~Department of Environmental QualityTo protect, conserve and enhance the quality of Wyoming'senvironment for the benefit of current and future generations.

Matthew H. Mead, Governor Todd Parfitt, Director

October 1, 2015

Mr. Ken Garoutte O~

Cameco Resources, Inc.P.O. Box 1210Glenrock, WY, 82637

RE: 2015 Annual Inspection Report, Cameco Resources Mine, Permit No. 633.

Dear Ken:

Enclosed is a copy of the above referenced report for the Cameco Resources Mine. Theinspection was conducted on July 28, 29 and 30 with your assistance. No issues were notedduring the inspection.

If you or other persons detect incorrect or misleading statements in the report, please identifythem in writing. The written comments you submit will be incorporated into the permanent filealong with my report.

I apologize for the delay in getting this inspection report to you; I was having problems with ourinspection software that delayed my getting this report out.

Please contact me at 675-5618 if you have any questions.

Respectfully,

Miles BennettUranium Coordinator

mb/enclosure: Inspection Report.xc: LQD Cheyenne copy.cc: Doug Mandeville, Document Processing Center, NRC, 11545 Rockville Pike, Rockville, MD.20852633_.Al_LT_10-1-15mb

2100 West 5th Street • SHERIDAN, WY 82801(307) 673-9337 • FAX (307) 672-2213 : i

r' ,'

URANIUM IN SITU MININGINSPECTION REPORT FORM

Land Quality Division / 2100 West 5th Street (

Sheridan, WY 82801(307) 673-9337 FAX: (307) 672-2213

GENERAL INFORMATION

* Permit No: 633

* Permittee: Cameco

* Mine Name: Smith Ranch Highland Uranium Project* Permittee Representative(s): Craig Hiser, Derek Eager. Dan Mudder, Seth Barnes, Darryl Parrett.

Vickie Gitthens. Jean Lawlor. Jim Clay.

* Date of Last Inspection: August 21 and 22 2015

* Inspector Name(s): Miles Bennett

FOLLOW-UP ITEMS FROM PREVIOUS INSPECTION OR PRE-INSPECTION DISCUSSIONWITH LOD PERMIT COORDINATOR.\

List Follow-up or New Items: Actions Taken by Permittee and Resolution of Follow-up Items:

No follow up items from previous inspections. Pre-inspection discussions centered on what was to beinspected during the annual inspection.

MINE PROJECTS AND ACTIVITIES

List Current and Anticipated Mine Projects and Activities:

Mine Unit 10 Extension Wellfield Data Package in not complete and will be sent to D3 as soon as it iscomplete. The Casing Leak Investigation Report is not yet complete. Delineation drilling on site willcontinue and will move into Mine Unit 8 to begin developing it. The Deep Disposal Well infrastructure iscomplete and Cameco is waiting for the permit from Water Quality Division.

RECORDS REVIEW

Records Reviewed for Follow-up from Previous Inspection or New Items: Y [] N I-']

List Records Reviewed including Mining and Groundwater Restoration on Schedule: Y [] N, [],

Spills Properly Reported and Recorded: Y [] N ['-,

Well Completion Certifications: Y [] N LI,Wells Being Sampled on Approved Schedule: Y [] N [--]

Excursions: Y [] N [-I, DM-003A still has constituents above the UCL but is showing signs ofimprovements. This well is believed to be in connection with the old underground workings which maybe the cause of the anomalies in the sampling data.

Page 1 of 4

MITs: YZ[ N I-,

Laboratory Analyses: Y jj N [•,

Copy of Current Mine Plan On-site: Y [] N D-7Copy of Latest Annual Report On-site: Y [] N D-,Spill Mitigation Plan Specific for Deep Disposal Wells(s): Y [] N [-. This is located in the Emergency

Response Manual Volume 8 EPRP S.7.2 Release Response Procedure

FIELD INSPECTION

Field Conditions: The temperature was in the 80's during the three-day inspection, light wind 5 to 8 mphand sunny.

