I'A 5 979+ 4'

UNITED STATES OF AMERICANUCLEAR REGULATORY COMMISSION

ATOMIC SAFETY AND LICENSING BOARD

Before Administrative Judges:E. Roy Haivkens, Presiding Officer

Dr. Richard F. Cole, Special AssistantDr. Robin Brett, Special Assistant

DOCKETEDUSNRC

May 9, 2005 (3:55pm)

OFFICE OF SECRETARYRULEMAKINGS AND

ADJUDICATIONS STAFF

In the Matter of:

Hydro Resources, Inc.P.O. Box 777Crownpoint, NM 87313

) Docket No.: 40-8968-ML

) Date: May 6,2005)

HYDRO RESOURCES, INC.'S RESPONSE IN OPPOSITION TOINTERVENORS' WRITTEN PRESENTATION REGARDING

GROUNDWATER, GROUNDWATER RESTORATION AND FINANCIALASSURANCE

NOTICE OF ERRATA

Hydro Resources, Inc. (HRI), by its undersigned counsel of record, hereby

submits this Notice of Errata for HRI's filing of April 21, 2005 entitled Hydro Resources,

Inc. 's Response in Opposition to Intervenors' Written Presentation Regarding

Groundwater, Groundwater Restoration and Financial Assurance and its May 4, 2005

filing entitled Submission of Indexfor Written Presentation Attachments.

In this filing, HRI hereby submits two specific amendments to its attachments

submitted as supporting documentation for the Affidavit of Mr. Mark S. Pelizza (Exhibit

A). The following bullet points describe the additions to HRI's Exhibit A attachments.

| With respect to HRI's May4,2005 filing, the description of Attachment G to

Exhibit A should be deleted and the following language should be added:

Az/te- sc c ol/ s5-6C y- 0 2z-

"Attachment G to Exhibit A presents excerpts of an affidavit submitted by

Intervenors regarding the testimony of Richard Abitz. These excerpts are cited by

Mr. Pelizza at ¶ 69 of Exhibit A."

With respect to HRI's April 21, 2005 filing, an additional Attachment referenced

at ¶ 251, 252, & 254 of Exhibit A should be added. This Attachment, hereinafter

labeled Attachment W, includes excerpts from Section 2 of HRI's Crownpoint

Restoration Action Plan (RAP) 'submitted to the Nuclear Regulatory Commission

(NRC) Staffon November 19,2001. These excerpts address RAP cost estimates

for groundwater restoration at the CUP.

Respectfully Submitted,

Chiistopher S, Pugsley,Thompson & Simmons, PL C1225 19th Street, NWSuite 300Washington, DC 20036(202) 496-0780(fax) (202) 496-0783aithompson(athompsonlaw.comicniurcshvi)ntthnmnqnn1awecom�ge,--vTt.sss&zg Be

ATTACHMENT W

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2. Groundwater Restoration

2.1. ]Introduction

In addition to the regulatory guidance provided by NRC, HEIt used historic and ongoingcompany experience 'with similar groundwater restoration operations in developing its budgetmodeL Groundwater restoration costs are presented as a monthly restoration budget withcul e total costs. MTis is an appropriate budget Interval becse ongoing operational costsuch as labor, electricity, reagents, replacement equipment etc. are paid out of cash on a monthlybasi. The duration of the restoration cost expenditure was based on the processing andcirculation of 9 pore volumes of grundwater as required by licetle condition 9.5 suretyrequirement Surety vlbe rainaned at tfis level until the rumber of pore volue required torestore the ground water qualty of a production. scale wdlfied bas bee' demonstrated as gated iaCOP Section OA4.4. !

The COP that was submitted in support of t HRI's 1ces contemplated a number ofmethods for liquid waste treatment and disposal during ground water restoration. Tle costs thatare presented in this budget assume the most conservative liquid waste teatment and disposaloption; reverse osmosis treatment CR0") and brine concentration (BC'). It is conservativebecuse it is authorized by the current license (other options would require additional licensinsteps) and it is -the most costly optionL If TMis to pursue one of the other treatment/disposaloptions described in the COP Revision 2.0 and it is approved in a future lcensing action, thenHRIwill adjust the surety budget accordingly during the annual update review.

RO and BC wiMl be used to treat water during production operations and be used forgroundwater restoration conducted m the pilot demonstration and during concrrent restorationthatwill be ongoing with production actives. Because the cost of restoration equipment such aswellfield pump;, ponds, the. RO luni ths BC unit, laboratory cqyippment, trucks, and fieldequipent must be incured for producton process operations, they are assumed to beoperational capital and are not includod as capital requiremeats in any of the RAP budget lines.NRC i be able to v'dfy the availabi ofthe retoration eqiment during routine inspections.

The budget model descrbed in. this RAP used 2,102,609,094 gallons of water to sizeduration of the restoraion program a t lhe projected nominal equipment capacity. Rows21-42 of the restoration budget is a monthly calculation of waler treatmen capacty that has beencumulated over the term of restoration and compared with the required -Ie pore volumes oftreated water. It is 'nominal equiment design capacity that is needed to process thc reqiste,gallonag that justifies the length (and cost) of groundwater restoration operations-

2.2. Revene Osmosis Equipment Descaiption

Reverse osmosis is a water treatment process whereby the majority of dissolved `ions arefltered from the wastewat, and cocntratd into a smaller concetrated brine volume. Theresultiag product water typically meets, or exceeds drinidng water standards, and duringrestoration ac&ties, is reinected back into the wellfield firther diuting the underground mining

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iovembte 19,2001

solutions toward baseline quality. For the purpose of this budget modd, the concentrated brine_; stream, representing 20% of the feed volume will be disposed by brine concentration (a form of

' distillation).

