Panj-kuh iron ore deposit is located in 50 km southeast of Damghan. volcanic and pyroclastic rocks of the Eocene with composition of andesite–trachyte are the main host of the ore deposit. Injection of quartz monzonitic intrusion into volcano–sedimentary and volcanic rocks of the Eocene in the center and south of the study area has resulted in skarnization and formation of Panj-kuh iron deposit.
Pyroxene, epidote and amphibole are the main silicate minerals and magnetite (and hematite), pyrite, chalchopyrite, malachite and azurite are the ore minerals. Extensive abundances of the sodi–calsic alteration which is defined by presence of albite, scapolite, and Mg-Ca-mafic minerals (diopsid), and constricted potasic alteration with minor distribution which is defined by orthoclase and biotite, major magnetite accompanied with minor pyrite and chalchopyrit, formation of malachite and azurite within the volcanic rocks are the most important features of the area. Also, geochemical investigations show that the intrusive rock samples of Panj Kuh have high MgO, SiO₂, Ni, V, Sc and lower contents of K₂O and Rb/Sr. The samples plot in the chalk alkaline and alkaline in the AFM and SiO₂-(Na₂O+K₂O) diagrams respectively. They show metalminus and oxidation characteristics. These features are indications of the metasomatic skarn mineralization which formed by metasomatic fluid. Major and trace elements comparison of the Panj-kuh intrusion with other intrusions associated with skarn mineralization of the world, indicate some features of the gold and copper bearing skarns in the Panj-kuh skarn that recommend new exploration projects for the copper and gold in the Panj-kuh district.