DRC-2010-006445 - 0901a068801ea8cc

State of Utah
GARY R HERBERT
Govtrntir
GREG BELL
Lieutenanl Governor
Department of
Environmental Quality
.•\mnnda Smith
E.xet'iiiive Direclor
DIVISION OF RADIATION rONTROL
Rusts Lundberg
Direnor
DRC
December 20. 2010
CERTIFIED MAIL
(Return Receipt Requested)
Jo Ann Tischler, Director Compliance and Permitting
Denison Mines (USA) Coip.
1050 17'^ Street
Suite 950
Denver. CO 80265
Subject: . Signed and Executed Tolling Agreement, Relevant to Terms of Stipulated Consent
Agreement Docket No. UGW09-03
Two copies of the final Tolling Agreement between Denison Mines (USA) Corp. (DUSA) and the
Co-Executive Secretary are enclosed. The copies have been signed by David C. Frydenlund
(DUSA, Vice President and Counsel) and Rusty Lundberg (Co-Executive Secretary).
If you have any questions or concems regarding this transmittal, please contact Loren Morton at
[phone] or Tom Rushmg at [phone].
Sincerely,
UTAH WATER QUALITY BOARD
Rusty Lundberg ' ^
Co-Executive Secretary
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195 North 1950 West • Salt.Uke Cily. UT
Mailing .Address. P.O. Box 144850-.Sail Lake City, L'T 84)14-4850.
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RE: 12/20/10: Tolling Agreement / TR
Jo Ann Tischler
Denison Mines (USA) Corp
1050 Seventeenth ST, STE 950
Denver, Co 80265 1
•pS Form 3800, August 2006 ' .See Reverse.for instrii
TOLLING AGREEMENT
This Tolling Agreement (Agreement) is made by and between Denison Mines (USA)
Corp. (DUSA) and the Co-Executive Secretary of the Utah Water Quality Board (Co-Executive
Secretary).
WITNESSETH
WHEREAS, DUSA and the Co-Executive Secretary entered into a Stipulated Consent
Agreement Docket No. UGW09-03 dated January 27,2009 (Consent Agreement) related to
nitrate contamination at DUSA's White Mesa Uranium! Mill Site, Blanding Utah (Mill);
i
WHEREAS, pursuant to Item 6.A of the Consent Agreement, DUSA submitted a Nitrate
Contamination Investigation Report, White Mesa Uranium Mill Site, Blanding Utah, dated
December 30,2009 (CIR) to the Utah Division of Radiation Control (DRC);
WHEREAS, Item 7.C of the Consent Agreement provides as follows:
If the Executive Secretary determines that the CIR has omitted any
information, content requirements, or failed to meet the
performance standards or objectives mandated by Item 6.A, the
Executive Secretary will so advise DUSA by written notice and
DUSA will remedy such omission or failure within 30 calendar
days of receipt of such notice. If DUSA fails to remedy such
omission or failure within such 30 day period, DUSA will pay
stipulated penalties in the amount of $2,000 per calendar day for
every day after such period that the CIR remains incomplete, as
determined by the Executive Secretary;
WHEREAS, by letter dated October 5, 2010 and hand delivered to DUSA on the same
date, the Co-Executive Secretary notified DUSA of his determination that the CIR is incomplete
(October 5, 2010 DRC Notice). As a result of this determination under Item 7.C of the Consent
Agreement, DUSA is to remedy such omissions in the CIR on or before November 4,2010;
WHEREAS, Item 11 of the Consent Agreement provides as follows:
The deadline stipulated in items 7. A - 7.D may be amended by prior
written mutual agreement of the parties. The party requesting the
amendment must write to the other party 14 days before the
stipulated deadline and request an amendment of the deadline. The
other party will either agree to or deny the amendment in writing
within 10 days;
WHEREAS, the October 5,2010 DRC Notice also directed DUSA to take one ofthe
following actions, in accordance with the Consent Agreement:
4843-7637-4791.2
I
DUSA believes may be relevant. In the November 15,2010 letter, DUSA proposed that a
meeting be held on November 30,2010 between DRC Staff and DUSA technical and regulatory
staff to discuss the foregoing studies and any associated matters, to agree on the studies to be
performed and the manner of performing those studies, and to develop a plan and schedule for
performing such studies and for submittal of a revised CIR;
WHEREAS the meeting contemplated in DUSA's November 15,2010 letter was held on
November 30,2010, among DRC Staff and DUSA technical and regulatory staff. At that
meeting, DUSA presented a number of additional studies (herein "Additional Studies") to be
performed by DUSA in order to complete the CIR. The Additional Studies were in addition to
the New Theory. The Co-Executive Secretary and DUSA further agreed that DUSA would
prepare a detailed plan and schedule (the "Plan and Schedule") for performing such studies and
for submittal of a revised CIR that meets the requirements of all applicable regulations on or
before February 15,2011. The February 15,2011 date for submittal of the Plan and Schedule is
somewhat later than the original 30 days proposed by DUSA in its October 20, 2010 email to the
Co-Executive Secretary, due to the complexity of certain ofthe Additional Studies to be
performed. During the November 30,2010 meeting it was agreed that both the Plan and
Schedule and the revised CIR will be subject to Co-Executive Secretary approval;
WHEREAS, via email correspondence between:October 29 and December 13,2010 the
parties exchanged various drafts of the Tolling Agreement;
WHEREAS, in lieu of proceeding fiirther under Item 11 of the Consent Agreement, and
amending any deadlines pursuant to Item 7.C, or pursuing dispute resolution under Item 13 of
that agreement, the parties desire to give themselves time for:
(a) DUSA to prepare and submit the Plan and Schedule, which addresses both the New
Theory and the Additional Studies, to the Co-Executive Secretary for approval. The
performance objectives for said Plan and Schedule and revised CIR shall meet all
applicable regulatory requirements, including those identified in the Consent Agreement,
Item 6(A)(vi).
