for mercury as 6 months. This method is the currently promulgated method
per 40 CFR 141 and 143 (September 1998). A proposed update, Draft Revision 5.5, has not
been approved by EPA.
f) Denison collected all the samples for groundwater mercury during the period from November
15 to November 29, 2010. EL received all of Denison's fourth quarter groundwater mercury
samples during the period from November 19, 2010 through November 24, 2010. Due to the
laboratory staff schedules during the holidays, EL did not have enough available staff to
analyze the mercury samples within the 28 day hold time, which expired on December 13, 2010
for the earliest, and December 28, 2010for the latest ofthe mercury samples.
g) Denison received the initial data reports containing two ofthe mercury results on December 30,
2010, too late to perform re-sampling within the fourth quarter. Denison received the remainder
ofthe needed data reports required for the quality assurance review, after the close ofthe
fourth quarter, on January 6, 2011.
h) Following Denison's review of the data, during phone conversations and emails with EL, the lab
advised Denison that:
a. there was room for confusion in interpreting the discrepancy between the 6-month hold
time identified in Method 200.8 Revision 5.4 and the 28-day hold time identified in 40
CFR 141 and 143. This is particularly so given footnote 3 in the table in 40 CFR
141.23(k)(2), which states that:
"In all cases, samples should be analyzed as soon after collection as possible.
Follow additional (if any) information on preservation, containers or holding
times that is specified in the method."
This could be interpreted to mean that the more specific, 6-month holding time
requirement in the method should prevail over the holding time specified in the table,
and
b. EL assumed the 6-month hold time in approved Method 200.8 Revision 5.4 was
applicable. Based on EE's interpretation, EL assumed that the 6-month hold time was
applicable and the samples were not out of hold.
i) Denison concluded that regardless of the holding time stated in EE's certified Method, the 28-
day hold time stated in the QAP should be considered correct and should be adhered to for the
following reasons:
a. The Mill's QAP requires a 28-day holding time.
Page 6
b. The September 1998 publication of 40 CFR 141 and 143 states a 28-day holding time
(notwithstanding footnote 3 referred to above).
c. Industry standards and practice appear to require a 28-day holding time for mercury.
d. In the draft revision 5.5 of Method E200.8, the holding time for mercury has been
changed to 28 days, presumably to be consistent with industry practices and
standards.
The root cause analysis is as follows. '
a) There exists a discrepancy between the holding time stated in the approved Method 200.8
Revision 5.4, for which EL is certified, and other statements of holding time for this method, as
appear in the 1998 40 CFR 141 and 143, and the proposed update to Method 200.8.
b) There was some confusion on the part of the lab in determining the applicable holding time.
The lab misinterpreted the discrepancy. Operating under the assumption that the 6-month
holding time was applicable, the lab did not analyze the samples in time or notify Denison in
time to recollect samples to meet a 28-day holding time.
b) Steps That Have Been Taken to Correct the Violation
The following actions will have already been taken to prevent a reoccurrence ofthis incident:
a) As stated above, Denison re-contacted EL by email and informed the lab that:
a. The 2B-day mercury hold time in the QAP is applicable and mandatory regardless of
EE's interpretation ofa longer hold time as stated in their certified method.
b. EI is required for all future samples to meet the 2B-day hold time for mercury.
c) Date When Compliance Was or Will be Regained
All mercury analyses conducted since this occurrence in 4th Quarter 2010 have been completed
within the
2B-day holding time as required.
d) Steps Taken to Prevent Reoccurrence ofthe Noncompliance
As previously stated, Denison has purchased a commercial database system. The database/data
management software will automatically note any holding time deviations at the time the data are
loaded by the laboratory. This would allow resampling efforts to be conducted immediately. As
mentioned above, Denison believes that the affirmative defense in Permit LG.3.(c) of the Permit is
applicable to this incident and that this violation should be retracted.
Page 7
DRC FINDINGS - VIOLATION 2
DRC notes that this violation type (sample not analyzed within recommended holding fime) has been
cited previously in an April 1, 2008 NOV (UGW08-02, Violafion #3. DRC will calculate a monetary
penalty for the reoccurring violation.
The violafion is related to "Ground Water Compliance Monitoring" and does not fall under
monitoring types for DMT or BAT. Therefore, DUSA's request for DRC to retract the violafion
based on Part I.G.3.(c) of the Groundwater Permit "Affirmative Defense" is not applicable.
