DRC-2009-004651 - 0901a068801430f5

State of Utah
GARY R, HERBERT
Govemor
GREG BELL
Lieutenant Governor
October 7, 2009
^U-.M^^toMwf::.!
Department of
Environmental Quality
Amanda Smith
Executive Director
DfVISION OF RADIATION CONTROL
Dane L, Finerfrock
Director
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. David C. Frydenlund
Vice President and General Counsel
Denison Mines (USA) Corp, (DUSA)
1050 Seventeenth Street, Suite 950
Denver, CO 80265
Subject: May 22, 2009 DUSA Response Regarding April 21, 2009 DRC NOTICE OF VIOLATION
AND ORDER TO PROVIDE INFORMATION Docket No. UGW09-04 - 3" and 4*
Quarter, 2009 Groundwater Monitoring Reports: Ground Water Quality Discharge Permit No.
UGW370004 (Pennit) - DRC Findings and Proposed Settlement Agreement and Monetary
Penalty
Dear Mr. Frydenlund:
The Utah Division of Radiation Control (DRC) reviewed DUSA's May 22, 2009 response to the DRC's
Notice of Violation and Order to Provide Information (Docket Number UGW09-04). Based on this review
the DRC has determined the following:
1. Violation of Part I.F.1 of the Permit for failing to report all well monitoring and samples
collected, including a result for Tl
November 2008 momtoring event,
collected, including a result for TDS in well MW-25 in the 4'" Quarter, 2008 Report, for the
DRC Findings: After review of the DUSA's explanation, we have detemiined that Violation No. 1
stands as cited, in that the 4* Quarter, 2008 Report failed to include the laboratory results for the
compliance sample in question. We have also detennined that it is necessary to pursue a monetary
penalty because the reporting problem is a repeat violation. This determination is based on a July 25,
2008 DRC Notice of Enforcement Discretion (NOED) Letter, where DUSA was cited for failing to
report the January and February, 2008 THF results in well MW-26. In that case samples were
collected, analyzed, and not reported in the 1*' Quarter, 2008 Groundwater Monitoring Report.
Therefore, a proposed civil penalty has been calculated by DRC staff and is attached to this letter. A
proposed Settlement Agreement (SA) is also attached for your consideration.
2. Violation of Parts I.E.l(a) and II. A of the Permit and Sections of 7.2,9.3(d), and 11 of the
DUSA Quality Assurance Plan (QAP) for failing to provide a chain of custody for the July
and September 2008 monitoring events.
DRC Findings: Violation No. 2 still stands despite DUSA's May 22, 2009 explanation, because the
168 North 1950 West • Salt Lake 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.goi'
Primed on 100% recycled paper
chain of custody records were not provided in the 3'^'' Quarter, 2008 Report. After considering the
Executive Secretary's possible enforcement options, we have detemiined not to pursue a monetary
penalty at this time on the basis that this was the first time this problem has been cited. However,
should the corrective actions provided in your May 22, 2009 response fail to be followed, DUSA may
be subject to escalated enforcement action.
3. Violation of Part I.E.l(a) of the Permit and Section 11 of the DUSA QAP for creating Water
Table Contour Maps in the 3^^ and 4'" Quarter, 2008 Reports with elevation data that was
not contemporaneous, i.e. collected with a time difference that was greater than five calendar
days.
DRC Findings: Violation No. 3 still stands despite DUSA's May 22, 2009 explariation. The water
table contour maps submitted were not prepared as required, using contemporaneous water level data,
i.e., data collected within a consecutive 5 day period. After considering the Executive Secretary's
possible enforcement options, we have determined not to pursue a monetary penalty at this time on the
basis that this was the first time this problem has been cited. However, should the conective actions
provided in your May 22, 2009 response fail to be followed, DUSA may be subject to escalated
enforcement action.
With regards to the attached SA, if you wish to resolve the April 21, 2009 NOV based on the enclosed
calculations, please review the SA and sign both originals (do not date them), and then retum them both to
this office within ten (10) calendar days of receipt ofthis letter. Thereafter, the Executive Secretary will
sign and date the SA and retum one original to you. Payment of the penalty will then be due within 30
days ofthe final SA document signed by the Executive Secretary.
If you would like to discuss the proposed monetary penalty or the content of the SA further, please contact
Phil Goble at [phone] to anange for a settiement meeting or conference call.
Thank you for your continued cooperation.
