The Merilia Passage magnetic anomaly is located northwest of Dallas Island.

The area is underlain primarily by quartz diorite and diorites of the Jurassic Coast Plutonic Complex and minor limestones. These have been intruded by andesite dikes.

Locally, a 15 to 20 degree compass deflection has been noted in Marilia Passage. A small island, due north of Dallas Island and 0.5 kilometre south of the main anomaly contains diorites hosting 3 to 5 per cent magnetite in the form of distinct 1 to 2 millimetre octahedral in calcic feldspar over an area of 300 square metres (Property File: Sirola 1961).