UNITED STATES

NUCLEAR REGULATORY COMMISSION

REGION II

245 PEACHTREE CENTER AVENUE NE, SUITE 1200

ATLANTA, GEORGIA 30303-1257

July 2, 2012

Mr. Steve Laflin

President and Chief Executive Officer

International Isotopes Fluorine Products INC. (IIFP)

Fluorine Extraction Process & Depleted

Uranium De-conversion Process Plant (FEP/DUP)

4137 Commerce Circle

Idaho Falls, ID 83401

SUBJECT: MEETING SUMMARY -CATEGORY 1 MEETING, INTERNATIONAL

ISOTOPES FLUORINE PRODUCTS — DOCKET NUMBER 40-9086

Dear Mr. Laflin:

This letter refers to the public meeting conducted as requested by your staff at the Region II

Office in Atlanta, Georgia on June 28, 2012, from 10:00 a.m. to 12:00 p.m. The purpose of this

meeting was for International Isotopes Fluorine Products (IIFP) to discuss the background and

project status activities for the FEP/DUP facility. The NRC staff provided an overview of the

construction inspection program. Additionally, the meeting afforded members of the public the

opportunity to ask the NRC staff questions regarding your facility.

The names of participating attendees at the meeting, and a copy of the presentations are

enclosed.

In accordance with 10 CFR 2.390 of the NRC’s “Rules of Practice,” a copy of this letter and its

enclosures will be available electronically for public inspection in the NRC Public Document

Room or from the Publicly Available Records (PARS) component of NRC’s Agency wide

Document Access and Management System (ADAMS). ADAMS is accessible from the NRC

Web site at http:llwww.nrc.gov/reading-rm/adams.html (the Public Electronic Reading Room).
S. Laflin 2

Should you have any questions concerning this meeting, please contact Cynthia Taylor at

404-997-4480 or by electronic mail at Cynthia.Taylor@nrc.gov.

Sincerely,

IRA by William Gloersen Acting Fort

Deborah A. Seymour, Chief

Construction Projects Branch 1

Division of Construction Projects

Docket No. 40-9086

Enclosures:

1. List of Participating Attendees

2. International Isotopes Fluorine

Products (IIFP) Presentation to NRC

Region II

3. Overview of the Construction Inspection

Program for Fuel Facilities
S. [at un 3

cc w/encls:

Mr. John Miller

Corporate Environmental Safety and Health Officer

International Isotopes Fluorine Products INC. (llFP)

Fluorine Extraction Process & Depleted

Uranium De-conversion Process Plant (FEP/DUP)

4137 Commerce Circle

iaano i-ails, lu i4U1

Michael Ortiz

Bureau Chief

Radiation Control Bureau

New Mexico Environment Dept.

Marquez Building-Suite 1

525 Camino de Los Marquez

Santa Fe, NM 87505

Michael Ortiz

Bureau Chief

Radiation Control Bureau

New Mexico Environment Dept.

P.O. Box 5469

Santa Fe, NM 87502-5469
S. Laflin 2

Should you have any questions concerning this meeting, please contact Cynthia Taylor at

404-997-4480 or by electronic mail at Cynthia.Taylor@nrc.qov.

Docket No. 40-9086

Enclosures:

1. List of Participating Attendees

2. International Isotopes Fluorine

Products (IIFP) Presentation to NRC

Region II

3. Overview of the Construction Inspection

Program for Fuel Facilities

Since rely,

IRA by William Gloersen Acting For!

Deborah A. Seymour, Chief

Construction Projects Branch 1

Division of Construction Projects

• PUBLICLY AVAILABLE LI NON-PUBLICLY AVAILABLE LI SENSITIVE • NON-SENSITIVE

ADAMS: U Yes ACCESSION NUMBER: ML12185A068 • SUNSI REVIEW COMPLETE

OFFICE RII:DCP RII:DCP RII:DCP RII:DCP RII:DCP RII:DCP RII:DCI

SIGNATURE

CDT

NAME C. Taylor

DATE 06/29/2012 06/ /2012 06/ /2012

E-MAIL COPY? YES NO YES NO YES NO YES NO YES NO YES NO YES NO

OFFICIAL RECORD COPY DOCUMENT NAME:
Letter to Steve Laflin from Deborah A. Seymour, dated July 2, 2012.

