Gold was discovered in the area in late 1859, during the Pike's Peak Gold Rush. However the initial discovery, where California Gulch empties into the Arkansas River, was not rich enough to cause excitement. On April 26, 1860, Abe Lee made a rich discovery of placer gold in California Gulch, about a mile east of Leadville, and Oro City was founded at the new diggings. By July 1860 the gold rush was on; the town and surrounding area grew to a population of 10,000 and an estimated $2 million in gold was taken out of California Gulch and nearby Iowa Gulch by the end of the first summer. But within a few years the richest part of the placers had been exhausted and the population of Oro City dwindled to only several hundred. Many claims were consolidated, and worked by ground sluicing. A ditch was dug in 1877 to provide water for hydraulic mining, but the hydraulic mining was reported to be unsuccessful.
In 1874, gold miners at Oro City had an assay done on the heavy, black sand that had been impedeing their placer gold recovery and found that it was the lead mineral cerussite, that carried a high content of silver. Prospectors traced the cerussite to its source, and by 1876 had discovered several lode silver-lead deposits, setting off the Colorado Silver Boom. Unlike the gold which was in placer deposits, the silver was in veins in bedrock and hard rock mining was needed for recovery of the ore.
The city of Leadville was founded near to the new silver deposits in 1877 by mine owners Horace Austin Warner Tabor and August Meyer, By 1878 Leadville had become the county seat of Lake county. The name Leadville probably was chosen for the town because lead was the major mineral in both the placers and in the lode mines. By 1880, millions of dollars were being made and Leadville became one of the world's largest silver camps with a population of over 40,000. Leadville became Colorado's largest mining camp and the town was second only to Denver. Leadville became overcrowded, unable to support the hundreds of miners that were flooding into the area. There was no local food source and all supplies had to come by either pack mules or the stage coach. Exorbitant prices were being charged for a place to sleep.
Leadville is a high mountain town and the winters are long and bitterly cold; many miners died of exposure and starvation. Crime was rampant and lawmen were unable to cope with it. Many small shanty towns grew up around Leadville, including Poverty Flats, Slabtown, Finn Town, and Boughtown. The name “Boughtown” referred not only to the many pine trees that grew in the area, but to lodgings the miners built of four posts covered with pine boughs.
In 1893, the repeal of the Sherman Silver Purchase Act caused a panic in Leadville and in all of Colorado’s silver camps. The price of silver fell rapidly and eventually many of the silver mines closed. Mining companies came to rely increasingly on income from the lead and zinc.
The Sherman Mine produced over 10 million ounces of silver, mostly between 1968 and 1982, with a value of over $300 million at 2010 prices. Secondary ore minerals from the Sherman mine are popular with mineral collectors.The prominent ruins of the historic buildings and structures of the Hilltop Mine (above the more recent Sherman mine workings) are often visited and photographed by hikers and mountaineers. After 100 years as a major US mining district, the last active mine, the Black Cloud mine, owned by ASARCO, closed in 1999.