However, in considerafion of the affirmafive defense arguments made by DUSA, DRC will allow full
credit in the penalty calculafion for: 1. Degree of Willfulness and/or Negligence, and, 2. Good faith
efforts to comply.
VIOLATION 3
DUSA RESPONSE - VIOLATION 3
3. Part I.E.1 (a) of the Permit and Section 7.1 and Attachment 1 of the DUSA QAP for failing to
use the currently approved Field Data Worksheet for Groundwater for the 4th Quarter
(November) and December, 2010 monitoring events, as found in Attachment 1 of the currently
approved DUSA QAP, Revision 6.0.
a) Root Cause of the Noncompliance
DUSA respectfully submits that Violation Number 3 is in error and should be retracted.
The field data sheet used for the 4th Quarter and December 2010 monitoring events is the same field
sheet contained in the approved QAP, with cosmetic changes only, to facilitate electronic data
capture. Denison began implementing an electronic data capture system in 2010. The system required
cleaner, darker formatting ofthe printed pages, specific fonts, marked cells for handwritten data, and
use of shaded electronic watermarked paper. Only these improvements were made to the field form.
All content and data contained in the Attachment 1 ofthe approved QAP have been retained in
approximately the same location on the page. Use of manually filled, handwritten, hand signed hard-
copy sheets in waterproof ink has been retained.
It is also important to note that the approved QAP, Section 7.1 requires the use of afield data sheet,
and notes that "An example of a Field Data Worksheet that incorporates ....is included as Attachment
1." The QAP does not state that the form included in Attachment 1 will be used, but is an example ofa
form that incorporates the required information. Based on the wording ofthe currently approved
QAP, any form that incorporates the required information is allowable. Nonetheless, Denison has
continued to use the same form as provided in Attachment 1 ofthe QAP, with no data added or
removed, or relocated on the pages. The Field Data Worksheet simply has been cosmetically changed
for ease of digital transfer. The wording in the approved QAP does not preclude the use ofa re-
formatted Field Data Worksheet provided the required information is collected.
Page 8
To assist with confirmation that the data sheets are the same, short ofthe cosmetic changes, DUSA
has attached copies of both the form included in Attachment 1 of the currently approved QAP
("Attachment 1") and the re-formatted data sheet. Each data input location on Attachment 1 has been
numbered. The same number has been recorded in the corresponding data input location on the re-
formatted field data sheet. Both sheets with the numbered data input locations are included as
Appendix A to this response letter. It is important to note that all data input locations noted on
Attachment 1 (numbers 1 through 60) are represented on the re-formatted field data sheet; that is, the
data collection requirements are identical. A second set ofthe same Attachment 1 and reformatted
Attachment 1 have also been included showing each of the pages with numbered content side-by-side.
b) Steps That Have Been Taken to Correct the Violation
The following steps have been taken to correct the violation:
DUSA believes it is already in compliance with the requirements ofthe QAP for field data collection
and no violatiori has occurred.
c) Date When Compliance Was or Will be Regained
DUSA believes it is already in compliance with the requirements ofthe QAP for field data collection
and no violation has occurred.
d) Steps Taken to Prevent Reoccurrence of the Noncompliance
DUSA believes it is already in compliance with the requirements of the QAP for field data collection
and no non-compliance situation has occurred.
DRC FINDINGS - VIOLATION 3
Based on DRC review of the Field Data Sheets provided as Appendix A of the DUSA September 19,
2011 response to NOV Docket UGWl 1-04, it appears that all informafion required On Attachment 1
of the DUSA QAP, Revision 6 was included on the altemate form. Therefore, DRC agrees with
DUSA's response that the forms are funcfionally equivalent and retracts the violafion.
2. Civil Penalty Calculation
WATER OUALITY PENALTY CRITERIA
According to R317-1-8 (Penalty Criteria for Civil Setfiement Negofiafions), the penalty calculafion
methodology consists of the following formula:
CIVIL PENALTY = PENALTY + ADJUSTMENTS - ECONOMIC AIVD LEGAL
CONSIDERATIONS
L Category Selection (R317-1-8.3)
The table below describes the Water Quality penalty categories.
Water Quality Penalty Categories (UAC R317-1-8.3)
Category A - $7,000 to $10,000 per day. Violations with high impact on public health and the
Page 9
environment to include:
Category A.l - Discharges which result in documented public health effects and/or significant
environmental damage.
