DRC-2021-014242 - 0901a06880f64d75

DRC-2021-014242 195 North 1950 West • Salt Lake City, UT Mailing Address: P.O. Box 144880 • Salt Lake City, UT 84114-4880 Telephone [phone] • Fax [phone] • T.D.D. [phone]
www.deq.utah.gov Printed on 100% recycled paper
State of Utah
SPENCER J. COX Governor DEIDRE HENDERSON Lieutenant Governor
Department of Environmental Quality
Kimberly D. Shelley Executive Director DIVISION OF WASTE MANAGEMENT AND RADIATION CONTROL Douglas J. Hansen Director October 5, 2021

Kathy Weinel, Quality Assurance Manager Energy Fuels Resources (USA) Inc.
225 Union Blvd., Suite 600
Lakewood, CO 80228 RE: Energy Fuels Resources (USA) Inc. June 14, 2021. White Mesa Uranium Mill MW-24A Report Utah Groundwater Discharge Permit No. UGW370004

Dear Ms. Weinel: The Division of Waste Management and Radiation Control has reviewed the Energy Fuels Resources (USA) Inc. (EFRI) June 14, 2021, White Mesa Uranium Mill MW-24A Report (Report). The Report was
received by the Division on June 16, 2021 and was prepared in association with groundwater
compliance activities for the White Mesa Uranium Mill (Mill); specifically, for continued investigation of Groundwater Compliance Limit (GWCL) exceedances in the Mill groundwater monitoring well MW-24. Groundwater compliance activities are conducted as required by the Mill Groundwater Discharge Permit No. UGW370004 (Permit).

The Report cover letter was signed by the EFRI Quality Assurance Manager. No additional signatures, certifications or other certification statements were provided with the Report. The Report was not signed according to the certification statement required by Part 1V.4 of the Mill Groundwater Discharge Permit, Permit No. UGW370004. Per previous discussions and correspondence between the Division
and EFRI, including conference calls on September 3, 2019 and March 29, 2021, regarding the MW-24
GWCL exceedances and source assessment activities it was generally identified that EFRI was preparing and providing the information and findings of the Report to better understand a potential sitewide explanation for the exceedances. The Division agreed to review the Report before continuing other actions but did clarify that an additional monitoring well downgradient from MW-24 would
provide a needed verification that recent exceedances and trends were isolated to MW-24/MW-24A.
(Over)
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Basis for the Report
Per the Division review of an EFRI June 27, 2019 Source Assessment Report (SAR) which included an
assessment for out-of-compliance constituents (OOC) in monitoring well MW-24 (Beryllium, Cadmium, Nickel, Thallium, Fluoride, pH), the Division noted that beryllium and nickel had recent significant increasing trends which were previously non-detect. Although in the Division review of the source assessment it was agreed that the recent MW-24 data trends did not appear to be caused by a tailings
wastewater source based on stable chloride data, it was also agreed that the GWCL exceedances
warranted additional investigation given their sudden and significant appearance. The Division findings regarding review of the June 27, 2019 SAR were discussed via teleconference (September 3, 2019 conference call) prior to sending a September 5, 2019 review letter which required EFRI to send a plan for installation of a new well MW-24A on or before 30 days from receipt of the letter. This was based
entirely on EFRI statements that they questioned if MW-24 well construction was suspect, and that
additional assessment would be conducted to determine if MW-24 well construction was the cause of the exceedances and trends. A plan for the installation of monitoring well MW-24A was subsequently submitted and approved and the well was installed in very close proximity to MW-24.
Per DWMRC review of the 1st and 2nd Quarter 2020 Monitoring Data at MW-24A it was noted that the
same OOC monitoring constituents showed elevated concentrations as observed in MW-24 groundwater data. The monitoring results confirmed that the exceedances at MW-24 were not caused by well construction problems since the same data pattern of constituent exceedances and high concentrations were evident.

Based on review of the EFR 2nd Quarter Groundwater Monitoring Report it is was found appropriate to collect additional MW-24/MW-24A tandem samples for comparison and better evaluation of indicator parameters and heavy metals:
1. Additional quarterly pH, sulfate, and chloride data points at MW-24/MW-24A to provide more
information of concentrations and trends. Two additional quarterly samples will provide an additional full year including potential seasonal variation. 2. Additional data for other heavy metals (beryllium, cadmium, manganese, nickel, and thallium) to evaluate the degree (steepness of curve) of upward concentration trends.

