DRC-2010-003914 - 0901a068801a5284

State of Utah
GARY R, HERBERT
Governor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Dane L. Finerfrock
Director
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DRC-2010-003914
June 28, 2010
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. David C. Frydenlund
Vice President and General Counsel
Denison Mines (USA) Corp. (DUSA)
1050 Seventeenth St. Suite 950
Denver, Colorado, 80265
Subject: May 24, 2010 DUSA Response Regarding April 20, 2010 DRC NOTICE OF VIOLATION
AND ORDER TO PROVIDE INFORMATION Docket No. UGWl 0-03 - 4"' Quarter, 2009
Groundwater Monitoring Report: Ground Water Quality Discharge Permit No. UGW370004
(Permit) - DRC Findings and Proposed Settlement Agreement and Monetary Penalty
Dear Mr. Frydenlund:
The Utah Division of Radiation Control (DRC) reviewed DUSA's May 24, 2010 response to the DRC's
Notice of Violation and Order to Provide Information (Docket Number UGWl 0-03). Based on this review
the DRC has determined the following:
1. Violation of Part I.F.I of the Permit for failing to report all well monitoring and samples
collected, including a result for TDS in wells MW-31 and MW-32 in the 4"' Quarter 2009
Report, for the October 2009 monitoring event.
DRC Findings: the DUSA root cause analysis focused on the claim that the Denver Environmental
Staff was not aware of the re-sampling of wells MW-31 and MW-32 performed by DUSA White Mesa
staff. These wells were resampled because the holding time for TDS had been exceeded for the
original samples when they arrived at the laboratory. We accept the root cause analysis and the
corrective and preventative actions taken, including the initiation of computer checks for analytical
completeness.
After review of the DUSA's explanation, we have determined that Violation No. 1 still stands as cited.
We have also determined that it is necessary to pursue a penalty for this violation because this is a
repeat violation, in that DUSA has been formally cited by for this problem before in two Notice of
Enforcement Discretion (NOED) letters, dated July 25, 2008 and November 17, 2009, and a April 21,
2009 Notice of Violation (NOV).
As described in the April 20, 2010 NOV, this problem continued in the 4*^ Quarter, 2009 Report, in
that DUSA failed to report a TDS result in 3 samples (MW-31, MW-32, and MW-65). Because this is
195 North 1950 West - Salt Uke City, UT
Mailing Address: P.O. Box 144850 • Sah Lake City, UT 84114-4850
Telephone [phone] • Fax [phone] • T.D.D. (801) 536^14
www.deq.utah.gov
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a repeat and continuing problem, a proposed civil penalty has been calculated by DRC staff and is
attached to this letter. For details, see the DRC memorandum attached herewith. A proposed
Settlement Agreement (SA) is also attached for your consideration.
2. Violation of Part I.F.I of the Permit and Section 4.3.3 of the DUSA QAP for failing to report
all well monitoring and samples collected, including a result for TDS in field duplicate MW-
65 in the 4"" Quarter 2009 Report, for the October 2009 monitoring event.
DRC Findings: again, the DUSA root cause analysis focused on that the claim that the Denver
Environmental Staff was not aware of the re-sampling of MW-65 (blind duplicate of MW-32). Well
MW-32 was resampled because the holding time for TDS had been exceeded for the original sample
when it arrived at the laboratory. We accept the root cause analysis, corrective and preventative
actions taken, including the initiation of computer checks for analytical completeness.
After review of the DUSA's explanation, we have determined that Violation No. 2 still stands, as cited.
We have also determined that it is necessary to pursue a penalty for this violation because this is a
repeat violation. This same problem was brought to the company's attention in a July 25, 2008 NOED
letter and an April 21, 2009 NOV (Violation No. 1), DUSA was cited for failing to report a result for
•TDS in well MW-25 in the 4* Quarter, 2008 Report, for the November 2008 monitoring event.
