The withdrawal of the Spaniards, protection from the natives by government troops and the California gold rush spurred the search for gold and silver in Colorado in the mid 1800’s. Thousands of prospectors moved west hoping to find treasure in the streams, hills and mountains of the then raw countryside. After a somewhat stumbling start, a number of investors and entrepreneurs settled their sights on the growing silver boom, and the focus of many was on the Town of Ouray.
The discoveries of the Fisherman Lode in 1876 and of the Gertrude and Una Lodes high in the San Juan mountains the following year convinced civil engineers and brothers Hubbard and Caleb Reed to drive a crosscut more than 130 feet through the hard rock and into what would turn out to be a vein of silver ore worth millions of dollars. The success of this work cemented the unquestionable potential of the area, and thus began an expansion of the local population, bringing new roads and mine sites through the mountains. One of the most important of these next new mines was the Virginius. At an altitude of more than 12,000 feet, this find was to become one of the largest and most productive silver mines in the area, as well as one of the most challenging to work. Blinding snow storms and avalanches, bitter cold, treacherous transportation and supply conditions, disease (especially pneumonia), and, the incredible demands of the labor itself cost many lives. Still, the area flourished, even more with the development of more mines coming on-stream.
In 1880, Albert E Reynolds of Denver, a “well-known owner of many mines throughout Colorado,” and John H. Maugham purchased what became known as the Revenue Mine. Boarding houses, churches, stores and hospitals finally dotted the region. In December of 1887, the first train made its way into Ouray, replacing dangerous horse and oxen pack trains and facilitating the transportation of ore to further afield mills. It also enabled people to move through the area in a far more “civilized” way. Of course, none of this growth was without controversy. The building of the Ouray and Mt. Sneffles Toll Road drew charges of fraud and unfair business practices.
Following the earlier discoveries of the two separate deposits, the catalyst for the development of what was to become the Revenue-Virginius Mine was the decision in 1888 to begin the Revenue Tunnel. This 1.5 mile drive was built to intersect the Virginius vein at a depth of 2,000 feet. By providing access to ore at a lower level, the operation could lower both the cost and effort of transporting the ore down to Ouray. It also provided better drainage and ventilation, further improving working conditions and the efficiency of the mine.
Despite the relative collapse of silver markets in 1893, a fact that almost destroyed the business and many of the towns that survived on its needs, the Revenue Tunnel was completed and the Revenue-Virginius Mine was born. In turn, this led to the building of a new, larger and more efficient mill near the mouth of the Revenue Tunnel, and production began in 1895.
A strike and an accident in the mine that took the lives of five men were still not enough to prevent this development from continuing to expand. Access to hydroelectrical power generated through the Ames Power Plant further improved operations at the mine and mill. Then, an underground fire in 1906 led to the flooding of the lower levels of the mine. Six years later, a mill fire put an end to structured mining as the mill was not rebuilt. By then, the mine had produced nearly 200,000 short tons of ore for 25 million ounces of silver, 160 thousand ounces of gold and 108 million pounds of lead.
Decades later, in the 1930’s, 40’s, 60’s and 80’s, sporadic exploration work was conducted by Federal Resources and Ranchers Explorations groups. Finally, in 1994, as resources markets hit a new growth cycle, 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. A decade later, in 2011, Star Mining purchased the mine and, over the coming three years, invested approximately US$40 million to restart the mine.
In 2014, Fortune Minerals, with financing from Lascaux Resource Capital (“LRC”) purchased the mine. Fortune invested an additional US$27 million in the project to continue mill commissioning and ramp up. However, it soon became clear that mine production and commodity prices were too low to maintain profitability. In July of 2015, LRC and Fortune executed a master settlement agreement (“MSA”) for defaults on the 2014 financing, and LRC received the shares of the company as part of the settlement. LRC renamed the company Ouray Silver mines and the RV Mine 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 producer ready for restart. These efforts culminated in a NI 43-101 Feasibility Study issued by SRK demonstrating the attractive economics of the project. Technical work continues to be conducted in preparation for reopening the mine in phases in the near future. In December 2018, Aurcana Corporation acquired Ouray Silver mines from LRC. Aurcana Corporation, a Canadian public company and experienced mine operator, is preparing to restart the Revenue-Virginius mine.