Color-enhanced image of a prospector panning for gold in the Black Hills of South Dakota. The Black Hills Gold Rush began in 1874. The first arrivals were a force of one thousand men led by George Armstrong Custer to investigate reports that the area contained gold, even though the land was owned by the Sioux. They found small amounts of gold in present day Custer, South Dakota, and looked for better paying locations. They moved north, establishing the towns of Hill City, Sheridan, and Pactola. At each spot they found flakes of gold, but not the bonanza they sought. Things changed when the miners stumbled across Deadwood and Whitewood Creeks in the northern Black Hills. For the initial discoverers, each spade of earth revealed a veritable fortune in gold. By 1876, miners had claimed all the land around the creeks. Although all the land was claimed thousands more flocked in, hoping to find a missed spot. The gold the miners found was placer gold, loose gold pieces that were mixed in with the rocks and dirt around streams. No date or photographer credited.