The primary outflow is an unnamed stream at the northeast leading to the Attawapiskat River, which itself flows to James Bay.

McFaulds Lake is at the centre of the Northern Ontario Ring of Fire,[4] a region of geological activity which has left a rich source of minerals, including nickel, copper, platinum, palladium, chromite, vanadium, diamond and gold, buried beneath the muskeg.

Muskeg refers to a peat forming the ecosystem common in Arctic and boreal areas, although it is found in other northern climates as well.

The area near the lake has attracted the attention of junior mining exploration companies.

Since a 2002 investigation of the area, some 20 companies have staked claims, forming joint ventures (JV).