History of the Revenue Mine

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by Don Paulson, Curator
Ouray County Historical Society

The Star Mining Company has recently reopened the Revenue Mine, one of the largest and most historic mines in Ouray County.  The history of this mine begins with the 1876 platting of the Virginius Lode by William Feland. The Virginius is located about eight miles west of Ouray at over 12,000 feet in Governor Basin. The Virginius changed hands several times over the next few years until it was sold in 1880 to Albert E. Reynolds and John H. Maugham for $100,000, quite a princely sum for the time. Reynolds had been a sutler (a civilian seller of goods to military forces in the field) in Indian Territory, an operator of Indian trading posts and the owner of a large cattle ranch in Texas.

Reynolds immediately brought former acquaintances to help him with the Virginius.  John Ashenfelter, the famous Ouray freighter, came to Ouray at the request of Reynolds.  Ashenfelter soon became the largest freighter in Ouray County.  Hubbard Reed, with the help of his brothers Caleb and David, managed most of Reynolds' mining interests from 1880 to 1901. Under Reed’s management the Virginius and its successor, the Revenue Mine, were wildly successful.
In the fall of 1888 Reynolds and Reed switched the Virginius, now known as the Caroline Mining Company, from steam power to electrical power. The electricity (direct current) was produced in three plants on Canyon Creek and powered by Pelton Water Wheels. They also had a coal fired electrical power plant in Ouray that was used when the water flow in Canyon Creek was too low to turn the Pelton Wheels. Transportation was greatly helped in 1883 when Otto Mears completed a toll road to the mine and in 1886 when the Denver and Rio Grande Railroad completed their branch to Ouray. Reed worked tirelessly to get the Mears toll road improved and made free. He finally succeeded in 1890 when Mears relinquished control of the road for what he considered a token payment.
In 1888 Reynolds started construction of the Revenue Tunnel. This was the first mining tunnel designed to drain vertical shafts and remove the ore at a much lower level. The 7,741 foot tunnel was completed in 1893 when it struck the Virginius vein 2000 feet below the Virginius Mine. Now ore could be fed by gravity to the Revenue Tunnel and hauled out without hoisting it to the surface. A large 60-stamp concentrating mill was built at the tunnel portal. By 1896 the Revenue Mill was processing 300 tons of ore per day. Water for the mill was taken from the drainage box in the tunnel. The water temperature was 60 degrees Fahrenheit all year long, which allowed the mill to operate in the winter without the water freezing. The Revenue Tunnel Mining Company produced more than $300,000 in profit during each of the next eight years.
The Revenue operated three four-story boarding houses which each held 100 miners. The boarding houses had electric lights in each room, were heated by steam and had reading rooms and indoor plumbing. The men were fed well and ate off china plates. In 1905 the Revenue was the first Colorado Mine to use electricity to power its mine cars and light its interior.
Hubbard Reed resigned in 1901 and Reynolds retired to Salt Lake City in 1911. By the time of Reynolds’ death in 1921 the Revenue Mine had produced gold and silver ore worth more than $28 million.
Over the next several decades the Revenue Mine was leased to a series of mining companies with varying success. The mine received a terrible blow when the mill burned in the 1920s. Attempts to reopen the Revenue occurred about every decade into the 1990s with each group confirming the ore potential that everyone knew was still there. It seemed that just as the Revenue was to again start producing, silver prices fell and the companies backed out or defaulted on their leases. Until recently the mine was still wholly owned by the descendants of Albert Reynolds. The Ouray mining community hopes that the latest endeavors by Star Mining will bring the Revenue back to its former glory.