Colorado Mining Conference

Mining History Association
Annual Conference June 9-12, 2016

Telluride, Colorado

Mining History of Telluride, Colorado

During August 1875, John Fallon and a partner were the first prospectors to find what would be called the Smuggler Vein in Marshall Basin. They staked their adjoining Sheridan and Union claims on the rich upper section of the vein just below the 12,000 ft. elevation line. At the time, the only way into Marshall Basin was a bushwhack trail that crossed through the “Keyhole” to the Ouray side of the mountains.

This remote setting, however, did not hinder a three man party led by J. B. Ingram from reaching Marshall Basin the following summer. Apparently, these men entered the basin ahead of Fallon and his partner, and were canny enough to recognize that their predecessors had staked more ground than was allowed by current mining law. As a result, the interlopers staked a new claim called the “Smuggler” that incorporated a lower parcel from the Sheridan claim with an upper parcel from the Union claim. As luck would have it, the Smuggler proved to be located on the widest, richest, and deepest part of the vein.

Altogether, these three discoveries and the rush that followed led to the establishment of the Upper San Miguel Mining District. Hundreds of mining claims covered the rugged topography. CLICK HERE for a portion of a typical map of mining claims. A camp called Newport was established at the east end of the Telluride Valley. This end of the valley was also where a succession of mills was erected over time.

In 1877, the town of San Miguel was platted further west in the Telluride Valley, but a year later, a new community named Columbia was incorporated a mile closer to the mines. Due to this superior location, it became the dominant town. Eight years later though, the US Post Office asked Columbia to change its name. The reason given was that there was a Columbia, California, and too much mail was being misdirected between the two communities because poor penmanship used to write the initials CALA for California or COLO for Colorado was often too hard to decipher.

Since Columbia, Colorado, was a newer town, it had to choose a new name. By chance, a large hunk of gold ore misidentified as a telluride form of sylvanite had recently been found at the Sheridan Mine. This led to renaming the town “Telluride” because telluride gold ore was considered to be very rich and the catchy name might attract mining investors. Ironically, the element tellurium is practically non-existent in the entire San Juan Mountains.

Between the years 1887-1889, consolidation of the mines along the great Smuggler Vein in Marshall Basin led to the formation of the Smuggler-Union Mining Company. Seven years later in 1896, the wealthy Rothschild family from Europe organized the Tomboy Gold Mines Company in neighboring Savage Basin. Altogether, these two mining companies were the best producers in the Upper San Miguel Mining District until they closed in the late 1920’s.

Tomboy Smuggler-Union Mine Complex at the Bullion Tunnel on the north side of the Telluride Valley, c1915.

Tomboy Mine Complex in the Savage Basin, high above Telluride, c1916.

It was no accident that consolidation occurred because two major events were about to usher in the heyday of Telluride mining during the decade of the 1890’s. The first event occurred in 1890 when the Rio Grande and Southern Railroad (RGS) arrived and made Telluride more accessible to the outside world. More importantly, when tracks were extended two years later to the mills at the east end of the Telluride Valley, the mines finally had an inexpensive means to ship greater quantities of ore concentrates to the smelter in Durango. Likewise, with the arrival of more ore, smelter rates dropped to the point where low grade ores worth only $20 per ton were now profitable to mine.

The second event was the 1891 introduction of alternating current (AC) electricity. George Westinghouse and Thomas Edison were in stiff competition to bring, respectively, AC or direct current (DC) systems to America. Eventually, the lower cost Westinghouse AC system prevailed. Its superiority was proven in 1891 when the Ames Hydroelectric Generating Plant began operation at the small town of Ames on the Ophir railroad loop south of Telluride. Its initial purpose was to supply electricity to run the stamp mill at the Gold King Mine near Ophir. In 1895 the Bridal Veil Falls Power Plant, the country’s second AC plant, was constructed above the falls of the same name at the town of Ingram to supply power to the Smuggler-Union Mine. The Town of Telluride was soon electrified and most area mines converted to AC power.

AC electricity also contributed to the construction of aerial trams that replaced the need for hauling ore from mines to the mills by less efficient and more costly mule trains or wagons. As a result, Marshall Creek Gorge that lay at the head of the Telluride Valley became a veritable spider web of trams that ran uphill to Smuggler-Union properties, and allowed the Tomboy Mine to send concentrates from its mill in Savage Basin down to the RGS. Even smaller mines were now outfitted with a jig-back or other types of aerial trams. The Ames plant was acquired by the Public Service Company in 1992. Its two pelton wheel driven generators are still in operation.