It was additionally stated in an October 28, 2020 letter regarding Division review of the EFRI 2nd Quarter Groundwater Monitoring Report for the Mill, that based on current groundwater monitoring data and trends it would be appropriate for EFR to consider additional information and data points (e.g., new monitoring wells) to evaluate the observed concentrations in MW-24 and MW-24A. It was noted that
groundwater concentrations at the nearest well downgradient from MW-24, which is monitoring well
MW-02 do not currently indicate the same exceedances or trends. However, additional data at point(s) downgradient and near MW-24/MW-24A would be useful to better evaluate the exceedances and potential source since MW-02 is fairly far downgradient. It was also noted that chloride concentrations at MW-24 remained low and no upward trend was evident as would be expected if the OOC were
caused by solution seepage from Cell 1.

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Subsequently, per Division review of the 4th Quarter 2020 Groundwater Monitoring data, it was noted that the additional data points had been collected to provide a full year of comparable data and trends.
Per data review the 3rd and 4th Quarter OOC parameters, data for MW-24/MW-24A continued to show
significant increasing trends. Although chloride was still not showing increases and concentrations remained low. Per a telephone conference call between DWMRC and EFR on March 29, 2021 it was recommended by
EFRI that additional source assessment for OOC parameters and trends at MW-24 would be appropriate
and needed. Per a follow up telephone discussion on April 12, 2021 amongst the Division, EFRI and Hydro Geo Chem, EFRI proposed actions for the continuing source assessment which resulted in preparation and submission of the Report. However, the Division notes that no study plan was submitted by EFRI prior to conducting the study and thus no information regarding the scope and
methods to be used for the study were reviewed by the Division. As per the Division review below it is
evident that EFRI was likely preparing for bottle roll sample evaluation (laboratory tests of MW-24A core leaching) well before the telephone discussions. Therefore, although the Division agreed that the discussed additional information would be useful, no specifics were known until receipt of the Report. It was additionally discussed during the March 29, 2021 and April 12, 2021 conference calls that
additional monitoring downgradient from MW-24 would be preferred, instead of or in addition to the
study, as an additional data point would serve to provide continuing verification that recent spikes in metals concentrations in MW-24/MW-24A were isolated. Based on these previous discussions and the context and submission of the Report (not certified), the
Division again points out that the Report is reviewed as an informational document. This letter
discusses the Division review of the Report and summarizes the EFRI findings regarding a potential cause(s) of the exceedances. Therefore, the data collected for the Report was conducted by EFRI at their own discretion and conclusions in the Report (e.g., that the leaching tests are representative and conservative) are not qualified but do constitute a record of efforts by EFRI to evaluate potential causes
of the out-of-compliance parameters at MW-24. The Report does provide new and useful information
and it is commendable that EFRI drilled new well MW-24A using continuous core equipment which provided for a more detailed investigation of the Dakota and Burro Canyon Formations minerology. Based on current Division findings regarding source assessment investigations the continuation of accelerated monitoring at monitoring well MW-24 is warranted. Additional monitoring location(s)/data
points are still needed and recommended by the Division to verify Report claims.
Division Report Review Summary Report Part 1 (Introduction):