SUBJECT: MEETING ANNOUNCEMENT -CATEGORY 1 MEETING, INTERNATIONAL

ISOTOPES FLUORINE PRODUCTS — DOCKET NUMBER 40-9086

Distribution wI ends:

Meeting Announcement Coordinator, OADM/DFIPS (PMNS)

Region II Regional Coordinator. OEDO

Headquarters Operations Officer

J. Kinneman, NMSS

T. Hsia, NMSS

T. Hiltz, NMSS

P. Silva, NMSS

M. Bartlett, NMSS

D. Arroyo, NMSS

Region II Division Directors and Deputies

R. Hannah, Public Affairs Officer, Ru

D. Seymour, Rh

W. Gloersen, RII

C. Taylor, RII

D. Edwards, Ru

Region II Administrator’s Administrative Assistant

PUBLIC
LIST OF PARTICIPATING ATTENDEES

U. S. Nuclear Regulatory Commission, Region II

F. Brown, Deputy Regional Administrator for Construction

J. Moorman, Director, Division of Construction Projects (DCP)

C. Ogle, Director, Division of Construction Inspection (DCI)

A. Gody, Director, Division of Fuel Facility Inspection (DFFI)

J. Yerokun, Deputy Division Director DCI

M. Lesser, Branch Chief, Construction Inspection Branch (CIB) 1

D. Seymour, Branch Chief, Construction Projects Branch I (CPBI), DCP

C. Taylor, Senior Project Inspector, DCP

D. Edwards, Construction Project Inspector, DCP

T. Fanelli, Construction Inspector, CIB1

Office of Nuclear Material Safety and Safeguards (NMSS)

P. Silva, Branch Chief, Fuel Cycle Safety and Safeguards (FCSS)

M Bartlett, Senior Project Manager, FOSS

M. Garcia, Project Manager, FCSS

International Isotopes Fluorine Products (IIFP)

S. Laflin, President and Chief Executive Officer

J. Miller, Corporate Environmental Safety and Health

Advanced Process Technology Systems (APS)

J. Thomas, President and Owner

T. Thompson, Director of Engineering

New Mexico Environmental Division Environmental Health Bureau

S. Zappe, Program Manager

R. Horowitz, Incident Response Coordinator

Nuclear Energy Institute (NEI)

A. Mauer

Members of the Public

C. Maddox

C. Patrick Quillian

H. Quillian

Enclosure 1
_j

International Isotopes Inc.

Making Clean Power Cleaner

NRC Region II Project Update

June 2012

Enclosure

2
Certain statements in this presentation are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Information contained in such forward-looking statements is based on current expectations and is subject to change. These statements involve

a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of International Isotopes, Inc. to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Those risks and uncertainties include, but are not limited to, changing market conditions, inability to raise financing, unanticipated costs and delays, time frames for licensing, design and construction, feasibility of FEP on

a large scale, expansion of the U.S. enrichment industry, opportunities with respect to fluoride products, pricing and cost estimates, and other risks detailed from time-to-time in the Company’s ongoing filings and we encourage investors to review the risks presented in our filings with the SEC. Other factors, which could materially affect such forward-looking statements, can be found in Internat:ional Isotopes Inc.’s filings with the Securities and Exchange Commission at www.sec.gov, including our annual report on Form 10-K for the year ending December 31, 2011. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this investor presentation and International Isotopes, Inc. undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

2
Manufactures products for nuclear pharmacy

Depleted Uranium

& Fluorine

Products

• Supplies bulk cobalt and sealed sources for medical and industrial

applications

• Supplies Iodine-i 31 as

a drug product directly to radiopharmacies

Largest New Commercial Opportunity

• Supports the processing of gemstones and other Health Physics contract services

Provides safe transport of nuclear materials

Cobalt Products

{ 9adiochmjcaI Products

Radiological

Services

3
• Cobalt Products and Services

4
U,
A Technology Breakthrough in

Intracranial Stereotactic Rac8iosurgery

• 1ntinia System Capability 12• Iafmi Siniciuse 13• Technical Spei1icatioos14• Rotary Focutin 51 6