Osmosis is a natural process tha occurs m1 all lving cells. With an appropriate semi-permeable membrane as a barrier to solutions of differing concentrations, anuy occuing

* osmotic pressure forces pure watei from the dilute solution to pass through the membrane, anddue the more concentrated solution. Tis process will continue un eqiibrium edsts betweenthe two solutions.

Reverse osmosis (RO.) is a xversal of the natural osmotic process. By confining aconcentrated solution against a semi peable membrane, and applying a reverse pressure on theconcentrate greater than the natrally ocaung osmotic pressure, water will move acoss themombrane ("product watel, and out of the orig concentrate, resling in an even mo

* concentrated sohlion brine'). The membrane rejects the passage of the majority of the| dissohred solids wie pemitting the passage of water.

Post-mining solutions from a depleted mine area will be treated with an ai-scaleni whichis the only chemical pretreatment budgeted. The solution may next be buk-filtered acoss sandM ile to remove all solids greater than 30 microns. Cartridge filters will then filter out thereaiing solids greaterthan I micron. The solution at this point is ready for t6 reves~e osmosisprocess. To achieve reverse osmotic purification, the pretreated and filtered solution isPressurized and directed to the first step of a two-stage reverse osmosis process. Approximately60 percent of the total feed volume will be coniv erted to product or purified water in the firststage. The brine water of the first stage will then act as the feed for the second stage, whichyields an overall product or purified to brine ratio of 4:1. The brine generated will be furthertreated and reduced by bine concentration.

The RO unit was sized to operate at a nomnina capacity of 580 gallons per minute. Thisdeiga rate has been utilized by URI at simila ISL faidlities with acllent results. Additionally,the d'zing is optimal becae it wi allow concuren restoration to proceed at approimately thesame rate production wellields are depleted. (Le. with mining and restoration going oanconcurrntly restoration and mming Wl proceed atsimilar rates).

- RO treatmeat operatiag and maintenance costs are included within the 0 & M budget in

Attachment E-2-i.

2*3. Brine Concentrator Equipment Description

; A brine concentrator will be used for final reduction of liquid waste. The RO reectstream wi be trated with a vertical tube, falling film vapor compressor eaorator followed by a

: RAPJl's nomninal Wt is p a stm I i equpi cncy or dowmeby a or g eq dze an ponestg c; . "o

! esu , if aftal cpertng resut Indkate that RO. equiment dowthme Is 5% then incasing the equipwti , desgachm5Ssgpto 610 lpmwould alow teaveagetu puitto xnmai tae Athis sa it

sble forH I t cpate and jst for cvzy qcpfional variable that way ahlse In the futum

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steam driven rotary drum dryer to ahieve zero liquid discharge (dry solids). The solids will bebulk stored and shipped to an Il.e2-byproduct facility for disposal

Brine concenttion is a process that can process a waste stream into deionized water andsolid slurry. Electrical utilities in the Four Comers area, and paper, and pulp companies haveemployed this technology for decades to bandle their waste streams. The ptinciple behind theprocess is based on the ideal Camot cycle where an initial fixed volume of concntrated brine isheated to boig tep e steam vapor ceated is mechanically compressed; resulting ina seconday steam vapor whose temperature is elevated (15-20 degrees) by the work energy used:duing compression. Distilled water is condensed fom the secondary steam vapor onto internalheat exchangers. The heat loss during condesation is transed to the irulasting bineon the.opposite side of the heat exchanger. he brine's temprature is rsised, maintainng the intienalboiling environment. his source of heat sustains the creation of pfimary steam used to feed thecoMPressor. The cycle is continuous so long as energy is added at the compressor stage. Theelectrical power used in compresn and elevating the temperature of the primary steam vaporproduces distilled product water. The resultant hyper-concentrated brine allows solid precipitatein the form of common salts as determined by the solution's lits for solubility. Typically, foreach 100 gallons of waste brine treated, 98 gallons of distilled water and 2 gallon of durry solidsare fotmed.

The BC was sized to accommodate the anticipated brine that the RO will produce.

BC costs are included wMthi the O & M budget in Atacbment f -2-1.

2.4. Pore Volumes and lhair

Restoration equipment capacity design coupled with timing of the restoration operationsbudgeted herein is a fimption of the quantity of water that will- be processed during restorationthat is calculated in this RAP by using the pore volume unit of measure. Tbe term 'pore volume"(PY) is a term of convenieace that has been conceived by the ISL industry to descrbe the quantityof fiee water in the pores of a given volume of rock. The uaits are provided im gallons. PVrsprovides a unit of reference that a miner can use to desczibe the amount of circulation that isneeded to leach an ore body, or des the tims water must be flowed through a quni ofdepeted ore to acieve restoration. Ps provide a way that a miner can take Small-scale studies,such as studies in the laboratory, and scale these studies up to field level or to compare pilot scalestudies' to commercial scale. Heo= they provide a miner with an important technique forcalculating ISL project economics and restoration costs.