Part I of the Report includes a discussion of findings regarding metals and other constituents in the groundwater beneath the Mill and provides a discussion that; Based on the formations hosting the groundwater (perched Burro Canyon Formation and Dakota Sandstone Formation aquifer) and potential invasion of porewaters from overlying remnants of the Mancos Shale (and subsequent increases in iron
sulfide minerals such as pyrite as discussed in the Report), the perched pore waters are expected to
contain significant concentrations of trace metals. Per the Report these include arsenic, lead, antimony, bismuth, copper, cobalt, nickel, zinc, gold, silver, selenium, and tellurium. The Report presents that an oxygen source such as by the monitoring well construction or wildlife pond seepage or a nitrate source such as from the nitrate/chloride plume, would “release these metals” into the groundwater.
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Part I discusses the presence of naturally occurring uranium mineralization in the Dakota/Burro Canyon
Formation and an expectation that the uranium would be “mobilized” in the presence of oxygen and/or
nitrate. The Report states that “elements associated with the sandstone-type uranium deposits include
sulfur, vanadium, molybdenum, selenium, arsenic, copper, silver, chromium, lead, zinc, nickel, cobalt, rhenium, beryllium, phosphorous, manganese and rare earths.”
Part I notes that these metals could be elevated by the discussed processes which would be unrelated to
releases from the tailings management system. The Report also notes that the groundwater elevations are not in steady state primarily due to the redistribution of seepage from the past wildlife ponds and from groundwater pumping activities for the chloroform and nitrate corrective action plans.
The Report includes a summary of groundwater data and investigation reports prepared for the Mill and
parts of those listed reports with findings pertaining to the MW-24 study. The listed reports include: 1) A 2008 Background Groundwater Quality Report1; 2) A 2012 Sitewide Source Assessment Report2; 3) A 2012 pH Report3; 4) A 2012 Pyrite Investigation Report4; 5) A 2016 source assessment report5, and; 6) A 2019 source assessment report6. The Report discussion regarding these previous reports and
discussions is included below. It is noted that the references sited for the Report also includes other
reports prepared for and in conjunction with the ones listed above, however, the body of the Report only includes those listed specifically. The Report references also listed other literature used for mineralogical evaluation of the formations in certain areas (e.g., Burro Canyon Formation Minerology) and geochemical findings related to the Report data review. These technical references were not
reviewed by the Division since the Report is considered informational.

2008 Background Report – The Report discusses findings regarding sitewide downward trends in pH in perched groundwater monitoring wells; including monitoring wells located upgradient and far downgradient from the Mill. Report discusses the EFRI proposed process of pyrite oxidation as the
cause of decreasing pH and increasing dissolved metals concentrations in monitoring wells. Also
discussed the findings of a 2008 University of Utah study which used isotopic analysis to determine groundwater ages and sources of constituents in monitoring wells. 2012 Sitewide Source Assessment – The 2012 Source Assessment Report included an evaluation of
MW-24 and concluded that increasing trends in thallium and cadmium and decreasing pH trends were
not caused by tailings seepage per evaluation. The Report stresses the findings that chloride is a conservative tracer of tailings seepage and would not be expected to sorb onto or react with formation
1 Denisons Mines (USA) Corp. 2008. Revised addendum, Background Groundwater Quality Report, New Wells for the White
Mesa Mill. Prepared by Intera. 2 Denison Mines (USA) Corp. October 10, 2012. Source Assessment Report for the White Mesa Uranium Mill. Prepared by Intera. 3 Denison Mines (USA) Corp. November 9, 2012. pH Report for the White Mesa Uranium Mill. Prepared by Intera.
4 Denison Mines (USA) Corp. December 7, 2012. Investigation of Pyrite in the Perched Zone White Mesa Uranium Mill. Prepared by Hydro Geo Chem.
5 Energy Fuels Resources (USA) Inc June 24, 2016. Source Assessment Report for MW-18 and MW-24 White Mesa Uranium Mill. Prepared by Intera.
6 Energy Fuels Resources (USA) Inc., June 27, 2019. Source Assessment Report for MW-11 and MW-24 White Mesa Uranium Mill. Prepared by Intera.
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materials, more so than pH which would be diffused/diluted if from a tailings source. The Report notes that pH measurements in MW-24 have remained stable through the first quarter of 2021.

2012 pH Report – The Report notes that MW-24 and MW-24A could be subject to the process of pH decrease attributed to pyrite oxidation. Notes that MW-24 and MW-24A have a large part of their well screens extending above the water table into the vadose zone which could conduct oxygen into the water table.

2012 Pyrite Report – The Report includes a summary of potential oxygen sources potentially introducing an oxidative state around monitoring well screens. The Report includes a description of pyrite oxidation and a discussion that per the Pyrite Report enough pyrite was measured in collected core/cutting samples (From historical monitoring well drilling) to cause the observed pH decreases as
demonstrated by core/cutting samples and screening calculations (for pH and sulfate).

