A Brief History of Lake City:
The Mining Era, 1874-1904
Mining: The Supply & Milling Center of the San Juans
Lake City was significant as the supply and milling center for the eastern San Juan region. Its late 1870s development encouraged mining investment elsewhere in the San Juans. The three mills built at Lake City also motivated further mining and milling in other mining Districts in the San Juans. The roads through Lake City served as secondary routes to Silverton and Ouray. Until 1880, Lake City was the largest town in the San Juan region.
Mining was crucial to Lake City's settlement and early growth. The potential of mining profits attracted trespassing prospectors into the San Juans even before the Utes relinquished the San Juan region in 1874. For example, the Ute-Ulay Mine southwest of the town was discovered in 1871. Lake City merchants profited by outfitting the deluge of prospectors who entered the area in 1875 and 1876.
Subsequent mine and mill operations provided a chief source of employment in the county. Stores, saloons, freighting companies, law offices, ore assayers, and other local businesses supplied goods and services to miners and the mining industry. Because the Denver & Rio Grande branch was not built to Lake City until 1889, most ore was processed locally, at one of the three ore processing plants at Lake City or at mills erected adjacent to outlying mining operations.