Over on the east shore of Kootenay Lake at Big Ledge Dr. Wilbur Hendryx had cleared the titles to the Sproul and Hammil claims in 1887. With Thomas Hammil dead, his heirs in England neglected his 1/3 interest in the Bluebell Claim, acquired when Colonel Hudnut refused to pay the court costs. When Hammil’s heirs failed to have the required yearly assessment work done on the claim, it reverted to the Crown, from which Dr. Hendeyx bought it. He now owned 100% of the Bluebell claim, and obtained a Crown Grant and title to it in 1888. Two years later, he was able to buy the Comfort and Kooteany Chief claims from the Ainsworths for $100,000 resolving the last of the claim conflicts on the Big Ledge.
On the ground a three year program of mine development was begun in 1887 with a crew of twenty men. A wharf was built out into Bluebell Bay from which to transfer the ore to barges, and on shore, ore bins, accommodations, and mine buildings were erected. A tunnel was begun to intersect the ore body below the surface, and an 18 inch gauge tramline was built to bring the ore down to the wharf. There remained the problem of the $30 per ton tariff on lead
ores entering the U.S. at Porthill. To make the Bluebell profitable, a smelter would have to be erected on Kootenay Lake, and the ores processed there before shipment to the U.S. Down at Pilot Bay, some 15 miles south of the Bluebell, Davies and Sayward, B.C. businessmen, had erected a sawmill and were furnishing lumber to the Kootenay Lake camps. This was an ideal location for a custom smelter to treat all the ores from Kootenay Lake mines. It had a good, sheltered bay at the central point of the lake where the three arms converged.
Dr. Hendryx reorganized his companies to bring the B.C. sawmill investors with their capital into the syndicate. A B.C. company was established, the Kootenay Mining and Smelting Company, with Edwin Herrick of Minneapolis, the Hendryx’ partner, as president; Robert Rithet, steamship magnate of Victoria, Vice President; Andrew Hendryx of New Haven, Connecticut, as Treasurer. All of the other directors, Baker, Chapman, Davies, Ellis and Hutchinson were from Victoria. Dr. Wilbur Hendryx remained as resident mine manager. The Kootenay Mining and Smelting Company represented the first substantial B.C. investment in what had been up until then a wholly American mining industry in the Kootenays. At the Pilot Bay site in 1892, a crew of 200 men began erecting a smelter with an ore concentrator, a sampler, roaster, engine room, boiler room, machine and blacksmith shop, carpenter shop, assay and general offices. It was a first class operation for the time, with two boilers of 100 horsepower each, the concentrator had two 9” x 15” crushers, six jigs, two slime tables and two Frue Vanners. The roast building had four 17’ x 65’ reverberatory furnaces of 12 tons capacity each, and the smelter was a single 100 ton water jacketed blast furnace. The engine house contained a 150 horsepower Corliss engine running the concentrator and sampling works with a rope drive. An 85 horsepower blower engine furnished air under pressure for the blast furnace, and a 30 horsepower engine turned a dynamo to light the works. The whole expensive complex cost the company $650,000. Smelter capacity was expected to be 100 tons of ore per day, with the Bluebell mine capable of furnishing 220 tons daily. By the time the works was completed, 52,000 tons or ore was on site ready to be processed. In March 1895 the smelter was blown in and processing begun. Fuel was charcoal, locally produced in two beehive kilns, and coal barged in from Bonner’s Ferry where the Great Northern Railway had arrived in 1892. By the end of the year 3,220 tons of silver- lead bullion had been produced and shipped to markets in the U.S.
A town of about 200 sprang up around the rim of Pilot Bay with the Galena Trading Company’s general store, two Hotels, a butcher shop and a boarding house. As Dr. Hendryx wanted to run a model community, brothels were banned, but prospector Henry Rose built a number of small houseboats, and anchored them in the bay to serve this purpose, beyond the authority of Dr. Hendryx.
Limestone flux was barged in from Big Ledge and iron oxide from the U.S. Ores from other Kootenay Lake mines were purchased, 2,500 tons in 1895, but the bulk of the smelter feed consisted of the Bluebell ore, and problems with it developed at once. All the Kootenay lead ores were sulphide ores requiring a preliminary roasting to remove as much sulphur as possible before charging it as lead oxide, into the blast furnace along with coal, coke or charcoal, limestone and iron oxide. If all went well, the limestone and iron oxide would form a molten slag which would absorb the impurities and earthy matter, and the carbon in the coal or charcoal would react with the lead oxide to form carbon dioxide which went up the stack, while molten lead containing the silver, was tapped out at the bottom of the crucible. But at Pilot Bay too many things went wrong. The roasting did not always remove all the sulphur, and the resulting matte would have to be re-smelted at an increased consumption of fuel. In normal smelting practice “dry” lead carbonate or lead oxide ores would be mixed with the “wet” or high sulphur ores to dilute the sulphur in the mix and allow its removal in a single pass. But in the Kootenays, dry ores were not available. The zinc content of the Bluebell ores also caused problems. Zinc boils (vaporizes) at 907º C. This is below the melting point of silver. If the furnace was run hot enough to recover the silver, the zinc would be lost up the stack as a fine dust. A metallurgist, Robert Hedley was brought in to manage them smelting operation, but he was unable to convince the stubborn Dr. Hendryx that the Bluebell ore was too refractory to smelt without the addition of dry ores. The Hendryx company would have to bring in dry lead ores (they were available in Stevens County, Washington) from the U.S. if the smelter was to run at a profit. Hendryx refused, Hedley departed, and in 1896 the smelter was closed for “reconstruction.”
Throughout the summer a crew of men made bricks for an extension of the smelter’s chimney and laboured at other improvements, while Dr. Hendryx went east to to try raise more capital. However, in September, his brother, Andrew Hendryx arrived with a grim face. The works were closed, all employees were discharged except for one watchman; the Hendryx brothers were pulling out.
The Bank of Montreal foreclosed on the Kooteany Mining and Milling Company, and leased the property to Braden Brothers who shipped their ore from the Ainsworth and Slocan properties to Pilot Bay and ran them through the concentrator. The concentrator was worked sporadically for the next ten years on local ores, but the smelter was never fired again. There were hopes that a promised CPR rail line through Crowsnest Pass would bring in cheaper coal and coke, and make the smelter economic. But the CPR , unwilling to build track until it got government subsidies, did not arrive until 1899. By that time a new Hall smelter was in operation in Nelson. The Sawmill closed in 1903, and Pilot Bay temporarily became a ghost town with only a few residents remaining, hoping for a revival.