MPYs are calculated by determing the three dimensional volume of the rock (that is alsothe ore zone) and mliplyg this mumber by the percent porosity. HR[ used the "ore area"method to determine pore volumes 7, where the eten of ore of given grade within a mine unit is

Le. sacx as the Seion 9 PLo See MS p. 4-37.Differ tOpems havc Wsed ieag methods to detcrwlne the vom of th One zcC FoC_ cMplc, smM

* __ *the '*ftm methodC wbu pat=n dimenslons art used to deternhw the area of the ore aWd then the area Is;umtllied by sc thi to determinteov of rodkluthe fvespo The e vlme the five pt is

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outlined and digitized to provide the ore arca'. This area is thm ltplied by the avenge orethickness to provide the three dimensional rvolume of the ore that is to be leched This volume isconverted to a PV by muldplyin the ore volume by the percent porosity and then converting tothe uiws of measuremet (Le. gallos). Table I below shows the ?W calculation for theCrownpoint location that was used as the asmption in the budget model.

Table 1- Crownpotnt Pore Volume Calculation

ii1..

I

.1I

ilIi

fi

Vol 1 i3) Pat AH-M VM cIv(ob 9XMV

Ua 168,000 12 2,016000 0.5 7.43 3,769,920 1.5 13 7351.344 66.162.09LA 63Q.000 9.6 60800 0.25 7.48 1l09760 1. 13 22S4032 19&4U;2N

MIA 260M0 00 O6 0.25 .748 4.11320 35 13 ,53.54 73.332166.-M 350.000 11 4,65000 O25 7.48 ,S 1.5 13 15,1g7A73 1369.053La 122,O0 9.2 L783.7 O 02M 7A 3,33n 1.5 13 O7 5W35sMyUC 67M . Co 7. -,130,000 O2 JA9 959.,100 1.5 1 5 165335MC 4000 12.2 1O349, 0.25 7A 19163J760 1.5 13 37.30132 23

DULS 992100 11 1705 C25 7.48 -Ws4_2 1 13 SGSW_ __4

MLC 7 000 73 50 025 7.,4 J2t,54 15 13 20,b.01S_ fW9.5399

TALS M4251.000 4- 6.400 = 91_3240 11,933 1,02,737,393

SW/4 - = -

LA 308,0 _.2 2.710.400 0.25 7.4Us 5, U448 1 13 9,.23,474 51,U2ULB 270,000 62 W4,000 0.25 7A2 3,130,130 1.5 3 _ 04.2411 54,938,169LB 437.00OO 7.5 -3217- 0.25 7.48 6,128,5 13 -i 11,951,404 -107,62,634

UUCM 256,0 6.5 4 01.25 7U8 31,tl IS Is 6.067,776 5A"MC 465,000 12-7 5,905.50 0.25 7.48 i25 1.5 13 21,534.406 _93,S091652

.TaTAS 1,n736,DO- 15,231,400 I - 2S.442,718 =8 -I 499,271,701

G.Tthb 6,587,000 = 64,067,00 - 1 6.6 = = 632,09,094

U - m n i ct -o t d p k a ~ubz z l r g i w

PV-Vztcvoc uoutyc ou~

CW. CoP or=. Vaft-z

"Flarc" fictors or pore volume increas fitors are multiplicas tht are commonly used bytheISLndustYto account forleah souion outside ofthe specificboundaries ofthe calatedore PV and are generally accepted increases? that should be recognized in cost estimates. HMI

-camdatedby Iulfipyig the wvotimeof rock by the pcent potosit and O= covting to the uafis ofC gams). -Te total PV of a w unit is cclsated by adding al the cv pot patts in th

mine nlt is mthod vwk wel for existing ISL opcrafions where the oro had been Y ddivratd andwdmld tostaed sub as tis exbistg pwjeds fnVWyomn.2 Futre wded PO= will be constractd wit the are that ax e nmic at the ime Pas wi be, a uubset

dX o sosratearcaPlare td&e of the M zone is lbe noM IIIne utbsuff water movs .a I pat icfronm jtor to'xtractor in its path ac=os the target cm By sing paens aflly ir is =ftimiz& However, as an

axfted voipoa oaSL m xng the Uir fados an bnclded ti the bonding calslati_ as a dMlete costcontingey. Thee is a imit oacnptAble flair, the hizontl monitr wlls if fid Is detcted in tb horizonlmonitorwells it is no longer aimply flar but then becomes an owarsion. An ecurson. requires immediate

corrccive actlamito draw It back to the mine zone or he.bcuning mnust be izeased above fth amocat coutwrplated

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uses pore volume increase factors of 1.5 for horizontal and 1.3 for vertical'0 . Horizontal increaseis calcated by multiplying the measured or mapped area of the ore, in plan, and multiplying theactual area by 1.5. ITis yields the affected horizontal area. Likewis, vertical increase iscalculated by multiplying the measures average thickness of the ore by 1.3. is yields theaffected vertical area. Mutplyi the affected horizontal times the affected vertical by porosityprovides the affected pore volume for the suety cost estimation. This lmber is n turmultiplied by 9 to determine water treatment and di~osal volumes that are entered into the modelto calculate costs. The 1.5 for horizontal and 1.3 for vertical pore volume increase factors havebeen calculated by URI engineers based on operating exerence at other restorationdemonstrations and commercial operatiow and have been adequate for monitoring and reportingrestoration pro ss at other operations. During the Cburchrock resion demo ion thatis described in LC 10.28, HRI will use these fictors to measure the number of pore volumes thatare processed during the restoration demonstraion.

