It is situated 5 km north of the Hearne Channel of Great Slave Lake, Northwest Territories, Canada, approximately 100 kilometers east-southeast of the capital city of Yellowknife.

Geologically located on the Canadian Shield it is mostly composed of peralkaline syenite (granitic rock with low quartz content).

Within the Mackenzie mining district, Thor Lake may contain some of the largest deposits of light and heavy rare-earth element (REE) ores.

The major elements of these ores are europium, terbium, dysprosium, neodymium, gallium, niobium, thorium, zirconium and beryllium.

[2] The extraction of these resources could be important for the global REE production, which almost exclusively occurs in China, especially around the Inner Mongolia Autonomous Region in Bayan Obo.