The Pegleg occurrence is situated at 1370 metres elevation above sea level on the west side of Gillis Creek, a south branch of Fry Creek, in the Slocan Mining Division.

Regionally, the area lies within the Kootenay Arc near the margins of the Ancestral North American Terrane. The Kootenay Arc is a curving belt of highly deformed metasedimentary and metavolcanic rocks which includes the Upper Proterozoic Horsethief Creek Group, the Eocambrian Hamill Group, the Lower Cambrian Badshot Formation, and the lower Paleozoic Lardeau Group. The volcano-sedimentary sequence is intruded by numerous Ordovician, Devonian and Mississippian granitoid plutons. The rocks have undergone regional metamorphism to middle or upper greenschist facies (Paper 1993-1).

The occurrence is hosted within a large, linear limestone and quartzite inclusion rafted within the Cretaceous Fry Creek intrusion. The limestone and calcareous quartzite have been extremely altered to a mass of garnet, titanite, fluorite, quartz, pyroxene and scapolite. Molybdenite and some pyrite are sparingly distributed, particularly along irregular quartz veins.

The Fry Creek intrusion, in the vicinity of the occurrence, is a coarse muscovite quartz monzonite that shows some evidence of post-crystalline deformation. Potassium/argon age determinations on four separate muscovite samples from the intrusion yielded ages ranging from 97 to 63 Ma with an average age of 83.5 Ma (Geological Survey of Canada Memoir 369).