The Iron Mountain sailed from Vicksburg on March 25, 1882, and hit an obstruction at Stumpy Point, near Island 102, which holed her hull and sank her.

[6][7] The ship was not found until later, having apparently been refloated by flood waters and carried through a break in a levee, and grounded in a cotton field[8] at Omega Landing, near Tallulah, Louisiana.

Another steamer, the Iroquois Chief, found the Iron Mountain's barges floating downriver, apparently having been cut loose, but the ship itself had vanished.

This legend is often repeated as fact, as in Frank Edward's 1956 book, Strangest of All, Paul Begg's Into Thin Air (1979), the Reader's Digest's Mysteries of the Unexplained (1982), Louis L'Amour's The Haunted Mesa (1987), Charles Berlitz's World of Strange Phenomena (1988) and Herbie Brennan's Seriously Weird True Stories (1997).

For years afterward, multiple reports of Valencia sailing along the coast, and of ghostly lifeboats being seen floating with the bodies of the crew inside them.