The Red Gulch placer occurrence is located on the west side of the Willow River about 1.6 kilometres south of its confluence with Peep O'Day Creek, approximately 2.1 kilometres northwest of Wells.

Placer gold deposits of the Quesnel Highland region, including the former rich producers of the Barkerville camp, have accounted for a large proportion of British Columbia's alluvial gold production. With the exception of a few producers in the Wingdam area, which are underlain by Upper Triassic Nicola Group sediments, almost all the deposits are underlain by the Upper Proterozoic to Lower Paleozoic Snowshoe Group. These rocks have been metamorphosed to greenschist facies and are predominantly metasedimentary.

Placer gold deposits in the region are generally found in relatively young Pleistocene gravels. The morphology and mineral associations of the gold suggests that it was derived locally, the most obvious sources being the numerous auriferous veins in the Downey succession of the Snowshoe Group.

Placer gold mining has been undertaken on Red Gulch. Total production from Mosquito Creek (093H 116) and Red Gulch from the years 1876-1915 and 1931-1945 totalled 18,295 ounces (568,974 grams) gold (Bulletin 28). Refer to Mosquito Creek Placer for production statistics.

"Data from the Cariboo mining district indicate that supergene leaching of gold dispersed within massive sulphides by Tertiary deep weathering followed by Cenozoic erosion is the most likely explanation for the occurrence of coarse gold nuggets in Quaternary sediments" (Exploration in British Columbia 1989, page 147).