Category A.2 - Any type of violation not menfioned above severe enough to warrant a penalty
assessment under category A. ^
Category B - $2,000 to $7,000 per day. Major violations of the Utah Water Pollufion Control Act,
associated regulafions, permits or orders to include:
Category B.l - Discharges which likely caused or would potenfially cause (undocumented) public
health effects or significant environmental damage.
Category B.2 - Creafion of a serious hazard to public health or the environment.
Category B.3 - Illegal discharges containing significant quanfifies of concentrafions of toxic or
hazardous materials.
Category B.4 - Any type of violation not menfioned previously which warrants a penalty
assessment under category B.
Category C - $500 to $2,000 per day. Violafions of the Utah Water Pollufion Gontrol Act,
associated regulations, permits or orders to include:
Category G.l - Significant excursion of permit effluent limits.
Category C.2 - Substanfial non-compliance with the requirements of a compliance schedule.
Category C.3 - Substanfial non-compliance with monitoring and reporting requirements.
Category C.4 - Illegal discharge containing significant or concentrafions of non toxic or non
hazardous materials.
Category C.5 - Any type of violafion not menfione(lj)reviously which warrants a penalty
assessment under category C.
Category D - up to $500 per day. Minor violafions of the Utah Water Pollufion Control Act,
associated regulafions, permits or orders to include:
Category D.l - Minor excursion of permit effluent limits.
Category D.2 - Minor violafions of compliance schedule requirements.
Category D.3 - Minor violafions of reporting requirements.
Category D.4 - Illegal discharges not covered in Categories A, B and C.
Category D.5 - Any type of violafions not menfioned previously which warrants a penalty
assessment under category D.
Violation 1 - Parts I.E.l(b)(2) and LG.l (b)(1) ofthe Permit for failing to accelerate samples for
TDS in wells MW-26 and MW-31 and Uranium in well MW-25 during December 2010. This is
also a continuing violation previously cited in three DRC NOVs dated January 11,2008
(UGW07-04), February 28, 2008 (UGW08-01), and April 1, 2008 (UGW08-02).
Violation 1 - Penalty Category and Dates of Noncompliance
Penalty Category: Penalfies for Violafion 1 will be calculated as Category D.3 Minor Violations of
Reporting Requirements with penalfies up to $500 per day. DRC considers Category D to be
appropriate and consistent with previous penalty calculafions for this violation type. The DUSA
failure to accelerate monitoring for TDS in wells MW-26 and MW-31 and Uranium in well MW-25
during December 2010 resulted in the loss of 1 monthly sample (December 2010) for two parameters
in three wells.
Calculation of violation days: DUSA exceeded the TDS GWCL in wells MW-26 and MW-31 and
the Uranium GWCL in well MW-26 in the 3'^^ Quarter, 2010 sampling event. The accelerated sampling
for these parameters should have begun with the December 2010 accelerated monitoring event. Per the
Page 10
DUSA September 19, 2011 response to the NOV, DUSA accelerated monitoring for TDS in
monitoring wells MW-26 and MW-31 and uranium in monitoring well MW-25 in January 2011.
Since the monitoring should have been accelerated in December 2011, the effecfive period of non-
compliance is 1 month (30 days).
The proposed maximum penalty, therefore, would be calculated for 30 days at $500 per day is
$15.000.
Violation 2 - Part I.E.I(a) of the Permit and Section 8.2 and Table 1 of the DUSA QAP for
failing to perform analysis for mercury in 10 wells (MW-1, MW-3, MW-3A, MW-12, MW-18,
MW-19, MW-20, MW-23, MW-26, and MW-34) and one blind duplicate (MW.70) within the
recommended holding time (28 days). This is also a continuing violation previously cited in the
April 1, 2008 NOV1UGW08-02, Violation #3).
Violation 2 - Penalty Category and Dates of Noncompliance
Penalty Category: Category D.3 is also considered applicable for the holding time violafion. Failure
to analyze within the holding time for the applicable parameters/monitoring wells resulted in a loss of
the data for the 4'''quarter of 2010.
Calculation of violation days: Per the DUSA September 19, 2011 response to the NOV, DUSA
notes that the 4^^ Quarter 2010 samples were not analyzed/reanalyzed within holding fimes and that
the 4^*^ quarter sarriple data was therefore lost. Therefore, the violafion occurred over a period of a
sampling quarter (90 days).
The proposed maximum penalty, therefore, would be calculated for 90 days at $500 per day is
$45,000.
