The quiet, pastoral appearance of Chili Gulch today belies its early day reputation as the richest and most-worked gulch in the county. As early as 1848, three camps were located along the gulch, mostly populated by Chilean miners. It was near this site in 1849 that the Chilean War occurred.
Within a few years of its discovery, many hundreds of miners were engaged in placer and hydraulic mining activities in the Gulch. Borthwick visited the camp in the spring of 1853 and reported seeing about two hundred Chilenos panning gold in large flat wooden dishes. Although the place may have been originally known as Chilean Gulch, as that name shows up in newspaper reports and contemporary maps, Chili Gulch was probably used interchangeably and when the post office was established on October 10 of 1857, the latter became official and has so remained.
Mining continued well into the 1860ís, with new discoveries enticing the miners. Shafts were sunk to depths of 130 feet and the lead was traced for miles. As late as 1869, a ten-stamp mill was in operation, supposedly powered by a hurdy gurdy wheel.
Chili Gulch is another perfect example of how a substantial mining camp could completely disappear. Once the gold gave out, there was no reason for anyone to stay in the Gulch, so the miners and merchants left. Time and the elements have long since wiped away most traces of Chili Gulch.

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