1.1.

1 Geologic Structures and Faults

The geologic structures that define the project site conditions at the TSF site are composed of faults,
folds, contacts, alteration zones, foliations, and a strongly developed joint/fracture systems. In
general, faulting is ubiquitous throughout the region and the complex faulting in the area is likely to
have been produced during a long history of varying tectonic stress configurations and emplacement
of the igneous intrusive plutons. The stress configurations have similarly resulted in the fold
structure and have created structural defects where intrusive rocks have intruded.

The faults indicated on the geologic maps provided by Candelaria and identified at the site during
field mapping are dominated by a NS to NNW SSE trending fault system with left-lateral offsets.
These faults typically dip steeply and are locally caused by E-W shortening across the Chaarcillo
basin (Amilibia, 2009). The orientations of faults mapped at the TSF sites are similar to the overall
orientation of the dominant Atacama Fault located approximately 20 km west of the site and may be
considered a part of this fault zone. There are occasional brecciated fault zones in the area that could
be associated with splays off the main fault trace. Named faults in the project area include the
following:

Candelaria Fault
San Gregorio Fault
Lar Fault
Paipote Fault
Ojancos Fault

The Candelaria, San Gregorio, and Lar Faults are the three dominant faults that have been mapped
as continuous within the project site and are mapped based on visible offset of the geologic units at
the ground surface, although recency of activity has not been determined. The faults mapped in the
area make up a wide zone of sheared and faulted bedrock composed of multiple N-NNW trending
faults that are mapped dipping at a high angle to the NE or SW.

The Candelaria shear zone is a dissected zone that is mapped trending NE-SW near the proposed
TSF site. The width of the shear zone ranges from 0.2 to 0.4 km. In general, the southeastern
margin is represented by a mylontic zone that separates the plutonic rocks juxtaposed against the
sedimentary rocks, which have been subsequently altered. This shear zones is associated with the
plutonic emplacement of the batholiths and is offset by local tectonic faults.

Along the southeastern margin of the shear zone, the reverse Paipote Fault is mapped with an
overall NNE-SSW trend (Amilibia, 2009). The Paipote Fault has formed en echelon flower
structures, which developed by left-lateral transpressive movement along the fault. The Paipote
Fault and Candelaria shear zone are offset by the left-lateral Lar and San Gregorio Faults as well as
multiple other similarly oriented strands that are considered more recently active.
The left-lateral Lar and San Gregorio Faults are mapped as bounding the east and west exposures of
the San Gregorio Pluton. The Lar Fault has been identified and mapped through the existing open
pit mine and the overall trend of the fault is approximately N10W and dipping steeply to the east
with some east side down displacement identified. The surface trace of the San Gregorio Fault is
similar to the Lar Fault, with similar strike and dip of the trace assumed. The two fault systems
appear to bound a horst structure where the block between the faults is uplifted relative to the
rock outside the horst. The relationship between the Lar and San Gregorio faults is not clear. Both
the Lar and San Gregorio faults show offset by smaller, minor fault structures on the regional and
local geologic maps. Additionally, both these faults have a mapped trace that crosses the Atacama
Gravel deposits (Tertiary derived basin fill material composed of alluvial fan terraces in the project
area). To date, it is unclear if these deposits express clear evidence of displacement by these two
fault systems.

The Lar fault is located near the toe of the El Buitre TSF, and the San Gregorio fault trace is
mapped under the right abutment of the Los Diques TSF.

Near the west edge of the project area is the Ojancos Fault, which represents the northern limit of
the Los Lirios intrusive body that outcrops in the Los Lirios Range. The Ojancos Fault zone is
mapped as a steeply dipping left-lateral fault trending N to NNW.

There are also numerous unmapped minor faults that may impact the design of the dams and
impoundment basin by creating potentially high permeability and/or low strength zones. These
minor faults may be considered splays of the dominant structure of the region since a number of
secondary fault features are mapped that trend parallel to the orientation of the main fault zone.

There is no evidence of historic (Holocene) movement of the faults in the TSF impoundment area
(i.e. clearly offset or displaced Quaternary deposits) based on the Phase 1 field investigation. It is
noted that a lack of evidence of fault activity does not indicate that the structure is inactive, only that
historic evidence for faulting is not evident based on the reconnaissance mapping conducted thus
far. Many of the faults in the region are thought to be Quaternary (or Holocene) active (<1.8
million years old) and therefore should be regarded as active for design considerations. Although no
evidence of active faulting has been observed in the TSF project area, the site is positioned in a
highly active seismotectonic region and all structures must be designed to withstand the anticipated
maximum credible earthquake for the region.

Potentially high permeability zones are anticipated along or adjacent to the main faults and their
associated splays because the rock mass is likely to be intensely fractured. The Phase 2 geotechnical
investigation will attempt to target these faults where they pass through the dam foundation and
basin perimeter to assess their influence on permeability and strength of the surrounding bedrock.
1.2 Seismicity
1.2.1 Historic Seismic Events
The TSF site is located in a high seismicity area approximately 150 km east of the subduction zone
that is parallel to the Chilean coastline. This convergent boundary has a rate of approximately
80 mm/yr and has been the site of many historical megathrust earthquakes, including the largest
recorded earthquake ever recorded, which was a Mw 9.5, on May 22, 1960, approximately 1,200 km
to the south-southwest of the site. The Copiap region has been very active seismically with at least
eight events with magnitude M7.5 occurring over the past 200 years (Comte et al, 1999).

Since 1471 approximately 52 earthquakes larger than magnitude M5.0 have been recorded within a
50 km radius of the site (Figure x; NEIC, 2011). Included are two very strong events and one
destructive event that occurred within a 15 to 20 km distance from the mine, one in 1796 with a
magnitude of 7.7, one in 1859 with a magnitude of 7.6, and one in 1819 with a magnitude of 8.3. All
three of these major events occurred near Copiap to the north of the site (NEIC, 2011) but further
information regarding these events is limited.

Between 1909 and 1983, four major seismic events (ranging from M=7.0 to 7.6) occurred
approximately 115 km to the north-northwest of the site. They were located approximately 20 km
southeast of Chaaral, a coastal town, at depths of 50-60 km, one event was shallow at 14 km depth
and the final event occurred prior to being able to record the depth of the event.

The 1922 Vallenar earthquake was located approximately 115 km to the south-southeast of the site.
This M=8.5 event has been called an under-thrusting earthquake that occurred on a shallow plane
that is striking parallel to the trench and is dipping 20 to the east (Comte et al, 1999). The depth of
the rupture is believed to be shallow, at 25 km, with almost 400 m of displacement produced along
the fault trace.

During 1973, the Copiap region experienced a swarm of minor seismic activity, without the
occurrence of associated large events immediately before or after this period. During this time,
there was an increase in seismicity for events of magnitudes 5.0Mb6.0. Many of these events
occurred approximately 75-85 km northwest of the site, offshore in the vicinity of the town of
Caldera.

In the end of April 2006, four thrust events occurred in the Copiap region with magnitude Mw~6
which initiated another swarm of seismic activity. The events occurred in the same area as the
swarm events of 1973, offshore in the vicinity of Caldera. The largest of the events was measured as
Mw 6.7.