The methods utilized ia this RAP and all three previous RAP's to calculate pore volumeand adjusted pore volumes are consistent with the methods used for the Mobil Section 9 Pilot thatwas conducted approximately thxee miles northwest of the Crownpoint site, whiich in turn Werethe basis for the NRC evaluation in the FMS, and are consistent with the methods used by 5 Rthroughout the CUP licensing process, and for HRI's submittals during the Subpart L hearing.HIM methods to calculate pore volume and adjusted pore volumes, and the factors that were usedwere not generic or arbitrary, but rather were consistently proposed, evaluated, litigated andapplied throughout the NkC licesing process and this Subpart L proceeding.

iH URI presented the NRC with the Summary Report for the Moblt Section 9 In Sitti Leach.Pilott1 as a part of the License Application support materials because the Pilot was a substantial-field demonstration, and provided empirical results'2, for the ISL development that is proposedfor the CUP. This Report 'was a complation of the ifformation from Mobil Oil Company's filesand records that were developed when the Pilot was conducted. HRI utilized actual patterdimensions and the actual ==ber of gallons processed during the restoration to compile thesumiary report.

.Te cumulative restoration anayses in Attachment C of the Summary Report show that59,173,469 gallons were circulated during restoration of the Secdon 9 Pilot, which equated to16.7 adjusted pore volumes. It is from tbls data that NRC determlned that after 8 - 10 pore

inthis RAP to cmpesatfor tdh cr intoacost. ( LC 10.13 which a&bhd ica ff

c.rreciv Is not componod 1n60 day)'Ci u por bmie te f tor i31.95.

E 1 t Seeza AMdaviJamazy 19,20041, htadnm 1.12

j1 S 9 HM a proVj& aCtW = = W ad PIM possed No the atia1 pM VoibDn

cabe procesed E )AUMwfitn iL yTthcsm May 23 2001114 Upecalyroiezesthmotaeof kwing ft quanity of wate removed from te fatio in caculatg pre v s ... if the r faorwwr l4reaed, the miner of pre voh= iecdreA Should be dreed. s soaaor may be tc only If thetoW pUaw of impacd gwtmdatter whurt Imm" The valu of the Seion 9 Pilo, or ar d =sftWaio sthlt it prwides kwwn variables to the eqnation that alls pore olum increase 00c to be assiged. Gven.Dm , can bg d tlo and aalogw dea poe olas t rse fators fo mc asthe Secion9 .Pilt can bc aplid to an panaoos dsto auch as the zwnon loc~ati~on.

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volumes that TOS concentrations tmd specifc conductance bad reached a point where Littleimprovement was realized with additional effort 3 and that the initial surety should be based on 9pore volumes. Table 2 shows how the adjusted pore volume was calWlated using the pattern area,screen thicIness, porosity, a horzoatal pore volume increase factor of 1.5, and a vertical porevolume increase factor of 13. The methods of pore volume analysis utilized im the SummaryRport form the foundation of the NRC impact evalhuion in Section 4.3.1 of the FEIS whiultimately resulted in the staff determination that 9 pore volumes would be required for suretycalculations 4 . It is important that HRI continue to use the previously evaluated pore volumeincrease factors in the RAP, and in fiture restomation analyses for the NRC, so that can projectedand actual performance and costs can be measured consistedny.

Table 2- Section 9 Pore Volume CalcUlation

gi& I J0 m1 24 J 97L7121Q25| 7.4t | t. 17101I 11 113 | 3,!! 1 5937,4n 691

CPV - Et pcoe V*m w s conwIF4Ioci±a hlr~'o~~e acfadr,

CIV-Ceddpoto~az

nuRI has presented similar pore volume estimates drg the license application reviewprocs. Specifically, in reponse to NRC Request for Further iformation, Question 59, August15, 1996, pertaining to Ground water Consumption, HRI supplied NRC wih a pore vohxmecalculation for the Crownpoint site that was milar to the one presented in th RAP Section

j2.aU 16 Consistent with the methodology used throughout the Crownpoix Pr censproces, MRI utilized the ore body outline, not pattern dimensions, to detemmei the affectedsurface area and used a horizontal increase factor of 1.5. These were the same values utilized byNRC to conduct the ev on of water consumption in the EIS"17. HRI's proposed porevolume in:rease factors are consistent with those, which had been systematically evaluated in the

. FEIS". The FEIS has been found to be adequate for the purpose of licensing the CrownpointUraniumProject."

Ia summary, HRI correctly used the same methods to calculate adjusted pore volumes inthe RAP cost estimate becs they were the same as those thAt NRC reviewed in HRI subnitals,

.- I FMp. 4-;4 "f Fe Sp. 440

tBase~d mL prdsslonald kfetmm, IJ1 jg the estmate pmusity fr~i .21 in QI59 to .2 in the RAP. 71sIt-- n am conacdivt estimAe in the RAP. AUl oliactar am ft

i ~ A P.ScMA Q1159,! n M FM pp. 4-57 ftbough 4 60.

' MIS ! 4-122 used a co=Id hoizontl and vertcal pore vomco base f&W o 1.95. Lo 1.3 (HDF) x 1.5(VDF) - 1.95.

See COM[SSION CLI-01.04.

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that NRC used in the FEIS impact evaluation, and that was placed into evidence by the HRI im thecourse of the SubpartLhearingprocess.