2016 and 2019 Source Assessments – The Report summarizes the source assessment reports for MW-24 submitted during 2016 and 2019. The Division is concerned about the recent sharp increasing trends in beryllium and nickel which have historically been non detect. Additionally, the Division disagrees with
the Report summary regarding the evaluation of indicator parameters (chloride, sulfate, uranium, and
fluoride). Page 7 (Section 1.1.6 of the Report states “MW-24 indicator parameters chloride, sulfate, and
uranium exhibit no trend, while fluoride was significantly increasing.” Per Division findings sulfate is showing a slight increasing trend, uranium is showing a moderate increasing trend, and fluoride is showing a significant increasing trend in MW-24. The Division agrees that chloride is not showing a
trend.
Report Part 2 (Geology/Hydrogeology): The Report includes a description of the geology and hydrogeology of all formations below the White
Mesa Mill as included in Titan 19947 and Hydro Geo Chem 20188. Per geological site conditions the
perched aquifer (in the Dakota Sandstone and Burro Canyon Formations) is hydraulically isolated from underlying water bearing formations by more than 1,000 feet of low vertical permeability materials. Hydrogeology of the perched aquifer is discussed, and the Report includes information regarding low
hydraulic conductivity of the formations with a geometric average (based on slug tests) of approximately
3 x 10-5 cm/sec and a measured hydraulic conductivity at monitoring well MW-24 of 4 x 10-5 cm/sec. It is also discussed that most areas of the perched aquifer have low permeability although there are zones with higher yields. In general yields are low <0.5 gallons per minute. The low permeability and hydraulic conductivity at MW-25 would likely cause more agitation around the well screen during
groundwater sampling.

7 Titan. 1994. Hydrogeological Evaluation of White Mesa Uranium Mill. Submitted to Energy Fuels Nuclear
8 Hydro Geo Chem. July 11, 2018. Hydrogeology of the White Mesa Uranium Mill and Recommended Locations of New Perched Wells to Monitor Proposed cells 5A and 5B.
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Report Part 3 (Data Collected for the Report):
Groundwater Data – The Report discusses that only groundwater data for MW-24A is used but that the
groundwater chemistry in MW-24A is analogous to MW-24. Appendix D of the Report includes the data (laboratory analysis sheets and QA/QC sheets) for MW-24A. The groundwater data is used to provide a comparison with whole rock and leached samples to provide information as to whether evaluation of core/cuttings samples could produce the groundwater concentrations measured in situ in
monitoring well MW-24A (and MW-24). There is limited discussion in the Report regarding whether
the core/cuttings bench testing is representational of leaching in the natural formation. Per Division findings, bottle roll analysis is more representative of and applicable to mining situations where ore is removed to a processing area and leached with a formulated lixiviant (provides estimates of metallurgical recovery).

