In 1902 the Ontario government incorporated the Temiskaming and Northern Ontario Railway (T&NOR). The company was to become a provincial Crown corporation with construction commencing on the railway beginning the following year.
By the summer of August 1903 T&NO railroad crews had reached the 103-mile mark north of North Bay. Legend has it that here a blacksmith named Fred Larose was working at his forge when he was startled by a fox. Larose, as the story is told, threw a hammer at the fox, missing it and hitting a rock instead. The hammer exposed a silver vein underneath that would set off a silver rush.
The actual discovery of silver in the Cobalt area began in the Long Lake area on August 7, 1903 while two workers named James H, McKinley and Ernest Darragh were scouting the right of way for trees to use as railway ties. The pair discovered rocks showing leaves of bright metal. The samples were sent away for examination with the results finding native silver assaying 4,000 ounces to the ton. McKinley and Darragh secured their claim and began the McKinley-Darragh mine which would go on to produce thirteen millions dollars worth of silver.
Contrary to the tale, Fred Larose found silver a few weeks later in mid-September. He had discovered pink-stained rocks that he thought contained copper and had the samples sent to Toronto. The results indicated that the rocks were rich in nickel. Newly appointed Ontario Provincial Geologist, Willett G. Miller followed up on Larose's discovery of nickel. His findings indicated that Larose had discovered four veins. Three of the veins contained massive chunks of silver while the fourth, the original nickel vein, was actually bloom.
These initial findings set off a silver rush that brought prospectors, miners and financiers from all over the world.
As for the railway, it reached Englehart in 1906, and Cochrane in 1909. After the silver rush began, the T&NO had no difficulty in finding men to work on the rail crews north of Cobalt, rather they had difficulty in keeping them. As the train neared 100 miles of Cobalt, men would jump from the train to go off in search of silver – their transportation provided free by the railway. Eventually the T&NO posted guards at the doors so that their fresh group of workmen would still be there when the train reached it's destination north of Cobalt.
Drinking became a problem for prospectors and the sale of alcohol was prohibited within a five-mile radius of any mine. The first Ontario Provincial Police detachment was opened and George Caldbick became the first constable. To keep the town peace, Caldbick would frisk each man for weapons when they disembarked the train.
Alcohol was available legally in Haileybury for thirsty miners and Cobalt residents. For those not wanting to purchase alcohol the legal way, over 100 “blind pigs” were operating out of Cobalt where a thirsty man could purchase some “home brew”. The Hunter Block building alone had nine illegal drinking establishments within it.
Female companionship became available for a price, at one of Cobalt's cathouses. In some cases the madams followed the miners from state to state.
Cobalt's mining reached its peak in 1911 and had a population of between 10,000 to 15,000 residents. That year the silver production reached 31,507,791 ounces.
By the 1920's most of the mines were closed due to the stock market crash and depleted silver supply.
-- Cobalt Lake Mine --
Much of Cobalt's early silver was to be found in narrow veins in rocks close to the surface. When it came to accessing the silver veins, early mining methods were not as environmentally friendly as today's methods. In some cases, trees would be cut down and then water would be pumped from nearby lakes and sprayed under high pressure to strip the soil from the land.
Nip Hill was one location in Cobalt where vegetation was washed away in order to access the silver content. Soil runoff from the high-pressure water drained into nearby Cobalt and Peterson Lakes. By 1910, Cobalt Lake was dark and murky as a result of soil and debris from mining, as well as tailings from the mills. Today much of Nip Hill remains barren.
In December of 1906, the Cobalt Lake Mining Company was given the ownership rights to 47 acres of mineral content located under Cobalt Lake. Shafts were dug at the Southern portion of the lake in order to gain access the minerals. By 1909 over 5000 feet of shaft had been sunk. In 1911 the first mill was built on the location of the Cobalt Lake Mine.
In 1914, the Mining Corporation of Canada Limited bought out numerous Cobalt area mines including the Cobalt Lake Mine. The lake was then drained to allow mining of veins located under the lake. A local doctor disputed resident's concerns about possible disease from the water by saying that, “the waters were a gift of nature, but since they were now so polluted there was no real drawback to draining the lake.”
The old tailings were removed from the lake to be processed. New tailings were then dumped into where the lake had been.
In 1932, while blasting in the mine, workers broke through the bedrock cap which resulted in approximately 400,000 tons of mill tailings to pour into the mine. There were no injuries but the lower levels of the mine were now flooded and unusable.
In 1951 the Hellens Mill was built on the site of the Cobalt Lake Mill to reprocess tailings. The lake was drained again and mining continued until 1955.