As an additional test for reasonableness of HI1's cost estimate, Table 3 below comparesimportant project vaibles for PRe's B~bland Utra Project in Wyome against ar

*21project variables for HRI's Crownpoint project . Table 3 brings into context the comparativesize, and corresponding scope of reclamation, of the two projects. Ia this table the actual suretyamount for P1I are shown against the proposed surety amount from this RP-CP. Reviewing thedata in Table 3 in the context of number of wells, tbrougbput, and number of satellite locations,the PRI Highlad project exceeds the size of the HRI Crownpoilnt project. The PM1 Highad andHRI Crownpoint wdlfield pattern size and duration of operion are comparable. The PrR! ghland adjusted pore volume is 20% greater than tbat estimaed by HRI for the Crowipoint-si. - In the comparative measur of Sacre wellfield, or $/pound produced, PRI proposedsurety amount exceeds that of URL In the comparative measurts of water process cost Vn S/ mgal., ELI's an PRI'?P proposed surety amount are essentially the same. The Table 3 infumnalionprovides strong evidence that the costs estimates for the HURI Crownpoint location are consistedthe PRI Highland costs that the Intcgenor's experts argue should serve as a reasonable example.

Table 3 - Comparison of KXey 3oject Variables and Reclamation Costs

I I

1 1; I

., I

I I

., I

ProiedVariables r muNuaberof ws (a -4141 '1014Acres of elfeld s attem -189 -l81mYearsof opcn 13 15Cumlaive produitia (mm Vh. U208) -13 -15Nmithma lnpe9000 .4000

.Uq=o Nofabeues 36 1__Number ofpomvolume's nsed in surety estimate 6 9Size of adjusted restmration'voxume (billion lons) -2.71 -2.10Conwaradvo PV size (mm gal) /ame wcfield 14.3 11.6

. __ ___ ___ ___ __ ___(-I_=_ _ $ S21.12 S16 39.__i _ __ _ ___ ___ $111,751 S 93,370

CVtnxd prduced $1.63 $1.09C__ _ _ _V ___ ___ ___Cog___ ___. . S7.79 $7.81

20 Tesimmy of AprigLaHvfty. May23, 2001 ¶11.2tM r. Jngle esti o y fDecem e 19, 2000, p. 31 states T~bre Is moieale ree atand analogonu ;uranu22 in Wyomig to draw fom to dmvelop edible cost edimate.

MostsWd InS iboq hisv andtkpated thatIf18wasto use tdpatenalthat orbomidarycs thanthe poare varm and 4 uted Pamvokhm=s wod be analle nd more popor to PRI whe compared to wellfidd aatw.23Dr. Abitz Testow dated My 23,2001 co ues to dciabe reasons to use vnit ovdwal costs fom theFernaldd t. It Is more qpmpatt tose a siNiar NRC iosed ISL faciy.

2 5Etmatd from COP 2.0. M~g=r 1.4-3.26 F ollts In ude the D A D of the also incue tbo mother plant FM moher plant D & D costs are included inthe Churdwock Seco 8 RAP.

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;2.6. Ground Water Quality

Once the econoic recovry lmit of a mine area is reached, li l iSmtion is stopped,and the affected ground water is treated (restored) to return the quali of water to regulatorystandards. Water quality will be redaimed to the criteria of L.C. 1021. The limited water qualitydata fiom the Crownpoint site suggests that the water good and meets drinking water qualitystandards for all parameters except uranium related radiowxclidesY. The Unit 1 site monitor welldatOfrom the same ore zone aquifer 2 to 3 miles to thewest of the Crownpoint locationis moreetensive, and provides a good picture of radionoclide concentrations ia water that is inerstitia toroll fihnt uranium mineralization. A thorough characterization of the premnme groundwater will beconducted at the Crownpoint location as required by L.C.'s 10.21 & 10.22 and it vM be this

. dwaracteization that provides the basdine against which restoration vl be measured.

* LC 9.14 States: "Prior to .iiection of lixiviant, the licensee shall obtain al necessarypermits and licenses from the appropriate regulatory authorities. At the Crownpoint location

i this provision requires that MIU acquire an Underground InWection Control Permit and an Aquiferi evwptioe through the USEPA. Aquifer Ehewption is a regulatory devise of the USEPA that isused to desinate aquifers or portions of aquifers as "exempt" because they are mineralized andproducible of minerals in comnmercial quatities and are not cmrently or likely to be in the futuresources of drinking water. TIM Was not acqired either of these authorizations for theCrowopoint location at this time but wl be required to do so by NRC before operations begin.

2.7. Groundwater Restoration Budget Lne Item Assumptions

H1I used historic and ongoing company perience with simnilar ISL uranium recoveryand groundwater restoration operations in developing its budget model. For example becauseURI, HII's sister company is currently redaiwIng two other commercial ISL mines, HRI drew onthis cxperience to aid in sizig labor requirments, maintenance needs and other cost categories

..that may not be apparnt to someone w ut similar "hands on" expeence. Unit lbor costs are

FBIS p. 3-31.\ X RA-'Ul 1 2.6.

* 40 CFR 146.4 state: 'An aquifer or a portion theof whibi mects the ,rtria for an "mneround ouce ofidrln2g wu in § 1463 may be ddtennn1 12de 40 CFR 144.8 to be an "czcmpted aquifee" If it meets thefolowingc criteriax(a) It does not currntly sve as a urc of ddringn watr, and(b) 1tcanotsw adwinotfIn te fuev asoa wurce ofdridngwater bcm e:

(1) It i6 neiwaton cr gwodugorcanbepe;i yappbict as, part ofE a perinit asIato foir a Cass gU orm terlOst ectlaniaor kydrocubons that considering tbcir qumntfty and location are erccled to be comwdallprodudble.(2) It is stasted at a depth or locaio which inva ccmy of water for dxbing waterpmpoa esoonoafal or oImpract;(3) It is so inatd that it would be economically ox tecinologically i£tractcal torender that water fit fot Ianian consmspon or(4) It is located or a Cass well ming area subjoct to sbcddm or catphic collps;..."

