It was back in 1864 that some Mexican prospectors were working in an area near Mt. Diablo that silver deposits were discovered on the slopes of a mountain. However it wasn't until the mid 1870's after some European prospectors arrived that the area really caught on as a prospective mining site.
The town site was in high desert elevation of nearly 6000 feet and one of the biggest issues was water. There was a spring in a valley about 10 miles away but this water had to be hauled with mules trains and the cost even back then was a flat rate of one dollar per gallon. Added to the fact the this spring was very limited in water supply, there was only enough water for domestic use and none for the purpose to mine. This was the one reason why Candelaria was known as a dry town.
The town had several mines that worked in this area however the Northern Belle and the Mount Diablo mines were the largest of all the mines. One of the first mines to go into production was the Northern Belle mine. Because of the lack of water, ore had to be crushed dry. The crushing of ore caused toxic dust to go everywhere and soon the entire town and surrounding area would be blanketed in this fine dust. Unlike other camps where a wet milling process was used, Candelaria miners suffered from an extremely high incidence of what was known as “miners consumption which caused respiratory tract infections and other diseases which often ended in death.
Then in 1882, a spur line for Carson and Colorado Railroad was built to the town. This train was able to haul water into the town in large tanks which in turn was able to be used in the wet processing of ore and help with the dust problems the town had been faced with. With this train service the town also grew as more people moved in and soon there were a couple of hotels, a few general stores, numerous saloons, a lawyer and even a couple of doctors. Candelaria became a silver mining boom town. During this time the Northern Belle mine produced over 15 million dollars worth of silver.
Work in the mines was steady for the next decade as finished ores were shipped out from the surrounding mines. Then the financial panic of 1893 came and dried up capital and development of the mines ceased. This resulted in many of the mines closing down. Soon most people packed up and moved on to other boom towns or places that were not so remote. There were however a few die hards who refused to leave. Some of these folks would start to go through the old workings looking for bits of ore while waiting for another boom that never did return.
By the mid 1920's there was only a handful of residents left. Then in 1939 the post office closed and in 1941 the town of Candelaria officially became a ghost town.