Silver mining in the hills of southern New Mexico had begun years before Lake Valley's fortunes changed. Prospectors George W. Lufkin and Chris Watson first staked silver claims in the Lake Valley area in the mid‑1870s, years before the district's biggest strike. They were joined by John Miller, the owner of a local store, in promoting their find. The bonanza strike occurred in August 1881, though the town itself did not take the name Lake Valley until the following year. The blacksmith‑turned‑prospector John Leavitt was digging about 40 feet down when he hit a vein of horn silver four feet thick, an exceptionally rich ore that assayed at almost 15,900 ounces of silver per ton, one of the richest discoveries of its kind in the United States. The vein was dubbed the Bridal Chamber, and George Daly, a mining engineer, purchased all claims in the vicinity, founding the Sierra Grande Mining Company with his partners J. Whitaker Wright and George Roberts.
The find drew investors and grew the town to an estimated 1,000 to 4,000 people