• Independent Keam Switch ConIrol 17

• Shielding Design Enhantemeats / 8

• Clrnice of 4 Different Collimators / 9

• Treatment ked 34) MovemenLf 10• PuLyAuiornated Coterol 3ystem ill• i3apanded Treatnscnt Voluate I 12• Unmatched Sculpturing of Dose Distribution / 13• Compreheativa Treatment Ptanniu 8System 1rfiuiP1an 114• IafiniP1an”Cq,ability1 159 Rapid end Seemlera Wnrkfktw f id

• TseeinwnrQ,nter/ 18

• Rgulations and Standards 120

• S.crvicet 121

An industrial design masterpiece.

/

Wrnnm of the 2008

Genuan iF Design annid.

(Medical cotsgniy)
• Radiochemical Products

7
Radioati icg1h

s ire;ted

,iTrn pobF rneasLlnrc

II ii io.Cti iy

7

8
• Depleted Uranium Project

Opportunity

9
• All uranium must be enriched in the process to create reactor fuel

• Enrichment of uranium results in production of by-product depleted uranium (“tails”)

• U.S. based enrichment capacity is growing and will create significant volumes of tails

• Tails are chemically reactive and must be de-converted for disposal

• De-conversion process separates valuable elements from tails and creates

a

chemically benign waste for disposal

• INIS is the only known company building commerciai de-conversion capacity in the U.S.

10
• Uranium goes through several steps

in the process to create reactorgrade fuel

• Enrichment is one of the most

important steps in the process

— Increases the concentration of U235 from “O.7°k to 4.5%

— Required to sustain nuclear fission

chain reaction

• Enrichment generates the greatest

volume of by-product from the

nuclear fuel cycle

unit of enriched UF6

units of tails are

Step 1: Uranium Mining/Milling

Step 3: UF 6 Enrichment

Enrichment I

Fachity

Enriched UF 6

(10%)

— For every 1

created,

9

produced

Ii

Centiuge

4

I

9:1 by-product ratio

11
• Typical 1000 Mw Reactor

— Supplies power for 600,000 homes

— Requires about 37,O00 lbs of enriched uranium per year— Results in the production of about ,b,485,000 lbs of depleted UF 6 Tails

• Current U.S. Reactor Base

— ‘‘1OO,000 MW (Production Capacity)

— “48.5 million Lbs of depleted UF 6 per year

12
• Expiration of the “Megatons to Megawatts” program 2013 - U.S. based enrichment capacity is growing

• Currently

4 major companies are building, or planning to build, new enrichment capacity in the U.S.

A

AREVA

Facility: Eagle Rock Enrichment

Location: Idaho Falls, ID

Opening Date: 2016

Full Production Date: 2019

Capacity: 6.6 million SWUJyr

wmcc

Facility: Louisiana Energy Services

Location: Eunice, NM

Opening Date: June 2010

Full Production Date: 2015

Capacity: 5.7 million SWU/yr

USIEC

A G4obJ Conphzj

Facility: American Centrifuge

Location: Piketon, OH

Opening Date: TBD

Full Production Date: TBD

Capacity: 3.5 million SWU/yr

j) rergy

Facility: Global Laser Enrichment

Location: Wilmington, NC

Opening Date: TBD

Full Production Date: TBD

Capacity: 3.5

— 6.0 million SWU/yr

13
11 million LBS DUF6 Capacity.

