DRC-2010-003605 - 0901a068801960f4

State of Utah
GARY R. HERBERT
Governor
GREG BELL
Lieutenant Governor
Department of
Environmental Quality
Amanda Smith
Executive Director
DIVISION OF RADIATION CONTROL
Dane L. Finerfrock
Director
June 16, 2010
CERTIFIED MAIL
(Retum Receipt Requested)
Ms. Jo Ann Tischler
Director, Compliance and Permitting
Denison Mines (USA) Corp. (DUSA)
1050 17"^ Street, Ste. 950
Denver, CO 80225
Dear Ms. Tischler:
SUBJECT: March 3, 2010 DUSA Letter, 2010 Surety Update;
Request for Information
We received the subject letter from DUSA which conveyed the 2010 surety update titled Revised
Cost Estimates for Reclamation of the White Mesa Mill and Tailings Management System, dated
March 2010. We have reviewed this information and have the following comments:
1. Equipment Maintenance. The Equipment Costs spread sheet with the subtitle White
Mesa Mill Reclamation Costs, shows that the hourly rate for equipment maintenance
dropped from $21.15 per hour in the 2009 estimate to $20.53 per hour in the 2010
estimate. The calculation method to derive the hourly maintenance rate for 2010 is
unclear.
a. Please explain and justify the derivation of the hourly equipment maintenance rate
for 2010, or
b. Correct the hourly maintenance cost for this estimate.
2. Tankage and Spare Parts Removal. On page 4 of the Mill Decommissioning portion of
the estimate, Misc. Tankage and Spare Parts Removal costs are shown in a table titled
the same. Per DUSA's previous surety letter of October 5, 2009, this table includes
only the reclamation of the newly constructed uranium and vanadium SX feed tanks
and the SX raffinate tank. However, the reclamation of all the other existing tank
systems at the mill appears to be omitted from the March 3, 2010 estimate.
Please demonstrate that the reclamation of all the existing tank systems at the mill are
included in the current estimate with appropriate hours budgeted for each system. If
168 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
Ms. Jo Ann Tischler
June 16, 2010
Page 2
not, please add this work to the estimate.
Insurance. Last year we requested several insurance items be included in the estimate.
The Contractor Equipment Floater, Workman's Compensation, and Employer's
Liability estimates are acceptable as included in the current estimate.
An exception is the estimate for contractor's General Liability submitted in the March
3, 2010 surety update, which we feel needs adjustment. We also desire to have
insurance for motor vehicles that will be involved in the work, included in the estimate.
For these two insurance types, we are requesting that DUSA (and the other Utah U-
mills) apply the limits of liability used by the Utah Dept. of Transportation (UDOT),
and other adjustments described in paragraphs a and b below:
a. General Liability Insurance. Last year we estimated this amount to be between
0.25 and 0.64% of the total project cost. An average amount of 0.45% was added
to the estimate. We have discovered this cost range was actually an estimate for
Biiilder's Risk insurance. We are not currently interested in Builder's Risk
insurance for the project. However, we are interested in budgeting for the general
liability insurance we originally intended. The extent of liability and requirements for
this insurance must have the following minimum limits of liability':
(1) . $1,000,000 Bodily Injury and Property Damage - Each Accident
(2) . $2,000,000 General Aggregate
(3) . $2,000,000 Products and Complete Operations Annual Aggregate
b. Automobile Liability Insurance. Provide Automobile Liability Insurance for
claims arising from the ownership, maintenance, or use of motor vehicles involved
in project work with the following minimum limits':
(1). $1,000,000 Combined single Limit Bodily Injury and Property Damage per
Occurrence
The costs for these insurance must be documented, based on quotes or reputable cost book
figures.
Reclamation costs for decommissioning, demolishing and disposal of the New Reagent
Storage Building needs to in the estimate.
Costs of pumping, monitoring and disposal after mill closure:
a. Slimes drain pumpage for Cells 2, 3, and 4A will be 6.5 years or more.
(1) . This adds extra time for pumping facilities and monitoring beyond the 5-
years for environmental monitoring already budgeted, which needs to be
added to the estimate.
(2) . It seems that if reclamation were to begin now, that the tailings ponds
would be closed to acceptance of tailings and wastewater. If the White
1 Insurance Requirements of the UDOT Standards for Road and Bridge Construction, 2008 edition.
Ms. Jo Ann Tischler
June 16, 2010
Page 3
Mesa Mill Tailings Cells are closed to further influent, the costs for a
separate pond for storage of pumpage, or other wastewater treatment
method will need to be included in the estimate,
b. Costs for treatment of the chloroform and nitrogen plumes at the White Mesa
Mill site need to be included in the estimate. Facilities and time for aquifer
pumping and related wastewater treatment or disposal pond system must be
estimated and justified. A separate wastewater treatment or disposal pond
system from the slimes drainage may be needed. It may not be feasible to co-
mingle wastewater from the chlorofonn and nitrogen plumes with slimes drain
wastewater pumpage discussed above.
6. Potential Closure of monitoring well WW2. DUSA is required to submit a plugging
and closure plan in Part I.H.3 of the imminent Ground Water Discharge Permit to
address the possibility of hydraulic interconnection of the chloroform plume and the
deep aquifer (tribal drinking water supply). Please include the costs for this plan and
implementation in the estimate.
As a reminder, surety costs must still be provided for the upcoming Cell 4B facilities, and be
approved before any operation of the cell.
Please review the above comments, and submit the requested information. In your email to us
received on June 16, 2010, you committed that DUSA would submit the subject information
Within 60-days of receipt. If you have any questions on the above, please contact me.
Sincjferely,
A-
David A. Rupp, P.E.
Geotechnical Services Section
DAR:LBM:dr
F:\drupp\wp\ lUQ Surety\2010\RFU 06-2010.doc
File: Documentum