UTAH WATER QUALITY BOARD
Dane L. Finerfrock
Co-Executive Secretary
DLF/PRG:prg
State of Utah
GARY R, HERBERT
Govemor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
E.xecutive Director
DIVISION OF RADIATION CONTROL
Dane L, Finerfrock
Director
MEMORANDUM
TO: Dane Finerfrock, Director
THROUGH: Loren Morton, Section Manager
FROM: Phil Goble, Hydrogeologist P/7/, ^if/On\ n^&
DATE: September 29, 2009
SUBJECT: Proposed Penalty for NOTICE OF VIOLATION and ORDER DOCKET
Number: UGW09-04, at Denison Mines (USA) Corp. (DUSA) White Mesa Mill,
Blanding, Utah.
VIOLATIONS
The EXECUTIVE SECRETARY issued the NOTICE OF VIOLATION and ORDER, Docket
Number UGW09-04 (hereinafter the "NOV and Order 07-04") to DUSA on April 21, 2009 for
violations found in the 3'^'' and 4^" Quarter, 2008 DUSA Groundwater Monitoring Reports, as
follows:
1. Part I.F. 1 of the Permit for failing to report all well monitoring and samples collected,
including a result for TDS in well MW-25 in the 4"" Quarter, 2008 Report, for the
November 2008 monitoring event.
2. Parts I.E. 1(a) and II.A of the Permit and Sections of 7.2, 9.3(d), and 11 of the DUSA QAP
for failing to a provide chain of custody for the July and September 2008 monitoring
events.
3. Part I.E. I (a) of the Permit and Section 11 of the DUSA QAP for creating Water Table
Contour Maps in the 3'^'^ and 4"* Quarter, 2008 Reports with elevation data that was not
contemporaneous, i.e. collected with a time difference that was greater than five calendar
days.
DRC STAFF RECOMMENDATIONS ON CIVIL PENALTY
Ofthe three violations described above, DRC staff believes it is appropriate to seek a civil penalty
for Violation No. I.
168 North 1950 West • Salt Uke City, UT
Mailing Address: P,0, Box 144850 • Salt Uke City, UT 84114-4850
Telephone [phone]-Fax [phone]'^0,0, [phone]
www.deq.utaix.gov
Printed on 100%- recycled paper
Denison Mines (USA) Corp.
WHITE MESA MILL
Settlement Agreement, Docket No. UGW09-04SA
UTAH WATER QUALITY BOARD
IN THE MATTER OF
Denison Mines (USA) Corp.
1050 SEVENTEENTH STREET SUITE 950
DENVER, COLORADO 80265
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW09-04SA
This SETTLEMENT AGREEMENT (hereinafter "AGREEMENT") is between Denison
Mines (USA) Corp. (hereinafter "DUSA") and the UTAH WATER QUALITY BOARD
(hereinafter the "BOARD"), conceming violations 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
Administrative Code. UCA §§19-5-106 and -115.
2. The EXECUTIVE SECRETARY of the BOARD (hereinafter the "EXECUTIVE
SECRETARY") will administer the terms and provisions ofthis AGREEMENT. UCA
§§19-5-106 and 115.
3. This AGREEMENT resolves all three violations cited in the NOTICE OF VIOLATION
and ORDER, Docket Number UGW09-04 (hereinafter the "NOTICE") issued to DUSA on
April 21, 2009, by the BOARD (incorporated hereto by reference). It does not in any way
relieve DUSA 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 administrative
proceedings except to the extent provided herein by entering into this AGREEMENT.
Entering into this AGREEMENT is not an admission of liability or factual allegation 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 violation of any law, rule, regulation or
permit by DUSA.
5. The Executive Secretary will not to seek a monetary penalty for Violation Nos. 2 and 3 of
the NOTICE because this is the first time DUSA has been cited for these types of
violations.
In resolution of Violation No. I of the NOTICE referenced herein in paragraph 3, DUSA
agrees to the settlement terms stated below:
Page 1 of 3
Denison Mines (USA) Corp.
WHITE MESA MILL
Settlement Agreement, Docket No. UGW09-04SA
a. In resolution of Violation No. 1 of the NOTICE referenced in Paragraph 3 of this
AGREEMENT, DUSA agrees to pay a total penalty amount of $4,815.00, by check
within 30 calendar days of the effective date of this AGREEMENT. The check
will be made payable to the State of Utah, delivered or mailed to the Division of
Radiation Control, Department ofEnvironmental Quality, 168 North 1950 West,
P.O. Box 144850, Salt Lake 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 considers such factors as the nature,
severity and extent ofthe violations, history of noncompliance, degree of willfulness
an(d/or negligence, good faith efforts to comply, and economic benefit.