Because this problem was a repeat violation, the DRC decided to pursue a Civil Penalty against DUSA.
On October 7, 2009 DUSA was issued a Penalty of $4,815. Enforcement for this problem was pursued
via an October 7, 2009 Settlement Agreement. Payment of the $4,815 penalty was received by DRC in
a DUSA letter dated October 28, 2009. DUSA responded to the April 21, 2009 NOV in a May 22,
2009 letter, in which they clamed corrective action would start with the 2""^ Quarter, 2009 Groundwater
Report.
As described above, this problem continues in the 4* Quarter, 2009 Report, in that DUSA failed to
report a TDS result in 3 samples (MW-31, MW-32, and MW-65). Because this is a repeat and
continuing problem, a proposed civil penalty has been calculated by DRC staff. Because Violations 1
and 2 both involve omission of required information from the 4* Quarter, 2009 Report, the DRC has
combined both violations under one penalty calculation. This calculation is attached to this letter. A
proposed SA is also attached for your consideration.
3. Violation of Part I.E. 1(a) of the Permit and Section 6.2.7(d)(v) of the DUSA QAP for failing
to achieve stable turbidity conditions before collecting groundwater samples in 12 wells
during the October, November, and December, 2009 monitoring events.
DRC Findings: in the May 24, 2010 DUSA letter, a root cause analysis DUSA claims that it may not
be feasible to achieve both a turbidity level less than the 5 NTU standard and stabilization of turbidity
for two consecutive measurements within 10% in every well before sample collection. The May 24,
2010 DUSA letter also stated that to correct the violation, they had submitted a letter request for waiver
of monitoring methods relative to turbidity issues. DUSA submitted this letter on April 2, 2010,
shortly after a March 29, 2010 conference call with DRC staff to discuss State findings for the 4"'
Quarter, 2009 Report. In the April 2, 2010 letter, DUSA requested that the Executive Secretary waive
the requirement in Section 6.2.7(d)(v) of the QAP for turbidity to stabilize in all groundwater
monitoring wells, chloroform investigation wells and nitrate investigation wells, until such time as
revised sampling procedures are approved in a revised QAP.
Please be advised that the April 2, 2010 request for waiver does not constitute an acceptable corrective
action, nor does it provide prevention steps that DUSA was ordered to provide in the April 20, 2010
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NOV. Further, acceptable corrective actions and steps for prevention must always be independent of
any future DRC actions or approvals.
After reviewing the April 2, 2010 request for waiver, the DRC sent DUSA a June 1, 2010 Request for
Information (RFI) letter. DUSA responded to the DRC June 1, 2010 RFI in an e-mail of June 24,
2010, which is currently under review. Therefore, Violation No. 3 remains unresolved, and DUSA has
yet to re-gain compliance with respect to this violation.
After review ofthe DUSA's explanation, we have determined that Violation No. 3 still stands, as cited.
After considering the Executive Secretary's possible enforcement options, DRC staff believes it is
necessary to pursue a penalty for this violation because this is a repeat violation, in that in a November
17, 2009 NOV (Violation No. 2), DUSA was cited for failing to achieve stable turbidity conditions
before collecting groundwater samples in 17 wells during the February and March, 2009 monitoring
events. DUSA responded to that NOV with a December 23, 2009 letter in which they stated that
compliance had been re-gained in that the "Samples were collected in accordance with Sections
6.2.7(d)(v) and 6.2.7(d)(vi) ofthe QAP during the 4"' Quarter. 2009 event. " This and other DUSA
corrective actions and prevention steps were accepted by the DRC in an April 21, 2010 letter.
Contrary to this claim, the problem continued in the 4* Quarter, 2009 Report, as cited in the April 20,
2010 NOV (Violation 3). Because this is a repeat and continuing problem, a proposed civil penalty has
been calculated by DRC staff and is attached to this letter. A proposed SA is also attached for your
consideration.
