DRC-2010-005162 - 0901a068801c55a1

State of Utah
GARY R. HERBERT
Govemor
GREG BELL
Lieutenant Govemor
Department of
Environmental Quality
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Rusty Lundberg
Director
C-2010-005162
September 22, 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: June 22, 2010 DUSA Response Regarding MAY 13, 2010 DRC NOTICE OF VIOLATION
AND CEASE AND DESIST COMPLIANCE ORDER, DOCKET NO. UGWlO-04 - May
4, 2010 DRC inspection of New Decontamination Pad - DRC Findings and Proposed
Settlement Agreement and Monetary Penalty
Dear Mr. Frydenlund:
The Utah Division of Radiation Control (DRC) reviewed DUSA's June 22, 2010 response to the DRC's
Notice of Violation and Order to Provide Information (Docket Number UGW 10-04). Based on this review
the DRC has determined the following:
1. Violation of Part I.D.4 of the Permit for construction, and operation of a new wastewater
treatment or storage facility without submittal of engineering design plans and specifications,
and prior Executive Secretary review and approval.
DRC Findings: In the June 22, 2010 DUSA root cause analysis, DUSA states it was their
understanding that this disagreement on the interpretation of Part I.D.4 arising in 2008 was resolved in
2009 through the addition of Part I.H.4 to the Permit. This statement would be tme, if DUSA had
followed the requirements of Part I.H.4 of the Permit, and secured the required approvals before
operation ofthe New Deontamination Pad (NDP).
In light of the January 20, 2010 Permit modification that required DUSA to obtain Executive
Secretary approval of certain NDP design elements and constmction before operation ofthe
pad , it is clear that the DUSA NDP facility has a potential to contaminate groundwater and is
therefore regulated under the Water Quality Act. Therefore, we have determined that
Violation No. 1 still stands as cited. 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.H.4(a) of the Permit for failure to submit an updated DMT Monitoring
Plan within 30 days of Permit issuance, or by February 19, 2010.
195 North 1950 West • Salt Lake City, UT
Mailing Address: P.O. Box 144850 • Salt Lake City, UT 84114-4850
Telephone [phone] • Fax [phone] • T.D.D. (801) 536^14
www.deq.utah.gov
Printed on 100% recycled paper
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DRC Findings: The DRC acknowledges that DUSA did submit letters regarding NDP on June 29,
2009 and November 16, 2009 that included excerpts of proposed language changes to the DMT Plan.
We also acknowledge that DUSA submitted a revised and stand-alone version ofthe DMT Plan dated
March 12, 2010. After review ofthe March 12, 2010 submittal the DRC sent DUSA a May 10, 2010
DRC RFI. As of this date, DUSA has not responded or resolved the issues presented. Therefore, we
have determined that Violation No. 2 still stands as cited. Because Violation No. 2 is a failure to
comply with a requirement found in Part I.H.4 of the Permit, the proposed penalty has been combined
for Violations 2, 3, 4, and 5. Said civil penalty has been calculated by DRC staff and is attached to this
letter. A proposed SA is also attached for your consideration.
3. Violation of Part I.H.4(b) of the Permit for failure to submit engineering drawings for the
steel liner and leak detection system and receive Executive Secretary approval before liner
construction.
DRC Findings: The facts remain that an October 8, 2009 DRC inspection found the steel liner had
already been constructed at the NDP. Further, the DRC has requested additional infonnation regarding
engineering design of the steel liner and leak detection system (LDS) in multiple DRC RFI letters,
dated August 6, 2009, Febmary 4, 2010, and May 10, 2010. To date, DUSA has not fiilly resolved the
concems and issues provided therein.
Because DUSA constmcted the steel liner and leak detection system before receiving Executive
Secretary approval of the engineering drawings, we have determined that Violation No. 3 still stands as
cited. A proposed civil penalty has been calculated by DRC staff and is attached to this letter.
Because this violation is a failure to comply with a requirement found in Part I.H.4 ofthe Permit, the
proposed penalty has been combined for Violations 2, 3, 4, and 5. Said civil penalty has been
calculated by DRC staff and is attached to this letter. A proposed SA is also attached for your
consideration.
4. Violation of Part I.H.4.(c) of the Permit for failure to provide at least a 10 calendar day prior
notice of the hydrostatic test that verifies that the steel liner and leak detection system
perform in accordance with the approved drawings, and to allow a DRC inspector to be
present during the test.
DRC Findings: We acknowledge that DUSA claims they provided a 10 day advance notification of
the hydrostatic test that began December 1, 2009. However, there was no advance notification made
for the Febmary 9 - 11, 2010 hydrostatic test. To correct the violation, DUSA states it will perform a
third hydrostatic test and will provide DRC staff a 10 day prior notification as requirement. To date,
we await said nofice.