7. Nothing contained in this AGREEMENT shall preclude the BOARD from taking additional
actions to include additional penalties against DUSA for permit violations not resolved by this
AGREEMENT.
8. If an agreement between DUSA and the EXECUTIVE SECRETARY cannot be reached in a
dispute arising under any provision ofthis AGREEMENT, then DUSA or the EXECUTIVE
SECRETARY may commence a proceeding with the BOARD under the Utah Administrative
Procedures Act, Utah Code Annotated §§ 63G-4-101 to -601 to resolve the dispute. A final
decision in any adjudicative proceeding shall be subject to judicial review under applicable
state law.
9. Nothing in this AGREEMENT shall constitute a waiver by DUSA to raise in defense any
legal or factual contention for future allegations of noncompliance.
10. Nothing in this AGREEMENT shall constitute or be considered as a release from any claims,
to include natural resource damage claims, cause of action, or demand in law or equity which
the STATE may have against DUSA, or any other person, firm, partnership or corporation for
any liability arising out of or relating in any way to the release of pollutants to waters of the
State.
Pase 2 of 3
Denison Mines (USA) Corp.
WHITE MESA MILL
Settlement Agreement, Docket No. UGW09-04SA
AGREED to this day of , 2009.
DENISON MINES (USA) CORP UTAH WATER QUALITY BOARD
By ^^ By_
DAVID C. FRYDENLUND DANE L. FINERFROCK
DUSA Vice President and Counsel Co-Executive Secretary
Page 3 of 3
-•V^ / H 9 t> //*
State of Utah
GARY R. HERBERT
Govemor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
Executive Direcior
DPv'ISION OF RADIATION CONTROL
Dane L, Finerfrock
Director
MEMORANDUM
TO: Dane Finerfrock, Director
THROUGH: Loren Morton, Section Manager
FROM: Phil Goble, Hydrogeologist PP/^ ^MVn]
DATE:
ri^^
September 29, 2009
SUBJECT: Proposed Penalty for NOTICE OF VIOLATION and ORDER DOCKET
Number: UGW09-04, at Denison Mines (USA) Corp. (DUSA) White Mesa Mill,
Blanding, Utah.
VIOLATIONS
The EXECUTIVE SECRETARY issued the NOTICE OF VIOLATION and ORDER, Docket
Number UGW09-04 (hereinafter the "NOV and Order 07-04") to DUSA on April 21, 2009 for
violations found in the 3"* and 4"" Quarter, 2008 DUSA Groundwater Monitoring Reports, as
follows:
1.
2.
Part I.F.1 of the Permit for failing to report all well monitoring and samples collected,
including a result for TDS in well MW-25 in the 4"" Quarter, 2008 Report, for the
November 2008 monitoring event.
Parts I.E. 1(a) and II.A of the Permit and Sections of 7.2, 9.3(d), and 11 of the DUSA QAP
for failing to a provide chain of custody for the July and September 2008 monitoring
events.
3. Part I.E. 1(a) of the Permit and Section 11 of the DUSA QAP for creating Water Table
Contour Maps in the 3'^'' and 4"^ Quarter, 2008 Reports with elevation data that was not
contemporaneous, i.e. collected with a time difference that was greater than five calendar
days.
DRC STAFF RECOMMENDATIONS ON CIVIL PENALTY
Of the three violations described above, DRC staff believes it is appropriate to seek a civil penalty
for Violation No. 1.
168 North 1950 West • Salt Uke City, UT
Mailing Address: P,0, Box 144850 • Salt Uke City, UT 84114-4850
Telephone [phone] • Fax [phone] • T,D,D, [phone]
www.deq.utati.gov
Printed on 100%' recycled paper
Page 2
Violations where the DRC should not pursue a monetary penalty at this time
1. Violation No. 2 - contrary to the requirements of Part I.E. 1 (a) of the Permit and Sections
7.2, 9.3(d) and 11 ofthe DUSA QAP, DUSA failed to provide Chain of Custody forms for
the July and September 2008 monitoring events. Later, in response to a DRC request,
DUSA provided the required Chain of Custody forms via two e-mails dated April 8, 2009.
Rational: UGW09-04 Violation No. 2 still stands in that chain of custody records were
not provided in the 3"* Quarter, 2008 Report. After considering the Executive Secretary's
possible enforcement options, the DRC staff recommends no penalty at this time on the
basis that this was the first time this problem has been cited. However, should these
violations be repeated in the future a penalty may be assessed.