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the same as what was provided to NRC as part of the license review of the overall project? 0 Inaddition HRI used actual costs estimates from the region for utilities, and other materials that willbeusedinreclamation.

The assumptions that were used in the groundwater restoration budget (See Attacbment11-2-1) are as follows:

&darkes

For the purpose of the Financa Assurance Plan, HRI assumed employment of technicalprofessionals whose expertise is needed on a limited basis during the restoration mode.Anticipated poaitions are listed in the Restoration Budget rows 1-15. However, to justiy their fulltime status and utilize their time on the job, it is asumed that they are reeked to ode a

m d of servces, Le., Cvery employee will be wearing vultiple hats. As such, individual jobdescriptons are difficult. For example, iathe restoration mode, a qualified geologist will berequrd to verifr the configuration of restoration patterns to assure efficient results. While thistask requires unique geological exprtise, the time commitment by the geologist to this task mayonly be several hours per week Therefre, to maximize the use of the geologist time, he or shewill be assigned to many other tasks for which he or she will be qualifed such as lab analyst, wellsampler, and plant operator. HRI also plans to maintain several other technical disciplines on staffsuch as radiation safety specialist, and e eers. In the restoration mode they will also performtheir pmary function and a mnmber of secoudazy roles.

Reflecting the very broad nature of each fiut time employee's job at the CUP duon therestoration mode, the following is a summary of each position that is budgeted in the Financial

* Assurance Plan- Anticipated salaries that were used in the budget are within Attachint E-2-4.

Operations Manager. In Chargo of all aspects of day-ta-dayactvities and planning forCrownpoint Uranium Project.) & D. Responsible for iteface wit accounting services includingcoding and approval of all Invoices, monthly cost analysis, restoration report generation, andemployee relation responsibilies.

Environmental Manager. Responsible for the radiation health and safety, environmentalcompliance and quality assurance program at the Crownpoirl Urani Project. Supervise theRadiation Safety Officers to esure that all radiation safety, environmental compliance andpenitting/licensing programs will be conducted in a responsible manner and in compliance withalapplicableregulatons andpemitcese conditions. Serve as Cowpayliaisowithreulatyagencies over the term of the restoration activity.

Radiation Safety Officer. Responsible for compliance with all USNC, and MSHA rulesand regulations at the CUP. Also responsible for assistance with laboratory analysis, vehiclesafety, reporting and public information.

'° Sev RAT Q118 -Feb. 19. 1996.

B5/B5/2005 13:05 9723877779 URI INC PAG 1B

Novamber 19, 2001

Chemist Responsible for maininig day to day analytical services including operational"_, and environmental In this capacity the chemist will assure that proper chemical parameters arc

reported to operations for the water treatment processes. He will be responsible for performinganalysis of all routine environmental samples such as monitor wls.

Senior Geologist Respomnble for evaluation of logs and other wi-l data and itsintepretation as it pertains to restoration activites. Performs all monitor well sampling duties andwhen possible, helps 'vith weldld construction as well as Smeal punp hoist operation. Dutiesinclude drafting and ACAD operator for mapping needs. Provides weekcnd call-out and rotatingoperator duties as needed.

Wellfield Foreman. Responsible for Wilfieeld operation and construcdon as it pertains torestoration. Helps withmonitor well sampling and backp pump hoist operator.

Wages-Direct

Electrician. Responsible for performing day to day electrical maintenance and repair* services. Performs restoration operator duties on a rotating basis-

Plant Operator. Performs restoration operator duties on a regular basis. This wouldinclude the operations of all water treatment equipment including the reverse osmosis unit andbrine, concentrator.

Truck driver. Provides. CDL driver duties. Will serve as backhoe operator aid haveoperator duties on a rotating basis.

Wellield Operator. Perform wellfield restoration operator duties on a regula basis and| . rotations with the Plant Opeator.

Pump Hoist Operator. Responsible fort1he of pumps in and out of the hole asrequired by restoration activities. Other duties Include the operation of the backhoc and labornecessary for field construction

InWrance-Workmcm 's ConqMnalion

Estimate based on projected compensation exenses and prevailing rates.

PyolU Taxes

Estimate based on projected compensation expenses and prevailing rates.

Medical Insrance

Estimate based on headcount and historic premiun rates.

; 5/05/2B05 13:0B5 9723877779 IRI INC P 11

Novewber 19, 2001

401K Confribufions

The 401(k) Contribution cost codes represent HRI-ftnded conribuious under the 401(k)- the retire nt savin plan for EU employees. The 401 (O) Contribution portion is madeconcurreat With each bi-wekly payroll period as a component of each elible employee's totalcompensation.

TdephonevTecegraph

Estimated zerage costs of regular telephone service, celllar telephone savice, and faxline service end intemet line sevice at aid CUP locations.

APwagw4reight

Iijimated average cost of dll types of mall servce.

Copy;EquIpnt

Estimate average cost for operation of all types of copy and fax equipment a alU CUPlocations.

-OtherEqupment &Rentrdal

This covens the renal of equipment and miscellaneous equipme average costs. Asapplied in. these estimates, it would indiude office machine rental, water machines for potablel I wrt etc.

Office Supples

Estimated average costs of office supplies suci as paper, pens, etc.

Office Eqtdpmen!Mainfen~mce

Estimate average cost for maintenance for all types of office equipment at all CUPlocations.

i, ¶Dafa Processng

Estimated average cost for outside data processing.

Maps

Estimaed avpge cost of plotting and reproducing maps for routine operations andreports.

