It was rediscovered by a gold prospector named Walter J. Mercer. On a hot summer day, Mr. Mercer was returning home from prospecting. Hot, tired and thirsty, he noticed some bay trees near a limestone rock. Thinking he might find water there, he walked over to take a look. Not finding anything, he sat down to rest in the shade. While resting, his attention was drawn to the movement of dry grass around a small hole about the size of his fist. Placing his hand to the opening, he felt a strong draft of cool air, which made him curious. He picked up a small rock and dropped it into the hole, and listening, he could hear it falling for quite a long way. He went to a mining camp and brought back enough tools to enlarge the opening, a rope and some candles to light his way.

He enlarged the hole big enough to crawl through, tied a rope to a tree, the other end around his waist, lit a candle and slid down a mud bank on the north side of a room now called the Gothic Chamber until he was half way (about 20ft) down. At this vantage point, he saw masses of tree roots that hung in clusters from ceiling to floor. In the dim light of his candle, he thought they looked like the decaying timbers of a lost mine. Exploring further, to the base of the fault wall approximately 40 feet below the entrance, he found himself among some human bones. Just as he found the bones, he also heard the sound of falling dirt and rock at the entrance. This warned him of the danger of reclosure; he picked up one bone--a thigh bone of a man--and left very quickly.

To secure the ownership of the land, Mr. Mercer filed a mining claim on September 2, a copy of which is on file in the Calaveras County Archives Book 1, page 250-251. Also on file in the archives is a Deed of Sale dated December 20, 1886 showing the purchase of an additional forty acres from a Mr. Daniel Thompson. The selling price was one five dollar gold piece.