A green copper stained outcrop on the south slope of Red Hill attracted the attention of prospectors at the time of the discovery of the nearby Mammoth mine in July 1879. Some of the oldest test pits excavated at this site probably date from the early 1880s. However, prospecting efforts over the next four decades failed to locate any ore grade mineralization and the claims were allowed to lapse. In July 1925, the original San Manuel Claims No. 1 to No. 5 (inclusive) were staked at Red Hill by Anselmo Laguna. James Douglas, a saloon owner in Superior, purchased a third interest in the San Manuel claim group in June 1926 and subsequently acquired another third interest in August 1939. The remaining third interest in the claim group was acquired by James Douglas and Burns Giffin in October 1939. They deeded a quarter interest in the property to Victor Erickson in March 1940 in return for performing assessment work on their claims and building a small camp at Red Hill. By the summer of 1942, they realized they needed assistance from someone, who had mining experience. In August 1942, they enlisted the support of Henry Nichols, an assayer at Magma Copper, who agreed to assist them in return for an interest in the property. Over the years, the number of claims had also been expanded from five to twenty-one.