Please be aware that the proposed civil penalty is based in part, on nine days of sampling during
October, November, and December, 2009, and that until the DRC approves any changes to the QAP,
that DUSA is bound to the commitments, corrective actions, and prevention steps listed in the
December 23, 2009 DUSA letter response. Again, said corrective actions were found acceptable in an
April 21, 2010 DRC letter. In the event that DUSA fails to execute these corrective actions, it may be
subject to additional enforcement actions and monetary penalties.
4. Violation of Part I.E.I (a) ofthe Permit and Section 6.2.7(d)(v) ofthe DUSA QAP for failing
to achieve stable redox potential (Eh) conditions before collecting groundwater samples in 5
wells during the October and November, 2009 monitoring events.
DRC Findings: in the May 24, 2010 DUSA root cause analysis claims are made that it may not be
feasible to achieve stabilized parameters, including redox potential (Eh), for two consecutive
measurements within 10% in every well before sample collection. DUSA also stated that to correct the
violation, they submitted a letter addressing modification of monitoring methods relative to parameter
stability issues. DUSA submifted this letter on April 2, 2010. In a submittal of April 2, 2010 DUSA
requested that the Executive Secretary waive the requirement in Section 6.2.7(d)(v) of the QAP for
turbidity in all groundwater monitoring wells, chloroform investigation wells and nitrate investigation
wells, until such time as revised sampling procedures are approved in a revised QAP; however, no such
request was made for redox potential (Eh) or any other field parameter. Therefore, Violation No. 4
remains unresolved, and DUSA has yet to re-gain compliance with respect to this violation.
Please be advised that the April 2, 2010 request for waiver for turbidity does not constitute an
acceptable corrective action, nor does it provide prevention steps that DUSA was ordered to provide in
the April 20, 2010 NOV. Further, acceptable corrective actions and steps for prevention must always
be independent of any future DRC actions or approvals.
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After review of the DUSA's explanation, we have determined that Violation No. 4 still stands, as cited.
After considering the Executive Secretary's possible enforcement options, DRC staff believes it is
necessary to pursue a penalty for this violation because as a field monitoring parameter, it is also
required to be stable before sample collection, and failure to achieve stable field parameters is at the
root of the violation. Further, in response to the November 17, 2009 DRC NOV (Violation No. 2),
DUSA in a December 23, 2009 letter responded that compliance had been re-gained in that "Samples
were collected in accordance with Sections 6.2.7(d)(v) and 6.2.7(d)(vi) of the QAP during the 4"'
Quarter, 2009 event. " Said sections of the QAP mandate that Eh conditions be stable (+/-10%) before
sample collection.
As described above, this problem continues in the 4"' Quarter, 2009 Report, as cited in the April 20,
2010 NOV. Because this is a related problem related to stabilization of field monitoring parameters,
the proposed penalty has been combined for Violations 3 and 4. Said civil penalty has been calculated
by DRC staff and is attached to this letter. A proposed S A is also attached for your consideration.
5. Violation of Part I.E. 1 (a) of the Permit and Section 6.2.7(d)(v) of the DUSA QAP for failing
to excavate two casing volumes before collecting groundwater samples in 17 wells during the
4"" Quarter (October) 2009 monitoring event.
DRC Findings: DUSA claims in the root cause analysis that, prior to November 17, 2009, sampling
personnel believed that they had the option either to pump each well to two casing volumes or to pump
the well until field parameters were stabilized. Further, they believed they had the verbal approval of
the DRC representative who has witnessed the field sampling program, to determine how long each
well would require to be pumped to two casing volumes, and to pump only to 120 minutes on any well
that would require longer than this interval of time. DUSA received a Notice of Violation dated
November 17, 2009 in which DRC identified that Mill staff were not following the QAP requirement
to evacuate two casing volumes and to achieve stable parameters.
