The California gold rush along with the withdrawal of the Spaniards and protection from natives by government troops is what initiated the search for gold and silver in the mountains of Colorado during the mid-1800’s. During this time, thousands of prospectors set out on a treasure hunt in streams and hills all over the state. After an unsettling start, several investors set their sites on the growing demand of silver. The town of Ouray became the center of focus due to the high-quality silver in the mountains surrounding the community.
In 1876, the discovery of Fisherman Lode and the Gertrude and Una Lodes high up in the San Juan mountains in 1877 is what prompted Hubbard and Caleb Reed, civil engineers and brothers, to drive a crosscut more than 130 feet through the hard rock. What they found was a vein of silver ore worth millions of dollars and the unquestionable potential of the area. During this time, the area began to populate which brought new roads and mine site locations throughout the mountains. One of the most prosperous sites was Virginius, which sat at 12,000 feet and quickly became the largest silver mine in production in the state, and one of the most challenging to work at. Snowstorms, avalanches, treacherous transportation, and bitter cold threatened the site during the winter months and claimed the lives of many miners. The area still flourished, and many more site locations were in the works of getting into production.
In 1880, Albert E Reynolds of Denver, a well-known owner of many mines throughout the state of Colorado, purchased what became known as the Revenue mine with John H. Maugham. This initiated the development of boarding houses, churches, stores, and medical facilities. In December of 1887, the first train made its way into Ouray replacing horses and oxen pack trains paving the way for transportation or ore to mills. This type of growth drew controversy. The building of the Ouray and Mount Sneffles toll road drew charges of fraud and unethical business practices. In 1888, the decision to begin the Revenue tunnel was made. This 1.5-mile tunnel was built to intersect the Virginius vein at a depth of 2,000 feet. This provided access to ore at a lower level and lowered the cost of transporting ore down to Ouray. It also provided better drainage and ventilation which improved working conditions for miners and production became more efficient. The Revenue Tunnel completed construction in 1893 despite the relative collapse of the silver market during that time. Upon completion, the Revenue-Virginius mine was born. A new larger, and more efficient mill was built near the mouth of the Revenue Tunnel, and production began in 1895. In 1906, an underground fire led to flooding of the lower level of the mine. Six years later, a mill fire put an end to structured mining and the mill was not rebuilt. By this time, the mine had produced nearly 200,000 tons of ore for 25 million ounces of silver, 160,000 ounces of gold, and 108 million pounds of lead.
In the 1930’s through the 1980’s, sporadic exploration was conducted by the Federal Resources and Ranchers Exploration groups. In 1994, a resources market hit a new growth cycle and Sunshine Mining began seven years of extensive exploration work. In 2001, resue mining techniques were being considered for the first time since the 1880’s. In 2011, Star Mining purchased the Revenue-Virginius mine and over three years invested around $40 million to restart the mine. In 2014, Fortune Minerals purchased the site with financing from Lascaux Resource Capital. Fortune invested an additional $27 million- to continue mill commissioning and ramping up. However, it became clear that mine production and commodity prices were too low to maintain profitability. In July of 2015, LRC and Fortune Minerals executed a master settlement agreement for defaults on the 2014 financing and LRC received the shares of the company per the settlement agreement. LRC renamed the company Ouray Silver Mines and the Revenue-Virginius site was put under care and maintenance. Following the MSA, LRC replaced management and has invested significant additional capital to support the new management team to get this historic mine ready to restart. These efforts culminated in an NI 43-101 Feasibility Study issued by SRK Consulting demonstrating the attractive economics of the project. Technical work continued to be conducting to prepare the mine for reopening in the future. In December 2018, Aurcana Silver Corporation, a Canadian public company and experienced mine operator acquired Ouray Silver Mines from LRC and is gearing up to restart production.