Access Good [], Limited [-, Poor D],Signs Viewed? Entrance Y [] N L-I, Permit Boundary V [] N [-I, Other: ____ Y LI N [].

Facilities Viewed? Office: Y [] N [-I, Control Room: Y LI N [], Laboratory: Y LI N []

Plant: Y LI N [], Non-NRC Impoundments: Y [] N E-i. Storage/Staging Areas: Y [] N [LI,

Trash and Debris: Y LI N [], Surface Run-off Leaving Site Causing Erosion: Y LI N [], if so

Erosion Control Measures in Place and Adequate: Y [] N [--] Deep Disposal Well(s) {DDWs} and

Structures Viewed: Y [] N LI, Other: ________Y LI N [].

Facilities Comments: No issues noted during the time of the inspection.

Roads Viewed? Y [] N LI Roads Maintained: Y [] N [-'] Erosion Control in Borrow/DrainageDitches Adequate: Y [] N LIRoad Comments: No issues noted during the time of the inspection.

Erosion or Drainage Control Structures Viewed? Y [] N [L],

Major Drainages Crossed: Y [] N [-], Erosion!/Drainage Control Adequate: Y [] N I-,

Culvert Protection Adequate: Y [] N 1-], Culverts Free of Debris: Y [] N I-7

Debris at Outlet of Drainage Control: Y LI N [], Drainage Control Seeded: Y [] N LI.Comments: No issues noted during the time of the inspection.

Spills? Active Spills Occurring: Y LI N [], Active Spill Clean-up Mitigation: Y LI N [].

Spills Comments: No issues noted during the time of the inspection.

Topsoil/Subsoil Salvage Viewed? Y [] N LI, Salvage Adequate: Y [] N LI-.Topsoil Salvage Comments:

Page 2 of 4

Roads: Topsoil was salvaged as required by Cameco's permit

Pipelines: Topsoil was salvaged as required by Cameco's permit. In Mine Unit 10 Extension. Camecohad stripped the foot print of the pipeline and the footprint of most of the wellfield.

Header houses: Stripping topsoil as required by Cameco's permit

Mud Pits: . Topsoil stripping as required by Cameco's Permit and in Mine Unit 10 Extension Camecowas stripping the footprint of the overburden piles.

Topsoil Stockpiles Viewed? Y [] N L'i, Stockpile Protection Adequate: Y [] N i"-]

Erosion Controls Adequate: Y [] N [--] Topsoil Staked or Signage Adequate: Y [] N L'i,Stockpiles Located in Drainages: Y Li N [], Long-term Stockpile Shown on Map: Y [] N [-i.

Topsoil Stockpile Viewed or Comments: No topsoil issued were noted during the time of the inspectionhowever some of the topsoil signs need to be repaired or repainted so they are more visible.

Welifield(s) Viewed? Y [] N [-i, Wellhead Protection Adequate: Y [] N ['i,

Collection House(s) Examined: Y [] N Li, Monitoring Wells Intact: Y [] N [-i,

Wells Currently on Excursion: Y [] N ['-] Excursion Control Measures, Adequate: Y [] N L"-]Maximum Allowable Injection Pressures Being Monitored and Maintained: Y [] N Li7.Welifields Viewed and Comments: The Reynolds Ranch delineation drill and reclamation was inspected.A backhoe was employed to locate bentonite chips at the 2 foot depth. All of the holes inspected metplugging requirements. Cameco switched from bentonite chips and capping with a concrete plug to chipsup to 2 feet from the surface and soil placed in the last 2 feet of the hole.

Active Well Construction Witnessed? Y [] N Li Wells Cemented to Surface Y [] N LiAnnular Seals Acceptable Y [] N Li, Centralizers Spaced Every 40 Feet Y [] N LiCement Weights Being Measured and Recorded Y [] N Li: ppg: 13+ verified from the drilling casingsheet. Cement trucks have mud scales

Verify casing OD, Type and grade: 5" Casing R 17 ASTM, 0-ring Rear Groove American NorthernStandard.

