The Government Creek placer deposit is located approximately 6.4 kilometres upstream from the Hixon Creek junction. Placer deposits occur in an area underlain by slates and schists containing quartz veining. The placer deposits on Government Creek occur on a false bedrock formed of a lacustrine-type deposit.

"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).