However, on 28 December 1872, an alternative was proposed, which would follow the Ave valley, and a concession to carry out surveys and construct the line was granted.

The Linha do Minho, a broad gauge railway running northwards along the foothills and crossing the Ave River near Trofa had recently been opened, and the proposal was for a metre-gauge line which would diverge from the Linha do Minho near the river bridge and follow the valley eastwards to Guimarães, with a branch onwards to Fafe.

[2] The government hoped that private enterprise would be keen to develop the railway network in the north of the country, but the remoteness of the regions on offer resulted in most entrepreneurs declining to proceed.

It was not until 3 December 1883 that agreement was reached with the Estado, operators of the Minho line, for the junction at Lousada on the north bank of the Ave near Trofa.

[5] An official opening for this section was held on 31 December 1883, when a party of people travelled from Porto Campanha station on a broad gauge train.

The train continued along the new narrow gauge track, stopping at Santo Tirso, Negrellos, Lordelo and finally Vizela, where celebrations were held.

The mixed-gauge section was the first to benefit, in 1893, and the company managed to obtain some 1,500 lengths of nearly new rail together with 16 wagons from the CF de Torres Novas à Alcanena when it closed.

By 1898, the company had managed to cut its operating coefficient to just 31 percent, a figure so extraordinarily low that it received approving comment in the newspapers.

Construction of the 67-metre (73 yd) tunnel at Paço Viera was difficult, as the rock was unstable, but the work was finished and a formal opening took place on 20 July 1907, with public services starting on the following day.

Considerable investment was needed to bring the Guimarães line up to modern standards for carrying the expected numbers of visitors.