05/05/2005 13:05 9723877779 URI INC PA 12

Wum.ber 19,2001Drting & Printing

Estimated average for outside computer automated drawing services for reportPreparation

: anportafian -Air & Car

Estimated average for aiplane tickets and auto rentaL

Meals

Estimated avege for travel related meals.

Mic Tavl Expse

Estimated average for travel related expenses such as hotels.

iE|-Depreciable Equipment

Replacemeat equipment and calibration costs. Tis would include suvey and sampleequipment and routie calibration and service.

' vfzw-Operational Analyses

This cost code is reserved for outside analysis

Emivronmenial-Mlme~laneous

As the iame Suggests, any cnvro cna related item not specifically addressed in the;other codes 090 through 098, Miscellaneous items may incude sample bottles, filters, reagents,calibraion, etc.

Saf ety

11s2 is for costs assodated with safety supplies for the employees. Items charged to thiscost code would include safety boots, safty glasses, potable water, protective gloves, safety' goggdss etc.

AM backhoe rental and maintenne such as oi changes, and repars would be chaged tothis account

Mixc Chemicals

0B5/05/2005 13:05 9723877779 -RI INC PAGE 13

Novemler 19, 2001The mayor diage to this cost code dung restoration is anti-scaent for the RO,

Ufilities-Electric, Welifield

Calculated electdcW1 cost for opemting the pumps and other equipment in the wilfield&The basis for these costs is shown in Aitacbment E2-2.

jU dies - Ekcic, Brine Concentrator

Calculated electrical cost for opeat the brine concenrator. The basis for these costs isum in Attachmeat E-2-2.

Utlfibes-EW&t4 PmtnandRO

Calculated electrical cost for operating the plant, revese osmosis unit, and other officet ii2ing and electrical needs. 'Me basis for thest costs is shown in Attachment E-2-2.

Submersible P ps

Estimated average maintenance and replacement costs for submersible pumps that are

used in extraction wels.

Submersible Motors

Estated average maintenaoce and replacement costs for submersible pump electricmotors that are used in aetracton wells.

ieldPiplng & Vahve

Estimated average mainance and rlacement costs for the various fittings, vacs,glues eth that is used inwellfield operations.

Meters

Estimated average mainteance and replacement costs for welfld meters.

' c Field

\ ~Thc mDor cWPg to tfiis cost W&d &uing restoration is PPA, raps, sohmf and othermibcenlaneous field needs.

E ' hantoolstl , t stimated averae handltool replacement costs

V05/15f2885 13:05 9723877779 URI INC PA 14

Novmber 19, 2001

Pla I PirrpIg & Valm

;stimated average maintenance and replacement costs for. the various ftigs, valves,glues etc. that is used in plant operations.

Pla4 Brine Concentrator Inst

A cost code to diarge anficipated brin concentrator instrument replacement

J,<tsmated average maintence and replacement costs for pumps tbat arm used in thewater treatment plant.

Plnt Eectieal

itii

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lEsimated average electrical mntenance and replacement costs for water treatment plantoperations.

Filler

Estimated average filter and filter media replacement costs and mainteance costs forfiltration eqpment for water treatmnt plant operations.

Evaporaton Ponds

A cost code to 6arge aittiped aintemn costs for pond ir rep andmalatenance.

Rbad'

A cost code to charge anticipated maintenanc costs for road maintence.

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Gas, 01), and Greae

Equipment fael costs and lubrication.

Dispsal- DC Sofids

Ongoing operional cost of disosing salt residue from brine concentrator. The basis forthese costs is ahown in Attachment E-2-2.

85105/2005 13:05 9723877779 'LII INC PAG 15

-November 19, 2001RO Unit

A cost code to charge anticipated ree osmosis unit rep, matenance and instrumentreplacement.

Lab Sipplies

flstimated average costs of analytical laboratory supplies such as reagets, filters,glassware, ec.

RO Membrane

Average replacemet costs of revs ososis unit menes.

iJeldESqup Repairs& MaInt

A cost code to charge anticipated maintenance costs for large field equipmeat such as thepump host equipment, generators, and track.

Vehicle Repats &Maint.

A cost code to charge antiipated maintenance costs for road vebicles such as pick uptrucks and company autos.

Vehicles-Pickps

T.e estimated average cost for the naor repak of a company pickup truck.

vejucl eds-actors &ThWAS

Tle e.timated average cost for the major repair of a large trucks or trailers.

Vehicks-Automobiles

The estimated average cost for the mjor repair of a company car.

iMins contingency/proflt, the total cost for groundwater restoration and post restorationmanAgent is projected to be $10,890,592.

Ii

.05/05/2005 13: 05 9723877779 * URI INC PAGE 16

NOGuMber 19,2001IiIIi

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. 05105/2085 13:05 9723877779 URI INCPAGE 26

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. I

UNITED STATES OF AMERICANUCLEAR REGULATORY COMMISSION

ATOMIC SAFETY AND LICENSING BOARD

Before Administrative Judges:E. Roy Hawkins, Presiding Officer

Dr. Richard F. Cole, Special AssistantDr, Robin Brett, Special Assistant

In the Matter of:Hydro Resources, Inc.P.O. Box 777Crownpoint, NM 87313

) Docket No.: 40-8968-ML

) Date: May 6, 2005

CERTIFICATE OF SERVICE

THIS IS TO CERTIFY that a copy of the foregoing Hydro Resources, Inc.'s

Response in Opposition to Intervenors' Written Presentation Regarding Groundwater,

Groundwater Restoration and Financial Assurance, Notice of Eratta in the above-

captioned matter has been served upon the following via electronic mail and U.S. First

Class Mail on this 6dh day of May, 2005.

