The Paco 40 occurrences are located on or near an unnamed creek on the west side of Hesquiat Lake, apparently on strike with each other and between the shore of the lake and the ridge top to the northwest.

The area is underlain by northwest striking limestones and volcanics of the Pennsylvanian to Permian Sicker Group (Geological Survey of Canada Map 1537A). The Sicker Group rocks are intruded by granodioritic rocks of the Muchalat Batholith which is part of the Jurassic Island Intrusions.

Locally, three iron occurrences are reported at the contact between granitic rocks of the Jurassic Island Plutonic Suite and unspecified Pennsylvanian to Permian Sicker Group sediments (Assessment Report 462).

In 1962, Paco Resources completed a program of geological mapping on the area. In 1982, Cominco completed a program of prospecting and geochemical sampling on the area as the Basin and Lake claims. In 1984, Flow Resources completed a program of geological mapping, soil sampling, trenching, a ground electromagnetic survey and 13 diamond drill holes, totalling 643.2 metres. The drill program explored a strike length of 84 metres and a total down dip extension of 28.5 metres on the Brown Jug structure, approximately 3 kilometres south of Paco 40.