Department of Environmental Quality

To protect, conserve and enhance the quality of Wyoming'senvironment for the benefit of current and future generations.

Matt Mead, Governor Todd Parfitt, Director

January 23, 2014

Mr. John CashLost Creek ISR, LLC5880 Enterprise Drive, Suite 200Casper, WY 82609

Re: Summary of January 2014 Inspection, Lost Creek ISR Project, Permit #788

Dear Mr. Cash:

Enclosed is WDEQ/LQD's summary of the January 2014 Inspection conducted at the Lost Creek Projecton January 23, 2014. The resulting Inspection Report is provided in the attached five-page Memorandum. Basedon this Inspection, there are now only six (6) Action Items for the site.

* Installation of silt fence on west side of TS-7,0 Control of laydown yard "creep" north of MU 1,* Delineation of header house turn-around areas,* Cleaning out of site's culverts,* Development of SOP for trash pick-up, and0 Finalization of the removal of equipment from Plant Site's diversion channel.

All of the action items listed above are expected to be addressed by March 31, 2014 or upon the ground thawingenough to enable the work. The next site Inspection is scheduled for February 26, 2014. If you have anyquestions regarding this correspondence, please contact Melissa Bautz in the Lander Land Quality Division officeat (307) 335-6943.

Sincerely,

Melissa L. Bautz, P.G.Natural Resources AnalystLand Quality Division - Lander

Enclosure Inspection Memorandum for January 2014 Inspection - Permit 788 (5 pages)

cc: Mark Newman - BLM, P. 0. Box 2407, Rawlins, WY 8230 1(w/encl)John Saxton - US Nuclear Regulatory Commission (w/encl)Tanya King - WDEQ-LQD, District II Supervisor--Pt. 788 Inspection File (w/encl)Ramona Christensen - Cheyenne LQD Records Specialist-- Pt. 788 Inspection File (w/encl)Chron (w/encl, minus photos)

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Lander Field Office * 510 Meadowview Drive - Lander, WY 82520 * http://deq.state.wy.us

ABANDONED MINES AIR QUALITY LAND QUALITY SOLID & HAZARDOUS WASTE WATER QUALITY(307) 332-5085 (307) 332-6755 (307) 332-3047 (307) 332-6924 (307) 332-3144FAX 332-7726 FAX 332-7726 FAX 332-7726 FAX 332-7726 FAX 332-7726

Wyoming Department of Environmental Quality (WDEQ)- Land Quality Division (LQD)Inspection Memorandum

File: Lost Creek ISR, LLC - Permit 788

Date of Inspection: January 22, 2014

Date of Report: January 23, 2014

Participants: Eric Stonaker, Lost Creek ISR/Ur-EnergyNate Fischer, Lost Creek ISRIUr-EnergyMichael Gaither, Lost Creek ISR/Ur-EnergyMelissa Bautz, WDEQ-Land Quality Division

Report Prepared by: Melissa Bautz - WDEQ-Land Quality Division

Subject: Monthly InspectionIntroductionOn January 22, 2014, the monthly Inspection of the Lost Creek ISR (LCI) site was conducted.The last site Inspection was conducted on December 18, 2013 (see Report dated January 7,2014). ISR mining commenced at the Lost Creek ISR Project on August 2, 2013 and hascontinued since that start-up date, with LCI seeing good results and success.

At the end of the last Inspection (the December 2013 monthly), the following 11 action itemswere indicated as remaining to be addressed:

1. The arcuate swath of ground in MU1 just northwest of Header House 1 that has hadtopsoil reapplied must be protected from vehicular traffic.