FEP

-?DUF 4 I

Step2: Can

Produce

a variety

of fluoride gases

• Phase2-

DUF 6l

24 million LBS DUF6 Capacity

> DUO 2I

•Phasel—

De-convert

DUF6

k

Step 1 - Proven

process to chemically

convert to DUF 4

DUO 2[ Low-level waste

Anhydrous HF

Low-level

waste

14
• We are paid to take our raw material input AND we are paid for products we extract/produce

— Raw material tails can be used for production of several fluorinated gases using FEP

— De-conversion also creates hydrofluoric acid

• Fluoride products play

a key role in the manufacture of thousands of products used in

a variety of industries

• We use

a simple, patented process to produce low cost, high purity fluoride products

• Lower energy requirements than by conventional manufacturing methods

• We optimize revenues by selecting/producing products with best value

15
Construction Start:

Commercial Operations:

De-Conversion Capacity:

Fluoride Gas capacity:

Anhydrous HF Cap:

(mm Ibs/yr)

(000lbs/yr)

(000Ibs/yr)

Phase 1

2013

2014

11

2,900

900

Phase

2

2017

2019

24

2,900

5,500

Phase

3

2020

2022

39

2,900

10,600

16
• De-conversion services agreement in place with URENCO USA

— Signed in April 2010 for first

5 years of operation

— evergreen conversion

— Fixed cost per pound for de-conversion (subject to annual inflation protections)— Contract has guaranteed minimum volumes

— Final waste disposal costs are passed through to URENCO (LES)

• Hydrofluoric acid sales contract in place

— Signed in Feb. 2012, 10 years with renewal features

— With an established company in the HF industry

— U.S. source for HP grade HF product

• Fluoride gas from FEP sales agreement in place

— Signed in December 2011,

8 years of production with first rights

— With an established company for the specific fluoride gas

— Contract is imminent

• Several additional new fluoride gas opportunities are under consideration

• We have had discussions with other U.S. enrichment companies

17
Acquisition of depleted uranium de-conversion equipment (UF6-UF4)

Selection of Hobbs, New Mexico as location for de-conversion facility

New Mexico Environment Department agreement completed

Submission of NRC license application

De-Conversion Services contract signed with URENCO (LES)Rocky Mountain Waste Compact Declaratory Order on DUF 6

Design and Build contractor selected (Parsons)

Land transfer completed

Formal design work initiated

De-Conversion Plant Equipment Staged

New Mexico Air Permit approved

NRC Final Safety Evaluation Report for License Approved and Published

May 2008

March 2009

October 2009

December 2Q9

April 2010

September 2010

July 2011.

August 2011

October 2011.

December 2011

April 2012

May 25, 2012

18
Acquired assets of the only complete de-conversion plant in the U.S. in 2008

— De-Constructioin completed in December 2011— Equipment relocation to New Mexico in 2013

I

I
• Plant has successfully demonstrated production

of several fluoride gases

• Granted an additional patent on the process

technology

(8th patent related to FEP)

• Large energy savings compared to conventional

processes - (6

X Less Energy Per Pound)

• Additional scale-up work is underway

L.

I

20
1pplication . . . . . . . . . . • • . a a • a a • . . • •• • •. • ....Decerriber 31 , 2009

Acceptance Review February 24, 2010

ACRSSubcommittee

Completed

RAl Responses...... . . • .......•I.a •...........1’ 4ay, 2011

0raft EIS •.................................•....January 2012

Safety Evaluation Report .................May 2012

Final EIS .......................................August 2012

Expected

License a.. a.. • a... • a.......aa...a.............a.Septeniber 201

—

21 13f\A<h
Expected Receipt of NRC License

Commence Construction (Non-Safety Structures and Site Prep.)

Start Main Facility Construction (Subject to obtaining adequate financing)

Begin Commercial Operations

September 201.2

4th Qtr 20jj

2nd Qtr 201.3

it tr. 2014

22
• Team has significant experience in nuclear fuel, uranium and fluorine product md ustries

Steve Laflin • 30+ years experience in the nuclear industry

ChiefExecutive Offlcer& • INIS CEO since 2001

President;, Director • U.S. Nuclear Navy and BSc Physics from Idaho State University

John Miller • Over 20 Years Nuclear physics, safety and licensing experience

Radiation Safety and • More than 20 NRC license amendments and actions

Licensing, INIS • SHARP Award for INIS

• BS Health Physics, MS Environmental Engineering, Certified Health Physics

Jim Thomas • Leads team of engineers and technical staff acting as the primary contractor in the conceptual Owner/President of design development and engineering, cost estimating, integrated safety analysis, environmental

Advanced Process permitting, financial analysis support and NRC licensing for INIS’ de-conversion/FEP facility Technology Systems • 35+ years experience in nuclear fuel cycle (‘4PTS’9 • Extensive experience in uranium conversion and enrichment, fluorine products and chemical manufacturing

• Managed the development of SILEX enrichment technology, currently in use by GE

Tom Thompson • 30 years of project, design and construction experience, including UF 6 conversion

APTS Engineering Director • Has previously worked in uranium and fluorine chemical industry for Allied Chemical (now Honeywell) as project engineer design, estimal:ing, purchasing and field engineering for capital projects and plant modifications.

