The Gooodnews Bay area lies in a region of subdued terrain, with landforms related to late Pleistocene glaciation. The Red Mountain, which rises 680 m above sea level, with the Thorsen Mountain to the south form a highland separating the Salmon River valley from the Bering Sea.

The area offshore from Red Mountain has undergone a complex history of sea level transgression and regression cycles that have periodically inundated an extensive low-relief coastal plain extending at least tens of kilometers to the west. Earlier strand lines are now drowned. According to Hopkins (1967), much of the region of the Bering Sea shelf was above sea level most of the middle and late Quaternary. Sometimes during the late Pliocene and early Pleistocene, the Bering-Chukchi platform was lowered with respect to sea level and inundated, thereby drowning pre-existing alluvial valleys. Consequently, transgressive scarp platforms were locally cut into the bedrock that lies below present sea level.

During the Pleistocene, sea level regressions coincided with glacial advances in some places, and intermittently exposing broad coastal plain. The area around Red Mountain was glaciated by at least four glacial advances. The Pleistocene and Holocene geologic history of the Goodnews Bay area is highly complicated by these ice advances and by sea level decrease by about 120 m that accompanied the ice ages. As a result of these sea level transgression-regression cycles, it is possible that several concentrates of platinum placer deposits might have occurred, primarily by hydraulic sorting of paleoshore deposits.

The several factors that provide geologic evidence for presence of possible placer deposits are:

1. Submerged south-west trending alluvial channels, presumably representing analogs of the present Salmon River, but lying west of Red Mountain, and now covered by 3 to 10 m of water and an unknown blanket of recent sediments. During the major glacial epochs the coastline was situated many miles to the west of its present position.
2. Submerged strand lines offshore and parallel to the present coastline where ancient sea levels may have concentrated heavy minerals by wave action.
3. Hydraulic sorting and concentration of platinum on false bedrock strata by combination of near-shore long-shore currents and storm generated waves concurrently with successive transgression of the sea level up to its present level. Concentrations of platinum-bearing black sands on gravel strata have been observed by the USBM studies in 1981 near the mouth of the Salmon River.
4. The longshore current, west of Red Mountain, flows north and is believed to be occasionally strong enough to be capable of concentrating platinum bearing grains. Of particular interest is the area of Flat Cape, a submerged high in the sea bottom, which may have acted as a large natural riffle where possibility of platinum enrichment could occur.
5. Strong currents at the mouth of Goodnews Bay appear to have scoured the bottom sediments. Consequently, concentration of heavy minerals may have occurred there.