2. The travel route to the water supply well west of DDW-3 (LCI008W) and its associated turnaround area needs to be better-delineated

3. Secondary containment for the tote at the southwest corner of DDW-3 is needed.4. The west edge topsoil stockpile TS-7 requires a silt fence or wattle.5. The laydown yard "creep" north of MU needs to be reigned-in and controlled.6. The turn-around areas around header houses need to be defined.7. Clean out the site's culverts.8. Trash (drums & pallets) needs to be picked up around the Plant Site.9. Develop SOP for trash pick-up at the site.10. Remove equipment stored in the Plant Site's diversion channel.11. Submit plan to address topsoil loss at site.

During this Inspection, the status of the progress on the above-listed action items were assessed.

Pre-Inspection MeetingPrior to the field inspection, LCI's Mike Gaither and LQD's Melissa Bautz briefly discussed thestatus of LQD's review of the Revised 2012/2013 Annual Report. Ms. Bautz indicated to Mr.Gaither that the Revised 2012/2013 AR was approved as submitted on January 22, 2014 (the dayof the inspection) and that a hard copy of the approval paperwork was in the mail.

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Lost Creek ISR, LLC - WDEQ/LQD Permit 788Inspection Date: January 22, 2014Report Date: January 23, 2014Page 2 of 5

The Letter of Violation (LOV) issued to LCI on December 13, 2013 was not discussed duringthis Inspection. However, LQD's review of LCI's responses to the LOV was also sent in themail on January 22, 2014.

InspectionAs indicated in the "Introduction" section of this Report (above), there were 11 outstandingaction items identified prior to this Inspection. This Inspection focused on the status of thoseaction items, as does this Report (see italicized section sub-headings below).

Arcuate swath of reclamation in MU]This area is now blocked off from vehicular traffic with metal t-posts.

Travel route to water supply well LCIOO8WThis travel route is now delineated with metal posts (painted orange).

Tote of hydrocarbons on DDW-3 well padThe tote of hydrocarbons has been completely removed from the site. It is no longer a concern.

Topsoil Stockpile TS-7 silt fenceConstruction of a silt fence on the west edge of TS-7 will be deferred until the ground is nolonger frozen.

Laydown Yard "creep" north of MU1In order to address the inadvertent spreading (to the south), or "creep", of the laydown yard thatis north of MUl, LCI personnel will need to remove the various pipes and equipment that iscurrently stuck in the frozen snow and ice. Therefore, the reigning-in of the laydown yard willbe addressed when the -ground is no longer frozen..

Delineation of header house turn-around areas in MU1Better delineation of the turn-around routes surrounding header houses in MU1 will beaccomplished as soon as possible, depending upon the ground conditions. It is difficult to installt-posts or other types of delineation posts when the ground is frozen.

Cleaning out of site's culvertsThe cleaning of the site's culverts is still a work-in-progress and is not yet completed.

Trash pick-up around Plant SiteTrash pick-up around the Plant Site was noted as adequate during this Inspection. The palletsand drums noted in the last Inspection have been removed.

Development of SOP for trash pick-upA Standard Operating Procedure (SOP) for trash pick-up at the site is still being crafted.

EAMELISSA WDEQWORKFOLDERM-LB Work Files\My WorkStuffiMines\Fremont CountySites\Lost-Creek-ISRPmt_

7 8 8\Pmt_788\Pmt_788 lnspections\Pt_788_2014_Inspections\Pt_788_2014-01-22_Inspec.doex

Lost Creek ISR, LLC - WDEQ/LQD Permit 788Inspection Date: January 22, 2014Report Date: January 23, 2014Page 3 of 5

Removal of equipment stored in Plant Site diversion channelThe removal of the equipment that was stored north of the ponds and within the Plant Sitediversion channel was nearly complete at the time of this Inspection (see Photo Number 1 of theattached Photo Addendum). LCI staff noted that the smaller objects that had fallen to the groundin this area will not be picked up thoroughly until the ground thaws, as many of those objects(nuts, bolts, etc...) are frozen in the ice and snow. The equipment formerly stored at thislocation has either been recycled, scrapped, or relocated to a new (formal) laydown area in thenorthwest comer of the Plant Site. The new laydown area has been stripped of topsoil asrevealed in the attached Photo Addendum (see Photo Number 2).