Verify open-hole diameter, drill bit size or caliper log: 8 ¾"4~ bit

Comments: Darryl is working with CCP to verify that 13 pound cement is ok for their application so thereis verification.

MIT(s) Viewed? Y [] N LiWells Which Fail MIT Being Abandoned Within 120 Days Y [] N LiComments: The MIT process was viewed at Well J-I65. It was pressured up to 140 psi and held for the

time duration demonstrating the well passed the MIT.

Developmental/Delineation Drilling Viewed? Y [] N Li, Drill Holes Properly Sealed: Y [] N L--q

Mud Pits and Drill sites Backfilled, Contoured and Seeded: Y [] N Li

Page 3 of 4

Drilling viewed and Comments:Mine Unit F Extension was in the process of further delineation at thetime of the inspection. Mine Unit 28 in the Reynolds area was drilled earlier this year (2015) and wasreclaimed.

Reclamation Viewed? Y [] N [-j Seeding Time Appropriate: Y [] N L-],Approved Seed Mixture Used: Y [] N [-, Mulching Being Utilized: Y [] N []

Active Noxious Weed Mitigation: Y [] N [-], Re-vegetation Efforts on Schedule: Y [] N L"-.

Reclamation Viewed and Comments: All 2015 reclamation looked good. Early abundant spring rains wasa key factor in the seeding success. The Reynolds Ranch area was seeded in May of 2015 and even withcattle grazing the newly seeded areas the grass seedlings were well established.

FIELD INSPECTION CONTINUED

Off-Site Impacts? Y LI N [].

Comments: No off-site impacts were noted during the time of the inspection.

Compliance Assessment

Photographs Taken During Inspection? Y [] N LINotice of Violation (NOV) outstanding? Y LI N LI

If yes, is NOV: NOV No.__________NOV Docket No._________

NOV Written on This Inspection? Y LI N []

Comments: None

Actions Required Y ['I, N [] or Requested of Operator Y LI N ]:_____________

Additional Field Inspection Comments: None

Future Inspection Items and describe any follow-up items: Check to see if topsoil pile signs have beenrepaired, or replaced.

Inspector Signature__________Date: •f./

Attachments: Photos [] Map LI Other LI

COPY: Cheyenne LQD File

District III File

Other: Doug Mandeville. Document Processing Center. NRC. 11545 Rockvi~lle Pike. Rockville.MD. 20852

Page 4 of 4

2015 Inspection of Cameco #633

Photo 1 of 6: Looking southeast. Photo showing the development of wells in Mine Unit 10 Extension and the construction of header house foundations . Photo takenby Miles Bennett 8/28/15.

2015 Inspection of Cameco #633

Photo 2 of 6: Looking southeast. Photo showing one of the foundations for a header house in Mine Unit 10 Extension ready for concrete. Photo taken by Miles Bennett 8/28/15.

2015 Inspection of Cameco #633Photo 3 of 6: Looking northwest. Photo showing Mine Unit 10 Extension development. Topsoil was stripped using a dozer prior to mud pit construction Phototaken by Miles Bennett 8/28/15.

2015 Inspection of Cameco #633 2015Photo 4 of 6: Looking southeast. Photo showing the top of the drill hole filled with bentonite chips. This photo was taken in the Reynolds area. Photo taken by Miles Bennett8/28/15.

2015 Inspection of Cameco #633Photo 5 of 6: Looking southeast. Photo showing the one of the last cone shaped concreteplugs used to plug drill holes at Cameco. Cameco now has approval to use bentonite chipsto with in 24" of the surface and backfill the remaining hole with soil. This photo was takenin Mine Unit F extension. Photo taken by Miles Bennett 8/28/15.

2015 Inspection of Cameco #633

Photo 6 of 6: Looking southeast. Photo showing the establishment of new seeding efforts on the Reynolds property. The seeding was completed in May, 2015. Photo taken by Miles Bennett8/28/15.