(b) the Co-Executive Secretary to review and approve the Plan and Schedule, with any
modifications deemed necessary by the Co-Executive Secretary; and
(c) the Co-Executive Secretary and DUSA to agree on a revised or replacement Consent
Agreement that incorporates the deliverables and timelines set out in the approved Plan
and Schedule; and
WHEREAS, the parties acknowledge that the covenants and forbearance under this
Agreement constitute adequate and sufficient consideration.
NOW, THEREFORE, in consideration of the promises contained herein, the parties to
this Agreement do hereby stipulate, covenant, and agree as follows:
1. Calculation of any time period or monetary penalty by the Co-Executive Secretary under
Item 7.C of the Consent Agreement shall:
4843-7637-4791.2
a) Not include the period from January 4,2010 (submittal ofthe CIR to DRC)
through October 5,2010 (delivery of ithe DRC Notice to DUSA);
b) Not include the period from October 5 to October 20,2010 (whereby DUSA
requested amendment of the Consent Agreement pursuant to Item 11);
c) Not include the period from October 20,2010, through the effective date of
this Tolling Agreement; and
d) Include the earlier of either: (i) the Effective Date of Termination of this
Agreement as defmed in paragraph 6i, or (ii) the Automatic Termination Date
as defined in paragraph 6, below.
Commencing January 4, 2010 and ending on the date specified in subparagraph l.d, above,
inclusive, is herein referred to as the "Tolling Period".
Stipulated Penalties have not begun to accrue under Item 7.C of the Consent Agreement, and
shall not accrue during the Tolling Period.
3. On or before February 15,2011, DUSA shall complete and submit for Co-
Executive Secretary review and approval the Plan and Schedule. DUSA agrees that the Plan and
Schedule v^ll include:
a. a logic diagram to identify all studies and decision processes that may be
required to meet all applicable regulatory requirements including the
performance objectives ofthe Consent Agreement, Item 6(A)(vi).
b. a schedule including timelines for the commencement and completion of all
studies identified above, and delivery of a revised CIR for Co-Executive
Secretary review and approval.
4. The Co-Executive Secretary shall provide his initial comments on the Plan and
Schedule on or before March 15,2011, and DUSA and the Co-Executive Secretary will
cooperate to finalize the Plan and Schedule as expeditiously thereafter as reasonably practicable.
5. DUSA and the Co-Executive Secretary shall cooperate to negotiate and finalize
and execute a revised or replacement Consent Agreement that incorporates the Plan and
Schedule, as soon as reasonably practicable after the Plan and Schedule has been finalized and
approved by the Co-Executive Secretary. The revised or replacement Consent Agreement will
contain a provision to the effect that DUSA will pay to DRC the reasonable fees payable by
DRC to the URS Corporation for consulting services to be rendered by the URS Corporation in
support of its review of the Plan and Schedule and revised CIR on behalf of DRC, based on an
estimate or estimates of such services approved by DUSA.
6. This Agreement shall terminate on the earlier of: (a) April 30,2011 ("Automatic
Termination Date") unless extended by prior v^itten agjeement executed by the parties; and (b)
the date of execution and delivery of the revised or replacement Consent Agreement
contemplated by paragraph 5 above. Prior to the Automatic Termination Date, any party may
4843-7637-4791.2
terminate this Agreement for any reason and without cause by sending a written termination
notice to the other party ("Termination Notice"). Such Termination Notice shall be sent to the
other party by certified mail or registered mail, retum receipt requested, using the addresses
indicated below. Termination shall not be effective until five (5) days after the date the
Termination Notice is received by the other party (the "Effective Date of Termination"), as
indicated by the retum receipts. The Tolling Period shall extend only to the earlier date of; (a)
the Effective Date of Termination, or (b) the Automatic Termination Date.
