The word like magic rippled through St. Paul’s population of 8,000 people in 1865. Henry Eames, Minnesota State Geologist had brought back from Lake Vermilion samples of what he believed to be gold bearing quartz.

The rush was on! Word spread across the nation of a gold strike in Minnesota and thousands left for Lake Vermilion in the dead of winter 1865-66. The first prospectors arrived at the lake in March 1866. Winter ran late and they had time to plot a town-- Winston City. In only two months it grew to a place of several saloons, a couple of stores, fourteen hastily erected shacks and a post office. By summer the population of the city approached 500.

Then came the bust.

Gold in paying quantities was not found. By Christmas 1866, the name of the place was changed to Vermilion City but still no gold was found. The city was abandoned, along with the tools, hopes and dreams of thousands. A marker just east of town displays part of a quartz crusher.

Today the remains of this venture can be seen; a shaft on Pine Island, a mine near Pike Bay, and part of a quartz crusher from a stamp mill dug out from Trout Creek and placed on display outside the depot. When the towns of Tower and Soudan were established in the 1880’s there was so much metal laying about that a special barge was built to pick it up and convert to nails for the first houses in the communities. Some of these houses still stand.

The gold rush had two effects on the region. The cliffs of iron ore that were to become Soudan Mine were discovered and an 84 mile overland route was established to connect Duluth with Lake Vermilion—The Vermilion Trail. The land was now open for development.