This statement is unsubstantiated. During the 4* Quarter 2009 monitoring event two DRC inspectors
were present and recall no such verbal statement being made. Further, the DRC inspectors recall
asking the DUSA sampler ''why do you only pump for 120 minutes rather than pumping for 2 casing
volumes!" DUSA staff replied that the contractor who installed the bladder pumps told DUSA they
would only have to pump for 2 hours before collecting a sample. Later in the inspection this same
claim was substantiated by the sampler's supervisor.
The November 17, 2009 NOV (Docket No. UGW09-06) was issued after review ofthe T' Quarter
2009 Report, in which DUSA was cited (Violation No. 3) for failing to excavate two casing volumes
before collecting groundwater samples in 13 wells during the January, February, and March 2009
monitoring events. The casing volume problem observed during the October 12 - 14, 2009 split
sampling event was not even considered when the November 17, 2009 NOV was issued.
After review of the DUSA's explanation, we have determined that Violation No. 5 still stands as cited.
After considering the Executive Secretary's possible enforcement options, DRC staff believes it is
necessary to pursue a penalty for this violation because this is a repeat violation. Previously, in a
November 17, 2009 NOV (Violation No. 3), DUSA was cited for failing to excavate two casing
volumes before collecting groundwater samples in 13 wells during the January, February, and March
2009 monitoring events. In response to that NOV, DUSA in a December 23, 2009 letter said
compliance had been regained, in that the "Samples were collected in accordance with Sections
6.2.7(d)(v) and 6.2.7(d)(vi) ofthe QAP during the 4"' Quarter. 2009 event. "
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As described above, this problem continued in the 4"" Quarter, 2009 Report, as cited in that April 20.
2010 NOV. Because this is a repeat and continuing problem, a proposed civil penalty has been
calculated by DRC staff and is attached to this letter. A proposed SA is also attached for your
consideration.
6. Violation of Part I.E.l(a) ofthe Permit and Section 3.1 ofthe DUSA QAP for failing to use
the correct formula in 39 instances to determine RPD for the duplicates of the October,
November, and December, 2009 monitoring events.
DRC Findings: the May 24, 2010 DUSA letter included a root cause analysis that stated that DUSA
was not aware of this problem until it was brought to their attention by the DRC in the February 17,
2010 letter and an April 5, 2010 closeout call, and that the problem was caused by an error in the RPD
formula. In the same letter, DUSA said they had corrected the RPD formula and implemented
computer automation thereof, effective with the 1^' Quarter, 2010 Report; which would provide
prevention for future problems. We accept the corrective actions and prevention steps taken.
After review ofthe DUSA's explanation, we have determined that Violation No. 6 still stands, as cited.
After considering the Executive Secretary's possible enforcement options, we have determined not to
pursue a monetary penalty for Violation No. 6 because this was the first time this problem has been
cited. However, should the root cause and corrective actions provided in your May 24, 2010 response
fail to be accurate or lasting, DUSA may be subject to fiiture escalated enforcement action.
7. Violation of Part I.F.l(e) ofthe Permit and Section 9.1.4(a) ofthe DUSA QAP for failure to
fully and completely disclose all non-conformance with the approved QAP for the October,
2009 sampling event with respect to a RPD in excess of 20% for ammonia (as nitrogen) in
well MW-22 and blind duplicate sample MW-70.
DRC Findings: the May 24, 2010 DUSA letter explained that the incorrect RPD formula, referred to
in Violation 6, was not apparent, and was therefore the root cause of Violation 7. We accept the
corrective actions (formula correction) and preventative steps (computer automation).
After review of the DUSA's explanation, we have determined that Violation No. 7 still stands as cited.
After considering the Executive Secretary's possible enforcement options, we have determined not to
pursue a monetary penalty for Violation No. 7 because this was the first time this problem has been
cited. However, should the root cause and corrective actions provided in your May 24, 2010 response
fail to be accurate or lasting, DUSA may be subject to future escalated enforcement action.
