DRC-2011-007657 - 0901a068802928f8

DENISO
MINES
December 6, 2011
Denison Mines (USA) Corp.
105017th Street, Suite 950
Denver, CO 80265
USA
Tel: [phone]
Fax: [phone]
www.denisohmines.com
VIA E-MAIL AND OVERNIGHT DELIVERY
Rusty Lundberg, Co-Executive Secretary
Utah Water Quality Board
Utah Department of Environmental Quality
195 North 1950 West
P.O. Box 144810
Salt Lake City, UT 84114-4810
Re: State of Utah Ground Water Discharge Permit No. UGW370004 White IVIesa Uranium Mill -
Notice Pursuant to Part I.G.3 of the Permit and UAC R317-6-6.16(C)
Dear Mr. Lundberg:
Please take notice pursuant to Part I.G.3 of the White Mesa Mill's (the "Mill's") State of Utah Groundwater
Discharge Permit No. UGW370004 (the "Permit") and Utah Administrative Code ("UAC") R317-6-6.16(C) that
Denison Mines (USA) Corp. ("Denison"), as operator of the Mill and holder of the Permit, failed to meet the
Best Available Technology ("BAT") standards in Part I.D.12a) 1) of the Permit, as a result of a malfunctioning
flow totalizer in the Cell 4B leak detection system ("LDS"), as described in more detail below.
The malfunction was discovered on Thursday, December 1, 2011. Initial notice of this failure to maintain BAT
was given by telephone to Mr. David Rupp of the Utah Department of Environmental Quality at 1:55pm on
Thursday December 1, 2011 at 801-536-4023 (within 24 hours ofthe discovery).
1. Facts and Background information
a) DRC provided authorization for use of Cell 4B on January 27, 2011.
b) Part 1.E.12 a) 1) ofthe Permit requires that
"... the permittee shall provide continuous operation of the leak detection system pumping and
monitoring equipment, including, but not limited to, the submersible pump, pump controller, head
monitoring, and flow meter equipment approved by the Executive Secretary."
c) Daily monitoring of the Cell 4B LDS prior to the week of November 22, 2011 indicated that the
components of the pumpng and flow monitoring system (pump, pump controller, flow meter, flow
totalizer, and all other components) were working properly. Due to the design of the LDS head
monitoring and pumping system, the pump sometimes has no pump starts for as many as several
weeks while sufficient head builds up in the LDS to trigger the pump start. Therefore, the system may
be working properly even if no pump starts or flow have been recorded for an extended time.
Y:\Notices\Cell 4B LDS Notice 12.06.11\12.06.11 Notice to RLundberg Cell 4B LDS.doc
Letter to Mr. Rusty Lundberg
December 6, 2011
Page 2
d) Daily monitoring of the Cell 4B LDS on November 3, 2011 indicated that the flow totalizer had
counted gallons pumped even though the indicator for the number of pump starts had not changed
since the previous daily inspection. Mill personnel contacted the supplier, Envirnmental Pump
Solutions to receive a software upgrade to potentially correct the disconnection between the pump
start indicator and the flow totalizer.
e) The software upgrade for the Cell 4B processor was installed and tested on November 4, 2011, within
24 hours. Ongoing montioring also included a manual pump test of the Cell 4B LDS pump and
controller, to confirm it was working properly. The system appeared to function properly.
f) Daily monitoring of the Cell 4B LDS on November 22, 2011 indicated that the pump controller, flow
meter, and all other components except the flow totalizer were working properly. The flow totalizer
was again indicating that gallons were being pumped, at the same time as the pump itself appeared
to be off, the flow rate meter indicated no flow, and the pump start indicator did not indicate any
pump starts. That is, the totalizer appeared to be over-reporting LDS flow.
g) Mill environmental personnel reported the finding to the Mill manager and to Mill engineering
personnel on November 22, 2011. Mill engineering personnel began immediate email and telephone
communications with the supplier to diagnose and troubleshoot the potential malfunction.
h) Diagnostic tests and troubleshooting, in coordination with the supplier, continued through December
1, 2011. During this period, a check on November 29, 2011 indicated that while the pump controller,
flow meter, and all other components except the flow totalizer were working properly, the flow totalizer
indicated 6 gallons of flow when the pump itself was off and its flow meter indicated no flow. Mill
personnel conducted a test by temporarily re-routing the pump discharge to a collection bucket to
confirm whether there was pump flow at the time that the totalizer indicated flow. The pump did not
discharge any fluid, and the processor monitor screen correspondingly indicated zero flow rate, while
the totalizer indicated 6 gallons of additional flow.
i) Mill environmental personnel. Mill engineering personnel, and Corporate environmental management
dicussed the corrective steps taken and status of the totalizer performance on December 1, 2011.
