The region is underlain by an assemblage of sedimentary rocks consisting mainly of continental margin and shelf facies rocks. This assemblage was deposited on and to the west of the Ancestral North American craton. These sedimentary rocks, for the most part typical miogeoclinal facies, range in age from Hadrynian to Upper Cretaceous. Structurally these rocks are part of the Foreland thrust and fold belt of the North American Cordillera.

The coal measures of the region occur mainly in Cretaceous sediments deposited unconformably on older miogeoclinal strata. These sediments were subjected to fold and thrust tectonics, which also affected the older rocks.

In the late 1970s to early 1980s, the Onion Lake property was owned by Shell Canada and exploration operations were conducted by Crows Nest Resources. Geological mapping was done between 1979 and 1980, followed by drilling of two diamond drill holes: one in 1981 and the other in 1984.

The main coal seams occur in the Gates Formation (362 to 435 metres thick), which consists of interbedded sandstone, siltstone, mudstone, coal and conglomerate. Up to 11 seams are present and range in thickness from 0.21 metre to approximately 14 metres. In general, the seams thin towards the top of the formation, with the thickest coal occurring between 20 and 30 metres above the Torrens sandstone (first Gates coal zone). Drillhole ON81-1 encountered an 8.5-metre-thick seam at the top of the coal-bearing section of the Gates Formation.

Coal also occurs in the Gething Formation, in possibly two zones of no more than 1 or 2 metres each.

The structure consists of four northwest-trending, northwest-plunging folds, of which the Wapiti anticline and the Onion syncline are the most northeastern. The Cretaceous is thrust against the Paleozoic along the northwest-trending, southwest-dipping Front Range thrust at the western edge of the property.