Saguache County has seen mining since the early days, including gold and iron mining in the Sangre de Cristo mountains 
near Crestone and silver and other metals in the hills southwest of Saguache, but Bonanza in northern Saguache County, 
was a true Colorado boom town. 

    Rich silver ore was discovered in the mountains north of Saguache and west of Villa Grove in 1880, and the town of 
Bonanza sprang up that fall. The name comes from the optimistically named Bonanza mine; one of the prospectors told 
his friends, "It’s a Bonanza, boys!" and the name stuck. In 1880-81, 40,000 people passed through the area, including 
former president and Civil War general U. S. Grant in August of 1880, drawn by rumors that Bonanza was  "the new 
Leadville". 

    Early strikes yielded silver ore worth $200 a ton, and in the 1880's the town of Bonanza boomed, with saloons, dance 
halls, a school, a town hall, plank sidewalks, daily stagecoaches, and even a town baseball team. An early town 
newspaper, the BONANZA BEE, featured the latest mine news and ads for livery stables, doctors, attorneys, groceries,
hardware stores, clothing shops, drug stores, the two hotels, a cigar store, a bakery, a furniture store, a candy shop, and 
the bank. Three other small communities briefly flourished within a couple of miles of Bonanza, one boasting a brewery, 
a bowling alley, and a sawmill. 

    Several mills were built in the area to treat high-grade ores, and an estimated 1500 prospect holes and mines were opened
before 1900. After the initial early discoveries, miners discovered that the deeper ores contained less silver and more 
lead, zinc, and copper and were harder to mine. Most of the mines and mills failed. Between 1890 and 1899, the population
of the mining district fluctuated from 500 to as few as 100 people. In 1893, the Government stopped buying silver and 
the price dropped from well over $1.00 an ounce to about half that. Most of the surrounding federal lands became a part 
of the Rio Grande National Forest in 1908. 

    In 1911-1912, the owners of the Rawley Mine, the biggest mine in the district, built the mile-long Rawley 12 tunnel 
underground from Squirrel Gulch  to beneath the existing mine workings to explore for additional ore and dewater the 
existing mine workings (which filled with water as fast as they could be pumped out). It cost more than $100,000 and 
took 17 months (this at a time when workers were paid $2 to $5 per day and a cord of wood cost $2). 

    Photos from 1917 show a major development at the Rawley 12 mine, including numerous buildings and a new method of 
getting ore out of the mine -  the mule was, out and the electric locomotive was in! 

    In 1921-23, a mill was built in Squirrel Gulch at the mouth of the Rawley 12 tunnel, and a 7 1/2 mile aerial tramway was 
built to haul concentrated ore north from the mill to the narrow gauge railroad line connecting with Salida. The route of the 
aerial tram over the hills is still visible today. When the mine went bankrupt, a new company was formed and produced 
about 320 tons of ore per day from 1925 to 1930 when the mine closed and the mill was scrapped. 

    Although the Bonanza mines were small by Colorado standards, tens of thousands of tons of metals came out of these hills
over the years, including more than 150 tons of silver worth more than $20 million dollars today. 

    Most of the mines in the Bonanza area closed by the 1930’s. The end of the town of Bonanza almost came in the fire of
 1937, when 30 buildings in the business section burned. The town has never been rebuilt, and just a few old houses, 
mine structures, and piles of rock remain from the boom days. Today, Bonanza is the smallest incorporated town in 
Colorado (pop. 10-15). 

    Since before the mines closed, environmental problems existed in the area. In the early 1990’s, the problems included 
dissolved metals in the creek water, mill waste too toxic to support plant life, and the creek through Bonanza was dead 
for several miles downstream. Today, the Forest Service, the State of Colorado, and others are working successfully to 
clean up contaminated sites and restore water quality in this historic area. 

    Other points of interest in the Bonanza area include a former toll road built by Otto Mears (famous Colorado railroad 
builder and Saguache County pioneer), various cemeteries, and spectacular views of the aspen-covered hills where the
prospectors once hoped to strike it rich. The Forest Service is establishing an interpretive loop for off-highway 
(high-clearance) vehicles around Bonanza, and this project will bring to life the rich history which is waiting to be 
discovered in the area.

Text courtesy of Saquache County web site