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Ames Power Plant with Ophir Loop railroad trestle in the right rear,c1905.

Ophir Depot with Gold King Mine ore tramway terminal at rear, c1940.

In 1893 when repeal of the Sherman Silver Purchase Act devastated silver mining in Colorado, Telluride was fortunate to find enough new gold ore bodies to keep its mines open. In fact, by 1896, two-thirds of the district’s $3 million in ore production came from gold, and only a year later, this value jumped to an estimated $25 million. Gold production was so robust that that the town adopted the motto “City of Gold” and even hung a banner on the side of an excursion train that boasted it was a “Town without a Bellyache”. Such a vigorous mining economy also enhanced the town’s population so that it topped out at slightly more than 5,000 residents.

With the turn of the 20^th Century, Telluride mines became embroiled in the famous Colorado Labor Wars that raged in the coal fields along the Eastern Slope and at the Cripple Creek and Victor gold mining camps near Pikes Peak. There were two sets of strikes in Telluride. The first one occurred in 1901 when the Telluride Miner’s Union, an affiliate of the Western Federation of Miners (WFM), demanded that miners should be paid $3 a day for an eight hour work day. In response, Smuggler-Union manager Arthur Collins initiated impossible company policies that forced union miners to quit work and strike. When they were replaced by scabs, the local union took matters into its own hands, an act that resulted in a dramatic gun battle at the Sheridan Mine that left two men dead. Although the union had taken possession of the mines, a special commission sent by Colorado Governor James Oram concluded that the mine owners were responsible for instigating the strike and forced them to rehire union miners.

During the uneasy peace that followed, union hatred of Collins came to a head when he was brutally murdered at his home on company property. In response to this outrage, Bulkeley Wells was made Manager of the Smuggler-Union by his father-in-law Colonel Thomas Livermore of Boston who had organized the syndicate that bought the mine in 1899. Wells, who was fiercely anti-union, realized that victory could only be achieved by discrediting the WFM. He was aided in this plan by the election of Governor James H. Peabody who favored law and order.

Thus, when union violence once again threatened Telluride and a new strike was called in 1903, Peabody sent in National Guard troops on two separate occasions to keep the peace. In between these episodes, Wells enlisted the Telluride Mine Owner’s Association and Telluride Citizens Alliance to run San Miguel County as his personal fiefdom. During the spring of 1904 when WFM President William Moyer became Wells’ personal prisoner, the union attempted to rescue him by force. However, their arrival in Telluride was repulsed by a huge show of anti-union sympathy. The strike was called off a few months later due to lack of support. Although the WFM was defeated in Telluride, it went on to become the International Union of Mine, Mill & Smelter Workers organization.

An eventual slowdown in mining occurred around 1913. The mines stayed open though, because a newly introduced flotation milling process recovered a higher percentage of minerals, especially base metals like zinc and lead that had industrial and military uses throughout World War I. However, during the decade that followed the end of this war, the Liberty Bell, Tomboy, and Smuggler-Union mines all closed. Mining dwindled until resurgence occurred with the creation of San Juan Metals Corporation in 1934, Veta Mines in 1936, and Telluride Mines in 1938. San Juan Metals concentrated on reprocessing tailings from the defunct Liberty Bell and Smuggler-Union mills, Veta Mines found good ore further down on the Smuggler Vein, and Telluride Mines leased property at the Tomboy workings.

Cross-section through the workings of the Idarado Mine (after Hillebrand, 1964).

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Then in 1939, the biggest mine that would ever operate in the San Juan Mountains was founded by a group of mining men from Idaho and Colorado that partnered with Newmont Mining Corporation to form the Idarado Mining Company. Initially, Idarado operated out of the Treasury Tunnel which was located near the top of Red Mountain Pass on the Ouray side of the mountains. The goal was to access lead and zinc deposits that underlay the old Barstow workings on the Ouray side and tap into more of these minerals that lay below the Black Bear Mine on the Telluride side. During the late 1940’s when the trail of ore from the Black Bear headed towards Tomboy property, Idarado was able to acquire leases under the old Tomboy workings that were layered between leases being worked by Telluride Mines.

