The Hermosa deposit is contained within a series of Cretaceous ash flow tuffs and breccias that were deposited upon gently north-dipping Permian-age Concha Formation limestone, and Scherrer Formation dolomite and sandstone. The deposit is located in and above a series of Paleozoic horst blocks that were active during Cretaceous volcanism. The Cretaceous-age tuffs and breccias are thinner over the Hermosa deposit than to the east and west where the tuffs and breccias rest conformably upon ignimbritic cooling units. Post-ash flow feeder dikes to thick trachyandesite flows that once completely covered the deposit area intrude some of the bounding blocks of the horst.

The major lithologic host for the Hermosa deposit is an epiclastic sandstone that is locally interbedded with very fine-grained tuff. High-angle faults, trending predominantly north-south and east-west, bound the horst blocks in the area, and may have served as conduits for mineralizing fluids.

Sections through the deposit oriented both east-west and north-south suggest that the strata are deformed into a doubly-plunging anticline the apex of which is coincident with the highest grade-thickness of silver accumulation, which suggests that deformation pre-dated the mineralizing event, that mineralizing fluids migrated to the topographically highest permeable area, and that post-mineral tilting of the deposit has occurred.