23
• Growth in U.S. commercial uranium enrichment capacity is underway

— URENCO operating and expanding

— Three other companies are evaluating, planning to build enrichment capacity in the U.S.

• The technology of the process is demonstrated

— De-conversion facility for UF6 to UF4

— Pilot plant demonstrations for FEP

• Agreements in place with customers

— De-conversion services with URENCO (UUSA)— Other fluoride products contracts

• Last steps to start construction are at hand

— “Shovel Ready”

— Pending issuance of NRC license

— Formal design team identified and design work underway

24
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doctorsJ-WLP

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A1e make the

C! FANFI POVvF[

even CLEANER
U.S.NRC Aenda nitd St,us uc.cr R ula(ciy Coinmision

Protecting People mu tthe Environnient

INTERNATIONAL ISOTOPES FLUORINE PRODUCTS, INC. (IIFP)

FLUORINE EXTRACTION PROCESS

& DEPLETED URANIUM

DE-CONVERSION PROCESS (FEP/DIJP) PLANT

PUBLIC MEETING AGENDA

JUNE 28, 2012

10:00 am. Opening Remarks and Introductions NRC/IIFP

10:15 a.m. Presentation: UIFP

* Background and Status of IIIFP

Fluorine Extraction and Depleted

Uranium De-conversion Plant

11:15 a.m. Presentation NRC

* Construction Inspection Program

Overview

11:45 am. Questions from Public NRC12:00 p.m. Adjourn Meeting

Enclosure 3
NRC

Lflitcd Stauc ucar .Rgu1aLoy Commission

Protecting PeopL and the Environment

This is

a Category

1 meeting in

which the public is invited to observe

and will have one or more

opportunities to communicate with

the NRC after the business portion,

but before the meeting is adjourned.

2
‘US.NRC

Lnicd Stat Nucicr Rcu1a(ory (OInmjsajofl

Protecting People and the Environment

To improve our communications, it would be

beneficial to hear from meeting participants.

Please take

a few minutes to fill out the NRC public

meeting feedback form (NRC Form 659) and return ormail the form to the NRC

NRC Form 659, the meeting agenda, and other handouts are located on the table niear the entrance to

the meeting room

Please sign the attendance sheet

3
US.NRC

LI) tud S t.

s

\ UCIL al IULLId LiJfV Ct. 111 1iiol1

Prolecting People and the En.vironment

Overview of the Construction

Inspection Program for Fuel Facilities

Cynthia Taylor

Division of Construction Projects

4
‘U.S.NRC

Jnitd Staccs Nuc.ar cgLIatov Comniston

Piweesing People and the Environnwnt

Construction Inspection Program

Mission Statement

To provide assurance in the safety of

future operations at new nuclear facilities

by ensuring that licensees and applicantsconstruc

t the facilities in accordance with

approved design criteria, using

appropriate practices and quality

materials.

5
/ tU.S.NRC

Unitcd $t:acs Nucicr RcguLcory Coinrnisson

Protecting People and the Environnwnr

NRC Fuel Facility ConstrUction

Inspection Program Basis

Inspections based on:

• License Requirements and Conditions

• Safety Analyses

• Safety Evaluation Report

• Building Codes and Standards

• Supplemental Program Plans Approved by NRC

6
US.NRC

_nt Cd Stace \uc.r 11oy (‘c inmion

P weciug Peop/ and the Envicunrnent

How Does NRC Inspect?

