Gold was first discovered in 1852 in gravels along Gold Creek in Powell County. However, it was not until the 1862 discovery of gold at Grasshopper Creek (Bannack) that the first gold rush occurred in Montana Territory.
As prospectors entered the territory by the thousands starting in 1862, new placer and lode discoveries were made with increasing frequency. In May of 1863, the rich deposits along Alder Gulch near Virginia City were discovered, which soon proved to be the most extensive and productive placers in Montana.
During the summer of 1864, important placer gold discoveries were made at Last Chance Gulch (Helena) and in the Butte district. Placer mining flourished in the territory well into the 1870s as numerous new discoveries were made.