2. Violation No. 3 - contrary to the requirements of Part I.E. 1(a) of the Permit and Section 11
of the DUSA QAP, the 3"* and 4"" Quarter, 2008 Water Table Contour Maps were created
with elevation data that was not contemporaneous, i.e. were collected more that five
calendar days apart.
Rational: UGW09-04 Violation No. 3 still stands, because the water table contour maps
submitted were not prepared using contemporaneous water level data, i.e., data collected
within a consecutive 5 day period. After considering the Executive Secretary's possible
enforcement options, the DRC staff recommends no penalty at this time on the basis that
this was the first time this problem has been cited. However, should these violations be
repeated in the future a penalty may be assessed.
Violations where the DRC should pursue a monetary penalty
1. Violation No. 1 - contrary to Part I.F. 1 of the Permit, DUSA failed to report a result for
TDS in well MW-25 in the 4"' Quarter, 2008 Report, for the November 2008 monitoring
event. Later, in response to a DRC request, DUSA provided TDS analysis results for a
November 19, 2008 sample from well MW-25, in an e-mail of April 15, 2009.
Rational: DRC staff believes it is necessary to pursue a penalty because this is a repeat
violation. Previously, in a July 25, 2008 DRC Notice of Enforcement Discretion (NOED)
Letter, DUSA was cited for failing to report THF results in well MW-26 for two
monitoring events in January and February, 2008 where samples were collected, analyzed,
and not reported in the 1^' Quarter, 2008 Groundwater Monitoring Report (dated May 29,
2008).
CONCLUSIONS ON CIVIL PENALTY
In the case of Violation No. 1, it was determined that DUSA was in violation of Part I.F.1 ofthe
Permit which requires the Permittee to report all analytical results for samples collected, including
a result for TDS in well MW-25 in the 4^'' Quarter, 2008 Report, for the November 2008
monitoring event
Page 3
WATER OUALITY PENALTY CRITERIA
According to R317-1-8 (Penalty Criteria for Civil Settiement Negotiations), the penalty
calculation methodology consists ofthe following formula:
CIVIL PENALTY = PENALTY + AD.TUSTMENTS - ECONOMIC AND LEGAL
CONSIDERATIONS
I. Category Selection (R317-1-8.3)
Table 1 below describes the Water Quality penalty categories.
TABLE 1
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
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 mentioned 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 Pollution Control
Act, associated regulations, permits or orders to include:
Category B.l - Discharges which likely caused or would potentially cause (undocumented) public
health effects or significant environmental damage.
Category B.2 - Creation of a serious hazard to public health or the environment.
Category B.3 - Illegal discharges containing significant quantities of concentrations of toxic or
hazardous materials.
Category B.4 - Any type of violation not mentioned previously which warrants a penalty
assessment under category B.
Category C - $500 to $2,000 per day. Violations of the Utah Water Pollution Control Act,
associated regulations, permits or orders to include:
Category C.l - Significant excursion of permit effluent limits.
Category C.2 - Substantial non-compliance with the requirements of a compliance schedule.
Category C.3 - Substantial non-compliance with monitoring and reporting requirements.
Category C.4 - Illegal discharge containing significant or concentrations of non toxic or non
hazardous materials.
Category C.5 - Any type of violation not mentioned previously which warrants a penalty
assessment under category C.
Category D - up to $500 per day. Minor violations of the Utah Water Pollution Control Act,
associated regulations, permits or orders to include:
Category D.I - Minor excursion of permit effluent limits.
Category D.2 - Minor violations of compliance schedule requirements.
Category D.3 - Minor violations of reporting requirements.
Category D.4 - Illegal discharges not covered in Categories A, B and C.
Category D.5 - Any type of violations not mentioned previously which warrants a penalty
assessment under category D.
Page 4 •*&
Failing to report all analytical results for samples collected during the November 2008 monitoring
event in the 4"" Quarter, 2008 Report, did not do any harm to human health or the environment;
therefore, the following penalty categories do not apply:
• Category A - Violations with high impact on public health and the
environment. For details see Table 1 above.
• Category B - Major violations of the Utah Water Pollution Control Act,
associated regulations, and permits. For details see Table 1 above.
• Category C - Violations of the Utah Water Pollution Control Act, associated
regulations, permits or orders. For details see Table 1 above.