VIOLATIONS 1 AND 2 STATUTORY MAXIMUM PENALTY CALCULATION
The statutory maximum penalty for Violafions 1 and 2, Category D.3 would be calculated for 120
davs at $500 per day is $60,000.
ASSIGNED PENALTY AMOUNT WITHIN CATEGORY D.5
DRC considerafion of credit as detailed in the Administrafive Penalty Policy follows:
VIOLATION 1
A. History of compliance or non-compliance:
Under UAC R317-1-8.3(A), two factors need to be considered, including previous violafions
and degree of recidivism.
DRC Finding: According to DRC records, DUSA has failed to accelerate monitoring
previously and has been cited for the violafion type 3 fimes since 2007, as follows:
• NOV Docket No. UGW07-04 (November 2007) - Failure to accelerate groundwater
. monitoring from quarterly to monthly for gross alpha in monitoring well MW-32.
Page 11
NOV Docket No. UGW08-01 (February 2008) - Failure to accelerate groundwater
monitoring from quarterly to monthly for gross alpha in monitoring well MW-32.
• NOV Docket No. UGW08-02 (April 2008) - Failure to accelerate groundwater
monitoring from quarteriy to monthly for gross alpha in monitoring well MW-32.
Per these past violafions, DUSA was given a 100% credit for history of compliance or non-
compliance. For this calculafion DRC is reducing the credit and will apply 50% credit for the
History of Compliance category.
B. Degree of willfulness and/or negligence:
Four factors need to be considered under the requirements of UAC R317-1-8.3(B), including:
1. How much control the violator had over and the foreseeability of the events consfituting
the violafion;
2. Whether the violator made or could have made reasonable efforts to prevent the violafion;
3. Whether the violator knew of the, legal requirements which were violated;
4. Degree of recalcitrance.
DRC finds that:
• DUSA had control over the events consfituting the violation and is ultimately responsible for
recognizing exceedances of the GWCLs collecfing the accelerated samples it is required to
take.
• DUSA could have made a reasonable effort to prevent the violafion by properly accelerating
sampling for TDS in MW-26 and MW-31 and Uranium in MW-26 quarteriy to monthly.
• DUSA knew of the legal/Permit requirements vvhich were violated which are specifically listed
in Part I.E. 1(c)(2) and Part I.G. 1(b)(1) of the Permit, signed by the Execufive Secretary on
March 8, 2005.
• To DRC knowledge, there is no indicafion of recalcitrance. However, DUSA has been cited
for this problem in four separate violations.
Therefore, a credit of 25% was given for willfulness or negligence.
C. Good faith efforts to comply:
Under UAC R317-1-8.3(C), this includes the Permittee's openness in dealing with the
violafions, promptness in correction of problems, and degree of cooperation with the State.
Per the DUSA September 19, 2011 response to the NOV, the violafion was caused by a failure
to provide fimely communicafion from corporate headquarters to the mill. DUSA has
implemented a new process to avoid this type of violafion in the future. Considering that this
is a first fime violafion, and that DUSA has provided correcfive acfion, DUSA was given 75%
credit for "good faith efforts to comply" category.
Page 12
Penalty Calculation
Violafion 1
Category D, which is a maximum of $500 per day penalty
Credits: 1/3 (max $166) History of Compliance:
1/3 (max $166) Degree of Willfulness and/or Negligence:
1/3 (max $166) Good Faith Efforts to Comply:
Penalty per day violafion: =
Number of violafion days:
Total Category Penalty (Gravity Component)
ADJUSTMENTS
(50% credit)
(25% credit)
(75% credit)
Total credit
= $ 500
= $, 83
= $-42
= $ 125
= $250
. $250
, X 30
= $ 7,500
According to R317-1-8.3, the civil penalty shall be calculated by adding the following adjustments to
the penalty amount:
a. Economic benefit (Cost Avoided) gained as a result of non-compliance. Part I.G. Kb) of
the Permit mandates that when a pollutant in a compliance monitoring sample exceeds a
GWCL in Table 2 of the Permit, DUSA shall immediately inifiate accelerated sampling of
the pollutant as required in Part I.E. 1(c)(2) and Part I.G. 1(b)(1) of the Permit. DUSA
saved money by failing to accelerate sampling for TDS in wells MW-26 and MW-31
Gross Alpha in MW-32 from quarterly to monthly, as shown below:
2 day of sampling (8 Hr/day)
to sample (3 Samples)
2 Employees @ $30/hr each $960
Ship samples to lab (1 cooler) Around $75 to ship $75
Laboratory Analysis 3
samples (2 TDS, 1 Total U)
Approx $35 each sample $105
Total Amount Saved by not accelerating TDS sampling in
wells MW-26 and MW-31 and Uranium in well MW-26.