Whole Rock Analytical Samples – Per the Report an evaluation of the MW-24A core (where adequate recovery was achieved) was conducted. The core was logged and quartered with attention of detecting intervals with pyrite and including the information on the drilling logging sheets. The core intervals were scanned using an X-ray Fluorescence (XRF) gun and Photoionization Detector (PID). Intervals
showing readings above (background) using PID were collected for analysis. The XRF data was used to
identify segments of the core with higher concentrations of metals (specifically screening for mineralization associated with pyrite). After this field analysis, whole rock samples were collected for analytical evaluation by the synthetic
precipitation leaching procedure (SPLP) to characterize the composition of the formation minerology.
Constituent testing was done according to an analytical list included with the Report. This analysis was done by American West Analytical Laboratory (AWAL). Data sheets and QA/QC evaluation are included in Appendix D of the Report.
Bottle Roll Testing – Per the Report three core samples from the MW-24A core were selected for bottle
roll testing and one sample using crushed pyrite was included as a control. The samples were 6-inch segments of core or crushed core which were in bottles with enough space to allow deionized water to cover the sample and allow for evaporation and sampling during the testing period. In total sixteen samples were analyzed by bottle roll testing. The samples were agitated weekly “to simulate the
disturbance created by purging and sampling of a well completed in pyritic Burro Canyon Formation.”
This process was completed for “approximately one year” before the solutions were analyzed for dissolved metals. These tests were also conducted by AWAL, laboratory results and QA/QC evaluation are provided in Appendix D of the Report.
Report Part 4 (Summary of Data):
This part of the Report provides a summary of the data collected and conformance with QA/QC requirements. Laboratory sheets for SPLP and Bottle Roll leachate results are included in Appendix D of the Report, along with data sheets for groundwater chemistry. As noted above all analysis was
conducted by AWAL and therefore the QA/QC findings are detailed and indicate where instrumentation
errors occurred. The Division did not comprehensively review the QA/QC findings since the Report as the review was conducted as informational.
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Report Part 5 (Data Analysis):
Per the summary and discussion of data result in the Report (pages 27 and 28) the overall findings of the data analysis are:
1. All trace metals of concern are naturally present in the formations hosting perched groundwater
and can be mobilized into solution at concentrations like those measured in groundwater monitoring well MW-24A. 2. Fluoride measured in SPLP solutions is consistent with apatite in the formation. 3. Trace metals could be mobilized into solution by agitation alone and without significant
decreases in pH.
4. Bottle roll analysis indicates a “large reservoir of trace metals exists in the formation.” 5. Pyrite has been shown to be a reservoir for all the trace metals of concern except beryllium and has the ability to substantially lower pH.
Division review notes that it is expected that the constituents of concern would be present in the Dakota
Sandstone and Burro Canyon Formations since the ore which is primarily processed at the Mill is from Colorado Plateau sources and is therefore of a similar deposition and mineralogy. The constituent of concern list was derived from solution in the Mill tailings management system. Although the Report conclusions are that there is a presence of these constituents in the aquifer mineralogy, and that those
constituents appear to be soluble, the Division notes that similar rises in the same constituents would be
expected due to seepage of tailing solution into the groundwater. Although some constituents in the tailings solution are present at significantly higher concentrations. The Report notes that based on evaluation of chloride concentration in MW-24 groundwater (no rising
trend) and an evaluation of mass balance of constituents the increases in concentrations do not appear to
be associated with a tailings solution source. The Division agrees with these findings and acknowledges that they are a good indication that tailings solution is not the cause of the increasing constituent concentrations. The Report provides a potential scenario of natural leaching to cause the observed increases. However, the report data and review does not change the Division perspective that the recent
increases and significant upward trends in beryllium and nickel are of concern and warrant additional
monitoring downgradient from MW-24 as discussed above. Report Part 6 (Conclusions):
The Report includes three conclusions regarding the behavior of trace metals in MW-24 (& MW-24A).

1. The Report page 28 states, “the analytical and test data demonstrate that natural processes unrelated to disposal of materials in the TMS can account for the behavior of all trace metals of concern, as well as fluoride.” The conclusion is based on the tests of selected core/cutting
samples bottle roll tests and statement that “agitation alone, such as would occur during routine
purging and sampling of low permeability wells such as MW-24A, could result in metals
mobilization.”
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2. The Report states that water level increases at MW-24 are not due to tailings seepage based on
current chloride concentrations which are approx. 45 mg/L but based on mass balance (using
volumes of tailings wastewater required to cause the water level increase) the chloride concentration in MW-24 would exceed 11,500 mg/L. The Report also provides a similar mass balance justification for MW-29 which shows similar results. 3. The Report concludes that although previous land use by the U.S. Army may have released
contaminants that could have impacted MW-24/MW-24A soils and groundwater, it is also
possible that discussed processes (formation mineralogy) could have caused the observed groundwater changes, triggered by well installation and sampling and wildlife pond seepage. As discussed in sections above and below, the Division notes that the Report provides an assessment of
potential sources of the groundwater geochemical changes in MW-24 but does not provide determinate
evidence that natural processes (or previous land uses) are the cause of the recent and significant changes. Per previous discussions between the Division and EFRI, additional monitoring locations downgradient from MW-24 would serve to verify whether these changes are isolated to MW-24/MW-24A. Using a shorter well screen design at a new monitoring location would additionally eliminate the
potential introduction of oxygen during purging and sampling activities.
Report Tables, Figures and Appendices: The tables section of the Report includes information relative to general groundwater chemistry in MW-
24/MW-24A, whole rock analysis and collection and analysis of the bottle roll core/cuttings samples, list
of samples included in the evaluation (3 interval samples from MW-24A) and bottle roll leach solutions and analysis. There are several figures (maps and graphs) included with the Report. The figures include current
delineations of the nitrate plume at the Mill location based on monitoring data, staging locations for the
U.S. army Pershing Project and a photo of the barracks which were at the Mill location and several plots of data regarding whole rock analysis and bottle roll analysis results. Tab A of the Report includes lithologic logs, core photos of monitoring well MW-24A. Tab B includes
MW-24 well construction schematic and lithologic log. Tab C includes QA/QC tables for whole rock
analysis and bottle roll analysis. Tab D includes the data sheets for all MW-24A groundwater sample results, SPLP sample results, bottle roll results, and associated QA/QC laboratory sheets. Division Actions and Recommendations based on the Report Review