They concurred that steps to date had not corrected the problem, and that the totalizer would not
record properly without either 1) scheduling a supplier team to come to the Mill site, or 2) a potential
equipment replacement.
j) Corporate environmental management determined on December 1, 2011 that notification to DRC of
the status of troubleshooting and repair plans was required under Part I.G.3 of the Permit and UAC
R317-6-6.16(c).
2. Action Talcen
a) Corporate Environmental personnel determined on December 1, 2011 that the totalizer was indeed
over-recording fiow and repair could not be completed without a supplier visit or shipment of parts.
b) Verbal notification was given to the DRC at 1:55pm on December 1, 2011, within 24 hours of
discovery. This verbal notification was followed by this written notification within five days of
discovery.
DENISO
MINES
Letter to Mr. Rusty Lundberg
December 6, 2011
Page 3
c) Environmental Pump Solutions determined on December 2, 2011 that a replacement of the digital
processor would be required.
d) A replacement digital processor was received at the Mill on December 6, 2011.
e) Installation was completed on December 6, 2011. System checking and startup was completed on
December 6, 2011.
f) Daily inspection and monitoring of the system continues to confirm that the repair has corrected the
over-recording problem.
3. Root Cause
The root cause analysis is as follows
a) The flow totalizer is one of the data input devices whose data is controlled in the data processor. It
was deternmined that the nature of the failure to correctly record flow totalizer numbers could not be
corrected by repair or raplacement of processor software, and that the data processor required
replacement.
4. Actions That Will be Taken to Prevent a Reoccurrence of this Incident
The following actions will be taken to prevent a reoccurrence of this incident:
a) Mill personnel installed a replacement for the malfunctioning processor.
5. Affirmative Defense
Denison believes that the affirmative defense in Part I.G.3.C) of the Permit should be applicable to this
incident, for the following reasons:
a) Notification
By virtue of the initial oral notification given to DRC at 1:55 PM on Thursday, December 1, 2011 (within 24
hours of the discovery) and this written notice, Denison has submitted notification according to Part I.G.3 of
the Permit and UAC R317-6-6.13.
b) Failure was not Intentional or Caused by the Permittee's Negligence
The failure to accurately measure the fluid volume pumped from the Cell 4B LDS was not caused by
Denison's negligence, either in action or in failure to act. The processor which records the gallons pumped
from the flow totalizer malfunctioned. Mill personnel discovered the malfunction and initiated diagnosis, in
conjunction with the manufacturer, and repair in a timely manner.
DENISO
MINES
Letter to Mr. Rusty Lundberg
December 6, 2011
Page 4
c) The Permittee has Taken Adequate Measures to Meet Permit Conditions
Mill personnel confirmed that the LDS head level monitoring equipment, LDS pump, and pump flowmeter were
functioning throughout the entire period of diagnostics and repair. The LDS pumping circuit was and continues
to operate properly. The maximum allowable head was and continues to be measured correctly. Even based
on the artificially elevated LDS flow data, the system has not exceeded the maximum allowable daily LDS flow
rate. As soon as it was determined that the LDS flow totalizer may be in error, diagnostic and repair measures
were immedately implemented to reinstitute correct reading of the flow totalizer rates.
d) Denison has taken adequate measures to meet Permit conditions in a timely manner.
The provisions of the Permit were implemented immediately. UDEQ was notified within 24 hours of discovery
of the measurement inaccuracy. Diagnostics of the system were initiated imiediately upon Mill personnel's
identification of the potential malfunction. A replacement processor was ordered as soon as the
manufacturer's diagnostics determined it was the source of the malfunction. Arrival of the replacement
processor and installation was completed during the week of December 5, 2011.
e) The Provisions of UCA 19-5-107 Have Not Been Violated
The provisions of Utah Code 19-5-107 have not been violated. There has been no discharge of a pollutant
into waters of the state. Denison has not caused pollution which constitutes a menace to public health and
welfare, or is harmful to wildlife, fish or aquatic life, or impairs domestic, agricultural, industrial, recreational, or
other beneficial uses of water, nor has Denison placed or caused to be placed any waste in a location where
there is probable cause to believe it will cause pollution.
There was no discharge of solutions from the Mill's tailings impoundments.
Please contact the undersigned if you have any questions or require any further information.
Yours very truly,
DENISON MINES (USA) CORP.
Jo Ann Tischler
Director, Compliance and Permitting
cc: Dan Hillsten
David C. Frydenlund
Harold R. Roberts
David E. Turk
Central files
DENISO
MINES