DRC-2011-006607 - 0901a068802456b6

Denison Mines (USA) Corp.
1050 17th Street, Suite 950
Denver, CO 80265
USA
Tel: [phone]
Fax: [phone]
www.denisonmines.com
June 17, 2011
VIA PDF AND FEDERAL EXPRESS
Mr. Rusty Lundberg
Executive Secretary
Utah Division of Radiation Control
Utah Department ofEnvironmental Quality
195 North 1950 West
Sah Lake City, UT 84116-3097
Re: White Mesa Mill Cell 2 Slimes Drain Compliance -Status Update and Plan and
Schedule
This letter provides an update on the status of actions committed to in Denison Mines (USA)
Corp.'s ("Denison's") May 27, 2011 Notice regarding Cell 2 Annual Slimes Drain Compliance
(the "May 27, 2011 Notice" or the "Notice") at White Mesa Mill and discussions during our
conference call with Utah Division of Radiation Control ("DRC") on May 25, 2011.
Re-grading of Interim Fill on Cell 2
The Notice committed that Denison would re-grade the interim fill on Cell 2 on or before August
1, 2011 in order to reduce the potential for the accumulation of stormwater on the surface of Cell
2, which can potentially infiltrate into Cell 2.
Denison has completed an updated survey of the Cell 2 surface which has identified low areas
that could be regraded. Denison has prepared a plan for regrading the surface. The completed
plan will require 50,000 cubic yards of cut and fill, consisting of alluvial material and/or rock, to
level out low areas on the current surface. Denison believes thatthe removal of low areas and
filling of potential pooling spots will have a positive effect on the slimes drain level, by reducing
infiltration.
As proposed in the Notice, Denison expects to compete the proposed regrading by August 1,
2011.
N:\Cell 2\06.17.11 Plan and sched slimes drain dewater\06.17.11 Itr to R Lundberg Cell 2 plan and sched.docx
Letter to Mr. Rusty Lundberg
June 17, 2011
Page 2
Installation of Piezometers
Denison proposed in the Notice that we would install one or more piezometers into Cell 2 for the
purposes of monitoring the water level in Cell 2 in lieu of continued monitoring of the Cell 2
slimes drain access pipe and that Denison would submit a plan and schedule to the Executive
Secretary on or before June 17, 2011 for installing such piezometer(s).
Denison has performed an engineering evaluation of issues related to the feasibility of
installation and use of piezometers in Cell 2 for the above purpose. Based upon this further
evaluation, Denison does not believe that it is feasible to install and operate peizometers that
would provide representative and dependable measure of the slimes drain level for the following
reasons.
1. Any piezometer properly installed would produce a connection or conduit between
solutions under high pressure at depth and the surface of the cell. The conduit would
permit the rise of solution up the casing in an artesian-type effect. Solution levels in the
casing would likely be consistently higher than, and not representative of, the actual
slimes drain level.
2. The cell contents are highly heterogeneous in the nature, physical properties and
elevation of materials in various sections of the cell. That is, the cell contains areas of
slimes, adjacent to areas of sands and buried debris differing in:
a. Porosity
b. Particle size
c. Density
d. Viscosity
Each of the above properties locally affects the moisture content and mobility of
solutions. As a result, any peizometer would be affected by and represent, only the
localized condifions in a small area adjacent to its installation location. No piezometer or
number of peizometers would be representative of conditions cell-wide or in the slimes
drain pump system.
3. Due to the heavy fine solids content, any piezometer installed at slimes depth would be
very likely to fill with solids from the bottom of the casing upward in a short period,
rendering it either
a. Incapable of any measurement or
b. Yielding falsely high measurement above a bottom column of solids.
For the above reasons, Denison has determined that piezometer installafion is not feasible in Cell
2.
DENISO
MINES
Letter to Mr. Rusty Lundberg
June 17, 2011
Page 3
Engineering Evaluation of Pump in Cell 2
The Notice proposed that Denison would perform an engineering evaluation ofthe current pump
in the Cell 2 access pipe to determine if any changes can be made to improve its efficiency and
output, in light of the changes described above. Denison has completed an engineering
evaluation of potential changes to the pump and made changes to the pump operation as
described below to address DRC's preference that pumping occur more consistently at a lower
flow rate over a narrower range of solution levels.