Continued accelerated monitoring at MW-24 and additional monitoring location near and downgradient from MW-24 is warranted to evaluate the behavior of the exceedances, and particularly the recent spikes and significant trends in beryllium and nickel. As discussed between the Division and EFRI during: 1. Conference calls on September 3, 2019, March 29, 2021 and April 12, 2021; 2. The Division close-out
letters regarding review of the EFRI 2nd Quarter 2020 (Letter dated October 27, 2020) and 4th Quarter
2021 Groundwater Report (Letter dated.March 31, 2021), and; 3. Division review of the EFR June 27, 2019 Source Assessment Report for out-of-compliance constituents (OOC) in monitoring well MW-24 (Beryllium, Cadmium, Nickel, Thallium, Fluoride, pH), the following actions are appropriate:
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1. Continued Accelerated Monitoring and Permit GWCL’s – Pending additional confirmation that the exceedances at MW-24, in particular the recent significant increasing trends in beryllium and
nickel are isolated and not caused by a Mill source, the GWCL’s will not be adjusted and
accelerated monthly monitoring will continue at MW-24 to further evaluate the concentrations and trends. 2. Additional Monitoring Well – Based on the Report review above; the findings of the report have
supported the EFRI assertion that the observed recent increasing concentration trends in MW-24
could potentially be caused by geochemical processes in the perched aquifer and not by tailings seepage. DWMRC acknowledges that current chloride concentrations and lack of chloride trends support the finding that the exceedances are not caused by tailings seepage. Additionally, the Report provides evaluation of chloride mass balance compared with groundwater elevation
increases at MW-24A and finds that, based on tailings average concentrations, the chloride
concentrations in MW-24A would be much higher if from a tailings solution source. Per past correspondence with EFRI (October 28, 2020 Division Letter Regarding Review of the 2nd Quarter 2020 Groundwater Monitoring Report) it was noted that additional monitoring downgradient from MW-24 (in a much closer proximity to MW-24 than the current nearest
monitoring well MW-02) could serve to provide confirmation that recent trends are isolated at
MW-24/MW-24A. The additional monitoring well should be constructed to eliminate suspected problems with well construction at MW-24/MW-24A (e.g., eliminate open well screen above the water table).
September 29, 2021 Teleconference
A teleconference amongst the Division, EFRI and Hydro Geo Chem. took place on September 29, 2021. The Division Report review findings, and recommendations above (continued accelerated monitoring and additional monitoring well) were discussed and agreed upon. EFRI also proposed additional Mill
investigations to provide more detail and data regarding systematic geochemical reactions in the
Dakota/Burro Canyon formation using an expanded set of monitoring well samples and data (e.g., other wells which have increasing groundwater elevations). The additional study will be to expand on the MW-24A study. It was agreed that the recommendations and additional study would be proposed in an EFRI study plan to be submitted for review and approval by the Division. Additional discussion
regarding the study plan and timing will take place after EFRI review of this letter.
If you have any questions, please call Tom Rushing at [phone]. Sincerely, Phil Goble, Uranium Mills and Radioactive Materials Manager Division of Waste Management and Radiation Control PRG/TR/as c: Mike Moulton, Interim Health Officer, San Juan County Public Health Department Ronnie Nieves, Environmental Health Director, San Juan County Public Health Department Russell Seeley, UDEQ District Engineer