In April 1859, John H. Gregory discovered alluvial gold in Clear Creek, near Golden, Colorado.

The gold was concentrated in the north branch of Clear Creek, in what is now called Gregory Gulch above Blackhawk.

[2] News of the discovery spread, and by September, 900 prospectors had arrived, living in log shanties and tents.

Mining camps, including Black Hawk, Central City, Nevadaville, Russell Gulch and Apex were formed.

In 1870, the 3 ft (914 mm) narrow gauge Colorado Central Railroad was formed to provide transportation to this remote region.

In 1878, a four-mile long switchback extension was built from Black Hawk to Central City, with the first train arriving on May 21, 1878.

[3] The problem still remained on how to economically get the gold bearing quartz ore down to the mills of Central City and Black Hawk.

The purpose of the company was to build a 2 ft (610 mm) narrow gauge railroad to transport ore from the mines above Black Hawk to the mills.

An agreement had been made with the Colorado Central to lay a third rail through Black Hawk (creating a dual gauge track) to allow the Gilpin to reach its various mills and smelters.

But that was not the end of it, in April 1888, the Mayor accompanied by the marshal ordered laborers to stop laying the third rail and to start removing trackage that had already been laid.

But with a payment from the Gilpin of $450 to the city, the Mayor was advised to quit his losing fight, and none of the trackage was removed.

Ore comes from wet ground, and in the winter, it has a tendency to freeze solid in the cars before delivery to the mills.