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Diamond City, which emerged in Confederate Gulch on the east side of present day Canyon Ferry Lake, was the hub of the area’s gold activity and became one of Montana Territory’s most populated early communities. Its population once reached more than 10,000 but dwindled to 255 by 1870. Eventually it slid into obscurity leaving barely a trace.
Placer gold, remarkable for its incredible wealth, was discovered in the area by two former Confederate soldiers. The gravels here were among the richest washed anywhere in the world. Single pans were said to contain more than $1,000 of gold at a time when gold’s worth was $20 an ounce. Most remarkable was that these gravels existed within only a two-acre area which by its end yielded over $16 million (over two and a half tons) of gold in 1860s standards of money. Weekend prospectors and some commercial placer miners still work the same areas in hopes of hitting paydirt.
Just like the ghost towns created by the gold rush era, evidence of much earlier activities can be found at various locations throughout the area. Ancient tepee rings, campsites, underground ovens, arrow heads and spear heads have been found throughout the region, some of which have been calculated to be 10,000 years old. A collection of such artifacts is displayed at the Broadwater County Museum in Townsend.
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