This arrangement ended in 1953 when Newmont finally bought the financially troubled Telluride Mines and added their Telluride property to the Idarado Mine. After a fire destroyed the mill outside the Treasury Tunnel, the old Smuggler-Union flotation mill in Telluride was revamped and renamed the Idarado Mill. Locally, the mill is also known as the Pandora Mill or simply the “gray mill.” Now that all ore was being processed at the east end of the Telluride Valley, the output made San Miguel County the second biggest mining county in Colorado. The Climax molybdenum mine in Lake County near Leadville remained in first place. Beginning in 1976, dropping metal prices and rising costs for transportation and smelting led to Idarado’s unavoidable closure on September 30, 1978. When underground activity ceased, it was the end of 103 consecutive years of mining in the Telluride area. Total production from the Telluride, Sneffels, and Red Mountain Mining Districts is estimated to be 7 million troy ounces of gold along with substantial amounts of silver, lead, zinc, and copper.

Starting in 1985, the Idarado Mining Company and the State of Colorado conducted an extensive study of the mining and milling impacts on the floor of the Telluride Valley and in the surrounding high country. In 1992, the two parties reached agreement on an appropriate plan for reclamation and remediation with minimum disturbance to the historic landscape and impact on the town of Telluride. Idarado completed most of the construction by 1997. The success of those efforts can be seen on the MHA tours at the reclaimed tailings areas near the Idarado/Pandora Mill. Monitoring of the reclaimed areas continues. The question of removal of the historic Idarado/Pandora Mill building, as required by the plan, or its preservation and repurposing remains unresolved. A 2014 video explains the history and status of the mill.

World Class Skiing Comes to Telluride

There is a silver lining to the end of this story, because the demise of mining occurred concurrently with the beginning of the Telluride Ski Area. Historically, skiing, or “snowshoeing” as it was called, originated in the area during the early 1900’s when it was done for fun by Scandinavian miners at the Tomboy Mine. During the 1960’s, local Telluride ski enthusiasts created two ski hills for their children on the south side of town. One was located at the Bear Creek end of Town Park and the other, called the “Kid’s Hill”, is now part of Telluride Ski Area slopes that come down to the base of the gondola.

During the mid 1960’s, a local Telluride visionary named Billy Mahoney, Sr., became convinced that Telluride should become a major Colorado ski area and looked for a financial backer to make this possible. Eventually, Mahoney’s efforts attracted Los Angeles industrialist Joe Zoline to visit. Zoline was familiar with Aspen, another former mining camp that was now a world class ski resort, and realized that Telluride’s setting could be developed into a similar town at the bottom of a ski area. With Zoline’s backing, trails were surveyed in 1969 and the first lifts opened in 1972.

After Zoline sold his interests to Ron Allred’s Benchmark Corporation in 1978, plans were put in place to create Mountain Village and expand the ski area. In 1984, Mountain Village was approved by the San Miguel County Commissioners as an independent community that would be connected to Telluride by a gondola. An earlier idea to connect the two towns by a cog railway purchased from the Broadmoor Hotel in Colorado Springs was nixed after a Telluride Rotary Club fact finding trip to Zermatt, Switzerland in 1979 found out that gondolas provided the most efficient transportation link.

By 1989, the complexion of the historic town of Telluride was rapidly changing. Most of the former mining residents had sold their properties and moved to warmer places, and the hippie culture that had arrived during the early days of the ski area were now business owners with young families. The new newcomers now looked at Telluride as a place to set up permanent or vacation homes. Thankfully, architectural controls and sensible planning for growth has kept Telluride’s historical perspective intact so that its mining town character is still respected. By accomplishing this, one can truly say that mining still exists, but the quest for wealth from mineral gold has been transformed into prosperity provided by white gold from winter snow.

(Photos courtesy Rudy Davison, Library of Congress, Telluride Historical Museum, and Homer Reid Collection by his Grandson Jon Larson.)

Additional Reference Material

Rudy Davison, “Rudy’s View: A Driving Guide from Telluride to the Top of Imogene Pass,” (Durango: Rudy Davison, 2009).

James R. Hillenbrand, “The Idarado Mine,” San Juan, San Miguel, La Plata Region (New Mexico and Colorado), Shomaker, J. W.; [ed.], New Mexico Geological Society 19th Annual Fall Field Conference Guidebook, (Socorro: NMGS, 1968) 130-140. Downloaded from http://nmgs.nmt.edu/publications/guidebooks/19/ , 29 October 2015.