By A. H. KOSCHMANN and M. H. BERGENDAHL - USGS 1968
Hinsdale County lies in southwestern Colorado in the western San Juan Mountains. Lake City, the county seat, lies at the junction of Henson Creek and Lake Fork. The mines are concentrated along Henson Creek for a distance of about 10 miles west of Lake City and for about 5 miles along Lake Fork south of Lake City. Silver and lead are the chief metals produced, but the county has also produced considerable gold and some copper and zinc.
The first significant ore discovery in the county was made in 1871 when silver-lead veins, called the Ute and Ulay veins, were discovered along Henson Creek about 4 miles west of Lake City. News of mineral wealth attracted many prospectors to the region, but all the land of the San Juan region belonged to the Ute Indians, who resented encroachment on their domain by prospectors.
In 1874, to avoid open hostilities, a treaty was made with the Utes, and the San Juan region was opened to settlement (Irving and Bancroft, 1911, p. 12-14). In August 1874, the rich Golden Fleece vein, about 4 miles south of Lake City, was discovered, and prospectors flocked to the region and made numerous discoveries. As development and production increased, Lake City became a center of activity, and smelters and concentrating works were built. Although rapid progress was made in the late 1870's, the area lacked railroad transportation and was generally inaccessible.
This situation brought on a decline in activity in the late 1880's which was alleviated in 1889 by construction of a branch of the Denver and Rio Grande Railroad to Lake City. The period from 1891 to 1902, inclusive, was the most productive in the county (Henderson, 1926, p. 51; Irving and Bancroft, 1911, p. 15-16).
Depletion of the higher grade oxidized and enriched ores decreased the annual output to $100,000 or less by 1903. After 1903 the output fluctuated, but for most years it was worth less than $100,000. Flotation units were installed in several mills during the 1920's and in 1937, but renewed activity was brief. Hinsdale County produced an estimated 70,243 ounces of gold ($1,451,921) during 1875-1923 (Henderson, 1926, p. 128), and 1,123 ounces of gold was produced during 1924-59. A total of about 71,365 ounces was produced through 1959.
Except for a relatively small amount of ore which is credited to several small outlying districts, the Hinsdale County production came entirely from the Lake City district in the northern part of the county (W. S. Burbank, in Vanderwilt and others, 1947, p. 439).
LAKE CITY DISTRICT
The Lake City district, which includes Henson Creek, Galena, and Lake Fork, is in northern Hinsdale County along Lake Fork and Henson Creek a few miles west and south of Lake City.
The district is on the margin of the Lake City caldera, an oval-shaped downfaulted block of volcanic rocks which is bounded roughly by Henson Creek on the north and Lake Fork on the south. Precambrian rocks are exposed along the south and west sides of the caldera, but elsewhere the prevailing rock types are Tertiary volcanics. The Silverton Volcanic Series, consisting of rhyolite, andesite, and latite lavas, tuffs, and breccias, occupies much of the caldera and surrounding areas.
Younger Tertiary rocks, including the Sunshine Peak Rhyolite, Hinsdale Formation, Fisher Latite-andesite, and Potosi Volcanic Series, cover higher parts of the area. Small bodies of intrusive rhyolite, latite, and quartz monzonite porphyry occur in the caldera and in the volcanic rocks within 4 or 5 miles from the margin of the caldera (W. S. Burbank, in Vanderwilt and others, 1947, p. 438).
The ore deposits are in veins whose distribution is related to the structural weakness around the margin of the caldera. Three types of veins are recognized: (1) quartz-sphalerite-galena veins, rich in silver, (2) tetrahedrite-rhodochrosite veins, valued for silver and lead, and (3) the telluride veins, characterized by krennerite, sylvanite, and petzite, and important for silver and gold (W. S. Burbank, in Vanderwilt and others, 1947, p. 440-441).