7. The undersigned representatives of the parties certify that they are authorized to
enter into the terms and conditions of this Agreement, and to execute for and bind the party
whom he represents.
The addresses and persons to whom notice is to be given are as follows:
If to DUSA:
David C. Frydenlund
Vice President and Coimsel
Denison Mines (USA) Corp.
1050 17* Street, Suite 950 ,
Denver, CO 80265
If to the Co-Executive Secretary: i
Rusty Lundberg
Co-Executive Secretary
Utah Water Quality Board
195 North 1950 West
Salt Lake City, Utah 84116
With a copy to:
Assistant Attomey General Denise Chancellor,
OfTice of Attorney General
160 East 300 South, 5* Floor
P.O. Box 140873
Salt Lake City, Utah 84114-0873
9. Subject to all other terms of this Agreement, the parties reserve all existing rights,
privileges, defenses and contentions which exist as against each other, and enter into this
Agreement without prejudice to or waiver of those rights, privileges, defenses, or contentions.
10. This Agreement may not be modified except in writing and signed by the parties
to this Agreement.
11. This Agreement shall continue in full force and effect until the earlier of the
Effective Date of Termination or the Automatic Termination Date, as defined in paragraph 6 of
this Agreement.
4843-7637-4791.2
12.
counsel, and have consulted with counsel, prior to executing this Agreement.
Rusty Liindbsrg
Co-Executive; Secretaiy
UTAH Wy^OfR QUALITY BOARD
Date:
DENIS(?NM1 ISA) CORP.
T^&^/i^UJjBryp.enl\xad, Esq.
Vice: President iahd Counsel
4843:7(537-479112
1) perform a number of additional studies suggested by DRC under a revised
CIR that could be submitted to the Co-Executive Secretary for review and
approval;
2) opt to request to amend the 30-day deadline for DUSA to submit a revised
CIR, pursuant to Item 11 ofthe Consent Agreement; or
3) opt to request amendment of the Consent Agreement (under Item 11) to
provide a schedule for submittal of performance standards and a Corrective
Action Plan for the nitrate contamination for Co-Executive Secretary approval
xmder Item 8 of the Consent Agreement;
WHEREAS, by an email transmitted to the Co-Executive Secretary on October 20,2010,
and pursuant to Item 11 of the Consent Agreement, DUSA requested an amendment to the
deadline stipulated in item 7.C of the Consent Agreement, which required that Denison must
remedy any omissions in, content requirements of, or failure to meet any performance standards
or objectives relating to the CIR mandated by Item 6.A of the Consent Agreement, within 30
calendar days of receipt of the October 5,2010 DRC Notice {i.e., November 4, 2010). Instead,
DUSA requested item 7.C be amended as follows:
a. DUSA representatives will meet with the Co-Executive Secretary and his legal
coimsel within two weeks from the date of the email to discuss the legal
responsibilities of DUSA with respect to the nitrate contamination;
b. Once the legal responsibilities of DUSA with respect to the nitrate contamination
have been determined, DUSA will, within 30 days after such a determination is
made, submit to the Co-Executive Secretary for approval a plan and schedule to
perform any further investigations that may be required in order to remedy any
such omissions, content requirements or failures of performance standards, and to
submit a revised CIR; and
c. DUSA will perfonn such investigations and submit a revised CIR in accordance
with the agreed upon plan and schedule;
WHEREAS, on October 26,2010, DUSA met with the Co-Executive Secretary, DRC
staff and legal counsel (October 26, 2010 Meeting) to discuss DUSA's legal obligations with
respect to the nitrate contamination. At the meeting, DUSA reported that it was premature to
submit a schedule for submittal of performance standards and a Corrective Action Plan for the
nitrate contamination. In tum, DUSA presented a new theory for a possible source ofthe nitrate
and chloride contamination beneath the Mill, based on DUSA's review of the scientific literature
(New Theory). Based on this New Theory, DUSA suggested that the nitrate contamination
source is or could be caused by naturally occurring nitrate and chloride salt deposits located in
the vadose zone near or beneath the Mill site area, which have been mobilized by natural and/or
artificial recharge. The parties agreed that this New Theory warrants additional investigation,
along with certain of the other additional studies suggested in the October 5,2010 DRC Notice;
WHEREAS, as agreed at the October 26, 2010 meeting, DUSA submitted via email on
November 15,2010, a letter setting out the additional studies to be considered that have been
identified to date, including the additional studies suggested in the October 5,2010 DRC Notice,
proposed additional studies relating to the New Theory, and any other additional studies that
4843-7637-4791.2