$1,140
b. Investigative costs - No invesfigafive costs aire incliided for these violafions. The
violations were the result of roufine inspecfion findings by DRC.
Grand Total: Penalty Calculafion ($7,500 -i- Economic Benefit ($1,140) = $8,640
VIOLATION 2
A. History of compliance or non-compliance:
Under UAC R317-1-8.3(A), two factors need to be considered, including previous violafions
and degree of recidivism.
Page 13
DRC Finding: According to DRC records, DUSA has failed to meet sample holding fimes
previously and was cited for the violafion type in 2008 as follows:
• NOV Docket No. UGW08-02 (April 2008) - Failure to analyze carbonate and
bicarbonate in October 30, 2007 sample from well MW-19 within 14 day maximum
holding fime.
DRC notes that a penalty has not been calculated for this penalty type in the past: DRC will
provide a 75% credit for this category.
B. Degree of willfulness and/or negligence:
Four factors need to be considered under the requirements of UAC R317-1-8.3(B), including:
1. How much control the violator had over and the foreseeability ofthe events consfitufing
the violafion;
2. Whether the violator made or could have made reasonable efforts to prevent the violafion;
3. Whether the violator knew of the legal requirements which were violated;
4. Degree of recalcitrance.
DRC finds that:
100% credit will be given for this category based on the statements of "affirmafive defense" in
the DUSA January 26, 2011 nofice to DRC. The letter was included as Appendix B of the
September 19j 2011 response to the NOV.
C. Good faith efforts to comply:
Under UAC R317-1-8.3(C), this includes the Permittee's openness in dealing with the
violafions, promptness in correcfion of problems, and degree of cooperation with the State.
DRC finds that:
100% credit will be given for this category based on the statements of "affirmafive defense" in
the DUSA January 26, 2011 notice to DRC. The letter was included as Appendix B of the
September 19, 2011 response to the NOV.
Penalty Calculation
Violafion 2
Category D, which is a maximum of $500 per day penalty = $ 500
Credits: 1/3 (max $166) History of Compliance: (75% credit) = $ 125
1/3 (max $166) Degree of Willfulness and/or Negligence: (100% credit) = $ 166
1/3 (max $166) Good Faith Efforts to Comply: (100%crediO $ 166
Total credit = $ 457
Penalty per day violafion: = $ 43
Number of violafion days: X 90
Page 14
Total Category Penalty (Gravity Component) = $ 3,870
ADJUSTMENTS
According to R317-1-8.3, the civil penalty shall be calculated by adding the following adjustments to
the penalty amount determined above:
1. Economic benefit gained as a result of non-compliance;
2. Invesfigative costs incurred by the State and/or other govemmental levels; and
3. Documented monetary costs associated with environmental damage.
There was no economic benefit gained by DUSA since the laboratory analysis was completed
regardless of the holding time violafion. Based on the degree ofthe violafion (Category D.3),
investigafive costs incurred by govemmental agencies are not included.
ADJUSTMENTS
According to R317-1-8.3, the civil penalty shall be calculated by adding the following adjustments to
the penalty amount:
a. Economic benefit - These include costs which were delayed or avoided due to the non^
compliance. ^
Economic benefit was gained for violafion 1, failure to accelerate. Specifically, DUSA
avoided the costs of Merciiry sample collection and analysis for December 2010, for the
affected monitoring wells. The table below summarizes DRC calculafion of the avoided
cost:
1 day of sampling (8 Hr/day)
to sample (3 Samples)
2 Employees @ $30/hr,each $480
Ship samples to lab (1 cooler) Around $75 to ship $75
Laboratory Analysis 3
samples (2 TDS, 1 Total U)
Approx $35 each sample $105
Total Amount Saved by not accelerafing Mercury sampling $660
DUSA did not gain economic benefit for violafion 2 since the laboratory analysis was
completed regardless of the holding time violation. Therefore, no economic benefit,
calculafion will be included in the penalty calculafion.
b. Investigative costs - No investigafive costs are included for these violafions. The
violafions were the result of roufine inspection findings by DRC.
