The Discovery of Gold at Clunes
Until 1851, Clunes enjoyed peaceful aboriginal and pastoral occupation. A Scot, Donald Cameron, had his homestead in the Clunes valley and the existence of gold was soon suspected. On 7 July 1851 James Esmond announced payable gold at Clunes the earliest such announcement in Victoria. A small rush ensued but little or no permanent development occurred until 1856 when the London based Port Phillip and Colonial Gold Mining Company negotiated an agreement to mine on the privately owned Clunes pre-emptive right (part of Cameron's original pastoral run). The gold was primarily found in quartz reefs, requiring considerable capital and many miners working co-operatively. The Port Phillip Company erected a large stamping battery and pioneered many innovations in company mining. Relatively few companies worked the reefs although small parties continued to operate, especially under the Cornish `tribute' system, where miners were paid an agreed percentage on the gold won.
Clunes - Victoria's first gold town
Commercial development commenced in `Lower' Fraser Street although by the late 1860s, when mining prosperity peaked, business houses in the central section of Fraser Street were rebuilt and development consolidated. Residential development stayed close to the mines initially (especially on Camp Hill and at North Clunes) but soon spread to South Clunes. Like business premises, residences were often enlarged and Clunes retains many examples of tiny cottages which have been enveloped by later extensions.