Babanango Valley is situated in a north-facing valley, encompassing the mountains on both sides. The Nsubeni, a small perennial river flows through the centre. The scenic beauty is emphasised by well-vegetated granite koppies, quartzite ridges and sandstone cliffs.

The granites (igneous rocks) date back 3 200 to 3 400 million years. There are exposures of schists (metamorphic rock) which are known to be a little older than the granites because they occur adjacent to them and there is a melt zone where the heat from the molten larva of the granites melted the schists. These formations, which cover the north eastern parts of KwaZulu-Natal and extend into Swaziland, are the second oldest rocks in the world (the oldest formations being found in Iceland).

More recently, about 240 million years ago, the area was subject to glaciation and with sedimentation giving rise to sandstone (sedimentary rock) formation. This story is beautifully illustrated in the tillite cliffs directly behind the lodge, where turbulent stream flows, mud slides and periods of calm water flow can easily be seen. Both the exposed glacial pavements a little further up the Valley and the multitude of beautiful stones lying scattered on the slopes below the cliffs, carried here from distant parts by the ice bear witness to these events. It was only 180 million years ago that the dolerite (igneous rock) intruded in to the sandstone and formed dykes and sills, examples of which can be clearly seen. Even more recent about 160 million years, are the quartzite intrusions (igneous rock) with which the mineral deposits are associated.

The Nature Reserve is located in a transition between Highveld and Lowveld. There is a difference of about 550 m (1800 ft) in altitude between the highest and lowest points on Goudhoek ( the Lodge is at 930 m above sea level). This gives rise to a rich diversity and interesting mixture of fauna and flora which include both typically Highveld and Lowveld species.