Because DUSA failed to provide a 10 day notificafion to the DRC for the Febmary 9 -11, 2010
hydrostatic test, we have determined that Violation No. 4 sfill stands as cited. A proposed civil penalty
has been calculated by DRC staff and is attached to this letter. Because this violation is a failure to
comply with a requirement found in Part I.H.4 ofthe Permit, the proposed penalty has been combined
for Violafions 2, 3, 4, and 5. Said civil penalty has been calculated by DRC staff and is attached to this
letter. A proposed SA is also attached for your consideration.
5. Violation of Part I.H.4(d) of the Permit for failure to refrain from use of the New
Decontamination Pad until after Executive Secretary approval ofthe as-built drawings.
DRC Findings: The fact remains that DUSA put the NDP into service before receiving approval ofthe
as-built drawings. We recognize that because the steel liner and LDS had been constmcted sometime
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before October 8, 2009, that the November 16, 2009'engineering drawings and other information ;
submitted could be considered an as-built report. However, the DRC has requested additional
information in RFI letters dated Febmary 4 and May 10, 2010. To date DUSA has not resolved these
issues.
To correct the violafion DUSA stated it: ''...stopped use of the new decontarnination pad^ on May 11, -
2010, and will not recommence use of the pad until all conditions in Part I.H.4 of the Permit have been
safisfied and Executive Secretary approval has been obtained in writing. " This corrective action is
acceptable.
Because DUSA placed the NDP into service before receiving Executive Secretary approval ofthe As-
Built drawings, we have determined that Violation No. 5 still stands as cited. A proposed civil penalty
has been calculated by DRC staff and is attached to this letter. Because this violation is a failure to
comply with a requirement found in Part I.H.4 of the Permit, the proposed penalty has been combined
for Violafions 2, 3, 4, and 5. Said civil penalty has been calculated by DRC staff and is attached to this
letter. A proposed SA is also attached for your consideration.
With regards to the attached SA, if you wish to resolve the May 13, 2010 NOV based on the enclosed
calculations, please review the SA and sign both originals (do not date them), and then return 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 of the 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
Rusty Lundberg
Co-Executive Secretary
RL/PRG:prg
CC: Laura Lockhart, Utah AG Office
Denison Mines (USA) Corp.
WHITE MESA MILL
Settlement Agreement, Docket No. UGW10-04SA
UTAH WATER QUALITY BOARD
IN THE MATTER OF
Denison Mines (USA) Corp.
1050 SEVENTEENTH STREET SUITE 950
DENVER, COLORADO 80265
SETTLEMENT AGREEMENT
DOCKET NUMBER UGW10-04SA
This SETTLEMENT AGREEMENT (hereinafter "AGREEMENT") is betweeh Denison
Mines (USA) Corp. (hereinafter "DUSA ") 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
C'UAC") R3I7-I 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 CO-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 five violations cited in the NOTICE OF VIOLATION
AND CEASE AND DESIST COMPLIANCE ORDER Docket Number UGW 10-04
(hereinafter the "NOTICE") issued to DUSA on May 13, 2010, by the BOARD
(incorporated hereto by reference). DUSA did not appeal the ORDER by requesfing a
hearing before the BOARD; therefore, the ORDER became final. 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 fiilly 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 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 DUSA.
5. In resolufion of the NOTICE referenced herein in paragraph 3, DUSA agrees to the
setfiement terms stated below:
a. In resolution of Violations 1 - 5 of the NOTICE referenced in Paragraph 3 of this
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Denison Mines (USA) Corp.
WHITE MESA MILL.
Settlement Agreement, Docket No. UGW 10-04SA
AGREEMENT, DUSA agrees to pay a total penalty amount of $62,500 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 of Environmental Quality, 195 North 1950 West,
P.O. Box 144850, Sah Lake City, Utah 84114-4850. The penalty has been
determined using the Penalty Criteria for Civil Setfiement Negotiations, Utah
Administrative Code ("UAC") R317-1-8 which considers such factors as the nature,
severity and extent of the violafions, history of noncompliance, degree of willfiilness
and/or negligence, good faith efforts to comply, and economic benefit.
6. Nothing contained in this AGREEMENT shall preclude the BOARD from taking addifional
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 consfitute a waiver by DUSA to raise in defense any
legal or factual contenfion for fiature allegafions of noncompliance.
9. Nothing in this AGREEMENT shall consfitute or be considered as a relfease from any claims,
to include natural resource damage claims, cause of acfion, 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.
AGREED to this day of , 2010.
DENISON MINES (USA) CORP UTAH WATER QUALITY BOARD
By_ By_
DAVID C. FRYDENLUND RUSTY LUNDBERG
DUSA Vice President and Counsel Co-Executive Secretary
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