Administrative Judge,E. Roy HawkensAtomic Safety and Licensing BoardU.S. Nuclear Regulatory CommissionMail Stop T-3 F23Washington, DC 20555Email: erh(.nrc.gov

Administrative JudgeRichard F. Cole, Special AssistantAtomic Safety and Licensing BoardU.S. Nuclear Regulatory CommissionMail Stop T-3 F23Washington, DC 20555Email: rfcl (anrc.gov

Office of the SecretaryAttn: Rulemakings andAdjudications StaffU.S. Nuclear RegulatoryCommissionMail Stop: OWFN-16 C1Washington, DC 20555Email: hearingdocket(anrc.gov

Mark S. Pelizza, PresidentUranium Resources, Inc.650 S. Edmonds LaneLewisville, TX 75067Email: mspelizza(.msn.com

Jep Hill, Esq.Jep Hill and AssociatesP.O. Box 30254Austin, TX 78755Email: iep(2)iephill.com

Administrative Judge, Robin Brett2314 44"t Street, NWWashington, DC 20007Email: rbrett(ausgs.gov

Louis Denetsosie, Attorney GeneralSteven J. Bloxhalm, Esq.Navajo Nation Department of JusticeP.O. Box 2010Window Rock, AZ 86515

William ZukoskyDNA-Peoples' Legal Services, Inc.201 East Birch Avenue, Suite 5Flagstaff, AZ 86001-5215Email:wzukoskyvidnalezalservices.org

Office ManagerEastern Navajo-Din6 AgainstUranium MiningP.O. Box 150Crownpoint, New Mexico 87313

W. Paul RobinsonChris ShueySouthwest Research andInformation CenterP. 0. Box 4524Albuquerque, NM 87106

Eric Jantz, Esq.Douglas Meiklejohn, Esq.Heather L. GreenNew Mexico Environmental LawCenter1405 Luisa Street, Suite 5Santa Fe, NM 87505Email: ejantz(anmelc.orgEmail: meiklihnemnmelc.orgEmail: Hgreenemnmelc.org

Adjudicatory FileAtomic Safety and Licensing BoardU.S. Nuclear Regulatory CommissionMail Stop: T- 3F23Washington, DC 20555

David C. Lashway, Esq.Hunton & Williams, LLP1900 K Street, N.W.Washington, DC 20037Email: dlashwavyahunton.com

Geoffrey H. FettusNatural Resources Defense Counsel1200 New York Avenue, NWSuite 400Washington, DC 20005Email: gfettusalnrcdc.org

Laura BerglanDNA-People's Legal Services, Inc.P.O. Box 765Tuba City, AZ 86045Email:lberzlan(adnaleyalservices.org

Atomic Safety and Licensing BoardPanelU.S. Nuclear RegulatoryCommissionMail Stop: T-3 F23Washington, DC 20555

Office of Commission AppellateAdjudicationU.S. Nuclear RegulatoryCommissionMail Stop: 0-16G15Washington, DC 20555-0001

2

John T. Hull, Esq.Tyson Smith, Esq.U.S. Nuclear Regulatory CommissionOffice of the General CounselMail Stop: O-15D21Washington, DC 20555Email: ith(Tnrc.govEmail: TRSI(a),nrc.gov

Anthony J. Thompson, Esq. N \$Christopher S. Pugsley, Esq.Thompson & Simmons, PLLC.1225 19'h Street, N.W., Suite 300Washington, DC 20036Telephone: (202) 496-0780Facsimile: (202) 496-0783Email: aithompsonelathompsonlaw.comEmail: cyugsleveathompsonlaw.com

(hydra TcsOUrcesCERTIFICATEOFSERVICE 5.04-05.DOC)

3

THOMPSON & SIMMONS, PLLC.g25 iqth Street, N.W., Suite 300

Washington, D. C. 20036202.496.0780/202.496.9g1t

Fax: 202.496.0783

446 Meadow Street, ANTHONYJ. THOMPSONWaterbury, Connecticut o6702 althompson@athompsonlaw.com

Admitted in D.C. and Virginia

CHARLES T. SIMMONScsimmons@athompsonlaw.com

May 6, 2005 Admitted in CT and D.C.

CHRISTOPHER S. PUGSLEYcpugsley@athpmpsontaw.com

BY ELECTRONIC MAIL AND U.S. FIRST CLASS MAIL Admited in MD

U.S. Nuclear Regulatory CommissionOffice of the SecretaryAttn: Rulemaking and Adjudications StaffMail Stop: OWFN-16CIWashington, DC 20555

Re: In the Matter of: Hydro Resources, Inc.Docket No: 40-8968-ML

Dear Sir or Madam:

Please find attached for filing Hydro Resources, Inc.'s Response in Opposition toIntervenors' Written Presentation Regarding Groundwater, Groundwater Restoration andFinancial Assurance, Notice of Errata in the above-captioned matter. Copies of theenclosed have been served on the parties indicated on the enclosed certificate of service.Additionally, please return a file-stamped copy in the self-addressed, postage prepaidenvelope attached herewith.

If you have any questions, please feel free to contact me at (202) 496-0780.Thank you for your time and consideration in this matter.

Sincerely,

Anthony J. Thompson,Christopher S. Pugsley, Esq.Thompson & Simmons, PLLC.Counsel of Record to HRI

Enclosures

(hydro resourcesCOVERLElTrER 5-06-05.doc)