Oil shales occur locally on the east side of Frederick Island and on Kennecott Point on the west side of Graham Island, in an area underlain by fine grained sandstone and limestone of the Upper Triassic to Lower Jurassic Sandilands Formation (Kunga Group). Here, the unit rests on or is in fault contact with medium bedded limestone of the Upper Triassic Peril Formation (Kunga Group).
Skaist Mines Ltd. by a November 1974 option agreement acquired a 70 per cent interest in the OS 1-6 claims, which were optioned from Toni Holdings & Management Ltd., owned by Dieter Ludwig and Susanne Robertson of Vancouver, and the Hanovarian Syndicate, owned by Hans Buhr & associates of Vancouver.