Li Resident Inspectors

• Provides daily onsite inspection oversight at the facility

Li Construction Inspectors

• Management Measures

• Civil/Structural

• Mechanical

• Electrical

Li Operations Inspectors

• Chemical Safety

• Criticality Safety

• Fire Safety

• Radiation Protection

• Environmental Protection

Resident

Inspectors

Operations

Inspectors

Construction

Inspectors

7
nttcd St tc uc car

R ,i C tflruisiofl

Prteciing Peopk and the Eiwironr,wnt

Safety-related foundation work (structural, equipment, and utilities)

Inspections of structures,

systems, and components

Component supplier inspections (vendor)

Pre-Operation

No later than 60 days in advance of the start of commercia.l

operations the licensee’s must

submit an operational readiness

(ORR) and management

measures verification review

report(s) to the NRC

- The NRC will perform follow-up inspections of ORR and

management measures

verification reviews as needed.

Commercial Operations

Acceptance of licensee’s

operational readiness and

management measure

verification reviews

Construction Inspection Program

Construction Inspections

F

Construction

I

-

8
US.NRC

Jnitcd Staics Nuccar RcgLIacoy Casmssion

Protecting People and the Ewironn,ent

Construction Inspection Schedule

Inspections scheduled early in the process of individual

construction activities to observe work in progress

• Develop confidence that the specific construction

activities have been adequately accomplished at all

stages of construction

• Inspection scope and frequencies may be expanded to

assure problem areas have been corrected

9
U.S.NRC Inspection Activities Jncd Staccs ucar Rci1atoy Commission

Protecting People and the Em;ironrnent

• Routine Inspections

• Performed in accordance with NRC guidance

• Reactive Inspections

• Performed in response to significant events• Inspection scope developed by NRC management• Usually involves inspection team

• Allegations Inspections

• Allegations are claims by workers or public of hidden safety

problems

• Inspectors review claims and determine if claims are true

and whether safety is affected

• Results of inspection communicated to person making

allegation claim

• Allegations may be sent to licensee for resolution

10
U.S.NRC

Lntcd Stac Nuccar RcgLlacorv (inrnsion

Protecting People and the Environme,ii

Documenting Inspection Results

• Typically issue quarterly inspection reports• Inspection Reports Include:

• Letter to licensee senior management• Notices of Violations (if any)

• Executive Summary of inspection findings

• Inspection details

• Publicly-available inspection reports can be accessed

electronically in the NRC’s document system (ADAMS),

accessible from the NRC Web site at

http://www. nrc.gov/readinç-rm/aciams.htmI.

11
U.S.NRC

Unitcd St:cs Nuccar

RLatory Coiirrissøn

Pro1eciing Peopk and the Envicannwnt

Performance Assessment Process

Assessment Program Overview Include:

• Internal quarterly reviews

• Annual licensee performance reviews (meeting with

licensee and public)

• Adjustment of construction inspection program (as

necessary)

12
US.NRC

Unitcd Sratc Nucicir I g.lawv Cammision

Proteiin People’ nml i/se Environment

Enforcement Actions

The NRC Enforcement Policy provides

guidance on assessing significance and

severity level of violations

• Actual safety consequences

• Potential safety consequences

• Impact on NRC’s ability to perform ts regulatory function

• Intentional violations

The NRC Enforcement Policy is available on the NRC

public web site at http://www.nrc.gov

13
U.S.NRC Construction Inspection Process Lintcd Suates Nucicar Regulatory Commission

Proteting People and i/icEnvironrmnl

L........

Evaluate Performance Results Across All Areas of Construction

10 CFR 21 -Construction

nse

Management Conference

Monitor Licensee Actions

Additional Regulatory Actions

Public Meetings

Press Releases

NRC Website

ADAMS

Assessment

Inspection Reports

Management Measures

Configuration Management

Maintenance

Training and Qualifications

Procedure Dev. /Implementation

Audits and Assessments

Records Management

Incident and Corrective Actions

Other QA Elements

*

Building Codes

& Standards

Installation

Procurement

Fabrication

Vendor Oversight

Special Processes

-*

14
Unitcd Staics Nucicar Rcgu1acry Ccinmisson

Protecting Feopk’ and theEnvironmerit

Questions?

15