• Category D.I, 2, 4, and 5 - Minor violations of the Utah Water Pollution
Control Act, associated regulations, permits or orders. For details see Table 1
above.
However, the violation referenced above is in violation of requirements of Part I.F.1 of the Permit
and falls under the penalty Category D3. For details see Table 1 above.
Category D - penalty up to $500 per day.
STATUTORY MAXIMUM PENALTY
The number of days that DUSA is considered to be out of compliance was calculated from the
date the 4"" Quarter, 2008 Groundwater Monitoring Report was due (March 1, 2009) to the day
DUSA submitted the analytical report (by e-mail) for TDS in well MW-25 (April 15, 2009) for a
total of 45 days.
The proposed maximum penalty, therefore, would be calculated for 45 days at $500 per day is
$22,500.
ASSIGNED PENALTY AMOUNT WITHIN A CATEGORY
A. History of compliance or non-compliance:
DRC Finding: According to DRC records, DUSA has been out of compliance with the
reporting requirements of Part I.F.1 of the Permit in two different quarterly monitoring
reports in 2008 (l" Qtr, 2008 and 4"" Qtr, 2008). The original Ground Water Discharge
Permit was issued to DUSA in March, 2005, and submission of quarterly groundwater
quality reports began in June, 2005 (1^^ Quarter, 2005). Since that time, DUSA has
submitted 15 other quarterly groundwater quality reports up thru 4"^ Quarter, 2008 for a
total of 16 reports. As a result, 2 of 16 reports were found to have the type of problem
cited, or 13% of the total. Therefore, an 87% credit was given for history of compliance.
B. Degree of willfulness and/or negligence:
Four factors need to be considered under the requirements of UAC R317-1-8.3(B),
including:
Page 5
1. How much control the violator had over and the foreseeability of the events
constituting the violation;
2. Whether the violator made or could have made reasonable efforts to prevent the
violation;
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 constituting the violation, i.e., report
preparation. Further, DUSA is ultimately responsible for submitting all analytical
results for the groundwater samples required by the Permit.
• DUSA could have made a reasonable effort to carefully review the analytical data,
and identify the missing information in the analytical report thus preventing the
violation.
• DUSA knew of the legal/Permit/QAP requirements which were specifically listed
in two different sections ofthe Permit, including: Part I.E. 1(d)(2) that requires
analysis of all GWPL parameters in Table 2 of the Permit, and Part I.F.1 of the
Permit, that requires reporting of all sample and analytical results required under
the Permit. Further, both of these requirements have existed in the Permit since the
original March, 2005 Permit.
• To DRC knowledge, there is no indication of any recalcitrance. The DRC doesn't
believe DUSA intentionally withheld TDS results for well MW-25 for the
November 2008 monitoring event, but it does appear they were neghgent in report
preparation.
While it appears that some negligence was present in report preparation, there was no
willfulness in this action. Accordingly, the DRC will assign a 50% credit for this category.
C. Good faith efforts to comply:
DUSA was verbally notified of the missing TDS result in a conference call of April 14,
2009. DUSA then emailed the lab result to DRC staff on April 15, 2009; therefore, a
credit of 100% was given for good faith efforts to comply in a timely manner.
Penalty Calculation
Category D, which is a maximum of $500 per day penalty = $500
Credits: 1/3 (max $166) History of Comphance: (87% credit) =$144
1/3 (max $166) Degree of Willfulness and/or Negligence: (50% credit) = $83
1/3 (max $ 166) Good Faith Efforts to Comply: (100% credit) = $166
Total credit = $393
Penalty per day violation: =$107
Number of days of violation: = 45
Total Category Penalty (Gravity Component) = $4,815
Page 6
ADJUSTMENTS
According to R317-1-8.3, the civil penalty shall be calculated by adding the following
adjustments to the penalty amount determined above:
a. Economic benefit (Cost Avoided) gained as a result of non-compliance. DUSA did not
gain any economic benefit by not the submitting the TDS results for well MW-25 for the
November 2008 monitoring event. DUSA had paid for the analysis to be done; however,
the results were not submitted with the 4"^ Quarter, 2008 Groundwater Monitoring
Report. Therefore, no economic benefit will be considered with this proposed civil
penalty.
b. Investigatiye costs incurred by the DRC and/or other governmental levels: Based on the
degree ofthe violation (Category D.3), investigative costs incurred by governmental
agencies are not included.
Proposed Civil Penalty for Docket No. UGW09-04: $ 4,815