Tunnel Camp came about when the Nevada State Mining Company in 1927 decided to build a 100-ton cyanide mill on the site, in addition to boring a tunnel through rock to the Seven Troughs mines on the other side of the mountain. The purpose of the tunnel was to improve the drainage and haulage that hampered the previous owner Seven Troughs Coalition Mining Company.  During the 2-1/2 mile boring operation, several gold veins were found.  When wet rock was encountered, the costs went through the roof and the boring ceased in 1934.

Mining activity continued off and on through the 1950s.