8. Violation of Part I.E.I (a) ofthe Permit and Section 11 ofthe DUSA QAP for failing to list in
a summary table analytes wells that were subject to accelerated monitoring pursuant to Parts
I.G.I and 2 of the Permit, including uranium (MW-14, MW-15, and MW-17) and thallium
(MW-18.
DRC Findings: the May 24, 2010 DUSA letter included: 1) a root cause analysis that stated the
DUSA Denver Environmental Staff inadvertently omitted these analytes from the summary table of
wells / analytes that are subject to accelerated monitoring, and 2) corrective action and prevention steps
were implemented, including computer checks for determining accelerated status, and will be effective
with the 1^' Quarter, 2010 Report. We accept the corrective actions and prevention steps taken.
After review ofthe DUSA's explanation, we have determined that Violation No. 8 still stands as cited.
After considering the Executive Secretary's possible enforcement options, we have determined not to
pursue a monetary penalty for Violation No. 8 because this was the first time this problem has been
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cited. However, should the root cause and corrective actions provided in your May 24, 2010 response
fail to be accurate or lasting, DUSA may be subject to future escalated enforcement action.
With regards to the attached SA, if you wish to resolve the April 20, 2010 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 of this 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
calendar days of the date the final SA document is signed by the Executive Secretary.
If you would like to discuss the proposed monetary penalty or the content ofthe SA fiirther, please contact
Phil Goble at [phone] to arrange for a settlement meeting or conference call.
Thank you for your continued cooperation.
UTAH WATER QUALITY BOARD
Dane L. Finerfrock
Co-Executive Secretary
DLF/PRG:prg
Denison Mines (USA) Corp.
WHITE MESA MILL
Settlement Agreement, Docket No. UGW10-03SA
UTAH WATER QUALITY BOARD
IN THE MATTER OF
Denison Mines (USA) Corp.
1050 SEVENTEENTH STREET SUITE 950
DENVER, COLORADO 80265
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW10-G3SA
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
C'UAC")R3I7-1 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 of this AGREEMENT. UCA
§§19-5-106 and 115.
3. This AGREEMENT resolves all eight violations cited in the NOTICE OF VIOLATION
and ORDER, Docket Number UGWl 0-03 (hereinafter the "NOTICE") issued to DUSA on
April 20, 2010, by the BOARD (incorporated hereto by reference). It does not in any way
relieve DUSA fi-om any other obligation imposed under the^cr 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. In resolution of the NOTICE referenced herein in paragraph 3, DUSA agrees to the
settlement terms stated below:
a. In resolution of Violations 1 - 5 of the NOTICE referenced in Paragraph 3 of this
AGREEMENT, DUSA agrees to pay a total penalty amount of $17.309 bv check
within 30 calendar days ofthe effective date of this AGREEMENT. The check
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Denison Mines (USA) Corp.
WHITE MESA MILL
Settlement Agreement, Docket No. UGW10-03SA
will be made payable to the State of Utah, delivered or mailed to the Division of
Radiation Control, Department of Environmental 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 of the violations, history of noncompliance, degree of willfulness
and/or negligence, good faith efforts to comply, and economic benefit.
b. In resolution of Violations 6, 7, and 8 of the NOTICE the EXECUTIVE
SECRETARY agrees not to seek monetary penalties.
6. Nothing contained in this AGREEMENT shall preclude the BOARD fi-om taking additional
actions to include additional penalties against DUSA for permit violations not resolved by this
AGREEMENT.
7. If an agreement between DUSA and the EXECUTIVE SECRETARY cannot be reached in a
dispute arising under any provision of this 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.
8. Nothing in this AGREEMENT shall constitute a waiver by DUSA to raise in defense any
legal or factual contention for future allegations of noncompliance.
9. 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 ofthe
State.
AGREED to this day of , 2010.
DENISON MINES (USA) CORF UTAH WATER QUALITY BOARD
By By J)a/KXoCw^^
DAVID C. FRYDENLUND DANE L. FINERFROCK
DUSA Vice President and Counsel Co-Executive Secilctary
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