Proposed Civil Penalty for Docket Nos UGWl 1-04
Violation 1- $ 8,640.
Violation 2 - $ 3,870.
TOTAL $ 12,510.
Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGWl 1-045A
UTAH WATER QUALITY BOARD
IN THE MATTER OF
DENISON MINES (USA) CORP.
1050 17™ STREET, SUITE 950
DENVER, CO 80265
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW11-04SA
This SETTLEMENT AGREEMENT (hereinafter "AGREEMENT") is between DENISON
MINES (USA) CORP. (hereinafter OPERATOR") and the UTAH WATER QUALITY
BOARD (hereinafter the "BOARD"), conceming violafions of the Utah Water Quality Act (the
Act), Utah Code Annotated ("UCA") §§19-5-101 to -124, and the Utah Administrative Code
('VAC")R317-1 to-560.
1. The BOARD has authority to administer the Utah Water Quality Act, and the Utah
Administrafive Code. UCA §§19-5-106, -115.
2. The CO-EXECUTIVE SECRETARY of the BOARD (hereinafter the
"CO-EXECUTIVE SECRETARY") will administer the terms and provisions of this
AGREEMENT: UCA §§19^5-106
3. This AGREEMENT resolves the 3 violafions cited in the NOTICE OF VIOLATION and
ORDER, Docket Number UGWl 1-04 (hereinafter the "NOTICE") issued to the
OPERATOR on August 15, 2011, by the BOARD. It does not in any way relieve the
OPERATOR from any other obligation imposed under the Act or any other State or
Federal laws.
4. The parties now desire to resolve this matter fully without further administrafive
proceedings except to the extent provided herein by entering into this AGREEMENT.
Entering into this AGREEMENT is not an admission of liability or factual allegafion set
out in the NOTICE, nor is it an admission of or an agreement to any disputed facts or
disputed legal theories, nor is it an admission of any violafion of any law, rule, regulafion or
permit by the OPERATOR.
5. In resolution of violations of the NOTICE referenced in Paragraph 3 of this
AGREEMENT, the OPERATOR agrees to pay a total penalty amount of $12,510 within
30 days of the effecfive date of this AGREEMENT by check. The check will be made
payable to the State of Utah, delivered or mailed to the Division of Radiafion Control,
Department of Environmental Quality, 195 North 1950 West, P.O. Box 144850, Salt Lake
City, Utah 84114-4850. The penalty has been determined using the Petmlty Criteria for
Civil Settlement Negotiations, Utah Administrative Code ("UAC") R317-1-8 which
Page 1 of 2
Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGW 11-04SA
considers such factors as the nature, severity and extent of the violafions, history of
noncompliance, degree of willfulness and/or negligence, good faith efforts to comply, and
economic benefit.
6. The deadline sfipulated in item 5 above maybe amended by prior written mutual agreement
of the parties. The party requesfing the amendment must write to the other party 14 days
before the documented deadline and request an amendment of the deadline. The other party
will either agree to or deny the amendment in wrifing within 10 days of receipt of the
request.
7. Nothing contained in this AGREEMENT shall preclude the BOARD from taking addifional
acfions to include addifional penalfies against the OPERATOR for permit violations not
resolved by this AGREEMENT.
8. If an agreement between the OPERATOR and the EXECUTIVE SECRETARY cannot be
reached in a dispute arising under any provision of this AGREEMENT, then the
OPERATOR or the CO-EXECUTIVE SECRETARY may commence a proceeding with the
BOARD under the Utah Administrative Procedures Ac t, Utah Code Annotated §§63G-4-101
to -601 to resolve the dispute. A final decision in any adjudicafive proceeding shall be subject
to judicial review under applicable state law.-
9. Nothing in this AGREEMENT shall consfitute a waiver by the OPERATOR to raise in
defense any legal or factual contention for future allegafions of noncompliance.
10. Nothing in this AGREEMENT shall consfitute or be considered as a release from any claims,
to include natural resource damage claims, cause of acfion, or demand in law or equity which
the STATE may have against the OPERATOR, or any other person, firm, partnership or
corporafion for any liability arising out of or relafing in any way to the.release of pollutants to,
waters of the State.
AGREED to this day of . 2011.
