The first gold discovery in South Dakota was in Custer County, on French Creeks, but the returns were small and did not warrant extensive work. The exact date of the beginning of mining in the Black Hills of South Dakota is unknown, but from relics such as stone walls, remnants of log cabins, picks and spades, skeletons, excavations and inscriptions cut in rocks, it would seem to indicate that this locality was visited as early as 1852 or earlier. Nevertheless, gold was found in the Black Hills in 1868. Further it is probable that gold was known to traders in the Hills, who of necessity came in contact with the Sioux. The Indians said that Father De Smet, a Jesuit priest, cautioned them against showing gold or making any mention whatever of it to white men, which if true, showed his wisdom and thoughtfulness of the Indinas welfare.
In 1874, a half-breed Indian exhibited at an Indian agency (Fort Larmie, Wyoming) a few grains of placer gold which he collected and placed in quills. He mentioned that they were found in the eastern foothills of the Black Hills. During the last year the rush to the Hills began and was swelled to still larger portions after the discovery of Deadwood Gulch in 1876.
Besides the placer at French Creek, others were located on Spring, Battle, castle and rapid Creeks. The Goldon party while searching for lost or stolen horses, entered in Deadwood Gulch, and found a gold bar, about one and one-half miles above Deadwood City. This turned out one of the richest strikes made. A search for quartz lodes soon followed, and ultimately led to the discovery of gold in outcrops of the hard ferruginous conglomerate. The Manuel brothers were among the first to look for quartz deposits, and in 1876, located the Homestake on the western side of Gold Run, on an outcrop of deep red quartz, which was low in value.
Silver was found in Dakota contemporaneously with gold, but as gold could be obtained much more readily than silver, the former was disregarded, except the location of claims. Nevertheless, on the exhaustion of many of the gold bearing lodes, the silver mines began to be opened up. The discovery of ragged Top district of the Black Hill was made by a prospector, who discouraged, with much hard, useless work, made a last try as a “drowning catching as straws” and had samples of the bowlders assayed and was astonished to find they were high grade ore. This was all the more surprising, seeing that the district had been both travelled across and prospected for years by miners without a reward.
The cement deposits, which are undoubtedly gold-bearing gravels cemented into a conglomerated, were located near Central City, and as late as 1880 were worked with considerable profit. In 1881, gold and silver mines were worked on bald and Green Mountains about seven miles distant from deadwood. The Philadelphia Bar above Pactola, and Stockade and Swede bars below, were profitable worked. These mines were in Pennington County, while in Custer County, a number of hydraulic mines were in operation. The year 1900 was noted for the great activity in construction of cyanidation plants. The output during 1901-1902 was increased owing to the operation of old and new mines, and the improved equipment.