The Dan 2 area is underlain by Devonian to Permian marine sedimentary and volcanic rocks of the Stikine Assemblage which area overlain by marine sedimentary and volcanic rocks of the Upper Triassic Stuhini Group. Lower Jurassic rock of the Hazelton groups overly the Stuhini rock.

The volcanic and sedimentary sequences were intruded by the Tertiary-Cretaceous Coast Plutonic Complex. A wide variety of intrusive phases are present including granodiorite, quartz monzonite and diorite. Small satellitic plugs from the main batholith are important for localizing mineralization.

The predominant lithologies on the property consist of marine sediments, volcaniclastics and volcanic flows. The marine sediments consist of argillites, argillaceous siltstones, and siltstone with some quartzite, greywacke and carbonates. These sediments are interbedded with contemporaneous marine volcanics ranging from rhyodacite to basalt in composition. Volcanic facies include crystal fragmental tuff, lithic tuff, breccias, agglomerate, flows and sills.

Low grade regional metamorphism has occurred within the marine sediments which contain abundant chlorite. Foliation is usually conformable with the bedding. Fault and shear zones trend 135 degrees and about 045 degrees with andesite and basalt dykes following the 045 degree structures and felsite dykes related to the 135 degree structures.

Locally, mineralization appears to be associated with base metals in distinct quartz vein systems. Pyritization, of up to 15 per cent, is commonly associated with silicified zones. Upon weathering, these zones develop moderate to intense gossans composed of hematite, goethite, jarosite and pyrolusite.

Mineralization occurs within the Third Basin Gossan (Area D) in silicified and hematized argillites and silicified and chloritized siltstones. Within these altered sediments are abundant quartz stringers. As well, disseminated pyrite with traces of galena occur within these altered, gossanous rocks.

In 1987, a grab of argillite with quartz stringers and traces of pyrite and galena assayed 0.685 grams per tonne gold, 43.8 grams per tonne silver, 0.04 per cent copper, 0.674 per cent lead and 2.205 per cent zinc (Assessment Report 16957).

In 1984, a rock chip sample from Area D assayed 13.03 grams per tonne gold, 1097.1 grams per tonne silver, 0.25 per cent copper, 1.50 per cent lead and 3.06 per cent zinc (Property File: Ikona, C.K., 1987).

In 1987, Pezgold Resources sampled rocks on the northern wall of the basin. One sample at 1750 metres assayed 220 parts per billion Au and 0.12 per cent copper (20624, 1988). Another sample, 700 metres east and 100 metres higher elevation, carried 13.7 grams per tonne silver and 2.2 per cent zinc (Assessment Report 18156).