Submittal ofplan to address topsoil loss problemsA plan to address topsoil loss in future well fields was submitted by LCI on January 15, 2014.The plan is currently under review by LQD. However, at first glance, it appears to be a viableplan.

Table 1. Summary of outstanding action itemsAction Item Description *Status of action item

Delineation of reclamation in northwest comer of MU1 Task accomplished.Delineation of travel route to water supply well LCI008W Task accomplished.Removal of hydrocarbon tote from DDW-3 well pad Task accomplished.Installation of silt fence on west side of TS-7 Task deferred until ground thaws.Control of laydown yard "creep" north of MU 1 Task deferred until ground thaws.Delineation of header house turn-arounds ', Task in progress.Cleaning culverts .. 1 : i. 1- . .' Task in progress.,Removal of trash around Plant Site Task accomplished.Development'of.SOP for trash pick-up . Task in progress.,,Removal of equipment from Plant Site's diversion channel Task in progress.Submittal of plan to address site's topsoil loss problems Task accomplished.* Status indicated in this table is based upon the January 22, 2014 site Inspection.

Establishment of Travel Routes in future well fieldsDuring this Inspection, LCI's Nate Fischer and Eric Stonaker explained in some detail theproposed topsoil loss control plan that was submitted by LCI on January 15, 2014. Mr. Stonakerand Mr. Fischer showed me a map of the proposed topsoil stripping (windrow) area and the areasthat will require delineated travel routes in the absence of topsoil stripping. This discussion,which occurred in MU2 and in the office was invaluable in helping me understand the practical,on-the-ground, aspect of LCI's proposed approach to topsoil loss controls in future well fields.Mr. Fischer's and Mr. Stonaker's attention to detail in this subject matter was most appreciated.

ConclusionAs indicated in Table 1 (above), five of the 11 required action items indicated in the lastInspection Report have been completed. The six (6) remaining action items are either "inprogress" or are being "deferred until the ground thaws"; these are considered to be acceptablestatuses for the action items. Based on this Inspection, the following six (6) action items remain.

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Lost Creek ISR, LLC - WDEQ/LQD Permit 788Inspection Date: January 22, 2014Report Date: January 23, 2014Page 4 of 5

Current Action Items:" Installation of silt fence on west side of TS-7," Control of laydown yard "creep" north of MUl," Delineation of header house turn-around areas," Cleaning out of site's culverts," Development of SOP for trash pick-up, and* Finalization of the removal of equipment from Plant Site's diversion channel.

The next site Inspection is planned to occur on February 26, 2014, Wednesday, at IOam. Pleasecontact WDEQ/LQD's Melissa Bautz at (307) 335-6943 with any questions regarding thisReport.

**********************END OF MEMORANDUM**********9******************

W/Photo Addendum (Pages 4 and 5)

Photo Addendum to accompany the January 2014 Monthly Inspection of Lost Creek ISR's Pt 788

Photo Number 1: This depicts the laydown area north of the ponds in the Plant Site. Many of the materialsthat were stored here has been lain atop the diversion channel that runs east-west just north of the north

pond. All that remains to be picked up from here are relatively small pieces of miscellaneous supplies, someof which will not be removable from the area until the ground thaws. The majority of equipment from herehas either been scrapped or relocated to a new laydown area in the northwest corner of the Plant Site (see

Photo Number 2 below).

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Lost Creek ISR, LLC - WDEQ/LQD Permit 788Inspection Date: January 22, 2014Report Date: January 23, 2014Page 5 of 5

Photo Addendum to accompany the January 2014 Monthly Inspection of Lost Creek ISR's Pt 788 cont'd...

Photo Number 2: This is a view looking generally north along the northwest corner of the Plant Site wherethe new laydown yard is located. Topsoil has been stripped and placed along the perimeter of the laydown

yard.

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