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Effluent Limitation Exceedances <br />June 2008 <br />Parameter Limit Type Effluent Analytical <br /> Limitation Result <br />Selenium 30-day average 20 mg/L 21 mg/L <br />WET Test Ceriodaphnia 100% 75% <br /> lethality <br />WET Test Pimephales 100% 25% <br /> lethality <br />It should be noted that only 100,000 gallons of water were treated in June 2008. This is <br />well below the permitted discharge volume of 900,000 gallons (based on the 0.03 mgd <br />permit limit over 30 days). <br />One exceedance occurred for selenium of the 30-day average effluent limitation. In mid- <br />June, prior to treatment, treated water was pumped from the sedimentation tank to the <br />untreated water tank for cleaning operations. Some sediment was transferred with the <br />water which may have caused resuspension of previously precipitated selenium. Energy <br />Fuels believes this is a isolated event and that selenium will come back down to levels <br />below effluent limitations during the treatment process. Energy Fuels is collecting <br />additional selenium level information during the July discharge event to further examine <br />the effectiveness of the current treatment process. It should be noted that the duplicate <br />sample of the June 24 discharge sample, collected and analyzed by a third parry per BLM <br />compliance stipulations, indicated that selenium was at 19.6 ug/L, below the effluent <br />limitation. <br />Two Whole Effluent Toxicity (WET) Test exceedances occurred during the June <br />discharge event. Bench scale chemistry from the WET Test indicates that low Dissolved <br />Oxygen (DO) levels in the discharge samples was the likely cause of failure. Chemical <br />Oxygen Demand (COD) was high (56 mg/L) when the June 24 discharge sample was <br />collected but dropped significantly as discharge progressed and was lower (14 mg/L) <br />during the June 26 sample. The WET Test data indicates that the large majority of the <br />species died in the sample collected on June 24 and that dissolved oxygen levels <br />improved throughout the test. Energy Fuels believes that the water transfer discussed <br />above contributed to the high COD and low DO levels in the initial stages of discharge. <br />Energy Fuels has commenced with a Preliminary Toxicity Investigation (PTI) to look <br />into the cause of WET Test failure. The PTI was discussed in a letter to your office dated <br />July 22, 2008. <br />Total Suspended Solids (TSS) levels have been brought down significantly from earlier <br />months when it ranged from an average of 14 to 64 mg/L to less than 10 mg/L in June. <br />Energy Fuels attributes this to completion of the underground mine sump and addition of <br />flocculent that occurred in early June. <br />Fracrg Fuck, Inc. 44 Union Blvd, Suite 600 <br />?hw-w.ei?erg}1'uGls.cor?2 Lakewood, Colorado 80268 <br />Phone: 303-9-14-21 0 <br />Fax: 303-974-2141