Located near the Creek and approximately two and a half miles along the Placer Road (road to Goose Lake) lies the Buffalo Mine. Tradition holds that R. P. and John J. Kelly opened the Blue Rock Tunnel in 1903. Adjacent to their mine were seven claims called the Silver King group owned by Charles Compton.
In 1910 both of these mining properties were acquired by the Buffalo - New Mexico Mining Company whose headquarters were located in Buffalo, New York. John ("Jack") Kelly was kept on as superintendent and a considerable amount of money was invested in the operation. New equipment was installed: a large boiler, air compressor, saw mill, steam hoist, and a boarding house for the miners. Ore removed from the mine was treated at the June Bug Mill in Red River City after being transported over the local Toll Road. This road was built by J. 0. and Tom Gill who lived in Goose Creek Canyon. They planned and constructed a short-cut road which went directly over the mountain and shortened the distance to the mill. It began at the junction of the East and West forks of Placer Creek, then led over the ridge at today's Kit Carson ski run, and came down into Red River at the present location of the main shaft house. The tolls were as follows:
| Foot travel | Free |
| Horse | 25 Cents |
| Empty Wagon | 50 Cents |
| Loaded Wagon | 75 Cents |
Jack Kelly was not only mine superintendent but also a deputy sheriff. In 1916 he arrested a man named Martin and escorted him to jail. When the prisoner lay down and refused to walk, the deputy momentarily left to get help and Martin escaped. Meanwhile Kelly had rounded up an assistant and together they approached the Martin house whereupon the prisoner fired a shot through the window hitting Kelly in the groin. He died within minutes from massive blood loss.
Following this, work at the Buffalo was curtailed and then stopped altogether during World War 1. Work resumed in 1920 and the following year the tunnel filled with water. Thereafter a new shaft and tunnel were dug nearby to drain the water, and in the course of doing this, a new vein was uncovered. This led to an expansion of the operation which was now under the direction of foreman Jack Munden. A new 25-ton mill was installed along with a universal crusher, new steam powerhouse, new cook house, and new bunkhouse.
The Buffalo remained a very active mine for the next several years but by the time of the Depression it had greatly declined and finally closed in 1930. Seven years later the mill burned.
Over the years a number of Red River citizens worked at the Buffalo Mine and this included Harry Young, Jack Brandenburg, Franklin Fuller, Gilbert Fuller, and Jesse Young.
Buffalo Miners
Head Frame at Shaft
R.P. & John Kelly
Compressor & Hoist
Buffalo Sawmill