DENISON MINES (USA) CORP UTAH WATER QUALITY BOARD
Bv By_
David Frydenlund Rusty Lundberg
DUSA Vice President and Counsel Co-Execufive Secretary
Page 2 of 2
Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGWl 1-04SA
UTAH WATER QUALITY BOARD
IN THE MATTER OF
DENISON MINES (USA) CORP.
1050 17™ STREET, SUITE 950
DENVER, CO 80265
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW11-04SA
This SETTLEMENT AGREEMENT (hereinafter "AGREEMENT") is between DENISON
MINES (USA) CORP. (hereinafter OPERATOR") and the UTAH WATER QUALITY
BOARD (hereinafter the "BO ARD"), conceming violafions of the Utah Water Quality Act (the
Act), Utah Code Annotated ("UCA") §§19-5-101 to -124, and the Utah Administrative Code
("UAC") R317-1 to -560.
1. The BOARD has authority to administer the Utah Water Quality Act, and the Utah
Administrafive Code. UCA §§19-5-106, -115.
2. The CO-EXECUTIVE SECRETARY of the BOARD (hereinafter the
"CO-EXECUTIVE SECRETARY") will administer the terms and provisions of this
AGREEMENT. UCA §§19-5-106 and 115.
3. This AGREEMENT resolves the 3 violafions citedin the NOTICE OF VIOLATION and
ORDER, Docket Number UGWl 1-04 (hereinafter the "NOTICE") issued to the
OPERATOR on August 15, 2011, by the BOARD. It does not in any way relieve the
OPERATOR from any other obligafion imposed under the Act or any other State or
Federal laws.
5.
The parties now desire to resolve this matter fully without further administrafive
proceedings except to the extent provided herein by entering into this AGREEMENT.
Entering into this AGREEMENT is not an admission of liability or factual allegafion set
out in the NOTICE, nor is it an admission of or an agreement to any disputed facts or
disputed legal theories, nor is it an admission of any violafion of any law, rule, regulafion or
pennit by the OPERATOR.
In resolufion of violations of the NOTICE referenced in Paragraph 3 of this
AGREEMENT, the OPERATOR agrees to pay a total penalty amount of $12,510 within
30 days of the effecfive date of this AGREEMENT by check. The check will be made
payable to the State of Utah, delivered or mailed to the Division of Radiafion Control,
Department of Environmental Quality, 195 North 1950 West, P.O. Box 144850, SaltLake
City, Utah 84114-4850. The penalty has been determined using the Penalty Criteria for
Civil Settlement Negotiations, Utah Administrative Code ("UAC") R317-1-8 which
Page 1 of 2
Denison Mines (USA) Corp.
White Mesa Mill
Settlement Agreement, Docket No. UGWl 1-04SA
considers such factors as the nature, severity and extent of the violafions, history of
noncompliance, degree of willfulness and/or negligence, good faith efforts to comply, and
economic benefit. -
6. The deadline stipulated in item 5 above may be amended by prior written mutual agreement
of the parties. The party requesfing the amendment must write to the other party 14 days
before the documented deadline and request an amendment of the deadline. The other party
will either agree to or deny the amendment in wrifing within 10 days of receipt of the
request.
7. Nothing contained in this AGREEMENT shall preclude the BOARD from taking additional
acfions to include addifional penalties against the OPERATOR for permit violafions not
resolved by this AGREEMENT. '
8. If an agreement between the OPERATOR and the EXECUTIVE SECRETARY cannot be
reached in a dispute arising under any provision of this AGREEMENT, then the
OPERATOR or the CO-EXECUTIVE SECRETARY may commence a proceeding with the
BOARD under the Utah Administrative Procedures Ac t, Utah Code Annotated §§63G-4-10I
to -601 to resolve the dispute. A final decision in any adjudicafive proceeding shall be subject
to judicial review under applicable state law.
9. Nothing in this AGREEMENT shall consfitute a waiver by the OPERATOR to raise in
defense any legal or factual contenfion for future allegations of noncompliance.
10. Nothing in this AGREEMENT shall consfitute or be considered as a release from any claims,
to include natural resource damage claims, cause of acfion, or demand in law or equity which
the STATE may have against the OPERATOR, or any other person, firm, partnership or
corporafion for any liability arising out of or relafing in any way to the release of pollutants to
waters of the State.
AGREED to this day of. 2011.
DENISON MINES (USA) CORP UTAH WATER QUALITY BOARD
By.
David Frydenlund
DUSA Vice President and Counsel
By_
Rusty Lundberg
Co-Execufive Secretary
Page 2 of 2