The slimes currently-installed drain pump is a Marinemate submersible pump Model 50TM2.45.
The titanium alloy materials of construction are required to withstand the corrosive conditions in
the cell slimes drain solution environment. Denison has previously used a number of other
smaller pumps of other materials of construction in the slimes drain, with a resulting rapid
corrosion and burnout of the pump. The currently-installed titanium-alloy model is the smallest
(lowest flow rate) size pump available from any manufacturer in the appropriate materials of
construction.
In order to address DRC's concems, Denison has installed a reducing neck to reduce the pump
discharge from 2 inches to 1 inch, this increasing the discharge head on the pump and reducing
the discharge flow rate. The sensor settings (which trigger pump startup) have been adjusted
from the former 0 feet to 4 feet setting to the current setting of 0 feet to 2 feet. As a result, the
pump rate has been slowed sufficiently to allow the pump to cycle on for a longer time at a
narrower range of solution levels, in effect, performing like a smaller pump, as suggested by
DRC.
Amendment of the Groundwater Discharge Permit for Reduced Monitoring Frequency
The Notice proposed that Denison would amend the Permit to adjust Part I.D.3(b)(2) to reflect
the changes in the monitoring of the Cell 2 water level, resulting from the installafion of the
piezometer(s) and approved monitoring procedure set out in the amended DMT Plan, and to
reduce the frequency of monitoring from monthly to quarterly. As described above, Denison
does not believe installation of piezometers to be feasible. However, as discussed with DRC,
reduction in the number of sampling periods will reduce the number of days the pump is off to
allow stabilization of levels to meet the data quality criteria in the DMT Plan, that is, will allow
the pump to run for more days per year. As indicated in the Notice Denison believes a reduction
in the monitoring frequency under the current pumping and monitoring regime will likely be
sufficient to result in compliance with the Formula over time.
Following DRC's approval of the plan included in this update letter, Denison would like to
discuss with DRC a timetable for amendment of the permit to address the agreed-upon changes.
DENISO
MINES
Letter to Mr. Rusty Lundberg
June 17, 2011
Page 4
Evaluation of Compliance
It should be recognized that the types of engineering modifications proposed above will produce
changes slowly, and may not indicate significant, measurable improvement in the first the
months they are in place. In addition, the modifications have been or are being installed during
the mid-point of the 2011 operating year (June and July 2011), that is half the operating year has
already passed. Although each modification is expected to have a positive effect on slimes
dewatering rate, reducing the level over time, it is possible that the measurable improvement will
not occur soon enough or to be reflected in the DMT slimes drain reduction Formula.
As discussed in our Notice of May 27, 2011, it is evident from a review of the data collected to
date, as indicated in the figure in the Notice, that the most recent monthly result. May 2011, is
lower than the last result reported for December 2010, despite the variability from month to
month.
It should be emphasized that the overall trend in the data since the beginning of 2009 continues
to be downward, and is expected that the engineering modifications will continue or increase the
downward trend. This trend also existed from January 2009 through December 2010, although
not as pronounced over that shorter period of time. The presence of the downward trend in the
same period in which the DMT slimes drain Formula is not satisfied, suggests that the Formula
may not be adequately capturing this trend. The failure of the Formula to adequately track this
downward trend may result from the fact that the four years of data required as inputs into the
Formula will not be available until the end of 2012 or from some other feature of the Formula
that may need to be addressed.
The Cell 2 water level will continue to be monitored in accordance with the current Permit
conditions and, after amended, the amended Permit condifions, through the remainder of 2011.
The monitoring results for 2011 will be compared to the results for previous years through
application of the Formula, and the comparison will be submitted to the Executive Secretary in
the DMT Report for the 4^^ quarter of 2011, which must be submitted on or before March 1,
2012. Trending data will continue to be plotted and submitted in the DMT reports.
Denison's proposal for evaluation of compliance after the 2011 results are collected and
analyzed is detailed in the Nofice of May 27, 2011.
Please contact me if you have any questions or require any further information.
Yours very truly.
DENISO
MINES
Letter to Mr. Rusty Lundberg
June 17,2011
Page 5
DENISON MINES (USA) CORP.
Jo Ann Tischler
Director, Compliance and Permitting
cc: David C. Frydenlund
Ron F. Hochstein
Harold R. Roberts
David E. Turk
Kathy A. Weinel
DENISO
MINES Mi